TCREUR_Public/160928.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

        Wednesday, September 28, 2016, Vol. 17, No. 192


                            Headlines


B U L G A R I A

UNICREDIT BULBANK: Fitch Assigns 'bb' Viability Rating


G E R M A N Y

DEA DEUTSCHE: Fitch Assigns 'BB' Senior Unsecured Rating


I R E L A N D

BLUE GRANITE 4: Moody's Lowers Rating on Class C Notes to B3
BLUEMOUNTAIN EUR 2016-1: S&P Affirms B- Rating on Cl. F Notes


I T A L Y

CREDITO VALTELLINESE: DBRS Assigns BB Rating to Tier 2 Notes


K Y R G Y Z S T A N

KYRGYZ REPUBLIC: S&P Affirms 'B/B' Sovereign Credit Ratings


L U X E M B O U R G

EDREAMS ODIGEO: Moody's Assigns B3 Rating to EUR435MM Sr. Notes


N E T H E R L A N D S

CARLYLE GLOBAL 2013-1: S&P Raises Rating on Class E Notes to BB+
IHS NETHERLANDS: Fitch Assigns 'B+' LT Issuer Default Rating
SCHOELLER ALLIBERT: Moody's Raises CFR to B2, Outlook Stable
SCHOELLER ALLIBERT: S&P Affirms 'B-' CCR, Outlook Positive


R U S S I A

CHELINDBANK: Fitch Affirms 'BB-' Long-Term IDR, Outlook Stable
EUROCHEM GLOBAL: Fitch Assigns 'BB(EXP)' Senior Unsecured Rating
GAZPROMBANK JSC: S&P Affirms 'BB+/B' Counterparty Credit Ratings
MOSVODOKANAL JSC: S&P Affirms 'BB+/B' CCRs, Outlook Stable
TENEX-SERVICE: S&P Affirms 'BB/B' Ratings, Outlook Stable

VEB-LEASING JSC: S&P Affirms 'BB+/B' Counterparty Credit Ratings


S P A I N

AYT CGH VITAL 1: Fitch Puts 'BBsf' Class C Debt on RWN
NH HOTEL: Moody's Assigns Ba3 Rating to Sr. Sec. Notes Due 2023


T U R K E Y

TURKEY: Moody's Lowers Long-Term Issuer Rating to Ba1


U K R A I N E

* UKRAINE: Official Puts Decision on Naftogaz Takeover on Hold


U N I T E D   K I N G D O M

ABC PRINT: Leaves Shortfall Of More Than GBP1 Million
AG BARR: To Cut 10% of Workforce as Part of Overhaul
CITY MOTOR: Car Dealership Goes Into Administration
HONOURS PLC: Fitch Puts 'Bsf' Class D Debt on RWN
NEWGATE FUNDING 2006-3: S&P Hikes Ratings on 2 Note Classes to BB

RAME ENERGY: Mulls Company Voluntary Arrangement After Asset Sale
ROTHSCHILD CONTINUATIONS: Fitch Affirms 'BB+' Hybrid Debt Rating
VIRGIN MEDIA: Fitch Assigns 'B+(EXP)' Rating to Proposed RFNs
WOLSELEY PLC: To Cut 13% of Workforce, Close 80 UK Branches


X X X X X X X X

* EUROPE: Regulators Must Level Playing Field on Bank Capital


                            *********


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B U L G A R I A
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UNICREDIT BULBANK: Fitch Assigns 'bb' Viability Rating
------------------------------------------------------
Fitch Ratings has assigned UniCredit Bulbank AD (Bulbank) a Long-
Term Issuer Default Rating (IDR) of 'BBB', a Support Rating (SR)
of '2' and a Viability Rating (VR) of 'bb'. The Long-Term IDR is
on Negative Outlook.

KEY RATING DRIVERS

IDRS and SR

Bulbank's IDRs and SR reflect a high probability of extraordinary
support from the bank's ultimate owner, UniCredit S.p.A.
(UniCredit; BBB+/Negative/bbb+). This is primary based on Fitch's
view that the Bulgarian bank and the wider CEE region are
strategically important for UniCredit. Bulbank's small size
(around 1% of UniCredit's consolidated assets at end-1H16) means
that potential support should be manageable for UniCredit.

UniCredit's commitment to its Bulgarian subsidiary has been
evidenced by a track record of significant operational and
managerial support for the bank. Bulbank contributed around 6% to
UniCredit's consolidated net profit in 1H16, despite its relative
small size.

The bank's Short-Term IDR of F2 -- the higher of two options
corresponding to a Long-Term IDR of 'BBB' -- reflects potential
support from higher-rated UniCredit. The Negative Outlook on the
bank's Long-Term IDR reflects that on UniCredit.

Bulbank is directly owned by UniCredit Bank Austria AG (Bank
Austria; BBB+/Negative/bbb+), which holds a 99.5% stake in the
bank. The upcoming transfer of CEE operations from Bank Austria to
UniCredit (planned in 4Q16) will be neutral to Fitch's view of the
parental support available to the Bulgarian subsidiary as it is
already notched from the ultimate parent, UniCredit.

VR

Bulbank's standalone profile reflects the bank's leading domestic
market franchise, solid profitability, strong capital buffers,
robust funding and liquidity. At the same time, Fitch also factors
in Bulgaria's challenging operating environment, the bank's high
impaired loans ratio and overall moderate risk appetite compared
with peers. The VR is also underpinned by potential ordinary
support available from its parent.

Bulbank's strong local franchise and scale have translated into
its more resilient performance through- the-cycle compared with
Bulgarian peers. At end-1H16, Bulbank was by far the largest bank
in Bulgaria by total assets (around 20% market share), customer
loans (around 19%) and deposits (around 19%; for retail customers:
15%). The bank has a dominant market position in Bulgaria in the
corporate segment and is ranked second in retail banking. The bank
operates a traditional banking business, with a solid foothold in
the corporate segment, which accounted for around 74% of gross
loans.

Bulbank's weak asset quality reflects mostly legacy problems
stemming from relaxed corporate lending pre-global financial
crisis, including financing of the commercial real estate and
construction sectors (around 13.5% of gross loan book at end-
1H16). Retail loans performed distinctly better, but should be
viewed against regular write-offs in the consumer loan portfolio.

At end-1H16, the bank's impaired loans ratio (defined as IFRS
impaired loans and non-impaired loans past due by more than 90
days) stood at around 13.9% (around 8% for retail loans only),
which was considerably below the sector average (around 20%), but
fairly high in the wider CEE region. The impaired loans ratio fell
from around 17.5% at end-2013, driven by loan expansion and
portfolio clean-up, which should benefit from a slowly recovering
real estate market.

Bulbank's profitability has been fairly resilient, despite
pressure from subdued domestic credit demand, low market interest
rates and excess liquidity. The bank's results compare favorably
with regional peers due to the bank's still wide margins (around
4% at end-1H16) and high operational efficiency (cost/income ratio
of around 40%). Loan impairment charges amounted to a considerable
1.5% of average gross loans at end-1H16.

Bulbank's substantial capital surplus over regulatory minimums
must be viewed against the difficult operating environment in
Bulgaria. Reserve coverage of impaired loans is moderate, but if
all outstanding impaired loans were fully covered with reserves,
the bank's Fitch core capital ratio would still be above 20% at
end-1H16. The common equity Tier 1 ratio increased in July 2016 by
around 250bp from 23.7% at end-1H16, due to the bank's transition
to the Advanced IRB method.

Refinancing risks are low because the bank is self-funded with
customer deposits (around 85% of total funding at end-1H16), it
has a strong deposit franchise, high excess liquidity and can rely
on ordinary parental support. Corporate deposits (around 50% of
total deposits) are generally stable and granular. Available
highly liquid assets (around BGN6.5bn) at end-1H16 covered around
48% total deposits.

The loans/ deposits ratio dropped to around 84% at end-1H16 from
above 100% at end-2014. This was driven by deposit growth of
around 25% in both 2014 and 2015, reflecting flight-to-quality
sparked by the collapse of the second-largest domestic bank and
the intensification of the Greek crisis, respectively.

RATING SENSITIVITIES

IDRS and SR

Bulbank's IDRs and SR are sensitive to changes in UniCredit's
ratings or to Fitch's view of UniCredit's commitment to Bulbank or
to the wider CEE region. Therefore, the bank's Long-Term IDR would
be downgraded in case of a downgrade of UniCredit's Long-Term IDR,
which is currently on Negative Outlook. Bulbank could be also
downgraded if UniCredit markedly changes its CEE strategy,
resulting in lower expectations of parental support propensity for
its subsidiaries in the region in general, and the Bulgarian
subsidiary, in particular.

VR

The bank's VR could be upgraded in case of a marked improvement of
the operating environment and a significant reduction of impaired
loans. A downgrade could be triggered by negative trends in loan
book performance or an increase in risk appetite.

The rating actions are as follows:

   -- Long-Term IDR assigned at 'BBB'; Outlook Negative

   -- Short-Term IDR assigned at 'F2'

   -- Viability Rating assigned at 'bb'

   -- Support Rating assigned at '2'



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G E R M A N Y
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DEA DEUTSCHE: Fitch Assigns 'BB' Senior Unsecured Rating
--------------------------------------------------------
Fitch Ratings has assigned Germany-based DEA Deutsche Erdoel AG
(DEA) a senior unsecured rating of 'BB'. Fitch has also assigned
DEA Finance SA's proposed senior unsecured notes an expected
rating of 'BB(EXP)'. The assignment of a final rating is
conditional on the receipt of final documentation in line with the
draft dated September 19, 2016.

The notes are guaranteed by DEA and its key subsidiaries
accounting for 99% of 2015 EBITDAX and 100% of fixed assets at
end-2015. The proceeds from the offering are expected to be used
to partially repay amounts outstanding under a reserve-based
lending facility (RBL).

DEA is a medium-sized oil and gas exploration and production
company based in Germany. The company's pro-forma hydrocarbon
output totalled 144 thousand barrels of oil equivalent per day
(mboepd) in 2015 (on a net entitlement basis and accounting for
acquisitions and disposals completed in 2015). DEA's key oil and
gas fields are located in Germany, Norway and Egypt. The share of
gas in total production is around 50%, which is expected to
increase to 80% when new assets in Norway and Egypt add to
production.

The ratings are supported by a diversified asset base in 'AAA'-
rated countries (mainly Germany and Norway), low cost of
production and a clearly stated financial policy with net debt-to-
EBITDAX capped at around 2.0x-2.5x. DEA's credit profile is
constrained by mature assets in Europe, where production decline
is yet to be arrested, and size of production. Fitch said, "We
deconsolidate oil and gas output from the West Nile Delta (WND)
reservoir in Egypt from DEA's financial profile because the
company plans to project-finance its stake."

DEA is a wholly owned subsidiary of L1E Acquisitions GmbH (owned
by LetterOne Holdings S.A.) following the acquisition of the
company from RWE AG (BBB/RWN) in March 2015. LetterOne was founded
in 2013 by Mikhail Fridman, German Khan and several other
shareholders.

KEY RATING DRIVERS

Production to Decline; Recovery Expected

"We expect DEA's production to decrease to 107mboepd in 2016
(excluding the output from the WND project), from 144mboepd in
2015 (excluding production from the UK assets sold to INEOS
Offshore BCS Limited and including full year production from
assets in the North Sea acquired from E.ON SE (BBB+/Stable)), due
to lower output from Skarv and Njord fields in Norway and disposal
of assets," Fitch said.

"We forecast total liftings to fall to 87 mboepd in 2019 because
of declining production in Germany and Norway before recovering to
106mboepd in 2021, following the development of the Zidane gas
field and higher output from the Skarv Area. In addition, the
company is developing the WND project in Egypt, which will lead to
its output increasing to 39mboepd in 2021 from 1mboepd in 2015."
Fitch said.

In Line with 'BB' Peers

DEA's geographical and asset diversification compares well with
peers, such as Kosmos Energy Ltd (B/RWN), which usually have a
concentrated asset base located in more politically challenging
countries, and is more comparable to Newfield Exploration Company
(BB+/Stable) with 2015 output of 139mboepd. This factor, coupled
with leverage and the size of production, is commensurate with the
mid-'BB' rating category.

'AAA' Countries Support Rating

Around 85% of total production in 2015 came from oil and gas
fields located in Germany, Norway and Denmark (GDN), mainly
Volkersen, Mittelplate, Skarv, Gjoa and Snorre. This represented
almost the entire EBITDAX in 2015. Fitch said, "We view assets
located in 'AAA' rated countries as positive for DEA's credit
profile."

At the same time, assets in the 'AAA' rated countries are mature
reservoirs with declining production. "The production volume from
GDN increased in 2015 on acquisition of assets in the Norwegian
North Sea from E.ON for USD1.6bn, but we expect volumes to
decrease 44% to 69mboepd by 2019, due to natural decline before
recovering substantially to 88mboepd in 2021 on the back of higher
production from the Zidane and the Skarv Area." Fitch said.

Zidane is a large gas field in Norway with 1P gas reserves of
432Bscf operated by DEA, which holds a 40% stake. The submission
of plan for operation and development has been delayed and is
expected to take place in September 2016 after the negotiations
with project partners are completed. DEA plans to tie back the
field to the Statoil operated infrastructure at Heidrun platform
with a 15km production flowline.

Production in the Skarv Area started in 2013 (Skarv and Idun
fields) and is expected by Fitch to naturally decline from the
peak in 2015 until 2020 when production is expected to improve
mainly from the development of the Snadd field.

Prospective Assets in North Africa

The company expects production in Egypt and Algeria to increase to
46mboepd in 2019 from 22mboepd in 2015, including 25mboepd from
WND. DEA started commercial production from the Disouq concession
(100% working interest (WI)) in Egypt (B/Stable) in 2013.

In March 2015, BP plc (A/Stable) and DEA signed the final
agreements for WND (WI 17.25%), where the companies expect to
develop 5 trillion cubic feet of gas and 55mmboe of condensates.
Another significant prospect is the Reggane Nord gas field in
Algeria (19.5% WI). Production in Reggane and WND is expected to
start in 2017.

"We view the company's track record in developing new reservoirs
as strong, which supports its ratings." Fitch said. Additionally,
WND and Reggane are operated by experienced partners - BP plc and
Repsol (BBB/Negative), respectively - with the former project
currently one of the core development assets for BP. The output
from these assets will help improve DEA's operational profile
before production decline in Germany and Norway is halted, which
is positive for the credit profile.

At the same time, a higher contribution from lower-rated and less
politically stable regions constrains the ratings. Increasing
production in Egypt and Algeria will also require significant
capex. DEA plans to project-finance its stake in WND, which will
reduce its share of spending by USD500m-USD600m from the expected
USD850m to develop the field. "We therefore deconsolidate WND from
our forecasts," Fitch said.

Project Finance for WND

The project finance loan is currently being negotiated. Our base
case assumption is that that ring-fencing of DEA from the loans
will be strong enough and WND funding and production will be
deconsolidated. An alternative scenario would have a neutral
impact on DEA's credit profile.

Fitch's forecasts including WND show that leverage metrics are
still commensurate with the 'BB' rating, while higher oil and gas
production would offset the negative impact on DEA's business
profile of higher production from lower rated countries. The
neutral impact of potential WND consolidation should also be
viewed in conjunction with Fitch's expectation of the majority of
oil and gas production coming from politically stable regions such
as Germany or Norway following the acquisition of assets in Norway
from E.ON.

Low Production Costs

Production costs totalled USD7/boe in 2015, down from USD13/boe in
2014, due to cost-cutting measures and the substitution of higher-
cost production in the UK with more profitable assets in Norway
acquired from E.ON. Costs are expected to remain broadly stable at
USD5/boe over the rating horizon of next five years when Egyptian
production is counted in. Low production costs support DEA's
credit profile.

1P reserves totalled 400 million boe (mmboe) in 2015 (including
WND), which translates into eight years of reserve life and
compares well with peers such as Kosmos Energy (nine years), Unit
Corporation (B+/Negative, seven years), Newfield Exploration
Company (10 years). Excluding WND and Njord fields, 1P reserves
total 317mmboe and reserve life is six years at the 2015
production level.

EBITDA to Rise From Low

"We expect EBITDA to bottom out in 2016 at EUR641m, due to lower
production in Norway and Egypt versus 2015 and lower hedging
income (EUR120m in 2015), followed by a gradual price-driven
increase, in line with our oil price deck of USD42/bbl in 2016,
USD45/bbl in 2017, USD55/bbl in 2018 and USD65/bbl over the long
term. We expect funds from operations (FFO)-adjusted net leverage
to peak at 3.3x in 2016, on the back of a challenging macro
environment and high capex in Egypt and Algeria, before decreasing
to 2.9x in 2019," Fitch said.

The financing structure comprises a USD2.3 billion (USD2,050m
drawn) senior secured reserve-based lending (RBL) facility with a
comfortable maturity profile. Shareholder loans (EUR.1.1bn at end-
2015) were excluded from the debt amount, as they have equity-like
characteristics.

DEA plans to maintain net debt-to-EBITDAX at around 2.0x, with a
temporary increase up to 2.5x in case of inorganic growth. The
company is also obliged to keep net debt-to-EBITDAX below 3.0x
under its RBL facility. Fitch's forecasts show net debt-to-EBITDAX
will remain below 2.5x until 2019.

New Acquisitions Likely

DEA plans to remodel its portfolio and to further grow through
acquisitions. Headroom for debt-financed inorganic growth is
currently limited. "We therefore assume that a potential
transaction would be largely financed with shareholder funds if
the expected contribution to EBITDA from acquired assets would not
allow the maintenance of the target net debt-to- EBTDAX ratio,"
Fitch said.

Parent Neutral for Rating

DEA was acquired by LetterOne Holdings S.A. in March 2015. The
latter entity is owned by an investment holding of Mikhail Fridman
and German Khan. DEA is domiciled in Germany. LetterOne received
all required consents from European authorities to acquire DEA,
but the UK authorities obliged LetterOne to dispose of DEA's UK
assets, which took place in 2015. "We do not view corporate
governance as a rating constraint," Fitch said.

"DEA is ring-fenced and we view it's the ownership by LetterOne as
rating-neutral as is also the case for DEA's private
equity-owned peers. LetterOne has ample resources after monetizing
its stake in TNK-BP and also provided shareholder funding to DEA.
Although future support is likely, especially for DEA's inorganic
growth, we do not include any rating uplift," Fitch said.

German Investment Guarantees Positive

Most of DEA's investments in North Africa are covered by
investment guarantees of Germany. The guarantee covers risk
related to expropriation, nationalization of assets, war or other
armed conflicts and cash transfer restrictions. The ability to
recover lost investment in case of major problems with operations
in Africa is positive for the company's credit profile.

