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        T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Tuesday, November 22, 2016, Vol. 17, No. 231


                            Headlines


F R A N C E

NOVASEP HOLDING: Moody's Raises PDR to Caa2-PD/LD, Outlook Stable
SAPPHIREONE MORTGAGES 2016-2: S&P Rates Class E Notes BB (sf)


G E R M A N Y

HORNBACH HOLDING: S&P Affirms Then Withdraws 'BB+' CCR


I R E L A N D

HALCYON LOAN 2016: Moody's Assigns (P)B2 Rating to Class F Notes
HALCYON LOAN 2016: S&P Assigns Prelim. B- Rating to Cl. F Notes


I T A L Y

LOCAT SV 2006: S&P Affirms CCC Rating on Class C Notes


L U X E M B O U R G

ARCELORMITTAL: S&P Revises Outlook to Pos. & Affirms 'BB/B' CCRs
DEUTSCHE BANK: S&P Lowers Ratings on Three Note Classes to 'D'


R O M A N I A

OLTCHIM RAMNICU: PCC Keen on Buying All Assets
RAFO ONESTI: Court Appoints CITR as Judicial Administrator


R U S S I A

BYSTROBANK JSC: Fitch Affirms 'B' LT Issuer Default Ratings
MEZHTOPENERGOBANK OJSC: S&P Affirms 'B-/C' Ratings, Outlook Neg.
ROLSEN GROUP: Raiffeisenbank Seeks Testimony From Co-Founder
SVERDLOVSK: Fitch Affirms 'BB+' LT Currency IDRs, Outlook Stable

* RUSSIA: 43 Regions on Verge of Bankruptcy, Zyuganov Says


S W E D E N

PERSTORP HOLDING: Moody's Affirms Caa1 CFR, Outlook Stable


U K R A I N E

KHARKOV: Fitch Hikes LT Issuer Default Ratings to 'B-'
KYIV: Fitch Hikes LT Issuer Default Ratings to B-
NATIONAL BANK: Liquidation Extended for Two years


U N I T E D   K I N G D O M

ARDEN FORESTRY: In Liquidation, Faces Pyramid Scheme Probe
DECO 11 - UK: S&P Lowers Ratings on Two Note Classes Notes to D
EUROSAIL 2006-3NC: S&P Raises Rating on Cl. E1c Notes to B-
GRAYTON ENGINEERING: Bought Out of Administration
HEWDEN: On Verge of Collapse, Taps EY to Act as Administrator

JERSEY RUGBY: Bought Out for GBP1.5 Mil. to Save Club's Future
LSF9 ROBIN: S&P Assigns 'B' CCR & Rates GBP500MM Sr. Loan 'B+'
MORTGAGE FUNDING: S&P Affirms BB Rating on Class A3 Notes
OXON INVESTMENT: 41 Jobs Saved Following Successful Sale
POWA TECHNOLOGIES: Wagner Transferred GBP50,000 to Bright Station

TOWD POINT 2016-GRANITE2: Moody's Rates Class E Notes Ba2


X X X X X X X X

* EU to Introduce New Senior Bank Debt Class to Absorb Losses


                            *********



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F R A N C E
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NOVASEP HOLDING: Moody's Raises PDR to Caa2-PD/LD, Outlook Stable
-----------------------------------------------------------------
Moody's Investors Service has upgraded the Probability of Default
Rating (PDR) of French life science contract manufacturer Novasep
Holding SAS (Novasep or the company) to Caa2-PD/LD from Ca-PD
following the successful completion of the exchange offer
announced on Sept. 26, 2016, classified as distressed exchange by
Moody's.  Concurrently, Moody's has affirmed Novasep's Corporate
Family Rating (CFR) at Caa2.  The outlook on all ratings has been
revised to stable from negative.

                        RATINGS RATIONALE

The action follows the completion of the refinancing of the 8%
USD195 million senior secured notes due December 2016 with EUR182
million unrated senior unsecured notes due May 2019 carrying a 5%
cash coupon and various PIK coupons with penny warrants attached
allowing to an equity portion of 25%.

The transaction postpones the refinancing risk by over two years
and also eliminates the risk of any insolvency proceedings
therefore the PDR has been upgraded to Caa2-PD/LD.  The "/LD"
indicator reflects the fact that Moody's considers this
transaction as a distressed exchange, which is a form of default,
and will be removed in three business days.  This is because
bondholders were offered notes with diminished security, extended
maturity and lower cash coupon and the refinancing alleviated the
fact that the company did not have sufficient liquidity to repay
the outstanding notes in full when due, which, in Moody's view,
represents a failure to honour the promise to pay contained
within the original debt obligations.

Conversely, Moody's affirmed Novasep's Caa2 CFR reflecting (1)
the unsustainability of the capital structure due to the
significant amount of debt which will continue to increase due to
the capitalization of the interests; and (2) the high financial
leverage of over 7x with future deleveraging contingent on strong
organic growth, which could prove challenging given YTD September
2016 trading, the intrinsic volatility of its operations and a
highly competitive operating environment.

Novasep's liquidity profile is viewed as weak for its near-term
cash uses.  It is underpinned by EUR26 million of cash as at 30
September 2016 pro-forma for any cash outflows related to the
refinancing and access to factoring arrangements, but also by the
lack of a revolving credit facility and Moody's expectations for
negative free cash flow over the next 12 to 18 months.  Despite
some fluctuations in the company's working capital, cash interest
payments (albeit reduced by 30% with this refinancing) and
capital expenditures will continue to absorb most of the company
cash flow.  There is limited ability to reduce capital
expenditures as the company has a critical need to invest in new
projects to be able to grow.

                   RATIONALE FOR STABLE OUTLOOK

The stable outlook reflects that, following the debt exchange in
November 2016, the risk of near-term payment default has reduced.

             WHAT COULD CHANGE THE RATING -- UP/ DOWN

Upward pressure on Novasep's ratings could develop if Novasep
delivered sustained revenues and EBITDA growth and improved
liquidity levels through consistent positive free cash flow
generation over the next 12 to 18 months, allowing the company to
de-leverage over time.

Downward pressure on the ratings rating could be exerted if the
company were not able to recover its operating performance and
its liquidity weakened.

LIST OF AFFECTED RATINGS:

Upgrades:

Issuer: Novasep Holding SAS
  Probability of Default Rating, Upgraded to Caa2-PD/LD from
   Ca-PD

Affirmations:

Issuer: Novasep Holding SAS
  Corporate Family Rating, Affirmed at Caa2

Outlook Actions:

Issuer: Novasep Holding SAS
  Outlook, Changed To Stable From Negative

                       PRINCIPAL METHODOLOGY

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

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

For the last twelve months ended Sept. 30, 2016, Novasep
generated revenues of EUR261 million and reported an EBITDA of
EUR25 million (9% margin).


SAPPHIREONE MORTGAGES 2016-2: S&P Rates Class E Notes BB (sf)
-------------------------------------------------------------
S&P Global Ratings assigned its credit ratings to SapphireOne
Mortgages FCT 2016-2's class A to E notes.  At closing,
SapphireOne Mortgages 2016-2 also issued unrated class F notes.

SapphireOne 2016-2 is the second true sale securitization of
residential loan receivables originated by GE Money Bank S.C.A.
(GEMB). GEMB and GE Societe de Credit Foncier (GE SCF) are the
sellers of the securitized loans.

The collateral is similar to what S&P observed in the SapphireOne
Mortgages FCT 2016-1 transaction and is in S&P's view atypical
for the French market as the pool comprises entirely debt
consolidation residential mortgage loan receivables that pay a
fixed installment.  The installment on the floating-rate loans in
the pool can be revised annually.  S&P considers the specific
nature of the assets in its analysis.

SapphireOne 2016-2 is a French securitization fund ("Fonds Commun
de Titrisation" or FCT), which is bankruptcy remote by law.

The transaction amortizes sequentially, with one tranche repaying
at a time, starting with the most senior.  A combination of
subordination, a non-liquidity reserve, and excess spread provide
credit enhancement for the notes.

S&P's ratings on the class A to E notes address the timely
payment of interest and ultimate payment of principal.

          POTENTIAL EFFECTS OF PROPOSED CRITERIA CHANGES

S&P's ratings are based on its applicable criteria, including its
French residential mortgage-backed securities (RMBS) criteria.
However, these criteria are under review.

As a result of this review, S&P's future criteria applicable to
rating transactions backed by French mortgage assets may differ
from S&P's current criteria.  These criteria changes may affect
the rating on the outstanding notes in this transaction.  Until
such time that S&P adopts new criteria, it will continue to rate
and surveil this transaction using its existing criteria.

                         RATING RATIONALE

Economic Outlook

In Q2 2016, real GDP declined slightly: -0.1% after 0.7% growth
in the first quarter.  Small contractions in private consumption
and investments were offset by a modest rise in government
expenditures, resulting in final domestic demand making zero
contribution to growth.  The positive contribution from net
exports was more than offset by falling inventories, which pushed
the headline figure into the negative territory.  S&P has revised
its expectation for GDP growth downward to 1.3% from 1.5%.  Main
risks to growth come from external developments (emerging markets
weakness, turmoil in financial markets) and domestic challenges:
a stall in the reform process, ahead of the upcoming general
elections in April 2017, and from security issues relating to
terrorist attacks.  The unemployment rate is likely to decline
steadily to 9.6% in 2017, still considered an elevated level by
historical standards.  Against that backdrop, activity in the
housing market will remain heavily dependent on trends in
interest rates.  Household indebtedness has been steadily
increasing to 71% of incomes at the end of 2015, a level that
appears still moderate by European standards.  House prices
could, in S&P's view, increase by as much as 2% in 2016 and in
2017.

Credit Analysis

S&P has conducted a loan-level analysis to assess the mortgage
pool's credit quality by applying its French RMBS criteria.

The portfolio is in S&P's experience atypical for the French
market for a number of reasons.  It comprises solely debt
consolidation mortgage loans and all of the floating-rate loans
are subject to "borrower protection mechanisms" (BPM), which
limit the potential increase in installments payable by
borrowers.

The loans are amortizing loans.  However, should interest rates
increase sufficiently, the loans that fall under the BPM may in
effect become interest-only loans as a greater proportion of the
borrower's installment is allocated to interest.  If interest
rates increase to the extent that the fixed installment is
insufficient to meet the borrower's obligation, then the excess
above the installment will be capitalized.  This can result in
negative amortization on the loan and the borrower can end up
owing more than the initial balance of the loan.  S&P believes
there is a potential legal risk regarding this practice and have
considered this in its cash flow analysis.

Another feature of the portfolio, which is in S&P's view
relatively unique in the French RMBS market, is that 3.48% of the
pool is flagged as either having had a restructuring under the
Banque de France or as defaulted.  S&P has accounted for each of
these features in our credit analysis.

Operational Risk

GEMB is an experienced player in residential financing in France.
It also has previous home loan securitization experience through
its existing covered bond program.  S&P has assessed GEMB's
origination policies, by conducting an on-site visit in August
2015 and, although the products offered are in S&P's view
atypical of the French residential mortgage market, S&P was
satisfied with the review.

GEMB also acts as the servicer of the loans in the pool and S&P
reviewed its servicing capabilities as part of S&P's on-site
review in August 2015.  S&P has, under its operational risk
criteria assessed the role of GEMB as servicer.  Given the debt
consolidation nature of the assets in the pool, they are not the
traditional type of assets S&P sees in the French RMBS market.
Under S&P's operational risk criteria, it therefore sees this
transaction as having moderate severity risk.  The next step when
applying S&P's operational risk criteria is to assess the
portability risk in the transaction.  S&P considers that this
transaction has moderate portability risk as there are a limited
number of servicers in the market capable of servicing assets
such as these.  Finally, S&P assessed the servicer in the context
of disruption risk, which it considers to be low.  S&P's
operational risk criteria do not cap the maximum potential rating
achievable in this transaction on account of the servicer.

"In this transaction, we have also assessed the role of the cash
manager as a key transaction party (KTP) under our operational
risk criteria.  Typically, we do not consider cash managers as a
KTP.  However, in this transaction -- due to the role that the
reclassification of collections has on the structure -- we have
applied our operational risk criteria to the cash manager,
Eurotitrisation.  As before, we view the level of severity risk
as being moderate, but consider the level of portability risk and
disruption risk to be low.  Our operational risk criteria do not
zap the maximum potential rating achievable in this transaction
on account of the cash manager," S&P said.

Legal Risk

The issuer is an FCT, which is considered bankruptcy remote under
French law, in line with S&P's European legal criteria.

S&P has received a legal opinion confirming that the sale of the
assets would survive the seller's insolvency.

S&P has also reviewed an external legal memorandum regarding the
issuer's potential exposure to future setoff in relation to the
fact that the BPM loans may be subject to negative amortization.
S&P has considered this potential risk in our analysis.

Counterparty Risk
The transaction is exposed to Societe Generale as the account
bank provider and HSBC Bank PLC as the swap counterparty.

The transaction's documented replacement language for all of its
relevant counterparties is in line with S&P's current
counterparty criteria.  S&P's analysis shows that counterparty
risk does not constrain its ratings on the notes.  The dynamic
nature of the replacement trigger in the swap documentation
could, if S&P lowered its ratings on the notes for performance
reasons, potentially constrain the maximum potential ratings on
the notes.

Cash Flow Analysis

The notes amortize sequentially.  A combination of subordination,
the non-liquidity reserve, and excess spread provide credit
enhancement for the notes.

The transaction benefits from a fully funded, nonamortizing
general reserve fund that is divided into a liquidity reserve and
a non-liquidity reserve.

S&P has assessed the transaction's documented payment structure,
which in its experience is unique in the Europe, Middle East, and
Africa (EMEA) RMBS market (with the exception of the previous
SapphireOne issuance -- SapphireOne Mortgages FCT 2016-1) as all
of the collections on the assets are pooled together and
reclassified according to documented conditions.

S&P has based its cash flow analysis on the application of its
French RMBS criteria and our European cash flow criteria.  It
indicates that the notes' available credit enhancement is
sufficient to withstand the credit and cash flow stresses that
S&P applies at the assigned rating levels.

Ratings Stability

S&P conducted its scenario analysis, in which it tested its
ratings under two scenarios and examined the transaction's
performance by applying S&P's credit stability criteria.

