TCREUR_Public/161102.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, November 2, 2016, Vol. 17, No. 217



* BULGARIA: Revises Rules to Allow Creditors to Freeze Accounts


RWE AG: Fitch Maintains 'BB+' Sub. Notes Rating on Watch Negative
TECHEM ENERGY: Moody's Raises CFR to Ba3, Outlook Stable


INTESA SANPAOLO: Fitch Affirms 'BB-' Rating on AT1 Notes
MONTE DEI PASCHI: Turnaround Plan Hinges on Loan Securitization


* MALTA: Travel Operators Seek Clarifications on Insolvency Fund


DRYDEN 46 EURO: Moody's Assigns B2 Rating to Class F Notes
HIGHLANDER EURO: Moody's Affirms Ca Rating on Class E Notes
VIMPELCOM LTD: Moody's Raises CFR to Ba2, Outlook Stable


DOURO MORTGAGES NO. 2: Fitch Hikes Class D Notes Rating to BB-
ENERGIAS DE PORTUGAL: Fitch Affirms 'BB' Rating on Hybrid Secs.


GLOBAL LIMAN: Fitch Affirms 'BB-' Rating on $250M Sr. Unsec. Debt

U N I T E D   K I N G D O M

LADBROKES PLC: Moody's Affirms Ba2 CFR, Outlook Stable
WELLINGTON PUB: Fitch Affirms 'B+' Rating on Class A Notes

* UK: Ofgem Reviews Safety Net Procedures for Energy Customers
* UK: New Insolvency Rules to Take Effect in April 2017



* BULGARIA: Revises Rules to Allow Creditors to Freeze Accounts
--------------------------------------------------------------- reports that creditors will be able to request from
courts to issue a European Account Preservation Order for bank
accounts of debtors, read a project for the amendment of the
Civil Procedure Code, which the Bulgarian government will submit
to Parliament.

According to, the purpose of the amendments is to
assist the implementation at a national level of Regulation (EU)
No. 655/2014, which is directly applicable in all member-states
of the EU as of January 18, 2017.

The regulation establishes a European procedure for cross-border
cases which provides the opportunity for efficient and quick
freezing of funds in bank accounts, discloses.

The declaration on preservation of accounts of the creditor is
issued by the bank to which the European Account Preservation
Order is addressed, states.


RWE AG: Fitch Maintains 'BB+' Sub. Notes Rating on Watch Negative
Fitch Ratings is maintaining RWE AG's Long-Term Issuer Default
Rating (IDR) of 'BBB', Short-Term IDR of 'F3' and subordinated
notes' rating of 'BB+' on Rating Watch Negative (RWN).

Fitch has revised the Rating Watch status of RWE Finance BV's and
RWE AG's senior unsecured ratings of 'BBB' to Positive (RWP) from
Negative. The RWP reflects RWE's intention to transfer all
existing senior unsecured notes to subsidiary innogy SE (innogy)
by changing the issuer. Fitch rates innogy at 'BBB+(EXP)' with
Stable Outlook and its senior unsecured notes at 'A-(EXP)'. Fitch
does not expect new senior unsecured debt to be issued at RWE
until the allocation of debt between RWE and innogy has been

The current ratings reflect RWE's consolidated profile adjusted
for a 23% stake in innogy, which was floated on the market in
October 2016, resulting in expected minority dividends outflow
related to the 23% innogy stake. However, the RWN reflects
Fitch's intention to assess RWE on a standalone basis, and to
treat innogy as a financial investment, once the financial
structure and overall strategy are finalised.

Fitch rates innogy as independent from RWE given their
independent supervisory boards, separate financing and treasury
teams, plans for independent liquidity arrangements, the lack of
cross guarantees or cross defaults between innogy and RWE as well
as RWE's intention to manage all intercompany agreements at arm's
length and not to impose any strategic and financial targets on

Fitch will review the equity-like features of the subordinated
hybrid notes, which it believes will remain with RWE, once the
new structure is finalised. It currently assigns the notes a 50%
equity credit.


Business Reorganisation

In October 2016 10% of innogy was placed via a primary offering
and RWE placed a 13% stake in innogy via secondary placement.
Further placements are possible and RWE may reduce its innogy
stake to 51%. Fitch believes that it is RWE's intention not to
influence innogy's strategic, operational or financial management
and to treat its shareholding in innogy as a financial
investment. Fitch will review RWE's standalone financial profile
once information on the group's strategy and financial policy
become available.

RWE's Debt Reorganisation

RWE intends to transfer all senior unsecured debt to innogy by
changing the issuer while the remaining EUR4bn of hybrid
creditors will remain with RWE. Further to this RWE has provided
a EUR3bn intercompany loan to innogy, the last tranche of which
falls due in 2020. The funds from the repayment of the loan may
be used by RWE to reorganise its financial structure. Once
details of RWE's long-term strategy become available, Fitch will
review the equity-like features of the existing hybrid notes

Limited Impact from Nuclear Provisions

KFK, a specially appointed government commission, has concluded
that RWE should pay about EUR6.8bn into a state fund, which is
about EUR1.8bn more than what has been provisioned for estimated
intermediate and long-term nuclear waste storage costs. In
return, the state will assume these liabilities and all related
risks, while RWE will still be responsible for the
decommissioning costs of its nuclear power plants.

"We expect the total negative impact on RWE's debt (and
consequently on leverage ratios) to amount up to EUR2bn,
including the revaluation of the remaining provisions; however,
this will be mitigated by the EUR2.6bn raised by RWE in innogy's
secondary offering. We assume that RWE's cash outflow related to
the decommissioning of the company's nuclear plants will not
change up to 2022 due to KFK's conclusion. As a result, we expect
the consolidated nuclear-adjusted leverage to average 4.6x over
2016-2019 but this will depend on RWE's long term financial
policy," Fitch said.


As with its German peers RWE is repositioning itself in response
to the country's energy policy and the challenges associated with
transitioning from a fossil fuel and nuclear generator to a
greener more customer-focused utility. German utilities are
seeking to adapt their financial policies to the immediate costs
associated with nuclear decommissioning and also to manage the
nuclear provisions for the longer term.

RWE's consolidated business profile is comparable with peers',
including E.ON, Iberdrola and Enel, but the group has weaker
credit metrics. "Although the ratings currently reflect RWE's
consolidated profile, we will assess RWE on a standalone basis,
treating innogy as a financial investment, once the financial
structure and overall strategy are finalised." Fitch said.


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

   -- RWE's average achieved power price in Germany of EUR33/MWh
      between 2016 and 2018. German forward prices of around
      EUR22/MWh and clean dark spreads of EUR3/MWh.

   -- Utilisation of provisions and negative cash-flow items not
      represented in EBITDA to increase to around EUR1bn
      (outflows) per annum over the medium term.

   -- Conservative low-triple-digit EUR million working capital
      outflows each year.

   -- Capital expenditure of EUR2.5bn in 2016, increasing to
      EUR3bn per year in 2017 and 2018, with the majority of
      these investments being at innogy level.

   -- EUR6.8bn to be paid into a state run-nuclear fund during
      2017, leading to a reduction in nuclear provisions.


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

   -- Group reorganisation where current creditor's recourse to
      operating cash flows weakens or the standalone business
      profile of RWE deteriorates, or loss of equity credit for
      RWE's hybrid bonds, which may lead to higher leverage.

   -- Lease- and nuclear-adjusted funds from operations (FFO) net
      leverage above 4.5x and corresponding fixed charge cover
      below 3.5x on a sustained basis, reflecting the
      consolidated profile of RWE.

   -- Energy market reform in Germany (or possibly in other
      countries) creating additional costs that cannot be passed
      on to consumers.

Positive: Rating upside is limited; however, future developments
that may lead to positive rating action include:

   -- Group reorganisation where current senior unsecured
      creditor's recourse to operating cash flows improves, for
      example due to change of the issuer to innogy.

   -- A visible improvement in forecast financial metrics with
      lease- and nuclear-adjusted FFO net leverage below 4.0x and
      corresponding fixed charge cover above 4.0x. The metric may
      also improve if the German Constitutional Court judges the
      nuclear fuel tax as unconstitutional, leading to a return
      of funds to nuclear operators directly.

Rating sensitivities will be reassessed once we have reviewed the
Rating Watch status and analysed RWE on a standalone basis.


RWE's liquidity remains strong. As of 30 June 2016, the group
held EUR2.7bn of cash and cash equivalents, EUR8.1bn of short-
term securities (assuming EUR 5.7bn unrestricted) and EUR4bn of
committed, undrawn revolving credit facilities with maturity in
March 2021. The group has short-term maturities of EUR2.1bn.
Fitch said, "We forecast slightly negative free cash flow over
the next three years."

TECHEM ENERGY: Moody's Raises CFR to Ba3, Outlook Stable
Moody's Investors Service has upgraded to Ba3 from B1 the
corporate family rating of German sub-metering and energy
management services provider Techem Energy Metering Service GmbH
& Co. KG.  Concurrently, Moody's upgraded to B2 (LGD5) from B3
(LGD6) the rating on the senior subordinated notes (due 2020) of
Techem, to Ba2 (LGD3) from Ba3 (LGD3) the rating on the senior
secured notes (due 2019), issued by the group's direct subsidiary
Techem GmbH, and to Ba3-PD from B1-PD the probability of default
rating (PDR) of Techem.  The outlook on all ratings has been
changed to stable from positive.

List of affected ratings:


Issuer: Techem Energy Metering Service GmbH & Co. KG
  Probability of Default Rating, Upgraded to Ba3-PD from B1-PD
  Corporate Family Rating, Upgraded to Ba3 from B1
  Senior Subordinated Regular Bond/Debenture, Upgraded to B2
   (LGD 5) from B3 (LGD 6)

Issuer: Techem GmbH
  Backed Senior Secured Regular Bond/Debenture, Upgraded to Ba2
   (LGD 3) from Ba3 (LGD 3)

Outlook Actions:

Issuer: Techem Energy Metering Service GmbH & Co. KG
  Outlook, Changed To Stable From Positive

Issuer: Techem GmbH
  Outlook, Changed To Stable From Positive

                        RATINGS RATIONALE

"The upgrade reflects Techem's robust performance as well as the
steady improvement in credit metrics following the outlook change
to positive two years ago", says Goetz Grossmann, Moody's lead
analyst for Techem.  "Constant growth in earnings over the last
three years prompted Techem's leverage as adjusted by Moody's to
gradually decline to 4.8x debt/EBITDA in the 12 months ended June
2016 from 5.8x at fiscal year-end March 2013, which is in line
with our guidance for an upgrade of below 5x.  Although free cash
flow generation has turned negative since 2015 owing to sizeable
profit distributions to shareholders, we acknowledge Techem's
resilient and very profitable business model which provides for
high earnings and free cash flow visibility.  The Ba3 rating
assumes that Techem will maintain a Moody's-adjusted leverage of
well below 5x debt/EBITDA, corresponding to a reported net
debt/recurring EBITDA ratio of below 4.5x at fiscal year-end",
adds Mr. Grossmann.