KEY ASSUMPTIONS

   -- Oil prices of USD42/bbl in 2016, USD45/bbl in 2017,
      USD55/bbl in 2018 and USD65/bbl in the long term

   -- Gas prices (NBP) of USD5/mcf in 2016, USD5.5/mcf in 2017,
      USD6/mcf in 2018 and USD6.5/mcf in the long term

   -- EURUSD exchange rate 1.1

   -- Oil and gas output around 5% below management's assumptions

   -- Non-core cash inflows plus divestments of USD274m in 2016,
      USD155m in 2017 and USD60m in 2018

   -- No dividend pay-outs except for partial payback of loan
      from shareholders in 2016

   -- Capex in line with management forecasts

RATING SENSITIVITIES

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

   -- Increase in oil and gas output to above 150mboepd
     (excluding WND)

   -- Majority of oil and gas production in politically stable
      regions

   -- FFO adjusted net leverage below 3.0x on a sustained basis

   -- Longer track record of operations in the current
      group/financial structure

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

   -- Large debt-financed acquisition

   -- FFO net leverage consistently above 4.0x

   -- Reserve life falling below five years

LIQUIDITY

DEA's liquidity is adequate. The group's policy is to ensure a
fully funded status for 12 months. DEA does not have any immediate
debt maturities. The first maturity is in 2019, when the RBL
amortization schedule begins. As at June 30, 2016, the group had
USD250 million under the RBL, USD50 million working capital
facility from Unicredit and USD141 million cash at hand (we assume
USD75 million is the minimum cash needs of the company in line
with our rating methodology and this balance is excluded from
DEA's reported cash balance). The proposed bond will strengthen
DEA's liquidity position.



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I R E L A N D
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BLUE GRANITE 4: Moody's Lowers Rating on Class C Notes to B3
------------------------------------------------------------
Moody's Investors Service has downgraded the rating of Class C
notes in Blue Granite Investments No. 4 (Proprietary) Limited -
refinanced 2012.  The rating action reflects the correction of an
error in its modeling.

Issuer: Blue Granite Investments No. 4 (Proprietary) Limited -
refinanced 2012

  Rand177 mil. C Notes, Downgraded to B2.za (sf); previously on
   May 11, 2016, Upgraded to A3.za (sf)

  Rand177 mil. C Notes, Downgraded to B3 (sf); previously on
   July 27, 2015, Confirmed at Ba2 (sf)

                         RATINGS RATIONALE

The rating action is prompted by the correction of a model error
in the cash-flow modeling of the transaction.  This error related
to the modelling of the principal deficiency ledger (PDL) which
overestimated the cash trapping mechanism in place.  The former
model incorrectly gave too much benefit to trapped amounts,
amortizing the notes faster than in reality.  The correction of
this error increases the Class C expected loss because less cash
is available to repay principal.

Key Collateral Assumptions.

The portfolio expected loss assumption remains unchanged at 3.2%
of the original pool balance.  The MILAN CE also remains unchanged
at 17%.

Additionally, Moody's has increased the constant prepayment rate
(CPR) from 15% to 20% to reflect the current trend observed for
this transaction , which also contributes to 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
ratings for RMBS securities may focus on aspects that become less
relevant or typically remain unchanged during the surveillance
stage.

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.


BLUEMOUNTAIN EUR 2016-1: S&P Affirms B- Rating on Cl. F Notes
-------------------------------------------------------------
S&P Global Ratings affirmed its credit ratings on BlueMountain EUR
CLO 2016-1 DAC's class A1, A2, B1, B2, C, D, E, and F notes
following the transaction's effective date as of Aug. 5, 2016.

Most European cash flow collateralized loan obligations (CLOs)
close before purchasing the full amount of their targeted level of
portfolio collateral.  On the closing date, the collateral manager
typically covenants to purchase the remaining collateral within
the guidelines specified in the transaction documents to reach the
target level of portfolio collateral.

Typically, the CLO transaction documents specify a date by which
the targeted level of portfolio collateral must be reached.  The
"effective date" for a CLO transaction is usually the earlier of
the date on which the transaction acquires the target level of
portfolio collateral, or the date defined in the transaction
documents.  Most transaction documents contain provisions
directing the trustee to request the rating agencies that have
issued ratings upon closing to affirm the ratings issued on the
closing date after reviewing the effective date portfolio
(typically referred to as an "effective date rating affirmation").

An effective date rating affirmation reflects S&P's opinion that
the portfolio collateral purchased by the issuer, as reported to
us by the trustee and collateral manager, in combination with the
transaction's structure, provides sufficient credit support to
maintain the ratings that S&P assigned on the transaction's
closing date.  The effective date reports provide a summary of
certain information that S&P used in its analysis and the results
of its review based on the information presented to S&P.

S&P believes the transaction may see some benefit from allowing a
window of time after the closing date for the collateral manager
to acquire the remaining assets for a CLO transaction.  This
window of time is typically referred to as a "ramp-up period."
Because some CLO transactions may acquire most of their assets
from the new issue leveraged loan market, the ramp-up period may
give collateral managers the flexibility to acquire a more diverse
portfolio of assets.

For a CLO that has not purchased its full target level of
portfolio collateral by the closing date, S&P's ratings on the
closing date and prior to its effective date review are generally
based on the application of S&P's criteria to a combination of
purchased collateral, collateral committed to be purchased, and
the indicative portfolio of assets provided to S&P by the
collateral manager, and may also reflect its assumptions about the
transaction's investment guidelines.  This is because not all
assets in the portfolio have been purchased.

"When we receive a request to issue an effective date rating
affirmation, we perform quantitative and qualitative analysis of
the transaction in accordance with our criteria to assess whether
the initial ratings remain consistent with the credit enhancement
based on the effective date collateral portfolio.  Our analysis
relies on the use of CDO Evaluator to estimate a scenario default
rate at each rating level based on the effective date portfolio,
full cash flow modeling to determine the appropriate percentile
break-even default rate at each rating level, the application of
our supplemental tests, and the analytical judgment of a rating
committee," S&P said.

"In our published effective date report, we discuss our analysis
of the information provided by the transaction's trustee and
collateral manager in support of their request for effective date
rating affirmation.  In most instances, we intend to publish an
effective date report each time we issue an effective date rating
affirmation on a publicly rated European cash flow CLO," S&P
noted.

On an ongoing basis after S&P issues an effective date rating
affirmation, it will periodically review whether, in its view, the
current ratings on the notes remain consistent with the credit
quality of the assets, the credit enhancement available to support
the notes, and other factors, and take rating actions as S&P deems
necessary.

RATINGS LIST

BlueMountain EUR CLO 2016-1 DAC
EUR409.8 Million Senior Secured And Deferrable Fixed- and
Floating-Rate Notes

Ratings Affirmed

Class     Rating

A1        AAA (sf)
A2        AAA (sf)
B1        AA (sf)
B2        AA (sf)
C         A (sf)
D         BBB (sf)
E         BB (sf)
F         B- (sf)



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I T A L Y
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CREDITO VALTELLINESE: DBRS Assigns BB Rating to Tier 2 Notes
------------------------------------------------------------
DBRS Ratings Limited has assigned a BB (high) rating to the
Mandatory Pay Subordinated Debt, in the form of Tier 2 Notes (the
Notes), to be issued by Credito Valtellinese S.c. (Creval, the
Bank or the Issuer) under its EUR 5,000,000,000 Medium Term Note
Programme (EMTN Programme). The trend on the Notes is Negative.

The BB (high) rating assigned to the Subordinated Notes is one
notch below the Bank's intrinsic assessment (IA) of BBB (low), in
line with DBRS' methodology for Rating Bank Capital Securities --
Subordinated, Hybrid, Preferred & Contingent Capital Securities.

DBRS highlights that the Notes constitute direct and unsecured
obligations of the Issuer and rank pari passu without any
preference among themselves. The Notes will rank in right of
payments after unsubordinated unsecured creditors (including
depositors and any holder of Senior Notes and their respective
coupons) of the Issuer and in priority to the claims of its
shareholders.

RATING DRIVERS

The rating is sensitive to a change in Creval's Long-Term Senior
Debt and Deposits rating and IA which are currently at BBB (low)
with Negative trend.

Notes: All figures are in EUR unless otherwise noted.

RATINGS

Issuer               Debt Rated         Rating Action      Rating
------               ----------         -------------      ------
Credito              Mandatory Pay       New Rating       BB(high)
Valtellinese         Subordinated Debt
S.c. (Gruppo         (Tier 2) - EUR 5
Bancario Credito     billion EMTN
Valtellinese)        Programme



===================
K Y R G Y Z S T A N
===================


KYRGYZ REPUBLIC: S&P Affirms 'B/B' Sovereign Credit Ratings
-----------------------------------------------------------
S&P Global Ratings affirmed its 'B/B' long- and short-term foreign
and local currency sovereign credit ratings on the Kyrgyz Republic
(Kyrgyzstan).  The outlook at the time of the withdrawal was
stable.  S&P subsequently withdrew the ratings and Transfer &
Convertibility assessment at the issuer's request.

                             RATIONALE

At the time of the withdrawal, the ratings on Kyrgyzstan reflected
S&P's view of its low GDP per capita and narrow economic base,
weak governance, and a weak external profile, characterized by
high dependence on remittances from, and trade with, Russia and
Kazakhstan, alongside weak monetary policy flexibility.

The ratings were supported by moderate government debt, which
consists mostly of official concessional loans.

S&P expects that the political environment will remain fluid,
although S&P does not expect that this will derail what S&P views
as a reasonable degree of policy continuity, particularly with the
three-year Extended Credit Facility (ECF) from the International
Monetary Fund, in place since April 2015.  In S&P's view,
Kyrgyzstan has the most pluralistic political system, by far, in
Central Asia.

Under the constitution adopted in 2010, S&P assesses the country
as a parliamentary republic.  The parliament nominates the prime
minister and forms the government.  The parliamentary elections
held in October 2015 ran relatively smoothly; however, the prime
minster and cabinet have since resigned and been replaced.  In the
past, political stability in the republic has regularly been
challenged at the time of elections.  As a result, S&P thinks that
domestic political challenges present some risk to policy-making,
especially in light of the presidential elections scheduled to be
held in 2017.

"Kyrgyz GDP per capita, which we estimate at about US$1,150 in
2016, is low by international standards.  However, we estimate
that trend growth in real per capita GDP (which we proxy by using
10-year weighted-average growth) will amount to about 2% during
2010-2019, which is in line with that of similarly wealthy
economies in the peer group.  We note, however, that GDP growth
has been very volatile owing to the economy's high dependence on
one key industry -- gold mining -- and frequent political
instability, which deters investments and reduces domestic
demand," S&P said.

"We expect real GDP growth to remain relatively robust over
2016-2019, averaging annual growth of 4%, from closer to 5% in
2012-2014.  The ongoing recession in Russia and lower growth in
Kazakhstan and China, Kyrgyzstan's key trading partners, mean that
stronger results are unlikely.  Lower gold production and the
diversion of trade from China through neighboring countries
following Kyrgyzstan's accession into the Eurasian Economic Union
(EEU) have also limited growth prospects in our view.  The impact
on Kyrgyzstan's economy from Russia is especially pronounced,
given that it accounts for over 30% of foreign trade and 70% of
worker remittances, which in turn contribute about 30% of GDP via
consumption, private construction, and imports of goods and
services.  Data point to an increase in remittances over 2016,
which should help to support consumption.  In 2015, the impact on
Kyrgyzstan of economic weakness in Russia was mitigated by the
growth of output in the country's single biggest enterprise -- the
Kumtor gold mine -- which accounts for about 9% of GDP and over
30% of exports.  However, gold output and export performance has
been very volatile due to fluctuations in international gold
prices and ongoing political tensions around Kumtor's ownership
structure.  We understand that 2016 production estimates are lower
than over the past few years," S&P said.

Although the government has been trying to reduce infrastructure
constraints (mainly those in transport and energy), which could
improve the country's growth potential, Kyrgyzstan's GDP
trajectory will continue to depend heavily on Russia's
performance, especially since Kyrgyzstan joined the Russia-led EEU
in August 2015.  The Kumtor mine's continued operations will also
remain important to Kyrgyzstan's economic growth prospects.

Kyrgyzstan has a narrow export base and high dependence on
consumer and fuel imports, as well as on remittance inflows.  As
such, current account deficits are typically very large, averaging
16% of GDP between 2009 and 2014.  The current account deficit
narrowed sharply in 2015 to about 11% of GDP from 25% in 2014
owing to a significant reduction in imports following the nearly
30% depreciation of the some versus the U.S. dollar (year-end 2015
rate), higher gold production, and the lower cost of oil imports.
However, S&P expects the deficit to widen again, averaging 17% of
GDP over 2016-2019, as export receipts are likely to remain weak
and imports rise again.  This assumption includes a relatively
stable exchange rate.  Such large current account deficits expose
Kyrgyzstan to a marked deterioration in external financing.  In
S&P's view, volatility in worker remittances from the
approximately 500,000 Kyrgyz citizens working in Russia poses an
external financing risk; remittances to Kyrgyzstan fell by over
30% in U.S. dollar terms in 2015, according to data from the
Russian central bank.  In S&P's base case, it believes that
Kyrgyzstan's current account deficits will continue to be financed
by a combination of external borrowings and foreign direct
investment (FDI), largely from China and Russia.

"We note that Kyrgyzstan has traditionally relied on official
loans, most of which have been related to public investment.  We
expect that increasing borrowing from concessional lenders, as
well as bilateral lenders such as Russia and China, will increase
the country's net external debt to approximately 60% of current
account receipts (CARs) in 2016-2019, compared with roughly 30% in
2012-2015.  This is lower than what we anticipated earlier in the
year, resulting mainly from a revision of our exchange rate
forecasts in line with that of recent trends in the ruble/U.S.
dollar exchange rate.  Net FDI is likely to stabilize at about 5%
of GDP over 2016-2019, given the several confirmed projects and
Russia's commitment to supporting Kyrgyzstan's accession to the
EEU via a newly established US$1 billion (14% of GDP) Russia-
Kyrgyz fund," S&P said.

Nevertheless, over 2016-2019, gross external financing needs,
which relate mostly to current account payments, will likely
remain high, at slightly over 100% of CARs plus usable reserves on
average, and the country's net external liability position will
weaken significantly to over 170% of CARs, due to the higher stock
of government external debt, which continues to grow apace.  In
2016, S&P expects the bulk of the government's external borrowings
to be related to borrowing under the IMF's ECF program, the Russia
backed Eurasian Stabilization Fund, and bi-lateral loans from
China. However, external analysis on Kyrgyzstan is complicated by
the poor quality of external data, including very high errors and
omissions, and stock and flow mismatches.

Thanks to lower-than-expected capital investment and higher-than-
expected revenues from gold production and the sale of radio
frequency licenses, the 2015 fiscal deficit was lower than S&P
expected, at 1.1% of GDP, compared with S&P's projection that it
would reach 2%.  However, given the ongoing implementation of
infrastructure projects and without any large one-off revenue
inflows expected over 2016, S&P expects the government deficit to
widen again, averaging about 4% of GDP in 2016-2019 from 2% over
2012-2015.

"We view infrastructure expenditure as an important contributor to
increasing the economy's potential production capacity.  However,
government deficits largely depend on the pace of capital
expenditure allocation, which is difficult to forecast.  In our
view, Kyrgyzstan's tax mobilization capacity is constrained
because of the large size of the informal economy and despite
efforts to formalize sectors, for example, by the introduction of
online cash registries.  We also note that because of slower
regional growth, the EEU members' customs revenue is likely to be
lower than expected because of lower imports and trade.
Kyrgyzstan should take 1.9% of total EEU tax revenues, which
ordinarily would boost fiscal revenues, but, due to a lower tax
take at the aggregate level, will also add pressure to the fiscal
position," S&P said.

"We now foresee a more stable scenario for the exchange rate, due
to our assumption of stability in the Russian ruble, compared with
the significant depreciations of the past.  As a result, we expect
the annual average accumulation of government debt will be much
lower over 2016-2019 (4% of GDP) than our previous projections
(8%).  We estimate 95% of government debt is denominated in
foreign currency.  The som depreciated by almost 30% in 2015,
which was largely responsible for the 16 percentage point increase
in gross general government debt as a proportion of GDP in that
year.  Offsetting the foreign currency risks of the government's
debt profile to an extent, most of the debt consists of official
funding at concessional rates and with long average maturities
(over 25 years), provided by China, Russia, the IMF, and other
multilateral lending institutions.  We expect these traditional
official lenders to continue to provide funding to the government.
Kyrgyzstan's contingent liabilities, in particular those coming
from the banking system and state-owned enterprises, are limited,
in our view.  We assess both sectors as relatively small, but note
a lack of transparency with regard to the level of state-owned
enterprises' indebtedness," S&P said.

The National Bank of the Kyrgyz Republic (NBKR, the central bank)
has little flexibility in implementing monetary policy, in S&P's
view.  S&P assesses the exchange rate as a managed float.  After
attempts to intervene in the fourth quarter of 2014 and first
quarter of 2015 to smooth spikes in the som exchange rate,
triggered by the collapse of the Russian ruble and a slowdown in
the economies of key trading partners, NBKR allowed an adjustment
to take place, evidenced by an almost 30% weakening of the som
against the U.S. dollar since 2015.  The som has appreciated by
about 11% against the U.S. dollar so far in 2016.

However, the central bank's ability to affect domestic demand or
inflation expectations is limited, owing to the small size of the
banking sector (slightly above 30% of GDP) and almost nonexistent
capital markets.  The high dollarization of the financial system
further constrains the effectiveness of the NBKR's policies, with
foreign currency deposits accounting for more than 50% of total
commercial bank deposits and about 45% of total bank loans (as of
mid-2016).  Headline data on asset quality shows some
deterioration, but S&P believes these figures do not represent the
true strain placed on financial institutions due to regulatory
forbearance.  Earlier in 2016, the government initiated a program
to convert foreign currency mortgage loans into local currency,
which we believe is indicative of strain at both lender and
borrower levels.  S&P notes, however, that the total nominal
conversions are small, at approximately US$32 million.

Since Kyrgyzstan relies heavily on imports of food and fuel,
inflation tends to fluctuate with global prices for these
commodities as well as in line with exchange rate movements.  The
recent appreciation of the som and lower current account deficits,
plus relative stability of the ruble and Kazakhstani tenge, has
helped tame headline inflation, although core inflation, i.e., not
factoring in food and energy prices, remains high.

                             OUTLOOK

The stable outlook at the time of withdrawal reflected S&P's view
that external risks emanating from Kyrgyzstan's dependence on
remittances from Russia and Kazakhstan will nonetheless be
consistent with a 'B' rating.  S&P expects these risks to be
counterbalanced by the government's good access to concessional
official funding.

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable.  At the onset of the committee, the chair
confirmed that the information provided to the Rating Committee by
the primary analyst had been distributed in a timely manner and
was sufficient for Committee members to make an informed decision.

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.

The committee agreed that all key rating factors were unchanged.

The chair ensured every voting member was given the opportunity to
articulate his/her opinion.  The chair or designee reviewed the
draft report to ensure consistency with the Committee decision.
The views and the decision of the rating committee are summarized
in the above rationale and outlook.  The weighting of all rating
factors is described in the methodology used in this rating
action.

