TCREUR_Public/161214.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

         Wednesday, December 14, 2016, Vol. 17, No. 247



PASHA BANK: S&P Affirms 'BB-/B' Counterparty Ratings


ALFATOUR: Files for Bankruptcy Following Liquidity Woes


HECKLER & KOCH: S&P Raises CCR to 'CCC+' on Operating Results


GREECE: IMF Officials Say "Not Demanding More Austerity"
GREECE: DBRS Confirms CCC Long-Term Currency Issuer Ratings


AVOCA CLO XVII: Fitch Assigns B- Rating to Class F Notes
CELTIC LINEN: To Exit Examinership After Investor Backing


HARBOURMASTER CLO 6: Fitch Affirms 'CC' Ratings on 3 Note Classes
HARBOURMASTER CLO 7: Fitch Raises Rating on Cl. B2 Notes to BB+
PEARL MORTGAGE 1: Fitch Affirms 'Bsf' Rating on Class B Debt
WOOD STREET CLO VI: Fitch Affirms 'B+sf' Rating on Cl. E Notes


HAVILA SHIPPING: Bondholders Approve Restructuring Plan


TAURON POLSKA: Fitch Assigns BB+ Rating to EUR190MM Hybrid Bonds


BRUNSWICK RAIL: Rejects Creditors' Debt-Term Breach Claims
EUROPLAN PJSC: Fitch Affirms 'BB-' LT Issuer Default Ratings


FT SANDANDER CONSUMO 2: DBRS Assigns CCC Rating to Class F Notes


ANTALYA MUNICIPALITY: Fitch Lowers IDR to 'BB+', Outlook Stable


UKRAINE: S&P Affirms 'B-/B' Sovereign Credit Ratings

U N I T E D   K I N G D O M

DJ & C FOODS: Creditors Approve CVA Deal, 200 Jobs Saved
INFINIS PLC: Moody's Affirms B1 Rating on GBP350MM Sr. Notes
TIG FINCO: Fitch Affirms 'B-' IDR, Outlook Remains Negative
WHITEHAVEN RUGBY: Bid to Wind Up Business Dismissed



PASHA BANK: S&P Affirms 'BB-/B' Counterparty Ratings
S&P Global Ratings affirmed its 'BB-/B' long- and short-term
counterparty ratings on Azerbaijan-based PASHA Bank.  The outlook
remains negative.

The affirmation reflects S&P's expectation that the bank's asset
quality and projected credit losses will be close to the system
average and will not materially deviate from those of peers
within the next two years.  At the same time, S&P expects that
increased economic risks in Azerbaijan will continue to weigh on
PASHA Bank's capital position.

S&P forecasts modest economic growth in Azerbaijan of 0.8% in
2017, after the recession in 2016.  The subdued growth will be
driven by lower government spending, low oil prices, and the
sharp devaluation of the Azerbaijani manat (AZN) in 2015.  That
said, S&P expects that economic risks in Azerbaijan will remain
high in the next two years.  S&P notes that, due to elevated
economic risks, banks in Azerbaijan need more capital to cover
potentially higher credit losses.

"We have revised our assessment of the bank's capital and
earnings to adequate from strong.  In our view, PASHA Bank's
capital position will be pressured and we now forecast that the
bank's RAC ratio before adjustments for diversification and
concentration will decline to 9.1%-9.4% in the next 12-18 months.
Our RAC forecast reflects heightened economic risks in
Azerbaijan, which are reflected in the higher risk-weights we
apply to the bank's exposures, and PASHA Bank's weakened ability
to build up capital internally because of the aggressive dividend
policy pursued by its shareholder," S&P said.

"We have revised up our assessment of the bank's risk position to
adequate from moderate.  In 2015, the bank's nonperforming loans
(NPLs; impaired loans) reduced to AZN36.3 million or 3.8% of
total loans--because some large exposures were recovered--from
AZN61.7 million (10.8% of loans) as of year-end of 2014.  In
first-half 2016, NPLs grew to 5.4% (similar to the general
banking sector trend) but still slightly below the system
average.  In our view, the bank's provisioning coverage of NPLs
remains adequate with a provisioning coverage ratio of about 120%
as of June 30, 2016.  We also note that single-name concentration
in the loan portfolio has improved recently; the 20-largest
exposures were 46% of total loans at June 30, 2016, compared to
62% at Dec. 31, 2014.  Although we expect that operating
conditions for Azerbaijan banks will remain tough in 2017-2018,
we think that the bank's asset quality and credit losses will be
in line with the system average indicators," S&P noted.

S&P views PASHA Bank's funding as below average and liquidity as
adequate.  The bank's funding profile remains highly concentrated
with the 20-largest depositors accounting for 73% of total
deposits as of June 30, 2016, and could be vulnerable if a few
large deposit withdrawals took place at the same time.  Despite
the bank's low dependence on wholesale funding and its large
liquidity buffers, S&P views the high concentration of the bank's
funding profile as the main constraint on S&P's assessment of its
funding and liquidity.  Although S&P observes that the
diversification of the bank's depositors has gradually improving
in second-half 2016, S&P will closely monitor the sustainability
of this trend.

S&P's assessment of PASHA Bank's business position reflects its
solid market franchise in corporate banking in Azerbaijan,
experienced management team, and supportive shareholders.

S&P regards PASHA Bank as having high systemic importance for
Azerbaijan's banking sector.  S&P believes that the government
would provide extraordinary support to the bank if needed,
considering PASHA Bank's important role of servicing large and
mid-size corporates in Azerbaijan and its substantial market
share in lending and transfers and payments.

The negative outlook on PASHA Bank reflects S&P's expectation
that the bank's capital position and asset quality may
deteriorate further if already-pronounced economic risks in
Azerbaijan increase.  The outlook also reflects the risk of a
possible deterioration in the government's capacity to provide
extraordinary support if public finances become even weaker than
S&P currently expects in its base-case scenario.

S&P could take a negative rating action in the next 12-18 months
if S&P lowered its local currency sovereign credit rating on
Azerbaijan, which could lead S&P to revise the government's
financial capacity to support PASHA Bank in case of stress.  A
negative rating action may also follow further weakening of
economic prospects in Azerbaijan and a faster-than-currently-
expected deterioration in PASHA Bank's asset quality.

A positive rating action is currently unlikely, in S&P's view.
S&P could revise the outlook to stable if it saw an improvement
of operating conditions and economic prospects in Azerbaijan
leading to substantial improvements in PASHA Bank's asset quality
and credit losses.


ALFATOUR: Files for Bankruptcy Following Liquidity Woes
SeeNews reports that Bulgarian tour operator Alfatour said it has
filed for bankruptcy due to liquidity issues.

"As a result of the revolutions in Tunisia and Egypt and after
the bombings in Turkey, Alfatour has lost its major destinations,
which constitute about 80% of our business," SeeNews quotes the
company as saying in a press release posted on its website.  The
tour operator also noted that "the aggressive entry of low-cost
airlines to the market" has led to a collapse of its sales on
destinations in Europe and the UAE, SeeNews relates.

Alfatour's customers who have paid in advance for their Christmas
and New Year holidays will not lose their money which has been
insured with Sofia-based Euroins Insurance Group, SeeNews


HECKLER & KOCH: S&P Raises CCR to 'CCC+' on Operating Results
S&P Global Ratings said that it raised its long-term corporate
credit rating on German defense contractor Heckler & Koch GmbH to
'CCC+' from 'CCC'.  The outlook is stable.

At the same time, S&P raised its issue rating on the company's
senior notes to 'CCC+' from 'D'.  S&P also revised the recovery
rating on the notes to '4' from '5', indicating its expectation
of recovery in the lower half of the 30%-50% range in the event
of payment default.

"The upgrades follow our review of Heckler & Koch's performance
after the company announced its nine-month results.  We have
changed our view regarding the recent and future bond buybacks.
In the first three quarters of 2016, Heckler & Koch outperformed
our previous base case due to solid revenue growth in both the
military segment and the commercial market.  Consequently, the
company's EBITDA margin increased to about 24.7% on a reported
basis as of the first nine months of 2016.  This is a strong
recovery compared to the levels reported at the end of 2015, when
the company's operating performance was affected by changes in
export license policies.  Improved profitability reflects
management's focus on process efficiencies and working capital
management, and was not dampened by any large, extraordinary
write-downs," S&P said.

S&P believes that the company will be able to successfully
execute its "green countries" policy and limit its export license
risk going forward.  This will provide more stability to the
business and allow Heckler & Koch to successfully execute its
order book of EUR129 million (excluding EUR92 million that S&P do
not expect to be delivered because of export license
restrictions) and translate it into stable revenues and sustained
profitability in 2017.  Given the company's strong EBITDA and
cash flow generation in Q1-Q3 2016 S&P now forecasts an S&P
Global Ratings-adjusted debt-to-EBITDA ratio of 5.5x-6.5x for
2016 and funds from operations (FFO) to adjusted debt of 5%-7%
for 2016.

This year, Heckler & Koch repurchased EUR27 million of its 9.5%
speculative-grade bonds.  Given the anonymous open-market nature
of these transactions and taking into consideration the
significant price recovery of the bonds, S&P no longer views
Heckler & Koch's bond repurchases as distressed transactions.
Since S&P currently do not envisage a concrete path to default
for Heckler & Koch in the next 12 months, S&P upgraded the
company to 'CCC+'.  A rating in the 'CCC' category reflects
vulnerability to nonpayment.  In S&P's view, for Heckler & Koch
this vulnerability stems from the risk surrounding the upcoming
maturity of the EUR295 million senior notes that are due in May

"Our view of the company's business risk profile remains
unchanged.  The group's revenue exposure is focused on the
military and the commercial segment, which is highly competitive
and subject to uncertainty regarding exporting policies.  We
positively view the strategic decision to almost exclusively
export to low risk countries with predefined criteria, such as an
anticorruption and democracy index.  This will focus sales on
Europe and North America while business with other countries, in
particular the Middle East, is expected to be reduced to a
minimum.  We believe that it will allow the company to further
stabilize its profitability and cash flow generation through
2017. We also positively acknowledge the new corporate structure
with improved corporate governance, introducing a clear
separation of duties for executive board, supervisory board, and
shareholders," S&P noted.

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

   -- Strong revenue growth of over 10% in 2016, in line with Q1-
      Q3 results and moderate revenue growth of 0%-2% per year
      from 2017 onward, supported by the execution of its
      existing order book;

   -- EBITDA margins of 24% in 2016, decreasing slightly
      thereafter to a level of 20%-24% from 2017 onward;

   -- Working capital improvements of EUR5 million in 2017 and
      2018, respectively, due to the operational transformation
      of the business; and

   -- Capital expenditures (capex) of EUR4 million in 2016,
      increasing to EUR14 million-EUR18 million in 2017 and 2018,

The stable outlook reflects S&P's view that Heckler & Koch will
continue to strengthen its performance through 2017, enabling the
company to complete anticipated refinancing in the next six-to-
eight months.  S&P's assessment also incorporates its view that
anticipated bond buybacks are not going to be considered as part
of a distressed exchange offer as they will be conducted
anonymously and above par value.

Upside scenario

S&P may raise the ratings on Heckler & Koch in the next 12 months
if the company successfully completes the refinancing of its
outstanding amount under senior notes.  The upgrade would be
subject to Heckler & Koch continuing to demonstrate a positive
operating performance in 2017.

Downside scenario

Alternatively, S&P could lower the ratings if Heckler & Koch does
not make sufficient progress in the next six-to-eight months
toward the refinancing of the senior notes due in May 2018.  S&P
may also take a negative rating action if the company faces
liquidity shortfalls due to operational issues, which can lead to
a margin squeeze.  S&P could also lower the ratings if the future
bond buyback is considered as distressed exchange offer.


GREECE: IMF Officials Say "Not Demanding More Austerity"
Szu Ping Chan at The Telegraph reports that the International
Monetary Fund has hit back at claims that it is demanding more
austerity in Greece, as the Fund warned that the country's
ambitious budget targets were "simply not credible".

