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

                           E U R O P E

           Wednesday, July 13, 2016, Vol. 17, No. 137


                            Headlines


G E O R G I A

LIBERTY BANK: S&P Affirms 'B/B' Counterparty Credit Ratings


G E R M A N Y

HSH NORDBANK: Fitch Affirms 'b' Viability Rating


G R E E C E

MARINOPOULOS GROUP: Unit's Hypermarket Put Up for Sale


I R E L A N D

CVC CORDATUS VII: Moody's Assigns (P)B2 Rating to Class F Notes


I T A L Y

DECO 2014 - GONDOLA: Fitch Affirms 'BBsf' Rating on Class E Notes
ITALY: Must Abide by "Strict" EU Bail-in Rules, Dijsselbloem Says
MONTE DEI PASCHI: Consob Temporarily Bans Short-Selling of Shares


N E T H E R L A N D S

CAIRN CLO II: Moody's Affirms B1 Rating on Class E Notes
JUBILEE CDO VII: Moody's Raises Rating on Cl. E Notes to Ba2


R U S S I A

AKCIA OJSC: Liabilities Exceed Assets, Assessment Shows
DEAL-BANK LTD: Liabilities Exceed Assets, Assessment Shows
FCRB BANK: DIA Terminates Role in Provisional Administration
INTERTRUSTBANK: Liabilities Exceed Assets, Assessment Shows
LENTA LLC: Fitch Raises LT Issuer Default Ratings to 'BB'


U N I T E D   K I N G D O M

TATA STEEL UK: Future Still Uncertain Despite ThyssenKrupp Talks


U Z B E K I S T A N

AGROBANK: Moody's Raises Long-Term Deposit Ratings to 'B2'


                            *********


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G E O R G I A
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LIBERTY BANK: S&P Affirms 'B/B' Counterparty Credit Ratings
-----------------------------------------------------------
S&P Global Ratings said that it has affirmed its 'B/B' long- and
short-term counterparty credit ratings on Georgia-based Liberty
Bank JSC.  The outlook is stable.

The ratings on Liberty Bank reflect S&P's view of the bank's
well-established market position in Georgia, low single-name
concentrations in the loan book and funding base, and good
earnings generation capacity.  At the same time, the ratings are
constrained by uncertainties related to the bank's ownership
structure and capital policy, moderate capitalization, and focus
on the high-risk retail lending segment.  S&P also thinks that
Liberty Bank has moderate systemic importance in Georgia's
banking sector, given its exclusive role in the pension and
social-welfare distribution network.

Liberty ranks fourth in Georgia in terms of assets, which totaled
GEL1.5 billion (about US$626 million) as of Dec. 31, 2015, and
has a 6.3% market share.  S&P considers the bank's market share
substantial, given the highly fragmented Georgian banking sector.
The bank's business focus is somewhat unique for Georgia because
it has been granted the sole right to distribute pensions and
welfare payments throughout the country, according to an
agreement with the government that was renewed in December 2014
and expires in December 2019.  Therefore, S&P believes that the
bank's core franchise is solid and stable and that it supports
revenue sustainability.

58.18% of Liberty's ordinary shares remain encumbered, by order
of the Tbilisi City Court, in connection with civil litigation
that started in 2013.  The outcome of this case might influence
the bank's ownership structure and, eventually, its strategy and
capital management policy.

So far, these uncertainties have not hurt the bank's performance.
However, easing of the uncertainties might eventually be positive
for Liberty Bank's creditworthiness if S&P considers that the
bank's ownership structure had stabilized and its future strategy
will allow it to maintain a good market position, consistent
financial performance, and at least moderate capitalization.

On the other hand, S&P regards the bank's capital policy as
volatile.  Contrary to S&P's base-case scenario, its risk-
adjusted capital (RAC) ratio for Liberty Bank declined to 4% in
2015 from 4.7% in 2014.  At the end of 2015, the bank executed a
share buyback transaction for about GEL17.4 million.  At the same
time, during that year, the bank increased its subordinated debt,
which qualifies as Tier 2 capital under local regulation, by more
than 3x to GEL58.4 million from GEL15.9 million.  These
transactions resulted in the bank's regulatory common equity tier
1 ratio (as per the National Bank of Georgia's Basel II/III
framework) weakening to 8.6% as of Dec. 31, 2015, from 11.3% as
of Dec. 31, 2014, although the total regulatory capital ratio
marginally increased.

S&P understands, however, that the bank intends to maintain its
core capital ratios at least at the current levels.  S&P expects
the RAC ratio, according to its criteria, will improve due to
strong profitability and stay above 5% in the next 12-18 months,
given the bank's still high margins, moderated growth, and
stabilizing credit costs.

Liberty Bank's funding is average and its liquidity adequate, in
S&P's opinion.  The bank maintains an adequate liquidity cushion,
with cash and money market instruments comprising about 48% of
total assets as of Dec. 31, 2015, and covering wholesale debt
maturing in 12 months by more than 6x.

The stable outlook reflects S&P's view that the bank's strong
franchise, sound business model, and ability to consistently show
good financial results balance uncertainties regarding its
ownership structure, growth strategy, and capital management
policy over the next 12-18 months.

S&P may take a negative rating action if it believes that the
bank is following a more aggressive capital management policy,
demonstrating high growth or increased dividends, which could
weaken its capital position as measured by S&P's RAC ratio or
lead to notable deterioration of loan book performance, increased
provisioning needs, and depressed earnings.

Furthermore, S&P could downgrade Liberty Bank if S&P sees the
uncertainties regarding the bank's ownership constraining
financial performance or management's efficiency, or if possible
future changes to the ownership structure are detrimental to the
bank's business stability or capital position.

S&P may take a positive rating action if the bank finds strategic
owners, resulting in a more stable ownership structure, and if
the new owners display a supportive and cautious approach with
regard to capital management and continue focusing on the bank's
core areas of expertise.  However, S&P considers this to be a
remote possibility over the next 12-18 months.



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G E R M A N Y
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HSH NORDBANK: Fitch Affirms 'b' Viability Rating
------------------------------------------------
Fitch Ratings has affirmed HSH Nordbank's (HSH) Long-Term Issuer
Default Rating (IDR) at 'BBB-' and Support Rating (SR) at '2'.
The Outlook is Negative. Its Viability Rating (VR) was affirmed
at 'b', and removed from Rating Watch Positive (RWP).

The rating action follows the EU's final decision regarding state
aid provided to HSH, which was published on May 2, 2016. Under
the terms of the decision, the restoration of HSH's EUR10 billion
guarantee provided by its federal state owners has been finally
approved and the bank has been relieved from part of its non-
performing legacy assets by an asset transfer to its federal
owners and sales to the market. The structure of its guarantee
fee obligations has been revised, resulting in a significantly
lower future burden but at the cost of a one-off payment of
EUR260 million.

