TCREUR_Public/160908.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

         Thursday, September 8, 2016, Vol. 17, No. 178



HETA ASSET: Bondholders Offered Discounted Buyback


ACCESSBANK: Fitch Affirms 'BB+' Long-Term Issuer Default Rating


BADEL 1862: Meteor Acquires 67.5% Pre-Bankruptcy Claims


M&J WALLACE: Three Banks Recoup EUR5MM From Asset Receiverships


GE CAPITAL: Moody's B2 LT Deposit Rating on Review for Downgrade
WIND TELECOMUNICAZIONI: Fitch Affirms B+ LT Issuer Default Rating


MINERVA LUXEMBOURG: S&P Assigns 'BB-' Rating to Sr. Unsec. Notes


VIMPELCOM LTD: Fitch Says Impact of Wind-3 Italia Merger Neutral


MOSTOTREST PJSC: Moody's Withdraws Ba3 Corporate Family Rating
NOVIKOMBANK: Moody's Confirms B2 Ratings, Outlook Developing


MADRID AEROSPACE: ST Engineering Liquidates Business

U N I T E D   K I N G D O M

DUKINFIELD II PLC: Moody's Assigns (P)Ba3 Rating to Class E Notes
LONDON WELSH: Avoids Liquidation, US Group to Take Over
OXFORD CITY: Averts Liquidation Following Tax Bill Payment
RAME ENERGY: Mulls Sale of Operations Following Administration
TURNSTONE MIDCO: Fitch Cuts LT IDR to 'B'; Removes from Watch Neg

WAGAMAMA LTD: S&P Raises Parent's CCR to 'B', Outlook Stable



HETA ASSET: Bondholders Offered Discounted Buyback
Kirsti Knolle at Reuters reports that bondholders of the "bad
bank" for collapsed Austrian bank Hypo Alpe Adria were offered a
discounted buyback on Sept. 6 that could bankrupt the province of
Carinthia if rejected.

According to Reuters, the offer to buy back around EUR11 billion
(US$12.3 billion) in bonds of Hypo wind-down vehicle Heta at a
discount follows new EU rules that require creditors, not
taxpayers alone, fund bank rescues.

The Austrian government and province agreed an improved offer
with bondholders including Commerzbank and Dexia Kommunalbank in
May after creditors rejected a first proposal in March, Reuters

Deutsche Bank, which holds junior bonds with a nominal value of
EUR200 million, had complained about the difference in treatment
of creditors in the first offer, Reuters discloses.

According to Reuters, under the revised offer, Carinthia, helped
by loans from the federal government, is offering senior
creditors 75% of the original face value and junior creditors

With a population of 560,000 and an annual budget of just over
EUR2 billion, Carinthia faces bankruptcy if no agreement with
creditors is reached, Reuters says.

Creditors have until Oct. 7 to respond, Reuters notes.  The
members of the three largest creditor groups have already said
they will support the offer, according to Reuters.

A two-thirds majority is needed to accept the offer, including at
least 25% of senior bondholders and 25% of junior bondholders,
Reuters states.

Heta Asset Resolution AG is a wind-down company owned by the
Republic of Austria.  Its statutory task is to dispose of the
non-performing portion of Hypo Alpe Adria, nationalized in 2009,
as effectively as possible while preserving value.


ACCESSBANK: Fitch Affirms 'BB+' Long-Term Issuer Default Rating
Fitch Ratings has affirmed Azerbaijan-based Accessbank's (AB) and
Pasha Bank's (PB) Long-Term Issuer-Default Ratings (IDRs) at
'BB+' and 'BB-', respectively. The Outlooks on both banks are
Negative. The agency has also downgraded AB's Viability Rating
(VR) to 'b+' from 'bb-' and affirmed PB's VR at 'b+'.



AB's Long-Term IDR of 'BB+' and Support Rating of '3' reflect the
moderate probability that the bank would receive support from the
bank's international financial institution (IFI) shareholders.
The European Bank for Reconstruction and Development
(AAA/Stable), KfW (AAA/Stable), International Finance Corporation
and the Black Sea Trade and Development Bank each hold a direct
20% stake in AB. A further 16.5% is held by Access Microfinance
Holding, in turn also controlled by IFIs.

Fitch views the propensity of AB's shareholders to provide
support as high because of (i) the IFIs' strategic commitment to
microfinance lending in developing markets; (ii) the IFIs' direct
ownership of AB, stemming from their participation as founding
shareholders; (iii) the significant integration of IFI guidelines
into AB's risk management; and (iv) Fitch's expectation that a
full exit of the IFIs from the bank in the next few years is

However, AB's ability to receive and utilize any potential
support could be restricted by transfer and convertibility
restrictions, as reflected in Azerbaijan's Country Ceiling of

The downgrade of AB's VR to 'b+' from 'bb-' reflects significant
deterioration in the bank's asset quality and performance
following the devaluations of the Azerbaijan manat in 2015.
Positively, AB's VR reflects the bank's still reasonable capital
levels and manageable refinancing risks.

At end-1H16, AB reported sizable non-performing loans (NPLs;
loans 90+ days overdue) at 20% of the total portfolio (57%
covered with impairment reserves), up from a moderate 5% at end-
2015 (97% covered). Restructured loans comprised a further
substantial 54% of the portfolio, as the bank actively extended
maturities on USD-denominated exposures following the devaluation
of the manat in February and December 2015. The ultimate credit
quality and recoverability of these restructured loans is yet to
be tested.

In 1H16, AB reported pre-impairment profit of AZN13m or 3.1%
(annualized) of average gross loans. This figure would be a
negative AZN10 million (-2.4%) if adjusted for interest accrued,
but not received in cash. The bottom line was further negatively
affected by elevated impairment charges (11.5% of average loans,
annualized) resulting in a net reported loss of AZN28 million in
1H16 (equal to 19% of end-2015 equity).

Despite the weak performance, AB's reported Fitch Core Capital
(FCC) ratio remained a high 16% at end-1H16, only down by 1ppt
from end-2015. The capital position was supported by
deleveraging, as the loan book contracted 21% in 1H16.

Fitch sees significant further downside to AB's asset quality,
performance and capital, since at least some of the AZN64 million
of unreserved NPLs (68% of FCC at end-1H16) or AZN388 million of
restructured loans (4.1x FCC) may result in additional impairment
charges. Fitch estimates that AB's regulatory capital buffer is
only sufficient to absorb additional charges of 5% of gross loans
before reaching the regulatory minimum of 10%, which would be
barely sufficient to fully cover existing NPLs.

Near-term refinancing needs moderated in 1H16, but remain
significant. At end-1H16, the bank's wholesale funding maturing
within 12 months was equal to around 30% of total liabilities,
although the available liquidity buffer was equal to 92% of this.
Refinancing risks are reduced by AB's firm access to IFIs and
parent funding.


PB's IDRs, SR and SRF are underpinned by the moderate probability
of support from the Azerbaijan authorities, in case of need.
Fitch's view on support takes into account: (i) PB's moderate
systemic importance as part of the largest privately-owned
banking group in the country, as together with its sister bank
Kapital Bank (KB) they hold around 15% of sector deposits; (ii)
the somewhat improved track record of sovereign support for the
banking sector in light of the ongoing financial rehabilitation
of International Bank of Azerbaijan (IBA, BB/Negative/b-); and
(iii) the benefits of PB being ultimately owned by a structure
closely connected to the Azerbaijani authorities, which at least
in the near term should make support more likely, in Fitch's

The Negative Outlook on PB's IDR mirrors that on the sovereign.
The two-notch differential between the sovereign's and bank's
ratings reflects the uneven track record of sovereign support for
the sector and PB's more moderate systemic importance relative to
the larger IBA, which at end-2015 held around 41% of sector
deposits and is rated one notch higher than PB.

