TCREUR_Public/160120.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

         Wednesday, January 20, 2016, Vol. 17, No. 013


                            Headlines


F R A N C E

NOVARTEX SAS: Fitch Affirms 'CCC' LT Issuer Default Rating


G E R M A N Y

PROVIDE BLUE 2005: Fitch Hikes Class E Debt Rating to 'Bsf'


I R E L A N D

CLARION HOTEL: Dalata Buys Business for EUR13 Million
MCELHINNEY FASHIONS: Dispute with Receiver Adjourned to Jan. 28
PETROCELTIC: Obtains Waiver Extension, Search for Buyer Ongoing
WINDMILL CLO I: Moody's Raises Rating on Cl. E Notes to 'Ba1'


I T A L Y

MONTE DEI PASCHI: Concerns Over Non-Performing Loans Hit Shares


L U X E M B O U R G

4FINANCE SA: Moody's Assigns (P)B3 Rating to Sr. Unsecured Notes
4FINANCE SA: S&P Lowers Rating on Outstanding Sr. Notes to 'B+'


N E T H E R L A N D S

MUNDA CLO I: Moody's Affirms Ba2 Rating on Class D Notes
STORM 2016-I BV: Fitch Assigns 'BB(EXP)sf' Rating to Cl. E Debt


P O R T U G A L

NOVO BANCO: Portugal Expresses Concern Over Bond Transfer


R U S S I A

EUROCHEM GROUP: Fitch Affirms 'BB' LT Issuer Default Ratings
TRANSFIN-M OJSC: S&P Assigns 'B/C' Counterparty Credit Ratings


S P A I N

GENERALITAT DE CATALUNYA: Moody's Affirms Ba2 Rating, Outlook Neg


U N I T E D   K I N G D O M

AFREN PLC: Fitch Withdraws 'D' Long-Term Issuer Default Rating
ARBOUR CLO III: Moody's Assigns (P)B2 Rating to Class F Notes
DRACO ECLIPSE 2005-4: Fitch Affirms 'CCCsf' Rating on Cl. E Debt
LORDS 2: Fitch Raises Rating on Class C Notes to 'BB-sf'
MERGERMARKET MIDCO 2: S&P Assigns 'B' CCR, Outlook Stable

PARAGON OFFSHORE: Defers Interest Payment on $15.4MM 2022 Notes


                            *********



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F R A N C E
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NOVARTEX SAS: Fitch Affirms 'CCC' LT Issuer Default Rating
----------------------------------------------------------
Fitch Ratings has affirmed Novartex SAS's (Vivarte) Long-term
Issuer Default Rating (IDR) at 'CCC'. Fitch has also affirmed
Vivarte SAS's EUR500 million super senior debt ('New Money') at
'B-'/'RR2' and Novarte SAS's EUR780 million reinstated debt at
'CC'/'RR6'.

The affirmation reflects Vivarte's compromised business model and
execution risks associated with a sustainable turnaround amid a
subdued consumer environment and high competitive pressures. Based
on the first measures implemented by the new management, Fitch
expects the group's profitability and funds from operations (FFO)
generation to progressively improve while liquidity should remain
adequate. However, Fitch does not expect any improvement in
Vivarte's financial metrics would be meaningful enough to lead to
a rating upgrade until 2018.

The current rating also reflects uncertainties around the request
for a covenant waiver extension on the group's minimum EBITDA;
however, as a mitigating factor we acknowledge the new
management's ability at reacting swiftly to protect the group's
liquidity and to put in place a comprehensive turnaround plan
aimed at restoring profitability to a more normalized level by
2018.

KEY RATING DRIVERS

Weak Credit Metrics

Fitch projects key financial credit metrics to remain weak with
stable FFO fixed charge cover at approximately1.2x and FFO
adjusted gross leverage above 8.0x over the next three years (our
leverage metrics include adjustments for operating leases and
EUR100 million cash considered not readily available for debt
repayments). The positive effect of growing FFO will be partially
offset by the negative impact of accumulating high PIK interests
on debt.

Waiver Request on EBITDA Covenant

Vivarte's management has asked lenders to extend the LTM EBITDA
covenant holiday to the next testing period of February 2016. The
degree of uncertainty around the lenders' acceptance of such
extension is embedded in the current 'CCC' IDR. Fitch notes that
the lenders are also the shareholders of the group and that the
set of covenants had been put in place based on the former
management's business plan, which had under-estimated the group's
distress. Fitch sees the first results of the new strategic plan
as encouraging, in particular the sound performance of the mass
market apparel segment (mainly La Halle Apparel) in 1QFY16
(financial year ending August 2016).

Evolving Business Model

Fitch positively views the turnaround plan implemented by new
management from mid-FY15. Key measures comprise the restructuring
of the loss-making banners (notably more than 230 store closures
mainly at La Halle Apparel), competitive repositioning on products
and prices, store network optimization and e-commerce development,
as well as the streamlining of its cost structure. Fitch expects
this plan to enable the group to restore both sales growth from
FY16 and EBITDA to near FY14 levels (EUR170 million) by FY17,
despite the group's diminished scale.

Still Difficult Market Environment

"Fitch views Vivarte's concentration in the French market as a
constraint to the rating. Our rating case integrates the
assumption that the French apparel and footwear market growth will
remain subdued due to a fragile consumer environment and
continuously fierce competition, implying recurring strong price
pressure. Furthermore, we expect abnormal weather conditions such
as the exceptionally warm autumn 2015 to keep on creating
additional market disturbances as this may lead retailers to
undertake deep discounting to keep their inventories at a
reasonable level," Fitch said.

Adequate Liquidity

Fitch believes Vivarte will have sufficient liquidity to support
the group's comprehensive turnaround plan over the next three
years. In FY15, management drastically reduced the main sources of
cash drain such as unprofitable stores, capex and obsolete
inventories. This should enable the group to fully dedicate its
liquidity resources to the turnaround plan.

Fitch projects Vivarte's FCF to remain deeply negative in FY16 at
approximately minus EUR220 million as unprofitable operations are
being discontinued. However, we expect the outflow to drop to
EUR45m-EUR50m per year in FY17 and FY18. These outflows should be
well covered by readily available cash of EUR427 million at end-
FY15, while Vivarte benefits from bullet debt maturities. Fitch
also assumes that the EUR147.4 million letter of credit lines used
for intra-year working capital funding and renewed for one year in
October 2015 will be further renewed thereafter.

KEY ASSUMPTIONS

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

-- Like-for-like sales growth to return to positive low single-
    digits in FY16

-- Gradual restoration of group's EBITDA margins towards 7.5% to
    slightly above FY14 level.

-- Negative cash impact of group restructuring mainly in FY16.

-- Average capex around 4.5% of sales over the next three years

-- Negative, although improving, FCF generation over the next
    three years

RATING SENSITIVITIES

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

-- Evidence of improvements to the business model and successful
    execution of the turnaround strategy by defending its market
    share while returning to like-for-like sales growth and
    improving profitability, particularly in the mass market
    channel. This is a key consideration for an upgrade.

-- Reducing financial risks, evidenced by at least neutral FCF
    generation and FFO fixed charge cover above 1.3x

-- FFO adjusted gross leverage below 8.0x

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

-- Inability to improve the business model leading to continued
    negative FCF generation, increasing leverage and eroding
    liquidity.

-- Breach of maintenance covenants resulting in further
    distressed debt restructuring and/or seriously impaired
    liquidity.



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G E R M A N Y
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PROVIDE BLUE 2005: Fitch Hikes Class E Debt Rating to 'Bsf'
-----------------------------------------------------------
Fitch Ratings has upgraded Provide Blue 2005 Series as follows:

Provide Blue 2005-1 PLC:

Class E (ISIN DE000A0E6NY0): upgraded to 'BBB+sf' from 'BB-sf';
Outlook Positive

Provide Blue 2005-2 PLC:

Class D (ISIN DE000A0GHZU5): upgraded to 'BBBsf' from 'BBsf';
Outlook Positive

Class E (ISIN DE000A0GHZV3): upgraded to 'Bsf' from 'CCCsf';
Stable Outlook

Both transactions are synthetic securitizations referencing
portfolios of residential mortgage loans originated by BHW
Bausparkasse AG (BHW). The rating actions reflect the improved
asset performance and credit enhancement (CE) levels over the last
12 months.

