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        T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

           Friday, June 10, 2016, Vol. 17, No. 114


                            Headlines


B U L G A R I A

NATSIONALNA ELEKTRICHESKA: S&P Affirms 'B' CCR, Outlook Negative


C Z E C H   R E P U B L I C

NEW WORLD: OKD Unit Needs CZK1-Bil. State Loan to Keep Operating


F R A N C E

HORIZON HOLDINGS: S&P Affirms 'B+' CCR, Outlook Stable
TECHNICOLOR SA: S&P Raises CCR to 'BB-', Outlook Stable
TEREOS UNION: Fitch Assigns 'BB(EXP)' Rating to EUR400MM Bond


G E R M A N Y

FTE VERWALTUNGS: S&P Puts 'B' CCR on CreditWatch Positive


I R E L A N D

LIGHTPOINT PAN-EUROPEAN 2006: S&P Raises Rating on E Notes to B+
PULS CDO 2007-1: S&P Lowers Ratings on 2 Note Classes to CC


I T A L Y

OFFICINE MACCAFERRI: Fitch Affirms 'B' IDR; Outlook Remains Neg.


K A Z A K H S T A N

KAZKOMMERTS-POLICY: S&P Affirms 'B-' Counterparty Credit Ratings


L U X E M B O U R G

COSAN LUXEMBOURG: Fitch Assigns BB+(EXP) Rating to USD500MM Notes


N E T H E R L A N D S

BABSON EURO 2016-1: Fitch Assigns B-(EXP) Rating to Class F Notes
ROYAL KPN: Fitch Raises Rating on Sub. Capital Secs. to 'BB+'


N O R W A Y

NORSKE SKOGINDUSTRIER: S&P Lifts Corp. Credit Ratings to 'CCC-/C'


R O M A N I A

HIDROELECTRICA SA: Insolvency Hearing Scheduled for June 15


R U S S I A

AGENCY FOR HOUSING: S&P Affirms 'BB+/B' ICRs; Outlook Negative
HOME CREDIT: Fitch Affirms 'B+' IDRs & Revises Outlook to Stable


S P A I N

GRUPO ISOLUX: Seeks Standstill Period for Restructuring Plan


U K R A I N E

METINVEST BV: June 28 Scheme of Arrangement Vote Set


U N I T E D   K I N G D O M

BHS GROUP: Dominic Chappell Faces MPs in Probe Over Collapse
INTELLIGENT ENERGY: Seeks Approval of GBP30MM Loan, CEO Resigns


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B U L G A R I A
===============


NATSIONALNA ELEKTRICHESKA: S&P Affirms 'B' CCR, Outlook Negative
----------------------------------------------------------------
S&P Global Ratings affirmed its 'B' long-term corporate credit
rating on Bulgarian electricity utility Natsionalna Elektricheska
Kompania EAD (NEK).  The outlook is negative.

The affirmation reflects that recent regulatory reforms contained
NEK's year-end 2015 losses, as well as S&P's expectation that NEK
will return to profit in 2016.  Among the reforms is the creation
of an electricity system security fund, where generators
contribute 5% of profits every month.  S&P understands that the
security fund and the revenues from auctions for selling CO2
emissions allowances are ultimately dedicated to covering NEK's
accumulated deficit, and ensuring the Bulgarian electricity
sector's more sustainable functioning.  The affirmation also
reflects the recent settlement of trade payables to two thermal
power plants -- a precondition for lowering prices under long-
term purchase power agreements.

NEK was able to settle the overdue payables thanks to a
shareholder loan received from its parent, BEH, mirroring the
terms of BEH's short-term bridge loan facility.  S&P treats this
shareholder loan as debt.  A key risk is that BEH could struggle
to refinance the bridge loan.  A failure to achieve a more
sustainable capital structure could potentially lead to a
liquidity problem at BEH in the short term.  This risk is
partially mitigated by the Bulgarian energy sector's overall
improving fundamentals.  S&P now expects NEK's deficit to be
fully eliminated at year-end 2016 and BEH to be able to improve
its credit ratios despite its higher debt levels.

"Although we do not rate BEH, we factor its credit quality into
our rating on NEK.  We regard BEH as a government-related entity.
We expect that BEH will be able to meet the interest coverage
covenant on its existing bond and on its new bridge loan
facility. Our assessment balances the group's improving financial
metrics against its further deteriorating cash cushion, its weak
management and governance, and its sizable contingent risks.  We
assess the likelihood of extraordinary state support as moderate,
reflecting the government's refusal to provide a state guarantee
for the new bridge loan, but partly offset by some evidence of
government support such as the approved dividend waiver for 2016-
2018 and the government's active role in enacting legal and
regulatory changes.  Our assessment of BEH's group credit profile
(GCP) is 'b+', factoring in potential extraordinary state
support," S&P said.

Despite the recent settlement of overdue payables, S& still
thinks NEK's financial position remains unsustainable in the long
term and its stand-alone capacity to meet its financial
obligations mainly depends on how quickly changes in regulatory
conditions will translate into positive cash flow generation.
However, S&P believes NEK may avoid default on its minimal
external debt obligations over the next 12 months because S&P
anticipates timely financial support from BEH.  S& continues to
regard NEK as a strategically important subsidiary of BEH.  S&P
consequently factors two notches of uplift from NEK's 'ccc+'
SACP.  S&P's rating on NEK is capped at one notch below the 'b+'
GCP.

The negative outlook reflects that S&P could downgrade NEK in the
short term because the company remains highly vulnerable on a
stand-alone basis.  The government's energy reforms may take
longer to fully materialize, which could result in a liquidity
shortfall at BEH and thereby undermine BEH's ability to provide
timely support to NEK.

S&P could lower the rating on NEK if BEH is unable to refinance
the bridge loan in the short term, which could signal that the
capital markets' perception of BEH is deteriorating.
Furthermore, S&P could lower the rating if NEK does not return to
profit in 2016 on the back of the introduced reforms.

S&P may also lower the rating if NEK accumulates further power
tariff deficits or mounting overdue payables or if parental
support from BEH diminishes.

S&P could revise the outlook to stable if the reforms address the
structural flaws in the Bulgarian power system and enable swift
turnarounds in NEK's earnings, liquidity, and credit ratios.

S&P could also take a positive rating action on NEK if S&P
believes that the government's willingness and ability to provide
extraordinary support, either directly or indirectly through BEH,
has strengthened.



===========================
C Z E C H   R E P U B L I C
===========================


NEW WORLD: OKD Unit Needs CZK1-Bil. State Loan to Keep Operating
----------------------------------------------------------------
Jason Hovet at Reuters reports that Czech Industry Minister
Jan Mladek said on June 8 Czech coal miner OKD, the insolvent
unit of New World Resources (NWR), urgently needs a state loan of
up to CZK1 billion (US$42.1 million) to keep operating.

According to Reuters, Mr. Mladek said in a statement that a
state-backed loan was the only option for OKD to secure financing
to keep operating this month.

OKD, a major employer in the Czech Republic's industrial
northeast, was declared insolvent by a court in May after its
owners failed to secure government aid to help it through a sharp
fall in global coal prices, Reuters recounts.

With around 13,000 jobs at risk, the government is now looking to
keep the miner operational for some time, Reuters says.

Mr. Mladek, as cited by Reuters, said the company needed
operating capital of CZK400 million along with CZK280 million for
mining operations until the end of the year.  He said it should
also hold another CZK320 million for reserves, Reuters notes.

Mr. Mladek was due to discuss the loan with Finance Minister
Andrej Babis on June 8, after Mr. Babis met OKD management and
labor union officials on June 7, Reuters relays.

After the June 7 meeting Mr. Babis said he would look into the
possibility of extending a state loan and cited management
estimates of needing up to CZK400 million, Reuters relates.

A Czech court last month issued a preliminary injunction taking
away NWR's control over OKD and handing it to a board of
creditors, Reuters recounts.

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



===========
F R A N C E
===========


HORIZON HOLDINGS: S&P Affirms 'B+' CCR, Outlook Stable
------------------------------------------------------
S&P Global Ratings said that it had affirmed its 'B+' long-term
corporate credit rating on Horizon Holdings I (Verallia), the
France-based financial holding company for glass packaging
manufacturer Verallia.  S&P also affirmed the 'B+' long-term
corporate credit rating on Verallia's finance subsidiary,
Verallia Packaging S.A.S. (formerly Horizon Holdings III S.A.S.).
The outlook on both companies is stable.

S&P also affirmed its 'B+' issue rating on the EUR800 million
senior secured notes (including the proposed EUR500 million tap)
issued by Verallia Packaging S.A.S, the up to EUR250 million
revolving credit facility (RCF; previously EUR200 million), and
the EUR1.075 billion term loan B (previously EUR1.337 billion).
The recovery rating is '3', reflecting S&P's expectation of
meaningful recovery in the lower half of the 50%-70% range for
the secured lenders in the event of a payment default.

S&P also affirmed its 'B-' issue rating on the EUR225 million
senior unsecured notes issued by Horizon Holdings I (Verallia),
two notches below the corporate credit rating on Horizon Holdings
I (Verallia).  This reflects S&P's recovery rating of '6' and its
expectation of negligible recovery (0%-10%) for the unsecured
noteholders in the event of a payment default.

The issue and recovery ratings on the proposed senior secured
notes are based on preliminary information and are subject to the
successful issuance of these notes and S&P's satisfactory review
of the final documentation.  S&P expects the documentation of the
tap issuance to be fully compatible with the existing notes,
without changes in definitions, terms, baskets and covenants.

The affirmation follows the announcement that Horizon Holdings I
(Verallia) will raise an additional EUR500 million of senior
secured notes and use the funds to repay EUR262 million of its
term loan B and repay EUR230 million of the share premium
contributed to the company.  The transaction will result in an
increase of EUR238 million of debt and, hence, weaken credit
metrics.  However, S&P thinks that the company has potential to
increase earnings in the coming years and therefore also improve
credit metrics gradually back to the previous level with S&P
Global Ratings-adjusted funds from operations (FFO) to debt
toward 13% and EBITDA toward 5.0x.  As a result, S&P has affirmed
its 'B+' corporate credit rating on Verallia.

S&P's assessment of Verallia's business risk profile is
constrained by its relatively undiversified product focus on
glass packaging, a history of operational issues that has
resulted in recurring margin pressure, and its high geographic
concentration in Europe (where four countries contribute around
80% of sales). These constraints are partly mitigated by its
leading market positions in its core European markets and
longstanding relationships with a broad and diversified customer
base.

S&P still considers Verallia's financial risk profile to be on
the higher end of S&P's highly leveraged category and
consequently continue to apply a one-notch uplift under the
comparable ratings analysis modifier.  While S&P views the
currently proposed transaction as aggressive, it thinks that it
is not as aggressive as other deals where S&P sees debt to EBITDA
well above 6.0x.

The stable outlook reflects S&P's belief that the growth
environment that currently benefits Verallia's main markets
should continue beyond 2016, resulting in moderate volume growth
and stabilizing prices.  S&P also expects Verallia to increase
margins through its internal operational improvement program and
that this will result in gradually improving credit metrics over
the coming 12-24 months.

