TCREUR_Public/160525.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, May 25, 2016, Vol. 17, No. 102


                            Headlines


A U S T R I A

HETA ASSET: Austria Refused to Heed "Bad Bank" Advice


A Z E R B A I J A N

AGBANK: Fitch Affirms 'CCC' Long-Term Issuer Default Rating


B E L G I U M

TRUVO NV: S&P Lowers CCR to 'CCC-' Then Withdraws Rating


F I N L A N D

TEOLLISUUDEN VOIMA: S&P Lowers CCRs to BB+/B, Outlook Stable


F R A N C E

CFHL-1 2014: Fitch Affirms 'BB' Rating on Class E Tranche


G E R M A N Y

BARTEC GMBH: Group of Lenders Draws Up Debt Plan
DEUTSCHE LUFTHANSA: Moody's Affirms Ba1 CFR, Outlook Positive
DEUTSCHE FORFAIT: Insolvency Plan Approval Becomes Final


G R E E C E

GREECE: EU Top Official Optimistic on Bailout Measures


H U N G A R Y

MKB BANK: Moody's Affirms Caa2 Deposit Rating, Outlook Positive


I R E L A N D

AURIUM CLO II: Moody's Assigns (P)B2 Rating to Class F Notes
AURIUM CLO II: S&P Assigns Prelim. B- Rating to Class F Notes
BACCHUS 2006-2: Moody's Lowers Rating on Class X Notes to Caa1
FCT ERIDAN 2010-01: Fitch Affirms BB+ Rating on Class B Debt


I T A L Y

BANCA POPOLARE DELL'ALTO: S&P Affirms 'BB/B' CCRs, Outlook Pos.
* ITALY: Company Bankruptcies Down 3.4% in First Qtr. 2016


K A Z A K H S T A N

TSESNABANK: S&P Revises Outlook to Neg. & Affirms B+/B Ratings


L U X E M B O U R G

ALLNEX LUXEMBOURG: S&P Affirms B+ Long-Term CCR, Outlook Stable


N E T H E R L A N D S

ABN AMRO BANK: Moody's Raises Pref. Stock Rating to 'Ba1(hyb)'
DMPL MORTGAGE XII: Fitch Affirms BB- Rating on Class B Debt
SUEDZUCKER INT'L: Moody's Raises Jr. Subordinated Rating to Ba2


R U S S I A

EUROPLAN JSC: Fitch Cuts LT Issuer Default Ratings to 'BB-'
MAGNITOGORSK OJSC: Fitch Affirms BB+ LT Issuer Default Rating
METALLOINVEST AO: Fitch Affirms BB LT Issuer Default Rating
RN BANK: Fitch Assigns BB+ Long-Term Issuer Default Ratings
SUKHOI CIVIL: Fitch Affirms BB- Long-Term IDR, Outlook Negative


S P A I N

GERDAU SA: Moody's Says Steel Unit Sale No Impact on B3 Rating
SANTANDER FINANCIACION 1: S&P Affirms D Ratings on 2 Tranches


S W I T Z E R L A N D

BARRY CALLEBAUT: Moody's Assigns Ba1 Rating to EUR450MM Notes
VAT GROUP: S&P Assigns BB- Long-Term CCR, Outlook Stable


T U R K E Y

FIBABANKA AS: Fitch Assigns 'BB-/B' Issuer Default Ratings


U N I T E D   K I N G D O M

BHS GROUP: Arcadia Warned of Suitor's Bankruptcy History
DECO 12-UK: Fitch Affirms D Ratings on 3 Note Classes
FAIRHOLD SECURITISATION: Fitch Cuts Ratings on 2 Tranches to D
HERCULES ECLIPSE 2006-4: Fitch Hikes Class C Debt Rating to B+
LADBROKES PLC: Fitch Says Gala Coral Merger Clears Major Hurdle

TATA STEEL UK: Deadline to Submit Formal Bids Passes
WILLIAM HILL: Moody's Assigns (P)Ba1 Rating to GBP350MM Sr. Notes
WILLIAM HILL: S&P Affirms BB+ Long-Term CCR, Outlook Stable


                            *********


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A U S T R I A
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HETA ASSET: Austria Refused to Heed "Bad Bank" Advice
-----------------------------------------------------
Boris Groendahl at Bloomberg News reports that Austria's Central
Bank Governor Ewald Nowotny told a parliamentary committee the
Austrian finance ministry's refusal to heed the central bank's
advice to create a "bad bank" after Hypo Alpe-Adria-Bank
International AG's rescue in 2009 inflated the cost of the
collapse to taxpayers.

In interviews the day after the emergency nationalization,
Mr. Nowotny recommended splitting Hypo Alpe into a "good"
operating unit that could be sold, and a "bad bank" that would
wind down assets that found no buyers, he told lawmakers
investigating whether taxpayers spent more than was necessary on
the failed business, Bloomberg relates.  According to Bloomberg,
he said the finance ministry refused to follow his advice because
it would have increased Austria's debt level.

"We made recommendations that were taken on board only after
multiple detours, and I'm afraid they were expensive detours,"
Bloomberg quotes Mr. Nowotny as saying.  "The fiscal argument
against the bad bank solution is legitimate, but it was
economically shortsighted and ultimately misguided."

Lawmakers in Vienna are probing the near-failure and rescue of
Hypo Alpe after Austrian taxpayers pumped at least EUR5.5 billion
(US$6 billion) into the lender, whose expansion in the former
Yugoslavia ended with billions of euros of soured loans, Bloomberg
discloses.  Mr. Nowotny reiterated that the central bank opposed
plans to let the bank go insolvent, because the damage done by
that would have been even bigger, Bloomberg notes.

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.



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A Z E R B A I J A N
===================


AGBANK: Fitch Affirms 'CCC' Long-Term Issuer Default Rating
-----------------------------------------------------------
Fitch Ratings has affirmed Azerbaijan-based AGBank's (AGB) ratings
and simultaneously withdrawn them.

Fitch has withdrawn AGB's ratings as the bank has chosen to stop
participating in the rating process, and Fitch will therefore no
longer have sufficient information to maintain the ratings.
Accordingly, Fitch will no longer provide ratings or analytical
coverage for AGB.

KEY RATING DRIVERS

On May 6, 2016, Fitch downgraded AGB's Long-Term Issuer Default
Rating (IDR) to 'RD' and then upgraded the rating to 'CCC' on
completion of a distressed debt exchange. Fitch has affirmed the
ratings of AGB prior to withdrawal due to limited changes to its
credit profile since the last rating action.

RATING SENSITIVITIES

Not applicable

The following ratings have been affirmed and withdrawn:

Long-Term IDR: 'CCC'
Short-Term IDR: 'C'
Viability Rating: 'ccc'
Support Rating: '5'
Support Rating Floor: 'No Floor'



=============
B E L G I U M
=============


TRUVO NV: S&P Lowers CCR to 'CCC-' Then Withdraws Rating
--------------------------------------------------------
S&P Global Ratings said that it had lowered its long-term
corporate credit rating on Belgian directories publisher Truvo
N.V. to 'CCC-' from 'CCC'.

S&P also lowered its issue rating on the company's EUR15 million
senior secured term loan to 'CCC+' from 'B-' and S&P's rating on
the EUR58 million payment-in-kind facility to 'C' from 'CC'.

S&P subsequently withdrew the corporate credit rating and issue
ratings at the company's request.

The outlook was negative at the time of withdrawal.

The downgrade follows Truvo's operational underperformance in 2015
compared with S&P's base case, including lower revenues and
profitability, and higher working capital requirements.  This led
to weakening of the group's cash generation ability and liquidity.
According to recent trading, Truvo was able to control its
operating expenses and hence improved its profitability in the
first quarter of this year.

Nevertheless, S&P thinks that the group will not be able to
stabilize its revenues and EBITDA on a full-year basis, due to
continuing structural decline in the print directory business and
strong competition in digital operations.  In S&P's view, the
combination of these factors will result in further erosion of
revenues, EBITDA, and cash flow generation.

Therefore, S&P expects that the group's cash position and
liquidity will weaken, increasing the likelihood of a minimum cash
covenant breach in the next six months.  Consequently, S&P thinks
that Truvo's risk of a default or debt restructuring will also
increase over that period.  The stand-still agreement protecting
Truvo from its debtholders' claims expired at the end of March
2016.  The first covenant test outside the agreement will be at
the end of June, and the results will be reported by mid-August
2016.  Truvo is required to comply with a minimum cash position of
EUR4 million by the end of June 2016 and EUR5 million by the end
of September 2016.

The rating reflected S&P's view of Truvo's business risk profile
as vulnerable and its financial risk profile as highly leveraged.

At the time of the withdrawal, the negative outlook reflected
S&P's view of the increased risk of a default or debt
restructuring over the next six months, resulting from a likely
breach of the minimum cash covenant in 2016 and decreasing
liquidity, due to weaker operating performance, higher working
capital needs, and declining cash flow generation.



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F I N L A N D
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TEOLLISUUDEN VOIMA: S&P Lowers CCRs to BB+/B, Outlook Stable
------------------------------------------------------------
S&P Global Ratings lowered its long- and short-term corporate
credit ratings on Finland-based nuclear power producer
Teollisuuden Voima Oyj (TVO) to 'BB+/B' from 'BBB-/A-3'.  The
outlook is stable.

The downgrade primarily reflects S&P's view that TVO's cost
competitiveness has weakened further because of the deterioration
in Finnish power prices and future price expectations.  Future
prices are currently predicted by the market to be below TVO's
expected costs of production when the third nuclear power plant
Olkiluoto 3 (OL3) is commissioned in 2018/2019.  In S&P's view,
this will diminish the cost advantage TVO currently offers to its
shareholders.  S&P has therefore revised down its view of its
business risk profile to satisfactory from strong.

S&P forecasts that TVO's average production cost will increase to
slightly below EUR30/mwh (megawatt hour) in 2019 from around
EUR20/mwh currently once OL3 is commissioned.  This could reduce
the economic attractiveness of TVO's business model for its owners
if current prices are maintained.

In S&P's view, maintaining a cost advantage will be an important
support for TVO's non-profit structure in the long term.  If the
current power price environment prevails, it will become more
difficult for TVO to maintain this advantage and will further
increase TVO's reliance on shareholders' ability and willingness
to provide contracted financial support.

Although S&P believes that TVO could sell any residual output
through the Nordic spot power market--and that this could cover
its cash costs in the short term--it may not be able to cover
depreciation and debt amortization if prices remain low.  If TVO's
production costs remain at or above market prices, S&P thinks that
other or new shareholders will be less likely to step in to meet
obligations left by a shareholder default.

OL3's competiveness has reduced notably given the increase in
expected construction costs, to approximately EUR2 billion.  This
has stemmed from significant construction delays; it's now nine
years behind the original scheduled completion date of 2009.
However, S&P expects that the project will be delivered without
any further material budget increases.  Despite a turn-key fixed-
price contract, TVO remains in arbitration with its suppliers,
AREVA-Siemens consortium, regarding the over-runs, and there is no
certainty that TVO will receive compensation via this arbitration.

TVO's non-profit cooperative-like "Mankala" business model
includes a full cost-cover structure backed by a long-term off-
take arrangement with the owners.  According to the company's
articles of association, the shareholders are severally liable for
TVO's annual fixed costs (accounting for about 80%-85% of total
costs), including interest expenses and debt installments.  They
are also responsible for TVO's variable costs in proportion to
their off-take.  Although the shareholders are not jointly liable
for TVO's costs, S&P believes the shareholders would have a strong
interest in supporting TVO should any individual shareholder
default, as long as they expect TVO's production costs to be
competitive in the long term.

TVO has a concentrated asset base.  However, its operational
nuclear plants have demonstrated a reliable operational track
record, seen in high capacity utilization rates that have remained
above 90%.  TVO has modernized and upgraded its plants over the
years, ensuring that they always have a remaining technical
lifetime of 40 years.

S&P believes that TVO's shareholders view their stakes in TVO as
long term.  They have shown support by supplying equity in the
form of shareholder loans -- with currently a further EUR300
million in committed shareholder loans -- to help fund OL3.  S&P
notes that TVO is exposed to the Finnish forest products industry
through two of TVO's major underlying shareholders: Pohjolan Voima
Oy--UPM-Kymmene and Stora Enso.

S&P assess TVO's financial risk as significant based on its high
debt leverage, which has increased due to cost overruns in the OL3
project.  TVO's financial risk is supported by its full cost-cover
structure and articles of association stipulating that the
shareholders are responsible for annual fixed costs, as well as
other expenses resulting from financing the company.

Because of the company's nonprofit cost-cover structure, its
financial ratios are less indicative of its financial risk profile
than those of profit-maximizing enterprises.  Although partly
equity-financed, the construction of OL3 has significantly
increased TVO's capital spending and debt in recent years.  In
addition, interest costs related to OL3's debt are treated as
capital expenditure in TVO's accounts and are not passed on to
shareholders as production costs.  This further weakens TVO's
financial measures.  This situation is likely to persist for the
next couple of years due to continued high investment needs and
negative free cash flows during the completion of OL3.

TVO has a relatively short-dated debt-maturity profile -- about
four years -- compared to the economic lifetime of its asset base
of over 40 years.  This increases the company's exposure to
refinancing risk, although, according to its articles of
association, TVO can charge its shareholders its yearly fixed
costs.  These include installments and interest payments on loans
falling due annually, in accordance with its loan agreements. That
said, TVO's debt does not benefit from any guarantees.

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

   -- Finnish area power prices around EUR29/mwh reducing to
      around EUR25/mwh in the medium term.

   -- TVO will continue to fully cover its production costs
      (including interest expenses) for existing plants OL1 and
      OL2, which S&P expects will remain competitive in the near
      term.

   -- No unexpected outages at OL1 and OL2.

   -- No further cost overruns in the completion of OL3.

   -- Use of EUR300 million of shareholder loan commitments for
      OL3.

The stable outlook reflects S&P's opinion that further downside
risk to future Finnish area power prices has reduced, as have the
expected costs for the completion of OL3.  The ratings on TVO's
largest shareholders are also stable.

S&P could lower the rating on TVO if S&P continued to see pressure
in Finnish area power prices, which could be caused by weakening
in the Nordic area price or if there was a reduction in Finnish
power price premium, or if S&P felt that the credit quality of its
shareholder group had reduced.

S&P could upgrade TVO if we saw that TVO could sustainably
maintain strong cost competitiveness compared with forecast
Finnish power prices and if the company's debt burden reduced.



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F R A N C E
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CFHL-1 2014: Fitch Affirms 'BB' Rating on Class E Tranche
---------------------------------------------------------
Fitch Ratings has upgraded three tranches of CFHL-1 2014 and
affirmed the remaining two. The transaction is a securitisation of
French residential mortgages originated by Credit Foncier de
France (CFF, A/Stable/F1), which also acts as servicer for the
portfolio.

Fitch has taken the following rating actions:

Class A2 (ISIN FR0011782390) affirmed at 'AAAsf'; Outlook Stable
Class B (ISIN FR0011782408) upgraded to 'AAAsf' from 'AAsf';
Outlook Stable
Class C (ISIN FR0011782416) upgraded to 'AAsf' from 'Asf'; Outlook
Stable
Class D (ISIN FR0011782424) upgraded to 'Asf' from 'BBBsf';
Outlook Stable
Class E (ISIN FR0011782432) affirmed at 'BBsf'; Outlook revised to
Positive from Stable

KEY RATING DRIVERS

Asset Performance
Prepayments have been at an elevated level (trailing 12 months'
average of 30%) over the last 18 months, reflecting the trend
across the French mortgage market and are a result of the
refinancing opportunities available due to a low base rate.

No repossessions or losses have been incurred on the pool since
closing in May 2014 although loans in late-stage arrears (greater
than 3 months) have increased sharply since closing to 0.6% of the
outstanding portfolio balance. While the absolute value of arrears
is still low the rate of increase is more pronounced than observed
in other Fitch-rated French RMBS transactions.

The structure has generated 1% excess spread (annualized) each
quarter. The high prepayments to date have resulted in a rapid
build-up in credit enhancement across all tranches, leading to the
upgrades to the class B, C and D notes.

Recovery and Valuation Adjustment
Based on findings from an agreed-upon-procedures (AUP) report
produced at transaction closing, Fitch cut the recovery rate by 5%
in all rating scenarios. The findings indicated incomplete or
missing documents which, in Fitch's view, may affect legal
recourse against the borrower in case of default. Fitch also
conducted a file review of 10 loans selected randomly at closing.
The agency discovered that the property value registered in CFF's
IT systems at origination were gross of agency fees. As such, a
haircut was applied to property values (excluding construction
loans) of 6% to counter the over-estimation.

Positive Selection
The securitized portfolio is characterized by a low weighted
average original-to-value (OLTV) ratio of 72.9%, below the levels
seen for other French specialized lenders. This low OLTV ratio is
the result of a positive selection of the securitized loans from
CFF's residential loan book. At closing, Fitch did not have enough
visibility to calibrate the impact of this positive selection and
therefore applied stresses on its default assumptions. The agency
now considers that the observed performance of the transaction,
together with further historical performance data now available,
sufficiently demonstrate the effects of this positive selection on
the credit quality of the portfolio. As a result, Fitch revised
its default expectation and applied lower default assumptions in
its analysis.

Issuance of Further A2 Notes
The issuer may issue, from April 2019, up to two further series of
A2 notes. These additional notes will be issued on substantially
the same terms (excluding margin) and the proceeds must be applied
towards redeeming (in full) the current A2 notes at the time. The
margin of the new A2 notes is subject to a cap and their issuance
is contingent on no adverse rating movements as well as amendment
of any swap margins as required.

RATING SENSITIVITIES

Adverse macroeconomic trends may impact employment or the housing
market, both of which have a direct bearing on the performance of
the transaction by eroding credit enhancement, in turn leading to
negative rating actions. Alternatively, if asset performance
remains robust and credit enhancement continues to build up at the
rapid rate observed to date, this may lead to positive rating
actions.