The rating action recognizes the group's solid operating
performance and progressively improved financial metrics since
Moody's first assigned its ratings to Techem in September 2012.
For instance, EBITDA as adjusted by Techem increased to around
EUR282 million in the 12 months through June 30, 2016, from
EUR239 million in fiscal year (FY) 2013 (ended 31 March 2013).
Besides steady growth of Techem's domestic rental business
fuelled by the non-discretionary (legislation-driven) demand for
sub-metering in Germany combined with the ongoing switch to
radio-equipped metering devices, the introduction of
supplementary services such as smoke detector maintenance and
drinking water analyses spurred additional sales and earnings
growth in Techem's Energy Services Germany (ESG) segment (c.64%
of group sales) over the last three years.

Moody's considers domestic growth opportunities for the group to
be rather limited in the medium term given close to full sub-
metering penetration in Germany and the gradual phasing out of
new smoke detector installations over the next few years.  By
contrast, favourable legislation in Europe requires sub-metering
to be implemented across the EU by 2017, which should support
Techem's international expansion efforts, in particular in
regions where it holds a leading market share in terms of
installed sub-metering devices (e.g. Italy).  This was already
seen in Techem's first quarter results ended June 2017 when sales
in the Energy Services International segment increased by 16.8%
year-over-year (yoy), spurred by higher legislation-driven
demand, especially in Italy.

The ratings upgrade further recognises Techem's recently improved
profitability, while Moody's expects margins to continue to
strengthen over the next two to three years.  This is largely due
to restructuring measures taken in previous years which have
started to bear fruit, including the termination of contracts
with sales partners, for which the group incurred costs of more
than EUR27 million between FY2014 and 2016 and which had a
positive effect on its cost base.  Partly as a result of this,
recurring EBITDA (as adjusted by Techem) in the first quarter of
FY2017 increased by approximately EUR9 million yoy and Moody's
anticipates to see a similar trend over the next quarters as
Techem will continue to optimize its operations and processes.
Although such efforts will likely require additional cost, these
should be more than compensated by expected efficiency gains.
Despite projected growth in profits and cash flow generation,
however, Moody's does not expect the group to meaningfully de-
lever in the foreseeable future, assuming it will continue to pay
dividends to its shareholder, which leaves limited room for
material debt reductions.  Nonetheless, should more excessive
profit distributions cause free cash flow to deteriorate
materially, giving evidence of a more aggressive financial
policy, pressure on Techem's rating or the stable outlook would


Techem's short-term liquidity is good.  The group's cash sources
comprise EUR88 million of cash on balance sheet as of June 30,
2016, as well as funds from operations of around EUR170 million
per annum.  Together with EUR210 million available commitments
under the group's two capex facilities (maturing June 2020;
unrated) and EUR46 million under its revolving credit facility
(maturing June 2020; unrated) these funds will cover all expected
cash needs in the next 12-18 months.  Liquidity uses mainly
include capital expenditures of around EUR130 million and
expected annual dividends of more than EUR100 million.  The
liquidity assessment also assumes that Techem will maintain solid
headroom under its financial covenants.


The stable outlook reflects the expectation that Techem will
continue to grow its revenue and profits in a stable supportive
regulatory environment in Germany and Europe, whilst at least
maintaining its current profitability and leverage metrics,
including a Moody's-adjusted debt/EBITDA ratio of well below 5x.
Moreover, Moody's expects the group to adhere to a thoughtful
financial policy, as shown by no excessive dividend payments that
would lead to materially deteriorating free cash flow generation
and/or a weakening of its sound liquidity profile.


A further upgrade of Techem's ratings would require (1)
visibility that profit margins can be sustained at or above
current levels, also in the context of the ongoing sector
investigation in Germany, (2) the group's leverage as adjusted by
Moody's to decline towards 4x debt/EBITDA, (3) interest coverage
to improve to at least 3x EBITA/interest expense, and (4) free
cash flows to improve to around break-even on a sustainable
basis.  A higher rating would further require Techem to establish
a track record of a prudent financial policy, evidenced by
available free cash flow being applied to debt reduction besides
balanced shareholder distributions.

Downward pressure on Techem's ratings would build, if (1)
profitability were to deteriorate, exemplified by Moody's-
adjusted EBITA margins falling below 26%, (2) leverage exceeded
5x Moody's-adjusted gross debt/EBITDA, (3) interest coverage
reduced to below 2x EBITA/interest expense, and (4) Moody's
financial policy assessment were to weaken, for instance
following a material re-leveraging as a result of more excessive
shareholder distributions.  Moreover, negative rating pressure
could evolve in case of a material negative outcome of the sector

                     PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.

Headquartered in Eschborn, Germany, Techem is a leading provider
of energy services operating through two divisions: Energy
Services (accounting for 86% of group sales in FY2016) and Energy
Contracting (14%).  Energy Services provides sub-metering
services of measuring heating use and water consumption of
individual housing units and supplementary services such as smoke
detector installation and maintenance and legionella analysis in
drinking water.  Energy Contracting offers a holistic management
of clients' energy consumption through the planning, financing,
construction and operation of heat stations, boilers, cooling
equipment and combined heating and power units.  In FY2016,
Techem reported total revenues of EUR745 million of which 77%
were generated in Germany.  Techem has been owned by funds
advised by the Macquarie Group since 2007.


INTESA SANPAOLO: Fitch Affirms 'BB-' Rating on AT1 Notes
This commentary replaces the version published on October 28,
2016, to include the Viability Rating affirmation of Credito

Fitch Ratings has revised the Outlooks of Intesa Sanpaolo
(IntesaSP), Credito Emiliano (Credem), Mediobanca and Banca
Nazionale del Lavoro (BNL) to Negative from Stable while
affirming their Long- and Short-Term Issuer Default Ratings

The four banks' Outlook revision to Negative follows the revision
of Italy's Outlook to Negative.


IntesaSP's, Credem's and Mediobanca's IDRs are based on their
standalone credit profiles as reflected in their Viability
Ratings (VRs) which, in turn, are at the same level as the
Sovereign Long-Term IDR. The Negative Outlook for these banks
primarily reflects our view that their VRs and Long-term IDRs are
likely to be downgraded if Italy's ratings are downgraded. The
three banks' activities are entirely or predominantly domestic.

BNL's Outlook revision to Negative reflects our view that a
downgrade of Italy's ratings and a deterioration of the operating
environment in Italy would negatively affect BNL's performance
and prospects. This could ultimately reduce its parent BNP
Paribas' (A+/Stable) propensity to provide support to its Italian
subsidiary, which would result in a downgrade of BNL's IDRs.

VRs, IDRs and Senior Debt


The ratings reflect the strong and diversified domestic franchise
of IntesaSP as Italy's second-largest bank, which has enabled it
to generate better operating profit than its domestic peers. The
ratings also reflect resilient capitalisation, driven by
reasonable internal capital generation, and adequate funding and

Fitch views IntesaSP's asset quality, which compares unfavourably
with international peers, as weak because a fairly large
proportion of capital is tied up in unreserved impaired loans.

The ratings of senior debt issued by IntesaSP's funding vehicles,
Intesa Sanpaolo Bank Ireland, Intesa Sanpaolo Bank Luxembourg,
S.A. and Intesa Funding LLC, are equalised with that of the
parent as the debt is unconditionally and irrevocably guaranteed
by IntesaSP.

Subsidiary and Affiliated Company

The ratings of IntesaSP's Italian subsidiary Banca IMI are based
on institutional support and reflect Fitch's view of Banca IMI's
core function within the group and its close integration within
the group.


The ratings reflect Credem's moderately healthy asset quality,
sound capitalisation and resilient profitability, due to a
business model that is more diverse than that of many other
Italian medium-sized commercial banks. Asset quality has been
helped by the bank's strategy of targeting customers of stronger
credit quality.


The ratings reflect the group's adequate capitalisation and
leverage, which are maintained with satisfactory buffers over
regulatory minimums and are commensurate with the bank's risk

Mediobanca benefits from a strong franchise in specialised
businesses in Italy, which provides it with business and revenue
diversification, although operating profit continues to rely on
proceeds from its large equity stake in Italian insurer,
Assicurazioni Generali, and fluctuate due to the bank's more
cyclical businesses.

The ratings factor in the bank's reasonable risk appetite but
which is at risk from continued expansion, as well as better
asset quality than domestic peers. The ratings take also into
account a funding profile that is biased towards wholesale and
retail bonds placed through third-party networks, complemented by
sound liquidity.

The ratings of the senior debt issued by Mediobanca International
(Luxemburg) SA are equalised with that of the parent since the
debt is unconditionally and irrevocably guaranteed by Mediobanca.

Support Ratings and Support Rating Floors

IntesaSP, Credem and Mediobanca

IntesaSP's, Credem's and Mediobanca's Support Ratings (SRs) and
Support Rating Floors (SRFs) reflect our view that senior
creditors can no longer rely on receiving full extraordinary
support from the sovereign in the event that a bank becomes non-
viable. The EU's Bank Recovery and Resolution Directive and the
Single Resolution Mechanism for eurozone banks provide a
framework for resolving banks that require senior creditors
participating in losses, if necessary, instead, or ahead, of a
bank receiving sovereign support.

IDRs, Senior Debt and Support Rating


The IDRs and SR reflect institutional support from BNL's parent,
BNP Paribas. Fitch views BNL as core to BNP Paribas' strategy as
Italy is a home market for the French group. BNL's IDRs and SR
are capped at one notch above Italy's sovereign rating of 'BBB+'.
This reflects Fitch's view that BNP Paribas' propensity to
support BNL is linked to Italy's operating environment, since
this affects the attractiveness of BNL to the group and BNL's
impact on the group's financial profile.

