TCREUR_Public/160614.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

           Tuesday, June 14, 2016, Vol. 17, No. 116


                            Headlines


B U L G A R I A

PROCREDIT BANK: Fitch Affirms 'bb-' Viability Rating


E S T O N I A

ST. ALEXANDER'S CHURCH: Estonia Gov't to Buy Building Complex


F R A N C E

COTE D'IVOIRE: Fitch Affirms 'B+' LT Issuer Default Ratings


G E R M A N Y

GRATENAU HOLZ: Business Operations to Stop by End of July
HYPOTHEKENBANK FRANKFURT: Moody's Withdraws (P)Ba1 MTN Rating
PASCHEN GMBH: Files Petition for Reorganization Process
SPRINGER SCIENCE+BUSINESS: Moody's Cuts Sr. Loan Ratings to B2
ZF FRIEDRICHSHAFEN: Moody's Hikes Corporate Family Rating to Ba1


I R E L A N D

BACCHUS 2006-2: S&P Raises Rating on Class E Notes to B-
DECO 15 - PAN EUROPE: S&P Lowers Rating on Class F Notes to D
DEPFA BANK: Moody's Puts Ba1 Debt Ratings on Review for Upgrade
HORIZON HOLDINGS: Moody's Affirms B1 Corporate Family Rating


I T A L Y

SALINI IMPREGILO: S&P Affirms 'BB+' CCR; Outlook Stable


L A T V I A

LIEPAJAS METALURGS: Latvenergo Won't File Insolvency Petition


L U X E M B O U R G

COSAN SA: Moody's Assigns Ba3 Rating to Proposed $500MM Notes


N E T H E R L A N D S

BABSON EURO: Moody's Assigns (P)B2 Rating to Class F Notes
CAIRN CLO VI: Moody's Assigns (P)B2 Rating to Class F Notes
JUBILEE CDO IV: S&P Affirms CCC+ Ratings on Two Note Classes
* NETHERLANDS: Number of Business Failures Down in May 2016


P O R T U G A L

CAIXA ECONOMICA: Moody's Puts B3 Deposit Ratings on Review


R U S S I A

ALTAI REGION: Fitch Affirms 'BB+' Currency Issuer Default Ratings
ATON CAPITAL: Moody's Changes Outlook on B2 Ratings to Stable
CHUVASH REPUBLIC: Fitch Affirms 'BB+' LT Issuer Default Ratings
KAZAN CITY: Fitch Affirms 'BB-' LT Issuer Default Ratings
KRASNODAR REGION: Fitch Affirms 'BB' LT Issuer Default Ratings

NK BANK: Moody's Changes Outlook on B3 Deposit Ratings to Neg.
SOVCOMFLOT PAO: Moody's Hikes Corporate Family Rating to Ba1


S P A I N

PAESA ENTERTAINMENT: Moody's Affirms B3 Corporate Family Rating


S W E D E N

COM HEM HOLDING: S&P Affirms 'BB' CCR, Outlook Stable
STENA AB: Moody's Lowers Corporate Family Rating to B1


S W I T Z E R L A N D

NAV CAPITAL: FINMA Initiates Bankruptcy Proceedings


T U R K E Y

TURKIYE IS BANKASI: Fitch Affirms 'BB+' Rating on Sub. Notes


U K R A I N E

ACTIVE- BANK: NBU Expects to Recover UAH1.5BB from Sale Proceeds
BANK VELES: Court of Appeal Confirms Legitimacy of Liquidation
FINANCE BANK: National Bank of Ukraine OKs Voluntary Liquidation
FINANSOVA INITSIATYVA: Ukraine Court Freezes Owner's Property
MYKHAILIVSKY (KYIV): Bank Placed Into Temporary Administration

SMARTBANK PJSC: NBU Declares Bank Insolvent
UKRAINE: S&P Affirms 'B-/B' Sovereign Credit Ratings


U N I T E D   K I N G D O M

BHS GROUP: Gov't to Publish Insolvency Service's Investigation
BP PLC: Egan-Jones Lowers FC Sr. Unsecured Rating to BB+
ECOLOGICLIVING: In Administration, Ceases Trading
MAR CITY DEVELOPMENTS: Enters Administration
NEW EARTH SOLUTIONS: Enters Administration

OUTSOURCERY: Teeters On Brink Of Administration
TATA STEEL UK: Decision on Sale of Operations Delayed


U Z B E K I S T A N

HAMKORBANK: Moody's Confirms B2 LT Currency Deposit Ratings
ONCILLA MORTGAGE: Moody's Assigns B2(sf) Ratings to Class ET Debt


                            *********


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


PROCREDIT BANK: Fitch Affirms 'bb-' Viability Rating
----------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Ratings
(IDRs) of Allianz Bank Bulgaria AD (ABB), Societe Generale
Express Bank AD (SGE) and Sogelease Bulgaria (Sogelease) at
'BBB+' and ProCredit Bank (Bulgaria) EAD's (PCB) Long-Term IDR at
'BBB-'. The Outlooks are Stable. Fitch has also affirmed the
banks' Viability Ratings (VR).

The affirmation of IDRs of the three banks and Soglease reflects
Fitch's opinion of a high probability that they would be
supported, if required, by their respective parents. The
affirmation of VRs of the three banks reflects no major changes
in their financial metrics over the last 12 months.

KEY RATING DRIVERS

IDRS AND SUPPORT RATINGS OF SGE, PCB, ABB AND SOGELEASE
ABB's ultimate majority shareholder is Allianz SE (AA-/Stable)
through a 66% stake in Allianz Bulgaria Holding, a direct 99.9%
owner of ABB. PCB is 100%-owned by ProCredit Holding AG & Co.
KGaA (PCH; BBB/Stable). SGE is a 99.7% subsidiary of Societe
Generale (SG, A/Stable), while Sogelease is SGE's 100%
subsidiary.

Fitch said, "ABB's IDRs reflect a high probability of support
from Allianz due to the parent's strong credit risk profile and
ABB's relative small size. However, ABB's Long-Term IDR is
notched four times from that of Allianz because of ABB's only
limited strategic importance. This is based on the strategic
focus of Allianz on the insurance business, with ABB its only
banking subsidiary in central and eastern Europe (CEE), and ABB's
marginal contribution to the parent group's profits. In our view,
whether ABB remains in the parent group in the long term depends
on its contribution to Allianz's insurance and asset management
business and ABB's standalone performance."

Fitch views PCB as a strategically important subsidiary to its
parent, PCH. The support considerations take into account the
100% ownership, the strategic importance of the south eastern
Europe region to the group, strong integration with the parent
and a track record of capital and liquidity support. At end-2015,
PCB accounted for 13% of PCH's total group assets.

Fitch believes that there is a high probability that SGE would be
supported, if required, by SG due to its strategic importance to
the parent in light of SG's strategic focus on the CEE region.
Fitch's view of SG's support propensity is reinforced by the
track record of significant funding provision to the subsidiary
and strong operational and management integration between the two
banks. The potential cost of support would be easily manageable
for SG given SGE's small size. SGE would have been rated one
notch off the parent were it not for the constraint by Bulgaria's
sovereign rating.

Sogelease's IDRs are equalized with those of SGE as Fitch views
the leasing company as the bank's core subsidiary. Fitch believes
that potential support for Sogelease, if needed, could come from
SGE or flow directly from SG. Sogelease is an integral part of
financial services provided by SG in Bulgaria and is strongly
integrated into the parent group at both operational and funding
levels.

VRS OF SGE, PCB AND ABB

The VRs of the three banks reflect their moderate risk appetite,
better-than-sector asset quality, adequate capitalization and
profitability, solid funding and ample liquidity. At the same
time weak market franchises (moderate at SGE) and the difficult
and an unstable operating environment negatively affect their
credit profiles.

Weak franchises constrain the VRs of PCB and ABB. At end-2015,
market shares in total sector assets were below 3% (ABB and PCB)
and about 6% (SGE). ABB and SGE run a universal banking model,
while PCB is entirely focused on serving small and medium-sized
enterprises (SMEs). At end-2015, the banks' share in retail
deposits stood at around 7% for SGE, 3% for ABB and only 1% for
PCB.

Fitch said, "The operating environment for Bulgarian banks is
likely to remain difficult in 2016 and beyond due to subdued
credit demand, falling interest rates and growing competition for
a limited number of borrowers in a small market. We believe that
the central bank's on-going sector-wide asset quality review
(AQR) and reforms to the supervisory framework should help
restore public confidence in the banking sector after the
bankruptcy of a large domestically-owned bank and a bank run on
the largest domestic bank (First Investment Bank; B-/Stable/b-)
in 2014."

The three banks' asset quality has persistently been better than
the sector average because of superior risk controls and
underwriting standards driven by tight parental control. The
inflow of new bad debt should remain contained, assuming no
economic stress. This reflects conservative origination of new
loans, already seasoned legacy loans and moderate (PCB and SGE)
or modest (ABB) expansion plans.

At end-2015, the official IFRS impaired loan ratios equalled
about 6% (PCB), 10% (SGE) and 14% (ABB). The asset quality ratios
based on the central bank's supervisory reporting were about 8%
at SGE and PCB and almost 14% at ABB, compared with about 20% for
the sector. Provision coverage of IFRS impaired loans was
adequate at the three banks, given their large share of
collateralized lending.

Capitalization at the three banks is adequate given the
challenging operating environment, moderate risk appetites,
limited expansion plans (except for SGE) and muted credit demand,
healthy internal capital generation and potential ordinary
parental capital support. Capital buffers at the three banks are
sufficient to absorb even substantial additional loan
provisioning that could result from the AQR. At end-2015, Fitch
core capital ratios equalled 23% (PCB), 16% (SGE) and 18% (ABB).
PCB's higher ratio is commensurate with the bank's strategic
focus on higher-risk SMEs. Unreserved impaired loans accounted
for 28% of Fitch core capital at ABB and SGE, and 18% at PCB.

Subdued domestic credit demand, coupled with lower market
interest rates, is hurting the profitability of Bulgarian banks.
However, their results continue to compare well with regional
peers mostly due to still wide margins and moderate risk costs.
Lending activity is unlikely to recover in 2016 (especially among
corporates) and margin pressure will increase since the room for
further deposit rate cuts is limited.

Refinancing risk is low at the three banks because they are self-
funded with stable and largely granular customer deposits, they
hold ample liquidity buffers and can rely on ordinary liquidity
support from their parents, in case of need. Overall funding
profile is stronger at ABB and SGE while PCB has a moderately
weaker deposit franchise. Fast deposit growth at the three banks
in 2015 and 2014 reflected a muted appetite for investments by
companies, coupled with customers' flight to quality after the
domestic (2014) and the Greek banking crisis (mid-2015).

At end-2015, gross loans/deposit ratios shrank to 66% (ABB), 92%
(SGE) and 105% (PCB). The higher ratio for PCB reflected long-
term financing received from international financial institutions
(such as EIB). The three banks' liquidity buffers (mainly cash
and Bulgarian sovereign debt) relative to total customer deposits
were substantially above the 20% regulatory minimum.

RATING SENSITIVITIES

IDRS, SUPPORT RATINGS
The IDRs and Support Ratings of the three banks and Sogelease
would likely be downgraded in case of a downgrade of their
parents' IDRs (multi-notch in the case of SG) or Bulgaria's
sovereign rating (SGE, Sogelease and ABB). An upgrade of SGE,
Sogelease and PCB would require a rating upgrade of the Bulgarian
sovereign and their respective parents. Upside is limited for
ABB.

The three banks and Sogelease could also be downgraded if Fitch
believes that their strategic importance to their parents is
weakened.

VR
An upgrade of ABB's and PCB's VRs would be contingent on a
significant improvement of their market franchises coupled with
maintaining adequate capitalization and asset quality. SGE's VR
upgrade would likely result from an improvement of the operating
environment and considerable strengthening in the bank's overall
credit risk profile.

Deterioration in the operating environment, which would result in
a substantial inflow of new bad debts and capital erosion at the
banks, could lead to their downgrade.

The rating actions are as follows:

ABB
Long-Term Foreign Currency IDR affirmed at 'BBB+'; Outlook Stable
Short-Term Foreign Currency IDR affirmed at 'F2'
Viability Rating affirmed at 'bb-'
Support Rating affirmed at '2'

PCB
Long-Term Foreign Currency IDR affirmed at 'BBB-'; Outlook Stable
Short-Term Foreign Currency IDR affirmed at 'F3'
Long-Term Local Currency IDR affirmed at 'BBB-'; Outlook Stable
Short-Term Local Currency IDR affirmed at 'F3'
Viability Rating affirmed at 'bb-'
Support Rating affirmed at '2'

SGE
Long-Term Foreign Currency IDR affirmed at 'BBB+'; Outlook Stable
Short-Term Foreign Currency IDR affirmed at 'F2'
Viability Rating affirmed at 'bb'
Support Rating affirmed at '2'

Sogelease
Long-Term Foreign Currency IDR affirmed at 'BBB+'; Outlook Stable
Short-Term Foreign Currency IDR affirmed at 'F2'
Support Rating affirmed at '2'


=============
E S T O N I A
=============


ST. ALEXANDER'S CHURCH: Estonia Gov't to Buy Building Complex
-------------------------------------------------------------
The Baltic Times reports that the Estonian state has decided to
buy the building complex of St. Alexander's Church of Narva and
for that the government on June 9 allocated nearly EUR190,000.

According to The Baltic Times, the ministry said the government
on June 9 decided to allocate to the Ministry of the Interior
half of the church's purchase price or EUR187,500 as well as
EUR2,372 to cover the notary and state fees.  The other half of
the price is to be paid by the Estonian Evangelical Lutheran
Church (EELK), The Baltic Times discloses.

A court declared St. Alexander's of Narva bankrupt in April 2015
because of the small congregation's inability to meet the
financial obligations taken in connection with the reconstruction
of the church building, The Baltic Times recounts.  The
bankruptcy petition was filed by the construction company AS
Eviko and the congregation's debt at the time it was declared
bankrupt allegedly amounted to more than EUR2.1 million, The
Baltic Times relates.

At the end of March this year, the general meeting of creditors
decided to put the building of St. Alexander's of Narva up for
auction with a starting price of EUR500,000, The Baltic Times
relays.



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


COTE D'IVOIRE: Fitch Affirms 'B+' LT Issuer Default Ratings
-----------------------------------------------------------
Fitch Ratings has affirmed Cote d'Ivoire's Long-Term Foreign and
Local Currency Issuer Default Ratings (IDR) at 'B+' with a Stable
Outlook. The issue ratings on Cote d'Ivoire's senior unsecured
foreign currency bonds have also been affirmed at 'B+'. The
Country Ceiling has been affirmed at 'BBB-' and the Short-term
foreign currency IDR at 'B'.

KEY RATING DRIVERS

The 'B+' rating reflects the following key rating drivers:

The ratings are in the 'B' rating category due to weak structural
features. GDP per capita, human development indicators and
financial development indicators are significantly below 'B'
medians, illustrating weak debt tolerance. Past debt defaults
also weigh on the ratings.

Political risk has receded over the past four years, as reflected
in a smooth presidential election in late 2015. However, Cote
d'Ivoire ranks below peers on governance indicators, even after
several years of steady improvement. Fitch expects that the
legislative elections due in 2H16 will be a test for political
stability, but will not derail the ongoing political
normalization.

Cote d'Ivoire's economy has outperformed peers since the end of
2011's post-election crisis. Real GDP growth has exceeded 8.5%
over the past four years amid stable and moderate inflation (1.2%
in 2015), a better performance than most 'B' peers. Despite a
gradual erosion of the catch up effect and the exposure of the
economy to weather shocks (which will likely drive a deceleration
in the 2016 growth rate), Fitch expects rising private and public
investment to keep medium term growth potential high. The recent
announcement of large new commitments by official creditors
underpins the credibility of the government's public investment
program over the 2016-2020 national development plan.

Cote d'Ivoire's fiscal performance is considered neutral to the
rating, with a budget deficit of 2.9% of GDP and public debt at
41.3% of GDP at end-2015 (excluding bilateral debt owed to France
under the Contrat de Desendettement et de Developpement
accounting for 6.8% of GDP at end-2015), below the 'B' median of
53%.

Fitch expects the budget deficit to remain around 3.0%-3.5% of
GDP over the forecast horizon, reflecting moderate rises in
revenues, spending rigidities and gradually increasing public
investment. Together with dynamic nominal GDP growth, this should
very gradually reduce public debt to below 40% of GDP by 2018.

Public finance management, a longstanding weakness in Cote
d'Ivoire, has improved in recent years. The clearing of supplier
arrears has reduced the magnitude of potential contingent
liabilities, but some state-owned companies, including in the
banking and energy sector, could require budget support in coming
years.

Cote d'Ivoire outperforms peers on a number of external finance
indicators, but export revenues are heavily dependent on
agricultural commodities (cocoa exports accounted for 45% of
goods exports in 2015), although the diversity of commodities
exported mitigates this risk partly. With cocoa prices reaching a
record high in 2015, the trade surplus remained resilient despite
heavy capital goods imports, resulting in a small current account
surplus. We expect the current account to record small deficits
over the forecast horizon, gradually eroding Cote d'Ivoire's
estimated net creditor position.

Cote d'Ivoire's membership in the CFA franc zone strengthens its
external financing flexibility, as the country can access FX
reserves pooled at the regional central bank, and can benefit
from an unlimited credit line from the French Treasury to support
the convertibility of the CFA franc.

SOVEREIGN RATING MODEL (SRM) and QUALITATIVE OVERLAY (QO)

Fitch's proprietary SRM assigns Cote d'Ivoire a score equivalent
to a rating of 'B-' on the Long-term FC IDR scale.

Fitch's sovereign rating committee adjusted the output from the
SRM to arrive at the final LT FC IDR by applying its QO, relative
to rated peers, as follows:

-- Macroeconomic Performance: +1 notch, to reflect a combination
    of high medium-term growth potential driven by rising
    investment and a diversified agricultural and mining base,
    and lower macroeconomic volatility, particularly for
    inflation and the real effective exchange rate.
-- Structural Features: +1 notch, to reflect the changed
    political environment from that which led to the 2011 debt
    default.

Fitch's SRM is the agency's proprietary multiple regression
rating model that employs 18 variables based on three year
centered averages, including one year of forecasts, to produce a
score equivalent to a LT FC IDR. Fitch's QO is a forward-looking
qualitative framework designed to allow for adjustment to the SRM
output to assign the final rating, reflecting factors within our
criteria that are not fully quantifiable and/or not fully
reflected in the SRM.

RATING SENSITIVITIES

The Stable Outlook reflects Fitch's assessment that the upside
and downside risks to the rating are broadly balanced.

The main factors that, individually or collectively, could
trigger negative rating action are:

-- Renewed political instability or security incidents
    jeopardizing macroeconomic prospects or the state's ability
    to honor its commitments.
-- A material decline in growth prospects.
-- A sharp deterioration in public debt dynamics.

The main factors that, individually or collectively, could
trigger positive rating action are:

-- Over the medium term, an improvement in development and
    governance indicators, indicating better debt tolerance.
-- Fitch said, "a significant improvement in public debt
    dynamics beyond our current projections."

KEY ASSUMPTIONS

Fitch assumes the monetary arrangement with France will continue
to support macroeconomic stability and the fixed parity of the
CFA Franc with the euro will remain unchanged.

Fitch assumes that world economy will grow by 2.5% in 2016 and
2.9% in 2017, supporting demand for Cote d'Ivoire's exports.



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


GRATENAU HOLZ: Business Operations to Stop by End of July
---------------------------------------------------------
EUWID reports that in contrast to the situation with the sister
company Gratenau & Hesselbacher GmbH & Co. KG, which specialises
in trading with paper and pulp, no continuation solution has been
found for the insolvent German timber dealer and importer
Gratenau Holz GmbH.

EUWID relates that initially interested parties with whom talks
had been held in March and April have in the meantime withdrawn.

According to EUWID, the 10 remaining employees at Gratenau Holz
were consequently given notice of dismissal at the end of April
by the insolvency administrator Dr Tjark Thies --
y.radtke@reimer-rae.de -- from Hamburg.

Insolvency proceedings had already been commenced at the Hamburg
district court on April 1, EUWID discloses.

Residual stock is to be sold and business operations terminated
by the end of July, adds EUWID.


HYPOTHEKENBANK FRANKFURT: Moody's Withdraws (P)Ba1 MTN Rating
-------------------------------------------------------------
Moody's Investors Service has withdrawn Hypothekenbank Frankfurt
AG's A2/P-1 long- and short-term deposit ratings, its Baa1 issuer
rating and its (P)Baa1 senior unsecured program rating, its
(P)P-1 short-term program rating and its (P)Ba1 subordinated
program rating. Concurrently, Moody's has also withdrawn the
bank's A2(cr)/P-1(cr) Counterparty Risk Assessment and its baa3
baseline credit assessment (BCA) and adjusted BCA.

The outstanding senior unsecured debt (Baa1 stable) and
subordinated debt (Ba1) are unaffected by today's rating action
and have been assumed by its parent, Commerzbank AG (Commerzbank;
deposits A2 stable/senior unsecured Baa1 stable; BCA baa3).
Moody's will continue to rate these instruments.

RATINGS RATIONALE

On May 17, Commerzbank announced that it has completed the wind-
down of Hypothekenbank Frankfurt and transferred Hypothekenbank
Frankfurt's private customer, commercial real estate and public
finance portfolios to Commerzbank, thereby assuming
Hypothekenbank Frankfurt's outstanding debt issuances. On
May 23, 2016, Hypothekenbank Frankfurt ceased to exist. The
withdrawals reflect the reorganization within Commerzbank group.

