TCREUR_Public/160628.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 28, 2016, Vol. 17, No. 126


                            Headlines


B E L G I U M

VLM AIRLINES: Files for Bankruptcy Following Financial Woes


G E R M A N Y

BILFINGER SE: S&P Revises Outlook to Stable & Affirms BB+/B CCRs
KION GROUP: Moody's Puts Ba1 CFR on Review for Downgrade


I R E L A N D

MELLON COUNTRY: KBC Bank Appoints Administrative Receivers
NAVIGATOR MORTGAGE: Moody's Cuts Class C Notes Rating to Ba2(sf)


I T A L Y

CREDITO VALTELLINESE: Fitch Affirms 'BB' LT Issuer Default Rating


N E T H E R L A N D S

DECO 14 - PAN EUROPE: Moody's Affirms C Rating on Class D Notes


P O R T U G A L

NOVO BANCO: Seeks to Buy Back EUR500MM Senior Debt at Discount


R U S S I A

BRUNSWICK RAIL: Debt Refinancing Talks with Creditors Collapse


S P A I N

CAIXABANK CONSUMO 2: Fitch Assigns 'B+sf' Rating to Class B Debt
CAIXABANK CONSUMO 2: DBRS Finalizes BB Rating on Series B Notes
PYMES BANESTO 2: S&P Affirms CCC- Rating on Class C Notes


S W I T Z E R L A N D

NEUCHATEL XAMAX: Debt Pile Totals CHF20MM Following Bankruptcy

U N I T E D   K I N G D O M

COUNTYROUTE PLC: S&P Raises Rating on GBP5.5MM Loan to 'B-'
DRACO PLC: Moody's Affirms Caa2 Rating on Class E Notes
ECOTECH LONDON: Undergoes Liquidation Following Administration
FHB MORTGAGE: Moody's Reviews Ba1 Covered Bonds for Downgrade
TAURUS UK 2014-1: DBRS Confirms BB Rating on Class C Debt

* Brexit Vote to Impact UK Corporate Insolvency Regime


U Z B E K I S T A N

KAPITALBANK: S&P Raises Counterparty Credit Ratings to 'B/B'


                            *********


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B E L G I U M
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VLM AIRLINES: Files for Bankruptcy Following Financial Woes
-----------------------------------------------------------
Kurt Hofmann at Air Transport World reports that Belgian regional
VLM Airlines has confirmed it has filed for bankruptcy.

The carrier had filed a formal application in May asking for
creditor protection for six months to avoid bankruptcy, ATW
recounts.  However, the company said it did not have enough time
in those six months to compensate for the number of pilots who
left the carrier and bring in additional financial resources, ATW
relates.

Also, a planned sale-leaseback deal for several aircraft in its
fleet had failed because VLM would have needed at least two or
three additional months for a successful re-capitalization, ATW
discloses.

"We realized that all restructuring measures we had implemented
from January onward had been come too late for a sustainable
restructuring," ATW quotes CEO Hamish Davidson as saying in the
statement.

In addition, several charter clients canceled some contracts, ATW
notes.

VLM Airlines, which was established in 1993, operated 11 Fokker
50s, transported 300,000 passengers in 2015 and employed 160
workers, according to ATW.



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G E R M A N Y
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BILFINGER SE: S&P Revises Outlook to Stable & Affirms BB+/B CCRs
----------------------------------------------------------------
S&P Global Ratings revised the outlook on Germany-based Bilfinger
SE to stable from negative and affirmed the 'BB+/B' long- and
short-term corporate credit ratings.  S&P also affirmed the issue
ratings on Bilfinger's outstanding rated debt instruments.

The outlook revision follows Bilfinger's recent announcement that
it has signed an agreement to sell its Building and Facility
business segment to EQT for a purchase price of EUR1.2 billion.
The transaction is subject to approval from the responsible
authorities.

Should the transaction be completed as expected, S&P believes the
immediate impact on Bilfinger's business risk profile would be
negative because it would significantly reduce the group's
diversification, likely leading to higher earnings volatility.
S&P therefore now views Bilfinger's business risk profile as fair
rather than satisfactory.

Nevertheless, S&P believes Bilfinger's credit ratios would
significantly improve because the cash proceeds from the
transaction would place the group in a net cash position post the
closing.  S&P understands Bilfinger intends not to make an
extraordinary dividend to shareholders, but to use the proceeds
to develop the group's industrial services business through
acquisitions and to permanently strengthen its balance sheet.

In S&P's view, the improving financial risk profile offsets the
weakening business risk profile in the short term.  Over the
medium to long term, S&P understands that Bilfinger will focus on
industrial services, where it intends to increase its market
share, improve its portfolio of services, and enhance operating
margins through strategic investments and targeted acquisitions.
These acquisitions could again improve the business risk profile
of the group over the longer run.  S&P also expects a permanent
significant reduction of adjusted net debt due to a decrease in
operating leases and pensions, as well as lower financial
indebtedness.

S&P could lower the rating if the group's operating and financial
performance weakened, or if its future financial policy was more
aggressive than expected, for instance through the inclusion of
material shareholder distributions from the sales proceeds or
debt-funded acquisitions resulting in higher-than-expected
financial leverage.  Furthermore, a lack of success in executing
restructuring and initiating strategic business development
measures to enhance profitability in the existing business and
provide future direction could result in rating pressure.

S&P views upside potential for the rating over the next 12 months
as limited, as this would require a tangible and sustainable
strengthening of Bilfinger's business risk profile without
weakening key credit ratios, in particular FFO to debt, from the
currently expected levels.


KION GROUP: Moody's Puts Ba1 CFR on Review for Downgrade
--------------------------------------------------------
Moody's Investors Service has placed on review for downgrade the
Ba1 corporate family rating and Ba1-PD probability of default
rating of KION GROUP AG.

RATINGS RATIONALE

The rating action has been triggered by KION's announcement to
acquire Dematic (DH Services Luxembourg S.a.r.l, B2 Positive),
which will increase KION's leverage significantly above our
downgrade trigger of 3.0x debt/EBITDA for its Ba1 rating.  On
June 21, 2016, KION announced the acquisition of Dematic at an
enterprise value of $3.25 billion.  The transaction will be
initially financed with a EUR3 billion committed bridge loan
facility, which will be refinanced through equity, long-term bond
and bank debt.  Supported by its main shareholder, Weichai Power,
KION said it planned to utilize its authorized capital to issue
up to 10% new shares and was also considering additional spectrum
of equity generating instruments in line with its conservative
financial policy.

Moody's estimates the leverage to increase to a range between
3.3x to 4.3x by the end of 2017 from 2.7x as of December 2015,
depending on the final financing mix and operating performance.
The lower end assumes additional capital measures beyond the 10%
authorized capital utilization and improvement of profitability
for both Dematic and KION in line with the management's
expectations.  The higher end assumes just a 10% capital increase
and more moderate improvements in profitability for both KION and
Dematic.  Despite the fact that the transaction enhances KION's
business profile, the leverage range is above our triggers for a
downgrade and therefore the transaction could result in a
downgrade of one notch.  In a severe scenario in the higher end
of the range there is a possibility of a downgrade by up to two
notches.