KEY RATING DRIVERS

Stable Asset Performance

Both transactions have reported improved asset performance over
the past 12 months with three months plus arrears and loans to
bankrupt borrowers decreasing to EUR4.7 million (from EUR7.1
million) for 2005-1 and to EUR14.6 million (from EUR19 million)
for 2005-2.

Strong Repayments Given Interest Resets

For 2005-1, after strong repayments in 2014 due to the majority of
the loans reaching their interest reset dates, repayments have
normalized. The same strong increase was observed for 2005-2 in
2015 and a normalization is also expected.

Low Loss Allocation, Increasing CE

The last four reporting periods saw additional losses of EUR0.6
million and EUR0.9 million allocated to 2005-1 and 2005-2,
respectively, taking total losses to EUR8 million and EUR17.1
million. Given repayments have been stronger relative to the loss
attribution, CE as a percentage of the outstanding balance
increased to 4.8% as of end-December 2015 from 3.5% for the 2005-1
class E notes. For 2005-2, as of October 2015, it increased to
0.9% from 0.7% for the class E notes and to 4.5% from 2.8% for the
class D notes.

Transactions Called

Following the regulatory call of 2005-1 in January 2010, the
senior CDS and class A+, A, B and C notes were paid in full. The
class D notes were repaid in full in July 2015. 2005-2 was called
in September 2015 with only the class D and E notes outstanding.
The outstanding notes' repayment is limited to proceeds received
from cures and recoveries of the overdue reference claims
exceeding new delinquencies in each period.

RATING SENSITIVITIES

Performance is dependent on the level of losses following the
borrowers' defaults and recovery. While Fitch expects continued
robust performance of German mortgage loans, unexpectedly sharp
deterioration of economic fundamentals could accelerate loss
allocation towards the class F notes (2005-1) and the class E
notes and the threshold amount (2005-2), adversely affecting CE
for the junior notes and resulting in a downgrade.

In addition, for seasoned portfolios a sharper reduction of the
reference claim portfolio relative to additional losses being
allocated may increase CE and potentially support upgrades across
the transactions. This is reflected in the Positive Outlooks on
the 2005-1 class E and the 2005-2 class D notes.

DUE DILIGENCE USAGE

Fitch did not undertake a review of the information provided about
the underlying asset pools ahead of the transactions' initial
closing. The subsequent performance of the transactions over the
years is consistent with the agency's expectations given the
operating environment and Fitch is therefore satisfied that the
asset pool information relied upon for its initial rating analysis
was adequately reliable.

DATA ADEQUACY

Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset
pools and the transactions. No full data tape was made available
by the originator. The findings were reflected in this analysis by
combining information from the last full data delivery in 2010 and
the current incomplete tape. Fitch has not reviewed the results of
any third party assessment of the asset portfolio information or
conducted a review of origination files as part of its ongoing
monitoring.



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I R E L A N D
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CLARION HOTEL: Dalata Buys Business for EUR13 Million
-----------------------------------------------------
Michael Cogley at Independent.ie reports that Dalata Hotel Group,
Ireland's largest hotel operator, has purchased the Clarion Hotel
in Sligo for EUR13 million.

According to Independent.ie, the hotel was offered for sale on
behalf of receiver, Aiden Murphy -- aiden.murphy@crowehorwath.ie
-- of Irish accountancy firm Crowe Horwarth.

Dalata managed the four-star hotel before buying it and will
continue to do so now, Independent.ie notes.

The hotel, which has 162 bedrooms, was established in 2005 and is
located in Sligo town, Independent.ie discloses.


MCELHINNEY FASHIONS: Dispute with Receiver Adjourned to Jan. 28
---------------------------------------------------------------
Aodhan O'Faolain at The Irish Times reports that a dispute
involving a bank-appointed receiver and the operators of fashion
outlet McElhinneys of Athboy has been adjourned in the High Court.

The case was mentioned after agents for the receiver allegedly
attempted to take possession of the premises, where more than 20
people are employed, The Irish Times relates.  Following a stand-
off, the store's general manager, Neal Sweeney, retook control of
the premises, The Irish Times recounts.

The property has been at the center of a legal dispute for three
years, The Irish Times relays.

According to The Irish Times, Barry Forrest, who was appointed
receiver by Bank of Ireland in 2013, had sought possession orders
in relation to three premises on Main Street, Athboy, Co Meath,
owned by members of the Sweeney family who are directors of
McElhinney Fashions Ltd.  He was appointed after the properties'
owners failed to repay EUR2.34 million owed to the bank, The Irish
Times discloses.

Mr. Justice Paul Gilligan adjourned the matter to Jan. 28, The
Irish Times states.


PETROCELTIC: Obtains Waiver Extension, Search for Buyer Ongoing
---------------------------------------------------------------
Laura Slattery at The Irish Times reports that Petroceltic has
confirmed it has been given more breathing by its banks on Jan. 18
as it continues its search for a buyer.

The company is in breach of its senior bank facilities, but has
received a number of waivers on loan repayments from its lenders,
The Irish Times discloses.  According to the report, the latest
waiver, which expired on Jan. 15, has been extended until the end
of the month.

The Irish group, which has debts of US$217.8 million (EUR199
million), announced a surprise strategic review of its business
just before Christmas, admitting in a December 23rd statement that
it "does not have certainty on liquidity beyond early January
2016", The Irish Times relates.

According to The Irish Times, Petroceltic said in a statement on
Jan. 18 its syndicate of banks was willing to continue to support
the company for the period of the review, which may result in the
sale of the group, the sale of specific assets within it or a more
negative outcome should a buyer or buyers fail to be found.

UK-based restructuring specialists at PricewaterhouseCoopers, led
by partner Ian Green, have already been working with the company
for about six months, The Irish Times relays.

Petroceltic is a Dublin-based oil and gas explorer.


WINDMILL CLO I: Moody's Raises Rating on Cl. E Notes to 'Ba1'
-------------------------------------------------------------
Moody's Investors Service has upgraded the ratings on these notes
issued by Windmill CLO I Limited:

  EUR55,000,000 Class B Senior Secured Deferrable Floating Rate
   Notes due 2029, Upgraded to Aaa (sf); previously on Dec. 31,
   2014, Upgraded to Aa2 (sf)

  EUR32,000,000 Class C Senior Secured Deferrable Floating Rate
   Notes due 2029, Upgraded to Aa2 (sf); previously on Dec. 31,
   2014, Upgraded to A2 (sf)

  EUR21,000,000 Class D Senior Secured Deferrable Floating Rate
   Notes due 2029, Upgraded to Baa1 (sf); previously on Dec. 31,
   2014, Upgraded to Baa3 (sf)

  EUR15,000,000 Class E Senior Secured Deferrable Floating Rate
   Notes due 2029, Upgraded to Ba1 (sf); previously on Dec. 31,
   2014, Upgraded to Ba2 (sf)

  EUR1,000,000 Class P Combination Note due 2029, Upgraded to
   A3 (sf); previously on Dec. 31, 2014, Upgraded to Baa2 (sf)

Moody's has also affirmed the ratings on these notes:

  EUR45,000,000 Class A-2A Senior Secured Floating Rate Notes due
   2029, Affirmed Aaa (sf); previously on Dec. 31, 2014, Affirmed
   Aaa (sf)

  EUR15,000,000 Class A-2B Senior Secured Fixed Rate Notes due
   2029, Affirmed Aaa (sf); previously on Dec. 31, 2014, Affirmed
   Aaa (sf)

  EUR200,000,000 (current outstanding balance: EUR49,819,293)
   Class A-1R Senior Secured Revolving Floating Rate Notes due
   2029, Affirmed Aaa (sf); previously on Dec. 31, 2014, Affirmed
   Aaa (sf)

  EUR165,000,000 (current outstanding balance: EUR82,799,825)
   Class A-1T Senior Secured Floating Rate Notes due 2029,
   Affirmed Aaa (sf); previously on Dec. 31, 2014, Affirmed
   Aaa (sf)

Windmill CLO I Limited, issued in October 2007, is a single
currency Collateralized Loan Obligation backed by a portfolio of
mostly high yield European loans.  The portfolio is managed by 3i
Group plc and commenced its amortization period on Dec. 16, 2014.

