TCREUR_Public/170103.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

           Tuesday, January 3, 2017, Vol. 18, No. 002



ZAGREB CITY: S&P Affirms 'BB' ICR & Revises Outlook to Stable


ELIS SA: S&P Affirms 'BB' CCR After Acquisition Announcement


EUROVEGAS: Liquidator Puts Properties Up for Sale


CELTIC LINEN: Social Protection Dept. to Get Just 10% of Claims
* IRELAND: Number of Insolvent Companies in Galway Down to 44
* IRELAND: Examinerships Save More Than 2,000 Jobs in 2016


CLARIS FINANCE 2007: S&P Lowers Rating on Class C Notes to 'BB-'
VENETO BANCA: S&P Raises Rating on Preferred Stock to 'CC'


OXEA SARL: S&P Lowers CCR to 'B' on Weak Performance


HIGHLANDER EURO III: S&P Affirms BB+ Rating on Class E Notes


SFO UNI 2016: Moody's Assigns (P)Ba1 Rating to Class A Notes


AYT HIPOTECARIO V: S&P Affirms 'B-' Rating on Class C Notes
BBVA LEASING 1: Fitch Raises Rating on Class B Notes to 'Bsf'


GATEGROUP HOLDING: S&P Cuts CCR to 'B+' on Acquisition Completion


PRIVATBANK PJSC: Fitch Lowers Issuer Default Rating to 'RD'

U N I T E D   K I N G D O M

CROWN AGENTS: Fitch Lowers LT Issuer Default Rating to 'BB'
EUROSAIL-UK 2007-1NC: S&P Affirms 'B-' Ratings on 3 Note Classes
KWM EUROPE: 40 Partners Quit After Recapitalization Fails
MANSARD MORTGAGES 2007-1: S&P Lifts Rating on Cl. B2a Notes to B



ZAGREB CITY: S&P Affirms 'BB' ICR & Revises Outlook to Stable
S&P Global Ratings revised its outlook on Croatia's capital, the
City of Zagreb, to stable from negative.  S&P affirmed its 'BB'
long-term issuer credit rating on Zagreb.

As a "sovereign rating" (as defined in EU CRA Regulation
1060/2009 "EU CRA Regulation"), the ratings on Zagreb are subject
to certain publication restrictions set out in Art 8a of the EU
CRA Regulation, including publication in accordance with a pre-
established calendar.  Under the EU CRA Regulation, deviations
from the announced calendar are allowed only in limited
circumstances and must be accompanied by a detailed explanation
of the reasons for the deviation.  In the case of Zagreb, the
deviation has been caused by the revision of the outlook on the
Republic of Croatia to stable from negative on Dec. 16, 2016.
The next scheduled rating publication on our rating on Zagreb
will be in 2017.


The rating action on Zagreb follows S&P's revision of the outlook
on Croatia to stable from negative on Dec. 16, 2016.  The long-
term rating on Zagreb remains at the same level as that on the
sovereign.  S&P would not currently rate Croatian local or
regional governments (LRGs) above the sovereign.

The rating on Zagreb reflects the city's weak budgetary
flexibility, financial management, and liquidity position, as
well as the volatile and unbalanced institutional framework for
Croatian LRGs.  Supportive factors are S&P's assessment of
Zagreb's average economy, very strong budgetary performance, low
debt, and moderate contingent liabilities.  S&P assesses Zagreb's
stand-alone credit profile (SACP) at 'bb'.


The stable outlook on Zagreb reflects S&P's expectation that the
city will continue to perform in line with its base-case scenario
over the coming 12 months.

"We might consider a negative rating action on Zagreb if we see
weakening budgetary performance, which could also lead to a
weaker assessment of the city's debt if operating surpluses were
lower than expected in our forecast.  We could also lower the
rating if the city's liquidity position deteriorated due to
dwindling cash reserves, or if we changed our assessment of the
city's financial management because of uncertainties regarding
political leadership," S&P said.

S&P could raise the rating if the city structurally improves its
liquidity position, resulting in free cash consistently exceeding
80% of annual debt service.  The prospect of an upgrade would,
however, also be contingent on S&P taking a similar rating action
on the sovereign, as it considers that Croatian cities cannot be
rated above the sovereign under S&P's criteria.

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's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.

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
Zagreb (City of)
Issuer Credit Rating
  Foreign and Local Currency         BB/Stable/--     BB/Neg./--


ELIS SA: S&P Affirms 'BB' CCR After Acquisition Announcement
S&P Global Ratings affirmed its 'BB' long-term corporate credit
rating on France-based textile and appliances rental provider
Elis S.A.  The outlook is positive.

At the same time, S&P affirmed its 'BB' issue rating on Elis'
EUR800 million senior notes, and EUR850 million of senior
facilities due February 2020.  The recovery rating on the notes
is unchanged at '3', indicating that S&P's recovery expectations
are in the higher half of the 50%-70% range.

The affirmation reflects that S&P continues to believe that Elis'
credit metrics may improve such that they support a higher
rating, even though the company has announced two acquisitions
with a combined enterprise value of EUR510 million, which S&P
expects will temporarily increase its debt leverage.

On Dec. 21, 2016, Elis announced its intention to acquire Spain-
based Indusal and Brazil-based Lavebras, two direct competitors
within the textile and appliance rental market.  To fund the
acquisition, Elis had signed a EUR550 million bridge facility.
S&P understands EUR225 million of this will be taken out by debt
and the remaining EUR325 million will be financed with a planned
rights issue.

In conjunction with the planned acquisitions, Elis had also
announced that it intends to refinance its EUR850 million senior
facilities maturing in 2019 with EUR1.15 billion of senior
facilities maturing in 2022.  S&P understands that Elis closed
the acquisition of Indusal on the signing date,but that the
Lavebras acquisition is still subject to regulatory approval and
other customary closing conditions.

"Indusal and Lavebras both hold leading market positions in their
local markets, and we expect that if the acquisitions go ahead as
planned in the next couple of months, the combined operations
will allow Elis to considerably strengthen its local presence in
the markets, which is in line with Elis' stated strategy of
contemplating acquisitions to achieve market leadership.  This is
particularly important in an industry where network density can
be a key competitive advantage as it enables companies to take on
large-scale projects and allows more efficient operations due to
shorter transfer periods.  We also note positively that the two
acquisitions continue to lessen Elis' dependency on its domestic
French market.  Nevertheless, we note that pro forma for the
contemplated transactions, Elis' revenue generation in France
remains significantly above 50%, which we consider as a
constraint for the business risk profile in particular given our
relatively sluggish economic growth expectations for the French
economy," S&P said.

"Our aggressive financial risk profile assessment reflects our
view that Elis will generate funds from operations (FFO) to debt
of about 20% and debt to EBITDA of 4.0x-4.5x in 2016, improving
to above 20% and 3.5x-4.0x in 2017, respectively.  We also take
into account the group's comparatively weaker free operating cash
flow to debt metrics, which we estimate at about 5% in 2016,
improving to about 6%-7% in 2017.  Elis' free operating cash flow
(FOCF) is held back by the relatively high level of capital
expenditures (capex; 18% on average over the past three years)
compared with peers in the wider business and consumer services
sector.  We, therefore, would likely need to see stronger
operating performance than we currently expect, coupled with
disciplined financial policies, to see FOCF to debt increase to
about 10%, a level that would be consistent with a 'BB+' rating.
We also see certain execution risks related to the planned
capital increase, which could hinder the group's ability to
improve its credit metrics in the short term," S&P said.

The positive outlook reflects S&P's view that Elis will be able
to maintain its steady organic growth along with broadly stable
operating margins to reduce leverage following the two
acquisitions.  S&P sees potential for strengthening credit
metrics that would support a higher rating.  In S&P's view, this
hinges on a continued strong operating performance, smooth
integration of the two acquisitions, well-controlled investments,
and successful placement of the rights issue.

S&P could consider an upgrade in the next 12 months if the group
integrates recent acquisitions smoothly, improves its margins in
those geographies faster than S&P anticipates, and maintains
disciplined financial policies and contained investments, which
could allow Elis to generate stronger FOCF than S&P currently
forecasts.  S&P considers FOCF to debt of about 10% and FFO to
debt comfortably above 20% to be commensurate with a higher

S&P could take a negative rating action if it observes
acceleration of litigation affecting the Brazilian entities,
significantly harming the company's brand and leading to the loss
of key contracts and deterioration in credit metrics, with FFO to
debt dropping to 10%-12%.  A more aggressive financial policy,
translating into adjusted debt to EBITDA moving toward 5x, could
also lead S&P to consider a downgrade.