S&P could lower the ratings if margins did not improve to the
extent S&P forecasts in its base case.  S&P thinks that this
would result in weaker cash flow generation and, hence, weaker
credit metrics with a high risk of debt to EBITDA remaining at
more than 5.5x and FFO to debt of less than 10%.

Rating downside could also stem from debt-funded acquisitions or
any additional shareholder returns.  S&P could also consider
lowering the ratings following a deterioration of S&P's
assessment of Verallia's liquidity profile, although this is
unlikely in the coming years due to the long-dated debt maturity
profile.

S&P believes that the likelihood of an upgrade is limited at this
stage, because of Verallia's high tolerance for relatively
aggressive financial policies and high leverage, owing to the
group's financial sponsor ownership.  An upgrade is therefore
more likely to be driven by an upward reassessment of the
company's business risk profile.  This could be a result of a
sustained improvement in profitability metrics, in particular
return on capital over 13% and a track record of low earnings
volatility.


TECHNICOLOR SA: S&P Raises CCR to 'BB-', Outlook Stable
-------------------------------------------------------
Standard & Poor's Ratings Services said that it raised to 'BB-'
from 'B+' its long-term corporate credit rating on France-based
technology company Technicolor S.A. and its subsidiary Thomson
Licensing SAS.  S&P affirmed its 'B' short-term corporate credit
rating on Technicolor.  The outlook is stable.

At the same time, S&P also raised its issue rating on the senior
secured term loans borrowed by Technicolor's Luxembourg-based
special-purpose vehicle Tech Finance & Co S.C.A. to 'BB-'from
'B+'.

S&P also raised its issue rating on the corresponding loan notes
issued by Technicolor to 'BB-' from 'B+'.  The recovery rating
remains at '3', indicating S&P's expectation of meaningful
recovery (50%-70%; higher half of the range) in the event of a
default.

The upgrade reflects S&P's view that Technicolor will
successfully integrate the acquisitions it closed in 2015.  S&P
understands that cost reduction plans are on track, and S&P views
positively that management recently revised its cost synergies
anticipation to EUR130 million (from EUR100 million) by 2018, for
the connected home segment.  As a result, S&P thinks recent
acquisitions will support revenue and EBITDA growth as we expect
them to offset the planned MPEG-LA patent license revenue and
EBITDA drop (contributing EUR60 million to EBITDA for the last
time in 2016).

"Our assessment of Technicolor's business risk profile is driven
by the integration process that Technicolor will go through over
the next two years in order to offset the planned phase-out of
the MPEG-LA license pool and the gradual but structural decline
of the DVD business.  We also factor in the significant amount of
synergies the group will have to achieve in order to compensate
for the decline in margins coming from the loss of a highly
profitable MPEG-LA deal and the integration of lower margin
businesses (except for The Mill).  However, we expect to see a
positive track record in achieving synergies targets, containing
restructuring costs and ultimately successfully integrating the
acquired assets.  But, we believe that, for the time being, the
acquisitions only have an incremental impact on our assessment of
Technicolor's business risk profile," S&P said.

"Technicolor closed the acquisition of Cisco Connected Device
(CCD) in November 2015 and we forecast connected home revenues
will approximately double in 2016, while revenue contributions
from this segment will rise to 57% from about 40% in 2015.  The
acquisition materially increases Technicolor's size and market
shares to about 14% from 7%.  However, it remains significantly
behind the market leader Arris Group Inc., and currently has
little exposure to the higher growth network and cloud equipment
segments of the sector.  Our forecasts, in line with management
guidance, include a significant amount of synergies in 2018,
representing about 20% of group consolidated EBITDA.  Despite
execution risk, we believe reported margins for the connected
home segment could exceed 10% in 2018, from about 5% in 2015,"
S&P noted.

In Technicolor's entertainment services segment, S&P believes the
gradual long-term shift away from the DVD business will be only
partly offset by an improved product mix that favors the more
profitable Blu-ray format and by a stronger competitive position
in visual effects following the acquisition of The Mill.  S&P
therefore expects revenues from the segment to start declining by
about 4% a year from 2017.  However, S&P expects that the
segment's margins will improve from 11.5% in 2015 to almost 15%
in 2018, on a better mix in the DVD business and cost reduction,
while cash flow generation will remain strong.

With the planned phase-out of MPEG-LA revenue contribution, the
technology segment will also undergo significant change over the
next few years.  S&P understands that the group continues its
effort to replace these revenues by developing and licensing its
large and diverse portfolio of patents.  However, S&P understands
that the current portfolio comprises smaller and less profitable
deals, which will not last as long as MPEG-LA due to the
shortening of the technological cycle.

"Our assessment of Technicolor's financial risk profile remains
constrained by its substantial gross debt and the potential
volatility of cash flow and ratios.  This is offset by an
adjusted leverage ratio of 2.3x-2.7x and positive free operating
cash flow (FOCF).  We adjust debt for surplus cash, amounting to
50% of the total cash balance and representing the cash held in
France, as we believe this cash is immediately accessible for
debt reduction.  As a result, we expect Technicolor to maintain
adjusted leverage of 2.7x-2.3x over the next two years (mainly
thanks to debt repayment in line with scheduled amortization and
mandatory repayment under the cash flow sweep as reported FOCF
remains strong above EUR200 million).  From 2018, we also
forecast ratio improvements to come from EBITDA growth on the
full-year contribution of synergies and lower restructuring costs
from the 2015 acquisitions.  Although a leverage ratio of less
than 3.0x suggests a stronger financial risk profile, we believe
Technicolor's stronger focus on the connected home and
entertainment services segments may result in more volatile cash
flow and leverage ratios during stress periods.  The connected
home segment may be affected by the unpredictable nature of
capital expenditure (capex) by clients, while entertainment
services are reliant on strong entertainment spending by
consumers and studio or cable companies," S&P said.

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

   -- Revenue will increase by more than 40% in 2016 as a
      consequence of the full-year contribution of assets
      acquired during 2015.  Inorganic growth should partly
      offset the expected decline in the technology business
      following the MPEG-LA phase-out.  S&P expects revenues to
      stabilize globally in 2017 on the declining DVD business
      and the MPEG-LA phase-out, which will only be fully offset
      from 2018;

   -- EBITDA margin will decline from about 14.3% in 2015 to 11%
      in 2016 on the reducing contribution of the high margin
      licensing business and the impact of the acquisitions of
      lower margin CCD and North American assets from Cinram.
      From 2017, margins are expected to slightly rebound because
      S&P expects synergies derived from the integration of
      acquired assets to partly compensate for the decline in the
      licensing and DVD businesses;

   -- Capex in line with management expectations between 2%-3% of
      revenues;

   -- The company will repay debt based on planned mandatory
      amortization of about EUR70 million a year and its 50% cash
      sweep from 2016; and

   -- Technicolor will pay a dividend of EUR25 million-EUR35
      million over the next two years.

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

   -- An adjusted leverage ratio of roughly 2.7x in 2016, but
      reducing toward 2.3x by 2017 mainly on debt repayment; and

   -- FOCF to debt of 20%-25% over the next two years.

The stable outlook reflects S&P's expectation that Technicolor
will successfully integrate the acquired assets and reduce its
debt.  S&P expects adjusted leverage to remain at 2.5x-2.0x and
strong FOCF generation of above EUR200 million on a reported
basis.

S&P could lower the rating if Technicolor's financial risk
profile weakened, with adjusted debt to EBITDA remaining above
2.5x or FOCF falling significantly below EUR200 million on a
sustainable basis, combined with a weaker liquidity position.
This could result from slower debt amortization than S&P
currently forecasts or EBITDA deterioration on difficulty in
integrating acquired assets, achieving expected synergies, or
containing restructuring costs.

S&P could raise the rating once the integration of acquired
assets is complete, assuming no negative deviation in synergies
achieved or restructuring costs incurred.  This could support
stronger credit ratios, for instance adjusted debt to EBITDA
falling sustainably below 2.0x.


TEREOS UNION: Fitch Assigns 'BB(EXP)' Rating to EUR400MM Bond
-------------------------------------------------------------
Fitch Ratings has assigned French sugar company Tereos Union de
Cooperatives Agricoles a Capital Variable's prospective issue of
EUR400 mil. a 'BB(EXP)' senior unsecured rating.  The bond is
being issued through Tereos Finance Group 1.

It has also affirmed Tereos's Long-Term Issuer Default Rating
(IDR) and Tereos Finance Group 1's outstanding EUR500 mil. bond
due 2020 at 'BB'.  The Outlook on the Long-Term IDR is Stable.

The rating affirmation reflects Fitch's view that following a
further profit contraction in FY16 (financial year to March),
Tereos's performance should recover from FY17, supported by a
temporary rebound in European sugar prices, recovering world
sugar prices over the medium term and benefits from the company's
strategy.

The ratings continue to reflect Tereos's weak credit metrics,
which Fitch expects, however, to have bottomed out in FY16 as
well as a strong business profile.  The company maintains a
strong market position, supported by well-invested assets, access
to some of the higher-yielding sugarbeet regions in Europe and
growing diversification in terms of geography and raw materials.
The cooperative ownership profile of Tereos also contributes to
its conservative financial policies.

                         KEY RATING DRIVERS

Strong Business Profile
The IDR is underpinned by Tereos's strong business profile for
the 'BB' category, both in operational scope and position in
commodity markets with potential for long-term growth.  Due to
its strong market shares and cost competitiveness, we expect the
group to benefit from a post-2017 deregulated European sweeteners
market. Geographic and product diversification as well as efforts
to increase efficiency also support Tereos's business risk
profile.

Successful Diversification
Tereos's diversification into the highly cost-competitive
Brazilian sugar market and into cereals through its 70%-owned
subsidiary Tereos Internacional (TI; 67% of FY16 group EBITDA)
should increase resilience against the current commodity down-
cycle.  TI's contribution to group's EBITDA increased 19% yoy in
FY16, supported by increased production capacity and efficiency
measures taken over the past few years in both the sugarcane and
the cereals divisions.  Fitch expects further growth over the
next 4 years, even after taking into account commodity price
volatility.

Although the company's cereals unit revenues and profits (21% of
FY16 group EBITDA), benefitted from low raw materials and energy
costs as well as higher ethanol prices in Europe in FY16, they
remain exposed to a challenging European starch and sweetener
market environment characterized by stagnating demand and
production overcapacity.  However, the unit should see lower
volatility as a result of ongoing cost savings measures, improved
raw materials and geographical diversification (in Brazil and
Asia) as well as an increased sales mix towards higher-margin
products.

European Sugar Price Adjustment
Similar to other European sugar processors, Tereos's European
sugarbeet business has suffered a sharp contraction.  Its EBITDA
dropped in FY16 to EUR146m, which is less than a third of its
FY13 level, following a steep decline in EU quota sugar prices
largely linked to the intervention of the European Commission in
2013.

Positively, European prices are on a recovery path due to the
sector's cutback in production, leading to a rapid drop in stock-
to-use ratios and supporting our expectation that FY17 and FY18
the sugarbeet division's EBITDA should improve.  Fitch expects
sugar prices to decrease again in FY19 as they eventually
converge with international prices, with the removal of the quota
regime in September 2017.  While international sugar prices have
started to show signs of improvement since mid-2015, we
conservatively assume a slow recovery over the rating horizon to
FY20, towards levels that would be below European sugar quota
prices in FY17-FY18.