RATINGS RATIONALE

The rating actions on the notes are primarily the result of the
deleveraging that has occurred over the last year.  The Class A-1R
and Class A-1T notes have amortized by approximately
EUR48.5 million and EUR80.6 million in the last two payment dates.
As a result of deleveraging, over-collateralization (OC) ratios
have increased.  According to the December 2015 trustee report the
OC ratios of Class A, B, C, D and E are 157.4%, 131.2%, 119.6%,
113.0% and 108.8% compared to 148.9%, 127.2%, 117.2%, 111.5% and
107.7%, respectively in December 2014.

The rating of the Combination Note addresses the repayment of the
Rated Balance on or before the legal final maturity.  For Class P,
the 'Rated Balance' is equal at any time to the principal amount
of the Combination Note on the Issue Date increased by the Rated
Coupon of 0.25% per annum respectively, accrued on the Rated
Balance on the preceding payment date minus the aggregate of all
payments made from the Issue Date to such date, either through
interest or principal payments.  The Rated Balance may not
necessarily correspond to the outstanding notional amount reported
by the trustee.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers.  In its base
case, Moody's analysed the underlying collateral pool as having a
performing par and principal proceeds balance of EUR431.9 million,
defaulted par of EUR5.9 million, a weighted average default
probability of 21.0% (consistent with a WARF of 2856), a weighted
average recovery rate upon default of 45.3% for a Aaa liability
target rating, a diversity score of 37, a weighted average spread
of 3.8% and a weighted average coupon of 5.4%.

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.

Methodology Underlying the Rating Action:

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

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

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it 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
were unchanged for the Class A and within one notch of the base-
case results for rest of the classes.

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:

  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 the collateral
   manager] or be delayed by an increase in loan amend-and-extend
   restructurings.  Fast amortization would usually benefit the
   ratings of the notes beginning with the notes having the
   highest prepayment priority.

  Recovery of defaulted assets: Market value fluctuations in
   trustee-reported defaulted assets and those Moody's assumes
   have defaulted can result in volatility in the deal's over-
   collateralization levels.  Further, the timing of recoveries
   and the manager's decision whether to work out or sell
   defaulted assets can also result in additional uncertainty.
   Moody's analyzed defaulted recoveries assuming the lower of

   the market price or the recovery rate to account for potential
   volatility in market price.  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
modeled, 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.



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I T A L Y
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MONTE DEI PASCHI: Concerns Over Non-Performing Loans Hit Shares
---------------------------------------------------------------
Rachel Sanderson at The Financial Times reports that concerns
about the EUR40 billion of non-performing loans on the balance
sheet of Banca Monte dei Paschi di Siena reduced the market
capitalization of Italy's third-largest lender by assets to just
EUR2.2 billion as its shares hit a record low.

Led by Monte dei Paschi, shares in Italian banks fell sharply amid
predictions of a tough year for the sector as an estimated EUR330
billion in NPLs and low interest rates weigh on profitability, the
FT relates.

Monte dei Paschi, which was the worst loser of the 2014 EU bank
health check and raised EUR3 billion less than a year ago, has
lost 50% of its value since the end of October amid widening
concerns about its future, the FT discloses.

Under pressure from EU regulators, the bank admitted more than a
year ago that it cannot remain independent, the FT relays.
However, despite months of searches, it has so far failed to find
a takeover partner, the FT states.

According to the FT, bankers say the primary concern for the
institution -- which has also deterred potential buyers -- is NPLs
worth nearly 100 per cent of its tangible equity.

Bankers say concerns about new bail-in rules, which came into
force on January 1 are also giving rise to market jitters, the FT
notes.

Italy's government orchestrated a rescue of four small,
near-insolvent Italian banks at the end of last year but Matteo
Renzi, prime minister, last week ruled out state intervention in
Monte dei Paschi and Carige, the FT recounts.  Italy's Treasury
owns 4% of Monte dei Paschi shares in lieu of its failure to repay
government bail-out bonds in 2014, according to the FT.

                    About Monte dei Paschi

Banca Monte dei Paschi di Siena SpA -- http://www.mps.it/-- is
an Italy-based company engaged in the banking sector.  It
provides traditional banking services, asset management and
private banking, including life insurance, pension funds and
investment trusts.  In addition, it offers investment banking,
including project finance, merchant banking and financial
advisory services.  The Company comprises more than 3,000
branches, and a structure of channels of distribution.  Banca
Monte dei Paschi di Siena Group has subsidiaries located
throughout Italy, Europe, America, Asia and North Africa.  It has
numerous subsidiaries, including Mps Sim SpA, MPS Capital
Services Banca per le Imprese SpA, MPS Banca Personale SpA, Banca
Toscana SpA, Monte Paschi Ireland Ltd. and Banca MP Belgio SpA.



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L U X E M B O U R G
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4FINANCE SA: Moody's Assigns (P)B3 Rating to Sr. Unsecured Notes
----------------------------------------------------------------
Moody's Investors Service has assigned a provisional (P)B3 rating
to the upcoming issuance of senior unsecured notes by 4Finance
S.A., a Luxembourg-based funding vehicle belonging to 4Finance
group.

RATINGS RATIONALE

The provisional (P)B3 rating assigned to the securities to be
issued reflects the B3 issuer rating of 4Finance Holding S.A.
(4Finance Holding, the group's holding company), 4Finance's role
as the group's funding vehicle, and the unconditional and
irrevocable guarantees from the largest operating companies in the
4Finance group, as well as 4Finance Holding.  The guarantees
constitute senior unsecured obligations by the guarantors, and
rank pari passu with all of the guarantors' senior unsecured debt
and senior to all of their subordinated debt.

The B3 issuer rating assigned to 4Finance Holding reflects its
strong financial performance, balanced against the regulatory
risks embedded in its fast growing business model, and the high
credit risk in its lending portfolio.  Its financial performance
is primarily driven by the elevated pricing of its loans, which,
in turn, reflects the considerable credit risk it takes by doing
business within the unsecured mass market retail segment.  Whilst
profitability is high, 4Finance Holding assumes significant credit
risks, which under adverse conditions could quickly translate into
considerably weaker profitability.

Moody's issues provisional ratings in advance of the final
issuance.  These ratings represent Moody's preliminary credit
opinion and Moody's will endeavor to assign definitive ratings to
actual issuances.  A definitive rating may differ from a
provisional rating if the terms and conditions of the issuance are
materially different from those reviewed.

WHAT COULD CHANGE THE RATING UP/DOWN

Moody's would consider a rating upgrade if 4Finance Holding
sustains its strong profitability and high capitalization, while
continuing its gradual shift towards longer tenor installment
loans, resulting in a longer record of predictable earnings.

Although currently not anticipated, Moody's would consider
downgrading 4Finance Holding's ratings if: i) financial metrics
were to deteriorate; ii) reported non-performing loans were to
increase above 15% of previous two year lending period; iii) the
average return on equity were to decrease below 10%; or iv) the
company's capital-to-asset ratio were to fall below 20%.

PRINCIPAL METHODOLOGY

The principal methodology used in this rating was Finance
Companies published in October 2015.


4FINANCE SA: S&P Lowers Rating on Outstanding Sr. Notes to 'B+'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered to 'B+' from 'BB-' its
issue rating on 4finance S.A.'s outstanding senior unsecured
notes, including the company's proposed issuance of US$200 million
senior unsecured notes, reflecting the parri passu priority.  The
proposed notes will be guaranteed by the non-operating holding
company 4finance Holding S.A. (B+/Stable/--).  This makes the debt
rating equal with S&P's issuer credit rating on 4finance Holding.

The increased borrowing leads S&P to expect lower overall recovery
prospects for bondholders.  S&P therefore revised the recovery
rating on the senior unsecured notes, outstanding and proposed, to
'3' from '2'.  The '3' recovery rating indicates S&P's view that
creditors could expect meaningful recovery in the higher half of
the 50% to 70% range in the event of a payment default.

The rating is subject to S&P's review of the proposed bonds' final
terms and documentation.

S&P expects 4finance will use the net proceeds from the proposed
issuance for general corporate purposes, including potential
acquisitions.  4finance intends to issue the proposed bonds as
senior unsecured notes on the Hong Kong Stock Exchange under
Regulation S terms.  This means that they cannot be sold in the
U.S.