RATINGS LIST

                                        Rating
                                        To           From
Kyrgyz Republic
Issuer Credit Rating
  Foreign and Local Currency           B/Stable/B   B/Stable/B
Transfer & Convertibility Assessment  B            B

Ratings Subsequently Withdrawn

Kyrgyz Republic
Issuer Credit Rating
  Foreign and Local Currency           NR           B/Stable/B
Transfer & Convertibility Assessment  NR           B

NR--Not rated



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


EDREAMS ODIGEO: Moody's Assigns B3 Rating to EUR435MM Sr. Notes
---------------------------------------------------------------
Moody's Investors Service has assigned a definitive B3 rating to
the EUR435 million senior secured notes due 2021 issued by
Spanish-based on line travel agency eDreams ODIGEO S.A.  The
outlook is stable.

                         RATINGS RATIONALE

Moody's definitive rating for the new Senior Secured Notes due
2021 is in line with the provisional rating assigned on Sept. 14,
2016.  This follows the issuance of the new notes, the proceeds of
which will be used to refinance in full ODIGEO group's outstanding
Senior Secured Notes Due 2018 issued by Geo Debt Finance S.C.A.
and the Senior Unsecured Notes due 2019 issued by Geo Travel
Finance S.C.A. Luxembourg and to pay related fees.

Rating Outlook

The stable outlook reflects Moody's expectation that the company
will continue to generate solid single-digit growth in revenue
margin and with a stable cost environment.  It also assumes that
conservative financial policies will continue with no material
debt-funded acquisitions or dividends in the near to medium term,
and that liquidity will remain satisfactory.

What Could Change the Rating - Up

Upward pressure on the rating could occur if Moody's-adjusted
debt/EBITDA were to trend substantially below 4.0x on a
sustainable basis, with Moody's-adjusted free cash flow (FCF) to
debt above 10%.  Moody's would in such a scenario also expect
ODIGEO to display solid growth in revenue margin and stable EBITDA
margins, with liquidity remaining satisfactory.

What Could Change the Rating - Down

Negative rating pressure could develop if Moody's-adjusted
debt/EBITDA were to exceed 5.0x, if Moody's-adjusted FCF to debt
were to trend towards zero, or if the company's liquidity profile
was to weaken.  Negative pressure could also develop if there is
significant disruption to the market or distribution chain
resulting in reducing revenue margin or profitability.

Principal Methodology

The principal methodology used in this rating was Business and
Consumer Service Industry published in December 2014.



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


CARLYLE GLOBAL 2013-1: S&P Raises Rating on Class E Notes to BB+
-----------------------------------------------------------------
S&P Global Ratings raised its credit rating on Carlyle Global
Market Strategies Euro CLO 2013-1 B.V.'s class B-1, B-2, C-1,
C-2, D-1, D-2, and E notes.  At the same time, S&P has affirmed
its 'AAA (sf)' rating on the class A notes.

Carlyle Global Market Strategies Euro CLO 2013-1 completed its
four-year reinvestment period on Aug. 15, 2016.  S&P Global
Ratings does not typically consider upgrades in a collateralized
loan obligation (CLO) transaction during its reinvestment period
as the collateral manager can change the credit risk profile of
the transaction.  The class A notes have now started to pay down
as the collateral in the transaction amortizes.  Following the end
of the reinvestment period, the collateral manager can only
reinvest unscheduled principal proceeds (e.g., prepayments) and
sale proceeds from the sale of credit impaired or credit improved
assets if it maintains certain credit parameters (e.g., an equal
or higher rating from S&P Global Ratings and the same or earlier
stated maturity of the substitute asset).

The rating actions follow S&P's assessment of the transaction's
performance, using data from the August 2016 trustee report,
following the end of the transaction's reinvestment period.

Since closing, the collateral performance and the weighted-average
spread earned on the assets have been stable.  As the portfolio
continues to amortize, S&P expects a reduction in the notes'
weighted-average life.

All par-value, interest coverage, portfolio profile, and
collateral quality tests are passing.  The weighted-average rating
of the collateral is 'B', with a small proportion of assets rated
in the 'CCC' category (2.98%).  There are currently no defaulted
and no non-euro-denominated assets in the portfolio.

S&P incorporated various cash flow stress scenarios using its
standard default patterns and timings for each rating category
assumed for each class of notes, combined with different interest
stress scenarios as outlined in S&P's corporate cash flow
collateralized debt obligation (CDO) criteria.

Under S&P's structured finance ratings above the sovereign
criteria (RAS criteria), S&P considers the transaction's exposure
to country risk to be limited at the assigned rating levels.
The exposure to individual sovereigns does not exceed the
diversification thresholds outlined in S&P's RAS criteria.

In light of the above developments, S&P believes the available
credit enhancement for the rated classes of notes is commensurate
with higher ratings than those currently assigned.  Therefore, S&P
has raised its ratings on the class B-1, B-2, C-1, C-2, D-1, D-2,
and E notes.

The available credit enhancement for the class A notes is
commensurate with the currently assigned rating.  Therefore, S&P
has affirmed its 'AAA (sf)' rating on these notes.

Carlyle Global Market Strategies Euro CLO 2013-1 is a cash flow
CLO transaction that securitizes loans granted to primarily
speculative-grade corporate firms.  The transaction closed on
June 17, 2013 and its reinvestment period ended on Aug. 15, 2016.

RATINGS LIST

Class            Rating
          To                From

Carlyle Global Market Strategies Euro CLO 2013-1 B.V.
EUR350 Million Fixed- And Floating-Rate Notes

Ratings Raised

B-1       AA+ (sf)          AA (sf)
B-2       AA+ (sf)          AA (sf)
C-1       AA- (sf)          A (sf)
C-2       AA- (sf)          A (sf)
D-1       A (sf)            BBB (sf)
D-2       A (sf)            BBB (sf)
E         BB+ (sf)          BB (sf)

Rating Affirmed

A         AAA (sf)


IHS NETHERLANDS: Fitch Assigns 'B+' LT Issuer Default Rating
------------------------------------------------------------
Fitch Ratings has assigned IHS Netherlands Holdco B.V. an expected
Long-Term Issuer Default Rating (IDR) and senior unsecured rating
of 'B+(EXP)' and an expected National Long-Term Rating of
'AA(nga)(EXP)'. The Outlook for both the IDR and National Rating
is Stable.

IHS Netherlands Holdco B.V. is issuing a USD800 million senior
unsecured bond, guaranteed jointly and severally by 100% owned
operating subsidiaries, IHS Nigeria Limited (IHSN) and IHS Towers
NG Limited (IHS Towers, formerly known as Helios Towers Nigeria
Limited). Collectively these companies are the restricted group,
owned ultimately by IHS Holding Limited (IHS Group), the mobile
telecommunications infrastructure company operating around 23,000
towers across Africa.

IHSN will also enter into a Nigerian naira credit facility of up
to USD150m equivalent. IHS Group has recently signed a USD120m
revolving credit facility (RCF), which is guaranteed by the
restricted group. These, together with the senior unsecured bond,
will be used to refinance all existing debt at IHSN and IHS Towers
as part of a financial transaction to create a new capital
structure for the restricted group, including a conditional tender
offer for IHS Towers' 2019 notes.

At the same time, Fitch has placed IHS Towers' 'B' Long-Term IDR
and senior unsecured rating and 'A-(nga)' National Long-Term
Rating on Rating Watch Positive (RWP). IHS Towers' ratings may be
aligned with the rating of IHS Netherlands Holdco B.V. if the
transaction is successfully completed as IHS Towers should benefit
from being part of the restricted group.

The restricted group's senior unsecured notes and NGN credit
facility will rank pari passu with any outstanding IHS Towers
notes and the guarantee of the IHS Group's RCF, although
outstanding IHS Towers notes will only have recourse to IHS
Towers. The drawn amount of the RCF will be included in the
calculation of the restricted group's credit metrics.

Final ratings are contingent on the successful completion of the
transaction and the receipt of final documents conforming
materially to the preliminary documentation Fitch has seen.

KEY RATING DRIVERS

Leading Nigerian Tower Operator

The restricted group is the leading tower company in Nigeria.
Following recent in-country consolidation and tower sales by
mobile operators, IHS Group controls just over 50% of all telecoms
tower infrastructure in Nigeria. It has 6,351 towers through the
fully owned subsidiaries of the restricted group and just over
9,000 towers through the 49/51 joint venture IHS Group has with
MTN. The JV is managed by the restricted group, which has full
operational control.

The towers represent over 70% of the towers in Nigeria not
directly owned by telecoms operators. Even with further
consolidation among the other tower owners, IHS Group should still
retain its number one position. Glo is the only of the four main
Nigerian mobile operators that has not sold its tower portfolio
(around 6,000 towers) to independent tower companies.

Strong Underlying Demand

The restricted group is well placed to benefit from strong growth
potential in Nigerian telecoms. "We expect it to continue growing
strongly in line with the telecommunications market in Nigeria,
which is seeing strong demand for mobile services," Fitch said.
With fixed-line population penetration of 0.1% in Nigeria in 2015,
3G and LTE networks are the main way of providing high-speed
broadband connectivity.

"We expect mobile operators to densify their networks to increase
capacity as smartphone take up increases and as data traffic
grows, resulting in growing demand for passive tower
infrastructure over the next five years. The Nigerian telecoms
regulator is focused on improving network quality. We believe that
the regulator sees the shared use of towers as a way of increasing
capital efficiency for network operators." Fitch said.

Strong Business Model

The market position of the restricted group is protected by high
barriers to entry, switching costs, and the quality of its
service. It benefits from a visible revenue stream driven by long-
term lease agreements, which comprise embedded contractual
escalators to mitigate inflation risk and, in some cases, cost
pass-through mechanisms for power costs. The average length of the
master agreements the restricted group has with its customers as
of 30 June 2016 was 7.6 years.

"We expect significant revenue growth in 2017 from contracted new
tower builds, 3G/4G upgrades and as FX rates are reset from 1
January following the naira's devaluation in 2016. This will boost
2017 EBITDA with strong margin expansion, helped by continued
energy efficiency gains. Free cash flow (FCF) is expected to be
negative in 2017 due to significant expansion capex. We forecast
FCF to turn positive in 2018 and grow strongly in the following
years as capex falls and EBITDA growth continues." Fitch said.

Growth More Certain

IHSN signed an amendment effective July 2016 to its existing
contract with MTN Nigeria. In this agreement, MTN has committed to
provide IHSN with a portion of its intended network rollout of
more than 11,200 sites in Nigeria by end-2017. This should result
in IHSN gaining around 2,000 new 3G/LTE tenancies and 1,650 new
build towers or co-locations by end-2017. This amount of new sites
is significant considering that IHSN built 1,648 new sites from
2013 to 2015 and 96 in 1H16.

Limited FX Exposure

Seventy-eight per cent of the restricted group's revenue of 30
June 2016 was linked to the US dollar. Payments are made in
Nigerian naira and the US dollar component is converted to naira
for settlement at a fixed conversion rate for a stated period.
Depending on the contract, the conversion rate is reset after a
period of three, six or 12 months.

Even though the proportion of revenue linked to the US dollar is
set to decline to 72% in 2018, the company aims to reduce its
foreign exchange revenue exposure by moving more contracts to a
three-month reset (48% of revenue in 2018 linked to the US dollar
with a three-month rest by 2018, compared with 49% in 2016 linked
to the US dollar with a 12-month reset). Of the 22% of revenue not
linked to the US dollar, roughly half is linked to the naira, with
the rest linked to the price of diesel, which is passed on to the
customer.

Almost all of the company's EBITDA (51% of revenue in 2015 and
1H16, pro forma for the acquisition of IHS Towers) is linked to
the US dollar. This is because most of the company's operating
costs are either related to the cost of diesel, or in naira,
offsetting the amount of revenue in naira and linked to the price
of diesel. Capex is paid in naira, with elements linked to the US
dollar.

Exposure to Diesel Price

The restricted group has some exposure to the cost of diesel as
not all of energy costs are passed on to customers. However, the
company is investing in more efficient generators and deploying
power management solutions. As of end-June 2016, 1,296 sites have
been upgraded, where diesel consumption per refurbished site has
dropped by more than 50%. Fitch said, "We expect overall diesel
consumption to fall as power management solutions are deployed to
more sites over the next two years. This should mitigate most of
any reasonable increase in the cost of diesel."

Sovereign Rating Constraint

All of the restricted group's assets are based in Nigeria, which
means the company is exposed to the risks associated with the
Nigerian sovereign (B+/Stable). Even though the restricted group
may have an operating and credit profile stronger than the 'B'
category, its rating is constrained by the Nigerian Country
Ceiling of 'B+'. Changes to the sovereign rating may lead to
ratings changes for the restricted group.

IHS Towers Tender Offer

IHS Towers Netherlands FinCo NG B.V. (formerly known as Helios
Towers Finance Netherlands B.V.) plans to buy all of IHS Towers'
USD250m 8.375% notes due 2019 in a conditional tender offer. This
will be funded by part of the proceeds of the issue of the
restricted group's new notes. Any IHS Towers notes outstanding
after the tender offer will rank pari passu with the restricted
group's senior unsecured notes and IHSN's naira credit facility,
as well as the guarantee of the IHS Group's USD120m RCF.

However, outstanding IHS Towers note holders will only have
recourse to IHS Towers, rather than the entire restricted group.
In a default scenario, this may result in potentially weaker
recovery prospects for the IHS Towers notes than the restricted
group's senior unsecured notes. Fitch said, "We could align IHS
Towers' ratings with the restricted group's 'B+(EXP)' rating if
the proposed transaction is successfully completed."

KEY ASSUMPTIONS

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

   -- Revenue growth in USD of over 20% per year in 2017 and
      2018, driven by the FX reset in early 2017 and strong
      underlying growth, assuming no major devaluation of the
      naira. Growth in 2019 is likely to be in the high single
      digit percentage range.

   -- EBITDA margin increasing to 60% in 2017 from 51% in 1H16,
      driven by the FX reset, strong revenue growth and continued
      cost efficiencies. EBITDA margin should rise slightly in
      2018 and 2019.

   -- Capex-to-revenue of over 80% in 2017 as the company invests
      heavily in medium-term growth opportunity, mainly new build
      towers and upgrading power management systems. Capex
      intensity should fall to around 23% in 2018 and decline
      further in 2019.

   -- No dividends paid in 2017-2019.

   -- The company will need more financing in 2017 to fund capex
      if it pursues all investment opportunities as FCF is likely
      to be negative in 2017.

RATING SENSITIVITIES

IHS Netherlands Holdco B.V.

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

   -- Funds from operations (FFO)-adjusted net leverage above
      5.5x on a sustained basis (3.5x at end-2015)

   -- FFO fixed charge below 2.0x (2.6x at end-2015)

   -- Weak FCF due to limited EBITDA growth, higher capex and
      shareholder distributions, or adverse changes to the
      restricted group's regulatory or competitive environment

   -- Downgrade of the Nigerian sovereign rating

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

   -- Upgrade of the Nigerian sovereign rating, together with
      FFO-adjusted net leverage below 5.0x on a sustained basis,
      and FFO fixed charge cover greater than 2.5x

IHS Towers NG Limited

Future developments that may, individually or collectively, lead
to the ratings being affirmed includes:

   -- The transaction not completing successfully as IHS Towers
      would not benefit from being incorporated into the larger
      pool of the restricted group's Nigerian assets.

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

   -- The successful completion of the transaction, which could
      result in IHS Towers' IDR and bond rating being upgraded to
      'B+' and aligned to the restricted group's rating.

Nigeria - Sovereign rating:

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

   -- A loss of foreign exchange reserves that increases
      vulnerability to external shocks

   -- Reversal of key structural reforms and anti-corruption and
      transparency measures

   -- Worsening of political and security risks that reduces oil
      production for a prolonged period or worsens ethnic or
      sectarian tension

   -- Failure to narrow the fiscal deficit leading to a marked
      increase in public debt

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

   -- A rise in non-oil revenues that leads to a reduction of the
      fiscal deficit and the maintenance of a manageable debt
      burden

   -- A revival of economic growth supported by the sustained
      implementation of coherent macroeconomic policies

   -- Increase in foreign exchange reserves to a level that
      reduces vulnerability to external shocks

LIQUIDITY

On a pro forma basis taking into account the financial
transaction, the restricted group had USD87 million cash at end-
1H16. Assuming that all existing debt is refinanced as part of the
proposed transaction, the restricted group will only have its
first debt repayment in 2018. Liquidity is likely to remain
limited due to significant capex plans in 2017. The restricted
group would need support from IHS Group, expected to be in the
form of a shareholder loan, if the former wants to invest to take
advantage of all medium-term growth opportunities.

FULL LIST OF RATING ACTIONS

IHS Netherlands Holdco B.V.

   -- Long-Term IDR: 'B+(EXP)'; Outlook Stable

   -- Senior unsecured rating: 'B+(EXP)'/'RR4'

   -- National Long-Term Rating: 'AA(nga)(EXP)'; Outlook Stable

IHS Towers NG Limited

   -- Long-Term IDR: 'B'; placed on Rating Watch Positive (RWP)

   -- Senior unsecured rating: 'B'/'RR4'; placed on RWP

   -- National Long-Term Rating: 'A-(nga)'; placed on RWP

IHS Towers Netherlands FinCo NG B.V.

   -- Senior unsecured notes guaranteed by IHS Towers NG Limited
      and Tower Infrastructure Company Limited: 'B'/'RR4'; placed
      on RWP


SCHOELLER ALLIBERT: Moody's Raises CFR to B2, Outlook Stable
------------------------------------------------------------
Moody's Investors Service has upgraded Corporate Family Rating of
Schoeller Allibert Group B.V., the Dutch manufacturer of plastic
returnable plastic packaging, to B2 from B3 and Probability of
Default Rating (PDR) to B2-PD from B3-PD.  The outlook on all
ratings is stable.

The rating upgrade primarily reflects these drivers:

   -- Reduction in leverage, improvement in maturity profile and
      debt structure proforma for the refinancing

   -- Resilient financial performance with stable EBITDA despite
      recent decline in sales

Concurrently, Moody's has assigned B2 rating to Schoeller Allibert
Group B.V.'s EUR210 million senior secured notes due 2021.

The proceeds from the notes will be used to support the
refinancing of the existing debt, including bank loans, vendor
loan and lease facilities, and pay estimated fees and expenses in
connection with the transaction.  Additionally, around
EUR18 million of proceeds will be retained as cash on balance
sheet for general corporate purposes.  The transaction also
includes a new EUR30 million 4.5 year super senior Revolving
Credit Facility (RCF) (unrated).

                          RATINGS RATIONALE

The upgrade of CFR to B2 reflects the reduction in leverage
proforma for the new capital structure from 5.4x LTM June 2016 to
4.7x (Moody's adjusted) expected at the end of 2016.  It also
reflects the improvement in maturity profile, streamlined debt
structure and removal of medium-term refinancing risk associated
with current liabilities maturing from June 2018.

The B2 rating on the senior secured notes, in line with CFR,
reflects the relatively small size of the super-senior RCF.  The
senior secured notes and RCF will share security and guarantee
package (c.80% of Group EBITDA), although the RCF has first
priority in respect of enforcement proceeds.