Hypothekenbank Frankfurt was the wind-down entity for the
remaining legacy portfolios in international commercial real
estate and public finance of Commerzbank. As such, the rating
agency's view of Hypothekenbank Frankfurt as a highly integrated
and harmonized (HIH) subsidiary of Commerzbank led to an
alignment of its ratings with those of its parent.

LIST OF AFFECTED RATINGS:

Hypothekenbank Frankfurt AG:

The following ratings and rating assessments were withdrawn:

-- A2 Long-term deposit ratings with a stable outlook

-- Baa1 Long-term issuer rating with a stable outlook

-- (P)Baa1 Senior unsecured MTN program rating

-- (P)Ba1 Subordinate MTN program rating

-- P-1 Short-term deposit ratings

-- (P)P-1 Other Short-term program rating

-- A2(cr)/P-1(cr) Long-term and short-term Counterparty Risk
    assessment

-- baa3 baseline credit assessment (BCA) and adjusted BCA


PASCHEN GMBH: Files Petition for Reorganization Process
-------------------------------------------------------
EUWID reports that Paschen GmbH filed a petition with the Munster
District Court seeking reorganisation proceedings under its own
administration on May 12.  An interim administrator has yet to be
appointed.

EUWID relates that Paschen's management team, consisting of
Frieder Lohrer, Christoph Feldkamp and Klaus Kammermann, will
stay in office during the proceedings. Manufacturing and delivery
of orders are currently continuing as normal, the report says.

A reorganisation plan is to be developed over the next three
months. Paschen wants to continue the restructuring path that it
forged with this work. No job cuts are planned at present, but Mr
Lohrer said that they could not be ruled out, says EUWID. Paschen
currently employs 92 workers.

According to EUWID, Mr Lohrer is confident that Paschen's
financial future will have been safeguarded by autumn. Talks with
banks and institutions about medium and long-term financing
strategies have already begun, the report states.

The report notes that the group of investors surrounding Mr
Lohrer, which had acquired the brand and operations of its
insolvent predecessor Paschen & Companies GmbH & Co. KG financed
Paschen GmbH, which was established on 15 March 2015, with their
own funds. Opportunities for external financing are now to be
reviewed. Its previous incarnation had filed for the opening of
insolvency protection proceedings on Jan. 2, 2015, EUWID says.

The background to this latest petition is the company's looming
insolvency, the report states.  According to the report, the
relaunch of Paschen GmbH initially proved to be challenging after
insolvency protection proceedings were completed a year ago.

EUWID relates that two key trading partners had terminated their
co-operation, resulting in a significant change to the framework
plan for financing the new entity. The trading partners were
regained, but the company was unable to meet its revenue targets
for 2015. The trend in the company's revenues so far in 2016 is
also falling short of expectations, the report notes.


SPRINGER SCIENCE+BUSINESS: Moody's Cuts Sr. Loan Ratings to B2
--------------------------------------------------------------
Moody's Investor's Service has downgraded to B2 from B1 the
ratings on the senior secured credit facilities issued by
Springer Science+Business Media Deutschland and Springer
Science+Business Media GmbH. Moody's also assigned a B2(LGD3)
rating to a new senior secured term loan to be issued by Springer
Science+Business Media Deutschland. Concurrently, Moody's also
affirmed the B2 Corporate Family Rating ("CFR") on Springer SBM
One GmbH ("Springer") and its B2-PD Probability of Default
rating. The outlook on all ratings remains stable.

The rating actions follow the company's announcement that it will
refinance a portion of its private high yield notes with proceeds
from a new covenant lite term loan of up to EUR420 million which
will rank pari passu with the company's existing covenant lite
senior secured debt. The refinancing is expected to be debt and
leverage metric neutral, warranting an affirmation of the CFR at
B2. However, the reduction in the amount of subordinated debt in
the capital structure materially lowers the cushion to absorb
losses for senior secured debt holders, resulting in the
downgrade of all senior secured instrument ratings to B2 from B1.

RATINGS RATIONALE

On June 7, 2016, Springer announced the refinancing of its
Private High Yield Notes due 2021, replacing up to EUR420 million
with a new Senior Secured Term Loan due 2020, leaving the company
with approximately EUR220 million or more of Private High Yield
Notes. The reduction of junior debt in the capital structure
lessens the cushion for senior secured debt holders. This results
in a higher loss given default for senior secured lenders, which
in turn leads to a downgrade of the rating for all existing and
new senior secured debt to B2.

The transaction is expected to have no effect on overall debt and
leverage metrics for the company, with Gross Debt/EBITDA expected
to remain around 7.0x (Moody's adjusted) post transaction.
However, the lower interest cost of approximately 400 basis
points on the new term loan versus the existing Private High
Yield Notes will positively impact interest coverage metrics
going forward.

The B2 CFR affirmation reflects that this transaction does not
alter Springer's operating and financial fundamentals. While
Springer's leverage is currently higher than expectations for the
rating category, the deviation is largely due to one off items in
2015. Moody's expects that by end-2016 Springer will be able to
de-lever helped by improved EBITDA growth resulting from
efficiency and synergy generation from the integration of MSE.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook is based on Moody's expectation that
Springer's organic revenues will grow by at least mid-single
digits in 2016 and that the combined group's Gross Debt/EBITDA
ratio (as adjusted by Moody's) will be within the guidance for
the rating category of around 6.0x by the end of 2016.

WHAT COULD MOVE THE RATING DOWN/UP

Downward pressure could be exerted on the existing B2 CFR should
(1) Springer's leverage remain above 6.0x Gross Debt to EBITDA
(as adjusted by Moody's) in 2016; (2) material deterioration
occur in its operating performance; (3) the company generate weak
free cash flows on a sustained basis; and/or (4) any factors
emerge with a negative impact on liquidity.

Upward pressure could be exerted on the ratings once (1) the two
businesses are integrated and synergies are realized such that
revenue growth in the mid-single digits is achieved and operating
margins are expanding; (2) Springer is able to reduce its
leverage to below 5.0x Gross Debt/ EBITDA (as adjusted by
Moody's) on a sustained basis; and (3) the company generates
improved free cash flow (as adjusted by Moody's -- after capex
and dividends) on a continued basis.

Springer is a leading global research, educational and
professional publisher formed in May 2015 as a result of the
merger of Springer Science+Business Media (owned by funds advised
by BCP) and the majority of Holtzbrinck-owned Macmillan Science
and Education (MSE), namely Nature Publishing Group, Palgrave
Macmillan and the global businesses of Macmillan Education.


ZF FRIEDRICHSHAFEN: Moody's Hikes Corporate Family Rating to Ba1
----------------------------------------------------------------
Moody's Investors Service upgraded to Ba1 from Ba2 the Corporate
Family Rating (CFR) and to Ba1-PD from Ba2-PD the Probability of
Default Rating (PDR) of ZF Friedrichshafen AG. At the same time
the rating agency upgraded to Ba1 from Ba2 the rating of the
Senior Unsecured Notes issued by ZF North America Capital, Inc.
and the rating of the senior unsecured Notes issued by TRW
Automotive Inc. The outlook on the ratings remains positive.

The following ratings are affected:

Upgrades:

-- Issuer: ZF Friedrichshafen AG

-- Corporate Family Rating, Upgraded to Ba1 from Ba2

-- Probability of Default Rating, Upgraded to Ba1-PD from Ba2-PD

-- Issuer: ZF North America Capital, Inc.

-- Backed Senior Unsecured Regular Bond/Debenture, Upgraded to
    Ba1 from Ba2

-- Issuer: TRW Automotive Inc.

-- Senior Unsecured Regular Bond/Debenture, Upgraded to Ba1 from
    Ba2

Outlook Actions:

-- Issuer: ZF Friedrichshafen AG

-- Outlook, Remains Positive

-- Issuer: ZF North America Capital, Inc.

-- Outlook, Remains Positive

-- Issuer: TRW Automotive Inc.

-- Outlook, Remains Positive

RATINGS RATIONALE

Moody's said, "The rating action was prompted by the steady
progress ZF is showing since the closing of the TRW takeover with
regard to (1) integrating the acquired business into the ZF
organization as well as (2) with regard to strengthening its
overall credit quality. During 2015 ZF generated a free cash flow
of EUR693 million (with 7.5 months contribution from TRW), which
well exceeds the minimum level of EUR500 million we expected when
we assigned the rating last year. In addition, management has
proven to deliver on its commitment to swiftly reduce debt, using
free cash flow and disposal proceeds. In addition, management
identified with the Global Engineered Fasteners and Components
Business further non-core activities which can be disposed."

"The one notch rating upgrade by Moody's acknowledges that ZF
achieved the expectations the rating agency had incorporated when
it assigned the Ba2 first time rating in April 2015", commented
Oliver Giani, Moody's lead analyst for the European automotive
supplier industry. "The decision to maintain the positive outlook
reflects Moody's assessment of ZF's business profile having
already today solid investment grade characteristics. On the back
of management's commitment to further focus on debt reduction and
assuming a continued smooth integration of TRW activities, we
expect the group's financial profile to gradually strengthen over
the next 12 to 18 months towards the requirements of an
investment grade rating."

Moody's said, "ZF's Ba1 CFR balances (1) its strong business
profile with a leading market position in the global automotive
supply industry and sizeable non-auto OEM business, (2) the
positive effect resulting from the integration of TRW, in
particular with regard to scale, product offering, technology as
well as regional and customer diversification, (3) the group's
high innovation rate, (4) its solid liquidity profile and (5)
ZF's conservative financial policy which includes our expectation
of solid free cash flow generation to be applied to debt
repayment, to some extent supported by moderate dividend payouts
going forward, with (1) the high debt load and leverage resulting
from the debt financed acquisition of TRW, leading to an
estimated Moody's adjusted and pro-forma debt/EBITDA ratio of
4.2-4.5x in financial year 2015, taking into account its exposure
to the cyclical automotive industry, (2) only average operating
profitability compared to other automotive suppliers, which,
however is also a reflection of strong product diversification
encompassing products with high technological content, offset to
some extent by products which are exposed to higher competition
as well as the impact of sizeable non-cash purchase price
amortization charges, (3) continued high capex spend which is
needed to maintain its technological leadership and improve its
geographical footprint and (4) challenges to integrate the two
companies are still taken into account given the size of the
transaction."

ZF's liquidity profile is considered to be solid. Main sources of
liquidity comprise EUR1.5 billion cash on hand, funds from
operations estimated to exceed EUR2.8 billion as well as EUR1.5
billion undrawn revolving credit facility. Moody's notes that
these facilities are subject to financial covenants, set with
initially solid headroom against management's business plan. In
its liquidity risk assessment Moody's expects, that these cash
sources, which together total more than EUR5.7 billion for the
twelve months period starting April 2016, are well covering
expected cash needs of EUR3.3 billion split into EUR1.9 billion
capital expenditures, EUR200 million working capital needs,
EUR1.1 billion working cash required to run the business, as well
as dividend payments, minor debt repayments and some
contingencies.

RATIONALE FOR POSITIVE OUTLOOK

Moody's said, "The positive outlook incorporates our expectation
that ZF will continue its conservative financial policy, smoothly
integrate TRW into the organization and will be able to build on
the solid performance that the combined group has shown since
closure of the transaction in May 2015. We take comfort from
management's commitment to debt reduction, evidenced by faster
than originally planned debt repayment at year-end 2015. Looking
ahead, we expect a further gradual but steady strengthening of
ZF's credit quality and could see the rating moving into
investment grade territory over the next 12-18 months."

WHAT COULD CHANGE THE RATING UP/DOWN

Upward pressure on the rating could develop upon successful
consummation of the transaction indicated by EBITA margin
approaching 7% on a sustainable basis (6.4% in 2015). In
addition, ZF's ability to manage leverage below 3.0x debt /
EBITDA (3.3-3.5x forecasted by Moody's for 2016 supported by
retained cash flow coverage around 25% RCF/Net debt and solid
free cash flow generation consistently well in excess of EUR500
million) could be positive for the rating (all figures in this
paragraph are as adjusted by Moody's). Downward pressure could be
exerted on the rating if the integration of TRW experiences major
disruptions or if ZF fails to achieve its business plan. This
could be indicated by EBITA margin falling below 6.0%, or
leverage fails to improve to below 3.5x debt / EBITDA. Likewise,
a weakening in free cash flow generation to clearly below EUR500
million annually leading to slower de-leveraging could trigger a
negative rating action.

ZF Friedrichshafen AG (ZF), headquartered in Friedrichshafen,
Germany, is a leading global technology company specialized on
driveline and chassis technology as well as active and passive
safety technology. The company, which has completed the
acquisition of TRW Automotive in May 2015, generates the majority
of its revenues with the passenger car and commercial vehicle
industries, but also delivers to other markets including the
construction and agricultural machinery sector. Following the
acquisition of TRW, ZF is one of the largest automotive suppliers
on a global scale with pro-forma revenues of EUR34.4 billion
(2015), having a similar size as Bosch, Denso and Magna.



=============
I R E L A N D
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BACCHUS 2006-2: S&P Raises Rating on Class E Notes to B-
--------------------------------------------------------
S&P Global Ratings affirmed its credit ratings on the class B, C,
and D notes in BACCHUS 2006-2 PLC.  At the same time, S&P has
raised its rating on the class E notes.

The rating actions follow S&P's assessment of the transaction's
performance using data from the March 31, 2016 trustee report and
the application of S&P's relevant criteria.

"We subjected the capital structure to a cash flow analysis to
determine the break-even default rate (BDR) for each rated class
at each rating level.  The BDR represents our estimate of the
maximum level of gross defaults, based on our stress assumptions,
that a tranche can withstand and still fully repay the
noteholders.  In our analysis, we used the portfolio balance that
we consider to be performing, the current weighted-average
spreads as reported by the trustee report, and the weighted-
average recovery rates calculated in line with our corporate
collateralized debt obligation (CDO) criteria.  We applied
various cash flow stresses, using our standard default patterns,
in conjunction with different interest rate stress scenarios,"
S&P said.

Since S&P's May 22, 2015 review, the notes have amortized
further, resulting in increased credit enhancement at all rating
levels.  At the same time, the concentration risk has increased
to less than 15 assets in the portfolio, down from 20 at S&P's
previous review.

The weighted-average spread and the coverage tests have also
improved, while the weighted-average life has reduced since S&P's
previous review.

Taking into account the results of S&P's credit and cash flow
analysis and the application of its current counterparty criteria
and S&P's nonsovereign ratings criteria, it considers the
available credit enhancement for the class B, C, and D notes to
be commensurate with the currently assigned ratings.  S&P has
therefore affirmed its ratings on these classes of notes.

S&P's analysis also indicates that the available credit
enhancement for the class E notes is now commensurate with a
higher rating than currently assigned.  S&P has therefore raised
to 'B- (sf)' from 'CCC+ (sf)' its rating on the class E notes.

BACCHUS 2006-2 is a cash flow collateralized loan obligation
(CLO) transaction that securitizes loans to primarily
speculative-grade corporate firms.  The transaction closed in
August 2006 and its reinvestment period ended in August 2012.
IKB Deutsche Industriebank AG is the transaction manager.

RATINGS LIST

BACCHUS 2006-2 PLC
EUR491.21 mil senior secured and deferrable floating-rate notes
                                         Rating
Class            Identifier              To            From
B                XS0260554232            AAA (sf)      AAA (sf)
C                XS0260554661            A+ (sf)       A+ (sf)
D                XS0260555395            B+ (sf)       B+ (sf)
E                XS0260555981            B- (sf)       CCC+ (sf)


DECO 15 - PAN EUROPE: S&P Lowers Rating on Class F Notes to D
-------------------------------------------------------------
S&P Global Ratings lowered its credit ratings on DECO 15 - Pan
Europe 6 Ltd.'s class D, E, and F notes.  At the same time, S&P
has affirmed its 'D (sf)' rating on the class G notes.

S&P's ratings address the timely payment of interest and the
ultimate payment of principal no later than the April 2018 legal
final maturity date.  On the April 2016 interest payment date
(IPD), the class F only received EUR16,161 of the EUR52,755
interest due and the class G notes did not receive any interest.

In S&P's view, the transaction experienced interest shortfalls
because of spread compression between the loan and the notes.
The weighted-average margin on the remaining loans is not
sufficient to cover issuer expenses and the notes' interest.
With only two loans remaining, the transaction has become more
exposed to periodic spikes in prior-ranking transaction costs.

S&P has therefore lowered to 'CCC+ (sf)' from 'B- (sf)' and to
'CCC- (sf)' from 'B- (sf)' its ratings on the class D and E
notes, respectively, in line with S&P's criteria for assigning
'CCC' category ratings, to reflect the higher risk of interest
payment default.  S&P believes these classes of notes face at
least a one-in-two likelihood of interest payment default.

The interest shortfalls represent a failure of the class F notes
to pay timely interest, which S&P believes is unlikely to be
repaid within 12 months.  S&P has therefore lowered to 'D (sf)'
from 'CCC- (sf)' its rating on the class F notes, in line with
S&P's interest shortfall criteria.

S&P has also affirmed its 'D (sf)' rating on the class G notes
because they have experienced interest shortfalls and nonaccruing
interest amounts have been allocated to them.

DECO 15 - Pan Europe 6 is a 2007-vintage commercial mortgage-
backed securities (CMBS) transaction that closed in 2007 and is
currently backed by two loans secured on German commercial
properties.

RATINGS LIST

DECO 15 - Pan Europe 6 Ltd.
EUR1.445 bil commercial mortgage-backed floating-rate notes
                                  Rating
Class            Identifier       To                   From
D                233180AG3        CCC+ (sf)            B- (sf)
E                233180AH1        CCC- (sf)            B- (sf)
F                233180AJ7        D (sf)               CCC- (sf)
G                233180AK4        D (sf)               D (sf)


DEPFA BANK: Moody's Puts Ba1 Debt Ratings on Review for Upgrade
---------------------------------------------------------------
Moody's Investors Service has placed on review for upgrade DEPFA
Bank plc's (DEPFA) Ba1 long-term senior unsecured debt and
deposit ratings and its Not-Prime short-term deposit ratings, as
well as the Ba1/Not-Prime deposit ratings of its fully owned
subsidiary DEPFA ACS Bank (DEPFA ACS). Concurrently, Moody's
placed on review for upgrade the banks' b2 baseline credit
assessments (BCAs) as well as their Baa3(cr)/Prime-3(cr)
Counterparty Risk Assessments.

The rating actions reflect Moody's assessment that DEPFA's and
DEPFA ACS's BCAs are under upward pressure considering improving
capitalization as a result of a faster-than-expected wind-down of
DEPFA group's assets. In addition, DEPFA's debt and deposit
ratings and DEPFA ACS' deposit ratings may benefit from higher
rating uplift as a result of Moody's Advanced Loss Given Failure
(LGF) analysis, which takes into account the severity of loss
faced by the different liability classes in resolution. Such
higher uplift may be triggered by DEPFA's liability profile
displaying a growing volume of subordinated instruments and/or
senior debt relative to total assets.

Moody's said that, considering that the review is driven by two
separate considerations for DEPFA's ratings, it does not rule out
an upgrade by more than one notch.

RATINGS RATIONALE

KEY DRIVERS OF THE REVIEW FOR UPGRADE

The review for upgrade of DEPFA's debt and deposit ratings, as
well as DEPFA ACS' deposit ratings, reflects upward pressure on
their b2 BCAs. In particular, this reflects a combination of
DEPFA's:

(1) Good progress in unwinding the group's balance sheet and
risk-weighted assets, as illustrated by the decrease of total
assets by 24% year-on-year to EUR37 billion as at year-end 2015,
and the 27% decrease year-on-year of risk-weighted assets;

(2) Sustained efforts to contain operating losses, which Moody's
expects will help the group to continue the unwinding of its
balance sheet in a capital-preserving fashion; and

(3) The resulting improvement of DEPFA's regulatory capital
adequacy ratios. DEPFA reported a fully-loaded common equity Tier
1 ratio of 20.1% as of December 2015, up 4.6 percentage points
year-on-year.

In addition, Moody's said that it sees potential for higher
rating uplift based on its assessment of a gradually reducing
severity of loss in resolution for both senior debt investors and
depositors. In particular, the result of Moody's Advanced LGF
analysis could benefit from an increasing volume of subordinated
instruments at the group level relative to total assets. For
instance, if DEPFA abstains from buying back any further
subordinated debt instruments (after redeeming a modest amount of
hybrid capital in 2015), while continuing to reduce assets and
non-subordinated liabilities, the resulting change in DEPFA's
liability profile bears potential for a third notch of rating
uplift. The group's current Ba1 debt and deposit ratings include
two notches of uplift from Moody's Advanced LGF analysis.

FOCUS OF THE REVIEW

Moody's said that the review for upgrade will focus on two main
drivers for DEPFA's and DEPFA ACS' ratings:

Firstly, the agency will assess the bank's potential for keeping
up a good pace of risk-weighted asset reduction as well as for
cost containment. This is because both of these could help the
group to preserve capital and maintain a suitable capital cushion
for unexpected losses to the group's asset base and, more
importantly, for expected operating losses during the unwinding.
In this context, Moody's notes that it expects DEPFA to remain
structurally lossmaking over the next few years.

Secondly, Moody's will assess DEPFA's strategy for reducing
different liability classes as the group's asset base will
continue to shrink, resulting in lower funding requirements. The
rating agency expects that DEPFA will carefully balance the
benefits of redeeming early the most subordinated and therefore
most expensive liabilities on the one hand, while maintaining
healthy amounts of subordination for the benefit of senior
unsecured investors on the other hand.

