TCREUR_Public/151208.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

           Tuesday, December 8, 2015, Vol. 16, No. 242



AZERBAIJAN REPUBLIC: S&P Affirms 'BB+' CCR, Outlook Negative


FCC SURF: S&P Raises Ratings on 2 Note Tranches to 'BB'


HYMMEN GMBH: Bielefeld Court Commences Insolvency Proceedings


PIRAEUS BANK: S&P Revises Counterparty Credit Rating to 'SD'


CARLYLE GLOBAL 2015-3: Moody's Rates Class E Notes '(P)B2'
CARLYLE GLOBAL 2015-3: S&P Assigns Prelim. B- Rating to E Notes
WINDERMERE VII: Moody's Cuts Rating on Class B Notes to B1(sf)


ASTALDI SPA: Moody's Affirms 'B1' Corporate Family Rating


EURASIAN BANK: S&P Lowers Counterparty Credit Rating to 'B'


STAHL GOUP: Moody's Withdraws 'B2' Corporate Family Rating


LEOPARD CLO II: S&P Lowers Rating on Class D Notes to CC
QUEEN STREET II: Moody's Affirms Ba3(sf) Rating on Class E Debt


CIECH SA: Moody's Hikes Corporate Family Rating to 'Ba3'
COGNOR SA: S&P Lowers CCR to 'CC', Outlook Negative


ASTRA ASIGURARI: Insurance Fund Approves Payout of 100 Claims


ALJBA ALLIANCE: S&P Affirms 'B/B' Counterparty Credit Ratings
RUSSIA: Moody's Affirms Ba1 Gov't Bond Rating, Outlook Stable
RUSSIA: Moody's Changes Outlook on 9 Sub-Sovereigns to Stable
SVIAZ-BANK: S&P Puts BB- Counterparty Credit Rating on Watch Neg.


SERBIA: Moody's Says IMF Program Helps Boost Credit Profile


ABENGOA SA: Minister Balks at Payouts, EU Opens Antitrust Probe
BANCO POPULAR MBS: Moody's Rates Series B Notes '(P)Caa1'


YAPI VE KREDI: Moody's Assigns (P)Ba3 Subordinated Debt Rating


PRIVATBANK JSC: S&P Lowers Rating to 'SD' Following Bond Deal

U N I T E D   K I N G D O M

AQUAMARINE POWER: Owes Scottish Enterprise GBP6.2 Million
EQUINOX PLC: S&P Lowers Rating on Class A Notes to 'CCC(sf)'
LOTUS F1: Gets Breathing Space in Insolvency Proceedings
REDTOP AQUISITIONS: Moody's Assigns 'Ba3' Rating to 2020 Loan
ROADCHEF FINANCE: S&P Raises Rating on Class B Notes to BB-

* EUROPE: Moody's Says UK's EU Exit Would be Negative for Economy



AZERBAIJAN REPUBLIC: S&P Affirms 'BB+' CCR, Outlook Negative
Standard & Poor's Ratings Services affirmed its 'BB+' long-term
corporate credit ratings on the State Oil Company of Azerbaijan
Republic (SOCAR) and related debt ratings.  S&P removed the
ratings from CreditWatch, where they were placed with negative
implications on Oct. 5, 2015.  The outlook on the corporate credit
rating is negative.

The affirmation reflects S&P's view that the SOCAR should be able
to maintain ratings-commensurate credit metrics even in the lower
oil price environment and that its liquidity should remain
sufficient to service its debt and finance its capital expenditure
(capex) program.

In line with international peers, SOCAR is reducing its capital
spending, which should allow the company to generate positive free
operating cash flow (FOCF).  S&P also expects it will receive
continuing ongoing support from the government, which it captures
in its business and financial risk, and liquidity assessments,
including S&P's expectation that the government will finance part
of SOCAR's capex in 2016.

S&P now assesses the stand-alone credit profile (SACP) on SOCAR at
'bb-', compared with 'bb' previously, as S&P's assessment on both
SOCAR's fair business and significant financial risk profiles are
no longer at the upper end of the range.

The rating on SOCAR reflects S&P's view of the "extremely high"
likelihood that its owner, the government of Azerbaijan, would
provide extraordinary support to the company.

In line with S&P's methodology for rating government-related
entities (GREs), it views SOCAR's role in the country's economy as
"critical."  The company plays a central role in Azerbaijan's most
strategic sector, oil and gas. SOCAR is the country's largest
employer and a substantial taxpayer, and it has important social
mandates and a monopoly in refining and petrochemicals.  It is
also a minority shareholder and the government's representative in
Azerbaijan's largest internationally-led upstream projects, such
as Azeri-Chirag-Guneshli (ACG; 11.6461% ownership).

The negative outlook on SOCAR mirrors the negative outlook on
Azerbaijan.  S&P would likely lower its rating on SOCAR, as a GRE,
if S&P lowered the sovereign credit ratings on Azerbaijan.
Although S&P could also lower the SOCAR rating if S&P lowered its
SACP, this seems less probable and could happen if SOCAR sharply
increases its investments without compensating support from the
government.  S&P would see a ratio of FFO to debt of sustainably
below 25% as not commensurate with the current ratings.

S&P would revise the outlook to stable if it took the same rating
action on Azerbaijan.  Beyond that, S&P do not see a strong
likelihood of a positive rating action in the next year or two,
given the oil price outlook.  Subject to the sovereign ratings,
S&P could consider an upgrade over time if SOCAR's stand-alone
performance improves by two notches to 'bb+', which could be
achieved only as a result of prices quickly recovering to above
S&P's long-term price assumption of $70/bbl and lower capital
investment commitments.


FCC SURF: S&P Raises Ratings on 2 Note Tranches to 'BB'
Standard & Poor's Ratings Services raised to 'BB(sf)' from
'B(sf)' its credit ratings on FCC Surf's class B1 and B2 notes.

The upgrades follow S&P's Nov. 24, 2015 rating action on MBIA U.K.
Insurance Ltd., which acts as the guarantee provider in FCC Surf.

S&P's ratings on FCC Surf's class B1 and B2 notes are linked to
the lower of S&P's rating on (i) Dexia Credit Local plus one
notch, as a swap counterparty, and (ii) MBIA U.K. Insurance, the
guarantee provider that is currently rated 'BB'.  S&P has
consequently raised to 'BB (sf)' from 'B (sf)' its ratings on FCC
Surf's class B1 and B2 notes.

FCC Surf is a French asset-backed securities (ABS) transaction,
which securitizes the receivables arising from a bank loan to
Sanef, a French toll road operator.


HYMMEN GMBH: Bielefeld Court Commences Insolvency Proceedings
Fordaq reports that Hymmen GmbH on Dec. 1 filed an application for
the commencement of insolvency proceedings at the Local Court of
Bielefeld.  The Court accordingly stated the insolvency
porceedings on Dec. 2, Fordaq relates.

Originally, on Nov. 27, Hymmen announced an application for self-
administration for the beginning of December, Fordaq notes.  Basis
for the self-administration is the positive order intake during
the last two months for Hymmen, as well as a further major order
for a double-belt press, worth more than EUR3 million, immediately
before the application, Fordaq discloses.

However, the insolvency proceedings were followed on Dec. 1,
Fordaq relates.  Along with financing institutes, it was decided
that restoration under insolvency proceedings is a better
alternative, due to the extremely complex financing structure of a
plant engineering company, according to Fordaq.

Hymmen GmbH is a German medium-sized mechanical and plant
engineering company.  It is based in Bielefeld.


PIRAEUS BANK: S&P Revises Counterparty Credit Rating to 'SD'
Standard & Poor's Ratings Services said it revised its long-term
counterparty credit rating on Greece-based Piraeus Bank S.A. to
'SD' (selective default) from 'D'.  S&P also raised its issue
rating on the senior unsecured debt to 'CCC+' from 'D' and its
issue rating on the subordinated debt to 'CC' from 'D' on its
EUR25 billion euro medium-term note (EMTN) program.  S&P also
raised the short-term rating to 'C' from 'D' on Piraeus' EUR25
billion EMTN program and on its EUR5 billion commercial paper

The rating action follows Piraeus' completion of a EUR4.93 billion
capital raising plan.  The bank has covered EUR1.94 billion
through private funds, by completing a capital increase and a
distressed exchange on its senior unsecured, subordinated, and
preferred securities.  About EUR271 million consisted of
mitigating measures accepted by the ECB.  In addition, the
Hellenic Financial Stability Fund (HFSF) will provide
EUR2.72 billion of the residual capital needed, of which 25% will
come through equity and 75% by acquiring contingent convertible
bonds to be issued by Piraeus.

S&P's 'SD' rating on Piraeus reflects S&P's view that the bank is
still unable to completely fulfill its deposit obligations in a
timely manner, due to the capital controls being imposed in

S&P raised its issue rating on Piraeus' senior unsecured bonds to
'CCC+' from 'D', reflecting S&P's view that Piraeus is currently
vulnerable and dependent on favorable business and financial and
economic conditions to meet its financial commitments.  The rating
reflects the bank's fragile financial profile in the context of a
weak economic and operating environment in Greece.  S&P also
expects the EU authorities to continue providing liquidity
facilities to the Greek banks.

S&P raised its issue rating on the subordinated debt to 'CC' from
'D'.  S&P rates Piraeus' subordinated debt three notches below the
senior notes to indicate their degree of subordination and that
these instruments carry higher risks than the senior obligations.


CARLYLE GLOBAL 2015-3: Moody's Rates Class E Notes '(P)B2'
Moody's Investors Service assigned these provisional ratings to
notes to be issued by Carlyle Global Market Strategies Euro CLO
2015-3 D.A.C:

  EUR285,000,000 Class A-1 Senior Secured Floating Rate Notes due
   2029, Assigned (P)Aaa (sf)

  EUR75,600,000 Class A-2 Senior Secured Floating Rate Notes due
   2029, Assigned (P)Aa2 (sf)

  EUR33,800,000 Class B Senior Secured Deferrable Floating Rate
   Notes due 2029, Assigned (P)A2 (sf)

  EUR20,600,000 Class C Senior Secured Deferrable Floating Rate
   Notes due 2029, Assigned (P)Baa2 (sf)

  EUR31,200,000 Class D Senior Secured Deferrable Floating Rate
   Notes due 2029, Assigned (P)Ba2 (sf)

  EUR15,700,000 Class E Senior Secured Deferrable Floating Rate
   Notes due 2029, Assigned (P)B2 (sf)

Moody's issues provisional ratings in advance of the final sale of
financial instruments, but these ratings only represent Moody's
preliminary credit opinions.  Upon a conclusive review of a
transaction and associated documentation, Moody's will endeavor to
assign definitive ratings.  A definitive rating (if any) may
differ from a provisional rating.


Moody's provisional rating of the rated notes addresses the
expected loss posed to noteholders by the legal final maturity of
the notes in 2029.  The provisional ratings reflect the risks due
to defaults on the underlying portfolio of loans given the
characteristics and eligibility criteria of the constituent
assets, the relevant portfolio tests and covenants as well as the
transaction's capital and legal structure.  Furthermore, Moody's
is of the opinion that the collateral manager, CELF Advisors LLP
("CELF Advisors") has sufficient experience and operational
capacity and is capable of managing this CLO.

Carlyle is a managed cash flow CLO.  At least 90% of the portfolio
must consist of senior secured loans and senior secured bonds and
up to 10% of the portfolio may consist of unsecured senior loans,
second-lien loans, mezzanine obligations and high yield bonds.
The portfolio is expected to be at least 70% ramped up as of the
closing date and to be comprised predominantly of corporate loans
to obligors domiciled in Western Europe.

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

In addition to the six classes of notes rated by Moody's, the
Issuer issued EUR55,100,000 of subordinated notes which will not
be rated.

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

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

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

Loss and Cash Flow Analysis:

Moody's modeled the transaction using CDOEdge, a cash flow model
based on the Binomial Expansion Technique, as described in Section
2.3 of the "Moody's Global Approach to Rating Collateralized Loan
Obligations" rating methodology published September 2015.  The
cash flow model evaluates all default scenarios that are then
weighted considering the probabilities of the binomial
distribution assumed for the portfolio default rate.  In each
default scenario, the corresponding loss for each class of notes
is calculated given the incoming cash flows from the assets and
the outgoing payments to third parties and noteholders.
Therefore, the expected loss or EL for each tranche is the sum
product of (i) the probability of occurrence of each default
scenario and (ii) the loss derived from the cash flow model in
each default scenario for each tranche.  As such, Moody's
encompasses the assessment of stressed scenarios.

Moody's used these base-case modeling assumptions:

  Par Amount: EUR500,000,000
  Diversity Score: 40
  Weighted Average Rating Factor (WARF): 2735
  Weighted Average Spread (WAS): 4.05%
  Weighted Average Coupon (WAC): 5.5%
  Weighted Average Recovery Rate (WARR): 43.00%
  Weighted Average Life (WAL): 8 years

Stress Scenarios:

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

Percentage Change in WARF: WARF + 15% (to 3145 from 2735)
Ratings Impact in Rating Notches:

Class A-1 Senior Secured Floating Rate Notes due 2029: 0
Class A-2 Senior Secured Floating Rate Notes due 2029: -2
Class B Senior Secured Deferrable Floating Rate Notes due
2029: -2
Class C Senior Secured Deferrable Floating Rate Notes due
2029: -2
Class D Senior Secured Deferrable Floating Rate Notes due
2029: -1
Class E Senior Secured Deferrable Floating Rate Notes due
2029: 0

Percentage Change in WARF: WARF +30% (to 3556 from 2735)
Ratings Impact in Rating Notches:

Class A-1 Senior Secured Floating Rate Notes due
2029: 0
Class A-2 Senior Secured Floating Rate Notes due 2029: -3
Class B Senior Secured Deferrable Floating Rate Notes due
2029: -4
Class C Senior Secured Deferrable Floating Rate Notes due
2029: -3
Class D Senior Secured Deferrable Floating Rate Notes due
2029: -1
Class E Senior Secured Deferrable Floating Rate Notes due
2029: -1

Methodology Underlying the Rating Action:

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

CARLYLE GLOBAL 2015-3: S&P Assigns Prelim. B- Rating to E Notes
Standard & Poor's Ratings Services assigned its preliminary credit
ratings to Carlyle Global Market Strategies Euro CLO
2015-3 D.A.C.'s class A-1, A-2, B, C, D, and E senior secured
fixed- and floating-rate notes.  At closing, Carlyle Global Market
Strategies Euro CLO 2015-3 will also issue unrated subordinated

Carlyle Global Market Strategies Euro CLO 2015-3 is a cash flow
collateralized loan obligation (CLO) transaction securitizing a
portfolio of primarily senior secured loans granted to
speculative-grade European corporates. CELF Advisors LLP will
manage the transaction.

