TCREUR_Public/161117.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Thursday, November 17, 2016, Vol. 17, No. 228


                            Headlines


C R O A T I A

BADEL 1862: Calls on Meteor to Help in Financial Restructuring


G E R M A N Y

LANXESS AG: Moody's Assigns (P)Ba2 Rating to Subordinated Notes


G R E E C E

GREECE: Launches New Round of Bailout Talks with Creditors


I R E L A N D

EUROCREDIT CDO V: S&P Raises Rating on Class E Notes to B+
IARNROD EIREANN: May Face Insolvency, More Funding Needed


I T A L Y

BANCA MONTE: Unveils Terms of Proposed Debt-to-Equity Conversion


N E T H E R L A N D S

BBVA GLOBAL: Moody's Lowers Rating on Series No. 64 Notes to Ba1
CADOGAN SQUARE CLO VII: S&P Affirms BB Rating on Class E Notes
PDM CLO I: S&P Raises Rating on Class E Notes to BB-


N O R W A Y

ISLAND OFFSHORE: In Creditor Talks, Halts Amortization Payments


R U S S I A

SOVCOMBANK: Fitch Hikes Long Term Issuer Default Ratings to 'BB-'


U K R A I N E

UKRAINE: Fitch Hikes Long Term Issuer Default Ratings to 'B-'


U N I T E D   K I N G D O M

BIBBY OFFSHORE: Moody's Lowers CFR to Caa2, Outlook Negative
KAYBOO LTD: In Administration, Corran's Operations Continue
SALISBURY 2015-1: Fitch Puts 'BB-' Class N Notes Rating on RWP
SOUTHERN PACIFIC 05-2: S&P Cuts Rating on Class D1a Notes to BB


                            *********


=============
C R O A T I A
=============


BADEL 1862: Calls on Meteor to Help in Financial Restructuring
--------------------------------------------------------------
SeeNews reports that Croatian alcoholic and soft drinks producer
Badel 1862 on Nov. 16 announced a decision to invite a potential
strategic investor, local chemical products maker Meteor, to aid
with the company's financial and operational restructuring as
part of pre-bankruptcy proceedings.

Badel 1862 has extended the invitation to Meteor under a public
call for strategic investors launched in May, it said in a filing
with the Zagreb bourse, SeeNews relates.

According to SeeNews, Badel also said that together with Meteor
and Badel's creditors, it will work intensively towards ending
the pre-bankruptcy procedure and achieving capital adequacy, both
of which are essential in ensuring the company's long-term
viability.

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

In September, however, Badel announced that Meteor had acquired
over 67.5% of the claims registered in the pre-bankruptcy
settlement of the company -- a move allowing Meteor alone to make
a decision on the company's financial and operational
restructuring, SeeNews relays.



=============
G E R M A N Y
=============


LANXESS AG: Moody's Assigns (P)Ba2 Rating to Subordinated Notes
---------------------------------------------------------------
Moody's Investors Service has assigned a provisional (P)Ba2
rating to the proposed issuance of Subordinated Resettable Fixed
Rate Notes by Lanxess AG.  The rating outlook is stable. The size
and completion of the Hybrid transaction are subject to market
conditions.

In September 2016, Lanxess announced its decision to acquire US
based specialty chemical company, Chemtura Corporation
("Chemtura", Ba3 review for upgrade) for an enterprise value of
approximately EUR2.4 billion.  The transaction, which is expected
to close around mid-2017, remains subject to approval by Chemtura
shareholders, regulatory approvals and certain other customary
closing conditions.

Following the placement of two EUR500 million senior unsecured
bonds at the end of September, Lanxess intends to issue hybrid
securities in benchmark size as part of the long-term financing
of the Chemtura transaction.

                        RATINGS RATIONALE

The rating of (P)Ba2 is two notches lower than Lanxess's Baa3
senior unsecured rating.  This reflects the features of the
proposed Hybrid securities in relation to the existing senior
unsecured obligations of Lanxess rated Baa3.

The proposed Hybrid is deeply subordinated, has a 60-year
maturity, no events of default and Lanxess can opt to defer
coupons on a cumulative basis.  In Moody's view, the Hybrid has
equity-like features that allow it to receive basket 'C'
treatment, which corresponds to 50% equity treatment of the
borrowing for the calculation of the credit ratios by Moody's.

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

As the Hybrid rating is positioned relative to another rating of
Lanxess, either (i) a change in the senior unsecured rating of
Lanxess, or (ii) a re-evaluation of its relative notching, could
impact the Hybrid rating.

Downward pressure on the ratings may result from (i) Lanxess's
failure to sustain the ongoing recovery in its operating
profitability and/or (ii) another large debt funded acquisition,
either of which would lead to some permanent deterioration in
financial metrics (leaving aside potential near-term volatility
in pension adjustment), including total debt to EBITDA rising
towards 4x and retained cash flow (RCF) to net debt falling below
20%.

Conversely, the rating could be upgraded following the successful
completion of Phase 2 of the realignment and efficiency programme
in parallel with the smooth integration of Chemtura, as evidenced
by an EBITDA margin rising into the mid-teens and sustained
strengthening in financial metrics including RCF to total debt in
the mid-20s.

The principal methodology used in this rating was Global Chemical
Industry Rating Methodology published in December 2013.

Headquartered in Cologne, Germany, Lanxess AG is a leading
European chemical company with reported sales of EUR7.9 billion
and reported EBITDA of EUR885 million for the financial year
ended Dec. 31, 2015.


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


GREECE: Launches New Round of Bailout Talks with Creditors
----------------------------------------------------------
The Associated Press reports that the Greek government has
launched a new round of talks with bailout creditors on demanded
reforms and cutbacks, whose success could lead to a lightening of
the country's debt load.

The negotiations started in Athens on Nov. 15 with meetings
between the ministers of finance, energy and development and
representatives of Greece's European partners and the
International Monetary Fund, The Associated Press relates.

Bailout inspectors are also due to meet the labor minister to
discuss potentially thorny issues such as pensions reform,
The Associated Press discloses.

Greece's left-led government wants to have the talks wrapped up
by a Dec. 5 meeting of finance ministers from the 19-country
eurozone, The Associated Press notes.  Greek officials hope the
ministers will back some short term debt relief measures, and
specify further medium- and long-term debt assistance, The
Associated Press states.


=============
I R E L A N D
=============


EUROCREDIT CDO V: S&P Raises Rating on Class E Notes to B+
----------------------------------------------------------
S&P Global Ratings raised its credit ratings on Eurocredit CDO V
PLC's class C, D, and E notes.  At the same time, S&P has
affirmed its rating on the class B notes.

The rating actions follow S&P's assessment of the transaction's
performance using data from the Sept. 2, 2016 note valuation
report.

