TCREUR_Public/151218.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

           Friday, December 18, 2015, Vol. 16, No. 250



HETA ASSET: Creditors Have Enough Support to Block Bond Deal


BANK OF CYPRUS: Moody's Affirms 'caa3' Deposits Rating
LAIKI BANK: Administrator Opposes Transfer of Assets to Creditors


SPCM SA: Moody's Affirms 'Ba2' Corporate Family Rating


ALITALIA SPA: Appoints Cramer Ball as New Chief Executive Officer
CORDUSIO RMBS 2007: Moody's Hikes Class D Notes Rating to Ba1(sf)


LITHUANIAN SHIPPING: Shares Removed From Secondary Trading List


ALISON MIDCO: Moody's Changes Outlook to Stable From Positive


EVRAZ GROUP: Moody's Says Tender Offer are Credit Positive
MECHEL OAO: Nears Debt Restructuring Deal with Sberbank
TRANSAERO AIRLINE: Placed Under External Supervision

U N I T E D   K I N G D O M

ADVANTAGE INSURANCE: Moody's Withdraws 'Ba1' IFS Rating
BOSTON PRIME: January 5 Client Money Claims Bar Date Set
NEW WORLD: Moody's Affirms Caa3 Corp. Family Rating, Outlook Neg.


* BOOK REVIEW: Transnational Mergers and Acquisitions



HETA ASSET: Creditors Have Enough Support to Block Bond Deal
Alexander Weber at Bloomberg News reports that creditors in Heta
Asset Resolution AG say they have enough support to block a EUR11
billion bond deal that would force them to take losses to rescue
the Austrian "bad" bank's indebted home province.

Opponents of the deal -- including Commerzbank AG, Dexia SA's
German unit and Deutsche Pfandbriefbank AG -- issued a statement
on Dec. 16 saying they collectively hold more than EUR5 billion
(US$5.5 billion) of Heta bonds guaranteed by the province of
Carinthia, Bloomberg relates.  That would leave less than the
required two-thirds participation in the planned offer, to be
launched as soon as next week, Bloomberg notes.

The creditors' refusal to take losses on the bonds isn't new,
Carinthia's finance secretary, Gaby Schaunig, as cited by
Bloomberg, said in a statement.  "The bond buyback offer will be
within the legal framework."

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


BANK OF CYPRUS: Moody's Affirms 'caa3' Deposits Rating
Moody's Investors Service affirmed the Baa3 ratings on the
mortgage covered bonds of Bank of Cyprus Public Company Limited
((BoC) the issuer, deposits Caa3 stable; adjusted baseline credit
assessment caa3; Counterparty Risk (CR) Assessment Caa2(cr)).


The affirmation reflects Moody's view that the effective
servicing of the cover pool and the likely recoveries from the
assets are commensurate with a Baa3 rating.

The affirmation follows two significant rating actions in the
last month:

(1) the upgrade of Cyprus' government bond rating to B1 from B3
     with the assignment of a stable outlook and the concurrent
     raising of Cyprus' local-currency and foreign-currency bond
     ceilings to Baa1 from Baa3 on November 13, 2015; and

(2) the change in Moody's outlook on Cyprus' banking system to
     stable from negative on December 8, 2015.

Moody's country ceilings reflect a range of un-diversifiable
risks to which issuers in any jurisdiction are exposed, including
economic, legal and political risks. The local-currency ceiling
also determines the maximum credit rating achievable for a
structured finance transaction, including covered bonds, for
which domestic assets or residents generate the cash flows that
the issuer uses to pay interest and principal on the notes.

Although Cyprus' local- and foreign-currency bond ceilings were
raised to Baa1, Moody's considers that the covered bonds cannot
achieve the same rating level as the country ceiling at present
because of the overall weak credit profile of the Cyprus banking
system and the high correlation of risks within that banking
system, given the small number of players and their large size
relative to the size of the economy.

In a hypothetical scenario where the sovereign were to default
and a covered bond anchor event were to occur for the Bank of
Cyprus, a disruption of servicing may result in a weakening of
collections activities, leading to increased delinquencies, lower
recoveries, and ultimately higher losses on the cover pool.

Moody's considers that the effective servicing of the cover pool
and the likely recoveries from the assets are commensurate with a
Baa3 rating.


Moody's determines covered bond rating using a two-step process:
an expected loss analysis and a timely payment indicator (TPI)
framework analysis.


In situations where the TPI framework is not applied, Moody's may
modify its Expected Loss (EL) Model to take account of the
reduced level of linkage to the issuer. Accordingly, Moody's made
the following adjustments to its modelling: (1) it removed the
value it would otherwise attribute to the issuer's primary
obligation to make payments under the covered bonds. This payment
obligation relies on the issuer's credit strength and therefore
is a primary source of linkage to the issuer in our EL Model; and
(2) it removed the refinancing-risk component from its
quantitative modelling, due to the effectiveness of the
conditional pass-through feature in the transaction. Moody's may
consider giving certain value to the credit strength of the
issuer if the credit strength of the issuer improves.

Moody's uses its cash flow model to determine a rating based on
the expected loss on the bond.