HSH has undergone material organizational transformation due to a
required split into a holding company and an operating subsidiary
as a result of the EU's decision on state aid. The operating
company will have to be privatized by February 2018 or, if the
sale is unsuccessful, wound-down.

KEY RATING DRIVERS

IDRS, SENIOR DEBT AND SUPPORT RATING

The IDRs, senior debt and Support Ratings are driven by support
from HSH's owners comprising the federal states of Schleswig-
Holstein (AAA) and Hamburg (AAA), the regional savings banks and
ultimately the Sparkassen-Finanzgruppe (SFG, A+/Stable) and the
Sparkassen (savings banks) and Landesbanken-shared institutional
protection fund (Sicherungseinrichtung).

HSH's Long-Term IDR is rated five notches below SFG's Long-Term
IDR because the bank's intrinsic weaknesses -- even after the
measures imposed under the EU agreement -- in Fitch's opinion,
make support less likely given the private investor test under EU
legislation.

Under the EU agreement the operating subsidiary will need to be
privatized by end-February 2018. If the privatization is
successful HSH's federal state owners will no longer be majority
shareholders and would only be allowed to own a combined share of
up to 25% for a period of up to four years, and following a
privatization Fitch would likely consider the public sector
owners' stakes in HSH no longer a strategic investment. Although
the bidding process has not yet started, we believe that the
scope of potential future investors will be limited particularly
if the shipping crisis persists or even deteriorates over the
next two years.

Fitch said, "If a sale is unsuccessful, the bank will have to
cease new business activities and manage the assets with a view
of winding them down. In this scenario, we expect that the
existing owners will have financial and reputational incentives
to ensure that the wind-down is managed in a way that senior
unsecured creditors do not incur any losses."

The Negative Outlook reflect Fitch's expectation that a sale
could result in a downgrade of the IDRs if the new owners have a
lower ability or propensity to provide support than HSH's current
federal state owners.

VR

HSH's VR primarily reflects Fitch's view that profitability is
weak and unlikely to materially improve until the bank's future
business model has been decided in the event of a privatization
of HSH.

Fitch said, "Profitability will benefit from lower fee payments
made by the bank for the guarantee as agreed with the EC.
However, HSH had to make a one-off payment of EUR260 million to
contribute to the establishment of the new holding company and
its guarantee payment obligations. HSH's 2015 pre-tax profit of
EUR450 million was driven by positive one-off effects of the
restructuring and the bank reported a pre-tax loss of EUR36
million in 1Q16. We believe that the core bank's profitability
will remain low and constrained by uncertain growth prospects
until privatization. Profitability will also depend on the level
of loan impairment charges, which could remain volatile given the
sizeable shipping portfolio that remains in the core bank."

Asset quality has seen a moderate improvement as a result of
increased reserve coverage of impaired loans and the support from
the remaining underlying guarantee. According to the EU
agreement, HSH has to sell at least EUR2 billion assets investors
and can transfer non-performing loans with associated exposure at
default (EaD) of up to EUR6.2 billion to its owners. Both
transactions will occur at market prices and the resulting losses
will be absorbed by the guarantee.

HSH announced on June 30, 2016 that it had transferred a EUR5
billion portfolio of non-performing shipping loans to HSH
Portfoliomanagement AoeR, the wind-down entity owned by the
federal states, and the sale of a portfolio of currently EUR3.2
billion is planned within one year. This portfolio includes
shipping, real estate, energy and aviation loans.

Once these transactions have been completed, Fitch estimates that
HSH's gross NPL ratio will decline to between 15% and 17% over
the course of 2017 from about 26% at end-2015. Despite this
improvement, HSH's NPL ratio will likely remain the weakest among
the bank's German peers. Even the reduced shipping portfolio will
continue to be a material burden on HSH's asset quality despite a
significant rise in reserve coverage, which reached about 50% of
impaired loans at end-2015, including the effect of the
guarantee.

HSH's capitalization has seen a modest benefit from lower risk-
weighted assets (RWAs) and the release of provisions for certain
components of the bank's guarantee fees that were converted into
CET1 capital. HSH's 11.3% end-1Q16 fully-loaded CET1 ratio
compares well with peers' but would be vulnerable to asset
quality deterioration.

Fitch said, "HSH's funding, particularly long-term US dollar
funding, in our view could become more challenging for the bank,
but the transfer of assets, many of which are US dollar-
denominated, to the federal states will reduce funding
requirements substantially. HSH's funding costs could increase as
a result of the possible ownership change and become increasingly
subject to changes in investor confidence. However, liquidity
remains solid and benefits from the portfolio sales."

SUBORDINATED DEBT

HSH's subordinated debt is rated one notch below the bank's VR to
reflect higher loss severity versus senior debt obligations.

STATE-GUARANTEED/GRANDFATHERED SECURITIES

Fitch said, "The 'AAA' rating of HSH's state-guaranteed/
grandfathered senior debt, subordinated debt and market-linked
securities reflect the credit strength of the guarantor -- the
federal state of Schleswig Holstein and the City of Hamburg --
and our view that they will honor their guarantees."

RATING SENSITIVITIES

IDRS, SENIOR DEBT AND SUPPORT RATING

HSH's IDRs, senior debt rating and SR are primarily sensitive to
the likelihood of a successful privatization. A sale of HSH or a
successful public offering would result in the bank's IDRs being
driven either by HSH's VR, in the absence of a sufficiently
strong new institutional owner, or by institutional support from
a new owner, if the owner is rated higher than HSH's VR at the
time and shows a sufficient propensity to provide support.

HSH's IDRs and Support Rating would be downgraded if Fitch
concludes that, in the event of a privatization, institutional
support from the new owner would not be sufficiently strong to
warrant an IDR of at least 'BBB-'.

If the privatization is not successful, HSH's shareholder
structure will be unchanged and the bank will be wound down. In
this case HSH is likely to remain a member of the protection
scheme of the Landesbanken (Sicherungseinrichtung), which means
that it could continue to receive support from its owners in
combination with the SFG to protect senior unsecured bondholders.
This would result in the affirmation of its IDR if we conclude
that the likelihood of imposing losses on senior creditors during
the run down of assets will remain low.

Fitch said, "We expect to review HSH's ratings once the bidding
process has started to assess whether a sale of the bank is
likely to be successful and what the bank's new ownership
structure is likely to be. A sale to an individual Landesbank is
possible but in Fitch's opinion increasingly unlikely given the
sector's challenges and the weak financial profile of the
northern German Landesbanken that is HSH, and NORD/LBand
BremerLB. We also believe that a sale to a group of Landesbanken
is becoming an increasingly remote possibility given the short
remaining time to privatization. We believe such a move could be
politically motivated but would require strong political
consensus and complex legal execution. We currently have no
indication of this materializing."