Eurocredit CDO V has been amortizing since the end of its
reinvestment period in September 2012.  Since S&P's previous
review on Oct. 8, 2015, the aggregate collateral balance has
decreased by 16% to EUR101.45 million from EUR120.15 million.

S&P subjected the capital structure to a cash flow analysis to
determine the break-even default rate (BDR) for each rated class
at each rating level.  The BDR represents S&P's estimate of the
maximum level of gross defaults, based on its stress assumptions,
that a tranche can withstand and still fully repay the
noteholders.  In S&P's analysis, it used the portfolio balance
that it considers to be performing (EUR101,448,370), the current
weighted-average spread (3.62%), and the weighted-average
recovery rates calculated in line with S&P's revised corporate
collateralized debt obligations (CDOs) criteria.  S&P applied
various cash flow stresses, using its standard default patterns,
in conjunction with different interest rate and currency stress
scenarios.

The class B notes (the senior-most class of notes outstanding)
have continued to pay down since S&P's previous review and
currently have a note factor (the current notional amount divided
by the notional amount at closing) of 16.5% following repayments
of EUR25.95 million in the last year.  In S&P's view, this has
increased the available credit enhancement for all of the rated
notes.

The weighted-average spread earned on the assets has marginally
dropped to 362 basis points (bps) from 368 bps since S&P's
previous review.  At the same time, the number of distinct
obligors in the portfolio has reduced to 26 from 32 over the same
period as the portfolio is deleveraging, post the transaction's
re-investment period.  The top 10 largest obligors account for
65.5% of the portfolio.  The portfolio's average credit quality
has remained stable as an increase in the proportion of assets
rated in the 'CCC' category ('CCC+', 'CCC', or 'CCC-') is
mitigated by the positive migration to the 'BB' category from the
'B' category.  The par coverage tests comply with the documented
required triggers.

Non-euro-denominated assets currently comprise 2.25% of the total
performing assets.  Any resultant currency risk (all outstanding
liabilities are denominated in euros) is unhedged and S&P modeled
this as an additional risk in our analysis.

S&P has also applied its structured finance ratings above the
sovereign criteria.  S&P considers the transaction's exposure to
sovereign risk to be within the threshold levels detailed in
these criteria and have therefore not applied any additional
stress in S&P's analysis.

In S&P's opinion, the increased available credit enhancement for
the class C, D, and E notes is now commensurate with higher
ratings than those previously assigned.  S&P has therefore raised
to 'AAA (sf)' from 'AA+ (sf)' its rating on the class C notes, to
'BBB+ (sf)' from 'BB+ (sf)' our rating on the class D notes, and
to 'B+ (sf)' from 'B- (sf)' our rating on the class E notes.

S&P has affirmed its 'AAA (sf)' rating on the class B notes as it
believes the available credit enhancement remains commensurate
with that rating level.

Eurocredit CDO V is a cash flow collateralized loan obligation
(CLO) transaction that securitizes loans to primarily
speculative-grade corporate firms.  The transaction closed in
September 2006 and is managed by Intermediate Capital Group PLC.

RATINGS LIST

Eurocredit CDO V PLC
EUR606 Million Senior Secured Deferrable Floating-Rate Notes

Class           Rating
          To             From

Ratings Raised

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

Rating Affirmed

B         AAA (sf)


IARNROD EIREANN: May Face Insolvency, More Funding Needed
---------------------------------------------------------
Less than one-tenth of those who commute into and around Dublin
travel by rail, The Irish Times' Sarah Bardon relays, citing a
major report on Ireland's railways which warns that Iarnrod
Eireann could face insolvency unless it gets more State money.

The National Transport Authority's review was considered by
Cabinet on Nov. 15 and later published -- it declares the semi-
State needs an extra EUR103 million a year over the next five
years to ensure its survival, The Irish Times relates.

The report argues some rural routes should be considered for
closure, The Irish Times notes.

The review, as cited by The Irish Times, said all five stations
between Ballybrophy and Limerick -- Roscrea, Cloughjordan,
Nenagh, Birdhill and Castleconnell -- and all four stations
between Limerick Junction and Waterford -- Tipperary town, Cahir,
Clonmel and Carrick-on-Suir -- are among the 15 least-used on the
network.

Labour TD Alan Kelly criticized closure calls, saying more
investment is needed, The Irish Times discloses.

According to The Irish Times, David Franks, chief executive of
Iarnrod Eireann, said the State subvention must rise, or else
fares will have to do so.

The current level of funding is "unsustainable" and was the
primary cause for the deterioration of the infrastructure, The
Irish Times notes.


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


BANCA MONTE: Unveils Terms of Proposed Debt-to-Equity Conversion
----------------------------------------------------------------
Silvia Aloisi and Stephen Jewkes at Reuters report that ailing
Italian lender Monte dei Paschi di Siena on Nov. 14 announced the
terms of a planned debt-to-equity conversion, a key plank of a
rescue scheme aimed at averting the bank being wound down.

The bank said the voluntary debt swap offer would target EUR4.289
billion (GBP3.68 billion) of subordinated bonds, Reuters relates.
It was also considering converting a hybrid financial instrument
known as Fresh 2008 worth EUR1 billion, Reuters discloses.

The debt-to-equity swap is a crucial leg of a EUR5 billion
(US$5.4 billion) rescue plan aimed at meeting regulators'
concerns about the bank's capital position and bad loans, Reuters
notes.

The bank aims to raise its equity by more than EUR1 billion as a
result of the debt conversion, Reuters relays, citing a source
with knowledge of the matter, with the rest of the EUR5 billion
coming from one or more cornerstone investors and a share sale on
the market.

Under the rescue plan, the bank also aims to transfer some EUR28
billion of bad loans to a special vehicle, which will securitize
them and put them up for sale, Reuters says.

A debt swap would reduce the amount of cash Monte dei Paschi
needs to raise on the market, boosting its chances of pulling off
the rescue plan which is seen as a test of investor confidence in
Italy's battered banking sector, Reuters states.

According to Reuters, the bank said that if take-up of the
planned conversion offer was judged not to be successful, it
would be unable to launch the share sale and could be subject to
European bail-in rules for dealing with bank crises, which
include among other things the forced conversion of subordinated
bonds.

The bank aims to launch the debt swap by the end of this month,
after a Nov. 24 shareholder meeting which is due to approve the
rescue scheme, Reuters discloses.

                    About Monte dei Paschi

Banca Monte dei Paschi di Siena SpA -- http://www.mps.it/-- 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.


