TCREUR_Public/160706.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

           Wednesday, July 6, 2016, Vol. 17, No. 132



AVOCA CLO XVI: Moody's Assigns B2(sf) Rating to Class F Notes
CASTLE LANE: High Court Approves Survival Plan
QUIRINUS PLC 23: Moody's Affirms Ba3(sf) Rating on X2 Notes


* ITALY: May Pump Public Funds Into Troubled Banking System


CB MIKO-BANK: Liabilities Exceed Assets, Assessment Shows
CB UNIFIN: Liabilities Exceed Assets, Assessment Shows
MDM BANK: S&P Lowers Counterparty Credit Rating to 'B-'
MOSTOTREST PJSC: Moody's Assigns Ba3 Corporate Family Rating


CAJA LABORAL: Moody's Affirms Ba1 Long-Term Deposit Ratings
FONDO EOLICO: Moody's Raises Rating on E2 Notes to Ba2
GEO TRAVEL: Moody's Affirms B2 CFR & Changes Outlook to Stable


SAS AB: Moody's Raises CFR to B2, Outlook Stable

U N I T E D   K I N G D O M

BHS GROUP: Dominic Chappell Defends Actions in Collapse Probe
DERBY FIREPLACE: In Liquidation, 11 Jobs Affected
PIZZA EXPRESS: Moody's Affirms B3 CFR & Changes Outlook to Stable
STAPLES UK: Faces Financial Woes, Mulls Rescue Options
* UK: Fitch Says Brexit to Impact European High-Yield Issuance


* Unenforced & Arbitration Judgments Cost 14% of Cos. Over $50M



AVOCA CLO XVI: Moody's Assigns B2(sf) Rating to Class F Notes
Moody's Investors Service assigned the following definitive
ratings to notes issued by Avoca CLO XVI Designated Activity
Company (the "Issuer" or "Avoca CLO XVI"):

-- EUR273,250,000 Class A Senior Secured Floating Rate Notes due
    2029, Definitive Rating Assigned Aaa (sf)

-- EUR55,850,000 Class B Senior Secured Floating Rate Notes due
    2029, Definitive Rating Assigned Aa2 (sf)

-- EUR25,650,000 Class C Deferrable Mezzanine Floating Rate
    Notes due 2029, Definitive Rating Assigned A2 (sf)

-- EUR22,500,000 Class D Deferrable Mezzanine Floating Rate
    Notes due 2029, Definitive Rating Assigned Baa2 (sf)

-- EUR27,750,000 Class E Deferrable Junior Floating Rate Notes
    due 2029, Definitive Rating Assigned Ba2 (sf)

-- EUR11,800,000 Class F Deferrable Junior Floating Rate Notes
    due 2029, Definitive Rating Assigned B2 (sf)


Moody's definitive rating of the rated notes addresses the
expected loss posed to noteholders by the legal final maturity of
the notes in 2029. The definitive 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, KKR Credit
Advisors (Ireland) ("KKR"), has sufficient experience and
operational capacity and is capable of managing this CLO.

Avoca CLO XVI is a managed cash flow CLO. At least 90% of the
portfolio must consist of senior secured loans and senior secured
floating rate notes and up to 10% of the portfolio may consist of
unsecured loans, second-lien loans, mezzanine obligations and
high yield bonds. The portfolio is expected to be approximately
60-70% ramped up as of the closing date and to be comprised
predominantly of corporate loans to obligors domiciled in Western

KKR 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

In addition to the six classes of notes rated by Moody's, the
Issuer issued EUR46.0 million of subordinated notes, which are
not rated.

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

Factors that would lead to an upgrade or downgrade of the

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. KKR's investment decisions and
management of the transaction will also affect the notes'

Loss and Cash Flow Analysis:

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

CASTLE LANE: High Court Approves Survival Plan
Tim Healy at Irish Independent reports that a survival plan has
been approved by the High Court for Castle Lane Food Company.

Ms. Justice Marie Baker approved the survival proposals for the
company, Irish Independent discloses.  It was placed under court
protection last April and an examiner was appointed, Irish
Independent relates.

According to Irish Independent, the judge said she would confirm
the scheme of arrangement notwithstanding objections from the
company's landlord, owed some EUR100,000 in rent arrears.

Castle Lane Food Company is based in Galway.  The company employs
nine people.

QUIRINUS PLC 23: Moody's Affirms Ba3(sf) Rating on X2 Notes
Moody's Investors Service affirmed the Class A and Class X2 Notes
(the "Notes") issued by Quirinus (European Loan Conduit No. 23)
plc (ELoC 23) (amount reflecting the initial outstanding amount):

Moody's rating action is as follows:

Issuer: Quirinus (European Loan Conduit No. 23) plc (ELoC 23)

-- EUR560 million A Notes, Affirmed Baa1 (sf); previously on Dec
    24, 2013 Confirmed at Baa1 (sf)

-- X2 Notes, Affirmed Ba3 (sf); previously on Dec 24, 2013
    Confirmed at Ba3 (sf)

Moody's does not rate the Class B, Class C, Class D, Class E or
Class F.


The rating affirmation of the Class A Notes reflects Moody's
continuously low loss expectation for the most senior class.
Moody's expects that the current Class A Note balance of EUR72.5
million (as of May 2016) will be fully redeemed by the recovery
proceeds of EUR 17.8 million for the H&B 3 Loan and the
anticipated sales proceeds of the retail portfolio securing the
Eurocastle Retail Loan.

In addition, Moody's positively took into account the full
sequential allocation of recovery proceeds, which benefits the
most senior class of Notes. At Moody's last rating action in
December 2013, there was still some uncertainty on whether the
principal proceeds of the H&B 3 Loan and the Eurocastle Loan
would be repaid on a sequential basis.

The Class X2 Notes have been affirmed because the overall
expected loss for the pool is at a similar level as at the last
rating action in December 2013. The Class X Notes reference the
underlying loan pool. As such, the key rating parameters that
influence the expected loss on the referenced loan pool also
influences the rating on the Class X Notes. The rating of the
Class X Notes is based on the methodology described in Moody's
Approach to Rating Structured Finance Interest-Only Securities
published in October 2015.

Moody's affirmation reflects a base expected loss in the range of
10%-20% of the current balance, compared with a similar range at
the last review in December 2013. Moody's derives this loss
expectation from the analysis of the default probability of the
securitized loans and its value assessment of the collateral.


* ITALY: May Pump Public Funds Into Troubled Banking System
Rachel Sanderson and Alex Barker at The Financial Times report
that Italy is prepared to defy the EU and unilaterally pump
billions of euros into its troubled banking system if it comes
under severe systemic distress, a last-resort move that would
smash through the bloc's nascent regime for handling ailing

According to the FT, Matteo Renzi, the Italian prime minister, is
determined to intervene with public funds if necessary despite
warnings from Brussels and Berlin over the need to respect rules
that make creditors rather than taxpayers fund bank rescues,
according to several officials and bankers familiar with their

The threat has raised alarm among Europe's regulators, who fear
such a brazen intervention would devastate the credibility of the
union's newly implemented banking rule book during its first real
test, the FT relates.  In the race to find workable solutions,
Margrethe Vestager, the EU's competition chief, has laid out
options for Rome to address its banking problems without breaking
the bail-in principles of Europe's banking union, the FT

Italy, the FT says, is the eurozone's biggest vulnerability
following the shock outcome of the UK vote to leave the EU, with
bank stocks plunging by a third.  Concerns are building before
the outcome of bank stress test results due this month and a
constitutional referendum in Italy in early October, on which
Mr. Renzi has wagered his job, the FT relays.