The purchase of Dematic makes strategic sense for KION because it
will broaden the service offering of KION and enable the company
to provide full-range intralogistics solutions to its customers.
Dematic has benefited from the strong market growth in supply
chain automation, as reflected in very double-digit organic
growth since 2013, which is expected to continue in the next few
years. In addition, Dematic has a complementary geographical
footprint compared to KION with 2/3 of revenues generated in the
US, which will enhance KION's presence in North America (sales
share to increase to 20% from 5%).

The rating review will focus on the execution and integration
risks and final capital structure of KION after completion of the
acquisition, its financial policy and business strategy going
forward as well as liquidity risks and hedging connected to the
transaction.

The principal methodology used in these ratings was Global
Manufacturing Companies published in July 2014.

Headquartered in Luxembourg, Dematic is a leading provider of
logistics and material handling solutions with a strong focus on
food, general merchandise and apparel retail.  For the calendar
year ended December 2015, the company generated revenues of
USD1.8 billion and adj. EBIT margin of USD166 million (adjusted
in line with KION's reported margin).  Dematic is owned by funds
managed by private equity firms AEA Investors LP and Teachers'
Private Capital (the private equity arm of Ontario Teachers'
Pension Plan).  Combined with Dematic, KION will generate more
than EUR6.7 billion in revenue for the calendar year 2015 and has
a profitability of approx. 9.4% combined adjusted EBIT margin for
this period.

The transaction is subject to customary closing conditions and
regulatory approvals and is expected to be closed in the fourth
quarter of 2016.

WHAT COULD CHANGE THE RATINGS - UP/DOWN

Downward pressure might develop on the ratings if KION were to
employ more aggressive financial policies, as exemplified by
debt/EBITDA above 3.0x on a sustainable basis.  Moody's would
also consider a downgrade, if there is an evidence of permanent
erosion of KION's profitability and sustained negative free cash
flow.

Upward pressure on the ratings would develop if KION were to
demonstrate the ability to sustain double digit Moody's adjusted
EBITA margin and further build a track record of conservative
financial policies, with Moody's adjusted debt/EBITDA sustainably
below 2.5x, while maintaining meaningful free cash flow
generation through the cycle.



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I R E L A N D
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MELLON COUNTRY: KBC Bank Appoints Administrative Receivers
----------------------------------------------------------
Margaret Canning at Belfast Telegraph reports that a Co Tyrone
hotel and country music venue has said it is business as usual
following the appointment of receivers.

KBC Bank Ireland appointed administrative receivers to the
company behind Mellon Country Hotel last week, Belfast Telegraph
relates.

It's understood around 30 staff, who are mainly part-time, are
employed at the hotel, Belfast Telegraph discloses.

Insolvency experts Keenan Corporate Finance were appointed
receivers by the bank, Belfast Telegraph relays.

No one was available for comment but it's understood the business
of the hotel is being scrutinized and options for its future are
being considered, Belfast Telegraph notes.

One possibility is that the hotel could go on the market, Belfast
Telegraph states.

Its last accounts, to the end of January 2015, showed liabilities
of just over GBP673,000, according to Belfast Telegraph.


NAVIGATOR MORTGAGE: Moody's Cuts Class C Notes Rating to Ba2(sf)
----------------------------------------------------------------
Moody's Investors Service has downgraded the rating of one note
in Navigator Mortgage Finance No. 1 plc. The rating action
reflects a correction of an assumption in the cash flow modelling
for this deal as well as a re-assessment of the mitigating
factors in relation to counterparty risk.

Issuer: Navigator Mortgage Finance No. 1 plc

-- EUR10 million C Notes, Downgraded to Ba2 (sf); previously on
    May 6, 2016 Upgraded to Ba1 (sf)

RATINGS RATIONALE

Moody's said, "The rating downgrade reflects corrections of both
an assumption in our cash flow modelling for this transaction and
our assessment of the mitigating factors to counterparty risk
exposure."

In the last rating action on May 6, 2016, an Expected Loss
assumption of 6.09% was used in the cash flow modelling of the
transaction instead of an updated assumption of 3.32%. Moody's
also underestimated the sensitivity of class C to the
counterparty risk related to set off and commingling. The action
reflects the correct cash flow modelling and assessment of its
result, as well as a correction of Moody's assessment of the
mitigating factors to counterparty risk exposure. Moody's also
took into consideration the updated assessment of the servicer
and originator in the analysis.



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I T A L Y
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CREDITO VALTELLINESE: Fitch Affirms 'BB' LT Issuer Default Rating
-----------------------------------------------------------------
Fitch Ratings has affirmed Credito Valtellinese's (Creval) Long-
Term Issuer Default Rating (IDR) at 'BB' and Viability Rating at
'bb'. The Outlook is Stable.

KEY RATING DRIVERS

IDRS AND VR
Creval's IDRs are driven by the bank's standalone profile, as
captured by the Viability Rating (VR).

Creval's capitalization is weak relative to the bank's risk
profile and this factor has a strong influence on the VR. In our
opinion, Creval's large stock of unreserved impaired loans, which
were equal to a high 140% of Fitch Core Capital (FCC) at end-
2015, renders the institution highly vulnerable to even moderate
shocks. The ratio has increased despite a strengthening of
regulatory capital in recent years as impaired loans have
continued to increase, and because of the bank's reliance on
collateral, which results in a fairly low coverage of impaired
loans. We expect the bank's capitalization to remain under
pressure as long as the stock of impaired loans remains high and
internal capital generation remains at its current low levels.

Fitch said, "Gross impaired loans accounted for 25% of gross
loans at end-1Q16, which is high compared with domestic and
international peers. Asset quality deteriorated because of a weak
economic environment in Italy, but also because of the bank's
fairly high exposure to a weak real estate sector. Because loan
impairment allowances take into account the value of collateral
backing the loan, which takes a long time to realise, the bank is
exposed to changes in the value of collateral, which is often in
the form of real estate assets. We expect Creval's VR to remain
rated below investment-grade at least as long as unreserved
impaired loans account for more than 100% of FCC.

"Creval has reduced its risk appetite and is addressing its asset
quality problems more actively than peers through tighter
underwriting standards, more efficient recovery and collection
processes and sales of impaired loans. While these actions are
positive for asset quality, we believe that any improvement in
asset quality will only be gradual given the nascent market for
impaired loans in Italy, and pressure on commercial real estate
prices.

"The bank posted operating losses from 2012 to 2015, but net
income was boosted in 2015 by a EUR250m one-off gain. We expect
operating profitability to remain weak throughout 2016. Creval's
business model largely depends on traditional commercial lending
and deposit-taking, which makes its profitability vulnerable to
low interest rates and keen competition for better-quality
clients. The bank has been successful in sustaining its net
interest margin by reducing funding costs but high operating
expenses and loan impairment charges (LICs) have resulted in weak
overall profitability.

"The bank's cost/income ratio of above 60% in 2015 is high but
shows a moderately improving trend. Creval is focusing on
managing costs more efficiently and has implemented plans to
reduce staff numbers and to simplify its group structure.
However, we do not expect these cuts to be large enough to result
in a significant improvement in efficiency.

"LICs have fallen as the flow of new impaired loans has reduced
in recent quarters but we believe that current reserve coverage
is insufficient for the bank to sell existing impaired loans at
book value and that it may have to write down the loans further
before a sale."

