TCREUR_Public/161005.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, October 5, 2016, Vol. 17, No. 197


                            Headlines


F R A N C E

FINANCIERE QUICK: S&P Affirms 'B-' CCR, Outlook Remains Negative
NOVASEP HOLDING: Moody's Lowers CFR to Caa2, Outlook Negative
NOVASEP HOLDING: S&P Revises Outlook to Neg. & Affirms 'B-' CCR


G E O R G I A

GEORGIAN RAILWAY: Fitch Puts 'BB-' IDR on Rating Watch Negative


I R E L A N D

AUGHINISH ALUMINA: Returns to Profit Amid State Aid Ruling
EPIC DRUMMOND: S&P Lowers Ratings on Two Note Classes to 'D'
HARVEST CLO XV: S&P Affirms B- Rating on Class F Notes


I T A L Y

GESTHOTELS SPA: Receivers Put Tower Hotel Genova Up for Sale
BANCA POPOLARE DELL'EMILIA: S&P Affirms 'BB-/B' CCRs
PORTO SAN ROCCO: Oct. 27 Bid Submission Deadline for Complex Set


K A Z A K H S T A N

BANK RBK: S&P Affirms 'B-/C' Counterparty Credit Ratings
KAZAGROFINANCE: Fitch Rates Series 2 Sr. Unsec. Bonds 'BB+(EXP)'


M A C E D O N I A

MACEDONIA REPUBLIC: S&P Affirms 'BB-/B' Sovereign Credit Ratings


N E T H E R L A N D S

CADOGAN SQUARE II: S&P Raises Rating on Class E Notes to BB+
STORM 2016-II: Fitch Assigns 'B+' Rating to Class D Notes


R U S S I A

BANK RSB 24: Liabilities Exceed Assets, Assessment Shows
CENTRCOMBANK LLC: Placed on Provisional Administration
EUROAXIS BANK: Liabilities Exceed Assets, Assessment Shows
IPOZEMBANK LLC: Liabilities Exceed Assets, Assessment Shows
NPO CREDITALLIANCE: Liabilities Exceed Assets, Assessment Shows

POLYUS GOLD: Moody's Assigns Ba1 CFR, Outlook Negative


S P A I N

SANTANDER CONSUMER 2014-1: Fitch Affirms CC Rating on Cl. E Notes


U N I T E D   K I N G D O M

COGNITA BONDCO: S&P Affirms 'B' CCR, Outlook Stable
GEMINI PLC: Moody's Withdraws C Rating on Class B Notes
PUNCH TAVERN: Fitch Affirms B+ Ratings on Three Note Classes
PUNCH TAVERNS: Fitch Affirms 'B-' Rating on Class M3 Notes
QUAYSIDE FABRICATIONS: Enters Liquidation, Jobs at Risk

REXAM PLC: Moody's Withdraws Ba1 Issuer Rating
SOUTHERN WATER: Moody's Affirms Ba1 Ratings on Two Note Classes
TOWD POINT 2016: Moody's Assigns (P)Ba1 Rating to Class D Notes
TOWD POINT 2016: S&P Assigns Prelim. BB+ Rating to Class E Notes
VIRIDIAN GROUP: Moody's Affirms B2 Rating on Sr. Secured Notes

YORKSHIRE WATER: Moody's Affirms Ba1 Sub. Debt Rating on B Notes


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F R A N C E
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FINANCIERE QUICK: S&P Affirms 'B-' CCR, Outlook Remains Negative
----------------------------------------------------------------
S&P Global Ratings said it has affirmed its 'B-' long-term
corporate credit rating on French fast food chain Financiere Quick
S.A.S.  The outlook remains negative.

S&P also affirmed its 'B-' issue rating on Quick's senior secured
floating rate notes with EUR360 million outstanding.  The '3'
recovery rating on this debt remains unchanged, indicating S&P's
expectation of modest recovery in the event of a payment default.
However, recovery prospects have weakened to the lower half of the
50%-70% range from the higher half of the range.

At the same time, S&P affirmed its 'BB-' issue rating on the
EUR44.5 million super senior secured revolving credit facility
(RCF).  The recovery rating is unchanged at '1+', indicating S&P's
expectation of full recovery prospects in the event of a payment
default.

In addition, S&P affirmed its 'CCC' issue rating on Quick's senior
unsecured floating rate notes with EUR145 million outstanding.
The '6' recovery rating on these notes remains unchanged,
indicating S&P's expectation of negligible recovery (in the 0%-10%
range) in the event of a payment default.

S&P's rating affirmation follows Quick's disposal of its
operations in Belux.  S&P understands the group plans to use a
majority of the Belux disposal proceeds to fund the Burger King
restaurant conversion program.  Without any planned debt reduction
with the disposal proceeds, as S&P understands, it forecasts its
S&P Global Ratings-adjusted debt to EBITDA will further increase
to above 8x in 2016 and 2017 (or above 7x when excluding the euro
mezzanine payment-in-kind instrument issued by parent Bertrand
Corp.).  Nevertheless, S&P recognizes Quick's improved liquidity
position following the cash receipt of the Belux disposal, which
supports the group's ability to service cash interest over the
next two years.  The group's liquidity position also benefits from
a one-year waiver on its leverage covenant, which will be
reactivated in September 2017.

Following the Belux disposal, Quick now only operates in France.
Consequently, S&P views the group's ability to service debt as
highly dependent on the successful execution of its restaurant
conversion program over the next four years.  This exposes Quick
to a very high level of execution risk, in S&P's view.  Without
the Belux operations, S&P also sees weakened recovery prospects
for the group's floating rate notes, which S&P anticipates could
improve as the benefits of the restaurant conversion are realized.

If the conversion plan is successful, S&P expects its adjusted
debt to EBITDA could gradually deleverage to 7.8x in 2018 (or to
7.0x when excluding the euro mezzanine issued by parent Bertrand
Corp).  However, if the group's rebranding effort does not
translate into sufficient EBITDA growth, it could result in an
unsustainable capital structure, high refinancing risk for its
floating rate notes maturing in 2019, and a higher likelihood of a
covenant breach in the medium term.

Quick was acquired by Burger King France S.A.S., an operating
subsidiary owned by Groupe Bertrand, in December 2015.  As part of
Groupe Bertrand's strategic development, Quick plans to convert
about 320 Quick restaurants to Burger King restaurants between
2016 and 2020.  The four-year business transition would enable the
Burger King brand to rapidly expand its presence in France.

"We recognize the long-term benefits of restaurant rebranding and
conversion.  Relative to the Quick brand, we anticipate that the
Burger King brand could provide the group a stronger customer base
and higher quality fast food offerings.  The business transition,
if successfully implemented, could improve the group's earnings
growth and cash flow generation in the long term.  However,
Quick's business transition inevitably requires significant
capital expenditure (capex) upfront, as well as meticulous
management planning and execution, in our view.  As Quick does not
generate sufficient operating cash flow to support the business
transition, we forecast that the group's reported free operating
cash flow (FOCF) will remain negative until 2020.  The business
transition will therefore be largely funded by cash proceeds from
the Belux disposal," S&P said.

Quick aims to complete about 30 restaurant conversions in the last
quarter of 2016, followed by about 80 restaurant conversions a
year until 2019, with the remainder to be completed in 2020.  Each
restaurant under conversion is expected to close for about six-to-
eight weeks, while continuing to bear rental costs.  Combined with
weak trading performance under the Quick brand, S&P views the
group's deleveraging prospects as highly dependent on the group's
financial success post conversion, leading to S&P's view of very
high execution risk.

S&P also expects the French fast food market will remain intensely
competitive with exposure to the French macroeconomic and
political environment, the risk of terrorist attacks, rising labor
costs, changes in commodity prices, the inherent risk of food
safety scares, and evolving consumer perceptions about fast food
offerings.

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

   -- France real GDP growth of about 1.5% in 2016 and 1.2% 2017.

   -- France consumer price index inflation of 0.2% in 2016 and
      1.4% in 2017.

   -- Revenue decline of 10.3% in 2016 and 9.5% in 2017.  The
      decline largely reflects the disposal of the Belux business
      and the temporary closure of restaurants for conversion, as
      well as small negative like-for-like sales growth under the
      Quick brand.

   -- Adjusted EBITDA margin reducing to 22.5% in 2016 due to
      temporary trading closures for planned restaurant
      conversions.  This could improve to 24.7% in 2017 if the
      rebranded Burger King restaurants provide sufficient
      profitability uplift.

   -- Substantial capex of about EUR50 million-EUR55 million in
      2016, rising to about EUR80 million-EUR90 million in 2017.
      The majority of capex will be used for restaurant
      conversion.

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

   -- S&P's lease-adjusted debt-to-EBITDA ratio further elevates
      to above 8.2x in 2016 and 8.1x in 2017 (or 7.5x in 2016 and
      7.3x in 2017 when excluding the euro mezzanine issued by
      parent Bertrand Corp).  The rise in leverage primarily
      reflects the impact of the Belux disposal in September 2016
      and the weak trading performance under the Quick brand.

   -- S&P's reported EBIDTAR cash interest coverage (defined as
      reported EBITDA before deducting rent over cash interest
      plus rent costs) of about 1.3x in 2016 and 1.4x in 2017.

   -- Significantly negative reported FOCF of about EUR30 million
      in 2016 and about EUR50 million in 2017 due to substantial
      capex relating to the business transition.  The business
      transition is, however, largely funded by cash proceeds
      from the Belux disposal.

The negative outlook reflects S&P's view that, following the Belux
disposal, Quick's ability to service debt is dependent on the
successful execution of its restaurant conversion program.  This
exposes the group to a very high level of execution risk, in S&P's
view.  S&P forecasts its adjusted debt to EBITDA will rise further
to above 8x in 2016 and 2017 (or above 7x when excluding the euro
mezzanine).

If the group's rebranding effort does not translate into
sufficient EBITDA growth, it could result in an unsustainable
capital structure, high refinancing risk for its floating rate
notes maturing in 2019, and a higher likelihood of a covenant
breach in the medium term.

S&P could lower the ratings on Quick if it experiences any
setbacks or difficulties in its restaurant conversion program,
resulting in EBITDA declining beyond S&P's expectations, such that
our adjusted debt to EBITDA rises toward 10x (including the euro
mezzanine).  This would lead to S&P's view of an unsustainable
capital structure for Quick.

S&P could also lower the ratings if it perceives a risk that the
group could implement an exchange offer or debt restructuring,
which S&P would view as distressed in nature and tantamount to a
default.  However, as far as S&P know, Quick is currently not
taking any steps in this direction.

S&P could revise the outlook back to stable if Quick successfully
implements its restaurant conversion program, resulting in
significantly higher EBITDA, such that S&P's adjusted debt to
EBITDA ratio deleverages on a sustainable basis.  S&P could also
consider a positive rating action if Quick reduces debt or
receives common equity contribution from the family-controlled
owner Groupe Bertrand.


NOVASEP HOLDING: Moody's Lowers CFR to Caa2, Outlook Negative
-------------------------------------------------------------
Moody's Investors Service has downgraded the Corporate Family
Rating of French life science contract manufacturer Novasep
Holding SAS to Caa2 from Caa1 and its Probability of Default
Rating (PDR) to Ca-PD from Caa1-PD.  Concurrently, Moody's has
downgraded the rating of the USD195 million senior secured notes
due December 2016 issued by Novasep to Caa2 from Caa1.  The
outlook on all ratings remains negative.

This rating action follows the announced exchange offer which, if
executed successfully, would qualify as distressed exchange
according to Moody's.  Upon completion of the proposed
transaction, Moody's expects to assign a "/LD" indicator to the
company's PD rating.

                       RATINGS RATIONALE

The downgrade was prompted by the company's announcement on 26
September 2016 that it had launched an exchange offer to refinance
the outstanding notes due December 2016.  Moody's considers that
this offer, if completed, would be classified as a distressed
exchange, which is a form of default, and is captured in the PDR
of Ca-PD.  This is because bondholders are offered notes with
diminished security, extended maturity and lower cash interest
coupon, and the proposed refinancing alleviates the fact that the
company currently does not have sufficient liquidity to repay the
outstanding notes in full when due, which, in Moody's view,
represents a failure to honor the promise to pay contained within
the original debt obligations.

According to the exchange offer and solicitation statement, the 8%
USD195 million outstanding senior secured notes due 15 December
2016 are offered to be exchanged with unsecured notes of the same
amount but euro denominated carrying a 5% cash coupon and various
PIK coupons, maturing May 31, 2019, with penny warrants attached
allowing to an equity portion of 25%.  The bondholders accepting
the exchange will receive USD5 every USD1000 of notes tendered and
additional USD5 every USD1000 of notes tendered before Oct. 7,
2016.

Moody's notes that if, by the expiration date, the consent
solicitation has not received the required 90% threshold, the
company may have to initiate French safeguarding proceedings or
some other form of pre-insolvency or insolvency proceedings.
Moody's however notes that 75.6% of the bondholders committed to
the exchange offer.  Furthermore, any untendered notes will be
reduced by 25% of its original amount, will carry a 1% coupon (to
be paid in cash or PIK, at company's election), will mature in
December 2032, will be unsecured and subordinated to the exchange
notes.

Notwithstanding the volatility of Novasep's operations, the
downgrade of the CFR also reflects (1) a weaker liquidity profile
given that the cash consummated to complete the proposed
refinancing (c.EUR10 million), which will bring the pro-forma cash
balances to EUR20 million at closing, more than offset future
benefits from reduced cash interest costs over the next 12-18
months, together with Moody's expectations for weak free cash flow
generation going forward; (2) the unsustainability of the capital
structure due to the significant amount of debt which will
continue to increase due to the capitalization of the interests;
and (3) the potential for a safeguard or insolvency process in
case of unsuccessful completion of the exchange offer.

                   RATIONALE FOR NEGATIVE OUTLOOK

The negative outlook reflects that a default is very likely in the
near term and that a failure of the exchange offer could be credit
negative with potentially weaker recovery prospects for the
bondholders in case of any form of insolvency proceedings.

                    WHAT COULD THE RATING UP/DOWN

Given the negative outlook, Moody's anticipates no upward pressure
on the CFR and existing bonds rating.  Moody's could stabilize the
outlook if the 2016 debt maturity were successfully refinanced and
Novasep were able to deliver a sustained revenues and EBITDA
growth and generate meaningful positive free cash flow allowing
the company to de-leverage over time.

Downward pressure on the CFR and existing bonds rating could
develop if the announced refinancing were not completed
successfully and Novasep were to commence safeguard or insolvency
proceedings, possibly resulting in heavier losses for bondholders.

LIST OF AFFECTED RATINGS:

Downgrades:

Issuer: Novasep Holding SAS
  Corporate Family Rating, Downgraded to Caa2 from Caa1
  Probability of Default Rating, Downgraded to Ca-PD from Caa1
  Senior Secured Regular Bond/Debenture, Downgraded to Caa2 from
   Caa1

Outlook Actions:

Issuer: Novasep Holding SAS
  Outlook, Remains Negative

Headquartered in France, Novasep is a global provider of contract
manufacturing services for life sciences industries and a
manufacturer and supplier of proprietary equipment and processes
for the purification of molecules.

For the last twelve months ended June 30, 2016, Novasep generated
revenues of EUR269 million and reported an EBITDA of EUR26 million
(10% margin).


NOVASEP HOLDING: S&P Revises Outlook to Neg. & Affirms 'B-' CCR
---------------------------------------------------------------
S&P Global Ratings said that it revised its outlook on Novasep
Holding S.A.S. to negative from stable.  At the same time, S&P
affirmed its 'B-' long-term corporate credit rating on the
company.

S&P also affirmed its 'B-' issue rating on Novasep's $195 million
bond due December 2016, which the company intends to refinance
through an offer to bondholders with euro-denominated unsecured
notes equivalent to $195 million.  The recovery rating on the bond
is unchanged at '3'.  S&P will withdraw the ratings on the bond if
the refinancing completes successfully.

The outlook revision reflects S&P's view that Novasep faces
refinancing risk with the upcoming maturity of its main debt
component in December.  S&P considers that the group is very
likely to successfully refinance its notes, given that 75% of the
bondholders are also shareholders in Novasep.  S&P also takes the
view, based on the information S&P received, that the refinancing
proposal offers a viable economic option for bondholders compared
to the upcoming debt maturity, through a combination of the
relatively short three-year maturity, cash and payment-in-kind
(PIK) coupon rates, and the addition of equity warrants.

The completion of this bond exchange offer is subject to a
participation threshold of at least 90%, whereas current
shareholders represent 75.6% of the bondholders.  The offer
expires on Oct. 25, 2016.  S&P believes that the proposed
refinancing should aid the group's operating cash flow generation
thanks to lower currency risk associated with debt service and
greater financial flexibility.