Under the transaction documents, the rated notes will pay
quarterly interest unless there is a frequency switch event.
Following such an event, the notes would switch to semi-annual

The portfolio's reinvestment period will end four years after the
closing date, and the portfolio's maximum average maturity date
will be eight years after the closing date.

At the end of the ramp-up period, S&P understands that the
portfolio will represent a well-diversified pool of corporate
credits, with a fairly uniform exposure to all of the credits.
Therefore, S&P has conducted its credit and cash flow analysis by
applying its criteria for corporate cash flow collateralized debt

In S&P's cash flow analysis, it used the portfolio target par
amount of EUR500 million, the covenanted weighted-average spread
(4.05%), the covenanted weighted-average coupon (5.50%), and the
covenanted weighted-average recovery rates at each rating level.

State Street Bank and Trust Co., Boston, MA will be the bank
account provider and custodian.  At closing, S&P anticipates that
the participants' downgrade remedies will be in line with its
current counterparty criteria.

At closing, S&P considers that the issuer will be bankruptcy
remote, in accordance with its European legal criteria.

Following S&P's analysis of the credit, cash flow, counterparty,
operational, and legal risks, S&P believes its preliminary ratings
are commensurate with the available credit enhancement for each
class of notes.


Preliminary Ratings Assigned

Carlyle Global Market Strategies Euro CLO 2015-3 D.A.C.
EUR517.00 Million Senior Secured And Floating-Rate Notes
(Including EUR55.10 Million Subordinated Notes)

Class               Prelim.            Prelim.
                    rating              amount
                                      (mil. EUR)
A-1                 AAA (sf)            285.00
A-2                 AA (sf)              75.60
B                   A (sf)               33.80
C                   BBB (sf)             20.60
D                   BB (sf)              31.20
E                   B- (sf)              15.70
Sub loan            NR                   55.10

NR--Not rated.

WINDERMERE VII: Moody's Cuts Rating on Class B Notes to B1(sf)
Moody's Investors Service has downgraded the rating of one class
of notes, upgraded the rating of one class of notes and affirmed
the ratings on two classes of notes issued by Windermere VII CMBS
plc (Notes).

Moody's rating action is as follows:

-- EUR50M(current outstanding balance of EUR5.02M) B Notes,
    Downgraded to B1 (sf); previously on Jul 3, 2014 Downgraded
    to Ba1 (sf)

-- EUR27.4M(current outstanding balance of EUR18.34M) C Notes,
    Upgraded to B3 (sf); previously on Jul 3, 2014 Affirmed Caa1

-- EUR50.8M(current outstanding balance of EUR34M) D Notes,
    Affirmed Ca (sf); previously on Jul 3, 2014 Affirmed Ca (sf)

-- EUR0.05M X Notes, Affirmed Caa2 (sf); previously on Jul 3,
    2014 Downgraded to Caa2 (sf)

Moody's does not rate the Class E and Class F Notes.


The downgrade of the Class B Notes reflects Moody's concerns that
the Notes are unlikely to be fully redeemed by the Legal Final
Maturity date in April 2016, although its expectation is still for
full ultimate repayment of the outstanding balance.

The upgrade action reflects Moody's increased recovery
expectations for the Class C Notes since its last review,
primarily due to the full repayment of the Nordostpark loan. This
has improved the overall credit enhancement of the Class C Notes.

The rating on the Class D Notes is affirmed as Moody's underlying
loss expectation for the two remaining loans in the pool has
remained unchanged.

The rating on the Class X Notes is affirmed because the current
rating is commensurate with the updated risk assessment. The Class
X Notes reference the underlying loan pool. As such, the key
rating parameters that influence the expected loss on the
referenced loan pool also influences the ratings on the Class X
Notes. The rating of the Class X Notes was based on the
methodology described in Moody's Approach to Rating Structured
Finance Interest-Only Securities published in October 2015.

For a summary of Moody's key assumptions for the loans in the pool
please refer to the section SUMMARY OF MOODY'S LOAN ASSUMPTIONS


As of the October 2015 IPD, the transaction securitized balance
had reduced to EUR69.8 million from EUR782.3 million at closing in
May 2006 due to the pay off and work-out of ten loans originally
in the pool. The Notes are currently secured by two first-ranking
legal mortgages ranging in size from 72.5% to 27.5% of the current
securitized pool balance. Since the last review the Nordostpark
loan repaid and proceeds were used to amortize the senior Notes.

The pool has an above average concentration in terms of geographic
location (89% France and 11% Germany, based on UW market value)
and property type (100% office). Moody's uses a variation of the
Herfindahl Index, in which a higher number represents greater
diversity, to measure the diversity of loan size. Large multi-
borrower transactions typically have a Herf of less than 10 with
an average of around 5. This pool has a Herf of 2.0 compared to
the Herf of 2.7 at Moody's prior review.

Moody's weighted average loan to value (LTV) ratio of the pool is


Below are Moody's key assumptions for the two remaining loans.

Adductor loan (72.5% of pool) - LTV: 96.7% (Whole)/ 96.7% (A-
Loan); Total Default Probability: N/A - Defaulted; Expected Loss:
20% - 30%.

The loan is secured by 13 office properties located in France. The
property portfolio itself is of average quality. The vacancy rate
is almost 24% with the weighted average remaining lease term
currently unreported (the August 2015 Investor Report recorded a
weighted average unexpired lease term of 1.42 years). The reported
LTV based on the latest June 2012 valuation has increased slightly
to 71.0% from 68.4% at Moody's last review.

Mulheim Loan (27.5% of pool) - LTV: 554.2% (Whole)/ 554.2% (A-
Loan); Total Default Probability: N/A - Defaulted; Expected Loss:
80% - 90%.

The loan is secured by an office property in Mulheim, let to GMG
Generalmietgesellschaft (a company affiliated to Deutsche Telekom
AG (Baa1)) until June 2015. The tenant did not serve notice and
the current situation allows for either party to terminate the
lease with a six month notice period. There is still no certainty
on whether the tenant will renew its lease or vacate the property.
At the beginning of 2013, the special servicer tried to sell the
property but the bids received were for an amount less than rental
income payable under the remaining lease and consequently the
marketing process was suspended. Moody's assumption is that the
property will be sold vacant at some point. The reported vacant
possession value is EUR3.5 million. Moody's expects a very high
loss on this loan which is in line with previous expectations.


ASTALDI SPA: Moody's Affirms 'B1' Corporate Family Rating
Moody's Investors Service changed the outlook on Astaldi S.p.A. to
negative from stable. Concurrently, Moody's has affirmed the B1
corporate family rating (CFR), B1-PD probability of default rating
(PDR) and the B1 senior unsecured ratings.

"The change in outlook to negative has been driven by the delayed
sale of concession assets leading to leverage ratios which are
outside of the range for a B1 rating for a longer than anticipated
time, and the weakening liquidity profile of the company." said
Matthias Heck, Moody's lead analyst for Astaldi.


The change of the outlook reflects the company's delayed asset
disposal program, which leaves execution risks in place and
financial leverage at high levels, well above our ratio guidance.
Moreover, it limits headroom to financial covenants of its
existing EUR500 million revolving credit facility at very tight
levels as per year end 2015. The negative outlook also reflects
the company's corporate governance, which we understand is in line
with Italian Stock Exchange guidelines, with regards to the CEO
having sold a substantial part of his shares in the second half of

On November 11, 2015, Astaldi announced some progress in terms of
the valorization of its concession assets, pursuing parallel
tracks of disposal options in terms of creating a fund for a
larger group of assets and/or selling assets individually. We
understand that Astaldi has received an indicative bid for the
largest single asset in Italy, a 14% stake in the A4 motorway.
Astaldi has granted an exclusivity period to the bidder until year
end 2015, resulting, however, in a delay of the overall asset
disposal process. Previously, the sale of the first tranche of
assets was expected by year end 2015.

Without proceeds from asset disposals applied to debt reduction,
Astaldi's financial leverage remains high. On a Moody's adjusted
basis, Astaldi had 6.8x gross debt / EBITDA as per June 2015, and
we estimate this has further increased to approximately 7.0x as of
end of September 2015. Our full year 2015 net debt expectation
reflects a seasonal reversal of sizeable working capital related
cash outflows recorded in the first three quarters but also high
investments of nearly EUR200 million into new concession assets in
2015, with, at the same time, just break-even free cash flow
generation. Without effects of asset disposals, we therefore
expect for the full year 2015 a decline of financial leverage to
the level seen at year end 2014 (6.3x). This would leave the
company weakly positioned versus our ratio guidance of 4.0x-5.0x
that is required to maintain the B1 rating.

Without the deleveraging effect of asset disposals, we also expect
that the headroom to maintain financial covenants within Astaldi's
EUR500 million revolving credit facility will become tight at the
end of 2015. Moody's understands that the company has been in
covenant compliance at the end of the first half of 2015. The
upcoming test at year end 2015, however, covenant levels will
become tighter, to 1.9x net financial indebtedness / equity
(versus previous 2.0x) and 3.25x net financial indebtedness /
EBITDA (versus previous 3.6x). We expect that Astaldi will also
pass this test, but with very limited headroom.


Astaldi's B1 rating reflects the good visibility and
predictability of its future revenue generation given the
company's strong and relatively well diversified order backlog in
execution, the company's geographically fairly well diversified
order portfolio, its solid track record of execution and
expectations of continued healthy operating margins, and a fairly
immature but attractive investment portfolio in concessions. The
B1 rating factors in expectations that the company will gradually
improve its leverage primarily driven by a reduction in debt from
proceeds of disposals of minority stakes in certain concessions to
achieve debt to EBITDA metrics in a 4.0-4.5x range (Moody's
adjusted) by the end of 2016 and sustain it at such level
thereafter while maintaining its order backlog at least around
current levels.

The main constraints to the rating are represented by the
company's currently high leverage, its fairly small size in an
international bidding context, a still significant exposure to the
weak Italian economy, and a generally high level of competition in
the construction industry.

"We continue to expect that the disposal proceeds from the sale of
a substantial majority stake in the concession portfolio could de-
lever Astaldi considerably. As per end of September, Astaldi had
invested a total amount of EUR734 million into its concession
assets. If the company sold the assets at book value and used
divestment proceeds to reduce gross debt, we would expect a
reduction in gross leverage by approximately 1.4x, bringing
leverage back into our guidance range."

Together with expected EBITDA growth, we expect the company to
become comfortably positioned within this range in 2016.
Furthermore, the asset disposals would lift the headroom to
financial covenants to comfortable levels again, even taking into
consideration the additional tightening of covenant levels in


An upgrade over the next 12-18 months is rather unlikely, however
the ratings could be upgraded in case of (i) major further growth
of orders backlog and revenue combined with greater
diversification across geographies and sectors; (ii) sustainable
and meaningful improvement in operating margins and cash
generation, with particular regard to the generation of meaningful
free cash flows; as well as (iii) improved leverage, as evidenced
by a Debt/EBITDA ratio (as adjusted by Moody's) falling below 4.0x
on a sustainable basis; and (iv) interest coverage measured as
EBIT/ interest expense (as adjusted by Moody's) exceeding 3.5x.

The B1 ratings could be downgraded in case of (i) Debt/EBITDA (as
adjusted by Moody's) exceeding 5.0x; (ii) interest coverage
measured as EBIT/ interest expense (as adjusted by Moody's)
failing to remain above 2.5x; or the inability to generate
positive free cash flows (as adjusted by Moody's) net of
investments in and disposals of concessions. Also, a weakening of
the company's short term liquidity profile could result in a


EURASIAN BANK: S&P Lowers Counterparty Credit Rating to 'B'
Standard & Poor's Ratings Services lowered the long-term
counterparty credit rating on Kazakhstan-based JSC Eurasian Bank
to 'B' from 'B+'.  The outlook is stable.  S&P affirmed the short-
term counterparty credit rating at 'B'.

At the same time, S&P lowered the national scale rating on the
bank to 'kzBB' from 'kzBBB-'.

S&P also lowered its global scale ratings on Eurasian Bank's
nondefferable subordinated debt to 'CCC+' from 'B-' and S&P's
national scale ratings on this debt to 'kzB+' from 'kzBB'.

The downgrade stems from S&P's reassessment of Eurasian Bank's
risk position to moderate from adequate.  Despite significant
tightening of its credit approval rates since mid-2014 and
enhancement of collection procedures, the bank's loan portfolio
quality, in both corporate and retail segments, has markedly
deteriorated over 2015.  The level of nonperforming loans (NPLs;
loans overdue more than 90 days) increased to 11.1% of total loans
on Nov. 1, 2015 (under local standards), from 7.5% on
Jan. 1, 2015.  In addition, NPL coverage by loan loss provisions
decreased to a very low 52% from 73% on the same dates.  This
compares unfavorably with the sector average of 114% as of Nov. 1,
2015.  As a result, S&P thinks that Eurasian Bank will likely
counter this by raising its provisioning expenses going forward,
which will hinder its financial performance.

Under S&P's base-case scenario, it expects that Eurasian Bank's
risk-adjusted capital (RAC) ratio before adjustment for
concentration and diversification will be between 5.0% and 5.2% in
the next 12-18 months.  In November 2015 the bank received a
Kazakhstani tenge (KZT) 6 billion (about USD19.5 million) capital
injection, and it plans to consolidate Bank Pozitiv by the end of
this year, which will result in a capital gain of around KZT2.6
billion, under S&P's estimates.  Yet, S&P thinks that the elevated
credit costs that it estimates at about 3.5%-4.0% of total loans
annually in 2016-2017, compared with 2.5% on Oct. 1, 2015
(annualized metrics), and pressured net interest margin staying
around 6.0%-6.2% (down from 6.6% in 2014 and 7.8% in 2013) will
constrain the bank's profitability and capital ratios going

S&P continues to see the bank's business position as moderate,
reflecting the risks of its rapid expansion over the last few
years, tight capital policy, and still moderate market share.
That said, S&P notes that Eurasian Bank enjoys the benefits of the
established franchise, solid reputation in Kazakhstan, and
experienced management team.

