TCREUR_Public/160729.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

            Friday, July 29, 2016, Vol. 17, No. 149


C Z E C H   R E P U B L I C

NEW WORLD: Czech Government Approves CZK700MM Loan to OKD Unit


BUDAPEST BANK: Moody's Raises LT Deposit Ratings to Ba2


DOBBINS: High Court Confirms Appointment of Examiner


MONTE PASCHI: Asks Eight Banks to Guarantee EUR5BB Cash Call


KAP: CEAC Holding Loses Arbitration v. Montenegro, To Bear Cost


STAHL HOLDINGS: S&P Affirms Then Withdraws 'B+' CCR


NORSKE SKOG: Moody's Raises CFR to Caa2, Outlook Stable


CARPATICA ASIG: Faces Bankruptcy, ASF Opts to Revoke License


GAZPROM PJSC: S&P Affirms 'BB+/B' CCRs, Outlook Negative
MEGAFON PJSC: S&P Affirms 'BB+' Long-Term FC CCR, Outlook Neg.
SOGLASIE INSURANCE: S&P Lowers Counterparty Credit Rating to 'B+'


CAJAMAR 1: Moody's Puts Definitive Caa1 Rating to Series B Notes


EREGLI DEMIR: S&P Revises Outlook to Negative & Affirms 'BB' CCR
TURKIYE SISE: S&P Lowers ICR to 'BB', Outlook Negative

U N I T E D   K I N G D O M

CONNAUGHT PLC: Liquidator Gets GBP18.5MM Payment from Capita
CURRAN COURT HOTEL: In Administration, Buyer Sought for Business
IDH FINANCE: Fitch Rates GBP425MM Sr. Secured Notes 'B+(EXP)'
IHS MARKIT: S&P Assigns 'BB+' CCR, Outlook Stable


* BOOK REVIEW: Competitive Strategy for Health Care Organizations


C Z E C H   R E P U B L I C

NEW WORLD: Czech Government Approves CZK700MM Loan to OKD Unit
Reuters reports that the Czech's prime minister and industry
minister said on July 27 the government approved a CZK700 million
(US$29 million) loan to help keep afloat hard coal miner OKD, an
insolvent unit of New World Resources.

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

The company has been scrambling for cash to pay miners' wages in
recent months as it goes through insolvency proceedings with the
aim of reorganizing and government ministers debate how to help
the firm, Reuters relays.

On July 27, the cabinet agreed to extend the loan through state
firm Prisko, giving OKD, which employs around 12,500 and mined 8
million tonnes in 2015, enough cash until the end of the year,
Reuters relates.

According to Reuters, a creditor committee is due to meet in
August to decide on the company's possible reorganization.

New World Resources Plc is the largest Czech producer of coking


BUDAPEST BANK: Moody's Raises LT Deposit Ratings to Ba2
Moody's Investors Service has upgraded the ratings of four
Hungarian banks.  This concludes the review for upgrade initiated
on June 29, 2016.

The review was prompted by the rating agency's change of its
Macro Profile for Hungary to "Moderate-" from "Weak+".  The
strengthening of the Macro Profile is driven by the improvement
in the Hungarian banks' operating environment, in particular the
gradual recovery in credit demand which should support banks'
lending growth and revenues after several years of loan book

For a detailed analysis of Hungary's Macro Profile please click
this link:

These banks are affected by the rating actions:

   -- Kereskedelmi & Hitel Bank Rt.'s long-term local-currency
      deposit rating was upgraded to Ba1 from Ba3, its long-term
      foreign-currency deposit rating was upgraded to Ba2 from
      Ba3, the baseline credit assessment (BCA) was upgraded to
      b1 from b2 and the adjusted BCA was upgraded to ba2 from
      ba3; the outlook on the long-term local-currency deposit
      rating is stable while the outlook on the long-term
      foreign-currency deposit rating is positive.  The bank's
      long-term Counterparty Risk Assessment (CRA) was affirmed
      at Baa3(cr).

   -- Erste Bank Hungary Zrt.'s long-term local and foreign-
      currency deposit ratings were upgraded to Ba2 from B2, the
      long-term CRA was upgraded to Ba1(cr) from Ba2(cr), the BCA
      was upgraded to b3 from caa1 and the adjusted BCA was
      upgraded to b1 from b2; the outlook on the long-term
      deposit ratings is positive;

   -- Budapest Bank Rt.'s long-term local and foreign-currency
      deposit ratings were upgraded to Ba2 from B2, the long-term
      CRA was upgraded to Ba1(cr) from Ba3(cr), the BCA and
      adjusted BCA were upgraded to b1 from b2; the outlook on
      the long-term deposit ratings is stable;

   -- MKB Bank Zrt.'s long-term local and foreign-currency
      deposit ratings were upgraded to B3 from Caa2 with a stable
      outlook. The bank's long-term CRA was affirmed at B2(cr).

                        RATINGS RATIONALE


Moody's change of Hungary's Macro Profile to "Moderate-" from
"Weak+" positively affects most rated Hungarian banks' BCAs and
the outcomes of Moody's Advanced Loss Given Failure (LGF)
analysis.  The Macro Profile constitutes an assessment of the
macroeconomic environment in which a bank operates.

The change of the Macro Profile illustrates Moody's assessment of
the improvement in Hungarian banks' operating environment, in
particular in the gradual recovery in credit demand.  Moody's
says that after contracting by more than 20% over the past five
years, Hungarian banks' loan books are likely to grow by about 5%
annually over the next 12 to 18 months, supporting their revenue
generation.  The improving operating environment benefits
Hungarian banks' standalone BCAs by helping to reduce the high
level of problem loans, restoring their profitability after
several years of losses, and strengthening capitalization.

The loss rate Moody's uses for banks with a Macro Profile of
"Moderate-" and higher is 8% of tangible banking assets, as
opposed to 13% for banks with a lower Macro Profile.  This has
resulted in increased rating uplift due to lower severity of loss
faced by the different liability classes in resolution.


Kereskedelmi & Hitel Bank Rt. (K&H)
According to Moody's, the two-notch upgrade of K&H's long-term
local-currency deposit rating to Ba1 from Ba3 was driven by: (1)
the upgrade of the bank's BCA to b1 from b2; (2) unchanged high
affiliate support assumptions from its parent, Belgium's KBC Bank
N.V. (A1 stable/A1 stable; baa1), resulting in a two-notch rating
uplift; and (3) one notch of rating uplift from Moody's Advanced
LGF analysis (no uplift previously).

K&H's Ba2 long-term foreign-currency deposit rating was upgraded
by one notch and is constrained by Hungary's foreign-currency
deposit ceiling and carries a positive outlook in line with the
positive outlook on Hungary's Ba1 government debt rating.

The rating agency added that the upgrade of K&H's BCA to b1 from
b2 reflects the improved Moderate-Macro Profile combined with
improvements in the bank's asset quality and profitability, as
well as its maintaining satisfactory capital adequacy.  In 2015
K&H returned to profitability recording net income of HUF37.9
billion, which translates to a return on assets (RoA) of 1.5%.
This improvement drove an increase in the bank's Tier 1 ratio to
12.1% as at year-end 2015 from 11.0% for 2014.  K&H's reported
NPL ratio declined modestly to 13.3% as at year-end 2015, from
14.7% as of year-end 2014, owing mainly to a reduction in
corporate NPLs.

The application of the Moderate- Macro Profile in Moody's
Advanced LGF analysis, including a lower 8% loss at failure
assumption, has resulted in lower loss-given failure and higher
rating uplift for deposit ratings.  This, combined with the
upgrade of the BCA has resulted in two notches of upgrade for the
bank's long-term local-currency deposit ratings.  These factors,
however, have no impact on the uplift for K&H's long-term CRA
which was therefore affirmed at Baa3(cr).

Erste Bank Hungary Zrt. (EBH)

The three-notch upgrade of EBH's long-term deposit ratings to Ba2
from B2 was driven by: (1) the upgrade of the bank's BCA to b3
from caa1; (2) the rating agency's unchanged high affiliate
support assumption from its parent, Austria's Erste Group Bank AG
(Erste; Baa1 stable/Baa1 stable; baa3), resulting in a two-notch
rating uplift; and (3) two notches of rating uplift from Moody's
Advanced LGF analysis (no uplift previously).

The upgrade of EBH's BCA to b3 from caa1 reflects the improved
Moderate- Macro Profile combined with improvements in asset
quality and capital adequacy, as well as reduced pressure on
profitability.  EBH reported a loss of HUF22 billion in 2015,
driven by high loan loss provisions and weaker revenues.  In July
2016 Erste Group increased EBH's capital by nearly 50% before
completing the sale of 15% stakes in the bank to both the
Hungarian government and the European Bank for Reconstruction and
Development (Aaa stable).  After the recapitalization, Moody's
estimates that EBH's Tier 1 ratio will rise to about 17% from
11.1% as of year-end 2015.  Such capital increase benefits EBH's
overall loss absorption capacity and credit profile, underpinning
the positive outlook assigned to the deposit ratings.