The new notes will mature at the end of May 2019 and will be the
euro equivalent amount of the $195.16 million par value of the
outstanding notes (including any accrued interest and unpaid
interests).  They will have a 5% cash interest payment payable
quarterly, along with 3% senior and 3% junior PIK interest
capitalized annually payable bullets, subject to the repayment of
Novasep's preference shares.  Moreover, a $5 cash payment per
$1,000 will be made for existing notes tendered before Oct. 7,
2016.  Bondholders will also be given the opportunity to subscribe
to Novasep's equity as they will get 300 warrants per exchanged
bond.

Novasep has shown resilient performance across its customer
portfolio, reflecting what S&P views as its unique expertise in
purification equipment that is also embedded in its contract
manufacturer services.  Novasep's ability to offer tailor-made
solutions -- with production capacity ranging from very small
quantities of high-potency active pharmaceutical ingredients
(HPAPIs) to thousands of tons of simpler active ingredients --
helps the group address a broad range of end markets.  Therefore,
Novasep enjoys wide applications for its internally developed
technologies and has the capacity to position itself in very
attractive and innovative health care markets such as
immunotherapy, with strong capabilities in areas such as antibody-
drug conjugates or gene therapy.

These positive factors are offset by Novasep's customer
concentration, mainly as its contract manufacturing represents the
lion's share of the group's EBITDA.  Moreover, S&P considers that
the group's modest scale of operations, with EBITDA of about EUR30
million, and its highly capital-intensive business model constrain
somehow the group's business profile.  The company's earnings also
show some volatility, stemming from the high fixed-cost base of
the group's European manufacturing footprint and some exposure to
volatile raw materials (mainly stainless steel).

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

   -- 2016 will be a year of consolidation to stabilize sales
      volumes and margins in the operationally geared synthesis
      division (which generates about 60% of Novasep's EBITDA),
      with positive trends emerging in the sales of higher value-
      added products, especially in the biopharma segment.

   -- EBITDA will stay in line with 2015 at EUR30 million.

   -- Capital expenditure (capex) will be about EUR16.5 million

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

   -- Group reported EBITDA margin stabilizing at 12% in 2016.
   -- S&P Global Ratings-adjusted debt to EBITDA of 8.58x on a
      weighted-average basis.

The negative outlook reflects the fact that there is a one-in-
three chance that the group will not reach an agreement on its
bond exchange offer before Oct. 25 or that the agreement will be
substantially modified.  S&P currently views this scenario as less
likely than timely, successful refinancing given the large overlap
between the shareholder and bondholder base and the extensive time
taken in preparation of the proposal.

S&P's base case factors in more positive operating cash flow
generation trends, not least due to lower exposure to foreign
exchange risks in the debt service for the new debt instruments.

S&P could consider lowering the rating if Novasep is not able to
complete its refinancing on substantially the same terms as the
current proposal, leading to an increased debt service burden.
Independently of the pending refinancing, S&P could also lower the
rating if Novasep were to experience a harsh shortfall in its
profitability, translating into negative operating cash flow
generation.

S&P will consider revising the outlook to stable if Novasep
successfully refinances its upcoming $195 million notes maturing
on Dec. 15, 2016.



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GEORGIAN RAILWAY: Fitch Puts 'BB-' IDR on Rating Watch Negative
---------------------------------------------------------------
Fitch Ratings has placed Georgian Railways JSC's Long-Term Foreign
and Local Currency Issuer Default Ratings and foreign and local
currency senior unsecured ratings of 'BB-' on Rating Watch
Negative (RWN).  The Short-Term Foreign and Local Currency IDRs
were affirmed at 'B'.

The RWN reflects the company's under-performing transportation
volumes and turnover, which have already been under pressure from
slowing economies in the region, leading to significantly weaker
forecast credit metrics than our rating guidance.  The RWN will be
resolved once we have assessed GR's updated business plan,
including capex and expected dividends, as well as the strength of
the government links in the view of the general elections in
October 2016.

Fitch would downgrade the ratings if it expects funds from
operations (FFO) adjusted net leverage to be sustainably above 3x
and FFO fixed charge cover below 3x.  The downgrade would be
limited to one notch below the sovereign rating (BB-/Stable)
provided the company's links with the state through JSC
Partnership Fund (BB-/Stable) do not weaken.

                         KEY RATING DRIVERS

Supply Disruptions Exacerbate Volume Drop

Volumes and turnover from transportation of oil products, the most
profitable and significant part of GR's business, have been
significantly hit by the political tensions between Azerbaijan and
Armenia during which Azerbaijani government restricted the
country's exports.  GR's oil product transportation volume and
turnover in 1H16 decreased 39% and 46% yoy, respectively.  This
emphasizes the high event risk GR is exposed to, due to its
reliance on the transportation of transit volumes by a single
transit route.  Overall volumes fell 22% yoy during 1H16.

Weaker Standalone Profile
GR's standalone creditworthiness is likely to weaken below the
current level of 'BB-' on the back of the reduction in
transportation activities, especially if we see them as largely
structural and if it is not offset by cash flow conservation.

Parent Links to Support Rating
The ratings may be supported at 'B+', a one notch below the
sovereign's, by GR's links with the state, including factors such
as the company's importance to the local economy as the largest
taxpayer and employer and the company's role in Georgia's regional
transit corridor.

                          KEY ASSUMPTIONS

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

   -- Freight transportation volumes to decline 12% in 2016,
      before growing in low single digits thereafter
   -- Freight tariffs to decline in low single digits
   -- Inflation-driven cost increase
   -- Capex in line with management expectations of USD316m for
      2016-2019
   -- GEL/USD exchange rate of 2.37 on average in 2016 and 2.35
      thereafter

                       RATING SENSITIVITIES

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

   -- A negative sovereign rating action.
   -- A sustained increase of FFO adjusted net leverage above 3x
      or FFO fixed charge cover falling below 3x that results in
      weaker standalone creditworthiness.  A downgrade for this
      reason would be limited to a one-notch differential below
      the sovereign rating if the links between GR and its parent
      do not weaken.
   -- Weakening links with the government, such as privatization
      of a majority stake, which may result in a wider
      differential from the sovereign rating

Positive: As the ratings are on RWN Fitch do not anticipate an
upgrade.  Future developments that may, individually or
collectively, lead to a rating affirmation:

   -- A sustained improvement in FFO adjusted net leverage to
      below 3x and FFO fixed charge cover greater than 3x.
   -- Stronger links with the government, such as government
      guarantees for a material portion of GR's debt, which could
      result in Fitch aligning GR's rating with the sovereign.

                             LIQUIDITY

As of June 30, 2016, GR had a USD500 mil. bond (or GEL1,211 mil.),
due 2022.  Cash and cash equivalents stood at GEL254 mil. and
undrawn credit facilities at GEL145 mil.  Fitch expects GR's free
cash flow to remain negative during 2016-2019 on the back of an
ambitious capex program.  GR may postpone certain capex if
necessary.



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AUGHINISH ALUMINA: Returns to Profit Amid State Aid Ruling
----------------------------------------------------------
Charlie Taylor at The Irish Times reports that the Aughinish
Alumina plant in Co Limerick staged a remarkable turnaround last
year, recording a US$14.4 million pretax profit after reporting a
US$12.1 million loss in 2014.

The facility, which was previously owned by commodities group
Glencore, is the largest alumina refinery in Europe with 450
employees and the capacity to produce up to two million tonnes of
aluminium oxide a year, The Irish Times discloses.

Earlier this year, the European Court of Justice ruled against
Ireland in a long-running legal case concerning the granting of
State aid to the plant, The Irish Times recounts.  The ruling
means the Government will be forced to claw back as much as
EUR10 million in a move that could put jobs at risk at the
facility, The Irish Times notes.

According to The Irish Times, new accounts for Limerick Alumina
Refining Limited, which is now owned by Russian aluminium giant
Rusal, show turnover fell by 4% to US$688 million from US$719
million a year earlier.


EPIC DRUMMOND: S&P Lowers Ratings on Two Note Classes to 'D'
------------------------------------------------------------
S&P Global Ratings lowered its credit ratings on the class B, C,
and D notes in Epic (Drummond) Ltd.  At the same time S&P has
affirmed its ratings on the class A, E, F, and G notes.

Epic (Drummond) is a synthetic European commercial mortgage-backed
securities (CMBS) transaction that closed in June 2007.  It was
initially backed by credit default swaps for a portfolio of 13
reference loans that The Royal Bank of Scotland PLC originated and
serviced.  Six of the loans have since been repaid including two
at a loss.  The rating actions follow the liquidation of the
Countrywide Kaufland loan and a review of the remaining loans.

                      IRUS LOANS (65% OF POOL)

There were originally six loans held in the Irus European Retail
Property Fund managed by NEINVER.  These loans were secured by six
separate retail factory outlet centers across Europe with
properties in Poland, Spain (three properties), Italy, and
Portugal.

Five of the original six loans remain, with the Irus Poland loan
having fully repaid at the April 2014 interest payment date (IPD).
The current securitized balance for the remaining five loans
totals EUR201.4 million.

The properties comprise retail outlet accommodation, close to
major cities.  The assets are between 95% to 100% occupied.

As of the July 2016 IPD, the individual loan's securitized loan-
to-value (LTV)ratio ranged between 46.8% to 75.6%, based on
December 2015 valuations.

S&P has not assumed principal losses on the loans in its 'B'
rating stress scenario.

                PROJECT MAGNUM LOAN (23% OF POOL)

The loan was initially secured on a portfolio of 12 retail
warehouse properties in Germany.

The sale of the remaining two properties was completed in May
2016.  No properties collateralize the remaining loan balance of
EUR25.1 million.

S&P expects that a credit event calculation date will not occur
before the note payment date in January 2018.

S&P expects the class C notes to experience additional losses in
connection to this loan on or after the January 2018 note payment
date.

               ZENON REAL ESTATE LOAN (12% OF POOL)

The loan is secured by a portfolio of 15 supermarkets and one car
park located in Greece.  The current securitized balance is
EUR36.2 million.

The loan entered special servicing following the credit event on
December 2013.

As of the July 2016 IPD, the loan's securitized LTV ratio was
109.3%.  This is based on a June 2012 valuation of EUR33.1
million, which S&P believes is unlikely to reflect current market
conditions.

S&P has assumed principal losses on the loan in its 'B' rating
stress scenario.

                          RATING ACTIONS

S&P's ratings on Epic (Drummond)'s notes addresses the timely
payment of interest, and the payment of principal no later than
the notes' legal final maturity date in January 2022.

Following S&P's review, it has affirmed its 'B (sf)' rating on the
class A notes as it considers the available credit enhancement for
these notes to be sufficient to mitigate the risk of losses from
the underlying loans in a 'B' rating stress scenario.  S&P applied
final transaction-level considerations.  This is to reflect the
weak credit characteristics of the notes ranking below the class A
notes, which create negative implications for these notes.

As a result of S&P's review of the Zenon loan, it has lowered to
'CCC- (sf)' from 'CCC (sf)' its rating on the class B notes
because this class is currently vulnerable to nonpayment, and
depends on favorable business, financial, and economic conditions.
S&P believes there is a one-in-two likelihood of default.  S&P
applied its "Criteria For Assigning 'CCC+', 'CCC', 'CCC-', And
'CC' Ratings".

S&P has lowered to 'D (sf)' from 'CC (sf)' its ratings on the
class C and D notes because they have experienced principal
losses.  This is in line with S&P's criteria, " Methodology:
Timeliness Of Payments: Grace Periods, Guarantees, And Use Of 'D'
And 'SD' Ratings," published on Oct. 24, 2013.

S&P has affirmed its 'D (sf)' ratings on the class E, F, and G
notes as they have previously suffered losses.

RATINGS LIST

Epic (Drummond) Ltd.
EUR1.143 bil commercial mortgage-backed floating-rate notes

                                         Rating        Rating
Class            Identifier              To            From
A                XS0303390453            B (sf)        B (sf)
B                XS0303391188            CCC- (sf)     CCC (sf)
C                XS0303391428            D (sf)        CC (sf)
D                XS0303391857            D (sf)        CC (sf)
E                XS0303392236            D (sf)        D (sf)
F                XS0303392400            D (sf)        D (sf)
G                XS0303393986            D (sf)        D (sf)


HARVEST CLO XV: S&P Affirms B- Rating on Class F Notes
------------------------------------------------------
S&P Global Ratings affirmed its credit ratings on Harvest CLO XV
DAC's class A, B, C, D, E, and F notes following the transaction's
effective date on Aug. 31, 2016.

Most European cash flow collateralized loan obligations (CLOs),
including Harvest CLO XV, close before purchasing the full amount
of their targeted level of portfolio collateral.

At closing, the collateral manager covenanted to purchase the
remaining collateral within the guidelines specified in the
transaction documents to reach the target portfolio size by
Nov. 22, 2016.  The collateral manager declared the effective date
on Aug. 31, 2016, by which date it had committed to purchase a
total of EUR401.05 million of eligible assets.  The transaction
documents contain provisions directing the trustee to request S&P
Global Ratings to affirm the ratings issued on the closing date
after reviewing the effective date portfolio (typically referred
to as an "effective date rating confirmation").

The affirmations reflect S&P's opinion that the portfolio
collateral purchased by the issuer, as reported to S&P 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.  S&P's effective date report provides a summary of
certain information that it used in its analysis and the results
of S&P's review based on the information presented to them.

S&P has performed a quantitative and qualitative analysis of the
transaction in accordance with its criteria to assess whether the
initial ratings remain consistent with the credit enhancement
based on the effective date collateral portfolio.  S&P's 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 percentile break-even
default rate (BDR) at each rating level, the application of S&P's
supplemental tests, and the analytical judgment of a rating
committee.  The BDR represents S&P's estimate of the maximum level
of gross defaults, based on its stress assumptions that a tranche
can withstand and still fully pay interest and principal to the
noteholders.

Following S&P's review of the transaction, it has affirmed its
ratings on the class A, B, C, D, E, and F notes.

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.  S&P will subsequently take rating actions as it deems
necessary.

Harvest CLO XV is a cash flow corporate loan CLO securitization of
a managed portfolio, comprising mainly speculative-grade senior
secured loans granted to broadly syndicated corporate borrowers.
3iDebt Management Investments Ltd. manages the transaction.

RATINGS LIST

Harvest CLO XV Designated Activity Company
EUR413 mil senior secured floating-rate deferrable and
subordinated notes

                                         Rating         Rating
Class            Identifier              To             From
A                XS1364811692            AAA (sf)       AAA (sf)
B                XS1364811775            AA (sf)        AA (sf)
C                XS1364811858            A (sf)         A (sf)
D                XS1364811932            BBB (sf)       BBB (sf)
E                XS1364812070            BB (sf)        BB (sf)
F                XS1364812153            B- (sf)        B- (sf)



=========
I T A L Y
=========


GESTHOTELS SPA: Receivers Put Tower Hotel Genova Up for Sale
------------------------------------------------------------
The Official Receivers of Gesthotels S.p.A. and Grandi Hotel
S.r.l., which entities are under Extraordinary Administration, in
execution of the Disposal Schemes approved by the MISE, call all
interested parties to submit, within 15 days from September 26,
2016, their expression of interest to purchase the Tower Hotel
Genova Business Unit, in accordance with the procedures set out in
the tender specifications available on the websites:
www.astagrandihotel.it and www.gesthotels.it


BANCA POPOLARE DELL'EMILIA: S&P Affirms 'BB-/B' CCRs
----------------------------------------------------
S&P Global Ratings affirmed its 'BB-/B' long- and short-term
counterparty credit ratings on Italy-based Banca Popolare
dell'Emilia Romagna (BPER).

S&P then withdrew the ratings at the issuer's request.  At the
time of the withdrawal, the outlook was positive.

The affirmation reflects S&P's view that BPER's asset quality will
stabilize over the next 12 months, backed by the mild economic
recovery in Italy.  In S&P's view, this should translate into a
further contraction of new net inflows of nonperforming assets
(NPAs), which, in line with most of its peers, has already
occurred in the first six months of 2016 (0.1% of loans in first
half compared to 0.7% in 2015 and 1.8% in 2014).  S&P also expects
that BPER will continue to build up reserves against its stock of
NPAs over the next two years (coverage increased to 46.7% in June
2016 compared to 42.4% in 2014, which is higher than most of its
peers).

However, S&P believes that BPER's creditworthiness remains
constrained by a higher-than-system average stock of NPAs,
representing a high 23.4% of customer loans at June 2016, compared
to 19.5% at a system level.  In the absence of more robust
economic growth and a more developed secondary market for
nonperforming loans in Italy, S&P believes that it might take BPER
longer than other domestic banks to work out its portfolio of
NPAs, which encompasses historically high exposures to
construction and real estate sectors as well as to weaker Southern
Italian regions.  Although gradually declining compared with
previous years, S&P believes that cumulative credit losses will
remain above the average for the sector as a result (180 basis
points over the next two years).