Country Risk

S&P has assigned a rating to the class A notes, which is above
its long-term unsolicited 'AA' rating on France.  Under S&P's
structured finance ratings above the sovereign criteria (RAS
criteria), as S&P rates the sovereign in the 'AA' category, it do
not apply a formal sovereign default stress test.

RATINGS LIST

SapphireOne Mortgages FCT 2016-2
EUR820 Million Euro-Denominated Residential Mortgage-Backed
Floating-Rate Notes (Including Euro-Denominated Unrated Notes)

Class    Rating            Amount
                           (mil. EUR)

A        AAA (sf)           665.60
B        AA (sf)            29.20
C        A (sf)             23.60
D        BBB (sf)           16.40
E        BB (sf)            14.40
F        NR                 70.80

NR--Not rated.


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


HORNBACH HOLDING: S&P Affirms Then Withdraws 'BB+' CCR
-------------------------------------------------------
S&P Global Ratings said it has affirmed its 'BB+' long-term
corporate credit rating on Germany-based home-improvement
retailer Hornbach Holding AG & Co. KGaA, and then withdrew the
rating at the issuer's request.  The outlook was stable at the
time of the withdrawal.

At the same time, S&P affirmed its 'BB+' long-term corporate
credit rating on its main operating subsidiary, Hornbach Baumarkt
AG.  The outlook is stable.

S&P's ratings on Hornbach Baumarkt continue to reflect S&P's view
of the group credit profile of Hornbach Holding.  This is because
S&P considers Hornbach Baumarkt to be a core subsidiary of the
Hornbach Holding group and a key driver of the group credit
profile.  Going forward, S&P will only maintain ratings on
Hornbach Baumarkt.

S&P's 'BB+' rating continues to reflect the group's well-
established presence in the market and sustained position among
the largest five players in the German DIY market.  This
assessment incorporates the group's track record of increasing
market share over a 15-year period, primarily through Hornbach
Baumarkt.  Stiff competition, coupled with soft macroeconomic
conditions in the European markets in which Hornbach operates,
will increasingly weigh on Hornbach Baumarkt's business risk
profile, in S&P's view.  S&P considers Hornbach Baumarkt's
business risk profile to be at the lower end of the satisfactory
category.

S&P's view of Hornbach Baumarkt's financial risk profile is
driven by S&P's view of the consolidated Hornbach Holding group.
The group's financial risk profile remains within S&P's
expectations for the rating, with funds from operations (FFO) to
debt above 20%.  However, S&P now expects the group to operate
with reduced headroom.  In S&P's view, mounting pressure on the
company's business risk profile, which could arise from sustained
negative market forces and increased competition, would likely
weigh on the corporate credit rating unless the group restores
the buffer in its credit metrics.

The stable outlook reflects S&P's opinion that the group should
continue to improve its like-for-like sales, in addition to
selective expansion-driven growth, with no material deterioration
in margins.  Assuming normalized levels of capital expenditure
(capex), this should translate into free operating cash flow that
exceeds dividends.

S&P would consider lowering the rating if it saw sustained
operational underperformance, which could occur if profitability
weakened and margins became constrained.  S&P could also take a
negative rating action if any underperformance was met with
insufficient remedial action, such that S&P's cash flow leverage
ratio -- FFO to debt -- were to fall below 20%, or if
discretionary cash flow (after capex and dividends) remained
negative.

S&P do not expect to raise the rating in the near term.  That
said, S&P would consider doing so if the group's business
operations were to improve materially, without any incremental
increase in leverage.  Any upgrade would be contingent upon our
view of a financial policy commitment to sustainably stronger
credit metrics, including FFO to debt of greater than 30%.


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


HALCYON LOAN 2016: Moody's Assigns (P)B2 Rating to Class F Notes
----------------------------------------------------------------
Moody's Investors Service announced that it has assigned these
provisional ratings to notes to be issued by Halcyon Loan
Advisors European Funding 2016 Designated Activity Company:

  EUR188,200,000 Class A-1 Senior Secured Floating Rate Notes due
   2030, Assigned (P)Aaa (sf)
  EUR10,000,000 Class A-2 Senior Secured Fixed Rate Notes due
   2030, Assigned (P)Aaa (sf)
  EUR39,000,000 Class B Senior Secured Floating Rate Notes due
   2030, Assigned (P)Aa2 (sf)
  EUR19,300,000 Class C Senior Secured Deferrable Floating Rate
   Notes due 2030, Assigned (P)A2 (sf)
  EUR15,500,000 Class D Senior Secured Deferrable Floating Rate
   Notes due 2030, Assigned (P)Baa2 (sf)
  EUR19,500,000 Class E Senior Secured Deferrable Floating Rate
   Notes due 2030, Assigned (P)Ba2 (sf)
  EUR10,000,000 Class F Senior Secured Deferrable Floating Rate
   Notes due 2030, Assigned (P)B2 (sf)

Moody's issues provisional ratings in advance of the final sale
of financial instruments, but these ratings only represent
Moody's preliminary credit opinions.  Upon a conclusive review of
a transaction and associated documentation, Moody's will
endeavour to assign definitive ratings.  A definitive rating (if
any) may differ from a provisional rating.

                        RATINGS RATIONALE

Moody's provisional rating of the rated notes addresses the
expected loss posed to noteholders by legal final maturity of the
notes in 2030.  The provisional 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, Halcyon Loan
Advisors (UK) LLP, has sufficient experience and operational
capacity and is capable of managing this CLO.

Halcyon Loan Advisors European Funding 2016 Designated Activity
Company is a managed cash flow CLO.  At least 90% of the
portfolio must consist of senior secured obligations and up to
10% of the portfolio may consist of senior unsecured obligations,
second-lien loans, mezzanine obligations and high yield bonds.
The portfolio is expected to be 60% 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 six month ramp-up period in
compliance with the portfolio guidelines.

Halcyon 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 or credit improved obligations, and are subject
to certain restrictions.

In addition to the seven classes of notes rated by Moody's, the
Issuer will issue EUR 36,500,000 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
ratings:

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.  Halcyon'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.

Moody's used these base-case modeling assumptions:

Par Amount: EUR 325,000,000
Diversity Score: 36
Weighted Average Rating Factor (WARF): 2775
Weighted Average Spread (WAS): 4.05%
Weighted Average Recovery Rate (WARR): 42.80%
Weighted Average Life (WAL): 8 years.

As part of the base case, Moody's has addressed the potential
exposure to obligors domiciled in countries with local currency
country risk ceiling (LCC) of A1 or below.  As per the portfolio
constraints, exposures to countries with local currency country
risk ceiling rating of A1 or below cannot exceed 10%, with
exposures to countries local currency country risk ceiling rating
of Baa1 to Baa3 further limited to 5%.  Following the effective
date, and given these portfolio constraints and the current
sovereign ratings of eligible countries, the total exposure to
countries with a LCC of A1 or below may not exceed 10% of the
total portfolio.  As a worst case scenario, a maximum 5% of the
pool would be domiciled in countries with LCC of A3 and 5% in
countries with LCC of Baa3.  The remainder of the pool will be
domiciled in countries which currently have a LCC of Aa3 and
above.  Given this portfolio composition, the model was run with
different target par amounts depending on the target rating of
each class of notes as further described in the methodology.  The
portfolio haircuts are a function of the exposure size to
countries with a LCC of A1 or below and the target ratings of the
rated notes and amount to 0.75% for the Class A notes, 0.50% for
the Class B notes, 0.375% for the Class C notes and 0% for
Classes D, E and F.

Stress Scenarios:

Together with the set of modelling assumptions above, Moody's
conducted an additional sensitivity analysis, which was an
important component in determining the provisional 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 3191 from 2775)
Ratings Impact in Rating Notches:
Class A-1 Senior Secured Floating Rate Notes: 0
Class A-2 Senior Secured Fixed Rate Notes: 0
Class B Senior Secured Floating Rate Notes: -2
Class C Senior Secured Deferrable Floating Rate Notes: -2
Class D Senior Secured Deferrable Floating Rate Notes: -2
Class E Senior Secured Deferrable Floating Rate Notes: -3
Class F Senior Secured Deferrable Floating Rate Notes: 0
Percentage Change in WARF: WARF +30% (to 3608 from 2775)

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 Senior Secured Floating Rate Notes: -3
Class C Senior Secured Deferrable Floating Rate Notes: -4
Class D Senior Secured Deferrable Floating Rate Notes: -2
Class E Senior Secured Deferrable Floating Rate Notes: -3
Class F Senior 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.


HALCYON LOAN 2016: S&P Assigns Prelim. B- Rating to Cl. F Notes
---------------------------------------------------------------
S&P Global Ratings assigned preliminary credit ratings to Halcyon
Loan Advisors European Funding 2016 DAC's (Halcyon 2016) class
A-1, A-2, B, C, D, E, and F notes.  At closing, Halcyon 2016 will
also issue an unrated subordinated class of notes.

The preliminary ratings assigned to Halcyon 2016's notes reflect
S&P's assessment of:

   -- The diversified collateral pool, which consists primarily
      of broadly syndicated speculative-grade senior secured term
      loans and bonds that are governed by collateral quality
      tests.  The credit enhancement provided through the
      subordination of cash flows, excess spread, and
      overcollateralization.

   -- The collateral manager's experienced team, which can affect
      the performance of the rated notes through collateral
      selection, ongoing portfolio management, and trading.  The
      transaction's legal structure, which is expected to be
      bankruptcy remote.

Under the transaction documents, the rated notes will pay
quarterly interest unless there is a frequency switch event.
Following this, the notes will permanently switch to semiannual
payment.  The portfolio's reinvestment period will end
approximately four years after closing.

"Our preliminary ratings reflect our assessment of the
preliminary collateral portfolio's credit quality, which has a
weighted-average 'B+' rating.  We consider that the portfolio at
closing will be well-diversified, primarily comprising broadly
syndicated speculative-grade senior secured term loans and senior
secured bonds.  Therefore, we have conducted our credit and cash
flow analysis by applying our criteria for corporate cash flow
collateralized debt obligations," S&P said.

"In our cash flow analysis, we used the EUR325 million target par
amount, the covenanted weighted-average spread (4.00%), the
covenanted weighted-average coupon (5.25%) (where applicable),
and the target minimum weighted-average recovery rates at each
rating level as indicated by the manager.  We applied various
cash flow stress scenarios, using four different default
patterns, in conjunction with different interest rate stress
scenarios for each liability rating category," S&P said.

Elavon Financial Services DAC is the bank account provider and
custodian.  At closing, S&P anticipates that the documented
downgrade remedies will be in line with its current counterparty
criteria.

Following the application of S&P's structured finance ratings
above the sovereign criteria, it considers that the transaction's
exposure to country risk is sufficiently mitigated at the
assigned preliminary rating levels.  This is because the
concentration of the pool comprising assets in countries rated
lower than 'A-' will be limited to 10% of the aggregate
collateral balance.

At closing, S&P considers that the issuer will be bankruptcy
remote, in accordance with our European legal criteria.

Following S&P's analysis of the credit, cash flow, counterparty,
operational, and legal risks, S&P believes its preliminary
ratings are commensurate with the available credit enhancement
for each class of notes.

RATINGS LIST

Preliminary Ratings Assigned

Halcyon Loan Advisors European Funding 2016 DAC
EUR338 Million Senior Secured Floating-Rate And Deferrable Notes

Class                 Prelim.         Prelim.
                      rating           amount
                                     (mil. EUR)

A-1                   AAA (sf)          188.20
A-2                   AAA (sf)          10.00
B                     AA (sf)           39.00
C                     A (sf)            19.30
D                     BBB (sf)          15.50
E                     BB (sf)           19.50
F                     B- (sf)           10.00
Sub                   NR                36.50

Sub--Subordinated loan.
NR--Not rated.


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


LOCAT SV 2006: S&P Affirms CCC Rating on Class C Notes
------------------------------------------------------
S&P Global Ratings raised to 'A (sf)' from 'BBB (sf)' its credit
rating on Locat SV S.r.l.'s series 2006 class B notes.  At the
same time, S&P has affirmed its 'CCC (sf)' rating on the class C
notes.

The rating actions follow S&P's full review of the transaction's
performance and the application of its structured finance ratings
above the sovereign criteria (RAS criteria).

The portfolio's total delinquencies ratio has been stabilizing
and stands at 3.64% as of the September 2016 interest payment
date (IPD), compared with 5.93% at S&P's previous full review.
The cumulative default rate since the transaction began
amortizing is 14.3% as of the September IPD, while the cumulative
recovery rate from all defaulted and defaulting loans since
closing is about 43%.  The pool has experienced average
prepayments, which are below S&P's high constant payment rate
scenario of 8.0%.

The pool's weighted-average yield has slightly decreased to 7.03%
as of September 2016 from 7.32% at closing.

As a consequence of the notes' amortization, available credit
enhancement for the class B and C notes has increased to 45.2%
and 4.0% from 3.70% and 0.45%, respectively, at closing.  The
pool factor -- the current pool balance as a percentage of the
original pool balance -- as of the September 2016 IPD was 12.9%.

Operational, counterparty, legal, payment structure, and cash
flow risks continue to be adequately mitigated, in S&P's view,
and do not constrain its ratings on the notes.

S&P's analysis indicates that the available credit enhancement
for the class B notes is sufficient to withstand the credit and
cash flow stresses that S&P applies at a higher rating than that
currently assigned.  However, the application of S&P's RAS
criteria constrains its rating on this class of notes at 'A
(sf)'. S&P has therefore raised to 'A (sf)' from 'BBB (sf)' its
rating on the class B notes.

Based on the observed trend in the cumulative net default ratio,
S&P continues to believe that the class C notes remain vulnerable
to nonpayment as a result of a class C interest deferral trigger
breach.  As a result, S&P has affirmed its 'CCC (sf)' rating on
the class C notes, in line with its criteria.

Locat SV's series 2006 securitizes an original portfolio of mixed
lease receivables, which now largely comprises real estate lease
receivables.  The receivables were originated by UniCredit
Leasing SpA.

RATINGS LIST

Class            Rating
          To               From

Locat SV S.r.l.
EUR1.973 Billion Asset-Backed Floating-Rate Notes Series 2006

Rating Raised

B         A (sf)           BBB (sf)

Rating Affirmed

C         CCC (sf)


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


ARCELORMITTAL: S&P Revises Outlook to Pos. & Affirms 'BB/B' CCRs
----------------------------------------------------------------
S&P Global Ratings revised its outlook on global integrated steel
producer ArcelorMittal to positive from negative.  At the same
time, S&P affirmed the 'BB/B' long-term and short-term corporate
credit ratings.