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.

Prior to the transaction closing, Fitch reviewed the results of a
third party assessment conducted on the asset portfolio
information, which indicated errors or missing data related to the
execution documentation. These findings were accounted for in this
analysis by assuming a 5% haircut to recovery rates across all
rating scenarios.

Prior to the transaction closing, Fitch conducted a review of a
small targeted sample of the originator's origination files and
found inconsistencies or missing data related to property
valuations. These findings were accounted for in this analysis by
assuming 6% haircut to property values.

Overall and together with the assumptions referred to above,
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.



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G E R M A N Y
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BARTEC GMBH: Group of Lenders Draws Up Debt Plan
------------------------------------------------
Edith Fishta and Luca Casiraghi at Bloomberg News report that
a group of Bartec GmbH lenders is drawing up a debt plan to
present to Charterhouse Capital Partners, the company's owner.

According to Bloomberg, people familiar with the matter said
the creditors are working with Deloitte LLP on a counter-proposal
to Charterhouse.

The private equity owner of Bartec has presented its own plan to
lenders as it seeks to persuade them to extend maturities and
amend rules governing loans to the safety equipment maker,
Bloomberg relates.

Charterhouse revised terms of its plan earlier this month,
offering a bigger cash injection and higher interest margins,
Bloomberg recounts.  Bartec, Bloombergsays, wants to change debt
terms after a collapse in crude prices hammered demand for safety
equipment and hurt earnings.

Bartec is an oil and gas equipment maker based in Bad Mergentheim
Germany.


DEUTSCHE LUFTHANSA: Moody's Affirms Ba1 CFR, Outlook Positive
-------------------------------------------------------------
Moody's Investors Service has affirmed the Ba1 corporate family
rating of Deutsche Lufthansa Aktiengesellschaft (Lufthansa), the
Ba1-PD probability of default rating (PDR), the NP short term
rating, the (P)Ba1/(P)NP senior unsecured rating of the company's
MTN programme and the Ba1 (LGD4, 57%) rating of the senior
unsecured notes.  The outlook on all ratings remains positive.

"We recognize Lufthansa's material earnings improvement in 2015,
and expect a further gradual increase in its operating profit this
year," says Sven Reinke, a Moody's Vice President - Senior Credit
Officer and lead analyst for Lufthansa.  "However, a ratings
upgrade requires further evidence of a sustainable improvement of
Lufthansa's financial profile alongside progress towards a
successful conclusion of the negotiations with key stakeholders
such as the pilot union Vereinigung Cockpit."

                         RATINGS RATIONALE

The rating action reflects improvements to Lufthansa's key credit
metrics in 2015 and Q1 2016, driven by a material improvement in
EBIT generation of EUR1,676 million in 2015 from EUR1,000 million
in 2014, and a reduction in seasonal loss in Q1 2016 to EUR49
million from an EBIT loss of EUR144 million in Q1 2015.
Lufthansa's Moody's-adjusted gross leverage improved to 4.0x in Q1
2016, from 5.6x at FYE2014 and its retained cash flow/net debt
ratio increased to 27.8% in Q1 2016 from 18.9% at FYE2014.  The
company's leverage is close to the guidance for a Baa3 rating but
further improvements are needed to consider Lufthansa's financial
profile sufficiently strong for an investment grade rating.

Lufthansa's credit metrics have improved despite strike-related
costs of EUR231 million in FY2015, which the rating agency does
not adjust for, as well as slightly higher adjusted debt.  A key
driver for Lufthansa's adjusted debt is the large pension deficit,
which has increased from EUR4.7 billion at the end of 2013 to
EUR6.6 billion at the end of 2015 despite cash injections into the
pension fund of EUR1,458 million in total over these two years.
Moody's notes that the magnitude of Lufthansa's pension deficit is
strongly correlated to the material decline in the discount rates.

Lufthansa made material changes to its point-to-point short-haul
strategy to improve its cost competitiveness in a market segment
where it faces challenges from successful low-cost airlines such
as EasyJet Plc (Baa1 stable) and Ryanair (not rated).  In 2013 and
2014, Lufthansa migrated its point-to-point short haul operations
to Germanwings, which had a lower cost base than the traditional
Lufthansa airline.  However, it continued to face a cost
disadvantage compared to its low cost rivals, partially due to its
pilots' remuneration, which was at a similar level as for
Lufthansa pilots.  In autumn 2015, the company started to replace
Germanwings with Eurowings which has a more competitive cost base
as the employees are not part of the Lufthansa group-wide labour
agreement.  In addition, by 2017, Eurowings will have a homogenous
short-haul fleet of Airbus 320 aircraft, resulting in a cost base
comparable to other low-cost airlines.

The company continues to address its cost disadvantage in other
areas as well.  For example, Lufthansa and the union ver.di agreed
in November 2015 to the gradual phase-out of the defined benefit
pension scheme.  One key obstacle remains the ongoing dispute with
key stakeholders such as the pilots which has so far prevented
Lufthansa from achieving more sustainable progress towards its
goal of becoming more cost competitive.  Further developments in
Lufthansa's rating trajectory will depend on the firm's ability to
address its cost structure, which remains driven by its former
status as a state-owned company.  Moody's notes that other legacy
carriers such as Iberia (not rated) and British Airways, Plc (Baa3
stable) have to date improved their cost competitiveness at a
faster pace.

For FY2016, Lufthansa targets an adjusted EBIT of slightly above
the EUR1,817 million achieved in 2015.  Significantly lower fuel
costs, which the company currently estimates to be EUR1 billion
below the EUR5.8 billion level of last year, will be largely
offset by yield pressure due to the pass-on of lower fuel prices
as well as the planned growth of Eurowings, which has lower
yields.  However, Moody's notes that the forecast excludes any
potential strike-related costs which cost the company a total of
EUR463 million in 2014 and 2015 -- strike cost could materially
impact Lufthansa's operating performance in 2016 as well.

Lufthansa's Ba1 ratings also reflect its leading position in the
European airline sector, its diversified route network, the
diversity of its business segments and its solid liquidity
position.  In particular, Lufthansa's maintenance and catering
segments -- which generate the majority of their revenues from
third party customers -- provide diversification to the group,
which distinguishes it from other airlines.  These segments
partially mitigate the exposure to the more volatile passenger
airlines and logistics (cargo) segments.  However, the rating also
reflects the exposure to external shock events that are
characteristic for the passenger airlines industry.

Moody's considers that Lufthansa has strong liquidity, with a
balance of cash and equivalents of EUR3.4 billion, undrawn
committed short-term credit lines of EUR780 million and short-term
debt of EUR1,3 billion as at the end of Q1 2016.  Moody's notes
that Lufthansa retains a minimum liquidity target of EUR2.3
billion.

               RATIONALE FOR THE POSITIVE OUTLOOK

The positive rating outlook reflects improved credit metrics in
2015, improved operating performance in Q1 2016 and Moody's
current expectation that Lufthansa over the next 12-18 months will
be able to continue to grow its earnings thereby improving Moody's
Adjusted Debt/EBITDA metric to below 4.0x.  Key drivers for the
anticipated improvement are lower fuel costs and the cost benefits
of the transformation of the point-to-point short-haul traffic.

               WHAT COULD CHANGE THE RATING UP/DOWN

Upward pressure could be exerted on the rating if Lufthansa
continues to improve its operating profit resulting in a stronger
financial profile on a sustainable basis.  Quantitatively, for
positive pressure on the rating, Moody's would expect to see:

  (1) gross adjusted leverage at 4.0x or below; and
  (2) a retained cash flow (RCF)/net debt metric of at least 25%

A successful conclusion of the negotiations with key stakeholders
such as the pilot union leading to an improving cost
competitiveness would also support a higher rating.

Although not expected in light of the recent rating and outlook
affirmation, the rating could come under negative pressure if
gross adjusted leverage were to trend back to above 5.0x on a
continued basis.  Given the company's current strategy, Moody's
believes that a deterioration in metrics would likely be the
result of external competition or significantly higher fuel costs
that cannot be fully forwarded to passengers.

                     PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Global
Passenger Airlines published in May 2012.

Deutsche Lufthansa Aktiengesellschaft, headquartered in Cologne,
Germany, is the leading European airline in terms of revenues.  In
FY2015 it reported revenues and an EBIT of EUR32.1 billion and
EUR1,676, respectively.


DEUTSCHE FORFAIT: Insolvency Plan Approval Becomes Final
--------------------------------------------------------
The insolvency plan submitted as part of the insolvency
proceedings of DF Deutsche Forfait AG, was approved by the Cologne
local court on April 29, 2016.

The court's approval became final.  On May 20, 2016 the court
issued the official "Rechtskraftvermerk" notice certifying the
legal effectiveness of the plan.  The company received the
official "Rechtskraftvermerk" on May 24, 2016.

DF Deutsche Forfait AG is German-based company engaged in the non-
recourse purchase and sale of receivables -- the forfeiting
business -- as well as the acceptance of risks through purchasing
commitments.



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G R E E C E
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GREECE: EU Top Official Optimistic on Bailout Measures
------------------------------------------------------
The Associated Press reports that the eurozone's top official
expressed optimism Tuesday that Greece's creditors will approve
its reform efforts, paving the way for the payout of a new batch
of rescue loans that would keep Athens from defaulting on its
massive debts this summer.

"I hope that there is full agreement between the institutions,
that we can move on in the program," the AP quotes Jeroen
Dijsselbloem, the head of the eurogroup of finance ministers, as
saying as he arrived for the talks in Brussels.

Greece's parliament passed a bill over the weekend on a series of
measures that creditors had demanded, the AP relates.  They
included tax hikes, more budget-cutting reforms and a new
privatization superfund, which will manage almost all state
property, the AP discloses.

The next step for creditors would be to find a way to lighten the
country's debt load, which mainly consists of past rescue loans
from eurozone states, the AP notes.  Greece's debt is predicted to
reach more than EUR333 billion (US$379 billion) this year, around
180% of its annual economic output, the AP states.

According to the AP, senior EU officials believe the plans being
drawn up by experts to address Greece's short, mid- and longer-
term debt needs will be enough to keep the IMF on board.



=============
H U N G A R Y
=============


MKB BANK: Moody's Affirms Caa2 Deposit Rating, Outlook Positive
---------------------------------------------------------------
Moody's Investors Service has affirmed the Caa2 long-term deposit
ratings of MKB Bank Zrt. and changed the outlook on the ratings to
positive from stable.  Concurrently, Moody's has upgraded the
bank's baseline credit assessment (BCA)/adjusted BCA to caa2 from
ca and its long-term Counterparty Risk (CR) Assessment to B2(cr)
from B3(cr).  MKB's short-term Not-Prime deposit ratings and Not-
Prime(cr) CR Assessment are affirmed.

This rating action follows the announcement of the National Bank
of Hungary (MNB) that MKB, currently state-owned and in resolution
since December 2014, was sold to a consortium of Hungarian and
foreign investors.  The sale is subject to regulatory approvals
and is expected to be completed by end-June 2016.  According to
MNB, MKB will exit resolution upon completion of the bank's sale.

                        RATINGS RATIONALE

The affirmation of MKB Caa2 long-term deposit ratings was driven
by: (1) the upgrade of the bank's BCA to caa2 from ca; (2) no
additional rating uplift from Moody's Advanced Loss-Given-Failure
(LGF) analysis (previously 1-notch uplift); and (3) low government
support assumption that results in no rating uplift (previously 1-
notch uplift owing to moderate government support assumption).
Consequently, the upgrade of the BCA by two notches offsets the
negative impact on the ratings of removing two notches of uplifts
from the Advanced LGF Analysis and government support.  The
upgrade of the CR Assessment to B2(cr) from B3(cr) is driven by
the upgrade of the BCA and removal of a 1-notch uplift from
government support.

   -- BCA

The repositioning of the BCA at caa2 from ca follows Moody's re-
assessment of MKB's financial fundamentals after a period of loan
book clean-up during the bank's resolution period.  The caa2 BCA
reflects a somewhat improved credit standing with an adequate
funding and liquidity profile but still considerable asset quality
and therefore solvency challenges.  The BCA also reflects Moody's
expectation that the ongoing clean-up of the bank's loan portfolio
and the more benign operating environment in Hungary compared to
the past six years will gradually benefit MKB's financial
fundamentals, albeit at very weak levels.  Consequently, the risks
for the bank's failure have receded noticeably.

MKB's resolution is performed under the EU Bank Recovery and
Resolution Directive (BRRD) regime and is based on Hungary's Act
XXXVII. of 2014 (Act on Resolution).  MNB is the resolution
authority.  Whilst the completion of the bank's sale will end the
resolution, MKB and its new shareholders will need to continue
implementing MKB's restructuring plan agreed by the Hungarian
authorities with the European Commission.  The restructuring plan
aims to reduce the bank's exposure to high-risk asset classes
(mainly commercial real estate) and to focus on retail and SME
lending.  Based on the restructuring plan, at the end of the
restructuring term, which is year-end 2019, MKB's Common Equity
Tier 1 (CET 1) ratio should be in the range of 10%-15% vs. the
minimum regulatory required 12.5% at that time.

In 2015, the bank sold in the market and transferred to Hungary's
Resolution Asset Management Vehicle (RAMV) a significant part of
its problem loans.  As a result, MKB's non-performing loans (NPLs)
ratio declined to 22.7% at year-end 2015 from 32.2% at year-end
2014.  Because of the increased loan loss provisions, the coverage
of NPLs with loan loss reserves rose to 73% at year-end 2015 from
63.6% at year-end 2014.  However, high loan loss provisions and
lower revenues resulted in large losses translating to a negative
return on average assets (ROAA) of 4% in 2015.  Consequently,
despite a sizable reduction in risk-weighted assets, MKB's Tier 1
ratio declined to 11.3% at year-end 2015 from 14.1% at year-end
2014.  The bank's capitalization is further constrained by high
level of leverage with tangible common equity-to-total assets at
5.24% at year-end 2015.  The bank's funding profile and liquidity
are adequate -- wholesale funding accounted for less than a
quarter of total asset and unencumbered liquid assets equaled
about 40% of the total assets.

MKB's new shareholders are Hungarian private equity fund Metis
with a 45% stake, Blue Robin Investments SCA (Luxembourg) with a
45% stake and Hungarian pension fund Pannonia with a 10% stake.
Moody's understand that Metis and Blue Robin Investments SCA have
been established recently for the purpose of acquiring MKB.  The
bank's still very weak financial profile and changing business
model will be a key challenge for the new shareholders and
management to achieve a successful turnaround for MKB.

   -- Deposit Ratings

MKB's Caa2 deposit ratings are based on its caa2 BCA and do not
receive any rating uplift.

Moody's Advanced LGF analysis assesses the severity of losses
faced by different liability classes in resolution, depending,
among other things, on the volume and subordination of such
liability classes.  The volume of MKB's issued senior unsecured
debt nearly halved in 2015, resulting in the removal of a 1-notch
uplift.

With total assets of EUR6.2 billion MKB has a 6% market share in
Hungary.  BRRD restricts the ability of governments to provide
support to banks, even if they were willing to do so, requiring
losses to be imposed on even senior creditors and large depositors
under many circumstances.  Following the privatization of the
bank, Moody's believes that government support for MKB is now less
certain.  Consequently the rating agency applies low government
support assumption that gives no rating uplift vs. moderate
support assumption with a 1-notch uplift previously.

   -- Positive Outlook

The positive outlook on MKB's ratings reflects the improving
operating environment that will likely support the bank's credit
profile over the next 12 to 18 months.

   -- WHAT COULD MOVE THE RATINGS UP/DOWN

A material improvement in the operating environment in Hungary
leading to an improvement in Moody's assessment of the country's
Macro Profile (currently Weak+) in combination with the bank
demonstrating a sustained decline in problem loans while improving
profitability and capitalization could positively affect MKB's
ratings.

Downward rating pressure could emerge if the bank's asset quality,
profitability and capital adequacy deteriorate noticeably.

                       PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Banks
published in January 2016.



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


AURIUM CLO II: 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 Aurium CLO II
Designated Activity Company:

  EUR205,000,000 Class A Senior Secured Floating Rate Notes due
   2029, Assigned (P)Aaa (sf)

  EUR49,700,000 Class B Senior Secured Floating Rate Notes due
   2029, Assigned (P)Aa2 (sf)

  EUR23,600,000 Class C Senior Secured Deferrable Floating Rate
   Notes due 2029, Assigned (P)A2 (sf)

  EUR18,900,000 Class D Senior Secured Deferrable Floating Rate
   Notes due 2029, Assigned (P)Baa2 (sf)

  EUR17,200,000 Class E Senior Secured Deferrable Floating Rate
   Notes due 2029, Assigned (P)Ba2 (sf)

  EUR10,300,000 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, Spire Partners LLP,
has sufficient experience and operational capacity and is capable
of managing this CLO.

Aurium CLO II D.A.C. is a managed cash flow CLO.  At least 90% of
the portfolio must consist of senior secured loans and senior
secured bonds and up to 10% of the portfolio may consist of
unsecured loans, second-lien loans, mezzanine obligations and high
yield bonds.  The bond bucket gives the flexibility to the Issuer
to hold bonds if Volcker Rule is changed.  The portfolio is
expected to be 75% ramped up as of the closing date and to be
comprised predominantly of corporate loans to obligors domiciled
in Western Europe.  The remaining of the portfolio will be
acquired during the 6 month ramp-up period.

Spire Partners LLP 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 six classes of notes rated by Moody's, the
Issuer will issue EUR 35m 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.  Spire's investment decisions and
management of the transaction will also affect the notes'
performance.