EUROVEGAS: Liquidator Puts Properties Up for Sale
MTI-Econews reports that Hungary's state-owned liquidator
Nemzeti Reorganizacios Nonprofit has put up for sale properties
for more than HUF6 billion that are part of the failed Eurovegas
casino project near the border with Austria.

Nemzeti Reorganizacios is offering some 150 hectares owned by
Ipari Terulet Bezenye for HUF3 billion and a little more than 150
hecatres owned by Eurovegas for HUF3.4 billion, MTI-Econews

Austrian developer Hans Asamer and other investors had earlier
planned to build a EUR300 million casino at the site, MTI-Econews
relays.  The project lost its casino license at the end of 2014
and it went bust in July of last year, MTI-Econews recounts.

Eurovegas was originally expected to open in 2010, but
construction was delayed due to the global financial and economic
crisis, MTI-Econews relates.

S&P Global Ratings said that it revised to positive from stable
its outlook on Hungary-based Magyar Takarekszovetkezeti Bank ZRt.
(Takarekbank).  At the same time, S&P affirmed its 'BB/B' long-
and short-term counterparty credit ratings on the bank.

Takarekbank recently enacted a radical transformation through
tighter integration with the group of Hungarian savings
cooperatives.  S&P expects the bank's overhaul of its business
model and enterprise risk management to gradually improve its
efficiency and lead to higher profitability.

S&P now takes into account the loss absorption capacity of the
cooperatives' joint capital coverage fund, the Integration
Organisation of Cooperative Credit Institutions (IOCCI).  As a
result, S&P has revised its assessment of the group's capital and
earnings to strong, reflecting its higher equity base.

Following the recent restructuring of the group, S&P now feels
confident that this reserve is fully fungible, loss absorbing on
a going-concern basis, and part of the group's equity.  S&P's
assessment is underpinned by the the joint and several guarantee
across the group and also by the regulatory inclusion of IOCCI
reserves for reporting and prudential ratios.

Including this reserve, S&P's risk-adjusted capital (RAC) ratio
forecast for Takarekbank is in the range of 10.75%-11.25% for the
next 12-18 months.

At the same time, S&P believes its improved RAC ratio does not
fully capture all of the group's risks, particularly those
relating to still-high stock of nonperforming loans as well as
the complex decentralized group structure and ongoing

The group is less exposed to domestic historical asset quality
weaknesses, such as mortgages in foreign currency and large
project finance loans compared to local peers.  But, S&P believes
the group's overall asset quality still compares poorly with
international peers that face similar economic risk.  Asset
quality is also weaker at the savings cooperatives than the
central bank institution, Takarek.  Furthermore, reserve coverage
is low compared to the international peer average, in S&P's view.

"We continue to assess Takarekbank's group credit profile (GCP)
at 'bb+' and view the bank as core for the group.  The ratings on
the bank also factor in our view that it compares poorly, in
terms of capital sustainability and its earnings buffer ratio (as
measured under our methodology), with banks that have a similar
stand-alone credit profile.  We apply a one-notch negative
adjustment to arrive at the rating on Takarekbank to reflect our
view that the bank is a relatively poor performer in its peer
group," S&P said.

The positive outlook on Takarekbank reflects S&P's expectation
that the continuing integration and restructuring of the group is
likely to lead to a gradual improvement of the group's
performance and internal capital generation capacity, which S&P
expects to become visible over the next 12 months.  The bank now
operates more closely in line with the savings cooperatives'
group strategy, with harmonized marketing, product, and IT
system.  S&P thinks that this will create stronger risk
management, better efficiency, and wider business opportunities
over time, leading it to compare more favorably with
international peers.

The positive outlook also reflects the improving domestic
economic environment in Hungary, which is likely to contribute to
Takarekbank's improving performance.

S&P could raise the ratings on the bank if S&P concludes that the
group's restructuring results in a sustainable, material
improvement of efficiency and earnings, as indicated by S&P's
earnings buffer and capital sustainability metrics.  S&P could
also take a positive action if conditions in the domestic economy
further improve within the next 12 months, while credit demand
picks up, translating into better profitability and earnings for
the group.  A material improvement in risk metrics could also act
as a driver of an upgrade.

Preconditions for the upgrade of Takarekbank would be stable
capitalization and S&P's unchanged view of Takarekbank's
importance to the group.

Conversely, S&P would revise the outlook to stable over the next
12 months if the group's profitability and earnings buffer remain
below peers.  S&P would also consider an outlook revision if,
contrary to S&P's base-case expectations, we observe a weakening
in Takarekbank's links with the savings cooperatives group or if
tail events materially depleted the bank's capitalization.


CELTIC LINEN: Social Protection Dept. to Get Just 10% of Claims
Gavin Daly at The Sunday Times reports that the Department of
Social Protection is owed EUR1.4 million by Celtic Linen, a
Wexford company that emerged from examinership in November, but
will receive just 10% of the debt under a court-approved rescue

According to The Sunday Times, a scheme of arrangement drawn up
by the examiner to the company, Tom Kavanagh -- -- of Deloitte, shows the department is a
preferential creditor but will face a EUR1.26 million shortfall
on its debt.  The Revenue Commissioners is owed more than
EUR971,000 by Celtic Linen but will be paid EUR155,815 under the
scheme, The Sunday Times discloses.

Celtic Linen, which employs 380 people, sought examinership in
September amid mounting losses, The Sunday Times recounts.  It
has been taken over by investors David Raethorne and Matt Scaife
of Causeway Capital, The Sunday Times relates.

* IRELAND: Number of Insolvent Companies in Galway Down to 44
Enda Cunningham at Connacht Tribune, citing statistics provided
by, reports that the number of companies declared
insolvent in Galway City and County in the first eleven months of
2016 has dropped by almost one quarter on the same period last

And the number of new companies set up during the same period saw
an increase, Connacht Tribune notes.

Statistics compiled for the Connacht Tribune for January to the
end of November -- the most up-to-date figures available -- shows
there were a total of 44 insolvencies recorded in Galway.

That figure is down from 57 for the same nine-month period in
2015, a reduction of almost 23%, Connacht Tribune discloses.

The total figure includes liquidations, receiverships and
examinerships and focuses on companies, which were not able to
repay their debts as they fell due, Connacht Tribune states.

* IRELAND: Examinerships Save More Than 2,000 Jobs in 2016
Irish Independent, citing Baker Tilly Hughes Blake's Examinership
Index 2016, reports that more than 2,000 jobs were saved in 2016
as a result of successful Examinerships, including more than a
quarter in small and medium enterprises (SMEs).

According to Irish Independent, the index shows 2,132 jobs were
saved through Examinations during the year.  A quarterly
breakdown reveals that the largest number of jobs were saved in
the third quarter of the year, when Debenhams successfully exited
an Examinership process, helping preserve 1,415 jobs in that
company alone, Irish Independent discloses.

Neil Hughes -- -- managing partner at
Baker Tilly Hughes Blake, said there was a decrease in the number
of jobs saved in 2016 at SMEs compared with 2015, because fewer
companies got into trouble as the economy recovered, Irish
Independent relates.


CLARIS FINANCE 2007: S&P Lowers Rating on Class C Notes to 'BB-'
S&P Global Ratings lowered to 'BB- (sf)' from 'BB (sf)' its
credit rating on the Claris Finance 2007 S.r.l.'s class C notes.
At the same time, S&P has affirmed its 'AA- (sf)' and 'A (sf)'
ratings on the class A and B notes, respectively.

The rating actions follow S&P's credit and cash flow analysis of
the most recent transaction information that S&P has received on
the November 2016 interest payment date.  S&P's analysis reflects
the application of its Italian residential mortgage-backed
securities (RMBS) criteria and S&P's structured finance ratings
above the sovereign criteria.

Collateral performance has improved over the past two years in
terms of arrears.  As of November 2016, 4.17% of the performing
balance is in arrears, slightly decreasing from the 8.60%
observed in S&P's previous review, and remains below the peak
(9.25%) experienced by the transaction in February 2010.

S&P's credit analysis results show a decrease in both the
weighted-average foreclosure frequency (WAFF) and in the
weighted-average loss severity (WALS) for each rating level
compared with those at S&P's previous review.  The decrease in
the WAFF is mainly due to the higher weighted-average seasoning
and the decrease in arrears.  As for the WALS, the decrease
results from the lower market value declines applied and the
lower weighted-average current loan-to-value ratio compared with
those at S&P's previous review.