WHAT COULD CHANGE THE RATING UP/DOWN

DEPFA's debt and deposit ratings and DEPFA ACS' deposit ratings
could be upgraded as a result of: (1) An upgrade of its
standalone BCA; (2) higher rating uplift as a result of Moody's
Advanced LGF analysis, which could be triggered by a reduction in
the estimated severity of loss in resolution; and/or (3) Moody's
assessment of higher-than-expected support being available from
the group's ultimate owner, the German government (Aaa stable).

An upgrade of DEPFA's and DEPFA ACS's BCAs could result from
sustained improvements in capitalization and an indication that
the recently improved level of capitalization will be sufficient
to absorb the anticipated remaining costs of the wind-down.

Moody's does not expect downward pressure on DEPFA's ratings as
indicated by the review for upgrade. However, downward pressure
could principally be exerted by: (1) A large unexpected loss or
similar set-backs in DEPFA's efforts to unwind its balance sheet
in a capital-preserving fashion; (2) a large buy-back of hybrid
instruments, if this materially reduces the volume of
subordinated instruments relative to total assets; and/or (3)
indications of the German government withdrawing its backing for
the Irish banks.

LIST OF AFFECTED RATINGS

DEPFA Bank plc:

The following ratings, rating inputs and rating assessments
assigned to DEPFA Bank plc were placed on review for upgrade:

-- the Ba1/Non-Prime long- and short-term bank deposit ratings
    (local and foreign currency)

-- the Ba1 long- term senior unsecured debt ratings (local and
    foreign currency)

-- the b2 BCA and b2 Adjusted BCA

-- the Baa3(cr)/Prime-3(cr) long- and short-term Counterparty
    Risk Assessment

DEPFA ACS Bank:

The following ratings, rating inputs and rating assessments
assigned to DEPFA ACS Bank were placed on review for upgrade:

-- the Ba1/Non-Prime long- and short-term bank deposit ratings
    (local and foreign currency)

-- the b2 BCA and b2 Adjusted BCA

-- the Baa3(cr)/Prime-3(cr) long- and short-term Counterparty
    Risk Assessment

DEPFA Bank Plc New York Branch:

The following ratings and rating assessments assigned to DEPFA
Bank Plc New York Branch were placed on review for upgrade:

-- the Ba1/Non-Prime long- and short-term bank deposit ratings
    (local and foreign currency)

-- the Ba1 long-term deposit note/CD program (local currency)

-- the Baa3(cr)/Prime-3(cr) long- and short-term Counterparty
    Risk Assessment


HORIZON HOLDINGS: Moody's Affirms B1 Corporate Family Rating
------------------------------------------------------------
Moody's Investors Service has affirmed the B1 Corporate Family
Rating (CFR) and B1-PD Probability of Default Rating for Horizon
Holdings I S.A.S., the top entity of the restricted group of
glass bottle producer Verallia.

Concurrently, Moody's has affirmed the B1 (LGD 3) rating to the
group's EUR300 million Senior Secured Notes that are proposed to
be upsized to EUR800 million, the EUR1,337 million Senior Secured
Term Loan B that is planned to reduce to EUR1,075 million and the
EUR200 million Revolving Credit Facility (RCF) planned to
increase up to EUR250 million, issued by Verallia Packaging
S.A.S., a majority owned indirect subsidiary of Horizon Holdings
I S.A.S. Moody's has also affirmed the B3 (LGD 6) rating to the
EUR225 million Senior Unsecured Notes, issued by Horizon Holdings
I S.A.S. The outlook on all ratings is stable.

-- The transaction will increase Moody's adjusted Debt/EBITDA by
    around 0.5x to approximately 6.0x and leaves the company
    weakly positioned in the B1 rating category.

-- The increase in leverage constrains the company's financial
    flexibility and its ability to deviate from its growth
    projections.

-- The B1 rating is supported by Moody's expectation the
    company's leverage will reduce back towards 5.5x over the
    next 12-18 months, owing to a combination of EBITDA growth
    and some debt repayment via the excess cash flow sweep.

Verallia plans to raise EUR500 million through a tap on existing
Senior Secured Notes. The proceeds of the transaction will be
used to repay EUR262 million on existing Senior Secured Term Loan
B due 2022. In addition, the company will make a distribution of
up to EUR230 million via partial repayment of its share premium
which represents up to 40% of the equity invested by the sponsors
at the time of the initial transaction. The remainder will be
used to pay fees and expenses associated to the transaction. As
part of the transaction, the RCF will be increased by up to EUR50
million to up to EUR250 million.

RATINGS RATIONALE

Moody's said, "The affirmation of the rating reflects our
expectation that continued positive trading performance will
offset the increase in the company's adjusted debt/EBITDA ratio
following the EUR230 million partial repayment of the share
premium. The elevated leverage constrains the company's financial
flexibility and its ability to deviate from its projections.
However, Moody's anticipates moderate improvements in the
company's operating profitability in the next 18 months, owing to
improving fixed cost absorption and benefits from initiated
restructuring measures, partly offset by negative pricing
effects."

The rating is weakly positioned in the B1 category, due to the
company's high financial leverage calculated at around 6.0x gross
debt/EBITDA (as adjusted by Moody's) pro forma for repayment of
the share premium. However, Moody's expects that the company will
gradually deleverage based on targeted profit improvements.

Verallia's operating profitability came under pressure in 2013-14
from increased competition, in particular in Italy and France.
Moody's notes positively Verallia's continued focus on efficiency
measures, which is likely to allow the company to gradually
improve operating profitability. The rating also considers the
risk of at least temporary margin compression, if input cost
inflation is not managed carefully and largely passed on to
customers.

The affirmation of Verallia's B1 CFR reflects its solid market
position as the third-largest global producer of glass
containers, with leading positions in its core markets of South
West Europe. Strong and long-standing customer relationships and
the group's track record of being perceived as a high quality and
reliable supplier also supports the rating. The B1 rating also
incorporates the group's strong historical profitability levels,
helped by its exposure to resilient end markets, lack of material
customer concentration, and track record of being able to pass on
volatile input costs as well as a focus on cost management.

Following the repayment of the share premium, Moody's expects
Verallia's liquidity profile will be good, supported by
approximately EUR64 million cash on balance sheet as of April 30,
2016 and pro forma for the transaction. Liquidity is also
supported by a EUR200 million revolving credit facility, planned
to be increased up to EUR250 million which Moody's expects to be
undrawn after the transaction, in addition to the generation of
funds from operations of around EUR270-300 million per year.

OUTLOOK

Moody's said, "The stable outlook reflects our expectation of
moderate improvements in operating profitability over the next 18
months, owing to improving fixed cost absorption and benefits
from initiated restructuring measures, partly compensated by
negative pricing effects. This should allow Verallia to
deleverage its capital structure."

WHAT COULD CHANGE THE RATING UP/DOWN

Upward pressure on the rating could result from Verallia's
success in improving profitability on the back of implemented
restructuring measures, such that its EBITDA margin improves back
to the high teen percentages and its Moody's-adjusted debt/EBITDA
declining below 4.5x.

Negative pressure on the rating could build if (1) profitability
were to weaken, with its EBITDA margins falling below the mid-
teen percentages, its Moody's-adjusted debt/EBITDA ratio trending
above 5.5x for a longer period; (2) the company were to generate
negative free cash flow; or (3) it embarked on a sizeable debt-
funded acquisition.

The principal methodology used in these ratings was Packaging
Manufacturers: Metal, Glass, and Plastic Containers published in
September 2015.

Headquartered in Paris, France, Verallia S.A. is a global leading
producer of glass containers for the food and beverage industry.
The group generated sales of EUR2.4 billion in 2015.

LIST OF AFFECTED RATINGS

Affirmations:

-- Issuer: Horizon Holdings I S.A.S.

-- Probability of Default Rating, Affirmed B1-PD

-- Corporate Family Rating, Affirmed B1

-- Senior Unsecured Regular Bond/Debenture, Affirmed B3 (LGD 6)

-- Issuer: Verallia Packaging S.A.S.

-- Backed Senior Secured Bank Credit Facility, Affirmed B1
    (LGD 3)

-- Backed Senior Secured Regular Bond/Debenture, Affirmed B1
    (LGD 3)

Outlook Actions:

-- Issuer: Horizon Holdings I S.A.S.

-- Outlook, Remains Stable

-- Issuer: Verallia Packaging S.A.S.

-- Outlook, Remains Stable



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


SALINI IMPREGILO: S&P Affirms 'BB+' CCR; Outlook Stable
-------------------------------------------------------
S&P Global Ratings said that it had affirmed its 'BB+' long-term
corporate credit rating on Italy-based construction company
Salini Impregilo SpA.  The outlook is stable.

At the same time, S&P assigned its 'BB+' issue rating and '4'
recovery rating to the proposed senior unsecured unguaranteed
notes of up to EUR500 million.  The recovery rating indicates
S&P's expectations of recovery prospects in the lower half of the
30%-50% range in the event of a payment default.

The issue and recovery ratings on the proposed notes are based on
preliminary information and are subject to the notes' successful
issuance and S&P's satisfactory review of the final
documentation.

S&P also affirmed its 'BB+' and '4' issue and recovery ratings on
Salini's existing EUR400 million senior unsecured unguaranteed
notes maturing in 2018, based on S&P's assumption that about
EUR200 million of these notes will be refinanced with the new
notes.  The recovery prospects are in the higher half of the 30%-
50% range.

Salini's operating performance in 2015 was roughly in line with
S&P's expectations, and it expects the company to continue
posting resilient results over the next few years.  This mainly
reflects S&P's forecast that Salini will generate organic revenue
growth of more than 10% annually, on the back of solid demand for
infrastructure and a large backlog that will provide strong
revenue coverage.

However, S&P forecasts that organic growth, pro forma the
acquisition of U.S.-based construction company Lane Industries,
will be somewhat subdued in 2016, due to delays in starting some
new projects.  S&P believes most of the revenue growth in the
coming years will come from the U.S., where Salini's market
position has strengthened significantly as a result of the Lane
acquisition in January this year.  S&P views the U.S. market as
one of the most promising in terms of infrastructure needs,
particularly following Congress' approval of a $352 billion
investment program over the next five years.  S&P estimates that
the North American market will contribute about 23%-25% of the
group's revenues in 2016 and almost 30% in 2019.  Nevertheless,
revenue growth will also continue to depend on Salini's presence
in emerging markets, as shown by the company's signing of a
EUR2.5 billion contract for a hydroelectric dam in Ethiopia this
year.

S&P projects a decline in our adjusted EBITDA margin for Salini
to about 9.5% in 2016 from 11% at year-end 2015, mainly due to
the consolidation of Lane.  In S&P's opinion, the decline in
profitability is not a weakness for the ratings.  Lane's margins,
particularly on its road paving business, are much lower than for
bridges, tunnels, or water infrastructure, which have been
Salini's traditional focus.  However, S&P believes the new
enlarged group's operations may reduce profit volatility over the
next few years.

In S&P's view, Lane's consolidation has improved Salini's
geographic diversification, but Salini still shows significant
exposure to emerging markets, which pose unpredictable risks.  S
continues to monitor the group's exposure to Venezuela and other
high-risk countries, and outstanding litigation.

Salini's leverage metrics have deteriorated temporarily this
year, owing to the Lane acquisition.  S&P anticipates that its
adjusted funds from operations (FFO) to debt metric will decline
to about 27%-30% in 2016 from 37% in 2015, and debt to EBITDA
will likely increase to 2.5x-2.7x from 2.1x.  However, S&P
believes these leverage metrics will recover in 2017, when S&P
projects FFO to debt will comfortably exceed 30%, and debt to
EBITDA will be in the 2.1x-2.3x range.

Management's commitment to reduce its reported debt levels
supports the ratings.  However, rating headroom has reduced
compared with 2015, and unexpected operating setbacks would put
pressure on the ratings, given the structural volatility of the
construction industry.  S&P believes that free operating cash
flow (FOCF) will likely remain negative in 2016, due to high
capital expenditure (capex), and turn modestly positive in 2017.
In S&P's view, the trend in working capital should improve in the
next few years, however, also reflecting the new group perimeter
and completion of some large projects.

S&P's adjusted debt figure is higher than the company's reported
debt because S&P excludes cash and equivalents that S&P believes
are not immediately available for debt repayment.  Furthermore,
S&P adds to debt about EUR305 million in financial guaranties
that Salini provides to nonconsolidated companies, as well as a
few other minor items, such as operating leases and pension
liabilities.

The stable outlook reflects S&P's view that Salini's adjusted FFO
to debt will rapidly recover in 2017 to comfortably above 30%,
after a temporary decline in 2016.  The company's solid order
backlog provides very high visibility on revenues and EBITDA in
2016-2017, reducing risk.  However, rating headroom has reduced
significantly after the Lane acquisition, and S&P expects it will
start to widen only in 2017.  Salini has stated that its dividend
distribution policy will be more generous in the coming years,
but S&P expects this will happen only after its leverage metrics
recover to more comfortable levels.

Negative rating pressure may arise if the company's adjusted FFO
to debt does not recover and remains below 30% for a sustained
period.  This would most likely happen if the group suffered a
severe operating setback or adverse trend in working capital,
particularly given its exposure to some high-risk countries.

S&P understands that Salini is not planning to pursue further
debt-funded acquisitions in the next few years, and believe that
any such activity may put pressure on the ratings.  S&P may also
lower the ratings if the company's liquidity position were to
deteriorate, although S&P sees this as unlikely.

An upgrade is unlikely over the next two years, since it would
require FFO to debt comfortably above 45%, which is far from the
levels S&P forecasts for 2016-2017.  However, beyond that period,
S&P might consider raising the ratings if the company's continued
strong backlog and favorable economic conditions translated into
higher-than-anticipated earnings and debt reduction.  An upgrade
would also depend on whether Salini successfully manages its
working capital and capex needs, such that FOCF turned
sustainably and meaningfully positive.



===========
L A T V I A
===========


LIEPAJAS METALURGS: Latvenergo Won't File Insolvency Petition
-------------------------------------------------------------
The Baltic Times reports that the Latvian state-owned power
utility Latvenergo is not going to file for insolvency of
financially troubled KVV Liepajas Metalurgs steel maker, Latvian
Economics Minister Arvils Aseradens said, answering questions
from lawmakers about the situation with KVV Liepajas Metalurgs.

According to The Baltic Times, the minister stated that although
the government representatives said earlier that they hoped one
of the unsecured creditors would file an insolvency claim against
KVV Liepajas Metalurgs, Latvenergo will not do this because of
its customer policy.

He stated that the amount that the steel plant owes to Latvenergo
is comparatively small, and so is its debt to Latvijas Gaze
natural gas company, The Baltic Times relates.

Mr. Aseradens said the employees of KVV Liepajas Metalurgs who
not been paid wages due to them also have failed to organize
themselves into a group of creditors, The Baltic Times notes.

Previously Mr. Aseradens, as cited by The Baltic Times, said that
KVV Liepajas Metalurgs was showing signs of insolvency and the
Latvian Privatisation Agency was working on the scenarios for
dealing with the steel company's problems which will be put
before the government so that it could discuss the ways to
recover the money that the Ukrainian owners of KVV Liepajas
Metalurgs owed to the Latvian states.

Ukraine's KVV Group announced in late March it had been forced to
take a decision on the conservation of KVV Liepajas Metalurgs
steel plant because the negative factors hampering the company's
operations -- the crisis in the global metal industry, the
company's debts to secured creditors, and the Latvian
government's reluctance to provide assistance to the industry --
were persisting, The Baltic Times recounts.

Liepajas Metalurgs metallurgical plant based in the Liepaja port
city in southwestern Latvia was declared insolvent after it
failed to repay a state-guaranteed loan to an Italian bank, The
Baltic Times relays.

The government sold the plant to Ukrainian investors, KVV Group,
in late 2014, The Baltic Times relates.  Liepajas Metalurgs was
renamed KVV Liepajas Metalurgs and officially re-opened on
March 6, 2015, but soon started having problems again, The Baltic
Times states.

According to The Baltic Times, the company has had difficulties
paying its electricity bills and wages to workers.  It has also
missed the deadline for a EUR2.7-million payment to the Latvian
state, an installment for purchase of the steel plant, The Baltic
Times discloses.

Based in the southwestern Latvian port city of Liepaja, Liepajas
Metalurgs used to be Latvia's leading metallurgical company and a
major provider of jobs in Liepaja.



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


COSAN SA: Moody's Assigns Ba3 Rating to Proposed $500MM Notes
-------------------------------------------------------------
Moody's Investors Service assigned a Ba3 foreign currency rating
to Cosan's proposed $US500 million notes due 2027 to be issued by
Cosan Luxembourg S.A. and irrevocably and unconditionally
guaranteed by Cosan S.A. industria e Comercio ("Cosan"). The deal
is part of Cosan's liability management strategy and net proceeds
will be mainly used to tender part of the company's existing
notes due 2018 and 2023 and for general corporate purposes. The
outlook for the rating is negative.

The rating of the proposed notes assumes that the final
transaction documents will not be materially different from draft
legal documentation reviewed by Moody's to date and assume that
these agreements are legally valid, binding and enforceable.

Ratings assigned:

Issuer: Cosan Luxembourg S.A.:

-- Proposed $US500 million senior unsecured notes due 2027: Ba3
    (foreign currency)

The outlook for the rating is negative.

RATINGS RATIONALE

Moody's said, "Cosan's Ba2 corporate family rating reflects the
group's aggregate credit risk, and is supported by the company's
diversified portfolio of businesses, including the entire sugar-
ethanol chain, fuel and gas distribution, lubes and land
management in Brazil, and its adequate liquidity profile. The
company's diversification, especially towards resilient
businesses such as the fuel and gas distribution, translates into
a stable cash source over the long-term. Moreover, we expect
Raizen and Comgas to distribute a significant amount of dividends
over the next several years, which will be the primarily
liquidity source to service Cosan's obligations.

"Constraining the ratings is Cosan's acquisitive growth history
and likely high dividends upstream to Cosan Limited -- although
the company is expected to generate enough cash to fund those
dividends and reduce leverage. Although this acquisitive history
translated into diversification, it also pressured leverage
ratios over the last several years. Moreover, even though Cosan
no longer proportionally consolidates its stake in Raizen, we
continue to incorporate Raizen's strengths, including its strong
cash generation, and risks, such as the exposure to the
underlying volatility of the sugar-ethanol business, in Cosan's
ratings."

The proposed notes were rated Ba3, one notch below Cosan's
corporate family rating to reflect the structural subordination
of Cosan's debt relative to the operating companies, namely
Raizen and Comgas. The deal is part of Cosan's liability
management strategy and proceeds from the transaction will be
used to tender part of the company's outstanding notes due 2018
and 2023, thus lengthening the company's debt amortization
schedule.

Draft legal documentation anticipates that if and when a proposed
spin-off of Comgas to a new holding (Comgas Holding) is completed
there will be a substitution of issuer (and guarantor), from
Cosan Luxembourg S.A. (guaranteed by Cosan S.A.) to Comgas
Holding (guaranteed by Comgas Holdings or Comgas). Upon the
conclusion of a possible spin-off the ratings for the notes would
be reassessed to reflect this new guarantee structure. The
substitution might occur within 36 months from the issue date,
otherwise Cosan S.A. will remain as guarantor of the notes.

The negative outlook on Cosan's ratings mirrors the negative
outlook on its two main subsidiaries, Raizen and Comgas.

A downgrade of Cosan's ratings could result from further negative
rating actions on Comgas or Raizen or if liquidity deteriorates.
In addition, the ratings could be downgraded if total adjusted
debt to EBITDA is sustained above 4.0x.

Although unlikely in the near term, Cosan's ratings could be
upgraded if the company is able to reduce leverage to levels
below 3.2x while maintaining an adequate liquidity profile. An
upgrade of Raizen or Comgas ratings would put positive pressure
on Cosan's ratings. (All pro-forma ratios including Raizen
figures).

Headquartered in Sao Paulo, Cosan S.A. Industria e Comercio has a
50% stake in Raizen (Ba1/Aaa.br negative) and a 61.3% stake in
Comgas (Ba2/Aa1.br negative). With annual revenue of BRL 74.1
billion (approximately $US 21 billion) as of March 2016, Raizen
is one of the global leading players in the sugar-ethanol segment
with an installed crushing capacity of 68 million tons and also
the third largest Brazilian fuel distributor, operating 5,809 gas
stations, mainly under the Shell brand name. Comgas, with
revenues of approximately BRL 6.5 billion (approximately $US 1.8
billion) in the same period, is Brazil's largest gas distributor,
providing natural gas to industrial, residential, commercial,
automotive, thermal-power generation and co-generation consumers.
The company benefits from an attractive concession area
strategically located in one of the most densely populated and
economically robust regions in the country.

Additionally, Cosan produces and distributes automotive
lubricants and base oil under the Mobil brand name and has a
37.7% stake in Radar, a land management company with interests in
agricultural properties. In the last twelve months ended March
2016 Cosan's net sales reached BRL8.5 billion (approximately $US
2.4 billion).