PB's VR reflects the bank's solid capitalization, ample liquidity
and so far manageable asset quality deterioration amid the
downturn in the broader economy. At the same time, the rating
remains constrained by (i) fragile operating environment, which
is currently in credit downcycle due to a fall in oil prices,
(ii) only moderate operating profitability, if adjusted for one-
off gains in 2015, (iii) the bank's still limited franchise and
track record; and (iv) some uncertainty with respect to the long-
term sustainability of the bank's sizeable related-party funding.

PB is strongly capitalized, as expressed by its solid 31% FCC
ratio at end-2015. In Fitch's view, PB is unlikely to consume
this large capital buffer in the near-term given moderate growth
plans (and limited actual growth in 1H16) and manageable loan
impairment to date.

According to PB's unconsolidated regulatory disclosures NPLs were
around 9% of gross loans at end-2015 while restructured loans
added a further 6%; however, the former ratio was supported by
significant write-offs in 2015, equal to 6% of average loans. The
major downside risk to asset quality stems from PB's foreign
currency loans (51% of the portfolio, or 1.2x end-2015 FCC),
although some of PB's largest borrowers may benefit from access
to foreign currency revenue or state support. The bank's
unconsolidated regulatory accounts show a rise in NPLs to 11% at

PB's 2015 profitability was largely supported by one-off gains,
including an AZN13 million translation gain and a AZN5.5 million
gain on FX derivatives. Fitch estimates that net of these gains
PB would have been marginally above break-even in 2015. PB's
performance on the pre-impairment level is undermined by
significant accrued interest income (AZN11.3 million or 16% of
2015 pre-impairment profit) but remains reasonable. Fitch
estimates that PB's core pre-impairment profit in 2015 equalled
to a sizable 6.7% of average gross loans (this may have reduced
to around 5% in 1H16 according to PB's management accounts).

PB's total available liquidity, net of potential wholesale debt
repayments, comfortably covered around 62% of the bank's end-1H16
customer accounts. However, this should be viewed against
significant related-party funding (around 51% of end-2015
liabilities) and high single name concentration of liabilities
(at end-2015 the three largest customers contributed 26% of total



The Negative Outlooks on both banks reflect that on the
sovereign. Accordingly, the support-driven IDRs on the banks will
likely be downgraded in case of the sovereign and the Country
Ceiling being downgraded. Conversely, a revision of the Outlook
on the sovereign to Stable will likely result in a similar action
on the banks.

Downside pressure on the banks' IDRs could also result from a
potential weakening of support from the sovereign (for PB) or
from IFI shareholders (for AB), although Fitch views this
unlikely in the near-term.

Upside for PB, implying a reduction of the notching between the
bank's ratings and that of the sovereign, is limited at present.
However, (i) further development of PB's franchise resulting in a
marked increase in the bank's systemic importance; or (ii)
improvements in the track record of sovereign support for the
banking sector as a whole would be credit-positive.


Negative pressure on the VRs could stem from significant asset
quality deterioration at either of the banks, if this results in
significant erosion of the capital base. These risks are markedly
higher for AB given its higher share of foreign currency-
denominated loans, and a smaller capital buffer.

Upside for the banks' VRs is limited given the weak outlook for
the broader economy. However, stabilization of economic
performance and of the banks' asset quality metrics would reduce
downward pressure on their VRs.

The rating actions are as follows:


   -- Long-Term IDR: affirmed at 'BB+'; Outlook Negative

   -- Short-Term IDR: affirmed at 'B'

   -- Viability Rating: downgraded to 'b+' from 'bb-'

   -- Support Rating: affirmed at '3'

Pasha Bank

   -- Long-Term IDR: affirmed at 'BB-'; Outlook Negative

   -- Short-Term IDR: affirmed at 'B'

   -- Viability Rating: affirmed at 'b+'

   -- Support Rating: affirmed at '3'

   -- Support Rating Floor: affirmed at 'BB-'


BADEL 1862: Meteor Acquires 67.5% Pre-Bankruptcy Claims
SeeNews reports that Croatian chemical products producer Meteor
has acquired over 67.5% of the claims registered in the
pre-bankruptcy settlement procedure of local alcoholic and soft
drinks producer Badel 1862, allowing it alone to make a decision
on the company's financial and operational restructuring.

Badel 1862 said in a statement filed with the Zagreb Stock
Exchange that Meteor has purchased over two thirds of all claims
held by Badel creditors and hence gained control over the
company's pre-bankruptcy settlement, SeeNews relates.

In May, Badel 1862 said it has received letters of intent in a
strategic partnership tender from Meteor, Zagreb-based trade
company Ostrc, Split-based Stanic Grupa and Slovakia's largest
producer of spirit drinks St. Nicolaus, SeeNews recounts.

The company was due to hold a session Sept. 7 to make a final
decision on its future strategic investor, SeeNews discloses.


M&J WALLACE: Three Banks Recoup EUR5MM From Asset Receiverships
Gordon Deegan at Irish Examiner reports that three banks have
recouped nearly EUR5 million, between them, from the receivership
of assets formerly owned by M&J Wallace, the main building arm of
independent TD Mick Wallace.

Documents recently filed with the Companies Office show ACC Bank,
Bank of Scotland (Ireland) and AIB have received a combined
EUR4.8 million to date from the receivership of the assets, Irish
Examiner relates.

The first bank to move against the firm was ACC, which appointed
receiver, Declan Taite to Wallace properties in May 2011, Irish
Examiner discloses.

It is understood Mr. Wallace's firm owed ACC around EUR20
million, Irish Examiner notes.  The Wexford TD has admitted he
owed EUR40 million to various banks, Irish Examiner relays.

The documents show ACC Bank has, to date, received EUR2.65
million from the sale and rent of M&J Wallace properties, Irish
Examiner states.

In 2011, Mr. Taite was appointed as receiver to company assets at
the Italian Quarter on Dublin's Ormond Quay, the Behan Square
apartment complex on Russell Street near Croke Park, and to
development land in Rathgar, Irish Examiner recounts.

Tom Kavanagh -- -- of Deloitte was
appointed by Bank of Scotland (Ireland) as receiver to other
assets owned by M&J Wallace in September 2013, Irish Examiner

Documents filed by Mr. Kavanagh show Bank of Scotland (Ireland)
Ltd. has received EUR977,134 from the EUR1 million in receipts he
received, according to Irish Examiner.

Separate documents lodged by a third receiver, Gerry McInerney
show AIB received EUR1.19 million from the receivership of a
number of M&J Wallace assets, Irish Examiner discloses.


GE CAPITAL: Moody's B2 LT Deposit Rating on Review for Downgrade
Moody's Investors Service has placed GE Capital Interbanca
S.p.A.'s B2 long-term deposit rating on review for downgrade,
following the announcement that its parent GE Capital
International Holdings Limited (unrated), a subsidiary of General
Electric Company (GE, senior unsecured A1) will sell its 99.99%
share of Interbanca to Banca IFIS (unrated).  At the same time,
the rating agency put Interbanca's standalone caa1 baseline
credit assessment (BCA) and adjusted BCA on review for upgrade,
while Interbanca's B1(cr) long-term Counterparty Risk Assessment
was put on review with direction uncertain.

Moody's said that the review for upgrade of the caa1 BCA and
adjusted BCA reflects the potential for improvements in the
bank's fundamentals following the transaction, as well as the
possibility of extraordinary support from its new owner.
Nevertheless, the B2 long-term deposit rating was placed on
review for downgrade, because the funding structure of the new
banking group once Interbanca is consolidated into Banca IFIS's
accounts would likely result in a higher loss-given-failure for
junior depositors than currently.  This is because GE currently
provides substantial funding to Interbanca through its
subsidiaries; this group funding is bail-in-able in resolution
and would therefore benefit wholesale depositors; however, the
transaction will see this replaced with more senior retail
deposits and secured funding.  The deposit rating is on review
for downgrade, as the negative impact deriving from higher loss-
given-failure is unlikely to be offset by an upgrade of the
adjusted BCA.