European Sugar Exports
European sugar processors currently are unable to compensate low
prices with increases in sales volumes due to stagnant European
demand and regulatory constraints on foreign exports until
September 2017.  However, as the third-largest sugarbeet player,
Tereos should, once the cap is lifted, benefit from its ability
to source increased volumes of sugarbeet from some of the most
efficient farmers in Europe and expand its sales volumes in
Europe and via exports.  This volume increase should allow it to
largely compensate the adverse impact on its profits (from FY19)
from the likely price reduction.  As a result, we project an only
mild reduction of EBITDA from Tereos's sugarbeet operations in
FY19.

Expected Profit Rebound
Fitch believes that the FY16 results represent the company's
lowest EBITDA point in the current cycle and expect a profit
rebound on the back of a recovery in sugar prices and efforts to
enhance competitiveness in sugar processing (both in Europe and
in Brazil),.  Fitch also expects growing profit contribution from
the cereals business, due to a better product mix, larger
capacity and higher industrial efficiency.

Fitch expects Tereos's underlying profitability, measured as
readily marketable inventories (RMI)-adjusted EBITDA/gross profit
(thus eliminating price fluctuations), to improve from FY17.
Additionally, once the current volume constraints in its
sugarbeet division are removed, underlying profitability should
gradually recover to pre-FY14 levels of above 40% (26% in FY16).

Expected Improvement of Credit Metrics
Tereos's RMI-adjusted funds from operations (FFO) gross leverage
rose to 6.1x in FY16 (FY15: 5.0x) as a result of reduced FFO and
RMI value.  TI's gross leverage, on the other hand, started to
improve to 6.3x from 7.5x during the same period, due to
recovering profitability.

Although these levels are not consistent with the current IDR,
Fitch expects Tereos's credit metrics to improve from FY17 on a
combination of a modest upturn in commodity prices, an increase
in sugar export volumes and overall a strengthened business
profile. Fitch expects free cash flow (FCF) to turn neutral to
positive from FY19 on a sustained basis and RMI-adjusted FFO
gross leverage to decrease to around 4.0x in FY18, consistent
with levels for a 'BB' rating.

Adequate Financial Flexibility
Tereos's weak credit metrics is partially mitigated by adequate
financial flexibility.  The latter is supported by strict
financial discipline in shareholder distributions and M&A
spending, adequate liquidity management and healthy RMI-adjusted
FFO fixed charge cover throughout the commodity down-cycle.

In the low sugar price environment, cooperative owners have
demonstrated their financial support to Tereos by accepting a
sharp reduction in price complements (which Fitch treats as
dividends) to EUR5 mil. paid cash in FY15 and EUR2 mil. in FY16
from EUR57 mil. in FY14. We assume these will remain subdued so
long as the profitability of Tereos's European sugar business
remains low.

Tereos's internal liquidity score, defined as unrestricted cash
plus RMI plus accounts receivables divided by total current
liabilities, improved to 1.1x in FY16 from 0.7x in FY14 as
management successfully lengthened the group's average debt
maturity profile.  This is consistent with levels for a 'BB'
rating.  Liquidity is further supported by comfortable access to
diversified sources of external funding.  Fitch expects Tereos's
RMI-adjusted fixed charge cover to have reached its low point in
FY16 at 3.0x (TI: 2.7x) and to recover above 4.0x from FY18.
These levels remain comfortable for the ratings.

Parent-Subsidiary Linkage
Despite limited but growing operational and financial
integration, Tereos France's (TF) and Tereos's influential
control as well as their legal and strategic ties with TI are
very strong, making the parent and its subsidiary intrinsically
linked.  Tereos will raise its stake in TI in the coming weeks
once it formally launches its offer to buy out the floating
portion of its shares.

The development of TI has been promoted by Tereos's cooperative
owners through their financial support.  This, together with
Tereos's expected increase in TI's ownership, signals a strategy
to allocate resources towards international diversification while
enabling greater resilience against increasingly volatile
commodity markets.

Senior Unsecured Rating Aligned with IDR
According to preliminary bond documentation, the 2020 EUR500 mil.
senior unsecured notes issued by Tereos Groupe Finance 1 and the
planned notes issue rank pari passu in the group's debt
structure. They are guaranteed on an unsecured basis by Tereos,
and are therefore subject to structural subordination not only to
debt at TF but also at the TI level.  TI's debt is non-recourse
to TF's assets; therefore Fitch excludes it from the amount of
debt ranking above the senior unsecured notes in the payment
waterfall in case of default.

However, due to cross-default provisions linking together the
debt of TI's subsidiaries, TI, TF and Tereos, Tereos's senior
unsecured notes' rating depends not only on TF's and Tereos's
probability of default and the potential level of debt ranking
ahead of them, but also on TI's probability of default.

Average Recovery Prospects
Due to the strong linkages between TF, Tereos and TI, the senior
unsecured notes rating is derived from the consolidated group's
IDR of 'BB'.  Usually, for issuers rated in the 'BB' category (a
transitional territory between investment-grade and highly
speculative), prior-ranking debt constituting 2x-2.5x EBITDA
indicates a high likelihood of subordination and lower recoveries
for unsecured debt.

As Fitch expects a recovery in EBITDA from the sugarbeet
business, Fitch believes the level of senior secured (or other
form of prior-ranking) debt leverage at TF is unlikely to rise
beyond 2.0x within the next three years.  Fitch believes TF (or
Tereos) is unlikely to increase its debt to support other group
entities.  In addition, existing committed debt ranking ahead of
the senior unsecured notes relates to TF's EUR400m revolving
credit facility (RCF), which exclusively funds working capital
needs throughout the year.  Based on the company's historical
intra-year working capital needs, average intra-year outstanding
RCF amounts are unlikely to rise beyond 2.0x TF's EBITDA.
Therefore the senior unsecured notes are rated at the same level
as the group's IDR.

                           KEY ASSUMPTIONS

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

   -- Annual increase in revenues in the mid-single digits,
      driven by recovering sugar prices (in FY17 and FY18 in
      Europe and, more slowly, towards FY20 globally) and growing
      volumes from all of the group's businesses

   -- Gradual EBITDA margin improvement towards 12% in FY20
      (FY16: 10%) driven by higher capacity utilization rates, a
      better product mix, improved cost competitiveness, and to a
      lesser extent, recovering international sugar prices

   -- Average annual capex of approximately EUR390 mil. between
      FY17 and FY18 as the group continues to invest in its cost
      base and in production capacity, before falling to EUR300
      mil. in FY20

   -- Price complements (dividends) paid to cooperative members
      to remain at negligible levels.

   -- Mildly negative annual FCF over FY16-FY18, before turning
      consistently positive from FY19.

   -- Minor M&A disbursements including outflow for the planned
      minority buy-out at TI in FY17

                        RATING SENSITIVITIES

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

   -- Strengthening of profitability (excluding price
      fluctuations), as measured by RMI-adjusted EBITDAR/gross
      profit, reflecting reasonable capacity utilization rates in
      the sugarbeet business and overall increased efficiency

   -- At least neutral FCF while maintaining strict financial
      Discipline

   -- FFO gross leverage (RMI-adjusted) consistently below 3.5x
      at Tereos group level and 4.0x at TI level.

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

   -- Inability to sustainably maintain cost savings derived from
      efficiency programs or excessive idle capacity in
      different market segments, leading to RMI-adjusted
      EBITDAR/gross profit remaining weak

   -- Inability to return consolidated FFO to approximately
      USD0.5 bil. (FY16: USD0.3 bil.) and to improve
      profitability and cash flow generation

   -- Reduced financial flexibility as reflected in FFO fixed
      charge cover (RMI-adjusted) falling below 3.0x,

   -- FFO gross leverage (RMI-adjusted) above 4.5x at Tereos
      group level (5.0x at TI level) on a sustained level.



=============
G E R M A N Y
=============


FTE VERWALTUNGS: S&P Puts 'B' CCR on CreditWatch Positive
---------------------------------------------------------
S&P Global Ratings placed its 'B' long-term corporate credit
rating on Germany-based auto parts manufacturer FTE Verwaltungs
GmbH (FTE) on CreditWatch with positive implications.

At the same time, S&P placed its 'BB' issue rating on the EUR42.5
million super senior revolving credit facility (RCF) and S&P's
'B' issue rating on the EUR263.3 million senior secured notes on
CreditWatch positive.  The recovery ratings remain '1+' for the
RCF and '3' for the senior secured notes, the latter rating
reflecting S&P's expectation of modest recovery (50%-70%) in the
event of a payment default.

The CreditWatch placement follows Valeo's announcement that it
intends to acquire FTE from its private-equity owner, Bain
Capital Private Equity.  The transaction values FTE at EUR819
million and is subject to regulatory approvals, which are
expected to be completed in fourth-quarter 2016 or first-quarter
2017.

S&P expects that FTE's credit profile may benefit from the
acquisition by financially stronger Valeo.  S&P would need to
assess FTE's strategic importance for Valeo to form S&P's opinion
of FTE's credit quality post the transaction.

The documentation for FTE's senior notes contains a change-of-
control clause that is triggered if the company is acquired by a
new shareholder.  S&P currently has no information on the
company's capital structure post the transaction.  However,
should the change-of-control clause be triggered, S&P assumes
that the refinancing would be managed in a timely manner by the
new parent.

S&P's current rating on FTE reflects S&P's assessment of its
financial risk profile as highly leveraged and its business risk
profile as fair.

S&P expects to resolve the CreditWatch placement at the close of
the transaction, which S&P understands is likely to occur in
fourth-quarter 2016 or first-quarter 2017.  At transaction close,
S&P would assess any changes to FTE's capital structure and
appraise its status within Valeo.



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


LIGHTPOINT PAN-EUROPEAN 2006: S&P Raises Rating on E Notes to B+
----------------------------------------------------------------
S&P Global Ratings raised its ratings on the class C, D, and E
notes from LightPoint Pan-European CLO 2006 PLC and removed them
from CreditWatch, where they were placed with positive
implications on April 1, 2016.  At the same time, S&P affirmed
its 'AAA (sf)' rating on the class B notes from the same
transaction.

The rating actions follow S&P's review of the transaction's
performance using data from the April 21, 2016, trustee report.

The upgrades reflect the transaction's EUR114.39 million in
collective paydowns since S&P's June 2014 rating actions, which
have paid off the class A notes and paid the class B notes down
to 78.55% of their original balance.  These paydowns resulted in
improved reported overcollateralization (O/C) ratios since the
April 2014 trustee report, which S&P used for its June 2014
rating actions:

   -- The class A/B O/C ratio improved to 328.59% from 142.80%.
   -- The class C O/C ratio improved to 180.98% from 123.71%.
   -- The class D O/C ratio improved to 125.83% from 109.44%.
   -- The class E O/C ratio improved to 109.92% from 103.75%.

The collateral portfolio's credit quality has improved since June
2014.  Collateral obligations with ratings in the 'CCC' category
decreased to the EUR1.16 million reported as of the April 2016
trustee report from the EUR1.81 million reported in the April
2014 trustee report.  Over the same period, the par amount of
defaulted collateral decreased to zero from EUR3.52 million.