In S&P's opinion, the outlook for the Italian residential
mortgage and real estate market is not benign and S&P has
maintained its expected 'B' foreclosure frequency assumption at
2.55% when S&P applies its RMBS criteria, to reflect this view.

Rating level       WAFF (%)    WALS (%)
AAA                   17.82       11.95
AA                    14.00        9.35
A                     10.48        4.92
BBB                    8.37        3.11
BB                     6.43        2.17
B                      4.41        2.00

The available credit enhancement for all classes of notes has
increased since S&P's previous review.

This transaction features a reserve fund, which currently
represents 6.5% of the outstanding performing balance of the
mortgage assets.  It can no longer amortize, as cumulative
defaults have breached the transaction's amortization conditions
by exceeding 3.9%.

When the cumulative default rates in Claris Finance 2007 reach
certain levels, the issuer may defer interest payments on the
class B and C notes.  The trigger is 13.8% of the collateral
balance at closing for the class B notes, and 8.7% for the class
C notes.  At the end of the latest collection period, cumulative
gross defaults were 7.18% of the initial collateral balance.

The interest rate and basis swaps are not in line with S&P's
current counterparty criteria, but are in line with superseded
counterparty criteria.  S&P therefore did not give benefit to the
swaps in its analysis at rating levels one notch above the long-
term 'A' issuer credit rating on Societe Generale as the swap
counterparty, i.e., above a 'A+' rating level.  S&P considered
appropriate cash flow stresses to address interest rate and basis
risk in the transaction.

As S&P's unsolicited foreign currency long-term sovereign rating
on Italy is 'BBB-', the application of S&P's RAS criteria caps at
'AA- (sf)' its rating on the class A notes and at 'A (sf)' S&P's
rating on the class B notes.

Taking into account the results of S&P's updated credit and cash
flow analysis and the application of its RAS criteria, S&P
considers the available credit enhancement for the class A and B
notes to be commensurate with S&P's currently assigned ratings.
S&P has therefore affirmed its 'AA- (sf)' rating on the class A
notes and its 'A (sf)' rating on the class B notes.

At the same time, S&P has lowered to 'BB- (sf)' from 'BB (sf)'
its rating on the class C notes due to an increase in the
probability of an interest deferral trigger breach and
considering the results of S&P's cash flow analysis.

Claris Finance 2007 is an Italian RMBS transaction, which closed
in February 2007 and securitizes a pool of first-ranking mortgage
loans that Veneto Banca SCPA, Banca di Bergamo, and Banca
Meridiana originated.  The mortgage loans are mainly located in
the Veneto and Apulia regions and the transaction comprises loans
granted to prime borrowers.


Class              Rating
            To                From

Claris Finance 2007 S.r.l.
EUR517.025 Million Asset-Backed Floating-Rate Notes

Ratings Affirmed

A           AA- (sf)
B           A (sf)

Rating Lowered

C           BB- (sf)          BB (sf)

VENETO BANCA: S&P Raises Rating on Preferred Stock to 'CC'
S&P Global Ratings said that it raised its issue rating on the
EUR200 million noncumulative perpetual preferred stock issued by
Veneto Banca SpA to 'CC' from 'D' (default) (ISIN: XS0337685324).

On Dec. 21, 2016, Veneto Banca resumed full coupon payment due on
its EUR200 million hybrid instrument.  As a result, S&P has
raised its rating on the instrument to 'CC' from 'D'.

The 'CC' ratings reflect S&P's view that:

   -- Despite resumption of coupon payments for this year, the
      bank will likely suspend next year's coupon payment, absent
      any unforeseen positive development over the next 12
      months.  S&P considers this default risk to be consistent
      with a 'CCC' scenario under our criteria.  The notes are
      subordinated, for which S&P deducts two notches.

S&P expects the bank to remain loss making in 2016 and 2017.
Therefore, absent any measures taken to strengthen its capital to
a level sufficient to cover these losses, S&P expects Veneto
Banca's total capital ratio to decrease going forward.  Veneto
Banca recently communicated an updated capital requirement
resulting from the European Central Bank's Supervisory Review and
Evaluation Process (SREP).  As a result, the bank has to maintain
a 12.25% transitional total capital ratio starting from March 31,
2017.  S&P notes that this ratio was 12.57% at end-June 2016 --
very close to the threshold.


OXEA SARL: S&P Lowers CCR to 'B' on Weak Performance
S&P Global Ratings lowered its long-term corporate credit rating
on oxo intermediates and derivatives producer OXEA S.a.r.l.,
Luxembourg to 'B' from 'B+'.  The outlook is stable.

At the same time, S&P lowered its issue ratings on OXEA's senior
secured revolving credit facility (RCF) and first-lien term loans
to 'B' from 'B+'.  S&P revised its recovery ratings on the
existing first-lien revolving credit facility (RCF) and term
loans B-1 and B-2 to '4' from '3', indicating S&P's expectations
of recovery in the higher half of the 30% to 50% range.

S&P also assigned a 'B' long-term corporate credit rating to
OXEA's core subsidiaries OXEA Finance & Cy S.C.A., Oxea Finance
LLC (Delaware), and Oxea Corp.  The outlook on all three entities
is stable.

The downgrade reflects that S&P expects the company's S&P Global
Ratings-adjusted debt to EBITDA will be high at about 6.5x-7.0x
for 2017 and 2018, due to weaker-than-expected operating
conditions and OXEA's continued high capital expenditures

OXEA's results, in particularly in its intermediates business,
have been under pressure in 2016, due to challenging business
conditions in global oxo chemicals markets. New capacities
brought on stream by competitors in the Middle East and Asia
further deteriorated the already unfavorable supply-demand
balance and led to severe pricing pressure and suppressed
margins.  While OXEA's oxo derivatives business -- which produces
specialty esters, carboxylic acids, and polyols -- benefited from
strong demand in key markets, such as safety glass, synlubes, and
cosmetics, and increased its margins in 2016 due to lower
feedstock costs, this has not been sufficient to balance the
compression in intermediates.

At the same time, S&P now forecasts negative free cash flow in
2017 and 2018, as a result of the lower operating cash flow and
the high capex of more than EUR100 million S&P anticipates for
2017 and about EUR80 million in 2018, mainly due to the 140,000
ton per year capacity expansion in n-Propanol and Propionaldehyde
at its U.S. oxo intermediates plant in Bay City, Texas.

The stable outlook on OXEA reflects S&P's expectations that the
company will report relatively stable operating performance with
adjusted EBITDA of about EUR160 million in 2017 and maintain
adequate liquidity over the next 12 months.  This is despite the
continued challenging environment for oxo chemicals and S&P's
expectation of the company's peak capex spending in 2017.

S&P could lower the rating if OXEA's operating performance
further weakened, if its liquidity deteriorated, for example due
to negative free operating cash flow materially exceeding the
EUR50 million-EUR60 million S&P forecasts for 2017, or if it
there was a change in its assessment of shareholder support from

S&P does not expect to raise the ratings over the next 12-18
months given its view of OXEA's highly leveraged capital
structure and S&P's assumption of limited EBITDA upside in 2017.
An upgrade could materialize over time, however, if OXEA
demonstrates a track record of sustainable improvement in
operating performance, with EBITDA of at least EUR180 million-
EUR190 million and adjusted debt to EBITDA of less than 6x.


HIGHLANDER EURO III: S&P Affirms BB+ Rating on Class E Notes
S&P Global Ratings raised its credit ratings on Highlander Euro
CDO III B.V.'s class B and C notes.  At the same time, S&P has
affirmed its ratings on the class A, D, and E notes.

The rating actions follow S&P's assessment of the transaction's
performance using data from the latest trustee report.

Highlander Euro CDO III's senior notes have been amortizing since
the end of its reinvestment period in May 2014.  Since S&P's
Nov. 18, 2015 review, the aggregate collateral balance has
decreased by approximately EUR105 million, to EUR390.93 million
from EUR495.12 million.

S&P has subjected the transaction's capital structure to a cash
flow analysis to determine the break-even default rates (BDRs)
for each rated class of notes at each rating level.  The BDR
represents our estimate of the maximum level of gross defaults,
based on our stress assumptions, that a tranche can withstand and
still fully repay the noteholders.  In S&P's analysis, it used
the portfolio balance that it considers to be performing
(EUR366.16 million), the current weighted-average spread (3.72%),
the principal cash balance (EUR24.77 million), and the weighted-
average recovery rates calculated in line with S&P's corporate
collateralized debt obligation (CDO) criteria.  S&P applied
various cash flow stresses, using our standard default patterns,
in conjunction with different interest rate and currency stress

The available credit enhancement has increased for all of the
rated notes due to the transaction's structural deleveraging post
its reinvestment period.  Taking into account the outstanding
cash balance, which will be used to amortize the class A notes at
the next payment date, credit enhancement for the class A notes
currently stands at 61.5%.  The increased available credit
enhancement is the main rating driver for today's upgrades.