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


BBVA GLOBAL: Moody's Lowers Rating on Series No. 64 Notes to Ba1
----------------------------------------------------------------
Moody's Investors Service has downgraded the rating on these
notes issued by BBVA Global Markets B.V.:

   Series Number 64 (under the Euro 2,000,000,000 Structured
   Medium Term Note Programme), USD15,000,000 Credit Linked Notes
   due 2018, Downgraded to Ba1 (sf); previously on June 19, 2015,
   Upgraded to Baa3 (sf)

                         RATINGS RATIONALE

Moody's explained that the rating action taken today is the
result of a rating action on Telefonica S.A., which was
downgraded to Baa3 from Baa2 on Nov. 7, 2016.

The transaction is a credit linked note issued by BBVA Global
Markets B.V., referencing Telefonica S.A. and guaranteed by Banco
Bilbao Vizcaya Argentaria, S.A.

Methodology Underlying the Rating Action:

The principal methodology used in this rating was "Moody's
Approach to Rating Repackaged Securities" published in June 2015.

Factors that would lead to an upgrade or downgrade of the rating:
The noteholders are mainly exposed to the credit risk of the
guarantor and the underlying asset.  A downgrade or upgrade of
either the guarantor and the underlying asset could trigger a
downgrade or upgrade on the Notes.

Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, which could negatively impact the
ratings of the notes, as evidenced by 1) uncertainties of credit
conditions in the general economy and 2) more specifically, any
uncertainty associated with the underlying credits in the
transaction could have a direct impact on the repackaged
transaction.

Loss and Cash Flow Analysis:

Moody's quantitative analysis focuses on the risks relating to
the credit quality of the guarantor and the underlying asset.
Moody's generally determine the expected loss posed to securities
holders by adding together the severities for loss scenarios
arising from either Underlying Asset default, and if applicable,
hedge counterparty risk, each weighted according to its
respective probability.  Moody's then translate the expected loss
to a rating using its idealized loss rates.


CADOGAN SQUARE CLO VII: S&P Affirms BB Rating on Class E Notes
--------------------------------------------------------------
S&P Global Ratings affirmed its credit ratings on Cadogan Square
CLO VII B.V.'s class A, B, C, D, and E notes following the
transaction's effective date.

Most European cash flow collateralized loan obligations (CLOs)
close before purchasing the full amount of their targeted level
of portfolio collateral.  On the closing date, the collateral
manager typically covenants to purchase the remaining collateral
within the guidelines specified in the transaction documents to
reach the target level of portfolio collateral.  Typically, the
CLO transaction documents specify a date by which the targeted
level of portfolio collateral must be reached.  The "effective
date" for a CLO transaction is usually the earlier of the date on
which the transaction acquires the target level of portfolio
collateral, or the date defined in the transaction documents.
Most transaction documents contain provisions directing the
trustee to request the rating agencies that have issued ratings
upon closing to affirm the ratings issued on the closing date
after reviewing the effective date portfolio (typically referred
to as an "effective date rating affirmation").

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

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

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

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

In S&P's published effective date report, it discusses its
analysis of the information provided by the transaction's trustee
and collateral manager in support of their request for effective
date rating affirmation.  In most instances, S&P intends to
publish an effective date report each time it issues an effective
date rating affirmation on a publicly rated European cash flow
CLO.

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

RATINGS LIST

Class             Rating

Cadogan Square CLO VII B.V.
EUR411.35 Million Senior Secured Floating-Rate Notes And
Subordinated Notes

Ratings Affirmed

A                 AAA (sf)
B                 AA (sf)
C                 A (sf)
D                 BBB (sf)
E                 BB (sf)


PDM CLO I: S&P Raises Rating on Class E Notes to BB-
----------------------------------------------------
S&P Global Ratings raised its credit ratings on PDM CLO I B.V.'s
class B, C, and E notes.  At the same time S&P has affirmed its
ratings on the class A and D notes.

The rating actions follow S&P's analysis of the transaction's
performance and the application of its relevant criteria.

Since S&P's March 21, 2016 review, the class A notes have
amortized by nearly EUR28 million, representing a more than 22%
reduction in the principal amount outstanding.

Taking into account the notes' amortization and the evolution of
the total collateral amount, overcollateralization has increased
for all the rated classes of notes since S&P's previous review.

S&P subjected the capital structure to its cash flow analysis to
determine the break-even default rate (BDR) for each class of
notes at each rating level.  The BDRs represent S&P's estimate of
the level of asset defaults that the notes can withstand and
still fully pay interest and principal to the noteholders.

S&P has estimated future defaults in the portfolio in each rating
scenario by applying its updated corporate collateralized debt
obligation (CDO) criteria.

S&P's analysis shows that the available credit enhancement for
the class B, C, and E notes is now commensurate with higher
ratings than those previously assigned.

Therefore, S&P has raised its ratings on the class B, C, and E
notes.

While the available credit enhancement for the class D notes has
increased since S&P's previous review, the increase is
insufficient to pass its credit and cash flows at higher rating
levels.  S&P has therefore affirmed its 'BBB+ (sf)' rating on the
class D notes.

S&P's credit and cash flow analysis indicates that the class A
notes can support the stresses that it applies at the 'AAA'
rating level.  S&P has therefore affirmed its 'AAA (sf)' rating
on the class A notes.

PDM CLO I is a cash flow collateralized loan obligation (CLO)
transaction managed by Permira Debt Managers Group Holdings Ltd.
A portfolio of loans to U.S. and European speculative-grade
corporates backs the transaction.  PDM CLO I closed in December
2007 and its reinvestment period ended in February 2015.

RATINGS LIST

PDM CLO I B.V.
EUR300 Million Secured Floating-Rate And Subordinated Notes

Class                    Rating
              To                       From

Ratings Raised

B             AAA (sf)                 AA+ (sf)
C             AA (sf)                  A+ (sf)
E             BB- (sf)                 B+ (sf)

Ratings Affirmed

A             AAA (sf)
D             BBB+ (sf)


===========
N O R W A Y
===========


ISLAND OFFSHORE: In Creditor Talks, Halts Amortization Payments
---------------------------------------------------------------
Offshore Energy Today reports that Island Offshore has decided to
stop amortization payments, citing tough market conditions.

According to Offshore Energy Today, the company has said the move
is a part of the company's strategy to address its long-term
financing structure with the aim of restructuring its balance
sheet.

"The Group has, as many others within our industry, during the
last two years suffered from the general deterioration in the
offshore service market.  The Group has taken a number of
measures to improve its financial situation but the continued
deterioration/lack of improvement to the general market
conditions necessitates a more structured approach to the Group's
financial and operational situation," Offshore Energy Today
quotes Island Offshore as saying.

Presenting its plan to tackle its financing woes on Nov. 15,
Island Offshore said that it began discussions with its
creditors, Offshore Energy Today relates.

"While these discussions are ongoing, the Group has decided with
effect from November 14, 2016, to temporarily halt all payments
of amortization to its secured finance providers.  The Group
will, however, continue paying interest on the debt to the
finance providers as it falls due.  The secured finance providers
have been informed of such payment halt," the company, as cited
by Offshore Energy Today, said.

