TCREUR_Public/160823.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Tuesday, August 23, 2016, Vol. 17, No. 166


                            Headlines


F R A N C E

VEOLIA ENVIRONNEMENT: Fitch Affirms 'BB+' Reset Rate Notes Rating
WFS GLOBAL: Moody's Lowers CFR to B3, Outlook Stable


G E R M A N Y

INEOS STYROLUTION: S&P Affirms 'B+' CCR, Outlook Stable


I R E L A N D

AERCAP GLOBAL: Moody's Rates $500MM Jr. Sub. Notes 'Ba3(hyb)'
AERCAP HOLDINGS: S&P Assigns 'BB' Rating to $500MM Jr. Sub. Notes


L A T V I A

KVV LIEPAJAS: KVV Group to Sue Latvia Over Firm's Insolvency


L U X E M B O U R G

EVERGREEN SKILLS: Moody's Cuts CFR to Caa1, Outlook Negative


M A C E D O N I A

MACEDONIA: Fitch Cuts Long-Term Issuer Default Ratings to 'BB'


P O R T U G A L

PORTUGAL: Fitch Affirms 'BB+' Long-Term Issuer Default Ratings


R O M A N I A

CET GOVORA: Stops Steam Deliveries to Polish Soda Ash Producer
* ROMANIA: Loses EUR3 Billion, 90,000 Jobs Due to Insolvencies


R U S S I A

BAIKALBANK PJSC: Placed Under Provisional Administration
CB BDT: Liabilities Exceed Assets, Assessment Shows
CB RENAISSANCE: Liabilities Exceed Assets, Inspection Shows
CB RUBANK: Placed Under Provisional Administration
NOVOSIBIRSK CITY: Fitch Affirms 'BB' LT Issuer Default Ratings

VSK INSURANCE: Fitch Assigns 'BB-' IFS Rating, Outlook Stable


S E R B I A

FARMAKOM MB: Receivers Put Firm's Properties Up For Sale


S P A I N

FTPYME BANCAJA 3: S&P Affirms CCC(sf) Rating on Class D Notes


T U R K E Y

TURKISH AIRLINES: Moody's Lowers CFR to Ba3, Outlook Negative


U N I T E D   K I N G D O M

DUNNE GROUP: Enters Administration
G COMMS: Director Gets 11 Year Disqualification for VAT Fraud
GLE & INTERNATIONAL: High Court Winds Up Landbanking Company
MONSOON: Owner Ditches Dividend Plans as Stores Close
ROYAL BANK OF SCOTLAND: 140 Firms Files Suit Over Administration

* UK: One Fifth of Corporate Insolvencies Caused by Late Payment


                            *********


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F R A N C E
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VEOLIA ENVIRONNEMENT: Fitch Affirms 'BB+' Reset Rate Notes Rating
-----------------------------------------------------------------
Fitch Ratings has affirmed France-based waste management company
Veolia Environnement's (Veolia) Long-Term Issuer Default Rating
(IDR) and senior unsecured rating at 'BBB'. The rating of its
undated deeply subordinated reset rate notes has been affirmed at
'BB+'. Outlook on the Long-Term IDR is Stable.

The affirmation reflects Veolia's EUR600 million cost reduction
program for 2016-18 supporting higher estimated cash flows, which
Fitch estimates will take average funds from operations (FFO)
adjusted net leverage to strong levels for the rating, further
supported by the sale of Transdev.

This is despite tighter guidelines to reflect a shift in business
mix away from municipal business and Europe towards industrial
business and emerging markets. Fitch said, "With capex and
dividends set to increase, we expect underlying free cash flow
(FCF) to remain negative. FCF pre-working capital movements,
disposals and acquisitions was a negative EUR244 million in 1H16
versus a negative EUR324 million in 1H15. We expect fixed charge
coverage to be adequate for the rating in the short-term."

KEY RATING DRIVERS

Cost Reduction Supports Earnings Visibility

With revenue growth slowing and turning negative in 1H16, cost
cutting is becoming more important for Veolia. Its new cost-
cutting program of EUR600 million through 2018 raises earnings
visibility and supports higher estimates of cash flows than
previously. The company delivered EUR121 million in 1H16 against
an annual target of EUR200 million, driving an increase in EBITDA
despite a challenging environment.

Veolia has recently taken additional steps to control costs in
French water. In view of continued competitive price pressures,
Fitch believes that the EUR600 million figure is a minimum and
would expect the company to look at similar additional cost-
cutting measures in future.

Shift in Business Model

Veolia's business model has shifted over the last five years away
from municipal towards industrial business and at the same time
away from Europe towards emerging markets. Municipal business
accounts for 55% of revenues against 70% five years ago,
industrial for 45% of revenues against 30% five years ago, while
Europe accounts for 57% of revenues against 64%.

"A focus on high-growth emerging markets may increase political
and currency risk, lowering the visibility of cash flows, while
lower profitability in France makes it less likely that Veolia
can utilize its tax losses. We have tightened our rating
guidelines to reflect these changes." Fitch said.

Higher Capex Needed for Growth

Although it has had several major contract wins recently, the
macro environment remains highly challenging and Veolia achieving
its target of 2-3% average revenue growth and 5% EBITDA growth
through 2018 is contingent on increasing capex from current
levels. The company is guiding to EUR1.6 billion-EUR1.7 billion
of capex for 2016-18 against EUR1.3 billion-EUR1.4 billion for
2015-16 and Veolia saw an increase in capex in 2Q16 for the first
time in several years.

Capital discipline has improved, with a preference for a capex-
lite model for some development projects. However, these are
equity-accounted, implying a slight change to the composition of
cash flow in future.

Sale of Transdev

After years of delay, Veolia has reached an agreement with Caisse
Des Depots for the sale of Transdev, recovering EUR895 million in
shareholder loans and equity by 2018. The proceeds are included
in our rating case, a key change from previously. Veolia will
likely use the proceeds to pay down debt and fund capex.

The waste industry is currently facing a wave of consolidation.
Although it has not ruled out large acquisitions completely,
Veolia's strategy is not based on M&A and we believe that further
asset disposals would be made as part of an asset arbitrage
strategy to protect the balance sheet. It has slated further
potential asset sales for a total of around EUR180 million.

Underlying Cashflow Still Negative

Veolia intends to keep debt levels stable in the EUR8 billion-
EUR9 billion range. Estimated average FFO adjusted net leverage
of 4.4x over the rating horizon of four years, supported by
additional cost-cutting and the sale of Transdev, are positive
for the credit profile.

However, despite estimates of higher EBITDA, increases in capex
and dividends imply continued sustained negative FCF. With
relatively high-cost debt, we would not expect FFO fixed charge
cover to meet our threshold figure of 3.0x for a potential
upgrade before 2018.

KEY ASSUMPTIONS

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

   -- Lower revenues than previously, reflecting negative
      currency impact, reduced construction activity as a result
      of Veolia downsizing this business and lower electricity
      prices. Fitch estimates of 2018 revenue of EUR24.5 billion
      is also based on static waste revenues as a result of
      global economic weakness.

   -- Higher EBITDA margins and estimates across all three
      businesses, based on the new EUR600 million 2016-18 cost
      cutting program.

   -- Capex and dividends in line with company's guidance.

   -- Sale of Transdev stakes for EUR220 million in 2016 &
      EUR330 million in 2018.

RATING SENSITIVITIES

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

   -- Additional cost cutting beyond the scope of the current
      EUR600 million 2016-18 program.

   -- Expected FFO adjusted net leverage below 4.5x, improvement
      in FFO fixed charge cover towards 3.0x and positive FCF, on
      a sustained basis.

   -- Business mix trending towards more predictable cash flows.

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

   -- Operational underperformance or a more aggressive debt-
      funded acquisition strategy.

   -- Expected FFO adjusted net leverage above 5.0x, a fall in
      FFO fixed charge cover towards 2.0x and negative FCF, on a
      sustained basis.

   -- Business mix with significantly higher exposure to
      counterparty risk.

LIQUIDITY

As at June 30, 2016, Veolia had group net liquidity of EUR2.5
billion. This included cash and cash equivalents of EUR787
million at group subsidiaries, of which we view around EUR200
million as restricted. Veolia's gross liquidity position of
EUR7.6 billion includes undrawn committed bank facilities of EUR4
billion.

Fitch believes Veolia has adequate liquidity to meet operating
requirements and debt maturities until end-2017. FCF at 1H16 was
negative EUR244 million pre-disposals, acquisitions and movements
in working capital, with the latter expected to reverse by year
end.


WFS GLOBAL: Moody's Lowers CFR to B3, Outlook Stable
----------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating to B3 from B2 and probability of default rating to B3-PD
from B2-PD of WFS Global Holding S.A.S.'s.  The outlook on all
ratings of WFS, the global aviation services company, is stable.

The rating action primarily reflects these drivers:

   -- The weakening of the company's financial metrics and
      liquidity following its M&A and new business activities
   -- Uncertainty associated with the departure of the senior
      management team including the company's founder and long-
      standing Group CEO

Concurrently, Moody's has downgraded these debt instrument
ratings:

   -- Rating of EUR325 million 9.5% senior secured notes due 2022
      to B3 from B2
   -- Rating of EUR140 million 12.5% senior unsecured notes due
      2022 to Caa2 from Caa1

                          RATINGS RATIONALE

The downgrade to B3 reflects Moody's view that WFS's risk profile
and financial metrics have weakened since the acquisition of
Consolidated Aviation Services ("CAS") in February 2016.  The new
business activities undertaken by WFS in Spain, Italy, US and
Germany resulted in significant year-on-year revenue growth but
also caused a negative impact on the company's profitability and
liquidity.

A recovery in financial metrics would to a large degree be
dependent on a successful execution of synergies following the
acquisition of CAS.  The ability to achieve these is accompanied
by a degree of uncertainty given the recently announced departure
of the senior management team including the company's founder and
long-standing Group CEO.  At the same time the company's
liquidity, diminished by future extra costs, requires careful
management in the context of declining covenant headroom under
the company's revolving credit facility (RCF).  Finally,
additional exceptional costs, such as a EUR10 million litigation
provision in California and a provision for management transition
costs in 2016, lead to an unusually high cost adjustment to
EBITDA.

WFS's B3 CFR reflects (i) the exposure of WFS's core cargo
business to economic and international trade cyclicality; (ii)
WFS's airline customer base and a competitive nature of the
industry which is causing price pressure and consolidation risk;
(iii) its geographic concentration in France, although reduced to
c. 30% of total revenue proforma for the CAS contribution; (iv)
the weak performance in Q4 2015 and Q1 2016 leading to
deterioration of financial metrics and weakening liquidity.

The B3 CFR also reflects WFS's: (i) strong position in the cargo
business as a one of the largest independent global players,
which is complemented by its trucking network across Europe; (ii)
growth and synergy opportunities offered by the proposed CAS
acquisition; and (iii) relatively stable client base and contract
base, offsetting some customer concentration.