Loss and Cash Flow Analysis:

Moody's modelled 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: EUR350,000,000
  Diversity Score: 38
  Weighted Average Rating Factor (WARF): 2750
  Weighted Average Spread (WAS): 4.40%
  Weighted Average Recovery Rate (WARR): 45%
  Weighted Average Life (WAL): 8 years

Moody's has analyzed 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, only up to 10% of the pool can be
domiciled in countries with foreign currency government bond
rating between A1 and A3 and 0% below A3.  Given this portfolio
composition, there were no adjustments to the target par amount,
as further described in the methodology.

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 Senior Secured Floating Rate Notes: 0
  Class B Senior Secured Floating Rate Notes: -1
  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: 0
  Class F Senior Secured Deferrable Floating Rate Notes: 0
  Percentage Change in WARF: WARF +30% (to 3575 from 2750)
  Ratings Impact in Rating Notches:
  Class A Senior Secured Floating Rate Notes: 0
  Class B Senior Secured Floating Rate Notes: -2
  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: -1
  Class F Senior Secured Deferrable Floating Rate Notes: -1

Methodology Underlying the Rating Action:

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


AURIUM CLO II: S&P Assigns Prelim. B- Rating to Class F Notes
-------------------------------------------------------------
S&P Global Ratings assigned its preliminary credit ratings to
Aurium CLO II Designated Activity Company's class A, B, C, D, E,
and F senior secured floating-rate notes.  At closing, Aurium CLO
II will also issue unrated subordinated notes.

Aurium CLO II is a cash flow collateralized loan obligation (CLO)
transaction securitizing a portfolio of primarily senior secured
loans granted to speculative-grade European corporates.  Spire
Partners LLP will manage the transaction.

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

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

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

In S&P's cash flow analysis, it used the portfolio target par
amount of EUR350.00 million, the covenanted weighted-average
spread (4.40%), the covenanted weighted-average coupon (6.25%),
and the covenanted weighted-average recovery rates at each rating
level.

Citibank, N.A., London branch will be the bank account provider
and custodian.  At closing, S&P anticipates that the participants'
downgrade remedies will be in line with its current counterparty
criteria.

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

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

RATINGS LIST

Preliminary Ratings Assigned

Aurium CLO II Designated Activity Company
EUR359.70 Million Senior Secured Floating-Rate Notes
(Including EUR35.00 Million Subordinated Notes)

Class               Prelim.            Prelim.
                    rating              amount
                                      (mil. EUR)

A                   AAA (sf)            205.00
B                   AA (sf)              49.70
C                   A (sf)               23.60
D                   BBB (sf)             18.90
E                   BB (sf)              17.20
F                   B- (sf)              10.30
Sub                 NR                   35.00

NR--Not rated.


BACCHUS 2006-2: Moody's Lowers Rating on Class X Notes to Caa1
--------------------------------------------------------------
Moody's Investors Service has taken rating actions on these notes
issued by Bacchus 2006-2 Plc:

  EUR18.4 mil. Class D Senior Secured Deferrable Floating Rate
   Notes due 2022, Upgraded to A2 (sf); previously on Oct. 5,
   2015, Upgraded to Baa2 (sf)

  EUR12.3 mil. (current balance: EUR9,527,605.87) Class E Senior
   Secured Deferrable Floating Rate Notes due 2022, Upgraded to
   B1 (sf); previously on Oct. 5, 2015, Affirmed B2 (sf)

  EUR28.5 mil. Class X Combination Notes due 2022, Downgraded to
   Caa1 (sf); previously on Oct. 5, 2015, Affirmed Ba3 (sf)

Moody's also affirmed these notes issued by Bacchus 2006-2 Plc:

  EUR39.9 mil. (current balance: EUR1,511,996.85) Class B Senior
   Secured Deferrable Floating Rate Notes due 2022, Affirmed
   Aaa (sf); previously on Oct 5, 2015 Affirmed Aaa (sf)

  EUR18.5 mil. Class C Senior Secured Deferrable Floating Rate
   Notes due 2022, Affirmed Aaa (sf); previously on Oct. 5, 2015,
   Upgraded to Aaa (sf)

  EUR33.95 mil. Class Y Combination Notes due 2022, Affirmed
   Ba3 (sf); previously on Oct. 5, 2015, Affirmed Ba3 (sf)

Bacchus 2006-2 Plc, issued in August 2006, is a collateralized
loan obligation (CLO) backed by a portfolio of high yield senior
secured European loans.  The portfolio is managed by IKB Deutsche
Industriebank AG.  The transaction's reinvestment period ended
August 2012.

                        RATINGS RATIONALE

The rating upgrades of the notes are primarily a result of the
redemption of senior notes and subsequent increases of the
overcollateralization ratios (the "OC ratios") of the remaining
classes of notes.  Moody's notes that only 4% of the original
balance of class B remains outstanding.  As a result of the
deleveraging the OC ratios of the notes have increased
significantly.  According to the March 2016 trustee report, the
classes A/B, C, D and E OC ratios are 3532.93%, 266.93%, 139.07%
and 111.43% respectively compared to levels just prior to the
payment date in February 2016 of 418.69%, 196.63%, 128.73% and
109.20% respectively.

The downgrade of the Class X combination notes is primarily the
result of its high dependence on the cash flows from the
subordinated notes.  According to Moody's approximately 18% of the
current rated balance of class X needs to come from the high risk
Class F subordinated notes component.

The ratings of the combination notes address the repayment of the
rated balance on or before the legal final maturity.  The rated
balances are equal at any time to the principal amount of the
combination notes on the issue date times a rated coupon of 0.125%
per annum accrued on the rated balance 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 analyzed the underlying collateral pool as having a
cash and performing par balance of EUR53.7 million, a weighted
average default probability of 22.18% (consistent with a WARF of
3464 and a weighted average life of 3.44 years), a weighted
average recovery rate upon default of 49.91% for a Aaa liability
target rating and a diversity score of 8.

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

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was "Moody's
Global Approach to Rating Collateralized Loan Obligations"
published in 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 lowered the weighted average recovery rate by 5
percentage points; the model generated outputs that were in line
with the base-case results for class C and within with one notch
for classes D and E.

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

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

  Around 47.6% 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

  Lack of portfolio granularity: The performance of the portfolio
   depends to a large extent on the credit conditions of a few
   large obligors with Caa1 or non-investment-grade ratings,
   especially when they default.  Because of the deal's low
   diversity score and lack of granularity, Moody's supplemented
   its typical Binomial Expansion Technique analysis with a
   simulated default distribution using Moody's CDOROM software.

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.


FCT ERIDAN 2010-01: Fitch Affirms BB+ Rating on Class B Debt
------------------------------------------------------------
Fitch Ratings has affirmed FCT Eridan 2010-01 as follows:

  EUR121.3 million Class A (ISIN FR0010979385): affirmed at
  'AAAsf'; Outlook Stable

  EUR28.9 million Class B (ISIN FR0010979393): affirmed at
  'BB+sf'; Outlook Stable

FCT Eridan 2010-01 is a static cash flow SME CLO originated by
BRED Banque Populaire (A/Stable/F1). At closing, the issuer used
the note proceeds to purchase a EUR950 million portfolio of
secured and unsecured loans granted to French small and medium
enterprises and self-employed individuals.

KEY RATING DRIVERS

The affirmations reflect the transaction's stable and sound
performance over the last 12 months. The share of loans in arrears
of more than 90 days decreased to 0.04% of the outstanding
portfolio balance from 0.15% one year ago. Fitch has assumed an
annual average probability of default of 2.5% based on the level
of delinquencies observed in the portfolio over the preceding
three years, a minimum annual average probability of default of 2%
and a ratio between notional-based and obligor-based delinquencies
of 1.2.

The notes have accumulated modest credit enhancement since closing
in 2010 despite the portfolio having amortized to 22.9% of its
original balance as of March 2016. The benign portfolio
performance means that portfolio proceeds (with the exception of
recoveries) are distributed pro rata to the notes, reducing the
benefits of deleveraging. The transaction is designed to switch to
fully sequential amortization should portfolio performance
deteriorate.

Despite the continuing amortization of the pool, the portfolio
remains fairly granular with the largest obligor and top 10
obligors representing respectively 0.8% and 6.6% of the
outstanding balance. Obligors representing more than 0.5% of the
pool have increased to 15 from seven over the last 12 months.

The class B notes' 'BB+sf' rating is capped in line with the
agency 'Criteria for Rating Caps in Structured Finance
Transactions'. The agency only considers 'Asf' or 'BBBsf' ratings
for bonds that are not expected to incur deferrals or under the
sequential and accelerated amortization scenarios, the class B
notes could experience temporary interest shortfalls as allowed by
the transaction's documentation.

RATING SENSITIVITIES

A 25% increase in the obligor default probability may lead to a
downgrade of one notch on the class A notes while not impacting
the rating of the class B notes.

A 25% reduction in expected recovery rates would not impact the
ratings of the notes.

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.



=========
I T A L Y
=========


BANCA POPOLARE DELL'ALTO: S&P Affirms 'BB/B' CCRs, Outlook Pos.
---------------------------------------------------------------
S&P Global Ratings said that it revised the outlook on Banca
Popolare dell'Alto Adige (BPAA) to positive from stable.  At the
same time, S&P affirmed its 'BB/B' long- and short-term
counterparty credit ratings on the bank.

The outlook revision on BPAA reflects S&P's view that the bank's
asset quality -- after the merger with Popolare di Marostica -- is
likely to perform better than S&P previously expected, and
therefore likely to recover faster than the Italian system
average.

S&P's new forecasts are driven by its view of more supportive
economic and operating conditions for Italy's banking sector over
the next couple of years.  In addition, S&P believes that BPAA can
benefit from the increasingly favorable operating environment that
characterizes the northeastern regions of Italy, in particular,
the wealthy Trentino Alto Adige, traditionally displaying higher
than average GDP per capita values and lower unemployment rates.

S&P understands that BPAA has successfully completed the review of
all the positions in Marostica's customer loans portfolio as part
of the acquisition process.  In addition, Marostica had already
cleaned up part of its portfolio before merging with BPAA,
increasing its coverage through provisions to about 48% at end-
2014, before its acquisition.  Therefore, in the context of a more
positive economic environment, S&P expects BPAA's credit losses to
remain below the level S&P expects for the Italian system average
over the next two years -- estimated at 0.80 basis points of
customer loans at end-2017.

S&P estimates a decreasing trend for BPAA's gross nonperforming
assets (NPAs) as a percentage of its customer loans from a post-
merger value of 15.2% at end-2015.  S&P thinks that BPAA's
stronger-than-peers risk management practices, in addition to
higher growth in customer loans than the industry average, could
contribute to an improving asset quality trend.

S&P believes that BPAA will be able to consolidate its market
share in the Veneto region -- ex-Marostica's historical market --
thanks to the ongoing advantageous competitive situation, created
by the progressive franchise loss by other peers operating in the
region.

S&P anticipates that the bank will be able to support its asset
growth, thanks to the EUR96 million capital increase successfully
completed in February 2016, while keeping its projected risk-
adjusted capital (RAC) ratio sustainably above 5.0% over the next
two years.

BPAA's profitability will remain positive but modest.  S&P
believes that BPAA will support a slightly increasing net interest
margin through assets growth on one side and cost-of-funding
reduction on the other.

The positive outlook on BPAA reflects S&P's opinion that BPAA's
asset quality will likely continue to outperform the Italian
system average over the next 12-18 months.

As such, S&P could raise the long-term rating on BPAA if the bank:

   -- Improves its net NPA ratio to close to 6%, the level of
      BPAA at end-2014 before the acquisition of BP Marostica;

   -- Reduces its gross NPA ratio to at least 13%, compared to
      15.2% at end-2015, thus outperforming S&P's expectations
      for the system average; and

   -- Demonstrates resilience in interest margins, and maintains
      its RAC ratio sustainably above 5%.

Alternatively, S&P could also raise the ratings if it anticipated
an improvement in the economic and operating environment in Italy,
supported by stronger projected capitalization.

S&P could revise the outlook to stable if BPAA's asset quality
metrics were not outperforming the Italian banking system average
and if S&P was to take a less positive view of the economic and
funding conditions affecting Italian banks.


* ITALY: Company Bankruptcies Down 3.4% in First Qtr. 2016
----------------------------------------------------------
Il Sole 24 Ore Radiocor Plus, citing data from business
information provider Cerved, reports that a total of 3,600 Italian
firms filed for bankruptcy in the first quarter of 2016, down 4.5%
from the year earlier.

According to Il Sole 24, bankruptcies in the construction sector
were down an annual 12.4%, while those in the services sector fell
1.9% and those in industry were 1.2% lower.



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


TSESNABANK: S&P Revises Outlook to Neg. & Affirms B+/B Ratings
--------------------------------------------------------------
S&P Global Ratings revised its outlook on Tsesnabank to negative
from stable.  S&P affirmed its 'B+/B' long- and short-term
counterparty credit ratings on the bank.

S&P also lowered its Kazakhstan national scale rating on the bank
to 'kzBBB-' from 'kzBBB'.

The rating actions reflect that S&P sees pressure on the bank's
risk position from its budgeted provisioning policy for 2016 and
track record of rapid loan growth as well as S&P's expectations of
rising nonperforming loans (NPLs) and credit costs for Tsesnabank,
in the Kazakh banking system's weakened operating environment
characterized by reduced GDP growth prospects and high tenge
devaluation.  Tsesnabank has shown very high loan growth rates of
about 50% annually over the past four years, which were
consistently above its budget, although this was mostly due to the
sharp tenge devaluation in 2015.  S&P expects the negative trend
in its asset quality will continue over the next two years as its
loans season amid deteriorated operating environment.  S&P expects
NPLs (loans over 90 days overdue), according to International
Financial Reporting Standards, will increase up to 8% in 2016-2017
from 3.8% at year-end 2015, while S&P expects an increase of up to
12%-14% on the system level.

S&P views Tsesnabank's provisioning policy as not sufficiently
conservative.  S&P views positively that its loan-loss reserves
increased to 6.0% of customer loans at year-end 2015 from 4.5% at
year-end 2014, and thus provisions covered NPLs by 158% at year-
end 2015.  However, the bank's budgeted credit costs of 2% for
2016-2017 fall short of our average forecast for the sector of
about 3% and do not cover the bank's NPLs and restructured loans
fully.  S&P anticipates that the bank's profitability would
decrease materially in case of a significantly increased
provisioning rate.

S&P revised its assessment of the bank's business position to
adequate from moderate to reflect the bank's improved market
position as the third-largest bank in Kazakhstan with a 8.4%
market share by total assets, 10% by loans, and 9.2% by deposits
as of April 1, 2016.  Tsesnabank is also the largest participant
in government lending programs, which are currently the main
driver of loan growth in the Kazakh banking system.  Tsesnabank's
business position is also underpinned by its location in
Astana -- the fastest-developing city in Kazakhstan -- where the
bank has a market share of 45% by loans and 25% by term deposits.
Tsesnabank's market share in the Kazakh banking sector by total
assets is smaller than that of Halyk Bank, which has a 16.7% share
and strong business position, but larger than that of Kaspi Bank,
which accounts for only 4.9% of the banking system's total assets
and has adequate business position.

"We revised our assessment of the bank's capital and earnings to
very weak from weak, reflecting a material weakening in its loss-
absorption capacity in 2015.  It also reflects our expectation
that the bank will not be able to restore its capitalization in
2016-2017, unless material additional capital injections take
place.  Our risk-adjusted capital (RAC) ratio fell to 2.9% at
year-end 2015 from 4.1% at year-end 2014, which was significantly
below our previous expectations.  This was because of 52% loan
growth (partly due to tenge devaluation, no capital injections,
and weak internal capital generation).  We forecast RAC of about
3% in the next 12-18 months, including the Kazakhstani tenge (KZT)
9.6 billion (about $28 million) capital injection in March 2016.
The bank's internal capital generation has weakened over the past
three years with return on average assets declining to 0.9% in
2015 from 1.7% in 2012, according to our calculations.  We expect
this trend will continue, pressured by a rise in provisioning
expenses and funding costs," S&P said.

The long-term rating on Tsesnabank is still one notch higher than
its SACP, reflecting S&P's view of the bank's moderate systemic
importance in Kazakhstan as the third-largest bank.  This means
that we consider that Tsesnabank's failure would likely have a
material, but manageable, adverse impact on Kazakhstan's financial
system and real economy.  In addition, because S&P assess the
Kazakh government as supportive, S&P believes Tsesnabank has a
moderate likelihood of receiving extraordinary support from the
government if needed.

The negative outlook reflects pressure on the bank's risk position
in view of its budgeted provisioning policy for 2016, despite the
high NPL coverage at year-end 2015, and a track record of rapid
loan growth, as well as S&P's expectations of rising NPLs and
credit costs in the weakened operating environment characterized
by reduced GDP growth prospects and high tenge devaluation.

S&P could take a negative rating action over the next 12 months if
the bank's risk position worsened on the back of the ongoing rapid
growth of its loan portfolio above the budgeted 15%-20%; NPLs
increased to the system-average level; and the provision coverage
of NPLs reduced below 100%.

S&P could revise the outlook to stable if the bank strengthens its
capitalization materially, for example through additional capital
injections, raising the RAC ratio close to 3.5%.  This would
provide a greater buffer against rising future provisioning
requirements.



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


ALLNEX LUXEMBOURG: S&P Affirms B+ Long-Term CCR, Outlook Stable
---------------------------------------------------------------
S&P Global Ratings affirmed its 'B+' long-term corporate credit
rating on Belgian chemical company Allnex (Luxembourg) & Cy SCA.
The outlook is stable.

At the same time, S&P affirmed its 'B+' issue rating on the
group's existing EUR0.6 billion secured debt and the $120 million
revolving credit facility (RCF).  The recovery rating of '3'
remains unchanged, reflecting S&P's expectation of recovery in the
lower half of the 50%-70% range in case of default.  S&P also
affirmed its 'B-' issue rating on the $150 million second lien
secured subordinated debt.  The recovery rating remains unchanged
at '6', reflecting S&P's expectation of 0-10% recovery.  S&P
expects this debt to be refinanced with the new term loan B.