S&P regards the bank's funding as average, reflecting its stable
funding ratio comfortably staying at 117% as of Oct. 1, 2015, and
funding base diversification that compares well with local peers.
S&P assess the bank's liquidity as adequate, with a cushion of
approximately 16% of total assets on Oct. 1, 2015.

The stable outlook on Eurasian Bank reflects S&P's expectation
that the bank's experienced management team will be able to
mitigate the pressure on the bank's financial results given the
depressed economic environment and constrained systemwide funding
in the Kazakh banking sector in the next 12-18 months.  While S&P
anticipates credit losses in 2016, it sees the capital injection
from shareholders as a buffer that will support the bank's
financial profile going forward.  In addition, although S&P
expects Eurasian Bank's NPLs to stay high at close to 10% of
overall loans, S&P considers that the advanced collection
processes will result in better recovery of its problem loans
compared with its expectations for most other Kazakh banks.  S&P
assumes in its base case that the bank's capitalization as
projected by S&P's RAC ratio before adjustment for concentration
and diversification will stay at 5.0%-5.2% in the next two years.

S&P would take a negative rating action if Eurasian Bank's
forecast RAC ratio fell below 5%.  This may result from the new
loan loss provisions markedly exceeding S&P's expectation of 3.5%-
4.0% of total loans per year over the next two years.  In S&P's
view, one of the key reasons for elevated credit costs going
forward is the bank's very low coverage of NPLs by provisions of
only 52% on Nov. 1, 2015.

A positive rating action is unlikely in the next 12-18 months
given the increasing economic and industry risks in the Kazakh
banking sector.


STAHL GOUP: Moody's Withdraws 'B2' Corporate Family Rating
Moody's Investors Service has withdrawn the B2 Corporate Family
Rating (CFR) and the B2-PD Probability of Default Rating (PDR) of
Stahl Group SA ('Stahl' or the 'Company'). Concurrently, Moody's
has withdrawn the provisional (P)B2 ratings of the proposed EUR
540 million-equivalent senior secured Term Loan B facility
denominated in USD and of the EUR 45 million-equivalent multi-
currency senior secured revolving credit facility assigned at
Dutch NewCo, a subsidiary of Stahl. The outlook on all ratings has
also been withdrawn.

The transaction the Company attempted in July 2015 did not
complete as expected, and therefore the bank facilities
contemplated in the transaction have never been issued / borrowed
by the Company.


Moody's has withdrawn the ratings because the transaction
contemplated last July did not complete and the expected
obligations related to the contemplated financing structure are
not outstanding.

Stahl is one of the leading global suppliers of chemical solutions
for leather processing as well as performance coatings and
polymers for all kinds of substrates. It has a leading position in
leather chemicals ("LC") with number one global market share
position and a strong position in a few niche performance coating
("PC") segments. In April 2014, Stahl completed the acquisition of
the Clariant Leather Services Business ('CLS'). The acquisition
enabled Stahl to cover the full leather production value chain
with a wider specialty chemicals portfolio. Stahl is owned by
Wendel SE, an investment company which entered into Stahl jointly
with Carlyle's private equity funds in 2006, and in 2010 become
the main reference shareholder, after supporting the Company with
an equity infusion. In 2014, Stahl generated sales of EUR598m,
pro-forma for the acquisition of CLS.


LEOPARD CLO II: S&P Lowers Rating on Class D Notes to CC
Standard & Poor's Ratings Services raised its credit rating on
Leopard CLO II B.V.'s class B notes.  At the same time, S&P has
lowered its ratings on the class C and D notes.

The rating actions follow S&P's assessment of the transaction's
performance using data from the Oct. 15, 2015 trustee report.

Upon publishing S&P's updated corporate collateralized debt
obligation (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.

Leopard CLO II's senior A-1 and A-2 notes have fully amortized
since the end of the transaction's reinvestment period, while the
class B notes have partially amortized.  As most of the capital
structure has deleveraged, there are only eight performing
obligors in the pool, leading to increased portfolio concentration
and thereby potential dilution of available credit protection to
the rated notes by the performance of individual obligors.  The
largest obligor represents 29.0% of the aggregate portfolio
balance, with the average exposure to each obligor at 12.50%.

Since S&P's Nov. 20, 2013 review, the aggregate collateral balance
has decreased by approximately 76.7% to EUR18.9 million from
EUR81.5 million.

"We have subjected the transaction's capital structure to a cash
flow analysis to determine the break-even default rates (BDRs) for
each rated class of notes at each rating level.  The BDR
represents our estimate of the maximum level of gross defaults,
based on our stress assumptions, that a tranche can withstand and
still fully repay the noteholders.  In our analysis, we used the
portfolio balance that we consider to be performing
(EUR18,974,810), the current weighted-average spread (3.16%), the
principal cash balance (EUR14,723), and the weighted-average
recovery rates calculated in line with our corporate CDO criteria.
We applied various cash flow stresses, using our standard default
patterns, in conjunction with different interest rate and currency
stress scenarios.  We also biased defaults towards assets with
highest spread and lowest base-case recoveries to address the
lumpy nature of the portfolio," S&P said.

About 35.0% of the portfolio will mature after the notes' legal
final maturity date (April 7, 2019).  In S&P's view, this exposes
the transaction to market value risk as the manager will need to
sell the assets ahead of the maturity date to repay the
transaction's liabilities.  To address this risk in S&P's
analysis, it reduced the balance of these assets in line with its
corporate CDO criteria to address any market value risk associated
with the sale of these assets.

The available credit enhancement for the class B notes has
increased significantly due to the transaction's structural
deleveraging post its re-investment period.  The class B notes,
which are the senior most class of notes outstanding, have
amortized by EUR19.84 million since S&P's previous review and
currently have a note factor of 9.78%.  The upgrade of this class
of notes is mainly driven by the increased available credit

The proportion of assets rated in the 'CCC' category ('CCC+',
'CCC', or 'CCC-') has decreased since S&P's previous review.
There are currently no defaulted assets in the portfolio, compared
with 5.89% in S&P's previous review.  The weighted-average spread
earned on the assets has decreased to 316 basis points (bps) from
358 bps over the same period.  The class B coverage tests comply
with the documented required triggers, while both the par-value
and interest coverage tests for the class C and D notes are
failing.  As a result, both the class C and D notes are currently
deferring interest.  The deferred interest is added to the
outstanding principal balance of the notes (and accrues interest),
thereby eroding the overcollateralization for the notes, even if
there are no defaults in the portfolio.

In S&P's opinion, the increased available credit enhancement for
the class B notes is now commensurate with a higher rating than
currently assigned.  S&P has therefore raised to 'A- (sf)' from
'BB+ (sf)' its rating on this class of notes.

S&P's analysis indicates that the available credit enhancement for
the class C notes is commensurate with a lower rating than
currently assigned.  The class C par coverage test is well below
100%, the notes are deferring interest, and the repayment of
principal on the notes will be determined by the market value of
the assets that are scheduled to mature after the notes' legal
final maturity.  In line with S&P's criteria for assigning 'CCC+',
'CCC', 'CCC-', and 'CC' ratings, S&P has lowered to 'CCC- (sf)'
from 'CCC+ (sf)' S&P's rating on the class C notes.

S&P has lowered to 'CC (sf)' from 'CCC- (sf)' its rating on the
class D notes as the notes are significantly under-collateralized.
In S&P's view, a payment default on the notes at their legal final
maturity seems highly likely.

Leopard CLO II is a managed cash flow collateralized loan
obligation (CLO) transaction that securitizes loans to primarily
European speculative-grade corporate firms.  The transaction
closed in April 2004 and is managed by M&G Investment Management


Class              Rating
            To               From

Leopard CLO II B.V.
EUR400 Million Floating-Rate Notes

Rating Raised

B            A- (sf)         BB+ (sf)

Ratings Lowered

C            CCC- (sf)       CCC (sf)
D            CC (sf)         CCC- (sf)

QUEEN STREET II: Moody's Affirms Ba3(sf) Rating on Class E Debt
Moody's Investors Service announced that it has taken rating
actions on the following classes of notes issued by Queen Street

-- EUR239.4M (current balance of EUR 28.2M) Class A1 Senior
    Secured Floating Rate Notes due 2024, Affirmed Aaa (sf);
    previously on Feb 16, 2015 Affirmed Aaa (sf)

-- EUR59.85M Class A2 Senior Secured Floating Rate Notes due
    2024, Affirmed Aaa (sf); previously on Feb 16, 2015 Affirmed
    Aaa (sf)

-- EUR34.9M Class B Senior Secured Floating Rate Notes due 2024,
    Affirmed Aaa (sf); previously on Feb 16, 2015 Affirmed Aaa

-- EUR38.25M Class C Senior Secured Deferrable Floating Rate
    Notes due 2024, Upgraded to Aa2 (sf); previously on Feb 16,
    2015 Upgraded to A1 (sf)

-- EUR16.875M Class D Senior Secured Deferrable Floating Rate
    Notes due 2024, Upgraded to Baa1 (sf); previously on Feb 16,
    2015 Upgraded to Baa2 (sf)

-- EUR18M Class E Senior Secured Deferrable Floating Rate Notes
    due 2024, Affirmed Ba3 (sf); previously on Feb 16, 2015
    Ba3 (sf)

Queen Street CLO II B.V., issued in June 2007, is a collateralised
loan obligation (CLO) backed by a portfolio of mostly high-yield
senior secured European loans managed by Ares Management Limited.
The transaction's reinvestment period ended in August 2013.


According to Moody's, the rating actions taken on the notes are
the result of deleveraging on the last two payment dates.

Class A1 notes have paid down by approximately EUR86.6 million
(36.3% of closing balance) on the February and August 2015 payment
dates, as a result of which over-collateralization (OC) ratios of
senior classes of notes have increased significantly. As per the
trustee report dated October 2015, Class A/B, Class C, Class D,
and Class E OC ratios are reported at 175.56%, 133.89%, 121.20%,
and 110.07% compared to January 2015 levels of 144.32%, 122.04%,
114.25%, and 106.98%.respectively.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analyzed the underlying collateral pool as having a
performing par and principal proceeds of EUR216.20 million,
defaulted par of EUR2.24 million, a weighted average default
probability of 21.88% (consistent with a WARF of 2903 over a
weighted average life of 4.88 years), a weighted average recovery
rate upon default of 47.43% for a Aaa liability target rating, a
diversity score of 29 and a weighted average spread of 3.59%.

The default probability derives from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool. The estimated average recovery rate on future
defaults is based primarily on the seniority of the assets in the
collateral pool. Moody's generally applies recovery rates for CLO
securities as published in "Moody's Approach to Rating SF CDOS".
In some cases, alternative recovery assumptions may be considered
based on the specifics of the analysis of the CLO transaction. In
each case, historical and market performance and a collateral
manager's latitude to trade collateral are also relevant factors

Moody's incorporates these default and recovery characteristics of
the collateral pool into its cash flow model analysis, subjecting
them to stresses as a function of the target rating of each CLO
liability it is analyzing.

Moody's notes that after this analysis was completed, the November
2015 trustee report has been issued. There is no material change
in key portfolio metrics such as WARF, diversity score, and
weighted average spread as well as OC ratios for Classes A/B, C,
D, and E from their October 2015 levels.
Factors that would lead to an upgrade or downgrade of the rating:

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it assumed a lower weighted average recovery rate for
the portfolio. Moody's ran a model in which it reduced the
weighted average recovery rate by 5%; the model generated outputs
that unchanged from the base case results for Classes A1, A2, and
B, and within one to two notches of the base-case results for
Classes C, D and E.

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

Additional uncertainty about performance is due to the following:

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

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

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


CIECH SA: Moody's Hikes Corporate Family Rating to 'Ba3'
Moody's Investors Service has upgraded the corporate family rating
(CFR) of Ciech SA (Ciech, or the company) to Ba3 from B1 and
withdrawn the B1-PD probability of default rating. The outlook is
revised to positive from stable.


The upgrade follows the company's good performance in 2014 and so
far in 2015, with improvements in EBITDA margins and retained cash
flow generation above Moody's previous expectations, and the
refinancing of Ciech's EUR245 million senior secured notes with a
larger PLN1.3 billion term loan, but significantly lower interest
rate, as well as a new upsized PLN250 million revolving credit
facility (RCF). In total Moody's expects this new debt provides
all the necessary financing for the company to complete its major
capital expenditure program for the period up to the end of 2016.
The favorable results were driven by the increased volumes and
price of soda ash and reduced raw material and energy prices, with
2014 benefitting from increased sales of plant protection
chemicals, although this has reversed in 2015.

Consequently, for FY2014, Moody's adjusted EBITDA margin improved
to 14.6% and for the last-twelve-months (LTM) ended September 2015
was 18.4%. Additionally, debt/EBITDA declined to 2.7x in FY2014
and was 2.2x for the LTM ended September 2015 with retained cash
flow/debt of 34.1% (ratios adjusted with Moody's standard
adjustments). These credit metrics are significantly better than
Moody's previous expectations and more appropriate for a Ba3
rating and position the company strongly in the rating category.

The rating action also incorporates Moody's view that current
profitability levels will be at least maintained throughout the
next 12-18 months, supported by trends in the soda ash market,
including Ciech's own capacity expansion and favorable raw
material and energy pricing. However, the company has a large
capital expenditure program that Moody's expects will result in
negligible free cash flow in 2016.

The Ba3 CFR reflects Ciech's (i) solid position as the largest
regional producer of soda ash in Central Europe with production
facilities in Poland, Germany and Romania; (ii) low leverage that
Moody's expects to remain below 2.5x and strong retained cash flow
generation expected to remain above 25% of debt; (iii) low-cost
production capabilities, as well as the improved energy efficiency
at the company's Polish facilities. This is particularly important
given the coal-based production at the company's largest site;
(iv) competitive position is also supported by established supply
relationships with leading glass producers in the region and high
transportation costs, relative to the cost of production, which
mitigate competitive pressures from foreign suppliers and support
solid operating margins; (v) improving soda ash market and delays
in Turkish trona capacities coming to market until at least
2017/2018; and (vi) a Supervisory Board that has agreed a five-
year plan targeting a reported leverage of below 1.0x by 2019,
subject to the capital expenditure plan assumed by the strategy.