During the last year the company undertook several acquisitions
and new business activities, including the acquisition of
Consolidated Aviation Services ("CAS") in the US, completed on
Feb. 29, 2016, and an acquisition of a 51% stake of Fraport,
consolidated from Nov. 1, 2015.  The company also acquired ground
handling businesses in Italy and Spain in 2015.

WFS has demonstrated strong top-line growth during the financial
year ending December 2015 (FY15) and Q1 2016, which was driven by
acquisitions, new businesses, favourable FX impact and organic
growth.  On a proforma basis LTM Q1 2016 sales reached EUR1,065
million following the growth in three consecutive quarters.
However EBITDA, despite heavy adjustments for non-recurring
expenses (at EUR83 million LTM March 2016), failed to meet
Moody's expectations and the company's liquidity has deteriorated
due to higher-than-expected restructuring and start-up costs.  As
a result, Moody's adjusted leverage proforma for acquisitions
increased to 4.9x LTM Q1 2016 versus Moody's expectation of 4.1x
at the end of 2015.

WFS's liquidity position has also deteriorated as a result of
exceptional costs incurred.  Although a EUR10 million litigation
provision is unlikely to be paid during the next 12 months, cash
flow generation is expected to weaken in 2016 due to substantial
restructuring costs, both on a WFS standalone basis and due to
the new businesses integration including USD9-10 million costs to
achieve the integration of CAS.

As a result, headroom to the springing gross leverage financial
covenant under the revolving credit facility (RCF) is expected to
be tight by the end of 2016.  Additional cash outflows are
expected to be partially offset by cost synergies related to CAS
acquisition starting from Q3 2016.  According to the company the
CAS integration is proceeding as planned and is expected to bring
in USD11-13 million through cost savings related to synergies
within 12 months of the acquisition; or USD21 million in overall
synergies to be achieved during 2016-2017.  Moody's expects
Moody's adjusted leverage to reduce to 4.5x as of year-end 2016.
The rating also incorporates Moody's expectation that the company
will execute careful management of available liquidity.

The ratings also incorporate Moody's understanding that the
shareholder funding into the restricted group, including that for
CAS acquisition, is wholly via common equity.

                   RATIONALE FOR STABLE OUTLOOK

The stable outlook reflects Moody's expectation of a gradual
deleveraging of the business based on maintaining or growing its
market share in a reasonably stable market environment and
successful integration of CAS.  The outlook also incorporates an
expectation that the company will maintain a sufficient liquidity
cushion, including access to EUR85 million of RCF.  The outlook
does not take into account any further material debt funded
acquisition nor any potential shareholder friendly actions,
including a repayment of the vendor loan outside of the
restricted group.

                WHAT COULD CHANGE THE RATING UP/DOWN

Positive pressure could arise if WFS's credit metrics were to
improve as a result of a stronger-than-expected operational
performance leading to (i) EBITA / interest towards 1.5x and (ii)
adequate liquidity and improved free cash flow generation.

Moody's could downgrade the ratings if: (i) Moody's adjusted
debt/EBITDA ratio (on a proforma CAS basis) rises towards 5.5x;
or (ii) liquidity or covenant headroom deteriorates.

The principal methodology used in these ratings was Business and
Consumer Service Industry published in December 2014.

WFS is a global aviation services company principally focused on
cargo handling and ground handling.  As of Dec. 31, 2015,
proforma for CAS, WFS operated at 200 airports in more than 22
countries and served over 300 airlines worldwide.  The company
reported EUR772 million net sales (under French GAAP) in 2015.
The company was acquired by Platinum Equity from LBO France on
Sept. 30, 2015.


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G E R M A N Y
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INEOS STYROLUTION: S&P Affirms 'B+' CCR, Outlook Stable
-------------------------------------------------------
S&P Global Ratings said that it has affirmed its 'B+' long-term
corporate credit rating on Germany-headquartered styrenics
producer INEOS Styrolution Group GmbH.  The outlook is stable.

S&P also raised to 'BB-' from 'B+' its issue rating on
Styrolution's first-lien term loan due in 2019, which is split
between a EUR517.12 million tranche and a $652.61 million
tranche.

At the same time, S&P revised its recovery rating on the term
loan to '2' from '3', indicating its expectation of 70%-90%
recovery prospects (at the lower end of the range) in the event
of a payment default.

S&P's affirmation reflects the significant strengthening in
Styrolution's credit metrics.  Its S&P Global Ratings-adjusted
(gross) debt to EBITDA fell to 2.1x in 2015 from 4.9x in 2014,
and S&P forecasts a further improvement to 2.0x this year.  At
the same time, however, S&P recognizes that the company could
take advantage of its considerable rating headroom to utilize
cash flows for dividends and to support growth initiatives.

"Considering that we calculate Styrolution's leverage on gross
basis, the key driver behind the meaningful reduction in leverage
is its EBITDA growth.  This reflects a top-of-the-cycle industry
environment in 2015 and 2016, with styrene benzene spreads of
$280 per metric ton on average in the year to date, and over $330
per metric ton in 2015 (partly due exceptional cracker outages
in the second quarter).  Styrolution's profitability is
additionally supported by cost-saving initiatives and synergies
with INEOS.  We have therefore revised our financial risk profile
assessment upward to significant from aggressive, factoring in
the improved forecast metrics but also potential wide variations
over the cycle," S&P said.

S&P anticipates that strong industry conditions will continue in
2016 and well into 2017 on the back of ongoing strong demand for
styrenics from packaging, leisure, automotive, and household
sectors in Europe and North America, which form about 80% of
Styrolution's end markets.  S&P's forecast is notwithstanding
weakening in Asia (notably China) affecting the polymer business,
especially ABS (acrylonitrile butadiene styrene).

Under S&P's base-case scenario, it forecasts Styrolution to
report high mid-cycle EBITDA after special items of about EUR740
million-EUR750 million in 2016 and EUR600 million-EUR620 million
in 2017.

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

   -- Reported EBITDA margin of about 17% in 2016, reflecting
      high mid-cycle conditions during the year, trending down to
      14%-15% in 2017;

   -- Capital expenditure (capex) of about EUR140 million in both
      years; and

   -- Dividends at about 50% of net income of the previous year.

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

   -- Adjusted debt-to-EBITDA ratio of about 2.0x in 2016, and
      about 2.4x in 2017 (based on adjusted gross debt of
      EUR1.5 billion).

   -- Strong free operating cash flow in both years.

S&P continues to view Styrolution's business risk profile as
constrained by the commodity nature of its products and its
limited diversification as a pure-play styrenics producer.  This
implies high cyclicality of earnings and cash flows during
periods of lower demand in the company's more cyclical end-
markets -- including consumer durables, packaging, automotive,
and construction.  In addition, volatility in raw material prices
(such as benzene) could erode profitability.

Styrolution benefits from a large-scale, integrated, and cost-
competitive asset base, as 75% of its production assets are
positioned in the first and second quartile of the industry cost
curve.  In addition, S&P factors in the company's successful
track record and focus on costs and efficiencies.

As an indirectly and fully owned subsidiary of INEOS AG, S&P
assess Styrolution's management and governance score as fair, in
line with S&P's assessment for its sister companies, Inovyn and
INEOS Group Holdings S.A.  This reflects S&P's view of the
concentrated ownership of INEOS--100% of shares are held by only
three individuals -- partly offset by our view of the
management's entrepreneurial cost focus and industry knowledge.

S&P believes Styrolution's future credit metrics could be weaker
than S&P's base case suggests.  This reflects S&P's view that
certain management actions, such as higher capex to support
capacity expansions, or debt-financed dividends, could contribute
to higher leverage than S&P currently forecasts.

At the same time, S&P views Styrolution as a moderately strategic
subsidiary of INEOS AG, reflecting S&P's understanding that
INEOS' policy is to fund the group on a stand-alone basis.
Therefore, the rating currently incorporates no adjustment for
group support, and would likely remain at or below the 'b+' group
credit profile of INEOS AG.

The stable outlook reflects S&P's view that Styrolution will be
able to maintain a strong operating performance in the coming
years, with EBITDA of about EUR740 million-EUR750 million in 2016
and EUR600 million-EUR620 million in 2017.  This assumes a drop
in styrene-to-benzene spreads to more normalized levels from top-
of-the-cycle profits in 2015 and 2016.  S&P forecasts an adjusted
ratio of (gross) debt to EBITDA of about 2.0x in 2016 and about
2.4x in 2017.  This is commensurate with the rating, which
assumes leverage of between 2.5x-3.0x in top-of-the-cycle
conditions, and between 4.0x-4.5x at the bottom of the cycle.

Rating pressure could develop due to a combination of a
deteriorated market environment, and releveraging through
unexpected dividends or acquisitions, such that the ratio of
adjusted (gross) debt-to-EBITDA rises to about 4x-5x.

S&P sees limited near-term likelihood of an upgrade, given the
volatility of the styrenics industry and Styrolution's current
material gross debt.  S&P also expects the company to remain
ambitious and that it may finance an expansion of the business
partly with debt.  A higher rating would therefore depend on
Styrolution taking clear actions to reduce debt and making a
commitment to keep leverage sustainably below 3x, in combination
with a wider improvement in the credit quality of the INEOS AG
group.


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AERCAP GLOBAL: Moody's Rates $500MM Jr. Sub. Notes 'Ba3(hyb)'
-------------------------------------------------------------
Moody's Investors Service assigned a Ba3(hyb) rating to the $500
million junior subordinated notes issued in June 2015 by AerCap
Global Aviation Trust, a subsidiary of commercial aircraft
leasing concern AerCap Holdings, N.V. (AerCap; Ba1 stable). The
outlook for the rating is stable.

Issuer: AerCap Global Aviation Trust

   -- Junior Subordinated Regular Bond/Debenture, Assigned Ba3
      (hyb)

   -- Outlook, Assigned Stable

RATINGS RATIONALE

The Ba3(hyb) rating is based on the irrevocable and unconditional
guaranty of the notes, on a junior subordinated basis, by
ultimate parent AerCap, as well as by affiliates AerCap Ireland
Capital Limited, AerCap Aviation Solutions B.V., AerCap Ireland
Limited, International Lease Finance Corporation and AerCap U.S.
Global Aviation LLC. The rating is two notches below AerCap's Ba1
senior unsecured rating, indicating the lower seniority of the
notes and the guarantees in AerCap's capital structure. The
ratings reflect AerCap's credit profile because the guarantees
are consistent with Moody's principles for credit substitution
(Rating Transactions Based on the Credit Substitution Approach,
December 2015).

AerCap issued the notes to American International Group (AIG) in
June 2015 as consideration, together with $250 million of cash,
for AerCap's repurchase of $750 million of its shares held by
AIG. The notes mature June 15, 2045.

Moody's expects the rating of the notes to change in alignment
with changes in AerCap's ratings. AerCap's ratings could be
upgraded if the company further improves fleet composition,
extends its track record of strong profitability and cash flow,
and effectively manages exposure concentrations. An upgrade would
also be contingent on AerCap demonstrating flexibility in
managing its liquidity in the face of increasing uses of cash,
including debt maturities and aircraft deliveries. Lower leverage
would strengthen AerCap's case for a rating upgrade.