S&P also expects BPER's risk-adjusted capital to remain
comfortably above 5% over the next 18-24 months, compared with
5.7% as of year-end 2015.  Less burdensome credit losses are
likely to support BPER's profitability prospects over the next
couple of years, even after a downward revision of the bank's
revenue expectations, to better reflect the additional margin
squeeze and reduced volumes.

At the time of the rating withdrawal, the positive outlook on BPER
reflected S&P's opinion that more positive economic conditions in
Italy could help support the bank's asset quality and
profitability over the next 12 months.


PORTO SAN ROCCO: Oct. 27 Bid Submission Deadline for Complex Set
----------------------------------------------------------------
Paolo D'Agostini, as official receiver of Bankr. Porto San Rocco
s.r.l., in liquidation, is selling the company's property complex,
in addition to certain fittings, located in Muggia
(Trieste), specifically in the Porto San Rocco area, indicated as
follows: 305 property units -- 117 of which used as dwellings or
tourist accommodations and several of which furnished; 11 business
premises, 22 cellars, 152 roofed parking spaces and 3 unroofed
parking spaces, spread over 13 UMIs (Minimal Units of
Intervention), divided into 7 apartment buildings, named from
letter A to letter H, except for letter E.

The complex is sold in accordance with art. 107 of the bankruptcy
law, using a competitive bidding procedure, through private bids
at the starting price of EUR9,491,439, EUR7,767,837.86 of
which (81.97%) relating to the housing units -- tourist
accommodations, EUR1,708,602.13 (18.03%) to the non-residential
property units, and EUR15,000 to the existing fittings partly of
the housing units, it being specified that the sale rules out any
possibility of the sale of a company or business unit, as a whole
and not on a per unit of measure basis, all as in fact and in law,
as resulting in the 20-year report drawn up by notary Alfonso
Colucci of Rome, and in the report drawn up by the court-
appointed expert of the Bankruptcy, surveyor Sergio Cruciani.

The complex is sold unencumbered by mortgages and other adverse
entries and registrations, with the charges thereof borne by the
successful bidder.

The bid should be enclosed in a sealed envelope and submitted by
11:00 a.m. on October 27, 2016, at the office of notary Alfonso
Colucci, in Via Emanuele Gianturco no. 1 Rome.  The sealed bid
should also include a bank draft/bank drafts made payable to Avv.
Paolo D'Agostini, official receiver of Bankr. Porto San Rocco
s.r.l. (no. 189/15 Court of Rome), equal to 10% of the bid
amount, as a deposit, on pain of nullity.  The envelopes shall be
opened on the same day at 12:00 a.m.; should more than one
envelope containing the purchase bid be submitted, the tender
among the bidders shall take place immediately before notary
Alfonso Colucci; in the tender, if any, the bid shall start from
a minimum of EUR100,000.

The conditions and procedures for the submission of the bids, for
the tender, if any, among the bidders, and for the sale, are
indicated in the application filed on July 27, 2016, approved by
the Creditors' Committee.

The documents are made available to the interested parties on the
website of the procedure, www.fallportosanrocco.it  information
may be requested from the official receiver Paolo D' Agostini,
via Girolamo da Carpi no. 6, Rome, tel. 06-3227850, or
from Claudio Santini, tel 06-80693292.



===================
K A Z A K H S T A N
===================


BANK RBK: S&P Affirms 'B-/C' Counterparty Credit Ratings
--------------------------------------------------------
S&P Global Ratings affirmed its 'B-/C' long- and short-term
counterparty credit ratings on Kazakhstan-based Bank RBK JSC.  The
outlook remains stable.

S&P also affirmed its 'kzBB-' Kazakhstan national scale rating on
the bank.

"The affirmation reflects that we believe RBK has improved its
market position and will be able to sustain it in the future,
although the bank's capitalization has weakened, due to rapid
development not being adequately supported by equity injections
and profits.  We view negatively potential consequences of such a
rapid expansion pace, as we still have doubts regarding the
quality of the bank's unseasoned loans, in particular those
denominated in foreign currency.  The bank's volatile liquidity
buffer and negative trends in the operating environment further
exacerbates those risks.  At the same time, over the past few
years, we have seen signs that the bank has established a loyal,
long-term client base, as shown by the RBK's stable funding
profile, and increased its presence and franchise in Kazakhstan,"
S&P said.

"We revised our assessment of the bank's business position upward
to moderate from weak to reflect the bank's improved market
position as the 10th-largest bank in Kazakhstan, with a
significant increase in market shares to 3.8% by total assets
(0.3% on Dec. 31, 2011), 4.6% by loans, and 4.1% by deposits as of
Aug. 1, 2016.  This is a marked improvement since the beginning of
2012, when we first assigned ratings and assessed the bank's
business position as weak.  Since we first assigned the ratings on
the bank at the beginning of 2012, RBK has significantly expanded
its client base and firmly established itself as one of the most
active participants in government lending programs, which are
currently the main drivers of loan growth in the Kazakh banking
system. Positively, the rise of business volumes has been
supported by a relatively stable funding base," S&P noted.

At the same time, S&P revised its assessment of the bank's capital
and earnings to weak from moderate, reflecting a material
weakening in its loss-absorption capacity in 2015-2016 due to its
history of rapid asset growth, weak profits, and insufficient
equity injections.  S&P doesn't expect the bank will restore its
capitalization back to moderate levels in 2016-2017, unless
material additional capital injections, not yet factored into
S&P's forecast, take place.

S&P's risk-adjusted capital (RAC) ratio fell to 3.9% at mid-2016
from 6.6% at year-end 2014, which was significantly below S&P's
previous expectations due to lower-than-expected capital
injections, market losses caused by Kazakhstani tenge (KZT)
devaluation in 2015, and higher-than-expected loan growth.

S&P forecasts RAC at about 4% in the next 12-18 months, given the
KZT9 billion (about $27 million as of Sept. 30, 2016) capital
injection in the second half of 2016 and KZT10 billion (about $30
million as of Sept. 30, 2016) in 2017.  S&P expects assets and
loan portfolio growth of about 15% in 2016 and 10%-12% in 2017.
The bank's internal capital generation, being lower than peers',
has weakened over 2015 with return on average assets of about 0%
in 2015 against 0.6% on average during 2011-2014.  S&P expects
this trend will continue, pressured mainly by a rise in
provisioning and partly by high interest expense on money-market
instruments in the first half of 2016.

"In our base case, we assume 2.5%-2.8% credit losses in 2016-2017,
compared with a reported 1.5% for 2015.  However, the difficult
operating environment and the bank's unseasoned portfolio can
reveal unexpectedly higher credit losses, as time passes.  It
means that under the negative scenario, the level of nonperforming
loans overdue more than 90 days could increase by significantly
more than our base-case projections of 6%-8% (International
Financial Reporting Standards) in the second half of 2016 and 2017
against 3.3% as of Dec. 31, 2015.  If so, this implies a need for
additional capital injections in 2016-2017 to compensate and
sustain capitalization.  Unseasoned loans aside, we see RBK as
particularly vulnerable to higher losses given its higher-than-
system-average share of foreign currency lending, which we
estimate formed 55% of the total loan book as of Sept. 1, 2016,
against the system average of about 35%-40%.  Therefore, in case
of further tenge weakening, we see the potential for deteriorating
credit quality among foreign exchange borrowers to have a material
impact," S&P noted.

Negatively, S&P observed significant volatility of liquidity
ratios, with net broad liquid assets to short-term customer
deposits reaching a low of 6.26% of as of year-end 2015 compared
to 31% as of year-end 2014.  Although, under S&P's estimations,
this ratio has restored to about 15%-20% as of Sept. 1, 2016, S&P
will closely monitor its volatility as well as other liquidity
metrics.  While S&P sees liquidity as a key source of
vulnerability for banks at this rating level, the risks are
slightly mitigated in S&P's view by KZT90 billion of undrawn
interbank credit lines as of Aug. 31, 2016, the absence of
material expected liability payments till the end of 2016, and
good customer relationship management, supported by the
shareholders' personal ties and recognizable franchise.

The stable outlook on RBK reflects S&P's expectation that, despite
a volatile liquidity cushion and negative trends in the operating
environment, the bank will be able to withstand over the next 12-
18 months prevailing negative consequences of decreased
capitalization along with higher-than-peers' risk taking.  The
last is expressed through rapid asset growth with higher-than-
peers' share of foreign exchange loans.  S&P expects the pressure
on the bank's credit profile will be eased by significant support
from the shareholders in the form of capital injections and
funding resources.

S&P could lower the ratings over the next 12 months if, contrary
to its expectations, S&P sees signs of RBK's loss-absorption
capacity declining further, with the RAC ratio falling below the
3% threshold.  That could happen if, for example, the bank takes
on material one-off charges or higher provisioning expenses than
we currently project or due to higher-than-expected risk-weighted
assets growth, assuming this is not supported by capital
injections.  S&P could also lower the ratings if RBK's asset
quality deteriorates markedly with the share of loans overdue more
than 90 days continuously increasing higher than market average
levels in the next 12-18 months.  S&P could also downgrade the
bank if its liquidity, which it currently sees as adequate,
deteriorates materially.

A positive rating action is a remote possibility at this stage.
However, S&P might do so over the next 12 months if it sees that
RBK is able to comfortably restore and sustain a RAC ratio above
5%, while asset quality does not deteriorate more than system
average and S&P observes improved stability of satisfactory
liquidity ratios.  While it would not be sufficient by itself to
justify an upgrade, if S&P believes the bank's systemic importance
within the Kazakh banking sector had strengthened to moderate from
currently low, this would support a positive rating action.


KAZAGROFINANCE: Fitch Rates Series 2 Sr. Unsec. Bonds 'BB+(EXP)'
----------------------------------------------------------------
Fitch Ratings has assigned Kazakhstan-based KazAgroFinance's (KAF)
planned Series 2 senior unsecured bond issue an expected Long-Term
rating of 'BB+(EXP)' and National Long-Term Rating of
'AA(kaz)(EXP)'.  Assigning final ratings to the issue is
contingent on the receipt by Fitch of final documents conforming
to information already provided to Fitch by KAF.

The tenge-denominated Series 2 bonds are expected to be issued
under the company's second bond program for KZT8 billion and with
a tenor of five years.

                       KEY RATING DRIVERS

The Series 2 issue's expected ratings are in line with KAF's
outstanding local senior unsecured bond ratings and at the same
level as its 'BB+' Long-Term Local Currency Issuer Default Rating
(IDR) and 'AA(kaz)' National Long-Term Rating.  KAF's ratings
reflect Fitch's view of the moderate probability of state support
to the company given its policy role in provision of state-
subsidized financial leasing and project financing to the
agricultural sector.

                       RATING SENSITIVITIES

The issue ratings would likely change in tandem with KAF's: Long-
Term Local Currency IDR and National Long-Term Rating.

KAF's other ratings are:

  Long-Term Foreign and Local Currency IDRs: 'BB+', Outlook
   Stable
  Short-Term Foreign Currency IDR: 'B'
  National Long-Term Rating: 'AA(kaz)', Outlook Stable
  Support Rating: '3'
  Support Rating Floor: 'BB+'
  Senior unsecured debt ratings: 'BB+'/'AA(kaz)'
  Series 1 bond issue expected ratings: 'BB+(EXP)'/'AA(kaz)(EXP)'



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


MACEDONIA REPUBLIC: S&P Affirms 'BB-/B' Sovereign Credit Ratings
----------------------------------------------------------------
S&P Global Ratings affirmed its 'BB-/B' long- and short-term
foreign and local currency sovereign credit ratings on the
Republic of Macedonia.  The outlook is stable.

                            RATIONALE

The ratings on Macedonia reflect S&P's view of the country's
relatively low income and wealth levels; weak checks and balances
between state institutions, which are exacerbated by the prolonged
political crisis; and limited monetary policy flexibility arising
from the country's fixed-exchange-rate regime.  The ratings are
supported by moderate -- albeit
rising -- external and public debt.

Macedonia's political crisis continues to drag on.  Early
elections, initially scheduled for April 2016 and then postponed
until June 2016, were again called off and are now slated for
December 2016.  Although in late August both major political
parties, VMRO-DPMNE and the opposition SDSM, agreed that the
necessary preconditions for free and fair elections had been met,
most notably the cleanup of the electoral roll and progress toward
freer media, another postponement of the December election cannot
be ruled out, given how protracted Macedonia's political crisis
has been.  S&P considers the ratings on Macedonia to be
constrained by weak institutional and governance effectiveness,
resulting from lack of progress in the areas of public financial
management, media freedom, and the independence of the judiciary.
Insufficient reform progress, combined with the ongoing conflict
with Greece over its constitutional name, make Macedonia's EU
accession during S&P's forecast horizon to 2019 unlikely, in its
view.

The protracted political crisis has taken its toll on Macedonia's
economy and S&P is lowering its real GDP growth forecast to 2.3%
in 2016 from 3.3% in S&P's previous review.  While exports
continue to grow strongly as foreign companies expand their
production capacities in the country's free economic zones,
domestic demand growth, most notably investments, has decelerated
compared with last year.  Foreign investors seem largely shielded
from the political uncertainty due to their special tax-exempt
status, but the postponement of elections may have dampened
sentiment among domestic companies.  If elections take place in
December, S&P expects a rebound in investments, especially from
domestic companies, over the next few years, which alongside
continued robust export growth supports our average GDP growth
forecast of 2.8% over 2017-2019.

Greater synergies between the free economic zones and the domestic
economy could drive growth while improving the unemployment rate,
which remains among the highest in Europe at 26% on average in
2015 although it dropped to 24.2% in the second quarter of 2016,
indicative of Macedonia's large informal sector and continued
reliance on remittances.

The August floods in the Skopje region have led the government to
once again present a supplementary budget, the second one this
year.  S&P is therefore revising its general government deficit
forecast upward to 4.1% of GDP from 3.4% in S&P's last review.
Without stronger consolidation measures and improvements in the
fiscal framework, including a track record of credible budgetary
assumptions, especially on economic growth; and fiscal rules
enshrined in law, the deficit will average 3.3% of GDP in S&P's
base case for 2017-2019.  In part, these deficits also reflect the
government's investment program, which is driven by the country's
infrastructure needs but also by less-productive investments, such
as the "Skopje 2014" program.

The slow pace of fiscal consolidation will also lead to an
increasing debt burden over 2016-2019, in S&P's view.  Gross
general government debt, while still relatively low, has more than
doubled since the global financial crisis began and S&P expects it
will stand at about 45% of GDP in 2016.  In contrast to
Macedonia's official statistics, our general government debt
calculation includes the increasing debt of The Public Enterprise
for State Roads (PESR), which the government moved off the balance
sheet in 2013.  This is because S&P believes that PESR will
continue to rely on government transfers and guarantees.  In
particular, a EUR580 million loan from the Export-Import Bank of
China, contracted in 2013 for the construction of two highway
sections, will continue to contribute to a mounting debt burden
over the coming years.  In addition, off-balance-sheet financing
pushed up the stock of guaranteed debt to 8.3% of GDP in 2016
including 3.6% of GDP that is attributable to PESR, which S&P
already includes in general government debt.  Nonetheless,
Macedonia's remaining external refinancing needs have been
relatively contained this year, due to a successful Eurobond
issuance in July 2016, which should partly prefund the 2017
repayments

As a result of the repeat Eurobond issuance, Macedonia's
government debt profile is exposed to risk.  Seventy-five percent
of government debt is denominated in foreign currency, which
increases the vulnerability of the government's balance sheet to
any potential foreign-exchange movements, even though the
Macedonian denar's peg to the euro reduces the risk.  In addition,
about 35% of Macedonia's general government debt is at floating
interest rates.  That said, the banking system holds, on average,
about 12% of its assets in government securities and central bank
bills, giving the government the flexibility to rely on domestic
issuance should external markets become more volatile.

With the public sector increasingly borrowing abroad, Macedonia's
external debt has been rising, despite deleveraging in the banking
sector.  In 2015, narrow net external debt (gross external debt
less liquid financial sector assets) increased to just over 40% of
current account receipts.  S&P expects Macedonia's external debt
metrics will gradually improve, supported by robust growth of
current account receipts and moderate current account deficits of
1.4% of GDP on average between 2016 and 2019.  These deficits will
be financed by external borrowing and, to a lesser extent, foreign
investment flows, in S&P's view.  However, about 30% of the
foreign direct investment inflow is in the form of debt-like
instruments and therefore has lower barriers to exit.  In
addition, S&P expects the current account deficit will widen to
1.8%of GDP by 2019 as investment-related imports pick up.