The weighted-average spread earned on the assets has marginally
decreased to 372 basis points (bps) from 383 bps since S&P's
previous review.  At the same time, the number of distinct
obligors in the portfolio has reduced to 73 from 88 over the same
period, due to asset repayments.  The top 10 largest obligors
account for 33% of the portfolio.

Highlander Euro CDO III has entered into asset swap agreements
with JPMorgan Chase Bank N.A., to hedge any currency risk from
non-euro-denominated assets (6.96% of the portfolio balance).
The documented downgrade provisions in these asset swap contracts
do not fully comply with S&P's current counterparty criteria.
S&P has therefore applied currency stresses on these non-euro-
denominated assets to test the effect on S&P's ratings on the
class A and B notes (rated above the long-term issuer credit
rating on JPMorgan Chase Bank) if the counterparty failed to

In S&P's opinion, the increased available credit enhancement for
the class B and C notes is now commensurate with higher ratings
than those currently assigned.  S&P has therefore raised its
ratings on these classes of notes.

The available credit enhancement for the class A, D, and E notes
continues to be commensurate with their currently assigned
ratings.  S&P has therefore affirmed its ratings on these classes
of notes.

Highlander Euro CDO III is a cash flow collateralized loan
obligation (CLO) transaction that securitizes loans granted to
primarily speculative-grade corporate firms.  The transaction
closed in April 2007 and CELF Advisors LLP is the collateral
manager.  S&P's ratings on the class A and B notes address the
timely payment of interest and the ultimate payment of principal.
S&P's ratings on the class C, D, and E notes address the ultimate
payment of principal and interest.


Class             Rating
            To             From

Highlander Euro CDO III B.V.
EUR800 Million Floating-Rate And Deferrable Floating-Rate Notes

Ratings Affirmed

A           AAA (sf)
D           BBB+ (sf)
E           BB+ (sf)

Ratings Raised

B           AAA (sf)       AA+ (sf)
C           AA+ (sf)       A+ (sf)


SFO UNI 2016: Moody's Assigns (P)Ba1 Rating to Class A Notes
Moody's Investors Service has assigned the following provisional
rating to the notes to be issued by LLC "SFO UNI SME 2016" ("the

  RUB5,280 million Class A Notes due 2031, Provisional Rating
  Assigned (P)Ba1 (sf)

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

LLC "SFO UNI SME 2016" is a cash securitisation of RUB8.0 billion
portfolio consisting of term loans and credit lines originated by
Uniastrum Bank ("Uniastrum", not rated) and granted to individual
entrepreneurs and small and medium-sized enterprises (SME)
domiciled in Russia.

This is the second domestic issuance of SME ABS notes in Russia,
and the first securitisation transaction launched by Uniastrum.

The Issuer is incorporated as a special financial organisation
(SFO) under the laws of the Russian Federation, and will issue
one class of RUB-denominated notes to finance the purchase of
receivables arising from Russian SME term loans and credit lines
originated by Uniastrum. Subordination is achieved by a sub-loan
provided by Uniastrum.


According to Moody's, the provisional rating takes into account,
among other factors, (i) a loan-by-loan evaluation of the
underlying portfolio, complemented by the historical performance
information as provided by Uniastrum, (ii) the structural
features of the transaction, which include the subordination of
the sub-loan granted by Uniastrum which provides credit support,
and an amortising cash reserve equal to 4.14% of the original
pool balance at closing providing liquidity and credit support at
maturity; and (iii) the sound legal structure of the transaction
under the Russian securitisation framework.

Moody's notes as credit strengths the mechanism that re-directs
excess spread to repay principal outstanding of the Notes
(accelerated amortisation). Such mechanism partially mitigates
losses to the noteholders in scenarios where (i) cumulative
defaults on the pool exceed 15% of the original pool balance, or
(ii) a servicer replacement event occurs. In addition, the
transaction is not exposed to interest rate type mismatch as both
assets and Notes bear fixed interest rate. Also, assets and Notes
are denominated in roubles, hence, the transaction is not exposed
to currency risk.

On the other hand, Moody's notes that the transaction features a
number of credit weaknesses, including (i) strong linkage to
Uniastrum, acting in multiple roles in the transaction; (ii) the
operational complexity and prolonged amortisation profile arising
from the transaction purchasing additional drawdowns on existing
credit lines; a prolonged amortisation profile increases
uncertainty over the future performance of the pool; and (iii)
significant debtor concentration in the construction and building
sector and exposure to refinanced loans, representing
respectively 34.2% and 27.3% of the portfolio as of September

Portfolio characteristics and key collateral assumptions:

As of September 2016, the portfolio principal balance amounted to
RUB 8.87 billion. The portfolio is composed of 3,281 contracts
granted to 1,045 borrowers (961 when accounting for borrower
groups), comprising individual entrepreneurs and SMEs domiciled
in Russia. In terms of product type, around 1.6% corresponds to
standard loans and 98.4% to credit lines (both revolving 16.2%
and non-revolving 82.2%). The assets were originated between 2008
and 2016, and have a weighted average seasoning of 2.1 years and
a weighted average remaining term of approximately 4.1 years.
Around 92% are secured by real estate property. The weighted
average interest rate is 18.0% (the entire the pool consists of
fixed-rate contracts).

Moody's derived the key collateral assumptions via the analysis
of: (i) the characteristics of the loan-by-loan portfolio
information, complemented by the available historical vintage
data; (ii) the potential fluctuations in the macroeconomic
environment during the lifetime of this transaction; and (iii)
the portfolio concentrations in terms of industry sectors and
single obligors. Moody's assumed the mean cumulative default
probability of the portfolio to be equal to 29.4% with a
coefficient of variation (i.e. the ratio of standard deviation
over mean default rate) of around 38.4%. The rating agency has
assumed stochastic recoveries with a mean recovery rate of 45%, a
standard deviation of 20% and a mean recovery time of around 30
months after the default occurrence. In addition, Moody's has
assumed the prepayments to be 15% per year. These assumptions
correspond to a portfolio credit enhancement of 29.8%.

Counterparty risk:

Uniastrum will act as the servicer of the portfolio, with
Promsvyazbank (PSB, Ba3/NP, Negative Outlook) assuming the role
of back-up servicer and ready to step in as needed upon a
servicer termination event.

Moody's has considered commingling risk by modelling the loss of
the equivalent of two month collection upon servicer insolvency,
assuming a recovery rate of 45%. Furthermore, Moody's has assumed
a set-off exposure due to deposits of approximately 2.8% (net of
recoveries) computed on the initial portfolio balance.

The main source of uncertainty in the analysis relates to the
possibility of further purchasing drawdowns on credit lines,
which may alter the weight of the debtors in the pool and create
uncertainty on the amortisation profile of both the pool and the
Notes. However, Moody's believes that (i) the asset eligibility
and portfolio criteria in place; and (ii) the accelerated
amortisation mechanism, mitigate the risk of the credit profile
of the portfolio deteriorating. In addition, the risk inherent in
purchasing further drawdowns on credit lines is mitigated, among
others, by the generally short-term nature of these products.

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

Factors or circumstances that could lead to a downgrade of the
rating affected by today's action would be (1) the worse-than-
expected performance of the underlying collateral; (2)
deterioration in the credit quality of the counterparties and (3)
an increase in Russia's sovereign risk.

Factors or circumstances that could lead to an upgrade of the
rating affected by today's action: a better-than-expected
performance of the underlying collateral and/or a decrease in the
counterparty risk.

Stress Scenarios:

Moody's also tested other set of assumptions under its Parameter
Sensitivities analysis. If the assumed mean default probability
of 29.4% used in determining the initial rating was changed to
35% and the mean recovery rate of 45% was changed to 35%, the
model-indicated rating for Class A Notes of Ba1(sf) would be
B1(sf). Parameter sensitivities provide a quantitative, model-
indicated calculation of the number of notches that a Moody's-
rated structured finance security may vary if certain input
parameters used in the initial rating process differed. The
analysis assumes that the deal has not aged. It is not intended
to measure how the rating of the security might migrate over
time, but rather, how the initial rating of the security might
differ as certain key parameters vary.

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

Methodology Underlying the Rating Action:

The principal methodology used in this rating was "Moody's Global
Approach to Rating SME Balance Sheet Securitizations" published
in October 2015.