After several of its ideas on intervention were rebuffed, Rome is
considering whether to act alone, the FT states.

"We are willing to do whatever is necessary [to defend the
banks], and do not rule out acting unilaterally, although that
would only be as a last resort," the FT quotes one person
familiar with the government's thinking as saying.


CB MIKO-BANK: Liabilities Exceed Assets, Assessment Shows
The provisional administration to manage LLC CB MIKO-BANK as
appointed by Bank of Russia Order No. OD-991, dated March 24,
2016, following banking license revocation, in the course of its
action to compose the Bank's register of liabilities to
depositors, found the facts of ad hoc records of the Bank's
liabilities to depositors to a total of over 0.8 billion rubles.

At the same time, the Bank executives provided documents which
allegedly evidence the facts of Bank employee theft of
unaccounted-for depositor funds.  However, no fact-finding action
was made to identify guilty persons and redress the damage done.

Concurrently, the provisional administration found that almost
all of the Bank-extended loans, in excess of 3 billion rubles,
are unrecoverable as they were extended to technical borrowers.

In the aggregate, the circumstances found suggest the facts of
intended fraud in the Bank's deposit attraction operations, as
well as asset siphoning off, including placement of funds in
inherently unrecoverable loans.

The current joint efforts of the Bank of Russia and the State
Corporation Deposit Insurance are focused on recovery of missing
data on open accounts (deposits) to enable inclusion of such data
into the register of the Bank's liabilities to depositors.

The provisional administration estimates the value of the Bank
assets to be under 0.5 billion rubles, vers. 2.2 billion rubles
of its liabilities to creditors.  On May 20, 2016, the
Arbitration Court of the City of Moscow recognized the Bank as
insolvent (bankrupt) and initiated bankruptcy proceedings. The
State Corporation Deposit Insurance Agency was approved to act as
its bankruptcy supervisor.

The information on financial transactions indicative of criminal
acts as carried out by the Bank's former executives and owners
was submitted by the Bank of Russia to the Office for Prosecutor
General of the Russian Federation, the Ministry of Internal
Affairs of the Russian Federation and the Investigative Committee
of the Russian Federation, to be reviewed and to enable the
appropriate procedural decisions to be made.

CB UNIFIN: Liabilities Exceed Assets, Assessment Shows
The provisional administration to manage CB Unifin JSC as
appointed by Bank of Russia Order No. OD-524, dated February 15,
2016, following banking license revocation, in the course of its
financial assessment of this credit institution, revealed the
former bank executives-performed transactions which are
indicative of asset siphoning off through substituting highly
liquid loan debt with receivables from companies with dubious
solvency, to a total of RUB1 billion.

Concurrently, at the time the Bank was actually insolvent,
transactions were being made to meet liabilities to certain
creditors, as a matter of preference above and to the detriment
of others, to a total of 0.2 billion rubles.

The provisional administration estimates the value of the Bank
assets to be not more than RUB4.6 billion versus RUB9 billion of
its liabilities to creditors.

On June 22, 2016, the Arbitration Court of the City of Moscow
recognized the Bank as insolvent (bankrupt) and initiated
bankruptcy proceedings.  The State Corporation Deposit Insurance
Agency was approved to act as its bankruptcy supervisor.

The information on financial transactions indicative of criminal
acts as carried out by the Bank's former executives and owners
was submitted by the Bank of Russia to the Office for Prosecutor
General of the Russian Federation, the Ministry of Internal
Affairs of the Russian Federation and the Investigative Committee
of the Russian Federation, to be reviewed and to enable the
appropriate procedural decisions to be made.

MDM BANK: S&P Lowers Counterparty Credit Rating to 'B-'
S&P Global Ratings lowered its long-term counterparty credit
rating on Russia-based MDM Bank to 'B-' from 'B' and lowered its
short-term counterparty credit rating to 'C' from 'B'.  The
outlook is stable.  S&P also lowered its Russia national scale
rating to 'ruBBB' from 'ruBBB+'.

The capitalization of MDM Bank, measured using S&P's risk-
adjusted capital (RAC) ratio before diversification, deteriorated
in 2015 to 2.3% from 5.0% as of end-2014.  The decline was
predominantly caused by the substantial credit costs charged over
2015.  These amounted to about Russian ruble (RUB) 21 billion, or
10% of the average loan portfolio.

Nevertheless, S&P anticipates that the new bank created through
the merger of MDM Bank and B&N Bank will see its RAC ratio
increase to about 4.5%-5.0% by the end of 2017, following a
planned RUB10 billion share capital increase and RUB3.5 billion
of perpetual subordinated debt from the owners.  Therefore, S&P's
ratings factor in its expectation that the merger with B&N Bank
will go ahead as planned and without serious negative
implications for asset quality and capital.  Therefore, S&P
expects MDM Bank to cease to exist in its current form.  Should
the merger be delayed and no capital support for MDM Bank is
forthcoming, or the merged entity's capital position does not
recover as fast as S&P expects after the merger, it might
consider revising down its view of the capital position.

S&P forecasts that credit costs for the consolidated entity are
likely to remain high at 4.0%-5.5% over the next two years.  At
the same time, S&P considers that synergy effects could see the
consolidated bank generating a return on equity of about 10% from
2017, compensating for its additional provisioning needs.  S&P
also views as positive the capital support MDM Bank's owners have
recently provided.  The owners transferred about RUB4 billion of
subordinated debt into equity.  An outstanding amount of about
RUB5 billion in subordinated debt has also been structured as a
perpetual capital instrument, which makes the latter eligible for
inclusion in Additional Tier 1 capital under local regulation.
S&P considers this instrument to have intermediate equity content
because of its perpetual nature and the bank's ability to cancel
interest payments, at its sole discretion.

Other rating factors remain unchanged as S&P continues to reflect
the 'bb-' anchor it applies for commercial banks in Russia.  S&P
takes into account that MDM Bank's focus on the recovery of
legacy problem loans, rather than new business generation, has
caused its market share to decline over the past five years.  The
other factor affecting S&P's assessment of its business position
is the integration process; the overall structure of the merged
institution is still evolving and there are material integration
risks ahead.  S&P assess its risk position as moderate, primarily
reflecting weaknesses in the bank's risk-management systems that
have resulted in a high share of nonperforming loans (NPLs).
Furthermore, S&P regards the bank's funding as average and its
liquidity as adequate.  Consequently, the bank's stand-alone
credit profile (SACP) is lower than the anchor at 'b-'.

The stable outlook primarily reflects S&P's expectation that,
over the next 12-18 months, the expected consolidated group's
asset quality and capitalization will remain unchanged from the
projected levels, despite the difficult operating environment in
Russia.  That said, ongoing capital support from the shareholders
is likely to compensate for the operational and financial risks
that stem from the planned merger between B&N Bank and MDM Bank.

S&P could consider lowering the rating if the bank does not
manage to sustainably recover its capital position within the
next 12 months, indicated by S&P's RAC ratio remaining below 3%.
S&P could also lower the rating because the integration risks
arising from the merger with B&N Bank had materialized.

