TCREUR_Public/160927.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, September 27, 2016, Vol. 17, No. 191


                            Headlines


B E L G I U M

SARENS BESTUUR: S&P Affirms 'BB-' LT Corporate Credit Rating


G E O R G I A

GEORGIAN RAILWAY: S&P Lowers CCR to 'B+', Outlook Stable


G R E E C E

GREECE: IMF Calls on EU States to Take Action on Bailout Plan


N E T H E R L A N D S

PANTHER CDO IV: Fitch Raises Rating on Class C Notes to 'Bsf'
REFRESCO GROUP: S&P Affirms 'BB' Long-Term CCR, Outlook Stable
TMF GROUP: Moody's Affirms B2 Corporate Family Rating


P O R T U G A L

BANCO SANTANDER TOTTA: Moody's Affirms Ba1 Senior Debt Ratings


R U S S I A

AGENCY FOR HOUSING: S&P Affirms 'BB+/B' ICRs, Outlook Stable
ATOMIC ENERGY: S&P Affirms 'BB+/B' CCRs, Outlook Stable
CENTRAL COMMERCIAL: Placed on Provisional Administration
DEFENCE INDUSTRIAL: Placed on Provisional Administration
KIROVHLEB: Ceases Operations, Prepares to Enter Bankruptcy

RUSSIAN RAILWAYS: S&P Rates Proposed USD-Denominated Notes BB+
VNESHECONOMBANK: S&P Affirms 'BB+/B' ICRs, Outlook Remains Neg.


S P A I N

CAIXA PENEDES: Fitch Withdraws BB+ Rating on Class C Notes


U N I T E D   K I N G D O M

DUKINFIELD PLC: Moody's Affirms Ba1 Rating on Class E Notes
JAMES HAUGH: Goes Into Liquidation
KMART: 2 Minn. Stores Closing, Liquidation Sales Start This Week
MICRO FOCUS: S&P Affirms 'BB-' Corporate Credit Rating
MONARCH AIRLINES: Denies Bankruptcy Rumors, In Takeover Talks


                            *********



=============
B E L G I U M
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SARENS BESTUUR: S&P Affirms 'BB-' LT Corporate Credit Rating
------------------------------------------------------------
S&P Global Ratings affirmed its long-term corporate credit rating
on Belgium-based Sarens Bestuur N.V. at 'BB-'.

At the same time, S&P affirmed its 'BB-' issue rating on the
group's EUR125 million senior unsecured notes and proposed
EUR125 million tap, issued by Sarens Finance Co. N.V. (Sarfin NV).
The recovery rating on this debt instrument is unchanged at '3',
indicating S&P's expectation of meaningful (50%-70%) recovery in
the event of a payment default.

Sarens is tapping its existing EUR125 million subordinated notes
for an additional EUR125 million, which should result in a total
quantum of these notes of EUR250 million.  The proceeds will be
used to repay the company's EUR45.7 million subordinated de groof
bond, maturing December 2016, and also to repay some current
drawings under the company's global leasing facilities and
bilateral lines, including its RCF.  The net effect on Saren's
adjusted debt is therefore minimal, but the transaction should
offer the company greater headroom and flexibility under its
global debt facilities going forward.  This should in turn support
the build out of the sizable contract with Chevron ("The TCO
contract"), which will ramp up through 2017.

In July 2016, TCO formally approved the US$36 billion project to
increase the well pressures and production capacity of the
existing Tengiz refinery, with the new plant being built on a
modular basis incorporating pre-assembled units (PAUs), mainly
fabricated in Korea, and pre-assembled racks (PARs), fabricated
within the Caspian.  Under the scope of the agreement, Sarens is
contracted to develop and operate two Trans-Shipment Bases (TSBs),
one in Northern Europe with the location to be confirmed, and one
in Bulgaria, where cargo will be offloaded from ocean-going
vessels and reloaded onto smaller Russian Inland Waterway System
(RIWS) vessels for onward delivery into the Caspian.  At the
Kazakhstan building site, Sarens is contracted to off-load, store,
stack, and transport the modules to their installation points.

On the other hand, Sarens continues to experience challenging
trading conditions and project delays in some of its end markets,
specifically the oil and gas and commodity industries.  This has
led to increased pricing pressure in other industries in which
Sarens and its direct competitors are active.

S&P's base case for fiscal 2016 assumes:

   -- Revenue contraction of about 4% to more than EUR560
      million.
   -- EBITDA margin of about 24%-25%.

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

   -- S&P Global Ratings-adjusted debt to EBITDA of about 4.6x at
      fiscal year-end 2016, improving toward 4x at fiscal
      year-end 2017; and
   -- FFO to debt of about 15% and trending toward 18%,
      respectively, over the same period.

S&P considers Sarens' operating cash flow to be sufficient to
cover debt service, working capital requirements, and capital
spending for maintenance.  Historically, the company has invested
heavily to expand its global fleet and meet growing demand,
resulting in negative free operating cash flow (FOCF).  This trend
has reversed in the past 12-18 months and S&P considers
management's ability to pare back capital expenditure (capex)
rapidly when demand slows as an important factor for the rating.
S&P notes that the average useful economic life of Sarens' crane
fleet is 7.6 years.

In terms of its capital structure, Sarens has a well-balanced and
relatively long-dated debt maturity profile.  S&P assesses Sarens'
risk-management policies as adequate.  The company generates a
large portion of its revenues in foreign currencies, and hedges
its cash flows to protect against foreign exchange risk.  The
company's financial obligations are mainly euro-denominated.  As a
majority family-owned company, S&P considers Sarens' access to
equity markets to be restricted.

Sarens' exhibits adequate liquidity, reflecting S&P's expectation
that liquidity sources will exceed uses by 1.2x in the next 12
months.

Over the next 12 months, S&P expects principal liquidity sources
to be:

   -- About EUR59 million available under a EUR99 million
      revolving credit facility, maturing November 2019;

   -- Cash on balance sheet of about EUR57 million as of June 30,
      2016;

   -- FFO of about EUR90 million; and

   -- Proceeds of EUR125 million from the notes tap.

Over the same period, S&P expects these principal liquidity uses:

   -- Up to EUR50 million of capex;
   -- Working capital outflows up to EUR20 million;
   -- Net repayment of the company's global leasing facility and
      bilateral lines over our rating horizon, which Sarens draws
      from and repays throughout the fiscal year as it acquires
      and disposes of cranes for its fleet; and
   -- The company's capital structure includes a EUR45.7 million
      subordinated loan (The "de Groof bond") that matures in
      December 2016, to be repaid with proceeds from the proposed
      notes tap.

S&P expects Sarens to exhibit sufficient covenant headroom for the
next 12 months.  As part of the proposed notes tap transaction,
Sarens has agreed with its lenders that its interest coverage
ratio will be changed to 3.5x, from 4x, resulting in greater
covenant headroom going forward.

The stable outlook reflects S&P's view that Sarens will
comfortably maintain credit metrics commensurate with an
aggressive financial risk profile, and that these metrics will
gradually improve as end markets recover.  To maintain a 'BB-'
rating, S&P expects Sarens to exhibit debt to EBITDA trending
toward 4x and FFO to debt trending toward 20%.

S&P could lower the ratings on Sarens if its debt to EBITDA and
FFO to debt were to weaken toward the lower end of its aggressive
financial risk profile, specifically toward 5x and 12%,
respectively.  This could happen if market conditions,
specifically in oil and gas and commodities, are weaker than S&P
expects for the next 12 months.  S&P could also lower the ratings
if Sarens' liquidity were to weaken beyond S&P's base case,
specifically if it anticipated that headroom under covenants were
to fall to below 15%.

S&P could raise the ratings if Sarens' credit metrics recover to a
level commensurate with a significant financial risk profile,
specifically if the company were to sustain FFO to debt of more
than 20% and debt to EBITDA of less than 4x, and if S&P believes
that near-to-mid-term macroeconomic and industry conditions
support those improved levels.



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G E O R G I A
=============


GEORGIAN RAILWAY: S&P Lowers CCR to 'B+', Outlook Stable
--------------------------------------------------------
S&P Global Ratings lowered its long-term corporate rating on
Georgia's national railway operator, JSC Georgian Railway (GR), to
'B+' from 'BB-'.  The outlook is stable.  S&P affirmed the short-
term rating on GR at 'B'.

At the same time, S&P lowered its rating on GR's senior unsecured
bonds to 'B+' from 'BB-'.

The rating action primarily reflects S&P's assessment that the
financial leverage at Georgian Railways has increased as a result
of the decline in freight volumes in the first half of 2016, and
will recover to previous levels in the next 12-24 months.

S&P estimates that, in the first eight months of the year, GR has
lost up to 47% of oil product turnovers, one of its most
profitable cargo types.  There was also a decline of about 16% in
dry cargo volumes, with some items falling by more than 30%.  The
causes vary between cargo types and include weaker economic
environments in neighboring economies and repair and maintenance
works in the oil and gas processing plants that supply liquid
products.  The increase of about 78% in sugar turnovers helped to
keep the dry cargo decline relatively moderate, compared to the
oil products.

GR has managed to grow volumes of crude oil transportation by up
to 70% thanks to a contract with Turkmenistan.  However, the
smaller absolute numbers and lower profitability of crude oil
operations limits the positive effect on overall performance.
Overall, the financial results have weakened at GR.  S&P now
expects that its debt to EBITDA will increase to more than 5.0x
and funds from operations (FFO) to debt will be below 12% at the
end of 2016, compared with the 2015 levels of 3.2x debt to EBITDA
and 24% FFO to debt.