"Our assessment of 4finance's group credit profile reflects the
parent's concentrated product focus on the European unsecured
short-term consumer lending market.  In our opinion, this focus
subjects the company to material reputational, regulatory, and
operational risks.  However, we believe the company's strong
earnings track record relative to those of its peers, flexible and
scalable business model, as well as its strong quality of capital
partly offset these weaknesses.  The ratings incorporate our
expectation that 4finance will continue to increase its lending
volumes as the company expands into new markets and rapidly
expands its balance sheet.  Taking into account the proposed
issuance, in addition to increased adjusted-EBITDA growth, we have
increased our forecast of debt to adjusted EBITDA to be
consistently within 3x and 4x over the medium term.  In line with
our previous forecast -- and our current assessment of 4finance's
significant financial risk profile -- adjusted EBITDA to interest
expense will remain within the 3x-6x range," S&P said.



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


MUNDA CLO I: Moody's Affirms Ba2 Rating on Class D Notes
--------------------------------------------------------
Moody's Investors Service has upgraded the rating on the Class B
notes issued by Munda CLO I B.V.:

  EUR61.75 mil. Class B Senior Secured Floating Rate Notes due
   2024, Upgraded to Aa3 (sf); previously on Sept. 22, 2014,
   Upgraded to A2 (sf)

Moody's also affirmed the ratings on these notes issued by Munda
CLO I B.V.:

  EUR243.95 mil. (Current balance outstanding: EUR153.8 mil.)
   Class A-1 Senior Secured Floating Rate Notes due 2024,
   Affirmed Aaa (sf); previously on Sept. 22, 2014, Upgraded to
   Aaa (sf)

  EUR200 mil. (Current balance outstanding: EUR 126.1 mil.) Class
   A-2 Senior Secured Delayed Draw Floating Rate Notes due 2024,
   Affirmed Aaa (sf); previously on Sept. 22, 2014, Upgraded to
   Aaa (sf)

  EUR27.3 mil. Class C Senior Secured Deferrable Floating Rate
   Notes due 2024, Affirmed Baa2 (sf); previously on Sept 22,
   2014, Upgraded to Baa2 (sf)

  EUR27.95 mil. Class D Senior Secured Deferrable Floating Rate
   Notes due 2024, Affirmed Ba2 (sf); previously on Sept 22,
   2014, Affirmed Ba2 (sf)

  EUR27.3 mil. (Current balance outstanding: EUR26.1 mil.)
   Class E Senior Secured Deferrable Floating Rate Notes due
   2024, Affirmed B3 (sf); previously on Sept 22, 2014,
   Downgraded to B3 (sf)

Munda CLO I B.V., issued in December 2007, is a collateralized
Loan Obligation backed by a portfolio of mostly high yield
European senior secured loans.  The portfolio is managed by Cohen
& Company Financial Limited.  The transaction's reinvestment
period ended in January 2014.

RATINGS RATIONALE

The rating action on the Class B notes is primarily a result of
the improvement in their over-collateralization (OC) ratios since
the last rating action in September 2014.  Class A-1 and Class
A-2 notes were paid down by EUR78.2 million or 17.61% of their
original balance at July 2015 payment date and are expected to
amortize by further EUR38.8 million or 8.75% at the next payment
date in January 2016.

As a result of the deleveraging, the OC ratios have increased.
According to the December 2015 trustee report the OC ratios of
Classes B, C, D and E are 129.28%, 119.48%, 111.07% and 104.22%
compared to 125.67%, 118.00%, 111.06% and 105.28% respectively in
June 2015.  The OC ratios are expected to further increase
following the January 2016 payment date.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers.  In its base
case, Moody's analyzed the underlying collateral pool as having a
performing par and principal proceeds balance of EUR413.3 million
and EUR38.8 million, EUR2.9 million of defaulted assets, a
weighted average default probability of 22.06% (consistent with a
WARF of 3,055 with a weighted average life of 4.49 years), a
weighted average recovery rate upon default of 40.81% for a Aaa
liability target rating, a diversity score of 30 and a weighted
average spread of 2.91%.

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.

Methodology Underlying the Rating Action:

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

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

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

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
note, in light of uncertainty about credit conditions in the
general economy especially given that the portfolio has 24.25% and
7.91% exposure to obligors located in Spain and Italy,
respectively.  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 due to embedded
ambiguities.

Additional uncertainty about performance is due to:

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

  3) Around 15% of the collateral pool consists of debt
     obligations whose credit quality Moody's has assessed by
     using credit estimates.  As part of its base case, Moody's
     has stressed large concentrations of single obligors bearing
     a credit estimate as described in "Updated Approach to the
     Usage of Credit Estimates in Rated Transactions", published
     in October 2009 and available at:

     http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_120461

In addition to the quantitative factors that Moody's explicitly
modeled, 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.


STORM 2016-I BV: Fitch Assigns 'BB(EXP)sf' Rating to Cl. E Debt
---------------------------------------------------------------
Fitch Ratings has assigned STORM 2016-I B.V.'s notes expected
ratings as follows:

Class A1 floating-rate notes: 'AAA(EXP)sf'; Outlook Stable
Class A2 floating-rate notes: 'AAA(EXP)sf'; Outlook Stable
Class B floating-rate notes: 'AA(EXP)sf'; Outlook Stable
Class C floating-rate notes: 'A-(EXP)sf'; Outlook Stable
Class D floating-rate notes: 'BB+(EXP)sf'; Outlook Stable
Class E floating-rate notes: 'BB(EXP)sf'; Outlook Stable

This transaction is a true sale securitization of prime Dutch
residential mortgage loans originated and serviced by Obvion N.V.
Since May 2012, Obvion has been 100%-owned by Rabobank Group and
has an established track record as a mortgage lender and issuer of
securitizations in the Netherlands.

The expected ratings address timely payment of interest, including
the step-up margin accruing from the payment date falling in
January 2021, and full repayment of principal by legal final
maturity in accordance with the transaction documents. The final
ratings are contingent upon the receipt of final documents and
legal opinions conforming to the information already received.

Credit enhancement (CE) for the class A notes will be 6% at
closing, provided by the subordination of the junior notes and a
non-amortizing cash reserve (1%), fully funded at closing through
the class E notes.

KEY RATING DRIVERS

Market Average Portfolio

This is a 49-month seasoned portfolio consisting of prime
residential mortgage loans, with a weighted average (WA) original
loan-to-market-value (OLTMV) of 88.7% and a WA debt-to-income
ratio (DTI) of 28.1%, both of which are typical for Fitch-rated
Dutch RMBS transactions and in line with previous STORM
transactions.

NHG Loans

Within the portfolio 32.2% of the loans benefit from a Nationale
Hypotheek Garantie (NHG) guarantee. Fitch received historical
claims data to determine a compliance ratio assumption which it
deemed to be in line with market average. No reduction in
foreclosure frequency for the NHG loans was applied, since
historical data provided did not show a clear pattern of lower
defaults for NHG loans. Fitch has also tested the transaction
without giving any credit to the NHG guarantee and found the
ratings on the class A notes to be identical.

Lower CE

Over-collateralisation through assets and a non-amortizing reserve
of 1%, funded through the class E notes, provide CE of 6%, which
is lower than the 7% typically seen in the STORM series. The
transaction also contains a liquidity facility (2% of the notes,
floored at 1.45%) and a margin-guaranteed total return swap, which
is in line with previous Fitch-rated STORM transactions.
Rabobank Main Counterparty
This transaction relies strongly on the creditworthiness of
Rabobank, which fulfils a number of roles. Fitch gave full credit
to the structural features in place, including those mitigating
construction deposit set-off and commingling risk embedded in the
transaction.

Robust Performance

Past performance of transactions in the STORM series, as well as
data received on Obvion's loan book, indicate sound historical
performance in terms of low arrears and losses.

Fitch reviewed the results of a third party assessment conducted
on the asset portfolio information. Each year, an internationally
recognized accounting firm conducts the report on a single
eligible mortgage pool, which will be used for all transactions in
the respective year. The report indicated no adverse findings
material to the rating analysis.

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



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


NOVO BANCO: Portugal Expresses Concern Over Bond Transfer
---------------------------------------------------------
Tom Beardsworth and Anabela Reis at Bloomberg News report that the
Portuguese government said it was against the central bank's
decision to impose losses on some Novo Banco SA bondholders.

According to Bloomberg, two people familiar with the situation
said Finance Secretary of State Ricardo Mourinho Felix told
investors on Jan. 11 that the ministry had expressed concern to
the central bank about the transfer of bonds to a bad bank.

The people said Pacific Investment Management Co. and BlackRock
Inc., the biggest holders of the debt, were among investors at the
event in London, Bloomberg notes.