VR
An upgrade of HSH's VR would be contingent on the confirmation of
the long-term sustainability of the bank's business model that
will allow the bank to generate adequate profitability. Fitch
believes that this would rely on a successful privatization, and
a moderate improvement in the bank's asset quality,
capitalization or profitability alone would not be sufficient for
an upgrade of the VR. If HSH is wound-down, Fitch would likely
withdraw its VR if it concludez that a stand-alone assessment of
the bank is no longer possible, in line with our approach for
other wound-down institutions.

STATE-GUARANTEED/GRANDFATHERED SECURITIES
The ratings of HSH's state-guaranteed/grandfathered senior debt,
subordinated debt and market-linked securities are sensitive to
changes in Fitch's view of the creditworthiness of the
guarantors.

SUBORDINATED DEBT

As the ratings are notched off HSH's VR, the subordinated debt
ratings are sensitive to a change in the VR or a change in their
notching, which could arise if Fitch concludes that loss severity
or incremental non-performance risk has increased.

The rating actions are as follows:

HSH Nordbank AG Bank

Long-Term IDR: affirmed at 'BBB-', Outlook Negative
Short-Term IDR: affirmed at 'F3'
Support Rating: affirmed at '2'
Viability Rating: affirmed at 'b', removed from Rating Watch
  Positive
Long-term senior debt, including programme ratings: affirmed at
  'BBB-'
Short-term senior debt: affirmed at 'F3'
State-guaranteed/grandfathered senior and subordinated debt:
  affirmed at 'AAA'
State-guaranteed/grandfathered market-linked securities:
  affirmed at 'AAAemr'
Senior market-linked securities: affirmed at 'BBB-emr'
Subordinated debt: affirmed at B-', removed from Rating Watch
  Positive



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MARINOPOULOS GROUP: Unit's Hypermarket Put Up for Sale
------------------------------------------------------
SeeNews reports that a Carrefour-branded hypermarket owned by CMB
Bulgaria, a unit of Greece's Marinopoulos Group, has been put up
for sale by a private enforcement agent at a starting price of
BGN22.68 million (US$12.9 million/EUR11.6 million).

The hypermarket, located in a shopping mall in the city of Stara
Zagora, has an area of 9,255 square meters, SeeNews relays,
citing the notice published on the website of the Bulgarian
chamber of private enforcement agents.

In June, Greek media reported that Marinopoulos Group has filed
for bankruptcy protection in Greece, SeeNews recounts.

Marinopoulos, which became Carrefour's exclusive franchisee in
southeast Europe in 2012 after the French retailer exited the
50/50 Carrefour Marinopoulos joint venture, had ambitious
expansion plans for Bulgaria and the whole region, SeeNews
relates.  However, its financial difficulties started surfacing
out already in 2014, with more and more goods disappearing from
the shelves of its supermarkets throughout Bulgaria, SeeNews
discloses.

Marinopoulos is a Greek supermarket chain.



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CVC CORDATUS VII: Moody's Assigns (P)B2 Rating to Class F Notes
---------------------------------------------------------------
Moody's Investors Service announced that it has assigned these
provisional ratings to notes to be issued by CVC Cordatus Loan
Fund VII Designated Activity Company:

  EUR248,400,000 Class A-1 Senior Secured Floating Rate Notes due
   2029, Assigned (P)Aaa (sf)
  EUR20,000,000 Class A-2 Senior Secured Fixed Rate Notes due
   2029, Assigned (P)Aaa (sf)
  EUR37,800,000 Class B-1 Senior Secured Floating Rate Notes due
   2029, Assigned (P)Aa2 (sf)
  EUR15,000,000 Class B-2 Senior Secured Fixed Rate Notes due
   2029, Assigned (P)Aa2 (sf)
  EUR23,700,000 Class C Senior Secured Deferrable Floating Rate
   Notes due 2029, Assigned (P)A2 (sf)
  EUR20,300,000 Class D Senior Secured Deferrable Floating Rate
   Notes due 2029, Assigned (P)Baa2 (sf)
  EUR30,800,000 Class E Senior Secured Deferrable Floating Rate
   Notes due 2029, Assigned (P)Ba2 (sf)
  EUR13,200,000 Class F Senior Secured Deferrable Floating Rate
   Notes due 2029, Assigned (P)B2 (sf)

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

RATINGS RATIONALE

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

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

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

In addition to the eight classes of notes rated by Moody's, the
Issuer will issue EUR 45.0 million of subordinated notes which
will not be rated.

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

Loss and Cash Flow Analysis:

Moody's modeled the transaction using CDOEdge, a cash flow model
based on the Binomial Expansion Technique, as described in
Section 2.3 of the "Moody's Global Approach to Rating
Collateralized Loan Obligations" rating methodology published
December 2015.  The cash flow model evaluates all default
scenarios that are then weighted considering the probabilities of
the binomial distribution assumed for the portfolio default rate.
In each default scenario, the corresponding loss for each class
of notes is calculated given the incoming cash flows from the
assets and the outgoing payments to third parties and
noteholders.

Therefore, the expected loss or EL for each tranche is the sum
product of (i) the probability of occurrence of each default
scenario and (ii) the loss derived from the cash flow model in
each default scenario for each tranche.  As such, Moody's
encompasses the assessment of stressed scenarios.

Par amount: EUR 440,000,000
Diversity Score: 36
Weighted Average Rating Factor (WARF): 2750
Weighted Average Spread (WAS): 4.25%
Weighted Average Coupon (WAC): 5.5%
Weighted Average Recovery Rate (WARR): 42.50%
Weighted Average Life (WAL): 8 years

Stress Scenarios:
Together with the set of modelling assumptions above, Moody's
conducted additional sensitivity analysis, which was an important
component in determining the provisional rating assigned to the
rated notes.  This sensitivity analysis includes increased
default probability relative to the base case.  Below is a
summary of the impact of an increase in default probability
(expressed in terms of WARF level) on each of the rated notes
(shown in terms of the number of notch difference versus the
current model output, whereby a negative difference corresponds
to higher expected losses), holding all other factors equal:

Percentage Change in WARF: WARF + 15% (to 3163 from 2750)
Ratings Impact in Rating Notches:
Class A-1 Senior Secured Floating Rate Notes due 2029: 0
Class A-2 Senior Secured Fixed Rate Notes due 2029: 0
Class B-1 Senior Secured Floating Rate Notes due 2029: -2
Class B-2 Senior Secured Fixed Rate Notes due 2029: -2
Class C Senior Secured Deferrable Floating Rate Notes due
2029: -2
Class D Senior Secured Deferrable Floating Rate Notes due
2029: -1
Class E Senior Secured Deferrable Floating Rate Notes due
2029: -1
Class F Senior Secured Deferrable Floating Rate Notes due
2029: 0

Percentage Change in WARF: WARF +30% (to 3575 from 2750)
Ratings Impact in Rating Notches:
Class A-1 Senior Secured Floating Rate Notes due 2029: -1
Class A-2 Senior Secured Fixed Rate Notes due 2029: -1
Class B-1 Senior Secured Floating Rate Notes due 2029: -3
Class B-2 Senior Secured Fixed Rate Notes due 2029:-3
Class C Senior Secured Deferrable Floating Rate Notes due
2029: -3
Class D Senior Secured Deferrable Floating Rate Notes due
2029: -2
Class E Senior Secured Deferrable Floating Rate Notes due
2029: -1
Class F Senior Secured Deferrable Floating Rate Notes due
2029: -2

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was "Moody's
Global Approach to Rating Collateralized Loan Obligations"
published in December 2015.

