TCREUR_Public/170104.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, January 4, 2017, Vol. 18, No. 003


                            Headlines


C R O A T I A

AGROKOR DD: Moody's Cuts CFR to B3 on Weak Operating Performance


C Y P R U S

IG SEISMIC: S&P Lowers CCR to 'CCC+' on Decline of Metrics


F R A N C E

VIESGO GENERACION: S&P Rates EUR125MM Term Loan 'BB-'


G E R M A N Y

LPP GMBH: Court Appoints Temporary Insolvency Administrator
SMARTHEAT INC: Recurring Losses Raise Going Concern Doubt
UNISTER HOLDING: Rockaway Capital Buys Travel Agency's Assets


I R E L A N D

CADOGAN SQUARE VIII: S&P Assigns 'B-' Rating to Class F Notes


K A Z A K H S T A N

DELTA BANK: S&P Lowers Counterparty Credit Ratings to 'CCC+/C'


M A L T A

VISTAJET GROUP: S&P Lowers CCR to 'B-', Outlook Negative


P O L A N D

CASINO POLONIA: Files Bankruptcy Petition
ROUST CORP: Files for Ch. 11 with Plan to Cut Debt by $462MM
ROUST CORPORATION: Case Summary & 11 Unsecured Creditors


R O M A N I A

KAZMUNAYGAS INTERNATIONAL: S&P Affirms 'B-' CCR, Outlook Stable


R U S S I A

PIK GROUP: S&P Affirms 'B' CCR on Morton Share Acquisition


S L O V E N I A

SLOVENSKE ELEKTRARNE: S&P Assigns 'BB' CCR, Outlook Stable


U N I T E D   K I N G D O M

ASHTEAD GROUP: S&P Raises Rating on $900MM 2nd-Lien Notes to BB+
AVANTI COMMUNICATIONS: S&P Lowers CCR to 'CC', Outlook Negative
BHS GROUP: Liquidators Conduct In-Depth Probe Into Property Deals
CAMBRIDGE TOY SHOP: Closes its Doors
COLONNADE UK 2016-1: DBRS Assigns (P)BB Rating to Tranche K Debt

COLONNADE UK 2016-2: DBRS Assigns (P)BB Rating to Tranche K Debt
KING & WOOD: Files Notice of Intent to Appoint UK Administrators
LIFESTYLE LIVING: FRP Advisory Appointed as Administrators
PREVA PRODUCE: In Administration, Cuts 20 Jobs
* UK: Number of Energy Firms Going Bust Reaches Record High

* UK: Cashflow Issue Biggest Risk to 71% of Small Businesses
* UK: Managers Pessimistic About Economic Prospects for 2017


                            *********


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C R O A T I A
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AGROKOR DD: Moody's Cuts CFR to B3 on Weak Operating Performance
----------------------------------------------------------------
Moody's Investors Service has downgraded the Croatian retailer and
food manufacturer Agrokor D.D.'s corporate family rating (CFR) to
B3 from B2 and its probability of default rating (PDR) to B3-PD
from B1-PD. At the same time, Moody's has downgraded the senior
unsecured rating assigned to the notes issued by Agrokor and due
in 2019 and 2020 to B3 from B2. The outlook on all ratings is
stable.

RATINGS RATIONALE

"The downgrade reflects our view that Agrokor is not likely to
restore credit ratios in line with our previous requirements for a
B2 rating in light of the deterioration in operating performance
that occurred during the first nine months of 2016" says Vincent
Gusdorf, a Vice President -- Senior Analyst at Moody's. "However,
the stable outlook reflects our expectations that Agrokor will
stabilize its earnings over the next 12 months despite fierce
competition in Croatia and Slovenia," added
Mr. Gusdorf.

Moody's forecasts that the adjusted debt to EBITDA of the Agrokor
group will reach 6.8x at the end of 2016 and 6.9x in 2017, and
6.2x and 6.3x for the restricted group. This compares with our
previous expectations of a Moody's-adjusted leverage ratio of
below 5.5x to maintain the rating at B2. The rating agency also
believes that slow earnings growth will constrain deleveraging
over the next 12 months at constant scope.

Agrokor has low interest coverage ratios. Moody's forecasts that
its adjusted EBITDA-to-interest ratio will remain at just 2x over
the next 12 months and that Moody's-adjusted EBIT-to-interest
ratio will stay at about 1x, a level which is deemed low for a
rating in the single B category.

High capital expenditures and interest expenses weigh on Agrokor's
cash flow generation. Although Moody's estimates that Agrokor will
post about HRK700 million of positive free cash flows (as defined
by Moody's) in 2016 thanks to a reduction of working capital, the
rating agency forecasts that free cash flows will be close to zero
in 2017 and in 2018. In addition, the historically high free cash
flow generation forecasted in 2016 will translate into a free cash
flow-to-debt ratio of only 2%, which is low for a B2 rating. That
said, Moody's cautions that Agrokor's cash flow generation is
somewhat difficult to assess with accuracy considering that the
company's consolidated cash flow statement includes several
undisclosed non-cash items.