The Macedonian denar is pegged to the euro.  At about $2.7
billion, Macedonia's foreign reserves cover the monetary base by
about 2x, implying strong backing for the pegged currency regime.
The exchange rate regime restricts monetary policy flexibility.
However, central bank measures, such as lower reserve requirements
for denar-denominated liabilities, have succeeded in lowering
overall euro-ization in Macedonia, with foreign currency-
denominated deposits and claims remaining below 50% of total
deposits and claims, down from a peak of 56% in 2005.  Rather
exceptionally for the region, bank lending in Macedonia --
including to corporations -- has continued to increase (by about
9.5%in 2015), with the loan-to deposit ratio estimated at about
90% at midyear 2016.

"Macedonia's banking system has seen several bouts of volatility
in recent years.  Last year, the crisis in Greece put some
pressure on Stopanska Banka, a subsidiary of the National Bank of
Greece S.A.  This year, political developments caused deposit
outflows from Macedonia's banking sector in April, although the
majority of funds have since flowed back into the system.  In
general, the banking system seems well capitalized and profitable,
and it is largely funded by domestic deposits.  Macedonia's
regulatory and supervisory framework under the National Bank of
the Republic of Macedonia (NBRM) has proven successful and
resilient in weathering these episodes of volatility; the NBRM
reacted swiftly to the volatility in April by raising interest
rates and intervening in the foreign exchange market to support
the currency peg.  In addition, this year the NBRM introduced
macroprudential measures, such as higher capital requirements for
consumer loans longer than eight years, to prevent the buildup of
credit risk in that segment.  Moreover, the NBRM has forced banks
to write down nonperforming loans (NPLs) that had been fully
provisioned and in arrears for more than two years, reducing the
NPL ratio to 7.6% of total loans in July 2016 from 10.8% at the
end of 2015," S&P said.

                            OUTLOOK

The stable outlook reflects the balance between the risks S&P sees
from Macedonia's rising public and external debt against the
country's economic prospects, which benefit from recurrent
investment inflows.

S&P could raise its ratings on Macedonia if reforms directed
toward higher broader-based growth led to a faster increase in
income levels than in S&P's base-case scenario, alongside improved
effectiveness and accountability of public institutions.

S&P could lower its ratings if large fiscal slippages or off-
budget activities were to call into question the sustainability of
Macedonia's public debt, raise the sovereign's borrowing costs,
and substantially increase its external obligations, given the
constraints of the exchange-rate regime.  In addition, if the
parent companies of systemically important banks operating in
Macedonia were to cut their exposure to subsidiaries, heightening
pressure on the banking sector's liquidity and external finances,
S&P could consider a negative rating action.

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        Rating
                                        To            From
Macedonia (Republic of)
Sovereign Credit Rating
  Foreign and Local Currency          BB-/Stable/B  BB-/Stable/B
Transfer & Convertibility Assessment BB            BB
Senior Unsecured
  Foreign Currency[1]                 BB-           BB-
  Foreign and Local Currency          BB-           BB-

[1] Dependent Participant(s): Citigroup Global Markets Ltd., Erste
Group Bank AG



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


CADOGAN SQUARE II: S&P Raises Rating on Class E Notes to BB+
------------------------------------------------------------
S&P Global Ratings raised its credit ratings on Cadogan Square CLO
II B.V.'s class C, D, and E notes.  At the same time, S&P has
affirmed its 'AAA (sf)' ratings on the class A-2 and B notes

The rating actions follow S&P's review of the transaction's
performance, using data from the Aug. 2, 2016 report, and the
application of S&P's relevant criteria.

Since S&P's July 10, 2015 review, the weighted-average spread
earned on the collateral pool has decreased to 4.05% from 4.15%
and the transaction's weighted-average life has decreased to 4.19
years from 4.27 years.  These movements in the portfolio's
statistics have been the result of the portfolio's maturation and
amortization as the manager has been restricted from reinvesting
any proceeds, except prepayments.  A lower weighted-average spread
would generally result in lower break-even default rates (BDRs),
while a higher weighted-average life would generally result in
higher scenario default rates (SDRs).  The BDR is the maximum
default rate that a tranche can withstand, while the SDR measures
the expected default rate.

S&P has also observed that the proportion of assets that it
considers to be rated in the 'CCC' category ('CCC+', 'CCC', and
'CCC-') has decreased in both notional and percentage terms, to
6.3% from 8.8%.  Assets that S&P considers to be defaulted (i.e.,
debt obligations of obligors rated 'CC', 'SD' [selective default],
or 'D') have increased notionally and in percentage terms to 1.5%
from 0.15% as an underlying asset migrated into the default bucket
from the performing portfolio.

As a result of the portfolio's amortization, the class A-1 notes
have been fully repaid and the notional amount outstanding of the
class A-2 notes has fallen to a factor of 58.5%.  In total, the
rated notes have repaid EUR83.9 million since S&P's previous
review.  In the same period, the collateral balance has fallen by
EUR84.3 million, indicating a minor loss in par since S&P's
previous review as a result of the newly defaulted asset, offset
somewhat by the sale of equity securities held by the issuer
following a previous restructuring of a distressed asset.  Due to
the repayment of the class A-1 notes, available credit enhancement
has increased by more than 1.5x for all of the remaining rated
notes.

S&P subjected the capital structure to its cash flow analysis, by
applying its corporate cash flow collateralized debt obligation
(CDO) criteria, to determine the BDR at each rating level.  S&P
used the reported portfolio balance that it considered to be
performing, the principal cash balance, the weighted-average
spread, and the weighted-average recovery rates that S&P
considered to be appropriate.

S&P incorporated various cash flow stress scenarios, using various
default patterns, levels, and timings for each liability rating
category, in conjunction with different interest rate stress
scenarios.  To help assess the collateral pool's credit risk, S&P
used CDO Evaluator 7.1 to generate SDRs at each rating level.  S&P
then compared these SDRs with their respective BDRs.

Taking into account its observations outlined above, S&P considers
the available credit enhancement for the class C, D, and E notes
to be commensurate with higher ratings than those currently
assigned.  S&P has therefore raised its ratings on these classes
of notes.

The available credit enhancement for the class A-2 and B notes
remains commensurate with a 'AAA (sf)' rating.  S&P has therefore
affirmed its 'AAA (sf)' ratings on these classes of notes.

Cadogan Square CLO II is a cash flow collateralized loan
obligation (CLO) transaction that securitizes primarily senior
leveraged loans.  The transaction manager is Credit Suisse Asset
Management Ltd. and it closed in June 2006.

RATINGS LIST

Class              Rating
            To                From

Cadogan Square CLO II
EUR481.8 Million Secured Floating-Rate Notes

Ratings Raised

C           AA+ (sf)          AA (sf)
D           BBB+ (sf)         BB+ (sf)
E           BB+ (sf)          B+ (sf)

Ratings Affirmed

A-2         AAA (sf)
B           AAA (sf)


STORM 2016-II: Fitch Assigns 'B+' Rating to Class D Notes
---------------------------------------------------------
Fitch Ratings has assigned STORM 2016-II B.V.'s notes final
ratings as:

  Class A EUR1,900 mil. floating-rate notes: 'AAAsf'; Outlook
   Stable
  Class B EUR57,0 mil. floating-rate notes: 'AA-sf'; Outlook
   Stable
  Class C EUR43,0 mil. floating-rate notes: 'BBB+ sf'; Outlook
   Stable
  Class D EUR43,0 mil. floating-rate notes: 'B+ sf'; Outlook
   Stable
  Class E EUR21,0 mil. floating-rate notes: not rated

This transaction is a true sale securitization of prime Dutch
residential mortgage loans originated and sold by Obvion N.V., an
established mortgage lender and issuer of securitizations in the
Netherlands.  Since May 2012, Obvion has been 100% owned by
Cooperatieve Rabobank U.A.  This is the 35th transaction issued
under the STORM series since 2003, and the first with a revolving
feature.

The ratings address timely payment of interest on the class A and
B notes, including the step-up margins accruing from August 2021,
and full repayment of principal by legal final maturity in
accordance with the transaction documents.

Credit enhancement (CE) for the class A notes is expected to be 8%
at closing, provided by the subordination of the junior notes and
a non-amortizing cash reserve (1%), fully funded at closing
through the class E notes.

                        KEY RATING DRIVERS

Market Average Portfolio
This is a 60-month seasoned portfolio consisting of prime
residential mortgage loans, with a weighted average (WA) original
loan-to-market-value of 89.4% and a WA debt-to-income ratio of
28.3%, both of which are typical for Fitch-rated Dutch RMBS
transactions and in line with previous STORM transactions.

Revolving Transaction
A five-year revolving period allows new assets to be added to the
portfolio.  In Fitch's view, the additional purchase criteria
adequately mitigate any significant risk of potential migration
due to future loan additions.  Fitch considered a stressed
portfolio composition, based on the additional purchase criteria,
rather than the actual portfolio characteristics.

Interest Rate Hedge
At close, a swap agreement was entered into with Obvion to hedge
any mismatches between the fixed and floating interest on the
loans and the floating interest on the notes.  In addition, the
swap agreement guarantees a minimum level of excess spread for the
transaction, equal to 50bp per year of the outstanding class A
through D notes' balance, less principal deficiency ledgers.  The
remedial triggers are linked to the parent's ratings, Rabobank.

Rabobank Main Counterparty
This transaction relies strongly on the creditworthiness of
Rabobank, which fulfills a number of roles.  Fitch analysed the
structural features in place, including those mitigating
construction deposit set-off and commingling risk and concluded
that counterparty risk is adequately addressed.

Robust Performance
The past performance of transactions in the STORM series, as well
as data received on Obvion's loan book, indicate good historical
performance in terms of low arrears and losses.

                      RATING SENSITIVITIES

Material increases in the frequency of defaults and loss severity
on defaulted receivables could produce losses larger than Fitch's
base case expectations, which in turn may result in negative
rating action on the notes.  Fitch's analysis revealed that a 30%
increase in the WA foreclosure frequency, along with a 30%
decrease in the WA recovery rate, would result in a model-implied-
downgrade of the class A notes to 'A-sf', class B notes to 'BBB-
sf', class C notes to 'Bsf' and the class D and E notes to below
'Bsf'



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


BANK RSB 24: Liabilities Exceed Assets, Assessment Shows
--------------------------------------------------------
The provisional administration of BANK RSB 24 (JSC) appointed by
virtue of Bank of Russia Order No. OD-3096, dated November 10,
2015, revealed that the main reason that the bank's asset value
was insufficient to fully meet creditor's claims were operations
carried out by the bank's management and owners, which bear the
evidence of moving out assets through lending to borrowers with
dubious creditworthiness, together with loan assignment contracts
worth more than RUR2.6 billion, according to the press service of
the Central Bank of Russia.  As a result, bank's liquid assets
were replaced with assets bearing no value.

According to estimates by the provisional administration, the
asset value of BANK RSB 24 (JSC) does not exceed RUR35,077.8
million, while its liabilities to creditors amount to RUR39,293.8
million.

On January 26, 2016, the Court of Arbitration of the city of
Moscow took a decision to recognize BANK RSB 24 (JSC) insolvent
(bankrupt) and initiate bankruptcy proceedings with the state
corporation Deposit Insurance Agency appointed as a receiver.

The Bank of Russia submitted the information on financial
transactions bearing the evidence of the criminal offence
conducted by the former management and owners of BANK RSB 24 (JSC)
to the Prosecutor General's Office of the Russian Federation, the
Ministry of Internal Affairs of the Russian Federation and the
Investigative Committee of the Russian Federation for
consideration and procedural decision making.


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

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

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

The Bank of Russia, by its Order No. OD-3257, dated September 26,
2016, appointed a provisional administration to Centrcombank LLC
for the period until the appointment of a receiver pursuant to the
Federal Law "On the Insolvency (Bankruptcy)" or a liquidator under
Article 23.1 of the Federal Law "On Banks and Banking Activities".
In accordance with federal laws, the powers of the credit
institution's executive bodies are suspended.

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

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


EUROAXIS BANK: Liabilities Exceed Assets, Assessment Shows
----------------------------------------------------------
The provisional administration of JSC EuroAxis Bank appointed by
virtue of Bank of Russia Order No. OD-1666, dated May 27, 2016,
following revocation of its banking license detected in the course
of examination of the bank's financial standing operations which
bear the evidence of moving out assets through extending loans
worth about RUR930 million to organizations with dubious solvency
and through replacing highly liquid securities with loan
liabilities of companies with unknown solvency totally amounting
to RUR228 million, according to the press service of the Central
Bank of Russia.

According to estimates by the provisional administration, the
asset value of JSC EuroAxis Bank does not exceed RUR423 million,
while its liabilities to creditors amount to RUR1,134 million
rubles.

On August 31, 2016, the Court of Arbitration of the city of Moscow
took a decision to recognize JSC EuroAxis Bank insolvent
(bankrupt) and initiate bankruptcy proceedings with the state
corporation Deposit Insurance Agency appointed as a receiver.

The Bank of Russia has submitted the information on the financial
transactions bearing the evidence of criminal offences conducted
by the former management and owners of JSC EuroAxis Bank to the
Prosecutor General's Office of the Russian Federation, the Russian
Ministry of Internal Affairs and the Investigative Committee of
the Russian Federation for consideration and procedural decision
making.


IPOZEMBANK LLC: Liabilities Exceed Assets, Assessment Shows
-----------------------------------------------------------
The provisional administration of IPOZEMbank LLC appointed by
virtue of Bank of Russia Order No. 3287, dated November 24, 2015,
following revocation of its banking license detected in the course
of examination of the credit institution's financial standing
transactions carried out by IPOZEMbank LLC former management which
bear the evidence of moving out assets or stealing property
through making transactions with the bank's promissory notes and
affiliated persons' promissory notes worth over RUR110 million,
according to the press service of the Central Bank of Russia.

According to estimates by the provisional administration, the
asset value of IPOZEMbank LLC does not exceed RUR123.7 million,
while its liabilities amount to RUR181.08 million.

On February 2, 2016, the Court of Arbitration of the Samara Region
took a decision to recognize IPOZEMbank LLC insolvent (bankrupt)
with the state corporation Deposit Insurance Agency appointed as a
receiver.

The Bank of Russia submitted the information on the financial
transactions bearing the evidence of criminal offences conducted
by the former management and owners of IPOZEMbank LLC to the
Prosecutor General's Office of the Russian Federation, the Russian
Ministry of Internal Affairs and the Investigative Committee of
the Russian Federation for consideration and procedural decision
making.


NPO CREDITALLIANCE: Liabilities Exceed Assets, Assessment Shows
---------------------------------------------------------------
The provisional administration of NPO CreditAlliance (LLC)
appointed by virtue of Bank of Russia Order No. OD-2158, dated
July 7, 2016, following revocation of its banking license revealed
in the course of examination of the bank's financial standing
(based on stocktaking results) shortages of assets worth over
RUR40 million, according to the press service of the Central Bank
of Russia.

Besides, the provisional administration also revealed the fact of
signing by the NPO a suretyship agreement to perform obligations
of an insolvent organization to a third party worth RUR250
million.

According to estimates by the provisional administration, the
total asset value of NPO CreditAlliance (LLC) worth RUR69.4
million is not enough to meet liabilities worth RUR285.6 million.

Under these circumstances, on September 7, 2016, the Court of
Arbitration of the Vologda Region took a decision to recognize NPO
CreditAlliance (LLC) insolvent (bankrupt) and appoint Nikolay A.
Petrov, a member of the Self-regulatory Organisation of Receivers
of the Central Federal District, as a receiver.

The Bank of Russia submitted the information on the financial
transactions bearing the evidence of criminal offences conducted
by the former management and owners of NPO CreditAlliance (LLC) to
the Prosecutor General's Office of the Russian Federation, the
Russian Ministry of Internal Affairs and the Investigative
Committee of the Russian Federation for consideration and
procedural decision making.


POLYUS GOLD: Moody's Assigns Ba1 CFR, Outlook Negative
------------------------------------------------------
Moody's Investors Service has assigned a corporate family rating
of Ba1 and probability of default rating (PDR) of Ba1-PD to Polyus
Gold International Limited, the holding company of Russia-based
PJSC Polyus, one of the lowest-cost gold producers in the world.
The outlook on the ratings is negative.  This is the first time
that Moody's has assigned ratings to Polyus Gold.