At the same time, S&P expects financial metrics to improve in 2017
and 2018, following the recovery of transportation volumes on
major freight types.  Certain types of goods, such as oil
products, sugar, and grains, have already demonstrated positive
dynamics in August and S&P expects the trend to continue in the
coming months.  S&P has consequently revised its view of GR's
financial risk profile to aggressive, which reflects S&P's
expectation that its debt to EBITDA will stay below 5x and FFO to
debt above 12% in 2017, with both ratios improving further in
2018.

S&P's base case assumes:

   -- Revenues to decline by 23%-27% in 2016 with a subsequent
      recovery of 10%-15% in 2017-2018.

   -- S&P Global Ratings-adjusted EBITDA margin to fall to
      45%-50% in 2016 and stay in the 45%-50% area over the next
      two-to-three years.

   -- Dividends distributed in line with company policy.

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

   -- Debt to EBITDA of 5.0x-5.5x in 2016, 4.5x-5.0x in 2017, and
      4.0x-4.5x in 2018.

   -- FFO to debt of 8%-12% in 2016, 12%-15% in 2017, and 15%-19%
      in 2018.

S&P continues to assess GR as a government-related entity with a
very high likelihood of government support.  S&P's view is based
on its assessment of GR's:

   -- Very important role for the Georgian government given GR's
      monopoly position as the manager and owner of the national
      rail infrastructure and sole nationwide rail freight
      provider.  In S&P's view, GR plays a key role in
      implementing Georgia's infrastructure development plan,
      underpinning its strategic importance for the government
      and the economy.  Furthermore, GR is a major player in the
      domestic economy, with revenues accounting for about 2% of
      Georgian GDP.  In addition to being the largest employer in
      the country, with about 12,500 staff, GR is also one of the
      largest taxpayers in Georgia; and

   -- Very strong link with the Georgian government, given that
      it is 100% state-owned (via the fully government-owned
      State Partnership Fund), even though the state may dilute
      its ownership through an IPO of a minority stake.  The
      government retains control of the company and appoints its
      management and supervisory board via the Partnership Fund,
      thus retaining control over main strategic decisions.

The stable outlook on GR reflects S&P's expectation that the
company should be able to stabilize its operating performance in
the remaining months of 2016 and begin to gradually improve its
financial measures.  S&P expects that the company should be able
to maintain its margins within the 40%-50% range and its FFO-to-
debt measures will be sustainably above 12%.

S&P could lower its ratings on GR if the company were unable to
stabilize its performance and maintain EBITDA margins above 40% or
if its FFO-to-debt ratio were to stay below 12% for a sustained
period.  S&P could also take a negative rating action if company's
cash balances deplete, materially weakening its liquidity
position.  Also, if S&P was to downgrade Georgia, S&P would likely
take a similar rating action on GR.

S&P could raise the rating on GR if the company were to
demonstrate meaningful improvement in its operating performance
and profitability, leading its FFO-to-debt ratio to increase
sustainably to above 20% and debt-to-EBITDA ratio to fall below
4x.



===========
G R E E C E
===========


GREECE: IMF Calls on EU States to Take Action on Bailout Plan
-------------------------------------------------------------
Jim Brunsden and Mehreen Khan at The Financial Times report that
the International Monetary Fund has piled pressure on eurozone
governments to take bolder action to alleviate Greece's debt
burden, saying that current plans do not go nearly far enough to
address the country's chronic problems.

The fund's warning shot comes as it weighs whether or not to take
part in the latest bailout of Greece -- a key decision for some EU
nations, such as Germany, that see IMF participation as vital to
the credibility of Greek rescue program, the FT relays.

Debt relief "going well beyond what is currently under
consideration" will be needed to make Greece's finances
sustainable, the IMF, as cited by the FT, said in a statement
published on Sept. 23.

"Further debt relief will be required to restore sustainability .
. . and it should be calibrated on realistic assumptions about
Greece's ability to generate sustained surpluses and long-term
growth," the FT quotes the fund as saying in its statement, which
is based on the findings of a team of officials that visited
Athens earlier this month.

The IMF report is an early salvo in the difficult talks to come
over its possible participation in the Greek bailout, the FT
notes.  The fund is set to take its decision by the end of this
year, the FT discloses.

The IMF and the EU have clashed over whether the conditions
attached to a bailout plan thrashed out last year by EU leaders
are realistic, with the fund's managing director, Christine
Lagarde, consistently calling for substantial debt relief.

Athens, the FT says, is currently struggling to meet the
conditions attached to its latest injection of bailout funds,
having met just two of the 15 outstanding milestones needed to
release EUR2.8 billion of rescue cash this autumn.

The measures, which were set to be finalized over the summer,
cover everything from labor market reforms to the creation of a
controversial privatization fund sequestering Greek assets, the FT
states.



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


PANTHER CDO IV: Fitch Raises Rating on Class C Notes to 'Bsf'
-------------------------------------------------------------
Fitch Ratings has upgraded Panther CDO IV notes, as:

  Class A1 (ISIN XS0276065124) upgraded to 'AA+sf' from 'Asf';
   Outlook Stable
  Class A2 (ISIN XS0276066361) upgraded to 'AA+sf' from 'BBBsf';
   Outlook Stable
  Class B (ISIN XS0276068730) upgraded to 'BBBsf' from 'Bsf';
   Outlook Positive
  Class C (ISIN XS0276070553) upgraded to 'Bsf' from 'CCCsf';
   Outlook Stable

Panther CDO IV B.V. is a managed cash arbitrage securitisation of
a diverse pool of assets, including high-yield bonds, asset-backed
securities, senior loans and second lien loans.  The portfolio is
managed by M&G Investment Management Limited.

                        KEY RATING DRIVERS

The upgrades reflect increases in credit enhancement (CE) across
the capital structure and a decrease in fixed-rate assets over the
past 12 months, thereby significantly reducing the interest rate
mismatch between the underlying assets and liabilities.  The
Positive Outlook on the class B notes reflects potential further
upgrades if deleveraging continues at the current rapid pace.

Credit enhancement has increased on the class A1 to 70% from 49%,
on the class A-2 notes to 46% from 32%, on the B notes to 26% from
19% and on the class C notes to 12% from 10% during the past year.
The increase in CE was mainly driven by assets sales and
prepayment.

The manager sold approximately EUR35.5 mil. worth of assets over
the last 12 months.  The sales were concentrated in fixed-rate
bonds with a weighted average selling price above par.  As a
result, the manager has built approximately EUR0.5 mil. of
additional par in the transaction.  In addition, approximately
EUR28 mil. of principal proceeds were received due to prepayment.

The trading activity also resulted in a decrease in fixed-rate
asset exposure.  As of the September 2016 investor report, fixed-
rate assets represented EUR8.3 mil., down from EUR30.9 mil. a year
ago.  The decrease in fixed-rate asset exposure is particularly
beneficial for the floating-rate liability structure.  Class A1
and A2 notes are now able to pay timely interest under Fitch's
rising interest rate stress scenario and the ratings are no longer
constrained by the timeliness of interest payment.

However, the ratings of the class A1 and A2 notes are capped to
'AA+sf', in line with the rating cap for Italian and Spanish
structured finance transactions due to the exposure of the
transaction to these jurisdictions.  Peripheral assets currently
represent approximately 23.5% of the performing portfolio and may
increase further as the portfolio amortizes.  These assets are
concentrated in the ABS sub-portfolio with a long expected
maturity date.

The transaction is increasingly exposed to high concentration
risk, particularly in the ABS sub-portfolio.  Given the
uncertainty on ABS amortization profile Fitch decided to stress
the maturity date of the large obligors in the ABS sub-portfolio
to their legal maturity date.  This approach introduces a
variation to Fitch's Global Surveillance Criteria for Structured
Finance CDOs leading to a rating lower by one category for the
class B notes.  The portfolio concentration has increased over the
last 12 months, with the largest and top ten obligors representing
respectively 5.7% and 40.2% as of the September 2016 investor
report.

Until the payment date in September 2016, the transaction had a
macro interest rate swap in place where the issuer was paying a
fixed rate in exchange of Euribor 6 months.  Given the current low
interest rate environment, the issuer was making a substantial
payment to the hedge counterparty on each payment date.  The
transaction is also paying deferred placement fee until the
payment date in March 2017.  Following the maturity of the
interest rate swap and full repayment of the deferred placement
fees, Fitch expects available excess spread to increase.

The portfolio is a combination of ABS assets and leveraged loans
and high-yield bonds.  The proportion of ABS assets has increased
to approximately 60% of the performing portfolio from 50% over the
last 12 months.  Asset performance has been broadly stable over
the last 12 months.  The Fitch-weighted average rating factor, as
reported by the trustee, increased to 15.23 from 14.77 during the
same period, reflecting slight deterioration in the credit quality
of the performing portfolio.  Defaults currently stand at EUR30
million, up from EUR25 million a year ago.

                        RATING SENSITIVITIES

Fitch found that reducing the recovery rate or increasing the
default rate by 25% each would not have any impact on the ratings
of the notes

     USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO RULE 17G-10

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

                          DATA ADEQUACY

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

The majority of the underlying assets have ratings or credit
opinions from Fitch and/or other Nationally Recognised Statistical
Rating Organisations and/or European Securities and Markets
Authority registered rating agencies. F itch has relied on the
practices of the relevant Fitch groups and/or other rating
agencies to assess the asset portfolio information.

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


REFRESCO GROUP: S&P Affirms 'BB' Long-Term CCR, Outlook Stable
--------------------------------------------------------------
S&P Global Ratings said that it affirmed its 'BB' long-term
corporate credit rating on Refresco Group NV.  The outlook is
stable.