The affirmation reflects S&P's view that the credit support
available is commensurate with the current rating level.

The ratings on the class D and E notes were driven by the
application of the largest-obligor default test, a supplemental
stress test S&P initially introduced as part of its 2009
corporate criteria update.

The transaction holds a majority of euro-denominated collateral.
However the transaction also has exposure to U.S. dollar- and
British pound sterling-denominated collateral and has a number of
hedges to address interest rate risk, as the liabilities are all
euro-denominated classes.

S&P's review of this transaction included a cash flow analysis,
based on the portfolio and transaction as reflected in the
aforementioned trustee report, to estimate future performance.
In line with S&P's criteria, its cash flow scenarios applied
forward-looking assumptions on the expected timing and pattern of
defaults, and recoveries upon default, under various interest
rate and macroeconomic scenarios.  In addition, S&P's analysis
considered the transaction's ability to pay timely interest
and/or ultimate principal to each of the rated tranches.  The
results of the cash flow analysis demonstrated, in S&P's view,
that all of the rated outstanding classes have adequate credit
enhancement available at the rating levels associated with these
rating actions.

S&P will continue to review whether, in its view, the ratings
assigned to the notes remain consistent with the credit
enhancement available to support them, and will take rating
actions as S&P deems necessary.

CAPITAL STRUCTURE AND KEY METRICS COMPARISON
Class                       April 2014        April 2016
Notional balance (mil. EUR)
A                               109.35              0.00
B                                23.50             18.46
C                                20.50             20.50
D                                20.00             20.00
E                                 9.50              9.50

Coverage tests and collateral quality tests (%)
                            April 2014      April 2016
Weighted average spread           2.88            3.58
Weighted average life             3.70            3.89
A/B O/C                         142.80          328.59
C O/C                           123.71          180.98
D O/C                           109.44          125.83
E O/C                           103.75          109.92
A/B I/C                         950.78         5324.68
C I/C                           760.37         2179.74
D I/C                           546.73          809.28
E I/C                           425.64          463.90

O/C--Overcollateralization test.
I/C--Interest coverage test.

                  CASH FLOW AND SENSITIVITY ANALYSIS

LightPoint Pan-European CLO 2006 PLC

                            Cash flow
       Previous             implied     Cash flow    Final
Class  rating               rating(i)   cushion(ii)  rating
B      AAA (sf)             AAA (sf)    29.01%       AAA (sf)
C      AA- (sf)/Watch Pos   AAA (sf)    25.35%       AAA (sf)
D      BB+ (sf)/Watch Pos   AA- (sf)    1.49%        BBB+ (sf)
E      B- (sf)/Watch Pos    BB+ (sf)    2.66%        B+ (sf)

(i) The cash flow implied rating considers the actual spread,
coupon, and recovery of the underlying collateral.
(ii) The cash flow cushion is the excess of the tranche break-
even default rate above the scenario default rate at the assigned
rating for a given class of rated notes using the actual spread,
coupon, and recovery.

              RECOVERY RATE AND CORRELATION SENSITIVITY

In addition to S&P's base-case analysis, it generated scenarios
in which it made negative adjustments of 10% to the current
collateral pool's recovery rates relative to each tranche's
weighted average recovery rate.

S&P also generated other scenarios by adjusting the intra- and
inter-industry correlations to assess the current portfolio's
sensitivity to different correlation assumptions assuming the
correlation scenarios outlined below.

Correlation
Scenario          Within industry (%)   Between industries (%)
Below base case                  15.0                      5.0
Base case equals rating          20.0                      7.5
Above base case                  25.0                     10.0

                 10% recovery Correlation  Correlation
      Cash flow  decrease     increase     decrease
      implied    implied      implied      implied   Final
Class rating     rating       rating       rating    rating
B     AAA (sf)   AAA (sf)     AAA (sf)     AAA (sf)  AAA (sf)
C     AAA (sf)   AAA (sf)     AAA (sf)     AAA (sf)  AAA (sf)
D     AA- (sf)   A+ (sf)      A+ (sf)      AA (sf)   BBB+ (sf)
E     BB+ (sf)   BB- (sf)     BB+ (sf)     BB+ (sf)  B+ (sf)

                   DEFAULT BIASING SENSITIVITY

To assess whether the current portfolio has sufficient diversity,
S&P biased defaults on the assets in the current collateral pool
with the highest spread and lowest base-case recoveries.

                  Spread      Recovery
      Cash flow   compression compression
      implied     implied     implied     Final
Class rating      rating      rating      rating
B     AAA (sf)    AAA (sf)    AAA (sf)    AAA (sf)
C     AAA (sf)    AAA (sf)    AAA (sf)    AAA (sf)
D     AA- (sf)    AA- (sf)    A (sf)      BBB+ (sf)
E     BB+ (sf)    BB+ (sf)    B+ (sf)     B+ (sf)

RATINGS RAISED AND REMOVED FROM CREDITWATCH POSITIVE

LightPoint Pan-European CLO 2006 PLC
                  Rating
Class         To          From
C             AAA (sf)    AA- (sf)/Watch Pos
D             BBB+ (sf)   BB+ (sf)/Watch Pos
E             B+ (sf)     B- (sf)/Watch Pos

RATING AFFIRMED
LightPoint Pan-European CLO 2006 PLC

Class         Rating
B             AAA (sf)


PULS CDO 2007-1: S&P Lowers Ratings on 2 Note Classes to CC
-----------------------------------------------------------
S&P Global Ratings lowered its credit ratings on PULS CDO 2007-1
Ltd.'s class A-1 and A-2B notes.  At the same time, S&P has
affirmed its ratings on the class B, C, D, and E notes.

The rating actions follow S&P's review of the transaction using
the April 2016 payment date report.

All the assets in the underlying portfolio are in default and the
only source of cash flows for the rated notes is the recovery
proceeds realized on these assets.  The aggregate collateral
balance (defaulted assets carried at a certain recovery rate,
rather than par) of the portfolio is EUR26.82 million, consisting
of 25 individual issuers, 18 senior bonds, and seven subordinated
bonds.  The outstanding principal balance of the class A-1 and
A-2B notes is currently EUR3.59 million and EUR13.8 million,
respectively.  The collateral manager expects additional recovery
amounts of EUR4 million to EUR6 million from the defaulted
issuers.

The legal maturity date of the notes is July 24, 2016.  In light
of the recovery data for this transaction, S&P believes any
additional recovery proceeds from the underlying assets will not
be sufficient to repay the full principal amount due on the class
A-1 and A-2B notes on the maturity date.  Therefore, S&P has
lowered to 'CC (sf)' from 'CCC- (sf)' its ratings on these notes
as S&P believes the notes are highly vulnerable to a payment
default.

At the same time, S&P has affirmed its 'D (sf)' ratings on the
class B, C, and D notes and S&P's 'CC (sf)' rating on the
deferrable class E notes to reflect the fact that any payments to
these classes of notes remain highly unlikely.

PULS CDO 2007-1 is a collateralized debt obligation (CDO)
transaction backed by a static portfolio of senior unsecured and
subordinated bonds issued by German, Austrian, and Swiss small
and midsize enterprises (SMEs).

RATINGS LIST

Class               Rating
            To                From

PULS CDO 2007-1 Ltd.
EUR300 Million Senior And Subordinated Deferrable Floating-Rate
Notes Series 2007-1

Ratings Lowered

A-1         CC (sf)           CCC- (sf)
A-2B        CC (sf)           CCC-(sf)

Ratings Affirmed

B           D (sf)
C           D (sf)
D           D (sf)
E           CC (sf)



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


OFFICINE MACCAFERRI: Fitch Affirms 'B' IDR; Outlook Remains Neg.
----------------------------------------------------------------
Fitch Ratings has affirmed Italy-based building products company
Officine Maccaferri S.p.A.'s Long-Term Issuer Default Rating and
senior unsecured rating at 'B' with a Recovery Rating RR4/50%.
The Outlook remains Negative.

The Negative Outlook reflects Officine Maccaferri's high
leverage, which is outside Fitch's negative rating guidelines,
with funds from operations (FFO) adversely impacted by the
payment of provisioned liabilities and cost of the company's
reorganization.  Although Fitch forecasts modest deleveraging
over the rating horizon to 2018, larger-than-expected investments
and rising restructuring costs could have a detrimental impact on
the ratings.

The senior unsecured bond rating reflects Fitch's recovery
analysis of the company on a going concern basis, using an
industry-consistent multiple applied to an appropriately stressed
EBITDA level, while taking into account the geographical
diversity of the company's assets.  As some of the assets are
domiciled in countries with a 'RR4' cap, Fitch uses a 50%
recovery which derives a Recovery Rating of 'RR4', resulting in
the equalization of the senior unsecured debt rating with the
IDR.

                         KEY RATING DRIVERS

High Leverage

Officine Maccaferri's FFO-adjusted gross leverage at end-2015 of
6.2x is not commensurate with the current ratings.  Fitch
forecasts this figure will decline to around 5.0x in 2019,
assuming cash flow generation will be used for debt repayment.
The impact of the high leverage on Officine Maccaferri's credit
profile is partly mitigated by the company's geographical
diversification and solid market positioning.

Positive Operating Performance

Officine Maccaferri's performance improved for 2015 with record
sales volumes in excess of EUR500 mil.  However, the
restructuring costs had a negative impact on the cash flow
generation.  The company achieved a double digit EBITDA margin,
underpinned by the good operating performance of both the double
twist mesh products and the tunnelling and engineering divisions,
which account for around two third of total revenue and EBITDA.

Ongoing Reorganization

In 2015, Officine Maccaferri initiated a reorganization process
to improve its industrial and operational footprint.  The company
invested in a new production and logistics hub in Slovakia,
relocated a production facility in the US, and shut down a plant
in Italy.  This, together with some restructuring costs, resulted
in a cash outflow of over EUR6m in the past two years.

Fitch expects reorganization expenditure and cash outflows to
reduce considerably in the next one year as the reorganization
process nears its completion, and operational savings to result.
Conversely, additional or rising expenses could impact
deleveraging with an adverse effect on the ratings.

Balanced Geographical Reach

Officine Maccaferri's geographic diversification offsets the
company's weak performance in some countries, notably Russia and
Brazil in the last two years.  Low customer concentration and
some industry diversification also contribute to the resilience
of the business.

Existing Intragroup Relationship

Officine Maccaferri is part of a family-owned conglomerate (SECI
Group).  The company lends around EUR30m to its parent (SECI
S.p.A.).  Fitch does not factor any repayment of the intercompany
loan over the rating horizon, as the loan is not included in our
net leverage calculation.

In a stressed scenario, the intercompany loan would likely be a
source of value for the repayment to the creditors of Officine
Maccaferri.  Although Fitch has not factored into the ratings any
cash support to other group companies, evidence of excessive cash
distributions to its parent could have a negative rating impact.
However, certain measures are in place, including largely non-
recourse debt issuance among its operating entities and
restrictions on upstreaming cash to the parent.