Moreover, Moody's has recently revised its assessment on the PIK
toggle loans issued by its holding company Adria (unrated) and has
decided to include them in its adjusted debt calculation even
though they sit above the restricted group. This is because the
new documentation of certain bank facilities refinanced between
September and November 2016 indicate that the outstanding loans
may become immediately due and payable if the PIK toggle loans are
not refinanced by 8 March 2018. This is tantamount to a cross
acceleration provision, in Moody's view. The PIK toggle loans also
mature before the bank facilities of the restricted group, which
come due between 2018 and 2021.

The inclusion of the PIK Toggle loans to Agrokor's Moody's-
adjusted debt adds approximately 0.7x to its leverage ratio.
Excluding this adjustment, Agrokor's debt-to-EBITDA stood at 6.0x
at the group level on 30 September 2016 and at 5.6x at the
restricted group level and are not expected to improve over the
next 12 months. These levels are no longer commensurate with our
prior expectations for the B2 rating of below 5.5x.

Moody's now views Agrokor's liquidity position as adequate. In
November 2016, it agreed with VTB Bank (Austria) (unrated) to
postpone the maturity of EUR340 million worth of debt. This
follows the extension in maturity of EUR500 million worth of debt
issued by a pool of large international banks which was announced
last September. In both transactions, Agrokor increased its debt
maturities by two to three years and, as a result, the majority of
the debt repayments will occur after 2019. Having said that, and
in light of the provision presently included in Agrokor's credit
agreements, failing to refinance the PIK toggle loans issued by
Adria by March 8, 2018, could trigger an acceleration of certain
of the bank facilities.

Agrokor's external sources of liquidity are limited. It has no
committed credit facilities maturing beyond 12 months although it
has access to short-term bilateral facilities. Agrokor has set up
a commercial paper program of $500 million but its availability is
subject to market conditions.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook reflects our view that Agrokor will gradually
stabilize its consolidated EBITDA in the coming quarters thanks to
better economic conditions and higher traffic. It is also based on
the assumption that the company will maintain an adequate
liquidity profile and that it will refinance the PIK toggle loans
issued by Adria in a timely manner. The B3 rating does not
incorporate any additional debt-funded acquisition.

WHAT COULD CHANGE THE RATING -- UP/DOWN

Moody's could upgrade Agrokor's ratings if it managed to reduce
its Moody's-adjusted debt-to-EBITDA ratio below 5.5x. Such a
scenario could unfold for instance if further improvement in
economic conditions combined with market share gains led to a
substantial increase in EBITDA.

However Moody's cautions that upward pressure would also be
subject to potential changes in the group structure. For instance,
we may revise our debt-to-EBITDA target if the creation of large
minorities would decrease the cash flows available to service
debt.

Moody's could downgrade the ratings if Agrokor's Moody's-adjusted
EBITA-to-interest expense ratio fell substantially below 1.0x.
Moody's could also lower Agrokor's ratings if it failed to curb
the deterioration of its EBITDA or if free cash flows become
significantly negative. Any weakening of the company's liquidity
profile could also trigger a downgrade.

The principal methodology used in these ratings was Retail
Industry published in October 2015.



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C Y P R U S
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IG SEISMIC: S&P Lowers CCR to 'CCC+' on Decline of Metrics
----------------------------------------------------------
S&P Global Ratings lowered its long-term corporate credit ratings
on Cyprus-headquartered IG Seismic Services PLC (IGSS) and its
Russia-domiciled core subsidiary GEOTECH Seismic Services JSC to
'CCC+' from 'B-'.  The outlook is stable.

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

S&P removed all the ratings from CreditWatch, where it placed them
with negative implications on July 22, 2016.

The downgrades reflect the substantial decline in IGSS' metrics,
weaker margins, and higher leverage, owing to Russia's
continuously weak oilfield services market.  S&P anticipates that
the company will report annual EBITDA of about Russian ruble (RUB)
2 billion (about $33 million) for 2016, but that high interest
payments will lead to negative funds from operations (FFO).  S&P
expects that leverage will have increased beyond its initial
forecast, with debt to EBITDA above 8.0x in 2016.

S&P expects only moderate market recovery starting in 2017, with
only limited upside for the company's margins and cash flows.
This limits IGSS' ability to deleverage in 2017-2018, in S&P's
view.  S&P understands that IGSS is currently renegotiating a new
term sheet with Otkritie Bank (expected in early 2017) to prolong
its current debt maturities, decrease the average interest rate,
and defer or capitalize 60% of interest payments due in 2017-2018
until 2019.  S&P believes that, under the current debt structure,
the company's cash flow will hardly be sufficient to cover
financing costs, leading to S&P's broader view on IGSS's financial
position as unsustainable in the long term.

S&P continues to view the company's liquidity management as
aggressive, with high dependence on its key lending bank Otkritie
and a significant share of short-term revolving credit lines in
total debt.  Otkritie is responsible for more than 80% of IGSS'
debt portfolio and is supportive to the company, as S&P
understands.  Otkritie provided an additional RUB3.2 billion in
facilities to IGSS in October 2016, and has also waived existing
covenants until October 2018.  At the same time, S&P understands
that the credit lines comprise a mix of short- and long-term
financing, which implies refinancing risks to IGSS in the event
its relationship with the bank weakens.

IGSS' operating and financial performance remains under pressure
from Russia's depressed seismic market, which S&P expects will
increase moderately in the future.  S&P understands that the
company has responded to the negative market conditions by
significantly reducing capital expenditure (capex).  However, S&P
do not expect the company will be able to maintain this stance for
a prolonged period, given the anticipated market recovery.