Funding and liquidity are adequate and have proved stable to
date. Funding sources are adequately diversified, but Creval's
status of regional bank means that funding will remain largely
dependent on customer deposits, particularly in the bank's home
region of Lombardy. Customer deposits are sufficiently granular,
reflecting the prevalence of private depositors over SME and
corporate deposits. This should also underpin funding stability.
Creval has access to central bank sources, if required.

KEY RATING DRIVERS

SUPPORT RATING AND SUPPORT RATING FLOOR

The SR and SRF reflect Fitch's view that senior creditors can no
longer rely on receiving full extraordinary support from the
sovereign in the event that a bank becomes non-viable. The EU's
Bank Recovery and Resolution Directive (BRRD) and the Single
Resolution Mechanism (SRM) for eurozone banks provide a framework
for resolving banks that require senior creditors participating
in losses, if necessary, instead of or ahead of a bank receiving
sovereign support.

RATING SENSITIVITIES

IDRS AND VR
Creval's ratings are primarily sensitive to a further
deterioration in asset quality, which could be the result of a
further deterioration in the operating environment, and to a
reduction in the reserve coverage of existing impaired loans. A
further increase in impaired loans net of reserves in relation to
FCC would likely result in a downgrade. Creval's ratings would
also come under pressure if the bank fails to improve its
operating efficiency or to improve sustainable operating
profitability.

An upgrade would be contingent on a material improvement in asset
quality and substantially stronger internal capital generation
through a sustained improvement in operating profitability.

SUPPORT RATING AND SUPPORT RATING FLOOR

An upgrade of the SR and upward revision of the SRF would be
contingent on a positive change in the sovereign's propensity to
support Creval. While not impossible, this is highly unlikely, in
Fitch's view.

The rating actions are as follows:

Credito Valtellinese

Long-Term IDR: affirmed at 'BB'; Outlook Stable
Short-Term IDR: affirmed at 'B'
Viability Rating: affirmed at 'bb'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'
Senior unsecured notes and EMTN: affirmed at 'BB'/'B'



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N E T H E R L A N D S
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DECO 14 - PAN EUROPE: Moody's Affirms C Rating on Class D Notes
---------------------------------------------------------------
Moody's Investors Service has upgraded the rating of Class A3 and
affirmed the ratings of Classes B, C and D Notes issued by
DECO 14 -- Pan Europe 5 B.V.

Moody's rating action is as follows:

Issuer: DECO 14 - Pan Europe 5 B.V.

-- EUR65 million Class A3 Notes, Upgraded to Aa2 (sf);
    previously on Mar 25, 2014 Downgraded to A1 (sf)

-- EUR100 million Class B Notes, Affirmed Ba1 (sf); previously
    on Mar 25, 2014 Downgraded to Ba1 (sf)

-- EUR65 million Class C Notes, Affirmed Caa1 (sf); previously
    on Mar 25, 2014 Downgraded to Caa1 (sf)


-- EUR101 million Class D Notes, Affirmed C (sf); previously on
    Mar 25, 2014 Downgraded to C (sf)

Moody's does not rate the Class E, Class F, Class G and the Class
X Notes.

RATINGS RATIONALE

The upgrade action reflects the positive impact of repayment
proceeds of EUR126 million over the last year as well as our
improved view of the refinancing prospects for the Armilla
Clarice 2 loan that is scheduled to mature in October 2016. This
improvement reflects the positive impact of the 11-year weighted
average lease extension with the single tenant Telecom Italia
S.p.A. (Ba1) on the property portfolio."

The ratings on the Classes B, C and D Notes are affirmed because
the ratings are commensurate with the risk assessment on the
defaulted loans in the pool (72% of the current pool balance).

The decline in the Euribor rate to negative levels has been one
of the drivers behind a decrease in the Issuer revenue triggering
interest shortfalls on the Class F and Class G Notes at the April
2016 IPD. The continued negative interest rate environment
combined with a scenario in which the higher margin Armilla
Clarice 2 and Arcadia loans repay, could further exacerbate the
interest shortfalls on the remaining class of notes. Moody's
understanding is that in the absence of loan level interest
shortfalls the liquidity facility covers senior expenses incurred
by the Issuer but does not cover Note level interest shortfalls.

Moody's rating action reflects a base expected loss in the range
of 40%-50% of the current balance similar to the previous review.
Moody's derives this loss expectation from the analysis of the
default probability of the securitized loans (both during the
term and at maturity) and its value assessment of the collateral.



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P O R T U G A L
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NOVO BANCO: Seeks to Buy Back EUR500MM Senior Debt at Discount
--------------------------------------------------------------
Alice Gledhill at Reuters reports that Novo Banco is seeking to
buy back up to EUR500 million of senior debt, some of which is
held by retail investors, at a discount to par as it looks to
bolster its balance sheet.

The Portuguese bank has launched a discounted cash tender offer
on eight euro and US dollar bonds, which have a face value of
EUR2.39 billion-equivalent, through an unmodified Dutch auction,
Reuters relates.

Banks bought billions of subordinated debt at discounted prices
during the financial crisis as a way of bolstering their balance
sheets but senior purchases below par are much more unusual,
Reuters discloses.

"Novo Banco's business plan for the medium-to-long term, which
was developed on the basis of the restructuring plan focuses on
restoring Novo Banco's profitability while continuing the orderly
reduction of exposure to non-core assets," Reuters quotes the
bank as saying in a statement.

The bonds' secondary prices have been under pressure due to
concerns around the Portuguese economy, the status of Novo Banco
as a bridge bank and its sale process, among other things,
Reuters relays.

The bank reminded investors that while the Bank of Portugal said
the transfer of assets at the end of last year was "final and
definitive", Novo Banco remained investors that they could be
bailed in, Reuters notes.

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

                        *     *     *

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



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R U S S I A
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BRUNSWICK RAIL: Debt Refinancing Talks with Creditors Collapse
--------------------------------------------------------------
Eric J. Weiner at Bloomberg News reports that talks between
Brunswick Rail Ltd. and a group of creditors on refinancing the
company's debt broke down as both sides rejected proposals to
clear the impasse.

Brunswick said in a statement on June 24, it had been meeting
with a group of holders of its US$600 million of 6.5% unsecured
notes due 2017, Bloomberg relates.  According to Bloomberg, the
company had offered the noteholders an all-cash swap valued at
about US$480 per US$1,000 of principle and an exchange involving
cash, pay-in-kind debt and warrants for 25% of the company's
enlarged equity.  But the group rejected it, Bloomberg relays.

The noteholders countered with a proposal to inject US$15 million
of new cash into Brunswick in return for a cash tender valued at
between US$550 to US$600 per US$1,000 of principal of the notes,
PIK notes and 49% of the company's stock, Bloomberg discloses.
The company rejected that offer, Bloomberg recounts.

In January, the creditors -- which include VR Capital Group Ltd.,
Ashmore Group Plc and Pacific Investment Management Co. --
questioned Brunswick about its decision to refinance a loan
before entering debt-restructuring talks, Bloomberg relays.

Brunswick Rail Ltd. is a Russian rail car company.