Firing a broadside at Brussels and Athens, Maurice Obstfeld, the
IMF's chief economist, and Poul Thomsen, director of the IMF's
European department, said cuts to investment and discretionary
spending had "gone too far" and would prevent the Greek economy
from recovering, The Telegraph relates.

According to The Telegraph, just 48 hours after Euclid
Tsakalotos, Greece's finance minister, accused the IMF of
"betraying" the country by pushing for more belt tightening, the
senior IMF officials insisted that they were "not demanding more

The IMF has previously insisted that a primary surplus target of
1.5% of GDP is more realistic, The Telegraph discloses.  It has
also called for significant debt relief that goes beyond the
action taken this month to reduce Greece's debt share by 20
percentage points, The Telegraph recounts.

Mr. Obstfeld and Mr. Thomsen said the IMF was not demanding more
cuts either now or in the future to lower the need for debt
relief, as they signalled that Greece itself had signed up for
tougher budget targets, The Telegraph relays.

According to The Telegraph, the IMF said only by broadening the
tax base in a country in which more than half of households are
not required to pay any income tax, and spending less on pensions
could it sustain a recovery.

The IMF, as cited by The Telegraph, said it recognized that there
were political constraints linked to Greece's third EUR85 billion

The IMF's frustration casts further doubt on its participation in
the country's third rescue program, which is a key objective for
eurozone governments in Germany, the Netherlands, and Finland,
The Telegraph notes.

GREECE: DBRS Confirms CCC Long-Term Currency Issuer Ratings
DBRS Ratings Limited (DBRS) on Dec. 9 confirmed the Hellenic
Republic's Long-Term Foreign and Local Currency Issuer Ratings at
CCC (high) and its Short-Term Foreign and Local Currency Issuer
Ratings at R-5. The trend on all ratings remains Stable.

The CCC (high) rating reflects Greece's very high level of public
sector debt and the political challenge the Greek authorities and
the institutional creditors face in placing this debt on a
downward path. Progress has been made in easing capital controls
imposed in 2015 and in improving financial institutions'
liquidity. However, DBRS remains concerned about banks' asset
quality and the adverse impact of the high level of impaired
loans on the ability of the banking system to support the economy
and employment growth in the future.

The Stable trend reflects our view that the current official
sector financial support programme for Greece continues to
reinforce stabilization of the economy and the banking sector.
Past funds disbursements from the three-year EUR86 billion Third
Adjustment Programme have eased the financial sector liquidity
squeeze and, some early signs of economic recovery are emerging.
The pending second review, on completion, should release
additional funds to support both the real economy and the banking
sector's improved financial health.

Greece's credit strengths include the benefits of Eurozone
membership and access to financial support from the European
institutions. Since 2009, the country has implemented a
significant fiscal adjustment. In addition, progress has been
made with structural reforms, including improvements in the
labour market, reform of the tax code and streamlining the public
administration. The external sector has also strengthened, with
the conversion of the current account from a large deficit into a
small surplus.

However, credit challenges are considerable. While some early
signs of economic recovery exist, Greece continues to face
challenges in restoring financial stability and returning to
sustainable growth, while consolidating public finances under a
fragile coalition government. Meeting the fiscal and structural
reform adjustments of the programme amid social constraints and a
slim three-seat majority in the parliament continue to be

Following the recapitalization of the banking sector in 2015,
bank balance sheets remain weak and non-performing loans are very
high. On the other hand, the persistent withdrawal of bank
deposits has stabilized and over the last six months bank
deposits have been increasing. Moreover, capital controls
introduced in June 2015 have been partially lifted. However,
credit growth to the domestic private sector remains on a
declining trend and the economic recovery is at very early stages
and vulnerable to adverse political events.


Triggers for a rating upgrade include: 1) continued co-operation
between Greece and its official creditors with fiscal and
structural reforms; 2) a clearer view of external financing
beyond the current third programme's completion in August 2018;
3) clearing of public sector arrears; 4) economic recovery.
Triggers for a rating downgrade include: 1) lack of co-operation
with the institutional creditors; 2) external debt service
payment arrears; 3) renewed financial sector instability.


AVOCA CLO XVII: Fitch Assigns B- Rating to Class F Notes
Fitch Ratings has assigned Avoca CLO XVII DAC notes final
ratings, as:

  Class A1: 'AAAsf'; Outlook Stable
  Class A2: 'AAAsf'; Outlook Stable
  Class B: 'AAsf'; Outlook Stable
  Class C: 'Asf'; Outlook Stable
  Class D: 'BBBsf'; Outlook Stable
  Class E: 'BBsf'; Outlook Stable
  Class F: 'B-sf'; Outlook Stable
  Subordinated notes: not rated

Avoca CLO XVII Designated Activity Company is a cash flow
collateralised loan obligation (CLO).  Net proceeds from the
issue of the notes are being used to purchase a EUR450 mil.
portfolio of European leveraged loans and bonds.  The portfolio
is managed by KKR Credit Advisors (Ireland).  The transaction
features a four-year reinvestment period.

                         KEY RATING DRIVERS

'B'/'B-' Portfolio Credit Quality
Fitch assesses the average credit quality of obligors in the
'B'/'B-' range.  The agency has public ratings or credit opinions
on 95.3% of the obligors in the identified portfolio.  The
weighted average rating factor of the identified portfolio is

High Recovery Expectations
At least 90% of the portfolio will comprise senior secured loans
and bonds.  The weighted average recovery rate of the identified
portfolio is 68.7%.

Payment Frequency Switch
The notes pay quarterly, while the portfolio assets can reset to
semi-annual.  The transaction has an interest-smoothing account,
but no liquidity facility.  A liquidity stress for the non-
deferrable classes A and B, stemming from a large proportion of
assets resetting to semi-annual in any one quarter, is addressed
by switching the payment frequency on the notes to semi-annual,
subject to certain conditions.

Limited Interest Rate Risk Exposure
Between 0% and 10% of the portfolio can be invested in fixed-rate
assets, while 97.6% of the rated liabilities pay a floating-rate
coupon.  Fitch modeled both 0% and 10% fixed-rate buckets and
found that the rated notes can withstand the interest rate
mismatch associated with each scenario.

At closing the issuer will purchase an interest rate cap to hedge
the transaction again rising interest rates.  The notional of the
cap is EUR12m (representing 2.7% of the target par amount) and
the strike rate is 4%.  The cap will expire in 2028.

Documentation Amendments
The transaction documents may be amended subject to rating agency
confirmation or noteholder approval.  Where rating agency
confirmation relates to risk factors, Fitch will analyze the
proposed change and may provide a rating action commentary if the
change has a negative impact on the ratings.  Such amendments may
delay the repayment of the notes as long as Fitch's analysis
confirms the expected repayment of principal at the legal final

If in the agency's opinion the amendment is risk-neutral from a
rating perspective Fitch may decline to comment.  Noteholders
should be aware that the structure considers the confirmation to
be given if Fitch declines to comment.

                        RATING SENSITIVITIES

A 25% increase in the obligor default probability would lead to a
downgrade of up to two notches for the rated notes.  A 25%
reduction in expected recovery rates would lead to a downgrade of
up to three notches for the rated notes.

CELTIC LINEN: To Exit Examinership After Investor Backing
Joe Brennan at The Irish Times reports that Celtic Linen is set
to exit court protection from its creditors after securing
investment from Causeway Capital, a private equity investor
backed by the Ireland Strategic Investment Fund.

The company, which employs 380 people in Drinagh, entered
examinership at the end of September as it was insolvent after
sustaining losses in recent years, The Irish Times recounts.

According to The Irish Times, it is understood that Causeway,
founded earlier this year by David Raethorne and Matt Scaife, who
were previously involved in a number of businesses, including
Helix Health and Smiles Dental, will initially inject EUR1
million into Celtic Linen, with a commitment to invest a further
substantial amount.

At the time it was seeking court protection, the High Court was
told it had liabilities of EUR14 million and its biggest
creditor, AIB, was supporting the application, The Irish Times

The court heard in September that on a going concern basis, the
company had a deficit of liabilities over assets of EUR2.7
million, while liquidation would see the deficit rising to EUR9.3
million, The Irish Times relays.

Wexford-based Celtic Linen is a supplier of linen to hotels,
hospitals and the Health Service Executive.


HARBOURMASTER CLO 6: Fitch Affirms 'CC' Ratings on 3 Note Classes
Fitch Ratings has upgraded Harbourmaster CLO 6 B.V.'s class A3,
A4E and A4F notes and affirmed the class B1, B2, S4 and S6 notes,

  Class A3 (XS0233875227): upgraded to 'AAAsf' from 'A+sf';
   Outlook Stable
  Class A4E (XS0233876209): upgraded to 'AAAsf' from 'BBB+sf';
   Outlook Stable
  Class A4F (XS0233876381): upgraded to 'AAAsf' from 'BBB+sf';
   Outlook Stable
  Class B1 (XS0233876621): affirmed at 'BBsf'; Outlook Stable
  Class B2 (XS0233877603): affirmed at 'CCsf'; Recovery Estimate
  Class S4 combo (XS0234648375): affirmed at 'CCsf'; Recovery
   Estimate 80%
  Class S6 combo (XS0234649852): affirmed at 'CCsf'; Recovery
   Estimate 40%

Harbourmaster CLO 6 B.V. is a securitisation of a portfolio of
mainly European senior secured and unsecured loans.

                        KEY RATING DRIVERS

Deleveraging of Senior Notes
The senior class A3 notes have paid down by EUR30.4 mil. over the
last 12 months with a current outstanding balance of EUR509,000.
The transaction currently holds cash totaling EUR4.8 mil.,
according to the October trustee report, and Fitch understands
that following the recent prepayment of one asset, the cash
balance has increased to EUR14.8 mil.  As a result the senior
class A3 and A4 notes have been upgraded as they are now cash
collateralized.  The notes are expected to be redeemed in full on
the next payment date in January 2017.

High Obligor Concentration
The portfolio contains seven assets from five obligors, meaning
the portfolio is highly concentrated with an outstanding balance
of EUR25.5 mil.  With the EUR14.8 mil. inclusion of cash, the
aggregate collateral balance is EUR40.3 mil. compared with a
total rated balance of EUR42.5 mil.  The top three obligors
represent 89% of the portfolio balance with the top obligor
representing 41.3%.  Fitch has affirmed the class B1 notes as the
increase in credit enhancement is offset by the increase in
obligor concentration risk.

Junior Notes Under-Collateralized
Credit enhancement for the class B2 notes is -8.9% and their
affirmation reflects the very high level of credit risk.  The
class S4 and S6 combination notes rely on the repayment of the
class B2 notes and have therefore also been affirmed.

Large Peripheral Exposure
Based on Fitch's country classification, exposure to Italy and
Spain has increased to 47.79% from 16.10% at last review.  In
line with its criteria, Fitch has adjusted the recovery
assumption at the 'AAAsf' level to consider transfer and
convertibility risk.

Default Timing Adjustment
The transaction is scheduled to mature in October 2020 and the
weighted average life (WAL) of the portfolio has decreased to
3.37 years.  Fitch's Global Rating Criteria for CLOs and
Corporate CDOs does not describe default patterns for portfolios
with a WAL lower than 3.5 years.  As such, the agency adjusted
its default patterns to account for the short tenor of the
transaction.  In the front-loaded scenario, Fitch assumed 50% of
the defaults occurred in year one and 25% in years two and three.
In the mid-default timing, the agency assumed 50% of the default
occurred in year two and 25% in years one and three.  In the
back-default timing, Fitch assumed 50% of the default occurred in
year three and 25% in years one and two.