                           KEY ASSUMPTIONS

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

   -- Modest performance in 2016, in line with trading figures
      for the last 12 months to March 2016
   -- Sales to improve beyond 2017, driven by a favorable outlook
      for civil infrastructure
   -- EBITDA margin stable over the rating horizon
   -- Capex around 2% of sales on a sustained basis

                        RATING SENSITIVITIES

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

   -- FFO adjusted gross leverage below 4.0x; on a sustained
      basis
   -- FFO fixed charge cover above 3.5x; on a sustained basis
   -- Free cash flow (FCF) above 2% of revenue; on a sustained
      basis
   -- EBIT margin above 7%; on a sustained basis

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

   -- FFO adjusted gross leverage above 5.0x; on a sustained
      basis
   -- FFO fixed charge cover below 2.5x; on a sustained basis
   -- Negative FCF; on a sustained basis
   -- EBIT margin below 5%, on a sustained basis

                            LIQUIDITY

Despite expected weak FCF generation in the short- to medium-term
and the absence of a committed back-up revolving credit facility,
the liquidity of the company is considered comfortable.  The
group's liquidity position improved significantly following a
EUR200m bond issue in 2014, which was used to re-finance a
significant portion of existing bank debt.



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


KAZKOMMERTS-POLICY: S&P Affirms 'B-' Counterparty Credit Ratings
----------------------------------------------------------------
S&P Global Ratings said that it had affirmed its 'B-'
counterparty credit and financial strength ratings and 'kzBB-'
Kazakhstan national scale rating on Insurance Co. Kazkommerts-
Policy JSC.  The ratings were subsequently withdrawn at
Kazkommerts-Policy's request.  The outlook was stable at the time
of the withdrawal.

The affirmation is based on S&P's view of Kazkommerts-Policy's
vulnerable business risk profile and less-than-adequate financial
risk profile.  S&P combines these factors to derive an anchor,
the starting point for further analyses, of 'bb'.

The business risk profile reflects Kazkommerts-Policy's
competitive position among the top 10 insurance companies in
Kazakhstan, with a small premium base in absolute terms compared
with that of international peers.  In S&P's base-case scenario,
it expects net premium growth to be flat in 2016.  In S&P's view,
Kazkommerts-Policy's capital is sufficient to support further
growth and is a supportive factor to S&P's assessment of the
financial risk profile.

S&P's assessment of management and governance constrains its
rating on Kazkommerts-Policy, and we deduct two notches from the
anchor.

S&P considers that Kazkommerts-Policy remains a strategically
important subsidiary of Kazkommertsbank.  However, S&P do not
factor any explicit support from the parent into S&P's ratings on
Kazkommerts-Policy, because S&P's 'ccc' assessment of
Kazkommertsbank's stand-alone credit profile is lower than that
of its subsidiary.

S&P rates Kazkommerts-Policy one notch higher than the parent
because S&P considers the insurance company to be insulated from
Kazkommertsbank.  This is because the regulatory framework
provides some protection for the insurer in the event of adverse
intervention from Kazkommertsbank.  The framework also includes
constant oversight from the National Bank of the Republic of
Kazakhstan.

At the time of withdrawal, the stable outlook reflected S&P's
view that Kazkommerts-Policy's creditworthiness would remain
intact even in the event of a further deterioration in
Kazkommertsbank's creditworthiness.



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


COSAN LUXEMBOURG: Fitch Assigns BB+(EXP) Rating to USD500MM Notes
-----------------------------------------------------------------
Fitch Ratings has assigned a 'BB+(EXP)' rating to Cosan
Luxembourg S.A's proposed USD500 million senior unsecured notes
due 2026, which will be unconditionally and irrevocably
guaranteed by Cosan S.A Industria e Comercio.  Net proceeds from
this issuance will be fully used to prepay existing debt.  Fitch
currently rates Cosan's Long-Term (LT) Foreign Currency (FC)
Issuer Default Rating (IDR) 'BB+'/Negative Outlook, and its LT
Local Currency (LC) IDR 'BB+'/Stable Outlook.

                        KEY RATING DRIVERS

Cosan's ratings are supported by its strong and diversified asset
portfolio.  Fitch expects this portfolio to provide a robust flow
of dividends to Cosan in order to cover its interest expenses
above 2x and pay a sufficient dividend to support its main
shareholder's (Cosan Ltd.) debt service.  The company's portfolio
benefits from the resilience of activities such as distribution
of natural gas, and the sale of lubricants and fuels.  The share
of the sugar and ethanol (S&E) business over Cosan's pro forma
consolidated EBITDA has stood flat at 33% in 2015, as this
business presented a stable performance despite its inherent
volatility.

The ratings incorporate Cosan's still-high leverage as of
March 31, 2016, although some reduction has been noticed, and the
company benefits from a comfortable debt maturity profile.
Fitch's analysis has also considered the subordination of this
company's debt to the obligations of its main investments, as
access to their cash is limited to dividends received.

Robust Asset Portfolio

Cosan's three main assets and source of dividends are companies
with robust credit quality.  Raizen Combustiveis S.A. (Raizen
Combustiveis; FC and LC IDRs of 'BBB' and 'AAA(bra)') is the
third largest fuel distributor in Brazil, with predictable
operational cash generation.  Despite its more volatile results,
Raizen Energia S.A. (Raizen Energia; rated 'BBB'/'AAA(bra)') is
the largest S&E company in Brazil and as such it benefits from
its large business scale, which somewhat mitigates the current
challenging scenario for the sector.  Companhia de Gas de Sao
Paulo (Comgas; FC IDR 'BB+', LC IDR 'BBB-'/'AAA(bra)') is the
largest natural gas distributor in Brazil, with high growth
potential and predictable operational cash flow.  Fitch's Rating
Outlook on all of their FC IDRs is Negative to reflect the
Negative Outlook on Brazil's sovereign rating.

All of Cosan's businesses reported improved performance in 2015
compared to the previous year.  In 2015, Comgas reported net
revenues at BRL6.6 billion and stable EBITDA margin at 23%, while
Raizen Combustiveis reported net revenues of BRL63 billion in the
fiscal year ended March 31, 2016, comparing favorably to BRL56
billion in fiscal 2015.  Raizen Energia reported a 22% increase
in revenues to BRL11.8 billion in fiscal 2016 and flat EBITDAR
margin at 29% compared to fiscal 2015.  The other two assets
invested in by Cosan are Cosan Lubrificantes S.A. and Radar
Propriedades Agricolas S.A., which add to business
diversification.

High Interest Coverage Expected to Remain

Fitch expects Cosan's investees to receive robust dividend
payments over the next few years, with Cosan receiving around
BRL1 billion in 2016, compared favorably with BRL684 million in
2015.  Raizen Combustiveis should maintain its growing trend in
revenues, with a stable EBITDA margin, while Raizen Energia's
operational cash flow generation should benefit from expected
higher S&E prices and sales volumes.  Comgas distributed
BRL1.2 billion of dividends in the first quarter of 2016 which is
expected to reach BRL1.4 billion at year-end.  Nevertheless,
Fitch estimates Comgas' annual dividends distribution will range
between BRL300 million-BRL500 million from 2017 to 2019.

Cosan's interest coverage should remain above 2x, which is
adequate for the rating category and allows the company to
gradually reduce its debt.  In 2015, the ratio of dividends
received/interest expense was near 2x.  Cosan's access to its
main investees is limited to dividends, as Raizen Combustiveis
and Raizen Energia are jointly controlled by Cosan and Shell.
Comgas is a regulated concession and any intercompany loan to
shareholders must be approved by regulators.

High Leverage for Cosan

Cosan's leverage should remain high on a stand-alone basis, in
our view, despite the lower ratio presented at the end of the
first quarter of 2016.  This decline was due to appreciation in
the BRL and, more important, a robust dividend inflow of BRL730
million in the three-month period ended March 31, 2016.  The
company reported net adjusted debt of BRL5.9 billion and total
dividend inflow of BRL1.4 billion in the last 12-months ended
March 31, 2016, bringing down the ratio of net adjusted debt-to-
EBITDA plus dividends received to 4.9x.  This compares favorably
with the net adjusted debt of BRL7.6 billion and net adjusted
leverage of 12.1x reported in December 2015.

Debt consisted mostly of intercompany loans of BRL4.4 billion,
which represent past bond issuances performed by its fully owned
subsidiaries, and non-voting preferred shares of BRL2 billion.
Although issued by Cosan Luxembourg S.A. (Cosan Luxembourg) and
Cosan Overseas, the associated debt at both entities is
guaranteed by Cosan, which is ultimately responsible for the
payment.

                          KEY ASSUMPTIONS

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

   -- An increased flow of dividends coming from Comgas, Raizen
      Combustiveis and Raizen Energia S.A over the next two
      years, reaching over BRL1 billion per year.

   -- Potential new issuances will only be used to refinance
      existing debt.

                        RATING SENSITIVITIES

Future developments that may, individually or collectively, lead
to a negative rating action include deterioration of the credit
profiles of Raizen Combustiveis, Raizen Energia and/or Comgas and
Cosan's interest coverage by dividends received falling below 2x.
A downgrade of the sovereign rating may also trigger a downgrade
of Cosan's FC IDR and ratings for the associated bond issuances.

Future developments that may, individually or collectively, lead
to a positive rating action include more predictable cash flow
generation at Raizen Energia, and Cosan's interest coverage by
dividends received remaining above 3x on a sustainable basis.

                              LIQUIDITY

Cosan's debt maturity profile is well laddered and is not
expected to pressure the company's cash flows until 2018 when the
BRL850 million notes are due.  As of March 31, 2016, the holding
company had BRL980 million of cash versus short-term debt of
BRL535 million, yielding robust cash-to-short-term debt coverage
of 1.8x. Fitch expects Cosan to receive a robust inflow of
dividends that should enable an adequate repayment capacity for
upcoming interest.  Cosan's liquidity is reinforced by a fully
available committed Stand-by Facility of BRL750 million and the
positive track record of paying dividends.

FULL LIST OF RATING ACTIONS

Fitch rates Cosan and related companies as:

Cosan:
   -- Long-Term Foreign Currency IDR at 'BB+'; Outlook Negative
   -- Long-Term Local Currency IDR at 'BB+'; Outlook Stable
   -- National scale rating at 'AA+(bra)'. Outlook Stable

Cosan Overseas:
   -- Perpetual notes at 'BB+'.

Cosan Luxembourg:
   -- Senior Unsecured Notes due in 2018 and 2023 at 'BB+'.



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


BABSON EURO 2016-1: Fitch Assigns B-(EXP) Rating to Class F Notes
-----------------------------------------------------------------
Fitch Ratings has assigned Babson Euro CLO 2016-1 B.V. notes
expected ratings, as:

  EUR228 mil. class A-1: 'AAA(EXP)sf'; Outlook Stable
  EUR12 mil. class A-2: 'AAA(EXP)sf'; Outlook Stable
  EUR38.5 mil. class B-1: 'AA(EXP)sf'; Outlook Stable
  EUR7.3 mil. class B-2: 'AA(EXP)sf'; Outlook Stable
  EUR22 mil. class C: 'A(EXP)sf'; Outlook Stable
  EUR20.5 mil. class D: 'BBB(EXP)sf'; Outlook Stable
  EUR27.3 mil. class E: 'BB(EXP)sf'; Outlook Stable
  EUR12.8 mil. class F: 'B-(EXP)sf'; Outlook Stable
  EUR41.6 mil. subordinated notes: not rated

Babson Euro CLO 2016-1 B.V., (the issuer) is a cash flow
collateralized loan obligation.