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

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



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DECO 2014 - GONDOLA: Fitch Affirms 'BBsf' Rating on Class E Notes
-----------------------------------------------------------------
Fitch Ratings has upgraded DECO 2014 - GONDOLA S.r.l.'s class B
and C floating-rate notes due 2026 and affirmed the other
tranches as follows:

  EUR53.7 million Class A (IT0005030777) affirmed at 'A+sf';
  Outlook Stable

  EUR65 million Class B (IT0005030793) upgraded to 'A+sf' from
  'Asf'; Outlook Stable

  EUR30.5 million Class C (IT0005030801) upgraded to 'Asf' from
  'A-sf'; Outlook Stable

  EUR52 million Class D (IT0005030827) affirmed at 'BBB-sf';
  Outlook Stable

  EUR21.9 million Class E (IT0005030835) affirmed at 'BBsf';
  Outlook Stable

DECO 2014 - GONDOLA S.R.L. closed in 2014 and was originally a
securitization of three commercial mortgage loans with an
original balance of EUR355 million. The loans were granted by
Deutsche Bank AG (A-/Stable) to two Italian closed-end real
estate funds and two cross-collateralized Italian limited-
liability companies to acquire/ refinance 13 logistics centers,
two shopping-centers, two office buildings and one hotel. All
assets are located in Italy and ultimately owned by the
borrowers' common sponsor, Blackstone.

KEY RATING DRIVERS

The upgrade reflects the full prepayment of the EUR80.1 million
Gateway loan and partial prepayment of the Delphine loan upon the
sale of the NHOW hotel. The issuer used the proceeds to pay off
the notes' principal on a sequential basis, improving the
available credit enhancement of the senior notes. Despite de-
leveraging and stable collateral performance, the junior tranches
have been affirmed due to risks arising from (i) the secondary
quality property comprising part of the collateral; (ii) re-
letting the larger units; and (iii) challenges in working out
Italian loans. Fitch applies a 'Asf' category rating cap to
reflect those challenges.

Following the sale of the NHOW hotel (and the repayment of
EUR29.7 million), the EUR96.2 million Delphine loan is now
secured on two office buildings located in Milan and Rome.
Telecom Italia (BBB-/Stable) accounts for 63.9% of gross rent, on
a lease with a break option in 2.3 years.

Milan tenant RCS (accounting for 34.5% of the rent) has vacated
part of the Delphine collateral since the last rating action in
July 2015, as expected. RCS remain committed to the remaining
space for a minimum of 6.2 years (to break option). The vacant
space is being refurbished while negotiations with potential
tenants are ongoing.

The EUR127.8 million Mazer loan is secured on 13 logistics assets
in northern Italy. There have been no asset disposals since
closing. The top three tenants account for 71% of passing rent,
with the largest occupier CEVA making up 50%. Consistent with the
property type, the remaining lease term to the break option is
short (ranging from 1.6 years to 4.8 years) and vacancy has
remained stable at around 9.2%. As with the Delphine loan, the
Mazer loan is due in February 2019.

RATING SENSITIVITIES

Fitch expects a full repayment of both loans in a 'Bsf' scenario.
A downturn in the Italian office and industrial sectors could
result in downgrades.

DUE DILIGENCE USAGE

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

DATA ADEQUACY

Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset
pool and the transaction. There were no findings that were
material to this analysis. Fitch has not reviewed the results of
any third party assessment of the asset portfolio information or
conducted a review of origination files as part of its ongoing
monitoring.

Fitch did not undertake a review of the information provided
about the underlying asset pool ahead of the transaction's
initial closing. The subsequent performance of the transaction
over the years is consistent with the agency's expectations given
the operating environment and Fitch is therefore satisfied that
the asset pool information relied upon for its initial rating
analysis was adequately reliable.

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


ITALY: Must Abide by "Strict" EU Bail-in Rules, Dijsselbloem Says
-----------------------------------------------------------------
Jim Brunsden, James Politi and Dan McCrum at The Financial Times
report that Italy has been warned it must abide by "strict" EU
rules for rescuing teetering lenders, limiting Rome's ability to
pump public money into the country's financial sector.

Jeroen Dijsselbloem, head of the eurozone's committee of 19
finance ministers, said on July 11 that any Italian plan would
have to respect EU rules that force losses on creditors before
they can be bailed out with taxpayer funds, the FT relates.

The EU rules are "very clear" on when creditors should face
compulsory losses, known as bail-ins, Mr. Dijsselbloem, as cited
by the FT, said ahead of a meeting of eurogroup finance ministers
in Brussels.

According to the FT, Matteo Renzi, Italian prime minister, told
the newspaper Corriere della Sera in an interview: "A deal is
absolutely within reach which is compatible with the current
rules and will protect [Italy] from any problems."

EU officials are increasingly concerned that an Italian banking
sector overburdened by bad loans is emerging as the weak link in
the six-year effort to strengthen eurozone finances following an
agonizing sovereign debt crisis that gave rise to the new bail-in
rules, the FT relays.

Italian lenders have been among the hardest hit by the market
turmoil triggered by the UK's surprise vote last month to leave
the EU, the FT notes.

Italy and the EU have held increasingly urgent talks to devise a
plan to recapitalize struggling banks in a way that would abide
by the EU rules, which are designed to protect taxpayers, the FT
discloses.  But the main sticking point of whether -- and how
much -- to hit debt investors in troubled banks remains
unresolved, the FT states.

Separately, The Wall Street Journal's Liam Moloney reports that
Bank of Italy Gov. Ignazio Visco on July 8 said that state
intervention may be needed to prevent the problems afflicting
Italy's weakest banks from spreading to other lenders.

"A public intervention cannot be ruled out given that in a
context of high uncertainty specific problems can impact
confidence in the [whole] banking system," the Journal quotes
Mr. Visco as saying.

According to the Journal, he said authorities aren't
underestimating signs of concern and nervousness about Italian
banks in financial markets.

The U.K. vote to leave the European Union has rekindled tension
in the Italian banking sector, with investors dumping local
banks' shares over concerns about their massive holdings of bad
loans and chronically low profitability, the Journal relays.

In response to market upheaval, especially among banks such as
Banca Monte dei Paschi di Siena SpA and Banco Popolare SC, the
Italian government has been discussing the possibility of state
intervention with European authorities to shore up the system,
the Journal discloses.