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


BABSON EURO: Moody's Assigns (P)B2 Rating to Class F Notes
----------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following provisional ratings to notes to be issued by Babson
Euro CLO 2016-1 B.V. (the "Issuer"):

-- EUR228,000,000 Class A-1 Senior Secured Floating Rate Notes
    due 2030, Assigned (P)Aaa (sf)

-- EUR12,000,000 Class A-2 Senior Secured Fixed Rate Notes due
    2030, Assigned (P)Aaa (sf)

-- EUR38,500,000 Class B-1 Senior Secured Floating Rate Notes
    due 2030, Assigned (P)Aa2 (sf)

-- EUR7,300,000 Class B-2 Senior Secured Fixed Rate Notes due
    2030, Assigned (P)Aa2 (sf)

-- EUR22,000,000 Class C Senior Secured Deferrable Floating Rate
    Notes due 2030, Assigned (P)A2 (sf)

-- EUR20,500,000 Class D Senior Secured Deferrable Floating Rate
    Notes due 2030, Assigned (P)Baa2 (sf)

-- EUR27,300,000 Class E Senior Secured Deferrable Floating Rate
    Notes due 2030, Assigned (P)Ba2 (sf)

-- EUR12,800,000 Class F Senior Secured Deferrable Floating Rate
    Notes due 2030, Assigned (P)B2 (sf)

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

RATINGS RATIONALE

Moody's provisional rating of the rated notes addresses the
expected loss posed to noteholders by legal final maturity of the
notes in 2030. The provisional ratings reflect the risks due to
defaults on the underlying portfolio of loans given the
characteristics and eligibility criteria of the constituent
assets, the relevant portfolio tests and covenants as well as the
transaction's capital and legal structure. Furthermore, Moody's
is of the opinion that the collateral manager, Babson Capital
Management (UK) Limited ("Babson"), has sufficient experience and
operational capacity and is capable of managing this CLO.

Babson Euro CLO 2016-1 B.V. is a managed cash flow CLO. At least
90% of the portfolio must consist of secured senior loans and up
to 10% of the portfolio may consist of Second-lien loans,
unsecured loans, Mezzanine loans. The portfolio is expected to be
approximately 70% ramped up as of the closing date and to be
comprised predominantly of corporate loans to obligors domiciled
in Western Europe. The remainder of the portfolio will be
acquired during the six month ramp-up period in compliance with
the portfolio guidelines.

Babson will manage the CLO. It will direct the selection,
acquisition and disposition of collateral on behalf of the Issuer
and may engage in trading activity, including discretionary
trading, during the transaction's four-year reinvestment period.
Thereafter, purchases are permitted using principal proceeds from
unscheduled principal payments and proceeds from sales of credit
improved and credit impaired obligations, and are subject to
certain restrictions.

In addition to the eight classes of notes rated by Moody's, the
Issuer will issue EUR 41,400,000 of subordinated notes. Moody's
will not assign ratings to this class of notes.

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

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

The rated notes' performance is subject to uncertainty. The
notes' performance is sensitive to the performance of the
underlying portfolio, which in turn depends on economic and
credit conditions that may change. Babson's investment decisions
and management of the transaction will also affect the notes'
performance.


CAIRN CLO VI: Moody's Assigns (P)B2 Rating to Class F Notes
-----------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following provisional ratings to notes to be issued by Cairn CLO
VI B.V. (the "Issuer" or "Cairn VI CLO"):

-- EUR212,000,000 Class A Senior Secured Floating Rate Notes due
    2029, Assigned (P)Aaa (sf)

-- EUR42,100,000 Class B Senior Secured Floating Rate Notes due
    2029, Assigned (P)Aa2 (sf)

-- EUR19,600,000 Class C Senior Secured Deferrable Floating Rate
    Notes due 2029, Assigned (P)A2 (sf)

-- EUR17,150,000 Class D Senior Secured Deferrable Floating Rate
    Notes due 2029, Assigned (P)Baa2 (sf)

-- EUR24,000,000 Class E Senior Secured Deferrable Floating Rate
    Notes due 2029, Assigned (P)Ba2 (sf)

-- EUR8,700,000 Class F Senior Secured Deferrable Floating Rate
    Notes due 2029, Assigned (P)B2 (sf)

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

RATINGS RATIONALE

Moody's provisional rating of the rated notes addresses the
expected loss posed to noteholders by the legal final maturity of
the notes in 2029. The provisional ratings reflect the risks due
to defaults on the underlying portfolio of loans given the
characteristics and eligibility criteria of the constituent
assets, the relevant portfolio tests and covenants as well as the
transaction's capital and legal structure. Furthermore, Moody's
is of the opinion that the collateral manager, Cairn Loan
Investments LLP ("CLI"), has sufficient experience and
operational capacity and is capable of managing this CLO.

Cairn VI CLO is a managed cash flow CLO. At least 90% of the
portfolio must consist of senior secured loans and senior secured
bonds and up to 10% of the portfolio may consist of unsecured
senior loans, second-lien loans, mezzanine obligations and high
yield bonds. The portfolio is expected to be at least 70% ramped
up as of the closing date and to be comprised predominantly of
corporate loans to obligors domiciled in Western Europe.

CLI will manage the CLO. It will direct the selection,
acquisition and disposition of collateral on behalf of the Issuer
and may engage in trading activity, including discretionary
trading, during the transaction's four-year reinvestment period.
Thereafter, purchases are permitted using principal proceeds from
unscheduled principal payments and proceeds from sales of credit
risk and credit improved obligations, and are subject to certain
restrictions.


JUBILEE CDO IV: S&P Affirms CCC+ Ratings on Two Note Classes
------------------------------------------------------------
S&P Global Ratings affirmed its 'BB+ (sf)', 'CCC+ (sf)', and
'CCC+ (sf)' credit rating on Jubilee CDO IV B.V.'s class C, D-1,
and D-2 notes, respectively.

The affirmations follow S&P's assessment of the transaction's
performance using data from the April 2016 trustee report.  S&P
performed a credit and cash flow analysis and applied its current
counterparty criteria to assess the support that each participant
provides to the transaction.

"We subjected the capital structure to a cash flow analysis to
determine the break-even default rate (BDR) for each rated class
of notes at each rating level.  The BDR represents our estimate
of the maximum level of gross defaults, based on our stress
assumptions, that a tranche can withstand and still pay interest
and fully repay principal to the noteholders.  In our analysis,
we used the reported portfolio balance that we considered to be
performing (EUR67.8 million), the reported weighted-average
spread (3.89%), and the weighted-average recovery rates for the
performing portfolio.  The transaction now contains only thirteen
assets that we consider performing.  We considered this
concentration in our analysis by running additional sensitivity
analysis," S&P said.

S&P incorporated various cash flow stress scenarios using its
short default patterns and timings for each rating category
assumed for each class of notes, combined with different interest
stress scenarios as outlined in S&P's corporate cash flow
collateralized debt obligation (CDO) criteria.

S&P's review of the transaction highlights that the class A and B
notes have fully repaid since S&P's previous review.  This has
increased the available credit enhancement for the remaining
classes of notes.

The transaction has an exposure to the Kingdom of Spain equal to
32.4% of the transaction's total performing asset balance.
However, S&P's ratings on the notes are below its threshold to
warrant the application of S&P's nonsovereign ratings criteria.

In S&P's analysis, it considered the increased credit enhancement
available to the remaining notes, as well as the 35% of the
aggregate collateral balance that is rated 'CCC' or 'CCC+'.

Furthermore, 48.9% of assets have maturity dates after the legal
final maturity of the notes.  In S&P's cash flow analysis, it has
applied haircuts (discounts) to the par balance of such assets
and amended their final maturities to match the maturity of the
notes, in line with S&P's corporate cash flow CDO criteria.

While S&P's credit and cash flow analysis indicates that the
class C notes could support higher ratings than that currently
assigned, the transaction has a significant portion of long-dated
assets, as well as a large proportion of assets rated in the
'CCC' category ('CCC+', 'CCC', and 'CCC-').  Combining these
factors with the high level of concentration in this largely
amortized transaction, S&P do not deem it appropriate to upgrade
the class C notes at this time.  Therefore, S&P has affirmed its
'BB+ (sf)' rating on the class C notes.

While S&P's credit and cash flow analysis indicates that the
class D-1 and D-2 notes could support higher ratings than those
currently assigned, S&P's ratings on these classes of notes are
also constrained by the application of its largest obligor test.
Therefore, S&P has affirmed its 'CCC+ (sf)' ratings on these
classes of notes.

Jubilee CDO IV is a cash flow collateralized loan obligation
(CLO) transaction that securitizes loans granted to primarily
speculative-grade corporate firms.  The transaction closed in
August 2004.  Since the end of the reinvestment period in October
2010, the issuer has used all of the scheduled principal proceeds
to redeem the notes in line with the transaction's documented
priority of payments.

RATINGS LIST

Class                Rating
             To                From

Jubilee CDO IV B.V.
EUR410 Million Secured Floating- And Fixed-Rate Notes

Ratings Affirmed

C            BB+ (sf)
D-1          CCC+ (sf)
D-2          CCC+ (sf


* NETHERLANDS: Number of Business Failures Down in May 2016
-----------------------------------------------------------
Statistics Netherlands (CBS) reports that the number of business
failures declined by 46 in May this year, versus 9 in April.

Most bankruptcies were filed in the trade sector, Statistics
Netherlands says.

According to Statistics Netherlands, with a total of 80, the
trade sector accounted for the highest number of bankruptcies.

In the sector financial institutions 66 bankruptcies were filed,
but these two sectors include the highest numbers of businesses,
Statistics Netherlands discloses.

In relative terms, the sector hotels and restaurants accounted
for the highest number of bankruptcies, Statistics Netherlands
notes.



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


CAIXA ECONOMICA: Moody's Puts B3 Deposit Ratings on Review
----------------------------------------------------------
Moody's Investors Service placed on review with direction
uncertain the Baa1 ratings of the mortgage covered bonds issued
by Caixa Economica Montepio Geral ("Montepio"; deposits B3;
adjusted baseline credit assessment caa1; counterparty risk (CR)
assessment B1(cr)).

RATINGS RATIONALE

The rating review reflects i) the downward pressure on the
covered bonds' ratings following the downgrade of Montepio's CR
assessment to B1(cr) from Ba3(cr), which would limit the covered
bonds' ratings at Baa2 (see "Moody's downgrades Montepio's
deposit and senior debt ratings to B3; outlook negative,"
published on 7 June 2016); and ii) the potential upward pressure
on the covered bonds' ratings, if bondholders were to approve the
issuer's proposed amendments to change the covered bond program's
structure to a conditional pass-through structure.

If the restructuring of the program is not finally approved, the
TPI framework would limit the covered bond rating at Baa2.
Conversely, an approval would be supportive of the covered bonds'
creditworthiness. We have therefore placed the ratings on review
with direction uncertain.

KEY RATING ASSUMPTIONS/FACTORS

Moody's determines covered bond ratings using a two-step process:
an expected loss analysis and a TPI framework analysis.

EXPECTED LOSS: Moody's uses its Covered Bond Model (COBOL) to
determine a rating based on the expected loss on the bond. COBOL
determines expected loss as (1) a function of the probability
that the issuer will cease making payments under the covered
bonds (a CB anchor event); and (2) the stressed losses on the
cover pool assets following a CB anchor event.

The CB anchor for this program is CR assessment plus 1 notch. The
CR assessment reflects an issuer's ability to avoid defaulting on
certain senior bank operating obligations and contractual
commitments, including covered bonds.

The cover pool losses for Montepio's mortgage covered bonds are
21.6%. This is an estimate of the losses Moody's currently models
following a CB anchor event. Moody's splits cover pool losses
between market risk of 16.6% and collateral risk of 5%. Market
risk measures losses stemming from refinancing risk and risks
related to interest-rate and currency mismatches (these losses
may also include certain legal risks). Collateral risk measures
losses resulting directly from cover pool assets' credit quality.
Moody's derives collateral risk from the collateral score, which
for this program is currently 7.5%.

The over-collateralization in the cover pool is 36.3%, of which
Montepio provides 13% on a "committed" basis. The minimum OC
level consistent with the Baa1 rating target is 3.5%, of which
the issuer should provide 0% in a "committed" form. These numbers
show that Moody's is not relying on "uncommitted" OC in its
expected loss analysis.

For further details on cover pool losses, collateral risk, market
risk, collateral score and TPI Leeway across covered bond
programs rated by Moody's please refer to "Moody's Global Covered
Bonds Monitoring Overview", published quarterly. All numbers in
this section are based on the most recent Performance Overview
(based on data, as of end March 2016).

TPI FRAMEWORK: Moody's assigns a "timely payment indicator"
(TPI), which measures the likelihood of timely payments to
covered bondholders following a CB anchor event. The TPI
framework limits the covered bond rating to a certain number of
notches above the CB anchor.

For the mortgage covered bonds issued by Montepio, Moody's has
assigned a TPI of Improbable.

FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE
RATINGS:

The CB anchor is the main determinant of a covered bond program's
rating robustness. A change in the level of the CB anchor could
lead to an upgrade or downgrade of the covered bonds. The TPI
Leeway measures the number of notches by which Moody's might
lower the CB anchor before the rating agency upgrades the covered
bonds because of TPI framework constraints.

The TPI assigned to Montepio's mortgage covered bonds is
Improbable. The TPI Leeway for this program is 0 notches. This
implies that Moody's might upgrade the covered bonds because of a
TPI cap if it lowers the CB anchor by one notch, all other
variables being equal.

A multiple-notch upgrade of the covered bonds might occur in
certain circumstances, such as (1) a country ceiling or sovereign
upgrade capping a covered bond rating or negatively affecting the
CB Anchor and the TPI; (2) a multiple-notch upgrade of the CB
Anchor; or (3) a material reduction of the value of the cover
pool.



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


ALTAI REGION: Fitch Affirms 'BB+' Currency Issuer Default Ratings
-----------------------------------------------------------------
Fitch Ratings has affirmed Russian Altai Region's Long-Term
Foreign and Local Currency Issuer Default Ratings (IDRs) at
'BB+', National Long-Term Rating at 'AA(rus)' and its Short-Term
Foreign Currency IDR at 'B'. The Outlooks on the Long-Term IDRs
and National Rating are Stable.

The affirmation reflects Fitch's unchanged baseline scenario
regarding Altai's stable budgetary performance, low debt, and
satisfactory liquidity.

KEY RATING DRIVERS
The 'BB+' ratings reflect the region's satisfactory budgetary
performance and low indebtedness. The ratings also take into
account the modest size of the region's economy and the depressed
macro trend for Russia, which could negatively influence the
region's financials in the medium term.

Fitch projects Altai will maintain stable budgetary performance,
with an operating balance of around 7%-9% of operating revenue
over the medium term (2015: 7%). This will be supported by the
region's prudent fiscal management aimed at cost control and
stable flow of current transfers and tax revenue in 2016-2018,
mitigating the negative impact of a prolonged economic downturn
in Russia. The region posted a small deficit before debt
variation of 2.3% of total revenue in 2015 (2014: 1%), driven
mostly by capex financing needs.

Fitch said, "we project Altai will remain prudent and maintain
conservative fiscal practices, leading to a manageable deficit
before debt variation not exceeding 5%-7% of total revenue in
2016-2018. The region funded 85% of its capex in 2015 with its
current balance and capital revenue. We expect the region's self-
financing capacity on capex to remain sound over the medium term.

"We expect Altai's direct risk to remain low in 2016-2018 (less
than 15% of current revenue). Historically the region's debt
position has been small, with subsidized federal budget loans
being the sole debt instrument since 2007. In the event of debt
increase due to the recession in Russia, the region's debt burden
will still be low by national and international standards, and
remain in line with the 'BB+' ratings. Last year, the region's
direct risk increased immaterially to RUB2.4 billion (RUB2
billion in 2014), as Altai contracted a new federal budget loan."

Altai depleted part of its cash reserves in 2015, reducing its
cash balance to RUB2.1 billion from RUB4 billion a year earlier.
Despite the depletion, the region's liquidity remains
satisfactory, almost fully covering its outstanding direct risk.

The region's contingent liabilities are limited to a single
outstanding guarantee (for a negligible RUB8.7m at end-2015) and
the low indebtedness of its public-sector companies. In Fitch's
view, the administration's oversight of its public sector
companies is adequate, limiting the region's exposure to material
contingent risk.

Fitch assesses Altai's economy as weak by international standards
due to the region's low economic output per capita. Altai's 2014
gross regional product (GRP) per capita was 35% below the
national median. This is in part attributed to the concessional
taxation of agriculture, which largely relies on in-kind
exchanges that is not captured in tax accounts and official
statistics. Positively, Altai's economy is fairly diversified
with low concentration of tax revenue; the top 10 taxpayers
represented 21% of the region's consolidated tax revenue in 2015.

RATING SENSITIVITIES

A downgrade could result from significant deterioration in
operating performance, coupled with a radical increase in the
region's total risk.

Fitch said, "Positive rating action is unlikely in our base line
scenario, given the worsened economic environment and dim
prospects for a swift recovery in Russia."


ATON CAPITAL: Moody's Changes Outlook on B2 Ratings to Stable
-------------------------------------------------------------
Moody's Investors Service has changed the outlook to stable from
negative on the B2 local and foreign currency long-term issuer
ratings of Aton Capital Group (ACG). At the same time, the long-
term issuer ratings, and the Not-Prime local and foreign currency
short-term issuer ratings have been affirmed.

Today's rating action reflects Moody's view that the company's
business model has proven to be relatively resilient to pressures
stemming from the challenging operating environment in Russia
since 2014.

RATINGS RATIONALE

The stable outlook on ACG's ratings was prompted by: (1)
Resilient profitability in 2014-15 despite a challenging
operating environment and external shocks such as plummeted oil
price, economy contraction, dramatic local currency depreciation
and elevated interest rate environment; and (2) Moody's
expectation that the depreciated rouble, along with the
stabilization of economic conditions recently, should improve the
company's revenues from private equity and investment banking
businesses in 2016-17.

Despite external shocks experienced in 2014-15 and the
challenging operating environment in recent years, ACG's business
model has remained resilient and profitable. This is due to
reliance on its brokerage business, which provided robust
recurring income that was sufficient to cover operational costs.
The company recognized $US26.5 million net profit in 2015, which
translates into a return on average equity of 9.6% compared to
8.6% a year before. ACG's strong results have been bolstered by:
(1) Increased revenue from intense client repo and trading
activity as, since the beginning of 2015, fixed-income asset
prices have experienced a dramatic recovery amid reduced interest
rates and a strengthened rouble; (2) robust foreign-exchange
income amid high rouble volatility; and (3) continuing tight
control over operational costs.

Although Moody's forecasts a 1.5% Russian economy contraction in
2016, it expects to see modestly positive growth in the second
half of the year on a quarter-on-quarter basis along with GDP
growth of 1.5% in 2017 as noted in June 2016. The stabilization
of economic conditions will likely encourage demand for riskier
assets and foster local bond and equity placements in 2016-17,
which should improve ACG's revenues from its investment banking
division. On top of this, the rating agency expects a stronger
performance of ACG's private equity projects, thanks largely to
imports substitution, with the depreciated rouble providing a
competitive advantage to local producers in agriculture,
manufacturing and other sectors.

WHAT COULD MOVE THE RATINGS UP/DOWN

Upward pressure on the long-term issuer ratings of ACG could be
driven by (i) strengthening of its market franchise and
profitability, (ii) further business diversification and (iii)
lowering of the group complexity to mitigate transparency risks.
However, in Moody's view, these improvements may only materialize
over the longer period of time.

Downward pressure could be exerted on ACG's ratings as a result
of significant capital erosion, material leverage increase or
deterioration of its liquidity profile, although Moody's does not
currently see any immediate risks associated with negative
pressure.


CHUVASH REPUBLIC: Fitch Affirms 'BB+' LT Issuer Default Ratings
---------------------------------------------------------------
Fitch Ratings has affirmed the Russian Chuvash Republic's
(Chuvashia) Long-Term Foreign and Local Currency Issuer Default
Ratings (IDRs) at 'BB+', with Negative Outlooks, and Short-Term
Foreign Currency IDR at 'B'. The agency has also affirmed the
republic's National Long-Term Rating at 'AA(rus)' with a Negative
Outlook.

The republic's outstanding senior unsecured domestic bond ratings
have been affirmed at 'BB+' and 'AA(rus)'.

The affirmation reflects the republic's stable key credit metrics
over the past six months, although the Negative Outlook reflects
Fitch's expectations that debt metrics will weaken due to growing
direct risk amid continuing budget deficit.

KEY RATING DRIVERS
The 'BB+' rating reflects Chuvashia's moderate, but growing,
direct risk as well as satisfactory, albeit weakened, budgetary
performance compared with the historical average. The ratings
also take into account a nationwide economic downturn, which
could negatively influence the republic's financials and a weak
institutional framework for Russian sub-nationals.

Fitch expects the republic's direct risk to grow towards 52% of
current revenue by end-2018, due to continuing budget deficit,
from 42% in 2015 and 34% in 2014. However, the adverse effect of
this increase is partly mitigated by structural improvement to
the region's debt profile. The proportion of market debt
decreased to 38% of total outstanding at end-2015, from 73% at
end-2014, following the receipt of RUB6.3 billion loans from the
federal budget, which the region had used to refinance short-term
bank loans. The budget loans have a three-year maturity and carry
negligible interest rates, which will help the republic to save
on interest payments.

Fitch projects the republic's budgetary performance will remain
satisfactory with a 7%-8% operating margin over the medium term.
In 2015, the operating balance increased to 8.4% of operating
revenue in 2015 from 7.6% in 2014, which is still below the 13.9%
seen in 2013. The improvement was due to cost optimization by the
administration as well as higher corporate income tax (up 9.6%
yoy) and excise duties (up 16.1% yoy). Fitch expects the budget
deficit to narrow to 5% in 2016-2018 from 7.6% in 2015, driven by
cuts in capital spending and control over opex.