The application of the Moderate-Macro Profile in Moody's Advanced
LGF analysis, including a lower 8% loss at failure assumption,
has resulted in lower loss-given failure and higher rating
uplift, which combined with an upgrade of the BCA has resulted in
three and one notches of upgrade, respectively, for the bank's
long-term deposit ratings and CRA.

Budapest Bank Rt. (Budapest Bank)

The three-notch upgrade of Budapest Bank's long-term deposit
ratings to Ba2 from B2 was driven by: (1) the upgrade of the
bank's BCA to b1 from b2; and (2) two notches of rating uplift
from Moody's Advanced LGF analysis (no uplift previously).

The upgrade of Budapest Bank's BCA to b1 from b2 reflects the
improved Moderate- Macro Profile combined with expected
improvements in asset quality and profitability, as well as good
capital adequacy and liquidity.  The bank's NPL ratio has
stabilized at a high 17.2% as of year-end 2015.  Moody's however
expects this to improve moderately in the next 12 to 18 months,
benefiting from the growing economy and the bank's work-out
procedures.  Risks stemming from the large stock of NPLs are
mitigated by a high level of coverage, with loan loss reserves
standing at 96% as of year-end 2015.  Budapest Bank reported a
net income of HUF14.8 billion in 2015, translating to a return on
average assets (RoAA) of 1.59%.

The application of the Moderate-Macro Profile in Moody's Advanced
LGF analysis, including a lower 8% loss at failure assumption,
has resulted in lower loss-given failure and higher rating
uplift, which combined with the upgrade of the BCA has resulted
in three and two notches of upgrade, respectively, for the bank's
long-term deposit ratings and CRA.

MKB Bank Zrt. (MKB)

The two-notch upgrade of MKB's long-term deposit ratings to B3
from Caa2 was driven by two notches of rating uplift from Moody's
Advanced LGF analysis (no uplift previously).

The application of the Moderate-Macro Profile in Moody's Advanced
LGF analysis, including a lower 8% loss at failure assumption,
has resulted in lower loss-given failure and higher rating
uplift, which has led to two notches of upgrade for the bank's
long-term deposit ratings.  The updated Advanced LGF analysis,
however, has led to an affirmation of the bank's B2(cr) CRA,
three notches above MKB's caa2 adjusted BCA.


A further improvement in the operating environment for Hungarian
banks leading to a considerable reduction in problem loans and
stronger capital ratios, could have positive rating implications.

A deterioration in the country's Macro Profile and/or in
individual banks' standalone financial metrics may have negative
rating implications.

Furthermore, alterations in the bank's liability structure may
change the amount of uplift provided by Moody's Advanced LGF
analysis and lead to a higher or lower notching from the banks'
adjusted BCAs, thereby affecting deposit ratings and CRAs.



Issuer: Erste Bank Hungary Zrt.
  LT Bank Deposits (Local), Upgraded to Ba2 Positive from B2
   Rating Under Review
  LT Bank Deposits (Foreign), Upgraded to Ba2 Positive from B2
   Rating Under Review
  Adjusted Baseline Credit Assessment, Upgraded to b1 from b2
  Baseline Credit Assessment, Upgraded to b3 from caa1
  Counterparty Risk Assessment, Upgraded to Ba1(cr) from Ba2(cr)

Issuer: MKB Bank Zrt.
  LT Bank Deposits (Local), Upgraded to B3 Stable from Caa2
   Rating Under Review
  LT Bank Deposits (Foreign), Upgraded to B3 Stable from Caa2
   Rating Under Review

Issuer: Budapest Bank Rt.
  LT Bank Deposits (Local), Upgraded to Ba2 Stable from B2 Rating
   Under Review
  LT Bank Deposits (Foreign), Upgraded to Ba2 Stable from B2
   Rating Under Review
  Adjusted Baseline Credit Assessment, Upgraded to b1 from b2
  Baseline Credit Assessment, Upgraded to b1 from b2
  Counterparty Risk Assessment, Upgraded to Ba1(cr) from Ba3(cr)

Issuer: Kereskedelmi & Hitel Bank Rt.
  LT Bank Deposits (Local), Upgraded to Ba1 Stable from Ba3

   Rating Under Review
  LT Bank Deposits (Foreign), Upgraded to Ba2 Positive from Ba3
   Rating Under Review
  Adjusted Baseline Credit Assessment, Upgraded to ba2 from ba3
  Baseline Credit Assessment, Upgraded to b1 from b2

Issuer: MKB Bank Zrt.
  Counterparty Risk Assessment, Affirmed B2(cr)

Issuer: Kereskedelmi & Hitel Bank Rt.
  Counterparty Risk Assessment, Affirmed Baa3(cr)

Outlook Actions:
Issuer: Erste Bank Hungary Zrt.
  Outlook, Changed To Positive From Rating Under Review

Issuer: MKB Bank Zrt.
  Outlook, Changed To Stable From Rating Under Review

Issuer: Budapest Bank Rt.
  Outlook, Changed To Stable From Rating Under Review

Issuer: Kereskedelmi & Hitel Bank Rt.
  Outlook, Changed To Positive(m) From Rating Under Review

All other ratings and rating assessments of the banks captured by
the rating actions remain unaffected.

                      PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Banks
published in January 2016.


DOBBINS: High Court Confirms Appointment of Examiner
The Irish Times reports that the High Court has confirmed the
appointment of an examiner to companies operating the well-known
Dublin restaurant Dobbins, and Becketts Hotel in Leixlip, Co

The businesses employ some 60 people, The Irish Times discloses.

The companies sought court protection late last month due to cash
flow difficulties caused by loss of business contracts and
historic bank debt, The Irish Times recounts.

While Dobbins, St Stephen's Lane, Dublin 2 and the 10-bedroom
Beckett's Hotel & Restaurant have good reputations and a loyal
customer base, the fact the companies' assets were acquired at
the height of the Celtic Tiger has left the group with a high
level of debt, the court was told during that application, The
Irish Times notes.

Mr. Justice Brian McGovern this week agreed to confirm insolvency
practitioner Kieran Wallace of KPMG as examiner of four related
companies: Dobbins Wine Bistro Ltd; Dobbins Holding Company Ltd;
Camrue Holding Company Ltd; and Camrue Catering Ltd., The Irish
Times relays.

According to The Irish Times, Andrew Fitzpatrick, for KBC Bank,
the largest creditor, said it had concerns about information
concerning rent issues previously put before the court and had
asked the examiner to look into that.  Mr. Fitzpatrick, as cited
by The Irish Times, said there must be clarity concerning what
amount of rent is payable as that will affect the debt and the
viability of the business going forward.

The judge said KBC and Revenue had "flagged" their concerns which
could be addressed at future hearings, The Irish Times relates.
In the interim, he would confirm Mr. Wallace as examiner, The
Irish Times discloses.

The judge appointed Mr. Wallace interim examiner last month after
being told an independent expert believed the companies have a
reasonable prospect of survival if certain steps are achieved,
including court approval of a scheme of arrangement with the
group's creditors, The Irish Times recounts.

As part of that scheme, the companies hope to restructure bank
debt, pay a dividend to creditors, secure additional investment
and enter into an open market lease for the companies' premises,
The Irish Times states.


MONTE PASCHI: Asks Eight Banks to Guarantee EUR5BB Cash Call
Pamela Barbaglia and Silvia Aloisi at Reuters report that
Banca Monte dei Paschi di Siena has asked at least eight banks to
guarantee a EUR5 billion (US$5.49 billion) cash call as Italy's
third-largest bank races against the clock to comply with
regulators' demands to strengthen its balance sheet.

According to Reuters, a source familiar with the matter said
JPMorgan and Mediobanca, who are leading the fund raising as
global coordinators, have so far contacted a pool of banks
including Goldman Sachs, Morgan Stanley, Bank of America,
Citigroup, Deutsche Bank, Unicredit and Intesa SanPaolo's Banca

He added that UBS, which is working on Monte dei Paschi's rescue
plan alongside Citi, is among the banks who have been left out
from the list, Reuters relates.

Monte dei Paschi wants to get approval from the European Central
Bank for its proposed capital hike ahead of the release of the
region's bank stress tests on Friday evening, Reuters says.
Investors fear the tests will show the bank has insufficient
capital levels to withstand an economic downturn, Reuters notes.

                      About Monte dei Paschi

Banca Monte dei Paschi di Siena SpA -- 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.