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S P A I N
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CAIXABANK CONSUMO 2: Fitch Assigns 'B+sf' Rating to Class B Debt
----------------------------------------------------------------
Fitch Ratings has assigned Caixabank Consumo 2, FTA's asset-
backed floating-rate notes, due April 2060, final ratings, as
follows:

  EUR 1,170 million Class A: 'Asf'; Outlook Stable
  EUR 130 million Class B: 'B+sf'; Outlook Stable

This transaction is a securitization of unsecured loans and real
estate-secured consumer loans. All the loans are originated and
serviced by CaixaBank (BBB/Positive/F2), which is also the
account bank counterparty.

KEY RATING DRIVERS

Mixed Risk and Dual Criteria Approach

The collateral comprises two product types: unsecured consumer
loans (around 75%) and real estate (RE) secured consumer loans
(around 25%). The RE secured consumer loans have a weighted
remaining life to maturity of 16 years and the unsecured portion
of the collateral is shorter with a weighted remaining life to
maturity of four years.

The agency used its Global Consumer ABS Criteria to analyze
unsecured consumer loans granted to individuals and its EMEA RMBS
Rating Criteria complemented by Criteria Addendum: Spain -
Residential Mortgage Assumptions to analyze the remaining
portfolio.

Limited Credit Losses

Fitch has analyzed the unsecured portfolio's credit risks and
formed a base case default expectation of 4.5% and a recovery
rate expectation of 30% for the lifetime of the portfolio. These
base cases were derived based on historical data provided by
CaixaBank, dating back to 2006.

Fitch's lifetime default base case and recoveries expectations
for RE secured consumer loans are 10.6% and 43.8% respectively,
derived from its proprietary Spanish RMBS default model
(ResiGlobal), which is based on the criteria for analyzing
securities backed by Spanish residential mortgage loans.

Counterparty Dependency Caps Rating

CaixaBank acts as originator, servicer, bank account provider and
paying agent. CaixaBank's rating sufficiently mitigates payment
interruption risk for a note rating up to 'Asf' category.
CaixaBank will post a reserve upon the loss of a 'BBB' rating to
address commingling risk.

The rating of the notes is capped at 'A+sf', one notch higher
than the initial rating of the senior notes, as the rating
trigger upon which the account bank would be replaced is set at
'BBB'.

Interest Rate Risk

The transaction is exposed to interest rate risk as a relevant
portion of the assets (around 72%) pay fixed interest rate while
both class A and B pay a floating coupon. Fitch found that notes
were able to withstand an increasing interest rate stress
commensurate with their rating derived in accordance with Fitch's
criteria for interest rate stresses in structured finance.

The impact of increasing interest rates is mitigated by the high
interest rate of fixed paying loans (around 9%), which makes
excess spread available at the beginning of the life of the
transaction even under an increasing interest rate scenario and
the fact that RE secured consumer loans (the ones with the
longest time to maturity) are majorly floating, thereby reducing
the potential mismatch at the end of the life of the deal.

RATING SENSITIVITIES

Rating sensitivity to increased default rate assumptions (class
A/ class B)
Current rating: 'Asf' / 'B+sf'
Increase in default rate by 15: 'A-sf' / 'B-sf'
Increase in default rate by 30%: 'BBB+sf' / 'CCCsf'
Increase in default rate by 45%: 'BBBsf' / 'CCsf' or below

Rating sensitivity to reduced recovery rate assumptions (class A/
class B)
Current rating: 'Asf' / 'B+sf'
Decrease in recovery rate by 15: 'Asf' / 'B-sf'
Decrease in recovery rate by 30%: 'A-sf' / 'B-sf'
Decrease in recovery by 45%: 'A-sf' / 'CCCsf'

Rating sensitivity to multiple factors (class A/ class B)
Current rating: 'Asf'/'B+sf'
Increase in default rate by 15%, decrease in recovery rate by
15%: 'BBB+sf' / 'CCCsf'
Increase in default rate by 30%, decrease in recovery rate by
30%: 'BBBsf' / 'CCsf'' or below
Increase in default rate by 45%, decrease in recovery rate by
45%: 'BBB-sf' / 'CCsf'' or below

DUE DILIGENCE USAGE

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

DATA ADEQUACY

Fitch reviewed the results of a third party assessment conducted
on the asset portfolio information, which indicated one error
related to the loan formalization information. This finding was
immaterial to this analysis, as set out more fully in the new
issue report. In addition, the loan affected by the finding was
excluded from the securitized pool as described in the
transaction prospectus

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


CAIXABANK CONSUMO 2: DBRS Finalizes BB Rating on Series B Notes
---------------------------------------------------------------
DBRS Ratings Limited finalized its provisional ratings on the
following notes issued by Caixabank Consumo 2 FT (the Issuer):

-- EUR1,170,000,000 Series A at A (low) (sf);
-- EUR130,000,000 Series B at BB (sf).

The Issuer is a static securitization of unsecured consumer loans
and mortgage consumer loans originated by Caixabank S.A.
(Caixabank). The mortgage consumer loans include standard loans
and current drawdowns of a revolving mortgage credit line called
Credito Abierto. Mortgage consumer loans are secured by first-
and second-lien mortgage on properties located in Spain. At the
closing of the transaction, the Issuer will use the proceeds of
the Series A and Series B notes to fund the purchase of the
unsecured consumer loans and the mortgage consumer loans from the
Seller, Caixabank. Caixabank will also be the servicer of the
portfolio. In addition, Caixabank will provide separate
subordinated loans to fund the initial expenses and the Reserve
Fund. The securitization will take place in the form of a fund,
in accordance with Spanish Securitisation Law.

The ratings are based on DBRS's review of the following
analytical considerations:

-- The transaction's capital structure and the form and
    sufficiency of available credit enhancement. The Series A
    notes benefit from EUR130 million (10%) subordination of the
    Series B notes and the EUR52 million (4.0%) Reserve Fund,
    which is available to cover senior fees as well as interest
    and principal of the Series A notes and Series B notes once
    the Series A notes are paid in full. The Reserve Fund target
    will amortize subject to the target levels and performance
    triggers. The Series A notes will benefit from full
    sequential amortization, whereby principal on the Series B
    notes will not be paid until the Series A notes have been
    redeemed in full. Additionally, the Series A principal will
    be senior to the Reserve Fund replenishment and Series B
    notes interest payments in the priority of payments.

-- DBRS has been provided with the final portfolio equal to
    EUR1.3 billon (as June 22, 2016). DBRS based the rating on
    the provisional portfolio (as of May 23, 2016). The main
    characteristics of the portfolio include: (1) 75.0% of the
    portfolio are unsecured consumer loans and 25.0% of the
    portfolio are mortgage consumer loans (standard loans and
    Credito Abierto drawdowns); (2) the top three geographical
    concentrations areas are Catalonia (34.1%), Andalusia (16.9%)
    and Madrid (11.5%); (3) weighted-average (WA) seasoning of
    2.5 years; (4) the WA margin of floating loans is 2.20% and
    the WA coupon is 7.30%; and (5) 65.9% of the portfolio
    corresponds to fixed-rate loans and the WA remaining term is
    7.0 years. DBRS has separately analyzed the consumer mortgage
    loans and the unsecured consumer portion.

