TCREUR_Public/160526.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

           Thursday, May 26, 2016, Vol. 17, No. 103


                            Headlines


A U S T R I A

* Moody's Takes Rating Actions on Austrian Mortgage Banks


C Z E C H   R E P U B L I C

NEW WORLD: Pavel Tykac Makes Acquisition Offer for Business
NEW WORLD: State Becomes Creditor of OKD Unit, Minister Says


F R A N C E

EXELTIUM SAS: Moody's Withdraws B3 Rating on EUR153MM Sub. Bonds


G E R M A N Y

PB DOMICILE 2006-1: Fitch Affirms B Rating on Class E Notes


G R E E C E

GREECE: Reaches "Breakthrough" Bailout Deal with EU Creditors


I T A L Y

BAROLO BIDCO: Moody's Assigns B2 Rating to New EUR450MM Sr. Notes
SAIPEM SPA: Moody's Lowers Corporate Family Rating to Ba1
WASTE ITALIA: Moody's Lowers CFR to Ca, Outlook Negative


K A Z A K H S T A N

KAZINVESTBANK: S&P Revises Outlook to Neg. & Affirms B-/C Ratings


L U X E M B O U R G

4FINANCE SA: Moody's Assigns B3 Rating to EUR100MM Sr. Notes
DANA FINANCING: S&P Assigns BB+ Rating to Proposed $375MM Notes


N E T H E R L A N D S

CADOGAN SQUARE: Moody's Affirms Ba3 Rating on Class E Notes
CHAPEL 2003-I: Moody's Raises Rating on Class B Notes to B3
MARFRIG GLOBAL: Fitch Rates Proposed Notes Issuance B+(EXP)
ST. PAUL'S CLO VI: Moody's Assigns (P)B2 Rating to Class E Notes


R U S S I A

NOVIKOMBANK JSCB: Moody's Puts B2 Rating on Review for Downgrade
ROSGOSSTRAKH PJSC: S&P Lowers Counterparty Credit Ratings to B+


S P A I N

CERCANIAS MOSTOLES: EUR34.1MM Fine Prompts Insolvency Filing


S W I T Z E R L A N D

CREDIT SUISSE: Fitch Cuts Additional Tier 1 Notes Rating to BB
SUNRISE COMMUNICATIONS: Fitch Affirms 'BB+ Long-Term IDR


U N I T E D   K I N G D O M

BHS GROUP: Credible Bidders Dwindle, Tufnell Among Buyers List
DEBENHAMS: S&P Affirms BB- CCR, Outlook Remains Stable
DECO 11 - UK: Moody's Affirms B3 Rating on Class A-1B Notes
SANTANDER UK: Fitch Affirms BB+ Subordinated Notes Rating
TATA STEEL UK: UK Business Secretary in Talks with Management

* UK: R3 Welcomes Business Rescue Moratorium Proposal
* Brexit to Spur More UK & EU Insolvencies, Euler Hermes Says


                            *********


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A U S T R I A
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* Moody's Takes Rating Actions on Austrian Mortgage Banks
---------------------------------------------------------
Moody's Investors Service on May 23, 2016, placed on review for
upgrade the backed debt ratings of Heta Asset Resolution AG,
Pfandbriefbank (Oesterreich) AG and the debt and deposit ratings
of Hypo Tirol Bank AG.  At the same time, the rating agency
affirmed the debt and deposit ratings of Vorarlberger Landes- und
Hypothekenbank AG (VLH).

The rating actions follow the announcement by Austria's Finance
Minister Schelling on May 18, 2016, of a renewed tender offer for
Heta's senior unsecured and subordinate debt obligations which
benefit from a grandfathered statutory guarantee of the regional
State of Carinthia (B3 negative) with a higher recovery than
previously offered.  Additionally, Mr. Schelling announced that a
Memorandum of Understanding had been signed by the Government of
Austria (Aaa negative) and 72 of Heta's creditors, representing
close to 50% of such outstanding guaranteed claims, increasing
the likelihood of a successful debt exchange.  The rating actions
reflect Moody's preliminary assessment of the potential
implications of the announced debt exchange on the fundamental
credit profiles or ratings of the banks affected by today's
announcement.

Moody's has taken these rating actions:

   -- Initiation of a review for upgrade of Heta's Ca senior
      unsecured debt rating and of its C subordinate debt rating,
      all guaranteed by Carinthia.  Heta's Austrian government-
      guaranteed subordinated debt rating of Aaa is unaffected by
      the rating action;

   -- Initiation of a review for upgrade of Hypo Tirol's Ba1
      long-term debt and deposit ratings, of the bank's backed
      long-term debt and deposit ratings of Baa2, and of its
      subordinated debt program rating of (P)B1 and its backed
      subordinated debt ratings of Ba2.  Moody's further
      initiated a review for upgrade of Hypo Tirol's short-term
      deposit ratings of Not-Prime, its standalone baseline
      credit assessment (BCA) and adjusted BCA of ba3, and its
      Counterparty Risk Assessment (CR Assessment) of
      Baa3(cr)/Prime-3(cr).  Its backed short-term deposit
      ratings of Prime-2 are unaffected by the rating actions;

   -- Affirmation of the Baa1 long-term debt, issuer and deposit
      ratings of VLH, of the bank's Prime-2 short-term issuer and
      deposit ratings and of its baa3 BCA and adjusted BCA. All
      other ratings or rating inputs of VLH were unaffected by
      the rating actions;

   -- Initiation of a review for upgrade of Pfandbriefbank's Ba1
      backed senior unsecured debt ratings.

During the review period, Moody's expects to obtain more
visibility about the acceptance of the offer as a precondition to
a successful debt exchange which is targeted by the Finance
Minister by October 2016.  Consequently, the conclusion of the
review period is expected to occur latest close to the date of
the eventual debt exchange.

                        RATINGS RATIONALE

  -- RATIONALE FOR THE REVIEW FOR UPGRADE OF HETA'S DEFICIENCY-
     GUARANTEED RATINGS

The review for upgrade reflects the increased likelihood that
Heta's unsecured creditors will bear lower losses than implied by
the current rating levels of Ca for deficiency-guaranteed senior
unsecured debt and C for deficiency-guaranteed subordinated debt.
These ratings reflect the rating agency's current assessment that
expected losses will be in the 35%-65% and the greater-than-65%
range, respectively.  The agreement signed on 18 May 2016 between
Austria and 72 creditors could, if it results in the execution of
the proposed distressed debt exchange, limit the losses to
deficiency-guaranteed senior unsecured creditors to less than 35%
of their claims and for deficiency-guaranteed subordinate
creditors to less than 65%.  As a result, Heta's deficiency-
guaranteed senior unsecured debt could be upgraded by up to two
notches and its deficiency-guaranteed subordinated debt could be
upgraded by one notch.  During the rating review, Moody's will
monitor the completion of the prerequisites to a successful debt
exchange, including, but not limited to, the degree of creditor
acceptance of the offer and the development of legal
uncertainties around Heta.

  -- RATIONALE FOR THE REVIEW FOR UPGRADE OF HYPO TIROL'S RATINGS

The review for upgrade reflects the anticipated significant
reduction of downside risks related to Hypo Tirol's contingent
liabilities resulting from its joint and several liability shared
with fellow members of Pfandbriefbank.  If the proposed Heta debt
exchange is successful, Moody's expects Hypo Tirol to benefit
from a sizable one-off profit resulting from the reversal of
reserves and impairments booked against its exposure to Heta,
which will support Hypo Tirol's efforts to further strengthen its
capitalization.  Moody's expects the beneficial effects of a
successful debt exchange at Heta for the BCA of Hypo Tirol to be
limited to one notch.  The rating review on Hypo Tirol's long-
term debt and deposit ratings reflects the high likelihood that a
BCA upgrade would translate into an upgrade of the bank's other
ratings placed under review.

Hypo Tirol's exposure to Heta is mostly indirectly through its
joint and several liability for Pfandbriefbank.  In line with
regulatory guidance, Hypo Tirol has built conservative reserves
and impairments of 50% of the principal claim against the future
and already paid-out liquidity commitment to Pfandbriefbank on
the back of this bank's liquidity problems following the 2015
debt moratorium on Heta.

   -- RATIONALE FOR THE AFFIRMATION OF VLH'S RATINGS

Overall, Moody's expects the combined effect of the possible
improvements in VLH's solvency profile to remain within the
bandwidth of the bank's current baa3 BCA, which has already taken
into account mitigating factors to risks emanating from
Pfandbriefbank, in particular the bank's above sector-average
profitability.  In the event of a significant reductionof
downside risks for the member banks of Pfandbriefbank, asset
risks for VLH would be reduced.  If the proposed Heta debt
exchange is successful, Moody's expects VLH to benefit from a
moderate improvement in its capitalization through a partial
retention of one-off earnings resulting from the reversal of
reserves and impairments booked against its exposure to Heta.

VLH's exposure to Heta is mostly indirectly through its joint and
several liability for Pfandbriefbank.  In line with regulatory
guidance, VLH has built conservative reserves and impairments of
50% of the principal claim against the future and already paid-
out liquidity commitment to Pfandbriefbank on the back of this
bank's liquidity problems following the 2015 debt moratorium on
Heta.  The State of Vorarlberg (unrated) considers recovering its
part of the financial burden through a special dividend of VLH,
which partly limits the additional earnings retention potential
of VLH resulting from a possible one-off gain following a
distressed debt exchange at Heta.

  -- RATIONALE FOR THE REVIEW FOR UPGRADE OF PFANDBRIEFBANK'S
     RATINGS

The review for upgrade reflects Moody's assessment that an
implementation of the announced debt exchange would exert upward
pressure on Pfandbriefbank's supporting member banks'
creditworthiness from which Pfandbriefbank's ratings are derived.
The upward pressure results from potentially lower-than-
previously expected losses imposed on their direct and indirect
Heta debt exposure based on the offering memorandum and reducing
tail risk related to Pfandbriefbank support.  Moody's expects the
beneficial effects on Pfandriefbank's ratings of a successful
debt exchange at Heta to be limited to one notch.

Pfandbriefbank's rating continues to be purely based on the
member banks' creditworthiness and does not include uplift from
public-sector entities, reflecting the ongoing lack of commitment
by several federal states to honour their obligations under the
existing joint and several liability framework.

Given its business profile as a poorly capitalised issuing
vehicle for its member banks, i.e., the Austrian
Landeshypothekenbanken or their legal successors, Pfandbriefbank
relies fully on the performance of its concentrated assets to
service its liabilities. The Heta moratorium in March 2015
therefore impaired its liquidity and solvency.  Pfandbriefbank
came under stress after the regulator in Austria imposed a
payment moratorium on the liabilities of Heta to which
Pfandbriefbank had a EUR1.2 billion exposure as of March 2015.

In April 2015, the member banks and the majority -- but not
all -- of the Austrian Federal states agreed support measures
that fully cover Pfandbriefbank's Heta exposure and have
therefore eliminated immediate liquidity and solvency concerns
for the entity.  However, the Austrian states' individual
contributions were not uniformly provided, as timely support has
been withheld by several states, undermining the reliability of
the multi-recourse support structure.  Pfandbriefbank's
liabilities are grandfathered under a statutory joint and several
guarantee from member banks and their former guarantors, i.e. the
relevant Austrian federal states, according to Austrian federal
law.

              WHAT COULD CHANGE THE RATINGS UP/DOWN

Heta Asset Resolution AG

As indicated by the direction of the rating review, an upgrade of
Heta's deficiency-guaranteed senior unsecured and subordinate
ratings could result from broad creditor acceptance and a
successful execution of the proposed distressed debt exchange and
from the associated better recovery value expectations for
creditors based on Moody's estimates.

Hypo Tirol Bank AG

An upgrade of Hypo Tirol's long-term debt and deposit ratings
could result from an upgrade of its standalone BCA and/or (2)
higher rating uplift as a result of Moody's Advanced LGF
analysis. As indicated by the direction of the rating review, an
upgrade of Hypo Tirol's BCA could result from broad creditor
acceptance and a successful execution of Heta's proposed
distressed debt exchange which in Moody's opinion could result in
a beneficial reversal of impairments and provisions as well as
remove some downside risks for Hypo Tirol related to
Pfandbriefbank.

Vorarlberger Landes- und Hypothekenbank AG

An upgrade of VLH's long-term debt and deposit ratings could
result from (1) an upgrade of its standalone BCA and/or (2)
higher rating uplift as a result of Moody's Advanced LGF
analysis.

A downgrade of VLH's long-term debt and deposit ratings could be
triggered following (1) a downgrade of the bank's standalone BCA;
and/or (2) an increase in the expected loss severity following a
material shift in the bank's funding mix as part of its ongoing
refinancing of deficiency-guaranteed debt maturities with
foremost covered bond issuance could result in a future decline
in uplift for senior debts as a result of Moody's LGF analysis.

Pfandbriefbank (Oesterreich) AG

An upgrade could result from (1) a strengthening of the member
banks' credit profiles; (2) a clarification of the legal
obligations of the Austrian federal member-states under the
guarantee framework, to the extent that this removes any doubts
over the full, unconditional liability of all parties to support
Pfandbriefbank in a timely fashion.

LIST OF AFFECTED RATINGS

On Review for Possible Upgrade:

Issuer: Heta Asset Resolution AG
  Backed Senior Unsecured Rating, currently Ca, outlook changed
   to Rating Under Review from Developing
   Backed Subordinate Rating, currently C

Issuer: Hypo Tirol Bank AG
  Adjusted Baseline Credit Assessment, currently ba3
  Baseline Credit Assessment, currently ba3
  Long Term Counterparty Risk Assessment, currently Baa3(cr)
  Short Term Counterparty Risk Assessment, currently P-3(cr)
  Long Term Bank Deposit Ratings, currently Ba1, outlook changed
   to Rating Under Review from Stable
  Short Term Bank Deposit Ratings, currently NP
  Senior Unsecured Rating, currently Ba1, outlook changed to
   Rating Under Review from Stable
  Senior Unsecured MTN Rating, currently (P)Ba1
  Subordinate MTN Rating, currently (P)B1
  Backed Long Term Bank Deposit Ratings, currently Baa2, outlook
   changed to Rating Under Review from Stable
  Backed Senior Unsecured Ratings, currently Baa2, outlook
   changed to Rating Under Review from Stable
  Backed Senior Unsecured MTN Rating, currently (P)Baa2
  Backed Subordinate Rating, currently Ba2
  Backed Senior Subordinate Rating, currently Ba2
  Backed Subordinate MTN Rating, currently (P)Ba2

Issuer: Pfandbriefbank (Oesterreich) AG
  Backed Senior Unsecured Ratings, currently Ba1, outlook changed
   to Rating Under Review from Stable

Affirmations:

Issuer: Vorarlberger Landes- und Hypothekenbank AG
  Adjusted Baseline Credit Assessment, affirmed at baa3
  Baseline Credit Assessment, affirmed at baa3
  Long Term Bank Deposit Ratings, affirmed at Baa1 Stable
  Short Term Bank Deposit Ratings, affirmed at P-2
  Senior Unsecured Ratings, affirmed at Baa1 Stable
  Senior Unsecured MTN Rating, affirmed at (P)Baa1
  Long-Term Issuer Ratings, affirmed at Baa1 Stable
  Short Term Issuer Rating, affirmed at P-2

Not Affected:

Issuer: Heta Asset Resolution AG
  Backed Subordinate Rating, currently Aaa

Issuer: Hypo Tirol Bank AG
  Backed Short-Term Bank Deposit Rating, currently P-2

Issuer: Vorarlberger Landes- und Hypothekenbank AG
  Long Term Counterparty Risk Assessment, currently A3(cr)
  Short Term Counterparty Risk Assessment, currently P-2(cr)
  Subordinate MTN Rating, currently (P)Ba1
  Backed Long Term Bank Deposit Rating, currently A3 Stable
  Backed Short-Term Bank Deposit Rating, currently P-2
  Backed Senior Unsecured Ratings, currently A3 Stable
  Backed Senior Unsecured MTN Rating, currently (P)A3
  Backed Subordinate Rating, currently Baa3
  Backed Subordinate MTN Rating, currently (P)Baa3

Outlook Actions:

Issuer: Heta Asset Resolution AG
  Outlook, changed to Rating Under Review from Developing

Issuer: Hypo Tirol Bank AG
  Outlook, changed to Rating Under Review from Stable

Issuer: Vorarlberger Landes- und Hypothekenbank AG
  Outlook, remains Stable

Issuer: Pfandbriefbank (Oesterreich) AG
  Outlook, changed to Rating Under Review from Stable

                     PRINCIPAL METHODOLOGY

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



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C Z E C H   R E P U B L I C
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NEW WORLD: Pavel Tykac Makes Acquisition Offer for Business
-----------------------------------------------------------
Ladka Bauerova at Bloomberg News reports that union leader
Jaromir Pytlik told public broadcaster Czech Television Czech
billionaire Pavel Tykac offered to buy New World Resources'
mining unit OKD, which was declared insolvent earlier in May.