Collateral risk measures losses resulting directly from cover
pool assets' credit quality. Moody's derives collateral risk
using an expected loss multiples approach. Based on the most
recent performance overview as of 30 June 2015, the collateral
risk for this program is currently 45%. The minimum OC level
consistent with the Baa3 rating target is 47% and as of 29
September 2015 BoC is providing 47% OC in a "committed" form.
These numbers show that Moody's is not relying on "uncommitted"
OC in its expected loss analysis. For further details on cover
pool losses, collateral risk, market risk, collateral score and
TPI Leeway across covered bond programs rated by Moody's, please
refer to "Moody's Global Covered Bonds Monitoring Overview",
published quarterly. TPI FRAMEWORK: Moody's assigns a TPI, which
measures the likelihood of timely payments to covered bondholders
following a CB anchor event. The TPI framework limits the covered
bond rating to a certain number of notches above the CB anchor.

Moody's has not applied the TPI framework to Bank of Cyprus'
covered bonds program.

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

Factors that may cause an upgrade of the ratings include a
significantly better-than-expected performance of the pool, a
significant improvement of the credit profile of the issuer and /
or of the overall credit profile of the Cyprus banking system.
Factors that may cause a downgrade of the ratings include a
decline in the overall performance of the pool or a downgrade of
Cyprus' local currency bond ceiling below the rating of the

LAIKI BANK: Administrator Opposes Transfer of Assets to Creditors
Angelos Anastasiou at Cyprus Mail reports that Legacy Laiki
administrator Chris Pavlou has warned parliament that
transferring control over the entity's assets from the Resolution
Authority to the failed lender's creditors could have disastrous
effects on the ongoing process of liquidating its assets, it
emerged on Dec. 16.

As the House plenum is poised to approve an amendment allowing
Laiki's depositors to wrest control of its remaining assets,
which include 9.6% of share capital in the Bank of Cyprus and
ownership stakes in subsidiary banks in six countries, Mr. Pavlou
argued against the move in a letter to deputies on Dec. 15, on
grounds that it would shatter the trust shown by the host
countries, as well as potential buyers, to the administrators,
Cyprus Mail relates.

According to Cyprus Mail, Mr. Pavlou told lawmakers, "The only
reason the six subsidiaries are allowed to operate as going
concerns is the tolerance shown by the Central Banks of the
countries in which they operate, which has been repeatedly stated
to arise exclusively from the fact that administration lies
directly with the Resolution Authority."

"The representatives of creditors and 'haircut' depositors, who
are asking to change Legacy Laiki's administrative structure
through this legislative amendment, have not sought, nor have
they received, any assurance from the oversight authorities in
these countries that they could be accepted as owners or
administrators of these subsidiaries."

As a result, Mr. Pavlou argued, any change in the administration
of Legacy Laiki would inevitably trigger the revocation of the
subsidiaries' licenses, and therefore cause their disorderly
bankruptcy, Cyprus Mail relays.

"The only recourse available will then be the immediate sale or
liquidation of the subsidiaries under pressure and panic, with
possibly disastrous results," Cyprus Mail quotes Mr. Pavlou as

In addition, he said, parties that have expressed interest in
acquiring Legacy Laiki's assets may submit lower offers, or even
withdraw from the process altogether, because of the perceived
inability to manage the entity after the bank's creditors take
over, Cyprus Mail discloses.

"In any case, such a change would substantially delay the already
expedited process of selling the subsidiaries," the
administrator, as cited by Cyprus Mail, said.

Laiki was founded in 1901 as the Popular Savings Bank Limassol.


SPCM SA: Moody's Affirms 'Ba2' Corporate Family Rating
Moody's Investors Service affirmed the Corporate Family Rating
(CFR) and Probability of Default Rating (PDR) of SPCM SA (SPCM),
the holding company for SNF Floerger group, at Ba2 and Ba2-PD,
respectively. Concurrently, Moody's upgraded the $250 million
senior notes, due 2022, issued by SPCM to Ba2 from Ba3. The
outlook is revised to stable from positive.


The affirmation of the Ba2 CFR follows the company's good
performance so far in 2015, with improvements in sales, EBITDA
margins and retained cash flow. The favorable results were driven
by the increased gross profit margin in the polyacrylamide (PAM)
business driven by reduced raw material prices as well as a
significant impact from the weaker euro. SPCM has also shown the
resilience of its business despite the weak oil and gas markets
and Moody's now expects it to generate positive free cash flow
next year for the first time since 2012. Consequently, for
FY2014, Moody's adjusted EBITDA margin was 14.1% and for the
last-twelve-months (LTM) ended September 2015 improved to 16.1%.

However, the outlook was revised to stable from positive as
debt/EBITDA increased to 3.3x in FY2014 from 2.3x in FY2013 and
only declined to 3.1x for the LTM ended September 2015 with
retained cash flow/debt of 19.8%, down from 28.5% in FY2013 and
only a small improvement on the 19.7% of FY2014 (ratios adjusted
with Moody's standard adjustments). These credit metrics are more
appropriate for a stable Ba2 rating considering the company's
small scale and product concentration.

The rating of the $250 million senior notes due 2022 was upgraded
one notch to Ba2 from Ba3 and in line with the CFR, as debt that
ranks equal with it now accounts for the vast majority of the
capital structure after the revolving credit facility (RCF,
unrated) was upsized and EUR400 million of notes due 2020 were
replaced with EUR550 million notes due 2023 earlier this year.