Subordinated Debt and Other Hybrid Securities

IntesaSP, Credem and Mediobanca

Subordinated debt and other hybrid capital issued by the banks
are all notched down from their respective VRs in accordance with
Fitch's assessment of each instrument's respective non-
performance and relative loss severity risk profiles, which vary

IntesaSP's AT1 notes are rated five notches below the bank's VR,
comprising two notches for loss severity relative to senior
unsecured creditors and three notches for incremental non-
performance risk relative to the VR. The notching for non-
performance risk reflects the instruments' fully discretionary
interest payment.


VR, IDRs and Senior Debt


IntesaSP's ratings are primarily sensitive to deterioration in
the operating environment in Italy and to Italy's sovereign
ratings. If Italy's sovereign rating is downgraded, IntesaSP's
VRs, IDRs and debt ratings would be downgraded.

IntesaSP's ratings could also be downgraded if the bank fails to
accelerate the reduction of its impaired loans or if its capital
remains highly exposed to unreserved impaired loans. Similarly, a
deterioration in the bank's funding and liquidity would put
pressure on the ratings as well as signs of an inflexible
dividend policy.

The ratings of the senior debt issued by IntesaSP's funding
vehicles, Intesa Sanpaolo Bank Ireland, Intesa Sanpaolo Bank
Luxembourg, S.A. and Intesa Funding LLC, are sensitive to the
same considerations that affect the senior unsecured debt issued
by the parent.


Credem's ratings are sensitive to deterioration in the operating
environment in Italy and to Italy's sovereign ratings. If Italy's
sovereign rating is downgraded, Credem's VRs, IDRs and debt
ratings would be downgraded.

"Credem's VR and IDRs are also sensitive to a material
deterioration in asset quality, which could be the result of
weaker underwriting standards, which we do not expect." Fitch
said. The ratings could also be downgraded if its capitalisation
deteriorates as a result of strong loan growth or if the bank
increases its risk appetite.


Mediobanca's ratings are primarily sensitive to deterioration in
the operating environment in Italy and to Italy's sovereign
ratings. If Italy's sovereign rating is downgraded, Mediobanca's
VR, IDRs and debt ratings would be downgraded.

Increased risk appetite, such as expanding higher-risk activities
in non-Italian operations, increasing concentration risk, a less
rigorous approach to pricing consumer finance risks or asset
quality deterioration could also lead to a downgrade. Similarly,
significantly increased volumes of foreign-originated activities
without an equivalent tightening of its risk controls framework
could put pressure on the bank's ratings. Deterioration in group
liquidity and funding could also result in a downgrade.

Support Rating and Support Rating Floor

IntesaSP, Credem and Mediobanca

An upgrade of the SRs and upward revision of the SRFs would be
contingent on a positive change in the sovereign's propensity to
support the banks. While not impossible, in Fitch's view this is
highly unlikely.

IDRs, Senior Debt and SR


BNL's IDRs and SR are primarily sensitive to a change in Italy's
sovereign rating and would likely be downgraded if Italy is
downgraded. The IDRs and SR are also sensitive to a change in
Fitch's assessment of BNP Paribas' propensity and ability to
provide support to its subsidiary. A downgrade of BNP Paribas'
IDRs will only affect BNL's IDRs and SR if the parent's Long-Term
IDR is downgraded by more than two notches. The Short-Term IDR
may come under pressure if short-term liquidity support from its
parent weakens, which Fitch currently does not expect.

Subordinated Debt and Other Hybrid Securities

IntesaSP, Credem and Mediobanca

The ratings of the securities are primarily sensitive to changes
in the issuing banks' VRs. The ratings are also sensitive to a
change in the notes' notching, which could arise if Fitch changes
its assessment of their non-performance relative to the risk
captured in the VR. For AT1 issues this could reflect a change in
capital management or flexibility or an unexpected shift in
regulatory buffers and requirements, for example.

Subsidiary and Affiliated Companies

Banca IMI's ratings are sensitive to changes in IntesaSP's
propensity to provide support respectively and to changes in the
parent's Long-Term IDRs.

The rating actions are as follows:


   -- Long-Term IDR: affirmed at 'BBB+'; Outlook Revised to
      Negative from Stable

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

   -- Viability Rating: affirmed at 'bbb+'

   -- Support Rating: affirmed at '5'

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

   -- Senior debt (including debt issuance programmes): affirmed
      at 'BBB+'/ 'F2'

   -- Commercial paper/certificate of deposit programmes:
      affirmed at 'F2'

   -- Short-term deposits affirmed at 'F2'

   -- Senior market-linked notes: affirmed at 'BBB+emr'

   -- Subordinated lower Tier II debt: affirmed at 'BBB'

   -- Subordinated upper Tier II debt: affirmed at 'BB+'

   -- Tier 1 instruments: affirmed at 'BB'

   -- AT1 notes: affirmed at 'BB-'

Banca IMI S.p.A.:

   -- Long-Term IDR: affirmed at 'BBB+'; Outlook Revised to
      Negative from Stable

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

   -- Support Rating: affirmed at '2'

   -- Senior debt (including programme ratings): affirmed at

Intesa Sanpaolo Bank Ireland plc:

   -- Commercial paper/Short-term debt affirmed at 'F2'

   -- Senior unsecured debt: affirmed at 'BBB+'

Intesa Sanpaolo Bank Luxembourg, S.A.:

   -- Commercial paper and Short-term debt: affirmed at 'F2'

   -- Senior unsecured debt: affirmed at 'BBB+'

Intesa Funding LLC:

   -- US commercial paper programme: affirmed at 'F2'

Credito Emiliano

   -- Long-Term IDR: affirmed at 'BBB+'; Outlook Revised to
      Negative from Stable

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

   -- Viability Rating: affirmed at 'bbb+'

   -- Support Rating: affirmed at '5'

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

   -- Senior unsecured EMTN programme: affirmed at 'BBB+'

   -- Subordinated note: affirmed at 'BBB'

Mediobanca S.p.A.

   -- Long-Term IDR: affirmed at 'BBB+'; Outlook revised to
      Negative from Stable

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

   -- Viability Rating: affirmed at 'bbb+'

   -- Support Rating: affirmed at '5'

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

   -- Senior unsecured short-term and long-term debt: affirmed at

   -- Market-linked notes: affirmed at 'BBB+emr'

   -- Subordinated debt: affirmed at 'BBB'

Mediobanca International (Luxemburg) SA

   -- Senior unsecured short-term and long-term debt: affirmed at

Banca Nazionale del Lavoro

   -- Long-term IDR: affirmed at 'A-'; Outlook Revised to
      Negative from Stable

   -- Short-term IDR: affirmed at 'F1'

   -- Viability Rating: 'bb+'; not affected

   -- Support Rating: affirmed at '1'

   -- Senior debt: affirmed at 'A-'

MONTE DEI PASCHI: Turnaround Plan Hinges on Loan Securitization
Alice Gledhill, Mariana Ionova and Graham Fahy at Reuters report
that Banca Monte dei Paschi di Siena unveiled an ambitious
turnaround plan last week, but its recast recapitalization still
hinges on a EUR28 billion bad loan securitization that remains
marred by deep uncertainty.

Italy's third largest lender confirmed that its financial
overhaul now includes a potential liability management exercise
that will look to assign both retail and institutional
subordinated bondholders new equity following scant investor
interest for the EUR5 billion cash call proposed in July, Reuters

The reduced rights issue -- the third in three years -- will be
anchored by as-yet unnamed sovereign and institutional investors
and will be partly reserved for existing shareholders, Reuters

According to Reuters, a banker who expected to be part of the
underwriting syndicate told IFR "The bank is being deliberately
vague around the structure of the equity-related capital-raising
to ensure maximum flexibility, but all three components could
face problems."

The capital package will be presented to BMPS shareholders on
Nov. 24, less than two weeks before a closely watched Italian
constitutional referendum that could prove to be another source
of volatility for the country's fragile banking sector, Reuters

At the heart of the plan's success, however, is the Italian
lender's ability to win over investors by purging its balance
sheet of some EUR28 billion of non-performing loans through a
planned securitization, Reuters notes.

"The sale of the securitized NPLs is a pre-requisite for any
capital raise," Reuters quotes Renaud Champion, head of credit
strategies at La Francaise Investment Solution, as saying.  "They
need to clean up the balance sheet before they can raise any
meaningful equity."

But, as BMPS races to recapitalize before the end of the year,
doubts are building over the structure, feasibility and appetite
for this all-important piece of the puzzle, Reuters states.

                      About Monte dei Paschi

Banca Monte dei Paschi di Siena SpA -- is
an Italy-based company engaged in the banking sector.  It
provides traditional banking services, asset management and
private banking, including life insurance, pension funds and
investment trusts.  In addition, it offers investment banking,
including project finance, merchant banking and financial
advisory services.  The Company comprises more than 3,000
branches, and a structure of channels of distribution.  Banca
Monte dei Paschi di Siena Group has subsidiaries located
throughout Italy, Europe, America, Asia and North Africa.  It has
numerous subsidiaries, including Mps Sim SpA, MPS Capital
Services Banca per le Imprese SpA, MPS Banca Personale SpA, Banca
Toscana SpA, Monte Paschi Ireland Ltd. and Banca MP Belgio SpA.


* MALTA: Travel Operators Seek Clarifications on Insolvency Fund
Times of Malta reports that the travel and tourism association
has called on the government and the Malta Tourism Authority to
confirm that the Insolvency Fund will not cover prior

FATTA urged the authorities to deny press reports that customers
who suffered losses from the bankruptcy of Fantasy Tours will be
compensated by the recently launched Insolvency Fund, Times of
Malta relates.

According to Times of Malta, the association said in a statement
the legal notice setting up the fund clearly states that the fund
will only cover bookings made from the date of publication of the
legal notice.

The fund, which will be guaranteed by travel agencies licensed to
sell package tours, is not intended to compensate for the
shortcomings of the regulator and government in implementing the
European Commission directive protecting consumers from
insolvency of package operators, Times of Malta notes.