Ratings could be downgraded if AerCap's operating performance
weakens materially, it encounters difficulties placing under
lease the aircraft scheduled to deliver in coming periods,
liquidity weakens, or if leverage increases from current levels.

The principal methodology used in this rating was Finance
Companies published in October 2015.


AERCAP HOLDINGS: S&P Assigns 'BB' Rating to $500MM Jr. Sub. Notes
-----------------------------------------------------------------
S&P Global Ratings assigned its 'BB' issue-level rating to AerCap
Global Aviation Trust's $500 million 6.5% fixed- to floating-rate
junior subordinated notes due 2045. AerCap Global Aviation Trust
is a wholly owned subsidiary of, and guaranteed by, AerCap
Holdings N.V.

S&P's ratings on Netherlands-based aircraft lessor AerCap
Holdings N.V. reflect its position as one of the two largest
aircraft lessors and the company's improved credit metrics
following its May 14, 2014, acquisition of competitor
International Lease Finance Corp.  S&P assess the company's
business risk profile as satisfactory and its financial risk
profile as significant.

The stable outlook reflects S&P's expectation that AerCap's
credit metrics will remain relatively consistent through 2017 as
increased earnings and cash flow offset the incremental debt it
will take on to fund its new aircraft deliveries.  S&P's ratings
on the company also incorporate a moderate level of share
repurchases.  S&P anticipates that the company's debt-to-capital
ratio will remain in the mid-70% area while its funds from
operations (FFO)-to-debt ratio remains around 10% over this
period.

Although unlikely, S&P could lower its ratings on AerCap over the
next 18-24 months if S&P believes the company will undertake a
larger-than-expected level of share repurchases or acquire a
large debt-financed aircraft portfolio that will cause its debt-
to-capital ratio to increase to the high-70% area.

Although also unlikely, S&P could upgrade AerCap over the next
18-24 months if its debt-to-capital ratio declines to the low-70%
area and its FFO-to-debt ratio improves to 12%.  This could occur
if the company's earnings and cash flow are stronger than S&P had
anticipated, due to increased demand and/or lease rates, or its
debt levels are lower than we had expected.

RATINGS LIST

AerCap Holdings N.V.
Corporate Credit Rating                   BBB-/Stable/--

New Ratings

AerCap Global Aviation Trust
$500M 6.5% Jr Subordinated Nts Due 2045   BB



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L A T V I A
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KVV LIEPAJAS: KVV Group to Sue Latvia Over Firm's Insolvency
------------------------------------------------------------
Baltic Course reports that KVV Group will turn to an
international court over insolvency proceedings started against
the KVV Liepajas Metalurgs, KVV Group's press secretary Natalya
Napadovkaya told LETA.

According to Baltic Course, KVV Group points out that filing a
lawsuit against the state of Latvia with an international court
of arbitration is the only way how the company can protect its
reputation and an investment of over EUR35 million in KVV
Liepajas Metalurgs.  The report says KVV Group attorneys are in
the final stages of gathering evidence to be brought to the
court.

"Manipulation of collateral properties, past debts that were
forced upon KVV Group, demanding a financial guarantee of EUR13
million, unilateral talks with potential investors all suggest
that government officials have been doing everything in their
power to make the legal owners of KVV Liepajas Metalurgs leave,"
KVV Group, as cited by Baltic Course, said.

At the same time, KVV Group is doing everything in its power to
reach an out-of-court settlement, the report relates.

Liepaja Court on June 30 decided to start a legal protection
proceeding in respect of KVV Liepajas Metalurgs metallurgical
company, court spokeswoman Velga Luka told LETA, Baltic Course
recalls.

With the opening of the legal protection proceeding, the court
suspended the insolvency proceeding started against KVV Liepajas
Metalurgs based on a claim filed by G4S Latvia security company,
the report states.
KVV Liepajas Metalurgs is to produce to the court by August 30 a
plan of legal protection measures aimed at rehabilitation of the
company and approved by the creditors, Baltic Course notes.

Baltic Course notes that the Latvian government on May 17 and
May 24 reviewed the report prepared by the Latvian Privatization
Agency (LPA) and FeLM, a company established by the LPA to which
the State Treasury will assign its claim against KVV Liepajas
Metalurgs, in cooperation with the economics and finance
ministries. It was concluded that the debt restructuring
proposals by KVV Group, the Ukrainian owners of KVV Liepajas
Metalurgs, are unacceptable and other solutions have to be found
for revival of the steel plant, says Baltic Course.

According to the report, the proposals by KVV Group include
significant participation of the Latvian state in the
metallurgical company without handing over control over the
company, tax discounts and other measures that might be
interpreted as unlawful state aid.

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


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


EVERGREEN SKILLS: Moody's Cuts CFR to Caa1, Outlook Negative
------------------------------------------------------------
Moody's Investors Service downgraded Evergreen Skills Lux S.a
r.l.'s ("Evergreen Skills") corporate family rating to Caa1 from
B3. Moody's also downgraded Evergreen Skills' probability of
default rating to Caa1-PD from B3-PD, downgraded the first lien
credit facilities (revolver and term loan) to B3 from B2, and
downgraded the second lien term loan to Caa3 from Caa2. The
outlook remains negative.

RATINGS RATIONALE

The Caa1 corporate family rating reflects Evergreen Skills' high
pro forma financial leverage in excess of 9x (Moody's adjusted
based on LTM April 30, 2016), modest EBITDA less CAPX to interest
coverage of about 1.3x and organic revenue declines. It also
incorporates Moody's expectation of continued execution risks in
refreshing the SumTotal platform, restructuring its operations
and refreshing its products offerings. The SumTotal acquisition
was sizeable and has led to management distractions and platform
refresh initiatives, which we expect to continue over the next 12
months. Furthermore, the rating recognizes the highly competitive
nature of the human capital management ("HCM") and enterprise e-
learning markets, which have low barriers to entry in addition to
relatively discretionary demand drivers. The loss of a few large
customers has contributed to revenue declines over the past year.

However, the Caa1 rating derives support from Evergreen Skills'
business model that generates fairly predictable revenues from
contracts (with relatively high renewal rates), good EBITDA
margins, a flexible cost structure and low capital expenditure
requirements. The enhanced scale of the business and more
diversified product offerings following the SumTotal acquisition,
as well as the eventual completion of product refreshes, should
improve the company's competitive position. Also, Evergreen
Skills' credit profile benefits from a highly diversified
customer base consisting of enterprise & small and medium
businesses ("SMB"), as well as organic growth opportunities
within its strategic business units (i.e., compliance and
leadership segments).

The negative outlook reflects an elevated financial risk profile
over the next 12 to 18 months, given the company's high leverage,
lack of revenue growth and possible execution risks associated
with refreshing product and platform offerings.

While a rating upgrade over the near term is highly unlikely
given Evergreen Skills' high pro-forma financial leverage and
continued product and platform execution risks, Moody's could
consider an upgrade if the company demonstrates sustained organic
revenue growth (at least in the mid-single digit percentages)
with increasing profitability, generates consistently positive
FCF and improves credit metrics such that we come to expect debt
to EBITDA to be sustained below 8x and FCF to debt in the mid-
single digit range. A ratings upgrade would also require
Evergreen Skills to successfully integrate the SumTotal
acquisition without any further material issues and to improve
its liquidity profile.

Evergreen Skills' ratings could be lowered if the company fails
to generate revenue and EBITDA growth such that leverage is
expected to remain at elevated levels, the company is unable to
generate consistently positive FCF or liquidity materially
weakens.

Moody's expects Evergreen Skills to maintain an adequate
liquidity profile over the next 12 to 18 months. Moody's expects
modest, but positive, FCF over the next year and drawings of up
to $25 million on the $100 million revolver, which matures in
2019. Additionally, there is a $150 million accounts receivable
credit facility ("ARCF") (not rated by Moody's) that expires 90
days prior to the revolver in 2019. Moody's anticipates at least
$65 million of the ARCF will be drawn over the next 12 months.

The company's uses of liquidity during the next 12 months include
its modest capital expenditures (about $15 million), one-time
expenses for generating the projected cost synergies, first lien
term loan annual amortization of about $14 million and working
capital needs.

The first lien credit agreement requires repayment of debt from
excess cash flows (as defined) with step downs in prepayment
percentages based on the net first lien leverage ratio. The
company is expected to maintain good cushion relative to the
springing net first lien leverage ratio financial maintenance
covenant. The covenant will be applicable only to the revolving
credit facility and will be tested if outstanding revolver
borrowings (including letters of credit) exceed 30% of the
revolver size.

Evergreen Skills' business exhibits large seasonality as the
majority of the bookings are completed in the fiscal fourth
quarter and the majority of the company's cash receipts on
invoices occur during the fiscal first quarter. Depending on the
levels of working capital, Evergreen Skills' FCF could turn
negative in the fiscal third quarter but is expected to remain
positive on an annual basis. The company does not have meaningful
sources of alternate liquidity as substantially all assets of the
company and its subsidiaries are encumbered by the senior secured
credit facilities.

The following ratings were downgraded:

   Issuer -- Evergreen Skills Lux S.a.r.l. (Evergreen Skills")

   -- Corporate Family Rating - Caa1 from B3

   -- Probability of Default Rating - Caa1-PD from B3-PD

   -- First lien revolving credit facility: - B3 (LGD 3) from B2
      (LGD 3)

   -- First lien term loan: - B3 (LGD 3) from B2 (LGD 3)

   -- Second lien term loan: - Caa3 (LGD 5) from Caa2 (LGD 5)

   -- Outlook - Negative

The principal methodology used in these ratings was Software
Industry published in December 2015.

Evergreen Skills Lux S.a r.l. ("Evergreen Skills") provides
cloud-based e-learning solutions for enterprises, government, and
education customers through its indirect wholly owned subsidiary
Skillsoft Limited (collectively, "Skillsoft"). Evergreen Skills
was formed in connection with Skillsoft's leveraged buyout by
Charterhouse Capital Partners LLP for approximately $2.3 billion
in April 2014. Evergreen Skills reported $605 million of adjusted
revenue (which excludes the impact of purchase accounting) for
LTM April 30, 2016. In September 2014 Evergreen Skills acquired
SumTotal Systems, Inc. ("SumTotal") for approximately $725
million. SumTotal is a global provider of personalized learning
and human capital management ("HCM") software to organizations.


=================
M A C E D O N I A
=================


MACEDONIA: Fitch Cuts Long-Term Issuer Default Ratings to 'BB'
--------------------------------------------------------------
Fitch Ratings has downgraded Macedonia's Long-Term Foreign and
Local Currency Issuer Default Ratings (IDRs) to 'BB' from 'BB+'.
The issue ratings on Macedonia's long-term senior unsecured
foreign and local currency bonds have also been downgraded to
'BB' from 'BB+'. The Outlooks on the Long-Term IDRs are Negative.
The Country Ceiling has been revised down to 'BB+' from 'BBB-'.
The Short-Term Foreign Currency and Local Currency IDRs have been
affirmed at 'B'. The issue ratings on Macedonia's short-term
senior unsecured local currency bond have been affirmed at 'B'.