At the same time, S&P affirmed its 'BB' issue rating on the
EUR722 million term loan B due 2021 with a recovery rating of '3',
reflecting S&P's expectation of meaningful (50%-70%) recovery in
the event of a payment default, at the higher end of the range.

The affirmation follows Refresco's recent acquisitions, including
Dutch co-packing business DIS and U.S.-based Whitlock Packaging,
after the company increased its syndicated loan facility to
EUR722 million.  The new facility now expires in July 2021 and
includes a revolving credit facility (RCF) of EUR150 million,
which is currently undrawn.  S&P sees the acquisitions as
consistent with the company's buy-and-build strategy and expect
earnings contributions over the next 12-18 months to support S&P's
significant financial risk profile assessment.

Refresco remains a market leader in the fragmented bottling and
packaging industry.  The group enjoys strong positions in large
European consumer markets including Germany, Benelux, France,
Italy, the U.K., and Iberia.  S&P views these markets as being
relatively mature, however, with the group's investment in modern
manufacturing plants, increased productivity, and variety in
packaging formats helping to maintain a competitive advantage over
other players.

The group has historically had significant exposure to private-
label production, which generally has lower margins and shorter
contract profiles than branded production.  Following the recent
Whitlock and DIS acquisitions, however, the group is expected to
improve the proportion of volumes from branded customers to above
30% from around 20% at year-end 2015.  Refresco will also enter a
new geographic market, the U.S.  This is expected to support the
group's overall growth prospects as North America is the largest
soft drinks market globally, with higher per capita consumption
rates than Western Europe.  There is also the potential for
further acquisitions as many U.S. players are smaller and
regionally focused, and if the group is able to leverage their
existing customer relationships it could help to drive increased
volumes.

S&P notes however, that Refresco continues to be exposed to
volatility in input prices, including raw materials such as juice
concentrate and sugar and packaging materials including PET,
liquid paper board, and aluminum cans.  The group mitigates some
of this exposure with the use of forward purchasing in its
procurement and pass-through mechanisms in its contracts.  The
increased proportion of co-packing volumes should also support
working capital volatility going forward as these volumes are
predictable and the raw materials are often provided by their
customers.  The growing trend of branded producers outsourcing the
bottling function supports growth prospects in Refresco's key
markets, but S&P notes that the group does not have any
proprietary brands and as such is not able to maximize its margins
by employing a marketing strategy.  S&P also views Refresco as
relatively small compared with some European bottlers with larger
revenue bases.  This fact, combined with the company's limited
pricing power, constrains S&P's current business risk profile
assessment to fair.

"We continue to assess the financial risk profile as significant.
This reflects our expectations that the group will record S&P
Global Ratings-adjusted debt to EBITDA of around 3.0x over the
next 12-18 months.  In addition to the EUR722 million term loan B,
our calculation of adjusted debt also includes our customary
adjustments for operating leases and post-retirement obligations
in excess of EUR100 million.  We also now give benefit for surplus
cash being held following the successful IPO transaction in May
2015 and management's public commitment to reported net leverage
not exceeding 3.0x in the long term.  We expect the company to
marginally improve its profitability given the increased co-
packing volumes with careful working capital management helping
the cash conversion cycle.  For 2016, we forecast adjusted EBITDA
of EUR240 million-EUR250 million and adjusted free operating cash
flow (FOCF) of EUR85 million-EUR100 million, with modest growth in
2017 supported by the full-year contribution of recent
acquisitions and organic top-line growth.  The group benefits from
low cost of debt -- the highest margin linked to the syndicated
loan is 2.6% -- which means that we expect the group to enjoy
EBITDA interest coverage above 8.0x in our forecasts.  We also
closely monitor the FOCF-to-debt and discretionary cash flow-to-
debt ratios in our forecasts given the importance of capital
investment for operating activity and Refresco's new financial and
dividend policy as a public company.  We expect FOCF to debt to
remain below 15% over the next 12-18 months, which we view as
commensurate with the 'BB' rating, as we expect adjusted FOCF to
be around EUR100 million in 2017 and 2018," S&P said.

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

   -- Revenue increases of 2.0%-5.0% for the next three years,
      driven by bolt-on acquisitions and supported by organic
      growth, especially in the U.S.  S&P expects the group to
      continue to acquire accretive targets in its drive to
      increase enterprise value.

   -- Adjusted EBITDA of EUR240 million-EUR250 million in 2016
      and steadily improving thereafter, reflecting top-line
      growth, a greater proportion of co-manufacturing volumes,
      and management's measures to improve cost efficiency and
      productivity.

   -- Modest outflows of working capital, reflecting the growing
      sales volumes as the group penetrates the U.S. market.

   -- Capital expenditure (capex) of about EUR80 million-
      EUR90 million annually in 2017 and 2018.

   -- Acquisitions of EUR200 million-EUR250 million in 2016 and
      EUR30 million-EUR80 million annually over the next two
      years.

   -- Shareholder dividends of about 35%-45% of net income.

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

   -- Revenues of EUR2.10 billion-EUR2.15 billion in 2016, rising
      to above EUR2.2 billion in 2017.

   -- Adjusted EBITDA margins of 11%-12% in 2016 and 12%-13%
      2017.

   -- S&P Global Ratings-adjusted debt to EBITDA of around 3.0x
      in 2016 and 2017.

   -- S&P Global Ratings-adjusted EBITDA interest coverage of
      above 8x and FOCF to debt of 12%-15% in 2016 and 2017.

The stable outlook reflects S&P's view that Refresco will improve
its profitability metrics, driven by management's continued focus
on operational efficiency and supported by a greater proportion of
co-packing volumes in group sales.  S&P expects modest bolt-on
acquisitions to augment low-single-digit organic growth, and S&P
expects management to adhere to its publicly stated leverage
target of 2.5x-3.0x reported net debt to EBITDA.  S&P expects that
the group's adjusted debt to EBITDA ratio will be around 3.0x and
FOCF above EUR90 million over the next 12-18 months.  S&P also
forecasts that EBITDA interest coverage will remain above 6.0x and
FOCF to debt will be 10%-15%, a level S&P considers commensurate
with the 'BB' rating.

S&P could consider lowering the ratings if the credit ratios
deteriorate or the group's liquidity comes under pressure, due to
debt-financed acquisitions or large shareholder distributions.
Weaker credit ratios could also be a result of a prolonged
weakness in demand for Refresco's bottling services across Europe
or tighter margins if Refresco fails to adjust its pricing and
product structure to an unexpected hike in raw material prices.
S&P would consider a lower rating if the adjusted debt-to-EBITDA
ratio rose to 4.0x and EBITDA interest coverage fell to 3.0x for a
sustained period.

An upgrade of Refresco would most likely be the result of stronger
credit ratios on the back of sustainable like-for-like growth and
strengthening profitability.  Specifically, S&P could raise the
ratings if it sees a sustainable improvement in the company's
adjusted debt-to-EBITDA ratio to about 2.5x, supported by FOCF to
debt comfortably above 15% in S&P's forecasts.


TMF GROUP: Moody's Affirms B2 Corporate Family Rating
-----------------------------------------------------
Moody's Investors Service affirmed TMF Group Holding B.V.'s
corporate family rating (CFR) of B2, the probability of default
rating (PDR) of B2-PD, the B1 instrument ratings on the
outstanding senior secured floating rate notes, and the Caa1
instrument ratings on the outstanding senior unsecured notes.
Concurrently, Moody's has assigned provisional (P)B2 (LGD3)
instrument ratings to the planned new EUR660 million equivalent
first lien term loan due 2023 and the new EUR90 million equivalent
revolving credit facility due 2022, to be issued by TMF Group
Holding B.V. The outlook on all ratings is stable.

Proceeds from the new loan, together with EUR33.4 million of cash
on balance sheet, will be used to effect full repayment of the
existing notes and EUR70 million RCF due 2018 (unrated). Upon
conclusion of the proposed transaction, Moody's expects to
withdraw the ratings on the outstanding instruments.

Moody's issues provisional ratings in advance of the final sale of
securities and these ratings reflect Moody's preliminary credit
opinion regarding the transaction only. Upon a conclusive review
of the final documentation, Moody's will endeavor to assign a
definitive rating to the facilities. Definitive ratings may differ
from provisional ratings.

RATINGS RATIONALE

The net proceeds of the issuance, together with EUR33.4 million of
cash on balance sheet, will be used to repay the outstanding
capital structure consisting of EUR450 million of senior secured
floating rate notes due 2018, EUR195 million senior unsecured
notes due 2019 and EUR70 million RCF due 2018 which was drawn for
EUR29.3 million at the end of June 2016.

Moody's positively notes that the proposed transaction will reduce
annual cash interest by approximately EUR16 million on a run-rate
basis while extending debt maturity to 2022 from the current 2018
when the outstanding secured floating rate notes and revolving
credit facility fall due.

Following the proposed transaction Moody's adjusted gross leverage
is expected to decrease by approximately 0.2x and interest
coverage ratio, Moody's adjusted EBITA to Interest Expense, will
improve by 0.4x to 1.9x (LTM pro-forma June 2016) from 1.5x (LTM
June 2016).

The B2 CFR reflects the company's (1) limited size and reliance on
Europe, in particular the Benelux region, for a large part of
revenues and EBITDA; (2) need for strong compliance and know-your-
customer (KYC) procedures given the complexity of regulation, tax
and reporting requirements across the world and elevated legal
risks inherent in the industry, particularly related to situations
where TMF provides trustee, (independent) director, or proxy
management representative services for clients; (3) the
significantly leveraged capital structure; and (4) the significant
restructuring and integration costs, primarily related to
acquisitions, that pressure operating cash flow generation.