S&P also affirmed its 'BB' issue rating on ArcelorMittal's senior
unsecured debt and revised the recovery rating to '3' from '4',
implying a 50%-70% recovery range.

The outlook revision reflects S&P's view that it now projects
stronger results for the year 2016 following the recovery in
steel and iron ore prices after significant customer destocking
at the end of 2015 and beginning of 2016.  Leverage has also
reduced following the company's $3 billion equity increase
earlier this year and earnings growth.  Since 2015, the company
has reduced its gross debt by $5.3 billion, at Sept. 30, 2016.
Supporting the positive outlook, S&P now estimates funds from
operations (FFO)-to-debt of 15%-20% in 2016 and at or above 20%
in 2017 and 2018.

S&P projects ArcelorMittal's EBITDA to be between $6.0 billion
and $6.4 billion for the full year 2016, up from the $4.8 billion
to $5.0 billion S&P saw at the beginning of the year.  This
increase in revenues and earnings reflects the relieved pressure
on pricing and margins and the benefits of ArcelorMittal's 2020
efficiency projects.  The fourth quarter is likely to be slightly
weaker than the second and third quarters due to the spike in
input coking coal prices S&P has seen in the last few months.
S&P continues to assess steel markets as highly volatile and
unpredictable as shown by the past 12 months' performance.

S&P has seen capacity reductions in the steel industry during the
year, and also in coal supply in China in particular, which is
visible in the new 276 day year for the coal industry.  This has
contributed to the recent sharp run up in coking coal prices to
over $300 per ton from around $100 per ton at the start of the
year.  Such fluctuations can have a material impact on both
quarterly profits and working capital needs.

S&P expects recent trade restrictions and import tariffs on
Chinese, Russian, and Brazilian exports in the U.S. and Europe to
continue to have a favorable effect on steel pricing and profits
in Europe and North America.

S&P's view of ArcelorMittal's satisfactory business risk profile
balances the cyclical and capital-intensive nature of the steel
sector against the company's large scale and the diversity of its
operations.  This is supported by ArcelorMittal's partial
vertical integration into iron ore and, to a lesser extent, coal.
The short-term EBITDA contribution from the group's mining is
recovering due to the increase in seaborne iron ore prices; the
company saw a 25% increase in EBITDA from this segment in the
third quarter.

S&P's base-case scenario factors in:

   -- Single-digit pricing declines for steel on average in 2016,
      but with net shipments broadly flat as net annual growth in
      North America balances a contraction in Brazil; broadly
      similar market conditions on average in 2017.  Iron ore
      prices per ton of $52 in 2016 and $45 in 2017 and 2018,
      resulting in higher EBITDA and some cash flow contribution
      from mining operations.

   -- EBITDA of about $6.0 billion-$6.4 billion in 2016 and 2017.

   -- Low capital expenditure of about $2.4 billion per year.

   -- No dividends in 2016.

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

   -- FFO to debt of 15%-20% in 2016 and 2017.
   -- An adjusted debt-to-EBITDA ratio of about 4.0x-4.5x in 2016
      and 2017.
   -- Sustained positive or neutral cash flows after capital
      investment.

The positive outlook on ArcelorMittal reflects S&P's view that
following the company's continuing efforts to reduce leverage and
its positive free operating cash flow generation, S&P sees a one-
in-three likelihood that it could raise the rating over the next
12-18 months.

S&P still sees some uncertainty based on coal prices and the
continuing steel capacity and export reductions coming from
China. Additionally, the higher raw material prices may lead to a
weaker first quarter in 2017, but an improvement in industry
conditions due to pass-through effects of higher raw material
prices may balance this out during 2017 as prices adjust.  S&P
sees trade-case outcomes and the effectiveness of efficiency
plans as a supportive factors for the company.

S&P could raise the rating if it sees the recent improvement in
steel market conditions and margins as broadly sustained, leading
to improved profitability and positive free cash flow generation.
This could lead to a sustained improvement in EBITDA and
deleveraging. A ratio of FFO to debt consistently and comfortably
above 20% could, in time, support a higher rating.

Higher steel prices and margins, and a further reduction in
Chinese exports and capacity would be supportive for the
company's EBITDA and cash generation.  Realization of the 2020
cash requirement reduction plans would also support an upgrade.

Although not anticipated in the near term, S&P could lower the
rating on ArcelorMittal if there is a sustained drop in demand
for steel in the group's core markets.  In this case,
ArcelorMittal's adjusted FFO to debt could remain well below the
15% that S&P sees as commensurate with the 'BB' rating, and cash
flow after investment and dividends could be markedly negative.

Prolonged higher coking coal prices and narrowing steel spreads
could have a negative effect on the rating and change S&P's view
of the resilience of the steel market recovery.  The actual
benefits of the 2020 plan will be important in this respect, to
underpin performance even in more challenging quarters.


DEUTSCHE BANK: S&P Lowers Ratings on Three Note Classes to 'D'
--------------------------------------------------------------
S&P Global Ratings lowered to 'D' from 'CC' its credit ratings on
the class A2, A3, and A4 notes in Deutsche Bank Luxembourg S.A.'s
(DBL) series 50.  S&P will subsequently withdraw, effective in 30
days' time, our ratings on the class A2 and A3 notes.

DBL's series 50 is a resecuritization of GEMINI (ECLIPSE 2006-3)
PLC's class A notes.  At closing, the seller -- Deutsche Bank
AG -- sold to DBL GBP175.84 million of GEMINI (ECLIPSE 2006-3)'s
class A commercial mortgage-backed securities (CMBS) floating-
rate notes. The issuance of the notes funded the purchase of this
portion of GEMINI (ECLIPSE 2006-3)'s class A notes.

On the most recent interest payment date (IPD), GBP100.2 million
in principal proceeds were applied to partially repay Gemini
Eclipse 2006-3's class A notes.  DBL's series 50 receives 30.90%
of all of Gemini (Eclipse 2006-3) class A notes' proceeds.  This
was sufficient to fully repay the class A2 and A3 notes, and
partially repay the class A4 notes.

The interest payments under the notes were previously met by the
DBL series 50's swap counterparty.  However, as the swap
terminated in July 2016, there is no payment under the swap.
Therefore, the class A2, A3, and A4 notes experienced an interest
shortfall, which S&P do not consider de minimis and is unlikely
to be repaid.

S&P has therefore lowered to 'D' from 'CC' its ratings on the
class A2, A3, and A4 notes, which are all of the remaining rated
classes of notes in DBL's series 50.  This is in line with S&P's
criteria.

S&P will subsequently withdraw its ratings on the class A2 and A3
notes in this transaction as they have fully repaid.  The ratings
will remain at 'D' for a period of 30 days before the withdrawals
become effective.

RATINGS LIST

Deutsche Bank Luxembourg S.A. RE Series 50
GBP175.84 mil Fiduciary Notes Series 50
                                             Rating
Class              Identifier                To       From
A2                 XS0570458090              D        CC
A3                 XS0570458256              D        CC
A4                 XS0570458413              D        CC


=============
R O M A N I A
=============


OLTCHIM RAMNICU: PCC Keen on Buying All Assets
----------------------------------------------
Romania Insider reports that Oltchim Ramnicu Valcea has a second
investor that is interested in taking over its assets, namely the
German-Polish group PCC, which is a minority shareholder in the
company.

Romania Insider relates that PCC will submit offers to buy all of
Oltchim's asset packages, after the company will officially start
the sale, according to sources close to negotiations, cited by
local News.ro.

Local company Chimcomplex, controlled by the investor Stefan
Vuza, will also submit a bid in the tender for the sale of the
plant, the report notes.

According to the report, sources said the authorities have been
trying to block PCC from taking part in the tender. However, PCC
will submit offers to purchase the assets that are up for sale.

Oltchim Ramnicu Valcea will be sold piece by piece to interested
investors, according to the company's new privatization strategy,
the report relays. It will be split into nine separate asset
packages, which will be sold either individually or together to
interested investors.

Oltchim went into insolvency in early 2012 due to its big
outstanding debts, Romania Insider discloses. The company, which
had a turnover of almost EUR500 million in 2007, was forced into
insolvency by a series of bad management decision and by the
conflicts between the Romanian state and the minority shareholder
PCC, Romania Insider reports.


RAFO ONESTI: Court Appoints CITR as Judicial Administrator
----------------------------------------------------------
Romania Insider reports that the refinery RAFO Onesti filed for
insolvency again, five years after the company had managed to
exit a seven-year restructuring process, in 2011.

On October 27 this year, Bacau Court approved the insolvency
request of RAFO Onesti appointing Casa de Insolventa Transilvania
(CITR) as the judicial administrator, Romania Insider relates
citing local Profit.ro.

At the end of last year, RAFO Onesti had total debts of over
EUR69.3 million. In the last six years, the refinery recorded
total losses of over EUR63.8 million, as its hasn't produced
anything for many years, the report discloses.

In June 2016, the company Anders Capital GmbH, registered in
Austria and controlled by two investors from Moldova, took over a
stake of 96.5% in the company. The refinery was previously owned
by another company registered in Austria, and owned by the
Russian investor Iakov Goldovski, according to the report.

However, the two Moldovan investors of Anders Capital GmbH
decided to step back from the company, and the refinery was
finally acquired by a Belgian-registered firm, owned by a person
called Daniel Goldberg. In the past he was a board member of
RAFO.

In February 2015, RAFO's owner announced that the refinery would
be dismantled and sold for scrap, the report notes.


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


BYSTROBANK JSC: Fitch Affirms 'B' LT Issuer Default Ratings
-----------------------------------------------------------
Fitch Ratings has revised JSC BystroBank's and SKB-bank's (SKB)
Outlooks to Stable from Negative, while affirming their Long-Term
Issuer Default Ratings (IDRs) at 'B' and 'B-', respectively. It
has also affirmed Uraltransbank (UTB) at 'B-' with Negative
Outlook.

At the same time Fitch has downgraded the IDRs of JSC Asian-
Pacific Bank (APB) to 'CCC' from 'B-' and placed them on Rating
Watch Negative (RWN). Fitch has also withdrawn BystroBank's
ratings for commercial reasons. Accordingly, Fitch will no longer
provide ratings or analytical coverage for BystroBank.

KEY RATING DRIVERS

ALL BANKS' IDRS, NATIONAL RATINGS AND VIABILITY RATINGS (VRs)

The revision of the Outlooks on BystroBank's and SKB's ratings to
Stable reflects the moderation of credit losses to a level where
they are now sufficiently covered by pre-impairment profits,
reducing the risk of capital erosion. The Negative Outlook on
UTB's ratings reflects weaker asset quality, resulting in the
bank reporting net losses for six years in a row and, which, if
continued, could put further pressure on already tight regulatory
capitalisation.

More generally, the three banks' low ratings in the 'B' category
reflect their small and potentially vulnerable franchises, modest
core bottom-line profitability, but reasonable liquidity
profiles. BystroBank's IDR is one-notch higher than those of the
other two banks due to a better capital cushion and smaller
credit losses. SKB's ratings are constrained by a large related
party exposure to Sinara group (SG, 3x of Fitch core capital,
FCC), largely extended by the recently acquired failed
Gazenergobank (GEB) using proceeds from the state rescue package,
as well as some other high-risk items, which, in Fitch's view,
undermine the quality of the bank's capital.

The downgrade of APB's IDR to 'CCC' reflects increased pressure
on the bank's asset quality and capital from the large RUB9.6bn
(88% of proforma combined Tier 1 capital at end-1H16) net
exposure to related parties of rather weak quality and RUB6.5bn
(63% of APB's Tier 1) of APB's placements (on a stand-alone
basis) in a defaulted 100%-owned banking subsidiary, M2M Private
Bank (M2M), which also has solvency problems. Shareholders of M2M
are currently discussing a bail-in of creditors to improve its
capitalisation.

The RWN on APB's IDRs reflects high contagion risks from M2M's
default and significant uncertainty regarding APB's rescue plan
for M2M, which if not supported by the creditors and approved by
the regulator, may lead to APB having to write-off at least some
of its interbank placements in M2M. This could result in APB's
own capital ratios breaching regulatory requirements, although,
according to management, the Central Bank (CBR) may allow APB
some temporary forbearance to increase reserves gradually. The
risk of deposit outflows is also present, although this is to an
extent mitigated by ABP's significant liquidity buffer covering
34% of customer accounts as of 10 November 2016.

BYSTROBANK

Non-performing loans (NPLs, overdue more 90 days) made up 15% of
BystroBank's loans at end-9M16 (0.9x reserved) and were mainly
attributable to retail loans (90% of total loans). Annualised
credit losses (calculated as an increase in NPLs plus write-offs,
divided by the average performing loans) shrank to 7% in 6M16
from 8% in 2015. This being below the core pre-impairment profit
(8% of average performing loans) has allowed the bank to show a
small profit.

FCC ratio was a solid 17% at end-1H16. Regulatory Tier 1 capital
ratio was a lower 9.8% (6% required minimum) due to positive
hyperinflation adjustment on IFRS equity and higher provisions in
regulatory accounts. Fitch estimates the bank has the capacity to
book additional impairment reserves equal to 4% of gross loans
without breaching capital requirements.

BystroBank is mainly funded by retail deposits (90% of
liabilities at end-6M16), which are sticky due to the bank's
strong market positions in its home region Udmurtia. Liquid
assets (cash and equivalents, short-term net interbank placements
and bonds eligible for repo funding with the CBR) net of 12
months wholesale repayments comfortably covered customer accounts
by 27% at end-9M16.

SKB

NPLs declined to 13% of gross loans at end-1H16 (17% at end-2015)
and were fully covered by impairment reserves. The decrease in
NPL ratio was mainly due to consolidation of GEB and sale of
overdue loans with a profit, which was used as a tool of capital
support by the shareholder. However, due to limited transparency
Fitch views these gains as low quality.

Retail loan performance has improved. Annualised NPL origination
ratio in retail decreased to 6% in 1H16 from 10% in 2015, mainly
due to a refocus on higher segment clients (monthly salary of
RUB40,000-60,000) and those who have positive credit history with
the bank. As a result the risk-adjusted margin in the retail book
(calculated as net interest income minus operating costs and
credit losses divided by average performing loans) improved to 4%
in 1H16 from around zero in 2015.