Mr. Tykac owns lignite mining operations in northern Czech
Republic, Bloomberg discloses.

As reported by the Troubled Company Reporter-Europe on May 24,
2016, Reuters related that NWR has been trying to reach a
restructuring and state aid agreement with the government since
the end of last year, after plunging into losses as global coal
prices fell.  It has debt of around CZK17 billion (US$704
million) and assets worth less than CZK7 billion, Reuters
disclosed, citing court filings.

New World Resources Plc is the largest Czech producer of coking
coal.


NEW WORLD: State Becomes Creditor of OKD Unit, Minister Says
------------------------------------------------------------
CTK reports that Industry and Trade Minister Jan Mladek said the
Czech state has become a creditor of OKD because the black-coal
mining company failed to cover some CZK70 million worth of social
insurance payments,

According to CTK, the state may become a member of the creditor
committee that would take part in a possible reorganization of
the coal miner.

Union leader Josef Stredula said that it is up to the insolvency
administrator to decide on whether miners will get their May
salaries, CTK relates.

Mr. Mladek, as cited by CTK, said that the state is going to
lodge its claim.

OKD filed for insolvency at the beginning of May and the Regional
Court in Ostrava sent it into insolvency, CTK recounts.  OKD owes
more than CZK17 billion to over 650 creditors but it is unable to
pay its debts, CTK discloses.  The value of its assets is lower
than CZK7 billion, CTK notes.

A total of 50 creditors have lodged their claims on OKD worth
more than CZK10 billion, CTK states.

New World Resources Plc is the largest Czech producer of coking
coal.



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EXELTIUM SAS: Moody's Withdraws B3 Rating on EUR153MM Sub. Bonds
----------------------------------------------------------------
Moody's Investors Service has withdrawn the B3 rating assigned to
Exeltium S.A.S.'s EUR153 million subordinated bonds (the Junior
Bonds) maturing in December 2031 for business reasons.  The Baa3
ratings of Exeltium's EUR1,000 million 15 year floating rate bank
term loan (Facility A), EUR155 million 15 year floating rate
institutional term loan (Facility B1) and EUR280 million 15 year
fixed rate institutional term loan (Facility B2), together, the
Senior Debt, are unaffected.

                         RATINGS RATIONALE

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

The last rating action on Exeltium S.A.S.'s Junior Bonds was
taken on May 5, 2016, when Moody's downgraded the rating to B3,
from Ba3.

Exeltium is a project vehicle that purchases baseload electricity
from Electricite de France (A2 negative) under a 24-year (from
2010) supply agreement and sells this electricity to Exeltium's
shareholders/Clients under long term take-or-pay agreements.
Exeltium's Clients currently comprise 27 French electro-intensive
companies.



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G E R M A N Y
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PB DOMICILE 2006-1: Fitch Affirms B Rating on Class E Notes
-----------------------------------------------------------
Fitch Ratings has upgraded PB DOMICILE 2006-1 plc's class D notes
and affirmed the class E notes, as follows:

  EUR5.1 million class D notes (DE000A0GYFL1) upgraded to
  'BBB+sf' from 'BBBsf'; Outlook Evolving

  EUR15.4 million class E notes (DE000A0GYFM9) affirmed at 'Bsf';
  Outlook Stable

The transaction is a synthetic residential mortgage backed
security referencing German mortgages loans. The debt instruments
were originated by Deutsche Postbank AG (BBB+/Evolving/F2) and
its acquired entity DSL Bank.

KEY RATING DRIVERS

The upgrade of the class D notes reflects Fitch's view that the
risk of loss attribution to the notes has reduced given the
significant loss absorption capacity of class E as well as the
excess spread generated from the asset pool, which has been
amortizing at a decreasing rate over the past quarters. The
rating on the class D notes is constrained by the charged assets,
which are senior unsecured notes issued by Deutsche Postbank AG.

Credit enhancement for the class E notes is only provided by the
excess spread of 57bps per year. This can also be used to recover
previously allocated losses until note maturity. As the
calculation of excess spread depends on the prospective reference
portfolio, the repayment rate represents a major risk driver.
Another key rating driver is potential late losses from re-
performing assets, given that the excess spread might decrease
over time due to strong repayments.

Sufficient excess spread might not be available for late losses
if only a few loans remain as basis for the calculation of excess
spread. Fitch considers the sensitivity of the class E notes to
loss allocation from a small number of loans defaulting very late
is not commensurate with a rating higher than 'Bsf'.

RATING SENSITIVITIES

The notes' ratings are dependent on the rating of Deutsche
Postbank AG as issuer of the charged assets and provider of
synthetic excess spread. A change in the rating of Deutsche
Postbank AG will have a direct impact on the class D notes'
rating.

The repayment rate of the reference portfolio together with the
timing of potential new defaults from loans that became
performing again after November 2011 are a furtherdriver of the
transaction's performance.

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.



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G R E E C E
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GREECE: Reaches "Breakthrough" Bailout Deal with EU Creditors
-------------------------------------------------------------
Szu Ping Chan at The Telegraph reports that Greece reached a
"breakthrough" deal with European creditors on May 24 that will
reduce its massive debt mountain and release vital rescue funds
to the cash-strapped nation.

After 11 hours of talks that included "a few tense moments",
Euclid Tsakalotos, the Greek finance minister, and
Jeroen Dijsselbloem, the head of the Eurogroup, hailed the deal
as an "important moment" for Athens, The Telegraph relates.

Mr. Dijsselbloem, as cited by The Telegraph, said it also paved
the way for the International Monetary Fund (IMF) to participate
in Greece's third bail-out.

Greece, The Telegraph says, will now receive EUR10.3 billion
(GBP7.8 billion) in fresh loans, EUR7.5 billion of which will be
disbursed next month to cover debt servicing needs and clear
arrears.

According to The Telegraph, the Eurogroup said in a statement the
rest will be given to Greece after the summer and subject to a
progress review, including the creation of a privatization and
investment fund.

The IMF backed down on demands for "upfront" and "unconditional"
debt relief for Greece, instead accepting that key measures would
not be in place until 2018, when Greece's current rescue package
ends, The Telegraph relates.



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BAROLO BIDCO: Moody's Assigns B2 Rating to New EUR450MM Sr. Notes
-----------------------------------------------------------------
Moody's Investors Service has assigned a B2 rating to the new
EUR450 million senior secured floating rate notes due 2022 issued
by Barolo BidCo S.p.A, part of TeamSystem.  Concurrently, Moody's
has also withdrawn the B2 rating on the EUR430 million senior
secured notes due 2020 issued by TeamSystem Holding S.p.A.

                         RATINGS RATIONALE

The rating actions follow the issuance of the senior secured
floating rate notes due 2022 and the repayment in full of the
EUR430 million senior secured notes due 2020.  The B3 corporate
family rating (CFR) and the B3-PD probability of default rating
of Barolo MidCo S.p.A. (TeamSystem, the company) as well as the
Caa2 rating to the EUR150 million senior notes issued by Barolo
MidCo S.p.A. remain unchanged.  The outlook on all ratings is
stable.

The B3 CFR and stable outlook reflects (i) TeamSystem's strong
market position in the Italian ERP market supported by high
retention rates; (ii) the high proportion of recurring revenues
provided by its maintenance services and frequent fiscal and
accounting upgrades; (iii) the complex local accounting and legal
framework which provides a degree of protection against larger
international competitors; (iv) the high profitability, with
Moody's adjusted EBITDA margins above 30%; and (v) the strong
track record of performance with positive growth prospects in its
micro and cloud division.

However the rating is constrained by (i) TeamSystem's high
opening leverage, with pro forma Moody's adjusted debt to EBITDA
at 7.7x as of December 2015; (ii) the amount of adjustments made
in arriving at pro forma EBITDA; (iii) its geographic
concentration which exposes the company to the Italian economy;
and (iv) the weak free cash flow generation due to its high
finance costs.

                          RATING OUTLOOK

The stable outlook reflects Moody's expectation that the company
will gradually reduce leverage backed by its well progressed cost
saving initiatives and will sustain its current operating
performance.  It also assumes that the company will maintain a
conservative financial policy with no large debt-funded
acquisitions or dividend distributions.

                 WHAT COULD CHANGE THE RATING -- UP

Positive ratings pressure could develop if TeamSystem reduces
Moody's adjusted leverage towards 6.5x on a sustainable basis,
whilst improving its FCF generation and liquidity profile.

                WHAT COULD CHANGE THE RATING -- DOWN

Negative rating pressure could arise if Moody's adjusted leverage
moves above its opening level on a sustainable basis, if
liquidity profile deteriorates, or if FCF stays negative for a
prolonged period.

The principal methodology used in these ratings was Software
Industry published in December 2015.

TeamSystem is primarily a provider of enterprise resource
planning (ERP) software to small and medium-sized enterprises
(SMEs) and professionals in Italy.  The group generated
approximately EUR254 million in revenues in 2015.


SAIPEM SPA: Moody's Lowers Corporate Family Rating to Ba1
---------------------------------------------------------
Moody's Investors Service has downgraded and converted the
provisional (P)Baa3 long-term issuer rating of Saipem S.p.A. into
a definitive Ba1 Corporate Family Rating, in line with the rating
agency's practice for corporates with non-investment-grade
ratings and assigned a stable outlook on all ratings.
Consequently, Saipem's (P)Baa3 issuer rating has been withdrawn.

The downgrade concludes the review, which was initiated on
Feb. 10, 2016.

Moody's has assigned a Corporate Family Rating (CFR) of Ba1 to
Saipem.  The CFR, which is typically assigned to speculative-
grade corporates, reflects Moody's opinion on Saipem's ability to
honour its financial obligations as if it had a single class of
debt and a single consolidated legal entity structure.

                        RATINGS RATIONALE

The rating action reflects Moody's expectation that Moody's
adjusted leverage will remain above 3.5x and FFO/debt only
slightly above 20% for the next few years as a result of the
severe stress in the oil and gas industry in which Saipem
operates.  The rating agency expects very weak conditions in
offshore drilling to continue for several years and a challenging
environment to win new orders in engineering and construction for
the oil and gas industry, with some evidence that demand in even
the Middle East is weakening.

The Ba1 CFR reflects Saipem's (1) investment grade business
profile with revenues of approximately EUR12 billion, a
substantial fleet size and asset scale; (2) strong market
position as one of the top engineering and construction (E&C)
companies providing offshore and onshore construction
predominantly for the oil and gas industry, with leading
engineering capabilities providing barriers to entry; (3)
recently upsized substantial cost efficiency plan expected to
generate EUR1.7 billion of cumulative savings between 2015 and
2017 compared to Moody's expectation of reported EBITDA of
approximately EUR1 billion for 2016; (4) long-term customer
relationships with major national oil companies (NOCs) such as
Saudi Aramco (unrated) and large integrated oil companies such as
ENI S.p.A. (Baa1 stable) and TOTAL S.A. (Aa3 stable); (5)
significant EUR14 billion contracted revenue backlog providing
some visibility into 2017 for both the E&C and drilling
businesses; (6) wide geographic diversity and with a significant
presence in the Middle East, which accounts for 37% of 2015
backlog and so far has shown some resilience in the current weak
oil price environment; and (7) demonstration of a conservative
financial policy following an equity raise of EUR3.5 billion in
February to repay debt.

At the same time, the CFR also reflects (1) the large exposure to
lump sum turnkey E&C contracts, which accounted for approximately
75% of contracts in the backlog and recent execution challenges,
including large losses in several ongoing projects; (2) exposure
to the highly cyclical oil and gas end market, where continued
low oil and gas prices have led to reductions in offshore spend
on deep and ultra-deepwater projects, leading to pricing pressure
and a lack of new awards in both the E&C and drilling space; (3)
likely strong competition from existing players in the onshore
E&C division, as well as new entrants in offshore, pressuring
margins for new awards; (4) the potential that Saipem will have
to scrap several of its older floaters as it will be difficult to
re-contract them in a market where we expect strong negative
trends to remain deeply entrenched through 2017; (5) challenges
of dealing with companies under financial pressure such as
Petroleo Brasileiro S.A. - PETROBRAS (B3 negative) and Petroleos
de Venezuela, S.A. (PDVSA, Caa3 negative) and Saipem's
outstanding and ongoing legal proceedings; (6) the relatively
high gross leverage (adjusted for leases, pensions and drawing
under a factoring facility) that Moody's expected of at least
3.5x and FFO/Debt to remain below 25% through 2017, despite an
increased cost savings program; and (7) the potential for
liquidity to be negatively impacted by large working capital
swings.

Although Saipem successfully raised EUR3.5 billion in equity, did
not suffer further losses on any projects and confirmed its 2016
guidance of revenues greater than EUR11 billion and EBIT greater
than EUR600 million, order intake during the first quarter 2016
was weak.  As a result the backlog fell to EUR14 billion from
EUR18 billion in the third quarter 2015, with some Middle East
contracts start dates also delayed to 2018 from 2017.  Whilst the
company won an approximately $1.5 billion contract for offshore
work with BP p.l.c (A2 positive) in Azerbaijan in May.  However,
in light of the adverse industry developments and the likely
prolonged nature of this challenging operating environment,
Moody's expects that further substantial order intake will be
challenging and the rating agency expects margins to be under
further pressure from the increased competitive environment.

As a result, Moody's gross adjusted leverage for FY2016-17 is
expected between approximately 3.5-4.0x, which is above the 3.5x
level that the rating agency viewed as the trigger to downgrade
the rating.  This leverage range was based on Moody's expectation
of a reported EBITDA of approximately EUR1.0 billion in 2016,
which the rating agency expected to fall in 2017.  Moody's debt
adjustments add capitalized leases (using a three times multiple,
consistent with other companies in the construction industry),
pensions and drawing under a factoring facility.

                             LIQUIDITY

Moody's considers Saipem's liquidity to be good despite
significant working capital swings over the last few years.  At
the end of March 2016, it had EUR1.6 billion cash on balance
sheet, and access to a fully undrawn EUR1.5 billion revolving
credit facility maturing in December 2020.  Moody's expects the
company to generate free cash flow in 2016 of a few hundred
million euros and it does not expect Saipem to pay any dividends.
There is no debt maturing in the next 12 months and Moody's
expects the company to have ample headroom on the 3.0x net
leverage covenant that is now being tested after a downgrade to
speculative grade.

                           RATING OUTLOOK

The stable outlook reflects Moody's expectation that Saipem (1)
will refinance the $1.6 billion bridge-to-bond facility well in
advance of its 18 month maturity date, although there is a six-
month extension option to January, 2018; (2) maintains Moody's
gross adjusted debt/EBITDA in a range of 3.5x-4.0x as the
contract backlog rolls off; and (3) continues to win new orders
and suffer no further losses on existing projects.