The B2 CFR also reflects (1) TMF's strong position as a corporate
services provider in the Benelux region, complemented by a global
network of 122 offices that enables growth for clients into new
regions and offers cost-efficient outsourcing of corporate
functions; (2) the high switching costs as TMF's services are
sometimes deeply embedded in the clients' process; (3) stable
performance throughout the cycle, good margins and cash flow
generation.

"We expect the company to consider smaller add-on transactions
from time to time to complement its services or geographical reach
and these may result in additional integration and restructuring
charges. The rating does not factor in any larger scale
transaction." Moody's said.

TMF reported good operating performance for the first six months
of 2016 with both revenue and company's adjusted EBITDA growth of
5.5% and 1.4% respectively (8.5% and 5.4% respectively on a
constant scope and currency basis). Revenue growth was delivered
across all regions during H1 2016. The company's Adjusted EBITDA
margins declined to 25.2% for the H1 2016 from 26.2% for the H1
2015 as TMF continues to diversify away from its high margin
Benelux operations.

Moody's expects the liquidity profile to be good supported by
positive underlying operating cash generation which benefits from
limited working capital changes and low capex. Despite EUR33.4
million of existing cash on balance sheet being used as part of
the proposed refinancing, the transaction will leave the company
with pro-forma cash balance of EUR22 million at the end of June
2016. The new EUR90 million RCF is undrawn pro forma, except for
EUR14.1 million which will be utilized for bank guarantees.
According to the draft SFA reviewed by Moody's, the new facilities
will only have one springing covenant, based on a net leverage
ratio, which will be tested if cash advances under the RCF are
more than 35% of total RCF commitments.

STRUCTURAL CONSIDERATIONS

The provisional instrument ratings of (P)B2 on the EUR660 million
Term Loan B and the EUR90 million pari-passu revolving credit
facility are in line with the company's CFR. The company's
probability of default (PDR) rating of B2-PD, is in line with the
CFR, and reflects the use of a 50% family recovery rate resulting
from a lightly-covenanted debt package. The facilities are
expected to benefit from guarantor and security package that
comprises not less than 70% of total group EBITDA, excluding those
entities with negative EBITDA and those which cannot give
guarantees for legal reasons.

The new facilities include flexibility for additional debt
provided that pro-forma net leverage, as per the documentation,
does not exceed 5x and Fixed Charge Coverage Ratio, as per the
documentation, is greater than 2x.

OUTLOOK

The stable outlook reflects our expectation that the company will
continue to deliver resilient operating performance through the
cycle albeit counter balanced by potential debt-funded
acquisitions.

WHAT COULD CHANGE THE RATINGS UP

Positive pressure could arise if the company continues to
successfully execute on its growth plans diversifying the business
into APAC and Americas regions so that adjusted Net Debt/EBITDA
falls sustainably below 5x and RCF/ Net Debt exceeds 10%, taking
into account Moody's expectations that sustained deleveraging may
be constrained by the continuing strategy of potential debt-funded
acquisitions.

WHAT COULD CHANGE THE RATINGS DOWN

Negative pressure on the rating could arise if any concerns around
the resilience of the business materializes, for example from
changes in the Netherlands' or Luxembourg's appeal as tax-
efficient regions. Negative pressure could also arise if any legal
dispute becomes more substantiated. In any case, the rating would
come under pressure if the ratio of adjusted Net Debt/EBITDA moves
towards 6x or free cash flow generation turns negative.

PRINCIPAL METHODOLOGY

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

CORPORATE PROFILE

TMF Group Holding B.V. ("TMF") is a provider of business process
services mainly for companies but also for individuals, funds and
structured finance vehicles with 60% of revenues generated in EMEA
including 25% in the Benelux region for the last twelve months to
June 2016. Corporate Services (80% of LTM June 2016 revenue)
provides integrated legal, administrative (including payroll) and
accounting services for companies. Structured Finance Services
(10% of LTM June 2016 revenue) provide services associated with
the creation and administration of financial vehicles. Private
Clients Services (10% of LTM June 2016 revenue) administers
corporate structures for high net worth individuals. The group
operates over 52,100 client entities across 84 jurisdictions. The
business is owned by Doughty Hanson (63%) and current and former
management and employees (37%).

For the last twelve months to June 2016, TMF reported revenue of
EUR492 million and company's adjusted EBITDA of EUR130 million
(26.4% margin).



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


BANCO SANTANDER TOTTA: Moody's Affirms Ba1 Senior Debt Ratings
--------------------------------------------------------------
Moody's Investors Service affirmed Banco Santander Totta S.A.'s
(BST) deposit ratings at Baa3/Prime-3, senior debt ratings at Ba1
and Commercial Paper rating at NP. The ratings of the subordinated
program and junior subordinated program issued by Banco Santander
Totta S.A., London have also been affirmed at (P)Ba2 and (P)Ba3
respectively.

At the same time, Moody's has affirmed the bank's baseline credit
assessment (BCA) at ba3, adjusted BCA at ba1, and counterparty
risk assessment (CR Assessment) at Baa3(cr)/Prime-3(cr). The
outlook on the bank's long-term deposit and senior debt ratings
remains stable.

The rating action was prompted by Moody's lowering Portugal's
Macro Profile to "Moderate --" from "Moderate" that reflects
Moody's expectations of a slower-than-anticipated growth of the
Portuguese economy in 2016 and 2017.

Further, the ratings and outlooks of all other Moody's rated
Portuguese banks are unaffected by the country's lower Macro
Profile.

RATINGS RATIONALE

(1) CHANGE IN THE MACRO PROFILE TO 'MODERATE-' FROM 'MODERATE'

The change of Portugal's Macro Profile to "Moderate-" from
"Moderate" has the potential to negatively affect rated Portuguese
banks' BCAs. The Macro Profile constitutes an assessment of the
macroeconomic environment in which a bank operates and is designed
to capture system-wide factors that are predictive of the
propensity of banks to fail.

The lowering of Portugal's Macro Profile to 'Moderate-' from
'Moderate' illustrates Moody's assessment of a weakening in
Portuguese banks' operating environment as reflected in the
country's weaker economic growth prospects, persisting high
leverage of the private sector and vulnerable funding conditions.

The Portuguese economy has experienced a significant slowdown over
the past several quarters, with Q2 2016 GDP growing by just 0.9%
year-on-year (similar to Q1 2016). This compares to an annual
growth rate of 1.5% in Q2 2015 and 1.7% in Q1 2015. After a
temporary boost to private consumption in Q1, as households
benefitted from the restoration of public-sector pay, income tax
cuts and a hike in the minimum wage, consumption growth has slowed
significantly in the second quarter. In addition, investment has
contracted for two quarters now, while net trade contributed
positively to growth again in Q2. Given the weak first half of the
year, Moody's has revised down its full-year real GDP growth
forecast to just 1.1% compared to 1.5% previously. The rating
agency also expects growth in 2017 to be weaker at 1.3% compared
to 1.8% before.

Portuguese corporates remain among the most highly leveraged in
Europe, with total debt for non-financial corporations standing at
111% of GDP at the end of 2015. Moody's considers that
persistently high private sector leverage levels will continue to
constrain domestic banks' asset risk and business volumes.

Moody's also notes that Portuguese banks funding conditions could
be challenged by the risk that Portuguese banks could have
restricted access or at very high costs to the wholesale funding
markets in case of need owing to their very weak credit
fundamentals and serious challenges faced by some of the country's
largest banks.

As a result of the revised assessment of the operating conditions
for banks and the lowering of Portugal's Macro Profile, Moody's
has affirmed the ratings and outlooks of BST while the ratings and
outlooks of all other Moody's rated Portuguese banks remain
unaffected by today's rating action.

(2) RATIONALE FOR THE AFFIRMATION OF BST's RATINGS

Moody's affirmed BST's Baa3/Prime-3 deposit and Ba1 senior debt
ratings with a stable outlook on the long-term ratings. The action
was driven by: (1) the affirmation of the bank's ba3 BCA,
reflecting Moody's expectations that the bank's credit profile
will remain resilient despite Portugal's less favorable operating
environment; (2) unchanged high parental support assumptions from
Spanish Banco Santander S.A. (Spain) (A3/A3 stable; baa1),
reflected in the affirmed ba1 adjusted BCA; and (3) the result
from the rating agency's Advanced loss-given failure (LGF)
analysis leading to one notch of additional ratings uplift for the
deposit ratings and no further uplift for the debt ratings.

In affirming BST's ba3 BCA, Moody's takes into account the bank's
resilient credit risk profile despite the deterioration of its
asset risk metrics that followed the acquisition of EUR11.1
billion of assets and liabilities from BANIF-Banco Internacional
do Funchal, S.A. (Banif, unrated) in December 2015. At end-June
2016, BST's non-performing loan (NPL) ratio rose to 10.5% after
integrating Banif's loan portfolio, which is an increase of 300
basis points (bps) relative to the 7.5% reported at year-end 2015.
The weak credit quality of Banif's loan portfolio was partly
mitigated by the substantial aid measures granted by the
Portuguese government as part of the sale process, which have been
used to reinforce provisioning cushions. BST's weakened asset risk
is also mitigated by the bank's: (1) sound capital ratios (the
fully loaded Common Equity Tier 1 ratio stood at 16.5% at end-June
2016) after the two recent capital increases for an amount of
EUR600 million that were ultimately subscribed by its parent Banco
Santander S.A. (2) improving profits (BST's net income over
tangible assets was 0.9% at end-June 2016) despite very weak
trends in the domestic market; and (3) improved liquidity position
owing to rising deposits and a lower reliance on European Central
Bank (ECB) funding.

The outlook on the long-term deposit and senior debt ratings is
stable, reflecting BST's resilient credit profile despite the
expected pressure on the bank's credit fundamentals that could
arise as a result of Portugal's weak economic growth prospects.