-- The mortgage consumer loans represented 25.0% of the total
    portfolio balance and it was analyzed using the European RMBS
    Insight Model (the Model) to estimate the defaults and losses
    of the portfolio. DBRS assigned a Spanish Underwriting Score
    of 3 to the standard loan portion and a Spanish Underwriting
    Score of 1 to the Credito Abierto drawdowns portion. The main
    characteristics of the mortgage consumer loans are: (1) 71.1%
    indexed WA current loan-to-value (INE Q2 2015); (2) WA
    seasoning of 6.3 years; (3) 21.0 % of the portfolio
    classified as self-employed; (4) the WA margin of the assets
    is 1.50%, which is considerably high for mortgage loans; and
    (5) 23.9% of the mortgage portfolio had a remaining term
    greater than 20.0 years.

-- The unsecured consumer loans represented the 75.0% of the
    total portfolio balance and its main characteristics are: (1)
    86.8% of the portfolio are fixed-rate loans; (2) the WA
    fixed-rate coupon is 9.6% and the WA margin for floating-rate
    loans is 3.8%; (3) WA seasoning is 1.3 years; and (4) the WA
    remaining term is 4.0 years.

-- The floating-rate loans are mainly linked to 12-month
    Euribor. The Series A and Series B notes are floating-rate
    liabilities indexed to three-month Euribor. The basis risk is
    mitigated by the amounts credited to the Reserve Fund.
    Additionally, the Series A notes benefit from the senior
    position in the priority of payments to the Series B notes
    and DBRS stressed the interest rates as described in the DBRS
    methodology "Unified Interest Rate Model for European
    Securitisations."

-- The credit quality of the portfolio backing the notes and the
    ability of the servicer to perform its servicing
    responsibilities. DBRS was provided with Caixabank's
    historical performance data divided by unsecured consumer
    loans and consumer mortgage loans (both standard loans and
    Credito Abierto drawdowns).

-- In accordance with the transaction documentation, the
    servicer is able to grant loan modifications without consent
    of the management company within the range of permitted
    variations. According to the documentation, permitted
    variations for up to 5% of the initial portfolio for maturity
    extension to September 2056 and reduction of loan margins to
    a portfolio spread equal to three-month Euribor plus 1.25%.
    DBRS stressed the margin of the portfolio and extended the
    maturity date for 5% of the mortgage loans up to September
    2056 in its cash flow analysis.

-- The transaction's account bank agreement and respective
    replacement trigger require Caixabank acting as treasury
    account to find (1) a replacement account bank or (2) an
    account bank guarantor upon the loss of a BBB (low) account
    bank applicable rating. The DBRS Critical Obligations Rating
    (COR) of Caixabank is A (high) while the DBRS rating for
    Caixabank's Senior Debt is A (low). The account bank
    applicable rating is the higher between one notch below the
    Caixabank COR or Caixabank's Senior Debt rating.
-- The legal structure and presence of legal opinions addressing
    assignment of the assets to the Issuer and the consistency
    with DBRS's "Legal Criteria for European Structured Finance
    Transactions" methodology.

As a result of the analytical considerations for mortgage
consumer assets, DBRS derived a base-case probability of default
rate (PDR) of 8.6% and loss given default (LGD) of 21.9%, which
resulted in an estimated loss (EL) of 2.1% using the Model. For
the unsecured consumer loans, the gross loss and recovery
assumption inferred from the received information are 12.5% and
21.6%, respectively. DBRS cash flow assumptions stress the timing
of defaults and recoveries, prepayment speeds and interest rates.
Based on a combination of these assumptions, a total of 16 cash
flow scenarios were applied to test the capital structure and
ratings on the notes.


PYMES BANESTO 2: S&P Affirms CCC- Rating on Class C Notes
---------------------------------------------------------
S&P Global Ratings raised its credit ratings on Fondo de
Titulizacion de Activos PYMES Banesto 2's class A2 and B notes.
At the same time, S&P has affirmed its rating on the class C
notes.

"We have used data from the March 2016 investor report to perform
our credit and cash flow analysis and have applied our European
small and midsize enterprise (SME) collateralized loan obligation
(CLO) criteria and our current counterparty criteria.  For
ratings in this transaction that are above our rating on the
sovereign, we have also applied our criteria for rating single-
jurisdiction securitizations above the sovereign foreign currency
rating," S&P said.

                          CREDIT ANALYSIS

PYMES Banesto 2 is a single-jurisdiction cash flow CLO
transaction securitizing a portfolio of SME loans that was
originated by Banco Santander S.A. in Spain.  The transaction
closed in November 2006. S&P has applied its European SME CLO
criteria to determine the scenario default rate (SDR)--the
minimum level of portfolio defaults that S&P expects each tranche
to be able to withstand at a specific rating level using CDO
Evaluator.

To determine the SDR, S&P adjusted the archetypical European SME
average 'b+' credit quality to reflect two factors (country and
originator, and portfolio selection adjustments).  S&P ranks the
originator in the moderate category.  Taking into account Spain's
Banking Industry Country Risk Assessment (BICRA) score of 5 and
the originator's average annual observed default frequency, S&P
has applied a downward adjustment of one notch to the 'b+'
archetypical average credit quality.  To address differences in
the creditworthiness of the securitized portfolio compared with
the originator's entire loan book, S&P further adjusted the
average credit quality by one notch.  As a result of these
adjustments, S&P's average credit quality assessment of the
portfolio was 'b-', which it used to generate S&P's 'AAA' SDRs.
After determining the average portfolio quality, where an
originator's internal SME scoring system is not used as a
building block in S&P's rating analysis, it uses the same average
portfolio quality for each performing asset in the portfolio for
the purpose of inclusion in CDO Evaluator.

S&P has calculated the 'B' SDR, based primarily on its analysis
of historical SME performance data and S&P's projections of the
transaction's future performance.  S&P has reviewed the
originator's historical default data, and assessed market
developments, macroeconomic factors, changes in country risk, and
the way these factors are likely to affect the loan portfolio's
creditworthiness.

S&P interpolated the SDRs for rating levels between 'B' and 'AAA'
in accordance with S&P's European SME CLO criteria.

                      RECOVERY RATE ANALYSIS

S&P applied a weighted-average recovery rate (WARR) at each
liability rating level by considering the asset type and its
seniority, the country recovery grouping, and the observed
historical recoveries in this transaction.

                         COUNTRY RISK

S&P's long-term rating on the Kingdom of Spain is 'BBB+'.  S&P's
RAS criteria require the tranche to have sufficient credit
enhancement to pass a minimum of a severe stress to qualify to be
rated above the sovereign.

                         CASH FLOW ANALYSIS

S&P used the reported portfolio balance that it considered to be
performing, the principal cash balance, the current weighted-
average spread, and the weighted-average recovery rates that S&P
considered to be appropriate.  S&P subjected the capital
structure to various cash flow stress scenarios, incorporating
different default patterns and timings and interest rate curves,
to determine the rating level, based on the available credit
enhancement for each class of notes under S&P's European SME CLO
criteria.