KAP: CEAC Holding Loses Arbitration v. Montenegro, To Bear Cost
Denitsa Koseva at bne IntelliNews reports that CEAC Holding,
owned by Russian businessman Oleg Deripaska, has lost an
arbitration with the International Centre for Settlement of
Investment Disputes against Montenegro on the bankruptcy of the
country's aluminium smelter KAP, the Montenegrin economy ministry
said in a statement on July 27.

In 2014, CEAC filed a claim for EUR600 million against Montenegro
with ICSID, saying that the decision of the country to declare
KAP bankrupt in 2013 has violated the trade treaty protecting
Cypriot investment in Montenegro, bne IntelliNews relates.  CEAC
had a 65.43% stake in KAP before the bankruptcy, bne IntelliNews

"ICSID . . . has ruled that CEAC does not have a headquarter on
the territory of Cyprus, therefore it is not a foreign investor
according to the terms of the applicable international agreement
for protection of foreign investments," bne IntelliNews quotes
the government as saying in the statement.

It added that, according to ICSID, CEAC was not eligible to file
this type of claim, and the company has to pay the EUR900,000
arbitration costs, bne IntelliNews relays.

KAP is Montenegro's largest industrial company.


STAHL HOLDINGS: S&P Affirms Then Withdraws 'B+' CCR
S&P Global Ratings affirmed its 'B+' corporate credit rating on
Dutch chemicals producer Stahl Holdings B.V.  S&P then withdrew
the corporate credit rating at the company's request.  The
outlook at the time of withdrawal was stable.

The affirmation reflects S&P's view of the company's resilient
performance and free operating cash flow generation.  The stable
outlook at the time of withdrawal reflected S&P's expectation
that the company will continue to post resilient performance
through 2016.


NORSKE SKOG: Moody's Raises CFR to Caa2, Outlook Stable
Moody's Investors Service has upgraded Norske Skogindustrier ASA
(Norske Skog)'s Corporate Family Rating to Caa2 from Caa3 and the
Probability of Default Rating (PDR) to Caa2-PD from Caa3-PD.

The outlook on all ratings is stable.

"The upgrade of Norske Skog's ratings to Caa2 acknowledges the
company's improved year-on-year gross operating earnings for the
third consecutive quarter on the back of improved newsprint
demand in Europe and higher capacity utilization rates, as well
as improved fixed and variable cost reductions, says
Matthias Volkmer, lead analyst at Moody's for Norske Skog.
"Following the successful debt exchange offer in April and the
bond redemption in June, Norske Skog's debt maturity profile has
been termed out until December 2019, which in conjunction with
currently available liquidity resources and a return to modest
free cash flow generation reduces the near-term default risk
substantially. Notwithstanding, the positive momentum in
performance, sustainability of break-even to positive free cash
flow is dependent on continued industrywide conversions of
newsprint production capacity into tissue and packaging grades or
alternatively capacity closures to help offset further demand
decline in publication paper in the coming years and retain
pricing at least around current, albeit low, levels", Mr. Volkmer

                         RATINGS RATIONALE

The Caa2 CFR reflects Norske Skog's history of distressed debt
exchanges (2012, 2015 and 2016) as well as its more recently
improved profitability and cash flow generation, expected to
continue through 2016.  However, its high exposure to the mature
publication paper market in Europe and Australia weighs on the
company's ability to sustainably improve profitability.  Norske
Skog's investments in growth projects, namely biogas and tissue
production (still in progress) as well as last year's acquisition
of a New Zealand-based wood pellet production (40k tons
currently) to diversify away from the traditional publication
paper market are not sufficient to materially offset challenging
market conditions in its paper operations.  Moody's notes that
these investments due to their relatively small size will only
moderately improve profit generation over time.  Nevertheless,
the incremental profits from the investments, cost reduction
efforts as well as improvements in supply-demand balance in the
publication paper market resulting in higher (+5% in Europe)
paper prices during 2016, have helped to improve profitability
and return to modestly positive free cash flow.  Moreover, the
recent repayment of the remaining 2016 notes in June (NOK1.044
billion), has eased the immediate refinancing pressure for the
next 3 years and is therefore credit positive.

For 2016 Moody's expects a recovery in the group's profitability
levels due to mentioned improvements in publication paper prices
which could help stabilize or improve Norske Skog's liquidity
profile.  However, Moody's cautions that, despite continued
capacity conversions and expected reductions in newsprint
production planned for 2017, demand for publication paper will
continue to decline in the coming years as function of digital
technologies and online news services' increasing attractiveness.
This could be amplified by the anticipated global economic
slowdown including effects of the impending Brexit process.
Despite recent price gains, pricing power for publication paper
has been subdued historically while volatile raw material costs
add pressure to profitability.  This will make it challenging for
Norske Skog to sustainably improve profit and cash flow
generation needed to de-leverage and improve liquidity.

Moody's considers Norske Skog's liquidity profile as modest but
sufficient to cover expected near-term cash uses.  Improving
Funds from Operations (FFO) of around NOK410 million during the
next 12 months and approximately NOK1 billion as of June 2016
available liquidity including NOK725 million cash on balance and
access to factoring arrangements and a short-term facility should
be sufficient to meet expected cash outflows related to capital
expenditure between NOK230-250 million (including NOK150 million
maintenance capex) and seasonal working capital requirements for
the next 12 months.  The next largest bond debt maturity is in
December 2019 with around NOK2.7 billion (EUR290 million).


The stable outlook reflects that, following the debt exchange in
April and the 2016 bond redemption in June, the risk of near-term
payment default (2016- 2017) has reduced.  Moody's expects Norske
Skog's improved profitability to translate into modest positive
free cash flow generation which should help to further stabilize
and improve liquidity during 2016-2017.


Upward pressure on the rating could arise should (i) Norske Skog
sustainably improve profitability at group level to aid the
deleveraging process, (ii) improve liquidity levels through
consistent and meaningful free cash flow generation through 2016-

Downward pressure over the ratings horizon could result from (i)
adverse market developments or operational problems resulting in
deteriorating financial performance, (ii) free cash flow
generation becoming negative; (iii) a weakened liquidity profile
including inability to procure liquidity resources (e.g. renewal
of securitization facilities), resulting in a heightened default

List of affected ratings:


Issuer: Norske Skogindustrier ASA
  LT Corporate Family Rating, Upgraded to Caa2 from Caa3
  Probability of Default Rating, Upgraded to Caa2-PD from Caa3-PD
  Senior Unsecured Regular Bond/Debenture, Upgraded to Caa3 from

Issuer: Norske Skog AS
  Senior Secured Regular Bond/Debenture, Upgraded to Caa1 from

Issuer: Norske Skog Holdings AS
  Senior Unsecured Regular Bond/Debenture, Upgraded to Caa2 from


Issuer: Norske Skogindustrier ASA
  Senior Subordinated Regular Bond/Debenture, Affirmed C

Outlook Actions:

Norske Skogindustrier ASA
  Outlook, Changed To Stable From Negative

Norske Skog AS
  Outlook, Changed To Stable From Negative

Norske Skog Holdings AS
  Outlook, Changed To Stable From Negative


The principal methodology used in these ratings was Global Paper
and Forest Products Industry published in October 2013.

Norske Skogindustrier ASA, with headquarters in Oslo, Norway, is
among the world's leading newsprint and magazine producers with
production in Europe (c.71% of sales) and Australasia (29%) and
an annual production capacity of 2.7 million tons (fully owned
mills).  During the last-twelve-months to June 2016 Norske Skog
recorded sales of around NOK11.6 billion (approximately
EUR1.24 billion).  The company is listed on the Oslo stock
exchange yet following the recent debt exchange in April-16 that
encompassed an equity rights issue (NOK142 million private
placement in March and NOK57 million repair offering in June) and
raised Norske Skog's new share capital to NOK279 million, Goldman
Sachs & Co. (9,05% ownership) and GSO Special Situations Fund
(8.46%) are currently the single largest principle shareholders.


CARPATICA ASIG: Faces Bankruptcy, ASF Opts to Revoke License
Romania Insider reports that Romania's Financial Supervisory
Authority (ASF) has decided to revoke local insurer Carpatica
Asig's operating license and ask for the company's bankruptcy due
to financial problems.

According to Romania Insider, the company had some of the highest
losses in the local insurance sector last year, of close to EUR46

The company's bankruptcy was anticipated as a recent report by
Deloitte showed that its liquidation would be less costly than
the scenario in which the company continued to operate, Romania
Insider relates.

ASF placed Carpatica Asig under its resolution mechanism earlier
this year, and the Policyholders Guarantee Fund took over the
company's management from its board of directors, Romania Insider
recounts.  However, the insurer's financial situation continued
to deteriorate, Romania Insider notes.