The rating also factors in Ciech's (i) small scale with revenues
of only PLN3 billion and significant exposure to cyclical end
markets such as the construction and automotive industries; (ii)
volatility in energy prices and growing cost emissions rights;
(iii) high capital expenditure in 2015 and expected in 2016 which
pressure free cash flow generation; (iv) weak performance in the
non-core organic segment (particularly the epoxy resins) and in
crop protection chemicals so far in 2015; (v) competition within
the soda ash market, particularly for its Romanian plant and (vi)
exposure to FX fluctuation: depreciation of EUR against PLN would
hinder the group's exports.

Moody's views Ciech's liquidity as good over the next 12-18
months. As of 30 September 2015, and pro forma for its recent
refinancing, the company had PLN224 million cash on balance sheet
and full availability under a new PLN250 million revolving credit
facility that expires in five years. Moody's expects negligible
free cash flow over the next 12-18 months due to the large capital
expenditure expected until the end of 2016 as well as the payment
of dividends that the rating agency expects to resume in 2016.
Covenants on the new debt are set at 4.0x net leverage and Moody's
expects the company to have substantial headroom going forward.


The positive outlook reflects the fact that Ciech is strongly
positioned in the Ba3 rating category and is based on Moody's
expectation of continued deleveraging and positive cash generation
in 2016 driven by a supportive soda ash market. It also assumes
successful completion of the company's capital expenditure program
in 2016.


The rating could be upgraded if Ciech executes its capex program
and deleverages further, so that adjusted Debt/EBITDA decreases
below 2.0x and retained cash flow/debt is maintained above 25%,
whilst maintaining good liquidity and EBITDA over PLN750 million
or significantly increases its non-soda segment sales and EBITDA.
Conversely, negative rating pressure could develop if the
conditions for a positive outlook are not being met. The rating
could then be downgraded if any deviations from our outlined
expectations occur, with weaker operating performance leading to
adjusted Debt/EBITDA above 3.0x, the company pursues a more
aggressive financial policy or liquidity deteriorates.

COGNOR SA: S&P Lowers CCR to 'CC', Outlook Negative
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on Polish steel producer Cognor S.A. to 'CC' from
'CCC+' and affirmed the short-term rating at 'C'.  The outlook is

At the same time, S&P lowered its issue rating on the EUR100
million senior secured notes due 2020 to 'CC' from 'CCC+'.  S&P
also lowered its issue rating on the EUR25 million highly
subordinated exchangeable notes due 2021 to 'C' from 'CCC-'.

The downgrade reflects Cognor's announcement that it is proposing
a tender offer for the senior secured notes due 2020.  This is a
modified Dutch auction process in which bondholders get to offer a
purchase price within the range of EUR48-EUR60 per EUR100 nominal
amount.  S&P considers the exchange offer to be distressed, as
defined in its criteria, since the expected cash value will be
materially less than the original par amount.  S&P also takes into
account the current poor credit standing of the company,
reflecting its challenging operating performance, vulnerable
business risk profile, and highly leveraged capital structure.

S&P understands, nevertheless, that the transaction is at
management's initiative because the notes are not due prior to
2020, and that the company will fund internally the repurchase of
a portion only of the total outstanding notes.  The company has
indicated that it will consider maximum available funds of
EUR10 million for the transaction, which would correspond to a
maximum 20% redemption of the total outstanding nominal, should
these notes be tendered at the lowest proposed purchase price.
The company intends to fund the transaction with free cash flow in
the fourth quarter that it expects to benefit from favorable
working capital developments on lower scrap prices; available cash
on hand, which stood at Polish zloty (PLN) 14 million (about
EUR3 million) at end-September 2015; and potential drawing under
its recently renewed factoring lines, which were upsized to
PLN200 million, according to management, and are non-recourse to
the company's receivables.

S&P will review the rating after the transaction is completed
based on its final terms, and the company operates under its new
capital structure.

S&P aligns the issue rating on the senior secured notes with the
corporate credit rating on Cognor, and will rate them 'D' after
the transaction takes place.  The issue rating on the exchangeable
notes is 'C', below the corporate credit rating, reflecting the
notes' subordination.  S&P do not have a recovery analysis for the
Polish jurisdiction.

The negative outlook reflects that S&P will lower the issuer
credit rating to 'SD' over the course of the proposed exchange


ASTRA ASIGURARI: Insurance Fund Approves Payout of 100 Claims
------------------------------------------------------------- reports that only 100 people who held
outstanding insurance policies at Astra Asigurari, which filed for
bankruptcy at the end of August, received the approval of the
Insurance Guarantee Fund on their claims files.

However, a total of 57,200 claims files are waiting the
institution's approval, notes.

The Bucharest Court confirmed the bankruptcy of Astra Asigurari
last week, but its decision is not final,
states.  The Insurance Guarantee Fund, however, needs a final
court decision to start making payments to the insured, Romania- relays, citing local

According to, to get their money, people first
need to make a request to the Fund, which will later analyze it.
The Insurance Guarantee Fund received about 7,500 new claims from
Astra's clients by Dec. 3, discloses.

Astra Asigurari lost its license and went bankrupt, following a
decision of the financial market regulator ASF, Romania- recounts.  Once the court decides the company's
bankruptcy, its clients will be compensated by the Insurance
Guarantee Fund, says.

Astra Asigurari is a Romanian insurance company.


ALJBA ALLIANCE: S&P Affirms 'B/B' Counterparty Credit Ratings
Standard & Poor's Ratings Services said that it had assigned its
'ruBBB+' Russia national scale rating to Russia-based Aljba

At the same time, S&P affirmed its 'B/B' long- and short-term
counterparty credit ratings on Aljba Alliance and its core
subsidiary SL Capital Services Ltd.  The outlook on both entities
is negative.

S&P's long-term rating on Aljba Alliance reflects the bank's weak
business position in view of its very small domestic franchise
with assets of about $125 million as of Sept. 30, 2015, and its
niche strategy of providing commercial banking and brokerage
services to a limited number of high-net-worth individuals.

S&P considers the bank's conservative capital management and its
moderate rate of expansion over the cycle to be major strengths
for the rating, resulting in S&P's strong assessment of the bank's
capital and earnings.  S&P forecasts that Aljba's risk-adjusted
capital (RAC) ratio will stay above 10% in 2015-2016.  The RAC
ratio stood at 10.6% on Dec. 31, 2014.

The bank's moderate risk position balances the bank's highly
concentrated lending book against management's solid knowledge of
its customers, very selective approach to lending, and notably
stronger asset quality than the banking system average.  S&P
expects Aljba Alliance's asset quality and provisioning to remain
better than the system average.  Nonperforming loans (NPLs; loans
more than 90 days overdue) were stable at 1.1% of total loans as
of Sept. 30, 2015, against 1.4% as of Dec. 31, 2014.  Provisions
according to International Financial Reporting Standards are
substantial at 5.7% as of June 30, 2015, and S&P expects them to
increase in 2015-2016, reflecting difficult operating conditions.

S&P views the bank's funding as average, reflecting a
concentrated, but historically stable, relationship-driven
depositor base, and a strong stable funding ratio above 155% over
the past four and a half years.  The bank is funded predominantly
by large customer deposits.

S&P views Aljba Alliance's liquidity as adequate, balancing a
higher share of liquid assets and a lower level of short-term
wholesale debt than the average in the Russian banking system
against tightened liquidity in the Russian banking system, against
our expectations of some deposit outflows at the bank and possible
increasing foreign currency asset and liability mismatches.

The long-term rating on Aljba Alliance is at the level of its
stand-alone credit profile (SACP) because S&P considers the bank
to be have low systemic importance and do not take into account
any potential support to the bank from the Russian government.

The ratings on Cyprus-registered S.L. Capital Services reflect its
core status within the Aljba Alliance group.  Aljba Alliance owns
100% of S.L. Capital Services, which is the group's booking center
for proprietary securities investments and client-driven
brokerage. S.L. Capital Services' business, operations, and
strategy are highly integrated with those of the group.

The negative outlook on the long-term counterparty credit rating
reflects S&P's expectations that Aljba Alliance's asset quality,
profitability, and capitalization will continue to be under
growing pressure over the next 12 months as Russia's economic
environment continues to deteriorate.

S&P could lower the rating in the next 12 months if the economy
further weakens, making operating conditions even more difficult
for Russian banks.  These risks could substantially weaken Aljba
Alliance's profits and capitalization.

S&P would consider revising the outlook to stable if operating
conditions for the sector as a whole even out, notably with
stabilization of economic and industry risk trends.  To take such
a decision, S&P would also need to see that Aljba Alliance was
able to maintain its strong capital buffers, solid asset quality,
and adequate liquidity.

RUSSIA: Moody's Affirms Ba1 Gov't Bond Rating, Outlook Stable
Moody's Investors Service has changed the outlook on Russia's Ba1
government bond rating to stable from negative. At the same time,
Moody's has affirmed Russia's government bond rating at Ba1/Not
Prime (NP).

The key drivers for the decision to change the rating outlook to
stable from negative are the following:

1. The stabilization of Russia's external finances, resulting from
   a macroeconomic adjustment that has helped to mitigate the
   effect of the fall in oil prices on official FX reserves.

2. The diminished likelihood of the Russian economy or finances
   facing a further intense shock in the next 12-18 months, such
   as from additional international sanctions given some easing of
   the conflict in eastern Ukraine.

Moody's says the decision to affirm Russia's current Ba1 rating
acknowledges the government's very high fiscal strength tempered
by the erosion of its savings buffers due to persistently low oil
prices. Moreover, the country's structurally weak growth potential
remains an important rating constraint. Overreliance on the oil
and gas industry makes the economy vulnerable to shocks to that
sector, and to its highly cyclical nature. While this dependence
is not new, the likelihood that oil prices will stay low for
several more years significantly constrains the government's room
for budgetary maneuver.

Russia's country ceilings remain unchanged at Ba1/NP (foreign
currency bonds), Ba2/NP (foreign currency bank deposits) and Baa3
(long-term local currency debt and deposits).


First driver: continued stabilization in the country's external

The first driver for changing the rating outlook to stable from
negative is Moody's expectation that Russia's external financial
position will remain relatively robust despite ongoing pressures
on public and external finances exerted by weak oil and gas
prices. The negative effect of low oil prices, in addition to the
sanctions-related impact of the Ukraine conflict, on Russia's
foreign exchange reserves this year has not been as severe as
Moody's initially expected due to a combination of macro policy
adjustments that helped mitigate the shocks.

The resilience of official foreign exchange reserves was partly
due to the introduction of the floating exchange rate in November
2014, and the steep depreciation of the ruble exchange rate which
that permitted. FX reserves have dropped by USD20 billion to about
USD308 billion between the end of 2014 and October 31, 2015, a
much smaller decline than the losses Moody's had anticipated and a
significant contrast to the USD129 billion drop in reserves that
occurred in 2014.

Although the government is drawing down its accumulated savings in
its Reserve Fund in order to finance the budget deficit this year,
in an amount expected to reach RUB2.6 trillion (USD40 billion),
the withdrawals from its deposits at the central bank have been
made almost entirely in rubles. So, while the government's savings
are being depleted, the official foreign exchange reserves have
been left largely intact.

As regards Russia's external liabilities, Moody's notes that a
steep fall in imports as a consequence of constrained household
finances and a plunge in investment spending meant that the
current account surplus largely covered external debt repayments
made by the government, banks and corporate issuers in the first
nine months of 2015. As a consequence, gross external debt
declined by USD77 billion in the period (and more than USD200
billion since external debt peaked in June 2014), further reducing
refinancing risks facing Russian corporates and banks.

Second driver: diminished likelihood of a further shock, e.g. from
tighter international sanctions

The second driver for changing the rating outlook to stable is
that the likelihood of a further economic or financial shock has
diminished relative to earlier in the year. In particular, the
relative stability in eastern Ukraine suggests a lower likelihood
of sanctions being tightened as a consequence of that conflict in
the near future. Tensions in the region have lessened
significantly and, as per the Minsk II agreement, local elections
are scheduled to take place in the contested regions early in 2016
after being held elsewhere in Ukraine in October (and in November
in Mariupol, the port city close to the contested eastern
regions). At the same time, we do not expect existing sanctions to
be loosened or removed until such time that the parties involved
in the conflict demonstrate their willingness to abide by the
terms of Minsk II for a sustained period of time, especially with
Crimea's status remaining a potentially insoluble impediment to
any final resolution of the impasse between Ukraine and Russia.


Moody's assessment of Russia's creditworthiness balances very
strong although weakening government finances against low growth
potential, weak institutional strength and still elevated
geopolitical risks. Russia has a low level of general government
gross debt, which Moody's estimates at 19% of GDP as of year end
2015, combined with the presence of substantial accumulated
financial assets. However, the government balance sheet is
weakening as the authorities are using significant amounts of
fiscal reserves to finance wider government budget deficits and,
to a lesser extent, to support local companies and banks. The
government projects that the Reserve Fund and the eligible portion
of the National Welfare Fund will be fully depleted by the end of

The uncertainty surrounding the economic situation, including the
oil price, led the government to drop formal medium-term budget
planning temporarily. The authorities intend to introduce a
revised fiscal rule before formulating the next three-year budget
framework, which if approved would base revenue forecasts on lower
average oil prices and provide for rebuilding fiscal reserves
should oil prices subsequently recover.

The affirmation of Russia's Ba1 government bond rating also
reflects the country's increasingly limited growth potential, a
key rating constraint. Overreliance on the oil and gas industry
makes the economy vulnerable to shocks to that sector, and to its
highly cyclical nature, which creates significant economic
distortions regardless of whether prices are elevated or low.
While this dependence is not new, the likelihood that oil prices
will stay low for several more years during a period in which we
expect to see the government's financial assets largely depleted,
significantly constrains the room for budgetary maneuver.

Moreover, the dominant oil and gas sector has limited room to
expand capacity due to the lack of sufficient investment over a
number of years. The international sanctions make investment
capital more scarce, so that companies must rely on their own
funds or in some cases, assistance from the government. The
sanctions also prevent Russian companies from obtaining advanced
technology to explore for oil offshore and other areas that are
more difficult to reach, which will be needed if the anticipated
decline in oil output is to be reversed.

Against this backdrop, we expect Russia's growth will remain
modest even when the economy starts to recover. The economy's
potential growth rate is estimated at only 1%-1.5%, constrained by
declining oil output capacity, underinvestment, fiscal
consolidation and highly indebted households. The one-off boost
from net exports in 2015 is not expected to recur, since it was
driven by a sharp contraction in imports, so further support from
this source is unlikely. Finally, the availability of investment
capital and technology transfer will be limited as long as
sanctions remain in place.