Bondholders were blindsided by the transfer of about EUR2 billion
(US$2.2 billion) of Novo Banco senior notes because the Bank of
Portugal had previously said it could fill a capital shortfall
through measures including asset sales, Bloomberg relates.

The people noted that Mr. Felix said the government didn't
interfere in the debt transfer because of central bank
independence.  The people said the event was focused on sovereign
debt rather than Novo Banco, Bloomberg relays.

Headquartered in Lisbon, Novo Banco, S.A. provides various
financial products and services to private, corporate, and
institutional customers.

                        *     *     *

As reported in the Troubled Company Reporter-Europe on Jan. 6,
2016, Moody's Investors Service downgraded to Caa1 from B2 the
senior debt and long-term deposit ratings of Portugal's Novo
Banco, S.A. and its supported entities.  This follows the Bank of
Portugal's (BoP) announcement on Dec. 29, 2015, that it had
approved the recapitalization of Novo Banco by transferring
EUR1,985 million of senior debt back to Banco Espirito Santo,
S.A. (BES unrated).  Moody's said the outlook on Novo Banco's
deposit and senior debt ratings is now developing.

The rating agency also downgraded to C from B2 (on review for
downgrade) the rating on Novo Banco's senior debt securities
transferred to BES (ISINs PTBEQBOM0010, PTBENIOM0016,
PTBENJOM0015, PTBENKOM0012 and PTBEQKOM0019).  Subsequently,
Moody's will withdraw the ratings on these senior bonds.  The
downgrade and withdrawal have been triggered by the transfer of
these senior debt instruments to BES, a bank which is being
liquidated and for which the BoP has asked the European Central
Bank (ECB) to revoke its banking license.

At the same time, Moody's downgraded to B2(cr) from B1(cr)
Novo Banco's counterparty risk assessment (CRA) and affirmed its
short-term deposit and senior debt ratings at Not-Prime and
short-term CRA at Not Prime(cr).  Novo Banco's baseline credit
assessment (BCA) was also confirmed at caa2.

This rating action concludes the review for downgrade on Novo
Banco's ratings, which was initiated on Nov. 18, 2015.

Novo Banco's Ba1 rated senior bonds, which are guaranteed by the
Republic of Portugal (Ba1 stable), are unaffected by the rating
action.



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


EUROCHEM GROUP: Fitch Affirms 'BB' LT Issuer Default Ratings
------------------------------------------------------------
Fitch Ratings has revised Swiss-based holding company Eurochem
Group AG's (EuroChem) and Russia-based JSC MCC EuroChem's Outlook
to Negative from Stable while affirming their Long-term Issuer
Default Ratings (IDR) at 'BB'.

The Negative Outlook is driven by forecast funds from operations
(FFO) adjusted net leverage (leverage) peaking at over 3x and
exceeding Fitch's negative rating guidance of 2.5x over the next
two years. This is largely due to the company implementing capex
for its potash and ammonia project at a time of low fertilizer
prices, which is not fully offset by lower costs.

The affirmation reflects EuroChem's strong business profile with
self-sufficiency in ammonia and phosphates in Russia, a strong
market presence in Europe and CIS, and robust diversification
across fertilizer products. The business profile will be further
enhanced by EuroChem's upcoming potash projects which are forecast
to come on stream from 2018 and be within the first quartile of
the global potash cost curve, aided by a projected weak rouble.

KEY RATING DRIVERS

Capex Projects Pressurize Leverage

Management is committed to the VolgaKaliy and Usolskiy potash
projects, which aim to commence operations in late 2017 to early
2018 targeting at 2.3mtpa of potash capacity each. These are
estimated to have a first-quartile position on the global potash
cost curve and will more than cover EuroChem's internal potash
needs and provide it with diversification into all three
nutrients.

On top of the potash projects, the 1mtpa ammonia project will also
help push leverage over our negative rating guidelines over the
next couple of years to over 3x until the potash projects come on
stream in 2018. We expect leverage to remain over our guidelines
even after taking into consideration EuroChem's proven flexibility
to suspend shareholder distributions and to delay capex when
needed.

Strong Business Fundamentals

EuroChem is strongly present in European and CIS fertiliser
markets (67% of sales) and ranks as the seventh-largest fertilizer
player by nutrient capacity in EMEA. EuroChem's Russian-based
self-sufficient nitrogen and phosphate production assets have
moved to the first quartile of the global cash cost curves
following the recent depreciation of the rouble. The company has
access to the premium European compound fertilizer market with its
own production capacities (in Antwerp, Belgium), trademarks and
distribution network. This, as well as strong EBITDA margins of
around 30%, gives EuroChem a stand-alone rating of 'BBB-' and an
IDR of 'BB' after applying the two-notch corporate governance
discount that Fitch typically applies to Russian corporates.

Weak Fertilizer Pricing

Pricing across all nutrients came under pressure during 2015 and
is being impacted by cheap gas, weak demand on the back of a low
grain price environment, and excess supply entering the market.
Fitch forecasts this weak pricing environment will remain over the
next 3 years, which will place pressure on earnings of EuroChem
and its forthcoming projects. Rouble depreciation has, however,
helped maintain margins as revenues are dollar-denominated while
costs are mainly rouble-linked.

Project Financing Facilities Consolidated

EuroChem has successfully procured project financing for its
Usolskiy Potash project and its Baltic ammonia project. Even
though the financing is specific to the projects and has non-
recourse features that separate it from EuroChem's outstanding
debt, Fitch continues to consolidate the projects and the
financing within its overall leverage metrics. This is due to the
strategic importance of the projects to EuroChem's future
operational profile and the inclusion of a cross default clause
within the financing agreement.

KEY ASSUMPTIONS

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

-- Nitrogen segment pricing to fall 2%-4% in 2016 following a
    12%-18% decline in 2015, phosphate and complex fertiliser
    segment pricing to fall by mid-single digits in 2016
    following almost flat dynamics in 2015

-- Volumes broadly flat until 2017 following additions from the
    new 300kt low density AN project and Kazakh phosphates
    project

-- $US/RUB to hit 65 in 2016 before gradually strengthening
    towards 50 by 2018

-- Capex/sales to peak in 2016-2017 at 27% before falling back
    in 2018 towards 2015 levels of 23%

-- Despite no significant dividends until 2018, high capex will
    lead to low single-digit negative free cash flow (FCF) in
    2016-2018

RATING SENSITIVITIES

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

-- Successful completion of one of the ongoing potash projects
    resulting in an enhanced operational profile, or an FFO
    adjusted net leverage trending towards 2.5x;

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

-- Continued aggressive capex or shareholder distributions
    translating into FFO adjusted net leverage not trending
    towards 2.5x by 2019, coupled with failure to enhance the
    operational profile over the medium term;
-- Protracted pricing pressure or double-digit cost inflation in
    2016 leading to an EBITDAR margin being sustained below 20%
    (2015E: 35%)

LIQUIDITY AND DEBT STRUCTURE

At end-3Q15, EuroChem's liquidity gap was USD221 million as short-
term loans including derivatives were USD1,044 million against
USD578 million cash and cash equivalents and fixed-term deposits,
and USD245 million committed undrawn non-project facilities.
However, Fitch expects EuroChem to draw down on at least USD300
million of the USD750 million committed Usolskiy facility in 2016,
which will cover EuroChem's liquidity needs in 4Q15-3Q16, given
its almost neutral FCF over the period.

FULL LIST OF RATING ACTIONS

JSC MCC EuroChem:

  Long-term foreign and local currency IDRs: affirmed at 'BB';
  Outlook Negative

  National Long-term rating: affirmed at 'AA-(rus)'; Outlook
  Negative

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

  Local currency senior unsecured rating (domestic bonds):
  affirmed at 'BB'

  National Long-term unsecured rating (domestic bonds): affirmed
  at 'AA-(rus)'

EuroChem Group AG:

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

EuroChem Global Investments Limited:

  Foreign currency senior unsecured rating on the loan
  participation notes: affirmed at 'BB'


TRANSFIN-M OJSC: S&P Assigns 'B/C' Counterparty Credit Ratings
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B/C' long- and
short-term counterparty credit ratings to Russia-based OJSC
TransFin-M (TFM).  The outlook is negative.

At the same time, S&P assigned its 'ruBBB+' Russia national scale
rating to the company.