MONTE DEI PASCHI: Consob Temporarily Bans Short-Selling of Shares
-----------------------------------------------------------------
Alexander Bueso at DigitalLook reports that Consob, temporarily
banned short-selling in Monte dei Paschi di Siena's shares.

According to DigitalLook, acting as a backdrop, in remarks to
Bloomberg TV, Societe Generale chairman Lorenzo Bini-Smaghi said
Italy's banking crisis might spread to the rest of Europe and
that rules capping state aid to lenders should be reconsidered.

For their part, analysts at Morgan Stanley said on July 6 that
both Banco Popolare and Banco Monte dei Paschi di Siena might see
their core equity Tier 1 ratios drop below 5.5% of assets (the
pass mark in the 2014 exam of their capital buffers) in the
European Banking Authority’s next set of stress tests of Italian
lenders, DigitalLook relates.

The results of the tests were scheduled to be published on
July 29, DigitalLook discloses.

However, the broker, as cited by DigitalLook, said BMPS was most
at risk.  Based in their estimates that Italian bank might be
asked to top up its capital buffers by between EUR2 billion and
EUR6 billion, DigitalLook relays.

"We believe the EBA stress tests to be published July 29 will
result in the authorities needing to address their capitalization
of Italian banks.  Having spoken to policymakers, regulators,
lawyers, we review the main options available.  Our conclusion is
that in the absence of new legislation being passed, the stress
tests open up an avenue to inject public money, given it would
avoid the 8% of liabilities being bailed in, although it would
still require burden sharing of EBA stress test to put the
spotlight on Italy," DigitalLook quotes the broker as saying.

                      About Monte dei Paschi

Banca Monte dei Paschi di Siena SpA -- http://www.mps.it/-- is
an Italy-based company engaged in the banking sector.  It
provides traditional banking services, asset management and
private banking, including life insurance, pension funds and
investment trusts.  In addition, it offers investment banking,
including project finance, merchant banking and financial
advisory services.  The Company comprises more than 3,000
branches, and a structure of channels of distribution.  Banca
Monte dei Paschi di Siena Group has subsidiaries located
throughout Italy, Europe, America, Asia and North Africa.  It has
numerous subsidiaries, including Mps Sim SpA, MPS Capital
Services Banca per le Imprese SpA, MPS Banca Personale SpA, Banca
Toscana SpA, Monte Paschi Ireland Ltd. and Banca MP Belgio SpA.



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


CAIRN CLO II: Moody's Affirms B1 Rating on Class E Notes
--------------------------------------------------------
Moody's Investors Service has taken rating actions on these notes
issued by Cairn CLO II B.V.:

  EUR25.6 mil. Class C Senior Secured Deferrable Floating Rate
   Notes due 2022, Upgraded to Aaa (sf); previously on Aug. 14,
   2015, Upgraded to Aa3 (sf)

  EUR24 mil. Class D Senior Secured Deferrable Floating Rate
   Notes due 2022, Upgraded to A3 (sf); previously on Aug. 14,
   2015, Upgraded to Baa3 (sf)

Moody's also affirmed these notes issued by Cairn CLO II B.V.:

  EUR80 mil. (current balance of approx. EUR18.8 mil.)
   Class A-1R Senior Secured Revolving Floating Rate Notes due
   2022, Affirmed Aaa (sf); previously on Aug. 14, 2015, Affirmed
   Aaa (sf)

  GBP13.473 mil. (current balance of approx. GBP4.850 mil.)
   Class A-1S Senior Secured Floating Rate Notes due 2022,
   Affirmed Aaa (sf); previously on Aug. 14, 2015, Affirmed
   Aaa (sf)

  EUR33.2 mil. (current balance of approx. EUR30.3 mil.) Class B
   Senior Secured Floating Rate Notes due 2022, Affirmed
   Aaa (sf); previously on Aug. 14, 2015, Upgraded to Aaa (sf)

  EUR19.2 mil. Class E Senior Secured Deferrable Floating Rate
   Notes due 2022, Affirmed B1 (sf); previously on Aug. 14, 2015,
   Affirmed B1 (sf)

Cairn CLO II, issued in August 2007, is a collateralized loan
obligation (CLO) backed by a portfolio of high yield senior
secured European loans.  The portfolio is managed by Cairn
Capital. The transaction's reinvestment period ended October
2013.

RATINGS RATIONALE

The rating upgrades of the notes are primarily a result of the
redemption of senior notes and subsequent increases of the
overcollateralization ratios (the "OC ratios") of the remaining
classes of notes.  Moody's notes that approximately 8% of the
original balance of class A remains outstanding.  As a result of
the deleveraging the OC ratios of the notes have increased
significantly.  According to the June 2016 trustee report, the
classes A/B, C, D and E OC ratios are 258.01%, 174.30%, 133.64%
and 112.63% respectively compared to levels just prior to the
payment date in April 2016 of 189.11%, 148.79%, 124.01% and
109.43% respectively.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers.  In its base
case, Moody's analyzed the underlying collateral pool as having
cash and performing par balances of EUR 111.7 million and
GBP20.7 million, a weighted average default probability of 21.07%
(consistent with a WARF of 3063 and a weighted average life of
4.12 years), a weighted average recovery rate upon default of
45.69% for a Aaa liability target rating and a diversity score of
18.

The default probability derives from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool.  The estimated average recovery rate on
future defaults is based primarily on the seniority of the assets
in the collateral pool.  Moody's generally applies recovery rates
for CLO securities as published in "Moody's Approach to Rating SF
CDOs".  In some cases, alternative recovery assumptions may be
considered based on the specifics of the analysis of the CLO
transaction.  In each case, historical and market performance and
a collateral manager's latitude to trade collateral are also
relevant factors.  Moody's incorporates these default and
recovery characteristics of the collateral pool into its cash
flow model analysis, subjecting them to stresses as a function of
the target rating of each CLO liability it is analyzing.

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was "Moody's
Global Approach to Rating Collateralized Loan Obligations"
published in December 2015.

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

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it lowered the weighted average recovery rate by 5
percentage points; the model generated outputs that were in line
with the base-case results for all classes of notes.

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
note, in light of uncertainty about credit conditions in the
general economy.  CLO notes' performance may also be impacted
either positively or negatively by 1) the manager's investment
strategy and behavior and 2) divergence in the legal
interpretation of CDO documentation by different transactional
parties because of embedded ambiguities.

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

  Around 10.77% of the collateral pool consists of debt
   obligations whose credit quality Moody's has assessed by using
   credit estimates.  As part of its base case, Moody's has
   stressed large concentrations of single obligors bearing a
   credit estimate as described in "Updated Approach to the Usage
   of Credit Estimates in Rated Transactions," published in
   October 2009 and available at:

     http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_120461

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

  Foreign currency exposure: The deal has exposures to non-EUR
   denominated assets.  Volatility in foreign exchange rates will
   have a direct impact on interest and principal proceeds
   available to the transaction, which can affect the expected
   loss of rated tranches.