The ratings also incorporate Moody's expectation that a number of
equity-like instruments will be upstreamed outside of the
restricted group as part of the proposed transaction including
EUR58 million shareholder loan and EUR33 million unpaid fees
payable to shareholders under consultancy, support and fee
agreements.

The B2 CFR of Schoeller Allibert reflects (i) the company's
exposure to the cyclicality, intense competition and commoditized
nature of packaging industry leading to fluctuations in
performance; (ii) weak European environment with softness and
limited visibility in volumes; (iii) raw material prices
volatility linked to oil prices affecting the input costs
partially offset by the costs pass through ability; (iv)
concentration of revenue in IFCO business (at around 21% of 2015
revenue); and (v) weak cash flow generation due to high capex.
Positively, the ratings assessment reflects Schoeller Allibert's
(i) strong local market position in key European countries of
operation and diversification across end markets; (ii) ability to
benefit from the positive trends in Returnable Transit Packaging
(RTP) sector due to its leading size in this niche market in
Europe and presence in pooling services; (iii) continued product
innovation supported by ownership of IP rights; and (iv) improved
maturity profile and simplified debt structure proforma for the
transaction.

Schoeller Allibert is a result of legal integration between the
Schoeller Arca Systems Group and the Linpac Allibert Group in
August 2013.  Schoeller Allibert is 60% owned by the private
investment arm of JPMorgan Chase & Co. and 40% by the Schoeller
Industries B.V., a family-owned business with a broad focus on
packaging and transport / logistics system.

The plastic RTP market is a niche market within the very large
global packaging sector.  Growth drivers and barriers to entry of
plastic RTP include: (i) perception of sustainability and
recyclability; (ii) growing focus on long-term reduction of supply
chain costs; (iii) high switching costs for pooling customers
which accounted for 29% of Schoeller Allibert's 2015 revenue, due
to their own investments related to the product; and (iv)
substitution of cardboard in the RTP in the retail and automotive
industries.

However, the environment in Europe, where Schoeller Allibert
generates most of its revenue, remains weak.  A purchase of the
company's products is typically seen as a capital investment, and
is therefore subject to deferral during periods of downturn.
Cyclicality in certain end-customer markets (such as automotive,
beverage, retail) may also affect demand for the company's
products.

Within its niche segment, the company has a solid market share,
with a leading positions in each of its key fragmented markets.
The company's ability to position itself on the basis of quality
and design specification supported by patents serves as a
competitive advantage.  However, price cuts and copying by
competitors may affect more standardized products.

Given that the price of resin is linked to the oil price, the
company's raw material costs can be volatile.  The company has
demonstrated the ability to pass on variations in raw material
prices via various contractual arrangements and price adjustments,
although in practice this is subject to the commercial and
competitive pressures and a time lag.  Furthermore, the oil price
relationship has the potential to introduce significant working
capital swings.

Since the integration of the Linpac acquisition, the company's
EBITDA has significantly improved resulting from both revenue
growth and the impact of operational restructuring efforts by the
new management team.  However during the first 6 months of 2016
revenue suffered a 7.6% year-on-year decline primarily due to some
slowdown in the beverage sector and declining business with some
of its pooling clients, including impact from a major product
replacement.  Management EBITDA, however, increased year-on-year
to EUR26 million during the first six months of 2016 from
EUR25 million due to focus on key accounts, cost control and
productivity.

Moody's expects sales growth to gradually pick up as Schoeller
Allibert ramps up the production of new products.  Innovation is
an important driver of the company's revenue and the company
currently has 60 new products in its innovation pipeline. Longer
term, Moody's expects to see a gradual de-leveraging through
EBITDA growth due to further improvement initiatives, such as
manufacturing costs optimisation and salesforce efficiency.

Free cash flow (as defined by Moody's) is expected to be positive
in 2016 but is anticipated to turn marginally negative in 2017 as
a result of an increase in discretionary capital expenditure
(including moulds) to support the growth, partially offset by the
reduction in exceptional costs.

The liquidity of Schoeller Allibert pro-forma for the proposed
transaction is adequate, supported by approximately EUR43 million
cash on balance sheet (including EUR5 million drawn overdraft) and
a EUR30 million revolving credit facility (RCF), out of which EUR5
million is expected to be utilised for guarantees.  Schoeller
Allibert has also factoring lines in place, which the company uses
to manage intra-year fluctuations in receivables.  Moody's
assessment doesn't include USD13.4 million related to Swedish tax
authorities claim which may become payable in case of unfavourable
ruling as the company has not provisioned for it.

The stable outlook reflects Moody's expectation of Schoeller
Allibert's continued growth, supported by positive RTP industry
trends, the company's strong market position, ongoing introduction
of innovative products and maintaining a stable customer base.

Positive pressure on the ratings could arise if Schoeller
Allibert's credit metrics were to improve as a result of a
stronger-than-expected operational performance, leading to (i)
Moody's adjusted debt/EBITDA ratio sustainably below 4.0x, and
(ii) positive free cash flow (as defined by Moody's) on a
sustainable basis.  Downward pressure could occur as a result of:
(i) Moody's adjusted debt/EBITDA ratio rising substantially above
5.0x; or (ii) free cash flow turning substantially negative
combined with weakening liquidity.

The principal methodology used in these ratings was Packaging
Manufacturers: Metal, Glass, and Plastic Containers published in
September 2015.

Schoeller Allibert Group B.V. headquartered in the Netherlands, is
a returnable transit plastic packaging manufacturer focused
primarily on Europe (87% of FY15 revenue) as well as the US (8% of
FY15 revenue).  Schoeller Allibert has 11 factories in Europe and
1 factory in the US.  The company generated revenue of EUR555
million and management adjusted EBITDA of EUR56 million in FY15.


SCHOELLER ALLIBERT: S&P Affirms 'B-' CCR, Outlook Positive
----------------------------------------------------------
S&P Global Ratings affirmed its 'B-' long-term corporate credit
rating on Netherlands-registered returnable transit packaging
(RTP) manufacturer Schoeller Allibert Group B.V. and revised the
outlook to positive from stable.

At the same time, S&P assigned its 'B-' issue-level rating to
Schoeller's proposed senior secured notes of EUR210 million.  The
recovery rating is '4', indicating S&P's expectation of recovery
in the lower half of the 30%-50% range in the event of default.

The outlook revision reflects S&P's view on the positive efforts
undertaken by Schoeller's management since the merger between
Schoeller Arca Systems and Linpac Allibert.  These include the
optimization of its manufacturing footprint, contract extension
with its biggest customer, stabilization of its earning base,
and -- most recently -- the current refinancing.

S&P thinks the new capital structure extends debt maturities and
alleviates certain risks that the previous capital structure posed
to the company's liquidity, including sizable maturities in 2018
and stringent maintenance covenants.  The new capital structure
will be primarily composed of the EUR210 million notes maturing in
2021 with no financial covenants.  This should give Schoeller some
room to execute its envisaged growth strategy.

S&P does not expect any immediate positive effect on the credit
metrics as a result of this transaction and still believe that the
capital structure will remain highly leveraged with an S&P Global
Ratings-adjusted debt-to-EBITDA forecast ratio of about 6x at
year-end 2016.

S&P thinks, however, that management will continue to execute its
growth strategy and expand its product offering (which will
require a higher capex outlay) in the challenging overall current
organic growth environment.  This should translate into a
gradually growing EBITDA base and some deleveraging over the
medium term.

S&P's assessment of Schoeller's business risk profile as weak
reflects the group's exposure to the fragmented and competitive
RTP container markets of Western Europe and the U.S.  In S&P's
view, the shift toward increased use of pooling services in the
industry may put pressure on Schoeller's pricing power.  While
Schoeller delivers to a variety of end-markets including
industrial manufacturing, retail, food and beverage, and
agriculture, S&P notes that it derives about 20% of its revenues
from a single customer.  S&P understands the relationship is long-
standing, but this does pose the risk of Schoeller losing a
significant portion of its earnings if it were to lose this
customer.

These weaknesses are partly mitigated by Schoeller's leading
position in the niche RTP market.  In S&P's view, there are some
barriers to entry in terms of an RTP provider often being embedded
in an end-user's logistics process, which results in some
switching costs.  This factor is gradually becoming more important
due to the rise of pooling in Schoeller's core markets.  Schoeller
also benefits from the fact that many of its end markets --
including food and beverage and retail -- exhibit stable and
strong growth trends and are generally less cyclical.

S&P's base-case operating scenario for Schoeller in fiscal 2016
assumes:

   -- Revenues of about EUR545 million;
   -- An improvement in the group's S&P Global Ratings-adjusted
      EBITDA to about EUR55 million;
   -- Capital expenditure (capex) of up to EUR34 million in
      fiscal 2016, resulting in weak free operating cash flow as
      the company plans to invest its cash flows into growth; and
   -- No major acquisitions or divestments.

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

   -- Debt to EBITDA of about 6x; and
   -- Funds from operations (FFO) cash interest coverage of more
      than 2x in the coming few years.

The positive outlook reflects that S&P could raise the rating in
the next 12 months if S&P saw Schoeller continuing the positive
momentum in EBITDA and cash flow generation that it recently
achieved -- despite the somewhat slower organic operating
environment, and as it executes its growth plan with discipline.

S&P might raise the rating by one notch if Schoeller continued to
report growing EBITDA generation and positive free operating cash
flows leading to a stabilization of its credit metrics.  In
particular, S&P would expect EBITDA interest cover to remain above
2x, and S&P Global Ratings-adjusted debt to EBITDA to stabilize at
6x.

S&P could revise the outlook to stable if it believed that
management's actions, including the planned investment into new
products, would not translate into steady EBITDA growth, or were
taking longer to materialize.  Rating pressure may also arise from
unanticipated lower growth as a result of slower economic growth,
operational disruptions, loss of significant customers, or working
capital management challenges.

S&P is also likely to revise its outlook back to stable if the
refinancing transaction did not go ahead.



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


CHELINDBANK: Fitch Affirms 'BB-' Long-Term IDR, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Ratings
(IDRs) of Chelindbank and Bank Avers at 'BB-', and of Primsotsbank
and Bank Levoberezhny at 'B+'. The Outlooks on the Long-Term IDRs
are Stable.

KEY RATING DRIVERS

ALL BANKS' IDRs, VRs AND NATIONAL RATINGS

The four banks' IDRs and National ratings are driven by their
individual strength, as reflected in their Viability Ratings
(VRs). The VRs reflect the banks' limited franchises (although
market positions are significant in their respective regional
markets), significant concentrations and the relatively high-risk
Russian operating environment.

However, the ratings also consider the banks' generally solid
financial metrics, reflected in sufficient capitalization,
reasonable asset quality, decent profitability and comfortable
liquidity. The higher ratings of Chelind and Avers reflect their
higher capital ratios, deeper regional franchise (Chelind), lower
loan impairment (Avers) and benefits from cooperation with TAIF
group (Avers).

The Stable Outlooks reflect Fitch's expectation that the banks
will be able to sustain their performance in the near to medium
term, notwithstanding the weak performance of the economy. This
view is based on their satisfactory recent performance since the
onset of the recession in Russia, generally stable asset quality
and moderate risk appetites. Significant pre-impairment
profitability -- supported by the recent recovery of net interest
margins -- and capital cushions also provide capacity to absorb
moderate unexpected credit losses. Liquidity risks are limited
given deposit stability, liquidity surpluses and modest
refinancing requirements.

The credit profiles of Primsotsbank and Levoberezhny are closely
correlated given their common ownership and similar business
models, although inter-company balances and risk sharing have been
limited.

CHELIND'S IDRs, VR AND NATIONAL RATING

Chelind's non-performing loans (NPLs, more than 90 days overdue)
have been relatively stable in the economic downturn at about 7%
at end-1H16 compared with about 6% at end-1H15 (end-2015: 7%).
Restructured loans added a further 3% of the book (end-1H15: 4%),
while reserve coverage of the total problem loans (NPLs plus
restructured) was a sound 1.2x at end-1H16.

Chelind's net interest margin (NIM) has returned to the level of
2014 (8.4% in 1H16), after a dip in 2015, following some
stabilisation in the local interest rate environment driven by the
gradually decreasing key rate. In 1H16, the bank's
pre-impairment operating profit was equal to 7.6% (annualized) of
average gross loans (1H15: about 6%), while impairment charges
consumed about 24% of the pre-impairment profit (1H15: 46%).

Chelind's capitalization and loss absorption metrics compare well
with those of peers, with Fitch Core Capital (FCC)/risk-weighted
assets at 21.1% and the statutory total capital adequacy ratio of
18.0% at end-1H16, up from 18.3% and 17.5%, respectively, at end-
1H15 thanks to some moderate deleveraging. At end-1H16 the bank's
capitalization allowed it to additionally reserve about 10% of
gross loans (up to about 23% in total) without breaching minimal
capital adequacy requirements.

At the same time, Fitch notes that about 28% of the bank's
statutory equity at end-1H16 comprised property revaluation
reserves (accounted as Tier 2 capital), exposing the bank to
market risk. However, Fitch believes that the latter is moderate
and thus the bank's capital should be preserved, at least in the
near term, given Chelind's modest growth plans and ability to
absorb incremental credit-related losses through income.

At end-1H16, Chelind's total available liquidity net of potential
debt repayments covered a high 49% of its customer accounts.
Liquidity is also supported by the stable cash generation from the
loan book, equal to about 8% of total customer accounts each
month.

AVERS IDRs, VR AND NATIONAL RATING

Avers' asset structure reflects its moderate risk appetite and the
treasury function it performs for TAIF group (a large oil
refining/petrochemical holding in Tatarstan ultimately controlled,
like the bank, by individuals close to the former head of the
republic, Fitch understands). About a quarter of the bank's assets
at end-1H16, 94% of non-equity funding and over 20% of operating
profit for 1H16 related to TAIF or the bank's shareholders.

Avers' assets are dominated by liquid items (cash, short-term
interbank placements and highly rated securities) which reflect
the short-term nature of funding from TAIF. Loans only comprise
about a third of assets. NPLs were a low 0.5% of the portfolio at
end-1H16 and restructured exposures comprised a further 0.4%. By
far the largest loan exposure (67% of the portfolio at end-1H16)
is short-term rouble-denominated financing to TAIF secured with
foreign-currency -deposits of TAIF held with Avers (net of cash
collateral exposure to TAIF is a moderate 8% of FCC). Other loans
are unrelated to TAIF, moderately concentrated (the rest of the
largest 20 exposures were equal to 40% of FCC), of moderate credit
risk and well-collateralized.

Avers' capitalization is solid (regulatory Tier 1 ratio of 25% at
end-7M16), although this has fallen from 36% at end-2015 as a
result of rapid growth. Asset growth was mostly to TAIF (cash-
covered) and in liquid assets, and so low risk. Additional loss
absorption is offered by pre-impairment profitability, which was
equal to 2.4% (annualized) of average assets in 1H16, supported by
moderate cost of funding from TAIF.

Avers' funding is largely short-term but is mostly from TAIF and
is therefore unlikely to become a source of liquidity stress.
Liquid assets are sufficient to cover a sizeable 70% of customer
funding and the bank has no wholesale funding.

PRIMSOTSBANK'S IDRs, VR AND NATIONAL RATING

Primsotbank's NPLs were reasonable, at 6.5% of gross loans at end-
1H16, and a moderate 3% of the portfolio was restructured. Asset
quality has stabilized in 2016 helped by better performance of
Primsotsbank's retail portfolio and only moderate worsening of the
corporate book. Loan loss reserves fully covered NPLs and
restructured exposures, combined.

Corporate loans (50% of gross loans), are of reasonable quality,
based on a review of the largest 25 borrowers (half of the
corporate book), of which only two were impaired at end-1H16.
Retail loans (35% of the total) were mostly (62%) unsecured, but a
majority of the latter comprised exposures to lower-risk borrowers
(payroll clients, or customers with a positive credit history with
the bank). Annualized losses fell to 2% of average performing
unsecured loans in 1H16 (5% in 2015, 9% in 2014) due to reduced
lending to street clients. The SME portfolio (14% of loans) was
mostly issued under SME Bank programs (the state-owned Russian
Bank for Small and Medium Enterprises Support) was granular and
generated a moderate 2% of NPLs (annualized) in 1H16.

Primsotsbank's regulatory Tier 1 capital ratio was a moderate 9.6%
at end-7M16. However, strong pre-impairment profit (net of unpaid
accruals, equal to 8% of average loans, annualized, in 1H16)
offers considerable loss absorption capacity.

The bank's liquidity has remained comfortable as loan growth has
been limited. The cushion of liquid assets was sufficient to cover
40% of customer accounts at end-1H16, and monthly proceeds from
loan repayments were equal to a further 7% of customer accounts.
Near-term wholesale repayments are limited at Primsotsbank.

The upgrade of Primsotsbank's National rating to 'A(rus)' from 'A-
(rus)' largely reflects the stabilization of its asset quality and
its continued sound performance.

LEVOBEREZHNY'S IDRs, VR AND NATIONAL RATING

NPLs at Levoberezhny (13% of gross loans at end-1H16) were higher
than at Primsotsbank due to a larger proportion of retail loans
(46% of gross loans), over 80% of which were unsecured. Credit
losses, however, are significantly lower than at other retail
banks due to Levoberezhny's predominant lending to lower-risk
retail borrowers (salaried employees of corporate clients, state-
sector employees and borrowers with positive credit histories with
the bank). Fitch calculates that origination of new losses in the
bank's unsecured retail book in 1H16 (calculated as growth of NPLs
plus write-offs divided by average performing loans) was minimal
compared with 5% in 2015 and 10% in 2014.

Restructured loans comprised a further 5% of loans at end-1H16 and
were mostly in the corporate portfolio. NPLs were fully covered by
reserves at end-1H16, but restructured were reserved to a lesser
extent, mostly due to them having reasonable collateral coverage.

Levoberezhny's regulatory Tier 1 capital ratio was a moderate 9.8%
at end-7M16. However, strong pre-impairment profit (net of unpaid
accruals, equal to 6% of average loans, annualized, in 1H16)
offers considerable loss-absorption capacity.

The liquidity cushion was sufficient to cover a significant half
of customer accounts at end-1H16, and near-term wholesale
repayments were minimal.

SUPPORT RATINGS AND SUPPORT RATING FLOORS

The banks' Support Ratings of '5' and Support Rating Floors (SRF)
of 'No Floor' reflect their limited market shares and systemic
importance, as a result of which support from the Russian
authorities cannot be relied on, in Fitch's view. Support from the
banks' private shareholders is also not factored into the ratings.

RATING SENSITIVITIES

IDRS, VRs and NATIONAL RATINGS

The four banks' ratings could be downgraded if their credit
profiles suffer significantly as a result of a material weakening
of asset quality or higher risk appetite, which could lead to
capital erosion. Avers' ratings could be also downgraded if the
current benefits of cooperation with TAIF reduce. Upside potential
for the banks' ratings is limited given the weak economic outlook.

SUPPORT RATING AND SUPPORT RATING FLOOR

Support Ratings and Support Rating Floors are unlikely to change
given the banks' limited systemic importance.