Under S&P's RAS criteria, it can rate a securitization up to four
notches above its foreign currency rating on the sovereign if the
tranche can withstand severe stresses.  The available credit
enhancement for the class A2 notes does withstand severe
stresses. S&P has therefore raised to 'AA- (sf)' from 'BBB+ (sf)'
its rating on the class A2 notes.

The increased available credit enhancement for the class B notes
is commensurate with a higher rating than currently assigned.
S&P has therefore raised to 'A+ (sf)' from 'BB- (sf)' its rating
on the class B notes.

Given that the rating level for the class C notes is lower than
the sovereign rating, S&P has not applied its RAS criteria to its
analysis of this class of notes.

The available credit enhancement for the class C notes is
commensurate with its currently assigned rating.  S&P has
therefore affirmed its 'CCC- (sf)' rating on the class C notes.

RATINGS LIST

Fondo de Titulizacion de Activos PYMES Banesto 2
EUR1 bil floating-rate notes

                                    Rating        Rating
Class            Identifier         To            From
A2               ES0372260010       AA- (sf)      BBB+ (sf)
B                ES0372260028       A+ (sf)       BB- (sf)
C                ES0372260036       CCC- (sf)     CCC- (sf)



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


NEUCHATEL XAMAX: Debt Pile Totals CHF20MM Following Bankruptcy
--------------------------------------------------------------
Swissinfo.ch reports that officials have concluded Swiss football
club FC Neuchatel Xamax, which slipped into near-oblivion in 2012
after being declared bankrupt, left debts totalling CHF20 million
(US$20.8 million), more than double earlier estimates.

According to Swissinfo.ch, the former owner, Bulat Chagaev, is to
face trial in Neuchatel in August for mismanagement and attempted
fraud.

On June 23, Alain Rivaux, a member of the Neuchatel cantonal
government, announced that the club's bankruptcy on January 26,
2012 had left debts amounting to CHF20 million, Swissinfo.ch
relates.

Xamax was formally declared bankrupt by a court in canton
Neuchatel in late January 2012, Swissinfo.ch recounts.  A week
earlier, the Swiss League revoked the team's license because of
suspected fraud and failure to prove it could meet its financial
obligations, Swissinfo.ch relays.  At that time, the debts were
estimated to be at least CHF8 million, Swissinfo.ch notes.



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


COUNTYROUTE PLC: S&P Raises Rating on GBP5.5MM Loan to 'B-'
-----------------------------------------------------------
S&P Global Ratings raised its issue rating on the GBP5.5 million
subordinated secured mezzanine bank loan (junior debt) issued by
U.K.-based concessionaire CountyRoute (A130) PLC (CountyRoute or
the project) to 'B-' from 'CCC+'.  The outlook is stable.

At the same time, S&P affirmed its 'B+' issue rating on
CountyRoute's GBP88 million senior secured bank loan.  The
outlook is stable.

Summary

CountyRoute issued debt in 1999 to fund the construction of a
shadow toll and availability road, the A130, a 15-kilometer road
between Chelmsford and Basildon in southeast England.  The A130
was the first local authority road to be built using a private
finance initiative in the U.K.  It is operated under a 30-year
concession granted by Essex County Council.

The project has experienced a third consecutive year of positive
traffic growth, averaging 3.5% overall in the year through March
2016.  The robust traffic performance has led to solid financial
performance and strengthening of future ratio expectations.

The improved financial performance expectations have prompted S&P
to increase its view of the operations phase stand-alone credit
profile (SACP) on the senior debt by one-notch to 'bb-' from
'b+'. This reflects S&P's expectations that the forecast senior
debt service coverage ratios (DSCR) will be above 1.0x coverage
for the remainder of the debt repayment period.

However, S&P assesses the project's parent linkage as capped.
Consequently, S&P's view of the credit quality of its sole
shareholder, John Laing Group PLC, constrains the project's SACP.
S&P has therefore affirmed its 'B+' rating on the senior secured
debt.

At the same time, the improved financial performance has enabled
the junior debt to exit temporarily from debt service lock-up.
All due principal and interest payments have subsequently been
made.  Junior debt lock-up occurs when loan covenants are
breached and results in a permitted deferral of principal and
interest.  S&P anticipates that full junior debt service
(principal and interest) from cash flows will occur by the
maturity date of March 2026, despite a return to lock-up between
2018 and 2022, when the project cash flows are suppressed by
lifecycle maintenance obligations.  S&P do not anticipate that
reserves built up in a voluntary reserve account will be needed
for the debt repayment, but they provide an additional layer of
liquidity protection.

Operations Phase SACP

As construction is complete, the operations phase SACP drives the
rating.  It reflects the weak, but improving, financial
performance, under S&P's base case, resulting from relatively low
traffic volumes.  However, this risk is partially mitigated by
the strength of the project under S&P's downside sensitivity
stress case.  Under S&P's stress case, CountyRoute can withstand
an extended period of traffic stress supported by cash balances
in the debt service, junior, and voluntary reserve accounts.

The project's forecast financial performance continues to be at a
level such that S&P anticipates periodic breaches of shareholder
and junior debt distribution covenants will occur in the
remaining debt repayment period, resulting in free cash flow
being swept into a voluntary reserve account and providing an
additional layer of liquidity to lenders.

Senior Debt

The stable outlook on the senior secured debt rating reflects
S&P's opinion that, despite continued solid traffic growth over
2015-2016, traffic volume growth on this mature road is unlikely
to markedly outperform U.K. economic performance indicators in
the remainder of the debt repayment period.  S&P expects the
project to be able to meet its operational costs and senior debt
service requirements in full and on schedule from operational
cash flow, with extra liquidity protection provided by trapped
cash reserves, as a result of periodic junior debt and
distribution covenant breaches.

Downside scenario.

S&P could take a negative rating action on the senior debt, if
project cash flows were to weaken materially as a result of, for
example, lower-than-forecast traffic growth or higher-than-
expected operating and major maintenance costs driven by
structural integrity issues of the pavement.  S&P could also take
negative action if its view of John Laing Group PLC's credit
quality were to decrease further.

Upside scenario

The rating on the senior debt is capped by S&P's view of the
parent's credit quality.  Rating upside is limited and depends on
an improvement in S&P's view of the credit quality of John Laing
PLC.  S&P could revise upward its assessment of the SACP of the
senior debt if the project's forecast financial profile improved.
This could occur, for example, if traffic volumes were to grow
faster than S&P forecasts over the next few years.

Junior Debt

The stable outlook on the junior debt reflects S&P's expectation
that although the terms of the debt covenants will periodically
prevent junior debt service over the next few years, full
repayment (including all due interest and principal) will occur
by the debt's maturity in March 2026.  Repayment will likely be
covered by the project's cash flows, which S&P forecasts will
strengthen materially toward the back end of the concession,
following completion of the majority of pavement lifecycle
expenditure and the repayment of the majority of senior debt.
Extra protection is provided by the cash swept into the voluntary
reserve account.

Downside scenario

S&P could take negative rating on the junior debt if it forecasts
debt service deferral will occur for a sustained period over the
course of the debt repayment period and S&P anticipates that
project cash flows and cash reserves are not sufficient to fully
repay the debt.  This could occur, for example, if traffic
volumes are noticeably below our base-case expectations.