              WHAT COULD CHANGE THE RATING UP/DOWN

As Saipem's rating has just been downgraded, an upgrade of the
rating is unlikely in the medium-term.  That said, over time
Saipem's ratings could be upgraded if it maintains a strong order
backlog and conditions improve in the oil and gas markets leading
to it sustaining: (1) EBITA over $600 million, (2) FFO/debt above
25%, and (3) Moody's adjusted gross leverage is sustained below
3.5x, while maintaining good liquidity and the company builds a
good execution track record.  Conversely, Saipem's rating could
be downgraded, if (1) Moody's were to conclude that Moody's
adjusted gross leverage will remain over 4.0x, (2) FFO/debt
remains below 20% or (3) if liquidity deteriorates.

                      PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Construction
Industry published in November 2014.

Saipem, based in Milan, Italy is a leading engineering,
construction and drilling company focussing on the oil and gas
industry and specializing in remote areas and deepwater.  It has
a large offshore fleet of 29 construction vessels, 15 drilling
rigs and 60 remotely operated vehicles (ROVs), capable of
executing technologically difficult projects, as well as 9
fabrication yards and 108 onshore rigs, including 8 managed or
under construction. In 2015, the company generated revenue of
approximately EUR12 billion with a broad regional diversity
across the world.


WASTE ITALIA: Moody's Lowers CFR to Ca, Outlook Negative
--------------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating of Italian waste management company Waste Italia S.p.A. to
Ca from Caa3.  Concurrently, Moody's downgraded the probability
of default rating (PDR) to Ca-PD from Caa3-PD and the instrument
rating on the senior secured notes to C from Ca.  The outlook on
all ratings remains negative.

                         RATINGS RATIONALE

The ratings downgrade is a result of the missed EUR10.5 million
interest payment on the senior secured notes that was due on 16
May 2016.  Waste Italia proceeded not to pay the coupon pending
the company's discussions with a committee of bondholders.
Accordingly, the downgrade reflects the higher near-term default
risk over the coming weeks and months.  The ratings also continue
to reflect our expectation of a limited overall recovery and
particularly of the notes given the priority ranking of the super
senior revolving credit facility, other bilateral overdraft and
factoring facilities, and given the trading levels of the senior
secured notes.

Following the missed interest payment, the company has now a 30-
day grace period and if it pays during this period would avoid a
payment default.  However, Moody's also points out that the
company needs to pay in addition to the coupon a mandatory
principal prepayment, likely during the second quarter of 2016
and dependent on the company's finalization of audited accounts.
Both would be challenging in Moody's view as Moody's expects
liquidity to remain tight for the company.

Moody's also expects that Waste Italia will negotiate over the
coming months with bondholders to address the company's liquidity
and unsustainable capital structure following the weak
performance in the fourth quarter of 2015.  The company reported
a drop in EBITDA to EUR6.6 million in Q4 2015 from EUR19.2
million in Q4 2014 and EUR10.4 million reported in Q3 2015.  The
drop in EBITDA was driven partly by lower volumes, higher costs
(including management fees) and absence of one-off benefits that
led to a particularly strong Q4 in 2014.

Rating Outlook

The negative outlook reflects Moody's expectation that liquidity
will remain tight in 2016.  In addition, the announcement of a
capital structure review and missed interest payment points to a
higher near-term default risk over the coming weeks and months.

What Could Change the Rating

Given the rating positioning an actual default under Moody's
definitions of default, including distressed exchange, would lead
to ratings pressure.  This could also include the signing of
waivers or agreement of a restructuring with the bondholders.
Any signs of further weakening of EBITDA in 2016 may also
pressure the rating as Moody's may adjust its recovery
expectations.  While there is no near term upward rating pressure
given the circumstances, a significantly improved liquidity
profile together with; (i) the demonstration of sustained and
visible free cash flow (after interest payments); (ii) an
expansion of the company's operations and landfill capacity; and
(iii) visible EBITDA growth could result in positive pressure.
However, this would also need to take into account the currently
uncertain outcome of the company's restructuring efforts with
bondholders.  In any case, Moody's would expect Moody's-adjusted
debt/EBITDA to fall visibly and interest cover to improve for any
positive pressure.

The principal methodology used in these ratings was Environmental
Services and Waste Management Companies published in June 2014.

Headquartered in Milan, Waste Italia is a waste management
company based in Northern Italy.  Its vertically integrated
business operates in the collections, processing and recycling,
landfill disposal and biogas, with a focus on non-hazardous
special (commercial) waste.  Its main regions of operations are
Lombardy, Piedmont and, following the acquisition of Geotea,
Liguria, where it has 7 service centers and depots operating a
fleet of 150 vehicles (of which 65 are owned), 10 sorting and
treatment plants and, following the sale of Alice Ambiente that
took place in Q1 2015, 12 landfills sites of which 7 are active.
In addition to this, the group operates through third party
partnership agreements to provide waste management services
throughout Italy. In the last 12 months to December 2015 Waste
Italia had consolidated revenues of EUR120 million.  Waste Italia
is owned by Gruppo Waste Italia S.p.A. which is publicly listed
on the Italian Stock Exchange.



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


KAZINVESTBANK: S&P Revises Outlook to Neg. & Affirms B-/C Ratings
-----------------------------------------------------------------
S&P Global Ratings revised its outlook on Kazakhstan-based
KazInvestBank (KIB) to negative from stable.  S&P affirmed its
'B-/C' long- and short-term counterparty credit ratings on the
bank.

S&P also lowered its long-term Kazakhstan national scale rating
on KIB to 'kzB+' from 'kzBB-'.

The outlook revision stems from S&P's view that the bank's only
moderate loss-absorption capacity leaves its credit profile
vulnerable to the prolonged negative trends in Kazakhstan's
economy and banking sector.  Contrary to S&P's expectations,
KIB's year-end 2015 risk-adjusted capital (RAC) ratio (5.7%) was
below the 7% threshold for our adequate capital assessment, and
under S&P's base case it expects it will only be in the range of
5%-6% in 2016-2017.  S&P's view is based on KIB's low expected
earnings capacity, lack of capital injection track record of the
new owners, and high balance sheet volatility.  Additionally, S&P
notes its already higher-than-peers share of nonperforming loans
(NPLs; loans overdue more than 90 days) to total loans, which
according to regulatory data, increased to 13.7% as of March 31,
2016, from 11.8% as of year-end 2015.  That might lead to
additional provisioning expenses in 2016-2017, which could
possibly further pressurize capitalization.

Low oil prices and the ensuing weak economic growth have eroded
the operating environment for all Kazakhstan-based banks.  Since
August 2015, there has been an approximate 50% depreciation of
the tenge against the U.S. dollar, which poses a significant risk
to banks' credit costs, liquidity, and capital, due to high
dollarization in the banking sector.

"Against this background, we had anticipated that management
would take a more cautious approach to capitalization in 2015.
Although overall this did not happen, the bank's capital
increased through Kazakhstani tenge (KZT) 2.2 billion (about $6.5
million) retained earnings in 2015.  Our RAC ratio decreased to
5.7% at year-end 2015 from 6.9% at year-end 2014, and we think
that it might decline further through year-end 2017.  We note the
lack of a sufficient track record of capital inflows from the new
owners, since the bank's long-time majority shareholders sold
their stakes to 10 Kazakh individuals in March 2016, who hold no
more than 10% each.  The new owners injected KZT1.6 billion of
new capital on May 16, 2016.  Due to the short track record, we
do not incorporate any additional capital injections, which will
be tracked on actual basis.  We note also a record of balance
sheet volatility at KIB, in terms of its total size and asset
mix, which add uncertainty and could yet negatively influence our
RAC ratio more than we expect in 2016-2017," S&P said.

"Although KIB reported substantially improved profitability in
2015, we do not see this as sustainable.  In our view, weak
conditions in the economy and banking sector led to deteriorated
asset quality during 2015 and the first quarter of 2016.  We also
anticipate that a lack of higher-margin retail lending and tight
competition in the sector will result in a low return on average
equity of about 1.5% and high credit costs of about 4% of average
loans in 2016-2017.  In addition, an aggressive provisioning
policy -- with loan loss reserves covering only 68% of reported
NPLs at year-end 2015 -- means that the bank may yet need to
substantially improve provisioning levels on existing NPLs," S&P
noted.

For now, S&P views KIB's funding and liquidity as neutral factors
within its 'b-' stand-alone credit profile, and in S&P's base
case the bank will be able to manage its substantial maturities
in the second half of 2016.  However, given these material amount
of financial commitments and taking into account risks of
potential additional funding outflows, S&P will closely monitor
the bank's liquidity and asset and liability management in 2016.

S&P's negative outlook on KIB indicates that S&P might lower the
ratings in the next 12-18 months if high prevailing downside
risks stemming from deteriorating operating conditions erode the
bank's creditworthiness.

S&P would expect to lower its long-term rating on the bank if S&P
assess a heightening of either economic or industry risks for
banks in Kazakhstan, or if KIB's funding and liquidity metrics
deteriorate.  S&P could also lower the ratings if it observes a
prolonged deterioration in the share of NPLs in the total loan
book beyond S&P's current expectations of 17%-18% in 2016.
Likewise, a significant reduction of KIB's loss-absorption
capacity leading to S&P's projected RAC ratio reducing to below
5% would lead to a downgrade.  The bank's capitalization could
slide if, for example, it takes on material onetime charges or
higher provisioning expenses than S&P currently expects, assuming
this is not offset by capital injections.

S&P might revise the outlook to stable if it sees an easing in
the economic and industry risks for banks in Kazakhstan.  S&P
might also revise the outlook to stable if it sees that the bank
will be able to comfortably sustain a RAC ratio above 7%, while
asset quality does not deteriorate more than S&P expects, and
liquidity remains adequate.



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


4FINANCE SA: Moody's Assigns B3 Rating to EUR100MM Sr. Notes
------------------------------------------------------------
Moody's Investors Service has assigned a backed B3 rating to the
EUR100 million senior unsecured notes issued by 4Finance, S.A., a
Luxembourg-based funding vehicle belonging to 4Finance group.
The rating carries a positive outlook.

                         RATINGS RATIONALE

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

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

                             OUTLOOK

Moody's positive outlook on 4Finance Holding's ratings reflects
(1) the company's increasing geographic diversification, which
reduces the risk that potential restrictive consumer protection
regulations in one market could pose to the company's overall
financial performance; and (2) our expectation that geographic
diversification, in combination with longer loan duration, will
contribute to the predictability of the company's strong
earnings.

               WHAT COULD CHANGE THE RATING UP/DOWN

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

Although currently not anticipated, Moody's would consider
downgrading 4Finance's ratings if: (1) non-performing loans were
to increase substantially, either as a share of previous two-year
lending or total outstanding gross loans; (2) the company's
average return on assets were to decrease below 2.5%; or (3) the
company's capital-to-asset ratio were to fall below 16%.

                       PRINCIPAL METHODOLOGY

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


DANA FINANCING: S&P Assigns BB+ Rating to Proposed $375MM Notes
---------------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issue-level rating and '4'
recovery rating to Dana Financing Luxembourg S.a.r.l.'s proposed
$375 million senior unsecured notes due 2026.  The '4' recovery
rating indicates S&P's expectation for average (30%-50%; upper
half of the range) recovery in the event of a payment default.
The issuer, Dana Financing Luxembourg S.a.r.l., is an indirect
wholly owned subsidiary of Toledo, Ohio-based auto supplier Dana
Holding Corp.

The company has said that it will use the net proceeds from this
issuance to redeem its $350 million of outstanding 2021 notes,
pay related fees and expenses, and for general corporate
purposes, which may include debt repayment.

The notes will be guaranteed, fully and unconditionally, by the
company.  The new notes will be the unsecured general obligations
of the issuer and the guarantor and will be subordinated in right
of payment to all secured debt, to the extent of the value of the
collateral securing such debt, and will be equal in right of
payment to all existing and future senior unsecured debt,
including the company's existing notes.

S&P expects the company to continue to generate solid earnings
and cash flow, while maintaining stable credit measures, despite
its unpredictable end markets and growth-related investments.
S&P believes that Dana can maintain credit metrics that are
appropriate for the current rating because of its neutral
financial policy, fair scope and scale, competitive market
position, and good operating efficiency.

RATINGS LIST

Dana Holding Corp.
Corporate Credit Rating               BB+/Stable/--

New Ratings

Dana Financing Luxembourg S.a.r.l.
Prpsd $375M Sr Unsecd Nts Due 2026    BB+
  Recovery Rating                      4H



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


CADOGAN SQUARE: Moody's Affirms Ba3 Rating on Class E Notes
-----------------------------------------------------------
Moody's Investors Service has upgraded the ratings on these notes
issued by Cadogan Square CLO B.V.:

  EUR31.2 mil. Class C Senior Secured Deferrable Floating Rate
   Notes due 2022, Upgraded to Aaa (sf); previously on May 6,
   2015, Upgraded to Aa1 (sf)

  EUR27.4 mil. Class D Senior Secured Deferrable Floating Rate
   Notes due 2022, Upgraded to Baa2 (sf); previously on May 6,
   2015, Upgraded to Baa3 (sf)

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

  EUR185 mil. (current outstanding balance of EUR18.4 mil.) Class
   A-1 Senior Secured Floating Rate Notes due 2022, Affirmed
   Aaa (sf); previously on May 6, 2015, Affirmed Aaa (sf)

  EUR120.7 mil. (current outstanding balance of EUR12.0 mil.)
   Class A-2 Senior Secured Floating Rate Notes due 2022,
   Affirmed Aaa (sf); previously on May 6, 2015, Affirmed
   Aaa (sf)

  EUR33.2 mil. Class B Senior Secured Floating Rate Notes due
   2022, Affirmed Aaa (sf); previously on May 6, 2015, Affirmed
   Aaa (sf)

  EUR10.3 mil. Class E Senior Secured Deferrable Floating Rate
   Notes due 2022, Affirmed Ba3 (sf); previously on May 6, 2015,
   Affirmed Ba3 (sf)

Cadogan Square CLO B.V., issued in December 2005, is a
collateralised loan obligation (CLO) backed by a portfolio of
mostly high-yield senior secured European loans, managed by
Credit Suisse Asset Management Limited.  The transaction's
reinvestment period ended in February 2012.

                        RATINGS RATIONALE

The upgrade of the notes is primarily a result of deleveraging
since August 2015.  As a result, the class A notes have paid down
approximately EUR38 mil. (19% of initial balance) resulting in
increases in over-collateralization levels.  As of the April 2016
trustee report, the Class B, C, D and E overcollateralization
ratios are reported at 234.79%, 157.53%, 122.21% and 112.71%
respectively compared with 186.73%, 142.98%, 118.58%, and 111.42%
in July 2015.

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
performing par and principal proceeds balance of EUR155.3
million, a defaulted par of EUR1.2 million, a weighted average
default probability of 21.88% (consistent with a WARF of 3138
over a weighted average life of 4.20 years), a weighted average
recovery rate upon default of 45.73% for a Aaa liability target
rating, a diversity score of 18 and a weighted average spread of
4.11%.

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 assumed a lower weighted average recovery rate in
the portfolio.  Moody's ran a model in which it reduced the
weighted average recovery rate by 5%; the model generated outputs
that were one notch lower than the base-case results for classes
C and E and two notches lower for class D.  Classes A and B were
not impacted.

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
notes, 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 due to embedded ambiguities.

Additional uncertainty about performance is due to:

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

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

  3) Long-dated assets: The presence of assets that mature beyond
     the CLO's legal maturity date exposes the deal to
     liquidation risk on those assets.  Moody's assumes that, at
     transaction maturity, the liquidation value of such an asset
     will depend on the nature of the asset as well as the extent
     to which the asset's maturity lags that of the liabilities.
     Liquidation values higher than Moody's expectations would
     have a positive impact on the notes' ratings.