Final ratings are contingent on the receipt of final
documentation conforming to information already received.

                       KEY RATING DRIVERS

'B'/'B-' Portfolio Credit Quality
Fitch expects the average credit quality of obligors to be in the
'B' category.  Fitch has credit opinions or public ratings on all
assets in the identified portfolio.  The weighted average rating
factor (WARF) of the identified portfolio is 30.85 while the
covenanted maximum Fitch WARF for assigning expected ratings is
34.

High Recovery Expectations
At least 90% of the portfolio will comprise senior secured
obligations.  Recovery prospects for these assets are typically
more favorable than for second-lien, unsecured and mezzanine
assets.  Fitch has assigned Recovery Ratings to all the assets in
the identified portfolio.  The weighted average recovery rating
(WARR) of the identified portfolio is 73.84% while the covenanted
minimum Fitch WARR for assigning expected ratings is 67%.

Diversified Asset Portfolio
The transaction contains a covenant that limits the top 10
obligors in the portfolio to 20% of the portfolio balance.  This
ensures that the asset portfolio will not be exposed to excessive
obligor concentration.

Limited Interest Rate Risk
No more than 15% of the portfolio may be invested in fixed-rate
assets while fixed-rate liabilities account for 4.825% of the
target par balance.  Therefore, the transaction is partially
hedged against rising interest rates.

Hedged Non-Euro Asset Exposure
The transaction is permitted to invest up to 20% of the portfolio
in non-euro assets, provided perfect asset swaps can be entered
into.

                        TRANSACTION SUMMARY

Net proceeds from the notes are being used to purchase a EUR400m
portfolio of European leveraged loans and bonds.  The portfolio
is managed by Babson Capital Management (UK) Limited.  The
reinvestment period is scheduled to end in 2020.

The transaction documents may be amended, subject to rating
agency confirmation or noteholder approval.  Where rating agency
confirmation relates to risk factors, Fitch will analyze the
proposed change and may provide a rating action commentary if the
change has a negative impact on the ratings.  Such amendments may
delay the repayment of the notes as long as Fitch's analysis
confirms the expected repayment of principal at the legal final
maturity.

If in the agency's opinion the amendment is risk-neutral from a
rating perspective Fitch may decline to comment.  Noteholders
should be aware that confirmation is considered to be given if
Fitch declines to comment.

Fitch's "Criteria for Interest Rate Stresses in Structured
Finance Transactions and Covered Bonds," dated May 2016, includes
stresses to address the risk of negative interest rates in
structured finance transactions.  European CLOs are unlikely to
be affected by negative interest rates due to the prevalence of
Euribor floors in the European loan market.  Therefore, we
applied the standard (positive) interest rate downward stresses
in our analysis.

                       RATING SENSITIVITIES

A 25% increase in the obligor default probability could lead to a
downgrade of up to two notches for the rated notes while a 25%
reduction in expected recovery rates could lead to a downgrade of
up to four notches for the rated notes.

Fitch published an exposure draft of its Counterparty Criteria
for Structured Finance and Covered Bonds on April 14, 2016.  The
exposure draft serves as the operative criteria report for this
ratings analysis.  Under the exposure draft, a direct-support
counterparty is expected to maintain a Long-Term rating of at
least 'A' or a short-term rating of at least 'F1' in order to
support note ratings of up to 'AAAsf'.  The issuer's account
holder, Elavon Financial Services Limited (Elavon;
AA/Stable/F1+), satisfies the minimum expected ratings threshold
for a direct-support counterparty under the exposure draft
framework.

Fitch's existing counterparty criteria (dated 14 May 2014), as
well as the issuer's governing documents, expect this role to be
fulfilled by an institution with a Long-Term rating of at least
'A' and a Short-Term rating of at least 'F1'.  Elavon has Long-
Term and Short-Term ratings that currently meet these
expectations. Therefore the ratings for class A notes remain
achievable under Fitch's existing criteria.

The framework regarding expectations for qualified investments
has not materially changed between the existing criteria and the
exposure draft


ROYAL KPN: Fitch Raises Rating on Sub. Capital Secs. to 'BB+'
-------------------------------------------------------------
Fitch Ratings has upgraded Netherlands-based Royal KPN N.V.'s
Long-term Issuer Default Rating and senior unsecured rating to
'BBB' from 'BBB-'.  The Outlook on the IDR is Stable.

The upgrade reflects Fitch's view that KPN is on a more
sustainable competitive track within its domestic consumer
market. The position may strengthen over time on the back of
bundled product offerings, network investments and a more
rational fixed line market environment.  This is likely to enable
KPN to sustain its recent stabilization in adjusted group EBITDA,
grow free cash flow (FCF) and maintain leverage and an operating
profile commensurate with a 'BBB' rating.

Fitch expects weakness in the business segment may continue over
the next two to three years.  However, the declines are likely to
have a diminishing impact after 2016 at the group level, as
growth in the consumer division and cost control in network,
operations and IT will enable the business division's EBITDA
declines to be progressively off-set.

                      KEY RATING DRIVERS

Sustainable Position in Consumer Emerging
After a period of decline in its domestic market driven by
intense competition, regulatory pressures and sectoral shifts, we
believe KPN's operational profile and EBITDA trajectory is on a
more sustainable footing.  The combination of investments in
fiber and broadband networks and bundled products offers should
enable the company to compete more effectively in the consumer
market.  Fibre and DSL based technologies are cost effectively
diminishing the broadband speed advantage of cable operator
Ziggo, while product bundling is providing a point of
differentiation from mobile-only operators in certain market
segments.

No Immediate Consolidation Threat
Fitch believes the recently announced merger of Vodafone
Netherlands and Ziggo stands a good chance of receiving
competition and regulatory approval.  The merger will be a form
of market consolidation, removing competition from one wholesale-
based mobile operator and one wholesale-based fixed line
operator. The merger will create an effective duopoly in local
network infrastructure access, which we consider is likely to
create a more rational market environment in the consumer
broadband and fixed line segment (29% of KPN's domestic
revenues), enabling greater control of prices.

Both KPN and Vodafone/Ziggo are defending subscriber and revenue
market shares in the consumer segment that are close to each
other.  Fitch estimates KPN, Ziggo and Vodafone account for
around 80% of total Dutch telecoms market revenue in 2015.  Given
the maturity of the Dutch broadband and mobile market, we believe
that both operators are likely to deploy strategies that optimise
market value rather than drive significant increases in market
share, which may be costly and unlikely to yield a sustainable
increase in incremental FCF.

The competitive dynamics in the Dutch market, in our view, are
more likely to be driven by Tele2 Netherlands' pricing strategy
and segment positioning following its recently launched own
mobile network and how T-Mobile Netherlands chooses to avert the
loss in its mobile market share.

Business Drag Likely to Remain
In 2015, KPN derived 40% of its domestic revenues from its
business segment.  They declined by 9% yoy driven by repricing of
single play mobile services, loss of traditional fixed line voice
revenues, migration to IP based products and macro-economic
pressure on network and IT services.  Management's strategy to
stabilise the decline is having some positive effects.  This has
been to reduce costs and grow multi-play products and new
services such as cloud, IoT and M2M.  However, there is limited
visibility around when the division's EBITDA will stabilize.

Fitch's base case assumes that the business division's decline in
adjusted EBITDA will reduce to 7%-8% yoy in 2016 from 12% in
2015. Thereafter, we assume the rate of decline will continue to
improve but it may take another two to three years before
stabilization is achieved.  However, the declines are likely to
have a diminishing impact post 2016 at the group level as growth
in the consumer division and cost control in network, operations
and IT enables the division's EBITDA declines to be progressively
off-set.

Improving FCF to Support Leverage
KPN's funds from operations (FFO) adjusted net leverage at the
end of 2015 reduced to 3.1x from 4.1x in 2014 primarily driven by
debt reduction following asset disposals and improving operating
FCF. We believe the company has the capacity to maintain leverage
around this level.  This assumes dividend growth in line with
pre-dividend FCF and that KPN continues to receive dividends from
its 15.5% stake in Telefonica Deutschland (TEFD) or that a
leverage-neutral stance is taken on the use of any future sales
proceeds. Dividends from the stake currently have a 0.15x
positive impact on FFO adjusted net leverage.

The ability to maintain a steady leverage profile is supported by
a gradual improvement in KPN's pre-dividend FCF margin to 11%
over the next three years from a projected 9% in 2016.  The
growth in FCF will primarily be driven by stabilizing EBITDA,
reducing capex, minimal cash taxes and a reduction in interest
costs as the company reduces debt.

Mobile Market Risks Manageable
Fitch expects the Dutch mobile market will continue to remain
competitive following the launch of Tele2's mobile network.
Fitch estimates that at the end of 2015 Tele2 had a subscriber
market share of 4% to 5%.  The low market share remains a risk
for KPN's credit profile in the event Tele2 takes a prolonged,
aggressive approach to its pricing policy driven by a potential
short-term need to fill network capacity.  To date, the greatest
impact has been in the lower value, price sensitive segments of
the market. This may spread to other segments over time.

In the medium to long term, Tele2's suboptimal spectrum holdings
may begin to restrain its operational flexibility without further
investment.  In the meantime, KPN has a number of levers to
minimize the impact of increased competition.  These include the
ability to offer triple and quad play services over its own
network, maintain investments in network quality, increase the
value of its bundled services, raise prices in the fixed line
portfolio and maintain subscriber acquisition and retention costs
at elevated levels while reducing other operational costs.

                          KEY ASSUMPTIONS

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

   -- Revenue change of -3.5% in 2016 gradually improving to -1%
      by 2018.

   -- Broadly stable EBITDA of EUR2.4bn, driven by a 2.5
      percentage point improvement in EBITDA margin between 2016
      and 2018.

   -- A stable capex to sales ratio of 17.5% to 18% excluding
     spectrum.

   -- A dividend pay-out ratio of 70% of pre-dividend FCF
      (excluding any dividend proceeds from TEFD)

   -- All TEFD dividends received are passed through to
      shareholders.

                        RATING SENSITIVITIES

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

   -- Revenue and EBITDA growth across all divisions combined
      with strengthened operating profile and competitive
      capability.

   -- Expectations of FFO adjusted net leverage sustainably below
      3.0x.

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

   -- A deterioration in KPN's domestic operations that result in
      declining EBITDA.

   -- Expectations of FFO adjusted net leverage remaining above
      3.5x on a sustained basis.

   -- Aggressive shareholder remuneration policy that is
      perceived by Fitch not be in line with company's operating
      risk profile.

FULL LIST OF RATING ACTIONS

  Long-term IDR: upgraded to 'BBB' from 'BBB-', Outlook Stable
  Senior unsecured debt: upgraded to 'BBB' from 'BBB-'
  Subordinated capital securities: upgraded to 'BB+' from 'BB'



===========
N O R W A Y
===========


NORSKE SKOGINDUSTRIER: S&P Lifts Corp. Credit Ratings to 'CCC-/C'
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it has raised its
long- and short-term corporate credit ratings on Norwegian paper
producer Norske Skogindustrier ASA (Norske Skog) to 'CCC-/C' from
'SD' (selective default).  S&P has subsequently placed the long-
term rating on CreditWatch with developing implications.