SPCM's Ba2 CFR reflects Moody's positive view that SPCM (1) is a
leading specialty chemicals producer for the global PAM industry
with a diverse customer base across several applications; (2) has
a proven ability to generate solid sales and EBITDA growth, while
maintaining low leverage, through global and European economic
cycles and recent oil price weakness; (3) has a resilient
business model, as demonstrated by solid operating performance
and growth; and (4) has historically been able to pass on
material and production costs while simultaneously improving
marginal income, despite the high degree of competition in the US
markets and the challenging trading environment in Europe.

However, the Ba2 CFR also reflects its limited scale and product
concentration with historic muted free cash flow generation,
which limits the company's ability to handle unforeseen, yet
probable challenges to its business plan, such as sharp raw
material price volatility, raw material supply limitations, or
the substitution of other products for polyacrylamide (PAM).
Furthermore, SPCM's global competition can come from the PAM
division of substantially larger and more financially flexible
companies such as BASF (SE) (A1 stable), Ecolab, Inc. (Baa1
stable), and Kemira (unrated). SPCM is also exposed to FX
movements, with recent operating performance boosted by the weak
euro. Finally around 20% of sales come from the oil and gas
industry although around only 6% of group sales are from the
fracking and drilling part, which currently exhibit the most

Over the last few years, the company's growth has been driven by
demand from its oil and gas customers. While Moody's now expects
this to remain subdued and some parts such as fracking and
drilling to decline further in 2015 and 2016, overall sales to
the oil and gas industry only represented 20% of 2015 revenues.
Moody's expects growth in sales to the water treatment and paper
industries should help counter this weakness. At the end of 2014,
Moody's had expected adjusted leverage to increase to up to 3.5x
by the end of 2015. However, there are now greater tailwinds from
a stronger dollar and lower raw material prices such as for
propylene, as well as the potential for the company to pare back
its capital expenditure as growth slows. As a result, Moody's
anticipates leverage will peak closer to 3.0x and remain there
for a few years.

Moody's views SPCM's liquidity as good over the next 12-18
months. As of September 30, 2015, the company had EUR157 million
cash on balance sheet and approximately EUR334 million available
under credit facilities that include a recently upsized EUR350
million revolving credit facility that expires in 2020.

In FY 2014, SPCM generated negative free cash flow of EUR195
million, mostly due to high capital expenditures related to its
capacity expansion that peaked in 2015. Going forward, although
Moody's expects the company to continue to invest in its existing
and new plants, the rating agency expects the company to generate
slightly positive free cash flow in 2016 onwards. SPCM is subject
to net leverage and interest coverage covenants that are tested
semi-annually. As of June 30, 2015, SPCM exhibited 32% headroom
on its leverage covenant despite high capital expenditure.
Moody's expects the company to continue to show comfortable
headroom on both covenants going forward.


The stable outlook reflects the fact that Moody's expects SPCM
will continue to exhibit a resilient business, despite pressure
in the oil and gas market, maintaining EBITDA margins around 15%
and slowly deleveraging. It also assumes the company maintains
good liquidity.


Positive rating pressure could develop if SPCM reduces adjusted
debt/EBITDA towards 2.5x and retained cash flow/debt is
maintained around 20%. Conversely, negative rating pressure could
develop if the conditions for a stable outlook are not being met.
The rating could then be downgraded if adjusted debt/EBITDA
exceeds 3.5x for an extended period of time, retained cash
flow/debt falls to the low teens in percentage terms, the company
pursues a more aggressive financial policy or liquidity

SPCM SA is the parent holding company of the SNF Group (SNF). SNF
is one of the world's leading producers of polyacrylamide, which
is a water-soluble specialty chemical used in water treatment,
oil and gas applications, mineral extraction, and pulp and paper
manufacturing. The company is family-owned and was formed as a
result of a buy-out of the flocculants business of WR Grace in
1978. SNF, headquartered in Saint-Etienne, France, reported
revenues and EBITDA of approximately EUR2.1 billion and EUR297
million respectively for FY2014.


ALITALIA SPA: Appoints Cramer Ball as New Chief Executive Officer
Tommaso Ebhardt and Deena Kamel at Bloomberg News report that
Alitalia SpA appointed Cramer Ball, head of Indian ally Jet
Airways, as its chief executive officer.

He succeeds Silvano Cassano, who stood down in September after
less than a year in charge of Italy's biggest airline, Bloomberg

According to Bloomberg, Mr. Ball, appointed CEO of Jet in May
2014, will take over at Alitalia next March, the Rome-based
company said on Dec. 17.

The two carriers are linked by their membership of the seven-
strong Equity Alliance developed by Etihad Airways PJSC, which
owns 49% of Alitalia and 24% of Jet, Bloomberg notes.

As reported by the Troubled Company Reporter-Europe on November
17, 2014, The Financial Times related that Brussels on Nov. 14
gave the go-ahead for Etihad Airways to become the largest
shareholder in lossmaking Alitalia, as part of a EUR1.7 billion
rescue of Italy's flagship carrier that will see the deep-
pocketed Gulf carrier step up its expansion in Europe.  For
Alitalia, the deal enables it to avoid the possibility of a
second bankruptcy in six years, the FT said.  Alitalia has not
reported a full-year net profit since 2002, but is now seeking to
generate earnings by 2017, the FT noted.