                        RATING SENSITIVITIES

A 25% increase in the obligor default probability would not
impact any of the rated notes.  A 25% reduction in expected
recovery rates would lead to a two-notch downgrade of the class
B1 notes. However, it would not impact any of the other rated

HARBOURMASTER CLO 7: Fitch Raises Rating on Cl. B2 Notes to BB+
Fitch Ratings has upgraded Harbourmaster CLO 7 B.V.'s notes as:

  EUR20.86 mil. Class A4 (ISIN XS0273890664): upgraded to 'AAAsf'
   from 'Asf'; Outlook Stable

  EUR38 mil. Class B1 (ISIN XS0273891639): upgraded to 'A+sf'
   from 'BB+sf'; Outlook Stable

  EUR16.2 mil. Class B2 (ISIN XS0273894732): upgraded to 'BB+sf'
   from 'B+sf'; Outlook Stable

  EUR0.37 mil. Class S5 combo (XS0273900992): upgraded to 'AAAsf'
   from 'Asf', Outlook Stable

Harbourmaster CLO 7 B.V. is a securitisation of mainly European
senior secured loans, senior unsecured loans, second-lien loans,
mezzanine obligations and high-yield bonds.  At closing a total
note issuance of EUR925 mil. was used to invest in a target
portfolio of EUR900 mil.  The portfolio is actively managed by
GSO / Blackstone Debt Funds Management Europe Limited.

                        KEY RATING DRIVERS

Rapid Portfolio Deleveraging
As of October 2016 the portfolio balance had fallen by
EUR156.8 mil. since October 2015 with 17 assets sold in May alone
totaling EUR84 mil.  The portfolio's credit quality has improved
as the weighted average rating factor, as reported by the
trustee, is currently 25.5 compared with 28.7 in October 2015.
In addition, the weighted average recovery rate reported by the
trustee has also improved by 5.6% to 79.50% from 73.90%.

Repayment of the Senior Notes
The class A2 and A3 notes have repaid in full since October 2015
with EUR17m repaid to the now senior class A4 notes.  The
transaction currently holds cash totaling EUR12 mil., according
to the October trustee report, and Fitch understands that
following the recent prepayment of one asset, the cash balance
has increased to EUR28.6 mil.

The class A4 notes are now cash collateralized, with the note
balance expected to be repaid in full on the next payment date in
December 2016, and so Fitch has upgraded the notes to 'AAAsf'
from 'Asf'.  The rating of the S5 combination notes is linked to
the rating of the class A4 notes and so has also been upgraded to
'AAAsf' from 'Asf'.

The credit enhancement for the class B1 notes has increased to
55.1% from 19.2% since October 2015 and to 31% from 13% for the
class B2 notes.

High Obligor Concentration
Despite the considerable credit enhancement for the class B1 and
B2 notes the EUR67.3 mil. portfolio is highly concentrated with
18 assets remaining from 15 obligors.  The top 10 obligors in the
portfolio represent 88.8% of the balance, compared with 68% in
October 2015, while the top three obligors currently represent
41%.  Due to the concentration risk, Fitch has tested the
transaction's sensitivity to the default of the top three

                         RATING SENSITIVITIES

Neither a 25% increase in the obligor default probability or a
25% reduction in expected recovery rates would impact the ratings
of the notes.

PEARL MORTGAGE 1: Fitch Affirms 'Bsf' Rating on Class B Debt
Fitch Ratings has affirmed PEARL Mortgage Backed Securities 1
B.V. (Pearl 1).

Pearl Mortgage Backed Securities 1 B.V.
  Class A (ISIN XS0265250638): affirmed at 'AAAsf'; Outlook
  Class S (ISIN XS0715998331): affirmed at 'BBB+sf'; Outlook
  Class B (ISIN XS0265252253): affirmed at 'Bsf'; Outlook Stable

The transaction comprises Dutch mortgages backed by the Nationale
Hypotheek Garantie (NHG) and originated by SNS Bank

                          KEY RATING DRIVERS

Stable Performance
Loans in arrears over one month have decreased at a greater rate
over the past year than the loans in late-stage arrears, implying
that fewer new borrowers are entering into arrears.  As of August
2016, arrears over one month stood at 0.51% of the current
collateral balance, compared with 0.87% 12 months earlier.  This
is 8bp above the average for Fitch-rated NHG transactions
(0.43%), but well below the average of all Fitch-rated Dutch RMBS
transactions (0.78%).

No Losses Reported
Since closing in 2006, no losses have been reported.  Defaulted
loans have been covered by the NHG guarantee or repurchased by
SNS Bank in accordance with its commitment to repurchase loans
ineligible for the guarantee.  Fitch expects this to remain the
case as reflected by the Stable Outlooks on the notes.

NHG Guarantee
Given the lender-specific data showing that NHG-backed loans have
performed better than non-NHG backed loans, Fitch reduced the
foreclosure frequency of the loans in the portfolio by 25%, in
line with its criteria.

NHG Compliance Ratio
The Stichting Waarborgfonds Eigen Woningen (WEW) may reject
claims from borrowers for reasons including incomplete
documentation, incorrect affordability calculations, or original
loan in excess of applicable limits.  To address this risk Fitch
applies a compliance ratio assumption when assessing the
likelihood of an NHG payment being received from the WEW.  In
this analysis a compliance ratio of 83% was applied in scenarios
of 'Asf' and above.

Given SNS Bank's rating at 'BBB+/Negative/F2' as of April 2016,
the agency applied a compliance ratio of 100% for rating
categories 'BBBsf' and below, thus giving credit to SNS Bank's
commitment to repurchase ineligible loans.

Lender-specific Adjustment
In recent transaction reviews comprising loans originated by SNS
Bank, Fitch applied a lender adjustment due to the below-average
performance of the originator's loan book.  This adjustment led
to a 20% increase in the base foreclosure frequency to the loans
in that portfolio.  As per its criteria, Fitch has applied the
same lender adjustment in this analysis.

Geographical Concentration
The mortgage pool displays geographical concentration in the
regions of Drenthe and Overijssel where the pool concentration is
over 2x the Dutch population distribution.  The agency accounted
for this by applying a 15% increase to the foreclosure frequency
for the portion of the portfolio in excess of the regional
population distribution.  Fitch's criteria do not specify a
foreclosure frequency adjustment for regional concentration in
the Netherlands, therefore the adjustment applied in this
analysis constitutes a variation from the agency's criteria.

Deposit Set-Off
SNS Bank is a deposit-taking institution and borrowers in the
portfolio can have various claims against the bank, which they
could set-off against their mortgages in case of insolvency of
the seller.  The claims can arise from current accounts, savings
accounts and long-term deposits.  The deposit set-off amounts
above the deposit guarantee scheme (DGS) of EUR100,000 have been
considered and included in the set-off risk analysis.  Fitch
reduced the credit enhancement of the notes rated above SNS Bank.

Insurance Set-off
Fitch estimates that 7.39% of the pool is subject to insurance
set-off risk.  These loans have an insurance vehicle attached.
Should the insurance provider default, there is a risk that the
borrower will offset their mortgage claim against the capital
built up under the insurance product.

Fitch has analysed this risk by assuming that capital builds up
in these vehicles over 30 years at a rate of 8% p.a.  In a
'AAAsf' scenario, Fitch assumes 100% of the insurance providers
default, with a 40% recovery.  For 'AAsf', 'Asf', 'A-sf',
'BBBsf', 'BBsf' and 'Bsf' scenarios the insurance provider
default assumption is 95%, 90%, 88%, 85%, 25%, 10%, with 50%,
55%, 55%, 60%, 70%, 75% of recovery, respectively.  If the
provider is affiliated with the originator, in scenarios below
'AAAsf' the risk of set-off is assumed to be 100%, otherwise it
is 25%.  As the recovery assumptions are not specified in Fitch's
criteria, these assumptions constitute a criteria variation.

Commingling Reserve
SNS Bank has deposited funds to mitigate commingling risk in case
it defaults.  The dynamic commingling reserve is 1.5x the average
portfolio collections over the past 12 months.  As of the latest
reporting period, the funds posted at Rabobank Group (AA-
/Negative/F1+) were EUR13.92 mil.  Fitch's analysis shows that
the collateral posted is sufficient to mitigate the commingling

Payment Interruption Risk
A liquidity facility currently at 2.31% of the notes balance is
sufficiently mitigating payment interruption risk for at least
two interest payment dates.

Data Adjustments
The loan-by-loan data of a small number of loans had been
labelled as having an interest rate type classified as 'other'.
For the purpose of this analysis, Fitch treated such loans as
'floating- rate'.

Class B Credit Enhancement
As the structure does not incorporate a reserve fund, the class B
notes have no credit enhancement and are highly reliant on 25bp
per annum excess spread generated by the total return swap to
cover for losses over the life of the transaction.  Based on the
performance to date, Fitch is of the opinion that the risk
associated with the notes remains reflective of a 'Bsf' rating
definition, resulting in the affirmation of the current rating.

                       RATING SENSITIVITIES

Deterioration in asset performance may result from macroeconomic
factors such as increased unemployment.  A corresponding increase
in new foreclosures and the associated pressure on excess spread
and liquidity facility beyond Fitch's assumptions could result in
negative rating action, particularly for the junior tranches.

                           DATA ADEQUACY

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

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

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

WOOD STREET CLO VI: Fitch Affirms 'B+sf' Rating on Cl. E Notes
Fitch Ratings has affirmed Wood Street CLO VI B.V., as:

  EUR70.0 mil. Class A-1 (ISIN XS0315358084): affirmed at
   'AAAsf'; Outlook Stable

  EUR15.0 mil. Class A-2 (ISIN XS0315362433): affirmed at
  'AAAsf'; Outlook Stable

  EUR23.7 mil. Class B (ISIN XS0315364991): affirmed at 'A+sf';
   Outlook Positive

  EUR18.4 mil. Class C (ISIN XS0315365451): affirmed at 'BBB+sf';
   Outlook Positive

  EUR15.5 mil. Class D (ISIN XS0315365618): affirmed at 'BB+sf';
   Outlook Positive

  EUR13.2 mil. Class E (ISIN XS0315366186): affirmed at 'B+sf';
   Outlook Positive

Wood Street CLO VI is a securitisation of mainly European senior
secured loans with a total note issuance of EUR325.8 mil.
invested in a target portfolio of EUR317.1 mil.  The portfolio is
actively managed by Alcentra Limited.

                         KEY RATING DRIVERS

The affirmation reflects increased credit enhancement (CE), which
has offset the deterioration of the portfolio quality and
increased obligor concentration.  CE available to the rated notes
has increased significantly over the past 12 months due to the
deleveraging of the transaction.  CE for the senior and junior
notes increased by 15.1% and 3.5% to 62.9% and 17.4%,
respectively.  The senior notes have paid down by EUR62.2 mil.

The portfolio quality has deteriorated following negative rating
migration as 17% of portfolio has been downgraded compared with
8.4% that was upgraded.  The Fitch weighted average rating
factor, as calculated by the trustee, has increased to 30.9 from
28.7 at last review and it continues failing compared with the
trigger at 28.  The 'CCC' obligations have also increased to
EUR42 mil. from EUR27.4 mil. and make up 18.8% of the current
portfolio.  There is one defaulted obligor with EUR1.4 mil. in
the current portfolio. All coverage tests are passing but the
cushions on the class D and E par value tests have decreased by
1% and 1.9% to 12.8% and 7.6%, respectively.

The portfolio concentration has increased.  Fitch calculated the
top one obligor exposure has increased to 5.6% from 4.2% and the
top 10 obligors have increased to 45.3% from 36.3%.  Due to the
concentration risk, Fitch tested the sensitivities of the
transaction to the default of the top three obligors.

The Positive Outlook reflects the possibility of an upgrade of
the respective notes should the amortization speed be maintained,
leading to further increases in CE.

                         RATING SENSITIVITIES

Fitch's rating sensitivity analysis showed that stressing the
probability of default or reducing the recoveries by 25% would
not impact the notes.

                           DATA ADEQUACY

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

The majority of the underlying assets have ratings or credit
opinions from Fitch and/or other Nationally Recognised
Statistical Rating Organisations and/or European Securities and
Markets Authority registered rating agencies.  Fitch has relied
on the practices of the relevant Fitch groups and/or other rating
agencies to assess the asset portfolio information.

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


HAVILA SHIPPING: Bondholders Approve Restructuring Plan
Reference is made to Havila Shipping ASA's stock exchange
announcement on November 29, 2016 with the summons to bond holder
meetings in HAVI04, HAVI06/07 and HAVI08.