The burden of any compensation that might be due for past
failures must solely be borne by the government and the regulator
themselves and should not be passed on to legitimate operators
and ultimately and indirectly to the consumer, Times of Malta


DRYDEN 46 EURO: Moody's Assigns B2 Rating to Class F Notes
Moody's Investors Service announced that it has assigned these
definitive ratings to notes issued by Dryden 46 Euro CLO 2016

  EUR236,500,000 Class A-1 Senior Secured Floating Rate Notes due
   2030, Definitive Rating Assigned Aaa (sf)
  EUR33,500,000 Class A-2 Senior Secured Fixed Rate Notes due
   2030, Definitive Rating Assigned Aaa (sf)
  EUR44,510,000 Class B-1 Senior Secured Floating Rate Notes due
   2030, Definitive Rating Assigned Aa2 (sf)
  EUR12,870,000 Class B-2 Senior Secured Fixed Rate Notes due
   2030, Definitive Rating Assigned Aa2 (sf)
  EUR25,430,000 Class C Mezzanine Secured Deferrable Floating
   Rate Notes due 2030, Definitive Rating Assigned A2 (sf)
  EUR24,080,000 Class D Mezzanine Secured Deferrable Floating
   Rate Notes due 2030, Definitive Rating Assigned Baa2 (sf)
  EUR26,900,000 Class E Mezzanine Secured Deferrable Floating
   Rate Notes due 2030, Definitive Rating Assigned Ba2 (sf)
  EUR13,280,000 Class F Mezzanine Secured Deferrable Floating
   Rate Notes due 2030, Definitive Rating Assigned B2 (sf)

                          RATINGS RATIONALE

Moody's rating of the rated notes addresses the expected loss
posed to noteholders by the legal final maturity of the notes in
2030.  The ratings reflect the risks due to defaults on the
underlying portfolio of loans given the characteristics and
eligibility criteria of the constituent assets, the relevant
portfolio tests and covenants as well as the transaction's
capital and legal structure.  Furthermore, Moody's is of the
opinion that the collateral manager, PGIM Limited, has sufficient
experience and operational capacity and is capable of managing
this CLO.

Dryden 46 Euro CLO 2016 B.V. is a managed cash flow CLO.  At
least 96% of the portfolio must consist of senior secured loans
and senior secured bonds.  The portfolio is expected to be 80%
ramped up as of the closing date and to be comprised
predominantly of corporate loans to obligors domiciled in Western
Europe.  The remainder of the portfolio will be acquired during
the ramp-up period in compliance with the portfolio guidelines.

PGIM Limited will manage the CLO.  It will direct the selection,
acquisition and disposition of collateral on behalf of the Issuer
and may engage in trading activity, including discretionary
trading, during the transaction's four-year reinvestment period.
Thereafter, purchases are permitted using principal proceeds from
unscheduled principal payments and proceeds from sales of credit
risk obligations, and are subject to certain restrictions.

In addition to the eight classes of notes rated by Moody's, the
Issuer will issue EUR54.11 mil. of subordinated notes, which will
not be rated.

The transaction incorporates interest and par coverage tests
which, if triggered, divert interest and principal proceeds to
pay down the notes in order of seniority.

Factors that would lead to an upgrade or downgrade of the

The rated notes' performance is subject to uncertainty.  The
notes' performance is sensitive to the performance of the
underlying portfolio, which in turn depends on economic and
credit conditions that may change.  PGIM Limited's investment
decisions and management of the transaction will also affect the
notes' performance.

Loss and Cash Flow Analysis:

Moody's modeled the transaction using CDOEdge, a cash flow model
based on the Binomial Expansion Technique, as described in
Section 2.3 of the "Moody's Global Approach to Rating
Collateralized Loan Obligations" rating methodology published in
October 2016.  The cash flow model evaluates all default
scenarios that are then weighted considering the probabilities of
the binomial distribution assumed for the portfolio default rate.
In each default scenario, the corresponding loss for each class
of notes is calculated given the incoming cash flows from the
assets and the outgoing payments to third parties and
noteholders.  Therefore, the expected loss or EL for each tranche
is the sum product of (i) the probability of occurrence of each
default scenario and (ii) the loss derived from the cash flow
model in each default scenario for each tranche.  As such,
Moody's encompasses the assessment of stressed scenarios.

Moody's used these base-case modeling assumptions:

Par amount: EUR 450,000,000
Diversity Score: 43
Weighted Average Rating Factor (WARF): 2850
Weighted Average Spread (WAS): 4.40%
Weighted Average Coupon (WAS): 6.00%
Weighted Average Recovery Rate (WARR): 40%
Weighted Average Life (WAL): 8 years

Stress Scenarios:
Together with the set of modelling assumptions above, Moody's
conducted additional sensitivity analysis, which was an important
component in determining the definitive rating assigned to the
rated notes.  This sensitivity analysis includes increased
default probability relative to the base case.  Below is a
summary of the impact of an increase in default probability
(expressed in terms of WARF level) on each of the rated notes
(shown in terms of the number of notch difference versus the
current model output, whereby a negative difference corresponds
to higher expected losses), holding all other factors equal:

Percentage Change in WARF: WARF + 15% (to 3278 from 2850)

Impact in Rating Notches:
Class A-1 Senior Secured Floating Rate Notes: 0
Class A-2 Senior Secured Fixed Rate Notes: 0
Class B-1 Senior Secured Floating Rate Notes: -2
Class B-2 Senior Secured Fixed Rate Notes: -2
Class C Mezzanine Secured Deferrable Floating Rate Notes: -2
Class D Mezzanine Secured Deferrable Floating Rate Notes: -2
Class E Mezzanine Secured Deferrable Floating Rate Notes: -1
Class F Mezzanine Secured Deferrable Floating Rate Notes: 0
Percentage Change in WARF: WARF +30% (to 3705 from 2850)

Ratings Impact in Rating Notches:
Class A-1 Senior Secured Floating Rate Notes: -1
Class A-2 Senior Secured Fixed Rate Notes: -1
Class B-1 Senior Secured Floating Rate Notes: -4
Class B-2 Senior Secured Fixed Rate Notes: -4
Class C Mezzanine Secured Deferrable Floating Rate Notes: -4
Class D Mezzanine Secured Deferrable Floating Rate Notes: -3
Class E Mezzanine Secured Deferrable Floating Rate Notes: -1
Class F Mezzanine Secured Deferrable Floating Rate Notes: -1

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was "Moody's
Global Approach to Rating Collateralized Loan Obligations"
published in October 2016.

HIGHLANDER EURO: Moody's Affirms Ca Rating on Class E Notes
Moody's Investors Service has taken rating actions on these notes
issued by Highlander Euro CDO B.V.:

  EUR41.25 mil. (current balance of EUR 39,249,125) Class C
   Primary Senior Secured Deferrable Floating Rate Notes due
   2022, Upgraded to Aaa (sf); previously on April 15, 2016,
   Upgraded to Aa1 (sf)

  EUR25 mil. Class D Primary Senior Secured Deferrable Floating
   Rate Notes due 2022, Upgraded to Baa2 (sf); previously on
   April 15, 2016, Upgraded to Ba1 (sf)

  EUR13.75 mil. (current balance of EUR 18,191,986) Class E
   Secondary Senior Secured Deferrable Floating Rate Notes due
   2022, Affirmed Ca (sf); previously on April 15, 2016, Affirmed
   Ca (sf)

Highlander Euro CDO B.V., issued in August 2006, is a
collateralised loan obligation (CLO) backed by a portfolio of
mostly high-yield senior secured European loans.  The portfolio
is managed by CELF Advisors LLP.  The transaction's reinvestment
period ended in August 2012.

                         RATINGS RATIONALE

The rating actions on the notes are primarily a result of
deleveraging since the last rating action in April 2016.  The
Class B notes have been redeemed in full and Class C notes have
paid down by EUR 2.0 million.  As a result of the deleveraging,
the over-collateralisation (OC) ratios of classes C and D have
increased.  As per the trustee report dated September 2016, the
classes C and D OC ratios are reported at 199.49% and 121.87%
respectively, compared to 156.45%, 114.04% in the March 2016
report.  The OC ratio for Class E has decreased to 94.97% from
95.24% in March 2016.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers.  In its base
case, Moody's analyzed the underlying collateral pool as having a
performing par and principal proceeds balance of EUR76.7 million,
defaulted par of EUR10.8 million, a weighted average default
probability of 17.48% (consistent with a WARF of 2706 and the WAL
of 3.76 years), a weighted average recovery rate upon default of
48.47% for a Aaa liability target rating, a diversity score of 10
and a weighted average spread of 3.51%.

The default probability derives from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool.  The estimated average recovery rate on
future defaults is based primarily on the seniority of the assets
in the collateral pool.  Moody's generally applies recovery rates
for CLO securities as published in "Moody's Approach to Rating SF
CDOs".  In each case, historical and market performance and a
collateral manager's latitude to trade collateral are also
relevant factors.  Moody's incorporates these default and
recovery characteristics of the collateral pool into its cash
flow model analysis, subjecting them to stresses as a function of
the target rating of each CLO liability it is analyzing.

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was "Moody's
Global Approach to Rating Collateralized Loan Obligations"
published in October 2016.

Factors that would lead to an upgrade or downgrade of the

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it assumed a lower weighted average recovery rate in
the portfolio.  Moody's ran a model in which it reduced the
weighted average recovery rate by 5%; the model generated outputs
were within one notch of the base-case results.

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
note, in light of uncertainty about credit conditions in the
general economy.  CLO notes' performance may also be impacted
either positively or negatively by 1) the manager's investment
strategy and behaviour and 2) divergence in the legal
interpretation of CDO documentation by different transactional
parties because of embedded ambiguities.

Additional uncertainty about performance is due to:

  Portfolio amortization: The main source of uncertainty in this
   transaction is the pace of amortization of the underlying
   portfolio, which can vary significantly depending on market
   conditions and have a significant impact on the notes'
   ratings.  Amortization could accelerate as a consequence of
   high loan prepayment levels or collateral sales by the
   collateral manager or be delayed by an increase in loan
   amend-and-extend restructurings.  Fast amortization would
   usually benefit the ratings of the notes beginning with the
   notes having the highest prepayment priority.