Chelind

   -- Long-Term foreign currency IDR: affirmed at 'BB-', Outlook
      Stable

   -- Short-Term foreign currency IDR: affirmed at 'B'

   -- Viability Rating: affirmed at 'bb-'

   -- Support Rating: affirmed at '5'

   -- Support Rating Floor: affirmed at 'No Floor'

   -- National Long-Term Rating: affirmed at 'A+(rus)', Outlook
      Stable

Avers

   -- Long-Term foreign currency IDR: affirmed at 'BB-', Outlook
      Stable

   -- Long-Term local currency IDR: affirmed at 'BB-', Outlook
      Stable

   -- Short-Term foreign currency IDR: affirmed at 'B'

   -- Viability Rating: affirmed at 'bb-'

   -- Support Rating: affirmed at '5'

   -- Support Rating Floor: affirmed at 'No Floor'

   -- National Long-Term rating: affirmed at 'A+(rus)', Outlook
      Stable

Primsotsbank

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

   -- Short-Term foreign currency IDR affirmed at 'B'

   -- Viability Rating affirmed at 'b+'

   -- Support Rating affirmed at '5'

   -- Support Rating Floor affirmed at 'No Floor'

   -- National Long-Term Rating upgraded to 'A(rus) ' from 'A-
      (rus)'; Outlook Stable

Levoberezhny

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

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

   -- Short-Term foreign currency IDR affirmed at 'B'

   -- Viability Rating affirmed at 'b+'

   -- Support Rating affirmed at '5'

   -- Support Rating Floor affirmed at 'No Floor'

   -- National Long-Term Rating affirmed 'A-(rus)'; Outlook
      Stable


EUROCHEM GLOBAL: Fitch Assigns 'BB(EXP)' Senior Unsecured Rating
----------------------------------------------------------------
Fitch Ratings has assigned EuroChem Global Investments Designated
Activity Company's upcoming USD-denominated loan participation
notes (LPNs) an expected senior unsecured 'BB(EXP)' rating.

The final rating is contingent upon the receipt of final
documentation conforming to information already received.

The upcoming LPNs, offered in an exchange offer for the
outstanding USD750 million LPNs (also rated BB) due in December
2017, will be issued for the sole purpose of funding a loan by
EuroChem Global Investments DAC to Russia-based JSC MCC EuroChem
and will represent the limited recourse obligations of the issuer
under a trust deed. The notes will be guaranteed by Eurochem Group
AG (EuroChem; BB/Negative) and rank pari passu with the current
and future outstanding senior unsecured and unsubordinated debt,
including any remaining existing USD750m LPNs. EuroChem Global
Investments DAC is an Ireland-based special purpose financing
vehicle of EuroChem.

EuroChem is a large Russian fertilizer producer with robust
diversification across products. Its business profile will be
further enhanced by upcoming potash projects, which are forecast
to come on stream from late 2017 to 2018 and be within the first
quartile of the global potash cost curve.

The Negative Outlook on EuroChem reflects our expectation that the
company's leverage will remain well above Fitch's negative rating
guidelines in 2016-17 before gradually moderating to a level more
commensurate with the current rating level. Higher leverage is
largely due to the company implementing capex for its potash and
ammonia projects at a time of low fertilizer prices. However, the
company's completion risks under these projects have reduced over
the past year, which mitigates the temporary deterioration of
projected credit metrics and supports Fitch's rating affirmation
on September 19, 2016.

"We expect EuroChem to comply with its financial covenants (net
debt/EBITDA below 3x), which at June 30, 2016, remained at 2.4x.
Headroom is limited but remains manageable as the company will, in
case of need, reduce its covenanted debt through more loans from
the shareholder or working capital optimization, such as
receivables factoring. Unless the company manages to receive
substantial shareholder loans with equity-like features, its
leverage is likely to come under additional pressure and may
prompt a downgrade," Fitch said.

KEY RATING DRIVERS

Leverage under Pressure from Capex

Management is committed to the VolgaKaliy and Usolskiy potash
projects, which aim to commence operations in late 2017 to early
2018, targeting as their first stage 2.3mtpa of potash capacity
each once they ramp up during the next several years. These are
estimated to have a first-quartile position on the global potash
cost curve, will more than cover EuroChem's internal potash needs
and provide it with diversification into all three major nutrients
(nitrogen, phosphates and potash).

EuroChem's high capital intensity together with low fertilizer
prices are pushing the company's leverage above our negative
rating action triggers. Fitch said, "We expect the company's fund
from operations (FFO)-adjusted net leverage to exceed 4x in 2016,
before gradually declining to 3.5x in 2018 and to just below 3x by
2019. This is worse than our expectations behind our previous
rating action in January 2016 (2.8x in 2016; 3.1x in 2018), mainly
on lower projected fertilizer prices. However, the company's
improving business profile, to an extent, offsets the higher debt
burden."

Low Prices Hit 2016 Results

In 1H16 EuroChem's reported EBITDA fell 26% to USD586m, as
realized fertilizer prices fell 30% yoy. To some extent lower
prices were offset by the rouble weakening by 18% over the same
period, as the company's costs are predominantly rouble-pegged.
Fitch said, "We expect EuroChem's EBITDA to be around USD1bn in
2016 (-29% yoy), before increasing to USD1.2bn in 2018 and
USD1.5bn in 2019 on the start-up and ramp-up of its new potash
projects, and aided by fertilizer price recovery in the single-
digits."

Strong Business Fundamentals

EuroChem has a strong presence in European and CIS fertilizer
markets (58% of 2015 sales) and ranks as the seventh-largest
fertilizer player by total nutrient capacity in EMEA. EuroChem's
Russian-based self-sufficient nitrogen and phosphate production
assets have moved to the first quartile of the global cash cost
curves following the recent depreciation of the rouble.

The company has access to the premium European compound fertilizer
market with its own production capacities in Antwerp (Belgium),
trademarks and distribution network. This, as well as strong
EBITDA margins of around 30%, gives EuroChem a rating of 'BBB-',
before typically applying the two-notch corporate governance
discount to Russian corporates that results in the current 'BB'.

Weak Fertilizer Pricing

Pricing across all nutrients came under pressure during 2015-16
and is being impacted by cheaper gas and energy, high fertilizer
stocks, weak demand on the back of a low grain price environment,
and new capacity entering the markets. Fitch forecasts this weak
pricing environment will remain over the next three years with
potash being the last to see a recovery, in turn placing pressure
on earnings of EuroChem and its forthcoming projects. Rouble
depreciation has, however, helped maintain margins as revenues are
dollar-denominated while costs are mainly rouble-linked.

Project Financing Facilities Consolidated

EuroChem has successfully procured project financing for its
Usolskiy Potash project and its Baltic ammonia project. Even
though the financing is specific to the projects and has non-
recourse features that separate it from EuroChem's other
outstanding debt, Fitch continues to consolidate the projects and
the financing within EuroChem's overall leverage metrics. This is
due to the strategic importance of the projects to the company's
future operational profile and the inclusion of a cross default
clause within the group's financing agreements. If the projects
were de-consolidated, EuroChem's projected leverage would be
lower, at 3.4x in 2016, and falling to around 2x by 2018-19.

KEY ASSUMPTIONS

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

   -- Fertilizer prices to fall 25%-35% in 2016, with nitrogen
      and phosphate fertilizers recovering in single-digit levels
      from 2017 and potash remaining flat over the next two
      years;

   -- Post-2016 sales volumes up, starting from 2018-2019 as
      Baltic ammonia and potash capacities commence and ramp up;

   -- USD/RUB to rise towards 57 in 2019 from 69 in 2016;

   -- Capex/sales to peak at around 30% in 2016-2017 before
      normalizing towards nearly 20%;

   -- No dividends over the next three years.

RATING SENSITIVITIES

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

   -- Successful completion of one of the ongoing potash projects
      resulting in an enhanced operational profile, coupled with
      FFO adjusted net leverage falling below 3x.

"In case the projects are delayed and the company's business
profile does not improve, we expect EuroChem to maintain its FFO
adjusted net leverage at below 2.5x on average through the cycle
to be in line with the 'BB' rating;" Fitch said.

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

   -- Continued aggressive capex or shareholder distributions
      translating into FFO adjusted net leverage not trending
      towards 3x (assuming enhanced business profile as evidenced
      by the start-up of at least one potash project), or towards
      2.5x (assuming project delays and lack of further business
      diversification) by 2019

   -- Protracted pricing pressure or double-digit cost inflation
      in 2016 leading to an EBITDAR margin being sustained below
      20% (2016E: 28%)

LIQUIDITY

Liquidity Manageable

At end-1H16, EuroChem's cash and short-term deposits (USD326m),
and committed credit lines (around USD320m) were not enough to
cover short-term debt, including derivatives (USD853m). Fitch
said, "In addition, we expect EuroChem to generate negative free
cash flow in 2016-17, which are, however, fully covered by
EuroChem's further utilization of committed project finance
facilities."

"Despite tightened liquidity we see the refinancing risk as
manageable as the company has a number of options to finance the
liquidity gap, such as raising a subordinated shareholder loan (up
to USD1bn is available according to the framework facility
agreement signed with AIM Capital SE in September 2016), accessing
Russian banks that continue to be supportive of large corporate
borrowers, or issuing bonds." Fitch said.

Limited Subordination Risk

"We expect EuroChem's ratio of prior-ranking debt (including bank
debt guaranteed by operating subsidiaries, secured debt and,
potentially, factored receivables)-to-EBITDA to fall to below 2.2x
by end-2016 and well below 2x by end-2017 from the current peak of
2.3x. This will be driven by project financing debt substituting
maturing prior-ranking debt and alongside EBITDA growth. " Fitch
said.

"We normally consider notching down the senior unsecured rating
relative to the IDR when the ratio of prior-ranking debt to EBITDA
exceeds 2x-2.5x. We do not notch down EuroChem's senior unsecured
rating at present, based on our projection of a falling share of
prior-ranking debt in its capital structure. However, we may
consider subordination in future if the capital structure does not
change in line with our expectations." Fitch said.

FULL LIST OF RATINGS

JSC MCC EuroChem:

   -- Long-Term Foreign and Local Currency IDRs: 'BB'; Outlook
      Negative

   -- National Long-Term Rating: 'AA-(rus)'; Outlook Negative

   -- Short-Term Foreign Currency IDR: 'B'

   -- Local currency senior unsecured rating (domestic bonds):
      'BB'

   -- National long-term unsecured rating (domestic bonds): 'AA-
      (rus)'

EuroChem Group AG:

   -- Long-Term Foreign Currency IDR: 'BB'; Outlook Negative

EuroChem Global Investments Designated Activity Company:

   -- Foreign currency senior unsecured rating on loan
      participation notes: 'BB'

   -- Foreign currency senior unsecured rating on upcoming loan
      participation notes: 'BB(EXP)'


GAZPROMBANK JSC: S&P Affirms 'BB+/B' Counterparty Credit Ratings
----------------------------------------------------------------
S&P Global Ratings said that it had affirmed its 'BB+/B' long- and
short-term counterparty credit ratings on Russia-based Gazprombank
JSC and its core Swiss and Luxembourgish subsidiaries, Gazprombank
(Switzerland) Ltd. and Bank GPB International S.A.  The outlook on
all three entities is negative.

At the same time, S&P affirmed the 'ruAA+' Russia national scale
rating on Gazprombank.

The affirmation balances the stabilization of the Russian
government's capacity to provide timely and sufficient
extraordinary support to government-related entities (GREs),
including Gazprombank, with concerns regarding the bank's stand-
alone capacity to keep sufficient loss-absorption capacity after
weak earnings and deteriorated asset quality.

In S&P's view, Gazprombank's capital and earnings position is weak
in a context of increased economic risks in Russia and lessened
earnings capacity.  The bank's risk-adjusted capital (RAC) ratio
at year-end 2015 stood at 3.4% before adjustments for
diversification, and S&P expects the ratio will remain within
3.0%-3.5% over the next 12-18 months.  Furthermore, in S&P's view,
retained earnings fail to support capitalization sufficiently.

Nonperforming loans (loans overdue by 90 days or more) moderately
deteriorated in 2015 and the first half of 2016 to 2.5% of gross
loans from 1.1% at year-end 2014.  As of the same date, the bank
had a robust provision coverage ratio of 3.3x, which is better
than the figures reported by peer banks, especially those that
also have strong retail lending operations.  However, since S&P
believes that distressed restructuring could make up an additional
8%-10% of Gazprombank's loans, such provisioning coverage is not
excessive, in our view.

At the same time, S&P recognizes the Russian government's strong
demonstration of support toward the bank, and S&P expects the
government will directly or indirectly support capital-building at
Gazprombank to ensure that it is on an adequate competitive
footing in the market.

Although the government does not own Gazprombank -- and therefore
does not control the bank directly -- S&P considers Gazprombank to
be a GRE with a high likelihood of timely and sufficient
extraordinary government support.  S&P bases this view on its
criteria for GREs and on our assessment of Gazprombank's very
important role for and strong link with the Russian government.

According to S&P's criteria, the ratings on Gazprombank are based
on its opinion of the bank's status as a GRE.  S&P therefore
incorporates two notches of uplift into its long-term rating on
Gazprombank to reflect the high likelihood of government support.

Because S&P classifies Gazprombank (Switzerland) Ltd. and Bank GPB
International S.A. as core subsidiaries of Gazprombank, S&P
equalizes the ratings on these entities with those on the parent.
The core status reflects the subsidiaries' close integration with
the parent, including full ownership, and the parent's commitment
to providing ongoing and extraordinary support if needed.

The negative outlook on Gazprombank reflects the continuing
pressure on Gazprombank's risk position and capital due to asset
quality deterioration that will potentially increase.  S&P would
consider lowering the ratings if it observed that the bank's
portfolio quality had worsened more than S&P expects for the
banking sector as a whole, resulting in S&P's RAC ratio falling
below 3%.

S&P could revise the outlook to stable if it saw a significant
strengthening of the bank's capital, along with lower credit
losses and higher retained earnings than currently expected.

The negative outlook on Gazprombank's core subsidiaries,
Gazprombank (Switzerland) Ltd. and Bank GPB International S.A.
mirrors the outlook on Gazprombank and will likely move in line
with S&P's outlook on Gazprombank.


MOSVODOKANAL JSC: S&P Affirms 'BB+/B' CCRs, Outlook Stable
----------------------------------------------------------
S&P Global Ratings revised its outlook on Russian regional water
utility Mosvodokanal JSC to stable from negative. At the same
time, S&P affirmed the 'BB+/B' long- and short-term corporate
credit ratings and the 'ruAA+' Russia national scale rating.

The rating action on Mosvodokanal follows a similar rating action
on the city of Moscow.  In S&P's view, there is a very high
likelihood that the city government would provide timely and
sufficient extraordinary support to Mosvodokanal in the event of
financial distress.  S&P continues to assess Mosvodokanal's stand-
alone credit profile (SACP) at 'bb+'.

The stable outlook reflects that on the long-term rating on the
City of Moscow.  It also reflects S&P's belief that financial
risks associated with Mosvodokanal's ambitious investment program
will continue to be mitigated by the utility's monopoly position
in the city and strong ongoing support from the City of Moscow,
including regular equity injections and co-financing of capital
expenditures.

S&P could lower the long-term rating on Mosvodokanal if S&P
lowered the long-term rating on Moscow by one notch, all else
being equal.

S&P could also lower the rating on Mosvodokanal if S&P revised
down its assessment of the utility's SACP by one notch.  This
might result from aggressive debt accumulation and weak financial
and operational results, leading to the debt-to-EBITDA ratio
rising above 2.5x and the funds from operations (FFO)-to-debt
ratio falling below 45% without a credible plan for recovery in
the next six-12 months.  Downward pressure might also stem from
deteriorating liquidity and maturity profiles.

A positive rating action on the city of Moscow might create upside
potential for the rating on Mosvodokanal, all else being equal.


TENEX-SERVICE: S&P Affirms 'BB/B' Ratings, Outlook Stable
---------------------------------------------------------
S&P Global Ratings said that it has revised its outlook on Russian
nuclear sector leasing company TENEX-Service to stable from
negative.

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

The outlook revision mirrors that on TENEX's parent, state-owned
Atomic Energy Power Corp. JSC.

TENEX is a captive leasing company of AtomEnergoProm.  S&P views
TENEX as a highly strategic subsidiary of AtomEnergoProm and
therefore rate TENEX one notch below AtomEnergoProm.  Although
small compared with the whole group, TENEX shows very high
integration with its parent.  TENEX's strategy, risk management,
funding, and client base are shared with, or provided by,
AtomEnergoProm and it has limited business scope outside the
group.  In S&P's view, TENEX is not separable from the rest of the
group and the likelihood of extraordinary support from its parent,
if required, is extremely high.

S&P views TENEX as a government-related entity (GRE), and S&P's
assessment of its limited link to the government is based on the
sovereign's indirect ownership of TENEX through AtomEnergoProm.
TENEX does not play a central role in meeting the Russian
government's key economic and social objectives, so S&P considers
that it has limited importance for the government.  Positively,
TENEX's business activities are secured by Presidential Act No.
556, which currently allows only TENEX to lease nuclear equipment
in Russia; S&P considers this to be a form of government support.
In addition, due to AtomEnergoProm's GRE status, S&P thinks that
any government support would likely be extended to TENEX through
AtomEnergoProm.

The stable outlook on TENEX mirrors that on its GRE parent,
AtomEnergoProm, reflecting S&P's expectation that TENEX will
continue to benefit from its close strategic and operational
integration with its parent.

S&P could downgrade TENEX if AtomEnergoProm modified its approach
to favor direct purchases over leasing, which would signal a
decrease of TENEX's importance to, and integration with, the
AtomEnergoProm group.  S&P might also take a negative rating
action if TENEX's strategy were substantially extended beyond
serving AtomEnergoProm's companies, leading to a marked weakening
of its stand-alone credit profile, alongside clear evidence of
diminishing parental support or more restrained parental
participation in TENEX's management and supervision.

A positive rating action is unlikely over the next 18-24 months
and would most probably depend on a positive rating action on the
parent.


VEB-LEASING JSC: S&P Affirms 'BB+/B' Counterparty Credit Ratings
----------------------------------------------------------------
S&P Global Ratings said that it has affirmed its 'BB+/B' foreign
currency and 'BBB-/A-3' local currency long- and short-term
counterparty credit ratings on Russia-based JSC VEB-leasing.  The
outlooks are negative.

At the same time, S&P affirmed its 'ruAAA' Russia national scale
rating on VEB-leasing.

The affirmation follows that of VEB-leasing's 100% owner,
Vnesheconombank (VEB).  S&P regards VEB-leasing as a core
subsidiary of VEB and equalize the ratings on VEB-leasing with
those on the parent.

S&P expects that VEB-leasing will remain within the VEB group, for
which it acts as the leasing arm.  Accordingly, S&P expects that
VEB-leasing will receive ongoing and extraordinary support from
VEB in the form of capital and liquidity.  In S&P's view, the
leasing company is a nonseverable part of the larger VEB group.