Moreover, ASF rejected the only bid from an international
investor who showed interest in the company, IIC Group, arguing
that the investor hadn't proven the capacity to finance Carpatica
Asig, Romania Insider relays.   The Dutch investor, as cited by
Romania Insider, said that Carpatica's special administrator
hadn't allowed it to see all the documents that showed the
company's financial situation.

Carpatica Asig was the seventh biggest insurer in Romania, in
2015, with gross premiums underwritten of over EUR130 million and
a market share of 6.7%.  The company was one of the leaders on
the mandatory car insurance (RCA) segment, according to Romania


GAZPROM PJSC: S&P Affirms 'BB+/B' CCRs, Outlook Negative
S&P Global Ratings said that it had affirmed its 'BB+/B' foreign
currency long- and short-term corporate credit ratings and
'BBB-/A-3' local currency long- and short-term corporate credit
ratings on Russian gas champion Gazprom PJSC.  The outlook on
both long-term ratings is negative.

"We have revised down our assessment of Gazprom's stand-alone
credit profile (SACP) to 'bbb-' from 'bbb' because we think that
Gazprom's credit metrics will weaken in 2016-2017 compared with
our previous expectations.  This is primarily due to higher
pressure on gas export prices.  We now expect Gazprom's
ratio of funds from operations (FFO) to debt to decline to about
45%-50% from the more than 60% observed over the past several
years.  The SACP is still higher than our foreign currency
ratings and transfer and convertibility assessment on Russia,
and, therefore, it our downward revision had no impact on our
long-term ratings on Gazprom, which we affirmed at the level of
the sovereign (foreign currency BB+/Negative/B; local currency
BBB-/Negative/A-3)", S&P said.

"We believe Gazprom will no longer be able to generate
meaningfully positive free operating cash flow at levels similar
to what we saw in 2014-2015.  This reflects the lower gas price
but also factors in our expectations that Gazprom's capital
expenditures (capex) will remain significant.  The company
continues to invest in the construction of a gas export pipeline
to China (Power of Siberia project), but several other projects
are also in the cards.  In our base case, we factor in the
investments related to the expansion of the Nord Stream project
(Nord Stream-2), given that we see it as likely to proceed, even
if the EU has not yet given its final approval," S&P noted.

It is S&P's expectation that Gazprom's profitability will be
under pressure from domestic taxes, as S&P considers it likely
that the increase in mineral extraction tax for Gazprom will be
extended beyond 2016.  In addition, due to the specificity of
local regulation, Gazprom cannot adequately respond to
independent producers and its market share in domestic business
continues to decline.

That said, S&P still recognizes Gazprom's vast reserves and
massive production, vertical integration into transportation,
monopoly over Russian gas exports, and strong competitive
position in Europe.  S&P thinks these factors will continue to
support Gazprom's SACP at an investment-grade level, absent a
further material drop in oil and gas prices or change of
political landscape that could harm Gazprom's export business.

The long-term ratings also continue to be supported by S&P's
assessment of the extremely high likelihood of support that
Gazprom could receive from the Russian government, owing to its
critical role to the economy and deep involvement of the
government in Gazprom's strategy and operations.  However, at
this point, the ratings on Gazprom are constrained by S&P's
sovereign ratings and transfer and convertibility assessment on
Russia, because S&P believes there are no mechanisms that could
prevent negative government intervention in case of stress.  In
the event that Gazprom's SACP were to weaken, however, the
extremely high likelihood of extraordinary support would
nevertheless support the rating and prevent material downside.

The negative outlook on Gazprom mirrors that on the Russian
Federation, Gazprom's controlling shareholder.  In S&P's base
case for Gazprom, S&P assumes that the company will adapt its
strategy to the revised industry conditions.  S&P also assumes
that it can achieve neutral free cash flow generation, despite
its strategic investments into Power of Siberia and Nord Stream-2
projects.  S&P generally expects Gazprom's FFO to debt will
exceed 45% on average in 2016-2018.

S&P would likely lower the ratings on Gazprom if S&P was to lower
the sovereign ratings.  Because S&P views Gazprom as a GRE with
very strong links to the government, S&P do not expect to rate
Gazprom above the sovereign.  At the same time, S&P would likely
affirm the ratings if Gazprom's SACP significantly deteriorated
but the sovereign rating remained unchanged.  This could happen
if the company made large debt-financed investments, which S&P do
not include in its base-case scenario.

Although S&P's 'BBB-' local currency rating on Gazprom has lower
headroom for a downgrade than the 'BB+' foreign currency rating,
as per S&P's criteria, downside still is unlikely, at this stage.

S&P would likely revise the outlook on Gazprom to stable if S&P
revised the outlook on Russia to stable.

MEGAFON PJSC: S&P Affirms 'BB+' Long-Term FC CCR, Outlook Neg.
S&P Global Ratings affirmed its 'BBB-' long-term local currency
and 'BB+' long-term foreign currency corporate credit rating on
Russia's second-largest telecommunications operator, MegaFon PJSC
(MegaFon), and its finance subsidiary, MegaFon Finance LLC.  The
outlook on both entities is negative.  S&P also affirmed its
'ruAAA' Russia national scale ratings on MegaFon and MegaFon

At the same time, S&P affirmed its 'BB+' ratings on MegaFon's
$1.5 billion midterm senior unsecured note program and S&P's
'BBB-' issue rating on its Russian ruble (RUB) 10 billion (about
$150 million) senior unsecured bond due 2022.

S&P has affirmed its rating on MegaFon because it demonstrated
resilient performance in the challenging Russian economic
conditions in 2015, and S&P continues to expect solid results in
2016-2017.  In addition, although MegaFon's leverage has
marginally increased on the back of slightly weaker margins and
adverse foreign exchange effects, S&P expects the company's
financial policy will continue to support maintenance of S&P
Global Ratings' adjusted leverage below 2.0x.

In 2015, the Russian economy suffered from negative economic
growth of 3.7% year on year and the devaluation of the Russian
ruble to 73.0 per U.S. dollar as of Dec. 31, 2015, from 60.5 at
the end of 2014.  That said, MegaFon continued to generate
healthy margins (our adjusted margin of 42.8% in 2015 versus
44.7% a year before) and reported only slightly declining
revenues of RUB313.4 billion (0.4% down year on year), supported
by higher demand for mobile data on the back of availability of
well-invested infrastructure.

"That said, we note that MegaFon's credit metrics are slightly
weaker now than in previous periods.  MegaFon's reported debt to
EBITDA, as calculated by S&P Global Ratings, increased to 1.7x at
the end of 2015 from 1.5x a year earlier, which was the result of
a moderate increase of debt in ruble terms from RUB207 billion to
RUB223 billion and EBITDA decreasing slightly to RUB131 billion
in 2015 from RUB137 billion in 2014.  Adjusted debt to EBITDA
inched up to 1.5x by the end of 2015 from 1.2x at the end of 2014
(0.9x a year before), and its adjusted funds from operations
(FFO) to debt ratio decreased to 52.2% in 2015 from 68.8% in

MegaFon's debt increase mostly resulted from negative
discretionary cash flow (after capital expenditures and
dividends) of RUB8 billion (compared with positive RUB19 billion
in 2014).

"We expect that in 2016-2017 MegaFon will continue to generate
very modest or even slightly negative discretionary cash flow.
This is because MegaFon will continue to invest massively in its
network.  In line with the management case, we assume that it
will spend about RUB70 billion as capital expenditures (capex) in
2016, which would translate into 22% of its revenues (compared
with 2015 when MegaFon spent RUB64.5 billion or 20.6% of
revenues).  We also expect that MegaFon's dividends will be only
slightly lower than in 2015," S&P said.

That said, S&P do not expect that in 2016-2017 MegaFon's leverage
will significantly increase compared to S&P's base case.  This is
because MegaFon has a strong track record of commitment to
sustainable capital structure and moderate leverage.  In S&P's
view, MegaFon would have the flexibility and determination to
downsize its capex and dividends if they could lead to
significantly weaker credit metrics.

In S&P's view, MegaFon's business risk profile remains supported
by its robust position of the second-largest player in Russia's
competitive and saturated telecoms market. In 2015, MegaFon's
number of subscribers increased by 6.4% to 76.8 million from
72.2 million.  MegaFon was the beneficiary of 32% of total
numbers ported in, after mobile number portability was introduced
in Russia in April 2014.

MegaFon's competitive position remains very strong in mobile
data, where its market leadership stems from its superior 3G
network quality and competitive advantage in 4G, supported by the
previous investment.  MegaFon's 4G/LTE network covers 77 Russian
regions, providing access to 59.3% of the population.  According
to management, at the end of 2015, MegaFon had the largest
network among Russian mobile operators, which comprised more than
113,000 base stations (up 10% year over year).  In 2015,
MegaFon's data average revenue per user in Russia increased by
10.4% year on year, and data-enabled device penetration increased
to 53% from 47%.