                        About Alitalia

Alitalia-Compagnia Aerea Italiana has navigated its way through
a successful restructuring.  After filing for bankruptcy
protection in 2008, Alitalia found additional investors, acquired
rival airline Air One, and re-emerged as Italy's leading airline
in early 2009.  Operating a fleet of about 150 aircraft, the
airline now serves more than 75 national and international
destinations from hubs in Fiumicino (Rome), Milan, Turin, Venice,
Naples, and Catania.  Alitalia extends its network as a member of
the SkyTeam code-sharing and marketing alliance, which also
includes Air France, Delta Air Lines, and KLM.  An Italian
investor group owns a majority of the company, while Air France-
KLM owns 25%.

CORDUSIO RMBS 2007: Moody's Hikes Class D Notes Rating to Ba1(sf)
Moody's Investors Service taken rating actions on three Italian
residential mortgage backed securities (RMBS) transactions.

Specifically, Moody's has downgraded one note and affirmed five
notes of Capital Mortgage S.r.l. (BIPCA Cordusio RMBS) and
upgraded six notes and affirmed three notes of Cordusio RMBS -
UCFin S.r.l. and Cordusio RMBS Securitisation S.r.l. - Series


The downgrade of tranche B of Capital Mortgage S.r.l. (BIPCA
Cordusio RMBS) results from the correction of an error identified
in Moody's previous analysis of the transaction, namely the
analysis of eligible investments.

The upgrades of tranches in Cordusio RMBS - UCFin S.r.l. and
Cordusio RMBS Securitisation S.r.l. - Series 2007 reflect (1) the
reduced uncertainty related to the collateral assumption of these
seasoned portfolios, and (2) the deleveraging of the
transactions. The ratings of other tranches in the deals have
been affirmed given credit enhancement is commensurate with
current ratings.


The rating previously assigned to tranche B of Capital Mortgage
S.r.l. (BIPCA Cordusio RMBS) did not adequately take into account
the definition of eligible investment present in the transaction.
Indeed the rating of class B notes is constrained due to (i) our
assessment of medium linkage of the transaction funds held in
eligible investments, and (ii) the minimum rating of Baa3
required for the eligible investments with maturities up to one
month and Baa2 for those with maturities of more than one month
and less than three months. As a result it can only achieve
Aa3(sf) according to "The Temporary Use of Cash in Structured
Finance Transactions: Eligible Investment and Bank Guidelines"
(December 2015). The ratings of other tranches in the deal have
been affirmed given credit enhancement is commensurate with
current ratings.


Our collateral performance outlook for Italian RMBS is stable.
The recent more favorable economic conditions (low interest
rates, slightly higher GDP growth and slightly improved
unemployment rate) have benefited some of Italian RMBS borrowers
and the delinquencies and defaults of the Italian RMBS market
remained relatively stable in recent months. However, the pace of
recovery is slow and we still see deterioration of performance in
some deals. Notwithstanding, we believe uncertainty in the sector
in general and, in some transactions of this seasoned portfolio
in particular, has reduced. Due to the reduced uncertainty in the
sector, we have removed the additional stress analysis of key
collateral assumptions

Moody's has reassessed its lifetime loss expectations (EL) for
the three transactions, taking into account the transactions'
underlying collateral performance to date, and maintained
previous assumption. MILAN CE assumptions remain unchanged for
the three deals.


Repayment of principal collections has contributed to increase
credit enhancement. In addition Principal Deficiencies Ledger of
Cordusio RMBS Securitisation S.r.l. - Series 2007 reduced in the
last two payments date.

This, together with the removal of additional stress analysis of
key collateral assumptions, resulted in the above mentioned
upgrades of Cordusio RMBS - UCFin S.r.l. and Cordusio RMBS
Securitisation S.r.l. - Series 2007.

Principal Methodology:

The principal methodology used in these ratings was "Moody's
Approach to Rating RMBS Using the MILAN Framework" published in
January 2015. Please see the Credit Policy page on
for a copy of this methodology.

The analysis undertaken by Moody's at the initial assignment of
ratings for RMBS securities may focus on aspects that become less
relevant or typically remain unchanged during the surveillance


Factors or circumstances that could lead to an upgrade of the
ratings include:

   (1) better-than-expected performance of the underlying

   (2) deleveraging of the capital structure; and

   (3) improvements in the credit quality of the transaction
       counterparties and

   (4) a decreased probability of high loss scenarios owing to a
       upgrade of the country ceiling.

Factors or circumstances that could lead to a downgrade of the
ratings include:

   (1) an increased probability of high loss scenarios owing to a
       downgrade of the country ceiling;

   (2) a worse than expected performance of the underlying

   (3) deterioration in the notes' available credit enhancement;

   (4) deterioration in the credit quality of the transaction


Issuer: Capital Mortgage S.r.l. (BIPCA Cordusio RMBS)

  EUR666.3M A1 Notes, Affirmed Aa2 (sf); previously on Jul 10,
  2015 Affirmed Aa2 (sf)

  EUR185.5M A2 Notes, Affirmed Aa2 (sf); previously on Jul 10,
  2015 Affirmed Aa2 (sf)

  EUR 61.8M B Notes, Downgraded to Aa3 (sf); previously on Jul
  10, 2015 Upgraded to Aa2 (sf)

  EUR14.3M C Notes, Affirmed A2 (sf); previously on Jul 10, 2015
  Affirmed A2 (sf)

  EUR18.0M D Notes, Affirmed Baa1 (sf); previously on Jul 10,
  2015 Upgraded to Baa1 (sf)

  EUR5.5M E Notes, Affirmed Baa3 (sf); previously on Jul 10, 2015
  Affirmed Baa3 (sf)

Issuer: Cordusio RMBS - UCFin S.r.l.