WHAT COULD CHANGE THE RATING UP/DOWN

Upward pressure on BST's BCA could result if the bank shows
progress in improving its asset risk metrics and/or further
improves its solvency levels.

Downward pressure on BSTs BCA could develop if the bank's
financial fundamentals deteriorate to the extent that its overall
risk-absorption capacity weakens from current levels.

As the bank's debt and deposit ratings are linked to the
standalone BCA, any change to the BCA would likely also affect
these ratings.

Furthermore, BST's deposit and senior debt ratings could be
affected as a result of an upgrade/downgrade of the standalone BCA
of the parent, Banco Santander.

BST's senior unsecured debt and deposit ratings could also change
as a result of changes in the loss-given-failure faced by these
securities.

LIST OF AFFECTED RATINGS

Issuer: Banco Santander Totta S.A.

Affirmations:

   -- Long-term Counterparty Risk Assessment, affirmed Baa3(cr)

   -- Short-term Counterparty Risk Assessment, affirmed P-3(cr)

   -- Long-term Bank Deposits, affirmed Baa3 Stable

   -- Senior Unsecured Regular Bond/Debenture, affirmed Ba1
      Stable

   -- Senior Unsecured MTN, affirmed (P)Ba1

   -- Short-term Bank Deposits, affirmed P-3

   -- Commercial Paper, affirmed NP

   -- Other Short Term, affirmed (P)NP

   -- Adjusted Baseline Credit Assessment, affirmed ba1

   -- Baseline Credit Assessment, affirmed ba3

Outlook Actions:

   -- Outlook, Remains Stable

Issuer: Banco Santander Totta S.A., London

   -- Long-term Counterparty Risk Assessment, affirmed Baa3(cr)

   -- Short-term Counterparty Risk Assessment, affirmed P-3(cr)

   -- Senior Unsecured Medium-Term Note Program, affirmed (P)Ba1

   -- Junior Subordinate Medium-Term Note Program, affirmed
     (P)Ba3

   -- Subordinate Medium-Term Note Program, affirmed (P)Ba2

   -- Other Short Term, affirmed (P)NP

Outlook Actions:

   -- No Outlook assigned

Issuer: TOTTA (IRELAND) p.l.c.

   -- Backed Commercial Paper, affirmed NP

Outlook Actions:

   -- No Outlook assigned

PRINCIPAL METHODOLOGY

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



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


AGENCY FOR HOUSING: S&P Affirms 'BB+/B' ICRs, Outlook Stable
------------------------------------------------------------
S&P Global Ratings said it had revised its outlook on the Russia-
based Agency for Housing Mortgage Lending JSC (AHML) to stable
from negative.  At the same time, S&P affirmed its 'BB+/B' long-
and short-term issuer credit ratings and 'ruAA+' Russia national
scale rating on the agency.

The outlook revision on AHML follows S&P's recent similar action
on the Russian Federation.

S&P continues to consider AHML to be a government-related entity
(GRE).  In accordance with S&P's criteria for rating GREs, S&P's
view of a very high likelihood of extraordinary government support
is based on S&P's assessment of AHML's:

   -- Very important role as Russia's sole state developer of
      mortgage market infrastructure, which the government views
      as an essential policy tool to improve currently poor
      housing affordability.  Going forward, AHML will play an
      increasing role in lowering primary mortgage rates through
      greater involvement on the secondary market.  The
      institution will continue to drive the development of the
      market for residential mortgage-backed securities and
      promote social and rented housing; and

   -- Very strong link with Russia, due to the state's 100%
      ownership of AHML and S&P's view of a very low likelihood
      of privatization of AHML's core public policy related
      business in the medium to long term, the government's
      strong oversight of the company's strategy with a deputy
      chairman of the government heading the board, and the high
      reputation risk for the government if AHML were to default.
      Over 60% of AHML's existing wholesale debt is secured by
      state guarantees, although these are conditional on
      potential the guarantor objections, as well as the form and
      timeliness of the claim.

S&P's long-term rating on AHML is therefore one notch higher than
its assessment of the agency's stand-alone credit profile (SACP).
S&P uses its banking criteria to assess AHML's SACP, reflecting
the agency's status as a quasi-bank and the similarities of its
financial profile to those of a bank.  S&P assess AHML's SACP at
'bb'.

The stable outlook on AHML reflects that on Russia, and the
entity's SACP, which remains in line with S&P's base-case
expectations.  A rating action on Russia would likely be followed
by a similar action on AHML.

S&P could lower its rating on AMHL over the next year, if S&P was
to lower its assessment of likelihood of extraordinary government
support, or if S&P saw a significant deterioration in the agency's
performance, leading to a downward revision of the SACP.  However,
S&P currently sees these developments as unlikely.

Given S&P's 'bb' SACP assessment for AHML and the one-notch uplift
for government support S&P includes in the long-term rating on
AHML, S&P could take a positive rating action on AHML in the next
12 months if S&P was to revise its assessment of the SACP upward
and raise its rating on the sovereign.  Under S&P's criteria for
rating GREs, S&P would cap its local currency ratings on AHML at
the level of the foreign currency sovereign rating.


ATOMIC ENERGY: S&P Affirms 'BB+/B' CCRs, Outlook Stable
-------------------------------------------------------
S&P Global Ratings revised its outlook on the Russian vertically
integrated nuclear power producer Atomic Energy Power Corp. (AEPC)
to stable from negative.

At the same time, S&P affirmed its 'BB+/B' long- and short-term
corporate credit ratings and 'ruAA+' Russia national scale rating
on AEPC.

The outlook revision on AEPC follows S&P's similar rating action
on the sovereign.  In addition, it takes into account S&P's
expectation of the company's solid stand-alone financial metrics.

S&P has also revised upward its assessment of AEPC's stand-alone
credit profile (SACP) to 'bb+' from 'bb', based on the company's
stronger current and expected financial metrics, compared with
S&P's previous expectations.

"We think that new capacity additions will support stronger EBITDA
generation in 2017-2018, which combined with currently significant
cash, translates into strong metrics.  We consequently anticipate
S&P Global Ratings-adjusted debt-to-EBITDA ratio lower than 1.5x
in the coming years.  We currently incorporate in our base case
AEPC's lower investments into nuclear power unit construction in
Russia, compared with our previous expectations, which should lead
to lower needs for new borrowings.  However, we think AEPC's
leverage might be higher than our base case suggests, given the
group's large number of new projects over the next few years and
uncertainty related to availability of government funds to finance
the projects, as well as possible pressure on future dividend
flows," S&P said.

S&P continues to view AEPC's business risk profile as fair,
supported by AEPC's position as the world's third-largest uranium
producer.  It has an estimated 36% share in uranium enrichment
services (including services to global peers), and a monopoly in
the domestic nuclear power industry.  Still, AEPC is exposed to
regulatory, political, operational, and construction-related risks
in the nuclear industry, which may make its future profits more
volatile and uncertain, in S&P's view.

As a government-related entity, AEPC will in S&P's view continue
to benefit from a very high likelihood of timely and sufficient
government support, if needed.  S&P bases its opinion on its
management of Russia's civil nuclear industry and provision of
about 17% of the country's electricity supply.  Moreover, the
company cannot be privatized without a change in legislation, and
the government closely monitors its strategy and operations.

The stable outlook on AEPC reflects S&P's outlook on Russia.  S&P
expects AEPC will continue to benefit from a very high likelihood
of extraordinary government support while maintaining a solid
operating and financial performance.

S&P sees limited ratings upside for AEPC at the current rating
level.  This is because S&P do not expect to rate the company
above the foreign currency rating on Russia, given AEPC's very
strong link with the government and S&P's opinion that the
company's SACP does not exceed our foreign currency sovereign
rating.

S&P might lower its ratings on AEPC if S&P was to downgrade
Russia, or if the company's SACP deteriorated to 'b+' or below
from 'bb+' currently.  S&P regards these scenarios as unlikely,
however.


CENTRAL COMMERCIAL: Placed on Provisional Administration
--------------------------------------------------------
The Bank of Russia, by its Order No. OD-3256, dated September 26,
2016, revoked the banking license of Moscow-based credit
institution Central Commercial Bank, LLC (Centrcombank LLC) from
September 26, 2016, according to the press service of the Central
Bank of Russia.

The Bank of Russia took such an extreme measure -- revocation of
the banking license -- due to the credit institution's failure to
comply with the federal banking laws and the Bank of Russia
regulations, repeated violations within a year of requirements,
stipulated in Article 7, except for clause 3, Article 7, of the
Federal Law "On Countering the Legalisation (Laundering) of
Criminally Obtained Incomes and the Financing of Terrorism" and
the requirements of the Bank of Russia regulations issued in
compliance with the said Federal Law, 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)",
considering a real threat to the creditors' and depositors'
interests.

Centrcombank LLC implemented high-risk lending policy connected
with placement of funds into low-quality assets.  Creation of loss
provisions adequate to the risks assumed as required by the
supervisor resulted in the grounds for the credit institution to
implement measures to prevent the bank's insolvency (bankruptcy).
Centrcombank LLC did not comply with the legislative requirements
and Bank of Russia regulations as regards countering the
legalization (laundering) of criminally obtained incomes and the
financing of terrorism in terms of submitting consistent
information on operations subject to mandatory control to the
authorized body.  Besides, the bank was involved in dubious
transit operations.  Management and owners of Centrcombank LLC did
not take any efficient and sufficient measures to bring its
activities back to normal. Under the circumstances the Bank of
Russia took a decision to withdraw the credit institution from the
banking services market.