The ratings factor in S&P's view of the structurally high economic
and industry risk facing leasing companies operating in Russia.
The ratings reflect the 'b' anchor that S&P assigns to Russian
nonbank financial institutions, as well as the company's so far
monoline business model that is, in S&P's view, prone to cyclical
fluctuations of the domestic economy, and high single name and
sector concentrations.  S&P balances this against what it regards
as sound corporate governance and management expertise, and
ongoing capital support by the shareholders, relatively stable
earnings, an adequate liquidity profile, and funding support from
its shareholders.  The company's stand-alone credit profile (SACP)
is 'b', also reflecting S&P's view that TFM has a stronger
business position in the market than its peers and that it will be
able to cushion the effect on its credit standing from higher
credit losses and weaker profitability due to deteriorating
economic conditions in Russia as the company has a proven track
record in dealing with problem assets.  Moreover, S&P expects TFM
to benefit from both ongoing and potential extraordinary support
from its shareholders.

The company was established in 2005 and with total assets of
Russian ruble (RUB)106 billion ($1.6 billion) as of mid-2015, TFM
is well positioned in the Russian leasing market compared with its
peers.  Moreover, company is one of the country's top-4 leasing
companies by new business volume growth.  While business mix
negatively affects the business position, with leasing in the
railway sector representing about 90% of the leasing portfolio at
mid-2015, S&P sees growth potential in other sectors and
developing operating leasing activities.  However, S&P anticipates
only gradual changes and expect the company to maintain its
leading position in railway sector leasing.

The negative outlook reflects the increasing challenges TFM could
face as a result of the deteriorating operating environment,
possibly putting pressure on liquidity and capitalization through
increased credit risk.

S&P could lower the ratings on TFM over the next 12 to 18 months
if it sees capitalization substantially weaken, causing S&P's RAC
ratio to approach 5% as a result of deterioration of TFM's lease
portfolio.

S&P could revise the outlook to stable if the operating
environment stabilizes or if S&P sees evidence that shareholder
support materially reduces related downside risk.



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


GENERALITAT DE CATALUNYA: Moody's Affirms Ba2 Rating, Outlook Neg
-----------------------------------------------------------------
Moody's Investors Service has changed the outlook on the rating of
the Generalitat de Catalunya to negative from stable and affirmed
its rating at Ba2/NP.

The outlook change to negative reflects: (i) the rating agency's
view that the risk of the region's fiscal consolidation efforts
coming to a halt has increased; (ii) increasing political tensions
between Catalunya and the central government that could negatively
affect the investment climate in the region; (iii) a slight risk
that, should political tensions escalate further, the government's
liquidity support to the region could be affected.

RATINGS RATIONALE

RATIONALE FOR OUTLOOK CHANGE TO NEGATIVE

The change to negative from stable in the outlook on Catalunya's
rating mainly reflects the rating agency's view that the risk of
the region's fiscal consolidation efforts coming to a halt has
increased.  The new regional government's main focus will be on
the region's independence.  Moody's believes that the region's
plans could negatively affect the investment climate in the region
and, potentially its tax collection.  Moreover, Moody's believes
that -- while there is a strong track record of government
liquidity support to the region since 2012 (through the Fondo de
Liquidez Autonomico) -- the likelihood that liquidity support
could be affected as a result of increasing political tensions has
slightly increased.

Moody's notes that the new Catalan president, Mr. Carles
Puigdemont, announced plans earlier this week to follow the
independence road map voted on Nov. 9, 2015, which aims at
separating Catalunya from Spain within 18 months.  This will
likely increase political tensions between Catalunya and the
central government, especially after the road map resolution was
declared unconstitutional by Spain's Constitutional Court on
Dec. 2, 2015.  In addition, given that the general election held
on Dec. 20, 2015, has yet to result in the formation of a new
central government, this makes it difficult to anticipate the
government's eventual response to Catalunya's independence
aspirations, creating further political uncertainty.

RATIONALE FOR AFFIRMATION OF Ba2 RATING

The Ba2 rating reflects the region's weak fiscal position as
evidenced by lower operating margins and higher financing deficits
than the average of its national peers (-16% and -24% in 2014
respectively, compared with -10% and -18% for rated Spanish
regions).  According to estimates by the "Autoridad Independiente
de Responsabilidad Fiscal", the Spanish government's independent
fiscal authority, Catalunya's 2015 financing deficit to GDP will
increase to around 2.9% compared with 2.65% in 2014.  In addition,
Catalunya's debt burden is the highest among Spanish regions: Its
debt stock was EUR68 billion in September 2015, equivalent to
33.6% of regional GDP, well above the peer group average of 23.6%.
The region's ratio of net direct and indirect debt to operating
revenue was 302% in 2014 compared with 203% for rated regions, and
will increase to around 314% in 2015.  Due to Catalunya's high
financing requirement of at least EUR6.6 billion in 2016, the
region's debt will continue to increase this year.

While Catalunya benefits from cheap government funding, Moody's
notes that this factor alone is unlikely to be able to bring its
debt burden down unless fiscal consolidation measures continue to
be implemented, for which the region is responsible.  This
supports the three-notch differential between the regional rating
(Ba2 negative) and the central government's (Baa2 positive).

WHAT COULD CHANGE THE RATINGS UP/DOWN

Given the change in Catalunya's outlook to negative from stable,
an upgrade in the region's rating is unlikely.  Significant
improvements in its own fiscal and financial performance could
lead to the stabilization of the rating's outlook.

In contrast, downward pressure on the rating could occur if
Catalunya's policy changes reverse the fiscal consolidation.  In
addition, a downgrade of the sovereign rating, or any indication
of weakening government support, would likely lead to a downgrade
in Catalunya's rating.

List of Affected Ratings:

Affirmations:

Issuer Rating, Affirmed Ba2
  Senior Unsecured Regular Bond/Debenture, Affirmed Ba2
  Senior Unsecured Medium-Term Note Program, Affirmed (P)Ba2
  Senior Unsecured Medium-Term Note Program, Affirmed (P)NP
  Senior Unsecured Commercial Paper, Affirmed NP

Outlook Actions:
  Changed To Negative From Stable

The new regional government's plans after its appointment on
Jan. 10, 2016, prompted the publication of this credit rating
action on a date that deviates from the previously scheduled
release date in the sovereign release calendar, published on
moodys.com.

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

Sovereign Issuer: Spain, Government of

  GDP per capita (PPP basis, US$): 33,711 (2014 Actual) (also
   known as Per Capita Income)
  Real GDP growth (% change): 1.4% (2014 Actual) (also known as
   GDP Growth)
  Inflation Rate (CPI, % change Dec/Dec): -1% (2014 Actual)
  Gen. Gov. Financial Balance/GDP: -5.8% (2014 Actual) (also
   known as Fiscal Balance)
  Current Account Balance/GDP: 1% (2014 Actual) (also known as
   External Balance)
  External debt/GDP: [not available]
  Level of economic development: Very High level of economic
   resilience
  Default history: No default events (on bonds or loans) have
   been recorded since 1983.

On Jan. 13, 2016, a rating committee was called to discuss the
rating of the Catalunya, Generalitat de.  The main points raised
during the discussion were: The issuer's fiscal or financial
strength, including its debt profile, has materially decreased.
The issuer has become increasingly susceptible to event risks.

The principal methodology used in these ratings was Regional and
Local Governments published in January 2013.

The weighting of all rating factors is described in the
methodology used in this credit rating action, if applicable.



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


AFREN PLC: Fitch Withdraws 'D' Long-Term Issuer Default Rating
--------------------------------------------------------------
Fitch Ratings has withdrawn UK-based Afren plc's ratings.

KEY RATING DRIVERS

Fitch is withdrawing the ratings of Afren plc as the company has
entered insolvency proceedings. Accordingly, Fitch will no longer
provide ratings or analytical coverage for Afren plc.

Afren is small-scale exploration and production company, with
production assets mainly in Nigeria. In 2014, the company produced
32 thousand barrels of oil per day, down 32% yoy. The company's
financial position and liquidity was severely affected by a
combination of falling oil prices, technical difficulties at its
largest Ebok field and a corporate governance scandal around
unauthorized payments by the company.

In July 2015, Afren announced its discussions with creditors aimed
at recapitalizing the company have failed and the board has
decided to take steps to put the company into administration.

RATING SENSITIVITIES

Not applicable.