Refinancing pressure on the budget will persist over the medium
term as the region will have to repay about 89% of its direct
risk during 2016-2018. In the near term refinancing needs for
2016 are limited to the repayment of RUB0.2 billion amortizing
bonds and RUB3.3 billion budget loans (of which RUB2.5 billion
are short-term treasury loans). Undrawn credit lines with banks
total RUB11.3 billion, which cover the region's 2016 refinancing
needs by 3x.

The republic's socio-economic profile is historically weaker than
that of the average Russian region. Its per capita gross regional
product was 35% lower than the national median in 2014. However,
Chuvashia has a diversified industry-oriented economy with a
broad tax base, ie the 10 largest taxpayers represent only 23% of
tax proceeds. According to the administration's estimates, the
republic's economy contracted 5.5% in 2015, worse than the 3.7%
fall in national GDP. Fitch expects the Russian economy will
contract 0.7% in 2016, which could negatively impact the
republic's economic prospects.

Russia's institutional framework for sub-nationals is a
constraint on the republic's ratings. Frequent changes in the
allocation of revenue sources and in the assignment of
expenditure responsibilities between the tiers of government
hampers the forecasting ability of local and regional governments
in Russia.

RATING SENSITIVITIES

Sharp growth of direct risk to above 50% of current revenue,
coupled with growing refinancing pressure and further
deterioration of operating performance, could lead to a
downgrade.


KAZAN CITY: Fitch Affirms 'BB-' LT Issuer Default Ratings
---------------------------------------------------------
Fitch Ratings has affirmed the Russian City of Kazan's Long-Term
Foreign and Local Currency Issuer Default Ratings (IDRs) at
'BB-', with Stable Outlooks, and Short-Term Foreign Currency IDR
at 'B'. The agency has also affirmed the city's National Long-
Term Rating at 'A+(rus)' with Stable Outlook.

The city's outstanding senior unsecured domestic bonds have been
affirmed at 'BB-' and 'A+(rus)'.

The affirmation reflects Fitch's unchanged base case scenario
regarding Kazan's high but stable direct risk, modest budget, and
a small deficit before debt variation over the medium term.

KEY RATING DRIVERS
The ratings reflect the high direct risk of Kazan driven by large
capex in the past, its modest budget with a low operating balance
and a weak institutional framework for Russian sub-nationals. The
ratings also factor in a diversified local economy with stagnant
gross city product, amid a recession in Russia, and potential
support from the Republic of Tatarstan (BBB-/Negative/F3).

Fitch said, "We project Kazan's operating performance to remain
adequate over the medium term with an operating balance below 5%
of operating revenue (2015: 2.4%) and a close to zero current
balance (2015: -0.6%). We expect the city's administration to
maintain cost control to limit the growth of operating
expenditure while tax flexibility remains weak. We also expect
decreasing interest payments due to interest rates on budget
loans being reduced to 0.1% from 0.5% from 2016 onwards.

"Fitch projects deficit before debt variation to remain small at
1%-2% of total revenue over the medium term, after an average
0.6% in 2014-2015, as the administration seeks to balance the
budget amid implied restrictions on new market borrowings (bank
loans and bonds) other than for refinancing needs. We therefore
project the city's direct debt to stabilize at RUB4.8 billion in
2016-2018, equal to 20%-25% of current revenue.

"We expect Kazan's direct risk to remain high over the medium
term, before moderately declining towards 135% of current revenue
in 2018, from 154% in 2015. Around 85% of direct risk relates to
RUB25.4billion budget loans from Tatarstan, which were allocated
to infrastructure development in preparation for Universiade
2013. The high debt is mitigated by the city's long-term maturity
profile with a grace period until 2023 and principal amortization
in 10 annual installments to 2032.

"Short-term refinancing risk is low as Kazan has no bank loans
maturing until 2017, when it will need to refinance all its bank
loans. We expect the city will have reasonable access to domestic
financial markets to enable it to refinance maturing debt."

Kazan is the capital of Tatarstan, one of the most developed
Russian regions. The city's economy is well-diversified and has a
developed industrial sector. The latter is dominated by
petrochemicals, machine-building and food processing. In 2015,
Kazan's gross city product was stable in real terms, according to
the city's administration. It outpaced the national economy,
which contracted 3.7%. The administration estimates the city's
economy will grow 1% in 2016 and about 3% annually in 2017-2018.

RATING SENSITIVITIES

A gradual decline of direct risk relative to current revenue,
accompanied by an improving operating balance to around 7% of
operating revenue, could lead to an upgrade.

An increase in direct debt to above 50% of current revenue or a
weakening of the operating balance towards zero could lead to a
downgrade.


KRASNODAR REGION: Fitch Affirms 'BB' LT Issuer Default Ratings
--------------------------------------------------------------
Fitch Ratings has affirmed Russian Krasnodar Region's Long-Term
Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB'
and National Long-Term rating at 'AA-(rus)' with Stable Outlooks.
The Short-Term Foreign Currency IDR has been affirmed at 'B'.

The region's outstanding senior unsecured domestic bonds have
also been affirmed at 'BB' and 'AA-(rus)'.

The affirmation reflects unchanged Fitch's base case scenario
regarding stabilization of the region's net overall risk and
sustainably positive current balance over the medium term.

KEY RATING DRIVERS
The 'BB' rating reflects Krasnodar's high direct risk, which is
partly mitigated by a high proportion of long-term low cost
budget loans, adequate fiscal performance and a well-diversified
economy. The ratings also consider the region's material
contingent risk stemming from its large public sector and the
weak institutional framework for Russian sub-nationals.

Fitch said, "We forecast Krasnodar's current balance will improve
to about 5% of current revenue in 2016-2018 from a close to zero
average in 2013-2015. This will be supported by growing tax
revenues and measures aimed at slowing down operating
expenditure. We project 9% tax revenue growth in 2016, largely
due to the restoration of corporate income tax after a material
tax refund in 2015. It should offset the expected 5% decline in
transfers from the state amid deteriorating national public
finances.

"We project the deficit before debt variation continues to narrow
to 3%-4% of total revenue over the medium term. It decreased to
6.6% in 2015 from a high average of 19.0% in 2012-2014. We
project capex will stabilize at 10%-11% of total expenditure in
2016-2018, down from an average 35% in 2011-2013, reflecting the
completion of large infrastructure investments for the 2014
Winter Olympic Games."

Fitch projects net overall risk to remain high at 90% of current
revenue over the medium term. At end-April 2016, direct risk
amounted to RUB133.8 billion (76.7% of current revenue), 40% of
which was budget loans linked to the Olympics financing. They
bear a 0.1% interest rate and mature in 2023-2034, which reduces
annual debt service and eases refinancing pressure on the budget.
Additionally Krasnodar is exposed to material contingent risk
stemming from its PSEs' debt, which is estimated by Fitch at
RUB25.4 billion (14.6% of current revenue), including RUB11.5
billion guaranteed debt of the Olympics developer NPJSC Centre
Omega.

Fitch said, "Like most Russian regions, Krasnodar has some
refinancing pressure as RUB77.8 billion (58% of direct risk) is
due between 2016 and 2019. Fitch expects Krasnodar to refinance
maturing debt with banks loans and bond issues. At end-May 2016,
the region had RUB9 billion undrawn credit lines that covered
half of its refinancing needs in 2016. We expect the region to
continue to have fair access to capital market to fund its
borrowing needs."

Fitch views Russia's weak institutional framework for local and
regional governments (LRGs) as a constraining factor on the
region's ratings. It has a short track record of stable
development compared with many of its international peers.
Unstable intergovernmental set-up leads to lower predictability
of LRGs' budgetary policies and negatively affects the region's
forecasting ability, and debt and investment management.

Krasnodar region's economy is diversified, providing a broad tax
base. Krasnodar is among the top five Russian regions by gross
regional product (GRP) and population, and its GRP per capita is
13% above the national median (2014). Krasnodar's administration
preliminary estimates the GRP to narrow 4% in 2015, close to the
wider national trend (decline 3.7%), and expects GRP to stabilize
in 2016 supported by growing agricultural and industrial sectors.

RATING SENSITIVITIES
A strong operating balance of about 10% of operating revenue on a
sustained basis accompanied by reduction of net overall risk
towards 60% of current revenue (2015: 90%) could lead to positive
rating action.

Consistently weak operating balance insufficient to cover
interest expense or inability to maintain the net overall risk to
current revenue below 100% would lead to negative rating action.


NK BANK: Moody's Changes Outlook on B3 Deposit Ratings to Neg.
--------------------------------------------------------------
Moody's Investors Service has changed to negative from stable the
outlook on NK Bank's B3 long-term local- and foreign-currency
deposit ratings and affirmed these ratings. Simultaneously,
Moody's has affirmed NK Bank's baseline credit assessment (BCA)
and adjusted BCA of b3. The bank's Not Prime short-term local-
currency and foreign-currency deposit ratings were also affirmed.

Concurrently, Moody's has affirmed NK Bank's long-term and short-
term Counterparty Risk Assessments (CR Assessments) of B2(cr) /
Not Prime(cr).

Moody's rating action is primarily based on NK Bank's audited
financial statements for 2015 prepared under International
Financial Reporting Standards (IFRS), its unaudited financial
statements for 2016 year to date prepared under local GAAP, as
well as information received from the bank management.

RATINGS RATIONALE

The change of the outlook on the deposit ratings reflects: (1)
the increase in NK Bank's stock of problem loans (PL) and their
low coverage by loan loss reserves (LLR) which implies high
provisioning charges in the next 12 to 18 months; and (2) the
bank's high appetite for risky equity investments.

The affirmation of the ratings reflects: (1) NK Bank's currently
high reported capital levels that provide some loss-absorption
buffers; and (2) the bank's sustainable funding and liquidity
profile.

Moody's anticipates that over the next 12 to 18 months, NK Bank
will continue to report higher-than-market average credit losses
because its PL ratio (the so-called "high-risk" category loans as
disclosed in the bank's IFRS) surged to 28.5% of gross loans at
year-end 2015 from 13.8% reported a year earlier. Over the same
period, non-performing loans (NPLs; loans overdue by more than 90
days, which form a part of PL) increased to 11.5% from 6.3%.
Although NK Bank's IFRS LLR increased to 15.7% of the gross loan
portfolio as of year-end 2015 from 9.3% reported at year-end
2014, this only provided approximately 55% coverage of PL.
Therefore, the rating agency expects that the heightened
provisioning charges will continue to suppress NK Bank's
profitability and capital buffer in 2016 and beyond.

In 2015, NK Bank also increased its market risk appetite as it
acquired a large portfolio of equity instruments comprising non-
listed shares of Russia-based manufacturing companies. The volume
of these investments stood at RUB1.2 billion or 53% of the bank's
reported Tier 1 capital as at year-end 2015 and Moody's cautions
that the bank may make further similar investments to increase
this portfolio over 2016. The bank expects to receive regular
dividend payouts from these investments. However, in Moody's
opinion, the value of future dividend streams is unpredictable,
as is the bank's potential ability to liquidate this position
quickly without a large discount.

Moody's notes that NK Bank's capital adequacy ratios (CAR) are
reportedly solid and underpinned by a high proportion of loss-
absorbing Tier 1 component. At year-end 2015, its Basel I Tier 1
and total CAR stood at 17.6% and 20.2%, respectively. However,
the rating agency estimates that, had the bank improved the
coverage of PL by LLR to the market-average level of 70%-75% at
year-end 2015 (from the reported 55% coverage), its Tier 1
capital ratio would have been in the 12%-13% range. Although this
still compares well with NK Bank's b-3 rated peer group, Moody's
highlights that, in this case, the carrying value of the bank's
risky equity investment portfolio would have accounted for
approximately 75% of the adjusted Tier 1 capital, a very high
level given the lack of reliable methods to estimate fair value
of these investments.

NK Bank is mainly funded by customer accounts that stood at
around 80% of the bank's total non-equity funding at 1 May 2016,
according to local GAAP financial statements. The short-term
nature of these customer accounts and their high concentration
(whereby top 20 deposits together accounted for 62% of the total
customer funding at January 1, 2016) are offset by NK Bank's
liquidity buffer which, according to Moody's estimates, exceeded
26% of the bank's total assets at May 1, 2016.

WHAT COULD MOVE THE RATINGS DOWN / UP

NK Bank's ratings have low upward potential in the next 12 to 18
months given the negative outlook assigned to these ratings. A
reversal of the outlook back to stable would require a
stabilization of the bank's asset quality metrics in the context
of sufficient coverage of problem loans by LLR. Another
prerequisite for stabilization of the rating outlook would be a
significant reduction of the bank's recently acquired equity
securities portfolio.

A material further deterioration of NK Bank's asset quality
metrics (if not compensated by sufficient coverage of problem
loans by LLR and capital), could lead to a downgrade of the
bank's ratings. An increase of the proportion of NK Bank's equity
securities portfolio in relation to the bank's capital level
might also exert negative pressure on its ratings.

Headquartered in Moscow, Russia, NK Bank reported total assets of
RUB16.4 billion and total equity of RUB2.2 billion under audited
IFRS as of December 31, 2015.


SOVCOMFLOT PAO: Moody's Hikes Corporate Family Rating to Ba1
------------------------------------------------------------
Moody's Investors Service upgraded to Ba1 from Ba2 corporate
family rating (CFR) and to Ba1-PD from Ba2-PD probability of
default rating (PDR) of Sovcomflot PAO (SCF), a 100% state-owned
energy shipping company and provider of seaborne energy solutions
domiciled in Russia (Ba1 negative).

At the same time, Moody's upgraded to Ba2 from Ba3 SCF's senior
unsecured issuer rating and the senior unsecured rating of the
$800 million Eurobond issued by SCF Capital Limited and
guaranteed by SCF on the back of improvements to the company's
standalone credit quality (baseline credit assessment upgraded to
ba3 from b1). The upgrade takes into consideration that the
company is proactively addressing its liquidity management,
notably the refinancing of $800 million bond maturity in 2017.
The outlook on all ratings is negative (in line with support
provider).

RATINGS RATIONALE

SCF's position as a 100% state-owned company means that Moody's
rates the company under its government related issuer (GRI)
methodology. According to this methodology, SCF's Ba1 corporate
family rating is driven by a combination of (1) its baseline
credit assessment (BCA) of ba3, a measure of standalone credit
strength; (2) the Ba1 government bond rating of Russia, with a
negative outlook; (3) the low default dependence between SCF and
the Russian government; and (4) the strong probability of
provision of state support to the company in the event of
financial distress.

As part of the action, Moody's has upgraded SCF's BCA to ba3 from
b1, reflecting material improvement in the company's financial
performance and the expectation that liquidity will be managed
prudently. SCF's ba3 BCA is supported by: (1) continuing
favorable dynamics in the crude oil and oil products marine
shipping segment, in which SCF primarily operates; (2) the
company's market position as the world's number two owner of
tankers in terms of the number of vessels, and the company's
young fleet with an average age of eight years; (3) material
improvements in time charter equivalent (TCE) revenue and margins
thanks to higher rates and lower bunker fuel costs; (4) good cash
flow visibility as two-thirds of revenue originate from long-term
charters as opposed to the spot market; (5) relatively moderate
fleet maintenance costs; and (6) revenue growth potential from
fleet additions and growing diversification into the liquefied
natural gas (LNG) shipping and offshore services. Moody's
positively notes that SCF has fully funded its capex program and
is undertaking steps to proactively manage its 2017 bond
maturity.

The company's revenue in the last 12 months ended 31 March 2016
is roughly at the level of 2011, a year when Moody's started a
series of downgrades of the company's ratings from the Baa3 level
triggered by a prolonged industry downturn. Moody's however notes
material improvement in cash flow generation and profitability,
as SCF's last 12 months ended 31 March 2016 adjusted EBITDA and
cash flow from operations (CFO) were 56% and 125% higher than in
the full year of 2011. The company's leverage measured by
adjusted debt/EBIDA decreased to 3.6x as of end-March 2016 and
retained cash flow/debt improved to 21.4% in the 12 months ended
31 March 2016 from 5.1x and 13.8%, respectively, in the full year
2014. Moody's notes that the currently positive balance of supply
and demand in the tanker market remains fragile, and tanker fleet
additions in 2016-17 will weigh on charter rates pushing them
down from the elevated levels of 2015-Q1 2016. However the agency
expects market demand in the tanker segment to remain steady in
the next 12 months driven by the low oil prices and increased
refining activity, potentially paving way some further marginal
improvements in SCF's credit metrics in 2016.

SCF's standalone credit profile is constrained by (1)
vulnerability of SCF's cash flow to the volatile marine charter
rates, and (2) pressure on free cash flow generation as Moody's
expects SCF to continue to invest $500-$600 million a year into
new vessels construction in 2016-17.

STRUCTURAL CONSIDERATIONS

The one-notch differential between the CFR of Ba1 and the Ba2
senior unsecured rating of the SCF guaranteed bond continues to
reflect the fact that a large amount of SCF's debt (approximately
70%), is raised by the company's operating subsidiaries and is
secured by vessels, which brings it higher in relative priority
ranking to the unsecured instrument.

Although Moody's acknowledges a degree of subordination of the
rated instrument, it believes that the GRI support, if required,
will likely apply across all tranches of debt, should the
government step in to help avoid a default. In addition, the
agency takes into account the fact that the issuer's unencumbered
asset value more than twice exceeds the amount of the bond.

Rating Outlook

The negative outlook on SCF's rating is in line with the outlook
on the sovereign rating. This reflects Moody's view that the
company's resilience to the increased risk arising from the
prevailing negative operating conditions is limited, as reflected
by the alignment of the country ceiling for foreign-currency debt
with the sovereign bond rating.

What Could Change the Rating -- Up

-- an upgrade of Russia's government bond rating, provided that

-- there is an improvement in the company's standalone credit
    profile so that its adjusted debt/EBITDA sustainably stays
    below 3.5x and its adjusted funds from operations interest
    coverage stays above 4.5x.

What Could Change the Rating -- Down

-- a downgrade of Russia's sovereign rating and lowering of the
    foreign-currency bond ceiling, and/or

-- a deterioration in the company's standalone credit profile so
    that its adjusted debt/EBITDA rises above 4.5x and its
    adjusted funds from operations interest coverage declines
    below 3.5x on a sustained basis.



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


PAESA ENTERTAINMENT: Moody's Affirms B3 Corporate Family Rating
---------------------------------------------------------------
Moody's Investors Service affirmed the B3 corporate family rating
and B3-PD probability of default rating of PAESA Entertainment
Holding, S.L., the owner and operator of PortAventura destination
resort in Spain ("PortAventura"). Moody's also affirmed the B3
rating of the senior secured notes issued by PortAventura
Entertainment Barcelona B.V. The outlook on all ratings has been
changed to positive from stable.

RATINGS RATIONALE

Moody's said, "This rating action reflects PortAventura's
improved performance since the initial rating in 2013 driven by
(1) successful track record of new attractions and openings, such
as Shambhala, the tallest rollercoaster in Europe, in 2012, Hotel
Caribe in 2013 and Hotel Lucy's Mansion in 2015, (2) the
company's resilience in the face of recession in some of its
source markets, such as Russia, and (3) our understanding from
the management that it will complete and open Ferrari Land on
schedule and on budget and generate the expected increases in
visits and per cap. This view is supported by our expectation
that Spain is poised to benefit from the sharply reduced demand
for such alternative vacation destinations as Egypt, Tunisia and
Turkey, following terrorist attacks in those markets in 2015. The
overall economic environment in Spain remains supportive
following two years of positive GDP growth (1.4% in 2014 and
estimated 3.2% in 2015) and based on expectations of 2.9% GDP
growth in 2016 and 2.4% in 2017."

PortAventura's leverage (debt/EBITDA) has remained around 5.5x in
2014 - 2015 while its coverage (EBITA/interest expense) increased
marginally from 1.8x to 1.9x over the same period. The company's
leverage is expected to decline closer to 5x following the
opening of Ferrari Land in 2017. The company's retained cash flow
turned positive for the first time in 2015. However, PortAventura
also began its $75 million investment in Ferrari Land which puts
pressure on its metrics after capex and will result in negative
free cash flow and drawings on the revolving credit facility. All
metrics include Moody's standard adjustments.

Moody's said, "PortAventura's rating continues to be constrained
by the company's small size relative to peers and its single
location, which is a risk. Its customer base is also highly
concentrated in Spain with approximately 68% of visits derived
from its home country. While we perceive this as a structural
feature of the business to some extent, greater diversification
of its customer base would be positive.

"The positive rating outlook reflects our expectation that
PortAventura will complete Ferrari Land as outlined and generate
increased revenues and cash flows from the project, thereby
deleveraging, while maintaining stable liquidity."

Moody's said, "The rating could be upgraded if the gross leverage
metric were to fall well below 5.5x on a sustainable basis, with
strong liquidity and consistent positive free cash flow
generation. We would anticipate this most likely to occur upon
timely, on-budget completion and successful operation of Ferrari
Land."

The rating outlook would likely revert to stable if Ferrari Land
development is materially delayed or exceeds its budget of $75
million or if the revenue and cash flow improvements from this
project fail to materialize such that the gross leverage metric
approaches 6.0x on a continued basis, or following a significant
deterioration in liquidity or free cash flow generation.



===========
S W E D E N
===========


COM HEM HOLDING: S&P Affirms 'BB' CCR, Outlook Stable
-----------------------------------------------------
S&P Global Ratings affirmed its 'BB' long-term corporate credit
rating on Swedish cable operator Com Hem Holding AB (publ).  The
outlook is stable.

At the same time, S&P assigned its 'BB' long-term corporate
credit rating to Com Hem's subsidiary, NorCell Sweden Holding 3
AB (publ).  S&P equalizes its rating on NorCell Sweden Holding 3
AB with that on Com Hem because S&P views the company as a core
subsidiary, fully integrated in the Com Hem group, and because it
is the group's funding subsidiary.