The Bank of Russia, by its Order No. OD-3257, dated September 26,
2016, appointed a provisional administration to Centrcombank LLC
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.

Centrcombank LLC 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 RUB1.4 million per
depositor.

According to reporting data, as of September 1, 2016, Centrcombank
LLC ranked 206th in terms of assets in the Russian banking system.


DEFENCE INDUSTRIAL: Placed on Provisional Administration
--------------------------------------------------------
The Bank of Russia, by its Order No. OD-3258, dated September 26,
2016, removed the banking license of Moscow-based credit
organization Joint Stock Company Defence Industrial Bank (DIB
JSC), effective September 26, 2016, according to the press service
of the Central Bank of Russia.

The Bank of Russia took the extreme measure of license revocation
because of the credit institution's failure to comply with federal
banking legislation and Bank of Russia regulatory acts, as well as
multiple violations, within one year, of requirements under
Articles 6 and 7 (except for Paragraph 3, Article 7) of the
Federal Law "On Countering the Legalisation (Laundering) of
Criminally Obtained Incomes and the Financing of Terrorism",
requirements of Bank of Russia regulatory acts issued in
accordance with this Federal Law, and due to the capital adequacy
ratio falling below 2 percent, capital decrease below the minimal
value of the authorized capital established as of the date of the
state registration of the credit institution, and repeated
applications, within one year, of measures envisaged by the
Federal Law "On the Central Bank of the Russian Federation (Bank
of Russia)".

While the quality of its assets was unsatisfactory, the Bank
inadequately assessed its risks assumed.  The appropriate
assessment of its credit exposure, unbiased accounting of asset
values in the credit institution's statements reveals a total loss
of bank capital.  Also, the Bank failed to comply with Bank of
Russia regulations as regards countering the legalization
(laundering) of criminally obtained incomes and the financing of
terrorism as it failed to submit true and full information to the
authorized body.

The provisional administration to manage the Bank -- the State
Corporation Deposit Insurance Agency -- as appointed under Bank of
Russia Order AD-3121, dated September 16, 2016, from day one of
its operations has faced severe obstruction from the Bank
management who failed to submit documents of entitlement as
regards the credit institution's assets.

In consideration of the foregoing, a financial turnaround of the
Bank involving the State Corporation Deposit Insurance Agency was
deemed impossible.  In the current circumstances, guided by
Article 20 of the Federal Law "On Banks and Banking Activity", the
Bank of Russia acted to revoke the credit institution's banking
license.

Following revocation of the banking license, the operations of the
provisional administration (whose powers were entrusted to the
State Corporation Deposit Insurance Agency, Bank of Russia Order
No. AD-3121, dated September 16, 2016) were terminated by force of
Bank of Russia AD-3259, dated September 26, 2016.

The Bank of Russia, by its Order No. OD-3260, dated
September 26, 2016, appointed a provisional administration to the
Bank 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.

DIB JSC 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 RUB1.4 million per
depositor.

According to reporting data, as of September 1, 2016, DIB JSC
ranked 89th in the Russian banking system in terms of assets.


KIROVHLEB: Ceases Operations, Prepares to Enter Bankruptcy
----------------------------------------------------------
Vladislav Vorotnikov at World Poultry reports that Russian
agricultural holding Kirovhleb has accumulated debts of RUB7
billion (US$120 million) and has had to virtually stop operation
at its three broiler farms and two eggs farms, as it prepares to
enter bankruptcy.

The problems of Kirovhleb resulted from the fact that chicken
production in the region in the first half of 2016 dropped by 80%
compared to the same period of last year, World Poultry relays
citing, information from the regional Agricultural Ministry.

Kirovhleb was already on the edge of bankruptcy at the beginning
of 2012, when due to monies outstanding for electricity, farms had
been disconnected from the grid, resulting in the deaths of
100,000 chickens in a short period of time, World Poultry
discloses.  However, the facility had been given a reprieve with a
special loan from Rosselhozbank, the Russian state-owned bank who
fully focuses on loans to agricultural producers, World Poultry
recounts.

The bankruptcy has also been associated with numerous scandals, as
according to employees, the owners of the holding have not been
paying salaries to operational staff for the past six months,
World Poultry notes.  In addition, according to employees,
management has even stolen equipment to hide it from law
enforcement agencies, World Poultry states.

"The bailiffs have opened enforcement proceedings and assets of
the company have been seized.  But part of the liquid assets, such
as live chickens, equipment and vehicles have disappeared in spite
of the seizure.  Now bailiffs tells us that poultry farms do not
have funds to pay off salary debts and probably will never has
them," World Poultry quotes Natalie Udnikova, one of the company's
employees, as saying.

Kirovhleb is a Russian agricultural holding company.


RUSSIAN RAILWAYS: S&P Rates Proposed USD-Denominated Notes BB+
--------------------------------------------------------------
S&P Global Ratings said that it had assigned its 'BB+' long-term
rating to the proposed U.S. dollar-denominated loan participation
notes (LPNs) and its 'BBB-' long-term rating to the Russian ruble-
denominated LPNs, both to be issued by Russian Railways JSC, the
monopoly owner and operator of Russia's railway infrastructure,
via its financing vehicle RZD Capital PLC.

The new U.S. dollar-denominated LPN issue will refinance a number
of existing U.S. dollar and Swiss franc bonds, maturing in 2017
and 2018.  The ruble notes will be used in the ordinary course of
business, including refinancing of maturing debt.  S&P assumes
that all key conditions of the new bonds will match those of the
outstanding bonds.  The rating is subject to S&P's analysis of the
bond's final documentation.


VNESHECONOMBANK: S&P Affirms 'BB+/B' ICRs, Outlook Remains Neg.
---------------------------------------------------------------
S&P Global Ratings affirmed its 'BB+/B' long- and short-term
foreign currency issuer credit ratings and 'BBB-/A-3' long- and
short-term local currency issuer credit ratings on Russian state-
owned development bank Vnesheconombank (VEB).  The outlook remains
negative.

S&P bases the ratings on its opinion of VEB as a government-
related entity (GRE) with an almost certain likelihood of
receiving extraordinary support from the Russian government in the
event of financial difficulties.  Accordingly, S&P equalizes its
ratings on VEB with those on Russia.

In accordance with S&P's criteria for GREs, S&P's view that there
is an almost certain likelihood of extraordinary government
support is based on S&P's assessment of VEB's:

   -- Critical role for Russia as the government's prime public
      development institution, a role that cannot be readily
      undertaken by a private entity.

   -- The VEB group's assets currently represent about 5.5% of
      Russia's GDP; and

   -- Integral link with Russia.  This is because of VEB's unique
      status as a state corporation operating under the law "On
      The Bank For Development," with strong oversight from the
      federal government and prime minister, represented on its
      supervisory board.  Also, the government has a proven track
      record of providing timely support to VEB in all
      circumstances, including through a recent $6 billion
      subsidy resulting from a lower interest rate on
      subordinated deposits and direct capital injections to VEB.
      Furthermore, high-ranking government and central bank
      officials have reiterated the government's strong
      commitment to VEB after the imposition of U.S. sanctions.

S&P assesses VEB's stand-alone credit profile at 'CCC+'.

The negative outlook reflects the possibility that S&P could
reconsider its assessment of the likelihood of government support
to Vnesheconombank.

Weaker government support could be seen, for example, by the
government's reluctance to approve the bank's revised business
strategy or explicitly factor in its support for Vnesheconmbank in
the upcoming budget cycle.  The rising risk of a material and
rapid weakening of VEB's capitalization or liquidity, in the
absence of the government's explicit commitment to provide timely
and sufficient financial support, could also signal such a
scenario.  S&P could take a similar action if the government
reduced VEB's role as a prime development institution.

S&P could revise the outlook to stable if the visibility of
government support to VEB was confirmed by the government's
approval of the bank's updated strategy and its explicit budgeting
of financial support to the bank in next year's budget.



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


CAIXA PENEDES: Fitch Withdraws BB+ Rating on Class C Notes
----------------------------------------------------------
Fitch Ratings has withdrawn its ratings on Caixa Penedes FTGENCAT
1 TDA, F.T.A.'s notes, as:

  Class B: 'AA+sf'; Outlook Stable; rating withdrawn
  Class C: 'BB+sf'; Outlook Positive; rating withdrawn

The transaction is a granular cash flow securitization of a pool
of secured and unsecured loans granted to Spanish small- and
medium-sized enterprises by Caixa Penedes (now part of Banco Mare
Nostrum) and serviced by Banco de Sabadell (BdS).

                        KEY RATING DRIVERS

Fitch is withdrawing the ratings of the class B and C notes issued
by Caixa Penedes FTGENCAT 1 TDA, F.T.A., as following a change in
the transaction's counterparties Fitch will no longer have
sufficient information to maintain the ratings.  Accordingly,
Fitch will no longer provide ratings or analytical coverage for
Caixa Penedes FTGENCAT 1 TDA, F.T.A.

On July 12, 2016, BdS, as the holder of all outstanding notes,
voted to move the transaction's reinvestment account from Societe
Generale (A/Stable/F1) to itself.  By voting the motion, the
noteholder is overriding the provisions of the transaction
documentation, including the requirement for the reinvestment
account bank to have a minimum Short-Term rating of 'F1'.

BdS acts as direct support counterparty as the reinvestment
account holds all the funds of the transaction (collections and
reserve fund) for the whole quarterly payment period.  Since BdS
is not rated by Fitch, the agency cannot assess the counterparty
risk and can therefore no longer maintain a credit view on the
notes issued by Caixa Penedes FTGENCAT 1 TDA, F.T.A.