Another positive rating factor is MegaFon's consistently robust
profitability.  It has maintained average EBITDA margins at above
40% in the past five years, outperforming some of its emerging
market peers.  This was a result of operating expenditure
spending efficiencies.  That said, in 2016 S&P expects the
company's EBITDA margin will decline by several percentage points
mostly owing to competition and high retail distribution costs,
but will rebound in 2017 on the back of cost saving.

MegaFon's exposure to high country risk in Russia, which is the
company's core market (generates about 98% of total revenues) and
the general risks of the telecoms industry, such as regulation
and competition, constrain the business risk profile.  S&P
believes that generally telecom regulation in Russia remains
comparatively benign; that said, S&P is mindful of the recent
introduction of the anti-terrorism package of laws that might
result in a significant capital outlay for all Russian telecom
companies, including MegaFon.

S&P affirmed the 'BBB-' local currency rating because it believes
that MegaFon will be able to service its local currency
liabilities in case of a sovereign default.  This is because
MegaFon has a sizable cash position and a very significant amount
of long-term lines from the banks.  That said, it is unlikely
that the local currency rating of Megafon will exceed the Russian
transfer and convertibility (T&C) assessment by more than one

The negative outlook on MegaFon mirrors that on Russia.  S&P caps
the foreign currency rating on MegaFon at the 'BB+' T&C
assessment for Russia because MegaFon does not have any
meaningful hard currency earnings.

S&P could lower the ratings on MegaFon if S&P lowers the foreign
currency ratings and revise downward its T&C assessment on the

S&P could also lower the ratings if the company increases its
adjusted leverage (debt to EBITDA) to above 2.0x on a prolonged
basis, as a result of financial policy decisions, or in case of a
significant weakening of the operating performance driven by the
weaker market environment in Russia.

S&P could revise the outlook to stable if it takes a similar
action on Russia.

SOGLASIE INSURANCE: S&P Lowers Counterparty Credit Rating to 'B+'
S&P Global Ratings lowered its long-term counterparty credit and
insurer financial strength ratings on Russia-based SOGLASIE
Insurance Co. Ltd. to 'B+' from 'BB-'.  The outlook is negative.

At the same time, S&P lowered its Russia national scale rating on
the company to 'ruA' from 'ruAA-' and removed all the ratings
from CreditWatch, where S&P placed them with negative
implications on June 9, 2016.

The downgrade follows SOGLASIE's announcement of its 2015 results
under International Financial Reporting Standards (IFRS), which
are weaker than S&P's forecasts.  Furthermore, adverse decisions
regarding the classification of court payments led management to
restate the company's 2013 and 2014 insurance reserves, which
significantly decreased its capital for those years and as of
year-end 2015.

"Due to these factors, we assess SOGLASIE's capital and earnings
as less than adequate compared with lower adequate previously.
The company's weaker-than-expect operating performance in 2015,
with a net loss of Russian ruble (RUB) 4.3 billion, led to some
capital erosion.  The owner, Mikhail Prokhorov, covered part of
this amount via financial support last year.  Amid a negative
operating environment -- including adverse court decisions
regarding obligatory motor third-party liability insurance and
generally lower demand for insurance -- we expect SOGLASIE's
bottom-line results could be weaker than the company's forecasts
for 2016-2017.  In our projections we incorporate additional
financial support in 2016 that could partly cover the company's
losses," S&P said.

"In our base case, we expect the insurer will likely gradually
tighten its risk management practices.  Given the substantial
restatement of insurance reserves for 2013 and 2014 -- by
RUB4.2 billion and RUB6.4 billion, respectively -- we expect that
past experience could potentially help SOGLASIE monitor future
risks, as could the improvement of its information technology
systems in 2015.  However, we need to see how the changes in risk
management will influence the insurer's future underwriting
performance as well as reserving practices," S&P said.

S&P regards SOGLASIE's liquidity as less than adequate because of
its low level of liquid assets and still-negative operating cash
flow.  That said, S&P do not currently view liquidity as a severe
risk for SOGLASIE, given its five-year track record of receiving
capital injections and S&P's expectation that the main
shareholder will continue providing financial support in 2016.
However, the company's low liquidity can be under pressure in
case of a lack of the owner's support.

The negative outlook stems from various downside risks to S&P's
ratings on SOGLASIE, including pressure on the company's business
risk profile, due to possible weakening of its competitive
position; potential deterioration of the financial risk profile,
due to unexpected capital erosion without sufficient support from
the main shareholder; and further strain on liquidity, given
limited available liquid assets over the next 12 months.

S&P could lower the ratings on SOGLASIE over the next 12 months

   -- S&P sees poor underwriting performance and further reserve
      deficiencies, which could indicate looser risk management
      and governance or weakening of the business risk profile;

   -- In S&P's view, low liquidity poses severe risks to
      SOGLASIE's operations as a going concern; or

   -- The company's capital adequacy continues to weaken, with no
      or only limited financial support from the main shareholder
      in 2016, putting pressure on the viability of the business

A revision of the outlook to stable will largely depend on an
improvement of the company's underwriting performance and its
risk management, particularly vis-a-vis reserving.  S&P would
then have a clearer picture as to SOGLASIE's viability without
relying heavily on shareholder support to maintain capital


CAJAMAR 1: Moody's Puts Definitive Caa1 Rating to Series B Notes
Moody's Investors Service has assigned these definitive ratings
to the notes issued by IM BCC CAJAMAR PYME 1, FT (the Issuer):

  EUR745 mil. Series A Notes due March 2056, Definitive Rating
   Assigned A2 (sf)
  EUR255 mil. Series B Notes due March 2056, Definitive Rating
   Assigned Caa1 (sf)

IM BCC CAJAMAR PYME 1, FT is a securitization of loans granted by
Cajamar Caja Rural, Sociedad Cooperativa de Credito ("Cajamar",
NR) to small and medium-sized enterprises (SMEs) and self-
employed individuals located in Spain.

Cajamar will act as servicer of the loans, while InterMoney
Titulizacion, S.G.F.T., S.A. will be the management company
(Gestora) of the Issuer.

                        RATINGS RATIONALE

The ratings are primarily based on the credit quality of the
portfolio, its diversity, the structural features of the
transaction and its legal integrity.

The provisional pool analyzed was, as of July 2016, composed of a
portfolio of 28,144 contracts granted to obligors located in
Spain.  Most of the assets were originated between 2008 and 2016,
and have a weighted average seasoning of 2.6 years and a weighted
average remaining term of 8 years.  The top three sectors
represented in the pool, in terms of Moody's industry
classification, are Beverage, Food & Tobacco (56.1%),
Transportation Cargo (6.5%) and Hotel, Gaming & Leisure (5%).
Around 39.2% of the portfolio is secured by mortgages over
residential and commercial properties.  Geographically, the
borrowers are located mostly in the regions of Andalusia (37.9%),
Murcia (20%) and Valencia (19.4%).  Delinquent assets up to 30
days in arrears represent around 3.2% of the provisional
portfolio.  Loans more than 30 days in arrears (which represent
around 1% of the provisional portfolio) will be excluded from the
final pool at closing.

In Moody's view, the credit positive features of this deal
include, among others: (i) Cajamar's expertise in lending to the
agriculture sector, which is closely linked to the pool's
exposure to Beverage, Food & Tobacco sector, in terms of Moody's
industry classification; (ii) granular portfolio with low obligor
concentration as the top obligor and top 10 obligor groups
represent 0.5% and 3.4% respectively; (iii) exposure to the
construction and building sector in terms of Moody's industry
classification, and at around 3.7% of the pool volume, is well
below the average observed in the Spanish market.  The
transaction also shows a number of credit weaknesses, including:
(i) there is a high sector concentration as around 56.1% of the
portfolio volume is concentrated in the Beverage, Food & Tobacco
sector, in terms of Moody's industry classification; (ii) the
portfolio is exposed to refinancing loans, representing around
8.7% of the pool volume; (iii) there is no interest rate hedge
mechanism in place while the notes pay a floating coupon and
57.7% of the pool balance are either fixed rate loans or loans
that initially pay a fixed rate (switching to a floating rate at
a later stage).

In its quantitative assessment, Moody's assumed an inverse normal
default distribution for this securitized portfolio due to its
granularity.  The rating agency derived the default distribution,
namely the relevant main inputs such as the mean default
probability and its related standard deviation, via the analysis
of: (i) the characteristics of the loan-by-loan portfolio
information, complemented by the available historical vintage
data; (ii) the potential fluctuations in the macroeconomic
environment during the lifetime of this transaction; and (iii)
the portfolio concentrations in terms of industry sectors and
single obligors.  Moody's assumed the cumulative default
probability of the portfolio to be equal to 13.6% with a
coefficient of variation (CoV, i.e. the ratio of standard
deviation over mean default rate) of 66.6%.  The rating agency
has assumed stochastic recoveries with a mean recovery rate of
46% and a standard deviation of 20%. In addition, Moody's has
assumed the prepayments to be 5% per year.  These assumptions
correspond to a portfolio credit enhancement of 36.5%.