In addition, S&P assigned its 'B+' issue rating to the EUR1,270
million term loan B and the EUR160 million RCF.  The recovery
rating is '3', indicating out expectation of recovery in the lower
half of the 50%-70% range in case of default.

The affirmation follows Allnex's binding proposal to acquire New
Zealand-based Nuplex for about EUR750 million in a fully debt-
financed transaction expected to close in the third quarter of
2016.  Nuplex is a global manufacturer and distributor of resins
used in architectural, industrial, automotive, and protective
coatings (EUR850 million in sales and about EUR90 million in
EBITDA in 2015).

S&P anticipates the transaction will further strengthen Allnex's
business risk profile, given the complementary nature of the two
companies' footprints in terms of geographic presence and product
range.  The transaction will also expand the company's
manufacturing footprint.  Moreover, S&P expects the company's S&P
Global Ratings-adjusted debt-to-EBITDA ratio post transaction to
peak at 5.1x in 2016, then reduce to below 5.0x from 2017, based
on resilient performance and cash generative nature of the
business, further supported by the deleveraging S&P observed at
Allnex over the past couple of years.  S&P's adjusted debt doesn't
include approximately EUR280 million of preferred equity
certificates, which S&P regards as equity.

The acquisition will create one of the largest coating resins
companies worldwide, and the new entity will hold a top-five
market position in all geographies.  While Allnex generated the
majority of its revenues in Europe, with some earnings stemming
from North and South America and Asia, the combined company will
benefit from the more than 35% of sales from the higher-growth
Asia-Pacific region (including Australia and New Zealand).  In
terms of product and end-market diversification, S&P expects the
combined company to have a more balanced portfolio by increasing
the share of marine and automotive end-markets.  Regarding
technology, Nuplex's strong position in Solventborn resins should
allow the company to benefit from this product's growth potential
in emerging markets, especially in Asia.

S&P's assessment of Allnex's business risk profile as fair
captures S&P's expectation that the group should continue to
deliver stable, or even slightly rising, adjusted EBITDA of about
EUR300 million-EUR320 million in 2016-2017 pro forma for the
Nuplex acquisiton.  This reflects:

   -- Good geographic diversification, with 46% of EBITDA coming
      from Europe, 29% from Asia-Pacific, and 25% from the
      Americas.

   -- Strong market positions in its niche industry as either the
      No. 1 or 2 player in segments accounting for about 60% of
      profits.

   -- A product portfolio comprising value-added liquid resins,
      powder coating resins, and innovative products such as
      radcure, with strong technical properties customized for
      end uses.

In S&P's view, these strengths mitigate Allnex's limited product
diversity beyond the coating resins and its exposure to some more
cyclical end-markets.

The stable outlook reflects S&P's expectation that Allnex's
adjusted debt to EBITDA will peak at 5.1x in 2016, then improve to
below 5.0x in 2017, as result of positive FOCF thanks to strong
cash conversion and the low capital intensity of the business.
S&P also sees FFO to cash interest of around 4x as commensurate
with the current ratings.

S&P sees limited upside to the current rating given the company's
financial policy.  S&P sees constraints on the company's business
risk profile because of the limited diversity of the product
portfolio beyond coating resins and some exposure to more cyclical
end-markets.

S&P might consider a negative rating action if it saw a more
aggressive financial policy than S&P currently anticipates,
including if the projected deleveraging below adjusted debt to
EBITDA of 5x.  Another risk factor would be greater cyclical
downside for Allnex's industrial coatings resins than S&P
currently assumes.



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


ABN AMRO BANK: Moody's Raises Pref. Stock Rating to 'Ba1(hyb)'
--------------------------------------------------------------
Moody's Investors Service has upgraded ABN AMRO Bank N.V.'s long-
term deposit and unsecured debt ratings to A1 from A2.  The
outlooks are stable.  Short-term deposit and senior unsecured
ratings were affirmed at Prime-1.  On the same day, the bank's
subordinated debt and 'high trigger' Additional Tier 1 (AT1)
securities were upgraded to Baa2 and Ba1(hyb) respectively from
Baa3 and Ba2(hyb) respectively.  Moody's also upgraded ABN AMRO's
long-term counterparty risk assessment (CR Assessment) to Aa3(cr)
from A1(cr).  The short-term CR Assessment was affirmed at Prime-
1(cr).  These upgrades result from the rating agency's upgrade of
ABN AMRO's baseline credit assessment (BCA) to baa1 from baa2.

The upgrade of the BCA reflects an improvement across most of the
bank's fundamentals, in particular asset quality, profitability,
solvency and liquidity, which is testimony to the progress
achieved on all fronts by the bank since its rescue by the Dutch
state in 2008.  These positive developments eventually led the
Dutch government to begin the return of the bank to the private
sector via an initial public offering in 2015.  Moody's assigned a
stable outlook, as it considers that the above fundamentals are
now likely to remain steady in the foreseeable future, against a
backdrop of a low interest rate environment which will weigh on
the bank's revenues and ability to generate capital.

The ratings of ABN AMRO's supported entities were upgraded and
affirmed respectively.

                         RATINGS RATIONALE

UPGRADE REFLECTS THE BANK'S IMPROVED FUNDAMENTALS

The upgrade of the BCA was driven by Moody's view that ABN AMRO's
asset quality has materially improved thanks to the recovery in
the domestic economy.  The group's cost of risk fell to 19 basis
points of gross loans in 2015 from 45 basis points in 2014 and 63
basis points in 2013, primarily driven by a considerable decrease
in losses on domestic exposures, in particular to the SME sector.
Moody's expects the Dutch economy to continue to perform well over
the coming months, which underpins the agency's view that the
improvement in asset quality is likely to be sustained.  The
decrease in loan loss impairment charges has contributed to the
restoration of the bank's profitability.  Although partly offset
by higher operating expenses attributable to increasing regulatory
costs and IT investment, ABN AMRO's profit generating capacity has
also progressively risen since 2012 thanks to an increase in
interest margins driven by loan re-pricing.

At the same time, the bank's solvency and liquidity have further
improved, providing it with greater resilience against unexpected
losses or a liquidity stress.  At 15.8% as of end-March 2016, ABN
AMRO's Common Equity Tier 1 ratio ranks amongst the highest of
major European banks.  Moody's believes the bank is now well-
prepared to cope with forthcoming regulatory changes which are
likely to result in higher risk weighted assets and hence
additional capital requirements.  ABN AMRO's funding structure has
materially improved over the past three years through an increase
in customer deposits and a lengthening in the term structure of
its wholesale funding.  The bank's solid liquidity is underpinned
by a large liquidity buffer that amply covers short-term funding
needs.

The BCA of baa1 also reflects the bank's strong footprint in the
Dutch market, its balanced business mix between retail and
commercial banking and its private banking activity undertaken
across Europe.  These activities result in a moderate risk
profile, the sustainability of which is underpinned by the bank's
conservative and predictable strategy.

The upgrade of the long-term deposit and senior unsecured ratings
to A1 from A2 was prompted by the upgrade of the BCA.  These
ratings are underpinned by (1) the bank's standalone credit
strength; (2) the application of Moody's Advanced Loss Given
Failure (LGF) analysis, resulting in a two-notch uplift -- for
both senior debt and deposits -- from the adjusted BCA of baa1
given the significant volumes of senior debt and junior deposits
and resulting very low loss-given-failure for these instruments;
and (3) government support uplift of one notch, reflecting a
moderate probability of government support.

The upgrade of the CR Assessment follows the upgrade of the BCA.
The CR Assessment of Aa3(cr)/Prime-1(cr) is four notches above the
BCA, reflecting the substantial volume of bail-in-able liabilities
protecting operating obligations as well as a moderate probability
of government support.

          UPGRADE OF SUBORDINATED AND HYBRID DEBT RATINGS

The upgrade of the subordinated debt and 'high trigger' AT1
securities to Baa2 and Ba1(hyb) respectively were prompted by the
upgrade of ABN AMRO's BCA.

The dated subordinated debt instruments are rated one notch below
the bank's BCA to reflect their higher loss-given failure.

Moody's positions the rating of the' high trigger' AT1 securities
at the lower of its model output (Baa3(hyb)) and the rating on the
bank's non-viability AT1 securities, i.e. the bank's BCA minus
three notches (Ba1(hyb)).  This rating is maintained by Moody's
and not requested by ABN AMRO.

                           STABLE OUTLOOK

Given the more benign operating environment in the Netherlands and
the bank's reinforced solvency and liquidity, Moody's believes
that ABN AMRO's creditworthiness will remain steady in the
foreseeable future.  The agency assigns a stable outlook to both
long-term deposit and senior unsecured ratings, which also assumes
that the liability structure and probability of government support
will remain broadly unchanged.

               WHAT COULD CHANGE THE RATING UP/DOWN

An upgrade of ABN AMRO's long-term ratings could occur if (1) the
bank achieves a longer track-record of stable and sustainable
profit evidencing the effectiveness of its low-risk profile; (2)
the bank's leverage ratio, which is currently just below the 4%
threshold recommended by the Dutch Ministry of Finance, materially
improves; or (3) if the amount of subordinated debt and hybrid
capital significantly increases, adding sustainable subordination
to the bank's senior creditors and hence reducing their loss-
given-failure.

The bank's BCA could be downgraded as a result of (1) a
significant deterioration in the bank's asset quality and
profitability; or (2) a negative development in its liquidity
and/or capitalization.  A downward movement in ABN AMRO's BCA
would likely result in downgrades to all ratings.

ABN AMRO's deposit and senior unsecured debt ratings could also be
downgraded as a result of an increase in loss-given-failure,
should for example they account for a significantly smaller share
of the bank's overall liability structure, or benefit from lower
subordination than is currently the case.

LIST OF AFFECTED RATINGS

Issuer: ABN AMRO Bank N.V.

  Upgrades:

  Long-term Counterparty Risk Assessment, upgraded to Aa3(cr)
   from A1(cr)

  Long-term Deposit Ratings, upgraded to A1 stable from A2 stable

  Long-term Issuer Ratings, upgraded to A1 stable from A2 stable

  Senior Unsecured Regular Bond/Debenture, upgraded to A1 stable
   from A2 stable

  Backed Senior Unsecured Regular Bond/Debenture, upgraded to A1
   stable from A2 stable

  Senior Unsecured Medium-Term Note Program, upgraded to (P)A1
   from (P)A2

  Subordinate Regular Bond/Debenture, upgraded to Baa2 from Baa3

  Subordinate Medium-Term Note Program, upgraded to (P)Baa2 from
   (P)Baa3

  Pref. Stock Non-cumulative, upgraded to Ba1(hyb) from Ba2(hyb)

  Adjusted Baseline Credit Assessment, upgraded to baa1 from baa2

  Baseline Credit Assessment, upgraded to baa1 from baa2

Affirmations

  Short-term Counterparty Risk Assessment, affirmed P-1(cr)

  Short-term Deposit Ratings, affirmed P-1

  Other Short Term, affirmed (P)P-1

  Deposit Note/CD Program, affirmed P-1

  Commercial Paper, affirmed P-1

Outlook Actions:
  Outlook remains Stable

Issuer: Fortis Bank (Nederland) N.V.

Upgrades:

  Backed Senior Unsecured Regular Bond/Debenture, upgraded to A1
   stable from A2 stable

Outlook Actions:
  No Outlook

Issuer: ABN AMRO Funding USA LLC

Affirmations:
  Backed Commercial Paper, affirmed P-1

Outlook Actions:
  No Outlook


DMPL MORTGAGE XII: Fitch Affirms BB- Rating on Class B Debt
-----------------------------------------------------------
Fitch Ratings has affirmed Dutch Mortgage Portfolio Loans XII B.V.
(DMPL XII). The transaction is a securitisation of Dutch prime
residential mortgages originated by Achmea Hypotheekbank N.V.
(AHB, A/Negative/F2), primarily prior to 2005.

Fitch has taken the following rating actions:

Class A1 (NL0010773867) affirmed at 'AAAsf'; Outlook Stable
Class A2 (NL0010773875) affirmed at 'AAAsf'; Outlook Stable
Class B (NL0010773883) affirmed at 'BB-sf'; Outlook Stable

KEY RATING DRIVERS

Stable Asset Performance

As the transaction closed just under two years ago, there is
limited observable asset performance data. As of end-March 2016,
late-stage arrears (loans in arrears for more than three months)
were 0.16% of the current portfolio balance compared with the
average of 0.23% for the 2014 Fitch-rated Dutch RMBS. The
transaction has also shown lower arrears than levels observed in
other DMPL transactions at similar point of seasoning. The
positive asset performance was reflected in fairly lower weighted
average foreclosure frequency (FF) figures at closing.

Employee Loans

Within the underlying loans, 8.8% are provided to employees of
Achmea Interne Diensten, an operating subsidiary of Achmea B.V.,
the insurance parent of AHB. Legal opinion has confirmed that
while these employees effectively work for AHB, set-off risk is
unlikely as AHB and Achmea Interne Diensten are legally separate
entities. Therefore, the risk of employees setting-off claims
against their employer (e.g. severance pay, pension etc) in the
event of AHB's default is considered minimal and not factored into
the analysis.

It should be noted that in line with its criteria, Fitch has
increased the FF for employee loans by 20%.

Insurance Set-off

Borrowers with insurance repayment vehicles may, in the case of
the insurance provider's insolvency, attempt to set-off their
claim over the provider against the mortgage. Fitch has factored
in potential losses alongside the probability of set-off in the
analysis of this transaction.

Swap

The senior notes are hedged by a margin-guaranteed swap provided
by Deutsche Bank (A-/Stable/F1), which generates excess spread of
35bps on the class A notes.

While the swap terminates upon pay-down or redemption of the class
A notes, the class B notes (paying fixed rate) are naturally
hedged as 85% of the portfolio consists of fixed-rate loans.

Employment Data

A large portion of borrowers are marked as having 'Other'
employment, which is inconsistent with the employment type
previously observed. In line with its criteria, Fitch has taken a
conservative approach and has increased the FF of these loans by
20%. The adjustment does not have an impact on the rating outcome.

Collateral Posting

Deutsche Bank in its capacity as swap counterparty is currently
posting collateral as it is in breach of its rating trigger. The
amount of collateral posted is broadly in line with Fitch criteria
and the discrepancy between the actual amount posted and the
required amount is considered immaterial.

RATING SENSITIVITIES

Adverse macroeconomic trends may have an impact on employment as
well as the housing market. Poorer asset performance may erode
available credit enhancement, which in turn may lead to negative
rating actions.

Movement in collateral values may have implications on the
required credit enhancement for senior rating levels.

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.

Prior to the transaction closing, Fitch reviewed the results of a
third party assessment conducted on the asset portfolio
information, which indicated no adverse findings material to the
rating analysis.

Prior to the transaction closing, Fitch conducted a review of a
small targeted sample of the originator's origination files and
found inconsistencies or missing data related to the employment
data and discounts on loans made to employees. These findings were
accounted for in this analysis by assuming a specific lender
adjustment.

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.

MODELS

The models below were used in the analysis. Click on the link for
a description of the model.


SUEDZUCKER INT'L: Moody's Raises Jr. Subordinated Rating to Ba2
---------------------------------------------------------------
Moody's Investors Service has changed to stable from negative the
outlook on the Baa2 long-term issuer ratings of Suedzucker AG.
Moody's has affirmed the long-term Baa2 issuer ratings and the
short-term Prime-2 ratings of Suedzucker and Suedzucker
International Finance B.V.  Additionally Moody's has upgraded
Suedzucker International Finance B.V's junior subordinated rating
to Ba2 from Ba3.

"We have revised the outlook on Suedzucker's Baa2 rating to stable
from negative, reflecting our expectation that Suedzucker's credit
metrics will continue to improve over the next 12-18 months
primary driven by stronger underlying operating performance in the
sugar segment; we have also upgraded to Ba2 from Ba3 the
Suedzucker International Finance B.V's junior subordinated rating
reflecting the increased headroom under a cash flow event of the
hybrid instrument" says Ernesto Bisagno, Moody's Vice President --
Senior Analyst and lead analyst for Suedzucker.

                        RATINGS RATIONALE

The rating action reflects Moody's expectation that in the next
12-18 months Suedzucker's key credit metrics will continue to
improve to levels more supportive of the rating as a result as a
combination of improved operating performance in the sugar segment
driven by stronger sugar prices, and stable operations in the
fruit and special products segments.  That will be partially
offset by weaker contribution from the cropenergy segment as
ethanol prices could trade below the 2015 average level.

The upgrade of the junior debt to Ba2 from Ba3 reflects the higher
headroom under the cash flow event and our expectation that it
will increase further in the financial year ending February 2017
(FYE 2017); that will be driven by a combination of improving cash
flow generation and stronger margins.

While Suedzucker's sugar segment operating performance has been
weak recently with the segment reporting an operating loss of
EUR78 million in the financial year closing February 2016 (FYE
2016), this was more than offset by a strong recovery in European
ethanol prices particularly in the last part of 2015 which had a
positive impact on the CropEnergies and Special Products segments'
operating performance.  Its fruit segment (fruit preparations and
fruit juice concentrates) also continued to report a stable
operating performance.  As a result, operating profit in FYE 2016
(company reported) increased by 33% to EUR241 million.

Positively, despite the weakened operating performance in the
sugar segment and a reasonably high capital expenditure program
peaking in FYE 2016, Suedzucker's free cash flow turned positive
in FYE 2016.  This resulted from higher EBITDA combined with
positive working capital inflows, and also owing to management's
decision to cut its dividends.  As a result, its unadjusted gross
financial debt declined to EUR1.1 billion at FYE 2016.  Moody's
adjusted leverage also showed a material improvement below 4.0x
(based on our preliminary adjustments) from 4.8x at FY 2015.
While it remains high for the Baa2 rating, we recognize that the
gross leverage is mitigated by cash balances of EUR459 million at
FYE 2016 (EUR585 million including short-term securities).
Excluding pensions, unadjusted reported net debt was EUR519 as of
FYE 2016 implying a net leverage around 1.0x.