Corporate book is dominated by related-party exposures (80%),
while the rest are of moderate quality. Also Fitch views a RUB2bn
bond exposure and RUB0.9bn bank placements as potentially high-
risk.

Fitch views the acquisition of failed GEB in 2016 as neutral to
the ratings, because it was made with the help of Deposit
Insurance Agency (DIA), which provided GEB with RUB23bn almost
interest-free 10 years deposit resulting in it booking a RUB16bn
fair value gain sufficient to cover a previous RUB12bn capital
shortfall. However, GEB on-lent the proceeds to SG, the majority
of which was passed on to PJSC TMK for refinancing its foreign-
currency loans. Although this transaction was reportedly approved
by the DIA/CBR, eliminating regulatory risk, and TMK exposure is
of reasonable credit quality, the ballooned level of related-
party lending (3x of FCC) remains a source of risk.

SKB's core net profit was about zero in 1H16, as pre-impairment
profit (equal to 5% of gross loans) was only enough to cover the
credit losses. At the same time the bank's net profit was
supported by RUB0.2bn (RUB3.3bn in 2015) gains on sale of overdue
loans to some collection companies (as discussed above), and
RUB1.1bn gain on the acquisition of GEB, so the net result was a
RUB1.1bn profit in 1H16.

FCC ratio stood at 8.3% at end-1H16. In 3Q16 the bank received
new RUB1.3bn equity and RUB0.7bn perpetual subordinated loans
from SG companies. As a result FCC ratio should improve to a
reasonable 10%. SKB's standalone regulatory Tier 1 capital ratio
was 8.6% at end-3Q16, allowing reserving for an additional 4% of
gross loans before breaching capital ratios.

Contingent risk exists over capital associated with the purchase
in 2013 by SG of a 25% stake in SKB from EBRD. This is because
the purchase was partially financed with a loan from a third
party bank, which could undermine SKB's capitalisation should the
bank upstream dividends to serve this facility. However, the
majority of its loan was already repaid and also SG could use
DIA's funds received through GEB or dividends from TMK to repay
this debt.

SKB is funded mainly with customer accounts, which represented
91% of total liabilities at end-1H16, 70% of which were retail
deposits. Cushion of liquid assets net of wholesale debt maturing
the next 12 months was sufficient to withstand an outflow of 25%
of customer accounts, which Fitch deems adequate.

UTB

UTB's asset quality remains under pressure. NPLs increased to 33%
at end-1H16 from 29% at end-2015, including overdue loans
transferred to collection agencies, where UTB retained credit
risk. NPLs' coverage decreased to 96% at end-1H16 from full at
end-2015, but viewed by Fitch as still reasonable, as at least
partial recoveries of some exposures are possible.

Additionally there were several reportedly performing corporate
loans that Fitch views as potentially high-risk (combined net
exposure was 0.7x of FCC). Reported related-party lending was a
low 4% of gross loans at end-1H16. However, Fitch identified
several other borrowers that are potentially connected with the
bank's shareholder, adding another 6% of gross loans.

Net interest margin jumped to 10.5% at end-1H16 from 6.8% in
2015, as UTB now keeps almost all its free liquidity (about 40%
of total assets) on overnight deposits with CBR. Also UTB's pre-
impairment profitability is underpinned by healthy commission
income (32% of gross revenues) and by lower operating expenses
(cost-income ratio improved to 77% in 1H16 from 100% in 2015), so
pre-impairment profit became a positive 3.3% of gross loans in
1H16. Impairment charges were modest relative to the increase in
NPLs, which allowed the bank to show a small net profit, but this
may not be sustainable.

FCC stood at a reasonable 18% at end-1H16 (up from 17% at end-
2015) due to moderate deleveraging and absence of losses.
However, regulatory Tier 1 ratio was much tighter at 6.8% at end-
3Q16 (6% required minimum), mostly due to significant operational
risk component and different weightings of loans under regulatory
rules, allowing UTB to additionally reserve only 1% of gross
loans without breaching the required minimum.

UTB is fully funded by customer accounts, and had large cushion
of liquid asset covering customer accounts by 54% at end-10M16.

APB

APB's NPLs decreased to around 20% at end-1H16, from around 23%
at end-2015, due to RUB4.5bn (around 5% of end-2015 gross loans)
of write-offs. Most (81%) NPLs are from the unsecured retail
book, where the NPL ratio was a high 34% at end-1H16. Positively,
the NPL origination rate in this book moderated to around 10% in
1H16 from a high 26% in 1H15. APB's corporate, SME and mortgage
loan books had lower NPL rates of 5%, 12% and 6%, respectively,
at end-1H16. Overall, NPLs were 88% covered by reserves at end-
1H16, which is reasonable.

However, NPL metrics do not capture the bank's high-risk
exposures to related parties and M2M, which are the bank's key
weakness. Furthermore, as APB only completed the acquisition of
M2M in 3Q16, the 1H16 accounts do not consolidate the latter.
M2M's gross loan book was equal to 18% of APB's at end-3Q16
(based on regulatory accounts), and Fitch estimates that around
70% of the portfolio is either non-performing or restructured.

APB's and M2M's combined net exposure to related parties consists
of loans to the holding company (RUB7.5bn at end-1H16) and shares
in a gold mining company (RUB2.1bn), which together were equal to
88% of proforma combined Tier 1 capital at end-1H16. Most of
these loans are unsecured and, as Fitch understands from
management, issued to finance other businesses of shareholders,
some of which are quite leveraged, while others are weakly
performing. Risk of further pressure on capital also exists due
to potential buyouts of foreign minority shareholders.

On a stand-alone basis, APB also has a RUB6.5bn (63% of Tier 1
capital) exposure to M2M, which defaulted last week for liquidity
reasons. Fitch believes the CBR had imposed constraints on
liquidity support from APB to its subsidiary to protect the
credit profile of the former. M2M also has solvency problems as
reflected by its breach of capital ratios on 1 November 2016 due
to additional reserves created in line with the CBR requirement.

At the same time, APB's ability to provide capital support to its
subsidiary is limited and may be subject to regulatory
restrictions. Fitch understands from management that a bail-in of
some of M2M's creditors, which could generate sufficient equity,
is currently being considered. However, significant execution
risk exists, and M2M's asset quality problems may ultimately
require further provisioning.

APB's FCC ratio was 14.2% at end-1H16, but regulatory
capitalisation was much tighter, with Tier 1 and total capital
ratios at 7.6% and 10.4%, respectively, mainly due to higher
statutory reserves and risk-weights. This small buffer could
allow the bank to reserve only about 2% of gross loans without
breaching minimal capital adequacy requirements, which is low in
light of significant net exposure to M2M and other related
parties.

APB's profitability is moderate. Annualised pre-impairment profit
was equal to 6.9% of average loans, which is a decent buffer
given asset quality risks. In 1H16, the bank created small
reserves equal to 2% of average loans (59% of pre-impairment
profit), resulting in moderate net income of RUB1bn (12.7% return
on average equity).

Due to negative news around M2M APB faces the risk of outflows.
Positively, APB has accumulated a significant liquidity cushion,
which, net of potential debt repayments due within 12 months,
covered 28% of customer funds as of 10 November 2016.

RATING SENSITIVITIES

IDRS, VRS, NATIONAL LONG-TERM RATINGS OF SKB, UTB AND APB

Rating upside for SKB and UTB is limited, although gradual
improvement of asset quality metrics resulting in sustainably
profitable performance and a strengthening of capital could be
positive, and in UTB's case could result in a revision of the
Outlook to Stable. Conversely, deterioration in asset quality
leading to capital erosion may result in negative rating actions.

Fitch plans to resolve the RWN on APB's ratings upon resolution
of the issues around M2M. A materialisation of contagion risks
from M2M resulting in a capital shortfall or a liquidity squeeze
at APB would likely lead to a downgrade. A downgrade may also
follow a further material increase of related-party exposures or
greater regulatory risks in respect of existing exposures.

If the issues around M2M are resolved without a material
weakening of APB's capital or significant liquidity stress, the
ratings will likely be affirmed at their current levels. An
upgrade of the ratings would require a significant reduction of
related-party risks or a strengthening of capitalisaiton.

ALL BANKS' SUPPORT RATINGS AND SUPPORT RATING FLOORS

The '5' Support Ratings and 'No Floor' Support Rating Floors of
the four banks reflect their small size and limited franchises,
making extraordinary capital support from the state, in case of
need, less likely. In Fitch's view, support from the banks'
private shareholders also cannot be relied upon. An upgrade of
these ratings is unlikely in the foreseeable future, although
acquisition by a stronger owner could lead to an upgrade of a
bank's Support Rating.

The rating actions are as follows:

   BystroBank

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

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

   -- National Long-term Rating: affirmed at 'BBB (rus)'; Outlook
      revised to Stable from Negative; withdrawn

   -- Viability Rating: affirmed at 'b'; withdrawn

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

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

   SKB

   -- Long-Term Foreign Currency IDR: affirmed at 'B-'; Outlook
      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'

   UTB

   -- Long-Term Foreign Currency IDR affirmed at 'B-'; Outlook
      Negative

   -- National Long-Term Rating affirmed at 'BB-(rus)', Outlook
      Negative

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

   -- Viability Rating affirmed at 'b-'

   -- Support Rating affirmed at '5'

   -- Rating Floor affirmed at 'No Floor'

   APB

   -- Long-Term Foreign and Local Currency IDRs: downgraded to
      'CCC' from 'B-', placed on RWN

   -- Short-Term Foreign Currency IDR: downgraded to 'C' from
     'B', placed on RWN

   -- National Long-Term Rating: downgraded to 'B-(rus)' from
      'BB(rus)', placed on RWN

   -- Viability Rating: downgraded to 'ccc' from 'b-', placed on
      RWN

   -- Support Rating: affirmed at '5'

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

Summary of Financial Statement Adjustments - BystroBank's
interest income and loan impairment charge for 6M16 were both
adjusted upward by RUB380m, since this amount was netted in the
IFRS accounts.


MEZHTOPENERGOBANK OJSC: S&P Affirms 'B-/C' Ratings, Outlook Neg.
----------------------------------------------------------------
S&P Global Ratings revised its outlook on Russia-based
Mezhtopenergobank OJSC (MTEB) to negative from stable and
affirmed its 'B-/C' long- and short-term counterparty credit
ratings on the bank.

At the same time, S&P lowered its Russia national scale rating on
the bank to 'ruBBB-' from 'ruBBB'.

The outlook revision reflects S&P's view that MTEB's
creditworthiness will likely experience pressure in the next 12-
18 months, owing to deteriorating asset quality and increased
credit losses.  Since early 2016, the share of nonperforming
loans (NPLs) in the bank's loan portfolio has increased, standing
at 7.36% on June 30, 2016, versus 3.91% at year-end 2015.  The
bank's credit costs were 3.98% of the gross loan portfolio in
first-half of 2016, versus negative 1.57% in 2015.

"We note that the increase in NPLs so far this year was largely
due to the default of one large borrower, which highlights the
risk of high credit concentrations in MTEB's loan portfolio.  In
our view, the bank's provisioning falls short of adequate levels,
and it will likely need to write additional provisions in 2017.
We therefore assume that in 2017 credit losses will remain at
least at the same level as in 2016, leading to negative financial
results.  In addition to its high single-name concentration, the
loan portfolio of MTEB is highly exposed to the real estate and
construction sector (around 41% of total loans as of July 1,
2016), which is currently not performing well in Russia.  This
might push NPLs and credit losses higher than we currently
forecast in the next 12-18 months, if one or several of the
bank's large exposures do not perform.  We therefore expect
potentially heightened pressure on MTEB's already weak capital,"
S&P said.

MTEB's management has indicated it plans to strengthen its
capital adequacy by raising additional capital.  However, these
plans will not materialize until 2017 and are not yet certain, in
S&P's view. Still, if the bank were to raise additional capital,
it might improve its ability to absorb potential losses.

"We think that MTEB's liquidity management has become more
aggressive this year.  Since the beginning of 2016, the bank's
broad liquid assets declined by 26.3% to Russian ruble (RUB)8.19
billion (US$127.5 million), resulting in our ratio of net broad
liquid assets to short-term customer deposits falling to 20.2% as
of June 30, 2016, from 28.8% at the end of last year.  We expect
management will take steps to improve MTEB's liquidity in the
coming months.  We note that the bank's funding and liquidity are
currently supported by the stable deposit base, low reliance on
wholesale funding, and funding from the Central Bank of Russia,"
S&P said.

The negative outlook on MTEB reflects the risk that its asset
quality might further deteriorate, requiring additional
provisions and weighing on the bank's capital in the coming 12-18
months. High single-name concentrations and high concentration in
the real estate and construction sector suggest NPLs might
significantly increase if one or a few large loan exposures do
not perform.

S&P could take a negative rating action in the next 12-18 months
if it saw significant deterioration in the quality of MTEB's
portfolio, prompting increased credit losses to above the sector
average, or if S&P observed that the capital base had
substantially weakened with its risk-adjusted capital ratio
falling below 3%.  Marked weakening in the bank's liquidity could
also trigger a downward rating action.

A positive rating action is remote, in S&P's view.  Such an
action would follow substantial improvement in the quality of
MTEB's loan portfolio, strengthening of its capital base, and
improvement of its risk-management systems and practices.


ROLSEN GROUP: Raiffeisenbank Seeks Testimony From Co-Founder
------------------------------------------------------------
RAPSI reports that Raiffeisenbank secured a U.S. court order
granting its application to obtain evidence and documents from
Ilya Zubarev, a co-founder and shareholder of Rolsen Group, which
might be substantial for insolvency and debt collection
proceedings against Rolsen Group companies in Russia.

According to RAPSI, Raiffeisenbank filed the application seeking
evidence and documents with the U.S. District Court for the
Northern District of California in September.

RAPSI relates that Raiffeisenbank which claims to be one of the
largest banks in Russia, lodged its application on the grounds
that Zubarev serves as senior partner of Runa Capital, board
member of Acronis Inc., both located in San Francisco, and
founding partner of Quantum Wave Fund, which is located in Palo
Alto (California).