S&P affirmed its 'BB' issue rating on NorCell Sweden Holding 3
AB's senior unsecured loans and notes.  The '3' recovery rating
on this debt is unchanged, reflecting S&P's expectation of
meaningful recovery in the lower half of the 50%-70% range in the
event of a payment default.  S&P also assigned its 'BB' issue
credit rating to NorCell Sweden Holding 3 AB's proposed senior
unsecured notes. The recovery rating on the proposed notes is
'3'.

S&P withdrew Com Hem AB as the issuer on senior unsecured debt,
because NorCell Sweden Holding 3 AB is now the sole borrowing
entity for the group.

S&P's rating on the proposed senior unsecured debt is subject to
its receipt and satisfactory review of all final transaction
documentation.

The affirmation reflects S&P's expectation that our credit
metrics and business risk profile assessment for Com Hem will
remain unchanged after the proposed notes issuance and the
company's announced agreement on June 8, 2016, to acquire Swedish
pay TV operator, Boxer TV Access AB. Proceeds from the proposed
notes of SEK1.75 billion maturing in 2021 will primarily be used
to refinance the existing SEK0.5 billion loan maturing in 2017
and part of the revolving credit facility (RCF), leaving net
leverage unchanged.  Following the acquisition, S&P forecasts a
temporary peak in its adjusted leverage (debt to EBITDA) for Com
Hem at year-end 2016 (as S&P expects the acquisition, subject to
regulatory approvals, will close in the second half of 2016)
above 4.5x before reverting to about 4.1x-4.3x in 2017, in line
with S&P's previous forecast.  S&P also expects free operating
cash flow (FOCF) to debt will remain at about 9%, based on S&P's
understanding that management is committed to maintaining capital
expenditures (capex) at about SEK1.1 billion annually.

Acquiring Boxer will provide Com Hem with larger scale and some
growth opportunities, but this will be offset by weaker margins.
The purchase will likely add half a million digital TV customers
to Com Hem's customer base, and its market share for digital TV
will increase to about 41% from 22% currently.  Com Hem's
footprint will expand by 40% to cover 2.5 million homes.  The
deal will also provide Com Hem with diversification into the one-
family homes segment and some growth opportunities if it sells
its own products to Boxer customers.

However, S&P only expects a gradual migration from the
terrestrial network to fiber connections among Boxers customers
over the coming years, given that currently only a small number
are connected.  S&P do not expect any significant investment
requirements for Com Hem to support the migration.  Furthermore,
S&P also expects that the acquisition will dilute profitability
to an adjusted EBITDA margin of 42%-43%, from 51% in 2015.

S&P's assessment of Com Hem's business risk profile is still
supported by:

   -- The company's established position in the Swedish market;
   -- A well-invested and upgraded hybrid-fiber-coaxial DOCSIS
      3.0 network that offers Internet speeds of 500 megabits per
      second in 92% of its coverage area;
   -- The competitive TiVo platform for digital TV and high
      profitability (even after the consolidation of Boxer); and
   -- Growth opportunities in Com Hem's network area including
      the enterprise segment).

These strengths are partly offset by intense competition from
various technology platforms in multidwelling areas, including a
70% overlap with fiber networks (although Com Hem's superior
network offers higher speeds in 80% of the area in which it
operates).  Com Hem competes with TeliaSonera AB and Telenor ASA,
which are much larger operators and use several alternative
technologies, including digital subscriber lines and fiber optic
networks.

S&P's assessment of Com Hem's financial risk profile remains
constrained by the company's relatively high leverage and a
shareholder remuneration policy (including dividends and share
buybacks) that S&P thinks will result in distributing nearly all
of its FOCF.  S&P expects that net debt would increase about
SEK1.3 billion following the acquisition of Boxer and S&P notes
that Com Hem has a committed bank line of SEK0.8 billion
designated for the transaction.  However, S&P expects that the
increase in EBITDA will counterbalance the higher debt and that
the company will remain committed to its financial policy, which
targets a reported leverage ratio of 3.5x-4.0x.  S&P anticipates
that this will translate into S&P Global Ratings-adjusted
leverage of 4.1x-4.5x.

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

   -- Organic revenue growth of about 4%, based on higher
      penetration in digital TV thanks to the TiVo platform,
      customers migrating to faster broadband speeds, and cross-
      selling opportunities leading to increased uptake of
      bundled offers;

   -- Price increases in broadband services and digital TV to
      represent 50% of the growth in 2016.  S&P expects further
      modest price increases in coming years and no material
      long-term impact on the churn rate following a recent
      improvement in customer satisfaction;

   -- The Boxer acquisition adding about SEK1.9 billion in
      revenues on a full-year basis;

   -- Profitability dilution from Boxer operations (S&P
      understands its reported EBITDA margin is below 20%),
      including some integration costs.  S&P expects an adjusted
      EBITDA margin of 42%-43%;

   -- Capex of about SEK1.1 billion in 2016, with no significant
      increase in capex in the near term as a result of the
      acquisition; and

   -- Dividends of SEK293 million in 2016 and annual share
      buybacks of about SEK700 million in 2016-2017.

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

   -- Adjusted debt to EBITDA at 4.1x-4.3x in 2017;
   -- FOCF to debt in the 9%-10% range in 2017; and
   -- EBITDA interest coverage of 5x-6x in 2016-2017.

The stable outlook reflects S&P's expectation that Com Hem's
revenues, EBITDA, and FOCF will continue to rise.  It also
reflects S&P's anticipation that adjusted debt to EBITDA, after a
temporary peak between 4.5x and 5.0x in 2016 depending on when
the acquisition closes, will remain below 4.5x on a sustained
basis, while FOCF to debt will stabilize at about 8%-9%.

S&P could lower its ratings on Com Hem if revenues and EBITDA are
weaker than S&P expects, for example, if prices are lower or the
company's market share erodes.  S&P could also lower the ratings
if FOCF to debt fell below 5% or adjusted debt to EBITDA exceeded
4.5x, following acquisitions or larger shareholder remuneration
than S&P currently anticipates.

S&P currently views an upgrade as remote given Com Hem's
financial policy.  An upgrade would likely follow an adjusted
debt-to-EBITDA ratio markedly below 4.0x on a sustainable basis
and FOCF to debt well into the 10%-15% range.


STENA AB: Moody's Lowers Corporate Family Rating to B1
------------------------------------------------------
Moody's Investors Service downgraded the corporate family rating
(CFR) of Swedish diversified group Stena AB (Stena) to B1 from
Ba3, its probability of default rating to B1-PD from Ba3-PD and
its senior unsecured notes rating to B3 from B2. Concurrently,
Moody's has downgraded the senior secured notes rating of
subsidiary Stena International S.A. to Ba3 from Ba2 and its
senior secured bank credit facility rating to Ba3 from Ba2. The
outlook on all Stena's and Stena International S.A.'s ratings is
stable.

This rating action concluded the review for downgrade initiated
by Moody's on February 9, 2016.

"We have downgraded Stena's corporate family rating to B1 to
reflect our expectation that the company's financial profile will
be materially affected when its offshore drilling contracts
expire in 2016 and 2017. Our view considers the ongoing
challenging pricing environment facing the sector and our
expectation that market conditions will remain under considerable
pressure when Stena has to renew its contracts", says
Marie Fischer-Sabatie, a Senior Vice President at Moody's and
lead analyst for Stena.

"While Stena has a diversified business profile that includes
more stable activities, which will mitigate the negative effects
on the drilling business, we still expect that its financial
profile will weaken over a prolonged period of time. Therefore,
Stena's ratings are more appropriately positioned at B1", adds
Ms. Fischer-Sabatie.

RATINGS RATIONALE

The downgrade of Stena's ratings mainly reflects Moody's
expectation that the offshore drilling sector will remain under
considerable pricing pressure when Stena's offshore drilling
contracts expire in 2016-17 and the group has to find new
employment for its rigs. Moody's expects that this will result in
Stena's financial profile weakening materially and for a
prolonged period of time. Stena's offshore drilling division is
the largest contributor to group EBITDA and represented 39% of
group consolidated EBITDA from operations in the 12-month period
through March 2016.

Stena, which owns seven rigs and has six rigs under contracts
currently, will see all six contracts expire between H2 2016 and
H1 2017. Given the currently weak market environment, Moody's
anticipates that it will be challenging for Stena to re-contract
all its rigs at contract expiry and that any new contract will
include substantially lower rates than existing contracts.

Stena has launched a cost-cutting program at its drilling
division, which will contribute to reducing its breakeven and
will mitigate the lower rates. However, Moody's still expects
that Stena's drilling profits will reduce in 2017, and that group
consolidated leverage (i.e. gross debt/EBITDA, including Moody's
adjustments), which stood at 5.5x at year-end 2015, will
substantially increase to around 7x, with high uncertainty as
regards the pace and extent of any recovery beyond 2017. As such,
Moody's projects that Stena's financial profile will be weaker
during a period longer than 12-18 months and consequently its CFR
is more appropriately positioned at B1.

Since the end of 2014, the offshore drilling sector has been
affected by sharp declines in day rates paid by customers. This
resulted from (1) lower oil prices, which drove oil companies to
reduce their investments in exploration and production; and (2)
large oversupply in the drilling sector, which could take several
years to dissipate.

Nevertheless, the rating agency recognizes the benefits of
Stena's diversified business profile, which includes more stable
activities such as (1) real estate and investments; and (2) Stena
Line, which has been steadily growing its EBITDA in recent years.
This will help mitigate the pressures on the drilling division.

Moody's also considers the company's satisfactory liquidity
profile to be credit positive. Stena's liquidity is underpinned
by (1) a cash balance amounting to SEK1.7 billion as at 31 March
2016; (2) several available revolving credit facilities, the main
one totalling $800 million and maturing in March 2020; and (3) a
portfolio of financial investments and marketable securities,
exceeding SEK8 billion, which could be monetized if needed.

Stena's main liquidity needs relate to capex, which Moody's
projects to total SEK7-8 billion in 2016 on a consolidated basis.
As at 31 March 2016, Stena had debt repayments over the next 12
months amounting to SEK4.8 billion, including a EUR300 million
(approximately SEK2.7 billion) unsecured bond maturing in
February 2017.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook reflects Moody's expectations that Stena's
financial profile will weaken within the next 12-18 months, but
will nevertheless remain within the boundaries set for the B1
rating, supported as well by the group's solid liquidity sources.

WHAT COULD CHANGE THE RATING UP/DOWN

Upward pressure on Stena's ratings could develop beyond 2017
following (1) a sustainable recovery in internal cash flow
generation, with consolidated retained cash flow/net debt
approaching the mid-teens in percentage terms; and (2)
progressive deleveraging of the group's balance sheet, with total
consolidated debt/EBITDA below 6.0x.

Moody's could consider downgrading Stena's ratings if the
company's consolidated debt/EBITDA increases above 7.0x and its
consolidated (funds from operations + interest)/interest ratio
declines below 2.5x when its rig contracts expire, for a
prolonged period of time. A debt/EBITDA ratio above 6.0x and a
retained cash flow/net debt ratio below 10% at the restricted
group level might also result in a rating downgrade.

A downgrade could, in particular, take place if Stena cannot re-
contract some of its rigs at contract maturity in 2016-17 and/or
if new contract rates do not cover operating expenses. Downward
rating pressure could also result from (1) any significant
deterioration in the group's liquidity profile; and/or (2) Stena
increasing its appetite for risk in its trading activities.



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


NAV CAPITAL: FINMA Initiates Bankruptcy Proceedings
---------------------------------------------------
The Swiss Financial Market Supervisory Authority has initiated
bankruptcy proceedings against the following company:

   -- NAV Capital AG in Liquidation
   -- NAV Capital Partners AG in Liquidation

NAV Capital AG is a pre-eminent consulting investment company
headquartered in Zurich.



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


TURKIYE IS BANKASI: Fitch Affirms 'BB+' Rating on Sub. Notes
------------------------------------------------------------
Fitch Ratings has affirmed the IDRs, Viability Ratings (VRs) and
Support Ratings of Turkiye Is Bankasi (Isbank), Akbank T.A.S.
(Akbank), Yapi ve Kredi Bankasi (YKB) and Turkiye Garanti Bankasi
(Garanti). The Outlook on YKB's Long-Term IDRs is Negative. The
Outlooks on Akbank's, Isbank's and Garanti's Long-Term IDRs are
Stable.

Isbank and Akbank's 'BBB-' Long-term IDRs are driven by their
standalone creditworthiness, as reflected by their 'bbb-' VRs.
Garanti's and YKB's 'BBB' Long-term IDRs are driven by potential
support from their controlling shareholders, Banco Bilbao Vizcaya
Argentaria (A-/Stable) and Unicredit (BBB+/Negative),
respectively. YKB's ratings are sensitive not just to Unicredit's
ratings, but also to any decision by Unicredit to reduce or sell
its stake in the bank.

The ratings of all four banks' subsidiaries are equalized with
those of their parent institutions. Consequently, the Long-term
IDRs of the subsidiaries of Isbank, Akbank and Garanti have been
affirmed with Stable Outlooks, while the Outlooks on YKB's
subsidiaries are Negative.

KEY RATING DRIVERS: IDRS, NATIONAL RATINGS AND DEBT RATINGS OF
ISBANK AND AKBANK; VRS OF ALL FOUR BANKS

Fitch said, "The 'bbb-' VRs of all four banks continue to reflect
their still reasonable financial metrics in terms of performance
and capitalization, notwithstanding some weakening in 2015. They
also consider the banks' strong franchises, which mean that any
moderate deterioration in the operating environment should be
manageable, in Fitch's view. We expect the domestic macroeconomic
situation to be broadly supportive for sector loan growth and
asset quality, and forecasts GDP growth at 3.5% in 2016 and 2017,
but political tensions and security risks remain."

The banks' performance ratios remain adequate, despite having
weakened in recent years. Reported returns on equity ranged from
8.8% to 12.8% in 2015, notwithstanding the difficult operating
environment, higher loan impairment charges, margin pressure from
competition, and the cumulative impact of regulation on
profitability. Performance ratios have been supported by loan
repricing, good cost efficiency and in 1Q16, a rise in business
volumes. ROE rose strongly at Garanti (13.5%), YKB (12.1%) and
Akbank (15.1%) in 1Q16 but fell at Isbank (10.7%) due to a one-
off item.

Overall, Fitch considers the banks' loss absorption buffers to be
sound and capital is of good quality. The banks' Fitch Core
Capital (FCC) ratios fell by 50bp at Akbank (to 13.2%) and YKB
(10.0%) and remained stable at Isbank (11.5%) and Garanti (12.5%)
in 2015. FCC then rose slightly at all four banks at end-1Q16
post-Basel III implementation. There was uplift (by 65bp-85bp) to
capital ratios in 2015 from the revaluation of fixed assets at
YKB, Garanti and Isbank but this has not yet been implemented by
Akbank.

Capitalization is supported by the banks' still adequate internal
capital generation and low levels of net non-performing loans
(NPLs) to FCC. Pre-impairment profit is sound (ranging from 21%
to 26% of the banks' equity bases in 2015) indicating significant
capacity to absorb unexpected losses through income statements.
Loan growth targets are also less aggressive than in preceding
years, although internal capital generation could fall slightly
short of banks' loan growth targets in the short term leading to
moderate erosion of capital ratios. Capital ratios also remain
sensitive to further depreciation of the Turkish lira.

Downside risks to the banks' asset quality, and therefore also
performance, remain, notwithstanding their still reasonable
headline asset quality ratios. NPLs (defined as loans overdue by
90 days) ranged from 2.0% to 3.9% of the banks' gross loans at
end-1Q16, with Akbank, Isbank and Garanti outperforming the
sector average (of 3.3%) in this respect. Regulatory group 2
watch list loans were generally manageable at between 2% and 3%
of gross loans at end-1Q16. The exception was Garanti whose watch
list loans rose to 4.4% from 2.8% at end-2014, but this partly
reflected a single large loan. Regulatory group 1 but
restructured loans ranged from 1.3% to 2.2% of gross loans at the
four banks at end-1Q16, which Fitch also considers reasonable.

Specific reserve coverage of NPLs was an acceptable 75% at
Isbank, Garanti and YKB at end-1Q16, and significantly above the
sector average at Akbank (95%). However, total reserve coverage
of NPLs and group 2 watch list loans (including specific and
general reserves) was weaker at all banks at end-1Q16, ranging
from a moderate 53% (Garanti) to 70% (Akbank, Isbank).

Fitch expects some weakening of asset quality ratios at all four
banks given recent rapid loan growth, their high level of foreign
currency (FC) loans (end-1Q16: between 36% and 42% of total
portfolios at the four banks, including FC-indexed loans) and the
sharp depreciation of the local currency in 2015. FC loans
consist mainly of long-term exposures, often to weakly hedged
borrowers, including some companies in vulnerable sectors such as
energy-related project finance and tourism. As many are among the
banks' largest exposures, they also bring concentration risk.
However, these risks are mitigated by the fact that such loans
are frequently to prime corporates in Turkey with diversified
businesses and revenues. In addition, the long-term amortising
repayment structures of these loans mean that any asset quality
problems would feed through only slowly.

FC denominated wholesale funding, attracted mainly on
international markets, is significant at all four banks (equal to
between 21% and 29% of non-equity funding at end-2015), having
risen significantly since 2011. This heightens FC liquidity
risks, particularly given the sizable short-term component of
this funding. However, the banks generally have sufficient FC
liquidity (primarily placements with the Turkish Central Bank
under the reserve option mechanism and maturing currency swaps)
to cover liabilities falling due within one year, although a
prolonged loss of market access could significantly strain their
FC liquidity positions. Of the four banks, Fitch views liquidity
risk as more moderate at YKB and Garanti as they would likely
retain access to FC liquidity support from foreign shareholders
in case of need. Akbank's FC liquidity coverage was weaker at
end-2015 although it has since successfully rolled over a
$US1.2billion syndicated loan. Fitch's base case is that the
Turkish banks should continue to enjoy good market access.

YKB's and Isbank's subordinated notes ratings of 'BBB-' and
'BB+', respectively, are notched down once from the bank's IDR,
in the case of YKB, and from the bank's VR in the case of Isbank,
to include one notch for loss severity and zero notches for non-
performance risk.

KEY RATING DRIVERS: YKB AND GARANTI's IDRS, NATIONAL RATING,
SUPPORT RATING AND DEBT RATINGS
YKB and Garanti's IDRs and National Ratings are driven by
potential support from Unicredit, via Unicredit Bank Austria
(BBB+/Negative), and BBVA (A-/Stable), respectively. Unicredit
Austria owns a 50% stake in YKB's holding company (which in turn
holds an 82% stake in YKB). BBVA holds only a 39.9% stake in
Garanti but has full management control via a majority of seats
on the board of directors. Garanti is fully consolidated into
BBVA's financial statements. Fitch considers Garanti and YKB to
be strategically important subsidiaries for their parent banks,
hence their Support Ratings of '2', which reflect a high
probability of support in Fitch's view.

YKB is notched down once from its parent due to its high level of
integration with Unicredit and longstanding status as a
strategically important subsidiary of the group. Garanti is
notched down twice from BBVA reflecting its recent acquisition
and greater operational and management independence. The two
notch difference for Garanti also reflects potential constraints
on BBVA's ability to provide support to Garanti given the
latter's size relative to BBVA (end-2015: equal to about 12% of
group assets).

KEY RATING DRIVERS: AKBANK'S AND ISBANK'S SUPPORT RATINGS AND
SUPPORT RATING FLOORS
Akbank and Isbank's '3' Support Ratings and 'BB-' Support Rating
Floors (SRFs) are based on potential support from the Turkish
sovereign (BBB-/Stable), reflecting their high systemic
importance. The three-notch difference between Turkey's sovereign
ratings and the SRFs reflects potential limitations on the
authorities' ability to provide FC support, given the banks'
sizable FC wholesale funding and the sovereign's moderate FC
reserves.

KEY RATING DRIVERS: SUBSIDIARIES
The Long- and Short-term IDRs assigned to Akbank AG, Ak Finansal
Kiralama A.S. Ak Yatirim Menkul Degerler A.S., Is Finansal
Kiralama A.S., Is Faktoring A.S., Garanti Faktoring A.S., Garanti
Finansal Kiralama A.S., Yapi Kredi Finansal Kiralama A.S.,
YapiKredi Yatirim Menkul Degerler A.S. and Yapi Kredi Faktoring
A.S. and the Long-term National Rating of Is Yatirim Menkul
Degerler A.S., are equalised with those of their respective
parents, reflecting Fitch's view that they represent core, highly
integrated, subsidiaries.

RATING SENSITIVITIES
VRS OF ALL FOUR BANKS; IDRS, NATIONAL RATINGS AND DEBT RATINGS OF
ISBANK AND AKBANK
The VRs of all four banks remain sensitive to a marked
deterioration in Turkey's economic performance, resulting in
heightened pressure on the banks' asset quality, capital and/or
liquidity positions. Likewise, if Turkish banks' access to
wholesale funding markets became restricted (not Fitch's base
case), resulting in a deterioration of FX liquidity position,
this would also be a negative rating factor. Upside potential for
the four banks' VRs is limited, given that they are already at
the level of the sovereign rating. Isbank and Akbank's IDRs,
National ratings and debt ratings are primarily sensitive to a
change in the banks' VRs.