KEY RATING DRIVERS

The downgrade of Macedonia's Long-Term IDRs to 'BB' from 'BB+'
with Negative Outlook reflects the following key rating drivers
and their relative weights:

HIGH

Macedonia's political crisis, which started following the
emergence of major corruption allegations in February 2015,
remains unresolved, underlining shortcomings in standards of
governance. A roadmap brokered by the European Commission under
the Przhino agreement in July last year broke down after failed
attempts to hold early parliamentary elections in April and June
this year. Protests have continued, the main opposition party has
resumed its boycott of parliament and the special prosecutor's
investigation into the high-level corruption allegations has been
hindered, according to independent observers.

In July, under EU and US mediation, the main political parties
made some progress on agreeing the conditions for a new election
and setting an election date. However, it remains uncertain
whether parliamentary elections will actually take place, and if
so, whether they will lead to a stabilization of the political
situation and ease political tensions.

MEDIUM

The political crisis has started to adversely affect the economy.
Real GDP growth slowed sharply to 2% yoy in 1Q16 from 3.7% in
2015, dragged down by a large contraction in investment activity,
likely affected by the uncertain political environment. Fitch
said, "We have revised our real GDP growth forecast for 2016 to
2.5%, from 3.6% previously. The new forecast is in line with
Macedonia's five-year average growth, but it is below the 3.5%
five-year average of the 'BB' median. GDP growth should recover
to 3.4% in 2017 based on recovery in investment activity, but the
risk of a deeper political crisis could negatively impact FDI
inflows, a key driver of Macedonia's economic model."

The political situation also contributed to a 'mini-panic' in
April that triggered a fall in household bank deposits. It also
led the central bank to raise interest rates and intervene in the
foreign exchange rate market to support the currency peg to the
euro.

In reaction to weaker economic growth, the government adopted a
supplementary budget in July. Largely due to lower revenues, the
fiscal deficit target for 2016 was revised to 3.6% of GDP from
3.2% in the original budget. Fitch's deficit forecast is slightly
higher, at 3.8% of GDP, reflecting the expectation of higher than
planned expenditures related to large investment projects and
costs associated with the political and migrant crisis, as well
as the recent floods. The latest supplementary budget follows a
history of overshooting of fiscal targets that has contributed to
a substantial rise in debt to 40% of GDP by the end of 2016, from
34% of GDP in 2012. This is still well below the 'BB' median of
51% of GDP, but debt is expected to remain on an upward trend.

Macedonia's 'BB' IDRs also reflect the following key rating
drivers:-

Annual government debt maturities are high, at 10.8% of GDP in
2016 which is double the median of 4.9% for the 'BB' category.
Macedonia issued a EUR450m Eurobond in July 2016, but the
political crisis meant a higher cost of borrowing for the
sovereign. 74% of government debt is in foreign currency, albeit
mainly in euros. The sovereign's contingent liabilities in the
form of guarantees to state-owned enterprises are expected to
rise to 9.7% of GDP in 2016, adding to upward risks to the public
debt stock.

External finances are broadly in line with 'BB' category peers.
Net external debt at 23% of GDP at end-2015 is above the 'BB'
median of 16%, but is entirely accounted for by the private
sector, where half the debt is intercompany lending. Fitch
expects the current account deficit in 2016 to be moderate, at
1.9% of GDP in 2016.

The authorities' strong commitment to maintaining the stability
of the denar-euro peg is an important anchor of macroeconomic and
financial stability. Political uncertainty in April 2016 forced
the central bank to intervene in foreign exchange markets due to
a sudden drop in denar-denominated deposits, but the level of
foreign reserves remains adequate. Fitch estimates they covered
4.5 months of current external payments as of July 2016.

Levels of GDP per capita are in line with the 'BB' range median.
Progress towards higher levels of income remains constrained by
structural bottlenecks in the economy.

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

Fitch's proprietary SRM assigns Macedonia a score equivalent to a
rating of 'BB+' on the Long-term FC IDR scale.

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

   -- Structural Features: -1 notch, to reflect Fitch's
assessment that the political risks are higher and levels of
governance are weaker than what is captured by the SRM.

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

RATING SENSITIVITIES

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

   -- An escalation in political instability, particularly if it
      leads to a breakdown in ethnic relations or adversely
      affects the economy and public finances.

   -- Fiscal slippage or the crystallization of contingent
      liabilities that jeopardize the stability of the public
      finances or currency peg.

   -- A widening of external imbalances that exerts pressure on
      foreign currency reserves and the currency peg.

The main factors that could, individually or collectively, result
in a stabilization of the Outlook include:

   -- A marked easing in political tension and uncertainty,
      including the completion of free and fair elections.

   -- Implementation of a credible medium-term fiscal
      consolidation program consistent with a stabilization of
      the public debt/GDP ratio.

KEY ASSUMPTIONS

Fitch assumes that Macedonia will continue to pursue monetary and
fiscal policy measures consistent with its currency peg to the
euro.



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


PORTUGAL: Fitch Affirms 'BB+' Long-Term Issuer Default Ratings
--------------------------------------------------------------
Fitch Ratings has affirmed Portugal's Long-Term Foreign and Local
Currency Issuer Default Ratings (IDRs) at 'BB+' with a Stable
Outlook. The issue ratings on Portugal's senior unsecured
foreign- and local-currency bonds are also affirmed at 'BB+. The
Country Ceiling has been affirmed at 'A+' and the Short-Term
Foreign and Local Currency IDRs at 'B'.

KEY RATING DRIVERS

Portugal's 'BB+' ratings are constrained by high indebtedness,
weak economic growth and legacy problems in the financial system.
Government debt, at 129% of GDP at end-2015, is almost three
times the 'BB' median. Positively, the ratings are supported by
high GDP per capita compared with rated peers, a solid
institutional framework and a strong business environment.

Portugal's 'BB+' IDRs reflect the following key rating drivers:

Fiscal figures for 1H16 have been broadly consistent with the
government's original expectations. Revenue has been lifted by
new levies on indirect taxes such as tobacco and vehicles, while
spending has been contained via capital expenditure cuts.
Nevertheless, risks to the 2.2% deficit target for 2016 persist,
including uncertainty as to the full effect of various fiscal
policy measures to be implemented throughout the year and the
impact of weaker growth. In this context, Fitch is maintaining
its cautious deficit forecast of 2.7% of GDP for this year.

Fitch said, "Despite potential political pressures to ease
consolidation over the medium-term, we continue to expect a
modest narrowing of the deficit in 2017-18. This will help meet
some key EU fiscal targets and reduce high public debt. We
currently forecast public debt/GDP to fall to 122% by 2020. There
are, however, key downside risks to our forecast, reflecting
mainly the prospect of further capital injections in state-owned
Caixa Geral de Depositos (CGD, Portugal's biggest bank)."

Financial institutions continue to suffer from poor asset
quality, affected by exposure to weak mortgage credit and rising
non-performing loans (credit at risk stood at 12.2% of total
loans in 1Q16 according to the Bank of Portugal), particularly on
their corporate portfolio. This remains a drag on profitability
and has put pressure on the capital position of some institutions
such as CGD. The authorities aim to conclude the restructuring of
the system by mid-2017 (including the sale of Novo Banco)
although delays to this schedule cannot be ruled out.

Economic growth continues to disappoint, constrained by a weak
export performance and a slowdown in investment. GDP growth was
only 0.2% q-o-q in 1Q and 2Q, well below the authorities'
expectations and the eurozone average. Private consumption
remains the most dynamic growth component (although it slowed in
2Q), helped by improving labour conditions.

The unemployment rate stood at 10.8% in 2Q16, the lowest figure
in five years. With external headwinds likely to continue in 2H,
Fitch now expects GDP to grow only 1.2% in 2016 (compared with
1.6% previously and the 'BB' median of 3.3%), with downside
risks.

A pick-up in external demand and rising household income will
help the economy gain some momentum from 2017 onwards. Stronger
medium-term growth performance, however, will be ultimately
determined by progress in tackling the economy's main structural
constraints. A major impediment remains high levels of corporate
indebtedness, which have fallen but at 143% of GDP (non-
consolidated) in March 2016 remain a significant hindrance to
investment. Ongoing problems in the financial sector also act as
a constraint on investment and consumer confidence.

Portugal's trade balance deteriorated in 1H16, as merchandise
exports contracted 2% y-o-y. This is the result of weaker demand
from key non-EU markets such as Angola (exports there fell by 42%
in 1H16) and one-off effects such as temporary disruptions in key
sectors.

However, the impact on the external accounts has been limited, as
tourism receipts continue to rise sharply and interest
expenditure falls. Fitch said, "With domestic demand pressures
remaining moderate, we expect the current account to remain in
surplus in 2016-18, helping to reduce external indebtedness
gradually." According to Fitch's estimates, net external debt
stood at 150.9% of GDP in 2015, compared with 16.4% for the 'BB'
median.

Portugal ranks well above its similarly rated and 'BBB' peers, in
terms of human development and governance, highlighting the
strength of its institutions and their resilience during the
recent crisis.

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

Fitch's proprietary SRM assigns Portugal a score equivalent to a
rating of 'A-' on the Long-Term FC IDR scale.

In accordance with its rating criteria, Fitch's sovereign rating
committee decided to adjust the rating indicated by the SRM by
more than the usual maximum range of +/-3 notches because: in our
view the country is recovering from a crisis.

Consequently, the overall adjustment of four notches reflects the
following adjustments:-

   -- Macro: -1 notch, to reflect high corporate indebtedness,
      low investment, adverse demographic trends and financial
      sector weakness that constrain the medium-term growth
      outlook.

   -- Public Finances: -1 notch, to reflect very high levels of
      government debt. The SRM is estimated on the basis of a
      linear approach to government debt/GDP and does not fully
      capture the higher risk at high debt levels.

   -- External Finances: -2 notches. The model gives a 2-notch
      enhancement for reserve currency but one-notch uplift is
      more appropriate for Portugal given the country's recent
      crisis and need for an IMF program. Moreover, net external
      debt as a percentage of GDP is one of the highest in the
      world.

RATING SENSITIVITIES

Future developments that could individually or collectively
result in negative rating action include:

   -- Renewed stress in the financial sector requiring further
      financial support from the state.

   -- Failure to make progress in reducing the general government
      debt/GDP ratio or in unwinding external imbalances.

   -- Weaker economic growth prospects with a negative impact on
      the banking sector or public finances.

Future developments that could individually or collectively
result in positive rating action include:

   -- Improved fiscal performance consistent with a downward
      trend in general government debt/GDP levels.

   -- An improvement in medium-term economic growth prospects.

KEY ASSUMPTIONS

In its debt sensitivity analysis Fitch assumes a primary surplus
averaging 1.5% of GDP, trend real GDP growth averaging 1.4%, an
average effective interest rate of 3.5% and deflator inflation of
1.7%. On the basis of these assumptions, the debt-to-GDP ratio
would fall to 117.2% by 2025. Fitch said, "Our debt dynamics do
not include any government bank asset disposals as the timing and
values of such operation remain uncertain."