The bondholders' meetings have now been held with sufficient
quorum.  According to attached Notice from Nordic Trustee ASA,
the proposed resolutions obtained following percentage of the

Havi 04:      91.57%
Havi 06/07:   99.47%
Havi 08:      96.03%

The bondholders have thereby approved the plan for the financial
restructuring of the company as described in the stock exchange
announcement on November 9, 2016.

Swedbank Norge and Fearnley Securities are the company's
financial advisors in connection with the restructuring.  The
company's legal advisor is Wikborg Rein.

Headquartered in Fosnavag, Norway, Havila Shipping ASA operates a
number of vessels, including platform supply vessels, anchor
handling tug supply vessels, and rescue and recovery vessels.
The Company provides supply services to offshore companies both
national and international.


TAURON POLSKA: Fitch Assigns BB+ Rating to EUR190MM Hybrid Bonds
Fitch Ratings has assigned Tauron Polska Energia S.A.'s proposed
EUR190 mil. (PLN844 mil.) hybrid bonds due in 2034 an expected
rating of 'BB+(EXP)'.  The proposed securities qualify for 50%
equity credit.  The final rating is contingent on the receipt of
final documents conforming materially to the preliminary
documentation reviewed.

The hybrid bonds are to be subscribed by European Investment
Bank. The proceeds will be used to co-finance capex in
distribution.  The bonds' rating and assignment of equity credit
are based on Fitch's hybrid methodology, dated Feb. 29, 2016.

                         KEY RATING DRIVERS

Ratings Reflect Deep Subordination
The proposed notes are rated two notches below Tauron's Long-Term
Issuer Default Rating (IDR; BBB/Stable) given their deep
subordination and consequently, the lower recovery prospects in a
liquidation or bankruptcy scenario relative to the senior
obligations.  The notes are subordinated to all senior debt.

Support to the Capital Structure
Fitch expects Tauron's credit metrics to improve once the large-
scale capital projects that are underway start contributing
earnings and annual capex normalises over the long term.  If the
group's financial profile has improved by the first call date of
the hybrid in 2024, management may decide to refinance the hybrid
with senior unsecured debt.  If the group's leverage is close to
the net debt/EBITDA covenant of 3.5x, which is included in some
long-term funding agreements, management is expected to replace
the hybrid with a similar instrument.  Both scenarios are
compatible with Fitch's interpretation of permanence.  The
important aspect is that the hybrid capital will support the
capital structure in a stress case.

Equity Treatment Given Equity-Like Features
The proposed securities qualify for 50% equity credit as they
meet Fitch's criteria with regards to deep subordination,
remaining effective maturity of at least five years, full
discretion to defer coupons for at least five years and limited
events of default.  These are key equity-like characteristics,
affording Tauron greater financial flexibility.  Equity credit is
limited to 50% given the cumulative interest coupon, a feature
considered more debt-like in nature.

Effective Maturity Date
The proposed notes are due 18 years from the issue date, which is
also the effective maturity according to the agency's hybrid
criteria.  The coupon step-up of 95bps from the first call date
is within Fitch's aggregate threshold rate of 100bps.  According
to Fitch's criteria, the equity credit of 50% would change to 0%
five years before the effective remaining maturity date.  The
issuer has the option to redeem the notes on the first call date
eight years from the issue date and on any coupon payment date

Cumulative Coupon Limits Equity Treatment
The interest coupon deferrals are cumulative, which results in
50% equity treatment and 50% debt treatment of the hybrid notes
by Fitch.  Despite the 50% equity treatment, Fitch treats coupon
payments as 100% interest.  The company will be obliged to make a
mandatory settlement of deferred interest payments under certain
circumstances, including the payment of a dividend.


High Share of Regulated Business
The ratings reflect the high share of the regulated and fairly
stable distribution business in Tauron's EBITDA (67% in 2015).
This contributes to cash flow predictability at a time when
conventional power generation, another key segment, is under
pressure due to a challenging operating environment and limited
fuel mix diversification with a high reliance on coal.

We expect the share of distribution to remain around 65% in 2016-
2018 but it may slightly decrease in 2019 when the Jaworzno III
910 MW coal-fired power plant comes on stream to boost the
performance of the weak generation segment.

Despite allocating fairly high capex for conventional power
generation by 2020, distribution continues to dominate Tauron's
capex plan (53% of 2016-2020 capex), followed by generation (37%)
and coal mining (7%).

Strategy Drives Slower Leverage Increase
One of the key elements of Tauron's strategy update in September
2016 is the support of the financial profile through capex
reduction by 11% to about PLN18 bil. for 2016-2020 (including the
cancellation of the PLN1.5 bil. gas-fired power plant project in
Lagisza), cost reductions and asset optimisation.

A key objective is to maintain leverage below the net debt/EBITDA
covenant of 3.5x.  Management said that the forecasts prepared
for the strategy update indicate that no dividends will be paid
until 2019.  In June the shareholders agreed to no dividend
payments in 2016, compared with a PLN263m dividend paid in 2015.

In our view, the capex programme remains significant despite the
planned reduction in the strategy update.  Fitch projects funds
from operations (FFO) adjusted net leverage to increase to about
3.4x in 2016-2018 from 2.4x in 2015, close to the maximum 3.5x
for the ratings.  As a result, Tauron has limited room for
underperformance or additional capex or acquisitions.

Financial Flexibility
In our view, Tauron retains some flexibility to reduce capex or
implement other measures should cash flows be below expectations.
For instance, it will consider selling to an external investor up
to a 50% stake in the Jaworzno III project.  Capex in the
distribution segment could also be deferred.  In addition, the
planned hybrid bonds with 50% equity credit are positive for FFO
adjusted net leverage and would be excluded from Tauron's net
debt in the covenant calculation.

Rated on a Standalone Basis
Tauron is 30.06% owned and effectively controlled by the Polish
state (A-/Stable).  However, Fitch rates it on a standalone basis
because it assess legal, operational and strategic links with the
state as moderate based on our Parent and Subsidiary Rating
Linkage criteria.  In Fitch's view, the links have had an
incrementally stronger impact on the company under the new
government since November 2015.  Examples include the plan of no
dividends until 2019.

In Fitch's view, the Polish government's plans to introduce a
capacity market are crucial in allowing new coal power plants
under construction, such as the Jaworzno III plant, to be
profitable in the long-term.  Fitch currently do not include any
cash inflows related to the contemplated capacity market in our
rating case forecast until 2020.

                        DERIVATION SUMMARY

Tauron's and Energa S.A.'s (BBB/Stable) business profiles benefit
from the large share of regulated distribution in EBITDA, which
provides good cash flow visibility at times when another key
segment, conventional power generation, is under pressure.  Two
other Polish utilities, PGE Polska Grupa Energetyczna S.A.
(BBB+/Stable), and ENEA S.A. (BBB/Stable) have lower share of
regulated distribution than Tauron and Energa.

Tauron, Energa and ENEA have limited headroom under their
negative rating guidelines due to a projected increase in
leverage in 2017-2018 driven by large capex.

                           KEY ASSUMPTIONS

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

   -- Weighted average cost of capital in the distribution
      segment reduced to 5.7% in 2016 from 7.2% in 2015 (and 6.8%
      when applying the one-off haircut applied by the
      regulator), before gradually increasing to 6% in 2020.

   -- 5% haircut reducing return on the distribution's regulated
      asset base incorporated from 2018.

   -- Wholesale baseload power prices falling to about PLN155 per
      MWh by 2020.

   -- Commencement of Jaworzno hard coal power block (0.9GW) and
      Stalowa Wola CCGT (50% of 0.4GW) in 2019-2020.

   -- Capex of PLN18bn for 2016-2020.

   -- No dividends until 2019.

   -- Tauron's PLN314.5m guarantee for the Stalowa Wola gas-fired
      power plant JV included in Fitch-adjusted debt calculation.

                       RATING SENSITIVITIES

Positive: Rating upside for Tauron is limited due to the
company's business profile and projected increase in leverage due
to capex. However, future developments that could lead to
positive rating actions include:

   -- Continued focus on the distribution business in capex and
      overall strategy, together with FFO adjusted net leverage
      below 2.5x on a sustained basis, supported by management's
      more conservative leverage target.

   -- A more diversified fuel generation mix and lower CO2
      emissions per MWh, which together with continued efficiency
      improvements, would result in a stronger business profile.

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

   -- FFO adjusted net leverage above 3.5x and FFO fixed charge
      cover below 5x (2015: 11x) on a sustained basis - for
      example, due to full implementation of capex and weaker
      than expected operating cash flows.

   -- Acquisitions of stakes in coal mines or other form of
      support for state-owned mining companies under financial
      pressure leading to net leverage above 3.5x or
      substantially worsening Tauron's business profile.

   -- Failure to maintain adequate liquidity.

   -- A substantial tax payment arising from an increase in the
      nominal value of Tauron's shares. This is a cash flow and
      operating environment risk for Tauron and other Polish
      state-controlled utilities as the government contemplates
      an increase of the nominal value of their shares.  Such an
      increase would be subject to approval at the shareholders
      meeting.  This tax payment is not included in Fitch's
      assumptions for the rating case.  Fitch treats this as
      event risk and a potential corporate governance issue.


Tauron has improved its medium-term liquidity in the past 12
months after having signed a new PLN6.3 bil. long-term bond issue
programme underwritten by banks in November 2015 and refinanced
PLN2.3 bil. bonds in 1Q16 ahead of maturity in December 2016.

Tauron has also tightened its funding approach by pre-arranging
committed funding at least 24 months ahead of actual funding
needs, compared with at least 12 months previously.  The company
plans to extend debt maturities in the next few months ahead of
the next large maturity of PLN2bn in 2019.

At end-September 2016 Tauron had PLN75 mil. of readily available
cash and PLN4.5 bil. of committed funding against short-term debt
of PLN1.1 bil. and Fitch-expected negative free cash flow for
2017 of PLN1.4 bil.


  Long-Term Foreign and Local Currency IDRs of 'BBB'; Stable
  Short-Term Foreign and Local Currency IDRs of 'F3'
  National Long-Term Rating of 'A+(pol)'; Stable Outlook
  National senior unsecured rating of 'A+(pol)'
  Proposed hybrid bonds assigned an expected rating of 'BB+(EXP)'


BRUNSWICK RAIL: Rejects Creditors' Debt-Term Breach Claims
Luca Casiraghi at Bloomberg News reports that Brunswick Rail Ltd.
rebuffed two claims from creditors that it had breached debt
terms, as the Russian rail-car lessor tries to avoid immediate

The company will contest Sumitomo Corp.'s claim that an "event of
default" has occurred on an October 2015 shareholder loan,
Bloomberg relays, citing a statement on Dec. 12.  According to
Bloomberg, the lessor said in a separate statement that claims
from some bondholders about a breach of terms were "unfounded."

Brunswick Rail has been negotiating terms of a debt restructuring
with creditors since January after a decline in the value of the
ruble increased the cost of repaying debt in foreign currencies,
Bloomberg discloses.  A group of investors controlling 48% of the
lessor have also asked bondholders to postpone debt maturities as
they seek new investors, Bloomberg relates.

Brunswick, as cited by Bloomberg, said Sumitomo, which owns about
5% of the company as of June 2015, contends it has the right to
seek immediate payment of the loan.

According to Bloomberg, the lessor said the bondholders, which
own some of Brunswick's US$600 million of November 2017 notes,
say they are entitled to 101% of the debt's face value plus
accrued interest.

Brunswick Rail leases railcars to corporate clients in Russia.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on July 7,
2016, S&P Global Ratings lowered its long-term corporate credit
rating on Russia-based freight car lessor Brunswick Rail Ltd. to
'CC' from 'CCC-'.  The outlook remains negative.  At the same
time, S&P lowered to 'CC' from 'CCC-' its issue rating on the
$600 million 6.5% senior unsecured notes due 2017, issued by
Brunswick's wholly owned subsidiary Brunswick Rail Finance Ltd.
The downgrade follows Brunswick's announcement that it intends to
launch a tender offer on its US$600 million unsecured notes due
in November 2017.