IDRS, NATIONAL RATING, SUPPORT RATING AND DEBT RATING OF YKB AND
GARANTI
The Outlooks on YKB and Garanti's IDRs reflect those on their
respective parents. A downgrade of Unicredit, which has a
Negative Outlook, would result in a downgrade of YKB. Likewise a
downgrade of BBVA would result in a downgrade of Garanti. A
downgrade of Turkey's sovereign rating and revision of the
Country Ceiling (BBB) would also result in a downgrade of the
banks' Long-term FC IDRs. An upgrade of Garanti would require
both positive rating action on BBVA and the raising of Turkey's
Country Ceiling.

Unicredit has recently stated that it is considering different
options to strengthen group capitalisation. While no plans have
been announced, sale of stakes in listed subsidiaries, like YKB ,
is one possible option. If Unicredit decides to sell or reduce
its stake in YKB, it would increase the likelihood of YKB's Long-
term IDRs being downgraded by one notch to 'BBB-', the level of
the bank's VR. However, if the stake in YKB was sold to a higher-
rated shareholder, it could also be moderately positive for YKB's
credit profile and result in the Outlook on YKB's Long-term
foreign currency IDR being revised to Stable.

SUBORDINATED NOTES RATING OF ISBANK AND YKB
The notes' ratings are primarily sensitive to a change in the
Isbank's VR and YKB's IDR. The ratings are also sensitive to a
change in respective notching due to a revision in Fitch's
assessment of the probability of the notes' non-performance risk
or in its assessment of loss severity in case of non-performance.

SUPPORT RATINGS AND SUPPORT RATING FLOORS OF ISBANK AND AKBANK
The SRFs of Isbank and Akbank could be revised down if either (i)
the Turkish sovereign is downgraded; (ii) the FC positions of the
banks, or more generally Turkey's external finances, deteriorate
considerably, or (iii) Fitch believes the sovereign's propensity
to support the banks has reduced. The introduction of bank
resolution legislation in Turkey aimed at limiting sovereign
support for failed banks could negatively impact Fitch's view of
support propensity, and hence the banks' SRs and SRFs, but Fitch
does not expect this in the short term.

Upward revisions of the banks' SRFs are unlikely unless there is
a marked strengthening of the sovereign's ability to support the
banks in FC.

SUBSIDIARIES
The subsidiaries' ratings are sensitive to any changes in (i) the
parents' ratings; and (ii) Fitch's view of the ability and
propensity of the parents to provide support in case of need.
AAG's support-driven IDRs are also sensitive to a change in its
strategic importance to Akbank.

The rating actions are as follows:

Turkiye Is Bankasi A.S. and Akbank T.A.S.
Long-term FC and local currency (LC) IDRs affirmed at 'BBB-';
Outlook Stable
Short-term FC and local currency IDRs affirmed at 'F3'
Viability Rating affirmed at 'bbb-'
Support Rating affirmed at '3'
Support Rating Floor affirmed at 'BB-'
National Long-term Rating affirmed at 'AA+(tur)'; Outlook Stable
Senior unsecured notes affirmed at 'BBB-'/'F3'
Subordinated notes (Isbank only) affirmed at 'BB+'

Turkiye Garanti Bankasi A.S.
Long-term FC and LC IDRs affirmed at 'BBB'; Outlook Stable
Short-term FC and LC IDRs affirmed at 'F2'
Viability Rating affirmed at 'bbb-'
Support Rating affirmed at '2'
National Long-term Rating affirmed at 'AAA(tur)' ; Outlook Stable
Senior unsecured notes affirmed at 'BBB'/'F2'

Yapi ve Kredi Bankasi A.S.
Long-term FC and LC IDRs affirmed at 'BBB'; Outlook Negative
Short-term FC and LC IDRs affirmed at 'F2'
Viability Rating affirmed at 'bbb-'
Support Rating affirmed at '2'
National Long-term Rating affirmed at 'AAA(tur)'; Outlook
Negative
Senior unsecured debt affirmed at 'BBB'/'F2'
Subordinated notes affirmed at 'BBB-'

Akbank AG
Long-term FC IDR affirmed at 'BBB-'; Outlook Stable
Short-term FC IDR affirmed at 'F3'
Support Rating affirmed at '2'

Ak Finansal Kiralama A.S. and Ak Yatirim Menkul Degerler A.S.
Long-term FC and LC IDRs affirmed at 'BBB-'; Outlook Stable
Short-term FC and LC IDRs affirmed at 'F3'
Support Rating affirmed at '2'
National Long-term Rating affirmed at 'AA+(tur)'; Outlook Stable
Senior unsecured debt Long-term ratings affirmed at 'BBB-' (Ak
Finansal only)
Senior unsecured debt Short-term ratings affirmed at 'F3' (Ak
Finansal only)

Is Finansal Kiralama A.S. and Is Faktoring A.S.
Long-term FC and LC IDRs affirmed at 'BBB-'; Outlook Stable
Short-term FC and LC IDRs affirmed at 'F3'
Support Rating affirmed at '2'
National Long-term Rating affirmed at 'AA+(tur)'; Outlook Stable

Is Yatirim Menkul Degerler A.S.
National Long-term Rating affirmed at 'AA+(tur)'; Outlook Stable

Yapi Kredi Finansal Kiralama A.O., YapiKredi Yatirim Menkul
Degerler A.S. and Yapi Kredi Faktoring A.S.
Long-term FC and LC IDRs affirmed at'BBB'; Outlooks Negative
Short-term FC and LC IDRs affirmed at 'F2'
Support Rating affirmed at '2'
National Long-term Rating affirmed at 'AAA(tur)'; Outlook
Negative

Garanti Faktoring A.S. and Garanti Finansal Kiralama A.S.
Long-term FC and LC IDRs affirmed at 'BBB'; Outlook Stable
Short-term FC and LC IDRs affirmed at 'F2'
Support Rating affirmed at '2'
National Long-term Rating affirmed at 'AAA(tur)'; Outlook Stable



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


ACTIVE- BANK: NBU Expects to Recover UAH1.5BB from Sale Proceeds
-----------------------------------------------------------------
The National Bank of Ukraine has authorized the Deposit Guarantee
Fund to sell the assets of failed banks that have been pledged as
collateral against refinancing loans.

There are plans to sell the property rights worth UAH878 million
arising from loan agreements entered into between borrowers and
ACTIVE- BANK PJSC, EUROGASBANK JSC, BROKBUSINESSBANK PJSC, and
Bank FORUM PJSC/ In particular, the list of property rights
approved for sale includes those for which collateral is oil
refinery manufacturing facility located in the town of Chuguiev,
hotel facility located in the town of Truskavets, and
manufactuting facilities located in the city of Kyiv.

Additionally, there are plans to sell the real estate items worth
over UAH620 million.

In 2016, the National Bank of Ukraine expects to recover UAH12.8
billion in proceeds from the sale of collateral pledged against
refinancing loans, including UAH7.1 billion from property rights
for loans and UAH4 billion in proceeds from the sale of
securities and UAH1.7 billion in proceeds from  the sale of real
estate.

In 2015, the NBU received UAH1.1 billion in proceeds from the
sale of failed banks' assets.


BANK VELES: Court of Appeal Confirms Legitimacy of Liquidation
--------------------------------------------------------------
The Kyiv Administrative Court of Appeal on May 26, 2016,
confirmed the legitimacy of NBU Board Resolution on liquidation
of Bank Veles PJSC. The Court ruling came into effect immediately
after being announced.

In January 2016, Mr Bondariev, the shareholder of Bank Veles
PJSC, took his claim to the Kyiv District Administrative Court,
seeking to overturn as illegitimate the NBU Board Resolution on
the Revocation of the Banking License and Liquidation of Bank
Veles PJSC and Decision of the Executive Directorate of the
Deposit Guarantee Fund (DGF) On the Initiation of the Winding-up
Proceedings in respect of this bank.

The Court partially upheld the claim by the shareholder,
overturning the decisions by the NBU and the DGF ordering the
liquidation of Bank Veles PJSC.

The NBU filed an appeal to the Kyiv Administrative Court of
Appeal, seeking to challenge the ruling by the court of the first
instance. Having considered the case, the Kyiv Administrative
Court of Appeal confirmed the legitimacy of NBU Board Resolution
on liquidation of Bank Veles PJSC.

On Dec. 10, 2015, the NBU issued a decision to revoke the banking
license and wind up Bank Veles PJSC for the bank's involvement in
risky activities   and systematic breaches of financial
monitoring laws. Nearly 90% of all the operations performed by
the bank fit the description of risky operations. For the part of
2015, the value of these operations exceeded USD 100 million.
Moreover, a significant number of the operations were conducted
using forged documents.


FINANCE BANK: National Bank of Ukraine OKs Voluntary Liquidation
----------------------------------------------------------------
The Board of the National Bank of Ukraine has decided to approve
the liquidation of FINANCE BANK PJSC and INVESTMENT TRUST BANK
upon the initiative of their owners and revoke their licenses.

The rationale behind the decision by the bank's shareholders and
ultimate beneficiary owner was their intention to shift their
focus to other activities.

"It is an appropriate and responsible way to withdraw from the
market. Banking business is specific, exposed to risks, and
highly regulated.  Under such circumstances, a bank's owner may
opt   to focus on its core business and give up banking business.
In the case of voluntary liquidation, a bank meets its
obligations to customers  and  the Deposit  Guarantee Fund is not
put under financial burden  Accordingly, the reputation of bank's
owners will not be tarnished," said NBU Deputy Governor Ms
Rozhkova.

The NBU urged the shareholders and owners of FINANCE BANK PJSC
and INVESTMENT TRUST BANK to bring their ownership structures
with transparency requirements. The controller of the banks was
identified. However, he had no intention to engage in banking
business and opted for the voluntary liquidation of financial
institutions.

The total amount of these banks' liabilities to legal entities
and individuals was less than UAH11 million. The amount of liquid
funds available to FINANCE BANK PJSC and INVESTMENT TRUST is
sufficient to enable these banks to settle their obligations
without external borrowings.


FINANSOVA INITSIATYVA: Ukraine Court Freezes Owner's Property
-------------------------------------------------------------
Reuters reports that a Ukrainian court has approved a central
bank request to freeze the real estate and moveable property of
Ukrainian businessman Oleg Bakhmatyuk in connection with the
failure by a bank owned by him to repay loans of about
$160 million, the regulator said.

Last year, parliament introduced laws making owners of banks
accountable if their institutions collapse, prompted by an
economic crisis that pushed scores of lenders in Ukraine's
overpopulated and shadowy banking sector into bankruptcy, Reuters
recalls.

Reuters notes that the central bank said the court had decided to
freeze Bakhmatyuk's property while it considers a lawsuit brought
by the central bank over UAH4 billion ($158 million) it lent to
Finansova Initsiatyva, which was indirectly owned by 41-year-old
Bakhmatyuk. Finansova -- one of Ukraine's top 20 banks -- was
declared insolvent in June last year.

Bakhmatyuk, also owner of London-listed egg producer Avangardco,
is guarantor to the loans, the central bank said, says Reuters.


MYKHAILIVSKY (KYIV): Bank Placed Into Temporary Administration
---------------------------------------------------------------
interfax-Ukraine reports that the Individuals' Deposit Guarantee
Fund has introduced temporary administration to bank Mykhailivsky
(Kyiv) declared insolvent for one month — from May 23 to June 22,
2016 inclusively, the fund has said on its website.

Temporary administrator is a representative of the fund, Turiy
Irkliyenko, the news agency discloses.

The report notes that the NBU declared the bank insolvent on
May 23. The central bank also accused the bank of perpetrating a
fraud on May 20. The burden on the Individual Deposit Guarantee
Fund increased from UAH1.6 billion to UAH2.6 billion.

Bank Mykhailivsky was registered on June 14, 2013.

The bank ranked 71st among 109 operating banks as of April 1,
2016, in terms of total assets worth UAH2.954 billion, interfax-
Ukraine discloses citing the National Bank of Ukraine.


SMARTBANK PJSC: NBU Declares Bank Insolvent
-------------------------------------------
The National Bank of Ukraine Board adopted a decision to declare
Smartbank PUBLIC JOINT STOCK COMPANY insolvent due to its non-
transparent ownership structure. NBU Board Decision No.20/B?,
dated May 24, 2016, has been issued to this effect.

Since May 2014, the NBU has repeatedly notified Smartbank PJSC
that its ownership structure fails to comply with transparency
requirements.

Following several unsuccessful attempts by different individuals
to secure the approval of the acquisition of a qualifying holding
in a bank in 2015-2016, Smartbank PJSC's ownership structure  was
never brought into compliance with transparency requirements  set
by the regulator.

It should be noted that Smartbank PJSC has replaced its
qualifying shareholder several times without the prior approval
by the NBU. The regulator has taken enforcement measures against
the Bank's qualifying shareholders for the violation of
applicable laws.

Smartbank PJSC became the third bank to be declared insolvent due
to its non-transparent ownership structure.

Deposits of less than 100 individuals were placed with this bank.
The financial burden on the Deposit Guarantee Fund will not
exceed UAH100,000.


UKRAINE: S&P Affirms 'B-/B' Sovereign Credit Ratings
----------------------------------------------------
S&P Global Ratings affirmed its 'B-/B' long- and short-term local
and foreign currency sovereign credit ratings on Ukraine.  The
outlooks on the long-term foreign and local currency ratings are
stable.

At the same time, S&P affirmed the 'uaBBB-' Ukraine national
scale rating on the country.

                               RATIONALE

The affirmation reflects the stabilizing macroeconomic picture
within Ukraine in 2016, which saw a return to growth in the first
quarter (for the first time in nine quarters) and the calming of
inflation, while the instatement of a new government in April
2016 ended a political deadlock that had stalled legislation.
This paves the way for the likely disbursement of a delayed
financing tranche from the International Monetary Fund (IMF) by
August, and for broader reforms to continue being passed by
parliament.  At the same time, S&P's 'B-' long-term ratings
capture the economic and political challenges that Ukraine still
faces.  These include widespread corruption, the unpredictable
security situation in the East of the country (where separatists
are fighting the Ukrainian army), sizable contingent liabilities,
and questions relating to the health of the financial sector.

Political infighting led to a no-confidence vote in parliament in
February, which was finally resolved in April by the replacement
of former Prime Minister Arseniy Yatsenyuk (who is also leader of
the junior coalition partner People's Front) by Volodymyr
Groysman (a party loyalist in the larger coalition partner Petro
Poroshenko Bloc [PPB] that supports President Poroshenko).  S&P
anticipates this consolidation of power will end the political
deadlock and allow parliament to pass key reforms, paving the way
for the disbursement of the next tranche of US$1.7 billion under
the IMF's Extended Fund Facility (EFF) program, which had been
delayed since September 2015.  S&P believes broader reforms will
continue, albeit with setbacks, and that Ukraine's western
partners will remain engaged.  The passage of a bill to raise
domestic gas prices (a key IMF condition) to full cost parity
ahead of schedule on April 27 was evidence of this.

Although Ukraine's economy posted positive growth in the first
quarter of 2016, increasing 0.1% year on year, growth prospects
remain challenging in light of weak exports, ongoing security
risks, the weak domestic business environment, and the need for
fiscal prudence.  S&P expects a slight pickup in growth for the
remainder of the year, culminating in a 1% full year growth for
2016, given a slight improvement in confidence and investment
thanks to a more predictable political environment, lower
inflation, and currency stabilization.  A pickup in 2017-2019
should lead to GDP growth averaging 2% per year in 2016-2019.

The size of the current account deficit narrowed sharply from
3.6% of GDP in 2014 to a near balance of 0.2% of GDP in 2015,
owing to import compression and a fall in exports, largely due to
large currency depreciation and a sharp reduction in trade with
Russia. On Jan. 1, 2016, the deep and comprehensive free trade
agreement between Ukraine and the EU came into effect, but,
simultaneously, Ukraine saw the suspension of a longstanding
preferential trade deal with Russia.  However, as the economy
stabilizes, S&P forecasts the current account deficit will
average 2.1% of GDP in 2016-2019 as imports rebound.  S&P
forecasts external debt, net of liquid assets (narrow net
external debt) will average 143% of current account receipts,
while gross external financing needs as a percentage of current
account receipts and usable reserves, S&P's key external
liquidity metric, will also stand at 142%.

Since the beginning of last year, the IMF has disbursed over one-
third (US$6.7billion) of the US$17.5 billion available under the
four-year EFF program, owing to large frontloading (the first
disbursement in March 2015 amounted to US$5 billion).  S&P's
ratings on Ukraine factor in S&P's assumption that the government
will remain broadly on course with the rest of the IMF program
and engaged with development partners, albeit with some continued
lags, which would mean it should receive a further about US$11
billion in installments by year-end 2018.  S&P anticipates that
the US$1.7 billion delayed tranche of IMF funds, along with the
associated external donor funds, will be disbursed after the
IMF's board meets in July 2016 and approves disbursement.

While the majority of IMF funds technically are lent to the
National Bank of Ukraine (NBU) to boost foreign exchange
reserves, continuation of the program requires fiscal prudence
and should also unlock other donor funds (such as from the U.S.
and EU) that contain explicit or implicit IMF conditionality.
S&P expects near-term sovereign debt repayments will be
fulfilled, given existing foreign exchange and hryvnia balances
held by the Ministry of Finance.  Now that external commercial
debt redemptions have been extended beyond 2018 as a consequence
of a debt exchange settled with Ukraine's private creditors in
October 2015, S&P considers obligations have become more
manageable.  The October debt exchange lowered the effective
interest rate on the entire outstanding stock of general
government debt, giving Ukraine three years during which it can
try to improve debt dynamics by increasing the primary fiscal
surplus and enacting reforms to boost growth.

After delays, the Rada (Ukraine's parliament) finally passed the
budget for 2016 on Dec. 24, 2015, with a forecast fiscal deficit
of 3.7% of GDP for the year.  Included in the broadly IMF-
compliant budget was a tax-system overhaul, lowering several key
tax rates--including the employer payroll tax from 41% to 22%--
moving tax rates more in line with peers.  Although S&P expects
Ukraine will suffer a near-term impact on revenues, the medium-
term fiscal outlook could be more optimistic, as the changes are
likely to broaden what has traditionally been a narrow and porous
tax base and thereby deliver more tax revenues in the medium
term. Additionally, the scrapping of a value-added tax payment
exemption on agricultural production, ongoing reforms to the
administration of revenues, and the prospect of state-owned oil
and gas company Naftogaz breaking even this year, given higher
tariffs, and thereby reducing the need for transfers from central
government, will provide support in controlling the fiscal
deficit.  S&P forecasts that the change in general government
debt will average 3.9% of GDP in 2016-2019.

With this said, S&P remains cautious on the fiscal outlook, owing
to the sizable risks that still remain, including the conflict in
the East (where military spending is already draining public
finances by a factor of 5.1% of GDP); large contingent
liabilities, included two court cases relating to a US$3 billion
Eurobond issued to Russia (the holders of this bond did not
accept the terms of the October debt restructuring), and an
approximately US$32 billion litigation case filed by Gazprom
against Naftogaz for nonpayment in a take-or-pay contract
(Naftogaz has also countersued Gazprom); and the possibility that
snap early elections next year could lead to further seats in the
Rada for populist parties, slowing the pace of Western-sponsored
reforms. In addition, concerns around the financing of a large
and growing pensions deficit remain.

At 76% of GDP at year-end 2015, Ukraine's net general government
debt remains high for a low-income economy, even after the public
debt restructuring in October 2015.  In S&P's view, the high
level of debt means that targeting a primary budgetary surplus
and retaining access to relatively cheap official financing via
the IMF and other donors are of critical importance for debt
sustainability, alongside sustained GDP growth.  Net general
government debt is forecast to average 70% of GDP in 2016-2019.

Capital controls, which the NBU has begun partially liberalizing,
remain in place.  The NBU put a limit on daily cash withdrawals
(although it relaxed them slightly recently) and has required
exporters to convert 75% of foreign currency revenues into local
currency.  Also in place are daily caps on wholesale market
foreign currency purchases, as well as other surrender and
transfer regulations.  S&P expects the liberalization process
will move slowly throughout the year as the NBU weighs up the
burden these controls have on foreign investment flows against
the risks that lifting them poses to the balance of payments and
the exchange rate.  Recent appreciation of the hryvnia also
reflects buoyant steel prices abroad, as well as a more stable
macroeconomic picture domestically.

Since February 2015 lows, official reserve assets have increased
by US$7.9 billion to US$13.5 billion as of May31, 2016,
reflecting IMF foreign currency loan inflows, reduced external
debt payments, the imposition of capital controls, and the shift
of the current account into balance (due to an even sharper
contraction in U.S. dollar-denominated imports versus exports).
After inflation targeting, accumulation of reserves remains the
NBU's second primary objective, and the central bank was able to
purchase US$529 million of foreign currency in April.  Rising
reserve assets have bolstered the NBU's credibility, promoting
increasing stability in the hryvnia market.

Conditions in the financial sector appear poor, with confidence
in the system strained and NPLs high, at an estimated 40% of
total loans.  S&P classifies Ukraine's banking sector in group
'10' ('1' being the lowest risk, and '10' the highest) under
S&P's Banking Industry Country Risk Assessment (BICRA)
methodology. Recapitalization and stress tests of the largest
banks operating in Ukraine, led by a newly reformed and more
prudent NBU, is in process.  Nevertheless, legacy issues
pertaining to related-party lending present a serious risk to
some large systemic banks, and hence to the broader system.  The
authorities' ability to save any such bad banks remains
uncertain.

                               OUTLOOK

The stable outlook reflects S&P's view that over the next 12
months the Ukrainian government will maintain access to its
official creditor support by pursuing required reforms, albeit
with a lag, on the fiscal, financial, and economic fronts.
Specifically, the stable outlook also factors in S&P's assumption
that the next tranche of IMF funds is disbursed in July or
August, unlocking the associated donor funds contingent on this,
and that the Rada is able to broadly pass further reforms as set
out by donors, thereby maintaining reform momentum throughout the
year.