Moody's said, "We assume Suedzucker's operating profit to continue
to increase in line with the company guidance and, as capital
expenditure moderates, we expect the company's free cash flow to
remain positive or at worst neutral, reflecting higher working
capital needs due to higher sugar prices and increased dividends.
Stronger operating profit will be mainly driven by the sugar
segment to return positive in FYE 2017, on the back of higher
sugar prices in the EU.  This will be partially offset by higher
fixed costs in the first half due to lower production from the
previous campaign.  In the second half, we expect lower fixed cost
reflecting expected higher production in the 2016-17 sugar
campaign, with additional improvement in profitability depending
on further improvements in sugar prices."

In the CropEnergies segment, Moody's assumes lower ethanol prices
compared to the 2015 average level and therefore we model
operating profit in line with the midpoint of the company's EUR30-
EUR70 million guidance for FYE 2017.  Lower ethanol prices would
also constrain the profitability of the Special Product segment.
Operating profit in the Special Product would be also negatively
impacted by the EUR10-20 million start-up costs associated with
the company's commissioning of the Zeitz starch plant to start
operations in Q1 2017.  Moody's assumes the Fruit division's
operating performance to continue to improve driven by higher
volumes in fruit preparations, and contribution from cost savings
in juice concentrates combining with recovering prices.

Suedzucker's liquidity is excellent, with a cash balance of EUR459
million as of FYE 2016 (EUR585 million including short-term
securities) and full a fully undrawn EUR600 million five-year
syndicated revolving credit facility maturing in November 2020.
The facility has no material adverse change clause or financial
covenants.  In addition, the company has available a EUR450
million syndicated credit line signed in December 2012 by Agrana
with maturities in February 2018 (EUR150million) and in December
2020 (EUR300 million).  The drawn amount under this facility was
EUR60 million as of FYE 2016.

Suedzucker's liquidity needs are seasonal.  Debt generally peaks
in March (first quarter) after the last payments to beet farmers,
when it is approximately EUR200-300 million higher than in
February.  The group tends to have cash and liquid investments on
the balance sheet at year-end ahead of the final payments to
growers.  Suedzucker typically finances its peak debt with
increased issuance under the EUR600 million CP program (EUR125
million drawn at FY 2016) or short-term bilateral credit lines
which are generally rolled over.  The company has modest
maturities over FYE 2017, with the Agrana promissory note due in
April 2017. The group's short-term debt includes the short-term
bank credit facilities that together amounted to EUR427 million
(including EUR125 CP program) at FY2016 more than covered by
existing cash.

                     STRUCTURAL CONSIDERATIONS

The upgrade to Ba2 from Ba3 brings the EUR700 million Suedzucker
International Finance B.V's junior subordinated rating back to
three notches lower than Suedzucker's Baa2 issuer rating
reflecting the increased headroom under the cash flow trigger.
This is in line with Moody's methodology to rate non-cumulative
hybrids with a strong mandatory coupon skip trigger.

The subordinated perpetual bond has an indefinite maturity.  The
issuer has a call option that became exercisable after June 30,
2015.  This call right is subject to Suedzucker having issued,
within the 12 months preceding the redemption becoming effective,
parity securities and/or junior securities under terms and
conditions similar to those of the bonds, against issue proceeds
at least equal to the amounts payable upon redemption.

The Ba2 subordinated instrument rating reflects the loss
absorption characteristics of the rated instrument (which
continues to receive Basket D treatment), including (1) its deeply
subordinated and perpetual nature; (2) the presence of a mandatory
non-cumulative coupon suspension linked to a breach of the strong
trigger (defined as above); and (3) an optional cumulative
deferral if no dividends are paid.

                           STABLE OUTLOOK

The stable outlook reflects Moody's expectation that Suedzucker's
credit metrics will continue to improve in FY 2017 with leverage
trending towards 3.0x in FY 2017 and retained cash flow (RCF) to
net debt to strengthen towards 25%

                WHAT COULD CHANGE THE RATING UP/DOWN

Positive pressure on the rating is unlikely to develop during the
next 12-18 months and is reliant on (1) Suedzucker improving
adjusted leverage to sustainably below 3.0x and adjusted RCF/net
debt sustainably above 25%; and (2) the group building on its cash
balances and financial flexibility cushion to ensure that it can
accommodate the increased earnings volatility in the Sugar
segment.

Conversely, negative rating pressure could develop if (1)
operating profitability in FYE 2017 deteriorates as a combination
of ethanol prices not mitigated by stronger sugar prices; and (2)
financial policies and liquidity management relax.
Quantitatively, an adjusted (gross) debt/EBITDA ratio sustainably
above 3.5x and an RCF/net debt ratio sustainably below 20% for a
prolonged period of time could put pressure on the rating.

The principal methodology used in these ratings was Global Protein
and Agriculture Industry published in May 2013.

List of Affected Ratings:

Upgrades:

Issuer: Suedzucker International Finance B.V.

  Backed Junior Subordinated Regular Bond/Debenture, Upgraded to
   Ba2 from Ba3

Affirmations:

Issuer: Suedzucker AG

  Issuer Rating, Affirmed Baa2
  Commercial Paper, Affirmed P-2

Issuer: Suedzucker International Finance B.V.

  Backed Issuer Rating, Affirmed Baa2
  Senior Unsecured Commercial Paper, Affirmed P-2

Outlook Actions:

Issuer: Suedzucker AG

  Outlook, Changed To Stable From Negative

Issuer: Suedzucker International Finance B.V.

  Outlook, Changed To Stable From Negative



===========
R U S S I A
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EUROPLAN JSC: Fitch Cuts LT Issuer Default Ratings to 'BB-'
-----------------------------------------------------------
Fitch Ratings has downgraded Europlan JSC's Long-term Issuer
Default Ratings (IDRs) to 'BB-' from 'BB' and removed them from
Rating Watch Negative (RWN). The Outlook is Stable.

KEY RATING DRIVERS

The downgrade reflects increased contagion risks as a result of
the company having been acquired by a shareholder, the B&N group,
with a weaker credit standing. The downgrade is limited to one
notch as the impact of B&N's acquisition on Europlan has so far
not been significant, and Fitch does not see any immediate risks
for the company. Europlan's ratings remain underpinned by its
still strong financial metrics.

Fitch placed Europlan's ratings on Rating Watch Negative in July
2015 following the announcement of B&N's acquisition, citing
possible contingent risks from the B&N group and the potential for
changes to Europlan's strategy, risk appetite, balance sheet
structure and/or financial metrics. Following the completion of
the acquisition, the retention of (substantively) all of
Europlan's management team and limited changes to the company's
operations and performance, Fitch has concluded that a one-notch
downgrade is sufficient to reflect the impact of increased
contagion risks on Europlan's credit profile.

Europlan is one of the leading privately-owned leasing companies
in Russia, focusing on auto leasing (passenger cars, trucks and
light commercial vehicles) to primarily SME customers. Europlan's
net investment in leases shrunk by 25% in 2015 and a further 7% in
1Q16 due to weaker new business generation and amortization of its
short-term lease book. However, this was in line with sector
trends, driven by weak demand, and hence the company retained its
leading market position

Europlan has continued to demonstrate sound performance in 2015
and 1Q16, notwithstanding tougher operating conditions. Asset
quality metrics deteriorated only modestly. An uptick in final
credit losses was driven by a one-off write down on discontinued
operations - the loans of Europlan bank, which was subsequently
sold in December 2015. Higher write-offs were partly offset by
gains on sales of foreclosed assets. The gains were supported by
low LTVs and rouble inflation of leased asset values. Foreclosed
assets on the balance sheet amounted to a low 3% of capital at
end-1Q16.

Europlan's 2015 profitability was strong as the company was able
to preserve its margins, and control both operating costs and
credit losses. This allowed Europlan to compensate for a
RUB1billion loss on the sale of Europlan bank and still report a
14% ROAE, which improved further to 22% in 1Q16. Fitch expects
profitability to moderate in 2016 - but still remain sound - due
to continued amortization of the lease book.

Europlan's already strong reported leverage improved further in
2015 due to sale of the bank and continuing amortization of the
lease book. Net debt to equity ratio fell to 1.6x at end-1Q16 from
3.4x at end-2014. The ratio is calculated after adjusting equity
for a RUB0.6 billion receivable from the shareholder, which is
expected to be netted against future dividends.

Management has informed Fitch that it plans to moderately increase
reported leverage in 2016, as a result of a dividend payment, but
in the near-term debt/equity should still remain significantly
below the targeted 4x, which is solid. The company's capital
position in a stress scenario could also benefit from its proven
ability to deleverage quickly without material losses, as was the
case in 2015 and 2009.

Fitch's assessment of capitalization is negatively affected by
significant double leverage at Europlan's ultimate holding
company, which financed the majority of Europlan's acquisition
with debt. Fitch treats this as a reflection of broader contagion
risk from the B&N group, given the latter's overall high leverage.
The debt used to finance Europlan's acquisition was mostly
provided by friendly creditors, specifically, pension funds
controlled by the B&N group and by other large Russian financial
groups. Fitch does not believe that Europlan will be under
significant pressure in the near term to distribute capital in
order to pay down holdco debt.

Europlan's liquidity is supported by good matching of asset and
funding maturities and reasonable diversification of funding
sources. Europlan decreased its total borrowings in 2015 in line
with asset amortization. The funding profile shifted towards
domestic bonds, with RUB12 billion (out of total liabilities of
RUB22 billion) outstanding at end-1Q16; Fitch understands a large
portion of these are also held by B&N-controlled pension funds.
Loans from banks decreased to about a third of total borrowings,
but remained diversified and include a number of Russian banks. FX
risks are negligible, as the company operates with a predominantly
rouble balance sheet.

RATING SENSITIVITIES

The Stable Outlook reflects Fitch's base case expectation that
Europlan's financial metrics will remain sound, notwithstanding
potential contagion risks from the broader B&N group and the
challenging operating environment.

The ratings could be downgraded if Europlan's financial metrics
weaken significantly, or if, in the agency's view, contingent
risks increase. There is limited potential for an upgrade.

The rating actions are as follows:

  Long-term foreign and local currency IDRs: downgraded to 'BB-'
  from 'BB', Stable Outlook; off RWN

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

  National Long-term Rating: downgraded to 'A+(rus)' from
  'AA-(rus)', Stable Outlook; off RWN

  Senior unsecured debt: downgraded to 'BB-'/'A+(rus)' from
  'BB'/'AA-(rus)', off RWN


MAGNITOGORSK OJSC: Fitch Affirms BB+ LT Issuer Default Rating
-------------------------------------------------------------
Fitch Ratings has revised Russia-based OJSC Magnitogorsk Iron &
Steel Works' (MMK) Outlook to Positive and affirmed its Long-term
Issuer Default Rating (IDR) at 'BB+'.

Fitch said, "the Positive Outlook reflects MMK's strong financial
performance, which has largely been in line with Fitch's
expectations. As a result, in 2015 MMK was able to reduce funds
from operations (FFO) adjusted gross leverage to around 1.3x,
mainly through debt repayments. We believe that leverage will
remain around this level for the next two to three years. MMK's
ratings also reflect its strong position on the Russian market as
a supplier of a wide range of high value-added steel products.

"MMK generated between 70% to 80% of its revenues in its domestic
market, where the operating environment remains challenging. For
an upgrade we would expect to see some stabilization in the
Russian economy, which would provide some comfort that MMK will be
able to maintain its current financial profile. An improvement in
profitability for its Turkish operations would also be positive
for the credit profile."

KEY RATING DRIVERS

Sustainable Leverage

Fitch said, "We project leverage to remain around 1.3x for the
next two to three years. For 2016, we expect a further decrease in
debt, which will off-set the lower FFO, due to lower steel prices
and the challenging operating environment in Russia. In 2015, the
company was able to reduce leverage to 1.3x from 1.8x in 2014
mainly due to a $US0.7 billion decrease in financial debt to
$US1.8 billion by end-2015 from $US2.6billion at end-2014. In
2015, the group also improved its cash position, resulting in FFO
adjusted net leverage decreasing by 0.6x."

Conservative Financial Policy

Fitch said, "The company does not have any material investment
needs, therefore we expect capex to be between $US400 million to
$US550 million per year for the next three years. Fitch expects
the average dividend pay-out for the next three years to be around
2x higher than the last three years as the company's improved
financial profile supports a higher dividend pay-out. However this
will be substantially lower than its close peers. As a result of
this, we expect that MMK will be free cash flow (FCF) positive and
repay, rather than refinance, a large chunk of its 2016 debt
maturities."

If approved, MMK's new dividend policy, which was recommended by
the board in April 2016, stipulates a pay-out ratio of 30% of FCF
on a semi-annual basis. The previous dividend policy stipulated
20% of net income.

Domestic Steel Consumption Remains Weak

Fitch said, "We expect sales volumes to continue to fall in 2016
before picking up in 2017, due to additional capacity coming from
the Turkish plant as a result of the resumption of steel-making
operations. We expect the fall in volumes in 2016 to be slightly
higher for MMK in comparison to some of its main peers, given its
exposure to the Russian and CIS markets. In 1Q16 MMK reported a
4.8% yoy decline in sales volumes while on qoq comparison there
was some improvement.

"The operating environment in Russia remains challenging for steel
producers, as we expect declining demand in key steel end-using
sectors such as construction, automotive and machinery for 2016.
Fitch expects real GDP to decline by 1.5% in 2016 in Russia. As a
result of weak demand, we expect steel consumption to decline by
up to 5% yoy for 2016, after declining by 8% yoy in 2015."

Weak Prices and Rouble to Affect Margins

Fitch said, "We expect MMK's EBITDA margin to decline in 2016 to
around 26.2% from 28.3% in 2015 (Fitch calculated) because of the
weaker steel prices. After 2016 we expect a recovery in prices but
we continue to expect EBITDA margins to decline as we factor in a
gradual appreciation of the RUB against the $US. In 2015 MMK's
EBITDA margin improved as the impact from the drop in steel prices
was off-set by the depreciation of the RUB against the $US. In
addition, the weak raw material prices positively impacted MMK's
margins, as it has lower vertical integration than its peers."

Turkish Business Marginally Profitable

MMK Metalurji, MMK's Turkish division, has been running only
rolling mills using hot rolled coil from MMK's main site. MMK's
main site provided 80% of MMK Metalurji's steel in 2015, with the
rest from third parties. MMK Metalurji's rolling capacity ran at
almost 100% in 2015 due to strong demand for galvanised and
colour-coated steel in Turkey. This has helped make the division
EBITDA positive, although profitability remains marginal with
$US28million EBITDA in 2014 and around $US36million in 2015.

Strong Operational Profile

MMK lacks the degree of vertical integration that its close peers
have. However, it is one of the best in Russia in terms of the
share of high value-added products in total sales (47%), on par
with Severstal but higher than NLMK (30%). This allows the company
to receive higher EBITDA per tonne of steel sold ($US142/t
compared with $US124/t for NLMK). MMK has a very strong presence
and market share in industrially strong regions of Russia, such as
Central, Volga, Ural and Siberia.

Corporate Governance

Fitch said, "We regard MMK's corporate governance as above average
compared with its Russian peer group, but we continue to notch
down the rating in respect of corporate governance by two notches
relative to international peers. This notching factors in
consideration of the Russian business and jurisdictional
environment, ownership concentration and MMK's corporate
governance policies, procedures and track record."

KEY ASSUMPTIONS

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

-- Up to 2% sales volume decline in 2016 with average 1.4%
    recovery afterwards

-- 15% decline in average realised prices in 2016 with 5% per
    year recovery in 2017-2018

-- Average RUB/$US exchange rate of 75 in 2016 trending towards
    57 by 2019

RATING SENSITIVITIES

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

-- FFO adjusted gross leverage consistently below 1.5x (FFO
    adjusted net leverage: 1.0x).

-- Positive FCF on a sustained basis.

-- Improvement/stabilization in the Russia steel sector
    (operating environment in Russia).

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

-- Negative rating action on the Russian sovereign.

-- Negative FCF on a sustained basis.

-- FFO adjusted gross leverage sustained materially above 2.0x.

LIQUIDITY

The company's liquidity position is adequate with $US244 million
(Fitch treats $US200 million of this cash as restricted) of cash
in hand, $US433 million of short-term investments (excluding FMG
stake) and $US1.2 billion of committed unutilized credit lines
compared with $US0.8 billion of short-term borrowings at 31 March
2016. If needed, MMK's liquidity position could be enhanced by the
sale of remaining 3% stake in Fortescue Metals Group Limited
(BB+/Negative) currently worth around $US209 million.

FULL LIST OF RATING ACTIONS

  Long-term foreign currency IDR: affirmed at 'BB+'; Outlook
  revised to Positive from Stable

  Long-term local currency IDR: affirmed at 'BB+'; Outlook revised
  to Positive from Stable

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

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

  Senior unsecured foreign currency rating: affirmed at 'BB+'


METALLOINVEST AO: Fitch Affirms BB LT Issuer Default Rating
-----------------------------------------------------------
Fitch Ratings has affirmed Russia-based AO Holding Company
METALLOINVEST's (Metalloinvest) Long-term Issuer Default Rating
(IDR) at 'BB'. The Outlook is Stable.

The affirmation reflects Metalloinvest's resilient financial
performance despite the depressed pricing environment on global
iron ore markets driven by structural imbalances. The company has
reduced debt over the past four years and is committed to continue
this. Metalloinvest's ratings reflect its strong business profile
(top-three pellet producer globally and accounts for 45% share of
merchant HBI global production) and low production costs, which
provide healthy positive free cash flow (FCF) generation and
resilience to market price volatility.