An upgrade would depend on operating conditions in Russia
stabilizing, and on MDM Bank making progress in its integration
with B&N Bank.  S&P could consider raising the rating if it
considered that, within the Russian banking sector, the systemic
importance of the bank created from MDM Bank and B&N Bank had

MOSTOTREST PJSC: Moody's Assigns Ba3 Corporate Family Rating
Moody's Investors Service has assigned a first-time non-
investment grade Ba3 corporate family rating (CFR) and Ba3-PD
probability of default (PDR) rating to Russian infrastructure
construction company Mostotrest PJSC (Mostotrest). The outlook on
the ratings is stable.

"Mostotrest's Ba3 rating weighs its position as Russia's largest
transportation infrastructure construction player, its good
revenue visibility and healthy financial profile against its
modest scale versus global peers, reliance on a flagging Russian
construction market, and high project concentration with exposure
to large high-risk multi-year works," says Ekaterina Lipatova, a
Moody's Assistant Vice President -- Analyst.


Mostotrest's Ba3 CFR reflects (1) its position as the Russia's
largest transport infrastructure construction player with
established reputation as a reliable general contractor and
strong in-house expertise in technologically-advanced projects,
with a focus on roads and bridges; (2) the low risk business
model, whereby most projects relate to the construction of
important federal transport infrastructure and are performed
under contracts with state bodies; (3) good revenue visibility,
owing to its healthy backlog as well as solid bidding
opportunities even during down-cycles in the market of large
complex infrastructure projects characterized by limited
competition and material barriers to entry; (4) strong track
record of successful execution and careful project and cost
management supporting adequate operating margins despite
increasing inflationary pressure; and (5) gradual diversification
into more profitable and stable services segment.

The rating further factors in Mostotrest's conservative financial
policy and prudent development strategy, which, together with
moderate capex requirements, allows the company to maintain a
healthy financial profile with adjusted debt/EBITDA at below 2.5x
in 2016. On a net-debt basis, adjusted leverage will be stronger,
at or below 1.0x, supported by substantial cash balances at year-
end under the distinct annual cash cycle, whereby contract
receipts are clustered towards the end of each year. Although
high seasonality involves some in-year liquidity volatility, the
company's good access to bank funding mitigates this risk.

However, the rating is constrained by Mostotrest's (1) modest
scale relative to its global peers; (2) reliance on Russian
transport infrastructure construction market, which is under
ongoing pressure from the weak domestic economy and the resulting
lower state spending on infrastructure projects, albeit longer-
term fundamentals remain strong; (3) high project and customer
concentration (its five largest projects account for around 50%
of its order book); and (4) exposure to large complex high-risk
multi-year projects and growing participation in public--private
partnership (PPP) projects, which require material long-term
investments. In particular, Moody's cautions significant risks
related to Mostotrest's involvement in the large and complex
Kerch bridge project and will closely monitor its execution.

Although there is also some corporate governance risk associated
with the controlling shareholder being a financial investor, it
is partly offset by the shareholder's long-term strategic view
toward its holding, in particular, given its relation to Russian
Railways Joint Stock Company (Ba1 negative), a large customer in
the infrastructure market.


The stable outlook on the ratings reflects Moody's expectation
that Mostotrest's business model will prove resilient to the
deteriorating operating environment and the company will maintain
healthy construction volumes and profitability. The outlook
assumes that the company will continue to adhere to a
conservative financial policy with adjusted debt/EBITDA
sustainably below 3.0x.


Mostotrest's rating could be upgraded if the company (1) builds a
track record of strong operating performance growing its revenue
and backlog, while preserving healthy profitability; (2) sticks
to conservative financial policies with adjusted debt/EBITDA
sustainably below 2.0x; and (3) maintains good visibility over
future cash flows alongside conservative liquidity management.

Mostotrest's rating could come under pressure if the company
faced material deterioration in its business and financial
profile, with adjusted debt/EBITDA increasing materially above
3.0x on sustainable basis. Any uncertainty regarding the
company's liquidity could also put negative pressure on the


CAJA LABORAL: Moody's Affirms Ba1 Long-Term Deposit Ratings
Moody's Investors Service has affirmed Caja Laboral Popular Coop.
de Credito's long-term deposit ratings at Ba1.  The rating agency
also affirmed the bank's baseline credit assessment (BCA) and
adjusted BCA at ba1 and upgraded the Counterparty Risk (CR)
Assessment to Baa2(cr)/Prime-2(cr) from Baa3(cr)/Prime-3(cr).
The outlook on the long-term deposit ratings remains stable.

Caja Laboral's Not-Prime short-term deposit ratings were
unaffected by today's rating action.

This rating action reflects the stabilization of the bank's
solvency and liquidity position, with improving asset quality
trends offset by downward pressure on the bank's top-line
earnings.  The rating action also reflects the result of Moody's
Advanced Loss Given Failure (LGF) analysis, which indicates a
higher cushion against default provided to the senior obligations
represented by the CR Assessment, in light of the bank's
deleveraging and stability in deposits.

                         RATINGS RATIONALE


Caja Laboral's affirmed ba1 BCA continues to reflect the bank's
adequate solvency levels against its balance sheet risk profile,
as well as its favorable funding position, given its large
deposit base and reduced reliance on market funding.  However,
the BCA also reflects the relatively high -- albeit declining --
level of problematic assets and the historically modest
profitability indicators.

In terms of asset risk, the bank's non-performing loan (NPL)
ratio stood at 7.2% by end-December 2015, down from 8.4% a year
earlier, and compares favorably with the system average of 9.5%.
While the exposure to other problematic assets -- namely
repossessed real estate assets and refinanced loans classified as
performing -- has not evolved as positively as the stock of NPLs,
the broader problematic assets ratio still declined to 17.2% at
the end of 2015 from 17.7% a year before.

Moody's has also incorporated Caja Laboral's improved capital
ratios, primarily driven by the balance sheet deleveraging with a
lower exposure to sovereign bonds.  Moody's calculated Tangible
Common Equity (TCE) ratio improved to 12.4% at end-December 2015
from 10.7% a year earlier, benefiting from lower risk weighted
assets that Moody's assigns to the bank's sovereign exposure,
given that a large part of the bank's Spanish sovereign debt
portfolio matured in 2015.  From a regulatory perspective, the
bank's capital ratios also improved, with Caja Laboral reporting
a phased-in Common Equity Tier 1 (CET 1) ratio of 15.1% at end-
December 2015, which compares to 13.6% a year earlier.

In affirming Caja Laboral's BCA, Moody's has also taken into
account the weakening trend in the bank's top-line earnings,
which, to a large extent, offsets the positive developments on
the bank's financial strength due to improved quality of assets.
The bank's net interest income decreased by 16% in 2015 compared
to 2014, which, combined with the stability observed in other
revenue sources and operating expenses, led to a 17% decrease in
the pre-provision income in 2015.


The affirmation of Caja Laboral's long-term deposit ratings at
Ba1 reflects: (1) The affirmation of the bank's adjusted BCA at
ba1; (2) the result from the rating agency's Advanced Loss-Given
Failure (LGF) analysis, which results in an unchanged no uplift
for the deposit ratings; and (3) Moody's assessment of a low
probability of government support, which results in no uplift.


Moody's has upgraded the CR Assessment of Caja Laboral by one-
notch to Baa2(cr)/Prime-2(cr) from Baa3(cr)/Prime-3(cr), two
notches above the adjusted BCA of ba1.  The upgrade of the CR
Assessment is based on the outcome of Moody's Advanced LGF
analysis, which provides a more favorable outcome for the CR
Assessment as a consequence of the decline in total assets and
the stability in deposits observed in 2015.  As a consequence,
the senior obligations represented by the CR Assessment benefit
from a higher cushion against default.