Island Offshore is a Norwegian offshore vessel owner.  It had 28
vessels at the end of the second quarter 2016.


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


SOVCOMBANK: Fitch Hikes Long Term Issuer Default Ratings to 'BB-'
-----------------------------------------------------------------
Fitch Ratings has upgraded Sovcombank's (SCB) and SDM Bank's
(SDM) Long-Term Issuer Default Ratings (IDRs) to 'BB-' from 'B+'.
The Outlooks on both banks' ratings are Stable.

Fitch has also affirmed the IDRs of Locko-Bank (Locko), Absolut
Bank (Absolut), Expobank (EB) at 'B+', and Russian Universal Bank
(Rusuniversal) at 'B'. The Outlook on Locko has been revised to
Stable from Negative. The Outlook on Absolut remains Negative and
those on EB and Rusuniversal remain Stable.

The rating actions reflect the banks' fairly stable financial
performance through the credit downcycle, in particular (i)
limited asset quality deterioration (somewhat higher in Absolut,
partly due to the acquisition of a small failed bank), (ii)
generally healthy performance (especially robust in SCB, but weak
in Absolut), and (iii) reasonable capital buffers (stronger in
SDM and EB).

Negatively, the ratings continue to reflect the banks' fairly
narrow franchises resulting in, among other things, significant
balance sheet concentrations and some uncertainty regarding the
future growth strategy in a still challenging environment.

The upgrade of SDM and SCB and their one-notch higher ratings
than Locko, Absolut and EB reflect their stronger financial
metrics relative to peers and an extended track record of more
resilient asset quality and earnings through the credit cycle.
The one-notch lower rating of Rusuniversal compared with Locko,
Absolut and EB reflects its limited franchise, which effectively
caps the rating at 'B'.

The Negative Outlook on Absolut reflects (i) considerable
downside asset quality risks mostly stemming from reportedly
performing but potentially vulnerable credit exposures and
investment properties, (ii) and modest pre-impairment
profitability, which may be insufficient to absorb impairment
losses related to the above-mentioned exposures.

The Stable Outlooks on the other five banks reflect Fitch's view
that their pre-impairment profitability should be sufficient to
cover potential loan impairments and avoid losses hitting
capital.

KEY RATING DRIVERS

IDRS, VRS AND NATIONAL RATINGS

SCB

At end-1H16, SCB's reported NPLs were at low 4.2% of gross loans
and were mainly attributable to the bank's retail book (37% of
total loans). Corporate book was mainly represented by granular,
low-risk exposures to Russian sub-sovereigns and municipalities
or top tier companies, which are predominantly state-owned or
rated at' BB' or higher. The quality of bond portfolio (around
60% of total assets) is also strong as 85% of bonds are also
rated 'BB' or higher. Downside asset quality risks stem from
sizable exposure to a failed Russian bank (15% of end-1H16 Fitch
Core Capital (FCC)). Subsequently this exposure was 50%
provisioned and reduced to 6-7% of FCC at end-3Q16.

Fitch views SCB core performance as robust despite around 60% of
operating profit in 1H16 being derived from positive mark-to-
market (MTM) revaluation of the bond portfolio, which is a
volatile income source. But even net of these MTN gains
annualised return on average equity (ROAE) for 1H16 and 2015 was
solid at 37% and 28%, respectively.

Material interest rate risk exists given the size of the bond
book, but this is mitigated by the high issuer diversification
and solid capital buffer relative to potential MTM losses and the
bank's track record of managing this risk (in the worst case
there is an option to classify bonds into held to maturity
category to avoid MTM losses).

SCB has predominantly been funded by fairly granular retail
deposits (43% of total liabilities at end-1H16) and secured repo
borrowings from the Central Bank of Russia (CBR) and large
Russian banks (a further 45% of liabilities). Liquidity is
supported by a sizable liquidity cushion, including cash and
unpledged securities (29% of end-1H16 total liabilities), and a
high-quality loan book (11% of liabilities), which also, at least
partially, could be pledged with the CBR.

SDM

SDM's NPLs remained a low 1.3% of end-1H16 gross loans with
restructured loans accounting for an additional 2.3%, compared
with 5.6% loan impairment reserves. Despite high concentrations
(top 25 borrowers accounted for 58% of end-1H16 corporate loans
or 1.8x FCC), Fitch views the quality of SDM's largest exposures
as generally adequate. The higher-risk part is exposure to
construction and property rental businesses (48% of FCC), but
these are well covered by hard collateral.

SDM's capital position improved in 1H16, as expressed by a 17.2%
FCC ratio (compared with14.6% at end-2015), due to a 16.5% return
on equity for 2015. Current regulatory capitalisation allows
absorption of about 12% of loan losses, which is a solid buffer.
Fitch does not expect capital ratios to materially decrease in
the near-term due to limited loan growth.

Pre-impairment profit (annualised 9% of average loans in 1H16)
benefits from fairly low funding costs (5% in 1H16), reflecting
SDM's high share of interest-free customer accounts (37% of end-
1H16 liabilities). Liquidity risks are mitigated by a
considerable liquidity cushion, which was sufficient to withstand
a substantial 65% reduction in customer funding at end-9M16.

LOCKO

NPLs accounted for a moderate 7% of gross loans at end-1H16 (5%
at end-2015), while restructured loans made up an additional 7%
(4.3% at end-2015). NPLs were 0.8x covered by reserves at same
date, which is adequate in Fitch's view, because the bank has
sound recovery prospects for few largest NPLs.

Single borrower concentration is moderate: top 25 borrowers
accounted for 1x FCC and most of them were exposed to real estate
and construction (total 0.6x FCC). Fitch views half of these
loans as of adequate risk since they are amortising and
underlying projects are performing, while the other half (0.3x
FCC) is of higher risk, as the collateral is fairly illiquid real
estate objects, although loan-to-value (LTV) is reasonable in
most cases. Restructured loans perform adequately under
renegotiated terms.

The bank's FCC ratio was a sound 18.3% at end-1H16 (20.3% at end-
2015), regulatory Tier 1 ratio was lower 10.3% (6% required
minimum) at end-9M16 and total ratio was 11.6% (8% required
minimum), due to more conservative risk weighting in regulatory
accounts. The bank would have been able to book additional
impairment reserves equal to 8% (up to 14% total) of gross loans
without breaching the regulatory minimum. Annualised pre-
impairment profit equalled 7% (largely due to high securities
gains, while net of that it would be 5%) of gross loans also
underpins adequate loss absorption capacity.

Funding concentration is low (20-largest clients accounted for a
moderate 20% of end-1H16 total customer accounts). Locko had a
large cushion of liquid assets as of end-8M16: net of potential
money market repayments maturing within the next 12 months,
liquidity buffer covers customer accounts by 39%.