The rating on IGSS incorporates S&P's view of the inherent
cyclicality of the seismic services sector.  The lack of pricing
power also adds pressure on IGSS' business, given its
substantially smaller size versus that of key customers, the
largest oil and gas producers in Russia.  On the positive side,
S&P notes IGSS' leading position in the domestic market and its
comparably new and modern fleet.

The stable outlook reflects S&P's expectation that IGSS' leverage
and cash flow generation will remain weak, but that the company
will continue receiving support from its key lender.

S&P would downgrade the company in the event of liquidity
shortfalls, which could be triggered by a weaker relationship with
its key lending bank Otkritie or continued significantly negative
FOCF generation.

For S&P to consider a positive rating action, IGSS' financials
would need to be substantially stronger, with debt to EBITDA at
5.0x or lower, and FFO to debt above 10%, which S&P currently does
not expect.  Upside potential would also require continuously
strong relationships with Otkritie Bank and other lenders, and an
improved liquidity and capital structure.



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F R A N C E
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VIESGO GENERACION: S&P Rates EUR125MM Term Loan 'BB-'
-----------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating (one
notch above the 'B+' long-term corporate credit rating on the
company) to Viesgo Generacion SLU's EUR125 million senior secured
term loan and EUR49.5 million senior secured revolving credit
facility due in 2021.  S&P assigned a '2' recovery rating to this
debt, indicating its expectation of substantial (70%-90%, in the
lower half of the range) recovery for lenders in the event of a
payment default.  Viesgo Generacion intends to use the proceeds,
along with cash on its balance sheet, to refinance the existing
term loan facility and repay shareholder loans.

S&P will withdraw the existing 'B+' issue rating and '3' recovery
rating on the existing term loan when the refinancing completes.

The new term loan will be secured by share pledges, security over
receivables, and bank accounts of the issuer and guarantors.
Guarantors will represent at least 85% of group EBITDA and
consolidated net assets.  The documentation contains one financial
covenant: a debt service coverage ratio of at least 1.1x, in line
with previous debt documentation.  Dividends payments will be
permitted if the leverage ratio is less than or equal to 2.5x, and
without any lock-up period, which is much more lenient than in the
previous loan facility agreement.

S&P's 'B+' long-term corporate credit rating on Viesgo Generacion
remains unchanged, and the stable outlook continues to reflect
S&P's expectation that Viesgo Generacion will maintain a funds
from operations cash interest coverage ratio of above 2.0x over
the next three years, which S&P views as commensurate with the
current rating.

SIMULATED DEFAULT ASSUMPTIONS

   -- Year of default: 2020
   -- Jurisdiction: Spain

SIMPLIFIED WATERFALL

   -- Emergence EBITDA: EUR34.5 million (Minimum capex at 2% of
      sales, reflecting the amount of capex S&P expects to be
      required at emergence from a default.  Cyclicality
      adjustment of 10% is standard for the unregulated power
      industry.  An operational adjustment of -10% was used to
      reflect the fact that under the new loan agreement, the
      company has the flexibility to increase dividend
      distributions which could negatively affect the enterprise
      value available to lenders.  Multiple: 4.5x, reflecting the
      company's weak business risk profile and S&P's view that
      coal assets face greater risk of value depreciation until
      the default year.

   -- Gross enterprise value at emergence: EUR155 million

   -- Net enterprise value after administrative expenses (5%) and
      pension deficit (EUR10 million): EUR138 million

   -- Senior secured debt claims: EUR173 million*

   -- Recovery expectation: 70%-90% (lower half of the range)

*All debt amounts include six months' prepetition interest.



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G E R M A N Y
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LPP GMBH: Court Appoints Temporary Insolvency Administrator
-----------------------------------------------------------
Evertiq reports that German PCB manufacturer LPP GmbH, which
operates as a subsidiary of Tecnomaster Group since December 2012,
is insolvent.

IKK classic has asked the insolvency court in Tubingen (Germany)
to open insolvency proceedings on the assets of LPP GmbH, Evertiq
says.

Evertiq relates that the insolvency court in Tubingen issued a
note saying: "In order to prevent [disadvantageous] changes in the
debtor's assets until a decision on the application is reached",
the court has ordered the following on December 15, 2016: 1.
Measures of enforcement including the execution of an arrest or
interim injunction against the debtor shall be prohibited unless
immovable property is involved; Measures already commenced are to
be temporarily stopped. 2. Martin Mucha was appointed as temporary
insolvency administrator."


SMARTHEAT INC: Recurring Losses Raise Going Concern Doubt
---------------------------------------------------------
Smartheat Inc. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q, disclosing a net
loss of $2.78 million on $138,047 of net sales for the three
months ended March 31, 2016, compared to a net loss of $37.80
million on $108,765 of net sales for the same period in 2015.

The Company's balance sheet at March 31, 2016, showed total assets
of $7.07 million, total liabilities of $9.64 million, and a
stockholders' deficit of $2.57 million.

The Company has incurred significant recurring losses from
operations in the past several years, including a net loss from
continuing operations of $1.10 million for the three months ended
March 31, 2016.  In addition, the Company recognized a loss of
$2.08 million from the 85% equity interest sale on SmartHeat
Germany.  These conditions raise a substantial doubt about the
Company's ability to continue as a going concern.  However, since
demand in China for heat pump products is increasing, the Company
will put more resources and efforts to grow its heat pump business
after completing the operational restructuring due to disposing of
its PHE business.  The Company expects to be able to obtain
necessary bank loans for expanding the HP business.