Caja Laboral's deposit ratings carry a stable outlook, reflecting
our expectations that Spain's favorable economic conditions will
help to preserve current trends in the bank's credit


Upward pressure on Caja Laboral's standalone BCA could be
primarily driven by a sustainable recovery in the bank's
recurrent earnings, provided that its risk profile does not

Any change to the BCA would likely also affect deposit ratings,
as they are linked to the BCA.

Caja Laboral's deposit ratings could also change as a result of
changes in the loss-given-failure faced by these securities.


Downward pressure could be exerted on Caja Laboral's BCA as a
result of: (1) An acceleration in the trend of NPL formation, on
an absolute level and in relation to the system average; (2) any
worsening in operating conditions beyond our current
expectations; and/or (3) any weakening of Caja Laboral's internal
capital generation and risk absorption capacity.

Caja Laboral's deposit ratings could also change as a result of
changes in the loss-given failure faced by these securities.


Issuer: Caja Laboral Popular Coop. de Credito


  Short-term Counterparty Risk Assessment, upgraded to P-2(cr)
   from P-3(cr)
  Long-term Counterparty Risk Assessment, upgraded to Baa2(cr)
   from Baa3(cr)


  Adjusted Baseline Credit Assessment, affirmed ba1
  Baseline Credit Assessment, affirmed ba1
  Long-term Deposit Ratings, affirmed Ba1 Stable
  Outlook Actions:

Outlook remains Stable.

FONDO EOLICO: Moody's Raises Rating on E2 Notes to Ba2
Moody's Investors Service has upgraded to Ba2 from B1, the rating
of the Series E2 notes issued under the AyT FONDO EOLICO, FTA
programme (AyT Fondo Eolico).


  EUR7.6 mil. Series E2 Notes, Upgraded to Ba2; previously on
   June 29, 2015, Upgraded to B1

AyT Fondo Eolico represents the securitization of loans granted
for the purpose of developing different Eolic projects in the
region of Galicia.  These projects are established under the
Galician Eolic Plan (Plan Eolico Estrategico), which the Galician
government has approved to promote the development of Eolic parks
in Galicia.

                        RATINGS RATIONAL

The upgrade follows the upgrade of Abanca Corporacion Bancaria,
S.A. long term deposit rating to B2 from Caa1 and the upgrade of
its Counterparty Risk (CR) assessment to Ba3(cr) from B2(cr) on
June 27, 2016.

Given that Abanca acts as guarantor to ensure any principal
payments due on the loans, this has a positive impact in the


The transaction features a guarantee from Abanca Corporacion
Bancaria, S.A. on any principal payments due on the loans.
Abanca Corporacion Bancaria, S.A. also guarantees the portion of
interest that does not depend on the turnover of the debtor.
However, there is no guarantee that bondholders will receive the
variable amount (2.75% of turnover) of interest to which they are

Moody's ratings do not address the timely payment of this portion
of interest, but only the (1) timely payment of interest accrued
at the reference index plus 25 basis points; and (2) payment of
principal at final legal maturity of the notes.

Moody's did not conduct a cash flow analysis or stress scenarios
as it directly derived the rating by accounting for the joint
benefit of the guarantee and of the cash deposits.

Moody's rating methodology takes into account the joint benefit
of the guarantee and the cash deposits.  The rating agency is
assuming a default probability for the notes that is consistent
with the CR Assessment of the guarantor, but currently includes
in its recovery assumption the benefit of the cash deposit, as
well as a claim on the guaranteeing bank for the residual amount
of the principal.  As a result, Moody's currently rates the notes
one notch above the CR Assessment of the guaranteeing bank.


The rating action took into consideration the notes' exposure to
relevant counterparties, such as the guarantor and the issuer
account bank. Moody's also incorporated the updates to its
structured finance methodologies in its analysis of the

The likelihood of payments under the notes relies primarily on a
guarantee from Abanca Corporacion Bancaria, S.A. In addition,
since 2008, the guarantor strengthened its collateral guarantee
by making cash deposits in BNP Paribas Securities Services
(deposits/senior unsecured A1 stable).  This deposit currently
represents around one third of the current outstanding notes'


Factors or circumstances that could lead to a downgrade for the
ratings affected by the rating actions would be (1) worse-than-
expected performance of the underlying collateral; (2) an
increase in counterparty risk; and (3) an increase in sovereign

Factors or circumstances that could lead to an upgrade of the
ratings affected by today's action would be (1) better-than-
expected performance of the underlying collateral; (2) a decline
in counterparty risk; and (3) a reduction in sovereign risk.

                       PRINCIPAL METHODOLOGY

The principal methodology used in this rating was "Rating
Transactions Based on the Credit Substitution Approach: Letter of
Credit-backed, Insured and Guaranteed Debts" published in
December 2015.

GEO TRAVEL: Moody's Affirms B2 CFR & Changes Outlook to Stable
Moody's Investors Service has changed to stable from negative the
outlook on the ratings of Spanish-based on line travel agency Geo
Travel Finance S.C.A. Luxembourg (ODIGEO or the company).

The change in outlook to stable from negative takes into account
these factors:

   -- Strong recovery in trading performance and deleveraging in
      the year ended March 31, 2016,

   -- Expectations of a continuation of conservative financial
      policies supporting further deleveraging

   -- Continued growth in the European on line travel agency
      (OTA) sector supported by increasing travel volumes, the
      shift to on line and market share gains for larger players

   -- The company's low exposure to the UK and Moody's
      expectations of a limited impact on ODIGEO from
      uncertainties caused by Brexit

At the same time, Moody's has affirmed ODIGEO's B2 corporate
family rating (CFR) and B2-PD probability of default rating
(PDR), as well as the Caa1 rating on the EUR129 million senior
unsecured notes maturing in 2019.  Moody's has also affirmed the
B3 rating on the EUR295 million senior secured notes maturing in
2018 and issued by Geo Debt Finance S.C.A.

                        RATINGS RATIONALE

The change in outlook reflects the company's strong trading
performance and reduction in leverage in FY2016.  Booking volumes
and revenue margin grew by 9.8% and 6.4% respectively, with
strong growth in mobile (bookings up 51%) and in non-flight
revenue margin (up 9.6%).  The company's core markets of France,
Spain and Italy were stable with growth in the rest of the
business (bookings up 20%).  The company has reduced its exposure
to paid search contributing to a reduction in variable costs per
booking of 6.1%, leading to underlying EBITDA growth (before
staff bonuses which were withheld in FY2015) of approximately
12%.  In addition leverage has fallen to 4.7x debt to EBITDA on a
Moody's-adjusted basis at 31 March 2016, stated pro forma for the
buyback of EUR30 million of senior secured notes in April 2016,
compared to 5.4x at Sept. 30, 2015.  Moody's expects conservative
financial policies to continue which will support further

The European OTA sector is expected to grow as air passenger
volumes increase, as more customers seek to make purchases on
line, and as the larger OTAs gain share at the expense of smaller
players.  ODIGEO is the #1 or #2 OTA in flights in its main
European markets and the #3 OTA overall in Europe across flight
and non-flight products.  It has grown revenue margin at 7.2% per
annum on average over the last 5 years and despite the potential
uncertainties over the pace of market growth following Brexit,
the company remains well placed to deliver solid single digit
growth in the medium term. In addition the company has a low
exposure to UK generated business and to sterling.