  Around 8.8% of the collateral pool consists of debt obligations
   whose credit quality Moody's has assessed by using credit
   estimates.  As part of its base case, Moody's has stressed
   large concentrations of single obligors bearing a credit
   estimate as described in "Updated Approach to the Usage of
   Credit Estimates in Rated Transactions," published in October
   2009 and available at:

  Recovery of defaulted assets: Market value fluctuations in
   trustee-reported defaulted assets and those Moody's assumes
   have defaulted can result in volatility in the deal's over-
   collateralisation levels.  Further, the timing of recoveries
   and the manager's decision whether to work out or sell
   defaulted assets can also result in additional uncertainty.
   Moody's analyzed defaulted recoveries assuming the lower of
   the market price or the recovery rate to account for potential
   volatility in market prices. Recoveries higher than Moody's
   expectations would have a positive impact on the notes'

In addition to the quantitative factors that Moody's explicitly
modeled, qualitative factors are part of the rating committee's
considerations.  These qualitative factors include the structural
protections in the transaction, its recent performance given the
market environment, the legal environment, specific documentation
features, the collateral manager's track record and the potential
for selection bias in the portfolio.  All information available
to rating committees, including macroeconomic forecasts, input
from other Moody's analytical groups, market factors, and
judgments regarding the nature and severity of credit stress on
the transactions, can influence the final rating decision.

VIMPELCOM LTD: Moody's Raises CFR to Ba2, Outlook Stable
Moody's Investors Service has upgraded the corporate family
rating of VimpelCom Ltd to Ba2 from Ba3, and the probability of
default rating (PDR) to Ba2 -PD from Ba3-PD.  Concurrently the
agency upgraded the long-term issuer ratings of VimpelCom PJSC to
Ba2 from Ba3 and the senior unsecured ratings of its guaranteed
debts issued by VIP Finance Ireland Limited and VimpelCom
Holdings B.V., to Ba2 (LGD 3) from Ba3 (LGD 3).  Moody's has also
upgraded the senior unsecured rating of the debts issued by GTH
Finance B.V. and guaranteed by VimpelCom Holdings B.V. to Ba3
(LGD 5) from B1 (LGD 5).

The outlook on all ratings is stable.

The action reflects Moody's view that the financial and
operational risks related to the ownership of Wind
Telecomunicazioni S.p.A. (Wind, B2 positive), a highly leveraged
telecommunications asset in Italy, have substantially subsided
for VimpelCom as a result of its deal with CK Hutchison Holdings
Limited ("CK Hutchison", A3 stable).  The deal, approved by the
European Commission on 1 September 2016 and by the Ministry of
Economic Development of Italy on 24 October 2016, combines
VimpelCom's 100% owned subsidiary Wind with Hutchison's
subsidiary 3 Italia S.p.A (not rated) in a 50/50 joint venture.
Whilst Moody's maintains a view that deconsolidation of Wind's
debt does not fully relieve VimpelCom's credit profile of all
contingent liabilities associated with high levels of Wind's
indebtedness, the agency considers such risks largely mitigated
by the partnership with a strong strategic investor such as
Hutchison. Moody's notes that the JV transaction was set up as
cash free for Vimpelcom while Hutchison contributed EUR200
million, however the agreement envisages a possibility of partner
buyout in three years' time (i.e. in 2019), which may create
additional cashflow opportunities for VimpelCom.

Other recent developments such as (1) the successful sale of 51%
stake in VimpelCom's asset Djezzy (not rated) in Algeria, which
brought VimpelCom a meaningful cash consideration and allowed it
to regain access to Djezzy's dividends from 2016, (2) completion
of the cash settlement relating to the US and Dutch authorities'
investigation of the company's activities in Uzbekistan in 2016,
and (3) self-sufficiency in cash generation achieved by the
subsidiaries Pakistan Mobile Communications Limited (B1, stable,
operating under a brand Mobilink) and Banglalink Digital
Communications Limited (Ba3, stable) in 2015, support Moody's
view that VimpelCom's risk profile has materially improved.
While Russia contributed 49% to the group's revenue and 44% to
its EBITDA in full-year 2015 (after deconsolidation of Wind from
Q3 2015), as well as the bulk of the dividend flow, Moody's
expects other subsidiaries including Ukraine to provide up to 50%
of the dividend flow available to the group by 2018-19.

                         RATINGS RATIONALE

VimpelCom's Ba2 CFR reflects (1) the company's strong positions
in its key markets: third largest in terms of subscribers in
Russia with 57.4 million subscribers, first largest in the
Ukraine with 25.4 million subscribers and in Pakistan with 39.1
million; and second largest in Bangladesh with 31.1 million; (2)
VimpelCom's improving financial metrics and diminishing risks as
the group streamlines its asset structure in several ways,
including via disposals; and (3) the company's solid liquidity
and balanced debt maturity profile, underpinned by its meaningful
cash balances.

Whilst this upgrade narrows the differential between the ratings
of VimpelCom and its Russian peers Mobile Telesystems PJSC (MTS,
Ba1 negative) and Megafon PJSC (Ba1 negative) to one notch from
two previously, we still note that 1) VimpelCom maintains
leverage higher than its peers as measured by gross debt/EBITDA,
although on a net-debt basis the metrics are more comparable; 2)
somewhat weaker profitability and financial metrics, in
particular debt coverage; 3) elevated foreign currency risk, with
more than 70% of the company's debt denominated in US dollars and
revenues in roubles, hryvnias and other currencies.

Despite broader geographical diversification than its Russian
peers, VimpelCom remains exposed to the Russian market, with its
high saturation levels and challenging competitive landscape.  In
addition, falling personal incomes and an economic slowdown in
Russia, Ukraine and the CIS countries amid devaluation of local
currencies and elevated cost inflation will, in our view,
continue to put pressure on all the telecommunications operators,
including VimpelCom's subsidiaries in these countries in the next
12-18 months.


The stable outlook on VimpelCom's rating reflects Moody's
expectation that the company will sustainably maintain its
leverage below 3.0x times on a gross-debt basis and around 2.0x
on a net-debt basis, and RCF/Debt above 20%.  The agency expects
that VimpelCom will maintain a robust liquidity profile and
address its refinancing needs in a timely fashion.


A sustainable reduction in leverage measured by gross debt/EBITDA
to below 2.0x and strengthening of coverage metrics so that they
are consistent with an upper Ba or a lower Baa rating categories
would exert positive pressure on the ratings, provided that there
are no negative developments in the company's operating profile,
market positions and liquidity.

Conversely, a material deterioration in its operating and
financial profile measured by (1) a sustainable increase in
leverage measured by gross debt/EBITDA above 3.0x, and (2) a
weakening of RCF/debt to below 20% would put pressure on the
ratings.  Moody's would assess any material
acquisition/shareholder distribution; such actions could exert
negative pressure on the ratings.

The principal methodology used in these ratings was Global
Telecommunications Industry published in December 2010.

The local market analyst for GTH Finance B.V. ratings is Julien
Haddad, Analyst, Corporate Finance Group, Journalists 44 20 7772
5456, Subscribers 44 20 7772 5454.


DOURO MORTGAGES NO. 2: Fitch Hikes Class D Notes Rating to BB-
Fitch Ratings has upgraded the junior notes of Douro Mortgages
No. 1 and No. 2 and affirmed Douro Mortgages No. 3.

The transaction is a securitisation of Portuguese residential
mortgages originated and serviced by Banco BPI S.A. (BB/RWE/B).


Robust Performance

The upgrades reflect the transactions' sound performance, with
arrears over three months remaining low (between 0.4% and 0.7%)
since October 2015 and below the 1.05% average observed for
Portuguese RMBS transactions,.

Pro-Rata Amortisation

Increases in credit enhancement since issuance remained limited
for all tranches. This is due to the pro-rata test conditions
being fulfilled and all notes amortising pro-rata since 2007
(Douro No.1), 2008 (Douro No. 2) and 2010 (Douro No. 3). Douro
No. 2 and Douro No. 3 include a trigger to return to sequential
amortisation once the outstanding notes balance is 10% or less of
the initial notes balance. Douro No. 1 does not include such
sequential trigger; as such, its senior notes may be exposed to
tail risk, which is addressed in Fitch's analysis.

Variation from Criteria

The transactions are outperforming the average observed for
Portugal. As a result, Fitch decided to remove the Performance
Adjustment Factor floor of 0.7x from its analysis and applied the
model-derived performance adjustment factor of 0.56x (Douro No. 1
and 2) and 0.58x (Douro No. 3). This constitutes a criteria
variation and is one of the key drivers underlying the rating

Expected Provisioning Needs

Both transactions have staggered provisioning mechanisms,
diverting excess spread to cover principal losses. The mechanism
depends on the number of monthly instalments in arrears. The
transactions provision 25% after 12 months in arrears, another
25% after 24 months and the remaining 50% after 36 months.

To account for the staggered nature of the provisions, Fitch has
estimated the loan balance that have defaulted in the
transactions, but which have not yet been fully provisioned.
Those amounts have been deducted from the available current
credit enhancement in Fitch's analysis, since they are expected
to be written off in the coming quarters.


The ratings may be sensitive to a change of the underlying
economic factors influencing the ability of borrowers to settle
their mortgage payments. Should this translate into significant
portfolio deterioration beyond Fitch's stress assumptions, the
notes may see negative rating action.

The rating of Douro No.1's class A notes is also capped at
Portugal's Country Ceiling of 'A+' and consequently sensitive to
changes to the Country Ceiling.



Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.


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

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

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


The information below was used in the analysis:

   -- Loan-by-loan data provided by Banco BPI dated 31 August
      2016 for Douro Mortgages No.1, 30 June 2016 for Douro
      Mortgages No. 2 and 31 July 2016 for Douro Mortgages No. 3

   -- Transaction reporting provided by Citibank since close and
      until 31 August 2016 for Douro Mortgages No. 1, 30 June
      2016 for Douro Mortgages No. 2 and 31 July 2016 for Douro
      Mortgages No.3


The models below were used in the analysis. Click on the link for
a description of the model.

ResiEMEA. EMEA RMBS Surveillance Model. Portfolio Credit
Model.EMEA Cash Flow Model.