KEY RATING DRIVERS

Low Prices Cut Profitability

Metalloinvest's revenue declined by 31% yoy in 2015 to $US4.4
billion, primarily driven by lower realised prices on iron ore and
steel products as well as by devaluation of domestic sales. The
company's EBITDA declined by 30% yoy to $US1.3 billion, which
compares favorably with global mining companies with iron ore
exposure such as Vale (BBB/Negative) and Fortescue (BB+/Negative),
whose EBITDA declined by 47% and 39%, respectively.

Metalloinvest's EBITDA margin remained nearly flat yoy at around
30% and was supported by the fall in the rouble against the US
dollar as around 80%-85% of the company's operating costs are
rouble denominated. Fitch expects a gradual recovery in iron ore
prices from 2018, while the rouble is forecast to reverse from
2017, driven by the recovery in oil prices. An unmatched recovery
in iron ore prices and rouble will have a negative effect on
Metalloinvest's profitability margin in 2016-2019 but we expect
the EBITDA margin will remain above 20% during this period.

Progress in Deleveraging

Fitch said, "The company has made some progress in reducing total
debt by approximately $US350m to $US4.4billion at end-2015 and is
committed to continuing to deleverage. At the same time, weak
prices drove FFO lower yoy which translated in FFO gross leverage
rise to 3.4x at end-2015 from 2.9x at end-2014. We expect FFO
gross leverage to be largely unchanged at around 3.0x during 2016-
2017. However, this remains subject to the amount of dividends
streamed to shareholders."

Steel Segment Profitability

Fitch said, "Metalloinvest steel segment's absolute EBITDA
remained largely flat in 2015 at around $US0.4 billion, despite
lower prices, supported by the weaker rouble and cost reductions
for the main raw materials. Fitch expects steel prices for 2016 to
be 15% weaker yoy, with a recovery starting from 2017. We
conservatively forecast a rouble reversal, which along with
marginal steel pricing recovery will put the segment's margins
under pressure from 2017."

Exposure to Downstream Products

Metalloinvest's strategy to increase exposure to downstream
products such as pellets and HBI/DRI will reduce exposure to more
volatile iron ore concentrate sales. Iron ore prices fell by 43%
yoy in 2015, while the price decline for pellets and HBI/DRI was
37% and 33%, respectively. The price premium for pellets compared
with concentrate (around $US25/t-30/t in 2015) also raises
profitability per tonne. The pellet plant commissioned in
September 2015 increased Metalloinvest's total pellet capacity to
28mtpy. Metalloinvest's remaining key project is construction of a
1.8mtpy HBI-3 plant at LGOK (total capex of $US650 million). The
project's launch is expected in late 2016-early 2017. The new
plant will further improve Metalloinvest's exposure to downstream
products with relatively lower price volatility.

Norilsk Nickel Stake a Source of Liquidity

In late 2014, Metalloinvest disposed of 1.8% of its 5% stake in
Russian nickel producer PJSC MMC Norilsk Nickel (NN; BBB-
/Negative) using $US588 million proceeds to repay RUB25 billion
bonds due in 1Q15. The remaining 3.2% stake, which is worth around
$US0.6 billion, is expected to bring around $US43 million of
dividends in 2016 unless the company decides to sell it before
cut-off date during the year. NN's stake serves as an additional
liquidity cushion in case this liquidity is required to be used
for debt repayment to maintain leverage within target guidelines.

Udokan Project Divested

In December 2015, the company announced the completion of its
restructuring, in which Baikal Mining Company LLC, which holds the
license for the Udokan copper project, was spun off to the
shareholder level of Metalloinvest. Fitch believes that
development of this project as part of Metalloinvest would have
brought about a material deterioration in the company's financial
profile and incurred significant implementation risks.

Corporate Governance

Metalloinvest is a private company with corporate governance
broadly in line with other Russian corporates. The country's weak
standards of governance and lack of legal safeguards are
constraints on the ratings. As a result, Fitch continues to notch
down the company's ratings by two notches.

The absence of a stated dividend policy and the use of
intercompany loans between Metalloinvest and its owner as an
alternative means of temporarily up-streaming cash to the USM
group are risks. These are balanced by the group's track record of
responsible financial management and commitment to, and history
of, deleveraging.

KEY ASSUMPTIONS

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

-- Iron ore CFR China at $US45/t during 2H16-2017 before increase
    to $US50/t in 2018-2019
-- New 5mt pelletizing capacity ramp up in 2016 and 1.8mt HBI
    capacity ramp up in 2017
-- Capex/sales to rebase to around 7% down from 9%-10% in 2014-
    2015
-- Dividends payout moderate and gradually increasing during
    2016-2019
-- FCF margin to peak at 15% in 2016 before moving towards low
    positive single-digit levels

RATING SENSITIVITIES

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

-- Further deleverage resulting in FFO adjusted gross leverage
    sustained below 2x (or FFO adjusted net leverage below 1.5x)
    and FFO fixed charge cover sustained above 8x.

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

-- EBITDAR margin below 20% on a sustained basis.
-- Related-party transactions with a major shareholder
    detrimental to the company's liquidity.
-- FFO adjusted gross leverage sustainably above 3x (or FFO
    adjusted net leverage above 2.5x) and FFO fixed charge cover
    sustainably below 6x.

LIQUIDITY

Metalloinvest's end-2015 liquidity position was strong with $US0.8
billion of cash in hand and $US0.4 billion of undrawn committed
bank facilities compared with $US0.7 billion of short-term
borrowings (primarily Eurobonds). In 1Q16 the company secured
$US400 million PXF financing and issued RUB20 billion (around
$US300 million) of local bonds to replace the previous PXF
facility and refinance maturities falling in 2017-2018. As a
result, the maturity profile during 2017-2018 has materially
improved. If necessary, the company's 3.2% stake in NN, worth
$US0.6 billion, represents a potential source of liquidity.

FULL LIST OF RATING ACTIONS

AO Holding Company METALLOINVEST

-- Foreign currency long-term IDR: affirmed at 'BB'; Outlook
    Stable
-- Senior unsecured rating: affirmed at 'BB'
-- Local currency long-term IDR: affirmed at 'BB'; Outlook
    Stable
-- National long-term rating: affirmed at 'AA-(rus)'; Outlook
    Stable

Metalloinvest Finance Limited

-- Senior unsecured rating affirmed at 'BB'


RN BANK: Fitch Assigns BB+ Long-Term Issuer Default Ratings
-----------------------------------------------------------
Fitch Ratings has assigned Joint Stock Company RN Bank (RNB) Long-
Term Issuer Default Ratings (IDRs) of 'BB+' with a Stable Outlook.

KEY RATING DRIVERS

RNB's IDRs, National Rating and Support Rating reflect the
potential support the bank may receive, if needed, from its
foreign shareholders. The bank is owned by UniCredit S.p.A.
(BBB+/Negative), through its Vienna-based subsidiary UniCredit
Bank Austria AG (BBB+/Negative) with a 40% stake; by Renault SA
(BBB-/Stable) through its subsidiary RCI Banque with a 30% stake,
and by Nissan Motor Co., Ltd. (BBB+/Stable) with a 30% stake.

In assessing the probability of support, Fitch views positively
(i) the strategic importance of the Russian market for Renault and
Nissan and the important role of RNB in supporting the two
companies' business; (ii) the track record of support, and in
particular the predominance of shareholder funding in RNB's
liabilities structure; and (iii) RNB's small size relative to its
owners, limiting the cost of potential support.

At the same time, RNB's Long-Term IDRs are notched down from those
of the bank's shareholders due to (i) each individual owner being
a minority shareholder, which may reduce their propensity to
provide support; and (ii) Fitch's view that reputational risks for
the owners would probably be containable in case of RNB's default.

Fitch has not assigned a Viability Rating to RNB due to its
limited track record and high reliance on shareholder funding.

RNB was established in 2013 and started its lending expansion in
2014. The bank has a moderate balance sheet (RUB52 billion at end-
2015) and a fairly narrow franchise, given the bank's focus on
supporting the sales of the Renault-Nissan Alliance brands in
Russia. The loan book (83% of total assets) is represented
primarily by car retail loans (76% of total loans) and financing
provided to Renault-Nissan Alliance dealers (24%). Non-performing
loans (NPLs; 90 days overdue) were a low 0.6% of end-1Q16 loans,
while reserve coverage of NPLs was a strong 4.6x.

Capitalization is sound given solid capital ratios (Fitch Core
Capital ratio of 15% at end-2015 and regulatory total CAR of 17%
at end-1Q16), well reserved NPLs and conservative development
plans. RNB's funding is dominated by shareholder placements (83%
of total end-2015 liabilities), although the plan is to somewhat
diversify this by increasing local funding through bond issuance.

RATING SENSITIVITIES

A weakening of the credit profiles of RNB's shareholders,
undermining their ability to support the Russian bank, could lead
to a downgrade of RNB's ratings, as could a reduction in the
importance of RNB for the development of business of Renault and
Nissan in Russia. A marked increase in the share of third-party
funding of RNB without recourse to the bank's shareholders could
also, in Fitch's view, somewhat erode the owners' propensity to
support RNB and could result in a downgrade of its ratings.

An upgrade of RNB's ratings would likely require a strengthening
of the parents' credit profiles and an extended track record of
support for the bank.

The rating actions are as follows:

Long-Term Foreign and Local Currency IDRs: assigned at 'BB+';
Outlook Stable

Short-Term Foreign Currency IDR: assigned at 'B'

National Long-Term rating: assigned at 'AA+(rus)'; Outlook Stable

Support Rating: assigned at '3'


SUKHOI CIVIL: Fitch Affirms BB- Long-Term IDR, Outlook Negative
---------------------------------------------------------------
Fitch Ratings has affirmed Russia-based Sukhoi Civil Aircraft
JSC's (SCAC) Long-Term Issuer Default Ratings (IDR) at 'BB-' with
a Negative Outlook.

KEY RATING DRIVERS

State Support

In line with Fitch's parent subsidiary linkage methodology, SCAC's
ratings are notched down three levels from the ratings of its
ultimate majority shareholder, the Russian sovereign
(BBB-/Negative). The three-notch differential reflects the
company's strong links to the state but also the lack of explicit
state guarantee for SCAC's debt. However, a high share of SCAC's
debt comes from state-owned banks while state-owned intermediate
holding company, Sukhoi Aviation Holding, provides guarantees for
a material proportion of SCAC's debt. The Outlook reflects that of
the Russian sovereign.

Due to the government's shareholding, Fitch expects SCAC to
continue to receive support from the Russian State via further
equity injections over and above what has already been
contributed. Any waning, actual or perceived, of that support, is
likely to lead to SCAC's ratings being further notched down from
those of the sovereign.

Debt into Equity Conversion

Fitch said, "The state support is also underpinned by the planned
conversion of the debt from the shareholder of SCAC into equity,
which is expected to take place in 2016. This would significantly
reduce the debt burden of the company and improve its liquidity
position. However, we expect support from the state to continue,
given the company's negative free cash flow (FCF) expected over
the short- to medium-term."

Super Jet 100

The relationship between SCAC and the Russian government is
underpinned by the strategic importance of the Super Jet 100 (SSJ
100) aircraft to the State, which is likely to be the entry point
for other Russian commercial aircraft programs such as the MS21.
In 2014, SCAC supplemented its product line with a business jet
version of the SSJ 100. A stretch version of the SSJ 100 is likely
to be delivered around 2020.

Delivery Ramp-up

SCAC has struggled to deliver on management's prior forecasts
regarding the ramp-up of the SSJ100. Due to adverse economic
conditions in the company's core market (Russia), SCAC delivered
only 25 aircraft in 2015 (down from 27 in 2014), as one of its
major customers (Transaero) was declared bankrupt, while another,
Utair, is currently experiencing problems in refinancing. The
contracts with these major customers have been cancelled or
postponed until at least 2017.

Despite SCAC's efforts to diversify away from Russian-based
customers, its domestic market remains the core source of revenue,
with 56% of the company's expected aircraft deliveries for Russian
companies.

SCAC Remains Loss-making

The standalone credit profile of SCAC is likely to be deeply
speculative-grade due to continuing losses caused by ramp-up
delays and the high costs incurred in the early production stages
of the SSJ100. Fitch expects SCAC to continue to utilize high
levels of cash over the short- to medium-term as the cost
structure only gradually improves. The agency therefore expects
the company to require further financial support from their
shareholders.

KEY ASSUMPTIONS

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

-- Continued evidence of tangible state support including further
    equity injections
-- Delivery of aircraft gradually increasing to 40 by 2018
-- Cost gradually decreasing to more sustainable levels over
    2015-2018
-- $US/RUB exchange rate at RUB70 per $US in 2016, decreasing to
    RUB65 per $US in 2017-2018.

RATING SENSITIVITIES

Future developments that could lead to positive or negative rating
actions include:

-- Changes to the sovereign ratings, which could prompt a review
    of the company's IDRs, National Ratings and Outlook
-- Any strengthening of state support, such as a provision of
    written guarantees of SCAC's debt from the Russian Ministry
    of Finance, would likely lead to a closer rating linkage
    between SCAC and the government. A weakening of support,
    such as a reduction in the state's shareholding in SCAC, or
    waning commitment to the company's programs, whether through
    a change in willingness or capacity to provide support, could
    lead to a widening of the rating gap between Russia and SCAC

For the sovereign ratings of the Russian Federation, Fitch has the
following rating sensitivities as of the rating action commentary
dated April 15, 2016:

Negative: Future developments that could, individually or
collectively, result in a downgrade include:

-- A further sharp decline in international reserves.
-- Failure to recover from recession, coupled with significant
    deviation from stated macroeconomic and fiscal policy aims
-- Rise in geopolitical tensions or sanctions risks

Positive: Future developments that could, individually or
collectively, result in the Outlook being revised to Stable
include:

-- Continued commitment to contain expenditure and
    implementation of a credible medium-term fiscal framework
-- Avoiding further significant depletion in international
    reserves

Fitch's rating actions are as follows:

-- Long-Term Foreign and Local Currency IDRs affirmed at 'BB-';
    Outlook Negative;

-- Short-Term Foreign and Local Currency IDRs affirmed at 'B';

-- Foreign and local currency senior unsecured ratings affirmed
    at 'BB-';

-- National Long-Term Rating affirmed at 'A+(rus)'; Outlook
    Negative;

-- National Short-Term Rating affirmed at 'F1(rus)'.



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


GERDAU SA: Moody's Says Steel Unit Sale No Impact on B3 Rating
--------------------------------------------------------------
Moody's Investors Service comments that the announced sale of a
Spanish specialty steel subsidiary for EUR155 million (BRL620
million) to Clerbil SL (unrated) is modestly credit positive for
Gerdau S.A. (Ba3 negative), but has no impact on the ratings
because the sale will not significantly affect the company's
future operations or capital structure.


SANTANDER FINANCIACION 1: S&P Affirms D Ratings on 2 Tranches
-------------------------------------------------------------
S&P Global Ratings raised to 'BBB (sf)' from 'CCC- (sf)' its
credit rating on Fondo de Titulizacion de Activos Santander
Financiacion 1's class D notes.  At the same time, S&P has
affirmed its 'D (sf)' ratings on the class E and F notes.

The rating actions follow S&P's review of the transaction's
improved performance and increased available credit enhancement,
our credit and cash flow analysis, and the application of S&P's
criteria.

On May 28, 2013, S&P affirmed its rating on the class D notes due
to the falling available credit enhancement and the deferral
trigger proximity.  Since then, the available credit enhancement
for the class D notes has increased considerably, thanks to
deleveraging and increasing available excess spread provided by
the swap agreement.  Additionally, the interest deferral proximity
is no longer a risk as since December 2015, the class D notes have
been the most senior notes in the capital structure.

The transaction's collateral performance has remained relatively
stable with some signs of improvement since our previous review.
As of the April 2016 payment date, long-term arrears (90 plus
days) are at 0.1% of the current balance, from 1.2% in April 2013.
The cumulative defaults ratio (loans delinquent for more than 12
months) represented 10.52% of the original pool balance at closing
in December 2006 and the pool factor is 2.54%.  Finally, at least
77.71% of the pool balance comprises loans granted to the
originator's employees.  Due to their longer tenor in relation to
the rest of the loans in the pool, the concentration of these
borrowers has considerably increased since closing when they
represented 17%.

S&P has analyzed credit risk under its European consumer finance
criteria, using the transaction's historical loss data and
recovery.  Based on the historical information, S&P has slightly
lowered its base-case default rate and kept its recovery rate
assumption unchanged.

The available credit enhancement for the class D notes has
significantly increased to 19.7% from 1.7% since S&P's previous
review.  This is mainly because the notes have paid down
sequentially, they benefit from guaranteed excess spread of 2.5%
provided by the swap agreement, and also benefit from the
relocation of all available cash, given the class E deferral
interest trigger is in place.

The transaction is highly exposed to the support provided by Banco
Santander S.A. as servicer, originator, and swap account provider.
Under S&P's current counterparty criteria, it relies on this
support for its transaction structure cash flow assumptions.
Therefore, under these criteria, S&P's ratings on the notes are
linked to our long-term 'A-' rating on Banco Santander.

The class E and F notes are deeply undercollateralized.
Additionally, they have defaulted interest payments since August
2009 and July 2009, respectively.  S&P has therefore affirmed its
'D (sf)' ratings on the class E and F notes.

S&P's operational and legal risk analyses have remained unchanged
since closing.

In light of the transaction's increased credit enhancement and
stable pool performance, S&P has raised to 'BBB (sf)' from
'CCC- (sf)' its rating on the class D notes.

Santander Financiacion 1's notes are backed by a portfolio of auto
loan and consumer loans granted to Spanish residents and Banco
Santander employees.  Banco Santander is the servicer for the
transaction.