A full-text copy of the Company's Form 10-Q is available at:

                   https://is.gd/HENfnF

SmartHeat Inc., formerly known as Pacific Goldrim Resources, Inc.,
through its operating subsidiaries in China and Germany, designed,
manufactured, sold and serviced plate heat exchangers ("PHEs"),
PHE Units, which combine PHEs with various pumps, temperature
sensors, valves and automated control systems, heat meters and
heat pumps for use in commercial and residential buildings.


UNISTER HOLDING: Rockaway Capital Buys Travel Agency's Assets
-------------------------------------------------------------
Kevin May at Tnooz reports that investment house Rockaway Capital
has big plans for a "pan-European online travel agency leader"
after buying the assets of Unister Travel.

Tnooz says Unister owned a large range of online travel companies
such as Fluege and Ab-In-Den-Urlaub, which together processed
somewhere in the region EUR1.9 billion in travel transactions
during 2015.

The group had essentially been up for sale since November 2015,
Tnooz relates.

According to the report, Rockaway said it has signed an agreement
with German administrators to acquire the assets of Unister for an
undisclosed fee, including those listed above and Reisen,
Billigfluege, Reisegeier, Urlaubstours, Hotelreservierung and
TravelViva.

The group bought into travel earlier this year when it acquired
Invia, an online travel agency in the Czech Republic, Poland,
Hungary and Slovakia, the report notes.

Tnooz relates that the deal has been cut financially with the help
of CEFC (China Energy Company), the seventh largest private
company in China and a strategic investor in western brands.

Rockaway said the full roster of around 520 staffers at Unister
(who have maintained operations of the brands during the
insolvency process) will remain in-post as part of the
acquisition, Tnooz relays.

Tnooz notes that the development is being touted as as Rockaway's
opportunity to bring a range of brands together, "support a new
beginning" and "take the platforms to the next level".

"Given its expertise in the travel sector, operational and
financial strength, I consider Rockaway an ideal partner and I am
confident that the new owner will unlock the acquired assets'
potential," Tnooz quotes insolvency administrator Lucas Flother as
saying.

The deal is expected to close in early 2017, adds Tnooz.

                           About Unister

Unister Holding GmbH is a German operator of travel, e-commerce
and news websites.  The Leipzig-based company operates more than
40 websites and employs about 1,100 people.

As reported in the Troubled Company Reporter-Europe on July 20,
2016, Bloomberg News said Unister Holding GmbH filed for
preliminary insolvency proceedings after its managing
director died in a plane crash.  According to Bloomberg, the
company said on July 18 in a statement that Unister, known for
hiring celebrities including soccer star Michael Ballack to woo
users to portals such as holiday-booking service ab-in-den-
urlaub.de, filed with a Leipzig court.  Lucas Floether has been
appointed as the company's preliminary administrator, Bloomberg
said.

Unister's founder and managing director Thomas Wagner, 38, died
July 14 in Slovenia when his plane crashed en route from Venice
to Leipzig, Bloomberg disclosed.



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CADOGAN SQUARE VIII: S&P Assigns 'B-' Rating to Class F Notes
-------------------------------------------------------------
S&P Global Ratings has assigned its credit ratings to Cadogan
Square CLO VIII D.A.C.'s class A-1, A-2, B-1, B-2, C, D, E, and F
notes.  At closing, Cadogan Square CLO VIII also issued an unrated
subordinated class of notes.

The ratings assigned to Cadogan Square CLO VIII's notes reflect
S&P's assessment of:

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

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

S&P considers that the transaction's documented counterparty
replacement and remedy mechanisms adequately mitigate its exposure
to counterparty risk under S&P's current counterparty criteria.

Following the application of S&P's structured finance ratings
above the sovereign criteria, it considers the transaction's
exposure to country risk to be limited at the assigned rating
levels, as the exposure to individual sovereigns does not exceed
the diversification thresholds outlined in S&P's criteria.

The transaction's legal structure is bankruptcy remote, in line
with S&P's European legal criteria.

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

Cadogan Square CLO VIII is a broadly syndicated collateralized
loan obligation (CLO) managed by Credit Suisse Asset Management
Ltd. (CSAM), an indirect, wholly-owned subsidiary of Credit Suisse
Group AG.

RATINGS LIST

Ratings Assigned

Cadogan Square CLO VIII D.A.C.
EUR479.14 Million Floating- And Fixed-Rate Notes (Including
Subordinated Notes)

Class            Rating          Amount
                               (mil. EUR)

A-1              AAA (sf)        248.40
A-2              AAA (sf)         23.00
B-1              AA (sf)          54.80
B-2              AA (sf)           5.00
C                A (sf)           27.83
D                BBB (sf)         21.02
E                BB (sf)          32.34
F                B- (sf)          12.65
Sub.             NR               54.10

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



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K A Z A K H S T A N
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DELTA BANK: S&P Lowers Counterparty Credit Ratings to 'CCC+/C'
--------------------------------------------------------------
S&P Global Ratings lowered its long- and short-term counterparty
credit ratings on Delta Bank to 'CCC+/C' from 'B/B' and the
Kazakhstan national scale ratings to 'kzB-' from 'kzBB+'.  At the
same time, S&P lowered its ratings on Delta Bank's senior
unsecured obligations to 'CCC+' from 'B'.