  EUR1735M A2 Notes, Affirmed Aa2 (sf); previously on Apr 9, 2015
  Upgraded to Aa2 (sf)

  EUR75M B Notes, Upgraded to Aa2 (sf); previously on Apr 9, 2015
  Upgraded to A1 (sf)

  EUR25M C Notes, Upgraded to Aa3 (sf); previously on Apr 9, 2015
  Upgraded to A3 (sf)

  EUR48M D Notes, Upgraded to Baa2 (sf); previously on Apr 9,
  2015 Upgraded to Ba1 (sf)

Issuer: Cordusio RMBS Securitisation S.r.l. - Series 2007

  EUR2227.6M A2 Notes, Affirmed Aa2 (sf); previously on Apr 9,
  2015 Upgraded to Aa2 (sf)

  EUR738.6M A3 Notes, Affirmed Aa2 (sf); previously on Apr 9,
  2015 Upgraded to Aa2 (sf)

  EUR71.1M B Notes, Upgraded to Aa2 (sf); previously on Apr 9,
  2015 Upgraded to A1 (sf)

  EUR43.8M C Notes, Upgraded to A1 (sf); previously on Apr 9,
  2015 Upgraded to A3 (sf)

  EUR102M D Notes, Upgraded to Ba1 (sf); previously on Apr 9,
  2015 Upgraded to Ba2 (sf)


LITHUANIAN SHIPPING: Shares Removed From Secondary Trading List
Nasdaq Vilnius on Dec. 15 disclosed that it decided to remove
shares (LJL1L, ISIN code LT0000125999) of Lithuanian Shipping
Company from the Secondary Trading List from 31-12-2015 provided
that the decision of the Klaipeda District Court as of
December 14, 2015 comes into effect where bankruptcy proceedings
to PC Lithuanian Shipping Company were initiated.

These financial instruments will be removed from the Secondary
Trading List following the provisions of item 19.1.4 of the
Nasdaq Vilnius listing rules.

By the decision of Regional Court of Klaipeda dated December 14,
2015, the bankruptcy proceedings of PC Lithuanian Shipping
Company have been initiated.  The decision comes into force 10
days after its adoption.


ALISON MIDCO: Moody's Changes Outlook to Stable From Positive
Moody's Investors Service changed to stable, from positive, the
outlook on all the ratings of Alison Midco S.a.r.l. (ARVOS
Group), a manufacturer of components and products for the power
generation and petrochemical industries. Concurrently, we have
affirmed: (1) the B3 corporate family rating (CFR) and B3-PD
probability of default rating (PDR) assigned to Alison Midco
S.a.r.l. (ARVOS Group), an entity fully owned by Triton funds,
and the holding company for the operating subsidiaries; (2) the
B2 ratings assigned to the first lien senior secured term loan
and the senior secured revolving credit facility (RCF) of Arvos
BidCo S.a.r.l.; and (3) the Caa2 ratings assigned to the second
lien senior secured term loan of Arvos Inc. The outlooks of Arvos
BidCo S.a.r.l. and Arvos Inc. have also been changed to stable
from positive.


"The change in outlook reflects the increasingly tough
environment for coal-fired power generation because of lower
commodity prices and the implementation of stringent
environmental legislation," says Scott Phillips, a Moody's Vice
President -- Senior Analyst and lead analyst for Arvos. "As a
manufacturer of products for the utility and oil & gas
industries, Arvos is somewhat sensitive to the demand from
companies operating within these segments," added Mr. Phillips.

Since the ratings were first assigned to Arvos in 2014, leverage
for the group (as measured by adjusted debt / EBITDA) has fallen
from above 7x to around 6.2x as of September 2015. While Moody's
expects that the existing order backlog will drive an increase in
both revenue and earnings in FY 2015/16, the agency sees
additional deleveraging beyond current levels as challenging.
This reflects the deteriorating outlook for coal generators in
Arvos' main markets of the United States, Europe and Japan which
have suffered because of lower commodity prices and may well lead
to lower levels of investment in those assets. In addition, the
agency believes that an increasing focus on carbon emissions will
lead to tougher environmental regulation (particularly in light
of the global agreement made in Paris in December 2015) that will
negatively affect the orders of new equipment and may potentially
reduce the size of Arvos' future addressable market.

The B3 CFR assigned to Arvos takes into consideration: (1) the
group's small scale, as reflected by revenue of EUR472 million in
FY 2015, which is low when compared with other rated issuers in
the manufacturing industry; (2) limited corporate history (albeit
a long-standing operational history) as the group has only
existed in its current form since August 2014; (3) high financial
leverage, with debt/EBITDA (as adjusted by Moody's) expected to
be close-to, or above 6x for the financial year 2015/16; (4)
limited product diversification, with around 60% of group revenue
generated by the Air Preheaters ("APH") division; (5) relatively
high exposure to the mature coal-powered electricity markets of
Europe, the United States, and Japan, which collectively face
structural challenges because of tightening environmental
legislation; and (6) dependence on the investment decisions of
companies operating in the cyclical oil & gas sector.