Moody's would consider a positive outlook on Russia's government
bond rating should the government's fiscal consolidation and
structural reform plans be advanced, enhancing growth and limiting
the risk of further depletion of its financial assets. The rating
agency said other positive rating developments would come from a
further diminution of Russia's exposure to financial or economic
shocks, such as might be expected were there to be further
progress on resolving the Ukraine conflict such that international
sanctions were loosened or removed.

Moody's says that Russia's government bond ratings would come
under negative pressure should volatile macroeconomic and
financial market conditions return or if progress on fiscal
consolidation and structural reforms does not take place. In
addition, the rating agency says it might downgrade the rating if
the military conflict in Ukraine were to escalate and result in
the introduction of additional sanctions, which would undermine
Russia's economic strength. Finally, actions that create greater
uncertainty around the government's capacity or willingness to
continue to service its debt would most likely put negative
pressure on the rating.

GDP per capita (PPP basis, US$): 24,449 (2014 Actual) (also known
as Per Capita Income)

Real GDP growth (% change): 0.6% (2014 Actual) (also known as GDP

Inflation Rate (CPI, % change Dec/Dec): 11.4% (2014 Actual)

Gen. Gov. Financial Balance/GDP: -1.2% (2014 Actual) (also known
as Fiscal Balance)

Current Account Balance/GDP: 3.1% (2014 Actual) (also known as
External Balance)

External debt/GDP: 32.2% (2014 Actual)

Level of economic development: Moderate level of economic

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

On November 30, 2015, a rating committee was called to discuss the
rating of the Russia, Government of. The main points raised during
the discussion were: The issuer has become less susceptible to
event risks and the country's external finances are expected to
continue to stabilize. The likelihood of tougher international
sanctions diminished.

Outlook Actions:

Issuer: Russia, Government of

-- Outlook, Changed To Stable From Negative


Issuer: Russia, Government of

-- Issuer Rating (Foreign Currency), Affirmed Ba1

-- Issuer Rating (Local Currency), Affirmed Ba1

-- Short-Term Issuer Rating (Local Currency), Affirmed NP

-- Senior Unsecured Regular Bond/Debenture (Local Currency),
    Affirmed Ba1

-- Senior Unsecured Regular Bond/Debenture (Foreign Currency),
    Affirmed Ba1

RUSSIA: Moody's Changes Outlook on 9 Sub-Sovereigns to Stable
Moody's Investors Service has changed to stable from negative the
outlooks on the ratings of 6 regional and local governments (RLGs)
in Russia and 3 government-related issuers (GRIs), reflecting the
improvement in systemic risk.  At the same time, it has affirmed
the ratings of these 9 issuers.

Concurrently, Moody's has affirmed the ratings of 10 Russian
regions and 3 cities with negative outlooks.

These rating actions follow the stabilization of Russia's credit
profile as captured by Moody's change of outlook to stable from
negative on Russia's government bond rating (Ba1) on 3 December

Specifically, Moody's has affirmed the ratings of and changed the
outlook to stable on the City of Moscow, City of St. Petersburg,
SUE Vodokanal of St. Petersburg and OOO Vodokanal Finance, OJSC
Western High-Speed Diameter, Republic of Bashkortostan, Republic
of Tatarstan, Autonomous-Okrug (region) of Khanty-Mansiysk and
Moscow Oblast.

Conversely, the ratings of the following regions were affirmed
with negative outlooks due to their vulnerability to negative
macroeconomic and financial pressure stemming from the operating
environment: Samara Oblast, Chuvashia Republic, Oblast of Omsk,
Republic of Komi, Krasnodar Krai, Krasnoyarsk Krai, Belgorod
Oblast, Oblast of Nizhniy Novgorod, Republic of Mordovia, Vologda
Oblast, City of Krasnodar, City of Omsk and City of Volgograd.



The outlook change to stable from negative and affirmations on the
ratings of City of Moscow, City of St. Petersburg, Republic of
Bashkortostan, Republic of Tatarstan, Autonomous-Okrug (region) of
Khanty-Mansiysk and Moscow Oblast follows the strengthening of
Russia's credit profile, as captured in the rating action on 3
Dec. 2015.  It reflects the strong linkages between the Russian
government and the 6 RLGs through institutional, financial and
macroeconomic linkages.  Moody's believes that these entities are
able to maintain an adequate fiscal performance despite the still
weak economy, thanks to their: (1) low or moderate level of market
debt; (2) consistently adequate or strong budgetary performance;
(3) relative stability of revenue streams due to strong local
economies; (4) moderate to low refinancing risks.

The affirmation of the issuer ratings with stable outlooks of SUE
Vodokanal of St. Petersburg, the senior unsecured rating of OOO
Vodokanal Finance, and senior unsecured rating of OJSC Western
High-Speed Diameter reflects their status as GRIs fully owned by
the St. Petersburg government and their strong credit linkages
with the City of St. Petersburg.

The affirmation of OJSC Western High-Speed Diameter's bond rating
with stable outlook reflects its link with the City of St.
Petersburg and the guarantee that the Russian government provides
on its bond principal payments.


The affirmation of the ratings with negative outlooks of 13 RLGs
(Samara Oblast, Chuvashia Republic, Oblast of Omsk, Republic of
Komi, Krasnodar Krai, Krasnoyarsk Krai, Belgorod Oblast, Oblast of
Nizhniy Novgorod, Republic of Mordovia, Vologda Oblast, City of
Krasnodar, City of Omsk and City of Volgograd) reflects their
relative weaknesses in their rating categories.  For these
entities Moody's expects intensifying pressure on revenue growth
while growing expenses (albeit at a slower pace) will make it
challenging to maintain balanced budgets, and will likely cause
their debt burdens to increase.  Financial markets which lack
stability and higher borrowing costs expose regions to some
refinancing and liquidity risks.

Pressure from refinancing risks has partially abated as soft loans
from the central government continue to ease the regions'
refinancing needs.  Debt affordability remains adequate and is
supported by ongoing lending from state-owned banks.


Entities with a stable outlook could experience upward rating
pressure in case of upward changes in the sovereign rating,
provided their budget performances do not deteriorate.  For
Russian RLGs with negative outlooks an improvement in their
performance leading to the stabilization of their debt burden and
a decline in refinancing risks could exert upward rating pressure.
Deterioration in the sovereign's credit quality, and/or
deterioration in the credit profiles of sub-sovereigns, could
exert downward pressure.



Moscow, City of: the issuer rating and backed senior unsecured
rating of Ba1 affirmed, outlook changed to stable.

St. Petersburg, City of: the issuer rating and senior unsecured
rating of Ba1 affirmed, outlook changed to stable.

SUE Vodokanal of St. Petersburg: the issuer rating of Ba2
affirmed, outlook changed to stable.

OOO Vodokanal Finance: the backed senior unsecured rating of Ba2
affirmed, outlook changed to stable.

OJSC Western High-Speed Diameter: the backed senior unsecured
rating of Ba3 affirmed, outlook changed to stable.

Bashkortostan, Republic of: issuer rating of Ba2 affirmed, outlook
changed to stable.

Tatarstan, Republic of: issuer rating of Ba2 affirmed, outlook
changed to stable.

Khanty-Mansiysk AO: issuer rating of Ba2 affirmed, outlook changed
to stable.

Moscow, Oblast of: issuer rating of Ba2 affirmed, outlook changed
to stable.


Samara, Oblast of: issuer rating of Ba3 affirmed, outlook

Chuvashia, Republic of: issuer rating and senior unsecured rating
of Ba3 affirmed, outlook negative.

Omsk, Oblast of: issuer rating of Ba3 affirmed, outlook negative.

Komi, Republic of: issuer rating of B1 affirmed, outlook negative.

Krasnodar, Krai of: issuer rating and senior unsecured rating of
B1 affirmed, outlook negative.

Krasnoyarsk, Krai of: issuer rating of B1 affirmed, outlook

Belgorod, Oblast of: issuer rating and senior unsecured rating of
B1 affirmed, outlook negative.

Nizhniy Novgorod, Oblast of: issuer rating of B1 affirmed, outlook

Krasnodar, City of: issuer rating of B1 affirmed, outlook

Omsk, City of: issuer rating of B1 affirmed, outlook negative.

Mordovia, Republic of: issuer rating and senior unsecured rating
of B2 affirmed, outlook negative.

Vologda, Oblast of: issuer rating of B2 affirmed, outlook

Volgograd, City of: issuer rating of B2 affirmed, outlook

The specific economic indicators, as required by EU regulation,
are not available for these entities.  These national economic
indicators are relevant to the sovereign rating, which was used as
an input to this credit rating action.

Sovereign Issuer: Russia, Government of

  GDP per capita (PPP basis, US$): 24,449 (2014 Actual) (also
   known as Per Capita Income)

  Real GDP growth (% change): 0.6% (2014 Actual) (also known as
   GDP Growth)

  Inflation Rate (CPI, % change Dec/Dec): 11.4% (2014 Actual)
   Gen. Gov. Financial Balance/GDP: -1.2% (2014 Actual) (also
   known as Fiscal Balance)

  Current Account Balance/GDP: 3.1% (2014 Actual) (also known as
   External Balance)

  External debt/GDP: 32.2% (2014 Actual)

  Level of economic development: Moderate level of economic

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

On Dec. 2, 2015, a rating committee was called to discuss the
ratings of the Russian sub-sovereign entities.  The main points
raised during the discussion were: The systemic risk in which the
issuers operate has decreased affecting some entities.

The principal methodology used in rating Russia RLGs was Regional
and Local Governments published in January 2013.  The principal
methodology used in rating Russia GRIs was Government-Related
Issuers published in October 2014.

SVIAZ-BANK: S&P Puts BB- Counterparty Credit Rating on Watch Neg.
Standard & Poor's Ratings Services placed its 'BB-' long-term
counterparty credit rating and 'ruAA-' Russia national scale
rating on Russia-based Sviaz-Bank on CreditWatch with negative

The CreditWatch placement reflects S&P's view of uncertainty
regarding the future capacity and willingness of Sviaz-Bank's main
shareholder, Vnesheconombank (VEB), to support the bank.  If
parent support decreases, S&P could see further deterioration in
Sviaz-Bank's stand-alone credit profile (SACP) in the next 12-18
months.  The uncertainty follows the ongoing discussion of the
government support program for VEB, within which VEB may dispose
of some assets that don't fit into its long-term strategy,
including Sviaz-Bank.  Still, S&P takes into account these:

   -- The divestment of Sviaz-bank is only possible with
      government approval because of VEB's special role as a
      government development group;

   -- For the time being and in the event of financial distress
      at Sviaz-Bank, S&P thinks VEB will likely continue
      providing liquidity, capital, or risk transfers to
      Sviaz-Bank in most foreseeable circumstances; and

   -- If the government approves the sale, Sviaz-bank will likely
      be sold to another government-related entity or a
      commercial bank that could provide the bank support similar
      to VEB's.

S&P's ratings on Sviaz-Bank continue incorporating S&P's view of
it as a strategically important subsidiary of VEB, as well as
S&P's view of the bank's moderate systemic importance for the
Russian banking sector.  However, S&P might revise its assessment
of the bank's status within the VEB group if S&P observes an
increasingly limited ability to provide support to the bank.
Support could decrease because of VEB's own financial constraints,
its potential sale of Sviaz-Bank, or if support from the bank's
potential acquirer is less than what VEB currently provides.

Moreover, S&P thinks that Sviaz-Bank might face challenges in
building capital internally, given its low earnings capacity.  S&P
forecasts its risk-adjusted capital (RAC) ratio (before
adjustments for diversification) for the bank within the 3.0%-3.5%
range in the next 12-24 months.  However, due to deteriorating
asset quality and increasing credit costs, which S&P currently
forecasts in the 1.7%-2.5% bracket, the bank's capitalization will
largely depend on its main shareholder's commitment to provide
support.  In the first 10 months of 2015, Sviaz-Bank posted a net
loss of Russian ruble (RUB) 7.8 billion (US$120 million) (based on
Russian generally accepted accounting principles) and will likely
report a loss in full-year 2015.

S&P aims to resolve the CreditWatch within the next three months,
when it has greater clarity on the government support program for
VEB, the group's restructuring, as well as a potential new
ownership structure for Sviaz-Bank.

S&P could lower its ratings on Sviaz-Bank by up to three notches
if S&P saw that VEB's willingness and capacity to support Sviaz-
Bank was declining, either due to VEB's own financial constraints
or a sale of the bank to an entity not able or not willing to
provide the same level of support to the bank as VEB.  S&P could
also lower the ratings if weakening in the bank's SACP continued
and it revised downward its SACP assessment, considering that the
bank's viability could be jeopardized, particularly if
capitalization fell.  This would be reflected in a RAC ratio
before adjustments at about 3% or below in the next 18 months, due
to a significant increase in nonperforming assets, low earnings
generation capacity, and the absence of a capital injection.

S&P could affirm the ratings and assign a negative outlook if it
observed that VEB was able and willing to provide support to
Sviaz-Bank, to the extent required, or that the bank's potential
acquirer would provide the bank with a similar level of support.
S&P could consider assigning a stable outlook if it saw an
improvement in the Russian banking sector's operating environment
and, at the same time, no further deterioration in the bank's


SERBIA: Moody's Says IMF Program Helps Boost Credit Profile
Serbia (B1, stable)'s credit profile benefits from the reform
program related to the Stand by Arrangement (SBA) signed with the
IMF in February 2015, and an economic recovery has started in the
last quarter of 2014. However, Moody's notes that the recent
past's rapid deterioration in fiscal and debt metrics poses

"Between 2008 and 2014, the government's debt-to-GDP ratio rose by
43 percentage points, a very significant increase. Low growth, a
high share of ear-marked social outlays and contingent liabilities
coming from state-owned enterprise (SOEs) are largely responsible
for this deterioration", says Marco Zaninelli, analyst at Moody's.

This deterioration of the fiscal position, coupled with subdued
real growth and the non-performing loan overhang are the issues
that the IMF program attempts to address. The program envisages
(1) rehabilitating public sector finances; (2) stabilizing and
strengthening the financial sector; and (3) implementing broad-
based structural reforms to foster job creation and sustainable

The IMF acknowledged the progress achieved so far, although
highlighting some delays in the implementation of structural
benchmarks due to technical and political reasons. Quantitative
performance criteria were comfortably met for both end-June and
end-September targets.