                        RATINGS RATIONALE

Polyus Gold's Ba1 CFR factors in (1) the company's global cost
leadership and large high-grade reserve base, dominated by open-
pit mines; (2) track record of cost-cutting and operational
enhancements; (3) Moody's assumption that the debt-financed
$3.4 billion share buyback completed in May 2016 was one-off, and
Polyus Gold will adhere to a conservative financial policy going
forward, with further shareholder distributions not exerting
excessive pressure on financial metrics and free cash flow
generation; (4) the company's very high Moody's-adjusted EBITDA
margin of 58.1% at June 30, 2016, backed by the weak rouble and
completed operational enhancements; (5) Moody's expectation that
the company will reduce its leverage towards 3.0x Moody's-adjusted
debt/EBITDA over the next 12-18 months and solidly below 3.0x
after the launch of operations at Natalka deposit in late 2017;
(6) the company's strong liquidity, long term debt maturity
profile and positive free cash flow, which mitigate risks
attributed to the elevated leverage; and (7) Moody's expectation
that the company will demonstrate prudent corporate governance.

At the same time, the rating takes into account the company's (1)
fairly moderate size, with gold production of 1.8 million ounces
in 2015; (2) operating and geographic concentration, with only six
active mines/deposits and one mine under construction, all located
in Eastern Siberia and Far East in Russia; (3) product
concentration, as the company produces no by-products; (4)
elevated leverage of 4.1x Moody's-adjusted debt/EBITDA at 30 June
2016, as a result of debt-financed $3.4 billion share buyback
completed in May 2016, although leverage is stronger on a net debt
basis, with Moody's-adjusted net debt/EBITDA of 2.8x at the same
date; (5) concentrated ownership-related risks, including
potential rapid changes in strategy and financial/dividend policy;
(6) large capex program and execution risks, which are common for
mining companies; (7) exposure to the volatile price of gold,
although mitigated by revenue stabilizer program to an extent; and
(8) exposure to Russia's macroeconomic, regulatory and operating
environment, as all of the company's operating assets and the
predominant share of sales are concentrated in Russia.

                RATIONALE FOR THE NEGATIVE OUTLOOK

The negative outlook is in line with the negative outlook for
Russia's Ba1 sovereign rating and reflects the fact that a
potential downgrade of the sovereign rating would result in a
downgrade of the company's ratings.  In addition, the negative
outlook reflects (1) the risk of capex overruns at Polyus Gold's
development projects and heightened shareholder distributions,
which could drive its free cash flow to the negative territory;
and (2) the lack of track record of the company adhering to the
anticipated conservative financial policy, following the debt-
financed share buyback earlier in 2016.

                 WHAT COULD CHANGE THE RATING UP/DOWN

Moody's could upgrade the rating if it were to upgrade Russia's
sovereign rating, and the company were to (1) reduce its Moody's-
adjusted debt/EBITDA below 2.5x on a sustainable basis; (2)
continue to generate a positive free cash flow; (3) maintain solid
liquidity; and (4) pursue a conservative financial policy on a
sustainable basis.

Moody's could downgrade the rating if it were to downgrade
Russia's sovereign rating, or the company's (1) Moody's-adjusted
debt/EBITDA were to remain above 3.5x on a sustained basis; (2)
shareholder distributions or capex were to materially exceed
Moody's current expectations; or (3) operating performance and
liquidity were to deteriorate materially.

                      PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Global Mining
Industry published in August 2014.

Jersey-domiciled Polyus Gold is a holder of a 93.3% effective
stake in Russia-based PJSC Polyus, which is one of the lowest-cost
gold producers globally, with six operating mines and one
development project in Russia.  In 2015, the company produced 1.8
million ounces of gold, ranking as the ninth-largest producer
globally, and generated revenues of $2.2 billion and Moody's-
adjusted EBITDA of $1.3 billion.  Polyus Gold is beneficially
controlled by Mr. Said Kerimov.  Polyus Gold owns a 63.72% stake
in PJSC Polyus, while a 31.75% stake in PJSC Polyus are quasi-
treasury shares owned by its subsidiary LLC Polyus Invest, and
4.53% is in free float on the Moscow Exchange and ADRs in the OTC
market.



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


SANTANDER CONSUMER 2014-1: Fitch Affirms CC Rating on Cl. E Notes
-----------------------------------------------------------------
Fitch Ratings has affirmed FTA Santander Consumer Spain Auto 2012-
1 (2012-1), FTA Santander Consumer Spain Auto 2013-1 (2013-1) and
FTA Santander Consumer Spain Auto 2014-1 (2014-1) as:

FTA Santander Consumer Spain 2012-1
  Class A notes affirmed at 'A+sf', Outlook Stable

FTA Santander Consumer Spain 2013-1
  Class A notes affirmed at 'A+sf', Outlook Stable

FTA Santander Consumer Spain 2014-1
  Class A notes: affirmed at 'Asf'; Outlook Stable
  Class B notes: affirmed at 'BBBsf'; Outlook Stable
  Class C notes: affirmed at 'BB+sf'; Outlook Stable
  Class D notes: affirmed at 'BBsf'; Outlook Stable
  Class E notes: affirmed at 'CCsf'; Recovery Estimate of 50%

All three transactions are securitizations of auto loans
originated in Spain by Santander Consumer EFC SA, a wholly-owned
and fully integrated subsidiary of Santander Consumer Finance
(SCF, A-/Stable/F2) whose ultimate parent is Banco Santander S.A.
(A-/Stable/F2).

                        KEY RATING DRIVERS

Rating Capped by Counterparty Exposure

The class A note ratings of series 2012-1 and 2013-1 are limited
by the exposure to SCF as the holder of the account bank.  The
documentation sets the counterparty rating trigger at 'BBB' in
2012-1 and 'BBB+'/'F2' in 2013-1, which constrains the rating of
the notes to 'A+sf' according to Fitch's counterparty criteria.
In both cases, the exposure to the account bank is larger than
usual as it holds retained collections of up to 20% and 8% of the
collateral balance respectively, due to a principal retention
feature.

Increased Credit Enhancement
Credit enhancement for the class A notes in 2012-1 and 2013-1
series has increased as the transactions have gradually
deleveraged.  Consequently, current credit enhancement of the
class A notes in both series is able to support the highest
achievable rating for Spanish SF transactions of 'AA+sf'.
However, this rating level is not achievable due to the rating cap
as a result of the transaction's exposure to the account bank.

On the other hand, 2014-1 credit enhancement has remained constant
as asset amortization has been offset by the purchase of new
assets.

Robust Performance
Cumulative defaults over initial collateral balance amount to 1.4%
for 2012-1, 0.6% for 2013-1 and 0.1% for 2014-1, while 30d+
delinquencies over outstanding collateral balance amount to 2.8%,
2.4% and 1.3%, respectively.  Fitch believes that the strong
performance observed is representative of lifetime performance in
the case of 2012-1 and 2013-1 as a considerable portion of the
assets of both deals has already amortized, to 16% for 2012-1 and
36% for 2013-1.

Fitch has therefore revised the lifetime 360d+ default base cases
to 1.7% from 1.9% for 2012-1 and to 1.3% from 2% for 2013-1, while
the lifetime recovery base cases have been revised to 26.3% from
25.8% and 28.8% from 27.4% respectively.  For 2014-1, default and
recovery base cases for the amortization period, which are based
on 180d+ default definition, have remained unchanged at 5.4% and
32.9% respectively.

Limited Negative Migration
2014-1 originally featured a four-year revolving period while the
other two deals have been static since closing.  2014-1 portfolio
characteristics and concentration levels have remained stable
since closing in November 2014.  The negative migration of the
portfolio characteristics during the remaining two-year revolving
period is limited by the eligibility criteria, portfolio limits
and early amortization events.  However, the risk of a potential
migration to the worst case portfolio during the remaining
revolving period has been captured in the analysis.

                        RATING SENSITIVITIES

Fitch believes the class A notes' ratings of 2012-1 and 2013-1
series are able to absorb large variations to our base case credit
assumptions.  This is because the ratings are capped by
counterparty exposures.  As a result a combined increase of the
default rate by 25% and a reduction of the recovery rate
assumptions by 25% would not have any rating impact.

  2014-1 Class A, B, C, and D notes sensitivities to default and
   recovery rates is these:
  Current Rating: 'Asf'/'BBBsf'/'BB+sf'/'BBsf'

Class A, B, C, and D notes sensitivities to default and recovery
rates:

  Increase default rate base case by 15%: 'A-sf'/'BBB-
   sf'/'BBsf'/'BB-sf'
  Increase default rate base case by 30%:
  'BBB+sf'/'BB+sf'/'BBsf'/'B+sf'
  Reduce recovery rate base case by 30%: 'A-
   sf'/'BBBsf'/'BBsf'/'BB-sf'



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


COGNITA BONDCO: S&P Affirms 'B' CCR, Outlook Stable
---------------------------------------------------
S&P Global Ratings said that it has affirmed its 'B' long-term
corporate credit rating on the U.K.-based independent school
operator Cognita Bondco Parent Ltd.  The outlook is stable.

At the same time, S&P affirmed its 'BB-' issue rating on Cognita's
GBP100 million RCF and our 'B' issue rating on its GBP325 million
senior secured notes, including the tap issuance of GBP45 million.
The recovery rating on the RCF is '1', indicating S&P's
expectation of very high (90%-100%) recovery prospects.  The
recovery rating on the senior secured notes is '4', reflecting
S&P's expectation of recovery in the lower half of the 30%-50%
range in the event of a payment default.

The rating affirmation follows Cognita's announcement that it has
increased its senior secured notes by GBP45 million to GBP325
million.  Following the acquisition of a property in Hong Kong in
April 2016, Cognita has incurred additional debt, including local
funding facilities and drawings on its RCF.  The group will use
the tap proceeds to reduce the drawings on the RCF, which was
upscaled to GBP100 million (by GBP20 million respectively in June
and September 2016) from GBP60 million in October 2015.  This will
enable Cognita to improve its liquidity.

In S&P's base case, it projects an increase in the S&P Global
Ratings-adjusted debt-to-EBITDA ratio to 8.5x-9.0x in 2016 from
8.0x in 2015, and a decline of the EBITDA interest coverage ratio
to 1.5x-1.8x in 2016 from 1.8x in 2015.  S&P affirmed the rating
because it anticipates a reduction in leverage to 7.0x-7.5x, and
recovery of the EBITDA interest coverage to 1.7x-2.0x in 2017,
owing to higher EBITDA in 2017.  That said, S&P notes that there
is almost no headroom under the credit metrics at the current
rating level.  Therefore if the company fails to successfully
execute its growth plan, deleverage, and improve its EBITDA
interest coverage in line with S&P's forecast for 2017, it could
take a negative rating action.

The rating reflects S&P's view of Cognita's small albeit expanding
scale of operations, its relatively low profitability compared
with peers', and construction risks that are partly offset by
management's track record.  The rating benefits from the group's
solid utilization of existing capacity and relatively good
visibility of enrolments.  The company's increased leverage after
the acquisition in April 2016, and relatively aggressive financial
policy constrain the ratings.

The stable outlook reflects S&P's view that Cognita will sustain
revenue growth fueled by expansion and organic capacity growth.
S&P calculates that Cognita's EBITDA base will gradually expand,
due to top-line growth and anticipated reduction of exceptional
costs, resulting in the S&P Global Ratings adjusted-margin
improving to 20% on average in 2016-2018.

Moreover, S&P believes that the group's track record of managing
construction projects will mitigate execution risks related to
capacity expansion projects in Asia.  S&P expects the company will
execute its growth strategy, reduce leverage to 7.0x-7.5x, and
improve its EBITDA interest coverage to 1.7x-2.0x in the next 12
months.  In addition, S&P expects that Cognita will maintain
adequate liquidity and pursue a more moderate financial policy.

S&P could consider lowering the rating if Cognita's growth and
investment plan did not translate into higher earnings or if the
group underperformed operationally. In this scenario, the group
would not be able to deleverage to 7.0x-7.5x in 2017 or increase
EBITDA interest coverage toward 2x.

Moreover, considering the very low headroom under the credit
metrics for the current rating, a negative rating action will
follow if execution risks related to capacity expansion projects
in Asia were to increase, and persistently high capex -- and
therefore negative free operating cash flow (FOCF) -- caused
Cognita's liquidity position to weaken.  A more aggressive
financial policy could also lead S&P to downgrade Cognita, for
example, as a result of more generous shareholder remuneration or
a large acquisition that led to increased debt.

At this stage, an upgrade is remote, since S&P already factors
successful execution of the growth plan and an increase in EBITDA
into its base-case scenario.  However, S&P could consider an
upgrade if Cognita's leverage ratio improved to below 5x and FOCF
turned positive on a sustainable basis.


GEMINI PLC: Moody's Withdraws C Rating on Class B Notes
-------------------------------------------------------
Moody's Investors Service has withdrawn the ratings of two classes
of Notes issued by Gemini (Eclipse 2006-3) plc.

Moody's rating action is:

Issuer: GEMINI (ECLIPSE 2006-3) plc

  GBP615 mil. Class A Notes, Withdrawn (sf); previously on
   March 1, 2016, Affirmed Ca (sf)

  GBP30 mil. Class B Notes, Withdrawn (sf); previously on
   March 1, 2016, Affirmed C (sf)

Moody's does not rate the Class C, Class D, and the Class E Notes.


PUNCH TAVERN: Fitch Affirms B+ Ratings on Three Note Classes
------------------------------------------------------------
Fitch Ratings has affirmed Punch Tavern Finance B Limited's swap
loan and senior debt (A3, A6 and A7 notes) and revised the Outlook
on the class A notes to Negative, as:

  GBP18.2 mil. floating-rate swap loan due 2019: affirmed at
   'BB', Outlook Stable
  GBP128.8 mil. Class A3 fixed-rate notes due 2021: affirmed at
   'B+'; Outlook revised to Negative from Stable
  GBP220 mil. Class A6 fixed-rate notes due 2022: affirmed at
   'B+'; Outlook revised to Negative from Stable
  GBP139.7 mil. Class A7 fixed-rate notes due 2024: affirmed at
   'B+'; Outlook revised to Negative from Stable

During the 12 months to March 2016 Punch continued its strategy of
selling off non-core pubs to improve the overall quality of the
remaining estate and pay down debt.  Key performance indicators
have fallen as a result, but performance on a per pub basis is
more stable, and investment has continued, which should support
future stable performance.  FY15 like-for-like net income growth
of 0.3% at group level also highlights ongoing stabilization.
However, during the year class A leverage has remained flat and
not improved in line with Fitch's expectations.  This has reduced
the limited cushion in the rating of the class A notes, and we
have therefore revised the Outlook to Negative from Stable.

The revision of the Outlook is also supported by the peer
comparison, as the class A leverage is relatively high for the
rating.

                       TRANSACTION PERFORMANCE

The ongoing disposals mean that revenues and EBITDA continued to
decline on an absolute basis by 5% and 8%, respectively, after
adjusting for the 53 week previous year.  This resulted in
trailing 12 months EBITDA to March 2016 of GBP69 mil.  However,
performance was slightly stronger on a per pub basis, with
revenues growing by 3% and EBITDA by 0.1%.  The relatively weaker
EBITDA performance was driven by a substantial increase in opex
over the year due to the development of the Retail Agreement team,
which Fitch expects to be an initial one-off setup expense.
EBITDA margins therefore also deteriorated slightly by 1ppt to
44%.

The ongoing disposals facilitated further investment and debt
prepayments.  Punch spent GBP24 mil. on the Punch B estate over
the year, which equates to around GBP17,000 per pub -- well in
excess of the minimum required spend of GBP8,000 per pub.  The
Swap Loan balance reduced to GBP18 mil. from GBP41 mil.,
representing a 56% reduction in principal outstanding over the
year.  However, the ongoing scheduled amortization of the class A
combined with disposal driven prepayments were insufficient to
drive further deleveraging of the class A notes.  Total leverage
remained flat at 7.4x and this lack of deleveraging places some
pressure on the ratings.  The updated projected synthetic DSCR
metrics improved significantly to over 20x for the Swap Loan, but
deteriorated slightly for the class A notes to 0.9x.  Reported
metrics were relatively stable over the year, but the EBITDA ICR
covenant declined slightly.

In comparison with peers such as Unique Pub Finance Company plc
(another predominantly leased/tenanted pubco), Punch B's one-year
projected leverage is reasonably high, which leaves limited
cushion in the rating, particularly after adjusting for
differences in the financial structure such as Punch B's exposure
to refinancing risk.  This supports the revision of the Outlook to
Negative from Stable.

                         KEY RATING DRIVERS

Industry Profile - Midrange

The pub sector in the UK has a long history, but trading
performance for some assets has shown significant weakness in the
past.  The sector has been in a structural decline for the past
three decades due to demographic shifts, greater health awareness
and the growing presence of competing offerings.  Exposure to
discretionary spending is high and revenues are therefore
inherently linked to the broader economic cycle.  Fitch views
competition as high including off-trade alternatives, and barriers
to entry are low, despite increasingly demanding regulations.
Despite the on-going contraction, Fitch views the eating- and
drinking-out market as sustainable in the long term, supported by
the strong pub culture in the UK.