During the review period Moody's will further the potential for
the transaction to enhance the creditworthiness of Interbanca.
Moody's said that the review will likely conclude following
regulatory approval of the transaction, which Interbanca and
Banca IFIS expect by year-end.

                         RATINGS RATIONALE


Moody's said that the review for upgrade on Interbanca's caa1 BCA
and adjusted BCA reflects potential benefits deriving from the
acquisition by Banca IFIS.

Banca IFIS has announced that it will substitute GE's long-term
funding, which was relatively costly, with a combination of Banca
IFIS's excess deposits and securitizations, which will likely
reduce the cost of funding; this would improve Interbanca's
profitability whilst maintaining a stable funding profile.

Moody's expects Banca IFIS to be committed to providing support
to Interbanca, as shown by Banca IFIS's plan to merge the two
legal entities by the end of 2018.  Banca IFIS is significantly
smaller than GE, and its creditworthiness is likely to be weaker
than GE's (GE's senior unsecured rating is A1, whilst the average
Italian senior unsecured bank rating is Ba1).  However, Moody's
had already eliminated potential extraordinary support from GE as
a source of ratings uplift for Interbanca, given GE's intention
to sell.  Following the acquisition by Banca IFIS, the likely
increased probability of support from the new shareholder will be
credit positive for Interbanca; Moody's will assess during the
review period the possibility that this could result in some
uplift via affiliate support to the adjusted BCA and hence
Interbanca's ratings.


Notwithstanding the potential for improvements to Interbanca's
standalone BCA and support from its new parent, the new group's
funding structure will likely result in high loss-given-failure
for wholesale depositors, which would more than offset the lower
probability of failure.

Currently Interbanca's deposit rating benefits from very low
loss-given-failure, which results in a two-notch uplift for the
long-term deposit rating.  In resolution, corporate depositors
would rank pari passu with funding from the GE group, which stood
at EUR2.4 billion as at December 2015; this compares with just
EUR0.2 billion corporate deposits.

According to Banca IFIS's announcement, GE's funding will be
substituted by resources that will rank senior to corporate
depositors in resolution: excess liquidity at Banca IFIS, which
is mostly generated by interbank repos or retail deposits,
additional retail deposits, and asset-based funding.  This would
disadvantage corporate depositors as they would no longer benefit
from the loss absorption offered by GE's funding, exposing them
to greater loss-given-failure.


Moody's said it put Interbanca's B1(cr) Counterparty Risk
Assessment (CR Assessment) on review with direction uncertain.

The CR Assessment, which is not a rating, reflects an issuer's
probability of defaulting on certain bank operating liabilities,
such as covered bonds, derivatives, letters of credit and other
contractual commitments.  In Moody's judgment, the Interbanca's
CR Assessment is likely to be less affected than the bank's
deposits by its changing liability structure, and the potentially
higher adjusted BCA may more than offset this, leading to an
upgrade of one notch.  However, if the adjusted BCA were not
upgraded, then the CR Assessment would likely be downgraded.
Moody's considers that the probabilities that Interbanca's CR
Assessment is upgraded, confirmed, or downgrade, are broadly


Moody's said Interbanca's BCA could be upgraded following a
substantial reduction of the very high stock of problem loans and
a return to a sustainable level of profitability, if the bank's
capitalization were broadly maintained.

The adjusted BCA could be upgraded following an upgrade of the
BCA; the adjusted BCA could also be upgraded if, following the
acquisition by Banca IFIS, our analysis shows that Banca IFIS has
sufficient capacity and willingness to provide additional support
to Interbanca in case of need.

An upgrade of the long-term deposit ratings is unlikely at the
moment, as indicated by the current review for downgrade.


A downgrade of Interbanca's BCA and adjusted BCA is unlikely, as
indicated by the current review for upgrade.

Interbanca's long-term deposit rating could be downgraded if the
planned liability structure results in an increased loss-given-
failure, which is not offset by a higher standalone rating and
the potential for support from Banca IFIS.


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


Issuer: GE Capital Interbanca S.p.A
  Placed on Review for Downgrade:
  Long-term Deposit Ratings, currently B2, outlook changed to
   Rating Under Review from Stable

Placed on Review for Upgrade:
  Adjusted Baseline Credit Assessment, currently caa1
  Baseline Credit Assessment, currently caa1

Placed on Review Direction Uncertain:
  Long-term Counterparty Risk Assessment, Placed on Review
   Direction Uncertain, currently B1(cr)

  Short-term Counterparty Risk Assessment, affirmed NP(cr)
  Short-term Deposit Ratings, affirmed NP

Outlook Actions:
  Outlook changed to Rating Under Review from Stable

WIND TELECOMUNICAZIONI: Fitch Affirms B+ LT Issuer Default Rating
Fitch Ratings has affirmed Wind Telecomunicazioni S.p.A's (WIND)
Long-Term Issuer Default Rating (IDR) at 'B+' with a Stable
Outlook. Fitch has simultaneously upgraded WIND's instrument

The rating actions reflect that the proposed merger of WIND and 3
Italia should result in an enlarged entity with a stronger
operating profile and lower leverage. Greater scale from a higher
mobile market share should improve the company's ability to
compete. A 'BB-' rating for the merged entity is possible over
the medium term as the integration process is completed and
leverage falls. CK Hutchison Holdings Ltd. (A-/Stable), parent
company of Italian mobile operator 3 Italia, and VimpelCom Ltd.
(BB+/Stable), parent company of WIND, received regulatory
clearance to form a 50/50 joint venture (JV) of their
telecommunication businesses in Italy on 1 September 2016.


Stronger Strategic Position in the Italian Market

A merger of WIND and 3 Italia will create a stronger operator in
the Italian market. The new company will control slightly above
one-third of the country's mobile subscribers and revenues,
making it a closer peer for Vodafone (BBB+/Stable) and Telecom
Italia (BBB-/Stable), both of which also have approximately one-
third of the market.

The enlarged company is likely to significantly benefit from its
larger scale. It will be able to increase the absolute size of
its infrastructure capex, which would allow it to quicker patch
the current gap in terms of LTE coverage and improve the quality
of its network. It will be better positioned to compete in the
corporate segment, the so far almost uncharted territory for both
merging operators. Its larger size will also make it easier to
absorb the financial impact of future spectrum investments,
including potentially into 700 MHz frequencies that are likely to
become available after 2020.

Unlikely Disruptive Impact Of New Operator

Iliad agreed to launch a new facilities-based operator in Italy,
but is unlikely to become a fiercely disruptive player in this
market, in our view. After years of intense pricing wars in
Italy, the current mobile average revenues per user are already
among the lowest in Europe, limiting the scope for further
pricing pressure. The new operator will need to address issues of
low brand recognition and the lack of own distribution platform.
Its fixed-mobile bundling options will be limited as it will
depend on fixed-line infrastructure providers for non-mobile
service elements of its bundles. However, the visibility of
Iliad's strategic plans in the Italian market remains low, which
increases market risk for all operators.

Significant Synergies

The combination of WIND and 3 Italia should result in significant
synergies, with a likely positive impact on margins over the next
three years. With integration costs estimated at significantly
below the targeted opex synergies run-rate, a positive impact on
EBITDA generation is likely to be achieved in the next one to two
years. In addition, management expects capex synergies of
approximately EUR200m per year. However, their net impact on cash
flow may be dwarfed by the intention to increase absolute capex
spend to around EUR7bn in the coming years.

Management is targeting EUR700m of opex and capex savings per
year (before tax and integration costs) with 30% relating to
capex and 70% to opex, 90% of which should be realised by the
third year after the deal closing.