In particular, the government's fiscal performance has improved,
mainly driven by revenue over-performance supported by some one-
offs measures, says Moodys. The general government fiscal deficit
of RSD51.1 billion (EUR426 million) for the January-September
period is significantly lower than the cumulative Q3 program
ceiling of RSD153.1 billion (EUR1.3 billion) agreed with the IMF.

However, the bulk of the crucial measures and reforms envisaged by
the IMF program to downsize the public administration and to
restructure the loss-making SOEs has been postponed to 2016. The
agency notes that the political ability to push through those
reforms despite their short-term negative impact on consumption,
unemployment and political support will be a key factor for
Serbia's creditworthiness.

The rating agency expects a general government fiscal deficit of
4.3% in 2015, below the initial official target of 5.9% agreed
with the IMF, and below the 6.7% headline deficit posted in 2014.
Notwithstanding this fiscal tightening, Moody's forecast a return
to real GDP growth by 0.5% this year, after the severe recession
experienced in 2014. Nevertheless, Moody's expects the debt-to-GDP
ratio to increase to 77.7% in 2015.

EU accession remains a target for Serbia, and negotiations started
in January 2014. Despite the strong commitment of the Serbian
government, Moody's views the EU membership target of 2020 as
being optimistic.


ABENGOA SA: Minister Balks at Payouts, EU Opens Antitrust Probe
Tomas Cobos and Angus Berwick at Reuters report that Spain's
industry minister criticized Abengoa SA on Dec. 4 for handing out
multi-million euro payoffs to executives in the months before the
indebted company entered into pre-insolvency talks with creditors.

Jose Manuel Soria said executives at Abengoa, which could face
Spain's largest-ever bankruptcy, had not invested wisely, given
the financial cost of the group's accumulated debt was far greater
than its cash flow and income, Reuters relates.

"It seems ridiculous that Abengoa's executives left the company in
pre-insolvency and they receive some EUR25 million in payoffs,"
Reuters quotes Mr. Soria as saying in an Onda Cero radio
interview.  "I think their financial policy was profoundly

The company has so far declared net debt of EUR9 billion (US$9.8
billion), Reuters notes.

Abengoa's former executive chairman Felipe Benjumea retired in
September with a EUR11.5 million package, while former chief
executive Manuel Sanchez resigned in May with a EUR4.5 million
payoff, Reuters relays.

                         Antitrust Probe

Meanwhile, Bloomberg News' Gaspard Sebag reports that the European
Union's antitrust arm added to Abengoa's woes on Dec. 7 by opening
a formal probe into suspicions the company colluded with Alcogroup
and Lantmaennen to rig ethanol benchmarks published by Platts.

The European Commission said in a statement the trio may have
agreed to submit or support bids with view to influencing
benchmarks upwards and thus driving up ethanol prices, Bloomberg
relates.  It said such practices could harm consumers and the
environment, Bloomberg notes.

As reported by the Troubled Company Reporter-Europe on Nov. 30,
2015, Bloomberg News related that Abengoa on Nov. 27 said it had
formally applied to a court in Seville for preliminary creditor
protection.  Under Spanish bankruptcy law, the company may now
suspend payments and keep negotiating with lenders for a maximum
of four months, Bloomberg disclosed.  If Abengoa hasn't reached a
deal by the end of March, it will have to file for full-blown
creditor protection, Bloomberg noted.

Abengoa SA is a Spanish renewable-energy company.

                        *       *       *

As reported by the Troubled Company Reporter-Europe on Dec. 1,
2015, Standard & Poor's Ratings Services lowered its long-term
corporate credit rating on Spanish engineering and construction
company Abengoa S.A. to 'CCC-' from 'B+'.  S&P said the outlook is

BANCO POPULAR MBS: Moody's Rates Series B Notes '(P)Caa1'
Moody's Investors Service has assigned provisional ratings to two
classes of notes to be issued by IM GRUPO BANCO POPULAR MBS 3, FT:

-- EUR 702M Serie A Notes due December 2058, Assigned (P)A1 (sf)

-- EUR 198M Serie B Notes due December 2058, Assigned (P)Caa1

The transaction is a securitization of Spanish prime mortgage
loans originated by Banco Popular Espanol, S.A. (Ba1 / NP) and its
100% subsidiary Banco Pastor, S.A.U. (N.R.) secured by properties
located in Spain. The portfolio consists of high Loan To Value
("LTV") mortgage loans secured by residential properties.

The rating addresses the expected loss posed to investors by the
legal final maturity of the notes. In Moody's opinion, the
structure allows for timely payment of interest and ultimate
payment of principal for the Serie A notes and the ultimate
payment of principal for the Serie B notes by the legal final
maturity. Moody's ratings only address the credit risk associated
with the transaction. Other non credit risks have not been
addressed, but may have a significant effect on yield to

Moody's issues provisional ratings in advance of the final sale of
securities, but these ratings only represent Moody's preliminary
credit opinion. Upon a conclusive review of the transaction and
associated documentation, Moody's will endeavor to assign
definitive ratings to the Notes. A definitive rating may differ
from a provisional rating. Moody's will disseminate the assignment
of any definitive ratings through its Client Service Desk. Moody's
will monitor this transaction on an ongoing basis.


IM GRUPO BANCO POPULAR MBS 3, FT is a securitization of loans
granted by Banco Popular Espanol, S.A. (Ba1 / NP) and its 100%
subsidiary Banco Pastor, S.A.U. (N.R.) to Spanish individuals.
Banco Popular Espanol, S.A. and Banco Pastor, S.A.U. are acting as
Servicers of their respective loans while InterMoney Titulizaci¢n,
S.G.F.T., S.A. is the Management Company ("Gestora").

The ratings of the notes take into account the credit quality of
the underlying mortgage loan pool, from which Moody's determined
the MILAN Credit Enhancement and the portfolio expected loss.

The key drivers for the portfolio expected loss of 8.0% are (i)
benchmarking with comparable transactions in the Spanish market
via analysis of book data provided by the sellers, (ii) the
performance of preceding MBS transactions of Banco Popular
Espanol, S.A., and (iii) Moody's outlook on Spanish RMBS in
combination with historic recovery data received from the seller.

The key drivers for the 31.0% MILAN Credit Enhancement number,
which is higher than other Spanish HLTV RMBS transactions, are (i)
the proportion of HLTV loans in the pool (84.95% with current LTV
> 80%) with Current Weighted Average LTV of 93.84%; (ii) 19.4% of
the pool corresponds to loans granted to new residents; (iii)
17.6% of the pool corresponds to second homes and 8.8% of the pool
corresponds to loans in principal grace periods; (iv)
approximately 29.6% of the portfolio correspond to self-employed
debtors; (v) 36% of the loans have been in arrears at least once
since the loans was granted, and (vi) the geographical
concentration in Andalusia (21.3%) and Madrid (19.8%).

According to Moody's, the deal has the following credit strengths:
(i) sequential amortization of the notes (ii) a reserve fund fully
funded upfront equal to 3% of the total notes to cover potential
shortfalls in interest of Serie A (and subsequently of Serie B,
once Serie A is fully amortized) during the life of the
transaction and to cover potential shortfalls of principal of both
classes at maturity. The reserve fund does not amortise and its
required amount at all times is the initial amount.

The portfolio mainly contains floating-rate loans mostly linked to
12-month EURIBOR, and most of them reset annually; whereas the
notes are linked to three-month EURIBOR and reset quarterly. There
is no interest rate swap in place to cover this interest rate
risk. Moody's takes into account the potential interest rate
exposure as part of its cash flow analysis when determining the
ratings of the notes.

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

Factors that may lead to an upgrade of the ratings include a
significantly better than expected performance of the pool,
together with an increase in credit enhancement for the notes.

Factors that may cause a downgrade of the ratings include
significantly different loss assumptions compared with our
expectations at close due to either a change in economic
conditions from our central scenario forecast or idiosyncratic
performance factors would lead to rating actions. Finally, a
change in Spain's sovereign risk may also result in subsequent
upgrade or downgrade of the notes.

Stress Scenarios:

Moody's Parameter Sensitivities provide a quantitative/model-
indicated calculation of the number of rating notches that a
Moody's structured finance security may vary if certain input
parameters used in the initial rating process differed.

The analysis assumes that the deal has not aged and is not
intended to measure how the rating of the security might migrate
over time, but rather how the initial rating of the security might
have differed if key rating input parameters were varied.
Parameter Sensitivities for the typical EMEA RMBS transaction are
calculated by stressing key variable inputs in Moody's primary
rating model.

At the time the rating was assigned, the model output indicated
that the Serie A notes would have achieved an A1 if the expected
loss was as high as 8.0% and the MILAN CE was 31.0% and all other
factors were constant.


YAPI VE KREDI: Moody's Assigns (P)Ba3 Subordinated Debt Rating
Moody's Investors Service has assigned a provisional (P)Ba3 (hyb)
long-term foreign-currency subordinated debt rating to Yapi ve
Kredi Bankasi AS 's (YapiKredi) planned US dollar-denominated
contractual non-viability Tier 2 bond issuance (the notes) under
its global medium term note (GMTN) program.


The provisional rating assigned to the subordinated debt
obligations of YapiKredi is positioned two notches below the
bank's baseline credit assessment (BCA) of ba1, in line with
Moody's standard notching guidance for subordinated debt with loss
triggered at the point of non-viability, on a contractual basis.
The provisional rating does not incorporate any uplift from
systemic (government) support.

The planned subordinated debt issuance is expected to be Basel
III-compliant and eligible for Tier 2 capital treatment under
Turkish law. The positioning of YapiKredi's provisional rating one
notch below the bank's current Ba2 foreign-currency "plain
vanilla" subordinated debt rating reflects the potentially greater
uncertainty associated with the timing of principal write-down. In
this respect, Moody's highlights that -- as a way for the bank to
avoid a bank-wide resolution -- YapiKredi is exposed to the risk
that the notes may be forced to absorb losses ahead of any losses
incurred on the "plain vanilla" subordinated debt.

As Moody's issues provisional ratings in advance of the final
issuance of the notes, these ratings only represent the rating
agency's preliminary credit opinion and do not immediately apply
to the issued securities. The rating on the debt notes issued will
be subject to Moody's review of the terms and conditions set forth
in the final base and supplemental offering circular and pricing
supplements of the notes to be issued. A definitive rating may
differ from a provisional rating if the terms and conditions of
the issuance are materially different from those of the
preliminary prospectus reviewed.


The assigned rating is notched from the BCA of YapiKredi and
further movements will be contingent on the changes in this
reference point.


PRIVATBANK JSC: S&P Lowers Rating to 'SD' Following Bond Deal
Standard & Poor's Ratings Services lowered its ratings on
Ukraine-based PrivatBank JSC to 'SD' (selective default) from

The downgrade follows PrivatBank's signing an agreement with its
creditors on Nov. 13, 2015, to restructure two bonds -- $150
million of subordinated debt with an original maturity in Feb.
2016 and a $200 million senior unsecured bond with an original
maturity in September 2015.

The bank extended the maturity of its $200 million senior
unsecured bond due Sept. 2015 to Jan. 15, 2016, in Sept. 2015, and
then subsequently to Jan. 23, 2018.  PrivatBank also changed the
bond's coupon rate to 10.25% from 9.375%.  The bank extended the
maturity of its $150 subordinated bond due Feb. 2016 to
Feb. 9, 2021, and increased its coupon rate to 11% from 5.8%.

S&P regards the agreed extension of the 2015 and 2016 bonds as a
distressed exchange, which is tantamount to a selective default.
This is based on S&P's understanding that the investors would not
receive the full value of the bonds on time as originally agreed.
S&P considers that the extension of the 2015 and 2016 bonds is a
selective default -- as opposed to a general default -- and so far
S&P is aware of no other debt obligations currently in default.

In July 2015, PrivatBank initiated the extension of two Eurobond
maturities in light of the very difficult economic situation in
Ukraine, as well with the requirements of the National Bank of
Ukraine to increase its capitalization and ease pressure on the
country's currency market.

S&P does not rate any debt issued by PrivatBank.

S&P expects to remove PrivatBank from 'SD' in the next few days
after S&P assess the bank's creditworthiness following the
completion of the debt restructuring.

U N I T E D   K I N G D O M

AQUAMARINE POWER: Owes Scottish Enterprise GBP6.2 Million
Perry Gourley at The Scotsman reports that Aquamarine Power, the
Edinburgh wave power company which ceased trading in November
after administrators failed to find a buyer, has left debts
estimated at more than GBP11 million.

The biggest creditor of the company is Scottish Enterprise, which
is owed GBP6.2 million The Scotsman relays, citing a statement of
the firm's financial affairs filed at Companies House.

According to The Scotsman, the document showed ABB Technology
Ventures, the venture capital investment arm of engineering giant
ABB, is owed GBP2.5 million and SSE's investment fund, SSE
Ventures, GBP1.27 million.

The company's total assets, including cash at the bank, patents
and trade marks for its technology, are estimated to realise just
GBP612,000, The Scotsman notes.

The Edinburgh-based firm, which employed 14 people, called in
administrators from BDO last month to manage the business and seek
a sale or fresh investment, The Scotsman relates.

Despite a comprehensive marketing process no offers were made for
the business as a going concern, The Scotsman discloses.

Aquamarine Power is an energy firm.

EQUINOX PLC: S&P Lowers Rating on Class A Notes to 'CCC(sf)'
Standard & Poor's Ratings Services lowered to 'CCC (sf)' from
'B+ (sf)' its credit rating on EQUINOX (ECLIPSE 2006-1) PLC's
class A notes.  At the same time, S&P has affirmed its 'D (sf)'
ratings on the class B, C, D, E, and F notes.

On the October 2015 interest payment date (IPD), all classes of
notes experienced interest shortfalls.  The transaction continues
to experience cash flow disruptions, primarily due to high prior-
ranking transaction costs.  Spread compression between the loans
and the notes has also resulted in the transaction having
insufficient funds to fully pay interest due on the notes.

S&P believes that, absent of recoveries, this transaction will
likely remain vulnerable to future interest shortfalls, given the
abovementioned factors that limit the issuer's capacity to pay
timely interest.

S&P's ratings in this transaction address the timely payment of
interest and the repayment of principal no later than legal final
maturity in January 2018.