AYT HIPOTECARIO V: S&P Affirms 'B-' Rating on Class C Notes
S&P Global Ratings raised to 'AA- (sf)' from 'BBB (sf)' and to
'BBB (sf)' from 'B (sf)' its credit ratings on AyT Hipotecario
Mixto V, Fondo de Titulizacion de Activos' class A and B notes,
respectively.  At the same time, S&P has affirmed its 'B- (sf)'
rating on the class C notes.

The ratings actions follow S&P's credit and cash flow analysis of
the most recent transaction information that it has received and
reflect the transaction's structural features.  S&P's analysis
reflects the application of its Spanish residential mortgage-
backed securities (RMBS) criteria and S&P's structured finance
ratings above the sovereign criteria.

"We have also considered our Oct. 2, 2015 upgrade of the Kingdom
of Spain (BBB+/Stable/A-2), which, due to an error, we had not
previously considered.  We previously considered our rating on
the class A notes to be linked to our rating on the swap
counterparty, when in fact it should have been delinked from our
rating on the swap counterparty as rating results were higher
without giving credit to the swap support and in line with our
'BBB+' foreign currency long-term sovereign rating on Spain
following our RAS analysis.  The upgrade of the class A notes
corrects this error and additionally considers the stronger
credit quality of the assets and credit enhancement levels," S&P

Long-term delinquencies (defined in this transaction as loans in
arrears for more than 90 days, excluding defaults) have decreased
to 0.63% from 3.08% since S&P's previous full review in January
2015.  However, S&P has continued to observe a continuous roll-
over of long-term delinquencies into defaults since Q1 2015.
Defaults in this transaction are defined as assets being
delinquent for more than 18 months or classified as such by the
trustee (Intermoney Titulizacion S.G.F.T.).

In S&P's opinion, the outlook for the Spanish residential
mortgage and real estate market is not benign and S&P has
therefore increased its expected 'B' foreclosure frequency
assumption to 3.33% from 2.00%, when S&P applies its RMBS
criteria, to reflect this view.  S&P bases these assumptions on
its expectation that economic growth will mildly deteriorate,
unemployment will remain high, and the increase in house prices
will slow down in the remainder of 2016 and in 2017.

After applying S&P's RMBS criteria to this transaction, its
credit analysis results show a decrease in both the weighted-
average foreclosure frequency (WAFF) and weighted-average loss
severity (WALS) for each rating level based on the higher
seasoning of the pool, the transaction's improved performance,
and the lower current loan-to-value (LTV) ratios.

Rating level     WAFF (%)    WALS (%)
AAAA                24.21       21.04
AA                  18.72       17.76
A                   15.66       11.96
BBB                 11.61        9.14
BB                   7.85        7.33
B                    6.72        5.78

Credit enhancement, if S&P accounts for the level of available
performing collateral and cash reserve in the transaction, has
increased to 14.10% from 10.22% since S&P's previous review for
the class A notes, to 8.60% from 5.92% for the class B notes, and
to 2.56% from 1.21% for the class C notes.

S&P has not given benefit to the swap counterparty in its
analysis at rating levels above our long-term 'BBB' issuer credit
rating (ICR) on Cecabank S.A. because it did not take remedy
actions when due.  Due to the credit enhancement levels and
credit quality of the assets, the class A notes can continue to
be delinked from S&P's rating on Cecabank.  The class B and C
notes continue to rely on the support of the swap and S&P's
rating on the class B notes is capped at its long-term 'BBB'
rating on Cecabank.

"Under our RAS criteria, we applied a hypothetical sovereign
default stress test to determine whether a tranche has sufficient
credit and structural support to withstand a sovereign default
and so repay timely interest and principal by legal final
maturity," S&P noted.

Following the application of S&P's RAS criteria and its RMBS
criteria, it has determined that its assigned rating on each
class of notes in this transaction should be the lower of (i) the
rating as capped by S&P's RAS criteria and (ii) the rating that
the class of notes can attain under its RMBS criteria.  In this
transaction, the rating on the class A notes is constrained by
S&P's RMBS criteria, which is in line with the rating as capped
by S&P's RAS criteria--at four notches above S&P's 'BBB+' long-
term rating on Spain.

Taking into account the results of S&P's credit and cash flow
analysis and the application of its RMBS and RAS criteria, S&P
considers that the available credit enhancement for the class A,
B, and C notes is commensurate with 'AA- (sf)', 'BBB (sf)', and
'B- (sf)' ratings, respectively.  S&P has therefore raised to
'AA- (sf)' from 'BBB (sf)' its rating on the class A notes and to
'BBB (sf)' from 'B (sf)' S&P's rating on the class B notes.  S&P
has also affirmed its 'B- (sf)' rating on class C notes.  The
rating outcomes are driven by the stronger credit quality of the
assets and credit enhancement levels.

AyT Hipotecario Mixto V is a Spanish RMBS transaction, which
closed in July 2006 and securitizes first-ranking mortgage loans.
Caja General de Ahorros de Granada (now CaixaBank S.A.), Caja de
Ahorros y Monte de Piedad de Navarra (now Banco Mare Nostrum),
and Unnim Banc (now Banco Bilbao Vizcaya Argentaria S.A.)
originated the pool, which comprises loans granted to Spanish
residents, mainly located in Navarra, Andalucia, and Catalonia.


AyT Hipotecario Mixto V, Fondo de Titulizacion de Activos
EUR675 Million Mortgage-Backed Floating-Rate Notes

Class             Rating
            To               From

Ratings Raised

A           AA- (sf)          BBB (sf)
B           BBB (sf)          B (sf)

Rating Affirmed

C           B- (sf)

BBVA LEASING 1: Fitch Raises Rating on Class B Notes to 'Bsf'
Fitch Ratings has upgraded BBVA Leasing 1, FTA's class B notes
and affirmed class C notes as:

  EUR65.5 mil. Class B notes upgraded to 'Bsf' from 'CCsf';
   Outlook Stable

  EUR61.3 mil. Class C notes affirmed at 'Csf'; Recovery Estimate

BBVA Leasing 1 FTA is a securitisation of a pool of leasing
contracts originated by Banco Bilbao Vizcaya Argentaria S.A.
(BBVA; A-/Stable/F2) extended to non-financial small- and medium-
enterprises domiciled in Spain.  BBVA (A-/Stable/F2) is also
servicer, account bank and swap provider for the transaction.

                          KEY RATING DRIVERS

Stable Performance

Transaction delinquency levels have remained low as leases more
than 90 days past due represented 2.4% of the outstanding balance
as of end-October 2016.  Although this amount was 0.6% as of end-
October 2015, 34% of the outstanding amount of non-defaulted
assets have amortised since then.  Cumulative defaults have
remained stable at 7% of the initial portfolio.

Reduced Outstanding Balance
Non-defaulted assets amounted to EUR76.9 mil. as of the last
payment date in November 2016 and represent 3.1% of the initial
portfolio.  This results in higher portfolio concentration than
in a typical granular deal.  Fitch incorporated the risk of
higher defaults at the end of the transaction life and irregular
recoveries by increasing the default multiple to 6x and
increasing the recovery stress to 60% in a AAAsf scenario.
Furthermore, Fitch assumed a remaining life default base case of
15% to account for a potential scenario of back-loaded defaults
as the deal is close to the end of its life.

Credit Enhancement Increase
The upgrade of the class B notes reflects increased credit
enhancement (CE) due to asset amortization, increased recoveries
and the low defaults over the last year.  As of end-November
2016, the class B notes' CE, provided entirely by
overcollateralization, was 14.8% compared with negative CE a year
ago as the class B notes were not supported by sufficient
performing collateral balance.

Class C Under-collateralized
The affirmation of class C notes at 'Csf' reflects an outstanding
principal deficiency ledger (PDL) of EUR49.9 mil.  With limited
excess spread, coupled with slow incoming recoveries, it is
highly unlikely that the PDL would be reduced to zero.
Therefore, the default of the class C notes is deemed inevitable.
Furthermore, the payment in full of the class C notes is subject
to repayment of its interest, which is currently being deferred
and its cumulative amount stands at EUR3.2 mil.

                        RATING SENSITIVITIES

The rating of the class B notes would be downgraded if the
default base case increases by 10% or the recovery base case
decreases by 30%.  The rating on the class C notes would not be
affected by stressed base case assumptions as it already is at a
distressed level


GATEGROUP HOLDING: S&P Cuts CCR to 'B+' on Acquisition Completion
S&P Global Ratings lowered to 'B+' from 'BB-' its long-term
corporate credit rating on Switzerland-based airline solutions
provider gategroup Holding AG.