RATINGS LIST

Class      Rating              Rating
           To                  From

Fondo de Titulizacion de Activos Santander Financiacion 1
EUR1.914 Billion Asset-Backed Floating-Rate Notes

Rating Raised

D          BBB (sf)            CCC- (sf)

Ratings Affirmed

E          D (sf)
F          D (sf)



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


BARRY CALLEBAUT: Moody's Assigns Ba1 Rating to EUR450MM Notes
-------------------------------------------------------------
Moody's Investors Service has assigned a definitive Ba1 rating
with a loss given default assessment of 4 (LGD 4) to Barry
Callebaut's EUR450 million senior unsecured note issuance due May
2024, issued by Barry Callebaut Services N.V., a fully owned and
guaranteed subsidiary of Barry Callebaut AG, following a review of
final documentation.  Additionally, Moody's has affirmed all the
other existing ratings.  The outlook on all ratings is stable.

Assignments:

Issuer: Barry Callebaut Services N.V.
  Senior Unsecured Regular Bond/Debenture, Assigned at Ba1 (LGD4)

Outlook Actions:

Issuer: Barry Callebaut AG
  Outlook, Remains Stable

Issuer: Barry Callebaut Services N.V.
  Outlook, Remains Stable

Affirmations:

Issuer: Barry Callebaut AG
  Probability of Default Rating, Affirmed at Ba1-PD
  Corporate Family Rating, Affirmed at Ba1

Issuer: Barry Callebaut Services N.V.
  Senior Unsecured Regular Bond/Debentures, Affirmed at Ba1
  (LGD4)

                        RATINGS RATIONALE

Moody's assignment of a definitive Ba1 rating to Barry Callebaut's
senior unsecured notes due 2024 is in line with the provisional
(P) Ba1 rating assigned on May 9, 2016.  The notes rank pari passu
with all of the issuer's other senior unsecured debt.

Barry Callebaut will use the proceeds of the offering to reimburse
the EUR175 million Term Loan falling due mid June 2016, and to
reduce outstanding amounts in respect of other current maturities
of bilateral and/or syndicated debt.  Moody's believes that the
note offering is positive for the liquidity as it will improve
Barry Callebaut's debt maturity profile.

The new notes will be guaranteed on a senior basis by the issuer's
direct parent company, Barry Callebaut AG, and certain of Barry
Callebaut's material subsidiaries that also guarantee the existing
notes.  As at Aug. 31, 2015, the issuer and the guarantors
represented approximately 90% of the company's EBIT and 74.3% of
its net sales on a consolidated basis.

Barry Callebaut's Ba1 CFR reflects (1) Barry Callebaut's leading
market position as a manufacturer of both chocolate and cocoa
products; (2) its geographical footprint with an established
presence in all major global markets and a growing contribution
from the emerging markets; (3) the stable nature of the chocolate
market which exhibits stable growth rates; (4) its resilient
profitability in the chocolate business due to pass-on
mechanism/hedging strategy of the commodity risk; and (5) its
vertical integration with the cocoa operations.  The rating is
constrained by (1) increased leverage due the major past
acquisition Petra Foods Cocoa Business and investment program in
new capacity to cope with above the market growth; (2) risk of
cocoa supply disruption due to the instability of the producing
countries; (3) modest free cash flow generation because of the
high working capital needs associated with high cocoa prices.

While the current metrics are weak for the rating, Moody's expects
that Barry Callebaut will continue to achieve stable earnings
growth, driven by rising volumes and the implementation of the
profitability enhancement strategy.  Moody's also expects free
cash flow to strengthen over 2016-17, driven by steady earnings
growth combined with lower capex and an increased focus on working
capital reduction.  As a result, Moody's anticipates a positive
impact on leverage, which it forecasts to decline to below 4.0x,
with retained cash flow (RCF) to net debt to strengthen to the
mid-teen level by FY 2016-17.

Barry Callebaut's liquidity improved as result of the EUR450
million issuance which more than covers the company short term
maturities.  Combined with the existing cash of CHF284 million,
the company would have sufficient liquidity to also repay its bank
overdraft and the outstanding amount under the commercial
programme.

                               OUTLOOK

The rating outlook is stable, reflecting Barry Callebaut's solid
business profile and operating performance despite elevated
leverage and the ongoing pressures of working capital needs on
liquidity management.  It reflects Moody's expectation that the
company's key credit metrics will gradually improve but also that
the pace of improvement will be constrained by working capital
needs.

                 WHAT COULD CHANGE THE RATING UP

Although not expected in the short term, positive rating pressure
could develop if, in conjunction with improved liquidity, Barry
Callebaut (1) improved its adjusted EBITDA margins towards double-
digit levels in percentage terms; (2) further reduced its adjusted
gross debt/EBITDA ratio towards 3.0x; and (3) increased its
RCF/net debt ratio above 20%.

                 WHAT COULD CHANGE THE RATING DOWN

Negative pressure could be exerted on the ratings if (1) the
company failed to maintain its adjusted EBITDA margins at high
single-digit levels in percentage terms; (2) its credit metrics
remained weak, with adjusted leverage not expected to return below
4.0x and RCF/net debt not returning in the mid-teens in percentage
terms by the end of FY 2016-17, and with further progression
thereafter; (3) supply risk were to renew; or (4) the company's
liquidity deteriorates.

The principal methodology used in these ratings was Global Protein
and Agriculture Industry published in May 2013.


VAT GROUP: S&P Assigns BB- Long-Term CCR, Outlook Stable
--------------------------------------------------------
S&P Global Ratings assigned its 'BB-' long-term corporate credit
rating to Switzerland-based vacuum valve manufacturer VAT Group
AG, the listed entity of VAT group.  The outlook is stable.

In addition, S&P raised and removed from CreditWatch positive its
long-term corporate credit rating on Luxembourg-based VAT Lux II
to 'BB-' from 'B'.  S&P subsequently withdrew the rating on VAT
Lux II.

At the same time, S&P raised and removed from CreditWatch its
ratings on VAT's $405 million senior secured term loan B due 2021
(about $276 million currently outstanding) to 'BB' from 'B'.  S&P
revised the recovery rating on this loan to '2' from '3'.  S&P's
recovery expectations are in the lower half of the 70%-90% range.

The rating action follows the successful completion of VAT Group
AG's IPO on the SIX Swiss stock exchange.  As S&P anticipated,
this transaction enlarged the group's shareholder base and
therefore had no direct cash impact for VAT.

However, the conversion of a shareholder loan of CHF405 million
(about US$400 million) into common equity has enhanced VAT's
credit profile.  Given a significant reduction in the group's
adjusted debt (to just below CHF290 million on March 31, 2016,
accounting for the $40 million prepayment, from more than CHF700
million at year-end 2015), S&P now anticipates that its debt
protection metrics will materially improve.  This translates into
a debt-to-EBITDA ratio of about 2.0x-2.5x by year-end 2016 and a
funds from operations (FFO)-to-debt ratio significantly improving
toward 25%-30% at the same date.

Following the transaction, S&P has revised upward its assessment
of the company's financial policy to FS-5, given the relinquishing
of control by its two financial sponsors, Partners Group and
Capvis Equity partners, which retain an aggregate 45.8%.  Free
float of 46% compares favorably with management's stake of 2.9%
alongside family ownership of 5.4%.

In S&P's view, VAT's highly aggressive dividend policy will weigh
on its financial risk profile.  S&P understands the company
targets dividend payments of CHF65 million in 2016, followed by a
potential payback of up to 100% of free operating cash flow to
equity after scheduled amortization of debt (provided reported net
debt does not significantly deviate from 1x EBITDA).

S&P is maintaining its assessment of the business risk profile,
given VAT's market leadership, technology edge, and attractive
geographic diversification.  With its focus on premium vacuum
valves, the company has delivered sustainably healthy EBITDA
margins averaging 28% over the past three years.

Nevertheless, VAT remains exposed to the semiconductor industry,
which is inherently volatile and features some customer
concentration.  Over the medium to long term, S&P also sees
technology risk attached to VAT's products, if competing products
emerge.  Moreover, S&P thinks VAT is small in size in absolute
terms, as reflected through revenues and EBITDA of about CHF411
million and CHF127 million at year-end 2015.

The stable outlook reflects S&P's expectation the group will
maintain its EBITDA margin in the range of 27%-30% and maintain
its FFO to debt of about 25%-30% in 2016.

S&P could take a positive rating action if a significant
improvement in EBITDA margin translated into stronger FFO
generation.  A further reduction in the financial sponsor
ownership, accompanied by management's commitment to a moderate
financial policy (maintaining its adjusted total debt to EBITDA
below 3x) could also contribute to a positive rating action.

A downgrade could stem from the closing of key contracts, or
deterioration in credit metrics, with the EBITDA margin deviating
from its current healthy level to below 25% or FFO to debt
dropping to 20%-25%.  Heavily debt-funded acquisitions, or
material returns to shareholders, translating into adjusted total
debt to EBITDA in excess of 4x could also lead to a negative
rating action.



===========
T U R K E Y
===========


FIBABANKA AS: Fitch Assigns 'BB-/B' Issuer Default Ratings
----------------------------------------------------------
Fitch Ratings has assigned Turkey's Fibabanka A.S. (Fiba) Long-
term Issuer Default Ratings (IDRs) of 'BB-', Short-term IDRs of
'B' and a National Long-term Rating of 'A+'. The Outlook on the
Long-term IDRs is Stable.

KEY RATING DRIVERS - IDRs, VIABILITY RATING (VR) AND NATIONAL
RATING

Fiba's Long-term IDRs, Short-term IDRs and National Rating are
driven by its standalone creditworthiness, as reflected by its
Viability Rating (VR) of 'bb-'. The VR reflects Fiba's limited
franchise in an increasingly competitive Turkish banking sector,
its small absolute size, and rapid growth since its acquisition in
2010. However, the VR also reflects Fiba's track record of
reasonable financial metrics and sound execution.

Fiba accounted for a moderate 0.5%-0.6% of sector assets, loans
and deposits at end-2015, and primarily offers banking services to
corporate, commercial and SME customers in Turkey. Its strategy
has been consistent since the bank was acquired in 2010 by the
Fiba Group, a large Turkish conglomerate with diverse operations
across multiple geographies. More recently, two international
financial institutions (IFI), European Bank for Reconstruction and
Development (AAA/Stable) and International Finance Corporation,
have acquired minority stakes of 9.95% each and are looking to
support the bank's growth plans.

Fiba's credit losses to date have been low and non-performing
loans (overdue by 90 days or more) were a low 2% of the portfolio
at end-1Q16, which compares well with peers and the sector
average. The recent years of rapid loan growth mean that
impairments could increase as the book seasons. However, Fitch
notes that a significant portion of loans are extended on a short-
term basis (67% of loans had maturities of one year or less at
end-1Q16).

Regulatory capital ratios are currently reasonable (total capital
ratio: 14% at end-1Q16), as supportive shareholders have helped
the bank grow since acquisition in 2010 through frequent capital
injections. Solid performance in recent years has also resulted in
significant internal capital generation. However, core capital
ratios (primarily measured by the Fitch Core Capital Ratio: 10% at
end-1Q16) have been below the peer average and could come under
pressure again with planned growth.

Fiba is mainly funded through customer deposits, which supports
liquidity ratios. Diverse sources of wholesale funding, including
an increasing share of IFI funding, are positive from a credit
perspective. However, Fiba's foreign currency short-term liquidity
position, as for most other Turkish banks, could come under
pressure in case of a marked deterioration in foreign investor
sentiment. This is not Fitch's base case.

KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR

Fiba's Support Rating of '5' and Support Rating Floor of 'No
Floor' reflect Fitch's view that support from the Turkish state
cannot be relied upon. This reflects the bank's lack of systemic
importance in Turkey. Support from the bank's main shareholders
appears possible based on the track record of capital injections.
However, the shareholders' ability to support cannot be reliably
assessed by Fitch.

RATING SENSITIVITIES

A further strengthening of Fiba's franchise without a
corresponding sharp increase in risk appetite or weakening of
underwriting standards could result in upside potential for the
bank's VR. A continued track record of successful strategy
implementation by management and of capital support from
shareholders could also result in upside potential for the
ratings.

The VR could be downgraded in case of a significant deterioration
in asset quality that puts pressure on capital ratios and
performance. A sharp tightening of liquidity could also result in
pressure on the VR. These scenarios are currently not envisaged by
Fitch, given the Stable Outlook.

The rating actions are as follows:

  Long-term Foreign Currency (FC) IDR: assigned at 'BB-'; Outlook
  Stable

  Long-term Local Currency (LC) IDR: assigned at 'BB-'; Outlook
  Stable

  Short-term FC IDR: assigned at 'B'

  Short-term LC IDR: assigned at 'B'

  Viability Rating: assigned at 'bb-'

  Support Rating: assigned at '5'

  Support Rating Floor: assigned at 'No Floor'

  National Long-term Rating: assigned at 'A+(tur)'; Outlook Stable



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


BHS GROUP: Arcadia Warned of Suitor's Bankruptcy History
--------------------------------------------------------
James Davey at Reuters reports that British lawmakers were told on
May 23 retail tycoon Philip Green's Arcadia group was warned by a
senior Goldman Sachs banker that a possible suitor of its BHS
department store chain had a history of bankruptcy.

The 88-year-old, 164-store, BHS was placed into administration, a
form of creditor protection, by owner Retail Acquisitions last
month, putting 11,000 jobs at risk, Reuters recounts.

Mr. Green owned BHS for 15 years before selling it in March last
year for a nominal sum of one pound to Retail Acquisitions, a
group of little known investors led by Dominic Chappell, Reuters
relays.

The collapse of BHS is being investigated by lawmakers, Britain's
Insolvency Service and its Pensions Regulator, Reuters discloses.

According to Reuters, Anthony Gutman, co head of UK investment
banking at Goldman Sachs, told a joint session of parliament's
Work and Pensions and Business, Innovation and Skills select
committees, that he provided Mr. Green unpaid "informal
assistance" as the billionaire was a former client.

He said he was asked by Arcadia to provide "observations" in
December 2014 concerning takeover proposals for BHS received from
Retail Acquisitions, which was called Swiss Rock at that time,
Reuters relates.

"We indicated to them (Arcadia) that clearly the potential buyer
here did not have retail experience, we indicated that the
proposal was highly preliminary and lacking in detail," Reuters
quotes Mr. Gutman as saying.

"We also indicated that the bidder here (Dominic Chappell) did
have a history of bankruptcy."

Arcadia finance director Paul Budge told the committees he knew of
Mr. Chappell's bankruptcy but said Retail Acquisitions provided
proof that they had lines of funding for GBP120 million, Reuters
notes.  Mr. Budge, as cited by Reuters, said that showed "their
intentions were serious in terms of they wanted to run this
business as a going concern."

Anthony Grabiner, non-executive chairman of Mr. Green's Taveta
Investments vehicle, told the committees failure to do a deal with
Retail Acquisitions would have meant BHS falling into
administration in 2015, Reuters relays.

BHS Group is a department store chain.  The company employs 10,000
people and has 164 shops.


DECO 12-UK: Fitch Affirms D Ratings on 3 Note Classes
-----------------------------------------------------
Fitch Ratings has revised the Outlook on DECO 12 - UK 4 p.l.c.'s
senior floating rate notes due 2020 to Stable from Negative as
follows:

GBP174 million class A1 (XS0289644121) affirmed at 'BB+sf';
Outlook revised to Stable from Negative

GBP113.6 million class A2 (XS0289644477) affirmed at 'BB+sf';
Outlook revised to Stable from Negative

GBP34.6 million class B (XS0289644550) affirmed at 'BB+sf';
Outlook revised to Stable from Negative

GBP27.7 million class C (XS0289644634) affirmed at 'BBsf'; Outlook
Stable

GBP8.6 million class D (XS0289644717) affirmed at 'Dsf'; Recovery
Estimate (RE) 80%

GBP0 million class E (XS0289644808) affirmed at 'Dsf'; RE 0%

GBP0 million class F (XS0289644980) affirmed at 'Dsf'; RE 0%

The transaction is a securitization of originally 10 UK loans
originated by Deutsche Bank AG, with a cumulative balance of
GBP672.9 million secured by 41 properties. Since closing in March
2007, four loans have repaid in full (Merry Hill, Quattro
Syndicate, Hiltongrove portfolio, Chesterton Commercial loan)
while another four loans have suffered losses (LMM, Industrial
Realisation, Group 7 loan and Borehamwood). The transaction is now
backed by the Tesco loan and the Regent's Capital loan, with a
cumulative balance of GBP358.4 million.

KEY RATING DRIVERS

The affirmations and the Outlook revision on the three senior note
tranches are driven by a corresponding rating action on Tesco plc
on April 21, 2016. This reflects, among other factors, Fitch's
expectation of a progressive recovery in Tesco's core UK market,
after a stabilization in the retailer's operating performance for
financial year ended February 2016. The affirmations of the CMBS
ratings also reflect stable performance of the Tesco loan
collateral and the cash-collateralized Regent's Capital loan.

The GBP347.4 million Tesco loan matures in January 2017. It is
secured on a portfolio of supermarkets in 16 locations across the
UK encumbered by a full repairing and insuring lease until
December 2026, with a lease break in December 2016. Should Tesco
decide to exercise the break option, as a precondition the
borrower (a joint venture involving Tesco) must have repaid the
loan in full. In rating scenarios up to Tesco's rating, Fitch
makes the conservative assumption that the break is not exercised.
However, in these same rating scenarios, Fitch does not assume
rental depreciation given Tesco's obligation to return the
supermarkets in a condition suitable for re-letting. Fitch
estimates a 'Bsf' LTV of approximately 80%.

Fitch said, "In testing higher rating scenarios than 'BB+sf', we
assume depreciation (in addition to the higher overall market
stresses) reduces recovery proceeds enough to cap the current
ratings at Tesco's Issuer Default Rating (IDR)."