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


DUKINFIELD PLC: Moody's Affirms Ba1 Rating on Class E Notes
-----------------------------------------------------------
Moody's Investors Service has upgraded the ratings of 3 tranches
in 3 German RMBS transactions and 6 tranches in 2 UK RMBS
transactions.

The rating upgrades reflect corrections of an assumption in our
cash flow modelling for four transactions and deleveraging and
improvement credit enhancement for one transaction.

Issuer: Dukinfield PLC

   -- GBP326.4M Class A Notes, Affirmed Aaa (sf); previously on
      Sep 17, 2015 Definitive Rating Assigned Aaa (sf)

   -- GBP37.9M Class B Notes, Affirmed Aa1 (sf); previously on
      Sep 17, 2015 Definitive Rating Assigned Aa1 (sf)

   -- GBP33.3M Class C Notes, Upgraded to Aa2 (sf); previously on
      Sep 17, 2015 Definitive Rating Assigned Aa3 (sf)

   -- GBP16.1M Class D Notes, Upgraded to A2 (sf); previously on
      Sep 17, 2015 Definitive Rating Assigned A3 (sf)

   -- GBP25.3M Class E Notes, Affirmed Ba1 (sf); previously on
      Sep 17, 2015 Definitive Rating Assigned Ba1 (sf)

Issuer: E-MAC DE 2006-I B.V.

   -- EUR437M Class A Notes, Affirmed Baa1 (sf); previously on
      May 6, 2016 Affirmed Baa1 (sf)

   -- EUR27M Class B Notes, Upgraded to Ba3 (sf); previously on
      May 6, 2016 Upgraded to B1 (sf)

   -- EUR17.5M Class C Notes, Affirmed Caa3 (sf); previously on
      May 6, 2016 Affirmed Caa3 (sf)

Issuer: E-MAC DE 2006-II B.V.

   -- EUR465.7M Class A2 Notes, Affirmed A3 (sf); previously on
      May 6, 2016 Upgraded to A3 (sf)

   -- EUR35M Class B Notes, Upgraded to B1 (sf); previously on
      May 6, 2016 Upgraded to B2 (sf)

Issuer: E-MAC DE 2007-I B.V.

   -- EUR19.5M Class A1 Notes, Affirmed A3 (sf); previously on
      May 6, 2016 Affirmed A3 (sf)

   -- EUR443.3M Class A2 Notes, Affirmed A3 (sf); previously on
      May 6, 2016 Affirmed A3 (sf)

   -- EUR39.1M Class B Notes, Upgraded to B3 (sf); previously on
      May 6, 2016 Affirmed Caa1 (sf)

Issuer: Slate No. 2 PLC (Public)

   -- GBP330.688M Class A Notes, Affirmed Aaa (sf); previously on
      Oct 27, 2014 Definitive Rating Assigned Aaa (sf)

   -- GBP16.33M Class B Notes, Upgraded to Aaa (sf); previously
      on Oct 27, 2014 Definitive Rating Assigned Aa1 (sf)

   -- GBP20.413M Class C Notes, Upgraded to Aa1 (sf); previously
      on Oct 27, 2014 Definitive Rating Assigned Aa3 (sf)

   -- GBP18.372M Class D Notes, Upgraded to A1 (sf); previously
      on Oct 27, 2014 Definitive Rating Assigned Baa2 (sf)

   -- GBP4.082M Class E Notes, Upgraded to Ba2 (sf); previously
      on Oct 27, 2014 Definitive Rating Assigned Ba3 (sf)

   -- X Certificates, Affirmed Aaa (sf); previously on Oct 27,
      2014 Definitive Rating Assigned Aaa (sf)

RATINGS RATIONALE

The rating action for E-MAC DE 2006-I B.V., E-MAC DE 2006-II B.V.,
E-MAC DE 2007-I B.V. and Dukinfield PLC reflects the correction of
a technical input to the cash-flow models, and the assessment of
their results for four transactions. When the model simulates the
net loss, the mean recovery rate is typically set to nil. In the
transactions referenced above, the mean recovery rate was a
positive number. The correction to this input has a positive
impact on the model results as the mean recovery rate only impacts
the way the model reduces the pool balance over time. With a mean
recovery rate set to zero, in line with the simulated net loss
distribution, the pool balance is only reduced by the net loss
amount. Additionally, Moody's took into consideration the
appointment of Adaxio AMC GmbH (NR) as new sub-servicer of the E-
MAC DE transactions.

The upgrade for Slate No. 2 PLC (Public) was due to deleveraging,
resulting in increased levels of credit enhancement. As a result
of the pay down of the X Certificates, tranches B, C D and E
benefited from increased amounts of available excess spread. The
mean recovery rate input for this deal has also been corrected to
nil but this was not a driver for the rating action.

The principal methodology used in these ratings was "Moody's
Approach to Rating RMBS Using the MILAN Framework" published in
September 2016.

The analysis undertaken by Moody's at the initial assignment of
these ratings for RMBS securities may focus on aspects that become
less relevant or typically remain unchanged during the
surveillance stage. Please see Moody's Approach to Rating RMBS
Using the MILAN Framework for further information on Moody's
analysis at the initial rating assignment and the on-going
surveillance in RMBS.

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

Factors or circumstances that could lead to an upgrade of the
ratings include (1) performance of the underlying collateral that
is better than Moody's expected, (2) deleveraging of the capital
structure and (3) improvements in the credit quality of the
transaction counterparties and (4) a decrease in sovereign risk.

Factors or circumstances that could lead to a downgrade of the
ratings include (1) an increase in sovereign risk (2) performance
of the underlying collateral that is worse than Moody's expected,
(3) deterioration in the notes' available credit enhancement and
(4) deterioration in the credit quality of the transaction
counterparties.


JAMES HAUGH: Goes Into Liquidation
----------------------------------
Rebecca Chaplin at Car Dealer Magazine reports that one of
Scotland's oldest car dealerships James Haugh (Castle Douglas) Ltd
has gone into liquidation and is seeking a buyer.

The independent garage, based in Castle Douglas, announced last
week that it would be going into liquidation. The business has
ceased trading with immediate effect and 11 employees have lost
their jobs, according to Car Dealer Magazine.

The report notes that its main business was both new and used
Vauxhalls, but it also sold a wide range of other used vehicles.
It offered servicing, fleet contract work, mobility servicing,
repairs and MOTs too.

The report says, managing director Jim Haugh told The Daily
Record: 'It's just a sad day. We took the decision as I didn't
want to be in a position at the end of a month where I had to say
to the staff that I couldn't pay them.

'We felt it was the best option and at least this way the staff
will get a redundancy payment,' the report quoted Mr. Haugh as
saying.

Founded in 1890 to hire out horse-drawn carriages, the company was
one of the first to offer a petrol driven car for public hire in
1909.  Six generations of the family have since managed the
business, which has been an approved Vauxhall Service Centre since
1962 and had a turnover of around GBP1 million.

Provisional liquidator Blair Milne --
blair.milne@campbelldallas.co.uk -- restructuring partner with
accountants Campbell Dallas, is looking to sell the business and
assets. He is urging the motoring trade, entrepreneurs or property
developers to make contact as soon as possible, the report
relates.

"James Haugh (Castle Douglas) Ltd is a prominent and much-valued
car dealership and service centre that has served the South of
Scotland for well over a century.  Unfortunately, in recent years
the rise of internet sales has seriously affected trade and
margins, and the business was not sustainable," explained
Mr. Milne, the report says.

"We are marketing the business and extensive assets for sale with
immediate effect, with the hope that if a deal can be secured
swiftly, a buyer has the opportunity to start trading again. The
business had a very wide and loyal customer base, so the
liquidation offers a good opportunity for a motor trade business
or entrepreneur wanting to enter this market," the report quoted
Mr. Milne as saying.

Mr. Milne added: "We are compiling the list of assets, which
includes the garage on King Street, offices, a large yard and
moveable assets including motor vehicles, ramps, diagnostic
equipment and tooling. Alternatively, the site could also offer
considerable potential for property development, possibly
residential," the report relates.


KMART: 2 Minn. Stores Closing, Liquidation Sales Start This Week
----------------------------------------------------------------
BringMeTheNews reports that two of Minnesota's Kmart stores will
be closing.

The stores in Moorhead and West St. Paul will shut down later this
year, Howard Riefs of Sears Holdings (which owns Sears and Kmart)
confirmed to BringMeTheNews.  They're among the 64 stores Kmart is
closing across 28 states, the report relates.

The closing stores will begin liquidation sales on Sept. 22, and
will close to the public in mid-December, the report discloses.

The report relates the number of employees these closings will
affect isn't publicly available, Mr. Riefs said, but most of them
are part-time or hourly workers.  They'll be eligible to receive
severance and can apply for positions in other Sears or Kmart
stores, the report discloses.

The report discloses that Mr. Riefs said deciding to close these
stores was difficult, but necessary, noting Sears Holdings has
been "strategically and aggressively evaluating our store space
and productivity, and are accelerating the closing of unprofitable
stores," the report relays.

This latest round of closures comes after Sears Holdings decided
to shut down nearly 80 stores (most of them Kmarts) back in July,
Business Insider said, noting analysts said recently that Kmart
doesn't have enough cash or access to cash to stay in business,
the report relates.

The report relates that Kmart currently has 870 stores, including
seven in Minnesota (that doesn't count the two that are closing).
In 2012, there were 1,300 stores, Business Insider said, the
report notes.


MICRO FOCUS: S&P Affirms 'BB-' Corporate Credit Rating
------------------------------------------------------
S&P Global Ratings affirmed its 'BB-' long-term corporate credit
rating on U.K.-based software provider Micro Focus International
PLC.