The following ratings have been withdrawn:

Afren Plc

Long-term Issuer Default Rating: 'D'
Senior Secured Rating: 'C'
Recovery Rating: 'RR5'


ARBOUR CLO III: Moody's Assigns (P)B2 Rating to Class F Notes
-------------------------------------------------------------
Moody's Investors Service announced that it has assigned these
provisional ratings to notes to be issued by Arbour CLO III
Limited:

  EUR230,000,000 Class A-1 Senior Secured Floating Rate Notes due
   2029, Assigned (P)Aaa (sf)

  EUR10,000,000 Class A-2 Senior Secured Fixed Rate Notes due
   2029, Assigned (P)Aaa (sf)

  EUR19,000,000 Class B-1 Senior Secured Floating Rate Notes due
   2029, Assigned (P)Aa2 (sf)

  EUR25,000,000 Class B-2 Senior Secured Fixed Rate Notes due
   2029, Assigned (P)Aa2 (sf)

  EUR23,000,000 Class C Senior Secured Deferrable Floating Rate
   Notes due 2029, Assigned (P)A2 (sf)

  EUR23,500,000 Class D Senior Secured Deferrable Floating Rate
   Notes due 2029, Assigned (P)Baa2 (sf)

  EUR27,500,000 Class E Senior Secured Deferrable Floating Rate
   Notes due 2029, Assigned (P)Ba2 (sf)

  EUR11,750,000 Class F 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.

RATINGS RATIONALE

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, Oaktree Capital
Management (UK) LLP/Oaktree Capital Management (Europe) LLP, has
sufficient experience and operational capacity and is capable of
managing this CLO.

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

Oaktree 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
restrictions.

In addition to the eight classes of notes rated by Moody's, the
Issuer will issue EUR44.6 mil. 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 ratings:

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.  Oaktree's investment decisions and
management of the transaction will also affect the notes'
performance.

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 in December 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: EUR 400,000,000
Diversity Score: 35
Weighted Average Rating Factor (WARF): 2750
Weighted Average Spread (WAS): 3.9%
Weighted Average Recovery Rate (WARR): 42%
Weighted Average Life (WAL): 8 years.

Moody's has analysed the potential impact associated with
sovereign related risk of peripheral European countries.  As part
of the base case, Moody's has addressed the potential exposure to
obligors domiciled in countries with local currency country risk
ceiling of A1 or below.  Following the effective date, and given
the portfolio constraints and the current sovereign ratings in
Europe, such exposure may not exceed 10% of the total portfolio.
As a result and in conjunction with the current foreign government
bond ratings of the eligible countries, as a worst case scenario,
a maximum 10% of the pool would be domiciled in countries with A3
local currency country ceiling.  The remainder of the pool will be
domiciled in countries which currently have a local or foreign
currency country ceiling of Aaa or Aa1 to Aa3.

Stress Scenarios:

Together with the set of modeling 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 3163 from 2750)
Ratings Impact in Rating Notches:
Class A-1 Senior Secured Floating Rate Notes: 0
Class A-2 Senior Secured Fixed Rate Notes: 0
Class B-1 Senior Secured Floating Rate Notes: -2
Class B-2 Senior Secured Fixed Rate Notes: -2
Class C Senior Secured Deferrable Floating Rate Notes: -2
Class D Senior Secured Deferrable Floating Rate Notes: -2
Class E Senior Secured Deferrable Floating Rate Notes: -1
Class F Senior Secured Deferrable Floating Rate Notes: -1

Percentage Change in WARF: WARF +30% (to 3575 from 2750)
Class A-1 Senior Secured Floating Rate Notes: -1
Class A-2 Senior Secured Fixed Rate Notes: -1
Class B-1 Senior Secured Floating Rate Notes: -3
Class B-2 Senior Secured Fixed Rate Notes: -3
Class C Senior Secured Deferrable Floating Rate Notes: -3
Class D Senior Secured Deferrable Floating Rate Notes: -2
Class E Senior Secured Deferrable Floating Rate Notes: -2
Class F Senior Secured Deferrable Floating Rate Notes: -3

Given that the transaction allows for corporate rescue loans which
do not bear a Moody's rating or Credit Estimate, Moody's has also
tested the sensitivity of the ratings of the notes to changes in
the recovery rate assumption for corporate rescue loans within the
portfolio (up to 5% in aggregate).  This analysis includes
haircuts to the 50% base recovery rate which we assume for
corporate rescue loans if they satisfy certain criteria, including
having a Moody's rating or Credit Estimate.

Methodology Underlying the Rating Action:

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


DRACO ECLIPSE 2005-4: Fitch Affirms 'CCCsf' Rating on Cl. E Debt
----------------------------------------------------------------
Fitch Ratings has affirmed DRACO (Eclipse 2005-4) plc's GBP3.2
million class E notes (XS0238141617) due 2017 at 'CCCsf'/Recovery
Estimate (RE) 90%.

Draco (Eclipse 2005-4) plc was a securitization of five commercial
mortgage loans originated in the UK by Barclays Bank plc. Four
loans have prepaid since closing in December 2005. The remaining
loan (GBP7.8 million Herbert House) is in default and special
servicing.

KEY RATING DRIVERS

The rating reflects Fitch's unchanged view that net recoveries
(after workout costs) on the underlying collateral may be
insufficient to redeem the tranche in full unless the collateral
value is boosted by a new lease.

Herbert House defaulted at its maturity in January 2014 and was
transferred into special servicing. The loan is secured against a
single office property located in Birmingham. The former sole
tenant exercised a break option in its lease and vacated the asset
in July 2015. A terminal schedule of dilapidations has been
served.

The 2013 valuation estimates open market value of the collateral
at GBP5.1 million (albeit with the previous tenant in place).
Fitch believes that a significant loss will be incurred on the
loan should the asset not be re-let prior to sale. The unrated
GBP4.6 million class F notes would absorb the majority of the
loss. However, the material possibility of a loss to the class E
notes (or the notes remaining outstanding beyond the approaching
bond maturity) is the main driver for the 'CCCsf' rating and 90%
Recovery Estimate.

RATING SENSITIVITIES

The notes may be upgraded if the asset is re-let at market terms
and if there is evidence of sales or good refinancing prospects.
The notes will likely be downgraded if a timely/ full repayment
becomes unachievable.

DUE DILIGENCE USAGE

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

DATA ADEQUACY

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

Fitch did not undertake a review of the information provided about
the underlying asset pool ahead of the transaction's initial
closing. The subsequent performance of the transaction over the
years is consistent with the agency's expectations given the
operating environment and Fitch is therefore satisfied that the
asset pool information relied upon for its initial rating analysis
was adequately reliable.

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


LORDS 2: Fitch Raises Rating on Class C Notes to 'BB-sf'
--------------------------------------------------------
Fitch Ratings has upgraded London & Regional Debt Securitisation
No. 2 (LORDS 2)'s class B and C floating rate notes due 2018 and
affirmed the class A notes, as follows:

GBP53.7 million class A (XS0262542565) affirmed at 'BBBsf';
Outlook Stable

GBP14.9 million class B (XS0262544348) upgraded to 'BBBsf' from
'BBB-sf'; Outlook Stable

GBP46.4 million class C (XS0262545402) upgraded to 'BB-sf' from
'Bsf'; Outlook Stable

LORDS 2 is a securitization of a single commercial mortgage loan
secured by a portfolio of originally 27 office, retail and leisure
properties located throughout the UK.

KEY RATING DRIVERS

The upgrades reflect the reduced securitized loan-to-value (LTV)
ratio and loan balance since the last rating action in January
2015. Fitch has affirmed the senior class of notes rather than
upgrading it, despite its low advance rate. This is due to the
risk that a failure to refinance could leave the notes outstanding
with less than 18 months until their maturity.

The reported securitised LTV has fallen to 53.9% from 68% (based
on a 2013 valuation), although the whole loan LTV is 102.9%, only
marginally down since the last rating action. Like the original
portfolio, the residual 12 asset pool is a mix of high quality
central London assets and secondary/ tertiary regional assets.

The loan was restructured in 2013 following a maturity default.
Key features of the restructuring included a one-year maturity
extension with two additional extension options, the latter
subject to meeting repayment targets. The loan margin was
increased to cater for the higher note margins demanded at the
time, together with senior costs.