The B2 CFR reflects (1) ODIGEO's continued high leverage; (2) a
geographic concentration in Southern Europe and France; and (3)
industry risks, including value chain disintermediation from
airlines or other intermediaries, exposure to paid search costs
and risks of exogenous shocks.

More positively, the ratings are supported by: (1) ODIGEO's
competitive positioning within the OTA industry in Europe,
particularly within the flight segment and in its key markets of
France, Spain, Italy, Germany, and Scandinavia; (2) Moody's
expectation that the on line travel market will continue to
benefit from migration from high-street travel agencies, although
at a slower rate than in the past; (3) Moody's expectation of
general growth in the airline passenger market; and (4)
conservative financial policies expected to drive further

Rating Outlook

The stable outlook reflects Moody's expectation that the company
will continue to generate solid single-digit growth in revenue
margin and with a stable cost environment.  It also assumes that
conservative financial policies will continue with no material
debt-funded acquisitions or dividends in the near to medium term,
and that liquidity will remain satisfactory.

What Could Change the Rating - Up

Upward pressure on the rating could occur if Moody's-adjusted
debt/EBITDA were to trend substantially below 4.0x on a
sustainable basis, with Moody's-adjusted free cash flow (FCF) to
debt above 10%.  Moody's would in such a scenario also expect
ODIGEO to display solid growth in revenue margin and stable
EBITDA margins, with liquidity remaining satisfactory.

What Could Change the Rating - Down

Negative rating pressure could develop if Moody's-adjusted
debt/EBITDA were to exceed 5.0x, if Moody's-adjusted FCF to debt
were to trend towards zero, or if the company's liquidity profile
was to weaken. Negative pressure could also develop if there is
significant disruption to the market or distribution chain
resulting in reducing revenue margin or profitability, or if the
company is unable to carry out a timely refinancing of its
capital structure.

Moody's Investors Service has changed to positive from stable the
outlook on its ratings of Heidelberger Druckmaschinen AG.  At the
same time, Moody's affirmed the group's B3 corporate family
rating, the B3-PD probability of default rating (PDR) and the
Caa1 (LGD4) rating on the EUR205 million senior unsecured notes
(due 2022).

                         RATINGS RATIONALE

"The outlook change to positive was prompted by Heidelberg's
recovering credit metrics through fiscal year (FY) 2016 (ended 31
March 2016) and our assessment of the group's strengthened
business profile following multi-year restructuring initiatives
to re-align its product portfolio and improve profitability,"
says Goetz Grossmann, Moody's lead analyst for Heidelberg.
"While we expect the group's leverage to reduce towards 6x
Moody's-adjusted debt/EBITDA over the next two years, supported
by moderate growth in earnings and a gradual phasing out of
restructuring costs, an upgrade to B2 would mainly hinge on the
group's ability to meaningfully improve its negative free cash
flow generation by fiscal year-end March 2018," adds Mr.

The rating action recognizes Heidelberg's improved financial
performance and credit metrics in fiscal year ended March 2016.
While topline growth of 7.6% year-over-year (yoy) was strongly
supported by favorable currency movements (mainly owing to a
strengthening US dollar) and scope effects, increased profits
before non-recurring items led to a moderate recovery in margins
and reduced the group's leverage.  For instance, Heidelberg's
EBITA margin as adjusted by Moody's of 3.8% in the previous
fiscal year climbed to 4.5% in fiscal year 2016 (3% including
restructuring costs, which Moody's adjusted only until FY 2015),
and leverage reduced to 5.8x debt/EBITDA (7.1x including
restructuring costs) from 7.4x in FY 2015.  The improved leverage
also benefitted from Heidelberg's pension obligations, which
decreased during 2015 to EUR534 million as of 31 March 2016 from
EUR605 million in the prior year and which Moody's includes in
its debt calculations for Heidelberg.

Moreover, Moody's acknowledges Heidelberg's large-scale
restructuring measures and portfolio re-alignment executed over
the last couple of years, which significantly lowered its fixed
cost base (e.g. headcount reduction to below 11,600 in FY 2016
from 15,200 in FY 2011) and strengthened its business profile.
Moody's considers Heidelberg's current business model to be less
vulnerable to customers' cyclical spending on new printing
presses following the disposal and re-organization of certain
loss-making equipment businesses such as its postpress commercial
and packaging activities in 2015.  At the same time, the group
has expanded its expertise in new technologies such as digital
printing and in the more stable and profitable segment of
services and consumables, partly through acquisitions.  As a
result, the group's revenue share derived from higher-margin
services and consumables has increased to 47% in FY 2016 from 37%
in FY 2013. Moody's also expects the group's strategic focus on
further growing its more profitable services segment (reported
EBITDA margins more than twice as high as in the equipment
segment), together with ongoing, although abating restructuring
measures, to spur further growth in profits and improve free cash
flow generation.

Nonetheless, before considering an upgrade of Heidelberg to B2,
Moody's would require free cash flow (FCF) generation to improve
to positive territory.  This should also be supported by lower
interest costs given Heidelberg's recently optimized financing
structure.  Following the full early redemption of its
outstanding 9.25% high-yield bond (due 2018) in June 2016 and a
loan of up to EUR100 million granted by the European Investment
Bank (EIB) to fund its R&D activities in May 2016, Moody's
expects the group's borrowing costs to reduce by some EUR8
million p.a.


The positive outlook reflects Moody's expectation of Heidelberg
to modestly grow its topline (including through occasional bolt-
on acquisitions) and to at least maintain its current
profitability (including possible additional restructuring
expenses).  This should translate into leverage reducing well
below 6.5x debt/EBITDA and positive free cash flow generation
over the next 12-18 months.


Heidelberg's liquidity is adequate.  This assessment takes into
consideration a sizeable cash position on the group's balance
sheet amounting to EUR215 million (of which EUR30 million are
subject to foreign exchange restrictions) at March 31, 2016, and
projected funds from operations in excess of EUR60 million (after
restructuring cash-outflows) in FY 2016.  These sources are
sufficient to cover all basic cash requirements of the group over
the next 12-18 months, including capital expenditures of over
EUR90 million, smaller debt maturities and working capital
spending, although Moody's projects free cash flow to remain
slightly negative this fiscal year.

Moreover, Moody's liquidity analysis of Heidelberg comprises the
group's committed and largely undrawn EUR250 million revolving
credit facility (maturing in June 2019) as well as compliance
with financial covenants as stipulated in its financing

                    WHAT COULD CHANGE THE RATING

Moody's might consider to upgrade Heidelberg to B2, if the group
was able to (1) sustainably improve profitability, evidenced by
Moody's-adjusted EBITA margins of 3.5% or higher (including
restructuring costs), (2) reduce leverage to below 6.5x Moody's-
adjusted debt/EBITDA, (2) improve Moody's-adjusted EBITA/interest
expense above 1x, and (4) if visibility of sustained positive
free cash flow generation were to increase.

Downward pressure on Heidelberg's ratings would evolve, if the
group materially failed to improve its operating profitability
and free cash flow generation as expected by Moody's.  Any
evidence of a weakening liquidity including insufficient headroom
under financial covenants could also result in a rating downgrade
or stabilization of the outlook.