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


JUBILEE CDO VII: Moody's Raises Rating on Cl. E Notes to Ba2
------------------------------------------------------------
Moody's Investors Service announced that it has upgraded the
ratings of these notes issued by Jubilee CDO VII B.V.:

  EUR31 mil. Class D Notes, Upgraded to A2 (sf); previously on
   Nov. 10, 2015, Upgraded to A3 (sf)

  EUR20 mil. Class E Notes, Upgraded to Ba2 (sf); previously on
   Nov 10, 2015, Affirmed Ba3 (sf)

Moody's also affirmed the ratings on these notes issued by
Jubilee CDO VII B.V.:

  EUR218 mil. (current outstanding balance of EUR 19.48 mil.)
   Class A-T Notes, Affirmed Aaa (sf); previously on Nov. 10,
   2015, Affirmed Aaa (sf)

  EUR100 mil. (current outstanding balance of EUR 7.64 mil.)

   Class A-R Notes, Affirmed Aaa (sf); previously on Nov. 10,
   2015, Affirmed Aaa (sf)

  EUR50 mil. Class B Notes, Affirmed Aaa (sf); previously on
   Nov. 10, 2015, Affirmed Aaa (sf)

  EUR30 mil. Class C Notes, Affirmed Aaa (sf); previously on
   Nov. 10, 2015, Upgraded to Aaa (sf)

Jubilee CDO VII B.V., issued in November 2006, is a
Collateralised Loan Obligation backed by a portfolio of mostly
high yield senior secured European loans.  The portfolio is
managed by Alcentra Limited.  The transaction's reinvestment
period ended in November 2012.

RATINGS RATIONALE

The rating actions on the notes are primarily a result of the
deleveraging of the Class A-T and Class A-R notes following
amortization of the underlying portfolio since the last rating
action in November 2015.

As of the trustee's May 2016 report, Class A/B, Class C, Class D
and Class E had OC ratios of 220.70%, 159.42%, 123.88% and
108.31% compared with 205.81%, 153.99%, 122.19% and 107.83%,
respectively, as of the trustee's October 2015 report.  Moody's
notes that the OC ratios are calculated pre May IPD and will
further increase.

The key model inputs Moody's uses, such as par, weighted average
rating factor, diversity score and the weighted average recovery
rate, are based on its published methodology and could differ
from the trustee's reported numbers.  In its base case, Moody's
analyzed the underlying collateral pool as having a performing
par and principal proceeds balance of EUR177.48 mil. and
GBP4.51 mil., a weighted average default probability of 24.73%
(consistent with a WARF of 3,504 and a WAL of 4.21), a weighted
average recovery rate upon default of 48.17% for a Aaa liability
target rating, a diversity score of 19 and a weighted average
spread of 3.98%.  The GBP denominated liabilities are naturally
hedged by the GBP assets.

The default probability derives from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool.  The estimated average recovery rate on
future defaults is based primarily on the seniority of the assets
in the collateral pool.  In each case, historical and market
performance and a collateral manager's latitude to trade
collateral are also relevant factors.  Moody's incorporates these
default and recovery characteristics of the collateral pool into
its cash flow model analysis, subjecting them to stresses as a
function of the target rating of each CLO liability it is
analyzing.

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was "Moody's
Global Approach to Rating Collateralized Loan Obligations"
published in December 2015.

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

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it assumed a lower weighted average recovery rate for
the portfolio.  Moody's ran a model in which it reduced the
weighted average recovery rate by 5%; the model generated outputs
that were within one notch of the base-case results.

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
note, in light of uncertainty about credit conditions in the
general economy.  CLO notes' performance may also be impacted
either positively or negatively by 1) the manager's investment
strategy and behavior and 2) divergence in the legal
interpretation of CDO documentation by different transactional
parties due to embedded ambiguities.

Additional uncertainty about performance is due to:

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

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

Around 12.78% of the collateral pool consists of debt obligations
whose credit quality Moody's has assessed by using credit
estimates.  As part of its base case, Moody's has stressed large
concentrations of single obligors bearing a credit estimate as
described in "Updated Approach to the Usage of Credit Estimates
in Rated Transactions," published in October 2009 and available
at:

http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_120461

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

Foreign currency exposure: The deal has exposures to non-EUR
denominated assets.  Volatility in foreign exchange rates will
have a direct impact on interest and principal proceeds available
to the transaction, which can affect the expected loss of rated
tranches.

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



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


AKCIA OJSC: Liabilities Exceed Assets, Assessment Shows
-------------------------------------------------------
The provisional administration of JSCB Akcia JSC appointed by
virtue of Bank of Russia Order No. OD-729, dated March 3, 2016,
following revocation of the banking license revealed in the
course of examination of the credit institution's financial
standing operations carried out by the bank's former management
which bear the evidence of moving out assets worth at least
RUR170 million mainly through extending known unrecoverable loans
to companies not involved in any real business operations,
according to the press service of the Central Bank of Russia.

According to the estimates of the provisional administration, the
value of the Bank's assets does not exceed RUR352 million, while
its liabilities to creditors amount to RUR464 million.

On May 18, 2016, the Court of Arbitration of the Ivanovo Region
took a decision to recognize JSCB Akcia JSC insolvent (bankrupt)
and to initiate bankruptcy proceedings with the state corporation
Deposit Insurance Agency appointed as a receiver.

The Bank of Russia submitted information on financial
transactions bearing the evidence of criminal offences conducted
by the former management and owners of JSCB Akcia JSC to the
Prosecutor General's Office of the Russian Federation, the
Ministry of Internal Affairs of the Russian Federation and the
Investigative Committee of the Russian Federation for
consideration and procedural decision making.


DEAL-BANK LTD: Liabilities Exceed Assets, Assessment Shows
----------------------------------------------------------
The provisional administration of Deal-bank Ltd. appointed by
virtue of Bank of Russia Order No. OD-3589, dated December 14,
2015, following revocation of the banking license, 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 extending loans to
organizations bearing the signs of shell companies as well as to
those with dubious solvency, to a total of at least RUR3.8
billion, according to a statement by the press service of the
Central Bank of Russia.

Additionally revealed were transactions suggesting asset
siphoning off through placing funds with the Bank-affiliated
companies, to a total of RUR0.4 billion; the actual shortage of
cash in the Bank's vaults of RUR0.25 billion was established.

According to the estimates of the provisional administration, the
value of the Bank's assets to does not exceed RUR3.9 billion,
while its liabilities to creditors amount to RUR11 billion.

On June 18, 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 receiver.

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.