Substantial Remedy Proceeds

The agreed merger remedies package will bring in substantial one-
off proceeds and additional revenue for the use of the JV's
infrastructure and roaming over the next three to five years.
These proceeds will be a significant contributor to the JV's

Iliad has agreed to acquire a spectrum portfolio for EUR450m with
payments phased across 2017-2019. It has also made an undertaking
to acquire or lease a few thousand mobile towers for an
undisclosed amount. Iliad has also entered into a renewable five-
year roaming agreement for the use of the JV's network. Taking
into account that proprietary infrastructure roll-out is likely
to take time, the new operator will initially heavily depend on
the JV to carry voice and data traffic, implying substantial
additional revenues for the JV.

Loss of Parental Support

WIND'S ratings no longer reflect shareholder support from
Vimpelcom as strategic incentives for support have significantly
diminished. Vimpelcom's shareholder interest is being diluted to
50% and any decisions regarding WIND need to be coordinated with
the other shareholder. JV will have a stronger operating and
leverage profile than WIND standalone, and its creditworthiness
is less sensitive to expectations of shareholder support.

Improved Leverage

"We expect the JV's leverage to significantly improve after the
merger, compared with WIND'S net debt/EBITDA of 5.9x and funds
from operations (FFO) adjusted net leverage of 6.6x at end-2015.
The enlarged operator will have a better deleveraging capacity
primarily driven by the gradual realization of its expected opex
synergies. Targeted opex synergies in the range of EUR500 million
are equal to almost a quarter of combined Wind/3 Italia EBITDA in
2015. The JV is likely to have more stable free cash flow (FCF)
generation than Wind on a standalone basis, with FCF margin
forecast by Fitch in the low-single digit range." Fitch said.

"We project that the JV's leverage may improve to approximately
4.5x net debt/EBITDA and FFO adjusted net leverage slightly above
5x by end-2017, assuming moderate lease payments by 3 Italia. The
largest positive impact on leverage will be from 3 Italia's
EBITDA, which will be contributed to the JV on a debt-free basis.
Additionally, 3 Italia's shareholders have agreed to inject
EUR200 million of cash, which will reduce leverage by 0.1x.
Expected spectrum divestment proceeds are equal to 0.2x of
combined Wind/3Italia EBITDA. We expect that the enlarged
operator would benefit from organic revenue stabilization, with
merger synergies leading progressively to EBITDA margin and cash
flow improvement." Fitch said.

"We forecast that the JV's leverage may improve to a level inside
the threshold required for an upgrade by the end of 2019.
Management has a long-term net debt/EBITDA target of 3.0x for the
enlarged entity." Fitch said.

Debt Structure After Closing

WIND's instrument ratings have been upgraded reflecting the
company's stronger IDR on a standalone basis, i.e. without
parental support. Fitch said, "We do not expect that the proposed
merger will trigger any change of control clauses of WIND's debt,
nor will bond holders' consent be required for WIND's debt to be
transferred to the merged entity."

However, under the terms of the proposed merger, WIND's existing
debt will not immediately benefit from any guarantees from the
combined entity. Therefore, Fitch's recovery expectations for
WIND's instruments only reflect assets that are owned by WIND.
The approach to recovery calculations may change depending on the
financial and legal integration of the two companies once the
deal has closed. Management plans to merge all assets into a
single legal entity shortly after the deal closes. Fitch said,
"In particular, we will examine how the company's legal structure
is adjusted so that existing debt holders benefit from the entire
cash flow of the enlarged entity, as well as the terms of the
subordinated shareholder loans from the JV's holding company to
the operating subsidiaries."

No Refinancing Exposure Before 2019

WIND does not face any significant refinancing exposure before
2019 when EUR700m of its debt becomes due. Fitch said, "We expect
the company to generate sufficient internal cash flow to finance
its capex, with any liquidity gaps covered by undrawn EUR400m RCF
with a maturity in 2019."


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

   -- Successful completion of the merger of WIND and 3 Italia

   -- Flat organic mobile revenue in 2017-2019

   -- Mid- to low-single digits revenue decline in fixed-line
      segment in 2016 and 2017 with stabilization from 2018

   -- EBITDA margin in the range of 32-35% in 2017-2019

   -- No dividends in 2016 and 2017

   -- Zero profit tax in 2017-2019 on the back of tax loss carry-

   -- Capex of EUR1.4bn per year in 2017-2019


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

   -- FFO adjusted net leverage sustainably below 4.8x, driven by
      the successful integration of WIND and 3 Italia.

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

   -- A deterioration in leverage beyond FFO adjusted net
      leverage sustainably above 5.5x.

   -- Continuing operating and financial pressures leading to
      negative FCF generation.


Wind Telecomunicazioni S.p.A.

   -- Long-Term IDR: affirmed at 'B+'; Stable Outlook

   -- Short-Term IDR: affirmed at 'B'

   -- Senior credit facilities: upgraded to 'BB'/'RR2' from 'BB-

Wind Acquisition Finance S.A.

   -- Senior secured fixed and floating 2020 notes: upgraded to
      'BB'/'RR2' from 'BB-'/'RR2'

   -- Senior unsecured 2021 notes: upgraded to 'B'/'RR5' from


MINERVA LUXEMBOURG: S&P Assigns 'BB-' Rating to Sr. Unsec. Notes
S&P Global Ratings assigned its 'BB-' issue-level rating to
Minerva Luxembourg S.A.'s proposed senior unsecured notes due
2026.  S&P also assigned the recovery rating of '3' to the debt,
indicating a meaningful recovery expectation (50%-70%; in the
lower band of the range) under a hypothetical default scenario.

The parent company, Minerva S.A. (BB-/Positive/--), will fully
guarantee the notes, and net leverage impact is expected to be
neutral because the company intends to use the proceeds to cover
a cash tender offer for any and all of the 2023 outstanding notes
and other short-term debt pre-payments.  In this scenario, S&P
continues to forecast the company's funds from operations to debt
improving close to 20% and debt to EBITDA below 3x over the next
few years, while Minerva maintains its strong liquidity.


Minerva S.A.
Corporate Credit Rating            BB-/Positive/--

Rating Assigned

Minerva Luxembourg S.A.
  Senior Unsecured                 BB-
  Recovery Rating                  3L


VIMPELCOM LTD: Fitch Says Impact of Wind-3 Italia Merger Neutral
Fitch Ratings says the impact of a merger of Vimpelcom's Wind and
Hutchison's 3 Italia and deconsolidation of Wind's results from
Vimpelcom's financial reporting is largely neutral for
Vimpelcom's credit profile as Fitch has always excluded Wind from
its analysis of the Vimpelcom group. Fitch has calculated
Vimpelcom's leverage metrics without Wind because the entity is
ring-fenced and its default would not trigger a default by the
parent. Cash flow from the entity has been restricted by the
terms of Wind's loan and bond documentation.

CK Hutchison Holdings Ltd. (A-/Stable), parent company of Italian
mobile operator 3 Italia, and VimpelCom Ltd. (BB+/Stable), parent
company of Wind (B+/Stable), received regulatory clearance to
form a 50/50 joint venture (JV) of their telecommunication
businesses in Italy on 1 September 2016.

"We have never expected Vimpelcom to provide significant
shareholder support to Wind, and estimated any potential impact
on the parent's leverage as modest." Fitch said. Vimpelcom was
likely to extend liquidity support on an as necessary basis or
make modest equity injections to facilitate Wind's refinancing
efforts, but we have always assumed that a large-scale bail-out
was a remote possibility.

The new JV will have a stronger credit profile than Wind on a
standalone basis, and be much less dependent on any additional
parental contributions. Vimpelcom's equity interest in the JV has
been diluted to 50%, reducing economic incentives for providing
shareholder support. Fitch said, "We no longer expect that
Vimpelcom would need to extend any additional shareholder support
to the JV."