The GBP11 million Regent Capital loan has been cash-collateralized
since closing (it was originally a construction development and
has failed to be let since completion). Escrowed funds are not
sufficient to repay the loan in full, and this minor discrepancy
is expected to widen until eventual loan exit. Together with
subordination of the defaulted (but not written-down) GBP8.6
million class D notes, proceeds from a sale of the vacant
collateral as well as from the Tesco loan should be sufficient to
redeem the class C notes.

RATING SENSITIVITIES

A rating action on Tesco's IDR would likely result in a
corresponding action on the class A1, A2 and B notes. In a Tesco
downgrade scenario, the class C notes could also be negatively
affected given the knock-on effect on collateral value, or if the
tenant is downgraded below 'BB'.

Fitch estimates 'Bsf' proceeds of GBP358.4m.

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.


FAIRHOLD SECURITISATION: Fitch Cuts Ratings on 2 Tranches to D
--------------------------------------------------------------
Fitch Ratings has downgraded Fairhold Securitisation Limited's
floating-rate notes due October 2017 and withdrawn the ratings, as
follows:

  GBP413.7 million class A (XS0298926360) downgraded to 'Dsf' from
  'Bsf'; Recovery Estimate 80%

  GBP29.8 million class B (XS0298927509) downgraded to 'Dsf' from
  'CCCsf'; Recovery Estimate 0%

The transaction is a single-borrower securitization of freehold
RPI-linked ground rents and transfer fees derived from a portfolio
of sheltered housing located in the UK and encumbered by long
leasehold interests. The variability of the inflation linked
ground rents was stripped out by long-term RPI swaps, while the
floating rate debt was hedged over a similar term using interest
rate swaps.

KEY RATING DRIVERS

The downgrades reflect a note event of default triggered by the
termination of the hedging at loan maturity and formally declared
by the issuer in April. As the formal representative of
noteholders, the Ad Hoc Group instigated various changes to the
transaction via noteholder resolution, including replacing
Deutsche Trustee Company Limited with GLAS Trust Corporation
Limited as note trustee. As a result, senior expenses greatly
increased, accounting for the bulk of issuer income.

The imposition of such extraordinary issuer costs (predominantly
advisory) under the direction of the Ad Hoc Group and at the
expense of secured liabilities (including swap breakage costs,
which crystallized in October and which would have ranked pari
passu with class A payments) represents a robust negotiation
tactic employed on behalf of noteholders. In response, swap
counterparties have challenged the validity of the supporting
noteholder resolutions, causing the issuer in April to suspend
further payments (including issuer expenses), and prompting it to
officially declare a note event of default.

Assuming issuer secured claims are redeemed according to the post-
enforcement priority of payments, Fitch estimates that the class A
notes would expect recoveries in the region of 80%. However, with
little visibility as to the likely resolution of the outstanding
claims against the issuer, Fitch is no longer in a position to
monitor the appropriateness of this assumption, and is therefore
withdrawing the ratings.

RATING SENSITIVITIES
Not applicable following the withdrawal of the ratings.

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.


HERCULES ECLIPSE 2006-4: Fitch Hikes Class C Debt Rating to B+
--------------------------------------------------------------
Fitch Upgrades Hercules (Eclipse 2006-4) plc Class B and C Notes
Fitch Ratings-London-23 May 2016: Fitch Ratings has upgraded
Hercules (Eclipse 2006-4) plc as follows:

GBP153.1 million class A (XS0276410080) affirmed at 'BBB+sf';
Outlook Stable

GBP43.9 million class B (XS0276410833) upgraded to 'BBB-sf' from
'BBsf'; Outlook Stable

GBP25 million class C (XS0276412375) upgraded to 'B+sf' from
'Bsf'; Outlook Stable

GBP50.9 million class D (XS0276413183) affirmed at 'CCCsf';
Recovery Estimate (RE) revised to 90% from 50%

GBP28.9 million class E (XS0276413340) affirmed at 'CCsf'; RE0%

Hercules is a securitization of originally seven, now three,
commercial real estate loans originated by Barclays Bank PLC and
The Royal Bank of Scotland plc. As of end-April 2016, two of three
outstanding loans were performing.

KEY RATING DRIVERS

The upgrade of the class A to C notes and the upward revision of
the class D notes' RE reflects substantial loan repayments since
the last rating action in May 2015, with both the GBP49 million
Endeavour and GBP55 million Booker loans repaying in full. The
rating action is further supported by the stable performance of
the GBP202 million River Court and GBP28 million Welbeck loans,
which are still outstanding.

The distressed ratings for the class D and E notes reflect the
poor performance of the defaulted GBP72m Ashbourne loan, secured
by a portfolio of nursing and residential care homes spread across
the UK. Fitch expects a material recovery on the class D notes (as
reflected in the increased recovery estimate) in view of market
interest in the portfolio, although recoveries may only be
realised after bond maturity due to potential delays. For
instance, replacing the special servicer could disrupt a speedy
resolution if the consensual marketing process breaks down. Fitch
did not give credit to recoveries from the Ashbourne loan in
rating scenarios of 'Bsf' or higher.

The River Court loan finances the Fleet Street offices of Goldman
Sachs International in the City of London. The Goldman lease
expires in 2025, with a break option in 2020. In line with its
criteria, Fitch has assumed the break option will be exercised,
which takes into consideration the tenant's plan to relocate to a
new City office campus. Based on Fitch's estimate of market value,
a refinancing of the loan at its October 2016 maturity seems
possible.

The Welbeck loan finances a portfolio of predominantly amusement
arcades in England and Scotland. Performance of the portfolio has
been reasonably stable with an interest coverage ratio (ICR) at
1.7x at end-January 2016. The debt service coverage ratio (DSCR)
has been hovering just slightly above 1x. The servicer is
reportedly in ongoing discussion with the borrower on a potential
refinancing of the loan at its July 2016 maturity date.

Fitch estimates 'Bsf' Recoveries of around GBP230m (excluding any
recoveries from the Ashbourne loan).

RATING SENSITIVITIES

A further delay in realising recoveries from the Ashbourne
portfolio may negatively affect the recovery estimate for the
class D notes.

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.


LADBROKES PLC: Fitch Says Gala Coral Merger Clears Major Hurdle
---------------------------------------------------------------
Fitch Ratings says that the announcement by the Competition and
Markets Authority (CMA) that it is provisionally in favour of the
proposed merger between UK gaming group Ladbrokes plc (Ladbrokes,
BB/RWN) and Gala Coral Group Limited (GCG, B/RWP) raises the
probability that the two groups will proceed with their merger
plans.

The transaction is still subject to various conditions preceding
final anti-trust clearance from the CMA, including the sale of 350
to 400 shops from both groups, and is not expected to conclude
before mid-2016 at the earliest.

Fitch said, "We continue to believe the combination of Ladbrokes
with most of GCG should create a UK market leader with a stronger
business profile than either group could achieve separately. We
assume around GBP865 million of GCG's existing indebtedness will
become part of Ladbrokes. Following the merger we expect the
initial leverage profile of the combined group (funds from
operations (FFO)-adjusted gross leverage estimated at between 5.0x
and 5.5x) will be somewhat weaker than Ladbrokes' existing one.
This is notwithstanding the benefits to its business profile and
possible improved cash flows after realising synergies from the
merger. Nevertheless, Ladbrokes' leverage targets, its GBP115
million equity placement in 2015 and modest dividend all signal
the company's intention to move to a stronger balance sheet in the
medium term.

"While cost savings arising from the merger should support
profitability over time, we see some execution risks in completing
the merger and integrating both groups. This includes the disposal
of a significant number of betting shops in a rapidly evolving
market and the amalgamation of the digital platforms as consumer
demand moves swiftly online, where GCG has been more successful
than Ladbrokes. These risks are reflected in the RWN on Ladbrokes.

"Following on from our July 2015 rating action, we continue to
estimate that the combined entity's Issuer Default Rating would
probably be no more than one notch below Ladbrokes' current 'BB',
subject to the final details of the combined group's capital
structure at completion. Apart from business profile or leverage
considerations, we expect weak interest cover metrics (FFO fixed
charge cover around 2x) to be close to 'B' category levels upon
completion. However we estimate strong profitability with EBIT and
FFO margins trending toward 10%, and positive free cash flow (FCF)
generation, all pointing to a strong 'BB' level."

Fitch aims to resolve the rating watches pending the successful
completion of the announced merger and greater clarity with regard
to Ladbrokes' post-merger strategy and potential synergies. The
enlarged group will be renamed Ladbrokes Coral plc.


TATA STEEL UK: Deadline to Submit Formal Bids Passes
----------------------------------------------------
Michael Pooler, Christian Shepherd and Simon Mundy at The
Financial Times report that the deadline for prospective buyers of
Tata Steel UK to submit formal bids passed on May 23 as the clock
ticked down on efforts to rescue a pillar of the UK's
manufacturing heritage.

According to the FT, Sajid Javid, the business secretary, will fly
to Mumbai to meet company executives before a Tata Steel board
meeting today, May 25, at which two or three bidders are expected
to be shortlisted.

Only two potential bidders have made their approaches known:
Liberty House, the commodities trading group, and a management
buyout team called Excalibur, the FT relates.  Several others have
been named but it is not clear they will actually submit bids, the
FT notes.

Tata Steel is the UK's biggest steel company.


WILLIAM HILL: Moody's Assigns (P)Ba1 Rating to GBP350MM Sr. Notes
-----------------------------------------------------------------
Moody's Investors Service has assigned a (P)Ba1 rating to William
Hill's proposed GBP350 million senior unsecured notes due 2023, to
be issued by William Hill Plc.  The proceeds from the 2023 notes
will be used to redeem the existing GBP300 million senior
unsecured notes due 2016 and for general corporate purposes.
Following the redemption, the rating on the 2016 notes will be
withdrawn.

Moody's issues provisional ratings in advance of the final sale of
securities and these ratings reflect Moody's preliminary credit
opinion regarding the transaction only.  Upon a conclusive review
of the final documentation, Moody's will endeavor to assign a
definitive rating to the facilities.  A definitive rating may
differ from a provisional rating.

                         RATINGS RATIONALE

  -- ASSIGNMENT OF (P)Ba1 RATING

The assignment of a (P)Ba1 rating to the 2023 senior unsecured
notes is the same as that the existing 2016 and 2020 notes as they
rank pari passu and share the same guarantors.  The refinancing
transaction is marginally credit positive because it will allow
William Hill to (1) extend the debt maturity profile and (2)
slightly reduce future interest expense while remaining broadly
leverage neutral.  The capital structure also includes a GBP540
million unsecured revolving credit facility, pari passu to the
notes.

The assignment follows the rating action where Moody's changed
William Hill's outlook to stable from positive and affirmed the
Ba1 ratings.

William Hill's Ba1 ratings with a stable outlook continue to
reflect (1) its mature premises-based retail business; (2) the
recent weakened operating performance of its online division,
which continues to rely heavily on a rising marketing and
technological spend; (3) the turnaround of its underperforming
Australian online business and more broadly the execution and
integration risk associated with its M&A activity into new
products and geographies; and (4) ongoing exposure to evolving
regulatory and fiscal regimes.

More positively, the ratings are supported by (1) William Hill's
leadership positions in the UK retail betting industry, with the
company reporting a market share of around 26%, as measured by
number of licensed betting offices, and in the UK online betting
and gaming segments as well as its growing international presence;
(2) the company's strong brand name and the retail segment's high
barriers to entry; and (3) the underlying positive industry
fundamentals underpinning online gambling wagers growth.

The stable rating outlook reflects Moody's expectation that
William Hill will maintain strong credit metric and liquidity for
its rating category over the next 12 to 18 months, despite
weakness in its online division and the turnaround of its
Australian operations from FY2015 underperformance.  Moody's also
expects that the company will generate positive free cash flow
from FY2017 onwards and there will be no further material
regulatory changes.

Upward pressure could be exerted on the rating if William Hill's
adjusted debt/EBITDA is maintained below 3.0x and its retained
cash flow/ debt well above 15%, while generating meaningful free
cash flow generation.  For an upgrade, William Hill will have to
publicly commit to a conservative financial policy.

Negative pressure could be exerted on the rating if the company's
credit metrics become weaker than the targets set for the rating
category, with the ratio of adjusted debt/EBITDA increasing
towards 4.0x.  Challenges to the company's liquidity risk profile
could also have negative rating implications.

LIST OF AFFECTED RATINGS

Assignments:

Issuer: William Hill plc
  Senior Unsecured Regular Bond/Debenture (Local Currency),
   Assigned (P)Ba1 (LGD 4)

                     PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Global Gaming
Industry published in June 2014.

Established in 1934, William Hill plc is a leading sports betting
and gaming company that operates predominantly in the UK, a market
that provided approximately 85% of the company's net revenues in
fiscal year 2015.  William Hill's main delivery channels are
retail and online: the former through 2,371 licensed betting shops
in the UK with over-the-counter betting and gaming machines, and
the latter offering sports betting, casino games, poker, bingo and
live casino via mobile and internet connections.  In fiscal year
2015, William Hill generated revenues of GBP1.6 billion and EBITDA
of GBP429 million on a Moody's adjusted basis.  The company has
been listed on the London Stock Exchange since 2002.


WILLIAM HILL: S&P Affirms BB+ Long-Term CCR, Outlook Stable
-----------------------------------------------------------
S&P Global Ratings said that it affirmed its 'BB+' long-term
corporate credit rating on U.K.-based William Hill PLC.  The
outlook is stable.

At the same time, S&P assigned its 'BB+' issue rating and recovery
rating of '3' to William Hill's proposed GBP350 million senior
unsecured notes maturing in 2023.  The recovery rating implies
meaningful recovery of 50%-70% in a default scenario.

S&P also affirmed the 'BB+' issue rating and '3' recovery rating
on the GBP375 million unsecured notes due 2020.

The affirmation follows William Hill's announcement that it plans
to issue GBP350 million senior unsecured notes maturing in 2023,
and use the proceeds to refinance the existing GBP300 million
senior unsecured notes due in 2016.

The successful refinancing of William Hill's GBP300 million
outstanding unsecured notes supports the company's liquidity by
terming out near-term debt maturities.  In addition, S&P
anticipates that the transaction will lower interest costs and
slightly improve adjusted metrics, positioning them at levels S&P
considers commensurate with the existing ratings.

Additionally, William Hill released its report for the fourth
quarter ending Dec. 29, 2015, with revenues below S&P's forecast
but EBITDA in line with our expectations.

S&P continues to assess William Hill's business risk profile as
satisfactory.  S&P's assessment is underpinned by the company's
strong brand, leading market share in U.K. retail and online
betting, and limited historical cyclicality.  The assessment also
reflects its expertise and technology in sports betting, its
modern gaming machine portfolio, and a growing online business
through William Hill Online and the Australian and Spanish
businesses of partially owned betting company, Sportingbet.  These
strengths--coupled with the industry's cash-generative nature--are
likely, in S&P's opinion, to continue supporting robust
profitability over the medium term.

These strengths are mitigated, in S&P's view, by William Hill's
sensitivity to discretionary consumer spending, intense
competition in online gaming, limited geographical diversification
outside the U.K., and exposure to gaming industry tax and
regulatory risks.  In particular, the introduction of the point of
consumption tax in 2015 for the online business, and the increase
in machines games duty for the retail business, have negatively
impacted margins in 2016, but not sufficiently to affect S&P's
view of the company's satisfactory business risk profile.  The
introduction of new tools enabling customers to tackle gambling
addiction through self-imposed limits on activity could also hurt
margins over the coming years.

William Hill's intermediate financial risk profile reflects the
company's moderate leverage, strong free operating cash flow
(FOCF), and comfortable interest coverage ratios.

S&P takes one notch from the 'bbb-' anchor to arrive at the 'BB+'
rating to reflect the impact of the group's current financial
policy.  Management has not made a commitment over its current
level of leverage because of potential debt-driven acquisitions.
In addition, it decided to increase shareholder returns over the
coming years through increased dividend distribution and share
buybacks.

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

   -- 3.5% revenue growth in 2016, propelled by upcoming sporting
      events, online business, and market share gains abroad.

   -- Contraction in the adjusted EBITDA margin from 27% to 23.4%
      in 2016 due to the full-year impact of the increased
      machines games duty for retail business, the impact of the
      implementation of responsible gambling rules, and increased
      marketing costs.

   -- Capital expenditure (capex) of about GBP80 million per
      year.

   -- Increased shareholder returns.

   -- GBP80 million outflow for acquisitions for 2016 and
      GBP50 million for future years given the acquisitive
      strategy of William Hill.

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

   -- Adjusted debt to EBITDA of about 2.4x in 2016.
   -- Slightly decreasing but still strong positive free cash
      flow generation of around GBP220 million.
   -- FOCF to debt at 24% in 2016.

The stable outlook reflects S&P's opinion that William Hill has a
degree of headroom to absorb some operating under performance, for
example due to higher regulatory costs.  The stable outlook
anticipates that adjusted debt-to-EBITDA will be 2.0x-2.5x in the
medium term, and adjusted FFO-to-debt will be above 30%.

Management's focus on growth, appetite for debt-funded
acquisitions, and shareholder returns limits the chances that S&P
would raise the rating.  An upgrade would however likely be linked
to William Hill adopting a more conservative financial policy,
resulting in a sustainable track record of discretionary cash flow
generation.

S&P could lower the rating if debt-funded shareholder returns or
acquisitions were to lead to a significant deterioration of credit
metrics such that S&P Global Ratings'-adjusted debt to EBITDA
sustainably increased toward 4x.  S&P could also take a negative
rating action if adverse tax or regulatory developments were to
cause William Hill's operating performance and earnings to
decline.


                            *********

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

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

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


                            *********


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

Troubled Company Reporter-Europe is a daily newsletter co-
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Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez,
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Copyright 2016.  All rights reserved.  ISSN 1529-2754.

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