The principal methodology used in these ratings was Moody's
Global Approach to Rating SME Balance Sheet Securitizations
published in October 2015.

The ratings address the expected loss posed to investors by the
legal final maturity of the notes.  Moody's ratings address only
the credit risk associated with the transaction, Other non-credit
risks have not been addressed but may have a significant effect
on yield to investors.

Factors that would lead to an upgrade or downgrade of the

Factors or circumstances that could lead to a downgrade of the
ratings affected by today's action would be (1) worse-than-
expected performance of the underlying collateral; (2) an
increase in counterparty risk; (3) an increase in country risk.

Factors or circumstances that could lead to an upgrade of the
ratings affected by today's action would be the better-than-
expected performance of the underlying assets, a decline in
counterparty risk or decreased country risk.

Moody's also tested other set of assumptions under its Parameter
Sensitivities analysis.  If the assumed default probability of
13.6% used in determining the initial rating was changed to 17.7%
and the recovery rate of 46% was changed to 36%, the model-
indicated ratings for Serie A and Serie B of A2(sf) and Caa1(sf)
would be Baa3(sf) and Caa2(sf) respectively.

Parameter Sensitivities provide a quantitative, model-indicated
calculation of the number of notches that a Moody's-rated
structured finance security may vary if certain input parameters
used in the initial rating process differed.  The analysis
assumes that the deal has not aged.  It is not intended to
measure how the rating of the security might migrate over time,
but rather, how the initial rating of the security might differ
as certain key parameters vary.


EREGLI DEMIR: S&P Revises Outlook to Negative & Affirms 'BB' CCR
S&P Global Ratings said that it revised the outlook on Turkish
flat steel producer Eregli Demir ve Celik Fabrikalari T.A.S.
(Erdemir) to negative from stable.  At the same time, S&P
affirmed its 'BB' long-term corporate credit rating on Erdemir.

The affirmation and outlook revision follow S&P's downgrade of
Turkey.  While S&P do not see imminent negative implications on
Erdemir, S&P believes Turkey's political landscape has fragmented
further, and that this will undermine the country's investment
environment, growth, and capital inflows into its externally
leveraged economy, which could, over time, have negative
implications for domestic steel demand.

Erdemir is highly dependent on the local Turkish flat steel
market, but benefits from the industry's supportive supply and
demand balance -- Turkey is a net importer or flat steel -- as
well as the company's high capacity utilization rates and a
leading domestic market position.  Because of the increase in
year-to-date steel prices, S&P continues to believe that Erdemir
can maintain an S&P Global Ratings-adjusted debt-to-EBITDA ratio
of 2x-3x.  S&P's calculation includes debt at Ataer, a special-
purpose vehicle owned by Oyak (Turkish Armed Forces Assistance)
pension fund, which is Erdemir's largest shareholder.

S&P's assessment of Erdemir's business risk reflects high country
risk, mitigated by the company's position as the only integrated
flat steel producer in Turkey, with high capacity utilization and
above average profitability.  Erdemir's production covers
approximately 40% of the growing domestic consumption of flat
steel, while the remainder is largely imported.  This is because
the arc furnaces that industry rivals use are focused on long
steel production and are less profitable, owing to high scrap
prices compared with the prices of the iron ore and coal that
Erdemir uses in its blast furnaces.  In addition, the company
sustains higher profitability than international peers because of
its proximity to local customers and flexible market strategy,
which have facilitated price realizations consistently above the
free-on-board Black Sea benchmark.

S&P's assessment of Erdemir's financial risk profile reflects
S&P's estimate of its ratio of adjusted debt to EBITDA at less
than 3x (including debt at Ataer). In 2015, this ratio was 2.2x
including Ataer debt and 0.2x excluding it.  The US$1.35 billion
of debt at Ataer accounted for most of Erdemir's total adjusted
debt of Turkish lira (TRY) 4.7 billion at year-end 2015.
Although debt at Ataer is not guaranteed by Erdemir, S&P believes
that its dividends remain the main source of repayment of this
debt. Although Erdemir's credit metrics fall into S&P's
intermediate category, it takes into account the high volatility
of Erdemir's profits and its leverage metrics, as the wide swings
between 2009 and 2012 illustrate.

In S&P's base case it assumes:

   -- 2016 margins similar to or slightly lower than 2015.
   -- Capital expenditures (capex) of TRY1.2 billion-
      TRY1.3 billion annually, with the flexibility to reduce to
      maintenance levels of below TRY500 million if necessary.
   -- Dividends in line with distributable reserves.

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

   -- Adjusted debt to EBITDA of about 2x-3x.
   -- Adjusted funds from operations (FFO) to debt of 30%-40%.

The negative outlook reflects the possibility that S&P could
downgrade Erdemir over the next 12-18 months if its business was
hindered by Turkey's political turmoil.

S&P could lower the rating if it saw a significant slowdown in
the Turkish economy that translated into a fall in steel
consumption and demand, for example, if S&P saw decline and
cancellations in customer orders from public infrastructure
projects being put on hold.  Weaker credit metrics -- such as
debt to EBITDA above 3x and FFO to debt below 30%, or negative
FOCF -- would serve as trigger points for a potential downgrade.
Weaker credit metrics could also be caused by an increase in
shareholder distributions, acquisitions, or higher capex than S&P
expects.  S&P could also downgrade Erdemir if S&P saw its
liquidity position weakening, notably its ability to access its
sizable U.S. dollar deposits.

S&P could revise the outlook back to stable if it gained better
visibility about the effect of the political and macroeconomic
uncertainty on Erdemir's business.  Moreover, an outlook revision
could be prompted by steel demand remaining supportive based on a
continuation of the favorable supply/demand imbalance for flat
steel in Turkey and a possible depreciation in the Turkish lira,
improving the competitive position of Turkish manufacturers who
use flat steel.

A further recovery in steel prices leading to stronger credit
metrics -- with FFO to debt above 40% and the ability for the
company to reduce leverage further -- could lead to positive
implications for the rating.

TURKIYE SISE: S&P Lowers ICR to 'BB', Outlook Negative
S&P Global Ratings said that it lowered its issuer credit ratings
on Turkey-based glass producer Turkiye Sise ve Cam Fabrikalari
A.S. (Sisecam) to 'BB' from 'BB+'.  The outlook is negative.  S&P
affirmed the short-term rating at 'B'.

At the same time, S&P lowered the issue ratings on Sisecam's
$500 million unsecured notes to 'BB' from 'BB+'.  The recovery
rating remains unchanged at '3' indicating recovery expectations
of 50%-70% (at the higher end of the range).

S&P's downgrade of Sisecam reflects that S&P recently lowered its
ratings on Turkiye Is Bankasi ("Isbank") to 'BB' from 'BB+'.
S&P's ratings on Sisecam cannot exceed those of its parent Isbank
because Sisecam is 67% owned by Isbank and, in S&P's opinion,
would not be insulated if the parent were distressed.

"Although we continue to view Sisecam's business risk profile as
fair, we are also mindful of the potentially negative effect that
rising country risk in Turkey could potentially lead to lower
domestic demand, volatility in export volumes, rising input
prices and pressure on profitability.  The heightened political
and economic risks in Turkey may exacerbate this trend over our
12 month rating horizon," S&P said.

S&P defines country risk as the broad range of economic,
institutional, financial market, and legal risks that arise from
doing business with or in a specific country and that can affect
a non-sovereign entity's credit quality.  The credit risk for
every rated entity and transaction is influenced to varying
degrees by these types of country-specific risks.  The factors
S&P evaluates are economic risk, institutional and governance
effectiveness risk, financial system risk, and payment
culture/rule of law risk.

S&P's base case assumes:

   -- Revenues growing to more than Turkish lira (TRY)7.6
   -- A contraction in the group's adjusted EBITDA margin to 19%-
      21% from 23% as of Dec. 31, 2015.
   -- Adjusted FFO of about TRY1.2 billion, continuing a trend of
      robust cash flow generation.
   -- Capex of up to TRY1 billion.
   -- No major acquisitions or divestitures.

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

   -- FFO to debt of above 60%; and
   -- Debt to EBITDA of 1.0x to 1.5x.

S&P continues to assess Sisecam's management and governance as
satisfactory, reflecting management's success at growing and
diversifying the group while reducing net debt.  It also reflects
S&P's opinion of management's good depth, breadth, and industry

S&P applies its negative comparable ratings adjustment to reflect
the fact that, relative to rated peers, rising country risk in
Turkey could potentially lead to lower domestic demand,
volatility of export volumes, rising input prices, and pressure
on profitability.  In other words, S&P's negative adjustment
reflects the effect that rising country risk in Turkey may have
on Sisecam's business risk profile.