List of rating actions:

Sagres, STC S.A. / Douro Mortgages No. 1:

   -- Class A (ISIN XS0236179270): affirmed at 'A+sf'; Outlook

   -- Class B (ISIN XS0236179601): affirmed at 'Asf'; Outlook

   -- Class C (ISIN XS0236180104): affirmed at 'BBBsf'; Outlook

   -- Class D (ISIN XS0236180443): upgraded to 'BB+sf' from
      'BBsf'; Outlook Stable

Sagres, STC S.A. / Douro Mortgages No. 2:

   -- Class A1 (ISIN XS0269341334): affirmed at 'Asf'; Outlook

   -- Class A2 (ISIN XS0269341680): affirmed at 'Asf'; Outlook

   -- Class B (ISIN XS0269343389): affirmed at 'BBBsf'; Outlook

   -- Class C (ISIN XS0269343892): upgraded to 'BB+sf' from
      'BBsf'; Outlook Stable

   -- Class D (ISIN XS0269344197): upgraded to 'BB-sf' from
      'Bsf'; Outlook Stable

Sagres, STC S.A. / Douro Mortgages No. 3:

   -- Class A (ISIN XS0311833833) affirmed at 'BBB+sf'; Outlook

   -- Class B (ISIN XS0311834211) affirmed at 'BB+sf'; Outlook

   -- Class C (ISIN XS0311835374) affirmed at 'BBsf'; Outlook

   -- Class D (ISIN XS0311836349) affirmed at 'Bsf'; Outlook

   -- subordinated rating affirmed at 'BB'.

ENERGIAS DE PORTUGAL: Fitch Affirms 'BB' Rating on Hybrid Secs.
Fitch Ratings has affirmed EDP - Energias de Portugal S.A.'s
(EDP) Long-Term Issuer Default Rating (IDR) and senior unsecured
rating at 'BBB-', Short-Term IDR at 'F3' and hybrid securities at
'BB'. The Outlook on the IDR is Stable.

The affirmation reflects EDP's leading position in Portugal, the
supportive and fast-growing renewables business and the moderate
exposure to merchant risk. It also factors in some uncertainties
coming from Brazil and the shift to a liberalised market in 2017
for the capacity managed under long-term contracts in Portugal.
Fitch's forecasts result in average funds from operations (FFO)
adjusted net leverage of 4.8x and FFO interest coverage of 4.5x
for 2016-2020, both within the guidelines for the 'BBB-' rating,
reaching the positive guidelines by 2020. The updated business
plan confirms the management's intention to reduce leverage and
preserve the largely regulated and quasi-regulated business mix.


Supportive Business Plan to 2020

The management expects to achieve moderate growth by 2020 (EBITDA
CAGR of 3%), a function of increasing renewables and efficiency
gains. The business plan foresees lower net capex and benefits
from Portuguese regulatory receivables (RRs) sales and EUR1bn of
asset disposals, largely from the execution of the China Three
Gorges' (CTG) partnership, leaving room for reducing leverage and
increasing returns to shareholders. The business plan confirms
EDP's intention to pursue growth only in activities with medium
to high visibility and to reduce leverage.

Net Debt Decrease

The positive trading and the large tariff deficit assets sales
already materialised year-to-date support a substantial reduction
in Fitch-adjusted net debt to around EUR15.5bn by end-2016 from
EUR17bn in 2015. "From 2017, we expect positive free cash flows
(FCF), mainly deriving from declining RRs and a stricter capex
policy, to be deployed towards debt reduction," Fitch said. FFO
is projected to slightly increase with moderate EBITDA growth and
reduced financial costs being largely offset by growing
minorities' leakage and higher cash taxes due to RRs

Moderate Net Capex

The business plan includes annual average capex of EUR1.4bn
across the period 2016-20, net of the proceeds from asset
rotation of EUR1.6bn across the plan (around 60% already achieved
in 2016). In Fitch's view, the conclusion of the large hydro
projects in Iberia leaves EDP with more flexibility over its
investments, benefiting also from average time to EBITDA of less
than two years. The group has a clear focus on onshore wind and
the US, and will slowly reduce the weight of Iberia in its cash

Shift to Merchant Largely Offset

From 2017, all Power Purchase Agreements (PPAs)/costs from the
maintenance of the contractual balance (CMEC) plants in Portugal
will be exposed to price and volume risk. Fitch assumes this move
to be negative for the credit profile, but that it will be
mitigated by the full integration with supply and new capacity in
wind with PPAs and hydro. By 2020, the expected EBITDA share from
liberalised activities will rise, according to Fitch's estimates,
to 24% (from 9% in 2012), still below the average of its EU

Declining Portuguese Regulatory Receivables

Fitch expects the declining trend of RRs started in 2015 to
continue. The recent government proposal for a 1.2% nominal
average tariff increase for 2017 is slightly below the committed
increases between 1.5% and 2% in real terms. "However, we see the
gap offset by additional funding measures (eg. EUR140m wind farms
injection)," Fitch said. The reduction in RRs on EDP's balance
sheet is key to support deleveraging from 2016 as a function of
declining outstanding RRs in the system and management's decision
of keep selling those assets. Any delay in the system's tariff
deficit reduction would probably translate into a slower
reduction in leverage.

Improved Operating Environment in Brazil

The end of a two-year drought has alleviated the issues linked to
the hydro scarcity for electricity generation in Brazil. The
government's structural measures have eased the financial impact
on the companies and limited the downside risk in extremely dry
years in the future. "However, we still have concerns linked to a
rising possibility of political interference in a weak
macroeconomic scenario, increased delinquency due to higher
energy tariffs, FX risk exposure and a decrease in electricity
demand," Fitch said.

Exposure to Iberian Baseload Price Volatility

EDP's conventional generation portfolio in Iberia is large in
hydro (54% of conventional generation fleet), and hence clean and
profitable but also exposed to volatility related to weather and
baseload price. The volatility is mitigated by the commissioning
of new pumping hydro capacity with spreads between peak/off-peak
prices persisting under lower average prices due to wind
volatility, financial hedges, and the supportive platform of its
customer base that it is now largely in the liberalised market.


EDP's business risk profile has a lower share of purely regulated
businesses, although it benefits from a higher share of long-term
contracted or quasi-regulated businesses (largely renewables),
than Southern European peers (eg, Iberdrola and Enel). In
addition, it has higher leverage and larger leakage due to
minorities within the group structure. All the above justifies
the current two-notch differential from these peers. However, the
2016-2020 business plan focuses on regulated business and
renewables with support mechanisms in strong economies, such as
the US, and incorporates a substantial reduction in leverage,
potentially narrowing the differential with its European peers by


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

   -- FY16 EBITDA at EUR3.75bn (excluding non-recurring items)
      and a 2% CAGR for 2016 to 2020, driven by wind and hydro
      organic growth and efficiency improvements.

   -- Average netted by asset-rotation-plan capex of EUR1.4bn per
      year for 2016-2020 and around EUR1bn of additional cash-in
      for disposals linked largely to CTG

   -- Increased dividend floor to EUR0.19 per share to be paid in
      2017 and slight annual increase thereafter.

   -- Declining Portuguese RRs on balance sheet for 2016-2020,
      largely materialised in 2016. This implies EDP will
      continue with securitisation in Portugal at a pace of
      EUR0.5bn on average for 2017-2020. No new TD in Spain and

   -- Brazilian real to depreciate against the euro by around 30%
      up to 2020. Stable euro/dollar.


Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action

   -- FFO adjusted net leverage trending towards 4.5x and FFO
      interest coverage above 4.0x on a sustained basis, assuming
      no major changes in the activities' mix other than expected
      by Fitch.

   -- Sustained positive free cash flows, together with the
      consistent reduction in the tariff deficit in Portugal in
      line with expectations.

Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action

   -- FFO net adjusted leverage above 5.0x and FFO interest
      coverage below 3.5x over a sustained period.

   -- Adverse regulatory or fiscal changes in any of the core
      markets affecting the predictability of cash flows,
      including substantial delays in declining Portuguese tariff
      deficit outstanding debt.

   -- A substantial increase in operations in emerging markets
      with a higher business risk or a substantial shift in
      business mix towards unregulated activities, higher than
      expected by Fitch, could lead us to tighten the ratio
      guideline for the current rating.


Strong Liquidity: As of end-June 2016, committed facilities plus
cash on hand amounted to EUR5.6bn. This compares with remaining
2016 and 2017 debt maturities of EUR2.9bn. Fitch expects the
company to generate positive free cash flow in the second half of
2016 driven by additional EUR1bn regulatory receivables sales. In
addition, group cash has increased by around EUR200m following
the net capital increase by EDP Brazil in July 2016. EDP's
liquidity is sufficient to cover its refinancing needs over the
next 24 months.


   EDP - Energias de Portugal S.A.

   -- Long-term Issuer Default Rating (IDR) affirmed at 'BBB-',
      Stable Outlook

   -- short-term IDR affirmed at 'F3'

   -- senior unsecured rating affirmed at 'BBB-',

   -- subordinated rating affirmed at 'BB'.

   EDP Finance B.V

   -- Long-term IDR affirmed at 'BBB-', Stable Outlook

   -- senior unsecured rating affirmed at 'BBB-',

   -- short-term IDR affirmed at 'F3'

   Hidroelectrica del Cantabrico, S.A.

   -- Long-term IDR affirmed at 'BBB-', Stable Outlook

   -- short-term IDR affirmed at 'F3'.


GLOBAL LIMAN: Fitch Affirms 'BB-' Rating on $250M Sr. Unsec. Debt
Fitch Ratings has revised the Outlook for Global Liman
Isletmeleri A.S.'s (Global Ports Holding, or GPH) USD250m senior
unsecured notes due 2021 to Negative from Stable. The rating has
been affirmed at 'BB-'.

The revision to a Negative Outlook reflects our view that
worsening security conditions in Turkey could have a material
impact on the tourist sector with a related knock-on effect on
GPH's Turkish cruise segment and relevant projected metrics. The
recent lower demand for marble exports to China also limits the
medium-term visibility on the future of Port of Akdeniz's
containerised throughput.

GPH's 'BB-' rating reflects its structural and concentrated
exposure to two volatile business sectors: the commercial segment
(about 73% of 2015 pro forma EBITDA of the two guarantor ports),
with significant exposure to the containerised export of marble
from Akdeniz, and the cruise business (about 27% of the two
guarantor ports). Fitch considers both sectors to be relatively
sensitive to business cycles. The rating is also constrained by
the issuer's acquisitive corporate profile and unsecured bullet
debt structure, with material exposure to refinancing risk.