=============
R O M A N I A
=============


CET GOVORA: Stops Steam Deliveries to Polish Soda Ash Producer
--------------------------------------------------------------
Romania Insider reports that Romanian power plant CET Govora in
Ramnicu Valcea, which is currently in insolvency, has stopped
delivering steam to the only soda ash producer in Romania, which
is part of Polish group Ciech, thus forcing it to stop
production.

According to Romania Insider, CET Govora's judicial
administrator, Remus Borza, claims that Ciech has been buying
steam from CET Govora at very low prices, which didn't even cover
the production costs. He cancelled the contract between the two
companies and asked Ciech to pay a higher price to restart the
deliveries.

Romania Insider relates that Ciech representatives said they are
trying to reach a compromise with CET Govora's judicial
administrator and that the price he asked for steam is too high
and would make the company unprofitable. Romania Insider says the
company's Polish managers also claim that CET Govora actually
makes profits from selling its steam to Ciech and that if CET
decides to stop the deliveries this may push both companies to
shut down their production, with negative consequences for the
whole city.

CET Govora is a thermal power plant that supplies electricity as
well as heat to companies and the residents in Ramnicu Valcea.
Romania Insider notes that he company took a serious hit when the
chemical plant Oltchim Ramnicu Valcea, the city's biggest
company, went into insolvency and reduced its production a couple
of years ago. Oltchim was CET Govora's biggest client.

CET Govora recorded losses of EUR74 million between 2012 and
2015. In 2015, the company's losses were close to EUR22 million
at a turnover of EUR90.5 million. The company increased its
number of employees by about 800 last year, to 2,100, as it took
over a coal mine that supplied the power plant, which only made
its financial problems worse, according to Romania Insider.

Soda ash producer Ciech is one of CET Govora's biggest clients.
However, Ciech is also dependent on CET because it can't function
without the steam from the power plant, says Romania Insider.

Romania Insider meanwhile reports that Ciech Soda Romania, the
company that owns the soda ash factory, has also had big
financial problems in recent years.  According to the report, the
company went through insolvency and had to lay off 30% of its
employees and restructure its activity. It recorded losses of
EUR65 million between 2010 and 2014. The results for 2015 haven't
been made public yet.

Polish group Ciech claims it invested EUR220 million in the
Romanian factory after taking control, in 2006. The group's
representatives also say that this is the biggest Polish
investment in Romania and the country's only soda ash factory.

Ciech Soda Romania had sales of EUR63 million and 600 employees
in 2014, the report adds.


* ROMANIA: Loses EUR3 Billion, 90,000 Jobs Due to Insolvencies
--------------------------------------------------------------
Romania Insider reports that the Romanian economy lost around
EUR3 billion and 80,000 to 90,000 jobs in the first half of the
year due to insolvencies, according to a study by Coface.

For the first time in the last eight years, the social and
economic effects caused by insolvencies have diminished, the
report says. Romania Insider, citing Hotnews.ro, relates that the
Coface study showed the number of insolvencies continued to go
up, but more new companies were registered during this period.

An insolvent company doesn't necessarily have profitability
problems but liquidity problems, the report states. Romania
currently has 23 insolvent companies per 1,000 active firms,
triple compared to the regional average. Only Serbia has higher
insolvency rates, Romania Insider notes.


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


BAIKALBANK PJSC: Placed Under Provisional Administration
--------------------------------------------------------
The Bank of Russia, by its Order No. OD-2675, dated August 18,
2016, revoked the banking license of Ulan-Ude-based credit
institution BaikalBank PJSC from August 18, 2016, according to
the Central Bank of Russia's Press Service.

The Bank of Russia took such an extreme measure -- revocation of
the banking license -- because of the credit institution's
failure to comply with federal banking laws and Bank of Russia
regulations, equity capital adequacy ratios below two per cent,
decrease in bank equity capital below the minimum value of the
authorized capital established as of the date of the state
registration of the credit institution, given the repeated
application within a year of measures envisaged by the Federal
Law "On the Central Bank of the Russian Federation (Bank of
Russia)".

BaikalBank PJSC placed funds in low quality assets and
inadequately assessed risks assumed.  As a result of meeting the
supervisor's requirements on due assessment of credit risks
taken, the credit institution fully lost its equity capital.

The management and owners of BaikalBank PJSC did not take
effective measures to normalize its activities and their
declaratory measures to restore financial stability did not
achieve satisfactory result.  Moreover, in August this year,
given the limitations placed on BaikalBank PJSC by the
supervisor, the management and owners of the bank performed
schemed operations and transactions, aimed at diverting the
bank's assets.

Under these circumstances, the Bank of Russia performed its duty
on the revocation of the banking license of BaikalBank PJSC in
accordance with Part 2 of Article 20 of the Federal Law "On Banks
and Banking Activities".

The Bank of Russia, by its Order No. OD-2676, dated August 18,
2016, appointed a provisional administration to BaikalBank PJSC
for the period until the appointment of a receiver pursuant to
the Federal Law "On the Insolvency (Bankruptcy)" or a liquidator
under Article 23.1 of the Federal Law "On Banks and Banking
Activities".  In accordance with federal laws, the powers of the
credit institution's executive bodies are suspended.

BaikalBank PJSC is a member of the deposit insurance system.  The
revocation of the banking license is an insured event as
stipulated by Federal Law No. 177-FZ "On the Insurance of
Household Deposits with Russian Banks" in respect of the bank's
retail deposit obligations, as defined by law.  The said Federal
Law provides for the payment of indemnities to the bank's
depositors, including individual entrepreneurs, in the amount of
100% of the balance of funds but no more than a total of 1.4
million rubles per one depositor.

According to the financial statements, as of August 1, 2016,
BaikalBank PJSC ranked 230th by assets in the Russian banking
system.


CB BDT: Liabilities Exceed Assets, Assessment Shows
---------------------------------------------------
During the examination of financial standing of the credit
institution, the provisional administration appointed by Bank of
Russia Order No. OD-1664, dated May 27, 2016, due to the
revocation of the banking license of CB BDT (JSC) revealed
operations conducted by the CB BDT (JSC) former management
bearing the evidence of moving out assets in the total amount of
more than RUR1 billion through conscious granting of non-
performing loans to companies bearing the evidence of non-
operating institutions, according to according to the Central
Bank of Russia's Press Service.

According to the provisional administration estimate, the assets
of CB BDT (JSC) do not exceed RUR1.3 billion, whereas the bank's
liabilities to its creditors amount to RUR2.2 billion.

On August 2, 2016, the Court of Arbitration of the city of Moscow
ruled to recognize CB BDT (JSC) insolvent (bankrupt) and initiate
bankruptcy proceedings with the state corporation Deposit
Insurance Agency appointed as a receiver.

The Bank of Russia submitted the information on financial
transactions bearing the evidence of the criminal offence
conducted by the former management and owners of CB BDT (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.


CB RENAISSANCE: Liabilities Exceed Assets, Inspection Shows
-----------------------------------------------------------
During the inspection of financial standing of the credit
institution, the provisional administration of LLC CB Renaissance
appointed by Bank of Russia Order No. OD-3591, dated December 14,
2015, due to the revocation of its banking license, revealed the
loss of evidence of ownership of the bank's assets in the total
amount of RUR3.7 billion prior to the revocation of its banking
license, according to the Central Bank of Russia's Press Service.

Moreover, the inspection revealed the operations bearing the
evidence of asset diversion through signing assignment agreements
with a number of companies, including non-resident companies, in
the total amount of RUR0.9 billion.

According to the provisional administration estimate, the assets
of LLC CB Renaissance do not exceed RUR5.5 billion, whereas the
bank's liabilities to its creditors amount to RUR9.5 billion.

On February 24, 2016, the Court of Arbitration of the city of
Moscow ruled to recognize LLC CB Renaissance insolvent (bankrupt)
and initiate bankruptcy proceedings with the state corporation
Deposit Insurance Agency appointed as a receiver.

The Bank of Russia submitted the information on financial
transactions bearing the evidence of the criminal offence
conducted by the former management and owners of LLC CB
Renaissance 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.


CB RUBANK: Placed Under Provisional Administration
--------------------------------------------------
The Bank of Russia, by its Order No. OD-2718, dated August 22,
2016, the Bank of Russia revoked the banking license of Moscow-
based credit institution JSC CB RUBank from August 22, 2016,
according to the Central Bank of Russia's Press Service.

The Bank of Russia took such an extreme measure -- revocation of
the banking license -- due to the credit institution's failure to
comply with federal banking laws and Bank of Russia regulations,
capital adequacy ratios being below 2 percent, decrease in
capital below the minimal value of the authorized capital
established by the Bank of Russia as of the date of the state
registration of the credit institution, and the repeated
application within a year of measures envisaged by the Federal
Law "On the Central Bank of the Russian Federation (Bank of
Russia)".

Given unsatisfactory quality of its assets, JSC CB RUBank
inadequately assessed the risks assumed.  A proper assessment of
the credit risk on a supervisor's demand detected a full loss of
the bank's capital.

Both management and owners of the credit institution did not take
any effective measures to bring its activities back to normal.
Under these circumstances based on Article 20 of the Federal Law
"On Banks and Banking Activities" the Bank of Russia fulfilled
its duty to revoke the banking license of JSC CB RUBank.

The Bank of Russia, by its Order No. OD-2719, dated August 22,
2016, appointed a provisional administration to JSC CB RUBank for
the period until the appointment of a receiver pursuant to the
Federal Law "On the Insolvency (Bankruptcy)" or a liquidator
under Article 23.1 of the Federal Law "On Banks and Banking
Activities".  In accordance with federal laws, the powers of the
credit institution's executive bodies are suspended.

JSC CB RUBank is a member of the deposit insurance system.  The
revocation of the banking license is an insured event as
stipulated by Federal Law No. 177-FZ "On the Insurance of
Household Deposits with Russian Banks' in respect of the bank's
retail deposit obligations, as defined by legislation.  The said
Federal Law provides for the payment of indemnities to the bank's
depositors, including individual entrepreneurs, in the amount of
100% of the balance of funds but not more than RUR1.4 million per
depositor.

According to reporting data, as of August 1, 2016, JSC CB RUBank
ranked 462nd in the Russian banking system in terms of assets.


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

Fitch has also affirmed Novosibirsk's senior unsecured debt at
'BB' and 'AA-(rus)' ratings.

The affirmation reflects Fitch's unchanged base line scenario
that the city will continue to record a stable positive current
balance and narrowing fiscal deficit, leading to direct risk
stabilizing at below 50% of current revenue.

KEY RATING DRIVERS

"The ratings reflect Novosibirsk's moderate direct risk with a
smooth maturity profile, our expectation of a stable operating
margin sufficient to cover interest payment in 2016-2018 and the
city's diversified economy. The ratings also factor in Russia's
weak institutional framework and a downward national macro-
economic trend." Fitch said.