"Our ratings on Sisecam cannot exceed those on the parent Isbank
because Sisecam is 67% owned by Isbank and we consider that it
would not be insulated if the parent were distressed.  In our
opinion, there is no overlap between Isbank and Sisecam in terms
of business operations or industry.  They do not share a name,
brand, or risk-management function and Sisecam's financial
performance and funding prospects are largely independent from
Isbank's.  As such, we see Sisecam as a nonstrategic subsidiary
of zsbank.  However, although Isbank does not currently exert
control over Sisecam's strategy, day-to-day operations, cash
flows, or dividend policy, we reflect in our analysis that Isbank
is majority owner and effectively has full control over Sisecam,"
S&P said.

The negative outlook on Sisecam reflects that on the parent
Isbank, that in turn reflects the negative outlook on Turkey.  In
S&P's opinion, Turkish banks' financial profiles and performance
will remain highly correlated with the sovereign's
creditworthiness, owing to their significant holdings of
government securities and exposure to the domestic environment on
a stand-alone basis, S&P anticipates that Sisecam will maintain
its leading market position in Turkey and that its ambitious
global expansion plans will continue to support its credit
metrics -- specifically, S&P Global Ratings-adjusted FFO to debt
in excess of 45% and adjusted debt to EBITDA of less than 1.5x.

S&P would lower the rating if it downgraded Isbank.  S&P could
also lower the ratings if FFO to debt sustainably fell to less
than 45%.  This could occur as a result of inflated raw material
or energy costs, a significant weakening in demand, or the
unsuccessful execution of the group's sizable capacity expansion
plans that result in ratios weakening to a level that S&P views
as commensurate with an intermediate financial risk profile.

A revision of the outlook to stable would follow a similar
outlook revision to Isbank.

U N I T E D   K I N G D O M

CONNAUGHT PLC: Liquidator Gets GBP18.5MM Payment from Capita
Monira Matin at International Adviser reports that UK outsourcing
firm Capita has paid GBP18.5 million (EUR22.07 million, US$24.2
million) to settle a claim brought against it by the liquidator
of the Connaught property fund fraud in which investors lost up
to GBP100 million.

According to International Adviser, the company's half-year
report shows Capita spent up to GBP1.1 million so far this year
in professional fees in relation to Connaught.

Last year, the Financial Conduct Authority announced that it had
decided to formally review the activities of Capita and Blue Gate
in their role as operators of the fund, after withdrawing from
negotiations aimed at securing compensation for investors,
International Adviser recounts.

Capita Financial Managers was the fund's authorized corporate
director (ACD) until 2009 when it was replaced by Blue Gate,
International Adviser notes.

                          Connaught case

The Connaught funds, called the Income Series 1, 2 and 3, were
originally launched as a Guaranteed Low Risk Income Fund in 2008,
International Adviser discloses.  It went into administration in
April 2012 after bridging lender Tuita collapsed, International
Adviser relates.  The FCA has been criticized for its handling of
the scandal, apologizing earlier this year for its poor treatment
of the whistleblower whose warnings about the fund were not
heeded by its predecessor, the Financial Services Authority,
International Adviser notes.

George Patellis, chief executive of Tiuta, went to the FSA about
his concerns some 18 months before the fund was suspended as it
was revealed to have invested in fictitious secured loans,
International Adviser relays.

However, his initial concerns were not addressed by the regulator
before the fund collapsed, International Adviser states.

Connaught plc was a company in the United Kingdom, operating in
the social housing, public sector and compliance markets and was
a constituent of the FTSE 250 Index.

CURRAN COURT HOTEL: In Administration, Buyer Sought for Business
Rebecca Black at Belfast Telegraph reports that The Curran Court
Hotel has been placed into administration.

A new buyer is currently being sought for the business, Belfast
Telegraph relays.

The administration is being handled by Belfast finance firm Ernst
and Young (EY), Belfast Telegraph discloses.

"It is business as usual as administrative receivers review
operations," Belfast Telegraph quotes a spokesman as saying.

The Curran Court is owned by local businessman Crawford Leitch
who also has an interest in The Bodega bar in Larne.  It is
located closed to the Port of Larne and describes itself as a
long-established family run hotel offering 33 en-suite bedrooms,
according to Belfast Telegraph.

IDH FINANCE: Fitch Rates GBP425MM Sr. Secured Notes 'B+(EXP)'
Fitch said, "We assigned IDH Finance plc's proposed super senior
revolving credit facility an expected rating of 'BB(EXP)' with a
Recovery Rating of RR1, We also have assigned an expected rating
of 'B+(EXP)' to the GBP425 million senior secured notes with a
Recovery Rating of 'RR3'.

"At the same time, Fitch has placed Turnstone Midco 2's
(Turnstone) Long-Term Issuer Default Rating of 'B+' on Rating
Watch Negative (RWN) as we expect to downgrade Turnstone's IDR by
one notch to 'B' with a Stable Outlook on completion of the
proposed debt issues."

The proceeds from the planned issues, together with cash on
balance sheet, will be used to refinance the group's existing
GBP539 million debt (senior and second lien notes, as well as
drawings under the senior secured revolving credit facility) and
associated transaction costs. The assignment of the final ratings
is contingent on the receipt of final documents materially
conforming to information already reviewed.

Fitch said, "The RWN on Turnstone's IDR reflects Fitch's
expectation that debt service and coverage ratios will weaken to
levels more commensurate with the 'B' rating level once the debt
issues are completed. We expect FFO-adjusted net leverage to
increase to 6.7x and FFO fixed-charge cover to structurally
weaken to below 2.0x, due to the larger amount of debt and higher
cost of debt."

The rating, however, remains underpinned by the strengths of its
brand, IDH, rebranded to Mydentist. IDH has a leading market
position in the UK's National Health Service (NHS) dental sector.
This gives it a stable cash flow driven by long-term evergreen
contracts accounting for around 59% of total revenue.

It also has a record of acquiring and successfully integrating
small dental businesses; vertical integration into dental supply
services; an expanding network, which delivers economies of scale
and a close relationship with the NHS.

Fitch expects there to be significant rating headroom under the
expected 'B' rating for Turnstone to deliver on IDH's growth
strategy as consolidator in the still fragmented dental services
market in the UK and assigns a Stable Outlook.


Fitch said, "Increased Leverage, Improved Financial Flexibility
Fitch expects debt protection ratios to weaken as the result of
the announced refinancing with pro-forma FFO adjusted net
financial leverage to increase to 6.7x in the financial year
ending March 31, 2017 (FY17) from 6.4x a year earlier and FFO
fixed charge cover to weaken to below 2.0x from 2.1x per our
previous expectations. This will be driven by the larger amount
and higher cost of debt. The metrics would be commensurate with a
'B' rating, although the debt issues would lengthen Turnstone's
maturity profile and the increased liquidity would offer
sufficient financial flexibility to continue the group's growth

Above-Average Business Risk
"We view IDH's business profile as stronger than its financial
metrics for the rating category. The business is supported by
growing scale in its operations, vertical integration and brand
investments. IDH benefits from its leading market position in the
UK NHS dental sector, and it enjoys stable cash flows, which are
underpinned by long-term evergreen contracts. IDH is also
well-placed to tap a structurally growing private dental market.
As a result, we project sustainable free cash flow margin of
2%-4% for the business over the four-year rating horizon, with
the exception of FY17, where free cash flow will be negative due
to exceptional costs, which are mostly associated with the debt
refinancing. IDH's business risk, however, is constrained by its
scale and limited diversification, compared to healthcare peers
rated by Fitch.

"NHS Contracts 'Sticky', But Focus on Value Increasing
The rating reflects a 92.4% decrease in units of dental activity
(UDA) in FY16 from 95.8% in FY15 and compared with a target of
96%. The decline was a result of fewer exempt patients due to an
improving economy, a change in band mix, and increased NHS
scrutiny around delivery, claims and performance benchmarks,
which we view as an industry-wide trend to improve value
generated in the system. As a result IDH's productivity suffered
and the management is taking active measures to recover UDA
performance towards the long-term target of 96%, which include
actively managing dentist productivity, simplifying
administration and achieving an improved patient and appointment
mix, in addition to increasing the share of private treatments."

Fitch projects a long-term average EBITDA margin of 15% (against
historic margins of closer to 19% and FY16 margin at 14.5%) based
on the expected improvement in UDA performance, greater value
focus in NHS contracts, the shifting patient mix to private
dental services as well as the integration of the dental supply
operations, which both have structurally lower margins.