RAPSI says the bank turned to the U.S. court amid proceedings it
is currently involved in Russian commercial courts as TV-Alliance
LLC, the main operational company of Rolsen Group, defaulted on
$19.8 million of debt.

A number of other Rolsen Group companies, including Videofon,
Vitta, Vargis, Sovershennaya Tekhnika, and Standard & Western
Trading are also involved in the proceedings as "collateral
providers," the report states.

Thus, in December 2015, Raiffeisenbank turned to the Moscow
Commercial Court launching insolvency and debt collection
proceedings against TV-Alliance and Vitta. As a result, a
monitoring procedure was introduced at TV-Alliance. The next
hearing in the case against TV-Alliance is set for November 21,
the report discloses.

RAPSI notes that the claim against Vitta was granted in April.
The ruling was upheld in June by the Ninth Commercial Court of
Appeal. Vitta opted to further challenge the ruling.

This February the bank lodged a claim against Standard & Western
Trading with the Moscow Commercial Court. In June
Raiffeisenbankwent after Vargis.

The bank filed a lawsuit against Sovershennaya Tekhnika in June
with the Kaliningrad Commercial Court.

By a ruling of the Voronezh Region Commercial Court a monitoring
procedure was introduced at Videofon. The next hearing in the
case is set for December 21, the report notes.

The bank seeks discovery from Zubarev about the corporate
structure of the Rolsen Group, its assets, intragroup and
external transfers of funds, and circumstances of the default,
adds RAPSI.


SVERDLOVSK: Fitch Affirms 'BB+' LT Currency IDRs, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed Russian Sverdlovsk Region's Long-Term
Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB+'
and National Long-Term Rating at 'AA(rus)'. The Outlooks are
Stable. The region's Short-Term Foreign Currency IDR has been
affirmed at 'B'. The region's senior unsecured debt affirmed at
BB+/AA(rus).

The affirmation reflects Fitch's unchanged base case scenario of
the region's fiscal performance being compatible with the 'BB+'
peer group.

KEY RATING DRIVERS

The 'BB+' ratings reflect Sverdlovsk's developed industrialised
economy, increasing but still moderate debt and satisfactory
operating performance with an operating balance sufficient for
interest payment coverage. These factors are balanced against
weak debt coverage, the deteriorated national economic
environment and weak institutional framework for Russian
sub-nationals.

Fitch forecasts Sverdlovsk's operating balance will recover to
6%-8% of operating revenue in 2016-2018 after a low 4.2% in 2015.
This will be enough for interest expenditure coverage, but is
notably below the historical peak of 17% operating margin in
2012. Fitch expects the region's deficit before debt variation to
narrow and hover in the range of 4%-5% of total revenue in the
medium term, down from a high 12.8% average in 2013-2015. The
expected recovery will be supported by the restoration of tax
revenue growth from its developed tax base and strict control of
expenditure.

For 9M16 the region collected 75% of full-year budgeted revenue
and incurred only 70% of budgeted expenditure, leading to an
interim RUB0.3bn deficit. However, such a low deficit largely
reflects the delayed execution of capex, and we expect higher
spending over 4Q to result in a full-year deficit of RUB12.4bn,
or 6.6% of the region's full-year revenue (compared with
RUB16.6bn deficit or 9.4% in 2015).

Fitch projects Sverdlovsk's direct risk will remain below 50% of
current revenue over the medium term. It will be supported by the
region's strong intention to limit the fiscal deficit and cut
capital expenditure to limit the region's borrowing needs. Fitch
expects the region will maintain capex at 9%-11% of total
expenditure in 2016-2018, lagging behind its national peers and
leaving little room for expenditure flexibility. Its self-
financing capacity will remain moderate as the current balance
and capital revenue will cover 50% of capex in the medium term,
leading to market funding requirements.

In its debt policy, Sverdlovsk relies on medium-term financing,
with bank loans dominating (53% of the direct risk at 1 October
2016), followed by budget loans (45%), with the residual related
to outstanding domestic bonds (2%). About 95% of maturities are
spread in 2016-2019 and the weighted average maturity of the debt
is estimated at three years, which is relatively short compared
with international peers. Immediate refinancing needs - the
region needs to repay RUB10.7bn during 4Q16 - are covered by
RUB21.3bn of undrawn bank credit lines. The region also has
RUB5bn of an unutilised domestic bond issuance programme. These
committed facilities also fully cover expected full-year deficit
before debt variation.

The region has a developed industrial economy weighted towards
the metallurgical and machine-building sectors. Its wealth
metrics are above median Russian region with GRP per capita 32%
above the median in 2014. The tax base is moderately
concentrated, with the top 10 taxpayers accounting for about 15%
of tax revenue in 2015. However, the overall concentration on a
few sectors of the processing industry exposes the region's
revenue to economic cycles. According to preliminary estimates,
regional GRP contracted by 5.2% in 2015, following the national
negative economic trend (Russia's GDP fell by 3.7%).

The region's credit profile remains constrained by the weak
institutional framework for Russian local and regional
governments (LRGs), which has a shorter record of stable
development than many of its international peers. Weak
institutions lead to lower predictability of Russian LRGs'
budgetary policies, which are subject to the federal government's
continuous reallocation of revenue and expenditure
responsibilities within government tiers.

RATING SENSITIVITIES

A weak operating balance that was insufficient to cover interest
expenditure or continuous growth of direct risk toward 60% of
current revenue without material operating balance improvement
would lead to a downgrade.

Restoration of the operating margin to the historical high of 15%
or above, accompanied by sound debt metrics with a debt payback
below five years (2015: 16.9 years) would lead to upgrade.


* RUSSIA: 43 Regions on Verge of Bankruptcy, Zyuganov Says
----------------------------------------------------------
The Moscow Times reports that the leader of the Communist Party
of the Russian Federation, Gennady Zyuganov, has warned Finance
Minister Anton Siluanov that 43 of Russia's regions are on the
verge of bankruptcy.

Mr. Zyuganov said 60%-70% of the regional budgets go toward
salaries, The Moscow Times relates.

In 2012, Russia's federal government shifted some of the
responsibility for social spending, in particular for health care
and education, to the regions, The Moscow Times recounts.  Since
then, a number of regions have been burdened with spiraling debt,
risking default if they are not bailed out by the federal
government, The Moscow Times discloses.


===========
S W E D E N
===========


PERSTORP HOLDING: Moody's Affirms Caa1 CFR, Outlook Stable
----------------------------------------------------------
Moody's Investors Service has affirmed the Caa1 Corporate Family
Rating and Caa1-PD Probability of Default Rating (PDR) of
Perstorp Holding AB, a Swedish chemicals company and appended the
PDR with the "/LD" (limited default) designation.  Concurrently,
Moody's has assigned definitive B3 ratings to Perstorp's proposed
approximately USD800 million equivalent Senior Secured First Lien
Notes due in 2021, which are split between EUR485 million and
USD275 million, and assigned a definitive Caa2 rating to the
proposed USD420 million Senior Secured Second Lien Notes due in
2021.  The notes will be used to refinance the company's existing
first lien and second lien debt and repay approximately USD150
million of existing mezzanine loans maturing in December 2017.
The outlook on all ratings is stable.

                          RATINGS RATIONALE

The affirmation of the Caa1 CFR and stable outlook reflect the
successful pricing of Perstorp's debt refinancing without
substantially changing its already large interest burden.  This
resolves the refinancing risk associated with a capital structure
that would otherwise have matured next year and pushes out the
next meaningful debt maturity to 2021.  The appending of the
"/LD" designation to the PDR results from the extension of the
mezzanine debt from 2017 to 2021, which we view as a distressed
exchange. The affirmation of the Caa1 CFR balances the ability to
successfully access the market for new first and second lien
debt, and the ability to PIK part of the interest which supports
liquidity, against the persistently high leverage which the PIK
feature may increase over time.  The resolution of short-term
debt maturities means there is no immediate trigger for a debt
default in the next few years, but at the same time a default
will remain likely as the 2021 maturities approach unless the
company's profitability and cashflow generation have improved
substantially by that time.

Moody's will remove the "/LD" designation from the PDR after
three days.  This transaction does not constitute an event of
default under any of the company's debt agreements.

Perstorp's Caa1 Corporate Family Rating (CFR) reflects (1) its
high Moody's adjusted gross leverage of 9.6x as of June 2016,
including a Mezzanine layer that accrues non-cash interest to
existing debt levels; (2) an interest expense of approximately
SEK1.5 billion (including approximately SEK1.1 billion in cash
interest expense) that is nearly equivalent to EBITDA; (3)
Moody's expectation of leverage only falling slightly below 9.0x
in FY2016, with limited deleveraging thereafter and weak cash
flow generation due to the high interest burden and capital
expenditure; (3) a degree of concentration in the company's
operating capacity, with facilities at Stenungsund and Perstorp;
(4) its exposure to a weak oxo-chemicals market leading to
declining EBITDA in 1H 2016 and cyclical customer industries; (5)
exposure to exchange rate fluctuations with a considerable cost
base in Swedish Krona; as well as (6) challenges from volatile
feedstock prices.

However, the rating also reflects (1) Perstorp's strong position
as an established independent player in the niche chemical
markets for polyols and oxo intermediates, and the benefits from
an integrated business model that underpin solid EBITDA margins
of approximately 15%; (2) improvement in 2014, 2015 and Q3 2016
operating performance supported by higher sales volume following
capacity increases over the past two years, lower feedstock
prices as well as favourable FX movements; and (3) adequate
liquidity following the proposed refinancing despite weak cash
generation due to the size of the SEK1 billion revolver, which is
undrawn.

The B3 ratings on the proposed USD800 million equivalent of
Senior Secured First Lien Notes reflects their priority ranking
ahead of the proposed USD420 million of Senior Secured Second
Lien Notes and a proposed USD281 million mezzanine facility
(unrated), as outlined in the intercreditor agreement.  The Caa2
rating for the Senior Secured Second Lien Notes reflects the
relatively large amount of first priority debt.  Moody's notes
that the revolving credit facility (unrated) ranks ahead of all
notes with regard to priority of payment according to the
intercreditor agreement.

Moody's views liquidity as sufficient to cover expected negative
free cash flow of SEK50-150 million a year through 2018.  The
successful refinancing addresses the current debt structure,
which matures during the course of next year.  The new RCF and
extended mezzanine will have maintenance covenants referencing
net leverage and interest cover and we expect them to have
adequate headroom over the next 12-18 months.

                          RATING OUTLOOK

The stable outlook reflects Moody's view that the company's
operating performance and cash flow will continue the improvement
seen in Q3 2016, benefitting from increased volumes and lower
capex from the completion of the Valerox project but that it will
not deleverage.  It also assumes that Perstorp will maintain an
adequate liquidity position.

               WHAT COULD CHANGE THE RATING UP/DOWN

Moody's currently does not expect any upwards pressure on the
rating, but it may occur if the company successfully executes on
its growth plans, resulting in sustained visible EBITDA growth
and Moody's adjusted debt/EBITDA falling below 5.5x.  The rating
agency would also expect sustained free cash flow generation
while the company maintains solid liquidity for any positive
pressure. Conversely, negative pressure would develop if EBITDA
growth fails to materialize, Moody's adjusted debt/EBITDA
increases from the current level or if the company's liquidity
profile becomes inadequate.

The principal methodology used in these ratings was Global
Chemical Industry Rating Methodology published in December 2013.

Headquartered in Perstorp, Sweden, Perstorp Holding AB, is a
chemical company mainly producing Polyols and Oxo intermediates
that are used in a variety of products, including resins,
coatings and plasticisers for various end markets.  The company
is owned by funds managed by private equity firm PAI partners SAS
(86%) and management (14%).  For the year ending December 2015,
Perstorp reported SEK11.1 billion in revenues and EBITDA of
SEK1.7 billion.



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


KHARKOV: Fitch Hikes LT Issuer Default Ratings to 'B-'
------------------------------------------------------
Fitch Ratings has upgraded the Ukrainian City of Kharkov's
Long-Term Foreign and Local Currency Issuer Default Ratings
(IDRs) to 'B-' from 'CCC', and Short-Term Foreign Currency IDR to
'B' from 'C'. The Outlook on the Long-Term IDRs is Stable. Fitch
has revised the Outlook on the city's National Long-Term rating
to Stable from Negative and affirmed it at 'A+(ukr)'.

The upgrade follows the upgrade of Ukraine's Long-Term Foreign
and Local Currency IDRs on November 11, 2016, as the city is
rated at the same level as the sovereign.

The revision of the Outlook on the National Long-Term rating
reflects Fitch's expectations of a stabilisation in the national
economic environment, with mild restoration of Ukraine's GDP and
easing inflation, which should be positive for the city's
economy.

KEY RATING DRIVERS

The upgrade of the city of Kharkov's IDRs and revision of the
Outlook on the National Long-Term rating reflect the following
key rating drivers and their relative weights:

HIGH

The city's ratings remain constrained by Ukraine's ratings (B-/B)
and a weak institutional framework governing Ukrainian local and
regional governments. The framework is characterised by political
tensions and challenging reform agenda implied by Ukraine's IMF
programme to secure additional external funding. This has
resulted in frequent changes in the allocation of revenue sources
and the assignment of expenditure responsibilities, which limits
forecasting ability and hinders the strategic planning of local
and regional governments in Ukraine.

"We expect that the improved macroeconomic stability should
positively impact the city's economy," Fitch said. Fitch has
recently revised its forecast for Ukraine's economy and expects
mild GDP growth recovery of 1.1% in 2016 and 2.5%-3% in 2017-
2018, following a 9.9% contraction in 2015. The inflation
pressure has eased to an expected 10%-15% in 2016-2017 and 8% in
2018 after 48.5% in 2015.

The city of Kharkov is the capital of the country's fourth-
largest region, which contributed 6% of Ukraine's GDP in 2014.
Kharkov region's GRP per capita is close to the national average,
although that of the city is likely to be higher as it is the
wealthiest municipality in the region. Kharkov is one of the
country's key scientific, industrial and cultural centres. Its
economy is diversified across manufacturing and services, and
supported by a large number of companies.