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


CHAPEL 2003-I: Moody's Raises Rating on Class B Notes to B3
-----------------------------------------------------------
Moody's Investors Service upgraded its ratings in two RMBS and
two ABS transactions backed by loans that the now-bankrupt Dutch
DSB Bank N.V. originated: Monastery 2004-I B.V., Monastery 2006-I
B.V., Chapel 2003-I B.V. and Chapel 2007 B.V.  In addition,
Moody's upgraded the Counterparty Instrument Rating on the
interest rate swap in Chapel 2003 and affirmed the rating on the
liquidity facility in Chapel 2007.

                       RATINGS RATIONALE

The upgrades are prompted by a pay-out from the DSB Bank N.V.
bankruptcy estate to the issuers representing a 100% recovery on
the special-purpose vehicle's (SPV) counterclaims for all DSB
Bank N.V. transactions.  The positive rating action also reflects
lower than previously anticipated borrowers compensations
relating to duty of care (DoC) claims linked to DSB Bank N.V.'s
lending and intermediation practices in Chapel 2003 and Chapel
2007.  Moody's took into consideration the operational risk in
the transactions. In Chapel 2007, Monastery 2004 and Monastery
2006, the rating action on the senior notes takes into account
the risk of payment disruptions.

  -- PAY-OUT RATIO FROM DSB BANK N.V.'S BANKRUPTCY ESTATE LEADS
TO HIGHER RECOVERIES THAN ANTICIPATED

The issuers have counter-claimed the compensation amounts set off
against the loans in the respective portfolios from DSB Bank
N.V.'s bankruptcy estate.  The bankrupt entity made a material
payment distribution in February 2016, resulting in a total pay-
out of 100% on due care claims.

As a result, all four transactions received or will receive a
pay-out equivalent to 100% of all claims filed in the bankruptcy
as at their last payment date or on their next payment date.
This represents a substantial increase from the 74% pay-out
distributed in December 2014.

These higher than expected recoveries from the bankruptcy estate
lead to increased credit enhancement levels in all four
transactions, through either a decrease and/or a curing of the
PDL, or through a replenishment of the reserve fund.

  -- LOWER EXPECTATIONS OF COMPENSATION FOR BORROWERS DoC
COMPLAINTS ON DSB BANK N.V.'S LENDING PRACTICES FOR CHAPEL 2003
AND CHAPEL 2007

In December 2015, Intertrust Management B.V., director of the
SPVs, provided noteholders with updated expectations of DoC
claims.  or Chapel 2003 and Chapel 2007, these amounts are
slightly below the estimated figures provided by the bankruptcy
trustee in May 2015.

Borrowers had until November 2015 to submit due care claims under
the framework agreement that was ratified in November 2014 by the
Amsterdam Court of Appeal.

Intertrust Management B.V. received an assessment from the
bankruptcy trustees of the maximum DoC amounts in all four
transactions based on (a) the number of claims already received;
(b) the influx of new claims; and (c) the reduced timeline for
borrowers to submit their due-care claims.  Bankruptcy trustees
revised the maximum DoC amount to EUR50.5 million in Chapel 2003
and EUR48 million in Chapel 2007, down from EUR55 million and
EUR52 million respectively.  In Monastery deals, the maximum DoC
amount remains the same as in May 2015: EUR6.5 million in
Monastery 2004 and EUR13 million in Monastery 2006.

The remaining DoC amounts represent a potential future loss of
0.3% of Chapel 2003's current pool balance, 0.4% for Chapel 2007,
0.1% for Monastery 2004 and Monastery 2006.

   -- REVISION OF KEY COLLATERAL ASSUMPTIONS

As a part of its detailed transaction review, Moody's reassess
its lifetime loss expectation for each securitized portfolio
reflecting the collateral performance to date as well as the
future macro-economic environment.

Monastery 2004 is performing modestly worse-than-anticipated as
at the last rating review.  As a result, Moody's increased its
expected loss assumptions to 2.45% from 2.2% of original balance.
Moody's maintained its key collateral assumptions for Monastery
2006, Chapel 2003 and Chapel 2007, which continue to perform in
line with expectations.

  -- COUNTERPARTY EXPOSURE

The rating actions took into consideration the notes' exposure to
relevant counterparties, such as servicer, account banks or swap
providers.

Following DSB Bank N.V.'s bankruptcy, the bankruptcy trustees
entered into a sub-delegation agreement with Quion Groep B.V.
(not rated).  The servicing transfer took place successfully in
June 2013.  DSB Bank N.V. continues to service the due care
claims, with the bankruptcy trustee committed to run-off the
portfolio for the next four years.  Additionally, Vesting Finance
and Ultimoo were appointed as special servicers in May 2015,
servicing the loans with arrears of 12 months or more.

The liquidity facilities represent 4.4% of Chapel 2003 's note
balance, 4.9% of Chapel 2007, 5.0% of Monastery 2004 and 3.6% of
Monastery 2006.  Moody's believes that the liquidity is
sufficient to support interest payments on the notes in case of
servicer disruption.

The mitigants to payment disruption have been tested in the 4
transactions following the bankruptcy of DSB Bank N.V.  Moody's
concludes that the maximum achievable rating for the senior notes
remains Aa3 (sf).  The ratings of the class A2 in Chapel 2007,
the class A2, B, C and D notes in Monastery 2004 and the class A2
and B notes in Monastery 2006 are constrained by operational
risks.

          COUNTERPARTY INSTRUMENT RATINGS IN CHAPEL DEALS

Moody's upgraded the interest rate swap to Aa3 (sf) from A1 (sf)
in Chapel 2003 and affirmed the Aa3 (sf) of the liquidity
facility in Chapel 2007.  These ratings measure the expected
losses to the counterparties if the respective issuer is unable
to honor its obligations under the referenced financial contracts
by maturity.

Repayment of the interest rate swap in Chapel 2003 and the
liquidity facility in Chapel 2007 rank senior to the rated notes
in the payment waterfall.  They are linked to the performance of
the underlying assets and are both constrained by operational
risks.

The principal methodology used in rating Monastery 2004 and
Monastery 2006 was "Moody's Approach to Rating RMBS Using the
MILAN Framework" published in January 2015.

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

The principal methodology used in rating Chapel 2003 and Chapel
2007 was "Moody's Approach to Rating Consumer Loan-Backed ABS"
published in September 2015.

Other factors used in rating the interest rate swap in Chapel
2003 and the liquidity facility in Chapel 2007 are described in
"Moody's Approach to Counterparty Instrument Ratings" published
in June 2015.

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

Factors or circumstances that could lead to an upgrade of the
ratings include 1) better-than-expected collateral performance;
2) deleveraging of the capital structure and 3) improvement in
the credit quality of the transaction's counterparties.

Factors or circumstances that could lead to a downgrade of the
ratings include 1) worse-than-expected collateral performance; 2)
deterioration in the notes' available credit enhancement and 3)
deterioration in the credit quality of the transaction
counterparties.

LIST OF AFFECTED RATINGS:

Issuer: Chapel 2003-I B.V.

  EUR890 mil. A Notes, Affirmed Baa1 (sf); previously on July 31,
   2015, Upgraded to Baa1 (sf)
  EUR39 mil. B Notes, Upgraded to B3 (sf); previously on Dec. 2,
   2011, Downgraded to Ca (sf)
  Interest Rate Swap, Upgraded to Aa3 (sf); previously on
   July 31, 2015, Upgraded to A1 (sf)

Issuer: Chapel 2007 B.V.

  EUR300 mil. A2, Affirmed Aa3 (sf); previously on July 31, 2015,
   Upgraded to Aa3 (sf)
  EUR13.8 mil. B, Upgraded to A1 (sf); previously on July 31,
   2015, Upgraded to Baa1 (sf)
  EUR23.5 mil. C, Upgraded to A3 (sf); previously on July 31,
   2015, Upgraded to Ba2 (sf)
  EUR17.9 mil. D, Upgraded to Ba1 (sf); previously on Dec. 2,
   2011, Confirmed at Ca (sf)
  EUR13.8 mil. E, Upgraded to Ba3 (sf); previously on May 31,
   2011, Downgraded to C (sf)
  Liquidity Facility Rating, Affirmed Aa3 (sf); previously on
   July 31, 2015, Upgraded to Aa3 (sf)

Issuer: Monastery 2004-I B.V.

  EUR604.5 mil. A2 Notes, Affirmed Aa3 (sf); previously on
   July 31, 2015, Upgraded to Aa3 (sf)
  EUR24.5 mil. B Notes, Affirmed Aa3 (sf); previously on July 31,
   2015, Upgraded to Aa3 (sf)
  EUR21.5 mil. C Notes, Affirmed Aa3 (sf); previously on July 31,
   2015, Upgraded to Aa3 (sf)
  EUR8.5 mil. D Notes, Upgraded to Aa3 (sf); previously on
   July 31, 2015, Upgraded to A3 (sf)
  EUR10.5 mil. E Notes, Upgraded to Ba3 (sf); previously on
    July 31, 2015, Upgraded to B3 (sf)

Issuer: Monastery 2006-I B.V.

  EUR663.6 mil. A2 Notes, Affirmed Aa3 (sf); previously on
   July 31, 2015, Upgraded to Aa3 (sf)
  EUR28 mil. B Notes, Affirmed Aa3 (sf); previously on July 31,
   2015, Upgraded to Aa3 (sf)
  EUR28.7 mil. C Notes, Upgraded to Baa3 (sf); previously on
   July 31, 2015, Upgraded to Ba1 (sf)
  EUR9.5 mil. D Notes, Upgraded to B3 (sf); previously on Dec. 2,
   2011, Confirmed at Ca (sf)


MARFRIG GLOBAL: Fitch Rates Proposed Notes Issuance B+(EXP)
-----------------------------------------------------------
Fitch Ratings has assigned a 'B+(EXP)/RR4' rating to Marfrig
Global Foods S.A.'s (Marfrig) proposed $US500 million issuance of
global notes. The proposed senior unsecured global notes will
mature in 2023. The notes will be issued through its wholly owned
subsidiary, Marfrig Holdings (Europe) B.V. and will be
unconditionally and irrevocably guaranteed by Marfrig. Proceeds
will be used to refinance existing debt and for general corporate
purposes.

Simplified Business Profile

Marfrig's ratings consider its broad product portfolio and
geographic diversification, which reduces risks related to
disease, trade restrictions and currency fluctuations. Recent
divestitures allowed Marfrig to simplify its organizational
structure into two business units: Marfrig Beef (50.3% of
revenue; 50% of EBITDA), one of the world's largest beef
producers, and Keystone Foods (49.7% of revenue; 50% of EBITDA),
which processes food for major restaurant chains in the U.S. and
Asia.

Improved Credit Metrics

Marfrig's net adjusted debt/EBITDA was 3.5x as of March 31, 2016,
as a result of satisfactory performance and the divestment of Moy
Park to JBS in September 2015. Fitch expects Marfrig's adjusted
net leverage ratio to fall below 3.5x in 2016 supported by EBITDA
growth, better asset and logistics management, steady capex and
lower interest expenses. Fitch expects Marfrig to generate
positive free cash flow (FCF) in 2016.

Challenging Domestic Environment

The domestic operating environment in 2016 remains difficult for
the Brazilian protein sector due to the economic recession,
elevated inflation, increased interest and unemployment rates,
and declining consumer confidence. Marfrig responded to these
challenges by reducing processing capacity (five slaughter units
closed in 2015), while exporters reported higher average prices
offsetting lower export volume.

No Acquisitions Anticipated

Marfrig is not expected to execute any major acquisitions over
the next 18 months given management's focus on deleveraging its
balance sheet, improving cash flow generation and reducing
interest expenses. Key initiatives will include the optimization
of plants and distribution facilities by Marfrig Beef and the
geographic expansion of Keystone.

RATING SENSITIVITIES

Negative Rating Triggers: Marfrig's inability to improve FCF over
the next 24 months and maintain net leverage above 4.5x-5.0x on a
sustainable basis could trigger a negative rating action.

Positive Rating Triggers: A combination of a positive FCF track
record, resilience of the group's operating margin in its beef
business in Brazil, and a reduced gross leverage and sustained
net leverage ratio near 3.5x would be viewed positively.

LIQUIDITY

Marfrig's liquidity is adequate. As of March 31, 2016, the group
held BRL5.2 billion of cash and marketable securities. This
compares favorably with short-term debt of BRL2.2 billion.
Marfrig's largest refinancing requirement will be in 2020 (BRL3.2
billion), as the company has redeemed most of its 2016 and 2017
bonds. Proceeds from the divestment of Moy Park are being used to
buy back outstanding bonds (2018, 2019 and 2021 bonds). Almost
96% of Marfrig debt and 80% of revenues is denominated in U.S.
dollars and foreign currencies

FULL LIST OF RATING ACTIONS

Fitch currently rates Marfrig as follows:

Marfrig:
-- Foreign and Local Currency IDR 'B+';
-- National scale rating 'BBB+ (bra)'.

Marfrig Holdings Europe B.V.:
-- Foreign Currency IDR 'B+';
-- Notes due 2017, 2018, 2019, 2021 'B+/RR4'.
-- Notes due 2023 'B+(exp)/RR4'

Marfrig Overseas Ltd:
-- Notes due 2016, 2020 'B+/RR4'.


ST. PAUL'S CLO VI: Moody's Assigns (P)B2 Rating to Class E Notes
----------------------------------------------------------------
Moody's Investors Service has assigned provisional ratings to
seven classes of notes to be issued by St. Paul's CLO VI D.A.C.:

  EUR245,000,000 Class A-1 Senior Secured Floating Rate Notes due
   2029, Assigned (P)Aaa (sf)
  EUR34,000,000 Class A-2A Senior Secured Floating Rate Notes due
   2029, Assigned (P)Aa2 (sf)
  EUR10,000,000 Class A-2B Senior Secured Fixed Rate Notes due
   2029, Assigned (P)Aa2 (sf)
  EUR24,000,000 Class B Senior Secured Deferrable Floating Rate
   Notes due 2029, Assigned (P)A2 (sf)
  EUR18,500,000 Class C Senior Secured Deferrable Floating Rate
   Notes due 2029, Assigned (P)Baa2 (sf)
  EUR28,000,000 Class D Senior Secured Deferrable Floating Rate
   Notes due 2029, Assigned (P)Ba2 (sf)
  EUR11,000,000 Class E Senior Secured Deferrable Floating Rate
   Notes due 2029, Assigned (P)B2 (sf)

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

                        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, Intermediate
Capital Managers Limited has sufficient experience and
operational capacity and is capable of managing this CLO.

St. Paul's CLO VI is a managed cash flow CLO.  At least 90% of
the portfolio must consist of senior secured loans and senior
secured bonds and up to 10% of the portfolio may consist of
unsecured senior loans, second-lien loans, mezzanine obligations
and high yield bonds.  The portfolio is expected to be at least
80% ramped up as of the closing date and to be comprised
predominantly of corporate loans to obligors domiciled in Western
Europe.

ICML 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 seven classes of notes rated by
Moody's, the Issuer will issue EUR 42,300,000 of subordinated
notes which will not be rated.

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

Factors that would lead to an upgrade or downgrade of the
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.  ICML' investment decisions
and management of the transaction will also affect the notes'
performance.

Loss and Cash Flow Analysis:

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

Moody's used these base-case modeling assumptions:

  Par Amount: EUR 400,000,000
  Diversity Score: 38
  Weighted Average Rating Factor (WARF): 2800
  Weighted Average Spread (WAS): 4.25%
  Weighted Average Coupon (WAC): 5.25%
  Weighted Average Recovery Rate (WARR): 43 %
  Weighted Average Life (WAL): 8 years

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 3220 from 2800)
  Ratings Impact in Rating Notches:
  Class A-1 Senior Secured Floating Rate Notes due 2029: 0
  Class A-2A Senior Secured Floating Rate Notes due 2029: -2
  Class A-2B Senior Secured Fixed Rate Notes due 2029: -2
  Class B Senior Secured Deferrable Floating Rate Notes due 2029:
   -2
  Class C Senior Secured Deferrable Floating Rate Notes due 2029:
   -1
  Class D Senior Secured Deferrable Floating Rate Notes due 2029:
   -1
  Class E Senior Secured Deferrable Floating Rate Notes due 2029:
   0

Percentage Change in WARF: WARF +30% (to 3640 from 2800)
Ratings Impact in Rating Notches:

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

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.