Further Acquisitions to Add Scale, Diversify
Fitch said, "We expect IDH to continue its targeted and carefully
executed acquisition strategy as the fragmented UK dental sector
consolidates further. Our rating assumes IDH will spend GBP40m a
year to acquire targets in both businesses -- practice services
and patient services -- which will add scale and diversification
to the business. We assume acquisition multiples of around 6.0x
and hence a continued deleveraging path despite these debt-funded
transactions. We view the integration and execution risk as
manageable based on IDH's good track record and will treat larger
acquisitions outside our defined parameters as event risk.


"Fitch believes that expected recoveries would be maximized in a
going-concern scenario rather than a liquidation given the scale
benefits, vertical integration and increasing investment in the
brand, which we believe are key value drivers for the business.
The 'RR3' Recovery Rating on the proposed senior secured notes
indicates good recovery prospects, with securities historically
recovering 51%-70% of current principal and related interest. We
estimate a post-restructuring EBITDA of approximately GBP80
million and a going-concern multiple of 6.0x EV/EBITDA."


Refinancing Improves Liquidity Profile
"With no material debt maturity over the four-year rating horizon
post-refinancing, we assess IDH's liquidity as adequate to
implement its prudent growth strategy. After the refinancing,
IDH's liquidity will comprise GBP9 million readily available cash
and an unutilized GBP100 million Super Senior revolving credit
facility (RCF)."


Fitch's expectations are based on the agency's internally
produced, conservative rating-case forecasts. They do not
represent the forecasts of rated issuers individually or in
aggregate. Key Fitch forecast assumptions are listed below.

-- Recovery in UDA delivery leading to an organic increase in
    NHS patient services revenues. This, combined with
    acquisitions will lead to annual growth of around 7.0% a year
    in 2017 and 2018.
-- Continued strong like-for-like growth in private patient
    services as the rebalancing and rebranding strategies
    continue to take effect. This is projected to lead to revenue
    growth of just under 10% a year to 2018.
-- Moderate growth in practice services (3.7% in 2017).
-- Improved margins driven by a recovery in revenues as UDA
    delivery begins to normalize. This will lead to EBITDA margin
    trending above 14.5%.
-- Continuance of acquisition strategy, aiming for GBP6
    million-GBP8 million additional EBITDA a year. Acquisition
    multiple projected to be less than 6.0x EV/EBITDA. This will
    lead to acquisition cash outflows of about GBP40 million a
    year, which will be partly funded by drawings under the RCF.

Future developments that may, individually or collectively, lead
to positive rating action include:
-- Ability to increase diversification and scale via
    acquisitions without diluting profits or FCF, while
    maintaining FFO-adjusted net leverage below 6.0x (FYE16:
    6.4x) on a sustained basis;
-- FFO fixed-charge coverage above 2.0x (FYE16: 1.9x)

Future developments that may, individually or collectively, lead
to negative rating action include:
-- Reduced profitability from failure to achieve UDA delivery,
    achieve cost synergies or to manage cost inflation, leading
    to EBITDA margin falling below 10%
-- Negative FCF, for example, as a result of an unsuccessful
    acquisition strategy driving weaker credit metrics such as
    FFO-adjusted net leverage above 7.5x (pro forma for
-- FFO fixed-charge coverage below 1.5x on a sustained basis

IHS MARKIT: S&P Assigns 'BB+' CCR, Outlook Stable
S&P Global Ratings said that it assigned its 'BB+' corporate
credit rating to London-based IHS Markit Ltd.  The outlook is

At the same time, S&P assigned its 'BB+' issue-level rating and
'3' recovery rating to the company's $743 million unsecured notes
due 2022 as well as its $1.206 billion term loan and $1.85
billion revolving credit facility, each due 2021.  The '3'
recovery rating indicates our expectation for meaningful recovery
(50% to 70%, in the upper half of the range) in the event of
payment default.

Markit Group Holdings Ltd., is the borrower of the company's bank
debt and $500 million unsecured notes (unrated).  S&P will
withdraw its ratings on IHS Inc. and its debt.

"The corporate credit rating reflects our view of IHS Markit's
acquisitive growth strategy, which we believe could result in
releveraging to the 4.0x area from an estimated level of around
2.7x pro forma the merger, but also its good market positions,
high recurring revenue, and good track record of operating
performance," said S&P Global Ratings credit analyst Christian

The merger diversifies IHS Markit's end markets, with around
one-third of revenues exposed to financial services and around
one-quarter exposed to energy.  Recurring revenue will remain
high at about 85% of the total, and the company's EBITDA margins
are about 37% pro forma for Markit with potential to increase to
the low to mid-40% area on operating leverage and $125 million of
cost savings to be completed by the end of 2019.  Chairman and
CEO Jerre Stead will continue until Dec. 31, 2017, after which
Markit CEO Lance Uggla will take over both roles.  Until then,
Mr. Uggla will be president and board member of the combined
company.  The company will be headquartered in the U.K., allowing
for some tax efficiencies.

The stable outlook reflects S&P's view that IHS Markit's good
market positions and recurring revenue base are likely to result
in consistent operating performance over the next 12 months.

S&P could lower the rating if the company pursues debt-financed
acquisitions or implements more aggressive shareholder return
programs, resulting in sustained leverage of more than 4x, which
S&P estimates would occur if EBITDA fell by one-third from pro
forma levels or if adjusted debt increased by more than
$1.7 billion from pro forma levels.

S&P could raise the rating if IHS Markit restores debt capacity
such that S&P believes it can achieve its growth and shareholder
return objectives while generally maintaining leverage in the
high 2x area or lower.  This would entail the company adopting a
more conservative financial policy.


* BOOK REVIEW: Competitive Strategy for Health Care Organizations
Authors: Alan Sheldon and Susan Windham
Publisher: Beard Books
Softcover: 190 pages
List Price: $34.95
Review by Francoise C. Arsenault
Order your personal copy today at

Competitive Strategy for Health Care Organizations: Techniques
for Strategic Action is an informative book that provides
practical guidance for senior health care managers and other
health care professionals on the organizational and competitive
strategic action needed to survive and to be successful in
today's increasingly competitive health care marketplace. An
important premise of the book is that the development and
implementation of good competitive strategy involves a profound
understanding of change. As the authors state at the outset:
"What may need to be done in today's environment may involve
great departure from the past, including major changes in the
skills and attitudes of staff, and great tact and patience in
bringing about the necessary strategic training."

Although understanding change is certainly important in most
fields, the authors demonstrate the particular importance of
change to the health care field in the first and second chapters.
In Chapter 1, the authors review the three eras of medical care
(individual medicine, organizational medicine, and network
medicine) and lay the groundwork for their model for competitive
strategy development. Chapter 2 describes the factors that must
be taken into account for successful strategic decision-making.
These factors include the analysis of the environmental trends
and competitive forces affecting the health care field, past,
current, and future; the analysis of the competitive position of
the organization; the setting of goals, objectives, and a
strategy; the analysis of competitive performance; and the
readaptation of the business, if necessary, through positioning
activities, redirection of strategy, and organizational change.

Chapters 3 through 7 discuss in detail the five positioning
activities that are part of the model and therefore critical to
the development and implementation of a successful strategy:
scanning; product market analysis; collaboration; restructuring;
and managing the physician. The chapter on managing the physician
(Chapter 7) is the only section in the book that appears dated
(the book was first published in 1984). In this day of
physician-owned hospitals and physician-backed joint ventures, it
is difficult to envision the physician in the passive role of
"being managed." However, even the changing role of physicians
since the book's first publication correlates with the authors'
premise that their model for competitive strategic planning is
based exactly on understanding and anticipating change, which is
no better illustrated than in health care where change is
measured not in years but in months. These middle chapters and
the other chapters use a mixture of didactic presentation, graphs
and charts, quotations from famous individuals, and anecdotes to
render what can frequently be dry information in an entertaining
and readable format.

The final chapter of the book presents a case example (using the
"South Clinic") as a summary of many of the issues and strategic
alternatives discussed in the previous chapters. The final
chapter also discusses the competitive issues specific to various
types of health care delivery organizations, including teaching
hospitals, community hospitals, group practices, independent
practice associations, hospital groups, super groups and
alliances, nursing homes, home health agencies, and for-profits.
An interesting quote on for-profits indicates how time and change
are indeed important factors in strategic planning in the health
care field: "Behind many of the competitive concerns lies the
specter of the forprofits.

Their competitive edge has lain until now in the excellence of
their management. But developments in the past halfdecade
have shown that the voluntary sector can match the forprofits
in management excellence. Despite reservations that may
not always be untrue, the for-profit sector has demonstrated that
good management can pay off in health care. But will the
voluntary institutions end up making the same mistakes and having
the same accusations leveled at them as the for-profits have? It
is disturbing to talk to the head of a voluntary hospital group
and hear him describe physicians as his potential competitors."


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
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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,
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