S&P placed all the ratings on CreditWatch with developing
implications.

S&P understands that, over the past few weeks, Delta Bank has
experienced a material outflow of corporate customer funds and
interbank deposits.  Despite the fact that retail depositors
accounted for less than 5% of total deposits at Delta Bank, the
suspension of its bank license to accept retail deposits and open
retail customer accounts for a period of three months on Nov. 7,
2016, by the NBK has caused outflows of corporate funds.

S&P understands that Delta Bank is currently in negotiations with
the NBK for liquidity support.  In addition, it is S&P's
understanding that the bank's shareholders have agreed with the
NBK to inject Kazakhstani tenge (KZT) 20 billion into the bank's
capital and/or liquidity in December 2016-January. Also, on
Dec. 29, the NBK reinstated the license.

"Despite these positive developments, we still see Delta Bank's
current liquidity position as vulnerable.  Among other things, we
will also monitor the impact of the current situation, and any
external support measures, on the bank's corporate deposit
balances.  This view is consistent with a 'CCC' category rating,
which, according to our criteria, reflects the situation of an
obligor vulnerable to nonpayment and dependent upon favorable
business, financial, and economic conditions to meet its financial
commitments.  We have lowered our assessment of the bank's
liquidity position to weak," S&P said.

With about Kazakhstani tenge (KZT) 495 billion (about $1.4
billion) of assets on Dec. 1, 2016, Delta Bank was the
13th-largest bank in Kazakhstan with a 2% market share by assets.

S&P expects to resolve the CreditWatch within the next three
months, as soon as S&P has greater clarity on the liquidity
situation, potential support from the NBK and the bank's
shareholders, and stabilization of corporate deposits.

S&P could raise the ratings by one notch if it was to see the
bank's liquidity position stabilize sustainably and sufficiently,
and if S&P believed that the bank had restored its ability to
attract customer funding.

S&P may lower the ratings to the 'CC' category if management
actions and NBK support appear likely to be insufficient or
corporate deposit outflows intensify, thereby making a default a
virtual certainty in the coming weeks.  S&P could also lower the
ratings to 'SD' (selective default), if it has confirmation that
the bank had discontinued serving some of its obligations.



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VISTAJET GROUP: S&P Lowers CCR to 'B-', Outlook Negative
--------------------------------------------------------
S&P Global Ratings lowered its long-term corporate credit rating
on private jet services provider VistaJet Group Holding Ltd. to
'B-' from 'B'.  The outlook is negative.

At the same time, S&P' lowered its long-term corporate credit
ratings on VistaJet's core subsidiaries VistaJet Malta Finance PLC
and VistaJet Co Finance LLC to 'B-' from 'B'.  S&P also lowered to
'CCC' from 'CCC+' its issue rating on the $300 million notes due
2020 guaranteed by VistaJet.

"The rating actions reflect our forecast that VistaJet will rely
on third-party funding in 2017, mainly because of increasing
financial lease repayments.  We understand that the company could
increase its sales by about 25% in the last 12 months, but further
ramp up in EBITDA -- at least to the extent forcasted in our base
case -- is needed to avert a potential liquidity shortfall.  The
financial lease obligations, which amounted to $1.65 billion as of
Sept. 30, 2016, fully amortize over approximately 10 years and
will lead to increasing repayment needs in 2017 and beyond.  In
our view, the company has reduced headroom for any weaker-than-
expected operating performance in the next 12 to 18 months given
its less-than-adequate liquidity profile," S&P said.

VistaJet has nearly finalized transactions and has already
obtained committed terms sheets to bolster its liquidity sources.
Furthermore, S&P's base-case forecast for 2017 assumes that the
company will be able to generate increased EBITDA to about
$240 million, which is a material improvement to S&P's projected
EBITDA of about $175 million for 2016.  This is backed by
management's projection to sell approximately 10,000 annual
subscrition new contractional Flight Service Program hours in
fiscal-year 2016.

VistaJet's rapid growth and expansion in new markets, such as
China and especially the U.S., has affected its average
utilization per aircraft.  In the 12 months through Sept. 30,
2016, average utilization was approximately 730 flight hours, down
from the 863 flight hours per aircraft it achieved in 2014.  S&P
understands that it takes time for the company to reach a mature
and efficient operational level, which currently puts pressure on
profitability.  S&P expects the EBITDA margin to be slightly above
35% in 2016, which is materially below its original forecast of
about 40%.

"However, we forecast that sales and EBITDA will reach record
levels in 2017, with an EBITDA margin of close to 40%, due to
economies of scale, backed by improved utilization of the larger
fleet.  However, cash flow generation will be constrained by the
increasing financial lease repayments and the weakening of the
euro against the U.S. dollar, which affects yields.  The effect,
however, will be less than previous periods of a weakening euro,
as its share of euro-denominated sales has decreased materially.
Higher U.S. dollar base rates will also increase VistaJet's
interest payments, in our view," S&P said.