The city's IDRs also reflect the following key rating drivers:

Our base case scenario is that the city's budgetary performance
will remain satisfactory over the medium term with an operating
balance above 15% of operating revenue (2015: 25%) and deficit
before debt variation of 1%-3% of total revenue (2015: surplus
7%). In 9M16, Kharkov recorded fiscal surplus of UAH864m,
supported by a good dynamic in tax revenues. However, future
growth is uncertain, in Fitch's view, due to unpredictable fiscal
changes and the overall weakness of sovereign public finances in
Ukraine.

"We expect the city will remain free from direct debt in
2016-2018 after it repaid its outstanding bank loan in 2015."
Fitch said. Kharkov does not plan to borrow over the medium term
and will fund any fiscal deficit from its cash balance. The
city's liquidity amounted to UAH1.6bn at end-September 2016,
which covered two months of its budgeted expenditure for 2016,
providing some cushion in case of stress.

Kharkov's exposure to contingent risk is growing. Its public
sector debt doubled during 2011-2015 to UAH565m. The debt stock
increase is mainly attributable to some utilities companies and
the city's park, with some exposure to forex risk. Most of the
city's public sector entities (PSEs) are loss-making and depend
on subsidies to sustain operations. In 2015, compensating
subsidies and capital injections granted to PSEs totalled about
UAH400m, or 5% of the city's operating revenue. Disclosure of the
PSEs' performance in 2015 is limited to the largest 15 of 72 PSEs
in the city.

RATING SENSITIVITIES

The city's ratings are constrained by the sovereign. Any rating
action on Ukraine's sovereign IDRs would lead to a corresponding
rating action on the city's ratings.


KYIV: Fitch Hikes LT Issuer Default Ratings to B-
-------------------------------------------------
Fitch Ratings has upgraded the City of Kyiv's Long-Term Foreign
and Local Currency Issuer Default Ratings (IDRs) to 'B-' from
'CC'. The agency has also upgraded the city's National Long-Term
rating to 'BBB(ukr)' from 'BB+(ukr)'. Outlooks on the Long-Term
IDRs and the National Long-Term rating are Stable.

Under EU credit rating agency (CRA) regulation, the publication
of sovereign reviews (including local and regional governments)
is subject to restrictions and must take place according to a
published schedule, except where it is necessary for CRAs to
deviate from this in order to comply with their legal
obligations.

Fitch interprets this provision as allowing us to publish a
rating review in situations where there is a material change in
the creditworthiness of the issuer that we believe makes it
inappropriate for us to wait until the next scheduled review date
to update the rating or Outlook/Watch status.

The next scheduled review date for the City of Kyiv will be
decided in December 2016 when Fitch will publish its LRG rating
review calendar for 2017. However, in this case the deviation was
caused by the city's full repayment of domestic bonds and upgrade
of Ukraine's Long-Term Foreign and Local Currency IDRs.

KEY RATING DRIVERS

The upgrade reflects the following rating drivers and their
relative weights:

HIGH

The upgrade of Kyiv's IDRs follows the city's full repayment of
domestic bonds (series G) on 10 November 2016, ahead of
originally scheduled maturity on 19 December 2016. This resolves
the risk caused by Kyiv's administration previous decision to
postpone the repayment of UAH1.915bn senior unsecured domestic
bonds for another 360 days.

Fitch was informed by the issuer that Ukraine's Commission on
Securities and Capital Market discontinued the registration of
the city's series G domestic bonds on 10 November 2016. Kyiv has
no other outstanding domestic bonds left, which in our view
significantly eases financing pressure and positively affects the
city's credit profile. The city's liquidity position has
stabilised with UAH6.489bn held on accounts at 14 November 2016
following the bond repayment.

Nonetheless the city still has obligations to Ukraine's Ministry
of Finance (MoF), which issued new debt instruments, following
completion of the city's debt exchange on external bonds (see
'Fitch Upgrades Ukraine's City of Kyiv to 'CCC'' dated 24
December 2015). According to the terms of agreement with MoF,
Kyiv is making semiannual clearance payments in March and
September, which Fitch treats as part of intergovernmental
relations with the national government.

Our upgrade of the city's ratings also follows recent upgrade of
Ukraine's sovereign ratings to 'B-', allowing us to reassess the
city's credit profile at the same level of the sovereign ratings.

RATING SENSITIVITIES

The city's ratings could be positively affected by the sovereign
upgrade, providing it maintains a stable fiscal performance over
the medium term.

Conversely, negative rating action on Ukraine's ratings will be
mirrored by the city's ratings. In the absence of sovereign
downgrade, a material increase of indebtedness, combined with
deterioration of financial flexibility would be negative for the
ratings.


NATIONAL BANK: Liquidation Extended for Two years
-------------------------------------------------
Interfax-Ukraine reports that the Individuals' Deposit Guarantee
Fund said it extended the liquidation of National Bank for
Development (VBR) for two years, until Dec. 24 2019, and that of
Bank Nadra for two years, until June 3, 2020.

According to the report, the powers of VBR's liquidator Serhiy
Mykhno and Bank Nadra's liquidator Iryna Striukova were extended
for the corresponding period, the news agency relates.

Temporary administration was introduced in VBR from November 28,
2014, while the procedure of liquidation started on December 23,
2015, Interfax-Ukraine notes.

Interfax-Ukraine relates that the fund said the estimated value
of the liquidation estate of VBR is UAH6.1 billion. The value of
the liquidation estate, excluding revaluation and reserves, is
UAH8.72 billion.

VBR was declared insolvent in connection with the application of
EU sanctions against its shareholder, the report notes.

VBR was registered in 2009. It is part of MAKO company. The owner
of the bank is the son of the former president of Ukraine,
Oleksandr Yanukovych.

The NBU, continuing the withdrawal of insolvent Bank Nadra from
the market, on June 4, 2015 decided to revoke its banking license
and liquidate the bank, the report notes.


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


ARDEN FORESTRY: In Liquidation, Faces Pyramid Scheme Probe
----------------------------------------------------------
Daily Record reports that Arden Forestry Management Ltd. went
bust and police were investigating claims the company were
operating a pyramid scheme.

Liquidators were appointed and a petition to wind up the firm up
was lodged with the High Court in Dublin on Nov. 2, Daily Record
relates.

Arden, who were set up in 2013, have two directors, William
McLaren and Garret Hevey, Daily Record discloses.  Their accounts
are overdue at Companies House and their website is down, Daily
Record relays.

Provisional liquidator Declan de Lacy -- D.deLacy@pkf.ie -- of
PKF O'Connor, Leddy & Holmes, based in Dublin, was appointed on
Oct. 25, Daily Record recounts.


DECO 11 - UK: S&P Lowers Ratings on Two Note Classes Notes to D
---------------------------------------------------------------
S&P Global Ratings lowered its credit ratings on DECO 11 - UK
Conduit 3 PLC's class A-1B, A2, B, C, and D notes.  At the same
time, S&P has affirmed its 'D (sf)' ratings on the class E and F
notes.

S&P's ratings in DECO 11 - UK Conduit 3 address the timely
payment of interest and the ultimate payment of principal no
later than the January 2020 legal final maturity date.

The repayment of the class A-1B, A2, and B notes is dependent on
favorable business, financial, or economic conditions, in S&P's
opinion.  These classes of notes face at least a one-in-two
likelihood of default.  S&P has therefore lowered its ratings on
the class A-1B, A2, and B notes, in line with its criteria for
assigning 'CCC' category ratings.

On the October 2016 interest payment date, full interest was not
paid on the class C and D notes.  S&P has therefore lowered to
'D (sf)' from ' CCC- (sf)' its ratings on these classes of notes
in line with its criteria.

S&P has also affirmed its 'D (sf)' ratings on the class E and F
notes because they continue to experience interest shortfalls.

DECO 11 - UK Conduit 3 is a U.K. multi-loan commercial mortgage-
backed securities (CMBS) transaction that closed in December
2006. It was originally backed by 17 loans, of which four remain.

RATINGS LIST

Class            Rating
          To               From

DECO 11 - UK Conduit 3 PLC
GBP444.387 Million Commercial Mortgage-Backed Floating-Rate Notes

Ratings Lowered

A-1B      CCC+ (sf)        B- (sf)
A2        CCC- (sf)        CCC+ (sf)
B         CCC- (sf)        CCC (sf)
C         D (sf)           CCC- (sf)
D         D (sf)           CCC- (sf)

Ratings Affirmed

E         D (sf)
F         D (sf)


EUROSAIL 2006-3NC: S&P Raises Rating on Cl. E1c Notes to B-
-----------------------------------------------------------
S&P Global Ratings affirmed its credit ratings on Eurosail
2006-3NC PLC's class A3a, A3c, D1a, and D1c notes.  At the same
time, S&P has raised its ratings on the class B1a, C1a, C1c, and
E1c notes.

The collateral backing the transaction comprises U.K.
nonconforming mortgages originated by Southern Pacific Mortgages
Ltd., and Southern Pacific Personal Loans Ltd. Barclays Bank PLC
is the bank account, guaranteed investment contract (GIC)
provider, and swap counterparty.

The notes in the transaction are denominated in multiple
currencies.  The transaction is therefore exposed to cross
currency risk.  The cross currency swap with Barclays Bank
mitigates this risk.

S&P's current counterparty criteria cap its ratings in the
transaction at 'A- (sf)' -- i.e., at our long-term issuer credit
rating (ICR) on Barclays Bank -- due to the unremedied breach
following last year's downgrade.

S&P's analysis indicates that the available credit enhancement
for all classes of notes has increased due to the transaction's
deleveraging.  Since S&P's Nov. 29, 2013 review, the class A3a
notes' available credit enhancement has increased to more than
67% from 49%.  The reserve fund has been at its required
documented level since the 2011 interest payment date (IPD), with
no subsequent draws.  Annualized excess spread is 3.04%.

In the December 2012 investor report, the servicer (Acenden Ltd.)
updated its arrears reporting to include amounts outstanding,
delinquencies, and other amounts owed. Other amounts owed include
fees arrears, charges, costs, ground rent, and insurance, amongst
others.  Delinquencies are principal and interest mortgage
arrears, based on the borrowers' monthly installments.

Amounts outstanding are principal and interest arrears, after
payments from borrowers are first allocated to other amounts
owed. For the transaction, any arrears payments are allocated to
other amounts owed, then to interest amounts, and subsequently to
principal.  From a borrowers' perspective, arrears payments are
allocated to interest amounts, then to principal amounts, and
subsequently to other amounts owed.  The difference in the
servicer's and the borrower's payment allocation results in
amounts outstanding being greater than delinquencies.  Amounts
outstanding and delinquencies have both recently increased, with
the former increasing at a higher rate.

Total arrears have decreased to 35.9% from 42.1% in Q3 2012.  S&P
has taken this into account and have projected a further 2.0%
increase in arrears.  As a result, S&P has decreased its
weighted-average foreclosure frequency (WAFF) assumptions since
its previous review.  S&P has also accounted for the servicer's
payment allocation of other amounts owed before interest and
principal arrears repayments to the special-purpose entity.  As a
result, S&P's weighted-average loss severity (WALS) assumptions
have increased.

Eurosail-UK 2006-3NC benefits from a weighted-average seasoning
of more than 10 years and original and current weighted-average
loan-to-value ratios of 73.0% and 56.7%, respectively.  However,
79.2% of the borrowers are self-certified, and 10.3% of the
pool's mortgages are second lien mortgages.

WAFF AND WALS ASSUMPTIONS

Rating      WAFF        WALS
level        (%)         (%)
AAA        45.61       56.59
AA         40.56       48.31
A          34.22       36.74
BBB        29.42       30.49
BB         24.29       26.29
B          21.52       23.51

The transaction's liquidity trigger prevents the issuer from
using the liquidity facility for notes other than the class A
notes, if the level of amounts outstanding for more than 90 days
(including repossessions) exceeds 15% of the transaction's
original balance. In the most recent investor report (as of Sept.
2016), this level was 11.28%.

"We consider the available credit enhancement for the class A3a,
A3c, B1a, C1a, and C1c notes to be commensurate with higher
ratings than those currently assigned.  However, the application
of our current counterparty criteria caps these ratings at our
long-term 'A-' ICR on Barclays Bank.  We have therefore affirmed
our 'A- (sf)' ratings on the class A3a and A3c notes and have
raised to 'A- (sf)' from 'BBB- (sf)' our rating on the class B1a
notes.  The upgrades of the class C1a and C1c notes to 'BBB (sf)'
from 'B+ (sf)' also reflect the proximity of the default rate to
the liquidity facility draw trigger," S&P said.

Based on the results of S&P's credit and cash flow analysis, it
has affirmed its 'B- (sf)' ratings on the class D1a and D1c
notes. S&P has raised to 'B- (sf)' from 'CCC (sf)' its rating on
the class E1c notes as S&P do not expect them to experience
interest shortfalls in the next 18 months.  S&P estimates the
likelihood of default to be lower than one-in-two.

RATINGS LIST

Class             Rating
            To                 From

Eurosail 2006-3NC PLC
EUR227.85 Million, GBP269.913 Million, US$205 Million Mortgage-
Backed Floating-Rate Notes, An Overissuance Mortgage-Backed
Floating-Rate Notes And Mortgage-Backed Deferrable-Interest Notes

Ratings Affirmed

A3a         A- (sf)
A3c         A- (sf)
D1a         B- (sf)
D1c         B- (sf)

Ratings Raised

B1a         A- (sf)             BBB- (sf)
C1a         BBB (sf)            B+ (sf)
C1c         BBB (sf)            B+ (sf)
E1c         B- (sf)             CCC (sf)


GRAYTON ENGINEERING: Bought Out of Administration
-------------------------------------------------
Laurence Kilgannon at Insider Media reports that a GBP9 mil.-
turnover mechanical engineering contractor which formed part of a
wider group backed by private equity house LDC has been acquired
out of administration in a pre-pack deal, safeguarding more than
50 jobs.

Grayton Engineering Ltd provides services to the cement,
chemical, petrochemical and steel industries operating from
premises in Barton-upon-Humber, the report discloses.

The report says the company was one of the two main trading arms
of Castle Donnington-based PJD Group, a specialist engineering
business, owned by LDC through the Power Industrial Group Ltd
(PIGL), which supplied into the power and industrial sectors.

Insider Media relates that following the loss of a number of key
power station contracts as Rugeley and Fiddlers Ferry scaled back
activities, group revenue reduced by more than 50% from GBP30
million in 2015. The contribution from Grayton Engineering and
the other trading entity, Peter J Douglas Engineering, was
insufficient to cover overheads leading to trading losses and
cash flow pressure, the report states.