EUROPLAN PJSC: Fitch Affirms 'BB-' LT Issuer Default Ratings
Fitch Ratings has affirmed the Long-Term Issuer Default Ratings
of PJSC Europlan and Baltic Leasing JSC (BaltLease) at 'BB-', and
of Sollers-Finance LLC (SF) at 'B+' and Carcade LLC at 'B+'.
Fitch has revised the Outlook on BaltLease to Stable from
Negative.  The Outlooks are Stable on Europlan and SF and
Negative on Carcade.

                          KEY RATING DRIVERS

The affirmation of Europlan and SF's IDRs with Stable Outlooks
and the revision of the Outlook on BaltLease to Stable reflect
the companies' solid performance through the cycle, stable low
credit losses of the lease books helped by solid underwriting and
a rigorous collection function, strong liquidity positions and
low leverage.  The Negative Outlook on Carcade reflects potential
pressure on its leverage and weak operational results.

The companies are among the leading private leasing companies in
Russia.  Europlan and Carcade are pure retail, predominantly
autoleasing companies, with passenger cars, trucks and light
commercial vehicles combined making up 87% and 99%, respectively,
of their lease books at end-6M16.  BaltLease and SF have more
lumpy and less liquid lease books.  The former's non-auto leasing
accounted for 46% of the book, while the latter focuses primarily
on trucks and fleet deals.

The companies' core clientele are SMEs, which are highly
sensitive to broader economic conditions.  The high volatility of
the underlying car market amplifies the cyclicality of auto
leasing. The sharp downturn of auto sales in Russia (by 24% in
2015 and 1% in 10M16 as measured by volume, or 36% and 13% by
number of cars) constrains origination of new leasing business.
However, all the companies accelerated business origination in
9M16 and BaltLease and SL achieved portfolio growth.  The quality
of this growth in a contracting auto market is yet to be

The companies' credit losses have been very low due to effective
foreclosure and sales.  This is supported by i) high down
payments, typically equal to 20%-25% of initial value, a higher
30% for SF; ii) the liquidity of the leased assets (typically
mid-range passenger cars); iii) good repossession rates; and iv)
the correlation of market stress with rouble depreciation, which
tends to increase the value in local currency of foreclosed
assets. Carcade and SF reported higher default rates in 2015-1H16
(calculated by Fitch at 12% and 7%, respectively, on an
annualised basis).  Carcade also demonstrated slower and less
efficient foreclosures and collateral sales compared with peers.

Each of the four companies reported low leverage at end-1H16,
with Fitch-adjusted debt/equity ratios ranging from 1.4x at
Europlan to 5.4x at Carcade.  Leverage has been supported by
strong internal capital generation at Europlan, BaltLease and SL
(driven by healthy margins, good cost efficiency and low credit
losses), and by deleveraging (in particular in 2015) at all four
companies. Fitch expects the less leveraged companies to increase
their debt-to-equity ratios to around 4x-5x as a result of
renewed business growth and/or capital distributions, but this
would still be in line with their ratings.

Europlan's financial metrics are currently the strongest among
peers, but Fitch expects leverage to increase after the
completion of a group reorganisation in 1H17.  Contagion risks
from the broader, highly leveraged Safmar group (formerly known
as B&N Group) weigh on Europlan's ratings.

BaltLease's financial metrics are also strong, although the
company has a shorter track record than Europlan and a somewhat
narrower franchise.  Debt at the shareholder level, taken on to
finance the acquisition of a majority stake in the company, is
sizable and may require significant dividend distributions to
support its service.  BaltLease has longstanding close ties with
the Otkritie group, which continues to own a minority stake in
the company and provide funding support.

Fitch adjusts Carcade's debt/equity ratio for receivables from
its shareholder and a debt collection company, while the sizable
stock of non-performing and foreclosed assets weigh on our
assessment of leverage.  Rapid deleveraging in 2H15-1H16 has
supported the capital ratio, offsetting the impact of operating
losses, but a turnaround in profitability will depend on the
company's ability to generate new business and improve
efficiency.  Fitch understands that Carcade's owner, Poland's
Getin Holding, is no longer actively seeking to sell the company,
and is focused instead on improving its performance.

SF is considerably smaller than its three peers, but grew its
lease book rapidly in 1H16 with big-tickets fleet deals in public
transportation.  However, the company's leverage (2.3x debt-to-
equity at end-1H16) still leaves significant room for growth
before this would start to put pressure on the company's
financial profile.  SF is jointly-owned by Russia-based
Sovcombank (BB-/Stable) and Sollers, a group with various
interests in the auto manufacturing industry.

The four companies are predominantly funded by Russian banks (as
direct lenders or bondholders).  Refinancing risk is limited,
mitigated by the short tenors of lease books, which are largely
matched by funding maturities.  Europlan and Carcade have
diversified bank loan portfolios, but are more dependent on
market funding than BaltLease (whose outstanding bonds (around
75% of end-9M16 liabilities) are predominantly held by Otkritie,
Fitch understands) and SF (which is currently funded almost
exclusively by Sovcombank).

                          SENIOR DEBT RATINGS

Senior debt ratings are aligned with the companies' IDRs and
National ratings, reflecting Fitch's view of average recovery
prospects for unsecured senior creditors in case of default.
This in turn is driven by the low to moderate proportion of
company assets (ranging from 5% in BaltLease to 40% in Carcade of
their lease portfolios) that have been pledged to secured

                           SUPPORT RATING

The Support Rating of '4' assigned to SF reflects Fitch's view
that the company would likely be supported by Sovcombank case of
deterioration in its financial position.  This view takes into
account support provided to date and SF's small size relative to
Sovcombank (equal to less than 1% of assets).  However, the only
50% ownership, the apparently non-strategic nature of the
investment and Sovcombank's intention to refinance its funding of
SF through bond issuance by SF make support somewhat less
certain, in Fitch's view.

                       RATING SENSITIVITIES

Upgrades are currently unlikely given the still challenging
operating environment, expected increases in leverage from
renewed business growth and capital distributions, small size
(SF) and weak performance (Carcade).

The companies could be downgraded if asset quality and
performance weaken significantly, to the extent that this results
in a marked increase in their leverage ratios or compromises the
quality of their capital.

Europlan and BaltLease could be also downgraded if Fitch
concludes that their strategy, risk appetite, balance sheet
structure and/or financial metrics are likely to significantly
weaken following shareholders actions, or if the companies become
significantly exposed to related parties, non-core assets or
other contingent risks arising from the other assets of their

SF's Long-Term IDR would only be downgraded if both its
standalone financial profile deteriorated significantly and
Sovcombank failed to provide timely support.

The Negative Outlook on Carcade reflects the risk that further
negative operational results or losses on non-performing and
foreclosed assets could put further pressure on capitalization.
If the company is able to return to sustainable profitability and
avoid any further significant increase in its leverage, then we
will likely revise the Outlook to Stable.

Senior debt ratings could be downgraded in case of a lowering of
IDRs/National ratings, or a marked increase in the proportion of
pledged assets, potentially resulting in lower recoveries for the
unsecured senior creditors in a default scenario.

The rating actions are:

PJSC Europlan

  Long-Term Foreign and Local Currency IDRs: affirmed at 'BB-';
   Outlooks Stable
  Short-Term Foreign Currency IDR: affirmed at 'B'
  National Long-Term Rating: affirmed at 'A+(rus)'; Outlook
  Senior unsecured debt: affirmed at 'BB-'/'A+(rus)'

Baltic Leasing JSC

  Long-Term Foreign and Local Currency IDRs: affirmed at 'BB-';
   Outlooks revised to Stable from Negative
  Short-Term Foreign Currency IDR: affirmed at 'B';
  National Long-Term Rating: affirmed at 'A+(rus)'; Outlook
   revised to Stable from Negative
  Senior unsecured debt of Baltic Leasing LLC: affirmed at

Sollers-Finance LLC

  Long-Term Foreign and Local Currency IDRs: affirmed at 'B+';
   Outlooks Stable
  Short-Term Foreign Currency IDR: affirmed at 'B';
  National Long-Term Rating: affirmed at 'A(rus)'; Outlook Stable
  Support Rating: assigned at '4'
  Expected Senior unsecured debt: assigned at
   'B+(EXP)'/'A(rus)(EXP)'; Recovery Rating 'RR4(EXP)'


  Long-Term Foreign and Local Currency IDRs: affirmed at 'B+';
   Outlooks Negative
  Short-Term Foreign Currency IDR: affirmed at 'B'
  National Long-Term Rating: affirmed at 'A-(rus)'; Outlook
  Senior unsecured debt: affirmed at 'B+'/'A-(rus)'; Recovery
   Rating 'RR4'


FT SANDANDER CONSUMO 2: DBRS Assigns CCC Rating to Class F Notes
DBRS Ratings Limited finalised the provisional ratings previously
assigned to the notes issued by Fondo de Titulizacion Santander
Consumo 2 (the Issuer) as follows:

   -- Class A notes at AA (sf)

   -- Class B notes at A (sf)

   -- Class C notes at BBB (sf)

   -- Class D notes at BB (sf)

   -- Class E notes at B (sf) and

   -- Class F notes at CCC (high) (sf).

The ratings on the Class A to Class E notes address the timely
payment of interest and the ultimate payment of principal payable
on or before the notes' legal maturity date. The rating on the
Class F notes addresses the ultimate payment of interest and the
ultimate payment of principal payable on or before the notes'
legal maturity date.

The transaction represents the issuance of notes backed by
approximately EUR 1 billion of receivables relating to personal
loan contracts granted by Banco Santander, S.A. (Santander) to
individuals residing in Spain. The receivables are serviced by
Santander, and the transaction is managed by Santander de
Titulizacion SGFT, S.A.

The ratings are based on DBRS's review of the following
analytical considerations:

   -- The transaction capital structure and the form and
      sufficiency of available credit enhancement.

   -- Credit enhancement levels are sufficient to support the
      expected cumulative net loss assumption under various
      stress scenarios at a AA (sf), A (sf), BBB (sf), BB (sf)
      and B (sf) standard for the Class A notes, Class B notes,
      Class C notes, Class D notes and Class E notes,

   -- The ability of the transaction to withstand stressed cash
      flow assumptions and repay investors according to the terms
      under which they have invested.

   -- The transaction parties' capabilities with respect to
      originations, underwriting, servicing and financial

   -- The credit quality of the collateral and ability of
      Santander, as the servicer, to perform collection
      activities on the collateral.

   -- The legal structure and presence of legal opinions
      addressing the assignment of the assets to the Issuer and
      the consistency with DBRS's "Legal Criteria for European
      Structured Finance Transactions" methodology.

The transaction was modelled in Intex Dealmaker.


All figures are in euros unless otherwise noted.

The principal methodology applicable is Rating European Consumer
and Commercial Asset Backed Securitisations.

DBRS has applied the principal methodology consistently and
conducted a review of the transaction in accordance with the
principal methodology.

The sources of information used for this rating include
performance and portfolio data relating to the loan receivables
sourced by Santander directly or through their agents, Santander
GCB, CrÇdit Agricole CIB and Santander de Titulizacion SGFT, S.A.

DBRS does not rely upon third-party due diligence in order to
conduct its analysis.

DBRS was supplied with third-party assessments. However, this did
not impact the rating analysis.

DBRS considers the information available to it for the purposes
of providing this rating to be of satisfactory quality.

DBRS does not audit the information it receives in connection
with the rating process, and it does not and cannot independently
verify that information in every instance.

This rating concerns a newly issued financial instrument. This is
the first DBRS rating on this financial instrument.

To assess the impact of changing the transaction parameters on
the rating, DBRS considered the following stress scenarios, as
compared to the parameters used to determine the rating (the Base

   -- Probability of Default (PD) Rates Used: Base Case PD of
      8.14%, a 25% and 50% increase on the Base Case PD.

   -- Recovery Rates Used: Recovery Rate of 45.8%, with a 25% and
      50% decrease in the Base Case Recovery Rate.