As of Dec. 23, 2016, VistaJet operates 69 aircraft, a net increase
of over 30 aircraft in the last two years.  The company has added
51 new aircraft over the same period and now has reached the end
of the investment cycle, with only two aircraft deliveries in
2017, which will improve free cash generation starting from
September 2017.  The manufacturer has agreed to allow VistaJet to
reduce its commitment to buying new aircraft, and as a result, the
company has only two aircraft on order -- to be delivered by
September 2017.  This brings the remaining aircraft delivery
commitments to about $170 million for the 12 months from Sept. 30,
2016.  S&P expects VistaJet to finance these with finance leases
on an 80%-85% loan-to-purchase price basis -- combined with equity
of about $22 million.

In S&P's base-case scenario, it anticipates that VistaJet will
remain highly leveraged in the coming years.  The key base-case
assumptions for 2017 include:

   -- Revenues will grow by more than 25% as the number and
      utilization of aircraft increases.  Prices per hour flown
      will increase only moderately, partly because the euro has
      weakened against the U.S. dollar.

   -- Variable costs will increase, in line with growth in the
      total number of hours flown.  Personnel costs will increase
      only marginally as utilization improves.  This should allow
      reported EBITDA margins to reach almost 40%, although this
      is highly dependent on the successful rollout in the U.S.

   -- Annual interest expenses of approximately $95 million.

   -- A further two aircraft to be delivered in 2017, leading to
      a further increase in debt.

S&P's issue ratings incorporate the material number of aircraft
and key operating entities that are domiciled in Malta.  Because
S&P has not performed a jurisdictional survey of Malta, it do not
apply a recovery analysis; instead, S&P determines the difference
between the corporate credit rating and the issue rating by
considering the amount of priority obligations ranking ahead of
the senior unsecured bondholders.  Because VistaJet's current
capital structure mainly consists of finance leases and all
aircraft are secured, it has a very limited number of unencumbered
assets.  S&P calculates that priority obligations would take up
more than 70% the group's total assets, and therefore S&P's issue
rating is two notches below the corporate credit rating, at 'CCC'.

The negative outlook reflects the risk of deterioration in
VistaJet's liquidity if the company's high expansion rate does not
translate into the strong cash flow generation over the next few
quarters that S&P currently anticipates, and if the company does
not raise additional liquidity sources to avert a potential
shortfall while paying increasing financial leasing expenses.

Downside scenario

S&P could downgrade VistaJet if its efforts to restore its
liquidity are not successful and if S&P considers its liquidity
sources-to-uses ratio will fall materially below 1.0x,
constituting a likely default risk within the next 12 months.  In
particular, S&P thinks this might happen if utilization and yields
don't improve materially and potential equity injections are
stalled.  S&P could also lower the rating if the financial
covenants appeared to be breached and the company was unlikely to
remedy such breaches.

Upside scenario

S&P could revise the outlook to stable if VistaJet's liquidity
position stabilizes, owing to successful measures by management to
boost liquidity sources accompanied by a significant improvement
to cash flow generation.



===========
P O L A N D
===========


CASINO POLONIA: Files Bankruptcy Petition
-----------------------------------------
Olympic Entertainment Group's Polish subsidiary Casino Polonia-
Wroclaw sp. z o.o., who operated the flagship casino of OEG in
Warsaw until September 2016, has submitted to the court its
bankruptcy petition.


ROUST CORP: Files for Ch. 11 with Plan to Cut Debt by $462MM
------------------------------------------------------------
Vodka maker Roust Corporation, formerly Central European
Distribution Corporation, sought Chapter 11 protection in Delaware
bankruptcy court with a prepackaged reorganization plan that would
slash the liquor giant's debt by more than $462 million and let
Russian billionaire Roustam Tariko retain 64% control of the
company.

The Company is one of the world's largest vodka producers and is
Central and Eastern Europe's largest integrated spirit beverages
business (measured by total volume) with approximately 24.6
million nine-liter cases produced and distributed in 2015.  The
Company is the largest vodka producer in Poland, with a portfolio
that includes valuable and recognizable brands such as Absolwent,
Zubrowka, Soplica, and Bols, each of which is produced at the
Company's Polish distilleries.  The Company is also one of the
largest vodka producers and a brand leader in Russia, the world's
largest vodka market, where its brand portfolio includes Green
Mark, Talka, Parliament and Russian Standard Vodka, the leading
brand in the premium segment of the Russian vodka market.

Roust is a wholly owned, indirect subsidiary of Roust Trading Ltd.
("RTL"), a holding company of the Russian Standard Group of
companies.  The Russian Standard Group is a private company
controlled by Russian businessman Roustam Tariko, with business
interests in premium vodka (notably RSV), spirits distribution,
banking, and insurance.  Mr. Tariko is Chairman of Roust's Board
of Directors.  Mr. Tariko was responsible for saving Roust (then
known as Central European Distribution Corporation, or CEDC) in
2013, when CEDC was in severe financial distress.

A hearing on first-day motions and scheduling matters was set for
Jan. 3, 2017 before U.S. Bankruptcy Judge Christopher S. Sontchi.

                     Return to Bankruptcy

On April 7, 2013, CEDC and two subsidiaries sought bankruptcy
protection under Chapter 11 of the Bankruptcy Code (Bankr. D.
Del. Lead Case No. 13-10738) with a prepackaged Chapter 11 plan
that reduced debt by US$665.2 million.  CEDC emerged from
bankruptcy in June 2013 after confirming a plan that gave RTL,
owned by Roustam Tariko, 100% of the outstanding stock in exchange
for funding cash payments required by the Plan.