EB

EB's asset quality has slightly deteriorated over the last 12
months as NPLs increased to 3.6% of gross loans at end-1H16 (1.3x
reserved) from a negligible 0.6% at end-2015 (2.3x reserved), due
to the default of two of its largest borrowers, which had been
fully reserved. The bank's loan book is highly concentrated by
name (25-largest borrowers made up 78% of total loans, or 1.5x
FCC). The potentially more volatile real estate and construction
sector represented 43% of gross loans; however, in many cases the
collateral is completed projects with reasonable LTVs.

The bank's FCC ratio was a comfortable 18.5% at end-1H16. The
regulatory Tier 1 ratio was a lower 10.5% (6% required minimum)
at end-9M16 due to more conservative risk-weighted assets
calculation in regulatory accounts and current year earnings of
around 2% of RWAs, which were not audited and therefore accounted
as Tier 2 capital. Fitch estimates that the bank's regulatory
capital buffer is sufficient to increase impairment reserves up
to a considerable 23%, from the current 7%.

EB demonstrates reasonable execution of M&A deals, including the
recent (in 1H16) acquisition of Royal Bank of Scotland Russia
(RBSR) with a substantial discount resulting in a RUB1.8bn gain.
This also supported the overall profitability (annualised ROAE of
54% in 1H16), while net of that gain, ROAE would have been 18%,
although also largely due to MTM gains on securities. The
profitability of the core banking business is modest.
The bank's liquidity cushion covered customer accounts by a high
80% at end-1H16, while market refinancing needs are limited. EB
is likely to repay at least a part of corporate accounts
inherited from RBSR although these made up only 15% of total
customer accounts at end-9M16.

Absolut

Absolut's credit profile benefits from a strong commitment of the
majority shareholder, Non-State Pension Fund Blagosostoyanie
(NPFB), ultimately controlled by JSC Russian Railways (BBB-
/Negative), in assisting the bank in its development. The fund
has a track record of providing considerable funding and equity
capital to the bank and Absolut's significant involvement in
servicing companies related to NPFB and Russian Railways.

At end-1H16, the bank's reported FCC ratio was at 9.4%, which
improved to 11.3% after a new RUB5bn equity injection by NPFB in
September 2016. Regulatory core tier 1 capital ratio at end-9M16
was also reasonable at 7.9% (minimum 6%). However, Fitch views
Absolut's capital in the context of bank's vulnerable asset
quality and modest core performance (the bank's ROAE of 8% in
1H16 was solely due to a gain from the recognition of negative
goodwill on the acquisition of failed BaltInvestBank).

Absolut's NPLs were at 7.8% of gross loans at end-1H16, up from
3% at end-1H15, due to failure of two fairly large borrowers.
Restructured loans made up a further 17% (14% at end-2015) due to
the acquisition of BaltInvestBank. Additional downside asset
quality risks stem from considerable exposure to potentially low
liquid, high risk unrated domestic bonds (32% of post-recap FCC),
and sizable non-core investment properties (69% of post-
recapitalisaion FCC).

The bank's liquidity is moderate with a buffer covering 21% of
customer accounts at end-1H16. Absolut faces only moderate
refinancing risk as wholesale funding maturing within 12 months
(RUB19bn, or 7% of end-1H16 liabilities) was significantly below
the bank's liquid assets, which equalled RUB43bn (16% of end-1H16
liabilities).

Rusuniversal

Rusuniversal's IDRs are constrained by the bank's narrow
franchise, highly concentrated mostly relationship-based
concentrated business and tighter regulation on banking services
to defence industry enterprises that may adversely affect
Rusuniversal's business. Positively, the ratings acknowledge
Rusuniversal's strong financial metrics.

Rusuniversal focuses mainly on defence sector companies with whom
the bank's management and shareholders have long-standing
relations. Both loans and deposits are extremely concentrated.
The bank had only 13 corporate loans (while retail lending is
negligible), while the top 10 depositors represented 86% of total
customer accounts at end-1H16. Regulatory risk stems from some
overlap between depositors and borrowers.

Fitch also believes that tighter regulation may result in about
25% of Rusuniversal's customer accounts moving to other banks.
Although this would be manageable for the bank given full
coverage of customer accounts by liquid assets, this could
negatively affect Rusuniversal's business and performance.

Rusuniversal's metrics remain robust. The bank has zero NPLs and
very high regulatory capitalisation (total capital ratio was
above 100% at end-9M16).

SUPPORT RATINGS AND SUPPORT RATING FLOORS

The '5' Support Ratings (SRs) for all six banks reflect Fitch's
view that support from the banks' shareholders, although
possible, cannot be relied upon. The Support Ratings and Support
Rating Floors (SRFs) of 'No Floor' also reflect that support from
the Russian authorities, cannot be relied upon due to the banks'
small size and lack of overall systemic importance. Accordingly,
the IDRs of all six banks are based on their intrinsic financial
strengths, as reflected by their VRs.

SENIOR UNSECURED DEBT RATINGS

The banks' senior unsecured debt, where rated, is affirmed at the
same level as their Long-Term IDRs and National Ratings,
reflecting Fitch's view of average recovery prospects, in case of
default.

SUBORDINATED DEBT RATINGS

Absolut's 'new-style' Tier 2 subordinated debt rating is affirmed
and is one notch below the bank's VR, in accordance with Fitch's
criteria for rating such instruments. This includes (i) zero
notches for additional non-performance risk relative to the VR,
as Fitch believes these instruments should only absorb losses
once a bank reaches, or is very close to, the point of non-
viability; (ii) one notch for loss severity, reflecting below-
average recoveries in case of default.

RATING SENSITIVITIES

IDRS, VRS, NATIONAL RATINGS

Downside pressure on all six banks' IDRs stems from potential
asset quality deterioration if it erodes any of the banks'
profitability and capital. These risks are higher for Absolut
bank as expressed by the Negative Outlook on its ratings. A
significant liquidity squeeze would also be credit-negative.

Upside for SCB and SDM is limited by their small franchises.
Upside for Locko's and EB's ratings would be contingent on
improvement in asset quality, an extended track record of
reasonable financial metrics and adaptation of business models to
more traditional banking (EB) and a low interest rate
environment.

Franchise limitations also constrain any upside for
Rusuniversal's ratings. The rating could be downgraded if the
bank's franchise narrows as a result of tightening regulation.

SUPPORT RATINGS AND SUPPORT RATING FLOORS

Positive rating action is unlikely in the foreseeable future,
although acquisition by a stronger owner could lead to an upgrade
of the Support Ratings.

SENIOR UNSECURED DEBT AND SUBORDINATED DEBT

Senior unsecured debt ratings are sensitive to changes in banks'
IDRs. Absolut's subordinated debt rating will move in tandem with
the bank's VR.