DBRS concludes that for the Class A notes,

   -- A hypothetical increase of the Base Case PD or Loss Given
      Default (LGD) by 25%, ceteris paribus, would lead to a
      downgrade of the Class A notes to A (high) (sf).

   -- A hypothetical increase of the Base Case PD or LGD by 50%,
      ceteris paribus, would lead to a downgrade of the Class A
      notes to A (sf).

   -- A hypothetical increase of the Base Case PD and LGD by 25%,
      ceteris paribus, would lead to a downgrade of the Class A
      notes to A (low) (sf).

   -- A hypothetical increase of the Base Case PD by 50% and a
      hypothetical increase of the LGD by 25%, ceteris paribus,
      would lead to a downgrade of the Class A notes to BBB
     (high) (sf).

   -- A hypothetical increase of the Base Case PD by 25% and a
      hypothetical increase of the LGD by 50%, ceteris paribus,
      would lead to a downgrade of the Class A notes to BBB
     (high) (sf).

   -- A hypothetical increase of the Base Case PD and LGD by 50%,
      ceteris paribus, would lead to a downgrade of the Class A
      notes to BBB (low) (sf).

DBRS concludes that for the Class B notes,

   -- A hypothetical increase of the Base Case PD or LGD by 25%,
      ceteris paribus, would lead to a downgrade of the Class B
      notes to BBB (sf).

   -- A hypothetical increase of the Base Case PD or LGD by 50%,
      ceteris paribus, would lead to a downgrade of the Class B
      notes to BB (high) (sf).

   -- A hypothetical increase of the Base Case PD and LGD by 25%,
      ceteris paribus, would lead to a downgrade of the Class B
      notes to BB (high) (sf).

   -- A hypothetical increase of the Base Case PD by 50% and a
      hypothetical increase of the LGD by 25%, ceteris paribus,
      would lead to a downgrade of the Class B notes to B (high)

   -- A hypothetical increase of the Base Case PD by 25% and a
      hypothetical increase of the LGD by 50%, ceteris paribus,
      would lead to a downgrade of the Class B notes to B (high)

   -- A hypothetical increase of the Base Case PD and LGD by 50%,
      ceteris paribus, would lead to a downgrade of the Class B
      notes to B (low) (sf).

DBRS concludes that for the Class C notes,

   -- A hypothetical increase of the Base Case PD or LGD by 25%,
      ceteris paribus, would lead to a downgrade of the Class C
      notes to BB (low) (sf).

   -- A hypothetical increase of the Base Case PD or LGD by 50%,
      ceteris paribus, would lead to a downgrade of the Class C
      notes to B (low) (sf).

   -- A hypothetical increase of the Base Case PD and LGD by 25%,
      ceteris paribus, would lead to a downgrade of the Class C
      notes to B (low) (sf).

   -- A hypothetical increase of the Base Case PD by 50% and a
      hypothetical increase of the LGD by 25%, ceteris paribus,
      would lead to a downgrade of the Class C notes to CCC (sf).

   -- A hypothetical increase of the Base Case PD by 25% and a
      hypothetical increase of the LGD by 50%, ceteris paribus,
      would lead to a downgrade of the Class C notes to CCC (sf).

   -- A hypothetical increase of the Base Case PD and LGD by 50%,
      ceteris paribus, would lead to a downgrade of the Class C
      notes to CC (sf).

DBRS concludes that for the Class D notes,

   -- A hypothetical increase of the Base Case PD or LGD by 25%,
      ceteris paribus, would lead to a downgrade of the Class D
      notes to B (sf).

   -- A hypothetical increase of the Base Case PD or LGD by 50%,
      ceteris paribus, would lead to a downgrade of the Class D
      notes to CCC (sf).

   -- A hypothetical increase of the Base Case PD and LGD by 25%,
      ceteris paribus, would lead to a downgrade of the Class D
      notes to CCC (sf).

   -- A hypothetical increase of the Base Case PD by 50% and a
      hypothetical increase of the LGD by 25%, ceteris paribus,
      would lead to a downgrade of the Class D notes to CC (sf).

   -- A hypothetical increase of the Base Case PD by 25% and a
      hypothetical increase of the LGD by 50%, ceteris paribus,
      would lead to a downgrade of the Class D notes to CC (sf).

   -- A hypothetical increase of the Base Case PD and LGD by 50%,
      ceteris paribus, would lead to a downgrade of the Class D
      notes to CC (sf).

DBRS concludes that for the Class E notes,

   -- A hypothetical increase of the Base Case PD or LGD by 25%,
      ceteris paribus, would lead to a downgrade of the Class E
      notes to B (low) (sf).

   -- A hypothetical increase of the Base Case PD or LGD by 50%,
      ceteris paribus, would lead to a downgrade of the Class E
      notes to CCC (sf).

   -- A hypothetical increase of the Base Case PD and LGD by 25%,
      ceteris paribus, would lead to a downgrade of the Class E
      notes to CCC (sf).

   -- A hypothetical increase of the Base Case PD by 50% and a
      hypothetical increase of the LGD by 25%, ceteris paribus,
      would lead to a downgrade of the Class E notes to CC (sf).

   -- A hypothetical increase of the Base Case PD by 25% and a
      hypothetical increase of the LGD by 50%, ceteris paribus,
      would lead to a downgrade of the Class E notes to CC (sf).

   -- A hypothetical increase of the Base Case PD and LGD by 50%,
      ceteris paribus, would lead to a downgrade of the Class E
      notes to CC (sf).

DBRS concludes that for the Class F notes,

   -- A hypothetical increase of the Base Case PD or LGD by 25%,
      ceteris paribus, would lead to a downgrade of the Class F
      notes to CCC (low) (sf).

   -- A hypothetical increase of the Base Case PD or LGD by 50%,
      ceteris paribus, would lead to a downgrade of the Class F
      notes to CC (sf).

   -- A hypothetical increase of the Base Case PD and LGD by 25%,
      ceteris paribus, would lead to a downgrade of the Class F
      notes to CC (sf).

   -- A hypothetical increase of the Base Case PD by 50% and a
      hypothetical increase of the LGD by 25%, ceteris paribus,
      would lead to a downgrade of the Class F notes to CC (sf).

   -- A hypothetical increase of the Base Case PD by 25% and a
      hypothetical increase of the LGD by 50%, ceteris paribus,
      would lead to a downgrade of the Class F notes to CC (sf).

   -- A hypothetical increase of the Base Case PD and LGD by 50%,
      ceteris paribus, would lead to a downgrade of the Class F
      notes to CC (sf).

Ratings assigned by DBRS Ratings Limited are subject to EU
regulations only.


ANTALYA MUNICIPALITY: Fitch Lowers IDR to 'BB+', Outlook Stable
Fitch Ratings has downgraded the Metropolitan Municipality of
Antalya's Long-Term Local Currency Issuer Default Rating (LTLC
IDR) to 'BB+' from 'BBB-'and its Short-Term Local Currency IDR to
'B' from' F3'.  In addition, Fitch has affirmed Antalya's Long-
Term Foreign Currency Issuer IDR (LTFC IDR) at 'BB+', Short-Term
Foreign Currency IDR at 'B' and National Long-Term Rating at 'AA+
(tur)'.  The Outlooks on the Long-Term ratings are Stable.

The downgrade reflects the alignment of the two Long-Term IDRs in
line with the action taken on the sovereign on July 22, 2016,
"Fitch Applies Criteria Changes to Turkey's Ratings".

Antalya's high direct and indirect foreign-currency denominated
liabilities, which are unhedged, expose the city to significant
FX risk in times of sharp financial market volatility similar to
other metropolitan municipalities.  Fitch believes that a
scenario of FX volatility could have an adverse effect on
Antalya's debt payback capacity overall (not only on its FX
debt).  Its payback capacity would not be in line with a 'BBB'
category rating. Furthermore, Fitch believes that in this
scenario, Antalya would not give preferential treatment to local
currency creditors relative to foreign currency creditors.  The
nature of Antalya's FX creditors (multilateral banks) and their
key role in financing the infrastructure in the whole country
makes it unlikely that they would become subordinated to local
creditors if the municipality faced financial hardship.


The ratings reflect these key rating drivers and their relative


Institutional Framework
Fitch views Antalya's credit profile as negatively affected by
the evolving nature of Turkey's institutional framework for local
governments (LGs).  It has a short track record of stable
development compared with many of its international peers.  An
unstable intergovernmental set-up leads to lower predictability
of LGs' budgetary policies and hamper the city's forecasting

As per Fitch's sovereign criteria change on July 22, 2016,
Turkey's credit profile does not support a notching up of the
LTLC IDR above the LTFC IDR.  This reflects Fitch's view that the
key factors cited in the criteria that support upward notching of
the LTLC IDR are not present for Turkey, namely (i) strong public
finance fundamentals relative to external finance fundamentals;
and (ii) previous preferential treatment of LC creditors relative
to FC creditors.

Furthermore, on Aug. 19, 2016, Fitch revised Turkey's Outlooks to
Negative from Stable as risks to political stability had
increased.  The agency expects political uncertainty to affect
the country's economic performance over the medium term.

Turkey's public sector is highly centralised, with the central
government collecting taxes attributable to each municipality's
economic output and distributing them according to fixed
allocation rules.  LGs are therefore exposed to any changes in
these allocations following a change in central government policy
and macroeconomic conditions.

Tax revenues out of the general government tax pool constitute up
to 80% of the tax revenue income of the large Turkish
metropolitan municipalities, and up to 50% of revenue income for
small- to medium-sized municipalities.  Moreover, local
governments have very little taxation power, as tax rates are set
by the central government.  It would therefore be difficult for
them to raise other revenues to compensate for any reduction in
revenue allocated from central government.

Antalya's debt is related to its capital intensive infrastructure
responsibilities similar to the other Turkish metropolitan
municipalities.  However, the share of the city's FX debt was
TRY302.8 mil. at end 2015, or 73% of its total debt.  When adding
the TRY304m indirect FX liabilities of its PSE, ASAT, the share
of its FX liabilities increase to 84%, which exposes the city to
substantial FX risk.  In a stress scenario, this would weaken its
debt payback capacity which would not be in line with a 'BBB'
category rating for the LTLC IDR.

The ratings also reflect these key rating drivers:

Budgetary Performance
The ratings consider Fitch's base case scenario, under which we
expect Antalya's operating margins to remain strong at about 30%
in 2016-2018.  This is due to its wealth levels that are
approximately 10% above the national average and increased shared
tax revenue base under Law 6360 combined with continued budgetary

Law 6360 boosted shared Antalya's tax revenue base.  Antalya
posted a strong operating margin in 2015 of 37.9% (4Y average:
7%).  This was supported by operating expenditure growth of
12.6%, substantially below operating revenue at 33% year-over-
year (yoy), in nominal terms.

In 2Q16, the city had already executed 43% of its budgeted
revenue reflecting continued robust local economic growth.
Furthermore, in line with our expectation of 2% higher opex than
expected operating revenue, opex was 46% of the budgeted amount,
reflecting continued expenditure discipline.

Fitch projects the improved operating revenue will help reduce
Antalya's net overall risk on a sustainable basis, below 100% of
current revenue in the medium term.

Antalya is Turkey's sixth-largest contributor to its GVA,
concentrated mostly in the services sector, a sector that grew on
average 4% per year in 2004-2011 (last available statistics).
With 2.2 million inhabitants in 2015, the metropolitan city is
the fifth-largest Turkish city and accounts for 2.9% of the
national population.  The city is the main hub for the country's
tourism, followed by agriculture.  Around 30% of national tourist
arrivals are hosted by the city.

The city attracts high migration due to its moderate climate and
cultural and natural heritage and in comparison to other big
cities lower inflation rate a popular destination for elderly
people from Turkey but also outside Turkey to reside.

Management intends to diversify the local economic structure by
establishing industrial hubs and hosting high scale international
organisations such as the G20 Summit and EXPO 2016.

After the local elections in March 2014, the newly elected mayor
after his previous first term in 2004-2009 revamped the finance
directorate staff by hiring highly skilled officials.