Sub-key rating drivers (KRD) Operating environment: Weaker;
Barriers to entry: Midrange; Sustainability: Midrange

Company Profile - Midrange
EBITDA per pub has stabilized over the past five years, mainly as
a result of extensive disposals of weakly performing non-core pubs
and increased investments in the core estate following years of
capex underspend.  The leased/tenanted business model makes it
more challenging for the Punch group to adapt to the growing
eating-out market in the UK, as it has reduced control over
publicans' strategy and less cash for capex due to performance
declines. Furthermore, limited visibility with respect to tenants'
profitability means that the sustainability of the cash flows
generated by tenanted pubs is more difficult to estimate.
However, Fitch expects the continued disposals of non-core pubs,
combined with increased capex invested in the core estate, to
result in an overall improved quality of the estate in the
foreseeable future.

Sub-KRDs: Financial performance: Weaker; Company operations:
Midrange; Transparency: Weaker; Dependence on operator: Midrange;
Asset quality: Weaker

Debt Structure - Midrange (swap loan)/ Midrange (class A)
The swap loan benefits from a favorable repayment profile with a
combination of front-loaded scheduled amortization and a cash
sweep mechanism.  Fitch also forecasts it will fully repay by
expected maturity under its base case.  However, Fitch has limited
its assessment to Midrange as Fitch views the probability of
default of the swap loan and the class A to be much more closely
aligned than in other tranched UK whole business securitizations
(WBS).  Unusually for such securitizations, only the most junior
class B3 notes can defer interest payments.  Consequently, failure
to pay interest and scheduled amortization (or final principal) on
the class A notes would result in an issuer event of default due
to the class A notes' non-deferability.  The interest rate
exposure of the floating-rate swap loan is deemed immaterial given
its small size and quick repayment.

The Weaker debt profile assessment for the class A notes reflects
the partial amortization and the large bullet maturities in 2021,
2022 and 2024.  These cannot be met out of excess cash flows in
Fitch's base case, requiring either a debt refinancing or
significant disposals of core pubs.

The security package is standard for UK WBS transactions.
Operational and financial covenants are satisfactory, although
Fitch notes the exclusion of the bullet repayments for the purpose
of calculating the free cash flow (FCF) debt service coverage
ratio (DSCR) as well as the possibility of preventing a covenant
breach through the availability of disposal proceeds as part of
the FCF definition.  Fitch considers the inclusion of a leverage
covenant mitigates this relative weakness.  A reduced liquidity
facility is structured to cover 18 months of peak debt service.
However, this is effectively only interest payments and scheduled
principal (excluding final bullets).

Sub-KRDs: Debt profile: Midrange (swap loan)/Weaker (class A);
Security package: Stronger; Structural features: Midrange

                        RATING SENSITIVITIES

Swap Loan and class A - Negative: Given that the class A projected
DSCR and leverage metrics both look reasonably weak at the current
rating relative to peers, any deterioration in these metrics could
lead to a downgrade.  This could be driven by declining
performance or disposal proceeds being insufficient to lead to
deleveraging via prepayments.  Furthermore, the anticipation of a
failure to refinance maturing debt tranches would lead to negative
rating action.

Swap Loan, class A - Positive: The notes are unlikely to be
upgraded in the foreseeable future.

                        SUMMARY OF CREDIT

Punch B is a whole business securitization of tenanted pubs
located across the UK owned by Punch Tavern Plc (the group).  As
of March 2016, the transaction consisted of 1,345 pubs in total,
consisting of 1,116 pubs in the core estate and 229 pubs in the
non-core estate, versus 1,484 at March 2015 (1,131 core and 353
non-core), a reduction of 9%.


PUNCH TAVERNS: Fitch Affirms 'B-' Rating on Class M3 Notes
----------------------------------------------------------
Fitch Ratings has affirmed Punch Taverns Finance plc's (Punch A)
super senior hedge notes (SSHN), class A1(F), A2(F), A1(V), A2(V)
and class M3 notes, as:

  GBP34.6 mil. floating-rate SSHN due 2021: affirmed at 'BB+';
   Outlook Stable
  GBP189.5 mil. Class A1(F) fixed-rate notes due 2026: affirmed
   at 'BB'; Outlook Stable
  GBP126.7 mil. Class A2(F) fixed-rate notes due 2025: affirmed
   at 'BB'; Outlook Stable
  GBP67.5 mil. Class A1(V) fixed-rate notes due 2026: affirmed at
   'BB'; Outlook Stable
  GBP45.8 mil. Class A2(V) fixed-rate notes due 2025: affirmed at
   'BB'; Outlook Stable
  GBP300 mil. Class M3 floating-rate notes due 2027: affirmed at
   'B-'; Outlook Stable

During the 12 months to March 2016, Punch continued its strategy
of selling off non-core pubs in order to improve the overall
quality of the remaining estate and pay down debt.  Key
performance indicators have fallen as a result, but performance on
a per pub basis is more stable, and investment has continued,
which should support future performance improvement.  FY2015 like-
for-like net income growth of 0.3% at the group level also
highlights ongoing stabilization.

The Stable Outlook is underpinned by the ongoing deleveraging and
improved projected debt service coverage ratio (DSCR) metrics
versus the previous year.  It is also supported by peer
comparison, which indicates that the SSHN, class A and class M
notes are well aligned in terms of leverage and projected DSCRs.

                      TRANSACTION PERFORMANCE

The ongoing disposals mean that revenues and EBITDA continued to
decline on an absolute basis by 3% and 9%, respectively, after
adjusting for the 53 week previous year.  This resulted in
trailing 12 months EBITDA to March 2016 of GBP110 mil.  However,
performance was slightly stronger on a per pub basis, with
revenues growing by 4% and EBITDA declining by only 2%.  The
relatively weak EBITDA performance was driven by a substantial
increase in opex over the year due to the development of the
Retail Agreement team, which we expect to be an initial one-off
setup expense.  EBITDA margins therefore also deteriorated by 3ppt
to 44%.

The ongoing disposals facilitated further investment and debt
prepayments.  Punch spent GBP31 mil. on the Punch A estate over
the year, which equates to around GBP15,000 per pub -- well in
excess of the minimum required spend of GBP8,000 per pub. The SSHN
balance reduced to GBP35m from GBP109m, representing a 68%
reduction in principal outstanding over the year. Ongoing
scheduled amortization of the class A(F) notes also contributed to
total leverage through the class A notes reducing by 9% to 4.2x.
Class M leverage also improved slightly to 7.0x and reported
metrics were relatively stable over the year.

The updated projected synthetic DSCR metrics improved to 40.5x,
2.5x and 1.0x from 7.4x, 2.2x and 0.9x through the SSHN, class A
and class M notes as a result of the ongoing deleveraging.  In
comparison with peers such as Unique Pub Finance Company plc,
Punch A is reasonably well aligned in terms of projected coverage
and leverage when adjusting for differences in the financial
structure such as Punch A's exposure to refinancing risk.

                         KEY RATING DRIVERS

Industry Profile - Midrange

The pub sector in the UK has a long history, but trading
performance for some assets has shown significant weakness in the
past.  The sector has been in a structural decline for the past
three decades due to demographic shifts, greater health awareness
and the growing presence of competing offerings.  Exposure to
discretionary spending is high and revenues are therefore
inherently linked to the broader economic cycle.  Fitch views
competition as high including off-trade alternatives, and barriers
to entry are low, despite increasingly demanding regulations.
Despite the on-going contraction, Fitch views the eating- and
drinking-out market as sustainable in the long term, supported by
the strong pub culture in the UK.

Sub-key rating drivers (KRD) Operating environment: Weaker;
Barriers to entry: Midrange; Sustainability: Midrange

Company Profile - Midrange
EBITDA per pub has stabilized over the past five years, mainly as
a result of extensive disposals of weakly performing non-core pubs
and increased investments in the core estate following years of
capex underspend.  The leased/tenanted business model makes it
more challenging for the Punch group to adapt to the growing
eating-out market in the UK, as it has reduced control over
publicans' strategy and less cash to spend on capex due to
performance declines.  Furthermore, limited visibility with
respect to the tenants' profitability means that the
sustainability of the cash flows generated by tenanted pubs is
more difficult to estimate.  However, Fitch expects the continued
disposals of non-core pubs, combined with increased capex invested
in the core estate, to result in an overall improved quality of
the estate in the foreseeable future.

Sub-KRDs: Financial performance: Weaker; Company operations:
Midrange; Transparency: Weaker; Dependence on operator: Midrange;
Asset quality: Weaker

Debt Structure - Midrange (SSHN, A1(F), A2(F), A1(V), A2(V)) and
Weaker (M3)

The Midrange assessment of the debt structure with respect to the
senior debt is a reflection of the partial repayment from cash
sweep (SSHN, A1(V), A2(V)) and scheduled amortization (A1(F) and
A2(F)), which contributes to some de-leveraging.  This somewhat
mitigates risks around the ability to refinance debt (or the
reliance on core pub disposal proceeds, which is another way to
fund debt repayment) at or prior to legal maturity.  However,
Fitch do not expect the junior ranking class M3 notes to benefit
from any amortization prior to maturity.

There is some floating rate exposure due to the unhedged floating-
rate SSHN.  However, ongoing prepayment means only 4% of total
debt outstanding is floating rate so Fitch views the risk as
negligible. The security package is standard for UK whole business
securitization (WBS) transactions.  Operational and financial
covenants are satisfactory, although Fitch notes the exclusion of
the bullet repayments for the purpose of calculating the free cash
flow (FCF) debt service coverage ratio (DSCR) as well as the
possibility of preventing a covenant breach through the
availability of disposal proceeds, which are part of the FCF
definition.

Fitch views the inclusion of a leverage covenant as mitigating
this relative weakness.  In terms of cash lockup provisions, only
a group service payment of up to 2% of EBITDA can be up-streamed
(i.e. paid to outside the securitized group) if a) no borrower
event of default has occurred and b) the net senior leverage is
below the closing level, which is a credit positive.  The
liquidity facility is structured to cover 18 months of peak debt
service.  However, this represents effectively only interest
payments on the rated notes and scheduled amortization with regard
to the class A1(F) and A2(F) notes (excluding final bullets).

Typically UK WBS allow debt tranches ranking below the most senior
notes to defer interest and scheduled principal payments if
available cash is insufficient to cover debt service.  However,
the ratings of the A(F) notes and the A(V) are aligned, given that
a failure to pay interest (or final principal) on the more junior
ranking A(V) notes would result in an issuer event of default due
to the A(V) notes' non-deferability.

The most senior ranking SSHN are rated one notch above the non-
deferrable subordinate ranking class A(F) and A(V) notes due to
their earlier maturity in 2021 and lower refinance risk compared
with the class A notes (as the SSHN mature in 2021 they are not
exposed to a potential inability of the class A notes to refinance
in 2025 and 2026).  A payment default under the class A notes
prior to the SSHN's full repayment would still trigger an issuer
event of default, affecting the then outstanding SSHN.  This
limits the uplift to one notch.

Sub-KRDs: Debt profile: Midrange (SSHN, classes A1(F), A2(F),
A1(V), A2(V)) and Weaker (class M3); Security package: Stronger
(SSHN) and Midrange (classes A1(F), A2(F), A1(V), A2(V), M3);
Structural features: Midrange

                       RATING SENSITIVITIES

SSHN, class A, class M - Negative: Any significant deterioration
in performance leading to a worsening of projected DSCR levels and
deleveraging profile, could impact the ratings.  Specifically,
five-year leverage expectations above 3.5x and 6.5x through the
class A and class M notes, respectively, could trigger negative
rating action.  Furthermore, the anticipation of a failure to
refinance maturing debt tranches would lead to negative rating
action.

SSHN, class A, class M - Positive: The notes are unlikely to be
upgraded in the foreseeable future.


QUAYSIDE FABRICATIONS: Enters Liquidation, Jobs at Risk
--------------------------------------------------------
Scott McCulloch of Daily Record reports that Quayside Fabrications
Limited and Claremont Office Interiors (Scotland) Ltd have gone
into liquidation with the loss of 37 jobs.

Joint liquidators from Johnston Carmichael were appointed to the
two firms with all 24 employees made redundant upon appointment,
according to Daily Record.

The report notes that Quayside Fabrications, which traded from
leased premises at Colpy in Aberdeenshire, provided specialized
structural steelwork and fabrication services as well as vessel
mobilization and demobilization services, to the oil and gas and
marine industries.

The liquidators said the business had been badly affected by
operating costs, a lack of larger projects, and a reduction in
fabrication rates as a result of the oil sector downturn, the
report discloses.

Joint liquidators from Johnston Carmichael were also appointed to
Claremont Office Interiors (Scotland) Ltd, which supplied and
installed moveable and fitted office furniture to customers
principally in the oil and gas industry, the report relates.

The business, which traded from leased premises at Tyseal Base in
West Tullos, is reported to have seen orders fall "substantially"
as a result of the slowdown in oil and gas activity and all 13
staff were made redundant upon liquidators being appointed, the
report notes.

The report relates that joint liquidator Gordon MacLure said: "The
failure of these companies, which had diverse service and product
offerings to one another, further demonstrates the negative impact
the downturn in the energy sector is continuing to have on
businesses right across the north-east economy."

"With no apparent recovery in sight, it may be expected that there
will be more company failures as we move towards the end of the
year," the report quoted Mr. MacLure as saying.


REXAM PLC: Moody's Withdraws Ba1 Issuer Rating
----------------------------------------------
Moody's Investors Service has withdrawn all ratings for REXAM PLC
following its disclosure that it was acquired by Colorado-based
manufacturing firm Ball Corporation.  The effective close date of
the transaction was June 30, 2016.  Rexam has ceased to be an
independent company, all outstanding debt was paid down and its
operations are now wholly owned by Ball.

These ratings were withdrawn:

  Issuer Rating, Ba1

The outlook is changed to withdrawn from stable.


SOUTHERN WATER: Moody's Affirms Ba1 Ratings on Two Note Classes
---------------------------------------------------------------
Moody's Investors Service has affirmed the Baa2 corporate family
rating of the seventh-largest UK water company, Southern Water
Services Limited (Southern Water).  The rating agency also
affirmed the Baa1 senior secured and Ba1 subordinated debt ratings
of the Class A and Class B notes issued by Southern Water Services
(Finance) Limited.  At the same time, Moody's changed the outlook
for the ratings to negative from stable.

The outlook change primarily reflects company's exposure to risks
associated with a potentially prolonged low-yield environment,
which could significantly curtail future allowed regulatory
returns and create particular challenges for companies, such as
Southern Water, with expensive, longer-term debt profiles.

                        RATINGS RATIONALE

RATIONALE FOR OUTLOOK CHANGE

The action reflects Southern Water's exposure to a persistently
low interest rate environment given the company's leveraged
capital structure and funding arrangements.  A 'lower-for-longer'
interest rate scenario could result in a significant reduction in
allowed returns for the UK water sector from 2020 and poses
particular risks for companies, including Southern Water, with
more expensive and longer-term debt relative to likely regulatory
assumptions.

Southern Water's net debt was close to 80% of its regulatory
capital value (RCV) as at March 31, 2016.  This level of gearing
is above both the sector average of around 70% and the gearing
assumed by the economic regulator at previous price controls
(62.5% at PR14).  Consequently, the company is relatively exposed
to any divergence between its borrowings costs and those allowed
by the regulator.

In addition to its outright borrowings, Southern Water holds a
portfolio of inflation-linked derivatives with a notional amount
of approximately GBP1.3 billion, which had a negative mark-to-
market (MTM) value of GBP920 million on a credit value adjusted
basis, equivalent to approximately 21% of the RCV, as at March
2016.  This sizeable MTM loss reflects the company's locked-in
funding costs, which are significantly above current market rates
over the long term.  Overall, taking into account debt and
derivatives, Southern Water reported an effective average interest
rate of 3.1% and 5.1% for index-linked and nominal fixed-rate
debt, respectively in the year to March 2016.

UK economic regulators base their allowed return calculations on a
notional company, that is to say a hypothetical entity with a set
gearing (trending towards the average sector gearing, but
currently lower) and a defined capital structure.  For example, in
the water sector the notional gearing is 62.5%, and the notional
company would have around 33% of index-linked debt within its
capital structure.  The Water Services Regulation Authority
(Ofwat), the economic regulator for the water and sewerage
companies in England and Wales, also assumes a split between
embedded and new debt, when setting the cost of debt allowance.
Historically, Ofwat has been guided by historical average rates
over a 10-year horizon when setting the cost of embedded debt.
Continuing with this approach during an extended period of low
interest rates, future cost of debt as well as cost of equity
(driven by reducing risk-free rates) allowances will invariably
decline.  Current gilt curves could, for example, support, an
overall reduction in the allowed wholesale return from 3.6% in the
current period by at least 100 basis points from April 2020.