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


NOVIKOMBANK JSCB: Moody's Puts B2 Rating on Review for Downgrade
----------------------------------------------------------------
Moody's Investors Service has placed on review for downgrade
Novikombank JSCB's B2 long-term local- and foreign-currency
deposit ratings, and has affirmed its Not-Prime short-term
deposit ratings.  Concurrently, Moody's has downgraded
Novikombank's baseline credit assessment (BCA) and adjusted BCA
to caa1 from b3 and placed it on review for further downgrade.
Moody's has also placed on review for downgrade the bank's long-
term Counterparty Risk Assessment (CR Assessment) of B1(cr) and
affirmed the bank's short-term CR Assessment of Not-Prime(cr).

The rating action primarily reflects weakening of the bank's
solvency metrics due to deteriorating asset quality of the bank
and recent losses from bail-out of Fundservicebank (unrated).

                         RATINGS RATIONALE

Moody's downgrade of the bank's BCA to caa1 from b3 is driven by
Novikombank's very weak solvency metrics, as its high credit
costs and losses from consolidation of troubled Fundservicebank
wiped the bank's equity to a negative RUB13 billion as at year-
end 2015. The high credit costs were driven by the rapid
deterioration of the bank's asset quality, including the failure
of Transaero air carrier with 100% provisioned exposure of RUB8.3
billion as at year-end 2015.

Novikombank's deposit ratings of B2 incorporates Moody's
assessment of a high probability of government support, owing to
Novikombank's strategic importance to its core shareholder,
state-controlled corporation Russian Technologies (RosTech,
unrated).

Novikombank reported a RUB27.5 billion loss in 2015, which was
2.5 times higher than its equity as of Jan. 1, 2015.  The bank's
losses were mainly driven by by:

  1) High credit costs of 17% of its average loan book for 2015,
     as the risk associated with high credit concentrations
     materialized and Novikombank's problem loans have grown to
     35% of its gross loan book as at year-end 2015 (from 10.5% a
     year before) on the back of several large borrowers'
     defaults.

  2) A RUB5.7 billion loss from the consolidation of bailed out
     Fundservicebank as the initial rescue package provided by
     the Deposit Insurance Agency and a state-controlled company
     was not sufficient to cover initially identified problem
     loans.

On the other hand, Moody's notes that Novikombank's core
shareholder, state corporation RosTech, committed to replenish
the bank's capital position in 2016.  In early 2016, the
shareholder injected RUB9.8 billion Tier 1 capital and approved
the conversion of RUB17.5 billion Tier 2 capital to equity.  In
the near term the bank is expecting to receive additional RUB15
billion of capital, mainly in the form of Tier 2 capital.

The support package will be linked to RosTech's consolidation of
a 100% stake in the bank.  The upcoming capital injections are
likely to be sufficient restore the bank's capital position and
enable it to fully provision recently identified problem loans.
However, there is a risk that new problem loans may materialize
that are not covered by the approved support package, as well as
a possibility of capital injection delays owing to legal and
regulatory complexity.

During the review, Moody's will assess the developments in asset
quality, as well as the progress with the capital replenishment
plan execution relative to the scale of existing and anticipated
credit losses.

Moody's assessment of Novikombank's ratings is based primarily on
the bank's audited financial statements for 2015 prepared under
IFRS, its unaudited financial statements for 2016 year-to-date
prepared under local GAAP, as well as information received from
the bank.

               WHAT COULD MOVE THE RATINGS DOWN / UP

Novikombank's deposit ratings have low upside potential in the
next 12 to 18 months, given the initiated review for downgrade.
However, Moody's could confirm the bank's long-term ratings at
its current level if the bank manages to stabilise its asset
quality metrics and replenish its capital profile in line with
the approved by RosTech programme.

The rating agency could downgrade Novikombank's ratings if the
bank fails to attract new capital sufficient to replenish eroded
capital metrics, and/or if its currently performing loan book
delivers higher-than-expected credit costs, resulting in further
erosion of the bank's capital profile.

                     PRINCIPAL METHODOLOGIES

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


ROSGOSSTRAKH PJSC: S&P Lowers Counterparty Credit Ratings to B+
---------------------------------------------------------------
S&P Global Ratings lowered its ratings on long-term insurer
financial strength and counterparty credit ratings on PJSC
Rosgosstrakh to 'B+' from 'BB-'.  The outlook is negative.

At the same time, S&P lowered the Russia national scale rating to
'ruA' from 'ruAA-'.

The downgrade reflects S&P's opinion that Rosgosstrakh's
financial risk profile deteriorated to an extremely weak level
due to capital erosion.  Capital adequacy worsened significantly
in 2015 due to high accumulated losses of Russian ruble (RUB) 10
billion (about US$137 million), significant goodwill on the
balance sheet of the company, and increased investments in
equities.  S&P consequently revised its capital and earnings
assessment to weak from less than adequate.  S&P don't see
further material improvements in the capital adequacy in 2016 due
to the aforementioned factors, even in the case of the company's
recently announced additional capital injection.

S&P sees negative pressure on the insurer's capital adequacy,
which was close to the regulatory minimum as of year-end 2015.
This could pose a risk to the insurer in terms of regulatory
intervention going forward.  S&P notes that the solvency margin
has improved to 135% thanks to net profit for the first quarter
of 2016, but S&P considers that further reserve strengthening and
an increased loss ratio could constrain capital.

Contrary to S&P's expectations that 2015 results would be
supported by tariff increase for obligatory motor third party
(OMTPL) insurance, last year marked the company's weakest result
over the five-year average period.  Under S&P's current forecast,
it expects the net loss ratio will be about 75% in 2016.  S&P
expects that a decline of premium in 2016 could dent the
insurer's bottom-line results.  Further developments will largely
depend on the company's ability to manage its insurance
portfolio, cut expenses, and be selective in taking risks.

S&P reassessed the insurer's competitive position as adequate
from strong due to pressure on the operating performance from
OMTPL losses and S&P's projections that the insurer will not
reduce OMTPL below 50% of its portfolio in 2016 based on gross
premiums written.  S&P believes that the dominance of OMTPL in
the insurer's portfolio will limit premium growth in the most
profitable segments on the Russian insurance market, such as
corporate insurance.

S&P continues to regard favorably Rosgosstrakh's broad regional
presence in Russia, its largest agent network, and its top
positions in Russia's insurance market.  As a result, S&P
considers the insurer's business risk profile as fair rather than
vulnerable, because S&P believes that Rosgosstrakh's dominant
size in retail insurance markets would enable the company to
quickly improve its position in case of a stabilization of the
market.

S&P factors into the ratings on Rosgosstrakh its special role as
the dominant provider of obligatory motor insurance to Russian
individuals in a number of Russian regions.  This includes remote
regions, which supports our view of the insurer's extensive
distribution network.  S&P notes that other insurers are not as
broadly present in some remote regions.  In S&P's view, this
creates an incentive for the regulatory forbearance and for the
regulator to provide support using different instruments on a
going-concern basis.

Following the company's strategy to improve underwriting
standards and clean up its portfolio, gross premiums written is
likely to drop by 10% in 2016, in particular in OMTPL.  However,
it could rise in 2017 and thereafter once the macroeconomic
environment becomes more favorable and adverse court decisions
are not weighing on the insurer's results.

S&P thinks that Rosgosstrakh's creditworthiness is pressured by
the insurer's low level of liquid assets relative to capital.
Going forward, this could strain our assessment of liquidity,
which S&P already views as less than adequate.

In S&P's view, Rosgosstrakh's risk position carries high risk.
S&P bases its assessment on the company's high single-name
concentrations, related-party concentrations, and investments in
real estate, as well as the overall credit quality of its fixed-
income portfolio at 'BB'.

The negative outlook on Rosgosstrakh reflects S&P's expectation
that, over the next 12 months, the company's business risk
profile may weaken, there could be further capital erosion that
could hamper the viability of the business model, and that growth
in claims could strain the insurer's already less-than-adequate
liquidity.

A negative rating action could occur over the next 12 months if
S&P was to see a drop in its capital adequacy ratio, the
regulatory solvency margin fell below 100%, or a weakening of the
company's financial flexibility in an absence of supportiveness
from the Rosgosstrakh's owners.  A deterioration of
Rosgosstrakh's business risk position could lead to a negative
rating action.

If S&P considers that the insurer's liquidity becomes a perpetual
constraint on operations, it is likely to cap the rating at 'B-'
at best.

An outlook revision to stable will largely depend on the
company's ability to show at least break-even bottom-line results
over the next 12 months.  This would provide us with more clarity
on the company's ability to stabilize its structural earnings
generation capacity in order to support capital adequacy and
further business growth.



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


CERCANIAS MOSTOLES: EUR34.1MM Fine Prompts Insolvency Filing
------------------------------------------------------------
Reuters reports that Cercanias Mostoles Navalcarnero SA, a unit
of Obrascon Huarte Lain SA, filed for insolvency after the Madrid
Superior Court denied to suspend a fine of EUR34.1 million (US$38
million) imposed by Madrid Community.

OHL said the unit has no bank debt, Reuters relates.

Cercanias Mostoles Navalcarnero SA is directly and indirectly
owned by OHL in 100%.



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


CREDIT SUISSE: Fitch Cuts Additional Tier 1 Notes Rating to BB
--------------------------------------------------------------
Fitch Ratings has downgraded Credit Suisse Group AG's (CSGAG)
Long-Term Issuer Default Rating (Long-Term IDR) to 'A-' from 'A'
and affirmed Credit Suisse AG's (Credit Suisse) Long-Term IDR at
'A'. The Viability Ratings (VR) of both Credit Suisse and CSGAG
have been downgraded to 'a-' from 'a'.

The Outlook on Credit Suisse's Long-Term IDR has been revised to
Stable from Positive. CSGAG's Long-Term IDR Outlook remains
Stable. A full list of rating actions is available at the end of
this rating action commentary.

KEY RATING DRIVERS

VR, IDRs and Senior Debt

Credit Suisse:

The downgrade of Credit Suisse's VR reflects vulnerabilities in
the business model to challenging capital markets as demonstrated
by losses recorded for the two quarters since the group was
recapitalized. The group's business will remain weighted towards
capital markets and is more vulnerable to developments in these
than most banks with VRs in the 'a' category. Fitch expects
execution of strategic restructuring to remain more challenged by
prevailing unfavorable fixed income and equities capital markets
than was the case when it was announced in October last year,
particularly in Europe and Asia. A slowdown in Asia Pacific
(APAC) economic growth will also add negative pressure to the
targeted business model, although the group successfully
accumulated CHF4.3billion net new assets in APAC in 1Q16."

The Global Markets (GM) division's securitized trading and
leveraged finance franchises have negatively impacted group
results and organic capital generation significantly for three
consecutive quarters. The group booked CHF1,076m mark-to-market
losses in 4Q15 and 1Q16, predominantly related to securitized
products, distressed credit, and certain underwriting positions
in the corporate bank and leveraged finance. Total revenue in the
group's securities businesses (GM, Investment Banking and Capital
Markets (IBCM) and the APAC divisions) was 24% lower year-on-year
in 2H15 and 46% lower yoy in 1Q16 and accounted for 50% of group
revenue, excluding the Strategic Resolution Unit (SRU).

The announced exit from distressed credit and European
securitized trading and sharp reduction in these exposures in
4Q15 and 1Q16 should help to improve earnings resilience. The
strategy of growing APAC wealth management is showing signs of
success. However, Fitch expects performance in 2016 to remain
challenged by a combination of subdued client activity in debt
and equity capital markets, larger-than-expected restructuring
costs (CHF1 billion in 2016, in addition to between CHF0.7
billion and CHF1.2 billion in planned costs to achieve savings
between 2016 and 2018) and an initially significant drag from
activities earmarked for wind-down and booked in the SRU.

Fitch said, "The bank's strategy to reduce fixed costs and
capital consumption in capital markets businesses and
discontinuing selected activities should improve earnings
stability in the medium term. The acceleration of the group's
restructuring efforts announced on March 23, 2016 highlights the
need for capital and cost efficiency in challenging market
conditions. The group targets CHF3billion net cost reduction by
end-2018, CHF1billion higher than initially planned. We believe
this is achievable, with the bulk of gross savings coming from
the wind-down of the SRU and larger-than-expected cost reductions
in GM, including workforce reductions and platform
rationalization.

"Escalated deleveraging has enabled capitalization to remain
stable despite booking losses. The group's capitalization and
leverage is in line with global trading and universal bank peers,
including its new target Common Equity Tier 1 (CET1) ratio of
11%-12% for 2016. However, notable double leverage at the legal
entity Credit Suisse (the parent bank) puts its capitalization
behind its peer group. Under revised Swiss 'too-big-to-fail'
proposals, the group will have to meet gone-concern capital
requirements equivalent to its total going-concern capital
requirements (5% of leverage exposure and 14.3% of risk-weighted
assets (RWAs)). We expect the group to reach its 3.5%-4% CET1
leverage target by 2017 (3.3% at end-March), and to comfortably
reach its gone-concern requirements by issuing a further
CHF30billion in total loss-absorbing capacity (TLAC) eligible
holding company senior debt or lower Tier 2 instruments by end-
2019.

"Credit Suisse's VR also reflects Fitch's view that risk controls
are sound, despite publicity around poorly communicated
distressed debt positions. Domestic asset quality is strong, and
the funding and sound liquidity profile remains solid. As with
peers, we expect conduct and litigation risk to continue to
represent material contingent liabilities for the foreseeable
future, although expected settlement of US mortgage matters
during 2016 should remove much of the uncertainty.

"Credit Suisse's IDRs and senior debt ratings are one notch above
the bank's VR because we believe that the risk of default on
senior obligations, as measured by the Long-Term IDR, is lower
than the risk of the bank failing, as measured by its VR."

The one-notch uplift for the Long-Term IDR above the VR reflects
further increase in the bank's buffer of qualifying junior debt
(QJD) combined with senior debt at the holding company. These
buffers could be made available to protect Credit Suisse's senior
obligations from default in case of failure, either under a
resolution process or as part of a private sector solution (such
as a distressed debt exchange) to avoid a resolution action. As a
result, the Outlook on the Long-Term IDR has been revised to
Stable, following the application of the uplift previously
envisaged in the Positive Outlook.

Fitch said, "Absent such a private sector solution, we would
expect a resolution action being taken on Credit Suisse when it
comes close to breaching minimum capital requirements. Currently,
we assume this to be at a CET1 ratio of no lower than 6% (after
high-trigger capital instruments but before low-trigger capital
instruments have been triggered). We then assume that the
regulator would require Credit Suisse to be recapitalized to a
CET1 ratio of above 14.3%. This assumes a restoration of its 10%
minimum CET1 ratio as well as its 4.3% Tier 1 high-trigger
capital buffer (since the bank post-resolution action would not
be in a position to issue capital instruments in the market).

"Our view of the regulatory intervention point and post-
resolution capital needs taken together suggest a junior debt
buffer above 9% of RWAs could be required to restore viability
without hitting senior creditors."

Fitch said, "between March 2015 and April 2016, CSGAG issued
around CHF19.5billion of senior TLAC, which was downstreamed on a
subordinated basis to Credit Suisse's London branch. Together
with existing subordinated debt (excluding legacy subordinated
debt likely to be called), the total buffer amounted to 13% of
RWAs. We believe the revised Swiss going- and gone-concern
capital requirements provide strong and transparent incentives to
ensure that these buffers remain in place.

CSGAG:

Fitch said, "CSGAG's VR is equalised with that of Credit Suisse,
which accounts for 98% of CSGAG's consolidated assets, reflecting
its almost exclusive role as Credit Suisse's holding company.
Double leverage at CSGAG (106% at end-2016 according to our
calculation) is below the maximum 120% threshold, where we would
usually notch the holding company ratings down.