The negative outlook on VEB-leasing mirrors that on its parent.
This means that the ratings and outlook on VEB-leasing will move
in tandem with those on VEB as long as the subsidiary remains core
to the group.

S&P could revise its view of VEB-leasing's core group status if
VEB were to divest part of the leasing subsidiary or if the group
no longer had the financial capacity to support VEB-leasing.  Both
scenarios appear currently remote, however.



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


AYT CGH VITAL 1: Fitch Puts 'BBsf' Class C Debt on RWN
------------------------------------------------------
Fitch Ratings has placed four tranches of AyT Colaterales Global
Hipotecario (CGH) Caja Vital 1, FTA on Rating Watch Negative (RWN)
following the discovery of an error in the calculation of the
Performance Adjustment Factor.

KEY RATING DRIVERS

Fitch has found that, in the June 22, 2016, rating action for
notes issued by AyT CGH Caja Vital 1, the calculation of the
Performance Adjustment Factor was inconsistent with the Fitch's
EMEA RMBS Rating Criteria and the variation thereto as set forth
in the rating action commentary.

The effect of the error will be determined by conducting a full
analysis of the transaction.

RATING SENSITIVITIES

The resolution of the RWN may result in downgrades up to three
notches.

DUE DILIGENCE USAGE

Fitch has not checked the consistency and plausibility of the
information it has received about the performance of the asset
pools and the transactions. Fitch has not reviewed the results of
any third party assessment of the asset portfolio information or
conducted a review of origination files as part of its ongoing
monitoring.

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

The rating actions are as follows:

   -- Class A notes (ISIN ES0312273081): 'AAsf' placed on RWN

   -- Class B notes (ISIN ES0312273099): 'Asf' placed on RWN

   -- Class C notes (ISIN ES0312273107): 'BBsf' placed on RWN

   -- Class D notes (ISIN ES0312273115): 'Bsf' placed on RWN


NH HOTEL: Moody's Assigns Ba3 Rating to Sr. Sec. Notes Due 2023
---------------------------------------------------------------
Moody's Investors Service has assigned a Ba3 rating to Spanish
hotel company NH Hotel Group S.A.'s proposed senior secured notes
due 2023.  The rating outlook is stable.

"The Ba3 senior secured rating reflects the strong guarantee and
security package of the proposed notes," says Maria Maslovsky, a
Vice President-Senior Analyst at Moody's and the lead analyst for
NH Hotel Group.  "The company's B2 corporate family rating
continues to reflect consistent performance of NH Hotel Group's
midscale and upscale urban business hotel portfolio and successful
progress toward implementing a comprehensive turnaround plan, as
well as improved maturity profile through this transaction, and
strengthened liquidity with the establishment of the new revolving
credit facility," adds Maslovsky.

The instrument rating assigned to the proposed senior secured
notes is two notches above NH Hotel Group's corporate family
rating of B2 and reflects the support from subsidiary guarantors,
a security package including real assets and substantial cushion
from convertible bond.

The new notes and the RCF will be pari passu with the existing
senior secured notes due 2019 (unrated) and will share in the
expanded collateral pool comprising eleven hotels in the
Netherlands, pledges of shares in nine further hotels (one in the
Netherlands and eight in Belgium), as well as share pledge in the
NH Italia SpA, a wholly-owned, indirect subsidiary.

The notes will also benefit from covenants that limit the group's
loan-to-value, leverage and coverage.

                        RATINGS RATIONALE

The B2 corporate family rating reflects NH Hotel Group's
established position as a top six European hotel operator focussed
on midscale and upscale urban business hotels.  The group operates
382 hotels with 58,318 rooms largely in Europe and Latin America.
The rating also incorporates NH's successful on-going
implementation of its comprehensive strategic turnaround plan,
adopted in 2013, which encompasses branding re-alignment and asset
enhancement via EUR200 million of repositioning capex (including
the envisaged disposal of the New York asset).  In addition, the
rating takes into account NH Hotel Group's improved liquidity and
"asset-lighter" focus.

The B2 corporate family rating also considers that NH continues to
face sizeable maturities in 2018, including a EUR250 million
convertible bond, and in 2019; positively, some of these will be
addressed as a result of the proposed transaction.  Also, NH Hotel
Group's disclosure of its lease obligations limits Moody's ability
to assess their impact on leverage in full; as a result, Moody's
has applied a 5x multiple in its leverage calculations, but
Moody's acknowledges that Moody's adjusted leverage could increase
materially as a result of changed disclosure.   Hotel Group faces
an unfavorable FX environment with respect to some of its Latin
American markets, among which Argentina is not performing well
owing to the weakness in its main feeder market, Brazil.
Repatriation of funds from some of the Latin American countries
could also be a challenge, though not significant for NH Hotel
Group at present.  In addition, NH is subject to seasonality which
is most pronounced in the first quarter.  NH's moderate growth
initiatives in China and Latin America, while limited in scope,
carry a measure of risk.

Moody's also notes that there is an on-going dispute among NH
Hotel Group's shareholders; while Moody's does not view it as a
rating driver at present, it could also pose a risk.

Moody's expects NH Hotel Group's leverage (debt/EBITDA, estimated
at approximately 5.2x at December 2016 pro forma for the
refinancing) to reduce gradually as a result of EBITDA growth
following the completion of the repositioning program by year-end.
Moody's also anticipates the company's coverage (EBITA/interest)
to improve above the 1.0x expected for 2016 following the proposed
transaction owing to the increase in EBITDA.  All metrics include
Moody's standard adjustments.

Rating Outlook

The stable rating outlook reflects Moody's expectation that NH
will continue executing on its five-year plan as outlined to
Moody's and to the market and continue to realize RevPAR gains
similar to its results to date along with maintaining adequate
liquidity.

Factors that Could Lead to an Upgrade

Positive rating momentum would occur from NH outperforming its
expected results such that its leverage (debt/EBITDA) is reduced
closer to 5.0x, its coverage (EBITA/interest) rises closer to
1.5x, and its retained cash flow to net debt reaches 10%, all on a
sustained basis.  In addition, the company would be expected to
maintain adequate liquidity at all times.

Factors that Could Lead to a Downgrade

Negative rating pressure would be precipitated by any operational
reversals such that leverage (debt/EBITDA) deteriorates to 6.5x,
coverage (EBITA/interest) reverts to 1.0x and retained cash flow
to net debt drops to 5%.  Any liquidity challenges would also be
viewed negatively.

The principal methodology used in this rating was Business and
Consumer Service Industry published in December 2014.

NH Hotel Group is a consolidated multinational operator and one of
the world's leading urban hotel groups with 382 hotels and 58,318
rooms in 29 countries across Europe, America, Africa and Asia.
The Company operates under the successful international brands NH
Collection, NH Hotels, NHOW and Hesperia Resorts, each one with
its own differential value proposition.



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


TURKEY: Moody's Lowers Long-Term Issuer Rating to Ba1
-----------------------------------------------------
Moody's Investors Service has downgraded the Government of
Turkey's long-term issuer and senior unsecured bond ratings to Ba1
from Baa3 and assigned a stable outlook.  This concludes the
review for downgrade that was initiated on July 18.  The drivers
of the downgrade are:

  1. The increase in the risks related to the country's sizeable
     external funding requirements.

  2. The weakening in previously supportive credit fundamentals,
     particularly growth and institutional strength.

The stable outlook balances downside risks arising from the
erosion in Turkey's economic resilience and increasing balance of
payments pressures against credit-positive considerations arising
from its large and flexible economy which continues to register
positive growth and the government's strong fiscal track record.

Concurrently, Moody's has downgraded to Ba1 from Baa3 the senior
unsecured bond rating of Hazine Mustesarligi Varlik Kiralama A.S.,
a special purpose vehicle wholly owned by the Republic of Turkey;
and assigned a stable outlook.

In conjunction with the rating actions, Moody's has also lowered
Turkey's long-term foreign-currency bond ceiling to Baa2 from
Baa1, and its long-term foreign-currency deposit ceiling to Ba2
from Baa3.  Turkey's short-term foreign-currency deposit ceiling
has been lowered to NP from P-3, and the country's short-term
foreign-currency bond ceiling to P-3 from P-2.  Furthermore,
Turkey's local currency bond and deposit ceilings have been
lowered to Baa1 from A3.

                         RATINGS RATIONALE

In recent years, Turkey's credit profile has presented a marked
contrast between significant external imbalances which heighten
its exposure to external shocks and/or loss of confidence, and a
strong government balance sheet, supported by a robust fast-
growing economy.

The upgrade to Baa3 in May 2013 reflected two things.  First,
increasing assurance that credit strengths such as economic growth
and fiscal performance were likely to be sustained at levels
compatible with a Baa3 rating.  And second, an assumption that
political stability would enable planned structural reform
implementation to address external imbalances, such as promoting
domestic savings and reducing the economy's reliance on imports
(across a range of sectors including energy) and imported capital.

However, since the upgrade in 2013, the risk of a shock arising as
a result of the country's weak external position has become more
pronounced, given the combination of persistently high political
risks and volatile investor sentiment.  Moreover, credit
fundamentals that had previously supported a Baa3 rating (e.g.,
high levels of institutional strength and a healthy economic
outlook) have deteriorated.  In particular, Moody's expects growth
will slow over the coming years, as constraints on the externally-
funded, consumption-fuelled economy emerge, the reform agenda
slows further and the investment climate remains weak.

Moody's believes that this slow deterioration in Turkey's credit
profile will continue over the next 2-3 years and the balance of
risks are better captured at a Ba1 rating level.  The stable
outlook on the Ba1 rating reflects the strengths in the credit
profile, namely the government's robust balance sheet, which would
allow for the absorption of shocks and flexible responses.

FIRST DRIVER: ELEVATED RISKS RELATED TO THE COUNTRY'S SIZEABLE
EXTERNAL FUNDING REQUIREMENTS

Moody's notes that Turkey continues to operate in a fragile
financial and geopolitical environment and that its external
vulnerability has risen, both over the past two years and more
recently as a result of unpredictable political developments and
volatile investor perception.  This has credit implications for
Turkey given its dependence on foreign capital.  The risk of a
sudden, disruptive reversal in foreign capital flows, a more rapid
fall in reserves and, in a worst-case scenario, a balance of
payments crisis has increased.

Turkey's current account deficit remains elevated (4.3% and 4%
forecast in 2016 and 2017 respectively) and exceeds those of other
similarly rated sovereigns despite a recent improvement tied to
low oil prices.  In particular, the upsurge in security-related
incidents, specifically in Ankara and Istanbul, and the sanctions
that were imposed by Russia last year have had an adverse impact
on the tourism sector in Turkey, which accounts for 4.4% of GDP
and around 15% of total current receipts (2015).  In the first
half of this year, tourist arrivals and revenues were down 27.9%
and 28.2% (compared to the same period last year) respectively.
While the removal of Russian sanctions is likely to provide some
support to the sector, full normalization will be delayed as long
as political and security risks remain elevated.

Additionally, the country's external indebtedness has risen.
According to our estimates, Turkish corporate, banking and
government sectors need to repay approximately $155.8 billion in
external liabilities this year.  Together with the current account
deficit, this amounts to an estimated 26% of GDP in 2016 and in
2017.  This large external funding need exposes the country to
sudden shifts in investor confidence, which has been weak and
volatile over the past 18 months, as reflected in the volatility
of the Turkish lira (vis-a-vis the US dollar) and substantial
volatility in portfolio flows.

Although debt rollover rates have shown resilience over that
period, including recently following the coup attempt, with only a
modest re-pricing of new facilities, Moody's believes that the
combination of elevated external financing needs, the rise of
domestic political risk, and the persistence of geopolitical
threats in combination with volatile financing environment raises
the risk of a balance of payments crisis in Turkey beyond that
which prevailed at the time of the upgrade.

Furthermore, external buffers to withstand external shocks remain
low.  Looking across the economy in aggregate, Moody's External
Vulnerability Indicator (which reflects the coverage of maturing
external financing, including non-resident deposits and short-term
external liabilities, by foreign-exchange reserves excluding gold)
positions Turkey unfavorably vis-a-vis its peers.  Moody's
estimates that this indicator stood at 187.3% in 2016, more than
20 percentage points above the level in 2013, and that the
indicator will remain at an elevated level for the foreseeable
future.

That said, a mitigating factor is that the Turkish banking sector
has foreign-currency reserves at the central bank amounting to
around 11% of GDP (end 2015).  In the event of systemic stress,
these buffers along with liquid assets on the banks' balance sheet
would be sufficient to cover banking sector liabilities due over
the next 12 months.  In contrast, the government is in a weaker
position to support the economy as a whole: net foreign exchange
reserves (excluding foreign exchange reserves held by the banking
system at the central bank) account for around 30% of total gross
foreign exchange reserves (as of end 2015), limiting the central
bank's ability to intervene in the currency markets.

SECOND DRIVER -- WEAKENING OF PREVIOUSLY SUPPORTIVE CREDIT
FUNDAMENTALS

In Moody's view, the erosion of Turkey's institutional strength,
which was evident prior to the failed coup attempt but which the
event may exacerbate, has negative implications both for the level
of growth in the coming years and for the implementation of the
structural changes the government has identified are needed to
deliver balanced, sustainable growth and relieve external
pressures.

Turkey's institutional strength has eroded since the rating agency
assigned a negative outlook to the rating in April 2014.
Qualitative surveys on Turkey's institutions began to erode two
years ago particularly reflected in the Worldwide Governance
Indicators for control for corruption and more recently reflected
in the World Economic Forum's Competitiveness Indicator where the
assessment of institutions experienced the most severe drop,
falling 11 places to 75 (out of 140).

More recently, the government's response to the unsuccessful coup
attempt raises further concerns regarding the predictability and
effectiveness of government policy and the rule of law going
forward.  This has consequences for both institutional and
economic strength.  As one example, the large-scale suspensions in
the civil service raise doubts over the capacity of Turkey's
policy making institutions to make meaningful further progress in
both legislating and implementing the reform program.  As another,
the government's actions in the private sector towards
institutions that have ties to the Gulen movement are likely to
affect the country's growth trajectory negatively, by raising
concerns regarding the protection of private investment and the
investment climate in general.

As a consequence, the rating agency now expects real GDP will grow
at an average of 2.7% over the 2016-19 period, which is
significantly lower than the average growth of 5.5% over 2010-14
and also lower than its forecasts when it upgraded Turkey to Baa3
in May 2013.

Moreover, although the government has made some progress on its
reform agenda earlier in the year and passed an important savings-
oriented reform policy after the failed coup attempt, Moody's
believes that that the prospect of sustained reform implementation
that decisively moves the economy from consumption- and external
capital-driven growth to a more balanced growth model is low.
Weakened institutions will likely face the distraction of
constitutional change at the same time as struggling to balance
the tensions inherent in the need to simultaneously boost near-
term growth, deal with heightened security risks and consolidate
power in a post- coup environment.  As a result, external risks
are unlikely to diminish in the coming years, and may rise.

                   RATIONALE FOR A STABLE OUTLOOK

Moody's decision to assign a stable outlook reflects the balance
of risks at the Ba1 rating level.  Turkey's headline fiscal
metrics are still favorable, notwithstanding the fact that the
country has only just completed an almost two-year electoral
cycle.  Since the beginning of 2009, Turkey's debt burden has
fallen by more than 13 percentage points to 32.9% of GDP in 2015.
Under the baseline, Moody's expects the debt ratio to remain
broadly stable at 32.2% of GDP in 2016.

Moreover, Turkey's ability to finance its outstanding stock of
debt is supported by the relatively low share of central
government foreign-currency-denominated debt (35.1% 2015, down
from 46.3% in 2003) and the favorable maturity profile of the
central government's debt stock: a significant portion of the
central government debt stock is contracted under fixed rates and
the average maturity of the central government debt stock is now
6.3 years (and the maturity of its external debt stock is now
almost 10 years).  This favorable structure mitigates somewhat the
impact of a further depreciation of the Turkish lira against the
US dollar, and from a rise in global interest rates on the
government's balance sheet.  In fact, the central government's
external debt payments due next year are modest at only
$11.3 billion (1.5% of forecast 2017 GDP).  Looking ahead,
Turkey's policy direction and its ability to maintain fiscal
stability in an environment of prolonged lower growth (than
previously seen) will be an important driver of sovereign
creditworthiness.

                 WHAT COULD MOVE THE RATING UP/DOWN

Upward movement in Turkey's sovereign rating will be constrained
by balance-of-payments factors as long as external imbalances
remain large.  However, upward rating pressure could materialize
in the event of structural reductions in these vulnerabilities or
material improvements in Turkey's institutional environment or
competitiveness.  Reductions in political risk emanating either
from the geopolitical or in the domestic political environment,
while credit positive, would not result in upward rating action in
the absence of other credit improvements.

Downward pressures on Turkey's sovereign rating could emerge if
one or a combination of the following occur: (1) trends in the
public finances were to be materially reversed; (2) a sudden and
sustained reversal in foreign capital flows; (3) a more than
anticipated erosion of institutional strength or an increase in
political risks greater than what has been anticipated.

  GDP per capita (PPP basis, US$): 20,438 (2015 Actual) (also
   known as Per Capita Income)
  Real GDP growth (% change): 4% (2015 Actual) (also known as GDP
   Growth)
  Inflation Rate (CPI, % change Dec/Dec): 8.8% (2015 Actual)
  Gen. Gov. Financial Balance/GDP: -0.6% (2015 Actual) (also
   known as Fiscal Balance)
  Current Account Balance/GDP: -4.5% (2015 Actual) (also known as
   External Balance)
  External debt/GDP: 55.4% (2015 Actual)
  Level of economic development: Moderate level of economic
   resilience
  Default history: At least one default event (on bonds and/or
   loans) has been recorded since 1983.

On Sept. 20, 2016, a rating committee was called to discuss the
rating of the Turkey, Government of.  The main points raised
during the discussion were: The issuer's institutional
strength/framework, has materially decreased.  The issuer has
become increasingly susceptible to event risks.  Other views
raised included: The issuer's economic fundamentals, including its
economic strength, are eroding.  The issuer's governance and/or
management, have eroded.  The issuer's fiscal or financial
strength, including its debt profile, has not materially changed.

The principal methodology used in these ratings was Sovereign Bond
Ratings published in December 2015.

The weighting of all rating factors is described in the
methodology used in this credit rating action, if applicable.

Downgrades:

Issuer: Turkey, Government of
  LT Issuer Rating, Downgraded to Ba1 from Baa3
  Senior Unsecured Regular Bond/Debenture, Downgraded to Ba1 from
   Baa3
  Senior Unsecured Shelf, Downgraded to (P)Ba1 from (P)Baa3

Issuer: Hazine Mustesarligi Varlik Kiralama A.S.
  Senior Unsecured Regular Bond/Debenture, Downgraded to Ba1 from
   Baa3

Lowers:

Issuer: Turkey, Government of
  Country Ceiling Bank Deposit Rating, Downgraded to Ba2 from
   Baa3
  Country Ceiling Bank Deposit Rating, Downgraded to NP from P-3
  Country Ceiling Bond Rating, Downgraded to Baa2 from Baa1
  Country Ceiling Bond Rating, Downgraded to P-3 from P-2

Outlook Actions:

Issuer: Turkey, Government of
  Outlook, Changed To Stable From Rating Under Review

Issuer: Hazine Mustesarligi Varlik Kiralama A.S.
  Outlook, Changed To Stable From Rating Under Review



=============
U K R A I N E
=============


* UKRAINE: Official Puts Decision on Naftogaz Takeover on Hold
--------------------------------------------------------------
Roman Olearchyk at The Financial Times reports that a senior
Ukrainian official on Sept. 19 "suspended" a controversial
decision to impose direct government control over the war-torn
country's prized natural gas transportation company.