Companies will benefit from the low interest rate environment over
time as they raise new debt.  However, companies such as Southern
Water with debt tenors beyond that assumed by the regulator, will
underperform as allowed returns will converge to market rates more
quickly than their embedded cost of debt.  A cut in allowed
returns will pressure interest cover ratios and companies may need
to reduce gearing if they are to maintain credit quality in a
lower-for-longer scenario.

Moody's further notes that the low-yield environment may have
eroded equity buffers.  Taking into account the fair value of
existing borrowings and derivatives, Southern Water had gearing
(as calculated by Moody's) of around 130% as at March 2016.  A
visible erosion of the equity value could weaken incentives for
shareholders to provide further funding.  In addition, while
Southern Water has enjoyed ready access to the capital markets,
lenders may in future be less supportive of companies with high
embedded debt costs and potentially limited equity value.

Moody's however notes management's actions in the previous
regulatory period to protect Southern Water's credit profile,
principally by retaining cash within the business rather than
paying equity dividends.

                RATIONALE FOR RATING AFFIRMATION

In affirming Southern Water's Baa2 rating, Moody's reflects that
the company has visibility over allowed revenues for the remainder
of the regulatory period to 2020, providing for a financial
profile in line with current ratings.  The rating agency also
takes into account that future interest rates are uncertain and
the regulator's duty to ensure that an efficient company is
financeable, while noting that this duty may be of limited value
to companies, such as Southern Water, with a financing structure
that is not aligned with the sector average or that of the
regulators notional company.

Moody's further anticipates that the time available until the next
price review allows managements and shareholders to consider
possible changes in financial and operational policy, which may
support cash flow generation and a reduction in gearing over time,
thereby creating additional flexibility to mitigate lower future
returns.

More broadly, Southern Water's Baa2 CFR reflects, as positives (1)
the company's low business risk profile as the monopoly provider
of essential water and sewerage services; and (2) the stable cash
flows generated under a transparent and well-established
regulatory regime.  As discussed above, the rating is constrained
by (1) the high level of gearing; and (2) the risk embedded within
the company's derivative portfolio.  The Baa1 rating of the Class
A Bonds reflects the strength of the debt protection measures for
this class of bonds and other pari passu indebtedness, the senior
position in the cash waterfall and post any enforcement of
security.  The Ba1 rating of the Class B Bonds reflects the same
default probability as factored into the Baa2 CFR but also Moody's
expectation of a heightened loss severity for the Class B Debt
following any default, given its subordinated position within the
financing structure.

               WHAT COULD CHANGE THE RATING UP/DOWN

The outlook could be stabilized if Moody's concludes that the risk
exposure of Southern Water's capital structure remains manageable
and does not adversely affect the company's financial flexibility
in comparison with its industry peers, taking into account any
additional measures management or shareholders may be willing to
implement to mitigate the company's exposure and the timing of
those.  The rating agency will also consider incentives for
shareholders to provide additional financing given the impact of
the low yield environment on the debt fair value and derivative
valuations.

Conversely, the rating could be downgraded if the above risks are
not offset by mitigating measures that would address the high
sensitivity to market-rate movements, or create additional
financial headroom.

Furthermore, negative rating pressure could derive from (1)
unexpected, severe deterioration in operating performance that
results in the company remaining persistently in breach of its
distribution lock-up triggers; (2) a material change in the
regulatory framework for the UK water sector leading to a
significant increase in Southern Water's business risk; or (3)
unforeseen funding difficulties.

The principal methodology used in these ratings was Regulated
Water Utilities published in December 2015.

LIST OF AFFECTED RATINGS

Affirmations:

Issuer: Southern Water Services (Finance) Limited

  BACKED Subordinate Regular Bond/Debenture, Affirmed Ba1
  Underlying Senior Secured, Affirmed Baa1
  Senior Secured Regular Bond/Debenture, Affirmed Baa1
  BACKED Senior Secured Regular Bond/Debenture, Affirmed Baa1

Issuer: Southern Water Services Limited
  LT Corporate Family Rating, Affirmed Baa2

Outlook Actions:

Issuer: Southern Water Services (Finance) Limited
  Outlook, Changed To Negative From Stable

Issuer: Southern Water Services Limited
  Outlook, Changed To Negative From Stable

Southern Water is the seventh largest of the ten water and
sewerage companies in England and Wales by RCV, providing water
and sewerage services to a population of approximately 2.5 and 4.6
million, respectively, in the south-east of England, including the
counties of Kent, East Sussex, West Sussex, Hampshire and the Isle
of Wight.  Since October 2007, Southern Water's ultimate parent
has been Greensands Holdings Limited, which is in turn owned by a
consortium of specialist funds, including IIF International SW UK
Investments Limited (advised by JP Morgan) and UBS Global Asset
Management (UK) Limited.


TOWD POINT 2016: Moody's Assigns (P)Ba1 Rating to Class D Notes
---------------------------------------------------------------
Moody's Investors Service has assigned provisional ratings to
these classes of notes to be issued by Towd Point Mortgage Funding
2016 - Auburn 10 plc:

  GBP Class A1 Mortgage Backed Floating Rate Notes due,
   Rating Assigned (P)Aaa (sf)
  GBP Class A2 Mortgage Backed Floating Rate Notes due, Rating
   Assigned (P)Aaa (sf)
  GBP Class B Mortgage Backed Floating Rate Notes due, Rating
   Assigned (P)Aa2 (sf)
  GBP Class C Mortgage Backed Floating Rate Notes due, Rating
   Assigned (P)A2 (sf)
  GBP Class D Mortgage Backed Floating Rate Notes due, Rating
   Assigned (P)Ba1 (sf)

The Class E Mortgage Backed Notes, the Class F Mortgage Backed
Notes, the Class Z Mortgage Backed Notes, the Senior Deferred
Certificate, the Deferred Certificate 1 and the Deferred
Certificate 2 have not been rated by Moody's.

This transaction is the latest securitization of Capital Home
Loans Limited ("CHL", not rated), and the second under the "TPMF"
label.  The portfolio consists of UK first lien home loans,
predominantly buy-to-let, originated by CHL and originally owned
by CHL and subsequently, owned by CHL, Auburn Securities 3 plc,
Auburn Securities 6 plc or Auburn Securities 7 plc and,
immediately prior to the sale by CHL to the Issuer, beneficially
owned by Auburn Warehouse Borrower 1 Limited.  Subject to certain
conditions the final pool will comprise of up to GBP million of
loans originated by CHL.  The portfolio will be serviced by CHL.

                        RATINGS RATIONALE

The rating of the notes take into account, among other factors:
(1) the performance of the previous transactions launched by CHL;
(2) the credit quality of the underlying mortgage loan pool, (3)
legal considerations and (4) the initial credit enhancement
provided to the senior notes by the junior notes and the reserve
fund.

   -- Expected Loss and MILAN CE Analysis

Moody's determined the MILAN credit enhancement (MILAN CE) and the
portfolio's expected loss (EL) based on the pool's credit quality.
The MILAN CE reflects the loss Moody's expects the portfolio to
suffer in the event of a severe recession scenario.  The expected
portfolio loss (EL) of 2.2% and the MILAN CE of 13.5% serve as
input parameters for Moody's cash flow and tranching model, which
is based on a probabilistic lognormal distribution.

The key drivers for the MILAN CE, which is lower than the UK buy-
to-let sector average of ca. 14.7% and is based on Moody's
assessment of the loan-by-loan information, are (1) the weighted-
average current loan-to-value (LTV) of [77.6]%, which is in line
with LTV observed in other comparable UK BTL transactions; (2) the
historical performance of the pool (more than [90]% of the pool
are loans that have never been in arrears); (3) the weighted-
average seasoning of [9.9] years; and (4) the proportion of
interest-only loans ([93.3]%).

The key drivers for the portfolio's expected loss, which is higher
than the UK buy-to-let sector average of ca. 1.7% and is based on
Moody's assessment of the lifetime loss expectation are: (1) the
performance of the seller's precedent transactions as well as the
performance of the seller's book; (2) benchmarking with comparable
transactions in the UK BTL RMBS market; and (3) the current
economic conditions in the UK and the potential impact of future
interest rate rises on the performance of the mortgage loans.

   -- Operational Risk Analysis

CHL is the contractual servicer.  A back-up servicer (Homeloan
Management Limited ("HML" not rated)) and back-up servicer
facilitator (Wilmington Trust SP Services (London) Limited (not
rated)) will be appointed at closing.  The backup servicer is
required to step in within 60 days and perform the duties of the
servicer if, amongst other things, the servicer is insolvent or
defaults on its obligation under the servicing agreement.

CHL will also act as cash manager.  A back-up cash manager (Elavon
Financial Services DAC (Aa2/P-1)) will be appointed at closing.

The collection account is held at Barclays Bank PLC
(A2/P-1/A1(cr)).  There is a daily sweep of the funds held in the
collection account into the transaction account.  In the event
Barclays rating falls below Baa3 the collection account will be
transferred to an entity rated at least Baa3.  The issuer account
is held at Elavon Financial Services DAC (Aa2/P-1) with a transfer
requirement if the rating of the account bank falls below A3.
Moody's has taken into account the commingling risk associated
with the collection account within its cash flow modeling.

   -- Transaction structure

There is no Liquidity Reserve Fund in place at closing.  Following
the step up date (3 years from closing) the Liquidity Reserve Fund
will start to build up to 1.65% of the Class A outstanding balance
and can be used to pay senior fees and interest on class A.  Prior
to the step up date liquidity is provided via a 365 day revolving
Liquidity Facility equal to 1.65% of the Classes A1 and A2 Notes
(together "Class A" Notes) outstanding balance provided by Wells
Fargo Bank, National Association, London Branch (Wells Fargo Bank,
N.A (Aa1/P-1/Aa1(cr)).  At closing, the Liquidity Facility
provides approx. 2.8 months of liquidity to the Class A assuming
Libor of 5.6%.  Principal can be used as an additional source of
liquidity to meet shortfall on senior fees and interest on the
most senior outstanding class.  In addition, Moody's notes that
unpaid interest on the Class B, C and D, is deferrable. Non-
payment of interest on the Class A notes constitutes an event of
default.

Interest on the Class B, Class C, and Class D notes is subject to
a Net Weighted Average Coupon (Net WAC) Cap.  Net WAC additional
amounts are paid junior in the revenue waterfall being the
difference between the class B, C, and D coupon and the Net WAC
Cap.  Net WAC additional amounts occur if interest payments to the
respective notes are greater than the Net WAC Cap.  Moody's notes
that the Net WAC additional amounts are not part of the interest
payment promise to the referenced Classes.  As such Moody's
ratings assigned to the Class B, Class C and Class D Notes do not
address the timely and/ or ultimate payment of such payments.

   -- Interest Rate Risk Analysis

The majority of the loans in the pool are BBR linked (ca. [98.7]%)
with the remaining small proportion linked to CHL's SVR.  There is
no swap in the transaction to mitigate the risk of mismatch
between the index applicable to the loans in the pool and the
index applicable to the notes.  Moody's has taken the absence of
swap into account in the stressed margin vector used in the cash
flow modeling.

   -- Parameter Sensitivities

At the time the ratings were assigned, the model output indicated
that Class A1 notes would have achieved Aaa (sf), even if MILAN CE
was increased to 16.2% from 13.5% and the portfolio expected loss
was increased to 6.6% from 2.2% and all other factors remained the
same.  Class A2 notes would have achieved Aaa (sf), even if the
portfolio expected loss was increased to 6.6% from 2.2% assuming
MILAN CE remained unchanged at 13.5% and all other factors
remained the same.  Class B notes would have achieved Aa2 (sf),
even if the portfolio expected loss was increased to 4.4% from
2.2% assuming MILAN CE remained unchanged at 13.5% and all other
factors remained the same.  Class C would have achieved A2 (sf),
even if MILAN CE was increased to 16.2% from 13.5% assuming
expected loss remained unchanged at 2.2% and all other factors
remained the same.  Class D would have achieved Ba1 (sf), even if
MILAN CE was increased to 16.2% from 13.5% and the portfolio
expected loss was increased to 3.3% from 2.2% and all other
factors remained the same.

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

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

Significantly different loss assumptions compared with our
expectations at close due to either a change in economic
conditions from our central scenario forecast or idiosyncratic
performance factors would lead to rating actions.

For instance, should economic conditions be worse than forecast,
the higher defaults and loss severities resulting from a greater
unemployment, worsening household affordability and a weaker
housing market could result in a downgrade of the ratings.
Downward pressure on the ratings could also stem from (1)
deterioration in the notes' available credit enhancement; (2)
counterparty risk, based on a weakening of a counterparty's credit
profile, or (3) any unforeseen legal or regulatory changes.

Conversely, the ratings could be upgraded: (1) if economic
conditions are significantly better than forecasted; or (2) upon
deleveraging of the capital structure.

The provisional rating addresses the expected loss posed to
investors by the legal final maturity of the notes.  In Moody's
opinion, the structure allows for timely payment of interest and
ultimate payment of principal with respect to the Class A and
Class B Notes by the legal final maturity.  In Moody's opinion,
the structure allows for ultimate payment of interest and
principal with respect to the Class C and Class D notes by the
legal final maturity.  Moody's ratings only address the credit
risk associated with the transaction.  Other non-credit risks have
not been addressed, but may have a significant effect on yield to
investors.

Moody's issues provisional ratings in advance of the final sale of
securities, but these ratings only represent Moody's preliminary
credit opinion.  Upon a conclusive review of the transaction and
associated documentation, Moody's will endeavor to assign
definitive ratings to the Notes.  A definitive rating may differ
from a provisional rating.  Moody's will disseminate the
assignment of any definitive ratings through its Client Service
Desk.  Moody's will monitor this transaction on an ongoing basis.


TOWD POINT 2016: S&P Assigns Prelim. BB+ Rating to Class E Notes
----------------------------------------------------------------
S&P Global Ratings assigned its preliminary credit ratings to Towd
Point Mortgage Funding 2016-Auburn 10 PLC's (TPMF-AUB 10) class
A1, A2, B, C, D, and E notes.  At closing, TPMF-AUB 10 will also
issue unrated class F and Z notes, as well as SDC, DC1, and DC2
certificates.

TPMF-AUB 10 will be a securitization of first-lien U.K. buy-to-let
mortgage loans.

At closing, TPMF-AUB 10 will purchase a portfolio of U.K. buy-to-
let mortgages from Capital Home Loans Ltd. (the seller; CHL),
using the note issuance proceeds to purchase the rights to the
mortgage loans.

The preliminary pool totals GBP1.252 billion (as of Aug. 31, 2016)
and S&P expects the final securitized pool to be a subset of this.
S&P bases its credit analysis on the preliminary pool and it
expects the final pool to be a representative sample of this.

CHL, which is in S&P's view a specialized and experienced entity
in the buy-to-let sector, originated a number of transactions
before 2008 via its Auburn shelf, but stopped originating as a
result of the global financial crisis. CHL originated all of the
loans securitized in this transaction between 1990 and 2015.  CHL
is the servicer of the transaction, and Homeloan Management Ltd.
is the back-up servicer.

As CHL no longer originates, the mortgages in this pool are highly
seasoned, with an average of more than 116 months.

The pool has a high concentration in the south east of England,
including London, at 59.18%. Furthermore, 93.01% of mortgages are
interest-only, while the remaining 6.78% pay capital and interest.

The class A1 and A2 notes will amortize sequentially among
themselves.  S&P rates the class A1 and A2 notes based on the
payment of timely interest.  Interest on the class A1 and A2 notes
is equal to three-month British pound sterling LIBOR plus a class-
specific margin.  However, the class B to D notes are somewhat
unique in the European residential mortgage-backed securities
market in that they pay interest based on the lower of the coupon
on the notes (three-month sterling LIBOR plus a class-specific
margin) and the net weighted-average coupon (WAC) cap.  The net
WAC on the assets is based on the interest accrued on the assets
(whether it was collected or not) during the quarter, less senior
fees, divided by the current balance of the assets at the
beginning of the collection period.  This rate is then divided by
the outstanding balance of the class A to D notes (minus the
aggregate amount recorded on the principal deficiency ledgers in
respect of these notes) as a percentage of the outstanding balance
of the assets at the beginning of the period to derive the net WAC
cap.  The net WAC cap is then applied to the outstanding balance
of the notes in question to determine the required interest.

In line with S&P's imputed promises criteria, its preliminary
ratings address the lower of these two rates.  A failure to pay
the lower of these amounts will, for the class B to D notes,
result in interest being deferred.  Deferred interest will also
accrue at the lower of the two rates.  S&P's preliminary ratings
however, do not address the payment of what are termed "net WAC
additional amounts" i.e., the difference between the coupon and
the net WAC cap where the coupon exceeds the net WAC cap.  Such
amounts will be subordinated in the interest priority of payments.
In S&P's view, neither the initial coupons on the notes nor the
initial net WAC cap are "de minimis", and nonpayment of the net
WAC additional amounts is not considered an event of default under
the transaction documents.  Therefore, S&P do not need to consider
these amounts in S&P's cash flow analysis, in line with its
criteria for imputed promises.