These negatives are, however, offset by the group's (1) strong
competitive position in certain niche areas of the global steam
auxiliary components market with a broad product portfolio and
global production capability; (2) established position in a
mature industry, which is supported by long-standing customer
relationships, as well as existing technological know-how; (3) a
sizeable aftermarket business (which accounts around 50% of group
turnover), which offers a higher level of revenue and earnings
stability than the new equipment business; (4) historically good
profitability as indicated by an EBITDA margin of around 18%
(unadjusted) in the financial year 2014/15, and (5) an ability to
generate modest amounts of positive free cash flow after interest
payments and taxes as result of low maintenance capital
expenditure and limited working capital needs.


Moody's considers Arvos' liquidity to be adequate. At the end of
September 2015, the company had EUR 27 million of cash on the
balance sheet and had access to a EUR 40 million revolving credit
facility (RCF), which was partially drawn (by EUR 4 million) at
the end of September. Over the next twelve months, Moody's
expects that Arvos will generate around EUR 40-50 million of
Funds From Operations (FFO) as well as positive levels of net
cash (as evidenced by free cash flow (FCF) / debt of around 5-


Given the recent change in outlook, Moody's considers an upgrade
to be unlikely in the 12-18 months. Nevertheless, if Arvos was
able to deleverage well below 5.5x debt / EBITDA and maintain FCF
/ debt in the mid-single digits, Moody's could consider an
upgrade. Conversely, downwards rating pressure would result if
leverage were to rise above 6.5x on a sustained basis. A
deterioration in liquidity would also be a driver for a possible

Alison Midco S.a.r.l. (ARVOS Group) is an auxiliary power
equipment provider operating in new equipment and aftermarkets
through three business units: Air Preheaters (APH), Heat Transfer
Solutions (HTS) and Mills. In FY 2015 Arvos generated EUR472
million of sales and EBITDA (unadjusted, pre-exceptionals) of
EUR88 million. Arvos is owned by private equity funds managed by


EVRAZ GROUP: Moody's Says Tender Offer are Credit Positive
Moody's Investors Service said that it views as credit positive
for Russian steel and mining company Evraz Group S.A. (Evraz; Ba3
stable) the results of its tender offer for outstanding notes and
the concurrent placement of its new $750 million notes with
maturity in January 2021, as announced on 14 December 2015. The
transaction will improve Evraz's liquidity, extend its debt
maturity profile and reduce medium-term refinancing risks,
without sustainably increasing its leverage and interest burden.

As a result of the tender offer, Evraz will purchase $524 million
out of the total outstanding $1.96 billion of three issues of its
notes maturing in 2017-18. The total amount of Evraz's debt
maturing in 2017 and 2018 will decline by $314 million and $210
million, respectively, further improving the already solid

Evraz is going to use around $200 million of the proceeds from
the placement of the new notes, which will remain after the
settlement of the tendered notes principal plus accrued interest,
to repay other debt due 2016-17. Moody's projects that Evraz's
debt/EBITDA will somewhat exceed 3.5x and that its EBIT interest
cover will decline below 2.5x in 2016, compared with 2.9x and
3.1x at 30 June 2015 (all metrics are Moody's-adjusted), because
of the continuing decline in steel prices.

However, the rating agency expects that Evraz will pursue its
deleveraging strategy and will be able to restore its financial
metrics in 2017, with debt/EBITDA declining to below 3.0x and
EBIT interest cover rising above 3.0x (all metrics are Moody's-
adjusted), owing to the company's sustainable cash flow
generation, assuming steel prices stabilise by that time.

The new notes' coupon rate of 8.25% is higher than the coupon
rates on two of three tendered issues of outstanding notes.
However, Moody's estimates that the weighted average coupon rate
on the four notes issues affected by the transaction will be less
than 20 basis points higher than the weighted average coupon rate
on the three tendered issues before the transaction.

Moody's also recognizes Evraz's proactive approach towards
refinancing its medium-term debt maturities, which reduces the
company's refinancing risk, and times the placement in
anticipation of the increase in borrowing costs in the
international markets following the expected rise of the US
Federal Reserve's interest rate.

In addition, the placement of the new notes demonstrates Evraz's
continuing access to international long-term public debt markets
despite the company's exposure to the challenging macroeconomic
environment in Russia, weak global market for steel, and low oil
and gas prices, which continue to exert pressure on the company's
US and Canadian assets' operating and financial performance.

Evraz is one of the largest vertically integrated steel, mining
and vanadium companies in Russia. Evraz's principal assets are
steel plants (in Russia, North America, Europe, South Africa,
Kazakhstan and Ukraine), iron ore and coal mining facilities, as
well as logistics and trading assets located predominantly in
Russia. In the last 12 months to June 30, 2015, Evraz generated
revenues of $11.1 billion (2014: $12.8 billion) and Moody's-
adjusted EBITDA of $2.0 billion (2014: $2.3 billion). EVRAZ plc
currently holds 100% of the company's share capital and is itself
jointly controlled by Mr. Roman Abramovich, Mr. Alexander
Abramov, Mr. Alexander Frolov and Mr. Eugene Shvidler.