At the same time, S&P raised its issue rating on the company's
senior secured notes to 'CCC-' from 'CC'.  S&P revised the
recovery rating to '4' from '3', indicating S&P's expectation of
recovery in the lower half of the 30%-50% in the event of a
default.

S&P also affirmed its 'C' issue rating on the company's senior
unsecured notes.  S&P's '6' recovery rating on these notes
remains unchanged, indicating negligible (0%-10%) recovery
prospects.

S&P assigned a 'C' issue rating and '6' recovery rating to Norske
Skog's new senior unsecured exchange notes maturing in 2026.

S&P placed all the issue ratings on CreditWatch with developing
implications.

The rating actions follow S&P's review of Norske Skog's liquidity
position after S&P lowered the rating to 'SD' on April 13, 2016,
following the company's announcement that it had completed its
debt exchange offer.

The 'CCC-' rating takes into account S&P's view that it is highly
uncertain whether Norske Skog will be able to repay the
EUR74 million of senior unsecured notes when they mature in June
this year.  S&P understands this amount was reduced in April 2016
from EUR108 million due to buybacks in the market, an action that
S&P views as similar to debt restructuring.  However, S&P still
thinks that Norske Skog's cash balances are too low to meet this
obligation.

In the past month, in addition to a EUR15 million equity
injection from two major shareholders GSO and Cyrus, Norske Skog
took several liquidity initiatives.  These include the planned
sale of energy assets in New Zealand, which could raise at least
EUR20 million, as well as a new EUR100 million securitization
facility provided by GSO and Cyrus.  However, the securitization
facility cannot be used to repay debt.  As a result, S&P thinks
that Norske Skog's ability to meet its debt commitments in June
2016 depends on additional equity injections and favorable
operating conditions.  Although S&P sees signs that paper prices
are increasing, and the company has started the process for a
secondary equity offering, S&P is unsure this will be enough.  In
addition, the company's public statement that its redemption of
the 2016 bonds is contingent on a number of factors adds to the
uncertainty.

On a positive note, Norske Skog faces a light debt maturity
schedule after June 2016 because the debt falling due in June
2017 was removed as part of the recently completed debt exchange.
The next due date is in December 2019 when Norwegian krona
(NOK)2.8 billion (EUR290 million) in debt matures.  That said,
S&P thinks Norske Skog's operations need sustained paper price
increases and a growth strategy that delivers on time and on
budget.  Although financial risks regarding the growth
investments appear limited, S&P sees execution risks and
uncertainties concerning the timing, as highlighted by the
cancellation of a partnership to convert a paper machine to
produce tissue paper at the Bruck mill in Austria.

S&P views the newly issued EUR79 million perpetual notes as debt.
The notes have equity-like features, such as deep subordination,
deferrable interest payments, and a long-dated contractual term.
However, S&P do not give equity credit because the issuer's
ability to call them at any time calls into question the notes'
permanency in the capital structure, in S&P's view.

S&P aims to resolve the CreditWatch by raising or lowering the
ratings within three months, depending on Norske Skog's ability
to repay the EUR74 million debt maturing on June 15, 2016.  S&P
will likely reassess the ratings shortly after this date.

S&P could raise the long-term rating to 'CCC' or 'CCC+' if Norske
Skog were to successfully repay the June 2016 debt maturity in
full and on time.  The magnitude of the upgrade would depend on
S&P's assessment of Norske Skog's operational performance and if
S&P thinks that the risk of a comprehensive balance-sheet
restructuring has abated.

S&P could lower the rating if Norske Skog were unable to repay
the June debt maturity in full and on time, or if it were to
enter into another debt restructuring.



=============
R O M A N I A
=============


HIDROELECTRICA SA: Insolvency Hearing Scheduled for June 15
-----------------------------------------------------------
Irina Vilcu at Bloomberg News reports that a Romanian court has
delayed ruling on the company's insolvency.

Judge Vasile Fitigau said in Bucharest the next hearing is set
for June 15, Bloomberg relates.

According to Bloomberg, Hidroelectrica judicial administrator
Remus Borza says he expects final ruling on insolvency next week.

As reported by the Troubled Company Reporter-Europe on April 5,
2016, Reuters related that Hidroelectrica has been run by a
court-appointed manager after it became insolvent for the second
time in early 2014.  It first became insolvent in 2012 after
losing US$1.4 billion over six years from contracts under which
it sold the bulk of its output below market prices, Reuters
disclosed.

Hidroelectrica is a Romanian state-owned electricity producer.



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


AGENCY FOR HOUSING: S&P Affirms 'BB+/B' ICRs; Outlook Negative
--------------------------------------------------------------
S&P Global Ratings affirmed its long- and short-term issuer
credit ratings on Russia's Agency for Housing Mortgage Lending
OJSC (AHML) at 'BB+/B'.  The outlook remains negative.

At the same time, S&P affirmed its 'ruAA+' Russia national scale
rating on AHML.

The ratings on AHML continue to be supported by S&P's view of the
agency's very important role for, and very strong link to the
Russian government, its moderate business position, and very
strong capital and earnings.  In addition, the ratings are based
on AHML's adequate risk position, average funding, and adequate
liquidity.

However, S&P considers the ratings constrained by AHML's high
risk concentrations in the residential real estate sector;
increasing risks challenging the agency's new financial strategy
after its merger with the Russian Housing Development Foundation
(RHDF); and the difficult operating conditions in Russia,
including heightened credit risks in the real estate market.

A new law regulating the activities of AHML was ratified in July
2015.  The institution now incorporates RHDF, formerly a not-for-
profit state-owned fund, which the government used since 2008 to
provide land plots and engineering infrastructure for housing
construction.  S&P understands that the aim of consolidating the
government policy instruments in the housing and construction
development markets is to increase the affordability of housing
and save costs by having a single development institution with a
broader mandate.

Going forward, AHML will continue to carry out important
functions of a development institution that include the
implementation of social housing programs designed by the
government.  At the same time, the agency will play an important
role in lowering mortgage rates with greater presence on the
secondary market focusing on refinancing primary mortgage
issuance through securitization.  In this regard, S&P expects
AHML guarantees on mortgage-backed securities will accelerate
over the medium term.  AHML's new strategy includes facilitating
the formation of financial mechanisms for the development of
rental housing.  That includes transforming the existing
institute of closed investments funds into the instrument similar
to real estate investment trusts (REITs).  AHML will also be
promoting new housing construction on the plots of land formerly
operated by RHDF.  At the same time, S&P notes that the new lines
of business may require significant time and efforts to develop
and implement.

S&P therefore believes that in the near term the agency will
predominantly continue its current activities while newly
developed lines of business will likely start playing an
important role in the agency's operations within two to three
years.

S&P continues to consider AHML to be a government-related entity
(GRE).  In accordance with S&P's criteria for rating GREs, S&P's
view of a very high likelihood of extraordinary government
support is based on its assessment of AHML's:

   -- Very important role as Russia's sole state developer of
      mortgage market infrastructure, which the government views
      as an essential policy tool to improve currently poor
      housing affordability.  Going forward, AHML will be playing
      an increasing role in lowering primary mortgage rates
      through greater involvement on the secondary market.  The
      institution will continue to drive the development of the
      market for residential mortgage-backed securities and
      promote social and rented housing; and

   -- Very strong link with Russia, due to the state's 100%
      ownership of AHML and S&P's view of a very low likelihood
      of privatization of AHML's core public policy-related
      business in the medium to long term, the government's
      strong oversight of the company's strategy with a deputy
      chairman of the government now heading the board, and the
      high reputation risk for the government if AHML were to
      default. Over 60% of AHML's existing wholesale debt is
      secured by state guarantees, although these are conditional
      on potential the guarantor objections as well as form and
      timeliness of the claim.

Based on the sovereign's solid track record of support for AHML,
S&P considers that it would likely provide timely financial
support to AHML in most circumstances.  S&P's long-term rating on
AHML is therefore one notch higher than S&P's assessment of
AHML's stand-alone credit profile (SACP).

S&P uses its banking criteria to assess AHML's SACP, reflecting
the agency's status as a quasi-bank and the similarities of
AHML's financial profile compared with that of a bank.  S&P
assess AHML's SACP at 'bb'.

S&P considers AHML's business position to be moderate, reflecting
its limited business diversity and strong focus on the still-
developing residential real estate market, given its particular
mandate.  But S&P also takes into consideration the
sustainability of AHML's operations and ongoing state support,
which are both an integral part of the agency's mandate.  On Jan.
1, 2016, about 60% of AHML's balance sheet exposure comprised
Russian residential mortgages.

S&P's very strong assessment of capital and earnings is a
positive rating factor for AHML's stand-alone creditworthiness.
S&P's main quantitative capital adequacy metric -- the risk-
adjusted capital (RAC) ratio before adjustments for concentration
and diversification -- was at a comfortable 35% at year-end 2015.
S&P expects the RAC ratio will remain very strong at 20%-25% over
the next 18-24 months.  However, in the longer term, S&P expects
AHML's currently excessive capital buffer will decline gradually,
subject to growth opportunities and credit costs.  For 2015, AHML
reported net profit of Russian ruble (RUB) 8.6 billion (about
$120 million), compared with RUB4.0 billion for 2014, supported
by positive financial performance of the consolidated RHDF.

"We assess AHML's risk position as adequate, based on its above
sector-average asset quality and very granular lending portfolio.
The share of reported nonperforming loans (NPLs; defined as those
overdue by more than 90 days) remains stable at 4.5% on Jan. 1,
2016, compared to 4.3% at end-2014.  We anticipate continuing
moderate deterioration of AHML's asset quality in 2016, mirroring
similar system-wide trends in Russia as the economy is still in
the correction phase.  However, in our opinion, the residential
real estate market is not overheating in most regions where the
company operates, and AHML has more conservative underwriting
standards than the industry average," S&P said.

S&P notes that AHML has access to ongoing government support in
the form of a 10-year loan from state-owned Vnesheconombank
(VEB), which constitutes about 20% of AHML's liabilities.
Moreover, VEB is a large investor in the agency's open-market
debt.

At the same time, the principal source of financing for AHML's
activities is issued wholesale debt, which accounted for about
75% of the agency's liabilities on Jan. 1, 2016, where about 64%
was covered by state guarantees.  S&P believes that AHML is
relatively well positioned to attract wholesale market funding
through the economic cycle, which is proven by a positive track
record.

S&P considers AHML's liquidity to be adequate but not abundant.
As of Jan. 1, 2016, AHML's liquidity cushion (cash and cash
equivalents plus deposits due from banks) made up 14% of total
assets.  S&P understands that accumulated cash reserves and
liquidity management could allow AHML to successfully meet debt
repayments amounting to RUB53 billion in the next 12 months
(including repurchase agreement transactions with the banks).

The negative outlook on AHML reflects that on Russia.

Given S&P's 'bb' SACP assessment for AHML and the one-notch
uplift for government support in the long-term rating on AHML, if
S&P lowers its ratings on Russia S&P will lower its long-term
rating on AMHL.