"CSGAG's Long-Term IDR and senior debt rating are one notch below
Credit Suisse's, because the quantum of qualifying junior debt
available as a buffer for holding company senior creditors is
insufficient to warrant a one-notch uplift, and we do not expect
it to become sufficiently large given the single-point-of-entry
resolution strategy focussed on building up TLAC in the form of
senior holding company debt."

In line with the downgrade of the Long-Term IDR, CSGAG's Short-
Term IDR has been downgraded to 'F2' from 'F1', which is the
lower of two options mapping to a Long-Term IDR of 'A-' because
group liquidity is managed and retained at Credit Suisse level
rather than at CSGAG.

TLAC-eligible senior unsecured debt issued by Credit Suisse Group
Funding (Guernsey) Limited and guaranteed by CSGAG is rated in
line with the guarantor's Long-Term IDR.

SUPPORT RATINGS AND SUPPORT RATING FLOORS

Credit Suisse and CSGAG:
Fitch said, "CSGAG's and Credit Suisse's Support Ratings (SR) and
Support Rating Floors (SRF) reflect our view that senior
creditors of both the holding and the operating banks can no
longer rely on receiving full extraordinary support from the
sovereign in the event that Credit Suisse becomes non-viable
largely due to progress made in Swiss legislation and regulation
to address the 'too big to fail' problem for the two big Swiss
banks."

SUBORDINATED DEBT AND OTHER HYBRID SECURITIES

Subordinated debt and other hybrid securities issued by Credit
Suisse, CSGAG and by various issuing vehicles are all notched
down from Credit Suisse's and CSGAG's VRs in accordance with
Fitch's assessment of each instrument's respective non-
performance and relative loss severity risk profiles, which vary
considerably. They have been downgraded by one notch in line with
the downgrades of the Credit Suisse's and CSGAG's VRs.

Subordinated lower Tier 2 debt is rated one notch below the VR
for loss severity, reflecting below-average recoveries.

Low trigger contingent capital Tier 2 notes are rated two notches
below the VR, reflecting loss severity, due to contractual full
and permanent write-down language.

Upper Tier 2 instruments are rated three notches below the VR,
including one notch for loss severity and two notches for
incremental non-performance risk reflecting cumulative coupon
deferral.

High trigger contingent capital Tier 2 notes are rated four
notches below the VR. The notes are notched down twice for loss
severity, reflecting poor recoveries as the instruments can be
converted to equity or written down well ahead of resolution. In
addition, they are notched down twice for high non-performance
risk, as the trigger can result in contractual loss absorption
ahead of non-viability.

Legacy Tier 1 securities are rated four notches below the VR,
comprising two notches for higher-than-average loss severity, and
two further notches for non-performance risk, reflecting that
coupon omission is partly discretionary.

High and low trigger contingent capital Tier 1 instruments are
rated five notches below the VR. The issues are notched down
twice for loss severity, reflecting poor recoveries as the
instruments can be converted to equity or written down well ahead
of resolution. In addition, they are notched down three times for
very high non-performance risk, reflecting fully discretionary
coupon omission.

SUBSIDIARIES AND AFFILIATED COMPANIES

The Long-Term IDRs of Credit Suisse International (CSI) and
Credit Suisse (USA) Inc. (CSUSA) have been downgraded to 'A-'
from 'A' as a result of the downgrade of Credit Suisse's VR.

Fitch said, "CSI is a UK-based wholly-owned subsidiary of Credit
Suisse, and CSUSA is a US holding company directly held by Credit
Suisse Holdings (USA), Inc., the group's US Intermediate Holding
Company (IHC). We view these entities as integral to the group's
business and core to Credit Suisse's strategy and their Long-Term
IDRs are aligned with Credit Suisse's VR and unlike Credit
Suisse's Long-Term IDR, they do not benefit from a one-notch
uplift.

"We would apply the one-notch uplift to a foreign subsidiary's
Long-Term IDR if sufficient qualifying junior debt, including
internal TLAC, was allocated to ensure its recapitalization in a
resolution event. The amount of qualifying junior debt to be
downstreamed to Credit Suisse's foreign subsidiaries is unclear
at this stage. The Positive Outlook on CSUSA's Long-Term IDR
reflects our view that the US authorities will require a sizeable
amount of internal TLAC to be downstreamed to the IHC and we
expect clarity on this within the next two years.

"CSI is incorporated as an unlimited liability company, which
underpins Fitch's view of an extremely high probability of
support from its parent, if needed. However, we have not applied
the one-notch uplift because it is not clear what impact
unlimited liability status would have in protecting senior
creditors in a resolution event.

"Given strong funding and liquidity within the Credit Suisse
group and the intention to keep this as fungible as possible
through the central treasury model at Credit Suisse, we have
affirmed CSI's and CSUSA's Short-Term IDRs at 'F1', the higher of
the two Short-Term IDRs mapping to an 'A-' Long-Term IDR.

"The IDRs of Credit Suisse New York branch are at the same level
as those of Credit Suisse as the branch is part of the same legal
entity without any country risk restrictions. The alignment of
IDRs reflects our view that senior creditors of the branch would
be treated identically to other senior creditors of Credit
Suisse."

RATING SENSITIVITIES

VR, IDRs and SENIOR DEBT

Credit Suisse:

Fitch said, "Credit Suisse's VR is based on our expectation that
continued progress towards its strategic goals should improve the
earnings profile of the bank and optimize capital usage. Should
the group's capitalization materially deviate from its planned
11-12% CET1 ratios for 2016 and gradual improvement after that,
this would put further pressure on the bank's VR. This could
arise as a result of higher-than-expected litigation costs,
lower-than-expected cost savings or insufficient revenue
improvements in its core franchises."

Fitch said, "Despite the planned reduction in GM RWAs and
leverage exposure to $US60 billion (-19%) and $US290 billion
(-8%), respectively, by end-2016, we expect securities businesses
to continue to account for more than 40% of group RWAs, which
limits upside to the VR."

Credit Suisse's Long-Term IDR is sensitive both to changes to the
VR and to unexpected reductions to the size, or changes to the
permanence of the buffer of holding company senior debt and
qualifying junior debt.

CSGAG:

Fitch said, "CSGAG's Long-Term IDR is primarily sensitive to a
change in its VR. The Stable Outlook on CSGAG's Long-Term IDR
reflects our view that capitalization targets will remain
materially on track as the group implements its new strategy. The
Outlook also factors in our view that qualifying junior debt
buffers at the CSGAG level are unlikely to be sufficient to allow
us to notch up the Long-Term IDR from the VR, given Switzerland's
single point-of-entry approach to bank resolution."

TLAC senior notes are rated in line with CSGAG's Long-Term IDR
and are therefore primarily sensitive to a change to the Long-
Term IDR.

SUPPORT RATINGS AND SUPPORT RATING FLOORS

Credit Suisse and CSGAG:

Fitch said, "An upgrade to Credit Suisse's or CSGAG's SRs and an
upward revision to the SRFs would be contingent on a positive
change in Switzerland's propensity to support its banks. This is
highly unlikely in our view, though not impossible."

SUBORDINATED DEBT AND OTHER HYBRID SECURITIES

Subordinated debt and other hybrid capital ratings are primarily
sensitive to a change in the VRs of Credit Suisse or CSGAG. The
securities' ratings are also sensitive to a change in their
notching, which could arise if Fitch changes its assessment of
the probability of their non-performance relative to the risk
captured in the respective issuers' VRs. This may reflect a
change in capital management in the group or an unexpected shift
in regulatory buffer requirements, for example.

SUBSIDIARIES AND AFFILIATED COMPANIES

Fitch said, "CSI's and CSUSA's Long-Term IDRs are sensitive to
changes in the parent bank Credit Suisse's VR. The subsidiaries'
Long-Term IDRs could benefit from a one-notch uplift if we
believe that sufficient TLAC will be pre-positioned (downstreamed
from the parent to the subsidiaries) to recapitalize them
sufficiently in a resolution event.

"Should the US Federal Reserve's rules on the implementation of
the TLAC standard in the US be approved as proposed in October
2015, we expect internal TLAC requirements to become binding for
Credit Suisse's US IHC from January 1, 2019. Once regulatory
requirements on TLAC pre-positioning in the US IHC are in force
and the bank commits to pre-placing these debt buffers, this
could result in CSUSA's Long-Term IDR being upgraded by one notch
and aligned with Credit Suisse's, if we conclude that the buffers
provide sufficient additional protection to CSUSA's senior
creditors."

Similarly, further clarity on internal TLAC pre-positioning for
CSI or clarity favoring support from its Swiss parent in a
resolution scenario due to its unlimited liability status could
lead to a one-notch upgrade of its Long-Term IDR.

The subsidiaries' IDRs are negatively sensitive to changes in the
parent's propensity to provide support.

Credit Suisse's covered bond ratings are not affected by today's
rating actions.

The rating actions are as follows:

Credit Suisse:
Long-Term IDR: affirmed at 'A'; Outlook revised to Stable from
Positive
Short-Term IDR: affirmed at 'F1'
Viability Rating: downgraded to 'a-' from 'a'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'
Senior unsecured debt (including program ratings): affirmed at
'A'/'F1'
Senior market-linked notes: affirmed at 'Aemr'
Subordinated lower Tier 2 notes: downgraded to 'BBB+' from 'A-'
Subordinated notes: downgraded to 'BBB' from 'BBB+'
Tier 1 notes and preferred securities: downgraded to 'BB+' from
'BBB-'

Credit Suisse Group AG
Long-Term IDR: downgraded to 'A-' from 'A'; Outlook Stable
Short-Term IDR: downgraded to 'F2' from 'F1'
Viability Rating: downgraded to 'a-' from 'a'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'
Senior unsecured debt (including program ratings): downgraded to
'A-'/'F2' from 'A'/'F1' Senior market-linked notes: downgraded to
'A-emr' from 'Aemr'
Subordinated notes: downgraded to 'BBB+' from 'A-'
Additional Tier 1 notes: downgraded to 'BB' from 'BB+'
Preferred stock (ISIN XS0148995888): downgraded to 'BBB-' from
'BBB'

Credit Suisse International:
Long-Term IDR: downgraded to 'A-' from 'A', Outlook Stable
Short-Term IDR: affirmed at 'F1'
Support Rating: affirmed at '1'
Senior unsecured debt: downgraded to 'A-'
Commercial paper program: affirmed at 'F1'
Dated subordinated notes: downgraded to 'BBB+' from 'A-'

Credit Suisse (USA) Inc.:
Long-Term IDR: downgraded to 'A-' from 'A', Outlook revised to
Positive from Stable
Short-Term IDR: affirmed at 'F1'
Support Rating: affirmed at '1'
Senior unsecured debt (including program ratings): downgraded to
'A-' from 'A'
Commercial paper program: affirmed at 'F1'
Subordinated debt rating: downgraded to 'BBB+' from 'A-';
withdrawn because Fitch no longer rates any specific issues, so
this rating is no longer considered to be relevant to the
agency's coverage.

Credit Suisse NY (branch):
Long-Term IDR: affirmed at 'A', Outlook revised to Stable from
Positive
Short-Term IDR: affirmed at 'F1'
Senior unsecured debt (including program ratings): affirmed at
'A'
Commercial paper program: affirmed at 'F1'
Senior market-linked notes: affirmed at 'Aemr'

Credit Suisse Group Funding (Guernsey) Limited
Senior unsecured notes (with TLAC language): downgraded to 'A-
'/'F2' from 'A'/'F1'

Credit Suisse Group (Guernsey) I Limited
Tier 2 contingent notes: downgraded to 'BB+' from 'BBB-'

Credit Suisse Group (Guernsey) II Limited
Tier 1 buffer capital perpetual notes: downgraded to 'BB' from
'BB+'

Credit Suisse Group (Guernsey) IV Limited
Tier 2 contingent notes: downgraded to 'BB+' from 'BBB-


SUNRISE COMMUNICATIONS: Fitch Affirms 'BB+ Long-Term IDR
--------------------------------------------------------
Fitch Ratings has affirmed Sunrise Communications Holdings S.A.'s
(Sunrise) Long-Term Issuer Default Rating (IDR) at 'BB+ with a
Stable Outlook. Fitch has also affirmed Sunrise's and Sunrise
Communications AG's senior secured debt ratings at 'BBB-'.

The affirmation reflects Sunrise's ability to maintain the
company's stable share in a competitive Swiss mobile market while
growing scale in the company's fixed-line business. Sunrise has
generated stable cash flows since its IPO in February 2015,
despite a decline in EBITDA (-2.8% LTM to March 2016). However,
spectrum payments and initial dividends will increase leverage by
the end-2016, limiting the company's headroom for the next two to
three years.

Fitch expects Sunrise's funds flow from operations (FFO)-adjusted
net leverage to gradually decline to 3.5x by 2018 from 3.8x at
end-2016 as the company approaches its target leverage of 2.5x
net debt/EBITDA (which maps to approximately 3.5x FFO-adjusted
net leverage). A lack of consistent progress in reducing leverage
over the next 18 months could result in downward pressure on the
ratings.

KEY RATING DRIVERS
Stable Cash Generation
Sunrise has generated stable cash flows following its IPO and
refinancing in February 2015, which substantially brought down
interest costs. A revenue decline of 8% in the LTM to March 2016
has only translated into a 2.8% EBITDA decline as the company is
realising cost efficiencies, principally from a headcount
reduction at end-2015. While part of the lost revenue is related
to low-margin business, competition in mobile, structural
declines in landline voice and roaming price reductions have only
in part been compensated by growth in Sunrise's fixed-line
products.

Expected Leverage Increase
Fitch said, "a final spectrum instalment of CHF110m due in
December 2016 and the first dividend payment of CHF135m should
raise FFO-adjusted net leverage to 3.8x by end- 2016, according
to our forecasts."

Fitch said, "Capex levels (excluding spectrum) are normalizing
after investments peaked at CHF356 million in 2014 and CHF276m in
2015. At the same time, the company is committed to a dividend
pay-out of at least 65% of equity-free cash flow. We therefore
expect Sunrise to gradually reduce FFO-adjusted net leverage to
3.5x in 2018, on the back of stabilizing revenues and improved
margins following restructuring efforts."

Stable Mobile Market Position
Sunrise has a stable, number-two position in the Swiss telecoms
market, which is dominated by the incumbent, Swisscom. Sunrise's
predominant strengths are within the mobile segment, where it has
maintained a stable revenue market share of around 25% and more
recently increased its share of higher average revenue per user
(ARPU) post-paid subscribers. Its position in the fixed line
market is fairly small; however, the company is steadily
improving its market share in this segment, which should help
Sunrise retain its higher-value mobile customers as fixed-mobile
bundles become more important to consumers.

Building Scale in Fixed
Sunrise is starting to stabilize fixed line revenues since its
successful renegotiation for more favorable wholesale terms for
high-speed broadband access in 2014. The company has been
successfully selling IPTV and multi-play bundles, growing its
broadband customers by 6% YoY as of end-March 2016. At the end of
2015, Sunrise accounted for approximately 9.4% and 3% of
broadband and TV subscribers, respectively, in Switzerland (9.3%
and 2% at end-2014). The uptake of bundles has also helped
stabilize fixed voice disconnections although the structural
revenue decline from this segment continues to weigh on overall
fixed line revenues, which declined 4.8% in LTM to March 2016 (-
7.9% in the same period to March 2015).

With over a 50% share and about a 75% share of the broadband and
fixed voice subscriber markets, respectively, Swisscom is a
dominant incumbent in the Swiss market. As an unbundled local
loop provider, Sunrise is vulnerable to competition, mainly from
Cablecom and Swisscom, which have been successful in marketing
bundles with ultra-broadband speeds.

Competitive Mobile Market
Competition in the mobile market has been putting pressure on
ARPUs as promotional activity remains intense, especially in the
lower-value segment of the market, which features attractive
post-pay offers. The acquisition of Salt (previously Orange) by
NJJ Capital in April 2015, a vehicle funded by Xavier Niel, the
founder of Iliad in France, has however not had a disruptive
impact on the market. Although Salt launched year-end promotions,
which were largely followed by the market, Salt's subscriber and
revenue trends have weakened.