According to a declaration by Roust CEO Grant Winterton, "Despite
challenging economic conditions, the Company has achieved record
market shares in Poland, Hungary, Israel, the UK, France and
Germany.  The Polish business, in particular, has been extremely
successful.  Comparing the first nine months of 2016 to the first
nine months of 2015, the Polish business has grown by 15.8% by
volume and, on a currency neutral basis, revenue increased by
24.5%, gross margin rose by 28.6% and EBITDA increased by 50.9%.
The Russian business is also developing well compared to overall
negative market trends.  Sales by volume have increased 6% for the
period of September - November 2016 against the same period for
2015. The premium brands that the Company distributes in Russia
continue to grow even faster, with 18%, 9% and 22% shipment
increases in the third quarter of 2016, compared with the same
period for 2015, for RSV, Remy and Jagermeister, respectively."

"However, this positive performance has been offset by
macroeconomic conditions beyond the Company's control, which have
left the Company over-leveraged and hampered by liquidity
constraints and high borrowing costs.  These macroeconomic factors
include, the economic crisis in Russia and depreciation of
currencies in four of the Company's markets -- Russia, Poland,
Kazakhstan and Ukraine -- each of which drastically reduced the
Company's EBITDA as expressed in U.S. dollars and made re-paying
debts, most of which are denominated in U.S. dollars, burdensome.
The depreciation of the Russian ruble also resulted in significant
increases in imported brand price and led to declining volumes in
the imported brand side of the business."

"Second, illegal alcohol sales within the black and parallel, or
grey, markets, as well as competition by competitors with lower
excise tax requirements, have eroded the mainstream vodka market
share."

"Third, the lending environment in Russia has contracted.  Many
Russian banks have moved to reduce credit lines to operating
companies and to significantly increase interest rates, which have
almost doubled in recent years. Finally, volumes for Roust's
Ukrainian business have declined 90% due to the ban on Russian
products in that country."

Faced with these extrinsic and immitigable pressures, in March
2016, the Company engaged with the largest holders of its Existing
Notes to discuss a potential balance sheet restructuring.

                     Prepackaged Plan

On Nov. 9, 2016, the Debtors entered into a restructuring support
agreement and term sheet (the "RSA") with holders of 90% in
aggregate principal amount of the Existing Senior Secured Notes
and holders of approximately two-thirds in aggregate principal
amount of the Existing Convertible Notes (together, the
"Consenting Noteholders"), and Russian Standard Bank, RTL and Mr.
Tariko (collectively with non-Roust affiliates, the "Russian
Standard Parties," and with the Consenting Noteholders, the "Plan
Support Parties").

The RSA outlines the Proposed Restructuring and provides the
framework and support for the Plan which, if effectuated, will
strengthen the Reorganized Debtors' capitalization by over $500
million, deleverage their balance sheet by at least $462 million,
result in funding of $55 million in new equity capital and result
in the contribution to Reorganized Roust of strategic assets,
namely RSV, and related intellectual property with an estimated
value of between $510 million and $570 million.  The Debtors'
Proposed Restructuring will immediately provide greater value to
all of the Debtors' stakeholders by positioning Reorganized Roust
for accelerated revenue and profit growth within the global
alcohol market.  The Proposed Restructuring will enable Roust
Corporation to more effectively execute its business strategy and
take advantage of growth opportunities worldwide to ensure that it
is well positioned for an initial public offering of its stock
within the next two to three years.

Briefly, the Proposed Restructuring and the Plan contemplate the
following transactions.  Holders of Existing Senior Secured Notes
will receive payment in full in the form of (i) new senior secured
notes due 2022 in the aggregate principal amount of $385 million
at 10% interest payable semi-annually, commencing on January 1,
2017 (the "New Senior Secured Notes"), (ii) cash consideration of
$20 million, (iii) a debt-to-equity conversion of the remaining
balance of the Existing Senior Secured Notes (including all
accrued and unpaid interest through and inclusive of the Petition
Date) in exchange for 12.08% of the new common stock in
Reorganized Roust (subject to the right of holders of Existing
Convertible Notes to subscribe for that same common stock, with
the proceeds of such subscription to be paid in cash to holders of
Existing Senior Secured Notes in lieu of such new common stock,
which is described in the Plan as the "Existing Senior Secured
Notes Equity Subscription") and (iv) the right to participate in
the $55 million offering of new common stock in Reorganized Roust
(the "Share Placement"), with the Existing Senior Secured Notes
Committee agreeing to backstop $5 million of the Share Placement.

Holders of Existing Convertible Notes will receive an estimated
recovery of approximately 27%5 in the form of (i) 10.59% of the
equity of Reorganized Roust through a debt-to-equity conversion of
the Existing Convertible Notes, (ii) 1.00% of the equity in
Reorganized Roust (contributed by the Russian Standard Parties to
the holders of Existing Convertible Notes), (iii) the right to
participate in the Share Placement, with the Existing Convertible
Notes Committee agreeing to backstop $50 million of the Share
Placement, and (iv) the right to participate in the Existing
Senior Secured Notes Equity Subscription.