                       PRINCIPAL METHODOLOGY

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

Based in Wiesloch, Germany, Heidelberger Druckmaschinen AG is the
leading global manufacturer of sheet-fed offset printing presses
used primarily in the advertising and packaging printing
segments. Its main competitors include unrated Koenig & Bauer and
Komori.  In fiscal year ended March 31, 2016, (FY 2016), the
group generated revenues over EUR2.5 billion and reported EBITDA
(excluding special items) of EUR189 million.  Heidelberg operates
under three business segments: (1) Heidelberg Equipment
(approximately 53% of revenues in FY 2016); (2) Heidelberg
Services (around 47%); and (3) Heidelberg Financial Services
(less than 1%).


SAS AB: Moody's Raises CFR to B2, Outlook Stable
Moody's Investors Service has upgraded Scandinavian airline group
SAS AB's (SAS) corporate family rating to B2 from B3 and its
probability of default rating to B2-PD from B3-PD.  Concurrently,
Moody's has upgraded its subsidiary SAS Denmark-Norway-Sweden's
backed subordinated loan rating to Caa1 (LGD 6) from Caa2 (LGD 6)
and its backed senior unsecured MTN rating to (P)B3 (LGD 4) from
(P)Caa1 (LGD 5).  Moody's has affirmed the NP commercial paper
rating and the (P)NP backed other short term rating.  The outlook
on all the ratings is stable.

"We upgraded SAS's ratings to reflect its material earnings
improvement in fiscal year 2015 and its solid financial
performance in the first half of fiscal year 2016, which have
strengthened the company's credit metrics," says Sven Reinke, a
Moody's Vice President - Senior Credit Officer and lead analyst
for SAS.

"We anticipate that SAS's performance will continue to be
challenged by the expansion of low-cost competitors, including
Norwegian Air Shuttle ASA.  However, our forecast of low oil
prices for the next two years and SAS's ongoing cost saving
initiatives will support a stable operating performance over the
next 12-18 months", Mr. Reinke adds.

                         RATINGS RATIONALE

The upgrade of SAS's ratings reflects the airline's strong
performance in fiscal year (FY)2015 and its solid results in the
first half of FY2016, which resulted in credit metrics that for
the last 12 months to April 2016 were well within Moody's
guidance for a B2 rating.  The company's reported that pre-tax
income before nonrecurring items improved substantially to
SEK1,329 million in the 12 months to April 2016, up from SEK388
million the previous year.

This improvement was driven by (1) lower fuel costs, which fell
to SEK6.8 billon compared with SEK9.3 billion in the previous 12
months; and (2) lower payroll expenses of SEK9.4 billion compared
with SEK10.2 billion in the previous 12 months, as a result of
SAS's cost saving measures.  These cost savings more than offset
a material decline in currency-adjusted passenger yield by 8.5%
in the first half of FY2016.

SAS has executed a number of restructuring and cost efficiency
programs in recent years, such as the 4Excellence Next Generation
program between 2012 and 2015 that lowered the company's cost
base by around SEK3 billion.  Key pillars of the program were new
pension terms (notably the transition away from defined-benefit
to defined-contribution schemes), and the reduction of headcount
by around 2,600 full-time employees, equivalent to 17% of the
workforce.  The company delivered a further SEK920 million of
cost savings in FY2015, predominately owing to the outsourcing of
ground handling and aircraft maintenance activities, aircraft
fleet simplification and the introduction of a two-tier
production model, whereby more regional services are now operated
by wet-lease partners.

However, SAS continues to suffer from severe yield pressure
driven by additional capacity from both low cost and network
carriers. SAS increased its own capacity by 11.5% in the first
half of FY2016 as it expanded its long-haul network.  Despite
lower ticket prices, SAS could not fully utilize the additional
capacity, with revenue passenger kilometers rising by only 8.7%.
This resulted in a decrease of its load factor to 67.7% compared
with 69.5% in the first half of FY2015.  SAS also reported
operational difficulties in Q2 FY2016, partially owing to an
abnormal level of unscheduled maintenance.

However, Moody's notes that SAS affirmed its outlook for FY2016,
guiding for a positive earnings before tax before non-recurring
items, as well as a capacity increase of 10%.  After deciding to
prioritize production stability and quality in the current fiscal
year, the company lowered its targeted cost savings for FY2016 by
SEK0.3 billion to SEK0.7 billion.  SAS is targeting efficiencies
in areas such as maintenance, ground handling, supply chain and
logistics, administration and sales, and facilities and rental

SAS's ratings reflect the application of Moody's rating
methodology for government-related issuers (GRIs).  The B2 rating
for SAS incorporates a one-notch uplift from the GRI methodology
reflecting the combination of the following GRI inputs: (1) a
baseline credit assessment (BCA) of b3; (2) the Aaa local-
currency rating of the Scandinavian sovereign shareholders; (3)
'High' dependence; and (4) 'Low' support.

SAS's b3 BCA reflects the company's improving although still low
operating profitability, despite far reaching internal
restructuring efforts, leading to moderately high leverage.
SAS's current adjusted debt-to-EBITDA ratio is well positioned
for a b3 BCA.  This ratio fell to 4.2x in Q1 FY2016 from 7.2x at
FY2014. However, Moody's expects no material improvement in
leverage over the next 12-18 months, as low fuel expenses and
ongoing cost efficiency measures are likely to be offset by yield
pressure, as a result of growing capacity in SAS's core
Scandinavian market.

The company's liquidity is adequate even beyond a 12-month
horizon, as SAS has taken a number of measures to improve its
liquidity in the past three years.  This includes the sale of
assets as well as the SEK3.5 billion preference share issuance
and SEK1.6 billion convertible bond issuance from February 2014.
At the end of H1 FY2016 in April 2016, SAS had cash and cash
equivalents of SEK9.1 billion, which compares favorably with
short-term debt of SEK2.7 billion.


The stable outlook reflects Moody's expectation that SAS will
continue to reduce its cost base.  This is likely to offset some
of the negative effects of the intensifying competition from low-
cost carriers in the Nordic region, which is likely to continue
to pressure SAS's top-line growth and yields.  The company
targets efficiency measures of SEK1.5 billion for FY2016-FY2018.
In addition, the materially reduced oil price provides cost
relief in the current FY2016, after a time delay owing to fuel
hedging currently in place, and Moody's expects the oil price to
remain low for the next two to three years.


Upward pressure could be exerted on the rating if SAS's adjusted
leverage were to fall below 4.5x and if its adjusted EBIT to
interest expense ratio were to improve to more than 1.5x on a
sustainable basis, while generating positive free cash flow and
maintaining an adequate liquidity profile and demonstrating the
resilience of its business model against increasing competition
from low cost competitors, as well as other legacy airlines.

The rating could come under negative pressure if the company's
gross adjusted leverage were to increase above 6.0x and if the
adjusted EBIT to interest expense ratio were to trend back
towards 1.0x, or as a result of weakened liquidity.  Given the
company's current strategy, Moody's believes that any
deterioration in its credit metrics would likely be the result of
a downturn in demand or intensifying external competition with an
associated capacity increase from other airlines.  In addition,
the removal of the GRI related rating uplift for example as a
result of a reduction of the government ownership stake in SAS
could lead to a rating downgrade.

                        PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Global
Passenger Airlines published in May 2012.  Other methodologies
used include the Government-Related Issuers methodology published
in October 2014.