Fitch expects some pressure on ARPUs, which are among the highest
in Europe, to persist in the next few years. 4G take-up and
mobile data consumption, however, are seeing some reprieve from a
recent deceleration in ARPU declines. The discontinuation of
handset subsidies initiated by Sunrise in mid-2012 is supportive
of margins and the company has nearly completed the transition to
the unsubsidized model without adverse churn effects.

KEY ASSUMPTIONS

-- Low single-digit revenue declines stabilizing gradually
    through 2018-2019, reflecting a stable market position but
    also continued competition;

-- Gradual EBITDA margin improvement to 33% over the next two to
    three years from 32% in 2016;

-- Capex (excluding spectrum)-to-revenue stable around 12% in
    2016-2018;

-- Dividend payments of 65% equity free cash flow, in line with
    company guidance;

-- Non-recurring cash restructuring costs of approx. CHF11m in
    2016, relating to headcount reduction;

-- No M&A activity.

RATING SENSITIVITIES

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

-- FFO-adjusted net leverage below 3.0x (2015: 3.4x)

-- FFO fixed charge cover above 3.7x on a sustained basis (2015:
    3.8x)

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

-- Failure to reduce FFO-adjusted net leverage to 3.5x on a
    sustained basis;
-- FFO fixed charge cover below 3.2x on a sustained basis;
-- Loss of service revenue market share or expectations of
    negative free cash flow (FCF), excluding spectrum payments,
    in the next two years

LIQUIDITY
Sunrise held cash and cash equivalents of CHF215m at end-March
2016 and benefits from an undrawn revolving credit facility of
CHF200m with a maturity in 2020. Pre-dividend FCF, excluding
spectrum payments in 2015, was CH164m and the company does not
have any debt maturities before 2020.

FULL LIST OF RATING ACTIONS

Sunrise Communications Holdings SA
Long-Term IDR: affirmed at 'BB+' / Stable
Senior secured notes due 2022: affirmed at 'BBB-'

Sunrise Communications AG
Term loan B facility due 2021: affirmed at 'BBB-'



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


BHS GROUP: Credible Bidders Dwindle, Tufnell Among Buyers List
--------------------------------------------------------------
Mark Vandevelde at The Financial Times reports that BHS
administrators are scrambling to find a buyer among a dwindling
band of credible bidders, after several of Britain's wealthiest
high street tycoons stepped away from the talks.

Waning interest from figures including Mike Ashley, founder of
Sports Direct, who had aimed to rescue all 164 BHS stores and the
collapsed retailer's 11,000 employees, has focused attention on
less established buyers that do not have a significant presence
on the UK high street, the FT relates.

According to the FT, Greg Tufnell, who led Mothercare for three
years in the 1990s and has since been involved in a series of
smaller retail ventures, was on May 24 named as a possible buyer
for the collapsed department store chain.

Unlike other possible buyers, who could draw on personal wealth
or bid through companies they control, Mr. Tufnell was said to be
working with third-party financial backers, whose identities have
not been disclosed, the FT notes.

Duff & Phelps, the administrators of BHS, have indicated that any
purchaser must take over the entire store estate, which includes
some prime locations but also about 40 stores whose viability BHS
considered doubtful even at steeply reduced rents, the FT
discloses.

Several property agents with experience of handling the affairs
of collapsed retailers were skeptical that a sale of the entire
estate could be agreed, the FT states.

They added that negotiations were likely to focus on how many
undesirable stores a bidder would have to take on, with buyers
resisting the administrators' efforts to sell as many as
possible, the FT recounts.  Buyers do not want to take on
underperforming stores and have to pay the costs of shutting them
down, the FT relays.

Talks with John Hargreaves, the founder of the Matalan discount
clothing chain who was named as a BHS bidder last week, were said
to have made little progress, the FT notes.

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


DEBENHAMS: S&P Affirms BB- CCR, Outlook Remains Stable
------------------------------------------------------
S&P Global Ratings said that it affirmed its 'BB-' corporate
credit rating and senior issue-level ratings on U.K. department
store operator Debenhams PLC.  The outlook remains stable.

S&P also affirmed the 'BB-' issue rating on the GBP225 million
5.25% senior notes due 2021 (of which GBP200 million is currently
outstanding).  The recovery rating on the notes is unchanged at
'3', reflecting S&P's expectation of meaningful recovery in the
higher half of the 50%-70% range.

The affirmation reflects S&P's view that Debenhams will continue
to gradually improve its operating performance and is likely to
maintain its market position.  It also incorporates S&P's
expectation that the group should continue to moderately improve
its margins and free cash flow generation.

The modest improvement in profitability, together with generally
stable capital investment and shareholder returns, should result
in the group's leverage ratio declining on a reported basis (it
was down to 0.9x on net reported basis at the end of February
2016, from 1.3x in the comparable period in 2015).  That said, on
a S&P Global Ratings-adjusted basis, leverage will continue to
remain over 5x, after accounting for substantial operating lease
commitments.

S&P's assessment of Debenhams' aggressive financial risk profile
continues to reflect the company's high lease-adjusted debt.  The
bulk of Debenhams' adjusted debt (more than 85%) relates to the
capitalization of operating lease commitments.  In S&P's view,
Debenhams' free operating and discretionary cash flow generation
and its relatively low level of on-balance-sheet financial debt
provide it with some level of financial flexibility.

S&P has lowered its assessment of Debenhams' business risk
profile to fair from the lower end of satisfactory as S&P
anticipates that market conditions will continue to remain
extremely competitive. In S&P's view, Debenhams will continue to
face intensified competition from larger retailers such as Marks
& Spencer and Next, and also from various specialty and discount
apparel retailers.  Debenhams is also exposed to seasonality as
well as changing fashion trends, customer tastes, and spending
patterns.

Debenhams' business model benefits from its multi-brand approach,
with a combination of own-brands, international brands, and
concessions on a wide product assortment.  Debenhams'
profitability, which is in line with that of its peer group, is
supported by its exclusive core and designer brands, which
comprise about one-half of its total sales.  Profitability is
also supported by the high volume of products that it sources
directly from suppliers.  S&P's business risk assessment
continues to reflect Debenhams' position as a leading U.K.
department store operator, with a strong mid-market position and
a growing presence online and overseas.

S&P anticipates an improving operating trend in 2016, with the
EBITDA margin improving slightly in our base-case scenario.  S&P
also thinks that Debenhams will be able to generate adjusted
discretionary cash flow (DCF) of more than GBP90 million, after
factoring in capital expenditure (capex) of about GBP130 million
and dividend payments of about GBP45 million.

S&P's base case assumes:

   -- In 2016-2019, assuming the U.K. does not leave the EU, S&P
      expects to see a mild slowdown, with GDP growth averaging a
      still-robust 2.1% per year.  S&P has revised down its
      growth forecasts slightly, owing to a weaker global
      backdrop, uncertainty around Brexit, and weaker
      productivity growth expectations.  Growth will likely
      continue to depend on domestic consumption, with domestic
      demand continuing to benefit from further job creation and
      private-sector wage growth.  A vote to leave the EU could
      undermine this sound growth story.

   -- Stable to a moderate improvement in the top line of less
      than 1% in financial-year 2016 (ending Aug. 31) mainly
      supported by online and international sales growth and
      moderate increase in new space.  Positive but low like-for-
      like (LFL) sales in 2016 as online and international LFL
      sales continue to somewhat offset contraction in U.K.
      stores.  S&P also factors in some benefits from the
      company's stronger focus on increasing sales density within
      the U.K. stores by adding more concessions.  Gross margin
      up by 10 basis points due to increased focus on inventory
      management and promotional strategy to deliver higher full-
      price sell-throughs and lower markdowns.

   -- Slight EBITDA margin improvement due to the continued focus
      on cost discipline across the business.

   -- Broadly stable capex of GBP130 million in financial 2015.

   -- Stable dividends of about GBP40 million-GBP45 million and
      no share buybacks in the near term.

   -- Management's commitment to reduce financial debt and
      deleverage to 0.5x on a reported net debt to EBITDA basis
      over the next few years.

Based on these assumptions, S&P arrives at these credit measures
for financial years 2016 and 2017:

   -- Adjusted debt to EBITDA decreasing to just below 6x and
      then to 5.7x, with adjusted funds from operations (FFO) to
      debt improving to around 10.0%.  Both these core credit
      ratios will however remain in the highly leveraged
      financial risk profile category.

   -- Operating cash flow to debt, free operating cash flow
      (FOCF) to debt, DCF to debt, and EBITDA interest coverage
      should remain in the aggressive financial risk profile
      category, albeit toward the lower end.

   -- Adjusted FOCF of around GBP130 million-GBP140 million, with
      DCF remaining positive at over GBP90 million.

The stable outlook reflects S&P's view that Debenhams should
continue to maintain its competitive position, and moderately
improve its margins and FOCF generation.  This will likely occur
on the back of improved operating performance due to a
combination of better margin management and increased
contributions from the online business.

S&P does not currently anticipate raising the rating in the
medium term.  Nevertheless, S&P would consider an upgrade if, on
the back of sustained improvement in trading, margin improvement,
and capex reduction, Debenhams materially improved its FOCF
generation, leading adjusted FOCF to debt to improve to more than
10%.  An upgrade would also be contingent on S&P's assessment of
the sustainability of this financial profile and management's
financial policy commitment to continue using DCF for debt
reduction.

S&P could lower the rating if Debenhams' business risk profile
comes under strain due to sustained weak trading, accompanied by
a significant drop in sales, trading margins, or market share.

Specifically, S&P could consider a downgrade if Debenhams'
adjusted FOCF and DCF to debt ratios fall below 5% and 2%,
respectively.  In S&P's view, this could occur if cash flow
declines on the back of lower profits, or if there are unexpected
operating setbacks due to a decline in sales, increased
competition, a weakening market share, or brand damage.  S&P
could also lower the rating if Debenhams adopts a more aggressive
financial policy with respect to growth, investments, or
shareholder returns, causing DCF to decline.


DECO 11 - UK: Moody's Affirms B3 Rating on Class A-1B Notes
-----------------------------------------------------------
Moody's Investors Service has affirmed the ratings of two classes
of notes issued by Deco 11 -- UK Conduit 3 p.l.c.

Moody's rating action is:

Issuer: DECO 11 - UK Conduit 3 p.l.c

  GBP220 mil. A-1A Notes, Affirmed Aa3 (sf); previously on
   Sept. 7, 2015, Downgraded to Aa3 (sf)
  GBP74.5 mil. A-1B Notes, Affirmed B3 (sf); previously on
   July 22, 2014, Downgraded to B3 (sf)

Moody's does not rate the Class A2, Class B, Class C, Class D,
Class E, Class F and the Class X Notes.

                         RATINGS RATIONALE

The ratings on the Class A-1A and A-1B Notes are affirmed because
the current credit enhancement levels of 79.1% and 52.5%
(adjusted for NAI amounts) respectively are sufficient to
maintain the ratings despite the moderate increase in Moody's
loss expectation for the pool since last review.  This loss
expectation is driven by the largest loan in the pool, Mapely
Gamma (83% of current pool balance) and the uncertainty around
recovery proceeds and the timing of these proceeds prior to legal
final maturity in January 2020.

Moody's downgraded the Class A-1A notes to Aa3(sf) from Aa1(sf),
on review for downgrade, in September 2015 due to the Account
Bank linkage, and since then the Account Bank has been replaced
with Citibank, N.A., an entity with the Requisite Rating as
defined in the transaction documents.  As such the maximum
achievable rating is no longer limited to Aa3 (sf).

Moody's derives the pool's loss expectation from the analysis of
the default probability of the securitized loans (both during the
term and at maturity) and its value assessment of the collateral.

Realized losses have increased to 1.88% of the original
securitized balance since the last review.  Moody's estimate of
the base expected loss (plus realized losses) is now in the range
of 30-35% of the original pool balance.

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was Moody's
Approach to Rating EMEA CMBS Transactions published in July 2015.

Other factors used in this rating are described in European CMBS:
2016-18 Central Scenarios published in April 2016.

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

Factors that would lead to a downgrade of the ratings are (i)
lower than expected recoveries on the two largest loans
representing 97% of current balance and (ii) delayed timing of
asset disposals for both loans.

Factors that would lead to an upgrade of the ratings are higher
than expected recoveries that are achieved via an accelerated
asset disposal process that increases the likely of note
repayment ahead of the legal final maturity date.

                    MOODY'S PORTFOLIO ANALYSIS

As of the January 2016 IPD, the transaction balance declined by
39% to GPB270.42 million from GPB444.39 million at closing in
December 2006 due to the pay off of 13 loans originally in the
pool.  The notes are currently secured by four first-ranking
legal mortgages over 27 commercial properties ranging in size
from 0.5% to 82.6% of the current pool balance.  Since the last
review, one loan repaid with losses.

The pool has an above average concentration in terms of
geographic location (100% UK) and property type (81% office).
Moody's uses a variation of the Herfindahl Index, in which a
higher number represents greater diversity, to measure the
diversity of loan size.  Large multi-borrower transactions
typically have a Herf of less than 10 with an average of around
5.  This pool has a Herf of 1.42, lower than at Moody's prior
review.

Moody's weighted average LTV on the securitized pool is 210% and
whole loan LTV of 214%, this constrast against the current
underwritten LTV on the securitized pool of 157% (162% whole
loan).  All four loans are in special servicing with Hatfield
Philips and Solutus.

SUMMARY OF MOODY'S LOAN ASSUMPTIONS

Below are Moody's key assumptions for the loans.

Mapeley Gamma Loan - LTV: 205%; Defaulted; Expected Loss 55%-60%.

The key risk factor is a further erosion of recovery values
during the asset disposal process.  The assets are sensitive to
the performance of the property investment market and tenant
demand for secondary offices, availability of liquidity, and the
planning process given that many of the vacant buildings in the
portfolio require change of use to increase investor interest.
Vacancy levels across the 24 office buildings are at 36%, with
seven of the 24 buildings currently vacant.  Moody's expects the
special servicer, Hatfield Philips, to begin disposing of the
assets once the SWAP expires at loan maturity in January 2017, at
which point they will have a three-year tail period to complete
their work-out plan.  The loan makes up 82.6% of the total pool.

Wildmore Northpoint Loan- LTV: 247% (Whole)/ 243% (A-Loan);
Defaulted; Expected Loss 60%-65%.

This secondary shopping centre is performing well with a low
vacancy rate of 7.66% and a weighted average unexpired lease term
of 5.84 years, both of which have improved since last review.  As
such, Moody's would expect the Special Servicer, Solutus, to
market the asset for sale since the asset management plan appears
to be completed.  A key concern is the risk of further value
erosion which could occur if these performance metrics change
direction while the asset lingers in special servicing.  The loan
makes up 14.2% of the total pool.

CPI Retail Management Loan - LTV: 211%; Defaulted; Expected Loss
55%-60%.

This small parade of shops anchored by Sainsburys is now almost
fully let (1.42% vacancy rate) with a weighted average unexpired
lease term of 7.53 years.  Moody's expects the Special Servicer,
Solutus, to market the asset for sale since the asset management
plan appears to be completed.  Moody's key concern is similar to
Wildmore Northpoint.  The loan makes up 2.7% of the total pool.

Investco Estates Loan - LTV:108.08%; Defaulted; Expected Loss
15%-20%.

The key risk factor is the declining remaining lease term
(currently 3.62 years) of this single-let warehouse which will
further erode the value.  The Special Servicer Hatfield Philips
continues to seek out exit opportunities but in the interim will
continue to amortize the debt on a quarterly basis from surplus
rental income.  The loan makes up 0.5% of the total pool.