The downgrade follows the announcement that HNA Group has
finalized the acquisition of gategroup.  S&P now applies its
group rating methodology to the HNA Group, and S&P assess the
creditworthiness of the combined diversified but highly leveraged
HNA Group to be commensurate with a 'b+' group credit profile
(GCP).  Under S&P's group rating methodology, it generally do not
rate a subsidiary higher than the GCP, even if the stand-alone
credit profile (SACP) of the subsidiary is higher than the GCP.
This is mainly because in S&P's view the weaker parent could
divert assets from its subsidiary or burden it with liabilities
during periods of financial stress.  In addition, the
subsidiary's flexibility with regard to raising debt and capital
could also be significantly reduced.  S&P considers gategroup to
be a moderately strategic subsidiary of the HNA Group because it
provides backward integration to its airline businesses and
complements its other at-airport services subsidiaries.

S&P assesses gategroup's SACP at 'bb-'.  In S&P's view,
gategroup's competitive position is marginally improved under
100% ownership of its new parent, with potentially more
opportunities for growth especially in Asia.  S&P forecasts that
FFO to debt will be almost 25% at year-end 2016, which is a
significant improvement compared to 13% in 2015.  The improvement
stems from enhanced operational performance driven by cost-saving
initiatives and reduced interest costs.  In S&P's view, the
business risk profile remains unchanged following the new
ownership structure and S&P believes that the HNA network will
improve gategroup's competitive position.

The SACP also takes into consideration S&P's view that HNA
Group's ownership and influence may result in a more aggressive
financial policy at gategroup.  Furthermore, it incorporates the
reduced visibility of credit ratios and the company's future
financial policy has yet to be finalized by HNA and management.

HNA Group operates in the aviation, infrastructure, real estate,
financial services (including leasing), tourism, and logistics
sectors.  It has grown its business portfolio substantially over
the past few years, financing a large part of this growth with
debt.  As a result, S&P considers that the HNA group generally
has a high tolerance for aggressive leverage.

Under S&P's base-case scenario, it expects gategroup will benefit
from its acquisitions, such as Inflight Services Group (IFS) and
from solid growth in emerging markets, where margins are
generally higher than in mature markets.

S&P's base-case scenario also takes into consideration the
increasing focus on external growth acquisitions under the HNA
ownership.  Nevertheless, S&P currently forecasts that FFO to
debt will remain at or above 20% on a pro rata basis in 2017.

S&P's base-case scenario assumes:

   -- Revenue growth of around 12%-15% in 2016, largely based on
      the full-year impact of the IFS acquisition.  For 2017, S&P
      assumes stronger growth, based on increased spending on
      acquisitions, combined with mid-single-digit organic
      growth.  Reported EBITDA margin to improve to about 6% in
      2016 and 2017 from 3.4% in 2015, on the back of direct cost
      savings, synergies from IFS, and a stricter contract
      renewal process.

   -- Capital expenditure (capex) of about Swiss franc
      (CHF) 85 million.

   -- Increased spending for acquisitions of about CHF250
      million-CHF300 million.

Based on these assumptions, S&P arrives at these credit measures
for the full-years to Dec. 31, 2016 and 2017:

   -- Adjusted FFO to debt of almost 25% in 2016, weakening to
      nearer 20% based on S&P's assumption of further
      acquisitions in 2017, up from about 13% in 2015.

   -- Adjusted debt to EBITDA of about 3.5x in 2016 and below
      4.0x on a pro rata basis in 2017.

The stable outlook reflects S&P's expectation that HNA's GCP will
remain unchanged in the next 12 months and that HNA will not
materially increase gategroup's financial leverage.

Downside scenario

S&P's rating on gategroup is currently capped at HNA's GCP of
'b+'.  Any rating downgrade is, therefore, likely to be based on
changes at HNA, rather than at gategroup.  In S&P's view,
gategroup has stronger credit metrics, on a stand-alone basis,
than its parent.  Based on gategroup's current debt levels, the
company has significant headroom for operational underperformance
before S&P's 'B+' rating would be affected.

Upside scenario

S&P could raise the rating on gategroup if it appears likely that
HNA will materially reduce its financial leverage and that
gategroup will maintain and commit to an FFO-to-debt ratio of 20%
at the same time.


PRIVATBANK PJSC: Fitch Lowers Issuer Default Rating to 'RD'
Fitch Ratings has downgraded PJSC CB PrivatBank's (Privat) Long-
Term Foreign Currency Issuer Default Rating (IDR) to 'RD'
(Restricted Default) from 'CCC' and removed it from Rating Watch
Evolving (RWE).  The Long-Term Local Currency IDR is unaffected
by this rating action.

                        KEY RATING DRIVERS

The downgrade of Privat's Long- and Short-Term Foreign Currency
IDRs and debt ratings follows the recent announcement by the
National Bank of Ukraine that third party senior unsecured and
subordinated creditors of the bank have been bailed in as a part
of the bank's recapitalisation process.  The bail-in was executed
before the bank was nationalized on Dec. 21, 2016.  Fitch
understands from the bank that all the proceeds due under the
senior unsecured Eurobonds, as well as some other senior
unsecured debt, have been used for recapitalisation of the bank.

The senior unsecured debt ratings have been downgraded to
'C'/RR6, the lowest possible level, and withdrawn as the
securities have been cancelled.  Fitch did not rate the bank's
subordinated obligations.

The affirmation of the Support Rating at '5' and the Support
Rating Floor at 'No Floor' reflect (i) that government support
has been insufficient to avert losses for senior creditors, and
(ii) in Fitch's view such support cannot be relied upon in
future.  The latter view in turn reflects (i) the non-strategic
nature of the state ownership of Privat and (iii) the limited
ability of the authorities to provide foreign currency support in
case of need.

The Long-Term Local Currency IDR and the National Rating have not
been affected by these rating actions as Fitch currently has
insufficient information to determine whether the bail-in of
creditors has affected third-party senior unsecured local
currency obligations.

The 'f' Viability Rating has not been affected by these rating
actions as the bank's recapitalization has not been completed
and, post bail-in, the capital shortfall remains large (estimated
at 4.3x end-3Q16 regulatory capital).

                       RATING SENSITIVITIES

The Long-Term Local Currency IDR and the National Rating will be
downgraded to 'RD' if Fitch receives information that third-party
senior local currency obligations have also been bailed in as
part of the recapitalization exercise.

Fitch expects to review and upgrade the bank's Foreign Currency
IDRs and Viability Rating once sufficient information is
available on the bank's post-recapitalization credit profile.

The rating actions are:

  Long-Term Foreign Currency IDR: downgraded to 'RD' from 'CCC',
   off RWE
  Long-Term Local Currency IDR: 'CCC' on RWE, unaffected
  Short-Term Foreign Currency IDR: downgraded to 'RD' from 'C',
   off RWE
  Viability Rating: 'f', unaffected
  Senior unsecured debt of UK SPV Credit Finance plc: downgraded
   to 'C'/Recovery Rating 'RR6' from 'CCC'/Recovery Rating 'RR4',
   off RWE, and withdrawn
  Support Rating: affirmed at '5'
  Support Rating Floor: affirmed at 'No Floor'
  National Long-Term Rating 'BB(ukr)' on RWE, unaffected

U N I T E D   K I N G D O M

CROWN AGENTS: Fitch Lowers LT Issuer Default Rating to 'BB'
Fitch Ratings has downgraded Crown Agents Bank Limited's (CABK)
Long-Term Issuer Default Rating to 'BB' from 'BBB-'.  The Outlook
is Evolving.  Fitch has also downgraded the Short-Term IDR to 'B'
from 'F3' and Viability Rating (VR) to 'bb' from 'bbb-' and
removed the ratings from Rating Watch Negative.  CABK's Support
Rating has been affirmed at '5'.

The downgrades reflect Fitch's reassessment of CABK's ratings
following the bank's planned significant change in scale in its
business model and significant growth expectations as a result of
its change of ownership.  Fitch considers the execution risk
associated with the planned expansion to be material.  The bank
will need to continue to strengthen its systems, business
development and risk controls to cope with the increased scale
and complexity of its targeted business model.  Investments in
infrastructure including the hiring of experienced staff are
underway but enhancements are not yet fully implemented.  The
investment costs are particularly burdensome given CABK's
currently weak profitability and internal capital generation
mitigated to some extent by a recently approved GBP13m capital
injection from the parent and further expected capital
injections. It is yet to be proven whether the bank can deliver
on sustainable, improved profitability under its new strategy.