Any significant dividends from Wind are unlikely in the short to
medium term. Management estimates that the JV's leverage will be
close to 5x net debt/EBITDA after the deal closes, and it expects
to start paying dividends once leverage drops to below 4x, a
covenanted threshold. Rapid deleveraging seems unlikely as
management plans to increase network investments, with Vimpelcom
guiding for EUR7bn investments in Italy over the next five years.

Vimpelcom's rating continues to be driven by its stable operating
performance outside Italy, and most notably in Russia, while its
cash flow and leverage profile is sensitive to foreign currency
exchange movements. Management expects leverage to approach 2x
net debt/EBITDA by end-2016, an increase driven by an acquisition
of Warid in Pakistan and emerging markets currencies' weakness.
"We estimate that Vimpelcom's leverage at the end of 2016 may
approach or slightly exceed Fitch's defined downgrade threshold
2.25x net debt/EBITDA." Fitch said. This is with Wind and the
Algerian operations deconsolidated by Fitch but reflecting their
regular dividend contributions to Vimpelcom (Wind has not paid
any dividends so far).

Vimpelcom's current deleveraging capacity is supported by its low
dividends. This may be compromised if the company restarts paying
higher shareholder remuneration. Management has announced that
the closing of the Wind/3 Italia merger could be a major
milestone, triggering a dividend policy review no later than in
early 2017. A failure to maintain leverage below our downgrade
threshold on a sustainable basis, whether due to higher
shareholder payouts or weaker than anticipated operational
performance, may put pressure on Vimpelcom's ratings.


MOSTOTREST PJSC: Moody's Withdraws Ba3 Corporate Family Rating
Moody's Investors Service has withdrawn Mostotrest PJSC's Ba3
Corporate Family Rating and Probability of Default Rating of
Ba3-PD.  At the time of the withdrawal the company's ratings
carried a stable outlook.

                        RATINGS RATIONALE

Moody's has withdrawn the rating for its own business reasons.

NOVIKOMBANK: Moody's Confirms B2 Ratings, Outlook Developing
Moody's Investors Service has confirmed the B2 long-term local
and foreign currency deposit ratings and the caa1 baseline credit
assessment (BCA) of Novikombank.  At the same time, the rating
agency has affirmed its short-term deposit ratings of Not-Prime
and confirmed its Adjusted BCA of caa1.  Moody's has also
confirmed the bank's long term Counterparty Risk Assessment of
B1(cr) and affirmed the short term assessment at Not-Prime(cr).
All ratings carry a developing outlook.

These actions conclude the rating reviews initiated by Moody's on
May 23, 2016.

                        RATINGS RATIONALE

The confirmation of Novikombank's BCA of caa1 is supported by the
stabilization of the bank's capital profile following the
implementation of the recapitalization program by the bank's core
shareholder state-controlled corporation Russian Technologies
(RosTech, unrated), as well as the accumulation of a full support
package associated with the financial rehabilitation of
consolidated Fundservicebank.

Novikombank's deposit ratings of B2 incorporate Moody's
assessment of a high probability of government support in case of
need, owing to Novikombank's strategic importance to RosTech,
which consolidated 100% ownership in the bank in July 2016.

In January-July 2016, Novikombank managed to increase its
consolidated core capital by around RUB44 billion, including:

   -- RUB1.8 billion Tier 1 capital injection;
   -- RUB10.9 billion cash and non-cash financial aid from
   -- RUB12.8 billion Tier 1 capital converted from Tier 2 debt;
   -- RUB18.4 billion one-off gains from initial recognition of
      10-year RUB27 billion Tier 2 deposit from State Space
      Corporation ROSCOSMOS, which was received by
      Fundservicebank under 0.51% per annum.

The rating agency considers these steps to be sufficient to
replenish Novikombank's equity back into the positive zone from
negative RUB13.7 billion as at Jan. 1, 2016, which was mainly
driven by high credit costs.  However, the bank's asset quality
metrics continued to erode in January-July 2016.  In accordance
with local GAAP accounts, overdue over one day facilities more
than doubled over the period and accounted for 29% of the gross
loan book as at Aug. 1, 2016.  Loan book deterioration will
require further provisioning both under local GAAP and IFRS
accounts, which will dilute the positive effect from the executed

Although Novikombank's shareholder announced a further capital
replenishment program of another RUB28 billion, there is a risk
that new problem loans may materialize which are not covered by
the approved support package, as well as a possibility of capital
injection delays owing to legal and regulatory complexity.

Moody's assessment of Novikombank's ratings is based primarily on
the bank's audited financial statements for 2015 prepared under
IFRS, its unaudited financial statements for 2016 year-to-date
prepared under local GAAP, as well as information received from
the bank.


The developing outlook reflects the balance between Novikombank's
future capital replenishment program and the possibility of
further deterioration in the bank's asset quality and
profitability metrics.


Novikombank's deposit ratings could be upgraded if the bank
manages to stabilise its asset quality metrics and succeed in
attracting new Tier 1 capital in line with the approved by the
RosTech programme.

The rating agency could downgrade Novikombank's ratings if the
bank fails to attract new capital sufficient to balance existing
asset risks, and/or if its currently performing loan book
delivers higher-than-expected credit costs, resulting in further
erosion of the bank's capital profile.

                      PRINCIPAL METHODOLOGY

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


MADRID AEROSPACE: ST Engineering Liquidates Business
Singapore Technologies Engineering Ltd.'s (ST Engineering)
aerospace arm, Singapore Technologies Aerospace Ltd. (ST
Aerospace) on Sept. 5 disclosed that its 50%-owned associated
company, Madrid Aerospace Services S.L. has been liquidated.

Consequently, Madrid Aerospace Services has ceased to be an
associated company of ST Aerospace.

The liquidation of Madrid Aerospace Services, which is based in
Madrid, Spain, is result of ongoing business review on the
Group's landing gear strategy to streamline capabilities and
optimize resources within the aerospace sector.

Madrid Aerospace Services is a joint venture between ST Aerospace
and Iberia Maintenance, the technical division of Spain's Iberia
Airlines.  Located in Madrid, Spain, the business specializes in
the repair and overhaul of landing gear systems and components.

The liquidation of Madrid Aerospace Services is not expected to
have any material impact on the consolidated net tangible assets
per share and earnings per share of ST Engineering for the
current financial year.

ST Aerospace (Singapore Technologies Aerospace Ltd) -- is the aerospace arm of ST Engineering
with a revenue of $2.09b in FY2015.  Operating a global MRO
network with facilities and affiliates in the Americas, Asia
Pacific and Europe, it is the world's largest commercial airframe
MRO provider with a global customer base that includes leading
airlines, airfreight and military operators.  ST Aerospace is an
integrated service provider that offers a spectrum of maintenance
and engineering services that include airframe, engine and
component maintenance, repair and overhaul; engineering design
and technical services; and aviation materials and asset
management services, including Total Aviation Support. ST
Aerospace has a global staff strength.

ST Engineering (Singapore Technologies Engineering Ltd.) -- is an integrated engineering group
providing solutions and services in the aerospace, electronics,
land systems and marine sectors.  Headquartered in Singapore, the
Group reported revenue of $6.34b in FY2015 and ranks among the
largest companies listed on the Singapore Exchange.  It is a
component stock of the FTSE Straits Times Index, MSCI Singapore
and the SGX Sustainability Leaders Index. ST Engineering has
about 23,000 employees worldwide, and over 100 subsidiaries and
associated companies in 46 cities across 24 countries.