In its base case scenario, Fitch expects a moderate recovery of
the city's fiscal performance, with an operating margin of 6%-7%
in 2016-2018. The improvement will be backed by the city's cost-
efficiency measures to limit expenditure growth below inflation
(Fitch's projects 7.5% consumer price increase for 2016). The
city's operating margin dropped to 5% in 2015 from a sound
average 11% during 2011-2014, following sharp tax revenue
declines due to a 10ppts reallocation of personal income tax
(PIT) to the regional budget. This was not compensated by an
increase in current transfers from the region or equivalent
expenditure reallocation to the regional budget.

Fitch expects the city's direct risk to be about RUB16.5 billion
by end-2016 (2015: RUB16 billion), and to stabilize at close to a
moderate 50% of current revenue over the medium term. Novosibirsk
demonstrates sophisticated debt management and, unlike most
Russian peers, the city does not rely on short-term funding. The
city's prime source of borrowing is amortizing domestic bond
issues (54% of direct risk as of June 1, 2016) with up to 10-year
maturity followed by revolving lines of credit from local banks
with maturity up to six years (21% of total direct risk). This
smooths the city's annual refinancing needs.

Novosibirsk's exposure to contingent risk is low, as the city's
public sector is compact with few public sector entities. The
city has no outstanding guarantees and is unlikely to issue new
ones under our base case scenario.

With a population of over 1.5 million inhabitants, the city is
the capital of Novosibirsk Region (BBB-/Negative) and is the
largest metropolitan area of Siberian Federal District. The
city's economy is diversified, with a well-developed processing
industry and service sector. The sound economic performance of
local companies supports Novosibirsk's fiscal capacity, with
taxes accounting for 49% of operating revenue in 2015. However,
Fitch's forecast of a 0.5% decline of national GDP in 2016, after
a 3.7% drop in 2015, will weigh on the city's economic and
budgetary performance.

The City of Novosibirsk's credit profile remains constrained by
the weak institutional framework for local and regional
governments (LRGs) in Russia. Russia's institutional framework
for LRGs has a shorter record of stable development than many
international peers. The predictability of Russian LRGs'
budgetary policy is hampered by the frequent reallocation of
revenue and expenditure responsibilities among government tiers.
The city's budgetary performance in 2015 particularly suffered
from changes in allocation of revenue and expenditure.

RATING SENSITIVITIES

Restoration of the operating margin sustainably above 10% and
maintaining direct risk below 60% of current revenue with a debt
maturity profile corresponding to the debt payback ratio could
lead to an upgrade.

Deterioration of the budgetary performance, leading to an
inability to cover interest expenditure with operating balance,
and direct risk increasing to above 70% of current revenue would
lead to a downgrade.


VSK INSURANCE: Fitch Assigns 'BB-' IFS Rating, Outlook Stable
-------------------------------------------------------------
Fitch Ratings has assigned Russia-based VSK Insurance Joint Stock
Company's (VSK) Insurer Financial Strength (IFS) rating at 'BB-'
and National IFS rating at 'A+ (rus)'. The Outlooks are Stable.

KEY RATING DRIVERS

The ratings reflect VSK's strong operating profitability,
supported by investment returns, and the adequate quality of its
investment portfolio. The ratings also factor in the insurer's
weak risk-adjusted capital position and its high exposure to a
single line with a deteriorating loss ratio (motor third party
liability insurance - MTPL), somewhat weak liquidity position and
uncertain financial flexibility.

VSK's capitalization, as measured by Fitch's Prism factor-based
capital model (Prism FBM), is below 'somewhat weak' based on 2014
and 2015 results. Its capitalization strengthened modestly in
2015, due to higher net profit on the back of RUB1.6 billion FX
gains, which helped to support a 28% growth in VSK's insurance
portfolio.

Fitch does not expect 2016 to see a notable strengthening in
capitalization as VSK continues to increase its business volumes
and the expired months of 2016 do not point to a repeat of
significant one-off income items. The acquisition of a local
small insurer, BIN Insurance, in July 2016 may have a moderate
negative impact on VSK's risk-adjusted capital position. From a
regulatory perspective, VSK's capital is stronger with a Solvency
I-like margin of 193% at end-1H16.

VSK has seen a sound improvement in its operating profitability
as it reported a return on equity of 32% for 2015, up from 18% in
2014 (a five-year average of 8% in 2011-2015). This improvement
was driven by strong investment income, which offset moderate
underwriting losses in 2012-2015. The net result for 2015 was
exceptionally strong due to FX gains on investments. VSK has been
generating negative underwriting result in the last six years,
with a combined ratio averaging 103%, although the figure has
slowly improved to 101% in 2015.

Although the insurer has been improving its underwriting
performance, Fitch notes a growing imbalance in VSK's business
mix. The insurer nearly doubled the MTPL portfolio in 2015 as its
share in net written premiums (NWP) increased to 40% from 23%.
Although many motor underwriters recorded growth of their MTPL
business due to increased MTPL rates by the regulator from 4Q14
and 2Q15, Fitch believes VSK has pursued a more aggressive growth
strategy in MTPL than some other market participants. VSK's
market share in the number of policies issued grew to 8.8% at
end-1Q16 from 5.5% at end-4Q14.

In line with the sector, VSK's MTPL loss ratio deteriorated
sharply throughout 2015. Based on VSK's in-house actuarial
assessment, the loss ratio for the floating year ended in March
2016 stood at 77%, up from 62% a year earlier. Based on the
company's 6M16 reporting, Fitch expects the weight of MTPL in
VSK's portfolio to see further moderate growth for 2016.

Motor damage, which represented VSK's second-largest line at 28%
of NWP in 2015, helped offset the deteriorating MTPL performance
in 2015. The line's loss ratio improved to 64% in 2015, from an
average of 84% in 2011-2014. This improvement was also in line
with some of the insurer's peers.

VSK also writes a wide range of other lines, including commercial
property and liabilities, homeowners' properties, health and
accident insurance. Non-motor lines saw their share in VSK's NWP
fall to 32% in 2015, from 41% in 2014. The loss ratio of the non-
motor portfolio moderately deteriorated to 52% from 47% in the
same period.

VSK's liquidity position remains weak, but is gradually
improving, with the liquid assets-to- net technical reserves
ratio at 85% at end-2015, versus 73% at end-2014.The average
credit quality of VSK's investment portfolio was strong for the
rating level.

VSK's investment and cash management policy has been largely
determined by the credit facility extended by Sberbank of Russia
(BBB-/Negative) to VSK's shareholder. Given the termination of
this credit facility with Sberbank and the recent change in VSK
ownership, VSK may review its cash management and investment
strategy, particularly as Sberbank has not been providing
significant distribution capabilities to the insurer.

VSK's beneficiary individual owner sold 45% of the insurer to
Safmar Group in July 2016. Safmar is a diversified group with
assets in the banking sector, construction, oil and gas, and
other industries.

Fitch believes VSK's majority shareholder has rather limited
financial flexibility to support VSK in case of need, as the
insurer is the shareholder's key operating asset. On the other
hand, Fitch believes that Safmar's ability and willingness to
provide capital support to VSK is to some extent constrained by
the group's minority stake in VSK and the insurer's consequently
lower priority as capital recipient within the group,
particularly taking into account the forthcoming merger of weak
banks within the group.

RATING SENSITIVITIES

A downgrade could be triggered by increased exposure to MTPL,
further deterioration of its loss ratio, or a weakening of VSK's
operating performance leading to capital erosion as measured by
Fitch's Prism FBM. A downgrade may also result from material
deterioration in investment or liquidity risks.

An upgrade could be triggered by a profitable diversification of
the insurance portfolio, or notable strengthening in VSK's risk-
adjusted capital position, although Fitch sees the latter as a
remote prospect over the medium term.


===========
S E R B I A
===========


FARMAKOM MB: Receivers Put Firm's Properties Up For Sale
--------------------------------------------------------
SeeNews reports that the receiver of Serbia's insolvent
conglomerate Farmakom MB has put up for sale through public
bidding properties worth RSD350 million ($3.2 million).

The offer includes buildings, land and equipment, including a
production facility for plastic packaging and the group's
headquarters in Sabac, the report says.

SeeNews says the owner of Farmakom MB, Miroslav Bogicevic, is
prosecuted on the accusations of illegal use of 42 loans granted
by Privredna Banka Beograd AD. The indictment was confirmed
earlier in May and he is awaiting trial.

Serbia-based Farmakom MB offers milk processing and produces
dairy products. The company also produces cheese that includes
Sirko cheese spread and Ala kajmak spread.


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


FTPYME BANCAJA 3: S&P Affirms CCC(sf) Rating on Class D Notes
-------------------------------------------------------------
S&P Global Ratings raised to 'BBB+ (sf)' from 'BB (sf)' its
credit rating on FTPYME Bancaja 3, Fondo de Titulizacion de
Activos' class C notes.  At the same time, S&P has affirmed its
'CCC (sf)' rating on the class D notes.

FTPYME Bancaja 3 is a single-jurisdiction cash flow
collateralized loan obligation (CLO) transaction securitizing a
portfolio of small and midsize enterprise (SME) loans that Caja
de Ahorros de Valencia, Castellon y Alicante originated in Spain.
The transaction closed in October 2004.

                         CREDIT ANALYSIS

S&P has applied its European SME CLO criteria to assess the
portfolio's average credit quality.  In S&P's opinion, the credit
quality of the portfolio is about 'ccc', based on these factors:

   -- S&P's qualitative originator assessment on Caja de Ahorros
      de Valencia, Castellon y Alicante is moderate.

   -- Spain's Banking Industry Country Risk Assessment (BICRA) is
      5.

   -- S&P received only limited information on the credit quality
      of the originator's entire loan book.

S&P used its 'ccc' average credit quality assessment of the
portfolio to generate our 'AAA' scenario default rate (SDR) of
86%.

S&P has calculated the 'B' SDR, based primarily on S&P's analysis
of historical SME performance data and S&P's projections of the
transaction's future performance.  S&P has reviewed the
portfolio's historical default data, and assessed market
developments, macroeconomic factors, changes in country risk, and
the way these factors are likely to affect the loan portfolio's
creditworthiness.  As a result of this analysis, S&P's 'B' SDR is
12%.

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

                       RECOVERY RATE ANALYSIS

At each liability rating level, S&P assumed a weighted-average
recovery rate (WARR) by taking into consideration the asset type
(secured/unsecured) and the country recovery grouping and
observed historical recoveries.

As a result of this analysis, S&P's WARR assumption in a 'AAA'
rating scenario was 27.42%.  The recovery rates at more junior
rating levels were higher (as outlined in our European SME CLO
criteria).

                        CASH FLOW ANALYSIS

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

                           COUNTRY RISK

S&P's foreign currency long-term sovereign rating on the Kingdom
of Spain is 'BBB+'.