Citing "widespread resonance" deputy prime minister Stepan Kubiv
caved into mounting pressure and announced that he had put on hold
a decision from earlier this month to change the charter of state
gas company Naftogaz in a way that shifted subsidiary gas
transportation company Ukrtransgaz directly under economy ministry
control, the FT relates.

The decision came after creditor warnings that the surprise
government decision jeopardized hundreds of millions of dollars of
additional financing linked to a US$17.5 billion International
Monetary Fund bailout package, the FT relays, citing Roman
Olearchyk in Kiev.

Mr. Kubiv insisted the government would proceed with plans to
unbundle Naftogaz into separate production, supply and transit
companies in order to meet the country's EU integration
commitments, the FT discloses.

The Sept. 19 decision partially defuses a bitter standoff with
Naftogaz management and creditors including the European Bank for
Reconstruction and Development who threatened to derail hundreds
of millions of dollars in financing, the FT notes.

Knowledge about the controversial government decision spooked
Ukraine's western backers by becoming public just days after the
IMF approved a long-delayed US$1 billion loan, the FT states.

Taken off guard, Ukraine's creditors and western partners accused
the government of violating corporate governance procedures and
European energy market competition agreements, according to the
FT.



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


ABC PRINT: Leaves Shortfall Of More Than GBP1 Million
-----------------------------------------------------
PrintWeek reports that the Hertfordshire-based business, which was
placed into insolvent liquidation last month, owed GBP1,022,308 to
unsecured, non-preferential creditors according to the statement
of affairs posted by insolvency practitioner Griffin & King. The
total came to GBP1,303,936 including preferential creditors.

Total assets available to unsecured creditors came to GBP215,211,
with Her Majesty's Revenue and Customs owed GBP48,472 in PAYE
payments and GBP50,871 in VAT, according to PrintWeek.  Employee
and pension claims totalled GBP333,913 while ABC Print managing
director Michael Greene was owed GBP220,581, the report notes.

Trade creditors, including various printers, finishing companies
and mailing houses, were owed more than GBP150,000 in total while
manufacturers and suppliers were owed more than GBP110,000 with
Antalis, which was owed GBP58,991, taking the biggest hit, the
report relays.

The report discloses that the book value of the company's plant,
machinery and equipment came to GBP1,323,171 and this was
estimated to realise GBP160,000 and GBP500,000 separately for
preferential creditors Clydesdale Finance and Close Brothers Asset
Finance, leaving a deficiency to those creditors of GBP30,000 and
GBP300,000 respectively.

The firm's assets subject to floating charge, including plant,
machinery and equipment, motor vehicles, stock and work in
progress, book debts and balance at the bank left GBP281,628
estimated total assets available for preferential creditors, the
report relays.  Its liabilities to preferential creditors included
employee claims of GBP43,569 and pension contributions of GBP768,
the report relates.

The report notes that GBP22,080 was owed to preferential creditor
Knappogue, the business that bought ABC's assets and goodwill from
the liquidator and whose only listed director at the time of
purchase was Garrett McGibney, also one of ABC Print's three
directors.

PrintWeek discloses that Knappogue, which was incorporated in
2011, was formerly known as Supplymeprint.com and changed its name
to Knappogue on August 2, 2016, according to Companies House, the
day before ABC Print fell into liquidation.

On August 11, following the purchase of ABC's assets and goodwill,
Knappogue's name was changed back to Supplymeprint.com, Greene
became a director of the business and its registered address was
changed to the former registered address of ABC Print, the report
recalls.

Mr. Greene told PrintWeek: "Professional advice was sought
following some unprecedented issues.

"I considered many options but after securing the support of most
of our suppliers, all of whom will be compensated if they incurred
any shortfall, and then ensuring our future model was aligned with
the business plan, I was in no doubt that with a pragmatic
approach it was the right decision to go forward," the report
quoted Mr. Greene as saying.

"In doing so, we have secured employment for a fabulous hard
working team here and I'm delighted to say our loyal customers are
keeping us very busy. The future's positive and exciting, and I
look forward to the challenges ahead in this industry," The report
quoted Mr. Greene added.


AG BARR: To Cut 10% of Workforce as Part of Overhaul
----------------------------------------------------
Gareth Mackie at The Scotsman reports that the maker of Irn-Bru on
Sept. 27 said it would be cutting a tenth of its workforce in an
efficiency drive as it attacked plans for a "punitive" tax on
sugary soft drinks.

Cumbernauld-based AG Barr, which also produces Rubicon, Strathmore
water and Funkin cocktail mixers, said the final phase of its
three-year "fit for the future" strategy will lead to a business-
wide overhaul aimed at improving its "service, efficiency and
speed to market", The Scotsman relates.

According to The Scotsman, it said: "Our organizational
restructure is likely to impact around 10% of our total employee
base, and as such around 90 job losses are possible across our
commercial, supply chain and central functions.  Subject to
consultation, we expect that the majority of the changes will be
implemented before the end of the current financial year."

The shake-up will lead to one-off costs of about GBP4 million, but
is expected to deliver ongoing annual savings of about GBP3
million, The Scotsman discloses.

Chief executive Roger White told The Scotsman that the proposed
job losses were still subject to a three-month consultation period
and "nothing is set in stone", but noted that about 60% of the
group's 900-strong workforce is based in Scotland, with the
remainder in the rest of the UK.


CITY MOTOR: Car Dealership Goes Into Administration
---------------------------------------------------
Business Sale reports that City Motor Holdings, a multi-franchise
car dealership based in the Thames Valley, has gone into
administration.

The company operated a total of 13 new and approved car
dealerships across Reading and Newbury and was headquartered in
Basingstoke, according to Business Sale.  The administration has
resulted in the loss of 267 jobs.

After a difficult trading period, the company was attempting to
sell off its Gowrings Ford and City Peugeot operations in Reading
as well as City Kia in Newbury, before it called in administrators
from KPMG Restructuring, the report notes.

The report relates City SEAT and City Skoda, both in Basingstoke,
have ceased trading since Tuesday, September 13 and a spokesperson
for City Motor Holdings said they were working with manufacturers
to minimize the disruption to customers.

The spokesperson also stated that they were in negotiations with a
number of parties but could not say anything while discussions
were ongoing, the report notes.  He said: "We are in talks with
third parties that may lead to the sale of the remaining
dealerships as a going concern, and if a buyer can be found it
will give us the best chance of preserving as many jobs as
possible."

Appointed administrators Steve Absolom and Will Wright have
retained 19 staff members to assist them with winding down the
company operation, the report relates.

The report discloses Mr. Absolom attributed the company going into
administration to the high number of nearly-new and used cars on
the market.  "While industry figures indicate that the number of
new car registrations in the UK has remained consistently high
over the last two years, the number of nearly-new and used cars
also coming to market has put pressure on motor dealerships around
the country," the report quoted Mr. Absolom as saying.

"Against this backdrop and after a sustained period of poor
trading, the directors of City Motors Holdings took the difficult
decision to close its operations and call for the appointment of
administrators," Mr. Absolom added.


HONOURS PLC: Fitch Puts 'Bsf' Class D Debt on RWN
-------------------------------------------------
Fitch Ratings has placed Honours Plc notes on Rating Watch
Negative (RWN), as follows:

   -- GBP57.1m Class A1 notes: 'AAsf' on RWN

   -- GBP 54.2m Class A2 notes: 'AAsf' on RWN

   -- GBP27.1m Class B notes: 'Asf' on RWN

   -- GBP 14.6m Class C notes: 'BBBsf' on RWN

   -- GBP9.7m Class D notes: 'Bsf' on RWN

This transaction is a refinancing of the previous Honours Plc
transaction that closed in 1999, a securitization of student loans
originated in the UK by the Student Loans Company Limited.

The RWN reflects uncertainty around a recent unexplained spike in
loans deferred with arrears, together with a yet unresolved
provision for a potential liability from a Consumer Credit Act
(CCA) non-compliance investigation. In addition, the servicer
transfer costs have contributed to an un-cleared GBP2.5m principal
deficiency ledger (PDL) balance.

KEY RATING DRIVERS

Loans Deferred with Arrears Up

Loans deferred with arrears increased to GBP10.7 million at end-
August 2016 from GBP2 million in August 2015. Deferred loans with
no arrears are eligible for cancellation given a set of
circumstances; however, loans deferred with arrears are not, and
therefore represent an additional potential loss to the
transaction. The note ratings are sensitive to the loans deferred
in arrears default assumption, which in the absence of an
established cause for the increase cannot be reasonably
ascertained. It is also unclear whether the servicer has
implemented any remedial action.

Uncertainty on CCA Non-Compliance Provision

A GBP10.9 million provision has been allocated for liabilities and
charges arising from potential non-compliance with certain aspects
of the CCA in relation to arrears notices sent to borrowers.
Although the provision represents the directors' best estimate to
meet the liabilities, the final amount is still to be determined
and discussed with the Financial Conduct Authority (FCA).

Expenses Add Pressure on Junior Notes

On January 29, 2016, the capita administrator agreement was
terminated and Link Financial Outsourcing Ltd was appointed
administrator. Over the last 12 months, expenses have risen,
adding pressure to the junior notes. However, as of end-August
2016 the observed senior fees have reverted to historical values.
Without the additional issues highlighted above Fitch would have
expected the PDL to have been cleared, although this now remains
uncertain.

Rating Cap

Deferred loans with no arrears (GBP128.4 million) are eligible for
cancellation, typically after 25 years. Fitch has incorporated a
cancellation profile that leads all loans to be cancelled by
transaction maturity. As the transaction is strongly reliant on
the UK government to make cancellation payments on deferred loans,
the rating of the notes is therefore capped to that of the UK
government (AA/Negative).

RATING SENSITIVITIES

While the outcome of the non-compliance investigation is pending
it is also not clear to what extent borrower reimbursements would
be applied either through the priority of payments or as "set-off"
against loan balances. Fitch has modelled various outcomes and
when applied in addition to the deferred loans in arrears
category, potentially leads to downgrade of at least between one
(class A) and three notches (class B to D). The RWN represents the
potential for this to be resolved in the next six months.

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

Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch 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 affected the
rating analysis. Fitch has not reviewed the results of any third
party assessment of the asset portfolio information or conducted a
review of origination files as part of its ongoing monitoring.

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

Prior to the transaction closing, Fitch did not review the results
of a third party assessment conducted on 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.


NEWGATE FUNDING 2006-3: S&P Hikes Ratings on 2 Note Classes to BB
-----------------------------------------------------------------
S&P Global Ratings affirmed its credit ratings on Newgate Funding
PLC series 2006-3's class A3a, A3b, Mb, Da, Db, and E notes.  At
the same time, S&P has raised to 'BBB+ (sf)' from 'BBB- (sf)' its
ratings on the class Ba and Bb notes and to 'BB (sf)' from 'B+
(sf)' its rating on the class Cb notes.

The rating actions follow S&P's credit and cash flow analysis of
the transaction using information from the August 2016 investor
report and August 2016 loan-level data.  S&P's analysis reflects
the application of its U.K. residential mortgage-backed securities
(RMBS) criteria and S&P's current counterparty criteria.

In S&P's opinion, the performance of the loans in the collateral
pool has improved since its Sept. 13, 2013 review.  Total
delinquencies have decreased to 26.2% from 35.6%, 90+ days
delinquencies to 18.7% from 27.5%, and repossessions to 0.5% from
1.4%.  Although the abovementioned decreases are in line with the
evolution observed in our U.K. nonconforming RMBS index, Newgate
Funding's series 2006-3 pool has historically performed worse than
the other transactions in our index.

Prepayments have remained stable since S&P's previous review.  As
of March 2016, the prepayment rate in this transaction was about
4.7%, which is lower than the 8.1% observed in our index.

Since S&P's previous review, our credit assumptions have decreased
at all rating levels, due to a lower weighted-average foreclosure
frequency (WAFF) and a lower weighted-average loss severity
(WALS).

The lower arrears levels and greater proportion of the loans in
the pools receiving seasoning credit benefitted our WAFF
calculations.  S&P's WALS assumptions have decreased at all rating
levels.  The transaction has benefitted from the decrease in the
weighted-average current loan-to-value ratios.

Rating        WAFF     WALS
               (%)      (%)
AAA          43.76    39.40
AA           37.82    32.76
A            32.46    22.21
BBB          27.99    16.22
BB           23.28    12.38
B            21.22     9.26

Credit enhancement levels have increased for all rated classes of
notes since S&P's previous review.  The notes benefit from a
liquidity facility and reserve funds.  The facilities are not
amortizing as the respective cumulative loss triggers have been
breached.

The structure started amortizing pro rata in May 2016 because all
of the pro rata triggers are currently met.  S&P has considered
this in its cash flow analysis.

S&P's credit and cash flow analysis indicates that the available
credit enhancement for the class Da, Db, and E notes is
commensurate with the currently assigned ratings.  S&P has
therefore affirmed its ratings on these classes of notes.

S&P considers the available credit enhancement for the class Ba,
Bb, and Cb notes to be commensurate with higher ratings than those
currently assigned.  S&P has therefore raised to 'BBB+ (sf)' from
'BBB- (sf)' its ratings on the class Ba and Bb notes, and to 'BB
(sf)' from 'B+ (sf)' its rating on the class Cb notes.

"In our credit and cash flow analysis, we consider the available
credit enhancement for the class A3a, A3b, and Mb notes to be
commensurate with higher ratings than those currently assigned.
However, the liquidity facility and bank account provider
(Barclays Bank PLC; A-/Negative/A-2) breached the 'A-1+' downgrade
trigger specified in the transaction documents, following our
lowering of its long- and short-term ratings in November 2011.
Because no remedy actions were taken following our November 2011
downgrade, our current counterparty criteria cap the maximum
potential rating on the notes in this transaction to our 'A-'
long-term issuer credit rating on Barclays Bank.  We have
therefore affirmed our 'A- (sf)' ratings on the class A3a, A3b,
and Mb notes," S&P said.

Newgate Funding's series 2006-3 is a U.K. nonconforming RMBS
transaction with collateral comprising a pool of first-ranking
mortgages over freehold and leasehold owner-occupied properties.
Based on loan-level data provided for August 2016, the collateral
pool comprises 24.0% first-time buyer loans and 57.3% self-
certified loans.

RATINGS LIST

Class            Rating
          To              From

Newgate Funding PLC
EUR296.1 Million, GBP319.85 Million, $271 Million Mortgage-Backed
Floating-Rate Notes Series 2006-3

Ratings Affirmed

A3a       A- (sf)
A3b       A- (sf)
Mb        A- (sf)
Da        B (sf)
Db        B (sf)
E         B- (sf)

Ratings Raised

Ba        BBB+ (sf)       BBB- (sf)
Bb        BBB+ (sf)       BBB- (sf)
Cb        BB (sf)         B+ (sf)


RAME ENERGY: Mulls Company Voluntary Arrangement After Asset Sale
-----------------------------------------------------------------
Further to the announcement made on August 5, 2016, Rame Energy
PLC's Joint Administrators, being Andrew Beckingham and Colin
Prescott of Leonard Curtis Recovery Limited, have informed the
Directors that they have entered into a binding agreement to
dispose of the Company's interest in Seawind Holding SpA and its
operating subsidiaries in Chile (the "Chilean Assets") for cash
consideration of US$1.2 million (the "Disposal") to TUDA sprl and
Safe Harbour Capital PTE. LTD ("Safe Harbour").  In addition,
contractual arrangements have been made for the Purchaser to seek
to assume or otherwise settle certain contractual liabilities of
the Company, that are themselves subject to liability at a Chilean
level, such that the remaining claims of unsecured creditors may
be reduced.

Specifically in relation to the Company's liability to InterEnergy
Holdings ("IEH"), there is contractual provision for the purchaser
to seek to enter into a novation agreement to the effect that the
Company's liabilities and obligations to IEH may be replaced.  If
such an agreement is unable to be completed, and IEH subsequently
claims as an unsecured creditor in the insolvency proceedings of
the Company, there is alternate contractual provision for an
additional sum calculated by reference to the dividend prospects
of IEH to be contributed to the company's Administration Estate
such that the dividend prospects of other creditors may be
protected without amelioration.

Splendid Suns Holdings Limited ("Splendid Suns") is a substantial
shareholder in Rame.  Vincent Trapenard holds over 30% of the
share capital of both Splendid Suns and Safe Harbour.  As such,
Safe Harbour is considered a related party and the Disposal
constitutes a related party transaction under AIM Rule 13. The
Directors, having consulted with the Joint Administrators and its
Nominated Adviser, Cantor Fitzgerald Europe, consider the terms of
the Disposal to be fair and reasonable insofar as the Company's
shareholders are concerned.

Further updates will be made in due course.

The Administrators confirm that the Administration process as
previously set out continues and that their formal proposals for
the conduct of the Administration proceedings have been approved
by creditors.

On the basis of ongoing discussions with potential funding
parties, the Joint Administrators consider that there may be
potential for a Company Voluntary Arrangement ("CVA") to be put to
creditors of the Company for consideration following the sale of
assets. Should a CVA proposal not prove viable or capable of
implementation, based on information currently available the Joint
Administrators consider that realisations from asset sales will be
sufficient to enable a dividend to be paid to unsecured creditors.
In this situation, on completion of the Administration, the Joint
Administrators will file a notice with the Registrar of Companies
in order that the Administration will cease and the Company will
move automatically into Creditors' Voluntary Liquidation ("CVL").

The Joint Administrators consider that it is likely that there
will be either a) a rescue of the Company or b) a return to the
Company's unsecured creditors.  The outcome and extent of any
return therefore is dependent upon resolution of the on-going CVA
discussions and funding negotiations and additionally the
discharge of the costs associated with the Administration. The
Joint Administrators and the Company will make appropriate updates
in due course.

On July 1, 2016, the Company's shares were suspended from trading
on AIM as the Company was not in a position to publish its audited
annual report and accounts ("Annual Report") within the timeframe
laid out by the AIM Rules for Companies. That suspension will
remain in place until such time as the Company is able to publish
its audited Annual Report.

Rame Energy is a Plymouth-based renewable energy company.


ROTHSCHILD CONTINUATIONS: Fitch Affirms 'BB+' Hybrid Debt Rating
----------------------------------------------------------------
Fitch Ratings has affirmed N M Rothschild & Sons Limited's (NMR)
Long- and Short-Term Issuer Default Ratings (IDR) at 'BBB+' and
'F2', respectively. The Outlook is Positive.