At the same time, S&P affirmed its 'BB-' issue rating on the
company's existing senior secured term loans, including a
revolving credit facility (RCF).  The recovery rating remains at
'3', indicating S&P's expectation of recovery in the higher half
of the 50%-70% range in the event of a default.

"The affirmation reflects our balanced view of Micro Focus'
announcement to acquire HPE Software.  In our view, the
acquisition entails some benefits including a potential
improvement in Micro Focus' scale, and we think that the combined
group will be able to generate strong margins after integration.
However, we see short-term risks arising from the large
integration process and current weaker performance of HPE
Software.  This is despite Micro Focus' good track record of
integrating acquired companies, including Attachmate Corp., which
it acquired in November 2014.  In our view, the increase in
leverage due to the acquisition of HPE Software remains reasonable
thanks to the usage of equity.  Furthermore, we think Micro Focus
will gradually reduce its leverage post-closing, owing to
potential cost savings and positive cash flow generation.  This is
also supported by the company's financial policy," S&P said.

Micro Focus and HPE announced on Sept. 7, 2016, that Micro Focus
will acquire PE Software for $8.8 billion.  The transaction is
mainly financed by an issuance of new Micro Focus shares to HPE's
shareholders.  Micro Focus also has commitments for a total of
$5.5 billion debt financing, including a $500 million revolving
credit facility (RCF).  The new debt will be used to fund a
$2.5 billion cash payment to HPE, $400 million distribution to
Micro Focus' current shareholders before completion of the
acquisition, transactions cost, and to refinance Micro Focus'
current indebtedness.  S&P understands HPE Software will be
acquired on a debt-free basis.  Micro Focus estimates its pro
forma company adjusted net leverage will be approximately 3.3x
when the transaction closes, which is expected to occur in the
third calendar quarter of 2017.

"Micro Focus' business risk continues to reflect its narrow
revenue base from mature infrastructure software with limited
growth prospects.  With annual revenues of $3.2 billion, HPE
Software will meaningfully increase Micro Focus' scale.  However,
about 80% of HPE Software's revenues come from legacy
infrastructure software with ongoing declining revenues.
Likewise, only 18% of Micro Focus' current revenues--pro forma
Serena Software Inc. (Serena) acquisition, completed on May 2,
2016--come from SUSE product portfolio (enterprise Linux
business), which is its only growing segment.  The remaining
revenues are derived from COBOL (a software programming language)
and mainframe solutions (18%), host connectivity (14%), identity,
access, and security solutions (16%), development and IT
operations management (23%), and collaboration and networking
(11%).  In COBOL, the company operates in the distributed segment
of this market, where customers can use their own applications
written in COBOL across multiple platforms.  Micro Focus also
operates in the mainframe segment, but to a much smaller extent.
Furthermore, the group competes with much larger players,
including IBM, Microsoft, and Oracle, and with niche software
providers such as Red Hat Inc. and newer entrants in the cloud
space," S&P noted.

These weaknesses are partly offset by Micro Focus' solid
profitability.  The S&P Global Ratings-adjusted EBITDA margin
improved to 43% from an already strong 38.2% in fiscal 2016,
ending in April 2016.  Micro Focus has been successful in
operating mature, non-growing businesses and in the integration of
Attachmate.  S&P thinks Micro Focus can replicate this success
with HPE Software.  HPE Software currently reports about 21%
EBITDA margin.  Micro Focus believes it can improve this margin to
about 46% within the mature product portfolio of HPE Software by
the end of the third full fiscal year post-closing.  In S&P's
view, there should be reasonable operational efficiencies derived
from running the target as a pure software company rather than as
part of a larger hardware-focused company.  Furthermore, limiting
the research and development and sales and marketing spending on
declining segments should provide cost savings.

Other strengths include:

   -- A high proportion of recurring revenues (more than 70% of
      Micro Focus' and about 59% of HPE Software's revenues),
      supported by mission-critical software in many segments;

   -- Leading positions in some segments like off-mainframe
      COBOL, host connectivity and enterprise Linux markets, and
      enhanced market position in segments like IT operations
      management post-closing; and

   -- Some diversification, operating in different segments
      within the infrastructure software market, and Micro Focus
      and HPE Software globally serving more than 20,000 and
      50,000 customers, respectively.

"We forecast that the HPE Software acquisition could push Micro
Focus' pro forma S&P Global Ratings-adjusted leverage to just
above our rating threshold of 4x.  However, we believe the group's
robust free cash flow and cost savings potential preserve adjusted
leverage at about 3.5x within a year of closing the acquisition.
That said, we expect that Micro Focus will remain acquisitive and
continue meaningful shareholder distributions.  Micro Focus
targets a company-adjusted leverage of 2.5x (which corresponds to
our adjusted leverage of about 3x), to be achieved again two years
post closure of the HPE Software acquisition.  In our view, Micro
Focus has a good track record of delevering, as witnessed by the
usage of equity in recent acquisitions and repayments of debt,
together with growing EBITDA," S&P said.

Compared with other software providers S&P rates, Micro Focus has
weaker growth prospects, in S&P's view.  Moreover, S&P continues
to see execution risks with the integration of HPE Software after
the integration of Attachmate, which could result in lower
revenues or delays in achieving cost reductions.

S&P's base case assumes:

   -- A low-single-digit organic revenue decline in fiscals
      2017-2019.  S&P expects revenue in all segments, including
      the acquired Serena and HPE Software, to decline or remain
      flat.  The only exception is SUSE, for which S&P
      anticipates continued solid annual growth.

   -- Modest restructuring costs relating to the Serena
      acquisition and remaining integration of Attachmate in
      fiscals 2017 and 2018.  Significant integration and
      restructuring costs in fiscals 2018 and 2019 relating to
      the HPE Software acquisition.  S&P expects about
      $300 million-$400 million annual expenses.  S&P includes
      these costs in its EBITDA calculation.

   -- Micro Focus and Serena to maintain or slightly improve
      their margins in fiscals 2017-2019 on the back of completed
      restructurings.  In S&P's view, there is meaningful cost
      savings potential from integrating HPE Software.  S&P
      assumes HPE Software's unadjusted EBITDA margin to
      gradually improve from the current 21% to above 30% in
      fiscal 2020.

   -- Increasing dividend and shareholder distributions, or
      additional acquisitions, to keep company adjusted leverage
      at around 2.5x.

Based on these assumptions, S&P arrives at these S&P Global
Ratings-adjusted credit measures:

   -- EBITDA margin of 43%-44% in fiscal 2017, compared with 43%
      in fiscal 2016.  On a pro forma basis, 22%-27% and 28%-31%
      in fiscals 2018 and 2019, respectively.

   -- Positive FOCF and break-even DCF after cash restructuring
      outlays in fiscal 2018, FOCF rising to $500 million-
      $700 million in fiscal 2019.

   -- Debt to EBITDA of below 3x in fiscal 2017.  On a pro forma
      basis, about 4x-4.5x in fiscal 2018 and about 3.5x in
      fiscal 2019.

   -- FFO to debt about 30% in fiscal 2017.  On a pro forma
      basis, less than 20% in fiscal 2018, but improving back to
      above 20% in fiscal 2019.

The stable outlook reflects S&P's anticipation that Micro Focus'
S&P Global Ratings-adjusted debt-to-EBITDA ratio could peak above
4x pro forma after the HPE Software acquisition closes, but it
will decline to about 3.5x in one year after closing and further
strengthen sustainably below 3.5x after two years.  S&P also
assumes Micro Focus will maintain above 30% average S&P Global
Ratings-adjusted EBITDA margins.

S&P could lower the rating if it assesses that it is unlikely that
Micro Focus will improve its debt to EBITDA and FFO-to-debt to
less than 3.5x and more than 20%, respectively, in the 24 months
after the acquisition closes.  S&P thinks this could result from
operational problems, notably from integration issues leading to
higher restructuring costs or lower cost savings, or if revenues
declined more than S&P expects, especially within HPE Software.

Rating upside is currently limited due to the expected significant
integration of HPE Software and the increased leverage at closing
of the acquisition.  S&P could raise the rating in the longer term
once the integration of HPE Software has been successfully
completed and organic revenues have at least stabilized.  In
addition, gradually stronger metrics in line with S&P's base case
would support an upgrade.


MONARCH AIRLINES: Denies Bankruptcy Rumors, In Takeover Talks
-------------------------------------------------------------
Ravender Sembhy and Neil Lancefield at Press Association report
that the owner of Monarch Airlines is in talks with several
interested parties about a potential takeover of the carrier as it
prepares to throw it a multimillion-pound lifeline.

According to Press Association, Greybull Capital is understood to
be in discussions with Chinese firm HNA Group, the company behind
Hainan Airlines, about a potential deal, with others thought to be
waiting in the wings.

Monarch was forced to deny "negative speculation" over the weekend
that it is in financial trouble, and sources close to the
situation confirmed that the airline is in no immediate danger of
going bust, Press Association relates.

"Over the weekend, there has been negative speculation about
Monarch's financial health.  Our flights are operating as normal,
carrying Monarch passengers as scheduled," Press Association
quotes a spokesman for Monarch as saying.

"To weather tougher market conditions and to fund its ongoing
growth, Monarch expects to announce a significant investment from
its stakeholders in the coming days."

Greybull, which acquired a controlling stake in Monarch in 2014,
is thought to be finalizing details of a cash injection over the
coming days, Press Association discloses.

Monarch Airlines, also known as and trading as Monarch, is a
British airline based at Luton Airport, operating scheduled
flights to destinations in the Mediterranean, Canary Islands,
Cyprus, Egypt, Greece and Turkey.


                            *********

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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Information contained herein is obtained from sources believed to
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                 * * * End of Transmission * * *