The rating actions are as follows:

   SCB

   -- Long-Term Foreign and Local Currency IDRs: upgraded to BB-
      from 'B+'; Outlooks Stable

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

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

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

   -- Support Rating: affirmed at '5'

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

   -- Senior unsecured debt: assigned at 'BB-'


   SDM

   -- Long-Term Foreign and Local Currency IDRs: upgraded to 'BB-
'
      from 'B+'; Outlooks Stable

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

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

   -- Support Rating: affirmed at '5'

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

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

   Locko

   -- Long-Term Foreign and Local Currency IDRs: affirmed at
      'B+', Outlooks revised to Stable from Negative

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

   -- Viability Rating: affirmed at 'b+'

   -- Support Rating: affirmed at '5'

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

   -- National Long-Term Rating: affirmed at 'A-(rus)', Outlook
      revised to Stable from Negative

   -- Senior unsecured debt: affirmed at 'B+'/Recovery Rating
      'RR4' and 'B+(EXP)'/Recovery Rating 'RR4(EXP)'

   -- Senior unsecured debt National long-term rating: affirmed
      at 'A-(rus)'and 'A- (rus)(EXP)'

   Expobank LLC:

   -- Long-Term Foreign and Local Currency IDRs: affirmed at
      'B+'; Outlooks Stable

   -- Short-Term Foreign Currency IDR affirmed at 'B'

   -- Support Rating affirmed at '5'

   -- Viability Rating affirmed at 'b+'

   -- Support Rating Floor affirmed at 'No Floor'

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

   -- Senior unsecured debt affirmed at 'B+'/Recovery Rating
      'RR4'

   -- Senior unsecured debt National long-term rating affirmed at
      'A-(rus)'

   Absolut Bank

   -- Long-Term Foreign and Local Currency IDRs: affirmed at
      'B+'; Outlooks Negative

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

   -- Viability Rating affirmed at 'b+'

   -- Support Rating affirmed at '5'

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

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

   -- Senior unsecured debt: affirmed at 'B+'/Recovery Rating
      'RR4'

   -- Senior unsecured debt National long-term rating: affirmed
      at 'A-(rus)'

   -- Subordinated debt: affirmed at 'B'/Recovery Rating 'RR5'

   -- Subordinated debt National long-term rating: affirmed at
      'BBB+(rus)'

   Russian Universal Bank:

   -- Long-Term Foreign and Local Currency IDRs affirmed at 'B',
      Outlook Stable

   -- National Long-Term Rating affirmed at 'BBB-(rus)', Outlook
      Stable

   -- Short-Term Foreign Currency IDR affirmed at 'B'

   -- Viability Rating affirmed at 'b'

   -- Support Rating affirmed at '5'

   -- Support Rating Floor affirmed at 'No Floor'


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


UKRAINE: Fitch Hikes Long Term Issuer Default Ratings to 'B-'
-------------------------------------------------------------
Fitch Ratings has upgraded Ukraine's Long-Term Foreign and Local
Currency Issuer Default Ratings (IDRs) to 'B-' from 'CCC'. The
Outlook is Stable. The issue ratings on Ukraine's long-term
senior unsecured foreign- and local-currency bonds are also
upgraded to 'B-' from 'CCC', and the sovereign's short-term
senior unsecured foreign- and local-currency bonds are upgraded
to 'B' from 'C'.

The Country Ceiling has been upgraded to 'B-' from 'CCC' and the
Short-Term Foreign- and Local-Currency IDRs to 'B' from 'C'.

KEY RATING DRIVERS

The upgrade of Ukraine's IDRs reflects the following key rating
drivers and their relative weights:

High

External financing pressures have eased. International reserves
have increased by USD2bn over the first 10 months of 2016 to
USD15.5bn (around 3.5 months of current external payments), due
to bilateral and multilateral support, improvement in some export
prices, greater domestic confidence and increased exchange rate
flexibility. However, the liquidity ratio remains weak and well
below the 'B' median.

The IMF disbursed USD1bn after completing the delayed second
review of Ukraine's Extended Fund Facility (EFF) in September,
and a third USD1bn US-guaranteed Eurobond issue was placed.
Further disbursements from the IMF and other international
partners depend on progress in structural reform, which is
subject to execution risks, and developments in bilateral
relations.

External debt repayments to multilateral and bilateral creditors
are manageable, and external market debt amortisations resume
only in 2019. Domestic debt roll-over risk is limited, as 91% of
the debt stock is held by the central bank and state-owned banks.
Some USD1.5bn in cash in Ukraine's treasury provides the
sovereign with space to bridge gaps in external disbursements in
the short-term.

The current account deficit is expected to widen moderately to
2.5% of GDP in 2016 from 0.2% in 2015 and approach 3% over the
forecast period to 2018 However, multilateral and bilateral
financing, as well as improving domestic confidence supporting
higher net capital inflows, will generate increases in
international reserves forecast to average USD2.3bn over 2017-
2018.

The macroeconomic policy framework has been strengthened through
increased exchange rate flexibility and tight monetary policy.
Macroeconomic stability has improved, despite the delay in
completing the second EFF review, as reflected by rapidly
declining inflation, slower currency depreciation and a mild
growth recovery.

Inflation is forecast to average 14.9% in 2016, down from 48.5%
in 2015, but well above the 4.6% 'B' median. The National Bank of
Ukraine (NBU) is working towards putting in place an inflation-
targeting regime that seeks to gradually reduce inflation to 5%
by 2019, a goal that depends on coordination with fiscal policy
and maintaining policy credibility.

Ukraine's 'B' IDRs also reflect the following key rating drivers:

General government debt is high, and Fitch forecasts debt to
increase to 74% of GDP (89% including guarantees) in 2016, from
67% in 2015. After a sharp narrowing in the general government
deficit in 2015, the challenge for authorities is to anchor
fiscal gains, taking advantage of external bond debt
rescheduling.

Fitch expects the general government to meet its 3.7% of GDP
deficit target (3.9% including Naftogaz) for 2016. The 2017
budget targets a 3% deficit, reflecting improvement in tax
revenues. Failure to keep current expenditure pressures in check
and to address the public pension deficit, combined with a
proposed increase in minimum wage, are risks for the government's
plans to gradually shrink the deficit to 2.3% by 2019. Fitch
forecasts a general government deficit of 3.7% of GDP in 2017.

Political risks remain significant, but near-term political
volatility has eased. The slim majority government of PM
Volodomyr Groysman has hit structural benchmarks to complete the
EFF review in September. Continued progress with the EFF will
depend on domestic and intra-government political support and
continued conservative policy-making. Ukraine has never completed
an IMF programme.