Upside scenario

S&P currently sees limited scope for rating upside.  That said,
S&P could raise its rating on the junior debt if traffic volumes
rise significantly above S&P's base-case forecast or if funds
from the voluntary reserve account are used to repay junior debt,
leading to a forecast minimum average DSCR comfortably above 1x
at all times.


DRACO PLC: Moody's Affirms Caa2 Rating on Class E Notes
-------------------------------------------------------
Moody's Investors Service has affirmed the rating of Class E
Notes issued by Draco (Eclipse 2005-4) plc.

Issuer: DRACO (ECLIPSE 2005-4) plc

  GBP12.1 mil. Class E Notes, Affirmed Caa2 (sf); previously on
   Dec. 22, 2014, Downgraded to Caa2 (sf)

Moody's does not rate the Class F Notes.

RATINGS RATIONALE

The rating on Class E is affirmed as Moody's continues to
maintain its loss expectation on the single remaining loan, the
Herbert House Loan.  The loan is backed by a single office asset
located in Birmingham, UK and has been vacant since the single
tenant exercised the break option and terminated the lease in
July 2015. According to the 2012 valuation report, the property
is in a poor state of repair.  The vacant property is in the
process of being sold and Moody's understands from the Special
Servicer (Capita Asset Services (London) Ltd) that the sale
process is currently at final bids stage with a view of
completing the sale as soon as possible. The reported 2012
underwritten VPV of the asset is GBP3.2 million which, if
achieved, would redeem the Class E in full.  However, the sale
price has not yet been confirmed or sale contracts signed, and
Moody's is still of the opinion that the Class E may experience
losses between 10% - 20% of the current note balance.

At the last IPD in April 2016, GBP650,000 proceeds were released
by the Special Servicer from dilapidation funds to amortize the
Class E notes, this has increased credit enhancement for Class E
to 64.5% from 59.2% since last review.

Methodology Underlying the Rating Action:

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

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

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

Main factor or circumstance that could lead to a downgrade of the
rating is a lower than expected recovery proceeds following the
sale of the vacant property.

Main factor or circumstance that could lead to an upgrade of the
rating is a higher sales price of the property than anticipated,
resulting in higher recovery proceeds.

                    MOODY'S PORTFOLIO ANALYSIS

As of the April 2016 IPD, the transaction balance has declined by
97% to GPB7.19 Million from GPB284.98 Million at closing in
December 2005 due to the pay-off of four loans originally in the
pool.  The notes are currently secured by one first-ranking legal
mortgage over one commercial property remaining in the pool.
Since the last review no loans repaid/prepaid.  The pool has an
above average concentration in terms of geographic location (100%
UK) and property type (100% Office).  Moody's uses a variation of
the Herfindahl Index, in which a higher number represents greater
diversity, to measure the diversity of loan size.  Large multi-
borrower transactions typically have a Herf of less than 10 with
an average of around 5.  This pool has a Herf of 1, the same as
at Moody's prior review.  Moody's weighted average LTV ratio on
the securitized pool is 312%.

SUMMARY OF MOODY'S LOAN ASSUMPTIONS

Herbert House Loan - LTV: 340.9%; Defaulted; Expected Loss 65%-
75%.

The GBP7.2 million Herbert House Loan is secured by an office
property in the central business district of Birmingham.  In
October 2014, the Special Servicer appointed fixed charge
receivers to work-out the loan with the aim to maximize
recoveries for the noteholders.  The property has been vacant
since July 2015 when the single tenant exercised their break
option.  The loan defaulted on its maturity date in January 2014
and was transferred to Special Servicing.

The Herbert House property is an early 1900s office building
situated in the prime office district of Birmingham of 52,150 sq
ft. (4,845 sqm).  Based on the valuation as of 2012, the
property's vacant possession value (VPV) was GBP 3.2 million.
According to the valuation, the property is in a tired state of
repair and requires significant capital expenditures to improve
the specification of the building.  Moody's has based its updated
assessment on a vacant possession value (VPV) in the range of
GBP2.0 to 2.5 million and therefore expects the principal loss on
the loan at the upper end of the 65% to 75% range.


ECOTECH LONDON: Undergoes Liquidation Following Administration
--------------------------------------------------------------
Platts reports that Ecotech London is undergoing liquidation
after being placed under administration.

"On May 31, we went into administration.  We tried working out
something," which did not come to fruition, so we are "now going
into liquidation," Platts quotes Javed Mawji, the CEO of Ecotech
London, as saying.

According to Platts, market participants said British PET
recyclers were at a disadvantage to their European counterparts
due to the mixed collection system in place within the UK, which
pushed their cost base higher due to lower yields of recyclable
PET from the bales.

Ecotech London is a UK-based PET recycler.  The company
specializes in the regrinding of PET and is capable of processing
clear and coloured bottles, preforms, as well as post-industrial
PET scrap.


FHB MORTGAGE: Moody's Reviews Ba1 Covered Bonds for Downgrade
-------------------------------------------------------------
Moody's Investors Service has placed on review for downgrade the
Ba1 assigned to the covered bonds issued by FHB Mortgage Bank Co.
Plc. (FHB or the issuer, CR assessment B2(cr) on review for
downgrade).

RATINGS RATIONALE

The review of the covered bonds follows the review of the CR
assessment of the issuer.

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. Moody's may use a CB anchor
of CR assessment plus one notch in the European Union or
otherwise where an operational resolution regime is particularly
likely to ensure continuity of covered bond payments.

The cover pool losses for this program are 36.2%. 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 25.5% and collateral risk of 10.8%. 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 16.1%.

The over-collateralization in the cover pool is 15%, of which FHB
provides 13% net present value OC on a "committed" basis. The
minimum OC level consistent with the Ba1 rating is 0%. These
numbers show that Moody's is not relying on "uncommitted" OC in
its expected loss analysis.

All numbers in this section are based on the most recent
Performance Overview (based on data, as per December 31, 2015).

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.

Moody's has assigned a TPI of Improbable to the covered bonds.

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 downgrades the
covered bonds because of TPI framework constraints.

The TPI assigned to this program is Improbable. The TPI Leeway
for this program is limited. Any reduction of the CB anchor may
lead to a downgrade of the covered bonds.

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


TAURUS UK 2014-1: DBRS Confirms BB Rating on Class C Debt
---------------------------------------------------------
DBRS Ratings Limited confirmed the ratings on all classes of
Commercial Mortgage-Backed Floating-Rate Notes due May 2022 (the
Notes) issued by Taurus CMBS UK 2014-1 Limited as follows:

-- Class A at A (sf)
-- Class B at BBB (sf)
-- Class C at BB (sf)

All trends are Stable.

The rating confirmations reflect the performance of the
transaction since issuance in July 2014. The transaction consists
of one interest-only, floating-rate loan with an initial
securitized balance of GBP211.5 million, which was secured by 132
properties located throughout the U.K. The loan represents the
95% pari passu interest of the whole loan that was granted to 13
affiliated borrowing entities, all of which are cross-defaulted
and cross-collateralized. The loan had an initial three-year term
(maturity in May 2017) with two one-year extension options
remaining.