At the same time, Fitch has affirmed NMR's Viability Rating (VR)
at 'bbb+',Support Rating at '5', Support Rating Floor at 'No
Floor' and simultaneously withdrawn them.

The VR, SR and SRF were withdrawn due to a reorganization of the
rated entity, notably the return of NMR's banking license, which
results in Fitch assessing NMR under its Global Non-Bank Financial
Institutions (NBFI) criteria.

NMR is a UK-domiciled subsidiary of Paris-based Rothschild & Co
(R&Co, previously Paris-Orleans), the finance holding company of
one of Europe's largest financial advisory groups. Together with
Paris-based Rothschild & Cie Banque (RCB, A/Stable), NMR is R&Co's
main operating subsidiary.

Following the sale of its leasing subsidiary (Five Arrows Leasing)
to Paragon Group of Companies PLC (BBB-/Stable), NMR announced in
April 2016 that it intended to retire its banking license and
redeem its remaining customer deposits. All customer deposits had
been redeemed by early August 2016 and NMR received Prudential
Regulation Authority approval to relinquish its license on
September 19.

The Positive Outlook on NMR reflects progress made in winding down
legacy assets (predominately UK commercial real estate exposure),
which over time will result in diminishing tail risk from legacy
asset-related credit events and improving capitalization and
leverage metrics.

KEY RATING DRIVERS

VR

NMR's VR reflected Fitch's assessment of the institution's
standalone strength as a bank. Following the return of its banking
license, Fitch assesses NMR under its NBFI criteria. As Fitch
typically does not assign VRs to NBFI (apart from cases where
sovereign support is likely which, in our view, is not the case
with NMR), Fitch has affirmed and simultaneously withdrawn NMR's
VR. Since prior to the withdrawal, NMR's Long-Term IDRs were
driven by the institution's VR, the key rating drivers for NMR's
IDRs (see below) also apply to the now withdrawn VR.

IDRS AND SENIOR DEBT

NMR's IDRs are underpinned by the institution's dominant European
and, to a lesser extent, global advisory franchise (GA), sound
track record in generating adequate profitability through multiple
economic cycles, increasingly low-risk and liquid balance sheet,
low leverage and strong capitalization.

The IDRs also reflects NMR's well-managed exposure to
reputational, operational and conduct risks, but also a heavy cost
and the inherent cyclicality of the financial advisory industry.
NMR's GA division accounts for the vast majority of the
institution's revenue, while a nascent credit management division
represents most of the remainder.

The GA franchise benefits from NMR being part of the wider
Rothschild group and its operational integration into R&Co has
increased since the reorganization of the Rothschild group in 2014
and 2015. GA revenue is fairly well diversified by advisory type
and sector (no sector accounted for more than 15% of GA revenue in
the financial year to end-March 2016) and NMR enjoys strong league
table positions in UK and European M&A, restructuring and equity
advisory, with slightly improved rankings in 1H16.

"After the UK's vote in June 2016 to leave the EU, we believe the
outlook for M&A, notably in the UK, has become more uncertain,
which could affect NMR's advisory pipeline in 2H16 and 2017, as it
accounts for a sizeable proportion of advisory revenue. However,
we expect any negative impact to remain limited to M&A advisory
revenue, with at least partial compensation from increasing
revenue from NMR's restructuring franchise. The latter tends to
benefit from more challenging operating environments such as in
2009 and 2010 when the global financial crisis led to a rise in
the proportion of restructuring-related advisory revenue. In
addition, NMR has demonstrated an ability to swiftly adjust its
cost base and to ensure adequate revenue in adverse market
conditions." Fitch said.

NMR's asset quality benefitted from progress in reducing legacy
exposures in FY16 (gross legacy loans accounted for 26% of NMR's
unconsolidated Fitch Core Capital (FCC) compared with 66% of
consolidated FCC at FYE15). Fitch said, "While we expect progress
in winding down legacy assets to be slower in 2H16 and 2017,
partly because of negative repercussions of the Brexit vote, we
believe that tail risk from NMR's legacy assets is now becoming
immaterial. Credit exposure related to European CLO retention
rules at FYE16 was small but given NMR's expansion plans for its
credit management business we expect CLO-related credit risk to
moderately increase in 2017."

NMR's adjusted business model and the sale of Five Arrows has
drastically reduced funding needs and as of early August 2016, NMR
had repaid all its customer deposits in anticipation of the return
of its banking license. External debt is limited to GBP124m
perpetual subordinated notes, carried at historical fair value.
Liquidity is sound with both NMR's internal liquidity guidance and
liquidity coverage ratios comfortably exceeding regulatory minima.

NMR's common equity Tier 1 (CET1) ratio at FYE16 was a sound 21.7%
(FYE15: 14.2%) and its gross debt/EBITDA ratio (excluding customer
deposits and including 50% of its outstanding perpetual
subordinated debt as debt in line with Fitch's equity credit
approach) stood at around 0.7x, which compares well with
securities firm peers. While internal capital generation is sound,
dividend pay-out ratios are high relative to banks. The latter is,
however, in line with other cash-generative businesses such as
investment managers or advisory firms.

As a fully-owned subsidiary of R&Co, NMR's disclosure and
reporting requirements are less extensive than those of listed
peers and since 2016 NMR reports on an unconsolidated basis.
Family ownership has also resulted in a stable management team and
distinct corporate culture.

The program ratings of Rothschild Continuations Finance PLC (RCF),
a fully-owned subsidiary of NMR, are driven by an unconditional
and irrevocable guarantee by NMR. The ratings are equalized with
NMR's IDRs.

SUPPORT RATING AND SUPPORT RATING FLOOR

NMR's Support Rating (SR) of '5' and Support Rating Floor (SRF) of
'No Floor' reflect our view that while support from the
authorities is possible, it cannot be relied upon. Fitch said, "We
have withdrawn both SR and SRF in light of NMR's return of its
banking license since Fitch does not typically assign sovereign
support-driven SRs or SRFs to privately-owned non-bank financial
institutions in developed countries."

SUBORDINATED DEBT AND OTHER HYBRID SECURITIES

The rating of RCF's perpetual subordinated notes (upper Tier 2
notes) is based on the guarantee provided by NMR. Under Fitch
corporate hybrid criteria, the notes are rated three notches below
NMR's Long-Term IDR and qualify for 50% equity credit.

RATING SENSITIVITIES

IDRS AND SENIOR DEBT

"We expect market conditions for UK and European M&A to be more
challenging in 4Q16 and 2017 and evidence that NMR is able to
generate adequate GA revenue under these conditions while
maintaining stable or improved earnings, capitalization and
leverage metrics would support an IDR upgrade in 2017. Given NMR's
continued reliance on the GA division for revenue generation, any
upside would be limited to one notch." Fitch said.

A material drop in GA revenue would lead to a revision of NMR's
Outlook to Stable. In addition, NMR's ratings remain sensitive to
damage to its reputation or franchise, which would impair the
ability to attract new GA business. More aggressive capital or
liquidity management following the return of its banking license,
though not expected by us, would also be rating-negative.

"NMR's compensation ratio remains high relative to many of its
peers but we view this as a feature of the company's advisory
profile." Fitch said. An inability to swiftly adjust its cost base
to falling fee levels in a more adverse market environment,
resulting in weaker financial flexibility, would also be rating-
negative.

The program ratings of RCF are primarily sensitive to a change in
NMR's Long-Term IDR.

SUBORDINATED DEBT AND OTHER HYBRID SECURITIES

Similarly, the ratings for the subordinated notes are primarily
sensitive to a change in NMR's Long-Term IDR.

The rating actions are as follows:

   N M Rothschild & Sons Limited

   -- Long-Term IDR: affirmed at 'BBB+'; Outlook Positive

   -- Short-Term IDR: affirmed at 'F2'

   -- Viability Rating: affirmed at 'bbb+'; withdrawn

   -- Support Rating: affirmed at '5'; withdrawn

   -- Support Rating Floor: affirmed at 'No Floor'; withdrawn

   Rothschild Continuations Finance PLC

   -- Senior unsecured programme rating affirmed at 'BBB+'/ 'F2'

   -- Hybrid debt (guaranteed by NMR): affirmed at 'BB+'


VIRGIN MEDIA: Fitch Assigns 'B+(EXP)' Rating to Proposed RFNs
-------------------------------------------------------------
Fitch Ratings has assigned Virgin Media Receivables Financing I
DAC's proposed receivables financing notes (RFNs) expected ratings
of 'B+(EXP)'/'RR5(EXP)'.

The expected ratings are one notch lower than Virgin Media Inc.'s
(VMED) Long-Term Issuer Default Rating (IDR) of 'BB-' and a notch
higher than the group's senior unsecured debt. The ratings reflect
Fitch's assessment of the security and transaction structure,
which places the RFNs structurally senior to VMED group's senior
unsecured debt. The rating of the RFNs, and the potential
recoveries in a distressed scenario, is highly dependent on the
amount of prior ranking senior secured debt. An increase in VMED's
senior secured leverage would be negative for the RFN's ratings.

Final ratings will be assigned to the RFNs subject to receipt of
final documentation in line with the draft documents reviewed.

Virgin Media Receivables Financing Notes I DAC is a Republic of
Ireland-domiciled special purpose vehicle.

KEY RATING DRIVERS

Structure

The RFNs represent the joint and several obligations of Virgin
Media Investment Holdings Limited (VMIH), the borrower of the
group's credit facility and one of the guarantors of the group's
secured debt; Virgin Media Senior Investments Limited (VMSI), a
newly created holding company; along with the initial operating
company (opco) obligors, Virgin Media Limited and Virgin Mobile
Telecoms Limited. Security will be approved receivables drawn on
the initial obligors and the structure creates joint and several
liabilities of the obligor group.

At June 2016, VMSI and its subsidiaries represented in excess of
70% of VMED group's assets and in excess of 95% of six-month
revenues. The RFNs and VM Facilities benefit from guarantees from
VMSI and the opco obligors, creating structural seniority relative
to the group's senior unsecured debt given that the latter is not
guaranteed by VMSI. From an organizational perspective, VMSI sits
closer to the operating assets of the group. Nor does the
unsecured debt benefit from guarantees from any of the operating
companies. While the unsecured debt has a subordinated guarantee
from VMIH, the borrower/guarantor of the group's secured debt,
Fitch believes this subordinated guarantee would not rank ahead of
claims against VMIH under the RFNs.

Structural Parity with Existing Vendor Finance

Security for the RFNs in the form of eligible receivables will
take the same form as those currently being funded through VMED's
existing reverse factoring/vendor finance platform, referred to in
the transaction documents, as the SCF platform. Existing vendor
financing activities via the SCF platform will continue to take
place alongside the RFNs. These liabilities are assumed by Fitch
to achieve parity status in terms of where they sit in the capital
structure, albeit they are not rated by the agency.

VMED's Capital Structure

As of end-June 2016, VMED's capital structure consisted broadly of
GBP8.3bn of senior secured debt (secured bank debt and secured
bonds), around GBP600m of existing vendor financing, finance
leases and other debt, and GBP2.2bn of senior unsecured bonds.
Fitch rates the group's senior secured debt at 'BB+'/RR1, two
notches above the IDR and the unsecured debt at 'B'/'RR6', two
notches below the IDR.

Vendor financing represents a small but growing part of VMED's
capital structure; with liabilities of GBP402m reported at end-
June 2016. Fitch believes VMED is likely to increase the use of
vendor financing, including the proposed RFN issuance, as it seeks
to fund capex associated with its Project Lightning build
programme. This envisages four million new cable premises being
passed by 2019, including 500,000 premises in 2016.

RFN Instrument Rating Approach

The expected instrument rating of the RFNs of 'B+(EXP)'/'RR5(EXP)'
is a notch higher than the senior unsecured debt rating,
reflecting the structural seniority and other benefits envisaged
by the transaction. This rating also takes into account the
sizeable amount of prior ranking senior secured debt ahead of the
RFNs and vendor financing in the capital structure.

Given the amount of senior secured debt in the capital structure,
there is a limit to the quantum of RFN/vendor finance debt VMED
can raise while maintaining the one notch differential between the
RFNs and the senior unsecured debt. RFN and vendor finance
liabilities above around GBP1.5bn on a sustainable basis (looking
through seasonal peaks) given the current amount of senior secured
debt would put pressure on the RFN rating. Ongoing financial
performance and how this is reflected in our view of recoveries is
also important for notching to remain.

At end-June 2016 senior secured leverage, including the company's
undrawn RCF, capital leases and other debt, of GBP9.1Bn, is
equivalent to roughly 4.3x Fitch's 2016 forecast EBITDA of
GBP2.1bn while an RFN and vendor finance threshold of GBP1.5bn is
equivalent to roughly 0.7x leverage. Fitch assumes RFN/vendor
finance liabilities for FYE16 in the region of GBP700m - GBP1bn.

Impact of Potential VMED Downgrade

Recovery ratings for corporate issuers with IDRs in the 'BB'
category, such as VMED, are analysed using Fitch's generic
approach. Fitch said, "If VMED's IDR were to be downgraded to 'B+'
or lower, we would move to using bespoke approach for recoveries -
- see "Recovery Ratings and Notching Criteria for Non-Financial
Corporate Issuers", published April 7, 2016, for more details.
Under a bespoke approach, combined with the weaker financial
performance which may be associated with a potential downgrade,
there is a risk that the recovery rating of the RFNs could go from
RR5 to RR6. This would mean that it would be possible for the RFN
instrument rating to be downgraded by 2 notches to 'B-' if VMED's
IDR were to downgraded by 1 notch from 'BB-' to 'B+'."

KEY ASSUMPTIONS

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

   -- Mid-single revenue growth in 2016; rising to around 6% in
      2017 and 8% in 2018 reflecting Project Lightning investment

   -- Slight EBITDA margin compression in 2016, reflecting
      programming inflation before expanding thereafter,

   -- Accrual capex/sales ratio in a range of 25% - 27% in 2016,
      including Project Lightning capex and in line with
      management guidance, and we expect this to rise to above
      30% in the next two years

   -- Operating metrics associated with Project Lightning in line
      with the trajectory envisaged by management targets but at
      moderately more conservative levels

   -- Net debt/EBITDA (including finance leases and vendor
      finance) at 4.9x - 5.0x, with excess cash flows repatriated
      to Liberty Global through payments under the shareholder
      loan.

RATING SENSITIVITIES

For Virgin Media's IDR:

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

   -- Funds from operations (FFO) adjusted net leverage expected
      to remain above 5.2x on a sustained basis (FY15: 4.9x).

   -- FFO fixed charge cover expected to remain below 2.5x on a
      sustained basis (FY15: 4.1x)

   -- Material deterioration in underlying free cash flow (FCF)
      generation. Our rating case assumes a pre-distribution FCF
      margin excluding Project Lightning investment in the mid-
      teens.

   -- Material decline in operational metrics, as evidenced by
      declining key performance indicators, such as customer
      penetration, revenue generating units per subscriber and
      average revenue per user. Evidence that investment in
      Project Lightning is being scaled up to proven demand will
      be an important operating driver.

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

   -- A firm commitment by VMED that it is adopting a more
      conservative financial policy (for example, FFO adjusted
      net leverage of 4.5x).

   -- Continued sound operational performance, as evidenced by
      key performance indicator trends and progress in both
      investment and consumer take-up with respect to Project
      Lightning.

For the RFN instrument rating:

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

   -- An increase in senior secured leverage, or an increase in
      RFN and vendor finance liabilities to above GBP1.5bn on a
      sustainable basis, which would reduce the potential
      recovery estimates for the RFNs in a potential VMED default
      scenario

   -- A downgrade of VMED's IDR.

In the event of a VMED downgrade recovery ratings would move to a
bespoke analysis. Depending on the prevailing capital structure
and post-distress value assumptions, recoveries of 10% or below
would result in an RR6 recovery rating and notching of the RFNs
widen to two notches from the IDR, in line with senior unsecured
debt.

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

   -- A reduction in prior rating senior secured debt, which
       would significantly improve the potential recovery
       estimates for the RFNs in a potential VMED default
       scenario. "Under VMED's current financial policy, we
       believe this is unlikely." Fitch said.

   -- An upgrade of VMED's IDR.

LIQUIDITY

Fitch considers VMED's liquidity to be sound, mainly provided in
the form of underlying cash flow generation, good access to debt
markets and the company's undrawn GBP675m revolving credit
facility.


WOLSELEY PLC: To Cut 13% of Workforce, Close 80 UK Branches
-----------------------------------------------------------
Sean Farrell at The Guardian reports that Wolseley will cut 800
jobs in Britain, or about 13% of its UK workforce, in a move that
takes job losses unveiled by the plumbing and heating products
group so far this year to 1,000.

Wolseley said it would shut 80 UK branches and a distribution
centre in Worcester to save GBP25 million-GBP30 million a year,
The Guardian relates.  The job reduction program, prompted by a
drop in demand for materials to maintain and upgrade buildings,
will start soon, The Guardian discloses.

Wolseley announced 200 job cuts in March in the UK, where the
company makes 8% of its profit, The Guardian relays.  Repair and
maintenance sales for the plumbing and heating trade, which make
up most of Wolseley's British business, have fallen sharply,
leading to an 18% drop in UK annual profit, The Guardian states.

The company employs almost 6,100 people in the UK and has 737
branches including 600 serving the plumbing and heating trade, The
Guardian notes.  After the overhaul, which will take two or three
years, plumbing and heating branches will trade under the Wolseley
name, scrapping brands including Pipe Center and Drain Center,
according to The Guardian.

After the closures, Wolseley will have 440 branches aimed at small
UK traders and about 80 bigger stores, The Guardian says.  Demand
from tradesmen has been dented by the government scrapping of
public subsidies for efficient boilers amid the cutting of green
energy measures, The Guardian relates.

Wolseley is a specialist distributor of plumbing and heating
products.



===============
X X X X X X X X
===============


* EUROPE: Regulators Must Level Playing Field on Bank Capital
-------------------------------------------------------------
Rainer Buergin at Bloomberg News reports that German Finance
Minister Wolfgang Schaeuble said global regulators mustn't punish
Europe or any other region as they complete work on revamped bank
capital requirements by the end of the year.

"The rules mustn't have particularly negative consequences for
specific regions because banks' balance sheets and the financial
markets are structured quite differently around the world,"
Bloomberg quotes Mr. Schaeuble as saying on Sept. 10.  "This is a
crucial, common European concern.  In Europe, companies are mostly
financed via banks, whereas in the U.S. this is mostly done in the
capital markets."

That message has found support outside Europe, Bloomberg states.
Leaders of the Group of 20 nations said earlier this month that as
work on the capital framework known as Basel III is wrapped up,
the Basel Committee on Banking Supervision should promote a "level
playing field" while honoring its commitment to avoid "further
significantly increasing overall capital requirements across the
banking sector", Bloomberg relays.

The Basel Committee promised in January not to boost "overall
capital requirements" significantly as it completes work on
bank-leverage limits and a revision of the way credit, market and
operational risks are measured, Bloomberg recounts.  That left
open the possibility that individual countries or banks could face
a marked increase, Bloomberg notes.

                            *********

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
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

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

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


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