Based in Stockholm, Sweden, SAS AB is publicly listed, and 49.7%
owned by the governments of Denmark, Norway and Sweden, 50.3% by
private investors (7.5% of which is held by the Knut and
Wallenberg Foundation).  SAS AB is the holding company for
Scandinavian Airlines System Denmark-Norway-Sweden, referred to
as the SAS Consortium, which is one of Europe's largest passenger
airlines, with total revenues of around SEK39.7 billion and 28.1
million passengers in the 12 months to October 2015.  The
Consortium primarily serves the Scandinavian and the European
region, as well as a number of destinations in the US and Asia.

U N I T E D   K I N G D O M

BHS GROUP: Dominic Chappell Defends Actions in Collapse Probe
Alan Tovey at The Telegraph reports that Dominic Chappell, the
former owner of failed retailer BHS, has taken to television to
defend his actions as custodian of the 88-year-old business which
collapsed on his watch.

In a Newsnight interview, the former bankrupt executive -- who
received a GBP600,000 salary and took out a separate GBP1.4
million -- sought to explain his actions and said the money he
took out of the business had no impact on its collapse, calling
the GBP2.6 million he received "a drip in the ocean", The
Telegraph relates.

Mr. Chappell, as cited by The Telegraph, said that he was "a
chancer" but had to be to take on BHS when no one else was
willing to.

"We took a chance with BHS.  We were the only people to stick our
heads above the parapet and give it a go, otherwise [Sir Philip
Green] would have liquidated that company and thousands of people
would have lost their jobs straight away," The Telegraph quotes
Mr. Chappell as saying.

"We gave it the best shot we possibly could.  We did everything
we could to save that company.  We were probably the only people
who were prepared to take that risk to try to get it to break
even, to try to get it to make a profit.  So if I'm a chancer for
that, well, yes I am."

He said he "sincerely and utterly apologized" to BHS's 11,000
staff in 163 stores who lost their jobs when the business
collapsed into administration this spring, just a year after
Mr. Chappell's Retail Acquisitions bought BHS from Sir Philip's
Arcadia for GBP1, The Telegraph relays.

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

DERBY FIREPLACE: In Liquidation, 11 Jobs Affected
Sam Metcalf at reports that eleven jobs have
been lost after The Derby Fireplace Company slipped into

Lucinda Matkin -- -- of LM
Insolvency & Advisory was appointed liquidator of the company on
June 27, relates.

According to, Ms. Matkin said the company
suffered from a shift in market preferences towards online
retail, resulting in a fail in sales of a number of years.

Ms. Matkin added that the Company had considered a CVA (Company
Voluntary Arrangement) process, and making cost savings by
condensing the business down to one showroom, by closing its
Nottingham showroom, relays.

The Company also tried the introduction of interest free credit
and the launch of a new Company website) in an attempt to
increase sales; however these initiatives failed to generate
enough sales to sustain the business long term, and the directors
of the company chose a CVL (Company Voluntary Liquidation)
instead, notes.

"All 11 staff have been made redundant, and the company has
ceased trading.  All stock including log burners, fires, fire
surrounds and home accessories will be available for sale via
auction through our agents, John Pye & Sons,"
quotes Ms. Matkin as saying.

The Derby Fireplace Company is a Derby- and Nottingham-based
supplier of fireplace products.

PIZZA EXPRESS: Moody's Affirms B3 CFR & Changes Outlook to Stable
Moody's Investors Service has changed to stable from positive the
outlook on all the ratings of PizzaExpress Financing 1 plc and
PizzaExpress Financing 2 plc.

At the same time, Moody's has affirmed the B3 corporate family
rating (CFR) and B2-PD probability of default rating (PDR) of
PizzaExpress Financing 1 plc, the holding company to the Pizza
Express group of companies (Pizza Express or the company).
Moody's has also affirmed the B2 rating of the GBP465 million
Senior Secured Notes due 2021 issued by PizzaExpress Financing 2
plc and the Caa1 rating of the GBP200 million Senior Unsecured
Notes due 2022 issued by PizzaExpress Financing 1 plc.

"We have changed our outlook on Pizza Express to stable because
our Adjusted Debt-to-EBITDA is unlikely to fall below 6.5x
because of an expected slowdown in like-for-like revenue growth
this year compared to 2015", says Emmanuel Savoye, AVP-Analyst at

                          RATINGS RATIONALE

The change in outlook from stable to positive reflects the
weakening performance since the positive outlook was assigned in
June 2015, notably in terms of like-for-like (LFL) sales growth
which have been negative in the last two quarters after a very
strong year in 2015.  The negative LFL sales reflect strong
comparable from the previous year, but also 1) higher competition
in the UK characterized by an increasingly crowded market place
due to continued new restaurant openings and 2) slowdown in the
growth rate of the casual dining market since late 2015 due to
declining consumer confidence.  In addition, EBITDA margins have
decreased in the UK due to lower volumes and investments in new
concepts such as take-away.  As a result, leverage remained
stable at 6.6x as of the last twelve months to April 2016
compared to the same period last year.  Continued positive LFL
sales, stable EBITDA margins, and deleveraging were among the
conditions for the positive outlook assigned in June 2015.
However, Moody's continues to see the current rating as well
positioned in the B3 category.

Pizza Express has reported negative like-for-like (LFL) sales
of -1.2% and -3% in the last two quarters in the UK and Ireland
citing lower footfall as the main driver.  Although S&P believes
that positive fundamentals remain for the UK casual dining
market, S&P also recognizes that it is being affected by
increasing competition, while the recent outcome of the UK
referendum to leave the European Union may lead to a period of
economic uncertainty.  Trading has however been supported by new
restaurant roll outs, with total revenues increasing by 15.2%
year-to-date to April 2016 compared to the previous year.  EBITDA
margins in the UK remained high for the industry but trended
lower to 22.4% year-to-date to April 2016 from 23.4% the year
before.  The decrease in margins is due to lower volumes and
investments in new concepts, in particular in the delivery
segment.  Moody's view the company's acquisition in February of
Firezza, a small delivery chain in the UK, and its recent
agreement in May with Deliveroo, to enable it grow in the
delivery sector positively, because of the growing trend in home
delivery which will support volumes.  Moody's also notes that
margins will be negatively affected by the planned increases of
the minimum national living wage with the cost estimated by the
company at GBP2 million pro forma for the year.

Moody's expects the company to continue the roll out of new
stores in the UK as well as internationally and to use internally
generated cash flows to finance the investments required.  As a
result, Moody's do not expect any meaningful free cash flow
generation in the next 12 months while recognizing that a large
portion of the expected capex is discretionary.  In light of the
bullet maturities of the outstanding notes, Moody's expects
deleveraging to be driven by EBITDA growth and Moody's currently
assumes that Moody's Adjusted Debt-to-EBITDA will stay at or
above 6.5x in the next twelve months.

Moody's considers Pizza Express's near-term liquidity to be
adequate, with sufficient internal resources to service the
coupon on its outstanding notes.  In addition, liquidity is
supported by a GBP20 million revolving credit facility which is
expected to remain undrawn, although it could be utilized if site
roll-out plans are accelerated.  The RCF has a draw-stop
mechanism when total net leverage exceeds 9.0x and the facility
is drawn more than 25%.

Moody's has also affirmed the B2 and the Caa1 ratings of the
outstanding GBP465 million senior secured notes and GBP200
million senior unsecured notes.  The different ratings for the
notes continue to reflect the relative ranking within the capital
structure.  The GBP465 million senior secured notes together with
the GBP20 million revolving credit facility benefit from a
guarantor and security package that comprises around 90% of total
group EBITDA and assets.  However, the revolver also benefits
from priority of payment according to the intercreditor
agreement.  The GBP200 million senior unsecured notes rank behind
these instruments and benefit from a senior subordinated
guarantee from the same guarantor group.