MECHEL OAO: Nears Debt Restructuring Deal with Sberbank
Svetlana Burmistrova and Andrey Kuzmin at Reuters report that
Mechel OAO said on Dec. 16 it had entered a "finishing line" on
its debt deal with Sberbank.

Mechel, which employs over 60,000 people, had to ask its lenders
to delay debt repayments after Russia's economic downturn and a
decline in coal and steel prices put an end to its strategy of
borrowing heavily to finance large investments, Reuters relates.

Mechel is a Russian steel and coal producer.

TRANSAERO AIRLINE: Placed Under External Supervision
Polina Montag-Girmes at Air Transport World reports that the
Arbitration Court of Saint Petersburg and Leningrad region has
put Transaero Airline under external supervision, in a decision
published on the court's Web site Dec. 16.

Russia's Sberbank filed a bankruptcy motion against Transaero on
Oct. 19, after Aeroflot's plans to acquire Transaero fell
through, ATW recounts.

According to ATW, Interfax agency, quoting Sberbank president
Herman Gref, reported Sept. 4 that Transaero's overall debt
reached RUB250 billion (US$3.72 billion).  Sberbank is one of
Transaero's biggest creditors, ATW notes.

Russia's Federal Air Transport Agency, Rosaviatsia, suspended
Transaero Airlines' ticket sales from Oct. 1, 2015, ATW relays.
The carrier's air operator's certificate was canceled Oct. 26,
ATW discloses.

OJSC Transaero Airlines is a Russian airline with its head office
in Saint Petersburg.  It operates scheduled and charter flights
to 103 domestic and international destinations.

U N I T E D   K I N G D O M

ADVANTAGE INSURANCE: Moody's Withdraws 'Ba1' IFS Rating
Moody's Investors Service has withdrawn the Ba1 insurance
financial strength rating and stable outlook on Advantage
Insurance Company Limited, the main insurance operating entity of
Hastings Group Holdings plc.

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

The following Advantage Insurance Company Limited ratings were

  Insurance Financial Strength rating of Ba1 Withdrawn

  Stable Outlook Withdrawn

Here's the revised notice. Thanks.

BOSTON PRIME: January 5 Client Money Claims Bar Date Set
Michael David Rollings -- -- and
Steven Edward Butt -- -- in their
capacity as Joint Special Administrators for Boston Prime
Limited, intend to make a final distribution of all client money
held by the Company.

On November 30, 2015 the High Court of Justice in England and
Wales made an order prescribing the procedure that shall apply
for the purpose of distributing client money held by the Company
to clients.

Clients who have not yet submitted a client money claim, but who
wish to do so, must submit their claim in writing to the Special
Administrators by 5:00 p.m. (London time) on January 5, 2016 (the
"Last Date for Proving") at the registered office address for the
Company at 6 Snow Hill, London, EC1A 2AY, or via e-mail to

Clients who do not submit a client money claim by the Last Date
for Proving in accordance with this notice will not be entitled
to share in the proposed distribution of client money.

Clients who submit a client money claim which is rejected by the
Special Administrators will also not be entitled to share in the
proposed distribution of client money, except in the event that
they successfully appeal against the Special Administrators'
adjudication of their client money claim.

Should clients wish to appeal against the Special Administrators'
adjudication of their client money claim, they are required to
file an application with the High Court of Justice in England and
Wales.  Details of the appeals process are contained within the

A copy of the Order can be viewed at:

NEW WORLD: Moody's Affirms Caa3 Corp. Family Rating, Outlook Neg.
Moody's Investors Service affirmed the Caa3 corporate family
rating (CFR) and the Caa3-PD probability of default rating (PDR)
of New World Resources N.V. ('NWR'). The Caa2 rating of the
EUR300 million senior secured notes due in 2020 has been also
affirmed. Concurrently, Moody's has changed the outlook on all
ratings to negative.


The CFR of Caa3 reflects NWR's very weak credit metrics and the
expectation of protracted negative free cash flows affecting its
already weak liquidity position. It additionally reflects Moody's
expectation of a very high probability of default for the company
within the next 12 to 18 months. The material deterioration of
the coal market environment during 2015, with benchmark thermal
coal and metallurgical coal prices falling by approximately 16%
and 34% respectively since the start of the year, and the absence
of a catalyst for their possible recovery anytime soon, is
actually exacerbating the structural vulnerabilities of the
company. Such structural weaknesses relate to an unsustainable
capital structure, which is burdened by too much debt,
notwithstanding the debt restructuring actions completed in
October 2014, and loss making mining operations, which are
characterized by still very high fixed costs, notwithstanding
ongoing cost-cutting and efficiency initiatives being implemented
by management on an ongoing basis to lower the average cash cost
position of the mines. Furthermore, broader environmental
concerns particularly around the thermal coal business, which
still accounts for approximately 40% of the company's revenues,
will increasingly pose considerable challenges to the long term
viability of a material portion of the business.