The downgrade also reflects the inherent risks arising from the
planned gradual growth in on- and off-balance sheet trade finance
exposure.  Trade finance is short-term and highly-structured in
nature, and the bank plans a portfolio diversified by geography
and counterparty.  However, it intends to fund trade
arrangements, which carries inherent exogenous risks driven by
geopolitical and commodity price developments.

                          KEY RATING DRIVERS

IDRs and VR

CABK's Long-Term IDR is equalized with its VR.  Strategy and
execution are the key drivers of the VR.  The bank's evolving
business model and investment needs present uncertainty, greater
operational risk and significant execution risk.  The rating
benefits from the liquid balance sheet and Fitch's understanding
that the bank will maintain a high proportion of liquid assets
over the medium term.

CABK plans to grow significantly, more than doubling its balance
sheet volume by 2021, as part of its aim to become a major
transactional bank for emerging market counterparties, providing
trade, payments, foreign exchange and treasury services for NGOs,
local banks and non-bank counterparties.  As part of the targeted
business model the bank will also gradually expand its trade
finance activity, including increasing its funded trade finance

Fitch believes that if successfully executed, the expansion will
help bring some diversification to the business and bring the
necessary improvement to profitability in the medium term.
However, Fitch believes that capitalisation offers little
protection for creditors given the small size of the capital base
(end-2015 total equity: GBP27m).  Furthermore, the bank's very
limited franchise, concentration of its assets and funding and
weak internal capital generation are all negative rating
considerations.  Helios injected GBP5 mil. of capital after
taking over CABK and Fitch understands it will provide further
funds when required (including the GBP13 mil. capital injection
before end-2016) but we believe this only partly mitigates the
possibility of increased operational risk and the need for
further investment as part of the expansion plans.  Fitch do not
expect strong internal capital generation in the short term.

Fitch expects a notable increase in risk appetite given the
bank's growth plans.  Historically, CABK has had a very
conservative appetite for credit risk as its business model
concentrated on disbursing aid to developing countries while
holding funds for various local and central banks in the form of
short-term highly-rated assets.  Although the bank's role as a
depositor bank is expected to remain a fundamental part of the
updated strategy, Fitch considers that given the weak
profitability of this business, its importance will gradually
reduce as the business model evolves.

Off-balance sheet exposures, predominately generated by CABK's
trade finance business, have been steadily increasing and are
expected to grow further as part of the new strategic plan.
However, Fitch considers the underlying credit risk to be low as
they are generally backed by cash collateral or a World Bank/UK
Export Finance guarantee.  At end-2015, these exposures, which
were mostly in the form of guarantees and letters of credit,
increased to GBP31.2 mil., or 128% of Fitch Core Capital.

The short-term nature of trade finance assets and cash collateral
mitigate some of the concentration and credit risks although a
single credit and/or operational loss event could have a
substantial effect on the small capital base.  Fitch also
understands that the bank will gradually increase on-balance
sheet trade finance exposures to form a more substantial portion
of the balance sheet as part of its expansion plans, giving rise
to further credit risk.  CABK will need to establish strong,
experienced and well-functioning risk management and operational
teams to handle a growing flow of small transactions

On-balance sheet trade finance is targeted to form less than one-
quarter of total assets in the medium term so we expect that the
risks from trade finance should be mitigated by the low-risk
nature overall of the targeted balance sheet.  The remaining
assets will carry generally low risk, comprising certificates of
deposit, money market exposures and high-quality liquid assets.
The bank is also exposed to settlement arising from its FX
transactions with its core African market, although we believe
the risk to be manageable due to fairly conservative limits that
limit potential losses.

The downgrade of CABK's Short-Term IDR to 'B' is based on the
downgrade of CABK's Long-Term IDR to 'BB' and maintains the
mapping relationship between Long-Term and Short-Term IDRs as
outlined in Fitch's Global Bank Rating Criteria

                           SUPPORT RATING

Fitch views CABK's owner as the most likely source of
institutional support for the bank.  However, Fitch considers
that such support, while possible, cannot be relied upon, mainly
because the agency considers the owners as financial, rather than
strategic, investors.  This is reflected in our Support Rating of

                        RATING SENSITIVITIES

IDRs and VR

CABK's ratings are primarily sensitive to the bank's ability to
successfully execute on its planned expansion.  The Evolving
Outlook signals that CABK will need to establish a track record
under the expanded business model to determine whether its Long-
Term IDR will remain at 'BB' or whether a higher or lower rating
is appropriate.

If the bank is able to build a track record of successfully
operating at its targeted larger scale, while improving
profitability and internal capital generation, strengthening risk
controls and maintaining sound asset quality and liquidity, then
this would likely be positive for the ratings.

Conversely, negative pressure on the ratings could arise if the
bank falls significantly behind its medium-term targets, such as
achieving below-target revenue growth that is insufficient to
offset the higher cost base, or (given the planned growth in on-
balance sheet trade finance lending) if impairment charges are
materially above management expectations.  A downgrade would also
be possible if the bank adopts a more aggressive risk appetite
than our current expectations or if it materially tightens its

EUROSAIL-UK 2007-1NC: S&P Affirms 'B-' Ratings on 3 Note Classes
S&P Global Ratings raised its credit ratings on Eurosail-UK
2007-1NC PLC's class B1a, B1c, and C1a notes.  At the same time,
S&P has affirmed its ratings on the class A3a, A3c, D1a, D1c, and
E1c notes.

The rating actions follow S&P's credit and cash flow analysis of
September 2016 information and the application of its relevant

The pool factor (the outstanding collateral balance as a
proportion of the original collateral balance) in this
transaction is 29.29%.

The notes in this transaction amortize sequentially, as the pro
rata conditions are not satisfied, including a cumulative losses
threshold of 1.50%.  As the cumulative losses are currently at
5.26%, the transaction will continue to pay sequentially.  S&P
has incorporated this assumption in its cash flow analysis.  This
transaction benefits from increased credit enhancement compared
with S&P's previous review, due to a nonamortizing reserve fund
and the sequential amortization.

Rating        WAFF       WALS     Expected
Level          (%)        (%)     loss (%)
AAA          48.48      61.75        29.94
AA           42.73      52.73        22.53
A            36.36      40.15        14.60
BBB          31.51      33.12        10.43
BB           26.20      28.20         7.39
B            23.49      24.87         5.84

WAFF--Weighted-average foreclosure frequency.
WALS--Weighted-average loss severity.

S&P's current weighted-average foreclosure frequency (WAFF)
assumptions have decreased since its previous review, primarily
due to greater seasoning and lower arrears.  S&P's weighted-
average loss severity (WALS) assumptions have increased because
it expects potential losses to be higher, given the servicer's
method of allocation of payments of other amounts owed for the
transactions and higher repossession market value declines.

The liquidity facility was restructured in 2014: It is now equal
to GBP27.35 million and is amortizing.  It was previously GBP38.5
million and did not amortize as the related triggers were not
satisfied.  The triggers have been removed following the

Based on the results of S&P's cash flow analysis, it has affirmed
its 'A- (sf)' ratings on the class A3a and A3c notes.  The notes
could have achieved a higher rating without the prevailing rating
cap.  The transaction and guaranteed investment contract (GIC)
account documentation rating triggers have been breached but not
remedied by Barclays Bank PLC.  Accordingly, S&P's ratings on the
notes in this transaction are capped at 'A-', which is the long-
term issuer credit rating on Barclays Bank.

S&P's analysis also indicates that the available credit
enhancement for the class B1a, B1c, and C1a notes is commensurate
with higher ratings than those currently assigned.  S&P has
therefore raised its ratings these classes of notes.

S&P's cash flow modeling shows that the class D1 and E1c notes
miss interest payments or fail to repay principal by the final
legal maturity date under a 'B' stress scenario.  Based on the
fact that S&P do not expect a default in the short term, it has
affirmed its 'B- (sf)' ratings on the class D1a, D1c, and E1c

S&P's credit stability analysis for this transaction indicates
that the maximum projected deterioration that S&P would expect at
each rating level over one- and three-year periods, under
moderate stress conditions, is in line with S&P's credit
stability criteria.

This transaction is a U.K. nonconforming residential mortgage-
backed securities (RMBS) transaction, originated by Southern
Pacific Mortgage Ltd., Preferred Mortgages Ltd., London Mortgage
Company, Langersal No. 2 Ltd., and Southern Pacific Personal
Loans Ltd.