U N I T E D   K I N G D O M

DUKINFIELD II PLC: Moody's Assigns (P)Ba3 Rating to Class E Notes
Moody's Investors Service has assigned provisional long-term
credit ratings to Notes to be issued by Dukinfield II PLC:

  Class A Mortgage Backed Floating Rate Notes due (Dec. 2052),
   Assigned (P) Aaa (sf)
  Class B Mortgage Backed Floating Rate Notes due (Dec. 2052),
   Assigned (P) Aa1 (sf)
  Class C Mortgage Backed Floating Rate Notes due (Dec. 2052),
   Assigned (P) A1 (sf)
  Class D Mortgage Backed Floating Rate Notes due (Dec. 2052),
   Assigned (P) Baa3 (sf)
  Class E Mortgage Backed Floating Rate Notes due (Dec. 2052),
   Assigned (P) Ba3 (sf)

Moody's has not assigned ratings to the Class F Mortgage Backed
Floating Rate Notes due (December 2052) and Class Z Certificates
due (December 2052).

The portfolio backing this transaction consists of UK non-
conforming residential loans originated by multiple lenders:
GMAC-RFC Limited (currently known as Paratus AMC Limited, [65.7]%
of the loans), Dukinfield Mortgages Limited (not rated, formerly
known as Future Mortgages Limited, [14.2]% of the loans),
Mortgages 1 Limited (not rated, [11.2]% of the loans), Edeus
Mortgage Creators Limited (not rated, [2.8]% of the loans), Wave
Lending Limited (not rated, [2.4]% of the loans), Rooftop
Mortgages Limited (not rated, [2.0]% of the loans), Southern
Pacific Mortgages Limited (not rated, [0.7]% of the loans), Amber
Homeloans Limited (not rated, [0.5]% of the loans), Platform
Funding Limited (not rated, [0.4]% of the loans , Citibank Trust
Limited (not rated), Citibank International Limited (A1, formerly
known as Citibank International Plc) and Citifinancial Europe Plc
(not rated, formerly known as Associates Capital Corporation

On the closing date Drake Recoveries Sarl will sell the portfolio
to Dukinfield II PLC.

                        RATINGS RATIONALE

The ratings take into account the credit quality of the
underlying mortgage loan pool, from which Moody's determined the
MILAN Credit Enhancement (CE) and the portfolio expected loss, as
well as the transaction structure and legal considerations.  The
expected portfolio loss of [7.0]% and the MILAN CE of [30]% serve
as input parameters for Moody's cash flow model, which is based
on a probabilistic lognormal distribution.

The portfolio expected loss of [7.0]%: this is higher than other
recent UK non-conforming securitizations and is based on Moody's
assessment of the lifetime loss expectation taking into account:
(i) the number of loans in arrears at closing including the
performance of the pool since January 2011 ([27.8]% of the pool
is in arrears as of the end of June 2016, of which [16.9]% is
more than 30 days in arrears), (ii) the weighted average current
LTV of [84.8]% , (iii) the originator limited historical
performance information, (iv) the current macroeconomic
environment and our view of the future macroeconomic environment
in the UK, and (v) benchmarking with similar transactions in the
UK non-conforming sector.

The MILAN CE for this pool is [30]%: this is higher than the UK
non-conforming sector average and follows Moody's assessment of
the loan-by-loan information taking into account the historical
performance and the following key drivers: (i) the high weighted
average current LTV of [84.8]%, (ii) relatively high balance of
loans to self-certified borrowers ( [45.9]% of the pool), (iii)
the presence of borrowers with bad credit history ([21.9]% of the
pool containing borrowers with CCJ's); (iv) the exposure to
interest only loans ([89.9%] of the pool), (v) the weighted
average seasoning of the pool of [9.0] years and (vi) the level
of arrears (around [27.8]% as of the end of June 2016).

At closing the mortgage pool balance consists of GBP [320.6]
million of loans.  The reserve fund is funded to [2.5]% of the
initial mortgage pool balance and will build up to [3.0]% of the
initial mortgage pool balance through the accumulation of excess
spread.  The general reserve fund will be split into a liquidity
ledger (the Class A Note Liquidity Reserve Sub-Ledger) and a
credit ledger.  At closing, the liquidity ledger will be sized at
[1.0]% of the Class A notes and will amortize with the Class A
notes.  As the Class A notes amortize the credit ledger will be
sized as the difference between the general reserve fund and the
liquidity ledger.

Operational Risk Analysis: Pepper (UK) Limited is acting as
servicer and is not rated by Moody's.  In order to mitigate the
operational risk, the transaction has a back-up servicer
facilitator (Structure Finance Management Limited (Not rated));
Homeloan Management Limited (Not rated) is acting as back-up
servicer and Elavon Financial Services Limited (UK Branch), is
acting as an independent cash manager from close.  To ensure
payment continuity over the transaction's lifetime the
transaction documents incorporate estimation language whereby the
cash manager can use the three most recent servicer reports to
determine the cash allocation in case no servicer report is
available.  Class A notes benefit from principal to pay interest,
a dedicated Class A Liquidity Reserve Fund and the Reserve Fund.
Together both reserves provide the Class A notes with the
equivalent of [2] quarters of liquidity assuming a LIBOR rate of

Interest Rate Risk Analysis: The transaction is unhedged with
[46.4]% of the pool balance linked to Bank of England Base Rate
(BBR), [44.3]% linked to three-month LIBOR, [7.1] SVR-linked
loans, [2.0]% linked to one month-LIBOR.  Moody's has taken the
absence of basis swap into account in its cashflow modeling.

The provisional ratings address the expected loss posed to
investors by the legal final maturity of the Notes.  In Moody's
opinion, the structure allows for timely payment of interest with
respect to Class A Notes, ultimate payment of interest to Class B
to E Notes and ultimate payment of principal with respect to
Class A to E Notes by legal final maturity.  Moody's issues
provisional ratings in advance of the final sale of securities,
but these ratings represent only Moody's preliminary credit
opinions.  Upon a conclusive review of the transaction and
associated documentation, Moody's will endeavor to assign
definitive ratings to the Notes.  A definitive ratings may differ
from a provisional ratings.  Other non-credit risks have not been
addressed, but may have a significant effect on yield to

Moody's Parameter Sensitivities: If the portfolio expected loss
was increased from [7.0]% to [10.5]% of current balance, and the
MILAN CE was increased from [30]% to [36]%, the model output
indicates that the Class A notes would still achieve (P) Aaa (sf)
assuming that all other factors remained equal.  Moody's
Parameter Sensitivities quantify the potential rating impact on a
structured finance security from changing certain input
parameters used in the initial rating.  The analysis assumes that
the deal has not aged and is not intended to measure how the
rating of the security might change over time, but instead what
the initial rating of the security might have been under
different key rating inputs.

Moody's Parameter Sensitivities provide a quantitative/model-
indicated calculation of the number of rating notches that a
Moody's structured finance security may vary if certain input
parameters used in the initial rating process differed.  The
analysis assumes that the deal has not aged and is not intended
to measure how the rating of the security might migrate over
time, but rather how the initial rating of the security might
have differed if key rating input parameters were varied.
Parameter Sensitivities for the typical EMEA RMBS transaction are
calculated by stressing key variable inputs in Moody's primary
rating model.

The principal methodology used in these ratings was "Moody's
Approach to Rating RMBS Using the MILAN Framework" published in
January 2015.

The analysis undertaken by Moody's at the initial assignment of
ratings for RMBS securities may focus on aspects that become less
relevant or typically remain unchanged during the surveillance

Factors that would lead to an upgrade or downgrade of the

Significantly different loss assumptions compared with our
expectations at close due to either a change in economic
conditions from our central scenario forecast or idiosyncratic
performance factors would lead to rating actions.  For instance,
should economic conditions be worse than forecast, the higher
defaults and loss severities resulting from a greater
unemployment, worsening household affordability and a weaker
housing market could result in downgrade of the ratings.
Deleveraging of the capital structure or conversely a
deterioration in the notes available credit enhancement could
result in an upgrade or a downgrade of the ratings, respectively.