The implications of the improved finance management are
demonstrated by a budgetary surplus before debt variation for the
first time since 2011, supported by expenditure discipline with a
strong reduction in opex growth less than the operating revenue.
Although capex was 87% of the budget, which is higher than the
metropolitan municipalities' average, this was mostly due to the
implications of Law 6360 and election period, the administration
managed to post an overall surplus without acquiring new debt in


A downgrade of the sovereign could put Antalya's ratings under
pressure.  Furthermore, a sharp increase in local and external
debt with an increase of the debt to current revenue above 60%
could also prompt a downgrade, although this is not Fitch's base
case scenario.

A sustainable reduction of net overall risk, with debt to current
revenue below 50% and FX share of debt below 50% and continuation
of strong budgetary performance with operating expenditure not
higher than budgeted would be positive for the Long-Term IDR and
National Rating.


UKRAINE: S&P Affirms 'B-/B' Sovereign Credit Ratings
S&P Global Ratings affirmed its 'B-/B' long- and short-term
foreign and local currency sovereign credit ratings on Ukraine.
The outlooks on the long-term foreign and local currency ratings
are stable.

At the same time, S&P affirmed the 'uaBBB-' Ukraine national
scale rating.


The affirmation reflects the broadly stabilizing macroeconomic
picture within Ukraine in 2016.  Positive growth has returned
(after a significant contraction in 2015) and inflation has
calmed.  The government also implemented some key reforms that
paved the way for the disbursement (albeit delayed) of
US$1 billion from the IMF in September 2016.  At the same time,
S&P's 'B-' long-term rating captures the significant economic and
political challenges that Ukraine still faces.  These include the
unpredictable security situation in the east of the country,
sizable contingent liabilities, and questions relating to the
health of the banking and financial sector.

Ukraine's economy has returned to growth in the last two
quarters, and S&P forecasts real GDP growth of 1% for 2016
despite weak exports, ongoing security risks, the weak domestic
business environment, and the need for fiscal prudence.  S&P
expects continuing growth over the forecast period; a pick up in
the later years should lead to GDP growth averaging 2.3% annually
between 2016-2019.

Earlier in the year, a no-confidence vote led to former prime
minister Arseniy Yatsenyuk being replaced by Volodymyr Groysman
from the larger coalition partner Petro Poroshenko Bloc (PPB).
PPB supports President Poroshenko, so Volodymyr Groysman's
appointment has provided some of the stability that was needed to
push through a series of IMF-supported reforms.  Against this
backdrop, S&P believes broader reforms will continue, albeit with
setbacks, and that Ukraine's western partners will remain
engaged. Tensions with Russia and the quasi-separatist areas in
the east remain and the situation has improved but not
stabilized, with about one-to-three casualties per day.  Trade
with Russia has fallen significantly, but has been partly
compensated with increasing trade with Europe and Asia.

In 2016, S&P forecasts the current account deficit (CAD) will
widen significantly to 3.1% of GDP owing to a rebound in imports
(the CAD had narrowed sharply in 2015 to 0.2% of GDP owing to
import compression following a sharply deteriorated hryvnia).  As
the economy stabilizes and exports pick up, S&P estimates the
current account deficit to average 2.8% of GDP in 2016-2019.  S&P
forecasts external debt, net of liquid assets, to average 151% of
current account receipts (CARs) in 2016-2019, while gross
external financing needs as a percentage of CARs and usable
reserves, S&P's key external liquidity metric, will also stand at

Since the beginning of last year, the IMF has disbursed over
US$7.6 billion of the $17.5 billion available under the four-year
Extended Fund Facility (EFF) program.  S&P's ratings on Ukraine
factor in S&P's assumption that the government will remain
broadly on course with the IMF program and engaged with
development partners, albeit with some continued lags.  The next
tranche of IMF funds, along with the associated external donor
funds, is likely to be disbursed in the first half of 2017.
While the bulk of IMF funds are lent to Ukraine's central bank to
boost foreign exchange reserves, continuation of the program
requires Ukraine to be fiscally prudent and meet IMF requirements
to unlock other funds from the EU and other donors.  The latter
have explicit or implicit IMF conditionality.

Given that Ukraine's external commercial debt redemptions have
been extended beyond 2018 as a consequence of a debt exchange
settled in October 2015, its obligations have become slightly
more manageable.  The debt exchange lowered the effective
interest rate on the entire outstanding stock of general
government debt while increasing the weighted average maturity,
giving Ukraine a couple of years during which it can try to
improve debt dynamics by improving the fiscal situation and
enacting reforms to boost growth.  However, big redemptions in
2019, a likely election year, may prove challenging but could be
partly mitigated by up-front funding.  S&P expects Ukraine will
meet its 2017 sovereign debt obligations using donor funds, bond
issuances, existing foreign exchange, and hryvnia balances held
at the central bank.  S&P notes that Ukraine can also issue
dollar denominated (as well as hryvnia) bonds in the domestic

The government's draft budget for 2017 targets a fiscal deficit
of 3% of GDP for the year, although S&P believes this will slip
somewhat.  The budget includes a planned increase in the minimum
wage (but this is not expected to have an impact on social
security outlays and is planned to be broadly fiscally neutral),
increased infrastructure investment, and hikes in local
government budget revenue and spending, while cutting expenditure
on health and education and procurement.

While S&P expects lower growth will subdue government revenues,
reforms to widen the tax base may broaden what has traditionally
been a narrow and porous tax pool and thereby deliver more tax in
the medium term.  Other ways the fiscal deficit may be controlled
include ongoing reforms to revenue administration and the
prospect of state-owned oil and gas company Naftogaz breaking
even or even making a profit this year (given higher tariffs),
thereby eliminating the need for transfers from the central

S&P remains cautious on the fiscal outlook, however, owing to the
sizable risks that persist, including the conflict in the east
where military spending is draining public finances (estimated at
at least 5% of GDP).  Overall, S&P forecasts that the annual
change in general government debt will average 3.7% of GDP in
2016-2019, with net general government debt to GDP declining to
61% in 2019 from 71% in 2015. At an estimated 76% of GDP by the
end of 2016, Ukraine's net general government debt remains high
for a low-income economy, even after the public debt
restructuring in October 2015.  In S&P's view, the high level of
debt means that targeting a primary budgetary surplus and
retaining access to relatively cheap official financing via the
IMF and other donors are essential for debt sustainability,
alongside sustained GDP growth.

Large contingent liabilities also pose a risk for the fiscal
outlook.  These include two court cases relating to a US$3
billion Eurobond issued to Russia, and a $31.8 billion litigation
case filed by Gazprom against Naftogaz (for non-payment relating
to a potential take-or-pay contract, noting that Naftogaz has
countersued Gazprom for a similarly large amount).  In addition,
there is the possibility that the coalition government could
fall, prompting snap early elections next year and potentially
leading to more seats for populist parties, slowing the pace of
fiscal reforms.

Reserves accumulation remains one of the central bank's primary
aims, and it has been able to purchase dollars.  From a low point
in February 2015, official reserve assets increased by over
$8 billion to $15.3 billion (although S&P believes that some of
the reserves are encumbered) as of Nov. 30, 2016.  This reflected
IMF foreign currency loan inflows, reduced external debt
payments, the imposition of capital controls, sizable FDI inflows
as well as the shift of the current account to near balance (due
to an even sharper contraction in imports versus exports).

Rising reserve assets have bolstered the NBU's credibility,
promoting increasing stability in the hryvnia market.  Recent
hryvnia stability reflects buoyant steel prices abroad, as well
as the more stable macroeconomic picture domestically.  Some
capital controls, which the NBU has begun partially liberalizing,
remain in place.  S&P expects the foreign exchange liberalisation
process will move slowly throughout the year as the NBU weighs
the burden these controls have on investment flows against the
risks that lifting them poses to the exchange rate.

Conditions in the financial sector have improved but further
recovery will be slow due to high credit risk.  S&P views
positively the withdrawal of 80 banking licenses due to a lack of
transparency regarding ownership structure.  A key negative is
the high level of nonperforming loans (NPLs) within the sector.
S&P classifies Ukraine's banking sector in group '10' ('1' being
the lowest risk, and '10' the highest) under our Banking Industry
Country Risk Assessment (BICRA) methodology.

Recapitalization of the largest banks operating in Ukraine, led
by newly reformed and more prudent stress tests by the central
bank, is in process.  Deposit outflows have largely stopped and
there is some small growth in hryvnia deposits which S&P expects
to continue.  While liquidity in the banking sector has largely
improved, legacy issues pertaining to related party lending
presents a serious risk to some large systemic banks, and hence
the broader system.  The authorities' ability to save any such
bad banks remains uncertain.


The stable outlook reflects S&P's view that over the next 12
months the Ukrainian government will maintain access to its
official creditor support by pursuing required reforms, albeit
with a delay, on the fiscal, financial, and economic fronts.

Downside risk to the ratings could build if Ukraine fails to
effectively implement further reforms required by the IMF for
more funding, if sizable contingent liabilities migrate to the
general government balance sheet, or the proportion of populist
MPs within the Rada increases and inhibits the reform agenda or
central bank independence, or if S&P concludes that a further
debt exchange is inevitable.

S&P foresees possible ratings upside if economic growth
significantly outperforms, alongside falling fiscal and external
deficits, and the situation in the east of the country improves.

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

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

The committee agreed that all key rating factors were unchanged.

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


                                     To               From
Sovereign Credit Rating
  Foreign and Local Currency           B-/Stable/B   B-/Stable/B
  Ukraine National Scale               uaBBB-/--/--  uaBBB-/--/--
Transfer & Convertibility Assessment   B-            B-
Senior Unsecured
  Foreign Currency[1]                   B-            B-
  Foreign Currency                      D             D
  Foreign Currency                      B-            B-

[1] Dependent Participant(s): Ukraine

U N I T E D   K I N G D O M

DJ & C FOODS: Creditors Approve CVA Deal, 200 Jobs Saved
Kara Shadbolt of Shoosmiths, on Dec. 12 disclosed that the
national law firm has advised DJ & C Foods Limited (t/a Love
Coffee), a national coffee house chain, on a CVA deal with its
creditors that will save hundreds of jobs.

This latest CVA comes soon after Shoosmiths struck another CVA
deal for another retail client, Grabal Alok (t/a Store Twenty
One), with the measures arranged saving thousands of jobs.

At a meeting of creditors held on December 9, 2016 the Company
Voluntary Arrangement (CVA) proposed was approved.  Damian Webb
and Philip Sykes -- -- of RSM
Restructuring and Advisory LLP will now become the Supervisors of
the CVA and monitor the implementation of the proposal.

Love Coffee is a family-run business and committed to providing
the richest coffee and fresh food which is all handmade every
morning in stores.  The chain's 35 stores employ more than 200

Legal advice was provided to DJ & C Foods by senior associate
Aaron Harlow and partner James Keates -- -- of Shoosmiths LLP -- the same
team which worked on the Store Twenty One CVA.

Vikesh Kumar Patel, Director of Love Coffee, said "We would like
to thank all of our employees, creditors and stakeholders for
their support through this challenging period.  The directors and
management team now look forward to focusing on the future of
Love Coffee and working together to make this business a success
for many years to come."

Aaron Harlow -- -- senior associate
at Shoosmiths who led the deal, said: "It has been a pleasure to
advise the Company on this complex CVA deal.  In our view this
arrangement was in the interests of all parties concerned and as
a result the business is healthier and hundreds of jobs have been
preserved before Christmas.  Shoosmiths has been very active in
providing the retail sector with restructuring advice of late,
and with our experience, are able to advise on very complex

Damian Webb, partner at RSM who also advised DJ & C Foods,
commented: "This deal is a positive outcome for all and the level
of votes in favor of the CVA, demonstrates the strong
relationships that the Company has with its stakeholders.  It
also demonstrates the tremendous support for the Love Coffee

Shoosmiths' corporate team advises public and private companies,
management teams, investors and debt providers through the
business life cycle.