FCRB BANK: DIA Terminates Role in Provisional Administration
------------------------------------------------------------
Due to the termination of the banking license of FCRB Bank, LLC,
the Bank of Russia took a decision (Order No. OD-2107, dated
July 1, 2016) to terminate from July 1, 2016 the functions of the
provisional administration of FCRB Bank, the state corporation
Deposit Insurance Agency performs under Bank of Russia Order No.
OD-992, dated March 24, 2016, "On Appointing the State
Corporation Deposit Insurance Agency to Perform the Functions of
the Provisional Administration of the Moscow-based FCRB Bank,
Limited Liability Company, or LLC FCRB Bank".


INTERTRUSTBANK: Liabilities Exceed Assets, Assessment Shows
-----------------------------------------------------------
The provisional administration to manage INTERTRUSTBANK appointed
by virtue of Bank of Russia Order No. OD-270, dated January 21,
2016, following revocation of the banking license, 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 extending loans to
organizations bearing the signs of shell companies as well as to
those with dubious solvency, to a total of RUR1.8 billion,
according to a statement by the press service of the Central Bank
of Russia.

According to the estimates of the provisional administration, the
value of the Bank's assets does not exceed RUR2.2 billion, while
its liabilities to creditors amount to RUR4.2 billion.

On March 31, 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 receiver.

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.


LENTA LLC: Fitch Raises LT Issuer Default Ratings to 'BB'
---------------------------------------------------------
Fitch Ratings has upgraded Lenta LLC's Long-Term Foreign and
Local Currency Issuer Default Ratings (IDRs) to 'BB' from 'BB-'
and its National Long-term rating to 'AA-(rus)' from 'A+(rus)'.
The Outlooks are Stable.

The upgrade reflects Lenta's proven execution of its sales growth
strategy while maintaining strong profitability so far. Fitch
also expects Lenta will be able to further strengthen its market
position and enlarge business scale over the medium term, while
keeping conservative credit metrics consistent with the assigned
ratings. This is based on Fitch's assumption that the company
will maintain strict financial discipline, rigorous control over
costs and deliver positive like-for-like (LfL) sales growth, as
it continues to execute its expansion plans. The ratings also
take into account Lenta's ability to raise equity to fund store
roll-outs and manage its leverage as proven in 2015.

KEY RATING DRIVERS

Improving Market Position

"Lenta has a moderate market position, as Russia's fifth-largest
food retailer by 2015 sales, and small scale with EBITDAR of
RUB31 billion in 2015 (or EUR455 million), which is considered
rather weak for its ratings. However, we take into account our
expectation that Lenta's business profile will strengthen in the
next three years with EBITDAR increasing towards RUB75 billion by
2019. The company has a strong record of more than doubling its
size in 2012-2015 and moving from seventh to fifth-largest among
Russian food retailers. We assume further growth will be
supported by Lenta's robust business model and strong growth
opportunities in the Russian food retail market arising from its
fragmented nature and substantial proportion of traditional
retail relative to modern chains," Fitch said.

Strong Credit Metrics

"After the deleveraging achieved in 2015 due to substantial
equity proceeds and solid profit growth, we expect Lenta to
maintain conservative credit metrics with funds from operations
(FFO) adjusted gross leverage of 3.2x-3.4x (2015: 3.0x) and FFO
fixed charge coverage of around 2.5x (2015: 2.5x) over the medium
term. These credit metrics are very comfortable for the upgraded
ratings. Our projections assume the company will maintain its
conservative and consistent financial policy. We also understand
from management that it retains the ability to manage leverage
through the timing of its store roll out program should economic
or business conditions become more challenging as well as equity
issuance as demonstrated in 2015," Fitch said.

Limited Format Diversification

The ratings are constrained by Lenta's limited diversification
outside its core hypermarket format. Fitch expects supermarkets
to account for less than 15% of sales by 2019 (2015: 4%), despite
Lenta's accelerated expansion in the format. At the same time,
Lenta's wide geographic diversification across Russian regions
and a continued reduction in reliance on the St. Petersburg
market (23% of sales in 1Q16) is positive for the credit profile.

Decreasing but Strong Margins

In 2015, Lenta maintained stable EBITDA margin of 11.2%, above
Fitch's prior expectation of 10.6%. Fitch believes this level is
unsustainable and project Lenta's EBITDA margin will reduce
gradually to 9.2% by 2019 as a result of growing share of leased
space in store portfolio and margin sacrifices due to
strengthening competition. The expected EBITDA margin will remain
strong compared with Russian and European food retail peers.

Subdued Consumer Sentiment

Fitch expects weak consumer spending and decelerating food
inflation to constrain average basket growth in 2016. Lenta's
'value-for-money' proposition and insights into consumer needs
through its loyalty card program are likely to continue to
support the company's LfL sales growth this year, which we assume
at low single digits. Fitch expects Lenta's price/value
perception, along with its low share of non-food, high priced
ticket products in revenues and smaller hypermarket store size in
square metres (compared with western European peers) to insulate
the group from the continuing weak consumer environment. Given
Fitch's expectations of only modest recovery in Russia's economy
over 2017-2018, it assumes low LfL sales growth rates over the
medium term for the whole sector.

Negative Free Cash Flow

Fitch expects Lenta's free cash flow to remain negative at 3%-7%
of revenue over 2016-2019 as the company is expanding rapidly. In
Fitch's view, it does not pressure Lenta's ratings as long as it
continues to generate positive LfL sales growth and maintain
strong profitability, while executing its store roll-out
strategy. Fitch expects Lenta to fund 50%-60% of capex for 2016-
2018 with internally generated cash flows, assuming it maintains
a negative working capital position, despite Fitch's assumption
of shorter trade payable days following recent trade law
amendments. The ratings are also premised on maintaining adequate
access to bank financing and capital markets.

Average Recoveries for Unsecured Bondholders

Lenta's bonds are rated in line with its Long-Term Local Currency
IDR of 'BB' as prior-ranking debt, represented by a secured loan,
is less than 2x (estimated at 0.2x in 2015) of the group's EBITDA
and Fitch expects the debt mix to remain unchanged over the
medium term. Therefore, subordination of unsecured creditors is
not triggered under Fitch's criteria 'Recovery Ratings and
Notching Criteria for Non-Financial Corporate Issuers'. The bonds
ratings reflect average recovery expectations in case of default.