Growth is forecast to accelerate to 2.5% in 2017 and 3% in 2018,
from a projected 1.1% in 2016. While investment has supported
growth in 2016, it is likely to remain low relative to 'B'-rated
peers, highlighting the importance of improving the business
environment. Privatisation has yet to gain momentum. The
unresolved conflict in eastern Ukraine will continue to weigh on
growth performance and expectations.

The banking sector has stabilised, but is weak with low
capitalisation levels and non-performing loans of over 50%, and
poses a risk to economic stability and constrains economic
recovery. Banks continue to improve capitalisation levels after
an asset quality review in 2015. State-owned banks may see
additional government injections, albeit at a lower level than in
previous years.

SOVEREIGN RATING MODEL (SRM) and QUALITATIVE OVERLAY (QO)

Fitch's proprietary SRM assigns Ukraine a score equivalent to a
rating of 'CCC' on the Long-Term Foreign Currency IDR scale.

Fitch's sovereign rating committee adjusted the output from the
SRM to arrive at the final Long-Term Foreign Currency IDR by
applying its QO, relative to rated peers, as follows:

   -- Macro: +1 notch, to reflect Ukraine's strengthened monetary
      and exchange rate policy which will likely support improved
      macroeconomic performance and domestic confidence.
      Increased exchange rate flexibility allows to the economy
      to absorb shocks without depleting reserves.

Fitch's SRM is the agency's proprietary multiple regression
rating model that employs 18 variables based on three-year
centred averages, including one year of forecasts, to produce a
score equivalent to a Long-Term Foreign Currency IDR. Fitch's QO
is a forward-looking qualitative framework designed to allow for
adjustment to the SRM output to assign the final rating,
reflecting factors within our criteria that are not fully
quantifiable or not fully reflected in the SRM.

RATING SENSITIVITIES

The main factors that could, individually or collectively, lead
to a negative rating action are:

   -- Re-emergence of external financing pressures, loss of
      confidence and increased macroeconomic instability stemming
      from delays to disbursements from, or the collapse of, the
      IMF programme.

   -- External or political/geopolitical shock that weakens
      macroeconomic performance and Ukraine's fiscal and external
      position.

The main factors that could, individually or collectively, lead
to positive rating action are:

   -- Increased external liquidity and external financing
      flexibility.

   -- Sustained fiscal consolidation leading to improved debt
      dynamics.

   -- Improved macroeconomic performance


KEY ASSUMPTIONS

   -- Fitch expects neither resolution of the conflict in eastern
      Ukraine nor escalation of the conflict to the point of
      compromising overall macroeconomic performance.

   -- Fitch assumes the status of the outstanding USD3bn debt
      with Russia does not create risks for Ukraine's sovereign
      debt service and access to external financing.


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


BIBBY OFFSHORE: Moody's Lowers CFR to Caa2, Outlook Negative
------------------------------------------------------------
Moody's Investors Service downgraded Bibby Offshore Holdings
Ltd's Corporate Family Rating to Caa2 from B3 and the Probability
of Default Rating to Caa2-PD from B3-PD.  Concurrently, Moody's
also downgraded the rating of Bibby Offshore Services Plc
GBP175 million senior secured notes due 2021 to Caa2 from B3.
The outlook on all ratings is negative.

                         RATINGS RATIONALE

The action reflects the heightened stress on the company's
operating performance, cash flow and the deterioration of the
liquidity profile.  Moody's expects Bibby Offshore market
environment to remain difficult next year, with lack of
visibility around an eventual recovery of prices.  Moody's
believes that the company will report a negative EBITDA this year
in the range of GPB20 million to GBP25 million with limited
improvement for 2017. The company's backlog remains low at GBP30
million at the end of September 2016, giving little visibility on
revenue trend past 3 months.  While Moody's expects some
improvements in volumes next year, the rating agency believes
that Bibby Offshore will continue to face pricing pressure as
customers continue to cut costs in this low oil price
environment.  Moody's also anticipates higher idle time between
jobs owing to lower visibility on tenders and hence, greater
difficulty in optimizing vessel utilization.

Bibby Offshore cash generation has been negative since the
beginning of the year resulting in a reduction of cash on balance
sheet of approximately GBP40 million out of the GBP97.1 million
it had at the start of the year.  Moody's believes that cash
generation will remain negative in 2017 to approximately GBP30
million with increased pressure in the first half of 2017 due to
seasonality.  Cash generation in the second half of 2017 should
slightly improve due to the anticipated positive effects of the
renegotiation of charter rates.

While Moody's notes that the company does not have any debt
maturing before 2021 when the senior secured notes are due, the
Bibby Offshore liquidity profile is weak.  As at Sept. 30, 2016,
the company had cash of GBP55.7 million and a super senior RCF of
GBP20 million (unrated), currently used for performance bonds for
an amount of GBP2.9 million.  Moody's believes that the company
has limited access to the RCF because of the financial covenant.
Given the expected negative free cash flow, Moody's remains
cautious about the level of available cash to service the debt
next year.

Moody's expects an adjusted EBITDA of GBP12 million for this year
(including Moody's standard adjustment for operating leases), at
which Moody's adjusted leverage increases to levels above 20x
from 4x at the end of 2015, which is high and outside the levels
expected for the B rating category.

More positively, the ratings reflect: (1) the company's position
as a leading regional competitor with control of key operating
assets; (2) its project track record and exposure to less
cyclical opex related projects and less risky reimbursable type
contracts; and (3) its ability to scale investment spend to
changing demand.

                          RATING OUTLOOK

The negative outlook reflects the weak market conditions and low
day rates, which pressurize cash generation.

                  WHAT COULD CHANGE THE RATING - UP

Although unlikely in the short term, there could be positive
pressure if (1) Moody's-adjusted debt/EBITDA ratio is below 6.0x
on a sustained basis; (2) the company improves its operating
performance resulting in sustained positive reported EBITDA; (3)
free cash flow generation turns positive and (4) liquidity
profile improves with notably pressure on covenant to access RCF
alleviated.  Any potential upgrade would also include an
assessment of market conditions.

                 WHAT COULD CHANGE THE RATING - DOWN

Moody's could downgrade the ratings in the event of continued
deterioration in operating performance and/or weakening liquidity
position including negative FFO, restricted access to the RCF due
to financial covenant and an unsustainable capital structure.

Bibby Offshore Holdings Ltd, headquartered in Aberdeen, UK, is a
leading provider of offshore and subsea services in the UK North
Sea.  For the financial year ended Dec. 31, 2015, Bibby Offshore
reported revenues of approximately GBP241 million.  Bibby
Offshore is wholly owned by Bibby Line Group Limited, a
diversified group of companies with international interests in
shipping, marine services, logistics, financial services,
offshore services and retailing, with revenue of GBP1.4 billion
for the year ended Dec. 31, 2015.