Class               Rating
              To             From

Eurosail-UK 2007-1NC PLC
EUR552.15 Million, GBP357.3 Million Mortgage-Backed Floating-Rate
Notes, Excess-Spread-Backed Floating-Rate Notes

Ratings Raised

B1a           A- (sf)        BBB (sf)
B1c           A- (sf)        BBB (sf)
C1a           BBB (sf)       BB (sf)

Ratings Affirmed

A3a           A- (sf)
A3c           A- (sf)
D1a           B- (sf)
D1c           B- (sf)
E1c           B- (sf)

KWM EUROPE: 40 Partners Quit After Recapitalization Fails
Alex Berry and James Booth at Legal Week report that forty
partners have quit KWM Europe since the firm was plunged into
crisis in October, by the resignation of four high profile
partners and the subsequent failure of its recapitalization plan.

The exits, divided across numerous firms as partners seek the
best individual deals for themselves, come as it emerges that all
60 of the stricken firm's trainees look likely to find new homes,
with Linklaters and Allen & Overy among those stepping in to
recruit them, Legal Week notes.

The legacy SJ Berwin business -- KWM Europe and Middle East
(EUME) -- announced on Dec. 22 that it had filed a notice of
intent to appoint an administrator with the High Court, with the
firm expected to file for administration in mid-January, Legal
Week recounts.

When Michael Halford, private equity partner Jonathan Pittal,
corporate partner Andrew Wingfield and former managing partner
Rob Day triggered the crisis in October by handing in their
notice, KWM EUME had 131 partners -- 77 of whom were in London,
Legal Week discloses.

Forty of these have now either joined another firm, agreed to
join another firm once the pre-pack is confirmed, or handed in
their notice without anywhere to go, Legal Week states.

The latest exits are tax partner Laura Charkin, who is set to
follow funds head Michael Halford to Goodwin, and high profile
tax partner Stephen Pevsner, who is set to join Proskauer Rose
alongside one associate -- following in the footsteps of former
managing partner Rob Day and corporate finance partner Andrew
Wingfield, Legal Week notes.

Others have been linked with firms but the moves have not yet
been confirmed, such as head of tax Gareth Amdor, who is in
discussions with firms including Reed Smith, Legal Week says.

On top of the partner moves, 47 other lawyers and two paralegals
are likely to join the hiring firms alongside partners, accoridng
to Legal Week.

The latest exits leave roughly 90 partners across Europe, the
Middle East and Africa (EMEA) still to find or confirm new firms,
including heavyweights such as funds partner Jonathan Blake,
fraud partner Ian Hargreaves, head of competition Simon Holmes,
corporate finance partner Greg Stonefield and projects partner
Ian Wood, Legal Week notes.  All partners are subject to three
months' notice until the firm files for pre-pack administration,
Legal Week discloses.

MANSARD MORTGAGES 2007-1: S&P Lifts Rating on Cl. B2a Notes to B
S&P Global Ratings took various credit rating actions in Mansard
Mortgages 2007-1 PLC and Mansard Mortgages 2007-2 PLC.

Specifically, S&P has:

   -- Raised its ratings on Mansard Mortgages 2007-1 and Mansard
      Mortgages 2007-2's class M1a, M2a, B1a, and B2a notes; and
   -- Affirmed its ratings on Mansard Mortgages 2007-1's class
      A2a and Mansard Mortgages 2007-2's class A1a and A2a notes.

The rating actions follow S&P's credit and cash flow analysis of
the transactions' information from the most recent investor
reports and loan-level data.  S&P's analysis reflects the
application of its U.K. residential mortgage-backed securities
(RMBS) criteria and S&P's current counterparty criteria.

Since S&P's previous review, the weighted-average foreclosure
frequency (WAFF) has decreased.  The decrease is primarily due to
the transactions' increased seasoning.  The loans' weighted-
average seasoning has increased to 121 months from 85 months at
our previous review in Mansard Mortgages 2007-1 and to 110 months
from 71 months in Mansard Mortgages 2007-2.  Arrears over 30 days
have marginally increased in Mansard Mortgages 2007-1,
representing 14.96% of the pool, compared with 13.34% in October
2013. However, they have decreased in Mansard Mortgages 2007-2,
to 8.14% of the pool, from 11.52% in July 2013.

S&P's weighted-average loss severity (WALS) calculations have
increased at the 'AAA' level, but have decreased at other rating
levels in both transactions.  Although the transactions have
benefitted from the decrease in the weighted-average current
loan-to-value (LTV) ratios, this has been offset by the increase
in S&P's repossession market value decline assumptions, which are
greatest at the 'AAA' level.

Mansard Mortgages 2007-1 PLC

Rating        WAFF      WALS
level          (%)       (%)
AAA          40.79     47.49
AA           31.29     38.45
A            24.30     24.86
BBB          18.20     16.83
BB           11.92     11.30
B             9.38      7.23

Mansard Mortgages 2007-2 PLC

Rating        WAFF      WALS
level          (%)       (%)
AAA          49.24     53.25
AA           35.82     45.80
A            27.72     34.04
BBB          19.89     26.74
BB           12.14     21.38
B             9.60     16.46

The transactions' reserve funds are at their required levels, and
the liquidity facilities have not been drawn.  In Mansard
Mortgages 2007-1, the portfolio's improved performance and the
increase in credit enhancement as a result of deleveraging have
resulted in the transaction currently paying principal pro rata.
On the other hand, principal is currently being paid sequentially
in Mansard Mortgages 2007-2 as the subordination trigger ratio is
not satisfied.  In accordance with S&P's U.K. RMBS criteria, it
has applied various cash flow stress scenarios, including
assuming the recession starts at the end of the third year to
test the resilience of the transactions' structures to back-ended
defaults. S&P has also considered the possibility of triggers
being either breached or met and the transactions switching to
paying principal either sequentially or pro rata.

Using S&P's WAFF and WALS calculations in its cash flow model,
Mansard Mortgages 2007-1's class A2a notes and Mansard Mortgages
class 2007-2's class A1a and A2a notes pass our cash flow
stresses at higher rating levels than those currently assigned.
However, under S&P's current counterparty criteria, its ratings
on Mansard Mortgages 2007-1's notes are capped at its 'A' long-
term issuer credit rating (ICR) on Danske Bank A/S as the
guaranteed investment contract (GIC) account provider, following
its loss of an 'A-1' short-term rating and failure to take remedy
action.  In Mansard Mortgages 2007-2, S&P's ratings on the notes
are capped at its 'A-' long-term ICR on Barclays Bank PLC as the
GIC account provider, following its loss of an 'A-1' short-term
rating and failure to take remedy action.

S&P has therefore affirmed its 'A (sf)' rating on the class A2a
notes in Mansard Mortgages 2007-1 and our 'A- (sf)' ratings on
the class A1a and A2a notes in Mansard Mortgages 2007-2.

As a result of a reduction in our WAFF calculations and an
increase in the level of credit enhancement, the class M1a, M2a,
B1a, and B2a notes in both transactions are able to pass S&P's
cash flow stresses at higher rating levels than those currently
assigned.  Consequently, S&P has raised its ratings on Mansard
Mortgages 2007-1 and Mansard Mortgages 2007-2's class M1a, M2a,
B1a, and B2a notes.

For both transactions, S&P's credit stability analysis indicates
that the maximum projected deterioration that it would expect at
each rating level for one- and three-year horizons, under
moderate stress conditions, is in line with S&P's credit
stability criteria.

Mansard Mortgages 2007-1 and Mansard Mortgages 2007-2 are U.K.
nonconforming RMBS transactions.  Rooftop Mortgages Ltd.
originated the loans.


Class           Rating
           To             From

Mansard Mortgages 2007-1 PLC
GBP250 Million Mortgage-Backed Floating-Rate Notes

Ratings Raised

M1a        A (sf)         A- (sf)
M2a        BBB (sf)       BB+ (sf)
B1a        BB (sf)        B (sf)
B2a        B (sf)         B- (sf)

Rating Affirmed

A2a        A (sf)

Mansard Mortgages 2007-2 PLC
GBP550 Million Mortgage-Backed Floating-Rate Notes

Ratings Raised

M1a        A- (sf)        BBB+ (sf)
M2a        BBB (sf)       BB (sf)
B1a        BB (sf)        B (sf)
B2a        B (sf)         B- (sf)

Ratings Affirmed

A1a        A- (sf)
A2a        A- (sf)


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

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

Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals.  All titles are
available at your local bookstore or through  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 2017.  All rights reserved.  ISSN 1529-2754.

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

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

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

                 * * * End of Transmission * * *