Moody's acknowledges management efforts made so far to preserve
liquidity, by reducing cost and capital expenditures to
historically low levels, by locking selling prices with customers
at fixed levels pre-agreed at the beginning of 2015 for all the
thermal coal and 74% of the metallurgical coal produced in 2015,
and by opting so far to capitalize interest rather than paying
cash interest on the senior secured notes and on the convertible
notes, exploiting the pay-in-kind (PIK) toggle option permitted
by the existing bond indentures. However, in spite of these
actions, the company has already burned more than EUR50 million
of cash since the beginning of the year, and is facing
refinancing risk on its EUR 35 million super senior revolving
credit facility, which is currently drawn and matures in October

Rating outlook

The change of the outlook to negative reflects Moody's
expectation that NWR's credit metrics and liquidity are likely to
deteriorate further in 2016, due to a still very challenging
outlook on thermal coal and, to a lesser extent, on coking coal,
which the rating agency believes cannot be sufficiently mitigated
by ongoing management actions. The outlook is also consistent
with Moody's negative fundamental view on the coal sector over
the next 12 to 18 months, which prompted the rating agency to
revise further down its price assumptions for both metallurgical
coal and thermal coal, whose average prices are now assumed at
$80/t and $55/t respectively for 2016 -- lower levels compared to
the average 2015 levels.

What could change the rating UP

Upward pressure on the ratings is currently not envisaged. A
stabilization of NWR's ratings would require a meaningful and
sustained improvement in the company's liquidity position, which
in turn would need a sustained recovery in the reference coal
markets and/or some sort of external liquidity support, making
the company more able to sustain its required capital expenditure
plans to improve the competitiveness of its mining asset base.

What Could Change the Rating DOWN

Negative pressure on the ratings would result if the weak
liquidity of the company deteriorates further, with an
acceleration of the cash burn and an increased likelihood of
breaching the minimum cash buffer maintenance financial covenant
required to be tested quarterly according to the terms of the
super senior facility maturing in October 2016. Furthermore, lack
of a plan to proactively address this debt maturity in 2016 will
contribute to exert negative rating pressure.

The principal methodology used in these ratings was Global Mining
Industry published in August 2014.

Headquartered in the United Kingdom, NWR is the largest hard coal
mining group in the Czech Republic through its subsidiary OKD,
a.s. The company has four operating coal mines which during 2014
led to annual sales of 8.3mt of coal. The company reported
consolidated revenues of EUR676 million in 2014. The investment
company CERCL Mining BV, following the completion of the
restructuring completed in October 2014, holds approximately a
51% stake in NWR.


* BOOK REVIEW: Transnational Mergers and Acquisitions
Author: Sarkis J. Khoury
Publisher: Beard Books
Softcover: 292 pages
List Price: $34.95
Review by Gail Owens Hoelscher
Order your personal copy today at

Transnational Mergers and Acquisitions in the United States will
appeal to a wide range of readers. Dr. Khoury's analysis is
valuable for managers involved in transnational acquisitions,
whether they are acquiring companies or being acquired

At the same time, he provides a comprehensive and large-scale
look at the industrial sector of the U.S. economy that proves
very useful for policy makers even today. With its nearly 100
tables of data and numerous examples, Khoury provides a wealth of
information for business historians and researchers as well.
Until the late 1960s, we Americans were confident (some might say
smug) in our belief that U.S. direct investment abroad would
continue to grow as it had in the 1950s and 1960s, and that we
would dominate the other large world economies in foreign
investment for some time to come. And then came the 1970s, U.S.
investment abroad stood at $78 billion, in contrast to only $13
billion in foreign investment in the U.S. In 1978, however, only
eight years later, foreign investment in the U.S. had skyrocketed
to nearly #41 billion, about half of it in acquisition of U.S.
firms. Foreign acquisitions of U.S. companies grew from 20 in
1970 to 188 in 1978. The tables had turned an Americans were
worried. Acquisitions in the banking and insurance sectors were
increasing sharply, which in particular alarmed many analysts.
Thus, when it was first published in 1980, this book met a
growing need for analytical and empirical data on this rapidly
increasing flow of foreign investment money into the U.S., much
of it in acquisitions. Khoury answers many of the questions
arising from the situation as it stood in 1980, many of which are
applicable today: What are the motives for transnational
acquisitions? How do foreign firms plans, evaluate, and negotiate
mergers in the U.S.? What are the effects of these acquisitions
on competition, money and capital markets; relative technological
position; balance of payments and economic policy in the U.S.?
To begin to answer these questions, Khoury researched foreign
investment in the U.S. from 1790 to 1979. His historical review
includes foreign firms' industry preferences, choice of location
in the U.S., and methods for penetrating the U.S. market. He
notes the importance of foreign investment to growth in the U.S.,
particularly until the early 20th century, and that prior to the
1970s, foreign investment had grown steadily throughout U.S.
history, with lapses during and after the world wars.
Khoury found that rates of return to foreign companies were not
excessive. He determined that the effect on the U.S. economy was
generally positive and concluded that restricting the inflow of
direct and indirect foreign investment would hinder U.S. economic
growth both in the short term and long term. Further, he found no
compelling reason to restrict the activities of multinational
corporations in the U.S. from a policy perspective. Khoury's
research broke new ground and provided input for economic policy
at just the right time.

Sarkis J. Khoury holds a Ph.D. in International Finance from
Wharton. He teaches finance and international finance at the
University of California, Riverside, and serves as the Executive
Director of International Programs at the Anderson Graduate
School of Business.


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

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

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


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

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

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

This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed to
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members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
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                 * * * End of Transmission * * *