Fitch's analysis of GPH focuses on the Turkish port business
(recourse business perimeter) as the Turkish subsidiaries are
designated as guarantors of the rated bond. Under our approach,
the subsidiaries funded with non-recourse debt contribute to the
recourse perimeter only through dividend distributions.


Revenue/Volume Risk - Weaker

Akdeniz is an export-driven port with sector exposure to
containerised marble exports to China. After years of solid
growth, throughput of 20-foot equivalent units (TEUs) posted five
consecutive quarters of contraction up to 2Q15 with marginal
stabilisation in 2H15. As a result, 2015 revenue and EBITDA
contracted by 8.7% and 3.2%, respectively. However, this dynamic
was largely offset by sound performances of cruise segment where
Kusadasi port posted growth of EBITDA of 11% in FY2015.

The situation deteriorated in 1H16. TEU throughput at Akdeniz
contracted by 6% in IH16 (although higher pricing allowed revenue
to remain substantially stable) and volumes at GPH Turkish cruise
ports decreased by 26%. The revenue drop was smaller at Ege Port,
Kusadasi (-3%) due to pricing policy.

The tourism sector could be further materially affected by the
worsening security situation. Terrorist attacks in Istanbul and
Ankara have caused multiple fatalities. The removal of a large
number of senior military officials after July's attempted coup
may hinder the capacity to address security challenges, in
Fitch's opinion. Revenues from foreign tourist arrivals in Turkey
were down 41% yoy in 1H16. A diplomatic rapprochement with Russia
should provide some support to the sector, but without a
significant improvement in security conditions, a broad-based
recovery is unlikely.

In this context, the Fitch rating case assumes a 5% volume
contraction at Akdeniz in 2016 followed by a modest recovery and
a sharp fall in passenger numbers at Kusadasi in 2016 (-13%) and
2017 (-10%) driven by the contraction of tourist sector.

The concentration risk of commercial revenues and exposure to the
more volatile cruise segment suggest a "weaker" volume

Revenue/Price Risk - Midrange

In both commercial and cruise segments, GPH's Turkish ports
benefit from full pricing flexibility. For the Turkish ports
within Fitch's recourse perimeter, the Turkish competition law
and authorities only prevent against "excessive and
discriminatory pricing", for which there is no history of
enforcement. GPH's management typically favours short-term
contracts with its customers, including incentives at times. The
pricing flexibility is balanced by the lack of long-term
visibility and results in a Midrange assessment. Fitch further
notes possibly reduced room for further price rises following the
recent sharp increases of 11% in 1H16 in container revenue per
TEU and 14% in general and bulk cargo revenue a ton at Akdeniz.

Infrastructure Development/Renewal Risk - Stronger

None of the Turkish ports within GPH's portfolio has a regulatory
requirement to increase capacity and all have sufficient capacity
headroom to deliver the expected throughput. Fitch said, "We note
cruise ports generally have materially lower capex needs than
their commercial counterparts."

Debt Structure - Weaker

Rated debt consists of a USD250m senior unsecured bullet bond
maturing in 2021. Furthermore, the bond does not benefit from
significant covenant protection, apart from the restrictions from
raising additional indebtedness if gross debt/EBITDA exceeds 5x
(event of default under the bond documents). There are no
limitations on acquisitions.

Credit Metrics

Under the Fitch rating case, GPH's adjusted leverage is expected
to reach 4.3x at YE16 and to then decline. Fitch's rating case
uses more conservative assumptions on volumes, tariffs and
dividends received from joint ventures than management. As a
result, Fitch expects leverage to average at 3.3x over a
five-year period.


Fitch compared GPH with a series of Fitch-rated single-site ports
and larger ports groups with varying levels of structural
protection for creditors. Mersin International Port (MIP;
BBB-/Stable) is a Turkish peer with a stronger debt structure and
lower leverage (max 2x). MIP also has a more diversified business
profile, a strong operational sponsor (PSA) and less acquisitive
profile. DeloPort (BB-/RWN) is a close peer as it also has a
weaker volume risk assessment, reflecting exposure to nearby
competition but marginally lower volume concentration. GPH is
more leveraged than DeloPorts, which also has a Midrange
assessment for Debt Structure.


Positive: A diversification of the business perimeter, leading to
greater stability of the cash flow without compromising GPH's
financial performance and a better-than-expected performance in
cruise passenger and commercial volumes could result in a
stabilisation of the outlook.

Negative: Considering the high exposure to refinancing risk in
2021 and the then short remaining tail before concessions'
maturities, negative rating actions may be triggered by the
issuer not deleveraging to less than 3.0x net debt/EBITDA by 2019
under the Fitch rating case.

U N I T E D   K I N G D O M

LADBROKES PLC: Moody's Affirms Ba2 CFR, Outlook Stable
Moody's Investors Service has affirmed UK gaming operator
Ladbrokes Plc's Ba2 corporate family rating and Ba2-PD
probability of default rating (PDR).  At the same time, the
rating agency has affirmed the Ba2 rating on the EUR225 million
senior unsecured notes due 2017 issued by Ladbrokes Group Finance
Plc.  The outlook on all ratings remain stable.

This action has been prompted by Moody's expectation that
Ladbrokes's merger with Coral (Gala Electric Casinos Plc, B1
under review for upgrade) will be completed in the near term.
Moody's also expects the ratings of Coral to be withdrawn upon
completion of the transaction, including the repayment of all its
outstanding debt.

"The transaction will improve the business profile of Ladbrokes
as a stand-alone entity.  That said, risks arise in integrating
the two companies, namely the associated costs and an increase in
the debt burden," says Donatella Maso, a VP-Senior Analyst at

                         RATINGS RATIONALE

The rating action has been prompted by the expectation that the
merger between Ladbrokes and Coral betting operations will soon
be completed following final approval of the Competition and
Markets Authority (CMA) on Oct. 26, and the publication of the
equity prospectus on Oct. 27.

In Moody's view, the enlarged group will benefit from a larger
scale, broader geographic reach and a stronger market share in
both UK retail and online segments.  There are several cost
synergies to be achieved with the merger, estimated by management
to be around GBP65 million, which will lead to profitability
improvements.  These positive factors are, however,
counterbalanced by the risk of integrating the two companies and
the associated costs to achieve the envisaged synergies; and by
the increase in the debt burden bringing the pro-forma Moody's
adjusted leverage to 4.1x at the end of 2016, compared to 2.8x
for Ladbrokes stand-alone in the twelve months ending 30 June

The transaction will add to Ladbrokes approximately GBP1 billion
of revenues and GBP200 million of EBITDA, including the impact
from the disposals of 360 shops, and will improve its reported
EBITDA margin by c.3%.  Ladbrokes will also strengthen its market
share in UK retail (to 41% from 24%) and UK online gambling (to
12.6% from 4.5%).  While the enlarged entity will still remain
largely exposed to the UK with 87% of its revenues, it will
benefit from a broader geographic reach, as Coral is one of the
largest retail and online betting operators in Italy.  Scale and
diversification are sought by gaming companies to better absorb
potential changes in regulation or taxation and compete more

There is a good industrial fit behind the merger, which lies with
the strategy to maintain and utilize the strengths of both
brands, to share best practices (particularly considering Coral's
online operating performance), and the achievement of cost
synergies in a three year period post-completion.  Most of these
cost synergies will be derived by eliminating duplicated
activities and by streamlining general and administration costs
across the retail and digital divisions.  According to the
management, this will result in non-recurring costs of
approximately 1.25 times of the annual quantified synergies.
However, Moody's notes that the integration process could be more
lengthy and costly than anticipated, causing business disruption,
particularly on the technology front.

The transaction is supported by a total of GBP1.35 billion bank
facilities maturing 2018-2020, while Ladbrokes' outstanding notes
will remain in place.  The GBP600 million term loan or Facility
A, is anticipated to be refinanced with new senior unsecured
notes. The merger will materially increase Ladbrokes' debt and
Moody's estimates the adjusted leverage to rise at around 4.1x at
the end of 2016.  However, moderate organic growth net of shop
disposals, the achievement of at least 75% of the synergies and
gradual prepayment of drawings under the revolving credit
facilities, will likely reduce the Moody's adjusted leverage at
around 3.2x by the end of 2018.

Moody's also expects that free cash flow generation will continue
to be positive although over the next two years, the combined
entity will be adversely impacted by high integration costs and
the renewal of Coral's betting licence in Italy, the latter
estimated in the range of GBP35 to GBP40 million.

Ladbrokes' Ba2 CFR continues to be negatively driven by (1) a
mature retail gaming business with limited growth potential; and
(2) its exposure to regulatory and fiscal headwinds including the
triennial review on slot machines and a potential gaming reform
in Australia, as well as volatile sports results.  Additionally,
the Brexit vote and the related uncertainty, could pose a risk to
Ladbrokes' UK operations if consumer sentiment significantly

Conversely, Ladbrokes' CFR is positively supported by (1) the
company's leading position in the UK retail gambling market
supported by a strong brand names and certain barriers to entry;
and (2) positive industry fundamentals underpinning the online
betting and gaming market segment.


Moody's considers Ladbrokes's liquidity profile as being adequate
for its near-term requirements including working capital needs,
restructuring costs to implement and complete the merger,
maintenance capital expenditures, licence renewal costs, dividend
payments and the repayment of the GBP225 million senior unsecured
notes due 2017.

The liquidity is underpinned by GBP40 million of cash balances at
close and two revolving facilities totalling GBP750 million
maturing in 2019 and 2020.

The bank facilities carry two maintenance covenants: a maximum
net leverage ratio of 3.5x and minimum net interest cover ratio
of 3.00x.  Moody's expects that Ladbrokes will maintain adequate
covenant headroom under these facilities.


The stable rating outlook reflects Moody's view that Ladbrokes
will be able to successfully integrate Coral and gradually
deleverage following completion of the merger, and maintain an
adequate liquidity profile by retaining its adequate covenant
headroom and availability under its revolving facilities.  The
stable outlook also assumes no material regulatory changes and a
conservative financial policy.