Shoosmiths work with businesses from start-up and first round
finance through to mergers and acquisitions, MBO and MBI
transactions, development funding and on exits, by way of sale,
listing, private equity investment and on restructuring deals
such as CVA's.

Nationally, the corporate team is ranked in joint first place by
deal volume in Experian's UK Deal Review and Advisor League
Table.  The team was recognized for its mergers and acquisitions
expertise at the 2015 M&A Awards, winning the Law Firm of the
Year category.

INFINIS PLC: Moody's Affirms B1 Rating on GBP350MM Sr. Notes
Moody's Investors Service has affirmed the B1 rating on the
GBP350 million senior unsecured notes due 2019 issued by Infinis
Plc and changed the LGD assessment to LGD4 from LGD3.
Concurrently, Moody's has assigned a B1 corporate family rating
and a probability of default rating (PDR) of Ba3-PD to Infinis.
The outlook on all ratings remains negative.

At the same time, Moody's will withdraw the B2 CFR (upgraded from
B3 with the outlook changed to stable from negative) and the
(affirmed) B3-PD ratings on Infinis Energy Limited, as Infinis is
now ultimately owned by 3i Infrastructure plc (3i) following the
completion of the acquisition on 8 December 2016 by 3i from
private equity group Terra Firma Capital Corporation (Terra

                        RATINGS RATIONALE

The rating actions were prompted following the successful
completion by 3i Infrastructure plc on Dec. 8, 2016, of Infinis
Energy Limited's, ultimately owned by private equity group Terra
Firma, landfill gas business, Infinis.

Upon closing of the transaction, the GBP20 million intercompany
loan made by Infinis to the wider Infinis group in January 2016,
together with accrued interest, has been repaid thereby
increasing Infinis's cash balance by GBP20.3 million and reducing
its Net Debt / EBITDA by around 0.2x (this was 3.1x at Sept. 30,

The assigned B1 CFR positively reflects, (1) Infinis's market
position as a leading renewable electricity generator in the UK;
(2) the relatively stable and predictable nature of the company's
principal renewable energy support mechanisms, controlled by the
UK Government, under which almost all of Infinis's output is
sold; and (3) its low marginal cost generating fleet, which
provides consistent load factors.  However, the rating is
constrained by (1) the company's small scale relative to peers
rated under Moody's Unregulated Utilities and Unregulated Power
Companies methodology; (2) reduced predictability about some
elements of future revenues, e.g. embedded benefits; and (3) the
reliance on declining landfill gas reserves.

UK wholesale power prices have increased since the Brexit
referendum vote in June 2016, initially due to the decline in
sterling with key commodities priced in US dollars and more
latterly due to nuclear outages in France reducing capacity
margins, primarily impacting winter 2017 contracts.  However,
since Infinis is fully hedged for FY2017 and Moody's anticipates
power prices will revert to historically very low levels after
this, with 1-year baseload forwards expected to trade in the
range GBP36-41/MWh over the period to 2021, the operating
environment remains challenging.  Under the covenants of the
Notes, Infinis can pay dividends of 50% of consolidated net
income, cGBP2-5 million per quarter based on Moody's calculations
(GBP3.2 million paid in November 2016 for the period ending Sept.
30, 2016).  Based on this assumption, Moody's expect Net Debt /
EBITDA to be around 3.0x until the notes are refinanced.

This challenging operating environment coupled with declining
output by around 6-7% per annum over the remainder of the decade
increases refinancing risk when the Notes mature in February
2019. Moody's notes 3i's stated intention to exercise the call
option on the Notes (103.5% of principal before Feb. 16, 2017,
and 101.75% of principal between Feb. 16, 2017, and Feb. 15,
2018, plus accrued interest in both cases).  Whilst no redemption
announcement has been made, the issuer must give between 10 and
60 days of notice.

The rating affirmation of the B1 rating on the Notes reflects the
alignment with the CFR.  More specifically, it stems from the
combination of Infinis's PDR of Ba3-PD and the change in the LGD
assessment to LGD4 from LGD3, principally capturing the capital
structure only comprises bond debt now that Infinis is no longer
owned by Infinis Energy Limited.


The negative outlook continues to reflect uncertainty over the
new owner's financial policy, in particular in the context of the
likely refinancing of the Notes in Q1 2017.


Given the high level of leverage for a single declining asset,
Net Debt to EBITDA is expected to be around 3.0x until the notes
are refinanced, and upwards rating pressure is not anticipated in
the medium term.

Conversely, Moody's could downgrade the ratings if Net Debt to
EBITDA was expected to be materially above 3.0x either because of
(1) a further fall back in wholesale power prices to below our
power price assumption; or (2) the resulting capital structure
following refinancing of the Notes.

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

Infinis plc is the leading generator of electricity from landfill
gas in the UK.  As at Sept. 30, 2016, Infinis plc had 121
operating sites and 7 outsourced sites geographically dispersed
across the UK and had power generation installed capacity of
around 300MW at its sites.  The vast majority of its output is
sold under the Renewable Obligations regime, a renewable energy
incentive scheme in the UK.  The company is owned by 3i
Infrastructure plc.

TIG FINCO: Fitch Affirms 'B-' IDR, Outlook Remains Negative
Fitch Ratings has affirmed TIG Finco PLC's (Towergate) Long-Term
Issuer Default Rating at 'B-'.  The Outlook remains Negative.
Fitch has also affirmed Towergate's GBP75 mil. super senior
secured notes at 'BB-'/'RR1' and downgraded the GBP425 mil.
senior secured notes due 2020 to 'B-'/'RR4' from 'B'/'RR3'.

Over the last year, Towergate has successfully reduced costs
through its transformation plan, but continued declines in sales
led to both falling earnings and leverage remaining high for the
assigned 'B-' IDR.  The Negative Outlook reflects the uncertainty
related to the deleveraging path and tight liquidity position,
partly due to regulatory fines, but supported by disposal
proceeds and monetisation of certain legacy assets by
shareholders.  In particular, progress on the transformation plan
has been slow to date relative to Fitch's expectations and Fitch
sees its delivery as critical to the success of the business.

                       KEY RATING DRIVERS

Delivery of Transformation Plan Critical: As part of Towergate's
turnaround and restructuring plan, the management team has put in
place a three-year transformation programme centred on a leaner
cost structure and a more decentralised management of client
accounts, which represents an unwinding of the original small
business units (SBU) plan in its core broking division.  The
operational improvements from this plan are essential in allowing
Towergate to stabilise its business and resume growth.  Due to
the ongoing nature of this plan, execution risk remains high.
Delays in this programme would negatively impact both the
delivery on revenue growth and improvements in FCF.

Leading Insurance Intermediary, Experienced Management: Towergate
maintains its leading position as an independent insurance
intermediary in the UK, albeit at lower margins.  Since its debt
restructuring completed in April 2015, the group has been able to
both renew and extend capacity with leading insurance providers
and develop new business lines, such as its Bishopsgate London
wholesale business.  Fitch believes the management team's
experience and reputation have been essential in achieving these

Leverage Remains Elevated: FFO adjusted leverage and the FFO
Fixed Charge Coverage ratio remain weak and will not be aligned
with a 'B-' IDR by end-2016; however, we expect these key credit
metrics to return to levels more consistent with the rating, at
around 7.5x and 1.5x, respectively, by end-2017.  The primary
drivers of continued improvements in these credit metrics will be
a reduction in restructuring costs and the materialisation of
cost savings that should result in improving EBITDA margins;
however, profit progression is subject to execution risks and a
longer-than-expected deleveraging path could result in a
downgrade to 'CCC'. Fitch expects EBITDA margins to improve to
17.6% by FYE16 from 16.5% in 2015.  Historically, margins have
been above 20% and remain below those of 'B-' rated peers.

Free Cash Flow Under Pressure: Towergate's cash flow has been
negatively impacted by material exceptional items, such as
restructuring costs, legacy customer redress payments for UCIS
misselling, rebates of upfront payments from insurance companies
and loss corridor payments relating to certain legacy
underwriting actions.  As a result, Towergate remains FCF
negative.  While these payments are difficult to predict, Fitch
expects their magnitude to decrease, which, along with improving
profitability, may support the group's financial flexibility.

Support from Shareholders Key: As part of the 2015 restructuring,
HPS Investment Partners LLC (formerly Highbridge Principal
Strategies LLC) became the lead investor and largest shareholder.
Throughout 2015, HPS played an important role in providing
additional liquidity to Towergate through the sale of The Broker
Network and by securitising a portion of the PaymentShield book.
In combination, these actions injected GBP54m into the business.
Subsequently, Madison Dearborn Partners LLC (MDP) acquired the
second-largest shareholding in Towergate and it could invest
additional equity in 1Q17, as disclosed in MDP's September 2016
tender documents.

Average Recovery Prospects for Senior Noteholders: In its
recovery analysis, Fitch adopted a going-concern approach, as the
resultant enterprise value is higher than the liquidation
approach.  Fitch assumes a post-hypothetical restructuring EBITDA
of GBP47.6 mil., which represents a 17% discount to Fitch's
GBP57.4 mil. pro forma 2016 EBITDA, and use a distressed
EV/EBITDA multiple of 5x, reflecting Towergate's competitive
advantage as it would take time for competitors to mirror its
distribution capabilities, its expertise in niche markets and the
relationship with leading insurers.  Fitch considers the project
Lunar facility as subordinated to the senior secured creditors.
Therefore, Fitch assess senior secured creditors' expected
recoveries at 33%, consistent with an 'RR4' Recovery Rating and a
'B-' bond rating.

                        DERIVATION SUMMARY

Towergate has significantly smaller scale than its publicly rated
insurance broker peers and has a less diverse product line.
While its expertise in niche, high-margin product lines and its
leading position among UK insurance brokers underpin a
sustainable business model, its higher financial risk and
underperforming business lines constrain the rating.


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

   -- Modest positive sales growth during 2017-2019
   -- Transformation plan leads to EBITDA margins improving to
      22% by 2018
   -- GBP65 mil. total ETV payments during 2017-2020
   -- Improving working capital management with outflows
      declining from GBP15 mil. to GBP5 by 2018

                        RATING SENSITIVITIES

Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action (revision of the Outlook to Stable)

   -- Evidence of financial metrics coming back into line with
      'B-' peers, such as FFO fixed charge cover above 1.5x and
      FFO adjusted gross leverage below 7.5x on a sustained basis

   -- Further evidence of shareholder commitment through a
      capital raising or progress towards refinancing high-cost

   -- EBITDA margins trending above 20%

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

   -- Declining liquidity trending below GBP20 mil.

   -- FFO adjusted gross leverage remaining above 7.5x and FFO
      fixed charge cover remaining below 1.5x on a sustained
      basis and sustained negative FCF

   -- Lack of improvement in EBITDA margin, suggesting no
      efficiency gains realized from the restructuring


Constrained Liquidity: At end-3Q16, Towergate had GBP25 mil. in
operating cash and it is expected to receive GBP26 mil. in
proceeds from the Project Lunar facility.  Towergate's liquidity
has been negatively impacted by exceptional items, such as
restructuring costs, regulatory fines and payments to its
insurance partners.  These items are unpredictable and, in
combination with negative FCF, may lead to a further decline in
liquidity.  Offsetting this risk are potential cash inflows from
the release of trapped cash, improved working capital management
and the raising of new equity.

WHITEHAVEN RUGBY: Bid to Wind Up Business Dismissed
Brian Farmer at Press Association reports that a bid by HM
Revenue & Customs to wind up Whitehaven Rugby League club has
been dismissed.

Officials at HMRC had applied for the club to be wound up at a
Bankruptcy & Companies Court hearing in London on Dec. 12, Press
Association relates.

But barrister Fiona Dewar, who was representing HMRC, asked a
judge -- Registrar Christine Derrett -- to dismiss the
application, Press Association discloses.

She gave no indication as to how much the club was said to have
owed, Press Association notes.

Whitehaven Rugby League Club is a semi-professional rugby league
club playing in Whitehaven in West Cumbria.


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

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

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


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

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

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

This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed to
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