The results of S&P's credit and cash flow analysis indicate that
while the class C notes have sufficient credit enhancement to
withstand higher defaults, they are not able to pass the
sovereign default stress test in our criteria for rating single-
jurisdiction securitizations above the sovereign foreign currency
rating.  In accordance with S&P's criteria, this would imply that
the class C notes may not be rated any higher than the long-term
sovereign rating on Spain.  Taking into account the results of
S&P's credit and cash flow analysis and the application of these
criteria, S&P has raised to 'BBB+ (sf)' from 'BB (sf)' its rating
on the class C notes.

S&P's analysis indicates that the available credit enhancement
for the class D notes is commensurate with the currently assigned
rating.  S&P has therefore affirmed its 'CCC (sf)' rating on this
class of notes.

RATINGS LIST

Class              Rating
            To                 From

FTPYME Bancaja 3, Fondo de Titulizacion de Activos
EUR900 Million Floating-Rate Notes

Rating Raised

C           BBB+ (sf)          BB (sf)

Rating Affirmed

D           CCC (sf)


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


TURKISH AIRLINES: Moody's Lowers CFR to Ba3, Outlook Negative
-------------------------------------------------------------
Moody's Investors Service has downgraded to Ba3 from Ba2 the
corporate family rating and to Ba3-PD from Ba2-PD the probability
of default rating (PDR) of Turk Hava Yollari Anonim Ortakligi
(Turkish Airlines).

Moody's also downgraded Turkish Airlines' Enhanced Equipment
Trust Certificates (EETCs) to Baa1 from A3 (Bosphorus Pass
Through Trust 2015-1A), to Baa1 from A3 (Anatolia Pass Through
Trust 2015-1: Class A) and to Ba1 from Baa3 (Anatolia Pass
Through Trust 2015-1: Class B).  The outlook on the corporate and
EETC ratings of Turkish Airlines is negative.

                       RATINGS RATIONALE

   -- TURKISH AIRLINES' RATINGS DOWNGRADED, NEGATIVE OUTLOOK

The downgrade of the CFR and PDR reflects the downgrade of
Turkish Airlines' baseline credit assessment (BCA), a measure of
its standalone credit profile, to b1 from ba3.

The downgrade of the BCA reflects (1) the downward revision in
our forecasts as a result of our expectation that Turkish
Airlines' operating environment will remain weak entering into
2017; and (2) execution risks in the implementation of planned
operational and strategic changes to address the currently
challenging operating environment.

The ratings of Turkish Airlines incorporate a one-notch uplift of
its BCA reflecting Moody's classification of the airline as a GRI
and our moderate government support assumptions, which have not
changed as a result of this rating action.  Moody's classifies
Turkish Airlines as a government-related issuer (GRI) because of
the Government of Turkey's 49.12% ownership stake.

Passenger load factor has decreased to 73.7% for the January to
July 2016 period from 78% a year earlier, driven by a decline in
foreign visitors travelling to Turkey as well as less travelers
passing through the Istanbul hub as a result of heightened
security concerns in Turkey and Europe.  This has been further
exacerbated by the additions of new debt-funded aircraft into the
airline's fleet, with available seat kilometers (ASK) increasing
14.1% for the January to July 2016 period from a year earlier.
Although as of March 31, 2016, (LTM) the airline's adjusted debt
to EBITDA (FX-adjusted) stood at 5.1x, Moody's forecasts adjusted
leverage to be in excess of 7.0x by year-end 2016 and believes
that, should operating conditions remain challenging over the
near term, leverage could stay elevated above 6.0x in 2017.

Moody's notes that Turkish Airlines has begun to take proactive
steps to improve its profitability, however it is unclear at this
stage on the timing and success of some of these measures.  A
timely execution of capacity management measures, cost-cutting
initiatives as well as revenue-enhancing steps could help to
sustainably reduce leverage and improve profitability faster than
what Moody's anticipates, which in turn could help stabilize the
negative outlook.

  -- TURKISH AIRLINES' EETC RATINGS DOWNGRADED, NEGATIVE OUTLOOK

The downgrade of the EETCs accompanies the downgrade of the
ratings of Turkish Airlines.

EETC ratings are assigned by applying notching to an issuer's
CFR, factoring in protective features such as (1) the importance
of the aircraft collateral to the airline's network; (2) a legal
framework that provides timely access to collateral following an
insolvency where the airline no longer wants to use the aircraft;
(3) liquidity facilities that fund a number of interest payments
following the rejection of an EETC financing; and (4) the equity
cushion.

The Bosphorus Trust (Series 2015-1) transaction is secured by
three Boeing B777-300ER aircraft delivered new in 2015.  The
Anatolia Trust (Series 2015-1, JPY-denominated) is secured by
three Airbus A321-200 aircraft delivered new in 2015.  Moody's
believes these aircraft models will remain integral to the
airline's respective long-haul and medium-haul network over the
remaining lives of the EETCs.

Some pressure on the values of B777-300ERs relative to
expectations and the depreciation of the US dollar versus the
Japanese yen since these transactions were issued have modestly
lowered the equity cushions versus Moody's expectations, but not
sufficiently to cause the rating agency to reduce notching
relative to the CFR.

The ratings also reflect Moody's belief that Turkish Airlines
would retain these aircraft under a reorganization scenario
because of their relatively young age and the importance of these
models to the network.

The negative outlook is aligned with the negative outlook on the
rating of Turkish Airlines.  Any combination of future changes in
the underlying credit quality or ratings of Turkish Airlines,
unexpected material changes in the market value of the aircraft
and/or changes in the airline's network strategy that de-
emphasize the subject aircraft models could cause Moody's to
change its ratings of the EETCs.

The EETC ratings on the senior tranches might also be downgraded
if the long-term local currency bond and deposit ceilings are
downgraded below Baa1 when Moody's concludes its review of the
ratings it assigns to Turkey.  EETC ratings are capped by one
notch above a country's long-term local currency bond and deposit
ceilings.

                   RATIONALE FOR NEGATIVE OUTLOOK

The negative outlook reflects uncertainty around the recovery in
passenger demand for Turkish Airlines at a time of heightened
security concerns in Turkey and Europe, as well as the execution
risks associated with a successful implementation of cost-saving
initiatives.

The rating outlook could be stabilized should the operating
environment for Turkish Airlines improve, with load factors
trending above mid-70s%, and adjusted debt to EBITDA trending
below 6.5x.

               WHAT WOULD CHANGE THE RATING UP/DOWN

Given that Turkish Airlines' rating outlook is negative, a rating
upgrade is unlikely in the near future.  Nevertheless, the rating
could be upgraded if Turkish Airlines sustainably maintains
adjusted debt to EBITDA below 5.5x and EBIT interest coverage
above 2.0x.

The rating could be downgraded if Turkish Airlines' gross
leverage were to remain elevated around 7.0x or above for a
sustained period, and its EBIT interest coverage were to remain
weak at around 1.0x or below.  Any change in Moody's current GRI
support assumptions could also negatively affect ratings.  In
addition, a downgrade could also occur if the company's liquidity
became strained, potentially as a result of its large aircraft
acquisition program combined with continued weak operating cash
flows.

List of affected ratings:

Downgrades:

Issuer: Turk Hava Yollari Anonim Ortakligi
  Corporate Family Rating, Downgraded to Ba3 from Ba2
  Probability of Default Rating, Downgraded to Ba3-PD from Ba2-PD

Issuer: Anatolia Pass Through Trust
  Enhanced Equipment Trust, Downgraded to Ba1 from Baa3
  Enhanced Equipment Trust, Downgraded to Baa1 from A3

Issuer: Bosphorus Pass Through Trust 2015-1A
  Enhanced Equipment Trust, Downgraded to Baa1 from A3

Outlook Actions:

Issuer: Turk Hava Yollari Anonim Ortakligi
  Outlook, Remains Negative

Issuer: Anatolia Pass Through Trust
  Outlook, Remains Negative

Issuer: Bosphorus Pass Through Trust 2015-1A
  Outlook, Remains Negative

The principal methodology used in rating Turk Hava Yollari Anonim
Ortakligi was Global Passenger Airlines published in May 2012.
Other methodologies used include the Government-Related Issuers
methodology published in October 2014.

The principal methodology used in rating Anatolia Pass Through
Trust and Bosphorus Pass Through Trust 2015-1A was Enhanced
Equipment Trust and Equipment Trust Certificates published in
December 2015.

Turkish Airlines is the national flag carrier of the Republic of
Turkey and is a member of the Star Alliance network since April
2008.  Through the Ataturk International Airport in Istanbul
acting as the airline's primary hub, the passenger airline
operates scheduled services to 240 international and 49 domestic
destinations across 115 countries globally.  As of June 2016, it
operates 230 narrow-body, 83 wide-body and 11 cargo planes.
Turkish Airlines is 49.12% owned by the Government of Turkey
through the Turkish Privatization Administration while the
balance is public on Borsa Istanbul stock exchange.


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


DUNNE GROUP: Enters Administration
----------------------------------
Stv News reports that the opening of a new children's hospital in
Edinburgh has been delayed after two construction companies went
into administration.

NHS Lothian said the GBP150 million Royal Hospital for Sick
Children will now open in spring 2018, months later than the
previous deadline of autumn 2017, according to Stv News.

The delay has been caused by Dunne Group entering administration
and JB Brickwork going into provisional liquidation, temporarily
halting work at the site in the city's Little France area, the
report notes.

Progress has also been hindered by unfavorable weather and
technical construction problems, the report relays.

The consortium building the new hospital now plans to increase
staffing, working hours and construction methods before providing
a revised schedule, the report says.

The report discloses that Jim Crombie, NHS Lothian's acting chief
executive, said: "Projects of this scale and, of this nature, are
very rarely straightforward and bring with them many complex and
sometimes unavoidable challenges.

"It is important to note that these alterations to the
construction timetable will not result in any additional costs to
NHS Lothian.

"Whilst this change is frustrating for our patients and staff, we
must not forget that construction of this impressive new building
is continuing and that much work has already been achieved. In
addition, the project has already created a host of new entrant
jobs for local people, including apprentices and graduate
opportunities."


G COMMS: Director Gets 11 Year Disqualification for VAT Fraud
-------------------------------------------------------------
Shiraz Ahmed, a director of G Comms Ltd, a wholesale mobile phone
business based in Ealing has been disqualified as a director by
the High Court for 11 years for participating in contrived
transactions with a view to gaining VAT refunds of over GBP2
million.

The disqualification regime exists to protect the public, and Mr.
Ahmed's disqualification from July 27, 2016 means that he cannot
promote, manage, or be a director of a limited company until
July 26, 2027.

This disqualification follows investigation by the Official
Receiver at the Public Interest Unit, a specialist team of the
Insolvency Service, whose involvement commenced with the winding
up of the company, for unpaid VAT owed to HMRC.

The Official Receiver's investigation uncovered that G Comms Ltd
participated in a form of VAT fraud known as Missing Trader Intra
Community fraud (MTIC, for short).

This missing trader fraud is commonly known as "Carousel" fraud,
as large consignments of electrical or other small item size high
value goods are invoiced rapidly and repeatedly around trading
chains, speeded up by movement on paper, with actual movement of
goods only taking place as they enter or exit the UK.