Upward pressure could be exerted on the ratings if the company's
debt/EBITDA (as adjusted by Moody's) trends below 3.5x and the
company's retained cash flow (RCF)/debt (as adjusted by Moody's)
remains above 20%, both on a sustainable basis, while maintaining
positive free cash flow generation.

Downward pressure on the ratings could occur if the company's
debt/EBITDA (as adjusted by Moody's) to rise towards 4.5x, or if
free cash flow turns zero, or if there any weakening of the
company's liquidity profile.  A downgrade could also occur as a
result of further negative regulatory actions.



Issuer: Ladbrokes Plc
  LT Corporate Family Rating, Affirmed Ba2
  Probability of Default Rating, Affirmed Ba2-PD

Issuer: Ladbrokes Group Finance Plc
  Backed Senior Unsecured Regular Bond/Debenture, Affirmed

Outlook Actions:

Issuer: Ladbrokes Plc
  Outlook, Remains Stable

Issuer: Ladbrokes Group Finance Plc
  Outlook, Remains Stable

                      PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was "Global
Gaming Industry" published in June 2014.

Established in 1886 and listed on the London Stock Exchange,
Ladbrokes, pro-forma for the merger with Gala Coral, is the
largest retail bookmaker in the UK with 3,800 betting shops and
the third largest online gambling operators with 12.6% share.
While 87% of the revenues are generated in the UK, the company
also operates in Ireland, Belgium, Italy, Spain (via a joint
venture, called Sportium, with gaming company Cirsa (Cirsa Gaming
Corporation S.A., B1, stable)), and Australia.

The combined group generated GBP2.4 billion of revenues and
GBP400 million of EBITDA before shop disposals, in the last
twelve months ended June 30, 2016.

WELLINGTON PUB: Fitch Affirms 'B+' Rating on Class A Notes
Fitch Ratings has affirmed Wellington Pub Company's (Wellington)
senior class A and B notes with Stable Outlooks: GBP111.5m
class A fixed-rate notes due 2029 are affirmed at 'B+'; Outlook
Stable; GBP26.5m class B fixed-rate notes due 2029 are affirmed
at 'B-'; Outlook Stable.

The ratings and Stable Outlooks are supported by the stablised
operational performance and marginally improved financial
metrics. The class A and B notes median free-cash-flow (FCF) debt
service coverage ratios (DSCR) under the Fitch base case are
estimated at 1.32x and 1.08x respectively, subject to some
uncertainty about the composition of the pub portfolio. The
ratings discount weaknesses in the debt structure, a high level
of non-performing assets (36% of rent payments are in arrears by
180+days) and a weaker company profile assessment, with the
portfolio's deteriorating asset quality and low level of
investment constituting a long-term concern.


Industry Profile - Midrange

While the pub sector in the UK has a long history, trading
performance for some assets has shown significant weakness in the
past. The sector is highly exposed to discretionary spending, and
strong competition. There are other macro factors that put
profitability under pressure such as the minimum wage, utility
costs and changes in regulation, with the statutory pub code
introducing the market rent-only option (MRO) in the
tenanted/leased segment in 2016. MRO breaks the traditional tied-
model that requires tenants to buy drinks from the pubcos,
usually in exchange for lower rent. The implementation of the
national living wage could put margins under further pressure.
Despite currently contracting, the eating- and drinking-out
market is viewed as sustainable in the long term, supported by
the strong pub culture in the UK.

(Sub-KRDs: Operating environment: Weaker, Barriers to entry:
Midrange, Sustainability: Midrange)

Company Profile - Weaker:

Wellington's portfolio performance has improved in the past 12
months as the result of stronger trading within the Greater
London area and subdued competition because of the falling number
of pubs in line with indutry trends. Total revenues and EBITDA
grew by 4% and 12.5%, respectively, at June-2016 year-on-year.
(YoY) However, the results were to an extent inflated by pubs
that Wellington had purchased from fellow Wellesley Pub Company
and whose sale will be eventually reversed.

Performance on a per pub basis also strengthened; EBITDA per pub
grew by 11.6%. During the 12 months ending June-2016, Wellington
disposed of 12 pubs and its total number fell to 768. The levels
of repossessions and rent in arrears stabilised and are
declining, albeit the levels are still high and may affect the
sustinablity of revenues going forward.

Wellington is managing the portfolio by disposing of and
acquiring new pubs, but the number of acquisitions is not
sufficient to compensate for the number of pubs closing.
Positively, the number of pubs on long leaseholds has been
stable. The company's low capex spend adversely impacts property
values and the profitability of the pubs, especially in current
markets when tenants do not have the financial strength to make
sufficient investment themselves. Fitch views this strategy as
credit negative. The asset manager estimates that about 40% of
the portfolio is suffering from noticeable deferred maintenance
(at least GBP5,000 per pub), with 11% experiencing
underinvestment of more than GBP20,000 per pub. The total average
deferred maintenance costs are estimated to be just under GBP10m.

The tenanted business model has less visibility on the tenants'
profitability. The sustainability of the cash flows generated by
tenanted pubs is more difficult to estimate. On balance, the
nature of the free-of-tie portfolio implies a low level of
operational management. Fitch deems the number of available
alternative operators to be sufficient in the competitive UK pub

(Sub-KRDs Financial performance: Weaker, Company operations:
Weaker, Transparency: Weaker, Dependence on operator: Stronger,
Asset quality: Weaker)

Debt Structure - Weaker:

The class A and B notes are fully amortising, secured and fixed-
rate. The class B notes debt service is gradually falling. The
security package for the class A and B notes is weakened by the
unfavourable ownership structure, whereby pubs are directly owned
by the issuer leading to a higher default risk compared with
standard WBS issuer-borrower structures. However, the security
package is strong, with typical first-ranking fixed and floating
charges over the issuer's assets. The class B notes rank junior
to the class A notes.

Structural features are weak because of the non-orphan SPV
structure, limited contractual provisions, an inadequate
liquidity reserve (covering about four months of class A debt
service), in addition to the lack of financial covenants. In
other WBS transactions, these provide bondholders with more
control by giving them the option to appoint an administrative
receiver well ahead of a payment default. As the liquidity
reserve is not tranched among the class A and B notes, it could
be depleted by drawings to support the subordinated class B
notes, leaving little support for the senior notes.

Another weak structural feature is the restricted payment
conditions (RPC) covenant, which stipulates that the transaction
is subject to a lock-up if the DSCR falls below 1.25x. In
practice, despite actual DSCR being below 1.25x, a lock-up has
never been triggered, since a surplus cash account is taken into
consideration when DSCR is calculated under the 'cash release
income cover test'.

(Sub-KRDs Debt profile: Stronger, Security package: Weaker,
Structural features: Weaker)


Wellington is the only Fitch-rated free-of-tie pub transaction.
Leased/tenanted pub WBS transactions relying on the beer-tie with
the Punch A and Punch B transactions are considered the closest
peers, albeit with different business models and revenue streams.
Wellington's Class A notes are rated on par with Punch B's Class
A notes, reflecting the latter's stronger financial metrics but
weaker business model and debt structure.


Negative: A downgrade would reflect a further deterioration in
FCF beyond Fitch's base case assumptions as a result of an
increase in arrears, pub vacancies and/or foreclosure rates and
slower-than-expected deleveraging.

If Wellington and/or its affiliates' combined portion of holdings
in a transaction's senior notes exceeds 75% (currently 58%), the
rating will be withdrawn as the majority noteholder will be able
to amend the terms of the notes at its own discretion.

Positive: Upgrade potential is limited.


Wellington is a securitisation of rental income from 768 free-of-
tie pubs predominantly located in residential areas, mainly in
the south-east of the UK.

* UK: Ofgem Reviews Safety Net Procedures for Energy Customers
Josie Clarke at Press Association reports that energy customers
have a new safety net to protect their credit balances if their
supplier goes out of business as a host of small companies enter
the market.

Ofgem has been reviewing procedures to cope with a supplier going
out of business as an influx of new start-ups join the market
offering cheap gas and electricity deals, Press Association

According to Press Association, the regulator already has plans
in place to ensure households will continue to receive their
energy supply if their supplier goes under, but there were
previously no guarantees that customers would get their money

Customers who pay by direct debit typically build up credit
during summer which might peak at just over GBP100 to cover the
cost of using more energy during the winter, Press Association

As unsecured creditors, these customers are unlikely to get their
money back if their supplier becomes insolvent, Press Association

Ofgem, Press Association says, will now take into account who can
best protect consumers' credit balances as part of the process
for selecting a replacement supplier in the "unlikely event" a
company goes bust.  It said that "where necessary" it would let
the replacement supplier recoup the cost of reimbursing the
credit balances through an industry levy spread across all
customers, but stressed this would only have a "small impact" on

According to the report, Rachel Fletcher, Ofgem's senior partner
for consumers and competition, said: "It's important that people
are fully protected in the unlikely event a supplier goes out of

"Our safety net gives peace of mind so they can have complete
confidence to shop around for the best deal."

* UK: New Insolvency Rules to Take Effect in April 2017
Pat Sweet at CCH Daily reports that the Insolvency Service is
flagging up the publication of the new insolvency rules, as the
legislation has begun its passage through parliament and is due
to come into force on April 6, 2017.

The new rules replace the Insolvency Rules 1986 and their 28
subsequent amendments, updating the language and modernising them
to take account of the changes resulting from the Deregulation
Act 2015 and the Small Business, Enterprise and Employment Act
2015, CCH Daily discloses.  In particular, there are amendments
enabling modern methods of communication and decision making to
be used in place of paper communications and physical meetings,
CCH Daily notes.

The Insolvency Service says the aim is to reflect modern business
practice and to make the insolvency process more efficient, CCH
Daily relays.

According to CCH Daily, changes include:

   -- enabling electronic communications with creditors;
   -- removing the automatic requirement to hold physical
creditors meetings
   -- although creditors will be able to request meetings;
enabling creditors to opt out of further correspondence
   -- and for small dividends to be paid by the office holder
without requiring a formal claim from creditors

The rules have been restructured, for example by separating out
the winding-up provisions into three separate parts for members'
voluntary liquidation, creditors' voluntary liquidation and
compulsory liquidation, CCH Daily notes.  Undue repetition has
been avoided through the greater use of common parts that apply
to multiple insolvency procedures, CCH Daily states.

The rules will apply in England and Wales, according to CCH


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

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

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


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

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

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

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

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

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

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