The stable outlook reflects the expectation that Moody's Adjusted
Debt-to-EBITDA will stay at or above 6.5x in the next twelve
months supported by the roll out of new stores and that LFL
revenues will stabilize and grow only marginally next year.
Moody's do not expect any meaningful free cash flow generation in
the next twelve months due to the company's use of internally
generated cash flows to finance the investments required for the
ramp up of new restaurant openings.  The outlook also assumes
that the company will not embark on any transforming acquisitions
or make debt-funded shareholder distributions.


Upward pressure on the rating could materialize if Moody's-
adjusted debt/EBITDA falls below 6.5x on a sustainable basis,
with Moody's-adjusted EBITA coverage of interest expenses moving
towards 2.0x.

Negative pressure could arise if EBITDA margins continue to
decrease and like-for-like sales growth remain negative for a
prolonged period of time leading to Moody's-adjusted debt/EBITDA
sustainably above 7.0x, or if liquidity substantially weakens.

                       PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Restaurant
Industry published in September 2015.

Founded in 1965, Pizza Express has grown to become the leading
player in the UK casual dining market measured by number of
restaurants.  As at April 3, 2016, it operated 480 sites in the
UK and Ireland as well as 90 international sites principally in
China, the Middle East and India.  It also has licensing
arrangements in place to enable Pizza Express pizzas, salad
dressings and other products to be sold through supermarkets.
Headquartered in London, it has approximately 11,000 employees
worldwide.  For FYE 2015 it had revenues of GBP428 million and
EBITDA of GBP100 million.  Pizza Express was acquired by Hony
Capital in a GBP895 million LBO in August 2014.

STAPLES UK: Faces Financial Woes, Mulls Rescue Options
Ashley Armstrong at The Telegraph reports that Staples, the US
stationery chain, is considering pulling out of the UK market, in
the latest blow to the UK's struggling high street.

According to The Telegraph, the UK arm, which has 107 stores
across the country, is dependent on its US parent, Staples Inc,
for financial support in order to continue operating as a going

However, after the US group's US$6 billion (GBP4.53 billion)
attempted merger with US rival Office Depot was blocked by
competition regulators earlier this year, Staples Inc. is
reviewing the future of its European operations, which includes
around 200 stores, and plans to slash US$300 million (GBP226
million) of annual cost, The Telegraph discloses.

Staples, The Telegraph says, has struggled with years of
declining revenue as demand wanes for traditional office basics
like folders, ink cartridges and filing cabinets and as shoppers
hunt for bargains online.

It is understood that KPMG has only recently been appointed to
work on options which could include a sale of Staples' UK
business, financial restructuring, a potential company voluntary
arrangement or administration, The Telegraph relays.

According to The Telegraph, a source close to the process said
that all options were being reviewed but said that the shops were
in poor retail park locations which would make it less appealing
to a trade buyer.

* UK: Fitch Says Brexit to Impact European High-Yield Issuance
The vote to leave the EU in the UK's referendum will further
subdue already constrained European high-yield new issuance
volumes and lead to more financial distress and higher default
rates for leveraged UK and eurozone issuers into 2017 and beyond,
Fitch Ratings says. This differs markedly from recent periods of
European high-yield volatility, which were largely confined to
funding markets.

Volatility is nothing new for the post-crisis European high-yield
market. But the lower growth outlook through 2017 for the UK and
eurozone economies following the "Brexit" vote presents
rebalancing pressures for their respective consumer and producer

'B' category credits in pro-cyclical discretionary consumer and
fixed-asset related sectors in the UK will come under the most
stress. Weaker sterling erodes purchasing power and managements'
preference to preserve cash flow via cost-cutting and deferred
investment raises risks regarding the outlook for employment and
spending in the UK's unbalanced economy.

Both the Bank of England and the European Central Bank may
respond with further stimulus in the form of rate cuts and
accelerated asset purchases, but the impact could be limited due
to the already low rates and uncertain spill-overs into funding
conditions for European banks. Moreover, collateral quality
constraints in central bank asset purchase programs exclude
speculative-grade corporate debt.

Credit quality is more robust at this late stage of the credit
cycle and a sharp spike in default rates remains unlikely in
light of financial system repair. But credit investors are likely
to bear the burden of declining debt-service capacity in the next
default cycle. The "Brexit" vote has brought that closer and we
expect high-yield investors to price risky credit accordingly.


* Unenforced & Arbitration Judgments Cost 14% of Cos. Over $50M
Burford Capital, a global finance firm focused on law, on June
29, 2016, announced research showing the troubling scale of
damages and awards left unpaid by judgment evaders.

A new Burford study shows that 86 percent of private practice
lawyers have clients who in the last five years have not been
paid the full value of a successful litigation or arbitration
judgment or award. Almost one in five lawyers (19 percent) said
their clients' unenforced judgments were worth between $10 and
$50 million (GBP7 to GBP35 million); 14 percent said that their
client's unenforced judgments were worth more than $50 million.

"If one were to add up the lost value to companies around the
world when they cannot enforce judgments, the collective sum
would be billions," said Christopher Bogart, CEO of Burford

The study, conducted by Burford in conjunction with the Lawyer
Research Service, points to a significant global problem. After
securing justice in court, often at a cost of millions in legal
fees and years of effort, companies can be left hanging when
judgment debtors -- individuals, corporations or foreign
governments -- simply fail to pay what they owe.  Collecting is
even more problematic when these judgment debtors take steps to
bury assets in offshore structures.

The majority of corporate executives surveyed (58 percent)
confirmed that their companies have not been paid the full value
of litigation and arbitration judgments in the past five years.
The majority of lawyers (62 percent) said the prime reason
judgments or awards could not be satisfied was because debtors'
assets were hidden offshore.  They identified the regions most
likely to erect barriers to securing judgment awards as Russia
and the former Soviet states (37 percent), followed by the
Caribbean (20 percent) and Asia (16 percent).

Corporations may, however, leverage professional judgment
enforcement and asset tracing partners to recover judgment
awards. Mr. Bogart continued: "Given the scale of the problem,
businesses are increasingly turning to enforcement partners --
and the savviest companies are also utilizing litigation finance
to turn those unenforced judgment debts into capital for the
business, without adding cost or risk to corporate balance

According to the survey, more than half of private practice
lawyers (52 percent) said clients have worked with judgment
enforcement and asset tracing professionals to recover judgment
awards the past five years.  However, only 11 percent have
clients who have sought and secured financing to fund these
enforcement services, moving these costs off their balance
sheets -- signalling both an opportunity for businesses and a
need for law firms to educate clients.

The study is based on a survey of over 200 private practice
lawyers, in-house counsel and corporate
C-level executives in the UK, US, Europe and Asia.

A copy of the report is available at:

                    About Burford Capital

Burford -- is a global finance
firm focused on law.  Burford's businesses include litigation
finance, insurance and risk transfer, law firm lending, corporate
intelligence and judgment enforcement, and a wide range of
investment activities.  Burford's equity and debt securities are
publicly traded on the London Stock Exchange.  The firm works
with lawyers and clients around the world from its principal
offices in New York and London.


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  Go to 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,

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

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