Downside risk to the ratings could build if Ukraine fails to
effectively deal with problems within the banking sector, sizable
contingent liabilities migrate to the general government balance
sheet, or a rise in populist representatives in the Rada inhibit
the reform agenda, or if S&P concludes that a further debt
exchange was inevitable.

S&P foresees possible ratings upside in the event of a sustained
rebound in economic growth alongside falling fiscal and external
deficits, and an improvement in the situation in the East.

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable.  At the onset of the committee, the chair
confirmed that the information provided to the Rating Committee
by the primary analyst had been distributed in a timely manner
and was sufficient for Committee members to make an informed
decision.

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.

The committee agreed that all key ratings factors remained
unchanged.

The chair ensured every voting member was given the opportunity
to articulate his/her opinion.  The chair or designee reviewed
the draft report to ensure consistency with the Committee
decision. The views and the decision of the rating committee are
summarized in the above rationale and outlook.  The weighting of
all rating factors is described in the methodology used in this
rating action.

RATINGS LIST

                                         Rating
                                         To          From
Ukraine
Sovereign Credit Rating
  Foreign and Local Currency          B-/Stable/B    B-/Stable/B
  Ukraine National Scale              uaBBB-/--/--   uaBBB-/--/--
Transfer & Convertibility Assessment    B-          B-
Senior Unsecured
  Foreign Currency                       D           D
  Foreign Currency                       B-          B-



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


BHS GROUP: Gov't to Publish Insolvency Service's Investigation
--------------------------------------------------------------
Ashley Armstrong at The Sunday Telegraph reports that the
Government will take the unprecedented step of publishing the
Insolvency Service's investigation into the collapse of BHS amid
pressure from the joint House of Commons select committees
probing its demise.

It comes as Mike Ashley makes a final last bid to save BHS from
liquidation, The Sunday Telegraph relates.  The Sunday Telegraph
has learnt that Sports Direct has written to administrators to
reopen talks to "save a number of stores, jobs and the BHS name".

Mr. Ashley had tried to buy the business twice before -- in the
days leading up to its collapse and during an auction by
administrators, The Sunday Telegraph notes.

It is currently illegal to publish confidential Insolvency
Service reports, but the Government believes there will be
sufficient public interest in the BHS findings, The Sunday
Telegraph says.

Sajid Javid, the Business Secretary, has already taken the
unusual step of ordering a fast-track investigation into why the
88-year-old retailer collapsed, resulting in 11,000 job losses
and a GBP571 million pensions hole, The Sunday Telegraph relays.

According to The Sunday Telegraph, it is understood that the
Insolvency Service has collected 200,000 pages of evidence
relating to BHS's failure.

The MPs will interrogate the Topshop tycoon about why he sold BHS
to Dominic Chappell, and whether the pension deficit was a result
of Sir Philip's family extracting GBP400 million in dividends
from the retailer, The Sunday Telegraph discloses.  The MPs will
also be keen to hear whether he has plans for compensating
pensioners, The Sunday Telegraph states.

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


BP PLC: Egan-Jones Lowers FC Sr. Unsecured Rating to BB+
--------------------------------------------------------
Egan-Jones Ratings Company downgraded the foreign currency senior
unsecured rating on debt issued by BP Plc to BB+ from A- on
May 17, 2016.  EJR also lowered the local currency senior
unsecured rating on the Company's debt to BB+ from BBB-.

BP plc, also referred to by its former name, British Petroleum,
is one of the world's seven "supermajor" oil and gas companies.


ECOLOGICLIVING: In Administration, Ceases Trading
--------------------------------------------------
cumbria.com reports that reductions in solar feed-in tariffs and
the Renewable Heat Incentive scheme have been blamed for pushing
the Carlisle firm into administration.

The business, which traded from premises at Rickerby's in Currock
Road, was founded in 2008 by husband-and-wife Islam and Judy
Pearson.

It specialized in the design and supply of renewables products
such as biomass boilers, heat pumps and solar panels, and at one
point employed 31 people.

The insolvency specialists Daryl Warwick --
daryl.warwick@armstrongwatson.co.uk -- and Michael Kienlen --
michael.kienlen@armstrongwatson.co.uk -- , of Armstrong Watson,
have been appointed joint administrators, according to
cumbria.com.

The report notes that Mr. Warwick said: "We attempted to find a
buyer before the business went into administration but interest
in taking it on as a going concern was very limited."

He added that it was "unlikely" there would be a payout to
unsecured creditors, the report relays.

The largest creditor is the North West Fund, which offers debt
and equity finance to growing businesses across the region, the
report notes.

It had provided loans and taken a stake enabling EcoLogicLiving
to move to bigger premises and import a log boiler from the US,
which allowed farmers to capitalise on the Renewable Heat
Incentive, the report says.

The report notes that Adam Workman, energy and environmental
manager at the North West Fund, said: "We backed the company over
a number of years and it is very disappointing what has happened.
It is just unfortunate that changes to the feed-in tariffs and
the Renewable Heat Incentive scheme have affected the business."


MAR CITY DEVELOPMENTS: Enters Administration
--------------------------------------------
Hanna Sharpe at business-sale.com reports that property developer
Mar City Developments Ltd (MCDL), which owns the freehold of
several commercial buildings in Birmingham, has been placed into
administration.

Its owners Tony and Maggie Ryan exited their roles as director of
Mar City plc in December 2015, but remained majority
stakeholders, according to business-sale.com.

MCDL is now in the hands of joint administrators Shay Bannon --
shay.bannon@bdo.co.uk --  and Sarah Rayment --
sarah.rayment@bdo.co.uk -- of BDO, who came in to handle matters
on 24 May 2016, the report notes.  The company has now ceased
trading and all three workers have lost their jobs, the report
relays.  The administrators will bring in agents to market the
property assets for the company, which include several commercial
buildings in Birmingham and development sites in the Midlands,
the report discloses.

MCDL's subsidiaries -- South Staffs Group Ltd and Terngate Ltd --
are not affected, the report notes.  Mar City plc, Mar City Homes
Ltd and Mar City Land Ltd are likewise unaffected by the
administration, and are owned and managed separately, the report
discloses.

The company revealed last year that MCDL owed Mar City Homes
GBP19.5 million.  Mar City planned to review the situation to
pinpoint the true amount owed by MCDL, the report notes.

Mar City Homes was shortlisted in two categories at the RESI
Awards 2015, and also in four categories in the RICS Awards 2015,
partly for its work on The Malt House, a Grade II-listed building
in Lichfield, the report adds.


NEW EARTH SOLUTIONS: Enters Administration
------------------------------------------
Darrel Moore at ciwm-journal.co.uk reports that Waste management
company New Earth Solutions Group has entered administration,
following the breakdown of takeover negotiations.

The announcement was made earlier in a letter to shareholders of
the New Earth Premier Fund.

The report notes that Fund director, Michael J Richardson, wrote:
"The senior lenders are currently in discussions with their
advisers concerning what further options they wish to pursue as
senior secured creditors of the New Earth Companies.  Once their
proposed course of action has become clearer, we will write to
you again in respect of the implications for the Fund."

New Earth was in talks with an unnamed developer of large
combined heat and power plants over restructuring New Earth
Solutions Group operations, according to ciwm-journal.co.uk.

After no progress was made in reaching an agreement with senior
lenders, proposals were put forward in early 2016 which offered
to provide a EUR50 million equity injection to restructure the
company's balance sheets, the report notes.  This was rejected by
senior lenders.

An agreement was then reached for the developer to purchase the
senior debt from the senior lenders if certain conditions were
met by the end of May, ciwm-journal.co.uk says.

After accounts for the year ending January 31, 2015 were filed,
however, customers threatened to stop taking off-takes if bank
guarantees were not given, the report says.

According to reports, the lenders were not prepared to accelerate
payment requests by customers or accept the developer's offer of
assistance.


OUTSOURCERY: Teeters On Brink Of Administration
-----------------------------------------------
Manchester Evening News reports that Manchester-based cloud
services Outsourcery is fighting for survival after shares are
suspended.

The business, owned by ex-Dragon Piers Linney, has informed
shareholders they are at risk of getting "no, or limited value"
from their investment, according to Manchester Evening News.

The report notes that the AIM-listed company, which was recently
bailed out by Vodafone to the tune of GBP5 million, says it "has
progressed with the previously announced restructuring, including
discussions about the disposal of business assets in the
immediate term."

However, despite EY being appointed four weeks ago, today the
firm denied it was acting as administrators for Outsourcery, the
report notes.

A statement from the company said: "Outsourcery has received a
number of initial offers for its assets, though the potential
proceeds from the current proposals would potentially leave no or
limited value to equity shareholders, the report relays.

"The board continues to carefully evaluate approaches for assets
as well as a number of further options to strengthen the
immediate and long-term financial position of the company," the
statement added.

While that process continues, the board has concluded that it is
no longer possible to present audited financial results for the
year ended December 31 2015 by June 3, the report notes.

The statement continued: "As such the Company has requested a
temporary suspension of the under-mentioned securities from
trading on AIM with immediate effect, pending publication of its
audited financial results and the appropriate notification being
made in accordance with the AIM rules," the report relays.

Hopes that the firm could be rescued by UKFast boss Lawrence
Jones were also dampened as he ruled himself out, the report
notes.

Mr. Jones, who previously invested to take a 10.5 per cent stake
in Outsourcery, said: "It's not an opportunity we are looking at
right now.

"I personally invested GBP1m last year with the intention of
trying to support them - that was on the understanding that we
could have some influence and help them to make the right moves,"
the report quoted Mr. Jones as saying.

"When I made that investment we were looking at long-term
collaboration and synergies and I was thinking of buying the
business out because there were some areas of potential there."
Mr. Jones said.

"I'm focussed on putting all my energy into continuing the growth
of UKFast, which is in the strongest position it's ever been in.
It's a really exciting time for us," Mr. Jones added.

Outsourcery was co-founded by Linney and Simon Newton - who both
hold a 13 per cent stake in the business.  Failure to sell
Outsourcery could lead to it entering administration.


TATA STEEL UK: Decision on Sale of Operations Delayed
-----------------------------------------------------
Simon Mundy, Jim Pickard and Peter Campbell at The Financial
Times report that Tata Steel has pushed back to July the
timetable for making a final decision on the future of its UK
steel operations, as the company haggles over more government
concessions to persuade it to retain the business.

Tata, which stunned the government in March by announcing the
sale of its British steel business, has been reviewing bids for
more than two weeks, the FT relates.

According to the FT, it was expected to unveil a shortlist on
June 10 and had planned to choose the preferred bidder by its
monthly board meeting on June 24 -- the day after the EU
referendum.

But that decision is now very unlikely to be made in June, said a
person close to the company, who said it was expected to come
only "within two months" instead, the FT notes. "

It is understood that the board meeting will also be delayed by
at least a week, the FT states.

The person, as cited by the FT, said that Tata was in talks with
the government on moves that could change the calculations which
prompted the company to deem its investment unsustainable.

Tata Steel is the UK's biggest steel company.



===================
U Z B E K I S T A N
===================


HAMKORBANK: Moody's Confirms B2 LT Currency Deposit Ratings
-----------------------------------------------------------
Moody's Investors Service has confirmed Hamkorbank's long-term
local- and foreign-currency deposit ratings of B2 and affirmed
the bank's Not-Prime short-term local- and foreign-currency
deposit ratings. All long-term ratings carry a stable outlook.
Today's rating action concludes the review for downgrade
initiated on February 26, 2016.

The rating action follows the Central Bank of Uzbekistan's (CBU)
announcement on 3 June, 2016 that it had lifted all restrictions
imposed on Hamkorbank's foreign currency operations on
February 10, 2016.

Concurrently, Moody's has also confirmed Hamkorbank's baseline
credit assessment (BCA) and adjusted BCA of b2, as well as the
bank's long-term counterparty risk assessments (CR assessments)
of B1(cr). The short-term CR Assessment was affirmed at Not-
Prime(cr).

RATINGS RATIONALE

Moody's confirmation of the bank's long-term ratings is driven by
the CBU's decision to reinstate Hamkorbank's license for its
banking operations in foreign currency (FX license), which was
temporarily suspended in February 2016.

The stable outlook on the bank's ratings reflects Moody's
expectation that Hamkorbank's credit profile will remain stable
over the next 12-18 months, given its healthy liquidity and
funding profiles, good profitability and adequate asset quality.

According to Moody's, during the period of license suspension,
the bank's ability to service its financial obligations
denominated in foreign currency were unaffected and the CBU's
restrictions had limited negative implications for Hamkorbank's
credit profile.

Moody's notes that Hamkorbank has not faced any significant and
prolonged deposit runs and its healthy liquidity profile helped
the bank to withstand unexpected outflows of customer funds,
which contracted by less than 8% before stabilizing in mid-March
and recovering in May. The bank's buffer of liquid assets (cash
and nostro accounts) have remained at around 35% of its total
assets at 30 May, 2016, covering around 94% of demand deposits
(according to unadited local GAAP).

Moody's also notes that imposed temporary restrictions had some
limited negative implications for Hamkorbank's business
franchise, namely by constraining its growth. During the first
five months of 2016, the bank's loan portfolio grew by only 7%
while its total assets and liabilities remained flat (according
to its unadited local GAAP).

Hamkorbank's ratings will likely remain constrained by the bank's
high appetite for credit risk and modest capital buffer. At end-
2015, the bank reported (under audited IFRS) a Tier 1 ratio of
9.3% (10.8% in 2014). Although Hamkorbank's capital position
benefits from its strong internal capital generation, the bank's
capital levels have been pressured by rapid lending growth in
recent years (42% in 2015, 80% in 2014 and 57% in 2013).

WHAT COULD MOVE THE RATINGS UP/DOWN

Hamkorbank's ratings have limited upward potential in the near
term as they are constrained by the bank's moderate capital
buffer and historically high appetite for credit risk. However,
in the longer term, the company's ratings could be upgraded
following an improvement in the country's macroeconomic
environment, combined with an improvement in the bank's
standalone credit profile.

Downward pressure could be exerted on Hamkorbank's ratings by any
material adverse changes in the bank's risk profile, particularly
significant impairment of the bank's liquidity position, and any
failure to maintain control over its asset quality.


ONCILLA MORTGAGE: Moody's Assigns B2(sf) Ratings to Class ET Debt
-----------------------------------------------------------------
Moody's Investors Service has assigned definitive credit ratings
to the following Notes issued by Oncilla Mortgage Funding 2016-1
plc:

-- GBP173,600,000 Class A Floating Rate Notes due December
    2043, Definitive Rating Assigned Aaa (sf)

-- GBP29,700,000 Class B Floating Rate Notes due December 2043,
    Definitive Rating Assigned Aa2 (sf)

-- GBP13,500,000 Class C Floating Rate Notes due December 2043,
    Definitive Rating Assigned A3 (sf)

-- GBP10,200,000 Class D Floating Rate Notes due December 2043,
    Definitive Rating Assigned Baa3 (sf)

-- GBP11,500,000 Class E Floating Rate Notes due December 2043,
    Definitive Rating Assigned B2 (sf)

-- GBP2,000,000 Class ET Floating Rate Notes due December 2043,
    Definitive Rating Assigned B2 (sf)

The GBP15,923,000 Class Z Notes due December 2043, the
GBP3,100,000 Class AXS Notes due December 2043 and the
GBP1,200,000 Class BXS Notes due December 2043 have not been
rated by Moody's.

RATINGS RATIONALE

The transaction is a static cash securitization of residential
mortgage loans extended to borrowers located in the UK. The
portfolio consists of mortgages on residential properties located
in the UK extended to 2,063 non-conforming borrowers, and the
current pool balance is approximately equal to GBP256 million at
the end of May 2016. The assets backing the notes are first-
ranking non-conforming mortgage loans originated by GMAC-RFC (Not
rated). Moody's assigned provisional ratings to these notes on 13
May 2016.

-- Expected Loss and MILAN CE Analysis

Moody's determined the MILAN CE of 30.0% and the portfolio
expected loss of 7.0% as input parameters for Moody's cash flow
model, which is based on a probabilistic lognormal distribution.

Moody's said, "Portfolio expected loss of 7.0%: This is higher
than other recent UK Non-Conforming transactions and takes into
account: (i) the number of loans in arrears at closing including
the performance of the pool since March 2011. 15.3% of the pool
is in arrears at the end of May 2016, of which 9.3% is more than
30 days in arrears, (ii) the WA current LTV of 87.4% together
with 79.67% of the pool being full and part and part interest
only loans (iii) the originator limited historical performance
information, (iv) the current macroeconomic environment and our
view of the future macroeconomic environment in the UK, and (v)
benchmarking with similar transactions in the UK Non-Conforming
Sector."

MILAN Credit Enhancement of 30.0%: This is higher than other
recent UK Non-Conforming transactions and takes into account: (i)
the high WA current LTV of 87.4%, (ii) the presence of 22.9%
loans where the borrower self-certified its income, (iii)
borrowers with bad credit history with 17.82% of the pool
containing borrowers with CCJ's ; (iv) the presence of 79.67% of
full and part and part interest-only loans in the pool, (v) the
weighted average seasoning of the pool of 8.72 years and (vi) the
level of arrears around 15.3% at the end of May 2016.

-- Operational Risk Analysis

Capita Mortgage Services Limited (not rated) will be the
servicer. The fact that Structured Finance Management Limited has
been appointed as back-up servicer facilitator is a positive
feature. In case default is made by the servicer on any payments
due under the servicing agreement, Structure Finance Management
Limited will facilitate the search for a suitable back-up
servicer and will use best efforts to appoint a back-up servicer
within 60 days.

Citibank, N.A. (London Branch) (A1/(P)P-1/A1(cr)) is appointed as
cash manager. There will be no back up cash manager in place at
closing. To help ensure continuity of payments the deal contains
estimation language whereby the cash flows will be estimated from
the most recent servicer reports should the servicer report not
be available.

The collection account is held at Barclays Bank PLC ("Barclays")
(A2/P-1). There is a daily sweep of the funds held in the
collection account into the transaction account. In the event
Barclays rating is below Baa3/P-2 the collection account will be
transferred to an entity rated at least Baa3/ P-2. The
transaction account is held at Citibank, N.A. (London Branch)
(A1/(P)P-1/A1(cr)) with a transfer requirement if the rating of
the account bank falls below A2/P-1. Moody's has taken into
account the commingling risk associated with the collection
account within its cash flow modelling.

-- Transaction structure

There will be a reserve fund in place at closing sized at 2.49%
of the Class A to Z note balance at close at approximately GBP6.4
million. The reserve fund will be fully funded at closing and
will be non-amortizing during the life of the transaction. The
reserve fund will only be available to cover interest and senior
fees shortfalls and will not be available to cover credit losses
during the life of the transaction. For Class B, Class C, Class
D, Class E and Class ET the reserve fund will only be available
to pay interest due to those notes as long as the PDL for the
note is below 10% of the note's outstanding balance. The reserve
fund can be used to amortize the outstanding rated notes at the
earlier of a) maturity of the transaction or b) if the reserve
fund (after having paid for any shortfall) together with the
principal proceeds are sufficient to fully amortize the rated
notes. The Class A liquidity reserve fund (0.5% of the Class A
balance) will be fully funded at closing and will amortize during
the life of the transaction in accordance with the amortization
of Class A. The Class A liquidity reserve fund will only be
available to cover interest on the Class A and senior fees and
will not be available to cover Class A credit losses. In
addition, principal proceeds may be used to cover senior fees and
interest shortfalls subject to certain conditions being
satisfied.

On the interest date falling in June 2021, the coupon on the
Class A notes will step-up to 3mL + 2.1%. The coupon on Class B,
Class C, Class D, Class E and Class ET notes will not step up but
additional amounts will be due to the notes after the
replenishment of the reserve fund. Moody's notes that the
additional note payments are not part of the interest payment
promise to the referenced Classes and as such Moody's ratings
assigned to the Class B, Class C, Class D, Class E and Class ET
do not address the timely and/or ultimate payment of such
payments.

-- Interest Rate Risk Analysis

58.3% of the pool balance will be exposed to the risk of variance
between the Bank of England base rate (BBR) and three-month
sterling LIBOR payable on the notes. 41.1% of the pool is linked
to three-month LIBOR and these assets reset at the same time as
the liabilities mitigating the risk of timing mismatch. As there
are no swaps in the transaction, Moody's stressed the yield of
the pool by applying a haircut of 0.50% to the yield of BBR-
linked loans to take into account the basis mismatch between
these assets and liabilities.

-- Stress Scenarios

Moody's Parameter Sensitivities provide a quantitative/model-
indicated calculation of the number of rating notches that a
Moody's structured finance security may vary if certain input
parameters used in the initial rating process differed. The
analysis assumes that the deal has not aged and is not intended
to measure how the rating of the security might migrate over
time, but rather how the initial rating of the security might
have differed if key rating input parameters were varied.
Parameter Sensitivities for the typical EMEA RMBS transaction are
calculated by stressing key variable inputs in Moody's primary
rating model. If the portfolio expected loss was increased from
7.0% of current balance to 12.0% of current balance, and the
MILAN Credit Enhancement remained unchanged, the model output
indicates that the Class A would still achieve Aaa assuming that
all other factors remained equal. If the MILAN Credit Enhancement
was increased from 30.0% to 36.0% the model output indicates that
the Class A would achieve Aa1.


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Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
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S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter-Europe is a daily newsletter co-
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Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez,
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