Daniel Butters -- dbutters@deloitte.co.uk -- and Clare Boardman -
- cboardman@deloitte.co.uk -- insolvency specialists from
Deloitte, were appointed as joint administrators of Grayton
Engineering Ltd on November 7 and completed the sale of the
company's business and assets to Grayton Mechanical and
Fabrication Services Ltd.

Grayton Mechanical and Fabrication Services, which emerged as the
best option following a competitive bidding process overseen by
Deloitte, is owned by a former director of Grayton Engineering
and a member of the management team on a consultancy basis,
according to the report.

Insider Media relates that due to a worsening cash position and a
forecast breach in PJD Group's GBP3.1 million overdraft
facilities with HSBC from early 2017, Deloitte had been engaged
since July 2016 to advise on an accelerated merger and
acquisition process, supported by the bank.

However, creditor pressure increased on the group and
specifically Grayton Engineering leading to the insolvency which
does not involve PJD Group or Peter J Douglas Engineering, the
report states.

PJD Engineering has now been acquired in a buyout by its
management team and the Power Industrial Group will now be wound
down in due course, says Insider Media.

LDC invested in PJD Group in 2011 to help further its buy-and-
build approach to growth.

Geldards advised Grayton Mechanical and Fabrication Services Ltd.


HEWDEN: On Verge of Collapse, Taps EY to Act as Administrator
-------------------------------------------------------------
Sky News reports that hundreds of jobs are at risk as Hewden, one
of the UK's biggest heavy machinery rental firms, teeters on the
brink of collapse following a sharp deterioration in trading
conditions.

Sky News has learnt that Hewden's owner has lined up the
professional services firm EY to act as administrator to the
Manchester-based company.

An announcement is expected to be made about EY's appointment in
the early part of this week, Sky News relays, citing insiders.

Hewden's failure, which would come after a frantic search for new
financial backers in recent weeks, will fuel the debate about the
impact of the EU referendum result on British industry, Sky News
states.

In a statement last month, the company, which was established in
1961 and employs around 750 people, said it was confident that it
could find new investors, Sky News recounts.

According to Sky News, sources said, however, that talks with
possible backers including Alchemy Partners had so far proved
fruitless.

"Hewden has been impacted by market uncertainty following the
vote to leave the EU.  The vote has adversely affected a number
of large construction and capital investment projects," Sky News
quotes Hewden as saying three weeks ago.

Sources said there was still some hope that a solvent solution
could yet be found for the business, or that a buyer may be found
after it enters administration, Sky News relays.

Hewden rents machinery such as cranes, excavators and power
generation tools to construction sites across the UK.


JERSEY RUGBY: Bought Out for GBP1.5 Mil. to Save Club's Future
--------------------------------------------------------------
TV News reports that Jersey Reds (Jersey Rugby Football Club) has
been bought by a private investor.

At an EGM attended by more than 120 people, members were informed
that the club and its assets has been bought for GBP1.5 million.

It's understood the buyer has no interest in owning the club long
term, the report says.

According to the report, the Reds have the option to buy back the
assets for no extra charge over a period of time.

ITV News notes that a Strategy Review board will be formed to
come up with a new business model by February 2017.

Chairman Mark Morgan told ITV News before the start of the season
that RFU funding for Championship clubs was insufficient and the
situation had reached "crunch point".

The deal was brokered by the executive committee and the funds
were transferred on Nov. 7, the report adds.


LSF9 ROBIN: S&P Assigns 'B' CCR & Rates GBP500MM Sr. Loan 'B+'
--------------------------------------------------------------
S&P Global Ratings said that it assigned its 'B' long-term
corporate credit rating to LSF9 Robin Investments Ltd., the
parent of U.K.-based petrol station operator MRH.  The outlook is
stable.

At the same time, S&P assigned a 'B+' issue rating to the
company's proposed GBP500 million senior secured term loan B,
which is set to be issued in two tranches, one denominated in
sterling and the other in euros.  S&P also assigned its 'B+'
issue ratings to the company's GBP50 million revolving credit
facility (RCF) and GBP50 million capital expenditure (capex)
facility, both of which rank pari passu with the senior secured
term loan.  The recovery rating on each of these instruments is
'2', reflecting S&P's expectation of substantial (70%-90%)
recovery in the event of default.

The issue rating is subject to the successful issuance of the
term loan facilities, the RCF, and the capex facility, and S&P's
review of the final documentation.  If S&P Global Ratings does
not receive the final documentation within a reasonable time
frame, or if the final documentation departs from the materials
the rating agency has already reviewed, it reserves the right to
withdraw or revise our ratings.

S&P's long-term rating on LSF9 Robin Investments Ltd. is
supported by S&P's view of MRH's leading position amongst
independent petrol station operators in the U.K. with a portfolio
of 453 sites.  MRH benefits from a cash-generative portfolio of
petrol filling stations, held on a significant freehold land
estate that represents about 80% of the portfolio.  The rating
also reflects S&P's forecast that the proposed refinancing
transaction will leave MRH with a highly leveraged capital
structure, with initial S&P Global Ratings-adjusted debt-to-
EBITDA of about 5.5x for the fiscal year ending Dec. 31, 2017.

"We consider that the following factors constrain MRH's business
risk profile.  MRH is exposed to underlying commodity oil price
fluctuations, and its operations are relatively modest in scale
compared to some of its peers; limited international
diversification; and profitability below that of comparable
sector peers.  We consider this to be partially attributable to a
relatively underdeveloped nonfuel business, although it has
inherent opportunity for future growth.  At the same time, our
view of the business risk also incorporates MRH's historical
track-record of maintaining fuel margins, as well as over 90% of
its existing estate having capacity to accommodate further
expansion," S&P said.

In the proposed transaction, MRH is looking to raise a GBP500
million term loan facility B (split into a sterling-denominated
GBP250 million tranche and a euro-denominated GBP250 million-
equivalent tranche).  S&P understands the euro-denominated loan
exposure will be subject to foreign exchange hedging to match the
capital structure currency exposure to MRH's sterling-based
earnings.  In addition, an undrawn GBP50 million revolving credit
facility and undrawn GBP50 million capex facility will be put in
place to support liquidity and ongoing business operations.
Proceeds will be used to refinance existing debt, with the
transaction primarily reflecting the post-transaction debt
financing of Lone Star Funds' acquisition of MRH, which was
completed in January this year.

After the proposed transaction, S&P forecasts that MRH will
maintain a highly leveraged capital structure, with adjusted debt
to EBITDA of about 5.5x in 2017.  S&P anticipates that the cash-
generative nature of the business and significant freehold land
will support sound coverage ratios, with adjusted funds from
operations (FFO) to cash interest coverage remaining above 3x.
S&P's adjusted debt calculation also includes about GBP50 million
of shareholder loans provided by Lone Star, which S&P treats as
debt.

S&P's base case assumes:

   -- The U.K.'s referendum vote to leave the EU is likely to
      produce a drag on European economies.  S&P's base case
      reflects its expectation of mild GDP growth in 2017 and
      2018 in the 1.0%-1.2% range in the U.K.

   -- Fuel volumes to remain relatively flat over the next few
      years (excluding the prospect of further site
      acquisitions).

   -- Marginal improvement in EBITDA margin to 5.0%-5.5% over the
      next few years, supported by increasing expansion of
      nonfuel business.  Capex of up GBP100 million in 2017
     (including additional site acquisitions) and up to GBP50
      million in 2018 including investment in knocking down and
      rebuilding existing sites.

Based on these assumptions, S&P arrives at these credit measures
in 2017 and 2018:

   -- Adjusted debt to EBITDA of about 5.5x in 2017 and 2018.
   -- Adjusted FFO to debt of about 10%-12%.
   -- Adjusted FFO to cash interest coverage remaining above 3x.
   -- Free operating cash flow (FOCF) to debt remaining between
      0%-5% (FOCF is after capex investment, which includes
      maintenance and growth capex, site acquisitions, and knock
      down rebuilds).
   -- Unadjusted EBITDAR coverage (EBITDA before rent costs to
      interest plus rent) of above 3x.

The rating also incorporates S&P's view of the ownership and
control by financial sponsor, Lone Star Funds.  Given the absence
of amortizing debt in the capital structure and the strategy to
reinvest in the existing portfolio or pursue potential
acquisition opportunities, S&P do not anticipate any significant
deleveraging over the next few years.

After the proposed issuance and refinancing, S&P assess MRH's
liquidity position as adequate, based on S&P's expectation that
sources of funds will exceed uses by more than 1.2x over the next
12 months.  S&P expects that liquidity sources will continue to
exceed uses, even if EBITDA were to decline by 15%.

S&P expects liquidity sources over the next 12 months to
comprise:

   -- Post-transaction cash on balance sheet of about
      GBP50 million;
   -- Committed and undrawn RCF of GBP50 million;
   -- Committed and undrawn capex facility of GBP50 million; and
   -- Forecast cash FFO of GBP55 million to GBP60 million.

S&P expects liquidity uses over the same period to comprise:

   -- Capex requirements of up to GBP100 million, consisting of
      about GBP15 million for maintenance capex, GBP10 million
      for growth capex, GBP20 million for knock down rebuilds,
      and GBP55 million for further site acquisitions; and
   -- No near-term debt maturities.

After the transaction, S&P anticipates the group will maintain
adequate headroom under its financial covenants, such that a 15%
decline in EBITDA would not result in a breach.

The stable outlook reflects S&P's expectation that management
will continue to sustainably grow the business, reinvesting and
replenishing in its existing estate.  In S&P's base case, it
forecasts that MRH will maintain an adjusted debt-to-EBITDA ratio
of about 5.5x and FFO cash interest coverage of above 3x in
fiscal year 2017, while generating positive FOCF and maintaining
comfortable liquidity.

S&P could lower the ratings if management's growth strategy were
to falter, resulting in overall earnings that materially
underperformed S&P's base case.  A downgrade could follow
earnings growth below S&P's expectations and margin
deterioration, resulting in weakened credit metrics that could
include adjusted EBITDA to interest approaching 2x, an inability
to sustain positive FOCF, or a deterioration in the company's
liquidity position.

In S&P's view these weak credit metrics could result from MRH
adopting a more aggressive financial policy, for example
undertaking significant debt-funded acquisitions.

S&P could consider a positive rating action if MRH were to
achieve a track record of improved credit metrics in line with
S&P's aggressive financial risk profile category.  S&P would
consider an upgrade if MRH sustains adjusted debt to EBITDA
comfortably below 5x and FFO to debt of comfortably above 12%.
Such a scenario could occur on the back of robust earnings growth
and improved profitability, translating into a track record of
sustainably stronger cash flow generation.  Any upgrade would be
contingent on S&P taking the view that MRH had adopted a more
conservative financial policy that supported the sustainability
of a stronger financial risk profile.


MORTGAGE FUNDING: S&P Affirms BB Rating on Class A3 Notes
---------------------------------------------------------
S&P Global Ratings affirmed its credit ratings on Mortgage
Funding 2008-1 PLC's class A1, A2, and A3 notes.

The affirmations reflect the transaction's payment structure and
cash flow mechanics, as well as the results of S&P's cash flow
analysis to determine whether the notes could be repaid under
stress test scenarios.

Credit performance has improved since S&P's Nov. 21, 2013 review,
resulting in a lower weighted-average foreclosure frequency
(WAFF) for the notes.  This is primarily due to a fall in arrears
(to 26.6% from 42.9%) and greater seasoning.  The weighted-
average loss severity (WALS) figures have risen due to higher
other amounts owed and repossession market value decline
(following a rise in property prices).

In the investor report, the servicer distinguishes among amounts
outstanding, delinquencies, and other amounts owed.  The
servicer's definition of other amounts owed includes (among other
items), arrears of fees, charges, costs, ground rent, and
insurance.  Under the transaction documents, 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.  S&P's WALS
assumptions have increased because it expects potential principal
losses to be greater, given the difference in the servicer's
allocation of payments.  It is likely that the ongoing increase
in other amounts owed will continue.  When the servicer sells
repossessed properties, recoveries available to the issuer will
be lower.

Rating     WAFF         WALS
            (%)          (%)
AAA       48.84        75.30
AA        40.98        66.22
A         33.79        53.62
BBB       27.87        45.68
BB        21.13        39.19
B         18.19        34.32

The transaction benefits from an amortizing liquidity reserve
fund of GBP4.7 million, which provides credit enhancement.

Under the documentation, the issuer can use principal receipts to
address interest shortfalls on the class A1, A2, and A3 notes
(subject to certain conditions), and to pay senior expenses.

The transaction is currently paying sequentially as one of the
performance triggers is breached.

A combination of subordination, overcollateralization of
GBP4,014,454, the liquidity reserve fund, and excess spread
provides credit enhancement for the rated notes.  Following S&P's
credit and cash flow analysis, it considers the available credit
enhancement for the class A1 and A2 notes to be commensurate with
higher ratings.  However, the application of S&P's current
counterparty criteria caps its ratings on these classes of notes
at the 'A-' long-term issuer credit rating on the bank account
provider, Barclays Bank PLC.  S&P has therefore affirmed its
'A- (sf)' ratings on these classes of notes.

S&P has affirmed its 'BB (sf)' rating on the class A3 notes
because it considers the available credit enhancement to be
commensurate with the currently assigned rating.

The collateral comprises nonconforming U.K. residential mortgages
originated by Alliance & Leicester PLC, Southern Pacific Personal
Ltd., Southern Pacific Mortgages Ltd., Preferred Mortgages Ltd.,
Matlock London Ltd., and Langersal No.2 Ltd.

RATINGS LIST

Mortgage Funding 2008-1 PLC
GBP582.409 Million Mortgage-Backed Floating-Rate Notes
(Including GBP89.3 Million Unrated Notes)

Ratings Affirmed

Class         Rating


A1            A- (sf)
A2            A- (sf)
A3            BB (sf)


OXON INVESTMENT: 41 Jobs Saved Following Successful Sale
--------------------------------------------------------
The job security of 41 employees and the future of Weston Country
House hotel, in Weston-on-the-Green, Oxfordshire, have been
secured after SFP, the nationwide insolvency practitioners,
conducted the sale of its operational business, Oxon Investments
Ltd.