The class A notes have experienced their first quarter of interest
shortfalls in October 2015.  S&P has not lowered to 'D (sf)' its
rating on the class A notes because its analysis indicates that
the issuer could fully repay the interest shortfall from
recoveries, before the legal final maturity date.  S&P has however
lowered to 'CCC (sf)' from 'B+ (sf)' its rating on this class of
notes because S&P considers that this class of notes faces at
least a one-in-two likelihood of default if the interest shortfall

S&P has affirmed its 'D (sf)' ratings on the class B, C, D, E, and
F notes because they continue to experience interest shortfalls.

EQUINOX (ECLIPSE 2006-1) is a true sale transaction that closed in
July 2006.  Initially, a pool of 13 loans secured on 136
predominantly commercial U.K. properties backed the transaction.
Since closing, 11 of the loans have repaid with losses.  The
outstanding notes' balance has decreased to GBP90.82 million from
GBP401.34 million at closing.


GBP401.34 mil commercial mortgage-backed floating-rate notes

Class             Identifier         To                  From
A                 XS0259279585       CCC (sf)            B+ (sf)
B                 XS0259280088       D (sf)              D (sf)
C                 XS0259280161       D (sf)              D (sf)
D                 XS0259280591       D (sf)              D (sf)
E                 XS0259280674       D (sf)              D (sf)
F                 XS0259280914       D (sf)              D (sf)

LOTUS F1: Gets Breathing Space in Insolvency Proceedings
Jan Colley at Press Association reports that the Lotus Formula One
team has won another two-week breathing space in insolvency
proceedings brought against it by the taxman.

Mr. Justice Birss granted the adjournment of the proceedings until
Dec. 21 after hearing that a share purchase agreement was due to
be completed on Dec. 16, with the GBP1.4 million due to HM Revenue
& Customs paid off shortly afterwards.

According to Press Association, counsel Jeremy Bamford told
London's High Court on Dec. 7 that other creditors, owed in excess
of GBP2 million, would be paid by Dec. 31.

HMRC had applied to put the Oxfordshire-based F1 team into
administration over unpaid bills relating to PAYE (income tax and
National Insurance), Press Association relates.

The judge approved Lotus's application for the adjournment, which
was backed by Renault Sport and not resisted, because the proposed
deal was the result most likely to be of benefit to the creditors
and the best chance of rescuing the business as a going concern,
Press Association discloses.

In September, Renault announced its intention to take over the
cash-strapped Lotus team, Press Association recounts.

"Renault Group and Gravity Motorsports Sarl, an affiliate of Genii
Capital SA, are pleased to announce the signature of a letter of
intent regarding the potential acquisition by Renault of a
controlling stake in Lotus F1 Team Ltd," Press Association quotes
Renault as saying.  "Renault Group and Gravity will work together
in the coming weeks to eventually turn this initial undertaking
into a definitive transaction, provided all terms and conditions
are met between them and other interested parties."

Lotus F1 is an Enstone-based Formula One team.

REDTOP AQUISITIONS: Moody's Assigns 'Ba3' Rating to 2020 Loan
Moody's Investors Service assigned a Ba3 rating to the new EUR52
million senior secured first lien loan due 2020 to be issued by
Redtop Acquisitions Limited (CPA), the parent holding company of
CPA Global, as an incremental facility under its senior facilities
agreement. The proceeds of the loan will be used to finance the
acquisition of Innography Inc., an Intellectual Property (IP)
analytics business headquartered in Austin, USA.

CPA's B1 corporate family rating (CFR), the Ba3 instrument rating
of the existing USD643 million equivalent senior secured first
lien term loan facilities due 2020, the Ba3 instrument rating of
the USD80 million revolving credit facility (RCF) due 2018 and the
B3 instrument rating of the USD280 million second lien loan
facility due 2021 are affirmed. The outlook on all ratings remains


CPA's B1 corporate family rating (CFR) incorporates its high
financial leverage 5.9x at 31 July 2015 and 6.1x (Moody's-adjusted
pro-forma leverage) based on acquisition details provided by
management. The rating derives considerable support from the
company's strong business profile including (1) CPA's leading
market position in the patent renewal niche market; (2) a degree
of revenue predictability from CPA's resilient patent renewal
business, which represents about 70% of the company's gross
income; and (3) CPA's history of low customer churn of less than

Innography provides subscription-based online patent search and
analysis software tools, leveraging CPA's unique database of 100
million global patent documents that are correlated to other
relevant IP-related information. Innography was founded in 2006
with a focus on big data analytics for business intelligence, in
particular patent related information. The Company is
headquartered in Austin, Texas and now employs 78 staff.
Innography has a diverse client portfolio of over 300 clients
across a range of industries, including energy, financial
services, healthcare, internet services, patent services and law
firms. The business has a blue chip client base counting
International Business Machines Corporation ("IBM"), Microsoft
Corporation, Bayer AG, JPMorgan Chase & Co., Huawei, Samsung
Electronics Co., Ltd., Halliburton Company, The Coca-Cola Company
and General Motors Company as clients.. Revenue in the year ended
31st December 2014 was $10.9 million and was generated across
multiple sectors with no material client concentration.

CPA's leverage of 5.9x as of financial year ending 31 July 2015
remains high for the B1 rating category. Moody's estimates that
pro-forma for the Innography acquisition, leverage will increase
to 6.1x. Moody's expects that the company will de-lever below 6.0x
quickly and will then maintain its leverage below this threshold.
Moody's anticipates that moderated growth in patent renewal
revenues, as well as additional focus on cross-selling products
and services, will continue to drive positive EBITDA growth
although this is likely to be at a slower rate than in recent
years. The rating benefits from CPA's track record of deleveraging
through a combination of debt repayment and EBITDA growth. With
low annual capex, the company demonstrates good free cash flow

CPA's loan facilities are covenant-lite with only a springing
covenant relating to the revolving credit facility (when it is at
least 30% drawn). Despite the financial flexibility that this
implies in terms of dividend payments and/or acquisitions, the B1
CFR assumes that CPA will maintain its leverage below 6.0x on a
sustained basis.

Moody's notes that patent renewal Gross Income per Case declined
by 6.7% in FY2015 (down 1.6% on a constant currency underlying
basis). Moody's considers that after a long run of uninterrupted
growth in patent renewal revenue, the company has now reached a
more sensitive point in the price/volume balance at which
additional price increases adversely affect volumes. Consequently,
Moody's expects revenue growth (on a constant currency basis) from
the patents renewal business to remain low in FY 2016. Future
patents renewal revenue growth will be driven to a greater extent
by patent volume growth. The market is estimated to be growing by
5% per annum in volume terms and management is seeking to maintain
market share. The challenge for management is to ensure that
volume growth is not offset by a deterioration in the business mix
as larger clients offering greater volumes are increasingly
seeking more competitive rates.

With a more mature position in the Renewals market, Group revenue
growth will be driven to a greater degree by acquisitions and
growth in the Software and Services businesses. In 2014, CPA
acquired Landon to develop its Services offering, followed by the
acquisition of Innography in 2015. The development of business
lines complimentary to, but outside of, the core renewals business
adds a degree of risk to the business profile. Moody's notes that
the Landon acquisition has been successful and synergies are
flowing through, albeit slightly behind expectation.

The rating is supported by strong market position and revenue
visibility. In renewals, the company's core market, CPA benefits
from a market share of around twice that of its nearest
competitors. Providing renewals on a global scale is technically
complex, requiring a high degree of accuracy for a high volume of
cases that require IT systems and data management tools. Moody's
considers this would be costly to replicate and therefore acts as
a significant barrier to market entry. While patents are granted
for up to 20 years, they typically have an average life span of
around 13 years. The requirement to pay a maintenance fee at
intervals throughout the life of the patent ensures a strong
pipeline of recurring revenue and good visibility. This also
provides cross-sell opportunities to the complimentary analytics

CPA's rating positively reflects the company's strong geographic
and end-market diversification. This is supported by a suite of
products and services that spans 6,300 clients in 181 countries.
The company benefits from low customer churn and long-standing
customer relationships. Around 70% of CPA's clients have been
clients for more than 10 years. CPA is not exposed to one specific
industry and has a wide geographic presence, although the US makes
up the majority of patent renewal cases by volume (35%). Moody's
estimates that no one firm represents more than 3% of total gross
income and CPA's top five customers represent less than 10% of
gross income combined. The company has some revenue concentration
through strategic alliances, with its largest (in Japan)
representing around 10% of gross income. Mitigating this exposure
is CPA's long-standing relationship with that entity, which dates
back to 1979.

Moody's deems CPA's liquidity profile to be good. It is supported
by a GBP58.6 million cash balance as at 31st July 2015 (despite
having spent GBP27.1 million on acquisitions including Landon IP).
Pro-forma for the acquisition of Innography, management forecasts
a cash balance of GBP22.9 million in addition to a USD80 million-
equivalent undrawn committed revolving credit facility (RCF).

The Ba3 rating to CPA's senior secured first lien loans, one notch
higher than the CFR, reflects the cushion provided by the second
lien, which ranks junior in the debt waterfall. The debt
facilities will benefit from guarantees by all material
subsidiaries representing at least 80% of the group's EBITDA and
gross assets. The B3 rating assigned to the second lien term loan
reflects its contractual subordination to the senior secured first
lien facilities.


Moody's considers that CPA's earnings growth is likely to remain
at a reduced rate over the ratings horizon as growth in the core
patent renewals business has slowed. Moody's now considers the
company to be weakly positioned in the B1 rating category and
there is limited headroom for additional debt-funded M&A at this
time. The stable outlook reflects Moody's expectation that the
company will reduce its leverage below 6.0x quickly and will
sustain leverage below 6.0x to the end of July 2017 through EBITDA
growth and/or prepayment of the debt facilities. It also assumes
that the company will maintain a solid liquidity profile and that
the Founding Firm client referral contracts that expire in 2016
are renewed on comparable terms.


Positive pressure on the ratings could develop if CPA is able to
reduce adjusted leverage comfortably below 5.0x, while maintaining
a solid liquidity profile.

Negative pressure could develop if credit metrics do not improve
as projected. This would include debt-to-EBITDA not falling below
6.0x by the end of July 2016. Any concerns regarding the company's
liquidity profile could also exert negative pressure on the

ROADCHEF FINANCE: S&P Raises Rating on Class B Notes to BB-
Standard & Poor's Ratings Services raised its credit ratings on
Roadchef Finance Ltd.'s class A2 and B notes.  At the same time,
S&P has removed its stable outlook on the ratings.

The upgrades follow S&P's review of Roadchef Motorways'
securitized estate of U.K. motorway service areas' (MSAs)
performance.  While S&P continues to assess the business risk
profile as weak, the company's investment in new facilities and
offerings has resulted in a sustainable and long-term improvement
in operating performance that exceeds our previous forecasts for
the period.

The company's business risk profile reflects the following


MSAs are the only commercial presence allowed on the U.K. motorway
network and so benefit from a captive market.  Most stops at MSAs
are unplanned and linked to motorists' basic needs, which can be
satisfied only by MSAs; only about 8% of stops are planned.
Customer surveys indicate that the most important reason why
people stop at an MSA is to use toilet facilities, with over 50%
of respondents giving this as their top answer.  This provides
MSAs with a stable footfall at all sites in their network.


A construction of a double site costs about GBP50 million,
including the access roads, which demand a significant expenditure
to be paid by the MSA operator.  The profitability of the business
is low, given the high costs of operating the sites around the

The planning approval process for a new MSA takes five to 10 years
on average, depending on the sensitivity of the proposed area to
additional development.  Approval is determined locally, with
sustainable development being the key determinant.

The quality of the estate has improved.  Only five sites are still
to be developed, including two sites within the securitized group
to be developed in the second half of 2015 and a further two in
2016.  At that point, all 22 securitized group sites will have
been developed and will have branded catering.

In S&P's view, Roadchef Motorways' catering brands are at par with
those of its peers.  In 2013, Roadchef Motorways introduced gaming
machines, and in 2014, it agreed with Regus Express to open 12
business center sites, six of which have already been opened.
Spar mini-supermarkets are to follow, subject to a trial started
in 2015, although in its most recent earnings report, management
reported that the results at the first two trial sites were lower
than expected.


In the fiscal year 2013, management correctly assessed that
disposing of one of the smaller sites (Annandale) would not
decrease EBITDA, but would increase Roadchef Motorways'
profitability by rechanneling the disposal proceeds into the
redevelopment of other sites.  Given that developed sites attract
higher footfall, they have a higher conversion rate than
underdeveloped sites (72% versus 61%) and generate higher sales.
Indeed, in the fiscal year 2014, EBITDA increased by 4% from the
prior year.  From 2007 to 2012 Roadchef Motorways was funding
capital expenditures (capex), thanks to equity injections from the
parent company, Delek Group, and vendor loans (e.g., from Costa
Coffee and McDonald's).  However, 2013 was the first year Dalek
Group did not provide any equity injections to the borrowing

Within the boundaries of restricted financing, Roadchef Motorways
has completed a number of positive changes, including the handover
of its forecourt operations and the resulting rental revenues to
BP PLC and Royal Dutch Shell PLC, arranging vendor funding to
improve its offerings at a low capex cost, and reducing central
and site overheads wherever possible.

S&P's projections indicate that Roadchef Motorways' absolute
adjusted EBITDA will gradually increase to approximately GBP32
million over the next five years from about GBP25 million in 2015.
Although revenues have declined from 2014 to 2015, EBITDA margins
have improved as the company is reducing its exposure to fuel
sales.  S&P anticipates in its base-case scenario that Roadchef
Motorways' exposure to the U.K. fuel business will become
negligible from 2017 onward when it transfers two forecourts to


Following the acquisition of Roadchef Group by Antin
Infrastructure Partners, the CEO, Simon Turl, and most of the
senior team have remained with the business.  James Muirhead
joined the company as CFO from the beginning of November 2014,
thus replacing Lior Dafna, who worked for the Delek Group.

These strengths are offset by:


The industry is regulated under guidelines produced by the
Secretary of State for Transport, with the Highways Agency
(England) acting as statutory consultee on the Secretary of
State's behalf, as well as legislation.  Although the Highways
Agency is promoting new independent MSAs, only two new MSA sites
have opened and only two other sites have been granted planning
permission since 2010.  Two potential MSAs (Sheffield and
Solihull) are currently under the planning application process and
it could take a few more years for the new sites to be developed.

The key driver for demand in the MSA industry is motorway traffic,
which is linked to GDP growth.