Such missing trader fraud indicators included the rapid
succession of same day trades without deliveries within the UK of
goods sitting at a shared freight forwarder, failing to conduct
adequate due diligence on trading partners, failing to arrange
adequate insurance on the goods etc.

Commenting on this case Paul Titherington, Official Receiver in
the Public Interest Unit, said:

"This type of VAT fraud is very serious and a high priority for
HMRC and the Insolvency Service. MTIC fraud has been a great
strain on the public purse and has cost the tax payer many
billions of pounds in fraudulent VAT claims. The Insolvency
Service is committed to making directors account for their
actions."

G Comms Ltd was incorporated on July 13, 2004. Its trading
address was at Manhattan Business Park, Ealing, London, W5 1UP.

The petition to wind up the company was presented by HM Revenue &
Customs in respect of unpaid VAT of GBP18,810 on Aug. 16, 2013.
The winding up order against G Comms Ltd was made on Sept. 30,
2013.

On June 21, 2016, Mr. Shiraz Ahmed gave an undertaking to be
disqualified for a period of 11 years. The Secretary of State
accepted Mr. Ahmed's undertaking on July 6, 2016. The period of
disqualification will commence on July 27, 2016 and will run
until July 26, 2027.


GLE & INTERNATIONAL: High Court Winds Up Landbanking Company
------------------------------------------------------------
Surrey-based company, GLE & International Property Ltd, was wound
up in the High Court following an investigation by the Insolvency
Service.

GLE & International Property Ltd sold plots of land to members of
the public for investment purposes on the false and misleading
basis that developers would then apply for planning permission,
and purchase the entire site, thereby resulting in substantial
profits for the investors.

The company sold plots of land on the following sites:

  -- Hollins Farm, Red Lees Road, Burnley, Lancashire (the
     Burnley site)

  -- Flax Lane, Lathom, Ormskirk, Lancashire (the Ormskirk site)

  -- North of Hammondstreet Road, Cheshunt, Waltham Cross,
     Hertfordshire (the Cheshunt site)

GLE & International Property Ltd purchased plots on the Burnley
site at GBP2.85 per square foot and immediately re-sold them to
investors at GBP7 - GBP8 per square foot. Between August 2010 and
November 2010 the company sold a total of 6 plots with an
aggregate sales value of GBP70,440.

The company purchased plots on the Ormskirk site at GBP4.75 per
square foot and immediately re-sold them to investors at GBP12 -
GBP14 per square foot. Between December 2010 and February 2011
the company sold a total of 7 plots with an aggregate sales value
of GBP99,952.

In respect of the Cheshunt site, the company purchased the plots
at GBP2.45 per square foot and immediately re-sold them to
investors at GBP12 per square foot. Between May 2011 and
November 2013 the company sold a total of 74 plots with an
aggregate sales value of GBP866,100.

The investigation found that none of the sites had been developed
and that no applications for planning permission had even been
made. Enquiries made of the relevant Local Authorities
established that the respective sites were within designated
green belt areas and were thus highly unlikely to be granted
planning permission for development. Indeed, Broxbourne Council
had issued a press release in February 2012 headed 'Land Scam in
the Hammondstreet Area of West Cheshunt' warning against
investment in the Cheshunt site, stating:

    "The Council . . . would like to make the following points
clear: firstly, the land in question is in the green belt, where
national planning guidance and local planning policies make it
clear that there is a strong presumption against development.
Secondly, the land in question is not allocated for development
and does not have planning permission for any form of
development."

West Lancashire Borough Council had issued a press release in
similar terms in August 2010 when it became aware that plots of
land were being sold on the Ormskirk site.

Insofar as the Cheshunt site is concerned the plots of land were
purchased by GLE & International Property Ltd from JDG Properties
Ltd and the purported developer of the site was Tithebarn Trading
Ltd. JDG Properties Ltd had purchased the land at GBP0.33 per
square foot. It then sold plots of the land to GLE &
International Property Ltd at GBP2.45 per square foot and GLE &
International Property Ltd had immediately sold them on to
investors at GBP12 per square foot. Investors were told that the
developer, Tithebarn Trading Ltd, would buy their plots at
GBP52.43 per square foot subject to planning permission having
been obtained. Investors were not told that JDG Properties Ltd
and Tithebarn Trading Ltd were under common ownership and
control.

The investigation found no commercial or legitimate reason why
Tithebarn Trading Ltd would be prepared to buy back the plots at
GBP52.43 per square foot when its associated company, JDG
Properties Ltd, had sold them (via GLE & International Property
Ltd) at GBP2.45 per square foot.

JDG Properties Ltd and Tithebarn Trading Ltd were previously
wound up on 3 July 2015 on the grounds that they had operated
against the public interest.

Commenting on the case, Colin Cronin, Investigation Supervisor
with the Insolvency Service, said:

"As invariably happens with landbanking cases of this type the
only people who profited from the company's trading were those
involved in the sale of the land to investors and those who
recruited or otherwise introduced investors to GLE &
International Property Ltd and who received significant
commission payments for doing so.

"The plots of land were sold to investors on the false basis that
there were developers waiting in the wings to obtain the
necessary planning permission and to develop the land, something
which would result in a substantial uplift in the value of the
plots. The reality is that there were no arrangements with
genuine developers in place and no steps were ever taken to apply
for planning permission.

"The net result is that investors have paid highly inflated
prices for plots of land which they are powerless to deal with on
an individual basis.

"These winding-up proceedings show that The Insolvency Service
will take firm action against companies which mislead the public
in this way."

GLE & International Property Ltd -- company registration number
07052772 -- was incorporated on Oct. 22, 2009. The company was
formerly known as the Best Inn Cape Verde Ltd (until Nov. 23,
2009) and as The Best in Cape Verde Ltd (until July 13, 2010).
The company's registered office was at Allen House, 1 Westmead
Road, Sutton, Surrey SM1 4LA.

The petition to wind-up GLE & International Property Ltd was
presented under s124A of the Insolvency Act 1986 on May 9, 2016.
The company was wound up on June 30, 2016 and the Official
Receiver has been appointed as liquidator.


MONSOON: Owner Ditches Dividend Plans as Stores Close
-----------------------------------------------------
cityam.com reports that Monsoon's owner Peter Simon has said he
won't be taking out any more hefty dividends as the company
shuts-up shops.

Mr. Simon, citing cityam.com, treated himself to a GBP26.9
million dividend last year, but he won't be repeating the payment
as company closes 141 shops, according to the Sunday Telegraph.

Monsoon and Accessorize are undergoing a restructuring over the
next three to five years, the report notes.

Drillgreat, the holding company for Monsoon and Accessorize,
posted a pre-tax loss of GBP155 million last year, the report
relays.  Hundreds of jobs are now at risk due to shops closing --
Accessorize has been outperforming Monsoon in recent years,
meaning many of the joint stores are set to go, the report says.

Paul Allen, the new chief executive, is undertaking the business'
restructuring, but it is not thought a company voluntary
agreement is on the cards, the report notes.

The current plan is a reversal of the work done by former chief
executive John Browlett, who expanded the company's joint store
offering, the report discloses.


ROYAL BANK OF SCOTLAND: 140 Firms Files Suit Over Administration
----------------------------------------------------------------
thisismoney.co.uk reports that small businesses are launching a
GBP1billion legal case against Royal Bank of Scotland -- claiming
they were destroyed by its turnaround unit.

The 140 companies say they were pushed into administration by
NatWest owner RBS's global restructuring group so the bank could
use their assets to pay down its debts, according to
thisismoney.co.uk.

They have also accused the City watchdog of sitting on a report
into the GRG, which it says is not yet finished, the report
notes.

The businesses had intended to wait for this to be published
before acting, but have said they cannot hold on any longer, the
report relays.

Active during the financial crisis, the GRG was meant to help
struggling firms stay afloat, the report discloses.  But it has
been alleged that the group deliberately sought to sink them
instead, the report notes.

In 2013, a report by Government-backed entrepreneur Lawrence
Tomlinson argued that executives at many companies were "forced
to stand by and watch an otherwise-successful business be sunk by
the decisions of the bank," the report says.

RBS denies the allegations.


* UK: One Fifth of Corporate Insolvencies Caused by Late Payment
----------------------------------------------------------------
At least one fifth of UK corporate insolvencies in the past year
were caused by late payment or the insolvency of another company,
according to new research by insolvency and restructuring trade
body R3.

A survey of the insolvency profession reveals that late payment
for goods or services was a primary or major cause of 23% of
insolvencies in the last twelve months, while the failure of a
supplier or customer was the primary or major factor in 20% of
cases.

Andrew Tate, R3 president, says: "A business can have a great
product and great staff, but if it doesn't get paid for what it
sells, or if it is over-reliant on one supplier or customer,
things can go wrong very quickly.

"On the surface, late payment or the failure of another company
can seem like factors outside a business' control, but there are
plenty of steps a business can take to reduce the risks posed by
its supply chain and customer base.

"Businesses must not be complacent when it comes to checking who
they are trading with. If a business is not paid upfront it is
essentially acting as a lender - albeit without the protections a
secured lender enjoys. Keeping track of invoices and getting paid
is vital."

The latest research reveals the extent of the problem hasn't
improved since 2014, when a previous survey of the insolvency
profession found that late payment was a primary or major factor
in 20% of corporate insolvencies.

Andrew Tate continues: "The serious implications of late payment
is recognized by the high profile the issue now commands.
Unfortunately, government promises and other initiatives don't
appear to have yet made any real impact on the scale of the
problem."

Over half (57%) of insolvency practitioners identified
construction as the sector with the worst track record for late
payment, in line with findings from a previous member survey in
2014 (59%).

Andrew Tate adds: "Construction is considered to have the worst
late payment problem and it comes as no surprise that it's
consistently the sector with the highest number of corporate
insolvencies. Late payment problems and relatively high
insolvency rates are not a coincidence.  If the sector could
diminish the extent of this issue it would see an improvement in
its business survival rate."

Previous research conducted by R3 found that 6% of UK businesses,
equivalent to 113,000 companies, were creditors in an insolvency
last year.

Andrew Tate says: "The failure of one company can have a serious
knock-on effect.  The loss of a major contract or supplier can
quickly interrupt a business' cash-flow.  It is possible to take
precautions to minimize the risk other insolvencies pose to your
business.  One option could be to make sure terms and conditions
include an effective 'Retention of Title' clause -- checked by a
lawyer -- to ensure the retrieval of goods from an insolvent
customer if they have not been paid for.

"Both late payment and the 'domino effect' have been identified
as leading causes of insolvency by the profession so more needs
to be done to prevent needless financial concerns for businesses.
In this time of uncertainty following the EU referendum, we
should be doing everything we can to mitigate problems for the
business community, making it easier for UK companies to carry
on."

R3 is the trade body for Insolvency Professionals, and represents
the UK's Insolvency Practitioners.


                            *********

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, Julie Anne L. Toledo, 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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re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

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

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


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