SANTANDER UK: Fitch Affirms BB+ Subordinated Notes Rating
---------------------------------------------------------
Fitch Ratings has affirmed Santander UK Group Holdings plc's
(SGH) and Santander UK's (San UK) Long- and Short-Term Issuer
Default Ratings (IDRs) at 'A'/'F1', Viability Ratings (VRs) at
'a', and Support Ratings (SRs) at '2'. The IDRs of San UK's
subsidiary, Abbey National Treasury Services plc (ANTS), have
also been affirmed at 'A'/'F1'. The Outlooks are Positive.

KEY RATING DRIVERS

IDRs, VRs AND SENIOR DEBT

Fitch said, "SGH's (the holding company) and San UK's (the
operating company) ratings are analyzed on a consolidated basis.
Their VRs are the same as they are driven by substantially the
same factors and also because we do not see a significant
difference in the likelihood of failure between the two entities.

In both cases, the VRs drive the IDRs. The IDRs of the two
entities are equalized because of the lack of holding company
double leverage at SGH and as yet insufficient down-streamed
senior debt from the holding company to San UK."

Fitch said, "our assessment of the VRs takes into consideration
the group's conservative risk appetite, sound and increasingly
diversified domestic franchise, healthy asset quality, consistent
but still low profitability and sound liquidity and
capitalization. The group has one of the most prudent risk
appetites among similarly rated banks. The ratings also reflect
the ordinary benefits it obtains in terms of expertise, franchise
value and products, of being part of the Santander group (Banco
Santander SA, rated A-/Stable), reducing the limitations of its
fairly narrow geographic presence."

The Positive Outlooks reflect the potential upgrade of SGH's and
San UK's VRs and Long-Term IDRs to 'a+'/'A+' from 'a'/A', should
the group's business model continue to diversify through an
expansion of the retail, commercial and corporate franchises,
while maintaining its conservative risk appetite and healthy
asset quality. Greater diversification should reduce its
dependence on the UK mortgage market and result in better
earnings and profitability without raising its risk profile
materially.

As a leading player in the UK's prime residential mortgage
market, the group has consistently low loan impairment charges
(LICs) although this has been a trend across the market in recent
years and has been helped by benign macroeconomic conditions such
as low and falling unemployment, low base rates, rising house
prices. However, with the increased presence of commercial and
corporate exposures as well as consumer and credit cards, LICs
are likely to increase slightly and possibly become uneven.
However, the quality of corporate borrowers has so far proved to
be healthy. The legacy commercial real estate and transportation
portfolio has been scaled back and at end-2015 the exposure
amounted to just GBP1.7billion.

The bank's reported non-performing loans (NPL) aggregate, which
include impaired loans plus all loans which are 90 days past due,
is a more conservative classification than that used by other UK
banks. NPLs have been falling and now account for just 1.54% of
gross loans (equal to an impaired loan ratio at the same date of
0.8%). The bank aims to reduce this ratio to less than 1.5% over
the medium term and while some increase can be expected with
rising base rates, this target does not appear overly ambitious
given its conservative risk controls.

The bank is mainly funded by customer deposits but also makes use
of wholesale markets, with a significant portion of funding
obtained from secured funding sources such as securitizations and
covered bonds. Its liquidity buffer is strong and is managed
across the group as under a single unit.

In Fitch's view the group's capitalization is in line with the
risk profile, taking into consideration current and expected
regulatory requirements. Current capital levels provide it with
an adequate buffer over and above these requirements and for the
group's projected growth. Leverage remains fairly high, however,
with a reported leverage ratio of 4% at end-2015, despite having
been boosted in 2014 and 2015 by the issuance of additional Tier
1 capital securities.

SUPPORT RATING
Fitch said, "SGH's and Sank UK's SRs reflect Fitch's view that
support from their ultimate parent, Banco Santander, should it
ever be needed, is highly probable. We believe that due to the
strategic importance of the UK business to Banco Santander and
the high reputational risk associated with failure to support UK
operations, Banco Santander would have a high propensity to
provide such support."

The likelihood of providing support, however, is somewhat limited
by Banco Santander's ability to provide such support given that
the group's UK operations comprise a material portion of the
parent's balance sheet. Therefore at the current levels of
ratings, the possibility of such support is not reflected in the
ratings of either SGH or San UK.

SUBORDINATED DEBT AND HYBRID RATINGS

The ratings of SGH's and San UK's subordinated debt and hybrid
securities are notched down from the respective banks' VRs,
reflecting a combination of Fitch's assessment of their
incremental non-performance risk relative to the VR (up to three
notches) and assumptions around loss severity (up to two
notches). These features vary considerably by instrument.

SGH's fixed rate reset perpetual additional Tier 1 capital
securities and San UK's non-cumulative preferred shares are rated
five notches below the respective banks' VRs to reflect the
higher-than-average loss severity risk of these securities (two
notches) and higher risk of non-performance as coupon payments
are fully discretionary (three notches).

Tier 1 securities, including those issued by Abbey National
Capital Trust 1 and guaranteed by San UK, are rated four notches
below San UK's VR to reflect higher loss severity risk (two
notches) and higher risk of non-performance due to discretionary
coupon payments (two notches).

Legacy upper Tier 2 securities are rated three notches below San
UK's VR (one for loss severity and two for non-performance).
Dated Tier 2 instruments are notched down once from the VR for
loss severity.

SUBSIDARY COMPANY - ABBEY NATIONAL TREASURY SERVICES (ANTS)

The ratings of ANTS, the UK group's main debt issuing vehicle,
are equalized with those of SGH and San UK. ANTS's obligations
are guaranteed by San UK and all proceeds are up-streamed to the
parent. Following an announcement of change of issuer in April
2014, San UK will become direct issuer of the group's senior debt
effective from June 1, 2016. ANTS debt rating is affirmed on the
expected substitution.

RATING SENSITIVITIES
IDRs, VRs AND SENIOR DEBT

Fitch said, "The Positive Outlooks on San UK's and SGH's Long-
Term IDRs reflect our view that as the group's business becomes
more diversified through the expansion of the retail, commercial
and larger corporate franchises while its risk appetite remains
moderate, their VRs and hence their IDRs, could be upgraded.
Given the high indebtedness of UK households, the strong focus of
the bank on the UK mortgage lending market, and its leading
franchise, however, we believe that the potential upgrade is
likely to be limited to one notch in the medium-term."

Negative pressure on their VRs, and hence IDRs, would arise if
the group increases its risk appetite, for example, through more
aggressive expansion into commercial lending, or if its
capitalization or asset quality weakens materially, none of which
are expected by Fitch.

Over time, the Long-Term IDR of San UK could be notched up once
from its VR, when sufficient senior debt is down-streamed to it
from its parent company, SGH, in a manner which is subordinated
to other senior creditors of San UK. The uplift would be
influenced by Fitch's assessment of the direct and indirect
linkages between San UK's and Banco Santander's risk profiles,
which typically constrains a subsidiary's VR to no more than
three notches above a parent's IDR. An upgrade of San UK's Long-
Term IDR could take place once there is sufficient quantum of
this down-streamed internal debt to recapitalize the bank to a
viable level without having to bail in other senior debt holders
at San UK.

Fitch said, "SGH's ratings would be downgraded on a material
increase in holding company double leverage, which we do not
expect.

"The group currently expects to keep only the necessary business
within its ring-fenced arm and a material part of its operations
to fall outside its ring fence under the auspices of ANTS. The
VRs of the various group entities could diverge depending on the
credit metrics of the various institutions, which have yet to be
fully clarified. However, in terms of Long-Term IDRs, the
differentiation among the group entities could be significantly
smaller given our expectation that the group will be able to
support its main subsidiaries to some degree."

The group's VRs and IDRs (and those of group subsidiaries) could
be affected by a material change in the operating environment,
for example, a material economic and financial market fallout
from a decision by the UK to leave the EU.

Fitch believes that San UK's reputation and business flows are to
some extent correlated with the overall creditworthiness of the
parent Banco Santander S.A and that consequently there should be
a difference of maximum two notches between the VR of SGH and the
Long-Term IDR of Banco Santander. San UK's ratings are therefore
also sensitive to changes to the parent's IDR.

SUPPORT RATING

The Support Rating is sensitive to both a change in the strategic
importance of the UK banking group to its parent, which is
currently not envisaged by Fitch, and in Banco Santander's
ability to provide such support.

SUBORDINATED DEBT AND OTHER HYBRID SECURITIES

The ratings are primarily sensitive to changes in SGH's or San
UK's VRs. The AT1 securities are also sensitive to a change in
Fitch's assessment of the probability of their non-performance
relative to the risk captured in SGH's VR. This could reflect a
change in capital management or flexibility or an unexpected
shift in regulatory buffers, for example.

SUBSIDIARY COMPANIES - ABBEY NATIONAL TREASURY SERVICES (ANTS)
ANTS's ratings are sensitive to changes in San UK's IDRs.

The full list of rating actions is as follows:

Santander UK Group Holdings plc
Long-Term IDR: affirmed at 'A'; Outlook Positive
Short-Term IDR: affirmed at 'F1'
Viability Rating: affirmed at 'a'
Support Rating: affirmed at '2'
Senior unsecured debt long-term rating, including program rating:
affirmed at 'A'
Senior unsecured debt short-term rating, including program rating
affirmed at 'F1'
Subordinated debt: affirmed at 'A-'
Subordinated notes and fixed rate reset perpetual additional Tier
1 capital securities: affirmed at 'BB+'

Santander UK plc
Long-Term IDR: affirmed at 'A'; Outlook Positive
Short-Term IDR: affirmed at 'F1'
Viability Rating: affirmed at 'a'
Support Rating: affirmed at '2'
Senior unsecured debt long-term rating, including program rating:
affirmed at 'A'
Senior unsecured debt short-term rating, including program rating
and commercial paper: affirmed at 'F1'
Market-linked senior unsecured securities: affirmed at 'Aemr'
Subordinated debt: affirmed at 'A-'
Upper Tier 2 subordinated debt: affirmed at 'BBB'
GBP300 million non-cumulative, callable preference shares,
XS0502105454: affirmed at 'BB+'
Other preferred stock: affirmed at 'BBB-'

Abbey National Treasury Services plc
Long-Term IDR: affirmed at 'A'; Outlook Positive
Short-Term IDR: affirmed at 'F1'
Senior unsecured debt long-term rating, including program
ratings: affirmed at 'A'
Senior unsecured debt short-term rating: affirmed at 'F1'

Abbey National Capital Trust 1
$US1 billion trust preferred securities (ISIN: US002927AA95)
(guaranteed by San UK): affirmed at 'BBB-'


TATA STEEL UK: UK Business Secretary in Talks with Management
-------------------------------------------------------------
Jim Pickard and Michael Pooler at The Financial Times report that
Sajid Javid, the UK business secretary, flew into Mumbai for
talks with the senior management of Tata Steel as the Indian
company gets set to finalize its shortlist of bidders for its UK
steel operations.

Mr. Javid arrived in Mumbai on May 24, one day before Tata's
board was due to meet, the FT relates.  According to the FT, the
Indian conglomerate is edging closer to a sale of its UK steel
business but its decision on a shortlist of bidders -- which it
is set to be whittled down to two -- could come closer to the
weekend and not straight after the board meeting, as previously
thought.

During the discussions with Mr. Javid, Tata did not rule out the
idea of keeping hold of its UK assets, which it bought nine years
ago under the GBP6.7 billion takeover of Anglo-Dutch steelmaker
Corus, the FT notes.

According to the FT, a source familiar with the company's
thinking said the company had come under pressure from the UK
government to stay and was "listening".

Nonetheless, Tata has a long list of demands it would expect to
be met before it would proceed, including big cuts to energy
bills and more action against Chinese steel dumping, the FT
discloses.

Tata said its European arm had a mandate to explore "all options
for portfolio restructuring", including the potential divestment
of the UK business, the FT notes.

According to the FT, a person close to the sales process said six
bids had been received by May 24 out of those who were qualified
to take part.  The government has offered to provide equity and
debt financing to potential buyers and is in talks with unions
and trustees of the British Steel pension fund to try to reduce
the scheme's liabilities, the FT relays.

Tata Steel is the UK's biggest steel company.


* UK: R3 Welcomes Business Rescue Moratorium Proposal
-----------------------------------------------------
Commenting on the government's announcement on May 25 that it is
proposing a 3 month moratorium from creditor action for insolvent
or near-insolvent companies (details here), Andrew Tate,
president of R3, the insolvency trade body, says:

"R3 welcomes the government's proposal to introduce a moratorium
for struggling businesses to give them breathing space from
creditor pressure.  A moratorium could give company directors
more time to turn a business around and negotiate with their
creditors."

"R3 has already published its own proposal for a business rescue
moratorium and is pleased to see the government is following
suit."

"It's very important that any moratorium is practical.  It should
be short, to make it easier to fund and to limit the burden on
creditors, and there should be a licensed insolvency practitioner
in place to look after creditors' interests."

"The government must also avoid repeating the mistakes of
existing moratorium options and ensure the oversight role is
proportionate."

"R3's own recommendation is for a 21 day long moratorium,
extendable to 42 days with court approval and insolvency
practitioner oversight.  This should be long enough for a company
to put in place a rescue plan and for it to bring creditors on
board with what it is trying to do.  A longer moratorium
increases the risk of harm to creditors and could allow companies
in the moratorium to 'drift' rather than sort their problems
out."


* Brexit to Spur More UK & EU Insolvencies, Euler Hermes Says
-------------------------------------------------------------
A UK exit from the European Union without a Free Trade Agreement
(FTA) could lead to a sharp rise in the number of insolvencies
for both the UK and a number of its key European partners,
according to research from Euler Hermes, the worldwide leader in
trade credit insurance.

Its latest Economic Insight "Brexit: what does it mean for
Europe?” sets out two scenarios to assess the impact of a Brexit
on the UK and its major EU trading partners.  Even in a "soft
leave" scenario -- an exit with a new FTA with the EU post-2019 -
-  UK GDP would fall -2.8pp in real terms. Some 1,500 additional
companies would become insolvent during the next three years, in
addition to the 20,300 bankruptcies per year on average currently
predicted.  In a "hard leave" scenario of a Brexit -- if no new
FTA is agreed -- the impact would be much more severe.  UK GDP
would fall -4.3pp in real terms, coupled with a 4.4 per cent rise
in UK bankruptcies by 2019. Some 1,700 businesses beyond the
current forecast would file for bankruptcy.  Ludovic Subran,
chief economist at Euler Hermes, commented: "Without a Free Trade
Agreement being agreed during exit negotiations, we expect the UK
to be in recession by 2019 with significant drops in GDP and
sterling, hampering turnovers and profit margins for UK
companies.

Even if a new trade deal with Europe is put in place, higher
financing costs, divestment and a collapse in exports are set to
create a challenging business environment."

Euler Hermes estimates that a Brexit would have the most
significant impact on the Netherlands, Ireland and Belgium
through their strong exports and cross-investment positions with
the UK.  Across these countries, insolvency rates are forecast to
rise by 2.5 per cent, 2 per cent and 1.5 per cent respectively by
2019 without a new FTA with the EU. France, Germany and the U.S.
would also experience a significant impact.

The report finds that the depreciation of sterling and lower GDP
growth resulting from a Brexit would trigger a fall in UK imports
from across the Eurozone.  As a result, cumulative 2017-2019
export losses in goods and services for the Single Market could
reach EUR23.5 billion in a scenario of no new FTA with Britain.
Germany's export market is expected to be heavily affected,
losing a total of EUR6.8 billion for goods alone over the period,
with EUR2 billion accounted for by automotive manufacturers.
Even with a new FTA, the losses in goods and services would be
EUR17.4 billion.

UK export losses could reach ú30 billion by 2019 or eight per
cent of total goods exports should no new deal be signed -- a gap
which, even when offset by trade with Commonwealth countries,
could take at least 10 years to fill.

                            *********

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

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

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


                            *********


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

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

Copyright 2016.  All rights reserved.  ISSN 1529-2754.

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

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

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


                 * * * End of Transmission * * *