The predominant property type within the portfolio is retail
(high street retail, shopping centers and retail warehouses).
Other property types are office and industrial. The sponsor is an
affiliate of Apollo Global Management, which purchased the
portfolio through various loan foreclosures. The sponsor's
business plan is to fully dispose of the property portfolio
before the loan maturity. As of the May 2016 remittance report,
42 properties have been sold since closing, resulting in a 39.6%
property collateral reduction. The outstanding securitized
balance has been reduced to GBP 127.7 million. The sold
properties were subject to a 20% or 10% release premium based on
their designation as tier-1 or tier-2 assets, respectively. As of
May 2016, 65.1% and 34.8% of the remaining property portfolio was
classified as tier-1 and tier-2, respectively.

According servicer reporting, the annual contracted rent of the
portfolio is GBP28.2 million. The projected April 2016 annualized
passing net rental income is reported with GBP13.9 million,
equating to a reported interest coverage ratio (ICR) of 2.7 times
(x), which is higher than the issuance ICR of 2.3x. Vacancy
across the portfolio was 25.1% in April 2016, slightly higher
than the 23.2% figure at the time of the last review in June
2015. Currently, there are 904 leases across the portfolio with a
weighted-average lease term to expiry of 6.0 years. As of the
April 2016 rent roll, 23.7% of contractual income expires on or
before April 2017. DBRS applied additional stress to its NCF to
account for this concentration.

The portfolio was last valued in September 2015. The reported
value for the 90 properties remaining is GBP 249.8 million, a 4%
like-for-like increase since closing. As a result of the release
premium paid for disposed properties and the marginal value
increase, the reported loan-to-value ratio is 53.8%, down from
65.0% at issuance.

The transaction does not benefit from a liquidity facility. The
final maturity date of the CMBS Notes is in May 2022, three years
beyond the fully extended maturity date of the loan in May 2019.
To date, the transaction is performing in line with DBRS's
initial expectations. As a result of the stable performance, DBRS
kept its underwriting assumptions for the 90 remaining properties
unchanged and confirmed its ratings on the Notes.


* Brexit Vote to Impact UK Corporate Insolvency Regime
------------------------------------------------------
Commenting on the decision by the UK to leave the European Union,
Andrew Tate, president of UK insolvency trade body R3, said:

"Leaving the EU will have a major impact on the way corporate
insolvency works in the UK.  The UK's insolvency regime does not
exist in a vacuum.  It is entwined with rules on employment, tax,
property, and more; and all of these are linked with European
rules."

"There will naturally be uncertainty for UK businesses and the
decision to leave could create immediate problems for some.
Businesses should seek out informed, professional, and regulated
advice to help them navigate any uncertainties they encounter,
and the sooner they seek advice, the more options they will
have."

"While domestic insolvency legislation itself is likely to be
unaffected, the insolvency profession is involved in a lot of
cross-border work in Europe. One key change is that it could
become much harder to retrieve assets on behalf of creditors from
across Europe.  With some exceptions, once the UK leaves, a UK
insolvency practitioner's powers may no longer be automatically
recognized elsewhere in Europe, nor will UK insolvency
proceedings enjoy automatic recognition.  New deals will need to
be negotiated."

"The decision to leave comes as the government is in the middle
of renewing the UK's corporate insolvency framework.  This is an
incredibly complex and important project, but there may now be
some uncertainty around the future of this work.  Some of the
proposals have their origin in EU harmonization programs, while
it's not clear where insolvency reform will fit on the
government's agenda in the next couple of months."



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


KAPITALBANK: S&P Raises Counterparty Credit Ratings to 'B/B'
------------------------------------------------------------
S&P Global Ratings said that it had raised its long- and short-
term counterparty credit ratings on Uzbekistan-based Kapitalbank
to 'B/B' from 'B-/C'.  The outlook is stable.

The upgrade stems from S&P's view of Kapitalbank's improved
capital position.  The bank's risk-adjusted capital (RAC) ratio
before diversification adjustments was 4.2% at the end of 2015,
supported by robust core earnings that exceeded S&P's previous
expectations.  S&P believes the bank will likely maintain its
current level of capitalization, with the RAC ratio remaining in
the 4.0%-4.5% range, compared with 3.0%-3.5% previously.
Consequently, S&P has revised its assessment of the bank's
capital and earnings to weak from very weak.

S&P bases its RAC ratio forecast on its assumption that the
bank's loan book will expand by about 25% per year over the next
12-18 months, with assets increasing 30%-35%.  The net interest
margin is expected to stay high at 5.5%-6.0%, while the cost of
risk will likely remain at 1.5%-2.0%, which is in line with the
historical average for the bank.

S&P notes that Kapitalbank's tempered growth appetite owes partly
to the Central Bank of Uzbekistan's efforts to tighten capital
adequacy regulations.  In particular, the regulator increased the
minimum total capital adequacy ratio to 11.5% in 2016 from 10%,
and this ratio will increase by one percentage point every year
until it reaches 14.5% by 2019.  S&P believes that, during that
transition period, Kapitalbank is likely to continue operating
with a capital cushion of 100 basis points higher than the
minimum capital requirement.

"Our forecast also factors in the bank's planned issuance of
preferred shares in accordance with presidential decree No.2454,
which stipulates that 15% of a bank's chartered capital should be
from foreign investors.  We understand that the bank plans to
issue preferred shares with an option to convert them into
ordinary shares totaling 15% of its chartered capital.  But we
don't expect the new investors will exercise this option over the
next 12-18 months or have a significant impact on the dividend
policy.  We do not expect any dividends on common equity to be
paid within the next two years," S&P said.

"We continue to assess the bank's risk position as adequate,
balancing its good asset quality against higher-than-average
foreign currency risk.  We note that Kapitalbank is dependent on
deposits in foreign currency, which constitute 62.5% of total
deposits.  While this risk is relatively easy to price in
Uzbekistan's managed-peg environment, and the bank prudently
hedges this exposure, we believe this may turn out to be a
primary source of risk in the future, if the currency regime
changes or there is an unexpected currency shock.  We also note
that the bank's exposure to related parties may exceed 5% of
total loans stated in the accounts based on International
Financial Reporting Standards.  We note that part of this
exposure is to leasing companies with somewhat diverse underlying
risks," S&P said.

The stable outlook reflects S&P's expectation that, over the next
12-18 months, Kapitalbank will maintain its capital buffers,
despite tightening minimum requirements in Uzbekistan, with the
RAC ratio consistently at 4%-4.5%.  Moreover, S&P assumes that
Kapitalbank will not expand into untested areas beyond its core
banking activities.

A positive rating action, although unlikely in the next 12-18
months, may occur if Kapitalbank's capitalization improved to
levels S&P would consider adequate, with the RAC ratio exceeding
7%, or if S&P see the bank's business position strengthening
significantly toward that of state-owned banks.

A negative rating action may follow if S&P observed that the bank
was not able to build its capital base, putting it at risk of not
meeting the central bank's capital adequacy requirements, or if
the bank's competitive standing in the market were to weaken.
Failure to maintain asset quality in line with systemwide levels,
with the cost of risk materially exceeding 2%, may also trigger a
downgrade.  A change in the central bank's managed peg policy may
also lead S&P to reassess Kapitalbank's foreign currency risk and
take a negative rating action.


                            *********

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

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

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


                            *********


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

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

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

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

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

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


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