LONDON WELSH: Avoids Liquidation, US Group to Take Over
BBC reports that London Welsh have avoided liquidation after
paying their debts, and are now set to be taken over by a United
States-based investment group.

A winding-up petition was dismissed by the High Court on Sept. 5,
BBC relates.

The brief hearing in London revealed an undisclosed amount of
money owed to Her Majesty's Revenue and Customs had been paid by
the Exiles, BBC discloses.

According to BBC, a club statement said the takeover had been
agreed, subject to the approval of the Rugby Football Union.

Welsh -- one of England's oldest clubs, having been formed in
1885 -- said the financial security provided by the unnamed
California-based group would allow the club "to plan for the
future with confidence and renewed enthusiasm", BBC relays.

OXFORD CITY: Averts Liquidation Following Tax Bill Payment
Oxford Mail reports that Oxford City has survived liquidation by
paying off an outstanding tax bill at the "last-minute."

The club had been summoned to the High Court faced with a winding
up order which could have seen them go out of business, Oxford
Mail relates.

A club spokesman told the Oxford Mail: "We had an outstanding
HMRC payment that the club has now paid off.

"It was paid off at the last minute, and the day before the
winding up order and there was no way of cancelling the hearing."

The club also confirmed it was in talks with "three or four"
potential investors, Oxford Mail discloses.

RAME ENERGY: Mulls Sale of Operations Following Administration
Stephen Farrell at Insider Media Limited reports that a potential
sale of Rame Energy and its subsidiaries could be in the offing
following its administration last month.

The business, which specializes in wind and solar power projects
with a particular focus on Chile, blamed the EU referendum result
and "difficult market conditions" for problems raising funds,
Insider Media relates.

Andrew Beckingham -- -- and
Colin Prescott -- -- of
Leonard Curtis Recovery were appointed as joint administrators of
Rame Energy plc on August 4, 2016, Insider Media recounts.

According to Insider Media, the administrators have now prepared
a formal statement of proposals for the business.

Talks have taken place with existing shareholders and other
shareholders regarding new investment in either recapitalizing
the group or the acquisition of subsidiary businesses Chile and
the UK, Insider Media relays.

They have now entered into an exclusivity period with a potential
purchaser for interests in the subsidiaries based in Chile and
are "continuing to advance discussions" regarding the sale of UK
operations, Insider Media discloses.

There may also be the potential for a company voluntary
arrangement (CVA) to be put to creditors of the company for
consideration alongside a possible sale of assets, Insider Media

If this is not possible, the administrators have said there could
be a dividend paid to unsecured creditors, owed GBP4.4 million,
through realizations from asset sales, Insider Media states.

Rame Energy is a Plymouth-based renewable energy company.

TURNSTONE MIDCO: Fitch Cuts LT IDR to 'B'; Removes from Watch Neg
Fitch Ratings has downgraded Turnstone Midco 2's (Turnstone)
Long-Term Issuer Default Rating to 'B' from 'B+' and removed it
from Rating Watch Negative. The Outlook is Stable. The downgrade
follows the completion of IDH Finance PLC's issue of GBP425
million new senior notes, to which we have assigned a final
senior secured rating of 'B+' with a Recovery Rating of 'RR3'.

"We have also assigned a final rating of 'BB' with a Recovery
Rating of 'RR1' to the GBP100 million super senior revolving
credit facility (RCF) with recourse to Turnstone." Fitch said.

These rating actions are in line with the agency's expectations
as detailed in the Rating Action Commentary dated July 25, 2016,
following the launch of the refinancing, with the terms of the
final documentation of the bonds in line with the information
already reviewed at the time of assigning the expected ratings.

The proceeds from the issue, together with the cash on balance
sheet and proceeds from an unrated second lien issue, have been
used to refinance the group's existing GBP539 million debt
(senior and second lien notes, as well as drawings under a senior
secured RCF) and associated transaction costs, improving the
group's liquidity and maturity profile.

The downgrade of Turnstone's IDR reflects weaker debt service and
coverage ratios post refinancing to levels more commensurate with
a 'B' rating. Funds from operations (FFO)-adjusted net leverage
will increase to 6.7x in the financial year ending March 31, 2017
and FFO fixed-charge cover will weaken to below 2.0x, due to the
larger amount of debt, higher cost of debt, and weaker
profitability as the result of under-delivery of units of dental
activity (UDA) and negative FX impact.

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

Turnstone also has a record of acquiring and successfully
integrating small dental businesses; self-sufficiency in dental
supply services; an expanding network of dental practices, which
delivers economies of scale; and a close relationship with the

Following the downgrade, the 'B' rating has significant headroom
for Turnstone to deliver on its growth strategy as a consolidator
in the still fragmented dental services market in the UK. This is
reflected in the Stable Outlook.


Increased Leverage, Improved Financial Flexibility

Debt protection ratios have weakened as the result of the
completed refinancing, with FFO adjusted net financial leverage
increasing to 6.7x in FY17 from 6.4x a year earlier and FFO fixed
charge cover weakening to below 2.0x, from 2.1x per our previous
expectations. This will be predominantly driven by the larger
amount and higher cost of debt as well as weaker profitability as
the result of UDA underperformance and FX headwinds. Fitch said,
"We now view these metrics as commensurate with a 'B' rating,
although the new debt has lengthened Turnstone's maturity profile
and improved liquidity, providing the company with sufficient
financial flexibility to continue its strategic development."

Lower-than-Average Business Risk

Fitch views the business profile of Turnstone as stronger than
its financial metrics for the 'B' rating category. The business
is supported by growing scale in its operations, self-sufficiency
and brand investments. IDH benefits from its leading market
position in the UK NHS dental sector, and enjoys stable cash
flows, which are underpinned by long-term evergreen contracts.

IDH is also well-placed to tap a structurally growing private
dental market. "As a result, we project sustainable free cash
flow (FCF) margin of 2%-4% for the business over the four-year
rating horizon, with the exception of FY17, where FCF will be
negative due to exceptional costs, which are mostly associated
with the debt refinancing. Constraints are its modest scale and
limited diversification, compared with international healthcare
peers rated by Fitch." Fitch said.

'Sticky' NHS Contracts

"The rating reflects a decrease in UDA delivery to 92.4% in FY16
from 95.8% in FY15 and compared with a target of 96%. The decline
was a result of fewer exempt patients due to an improving
economy, a change in patient mix, and increased NHS scrutiny on
delivery, claims and performance benchmarks, which we view as an
industry-wide trend to improve value generated in the system."
Fitch said.

As a result IDH's productivity suffered and management is taking
active measures to recover UDA performance towards the long-term
target of 96%, which include actively managing dentist
productivity, simplifying administration and achieving an
improved patient and appointment mix, in addition to increasing
the share of private treatments.

Fitch projects a long-term average EBITDA margin trending towards
15% (against historical margins of closer to 19% and FY16 margin
at 14.2%) based on expected improvement in UDA performance,
greater value focus in NHS contracts, the shifting patient mix to
private dental services as well as the integration of the dental
supply operations, both of which have structurally lower margins.
A key risk to the margin targets are FX headwinds following the
recent depreciation of sterling, as some of the Practice Service
division's costs are based in euros and US dollars.

Acquisitions Add Scale, Diversification

Fitch expects Turnstone to continue its targeted and carefully
executed acquisition strategy as the fragmented UK dental sector
consolidates further. However, the current weaker UDA performance
and profitability, together with increased acquisition
valuations, have led to management prioritizing improvement of
operating performance over aggressive acquisition growth for

Fitch has reflected this strategy shift in its rating case
assumptions, lowering the acquisition budget for FY17 to GBP13m
(from GBP40 million previously) but increasing thereafter in line
with an improvement in operating performance. Fitch said, "We
view this change in strategic emphasis as prudent in the current
uncertain environment, confirming management's disciplined
approach to external growth. We view the integration and
execution risk as manageable based on IDH's good track record and
will treat larger acquisitions outside our defined parameters as
event risk."