A significant increase in the motorway network is unlikely in the
medium term due to the U.K. government's financial constraints.

The Department for Transportation forecasts traffic to grow at a
rate of about 1.3% per year until 2035.  This is slower than the
historic 2.4% annual growth rate experienced between 2002 and

In S&P's view, commercial and practical barriers are significant.
In September 2013, in order to allow more sites to be developed on
the motorways, the Highways Agency relaxed certain regulatory
provisions, and in particular, removed the previous minimum
distance between service areas of 28 miles or 30 minutes' travel
time.  The minimum distance between sites can now be as low as
three miles.


With Spar, Roadchef Motorways will not be competing with more
upmarket brands at Welcome Break (Waitrose) and Moto (Marks &
Spencer PLC).

Due to historic financial constraints, Roadchef Motorways has
remained behind its competitors in terms of services offered, in
particular with relation to a commuter/grocery brand, but it is
catching up quickly.  In S&P's view, its catering brands are on
par with those of its peers.

Roadchef Motorways is the smallest out of the three largest U.K.
MSA providers.  It has 22% market share by number of locations,
lagging behind Moto Hospitality (36%) and Welcome Break (27%).  It
owns 20 MSAs (covering 30 sites when counting separately the sites
that are located on the opposite sides of the road), whereas Moto
Hospitality's operations cover 68 locations and Welcome Break
covers 24 locations.

Roadchef Motorways is a relatively small company, generating
GBP24.9 million adjusted EBITDA (FY 2014), with no diversification
outside the U.K.  The EBITDA is 40% of Welcome Break's EBITDA and
30% of Moto's.


Roadchef Motorways' EBITDA margin in non-fuel continues to lag its
peers, although it is similar to Welcome Break's non-fuel EBITDA
margin for 2014.  The company's overall EBITDA margin is
materially higher than its peers, considering its lower exposure
to fuel operations.  S&P expects that the EBITDA margin will
slowly improve, in line with the company's plans to further reduce
its exposure to fuel operations.


Management continues to suffer from a degree of key personnel
risk, given its heavy reliance on the CEO for both strategic and
operational issues.  There are no independent directors on the
management board.  S&P considers that the heavy reliance on the
CEO could be somehow alleviated post the Antin acquisition, given
the participation of Antin in the monthly management board
meetings.  The management board now comprises three members from
Antin and four from Roadchef Group.

After several quarters of year-over-year declines in revenue, the
53-week period ending on Oct. 6, 2015 showed an increase in
revenue, as the declines due to reductions in fuel sales were
offset by increases in non-fuel sales and EBITDA margin of 18.0%,
down from the 19.8% reported for the 52-week period ending
Sept. 30 ,2014.  The decrease is due to increases in site
overheads, due to wage increases, and central overheads from
insurance, business rebates, rent adjustments, professional fees,
bonus payments and staff costs.

In 2012 S&P stated that it could raise its ratings if it observed
a self-supported, sustained improvement in the EBITDA debt service
coverage ratio, as calculated by the company and by Standard &
Poor's, to well above 1.25x.  The reported 12-month EBITDA debt
service coverage ratio for the securitized business was 1.39:1 for
the 53 weeks ending April 7, 2015, and 1.37:1 for the 53 weeks
ending Oct. 6, 2015.

The improvements in EBITDA and the EBITDA margin have been mainly
attributable to a decline in the cost of goods sold following the
transfer of the company's forecourt operations to BP, which more
than compensated for the resulting decline in revenue.  The
decline in cash flow available for debt service (CFADS) is due to
an increase in capex, which totaled GBP12.2 million for the 53
weeks ending Oct. 6, 2015, and GBP5.8 million for the 52 weeks
ending Sept. 30, 2014.

S&P projects that over the next 12 months, the ratio of the
sources of liquidity, including cash and cash equivalents, to debt
service will reach 1.13x.  This is a marked improvement over S&P's
prior projections, and we anticipate that sources of liquidity
will cover uses of cash by a ratio of 2.40:1 for the 12 months
ending Dec. 31, 2015, but that the ratio falls to 1.08:1 under
S&P's criteria when it considers the entire amount of projected
capex over the coming periods.

Given the improvement in Roadchef Motorways' operations and the
lack of reliance on support from the parent company, S&P's
analysis is no longer limited to a pure corporate analysis, with
the ratings determined by S&P's corporate credit rating (CCR) on
the borrowing group and a recovery analysis to assign ratings
above the CCR based upon the recovery prospects given a default of
the borrower.  The application of recovery analysis results is a
ratings cap of no more than three notches above the CCR.  A
recovery rating assumes a default at the borrower level and the
inability of the issuer to survive that default.  In other words,
a recovery rating assumes that S&P can rates through the
insolvency of the borrower.

Under S&P's corporate securitization criteria, its basic
assumption is that it can rate through the insolvency of the
borrower, given the presence of a liquidity facility and a legal
structure that allows for the security trustee to enforce security
and appoint an administrative receiver, which provides S&P with a
cash flow basis for assigning its ratings.  S&P assigns its
ratings based upon stressed operating cash flows, whereby the
number of notches above the business risk profile carry with them
increasing levels of cumulative declines.  As a result, S&P's
ratings are not explicitly limited as they are under a recovery
analysis, but are limited solely by our view of the issuer's
ability to service the notes under S&P's cash flow stresses.

Another consideration is the level of leverage and where the time
horizons to the maturity dates fall within S&P's cash flow
projections.  Compared to most transactions, the eight-year
remaining term for the class A2 notes and the 11-year remaining
term for the class B notes are short, particularly given that the
notes are fully amortizing.  As a result, the debt service profile
is not subject to S&P's full 25-year cumulative declines in its
cash flow projections.  The class A2 notes' debt service falls
within S&P's projected 'BB+' level cash flow available for debt
service projection over the eight years to its maturity, while the
class B notes' debt service falls within S&P's projected 'BB-'
cash flow available for debt service over the 11 years to its
maturity.  If the maturity dates were as long as those for notes
in other corporate securitizations, the future declines in the
'BBB' and 'BB' rating category stresses would eventually fall
below the required debt service and would therefore further
constrain S&P's ratings.

In terms of leverage, the class A leverage ratio reduced to 3.46x
in 2014 from 5.96x in 2009, while the class B leverage ratio has
declined to 4.98x from 7.92x over the same period.

S&P still assess Roadchef Motorways' liquidity as less than
adequate under S&P's criteria.  With the inclusion of projected
total capex in S&P's calculation, it anticipates that sources of
liquidity will cover uses of liquidity by about 1.8x in the 12
months to Dec. 31, 2015.


In September 2014, Roadchef Group was acquired by Antin, a
European private equity firm specializing in infrastructure
investments, with over EUR3 billion in assets under management.
It invests in mid-market brownfield infrastructure assets in
Europe across the energy and environment, transport, and telecoms
sectors.  As part of the acquisition, Antin provided an equity
injection of GBP7.95 million (part of the purchase price), paid
down the Delek' Group's debts, repaid Roadchef Development Group's
bank debt with Barclays Bank PLC and Lloyds Bank PLC, and arranged
a new capex facility with Barclays Bank for the Development Group.

S&P considers Antin as a financial investor.  Its investment
horizon is six to seven years, although it can push the investment
horizon.  The day-to-day responsibility for managing the business
remains with Roadchef Group, with Antin providing oversight.

Although the acquisition does not affect the securitization
directly, overall, S&P views the new ownership as a favorable
development for the business.  S&P considers Delek Group to be an
"accidental owner" as it purchased Roadchef Group from its
subsidiary, Delek Real Estate, in 2011, which was at the time
suffering a liquidity stress and put Roadchef Group up for sale.
The transaction was paid for by offsetting some of Delek Real
Estate's debt.  Hence, Delek Group did not consider Roadchef Group
to be its core business, although it was willing to provide
support to Roadchef Group for the sake of its reputation.  Antin,
on the other hand, has acquired Roadchef Group with an aim to grow
the business and ensure funding for it (GBP40 million over five
years).  S&P understands Antin is committed to fully supporting
the investment plans that Roadchef Group's management has


S&P also considers credit stability in its analysis.  Under S&P's
rating category cash flow stresses, it projects that reliance on
the liquidity facility for the final principal payment would
increase if there is a decline in the corporate group's flat case,
and a resulting downward shift in S&P's rating category stresses.

Given the relatively new ownership and the number of new
initiatives that are being implemented, it is a little too soon to
tell whether the gains made will be sustainable over the medium to
long term, particularly given the level of capex required.  For
example, the most recent results show a decrease in unadjusted
EBITDA for the 53-week period ending Oct. 6, 2015 (GBP26.6
million), compared with the 52-week period ending Sept. 30, 2014
(GBP28.3 million).  Over the same period, administrative expenses
increased to GBP72.4 million from GBP64.0 million and development
capex increased to GBP12.2 million from GBP5.8 million, although
the incremental capex was offset by the additional capital
contributed at the time of the acquisition by Antin.

S&P's ratings reflect the potential for some volatility due to the
infancy of the capital investment program and the new ownership of
the company.  S&P's cash flow analysis also considered the need
for some headroom for the company to absorb any volatility, should
the current gains be unsustainable.

The upgrades of the class A2 and B notes reflect the company's
investment in new facilities and offerings, which has resulted in
an improvement in operating performance.  In addition, S&P views
the acquisition of Roadchef Group by Antin as providing both a
strategic and financial alignment, and S&P now assess Roadchef
Finance's liquidity as less than adequate under its criteria after
accounting for total projected capex.  S&P has also removed its
stable outlook on the ratings to reflect its view that outlooks,
which are generally assigned where appropriate, to corporate and
government entities and some structured finance ratings (unless
the ratings are on CreditWatch), are no longer appropriate for
S&P's ratings on the notes issued by Roadchef Finance, given that
S&P's ratings approach assumes that we can rate through the
insolvency of the borrower.

As business profile risk is a significant factor in S&P's review
of credit risk and in determining stresses, a material change in a
company's business risk profile would likely lead to a material
change in S&P's stresses.  A material weakening of the company's
business risk profile would likely lead S&P to apply harsher
stresses when considering the ratings in the transaction.


S&P would consider a downward revision to Roadchef Motorways'
business risk profile if the operational turnaround proved to be
unsuccessful and the company was unable meet its working capital
needs, capex, and/or debt service obligations without reverting to
parental help.


S&P would consider a downward revision to Roadchef Motorways'
business risk profile to fair if the company demonstrated a track
record of sustained and meaningful growth in EBITDA and free cash
flow generation, combined with a material improvement in

Roadchef Finance is a corporate securitization, backed by a
portfolio of MSAs operated by Roadchef Motorways Holdings.  The
company operates 20 U.K. MSAs, including 15 within the Security
Group (Roadchef Motorways Holdings Ltd.) and five outside.  When
counting separately the sites that are located on the opposite
sides of the road and the trunk road service areas, Roadchef
Motorways operates a total of 30 U.K. locations.  The transaction
closed in December 1998.


Class                  Rating
            To                       From

Roadchef Finance Ltd.
GBP210 Million Fixed- And Floating-Rate Notes

Ratings Raised And Stable Outlook Removed

A2          BB+ (sf)                 B- (sf)/Stable
B           BB- (sf)                 CCC+ (sf)/Stable

* EUROPE: Moody's Says UK's EU Exit Would be Negative for Economy
If the UK were to leave the EU, the credit impact for the
sovereign and the implications for its rating would depend
primarily on what new trade arrangements the UK government could
achieve, as well as its other economic policy choices, says
Moody's Investors Service in a report published today. Moody's
might assign a negative outlook to the UK's Aa1 rating in the
event of a vote to withdraw from the EU, to reflect its view that
exit would have negative consequences for the UK economy and hence
potentially for the UK's credit strength.

Moody's report, entitled "Government of the United Kingdom: EU
exit would be negative for UK economy; post-exit policy choices
will drive credit impact," is available on Moody's
subscribers can access this report via the link provided at the
end of this press release. The rating agency's report is an update
to the markets and does not constitute a rating action.

"Exit would be negative for trade and investment in the UK, given
the close links with the EU as the UK's single most important
trading partner and largest source of foreign-direct investment,"
says Kathrin Muehlbronner, a Senior Vice President at Moody's.
"These negative effects outweigh the benefits from exit such as
cost savings for government and a reduced regulatory burden for
businesses in our view," she adds.

However, rather than the short-term impact on growth, Moody's
would focus on the medium term economic and political impact of an
exit. In the rating agency's view, exit from the EU would not
provide immediate clarification on the UK's future trade and
economic prospects. Instead, it would likely be the beginning of
potentially multiple, lengthy and complex negotiations on a new
trade agreement with the EU that conserves at least part of the
benefits that EU membership affords.

"The UK could face a potentially prolonged period of uncertainty,
which in itself would be damaging to confidence and investment. A
Swiss-style series of bilateral agreements or a comprehensive free
trade agreement would invariably take time to negotiate and this
process wouldn't be easy," says Muehlbronner. According to EU
legislation, effective withdrawal from the EU could take up to two
years, during which the outline of an alternative arrangement
would likely emerge.

In addition to negotiating with the EU on a new trade deal, the UK
authorities would probably have to renegotiate other bilateral and
multilateral free trade agreements that the UK currently benefits
from as an EU member state.

The UK authorities might also reconsider other domestic policies,
such as banking regulation, in order to limit the impact on the
financial services sector. While Moody's considers the UK's
institutional strength to be very high, exit and the associated
challenges would place a significant burden on policy-makers and
Moody's would monitor the implications for the effectiveness of
policymaking very closely.

These challenges would likely outweigh the economic benefits of
exit, according to Moody's. The cost savings on the government's
contributions to the EU budget are modest at around 0.6% of GDP
per annum and in the rating agency's view UK-based businesses
would continue to have to comply with EU regulation even after
exit, if they wanted to sell into the Single Market.

Moody's also notes that EU regulation has not impeded the UK's
flexible labour and product markets, nor does the EU seem to be a
key constraining factor for extra-EU trade, as e.g. Germany'
strong trade links with China and other emerging markets show.

The EU accounts for around 50% of UK goods exports and 37% of
services exports (2014 data). Last year, the UK received net
foreign-direct investment (FDI) of GBP44 billion, which equates to
around one third of all EU investment inflows, with many
investments from outside of the EU attracted to the UK as an entry
point to the larger EU market.


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

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

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


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

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

                 * * * End of Transmission * * *