S&P treats the class B to D notes as deferrable-interest notes in
its analysis.  Under the transaction documents, the issuer can
defer interest payments on these notes.  While S&P's preliminary
ratings on the class A1 and A2 notes address the timely payment of
interest and the ultimate payment of principal, its preliminary
ratings on the class B to D notes address the ultimate payment of
principal and interest.

The class E, F, and Z notes are principal-only notes, and pay no
interest.  The class E notes pass our cash flow stresses at the
'BB+' level.  Therefore, S&P has assigned its preliminary
'BB+ (sf)' rating to the class E notes.  The class F and Z notes
are not rated.

S&P's preliminary ratings reflect its assessment of the
transaction's payment structure, cash flow mechanics, and the
results of its cash flow analysis to assess whether the notes
would be repaid under stress test scenarios.  Subordination, a
liquidity facility (only for the class A notes), and excess spread
(there will be no reserve fund to provide credit enhancement in
this transaction) will provide credit enhancement to the rated
notes that are senior to the unrated notes and certificates.
Taking these factors into account, S&P considers that the
available credit enhancement for the rated notes is commensurate
with the preliminary ratings assigned.

RATINGS LIST

Towd Point Mortgage Funding 2016-Auburn 10 PLC
GBP1.252 Billion Residential Mortgage-Backed Bonds, Including
Unrated Notes

Class              Prelim.      Prelim.
                   rating        amount
                                    (%)

A1                 AAA (sf)       79.80
A2                 AA+ (sf)        2.30
SDC cert.          N/A              N/A
B-Dfrd             AA- (sf)        5.60
C-Dfrd             A+ (sf)         2.80
D-Dfrd             BBB+ (sf)       2.40
E                  BB+ (sf)        2.20
F                  NR              2.60
Z                  NR              2.30
DC1 cert.          N/A              N/A
DC2 cert.          N/A              N/A

Cert.--Certificates.
NR--Not rated.
N/A--Not applicable.


VIRIDIAN GROUP: Moody's Affirms B2 Rating on Sr. Secured Notes
--------------------------------------------------------------
Moody's Investors Service has affirmed the B2 rating of the Senior
Secured Notes due 2020 issued by Viridian Group FundCo II Limited,
with a loss given default (LGD) assessment of LGD4.  Concurrently,
Moody's has affirmed the B1 corporate family rating (CFR) and B1-
PD probability of default rating of the restricted group of
companies owned by Viridian Group Investments Limited
(collectively referred to as Viridian), and the Ba1 rating of
Viridian Group Limited's GBP225 million super senior secured
revolving credit facility with an LGD assessment of LGD1.  The
outlook on all ratings is stable.

                         RATINGS RATIONALE

The rating affirmation reflects the (1) good operational
performance of the group in challenging market conditions, in
particular the continued low power price environment which we
expect to persist for the next five years; (2) the recent
acquisition of Viridian by I Squared Capital and subsequent
strengthening of the capital structure; and (3) reduced execution
risk associated with build-out of owned renewable wind assets,
which will improve earnings.

Moody's believes Viridian has limited further downside exposure to
continued low power prices in Ireland.  For its Huntstown combined
cycle gas turbines, the vast majority of revenues are already
coming from ancillary services and capacity payments which are not
affected by commodity prices, reflected by unconstrained
utilization of both plants below 3% in FY2016.  Similarly, for its
power purchase agreement businesses, in the Republic of Ireland
power prices are already below the floor price set by the
government (under the Renewable Energy Feed-In Tariff scheme) and
in Northern Ireland, whilst some power price exposure remains, the
majority of the revenues come from a government support scheme
(Renewable Obligation Certificates under the Northern Ireland
Renewables Obligation, NIRO).

On completion of the acquisition of Viridian in April, I Squared
Capital paid down the GBP147.3 million of external payment in-kind
notes via an equity injection into Viridian.  Whilst Moody's
treated the junior facility as equity, and so this action does not
impact financial metrics, the rating agency views this development
as credit positive as it has strengthened the group's capital
structure.

Viridian's consolidated leverage has increased since 2014 to debt/
EBITDA of 4.3x at March 31, 2016, with the build-out of its
onshore wind generation assets, in line with its medium term
target of 300MW of owned renewable assets, and the associated
project financing secured for this portfolio.  At the same time,
Moody's believes execution risk associated with delivering these
renewable assets has decreased as by March 2017 around 75% of the
target 300MW portfolio will be operational (compared to just over
10% at June 2016).  Once these projects are operational Viridian
will have a larger and higher quality earnings base.  Moreover,
with the December 2018 Renewables Obligation accreditation
deadline in Northern Ireland, we expect the pace of onshore wind
investments, absent further acquisitions, to slow, further
improving financial metrics.

Viridian's B1 CFR also positively reflects the group's earnings
diversity across its businesses, including: the aforementioned
generation capacity payments and portfolio of contracted wind farm
output; price-regulated supply in Northern Ireland; and
unregulated energy supply across the island of Ireland.  However,
the company's credit profile is constrained by (1) its high level
of leverage, with Moody's expecting debt / EBITDA of the
consolidated group of over 6x at FY2017; (2) the remaining
uncertainty about the future profitability of its core businesses
resulting from the re-design of the Integrated Single Electricity
Market (I-SEM), due to be operational by end 2017; (3) the limited
owned assets supporting its market activities, albeit expected to
increase to over 200MW by March 2017; (4) concentration risk at
the Huntstown site; and (5) the expected slight decrease in the
contribution to earnings from price-regulated supply businesses in
Northern Ireland due to the proposed deregulation of tariffs for
all remaining non-domestic customers from April 1, 2017.

                 RATIONALE FOR THE STABLE OUTLOOK

The stable outlook reflects Moody's expectation that the issuer
will maintain financial metrics in line with the guidance for its
B1 CFR, including funds from operations (FFO) to debt at least in
the high single digits in percentage terms; and debt / EBITDA
trending below 6.0x by FY2018.

               WHAT COULD CHANGE THE RATING UP/DOWN

Given the existing high level of leverage and the further increase
expected associated with delivering the material planned renewable
asset investments over the next 6-12 months, upward pressure on
the ratings is unlikely to arise in the short term.  Over the
medium to long term upward pressure for the rating could develop
if the group demonstrated a sustained improved financial profile,
including FFO / debt approaching the low teens in percentage terms
and debt / EBITDA below 5.0x, without an increase in business
risk.

Conversely, downward pressure would arise if the group was
unlikely to meet its ratio guidance for the B1 CFR, possibly as a
result of one or more of the following occurring: (1) an adverse
outcome from the I-SEM review or serious technical problems, which
affected Huntstown's ability to receive capacity payments; (2)
unexpected difficulties in relation to the onshore wind build-out
including cost overruns; (3) significant loss of market share for
the non-domestic business in Northern Ireland when it becomes
fully deregulated on 1 April 2017; or (4) weaker-than-expected
retail margins in the growing domestic retail business in the
Republic of Ireland.  Similarly, the ratings could be downgraded
if I Squared Capital's growth strategy were to result in a more
aggressive financial policy or an increase in business risk
without a corresponding improvement in financial metrics.

The principal methodology used in these ratings was Unregulated
Utilities and Unregulated Power Companies published in October
2014.

Viridian Group Investments Limited and its subsidiaries (together,
Viridian) are an integrated power utility based in Belfast and
operating across the island of Ireland.  The group generated
revenue of GBP1,321 million in the full year ending March 2016.


YORKSHIRE WATER: Moody's Affirms Ba1 Sub. Debt Rating on B Notes
----------------------------------------------------------------
Moody's Investors Service has affirmed the Baa2 corporate family
rating of the fifth-largest UK water company, Yorkshire Water
Services Limited (Yorkshire Water).  The rating agency also
affirmed the Baa1 senior secured and Ba1 subordinated debt ratings
of the Class A and Class B notes issued by Yorkshire Water
Services Bradford Finance Ltd, the Baa1 senior secured debt
ratings of Yorkshire Water Services Finance Limited, and the Baa1
senior secured debt ratings of Yorkshire Water Services Odsal
Finance Limited (all issuance guaranteed by Yorkshire Water) were
also affirmed.  At the same time, Moody's changed the outlook for
the ratings to negative from stable.

The outlook change primarily reflects the company's exposure to
risks associated with a potentially prolonged low-yield
environment, which could significantly curtail future allowed
regulatory returns and create particular challenges for companies,
such as Yorkshire Water, with expensive, longer-term debt
profiles.

                         RATINGS RATIONALE

RATIONALE FOR OUTLOOK CHANGE

The rating action reflects Yorkshire Water's exposure to a
persistently low interest rate environment given the company's
leveraged capital structure and funding arrangements.  A 'lower-
for-longer' interest rate scenario could result in a significant
reduction in allowed returns for the UK water sector from 2020 and
poses particular risks for companies, including Yorkshire Water,
with more expensive and longer-term debt relative to likely
regulatory assumptions.

Yorkshire Water's net debt was close to 80% of its regulatory
capital value (RCV) as at March 31, 2016.  This level of gearing
is above both the sector average of around 70% and the gearing
assumed by the economic regulator at previous price controls
(62.5% at PR14).  Consequently, the company is relatively exposed
to any divergence between its borrowings costs and those allowed
by the regulator.

In addition to its outright borrowings, Yorkshire Water holds a
portfolio of inflation-linked derivatives with a notional amount
of approximately GBP1.3 billion, which had a negative mark-to-
market (MTM) value of around GBP2.6 billion, equivalent to
approximately 40% of the RCV, as at March 2016.  This sizeable MTM
loss reflects the company's locked-in funding costs, which are
significantly above current market rates over the long term.
Overall, taking into account debt and derivatives, Yorkshire Water
reported effective average interest rates of 2.4% and 6.0% for
index-linked and nominal fixed-rate debt, respectively, in the
year to March 2016.

UK economic regulators base their allowed return calculations on a
notional company, that is to say a hypothetical entity with a set
gearing (trending towards the average sector gearing, but
currently lower) and a defined capital structure.  For example, in
the water sector the notional gearing is 62.5%, and the notional
company would have around 33% of index-linked debt within its
capital structure.  The Water Services Regulation Authority
(Ofwat), the economic regulator for the water and sewerage
companies in England and Wales, also assumes a split between
embedded and new debt, when setting the cost of debt allowance.
Historically, Ofwat has been guided by historical average rates
over a 10-year horizon when setting the cost of embedded debt.
Continuing with this approach during an extended period of low
interest rates, future cost of debt as well as cost of equity
(driven by reducing risk-free rates) allowances will invariably
decline.  Current gilt curves could, for example, support, an
overall reduction in the allowed wholesale return from 3.6% in the
current period by at least 100 basis points from April 2020.

Companies will benefit from the low interest rate environment over
time as they raise new debt.  However, companies such as Yorkshire
Water with debt tenors beyond that assumed by the regulator, will
underperform as allowed returns will converge to market rates more
quickly than their embedded cost of debt.  A cut in allowed
returns will pressure interest cover ratios and companies may need
to reduce gearing if they are to maintain credit quality in a
lower-for-longer scenario.

Moody's further notes that the low-yield environment may have
eroded equity buffers.  Taking into account the fair value of
existing borrowings and derivatives, Yorkshire Water had gearing
(as calculated by Moody's) of around 130% as at March 2016.  A
visible erosion of the equity value could weaken incentives for
shareholders to provide further funding.  In addition, while
Yorkshire Water has enjoyed ready access to the capital markets,
lenders may in future be less supportive of companies with high
embedded debt costs and potentially limited equity value.

The rating agency does not expect Yorkshire Water to face
significant pressures from its operations, taking into account
that (1) its final price determination has been largely in line
with the company's business plan submission; and (2) it has a
solid operational performance track record.  Management's approach
to reducing gearing below 80% of the RCV also shows consideration
of pressures presented by the current capital structure in a low-
yield environment.

However, these positive aspects may not be sufficient to fully
offset the risk embedded within the company's capital structure,
particularly considering its high-cost and long-dated debt.

                RATIONALE FOR RATING AFFIRMATION

In affirming Yorkshire Water's Baa2 rating, Moody's reflects that
the company has visibility over allowed revenues for the remainder
of the regulatory period to 2020, providing for a financial
profile in line with current ratings.  The rating agency also
takes into account that future interest rates are uncertain and
the regulator's duty to ensure that an efficient company is
financeable, while noting that this duty may be of limited value
to companies, such as Yorkshire Water, with a financing structure
that is not aligned with the sector average or that of the
regulator's notional company.

Moody's further anticipates that the time available until the next
price review allows management and shareholders to consider
possible changes in financial and operational policy, which may
support cash flow generation and a reduction in gearing over time,
thereby creating additional flexibility to mitigate lower future
returns.

More broadly, Yorkshire Water's Baa2 CFR reflects, as positives
(1) the company's low business risk profile as the monopoly
provider of essential water and sewerage services; and (2) the
stable cash flows generated under a transparent and well-
established regulatory regime.  As discussed above, the rating is
constrained by (1) the high level of gearing; and (2) the risk
embedded within the company's derivative portfolio.  The Baa1
rating of the Class A Bonds reflects the strength of the debt
protection measures for this class of bonds and other pari passu
indebtedness, the senior position in the cash waterfall and post
any enforcement of security.  The Ba1 rating of the Class B Bonds
reflects the same default probability as factored into the Baa2
CFR but also Moody's expectation of a heightened loss severity for
the Class B Debt following any default, given its subordinated
position within the financing structure.

               WHAT COULD CHANGE THE RATING UP/DOWN

Given the current negative outlook, there is currently limited
upgrade potential.  The outlook could be stabilized if Moody's
concludes that the risk exposure of Yorkshire Water's capital
structure remains manageable and does not adversely affect the
company's financial flexibility in comparison with its industry
peers, taking into account any additional measures management or
shareholders may be willing to implement to mitigate the company's
exposure and the timing of those.  The rating agency will also
consider incentives for shareholders to provide additional
financing given the impact of the low yield environment on the
debt fair value and derivative valuations.

Conversely, the rating could be downgraded if the above risks are
not offset by mitigating measures that would address the high
sensitivity to market-rate movements, or create additional
financial headroom.

Furthermore, negative rating pressure could derive from (1)
unexpected, severe deterioration in operating performance that
results in the company remaining persistently in breach of its
distribution lock-up triggers; (2) a material change in the
regulatory framework for the UK water sector leading to a
significant increase in Yorkshire Water's business risk; or (3)
unforeseen funding difficulties.

The principal methodology used in these ratings was Regulated
Water Utilities published in December 2015.

LIST OF AFFECTED RATINGS

Affirmations:

Issuer: Yorkshire Water Services Bradford Finance Ltd
  BACKED Subordinate MTN Program , Affirmed (P)Ba1
  BACKED Subordinate Regular Bond/Debenture, Affirmed (P)Ba1
  BACKED Subordinate Regular Bond/Debenture, Affirmed Ba1
  BACKED Senior Secured MTN Program, Affirmed (P)Baa1
  BACKED Senior Secured Regular Bond/Debenture, Affirmed Baa1

Issuer: Yorkshire Water Services Finance Limited
  BACKED Senior Secured Regular Bond/Debenture, Affirmed Baa1
  Underlying Senior Secured Regular Bond/Debenture, Affirmed Baa1

Issuer: Yorkshire Water Services Limited
  LT Corporate Family Rating , Affirmed Baa2

Issuer: Yorkshire Water Services Odsal Finance Limited
  BACKED Senior Secured MTN Program, Affirmed (P)Baa1
  BACKED Senior Secured Regular Bond/Debenture, Affirmed Baa1

Outlook Actions:

Issuer: Yorkshire Water Services Bradford Finance Ltd
  Outlook, Changed To Negative From Stable

Issuer: Yorkshire Water Services Finance Limited
  Outlook, Changed To Negative From Stable

Issuer: Yorkshire Water Services Limited
  Outlook, Changed To Negative From Stable

Issuer: Yorkshire Water Services Odsal Finance Limited
  Outlook, Changed To Negative From Stable

Yorkshire Water Services Limited is the fifth largest of the 10
water and sewerage companies in England and Wales by both RCV and
number of customers served.  Yorkshire Water provides drinking
water to around 5 million people and around 130,000 local
businesses over an area of approximately 14,700 square kilometers
encompassing the former county of Yorkshire and part of North
Derbyshire in Northern England.



                            *********

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

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

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


                            *********


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

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

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

This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed to
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The TCR Europe subscription rate is US$775 per half-year,
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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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