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


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

   -- Recovery in UDA delivery leading to an organic increase in
      NHS patient services revenues. This, combined with
      acquisitions, will lead to annual revenue growth of around
      7% in 2017 and 2018.

   -- Continued strong like-for-like growth in private patient
      services as the rebalancing and rebranding strategies
      continue to take effect. This is projected to lead to
      revenue growth of just under 10% a year through to 2018.

   -- Moderate growth in practice services (3.7% in FY17).

   -- Increased focus on profitability, UDA performance and
      mitigation of FX headwinds should see EBITDA margins
      trending towards 15%.

   -- Continuation of acquisition strategy, albeit at a slower
      pace, as management shifts focus to performance
      improvements over external growth. Acquisition multiples
      are projected to be greater than 6.0x EV/EBITDA. This will
      lead to acquisition cash outflows of about GBP20 million on
      average a year, which will be partly funded by drawings
      under the RCF.


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

   -- Ability to increase diversification and scale via
      acquisitions without diluting profits or FCF, while
      maintaining FFO-adjusted net leverage below 6.0x (FYE16:
      6.4x) on a sustained basis;

   -- FFO fixed-charge coverage above 2.0x (FYE16: 1.9x)

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

   -- Reduced profitability from failure to achieve UDA delivery,
      achieve cost synergies or to manage cost inflation, leading
      to EBITDA margin falling below 10%

   -- Negative FCF, for example, as a result of an unsuccessful
      acquisition strategy driving weaker credit metrics such as
      FFO-adjusted net leverage to above 7.5x (pro forma for

   -- FFO fixed-charge coverage below 1.5x on a sustained basis


"With no material debt maturity over the four-year rating horizon
post-refinancing, we assess liquidity as adequate for Turnstone
to implement its prudent growth strategy. Post refinancing,
Turnstone has readily available cash of GBP9 million in addition
to the GBP100 million super senior RCF." Fitch said.

WAGAMAMA LTD: S&P Raises Parent's CCR to 'B', Outlook Stable
S&P Global Ratings said it has raised to 'B' from 'B-' its long-
term corporate credit rating on Mabel Topco Ltd., the parent
company of U.K.-based casual dining restaurant operator Wagamama
Ltd.  The outlook is stable.

Accordingly, S&P raised its long-term issue rating on the group's
GBP150 million senior secured notes to 'B'.  The recovery rating
on these notes remains unchanged at '4', indicating S&P's
expectation of average (30%-50%) recovery prospects in the event
of a payment default.

At the same time, S&P also raised its long-term issue rating on
the group's GBP15 million super senior revolving credit facility
(RCF) to 'BB'.  The recovery rating on the RCF remains unchanged
at '1+', indicating S&P's expectation of full recovery prospects
in the event of a payment default.

S&P's upgrade primarily reflects Wagamama's very strong like-for-
like sales growth in the U.K. (9% in FY2015 and 13% in FY2016)
alongside new site openings and restaurant refurbishments, while
maintaining S&P's adjusted EBITDA margin at about 22%-23%.  Going
forward, S&P anticipates that Wagamama will maintain strong
operating fundamentals, resulting in our forecast of EBITDAR cash
interest coverage (defined as unadjusted EBITDA before deducting
rent over cash interest plus rent) being above 1.7x, signaling
improved deleveraging prospects.

S&P's view of the Wagamama's highly leveraged capital structure
reflects its high debt level, sizable operating lease profile,
and the inherent risk of dividend recapitalization under
financial sponsor ownership.  S&P forecasts adjusted debt to
EBITDA to remain over 8x in FY2017 and FY2018 (or about 5x in
FY2017 and FY2018 when excluding the unsecured shareholder loan
notes).  S&P treats the unsecured shareholder loan notes as part
of its adjusted debt due to insufficient economic incentives
aligning with common equity.

As Wagamama rapidly opens new sites and refurbishes existing
restaurants, S&P also expects the group to reinvest most of its
operating cash flow for growth capital expenditure (capex),
resulting in minimal reported free operating cash flow (FOCF)

Wagamama is the U.K.'s eighth-largest branded casual dining
restaurant chain competing in the highly fragmented eating-out
market.  The group operates about 125 restaurants under its own
brand name in prime locations across the country, and is
expanding at a steady pace with about five net new restaurants
per year.

In light of the weakened pound sterling, S&P anticipates that
suppliers would negotiate for a moderate rise in food costs over
the medium term.  Nevertheless, S&P understands that the group
has locked in prices on its key ingredients with its major
supplier until 2018.  This helps the group mitigate some food
inflation pressure in the near term.  As a result, S&P forecasts
that the group's adjusted EBITDA margin could remain at about
22%-23% in FY2017 and FY2018.

At the same time, the nature of the restaurant's operations is
constrained by the risks of changing trends in consumers' eating-
out habits, fierce competition, and the inherit risk of food
safety and hygiene issues.  Relative to other rated restaurant
peers, S&P considers that Wagamama's scale of operations still
has significant room to expand.  These factors result in a
business risk profile assessment at the high end of the weak

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

   -- U.K. real GDP growth slowing to 1.5% in 2016 and 0.9% in
      2017 following the U.K.'s Brexit vote.

   -- Increased consumer price index growth of 0.9% in 2016 and
      2.2% in 2017.

   -- Strong sales growth of about 12% in FY2017 and 14% in
      FY2018, supported by strong like-for-like sales growth in
      the U.K., restaurant refurbishments, and steady new site

   -- Adjusted EBITDA margin of about 22%-23% as S&P expects the
      group should be able to keep costs under control and
      benefit from economies of scale under a steady pace of

   -- Capex at 11%-12% of revenues, most of which would be used
      to fund restaurant refurbishments and new site expansion.

   -- Increasing operating lease obligations in line with new
      site openings.

   -- No shareholder remunerations in the near term.

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

   -- Adjusted debt to EBITDA of about 8.5x in FY2017 and 8.1x
      and FY2018 (about 5.3x in FY2017 and 5.0x FY2018 when
      excluding unsecured shareholder loan notes).

   -- EBITDAR interest coverage of above 1.7x in FY2017 and

   -- Minimal reported FOCF of less than GBP5 million per year in
      FY2017 and FY2018 due to elevated capex.

Wagamama has one financial covenant, which requires the group to
maintain a minimum EBITDA of GBP17 million.  S&P believes that
the group should exhibit significant covenant headroom over the
next 12 months.

S&P's stable outlook primarily reflects its expectation that
Wagamama should continue to expand on the back of strong like-
for-like sales growth, restaurant refurbishments, and new site
openings in the U.K.  S&P forecasts an adjusted debt-to-EBITDA
ratio of above 8.0x (or about 5x when excluding unsecured
shareholder loan notes) and EBITDAR cash interest coverage of
over 1.7x over the next 12 months.

S&P could consider lowering the ratings if the group's operating
performance deteriorates and it is unable to rein in capex
accordingly, leading to EBITDAR cash interest coverage
approaching 1.5x and weakening liquidity.  Such a scenario could
result from a slowdown in the U.K. economy, increasing
competition in the eating-out market, a supply chain disruption,
or a food safety scare.

S&P could also lower the ratings if the financial sponsor
materially increases leverage by adopting a more aggressive
financial policy with respect to growth, investments, or
shareholder returns.

S&P could consider raising the ratings if, on the back of strong
reported FOCF generation and an adequate liquidity position,
Wagamama reduces its leverage such that S&P's adjusted debt-to-
EBITDA ratio improves to below 5x (including the shareholder loan
notes) on a sustainable basis.  An upgrade would also be
contingent on management and the financial sponsor demonstrating
a commitment to a conservative financial policy.


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

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

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


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

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

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

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