KEY ASSUMPTIONS

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

-- Revenue CAGR above 25% over 2016-2019 driven primarily by
    increase in selling space, and LfL annual sales growth
    trending towards 3%
-- EBITDA margin gradually decreasing to 9.2%
-- Capex at around 10%-15% of revenue
-- No external dividends paid by Lenta Ltd funded by Lenta LLC.
-- No large-scale debt-funded M&A
-- Maintained negative working capital position (stable as
    percentage of sales)

RATING SENSITIVITIES

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

-- A sharp contraction in LfL sales growth relative to close
    peers along with material failure in executing the company's
    expansion plan
-- EBITDA margin erosion to below 8%
-- FFO-adjusted gross leverage above 4.0x on a sustained basis
-- FFO fixed charge cover significantly below 2.5x
-- Deterioration of liquidity position as a result of high
    capex, worsened working capital turnover and weakened access
    to local funding

Positive rating action is unlikely in the coming two years,
unless there is a material improvement in Lenta's market position
translating into EBITDAR of at least EUR1 billion, and subject
to:

-- Solid execution of the company's expansion plan and good LfL
    sales growth relative to peers
-- Maintaining EBITDA margin at around 9%
-- FFO-adjusted gross leverage below 3.0x on a sustained basis
-- FFO fixed charge coverage above 2.5x on a sustained basis

LIQUIDITY

As at end-April 2016, Lenta's cash of RUB10.8 billion and
available undrawn committed credit lines of RUB7.3 billion were
insufficient to cover expected negative FCF and RUB11.6 billion
short-term debt. Nevertheless, Fitch believes that the company's
liquidity position is supported by its good access to bank loans
and capital markets as evidenced by recent refinancing
activities. As at end-April, Lenta had RUB38 billion of undrawn
uncommitted credit lines.

FULL LIST OF RATING ACTIONS

  Long-Term Foreign Currency IDR upgraded to 'BB' from 'BB-',
  Stable Outlook

  Long-Term Local Currency IDR upgraded to 'BB' from 'BB-',
  Stable Outlook

  National Long-Term rating upgraded to 'AA-(rus)' from
  'A+(rus)', Stable Outlook

  Senior unsecured rating upgraded to 'BB'/RR4 from 'BB-'/RR4

  National senior unsecured rating upgraded to 'AA-(rus)' from
  'A+(rus)'



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


TATA STEEL UK: Future Still Uncertain Despite ThyssenKrupp Talks
----------------------------------------------------------------
Marion Dakers at The Telegraph reports that Tata Steel has
offered no assurances about the long-term future of its Port
Talbot plant after halting a sale process to explore a joint
venture with a German rival.

According to The Telegraph, the firm, which announced the new
talks on July 8, has not yet agreed with ThyssenKrupp whether the
plant in south Wales would be saved as part of the pair's
possible European venture.

"It's important to look at it from the prism of a competitive
business rather than setting any firm guarantees because at the
end of the day, the volatility of the market, the risk of
performance has to be mitigated by building a structurally
competitive business.  That's what we're focused on at all our
sites," The Telegraph quotes Koushik Chatterjee, Tata Steel's
executive director for Europe, as saying.

"The management and employees of the company have been working
very hard with advisers to make the business sustainable.  We
continue to invest in the company today."

Port Talbot, which employs more than 4,000 people but was losing
more than GBP1 million a day after steel prices slumped last
year, was put up for sale in March as Tata Steel moved to exit
its European business, The Telegraph recounts.

Despite receiving seven offers to take over the plant, Tata's
board met in Mumbai last week to stop the sale process and
announce talks with ThyssenKrupp and at least one other company,
which Mr. Chatterjee declined to name, The Telegraph notes.

He said that Tata's other British steel sites in Hartlepool,
Rotherham and Stockbridge could still be sold separately because
they work with plate steel and "do not in any way cannibalize the
Port Talbot supply chain", which is focused on strip products,
The Telegraph relates.

He said the discussions are at an early stage and there has been
no decision on whether to keep Port Talbot's blast furnaces
running, or whether any deal would come with financial or policy
support from the UK or Welsh governments, The Telegraph relays.

Negotiations are also ongoing about the GBP15 billion steel
pension scheme, which has 130,000 legacy members and a deficit of
around GBP700 million, The Telegraph discloses.

Sajid Javid, the business secretary, as cited by The Telegraph,
said on July 11 that the Government stands by its offer to help
save Port Talbot by taking an equity stake or offering a
commercial loan to the future owner.

The lack of detail around the talks with ThyssenKrupp, however,
has triggered more frustration in Port Talbot, whose biggest
employer has spent months with an uncertain future, The Telegraph
states.

Tata Steel is the UK's biggest steel company.



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


AGROBANK: Moody's Raises Long-Term Deposit Ratings to 'B2'
----------------------------------------------------------
Moody's Investors Service has upgraded the long-term foreign and
local currency deposit ratings of Uzbekistan based Agrobank to B2
with a stable outlook from B3 positive.  Concurrently, Moody's
upgraded the bank's baseline credit assessment (BCA) and adjusted
BCA to caa2 from caa3 and the bank's long-term Counterparty Risk
Assessment (CR Assessment) to B1(cr) from B2(cr).

The rating agency also affirmed the bank's short-term local and
foreign currency deposit ratings of Not-Prime and the short-term
CR Assessment of Not-Prime(cr).

The rating action reflects material improvements to Agrobank's
loss absorption capacity upon successful completion of its
recapitalization plan in 2015-2016.

RATINGS RATIONALE

The upgrade of Agrobank's long-term deposit ratings with a stable
outlook reflects material improvements to Agrobank's loss
absorption capacity upon successful completion of its
recapitalization plan in 2015-2016.

Over the past five years, the bank has demonstrated progress in
strengthening its capital base and addressing its capital
shortfall with the help of regular capital injections by the
Uzbekistan government, Agrobank's majority shareholder.  As a
result, Agrobank's shareholders' equity increased by UZS350
billion to UZS527 billion at May 31, 2016, from UZS176 billion at
the end of 2010.

Under its capital-raising plan for 2015-2016, Agrobank raised
UZS100 billion (the amount equivalent to around 28% of its
shareholders equity as at year-end 2014).  The bank's non-core
problem assets accounted for 50% of the bank's shareholders'
equity following the recent capital increase (80% at YE2013 and
over 100% at YE2012).

Agrobank's BCA of caa2 reflects Moody's view that the bank still
remains undercapitalized, as well as Moody's expectations that
the bank will continue to benefit from regulatory forbearance
over the next 12-18 months and remain highly reliant on
extraordinary support from the government in terms of capital.

                      SUPPORT CONSIDERATION

Agrobank's B2 deposit ratings incorporate a three-notch uplift
from its standalone BCA of caa2, reflecting a very high
probability of government support, given Agrobank's government
ownership, its large market shares and systemic importance for
Uzbekistan's economy.  The bank has a special mandate for
servicing the agriculture sector and plays an instrumental role
in the implementation of government policy, acting as a
government agent.

WHAT COULD MOVE THE RATINGS UP/DOWN

Any further positive rating action will be contingent on the
bank's material progress in recovering problem assets, its
ability to maintain adequate quality of its loan portfolio, and
to materially improve its funding profile.  At the same time,
negative pressure could be exerted on Agrobank's ratings due to
Moody's perception of a reduced probability of government support
for the bank in case of need.



                            *********

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
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Information contained herein is obtained from sources believed to
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members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
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202-362-8552.


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