KAYBOO LTD: In Administration, Corran's Operations Continue
-----------------------------------------------------------
Lee MacGregor at WalesOnline reports that Kayboo Ltd., the
company behind plans to build 200 two, three and four bedroom
lodges, a swimming pool and restaurant at the Corran Resort and
Spa in Laugharne, has gone into administration.

Despite an administrator being appointed at Kayboo, the Corran
said it remains open for business, WalesOnline relates.

General manager Sharon Adams, as cited by WalesOnline, said: "The
hotel is under new management and open for business as usual.

"We are unable to comment on any matters relating to the
administration of Kayboo Ltd."

Back in December Mr. Burnett, who lodged the application, said
the plans could create 200 new jobs and bring in between GBP12
million and GBP15 million a year to the local economy,
WalesOnline relays.

But in December, members of the planning committee voted against
the project by 12 votes to two, WalesOnline recounts.


SALISBURY 2015-1: Fitch Puts 'BB-' Class N Notes Rating on RWP
--------------------------------------------------------------
Fitch Ratings has placed Salisbury 2015-1's notes on Rating Watch
Positive (RWP) as following:

   -- Class C: 'AA+(EXP)sf'; on RWP

   -- Class D: 'AA(EXP)sf'; on RWP

   -- Class E: 'AA-(EXP)sf'; on RWP

   -- Class F: 'A+(EXP)sf'; on RWP

   -- Class G: 'A(EXP)sf'; on RWP

   -- Class H: 'A-(EXP)sf'; on RWP

   -- Class I: 'BBB+(EXP)sf'; on RWP

   -- Class J: 'BBB(EXP)sf'; on RWP

   -- Class K: 'BBB-(EXP)sf'; on RWP

   -- Class L: 'BB+(EXP)sf'; on RWP

   -- Class M: 'BB(EXP)sf'; on RWP

   -- Class N: 'BB-(EXP)sf'; on RWP


   -- Class A: 'AAA(EXP)sf'; unaffected

   -- Class B: 'AAA(EXP)sf'; unaffected

   -- Class Z: not rated; unaffected

KEY RATING DRIVERS

The RWP reflects a model correction, which leads to a higher
Rating Recovery Rate (RRR) in the Portfolio Credit Model (PCM)
output.

The PCM used at closing did not correctly apply the market value
decline as specified by Fitch's UK RMBS Criteria. The error is
related to the Region - Postcode mapping in PCM, which passes a
postcode that is not recognised by Resi EMEA, the agency's
residential mortgage default model. As a result the RRR produced
by the PCM is lower than the correct approach.

Fitch will conduct an annual surveillance review to resolve the
RWP.

RATING SENSITIVITIES

The resolution of the RWP may result in an upgrade by one or two
notches.

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

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

DATA ADEQUACY

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

The majority of the underlying assets have ratings from Fitch and
other Nationally Recognized Statistical Rating Organizations.
Fitch has relied on the practices of the relevant groups within
Fitch and other rating agencies to assess the asset portfolio
information.

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

SOURCES OF INFORMATION

No data has been used.


SOUTHERN PACIFIC 05-2: S&P Cuts Rating on Class D1a Notes to BB
---------------------------------------------------------------
S&P Global Ratings lowered to 'BB (sf)' from 'BBB- (sf)' its
credit rating on Southern Pacific Securities 05-2 PLC's class D1a
notes.  At the same time, S&P has affirmed its ratings on all
other classes of notes.

The rating actions follow S&P's credit and cash flow analysis of
the most recent information that S&P has received for this
transaction (September 2016) and the application of its relevant
criteria.

In this transaction, the servicer first allocates any arrears
payments to other amounts owed, then to interest amounts, and
subsequently to principal.  From a borrowers' perspective, the
servicer first allocates any arrears payments to interest and
principal amounts, and secondly to other amounts owed.  This
difference in the servicer's allocation of payments for the
transaction and the borrower results in amounts outstanding being
greater than delinquencies.  Total delinquencies (including
repossessions) have marginally reduced to 35.32% in September
2016 from 39.59% three years earlier at S&P's previous review.
Over the same period, other amounts owed have almost doubled to
4.5%.

Acenden Ltd. uses amounts outstanding to determine the level of
90+ day arrears.  The transaction pays principal sequentially
because the 90+ day arrears trigger of 22.5% (the current level
is 45.7%) remains breached.  As the amounts outstanding continue
to increase, S&P considers that the transaction will likely
continue paying principal sequentially and S&P has incorporated
this assumption in its cash flow analysis.

The transaction's total delinquencies are higher than S&P's U.K.
nonconforming residential mortgage-backed securities (RMBS)
index. Given the slow pace of the reduction in arrears, despite
the overall improvement in S&P's index, and to address the
potential for increasing arrears in the pool, S&P has projected
arrears of 2.0% in its credit analysis.  However, S&P has lowered
its weighted-average foreclosure frequency (WAFF) assumptions
since its previous review, due to greater seasoning, lower
modeled arrears, and a lower proportion of second-lien and cash-
out mortgages.  Given the servicer's method of payment allocation
for other amounts owed for the transaction, in S&P's analysis, it
expects potential losses to be higher and have factored the other
amounts owed into S&P's weighted-average loss severity (WALS)
assumptions.

Rating     WAFF     WALS
level       (%)      (%)
AAA       51.70    55.06
AA        46.22    46.52
A         40.53    34.45
BBB       34.96    27.64
BB        28.84    22.92
B         25.95    19.61

S&P's current counterparty criteria continue to cap the maximum
achievable ratings on the classes of notes in this transaction at
S&P's long-term 'A-' issuer credit rating on Barclays Bank PLC as
the guaranteed investment contract (GIC) account provider.  S&P
has therefore affirmed its 'A- (sf)' ratings on the class C1a and
C1c notes.

Based on S&P's credit and cash flow analysis, the class D1a notes
have experienced some interest shortfalls resulting from the
amortization of the liquidity facility.  S&P has therefore
lowered to 'BB (sf)' from 'BBB- (sf)' its rating on the class D1a
notes.

S&P do not expect the class E1c notes to experience interest
shortfalls in the next 12 to 18 months.  S&P has therefore
affirmed its 'B- (sf)' rating on the class E1c notes.

Southern Pacific Securities 05-2 is a securitization of
nonconforming U.K. residential mortgages originated by Southern
Pacific Mortgages Ltd. and Southern Pacific Personal Loans Ltd.

RATINGS LIST

Class              Rating
            To                From

Southern Pacific Securities 05-2 PLC
EUR145.8 Million, GBP310.75 Million, And $205 Million Mortgage-
Backed Floating-Rate Notes

Rating Lowered

D1a         BB (sf)           BBB- (sf)

Ratings Affirmed

C1a         A- (sf)
C1c         A- (sf)
E1c         B- (sf)



                            *********

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

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

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


                            *********


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

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

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

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

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

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


                 * * * End of Transmission * * *