S&P would consider revising the outlook to stable if it was to
take a similar action on Russia.


HOME CREDIT: Fitch Affirms 'B+' IDRs & Revises Outlook to Stable
----------------------------------------------------------------
Fitch Ratings has revised the Outlook on Home Credit & Finance
Bank's (HCFB) Long-Term Issuer Default Ratings to Stable from
Negative and affirmed the IDRs at 'B+'.

KEY RATING DRIVERS - IDRs AND VR

The revision of the Outlook reflects reduced downside risks to
HCFB's capitalization due to recent improvement in asset quality
and consequently performance, which almost reached break-even in
1Q16, albeit partly due to the solid earnings of the Kazakh
subsidiary.  However, the 'B+' IDR continues to reflect the
bank's focus on the risky and overheated Russian consumer finance
market and therefore vulnerable asset quality and performance.
On the positive side, the ratings continue to consider HCFB's
reasonable capital and liquidity buffers.

HCFB's annualized credit losses (calculated as an increase in
loans 90 days overdue (non-performing loans) plus write-offs,
divided by the average performing loans) improved markedly to
moderate 13%-14% in 1Q16-2H15 from a very high 23-24% in 1H15-
2014.  Fitch believes that the primary reason for asset quality
improvement is HCFB's reduced risk appetite, reflected by reduced
acceptance rates and more limited loan issuance (gross loans
shrank by 7% in 1Q16 and 29% in 2015).  Another reason for
improvement is the ultimate maturity of most risky loans issued
during 2012-2013 when HCFB was growing very fast with more
relaxed loan approval criteria.

Fitch believes that credit losses could remain stable throughout
2016 or even slightly reduce, although there are still
considerable downside asset quality risks stemming from the
weaker economic environment.  Consumer finance borrowers in
Russia are highly leveraged and have small to average incomes,
which have fallen in real terms due to high inflation and
increasing living costs.  However, in Fitch's view, these
downside asset quality risks are largely captured by HCFB's
relatively low 'B+' rating.

HCFB became slightly below break-even in 1Q16 (net loss of
RUB0.2 bil. or 0.5% of end-1Q16 equity)) after reporting
significant losses in 2015-2014.  1Q16 net results were boosted
by around RUB0.5 bil. income from the Kazakh subsidiary, but this
was offset by a RUB0.6 bil. FX loss from rouble appreciation,
while HCFB's core retail business was profitable.  Fitch believes
the bank will end 2016 with a small profit, assuming that credit
losses remain stable at around 12%-13%.  The longer-term
performance is difficult to forecast due to the uncertain
prospects for saturated consumer finance lending in Russia and
competition, particularly from larger universal banks, which
benefit from cheaper funding and stronger cross-selling
potential.

Risks around capital have reduced along with gradual
stabilization of asset quality and performance.  Capitalization
is reasonable with 15.9% Fitch Core Capital (FCC) ratio at end-
1Q16.  The regulatory Tier-1 capital ratio is much tighter at
7.7% (minimum 6.625% including capital conservation buffer) at
end-April 2016, due to more stringent risk-weighting on consumer
finance loans and sizeable operational risk component.  However,
the latter may gradually decrease in the next few years.  Despite
previous significant losses, HCFB managed to ease capital
pressure in 2014-2015 by de-leveraging and selling of high-margin
retail loans with prohibitively high risk-weights to related
parties. Capital ratios are unlikely to drop in the near term due
to the improved bottom line and limited growth prospects.

Funding and liquidity remains a rating strength.  HCFB is funded
with retail deposits (77% of end-1Q16 liabilities), which are
very granular and rather stable (although price-sensitive) as
around 90% of customers are covered by state deposit insurance.
The nearest potential wholesale debt repayment is in 2018 due to
put option on USD230m (8% of total liabilities) subordinated
Eurobond issued followed by another put option on another
subordinated Eurobond issue of USD165m (6% of total liabilities)
in 2019.  At end-April 2016, HCFB's liquidity buffer equaled a
solid RUB38 bil. or 22% of total liabilities.

   KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR

HCFB's '5' Support Rating reflects Fitch's view that support from
the banks' shareholders, although possible, cannot be relied
upon. The Support Rating and Support Rating Floors of 'No Floor'
also reflect the fact that support from the Russian authorities,
although possible given HCFB's considerable deposit base, cannot
be relied upon due to HCFB's still small size and lack of overall
systemic importance.  Accordingly, the HCFB's IDRs are based on
its intrinsic financial strength, as reflected by its VR.

                KEY RATING DRIVERS - SUBORDINATED DEBT

HCFB's subordinated debt ratings are notched down once from its
VR, in line with Fitch's criteria for rating these instruments.

                     RATING SENSITIVITIES

HCFB's IDRs remain highly sensitive to asset quality, performance
and capital.  Downside pressure on the ratings would stem from
renewed asset quality deterioration if it leads to significant
bottom line losses and erodes HCFB's capital buffer.  An upgrade
of HCFB's ratings would probably require an improvement in
economic environment.  However, significant progress in further
asset quality and profitability strengthening, along with gradual
pick up in loan growth would be credit positive.

HCFB's Support Rating could be upgraded and the Support Rating
Floor revised if HCFB's systemic importance markedly increases
but Fitch views this as highly unlikely.

The rating actions are:

HCFB

  Long-Term foreign and local currency IDRs: affirmed at 'B+';
   Outlooks revised to Stable from Negative
  Short-Term foreign currency IDR: affirmed at 'B'
  Viability Rating: affirmed at 'b+'
  Support Rating: affirmed at '5'
  Support Rating Floor: affirmed at 'No Floor'
  Subordinated debt (issued by Eurasia Capital SA) Long-term
   rating: affirmed at 'B', Recovery Rating 'RR5'



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


GRUPO ISOLUX: Seeks Standstill Period for Restructuring Plan
------------------------------------------------------------
Rodrigo Orihuela at Bloomberg News, citing El Economista, reports
that Grupo Isolux Corsan SA is to seek standstill period to work
on its restructuring plan.

                      Debt-for-Equity Swap

As reported by the Troubled Company Reporter-Europe on May 16,
2016, Bloomberg News related that Isolux was planning to start
talks with creditors over a proposal to swap about 70% of its
debt into equity.  According to Bloomberg, two people with
knowledge of the matter said the company wants to cut debt to
about EUR600 million (US$678 million) from EUR2 billion.  They
said that under the plan, creditors would get at least 90% of
Isolux in return for reducing debts and injecting at least EUR200
million of new money, Bloomberg disclosed.

Grupo Isolux Corsan SA is a Spanish construction company.



=============
U K R A I N E
=============


METINVEST BV: June 28 Scheme of Arrangement Vote Set
----------------------------------------------------
Luca Casiraghi at Bloomberg News reports that a London judge has
consented to a June 28 vote on a scheme of arrangement covering
Metinvest BV's US$1.2 billion of bonds due 2016, 2017 and 2018.

According to Bloomberg, the moratorium is to run until Sept. 30.

The company will have the option to extend to Nov. 30, Bloomberg
notes.  It will have to pay fees if bondholders approve the
moratorium, Bloomberg says.

                       About Metinvest B.V.

Svitlana Romanova, in her capacity as foreign representative of
Metinvest B.V., filed a Chapter 15 bankruptcy petition in the
U.S. Bankruptcy Court for the District of Delaware (Bankr. D.
Del. Case No. 16-10105) on Jan. 13, 2016, in the United States,
seeking recognition of a scheme of arrangement under part 26 of
the English Companies Act 2006 currently pending before the High
Court of Justice of England and Wales.

The Debtor and its subsidiaries claim to be the largest
vertically integrated mining and steel business in Ukraine.

Joseph M Barry, Esq., at Young Conaway Stargatt & Taylor, LLP,
counsel for the petitioner, said the Metinvest Group has
struggled in recent years in light of the ongoing political
turmoil in Ukraine since the end of 2013, which has negatively
impacted Ukraine's economy and the protracted slump in prices for
steel products, coal, and iron ore throughout much of 2014 and
2015.

The petitioner has engaged Young, Conaway, Stargatt & Taylor and
Allen & Overy LLP as her as counsel.

Judge Laurie Selber Silverstein has been assigned the case.



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


BHS GROUP: Dominic Chappell Faces MPs in Probe Over Collapse
------------------------------------------------------------
Jim Pickard and Lauren Fedor at The Financial Times report that
Sir Philip Green called in administrators at BHS because he did
not want the retail chain he once owned falling into the hands of
rival billionaire Mike Ashley, according to the company's most
recent owner at an extraordinary Parliamentary hearing.

Dominic Chappell -- the ex-bankrupt whose Retail Acquisitions
consortium bought BHS from Sir Philip for GBP1 last year -- told
MPs that the Arcadia boss had used his continuing influence over
BHS to appoint administrators Duff & Phelps earlier this year,
the FT relates.

At an evidence session probing the collapse of the group -- which
has left 11,000 jobs in danger and a multimillion-pound pension
scheme deficit -- a joint committee of MPs also heard how senior
BHS figures had traded insults and even made death threats, the
FT relays.

According to the FT, Mr. Chappell said Sir Philip became "insane"
with anger after finding out that the retailer was in rescue
talks with Mike Ashley, the majority owner of high-street chain
Sports Direct.

Sir Philip, who bought BHS 16 years ago in a deal that made him a
billionaire, will give his version of events to MPs on June 15 in
one of the most eagerly-awaited appearances in Parliament for
years, the FT discloses.

Describing Sir Philip as "hostile", Mr. Chappell, as cited by the
FT, said at another point: "If Philip had assisted us, we could
have saved BHS . . . I think Philip genuinely thought that we
would fail.  But he sold it to us nevertheless."

According to the FT, Sir Philip's spokesman later said: "As
provider of many of BHS's central services, Arcadia retained a
close working relationship with BHS after Retail Acquisitions
acquired it.  That was the extent of it."

However, Mr. Chappell himself was accused of threatening to kill
chief executive Darren Topp because he had questioned a GBP1.5
million transfer to BHS Sweden, a separate corporate entity, the
FT relays.

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


INTELLIGENT ENERGY: Seeks Approval of GBP30MM Loan, CEO Resigns
---------------------------------------------------------------
Jessica Shankleman at Bloomberg News reports that Intelligent
Energy Holdings Plc Chief Executive Officer Henri Winand resigned
ahead of a shareholder vote on whether to approve a GBP30 million
(US$43.4 million) loan to help the U.K. fuel cell maker avoid
insolvency.

Intelligent Energy said in a statement Martin Bloom, a
non-executive director at the Loughborough-based company for the
last four years, will become interim CEO, Bloomberg relates.

Shareholders were set to vote on June 9 on the proposed loan,
which would raise the stake of Intelligent Energy's biggest
shareholder, Meditor Group Ltd., to 72.2%, Bloomberg discloses.

According to Bloomberg, Intelligent Energy says it needs
shareholder support for the proposed loan to avoid bankruptcy
after it failed to raise the funds needed to install its fuel
cell technology on more than 27,000 telecommunications towers in
India earlier this year.

Intelligent Energy Holdings Plc is a U.K. hydrogen fuel cell
maker.



                              *********

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.


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