Prior to entering insolvency, Oxon Investments conducted a review
of its financial position in early 2015, and the directors
implemented strategic changes in order to meet previous
liabilities.  This strategy failed, however, and it entered into
a Company Voluntary Allowance (CVA) in September 2015 -- enabling
it, and therefore the Hotel, to continue trading.

Initial CVA re-payments were maintained, but in mid-2016
faltered.  Coupled with the added pressure of creditor debt
accumulated post-CVA, Oxon Investments amounted total debts of
GBP550,000 and appointed Joint Administrators Simon and Daniel
Plant of SFP, both licensed members of the Insolvency
Practitioners' Association (IPA), on October 14, 2016.
SFP subsequently sanctioned agents to undertake a valuation of
the business and successfully negotiated its sale, transferring
all existing employees to the new owner via the TUPE process on
October 21, 2016 -- a seven-day turnaround.

"We were able to conduct a quick sale of the business, which was
arranged within a week, ensuring the impact on both trading and
employees was kept to a minimum," Simon says.

"Small rural businesses are integral to local economies, and this
is another prime example of a struggling business seeking expert
help quickly and achieving the best possible result."


POWA TECHNOLOGIES: Wagner Transferred GBP50,000 to Bright Station
-----------------------------------------------------------------
Ben Martin at The Sunday Telegraph reports that Dan Wagner, the
controversial entrepreneur behind Powa Technologies, transferred
GBP50,000 from the business to a different company he owns three
weeks before the mobile payments firm collapsed into
administration.

Deloitte was appointed as administrator to Powa in February after
it missed a deadline to repay US$60 million of debt to Wellington
Management, the US investment giant that bankrolled it, at the
end of 2015, The Sunday Telegraph recounts.

Powa, which was founded by Mr. Wagner, hit the buffers after
running out of cash, The Sunday Telegraph discloses.  A report by
Deloitte found it had not paid staff or suppliers since December,
The Sunday Telegraph relates.  Despite that, GBP50,000 was sent
from the ailing company to Bright Station, Mr. Wagner's vehicle,
at the end of January, The Sunday Telegraph notes.

According to The Sunday Telegraph, it is understood the
transaction was one of a number of payments to different vehicles
examined by Deloitte as part of a review into Powa directors'
conduct that has been sent to the Insolvency Service.  The
administrators have asked Mr. Wagner to explain the payment and
it is understood that he has not yet formally responded to this,
The Sunday Telegraph relays.

When questioned by The Sunday Telegraph about it, Mr. Wagner said
Bright Station was a "service provider" to the business and the
payment was "for services provided to Powa, including the
provision of its telephone systems".

Powa failed despite Wellington pumping almost US$200 million in
total into the company, The Sunday Telegraph relates.  It had
just under GBP280,000 in cash when Deloitte was appointed, The
Sunday Telegraph notes.


TOWD POINT 2016-GRANITE2: Moody's Rates Class E Notes Ba2
---------------------------------------------------------
Moody's Investors Service has assigned definitive credit rating
to the following notes issued by Towd Point Mortgage Funding
2016-Granite2 plc:

  GBP372.48 mil. Class A Floating Rate Note due August 2051,
   Definitive Rating Assigned Aaa (sf)
  GBP18.35 mil. Class B Floating Rate Note due August 2051,
   Definitive Rating Assigned Aa2 (sf)
  GBP12.96 mil. Class C Floating Rate Note due August 2051,
   Definitive Rating Assigned A3 (sf)
  GBP6.48 mil. Class D Floating Rate Note due August 2051,
   Definitive Rating Assigned Baa3 (sf)
  GBP5.40 Class E Floating Rate Note due August 2051, Definitive
   Rating Assigned Ba2 (sf)

The GBP16.20 mil. Class Z Subordinated Note due August 2051, the
GBP8.64 mil. Class X Note due August 2051 and the SDC
Certificates, DC1 Certificates and DC2 Certificates have not been
rated by Moody's.  Moody's assigned provisional ratings to the
notes on Nov. 4, 2016.

The loans are backed by a pool of prime UK residential mortgage
"terms and conditions" loans ("T&C loans") originated by Landmark
Mortgages Limited (Landmark, formerly NRAM PLC (NRAM)).  The
assets were previously held in the Neptune T&C Warehouse Limited
transaction (definitive ratings assigned by Moody's on 5 May
2016).  Prior to that the assets were securitized within Granite
Master Trust.  T&C loans are loans with assignability
restrictions or the transfer of which would limit the ability to
vary the rate of interest payable.  Landmark, as the Legal Title
Holder of the T&C loans, has declared a trust over the T&C loans
in favour of Cerberus European Residential Holdings B.V., which
further nominated Towd Point Mortgage Funding 2016-Granite2 plc
(the "Transaction") as the beneficiary of the Legal Title Holder
Trust.

                         RATINGS RATIONALE

The ratings of the notes are based on an analysis of the
characteristics of the underlying mortgage pool, sector wide and
originator specific performance data, protection provided by
credit enhancement, the roles of external counterparties
including the backup servicer and the structural features of the
transaction.

   -- Expected Loss and MILAN CE Analysis

Moody's determined the MILAN CE of 12.5% and the portfolio
expected loss of 2.1% as input parameters for Moody's cash flow
model, which is based on a probabilistic lognormal distribution.

Portfolio expected loss of 2.1%: This is higher than the UK Prime
sector average of 1% and is based on Moody's assessment of the
lifetime loss expectation for the pool taking into account (i)
the collateral performance of Landmark originated loans to date,
as provided by Landmark (formerly NRAM). 8.0% of the pool (as of
31st October 2016) are three months or more in arrears
(calculated on loan part level); (ii) the current macroeconomic
environment in the UK and the potential impact of future interest
rate rises on the performance of the mortgage loans and (iii)
benchmarking with comparable transactions in the UK market.

MILAN Credit Enhancement of 12.5%: This is higher than the UK
Prime sector average of 9% and follows Moody's assessment of the
loan-by-loan information taking into account the following key
drivers (i) the historic collateral performance described above;
(ii) the loan characteristics including 10.8% of the pool being
Together loans for which an unsecured loan balance is outstanding
and 37.8% being flexible loans.  Together loans are loans where
the borrower obtained a secured and an unsecured loan and the
unsecured loan balance is still outstanding; (iii) the weighted
average current loan-to-value of 52.8% (weighted average current
loan-to-indexed value of 42.9%), which is slightly lower than the
average seen in the sector mainly due to the high seasoning (over
15 years) of the T&C pool; (iv) the historical performance of the
loans with 62.9% of the loans in the pool having been current
over the last five years; and (v) the relatively high
concentration of interest-only loans in the pool (55.2%).

Moody's notes that the expected loss is the same for this
transaction compared to the rated Neptune T&C Warehouse Limited
and is in line with the assumption previously in place for
Granite Master Trust.  Prior to the asset sale to the Neptune T&C
Warehouse Limited the expected loss in Granite Master Trust was
2.1%.

The MILAN Credit Enhancement is slightly lower for this
transaction compared to Granite and is similar to the Neptune T&C
Warehouse Limited (13%).  The reduction in the MILAN Credit
Enhancement from 13.0% to 12.5% is largely driven by positive
house price developments over the past 12 months.

   -- Operational Risk Analysis

Landmark is the contractual servicer delegating all its servicing
to Computershare Mortgage Services Limited (Computershare, Not
rated).  A back up servicer Topaz Finance Limited ("Topaz", Not
rated), back up delegated servicer Western Mortgage Services
Limited (WMS, Not rated, part of Capita) and back up servicer
facilitator (Wilmington Trust SP Services (London) Ltd) were
appointed at closing.  Topaz and Computershare are both owned by
Computershare Investments (No3) Limited.  If Computershare is
insolvent or defaults on its obligations under the back-up
delegated servicing agreement WMS will step in as delegated
replacement servicer and execute a delegated replacement
servicing agreement.  If the back up servicer Topaz is insolvent
or defaults a replacement back-up servicer will be appointed by
the Issuer.  In case Topaz already acts in the role of
replacement servicer, the back-up servicer facilitator will on a
reasonable endeavours basis select a replacement within 30 days
(to be appointed by the Issuer).  The relevant backup servicer is
required to step in within 90 days and perform the duties of the
servicer or delegated servicer (as applicable) if, amongst other
things, the servicer and/ or delegated servicer is insolvent or
defaults on its obligations under the servicing agreement or
delegated servicing agreement.

Elavon Financial Services DAC, UK Branch (subsidiary of Elavon
Financial Services DAC (Aa2/P-1)) is appointed as cash manager.
There is no back up cash manager in place at closing.  To help
ensure continuity of payments the deal contains estimation
language whereby the cash flows will be estimated from the three
most recent servicer reports should the servicer report not be
available.

The collection account is held at National Westminster Bank PLC
(NATWEST) (A3/P-2/A3(cr)).  There is a daily sweep of the funds
held in the collection account into the issuer account bank.  In
the event NATWEST rating is below Baa3 the collection account
will be transferred to an entity rated at least Baa3.  The issuer
account bank provider is Elavon Financial Services DAC, UK Branch
(subsidiary of Elavon Financial Services DAC (Aa2/P-1)) with a
transfer requirement if the rating of the account bank falls
below A3.

   -- Transaction structure

There is no liquidity reserve fund in place at closing.  On and
from the step-up date (2.5 years from closing) the liquidity
reserve fund will be credited with amounts up to the greater of
(i) 1.7% of the total class A and class B outstanding balance,
and (ii) 1.0% of the total class A balance at closing and can be
used to pay senior fees and interest on class A and class B.
Prior to the step up date and until the liquidity reserve fund
has been credited with aggregate amounts at least equal its
target (disregarding any drawings thereon), liquidity is provided
via a 364 day revolving liquidity facility equal to 1.7% of the
total class A and class B outstanding balance provided by Wells
Fargo Bank, National Association, London Branch (Wells Fargo
Bank, N.A (Aa1/P-1/Aa1(cr)).  On and from step-up date the
liquidity facility commitment reduces as amounts are credited to
the liquidity reserve fund.  At closing, the liquidity facility
provides approx. three months of liquidity to the class A and
class B assuming Libor of 5.0%.  Principal can be used as an
additional source of liquidity to meet shortfall on senior fees
and interest on the most senior outstanding class.  In addition,
Moody's notes that unpaid interest on the class B, C, D and E is
deferrable.  Non-payment of interest on the class A notes
constitutes an event of default.

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

   -- Interest Rate Risk Analysis

As there are no swaps in the transaction, Moody's has modelled
the spread taking into account the minimum margin covenant of
Libor plus 2.4%.  Due to uncertainty on enforceability of this
covenant, Moody's has taken the view not to give full credit to
this covenant.  Instead, Moody's has stressed the interest rate
of the pool by assuming that loans revert to SVR yield equal to
Libor + 2.0%.

   -- Parameter Sensitivities

Moody's Parameter Sensitivities provide a quantitative/model-
indicated calculation of the number of rating notches that a
Moody's structured finance security may vary if certain input
parameters used in the initial rating process differed.  The
analysis assumes that the deal has not aged and is not intended
to measure how the rating of the security might migrate over
time, but rather how the initial rating of the security might
have differed if key rating input parameters were varied.
Parameter Sensitivities for the typical EMEA RMBS transaction are
calculated by stressing key variable inputs in Moody's primary
rating model. If the portfolio expected loss was increased from
2.1% of current balance to 4.2% of current balance, and the MILAN
Credit Enhancement remained at 12.5%, the model output indicates
that the class A would still achieve Aaa assuming that all other
factors remained equal.

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

Factors that would lead to a downgrade of the ratings include
economic conditions being worse than forecast resulting in worse-
than-expected performance of the underlying collateral,
deterioration in the credit quality of the counterparties and
unforeseen legal or regulatory changes.

Factors that would lead to an upgrade of the ratings include
economic conditions being better than forecast resulting in
better-than-expected performance of the underlying collateral.

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

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

The analysis undertaken by Moody's at the initial assignment of
ratings for RMBS securities may focus on aspects that become less
relevant or typically remain unchanged during the surveillance
stage.

Moody's will monitor this transaction on an ongoing basis.


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


* EU to Introduce New Senior Bank Debt Class to Absorb Losses
-------------------------------------------------------------
Alexander Weber at Bloomberg News reports that the European Union
is preparing to introduce a new class of senior bank debt
designed to absorb losses when a firm fails, according to Valdis
Dombrovskis, the bloc's financial-services chief.

The plan is part of efforts to end taxpayer bailouts by ensuring
that banks can be salvaged or shuttered without recourse to
public funds, Bloomberg says.  The EU is in the process of
setting requirements for the liabilities banks must have to
absorb losses and allow recapitalization in a crisis, Bloomberg
discloses.  Eligible securities must be easily converted to
equity or written down in resolution, a process known as bail-in,
Bloomberg states.

"What we're doing is ensuring that there is an asset class that
is clearly bail-inable," Mr. Dombrovskis, as cited by Bloomberg,
said in a Nov. 17 interview in Brussels.  "We're clarifying or,
if you want, harmonizing, the creditors' hierarchy so they know
where they stand."

Under EU rules, shareholders and creditors must bear losses
equivalent to 8%of a failing bank's total liabilities including
own funds before rescue funds can be tapped, Bloomberg relays.
If necessary, that means senior creditors must also take a hit,
Bloomberg notes.

Countries have taken different approaches to lining up creditors
for losses, Bloomberg recounts.  Germany subordinated
plain-vanilla senior unsecured debt to deposits, derivatives and
structured notes to make it available to take losses, Bloomberg
relates.  This applies retroactively, making a pool of
liabilities available in January, when the law kicks in,
according to Bloomberg.

Italy chose an approach similar to Germany's, but it left
liabilities other than deposits on the same level as senior
unsecured bonds in the insolvency ranking, Bloomberg states.
France created a new class of "senior non-preferred" debt,
Bloomberg notes.

"I wouldn't say it's this or that country's approach," Bloomberg
quotes Mr. Dombrovskis as saying, when asked about the similarity
between the EU and French plans.  He said the EU rules will apply
to new issuance, and won't disrupt national arrangements already
put in place, Bloomberg relays.

"This is without prejudice to solutions which are already taken,"
Mr. Dombrovskis, as cited by Bloomberg said.  "There's no need to
step back for those countries which already made their creditors
bail-inable."


                            *********

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 * * *