A GBP29 million capex reserve was funded by the borrower to allow
various assets to be improved, with drawdowns yielding 8%
repayable ahead of the B-note to provide an incentive. The
allocated loan amounts were revised down for each property given
the decline in values. However, the A-note has a full cash sweep
and the B-note lender's rights have been largely removed.
Provisions for the appointment of a special servicer should the
cured loan default again were also implemented.

In October 2015, the loan was extended for a final year after the
senior balance was further reduced to GBP115 million via asset
sales, cash sweep and equity injection. Extending financing that
costs it a margin of 225bps may be a sign that the borrower has
limited prospects of refinancing. However, the repayment does de-
risk the notes, with debt yields increasing from 10.8% in October
2014 (on a reversionary basis) to the current 11.7%. The latter is
on an actual basis given two previously occupied (and over-rented)
properties have since been vacated.

Fitch believes the notes will be repaid in full.

RATING SENSITIVITIES

Future upgrades are unlikely due to structural limitations.
Downgrades may occur if the loan fails to be repaid at or soon
after maturity.

DUE DILIGENCE USAGE

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

DATA ADEQUACY

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

Fitch did not undertake a review of the information provided about
the underlying asset pool ahead of the transaction's initial
closing. The subsequent performance of the transaction over the
years is consistent with the agency's expectations given the
operating environment and Fitch is therefore satisfied that the
asset pool information relied upon for its initial rating analysis
was adequately reliable.

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

Sources of Information:
The information below was used in the analysis.
-- Transaction reporting provided by Bank of New York Mellon as
    of October 2015


MERGERMARKET MIDCO 2: S&P Assigns 'B' CCR, Outlook Stable
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' long-term
corporate credit rating to global financial information services
provider Mergermarket Midco 2 Ltd., the parent of MergerMarket
USA, Inc.  The outlook is stable.

At the same time, S&P affirmed its 'B' issue rating on the U.S
dollar-equivalent GBP216.6 million first-lien term loan and the
$40 million-equivalent, multicurrency, five-year revolving credit
facility (RCF) issued by MergerMarket USA, Inc. and guaranteed by
Mergermarket Midco 2 Ltd.  The recovery rating on these loans is
'3', reflecting S&P's expectation of meaningful recovery in the
event of a payment default in the lower half of the 50%-70% range.

In addition, S&P affirmed its 'CCC+' issue rating on the U.S
dollar-equivalent GBP73.6 million second-lien term loan issued by
MergerMarket USA, Inc. and guaranteed by Mergermarket Midco 2 Ltd.
The recovery rating on this loan is '6', reflecting S&P's
expectation of negligible (0%-10%) recovery in the event of a
payment default.

Finally, S&P withdrew its 'B' long-term corporate credit rating on
MergerMarket USA, Inc.

"The rating on MergerMarket Group primarily reflects our
assessment of its weak business risk profile, which we view as
characterized by its small scale and vulnerability to changes in
the competitive landscape.  Our assessment of the group's business
risk profile is also based on the group's reliance on two key
products, MergerMarket and Debtwire, which account for
approximately two-thirds of invoiced sales.  On the positive side,
we incorporate MergerMarket Group's leadership in the niche
markets of merger and acquisition news, credit news, and
intelligence services.  The group's niche focus means that it has
limited direct competition globally.  MergerMarket Group also
benefits from a loyal customer base operating in different
segments of the financial services industry, with renewal rates of
over 95%.  Customers typically obtain MergerMarket Group's
products through subscription contracts, which we view as positive
for business risk because it provides better stability and
visibility of revenues, and limits the group's working capital
needs," S&P said.

S&P anticipates that MergerMarket Group will continue to post
moderate revenue and EBITDA growth over the next few years, based
on the increase in its global subscriber base.  S&P also considers
that the specialized nature of MergerMarket Group's offerings will
guard it to some extent from direct competition from larger
players in the global financial data, information, and analytics
market.

S&P's assessment of MergerMarket Group's financial risk profile
reflects S&P's view of the group's highly leveraged capital
structure and ownership by the private equity firm BC Partners.
Under S&P's base-case operating scenario, it forecasts that
MergerMarket Group's adjusted gross debt to EBITDA will be above
12.0x (including shareholder loans) over the next two years.
Mitigating MergerMarket Group's highly leveraged capital structure
is S&P's forecast that the group's adjusted EBITDA to interest
ratio will be about 2.5x over the same period.

In addition, S&P forecasts that the group will maintain an
adequate liquidity position at all times.  This reflects
MergerMarket Group's lack of material debt amortization
requirements and S&P's forecast of positive free cash flow
generation (even after accounting for onetime events), thanks to
limited capital expenditures (capex) and working capital needs.
It also reflects S&P's forecast that the group will maintain
adequate (above 15%) covenant headroom going forward, even after
accounting for debt-financed bolt-on acquisitions.

The stable outlook on MergerMarket Group mainly reflects S&P's
view that the group will continue to post moderate revenue and
EBITDA growth over the next few years, based on new subscriptions
and strong renewal rates.  S&P anticipates that the group will
generate positive free operating cash flow even after onetime
items, alongside with adequate liquidity, including 15% covenant
headroom.  S&P assumes that adjusted EBITDA interest coverage will
comfortably remain above 2.0x.

S&P could lower the ratings if MergerMarket Group does not
increase its revenue and profits, or if it increases its spending,
leading to negative free cash flow or weakened liquidity.  Further
debt-funded acquisitions may also generate downward pressure on
the rating, specifically if covenant headroom falls below 15%.
S&P could also lower the ratings if adjusted EBITDA interest ratio
declines to 2x or less.  More direct and persistent competition
from larger players in the global financial data, information, and
analytics market could also cause S&P to revise down its
assessment of the group's business risk profile, potentially
leading to a downgrade.

S&P sees the likelihood of an upgrade as remote because of
MergerMarket Group's highly leveraged capital structure and S&P's
expectation that its Standard & Poor's-adjusted total leverage
will remain high.  Notwithstanding the positive free operating
cash flows and revenue growth S&P includes in its base-case
scenario for the group, S&P believes that any meaningful debt
deleveraging will be unlikely in the near term, due to the PIK
nature of the group's shareholder loans.


PARAGON OFFSHORE: Defers Interest Payment on $15.4MM 2022 Notes
---------------------------------------------------------------
Paragon Offshore plc disclosed that it has elected to defer an
interest payment of approximately $15.4 million due on Jan. 15 on
its 6.75% senior unsecured notes maturing July 2022.  Under the
terms of the indenture governing the 2022 Notes, the company has a
30-day grace period after the interest payment date before an
event of default occurs.  Paragon believes it is in the best
interests of all stakeholders, including equity holders, to use
the grace period to continue to engage in discussions with its
secured and unsecured debtholders related to alternatives to
improve Paragon's long-term capital structure.

There is no assurance that the discussions with Paragon's
debtholders will result in an agreement before the end of the
grace period.  Paragon can elect to make the interest payment at
any time during the grace period.  However, if Paragon decides
not to make the interest payment by the end of the grace period,
such failure would result in the rights of the requisite holders
of certain of its indebtedness, including the 2022 Notes and
revolving credit facility, to accelerate the repayment of the
principal amounts due thereunder, which acceleration would result
in a cross-default under Paragon's term loan facility.

Randall D. Stilley, President and Chief Executive Officer of
Paragon, said, "Paragon has made the strategic choice to defer
this interest payment as constructive dialogue with debtholders
continues.  We believe we are making progress in achieving our
objective to improve the long-term capital structure of the
company. Paragon's substantial cash position at December 31, 2015,
more than $750 million, provides us with flexibility as we
negotiate.  Furthermore, it allows us to continue to meet all of
our obligations to suppliers, employees, and others as we deliver
safe, reliable, and effective operations to our customers in
the normal course of business."

                     About Paragon Offshore

Paragon -- http://www.paragonoffshore.com-- is a global provider
of offshore drilling rigs.  Paragon's operated fleet includes 34
jackups, including two high specification heavy duty/harsh
environment jackups, and six floaters (four drillships and two
semisubmersibles).  Paragon's primary business is contracting
its rigs, related equipment and work crews to conduct oil and gas
drilling and workover operations for its exploration and
production customers on a dayrate basis around the world.
Paragon's principal executive offices are located in Houston,
Texas.  Paragon is a public limited company registered in England
and Wales with company number 08814042 and registered office at
20-22 Bedford Row, London, WC1R 4JS, England.


                            *********

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

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

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


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-
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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 2016.  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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                 * * * End of Transmission * * *