The Proposed Restructuring is made possible in part by the Russian
Standard Parties' agreement to contribute significant value to
Reorganized Roust.  In particular, the Russian Standard Parties
will contribute RSV and all related RSV intellectual property and
compromise certain debt owed by subsidiaries of Roust to certain
of RTL's non-Roust subsidiaries.

In exchange for these contributions, the Russian Standard Parties
are entitled to receive 64.04% of the equity in Reorganized Roust.
However, the Russian Standard Parties will allocate 1.00% of this
equity to holders of the Existing Convertible Notes and 6.00% of
this equity to participants in the Share Placement.  The
implementation of these concurrent transactions will be considered
repayment in full of all intercompany loans owed to the Company
from RTL and its direct and indirect subsidiaries.

According to papers filed in U.S. Bankruptcy Court, the
contribution of RSV to Roust represents a tremendous contribution
by the Russian Standard Parties.  RSV is a powerhouse in Russia,
with a leading market share in the Russian vodka market of 30%. R
SV exports vodka to more than 80 countries.  Over 75% of its sales
volume in 2015 was from international markets.  In 2014 and 2015,
RSV generated approximately $88 million and $69 million of revenue
(net of taxes), respectively, with reported EBITDA of
approximately $30 million and $18 million, respectively, and
adjusted EBITDA of approximately $34 million and $28 million,
respectively.  RSV's financial performance year-to-date through
September 30, 2016 has continued to strengthen, with revenue
growth of approximately 4.0% year-over-year, LTM reported EBITDA
of approximately $19 million and

LTM adjusted EBITDA of approximately $31 million. Forecasted
fiscal year 2016 Adjusted EBITDA for RSV is approximately $37
million.

                     Prompt Confirmation

The Proposed Restructuring, as embodied in the RSA and the Plan,
is also described in the Offering Memorandum, Consent Solicitation
Statement and Disclosure Statement Soliciting Acceptances of the
Prepackaged Plan of Reorganization of Roust Corporation, CEDC
Finance Corporation International, Inc. and CEDC Finance
Corporation LLC, dated as of December 1, 2016.

The only impaired creditors entitled to vote on the Plan are the
holders of each of the Existing Senior Secured Notes and the
Existing Convertible Notes.

Solicitation of votes on the Plan began on Dec., 1, 2016. Voting
on the Plan closed on Dec. 30, 2016.  According to the official
vote tabulation prepared by Roust's voting and information agent,
creditors have voted overwhelmingly to accept the Plan.  In
particular, the Plan was accepted by approximately 100% in number
and 100% in amount of Existing Senior Secured Notes that were
voted on the Plan.  The Plan also was accepted by approximately
100% in number and 100% in amount of Existing Convertible Notes
that were voted on the Plan. Moreover, participation in the Plan
vote by holders of Existing Notes was extraordinarily high, with
approximately 90% of all holders of Existing Senior Secured Notes
and approximately 93% of all holders of Existing Convertible Notes
voting.

Prior to filing for chapter 11 protection, the Debtors sought, and
received, a court date for a combined hearing on the adequacy of
the information contained in the Disclosure Statement and
confirmation of the Plan. Notice of the date for the combined
hearing, Jan. 6, 2017, was distributed to all creditors and
parties in interest concurrently with the documents soliciting
votes on the Plan.

The Debtors have requested that the Court entering a scheduling
order setting the combined hearing date for Jan. 6, 2017.

        No Insolvency Proceedings for European Operations

The Company has six operational manufacturing facilities located
in Poland and Russia and a total workforce of approximately 3,500
employees.

None of the European operations are involved in insolvency
proceedings.  Specifically, none of Roust's Polish, Russian or
other operating subsidiaries are subject to any insolvency
proceedings.

According to Mr. Winterton, those entities are fundamentally
sound, profitable and will continue to operate in the ordinary
course of business.  Accordingly, the Company, Mr. Winterton says,
will continue honoring all its obligations to vendors, employees,
and local credit support providers in the ordinary course of
business, without interruption.

                     About Roust Corporation

Roust Corporation, formerly Central European Distribution
Corporation -- http://www.roust.com/-- is a vodka producer.  The
Company's business primarily involves the production and sale of
its own spirit brands, and the importation of a range of spirits
and wines.  It operates its business based upon three primary
segments: Poland, Russia and Hungary.  In Poland, its brand
portfolio includes Absolwent, Zubrowka, Zubrowka Biala, Soplica,
Bols and Palace brands.  Its other brands include Absolwent
Grapefruit, Absolwent Apple Mint, Zubrowka Zlota, Soplica Plum and
Soplica Blackcurrant.  It produces and sells vodkas primarily in
three vodka sectors: premium, mainstream and economy.  Its primary
operations are conducted in Poland, Russia, Ukraine and Hungary.
It has around six operational manufacturing facilities located in
Poland and Russia.  It also produces ready-to-drink alcoholic
beverages, such as wine-based Amore, gin-based Bravo Classic and
Elle.

On Dec. 30, 2016, Roust Corporation and three affiliated companies
each filed petitions seeking relief under chapter 11 of the U.S.
Bankruptcy Code.  The Debtors' cases have been assigned to Judge
Robert D. Drain.  The Debtors are seeking to have their cases
jointly administered (Bankr. S.D.N.Y. Lead Case No. 16-23786).
The petitions were signed by Grant Winterton, CEO.

The Debtors disclosed $1,373,863,812 in assets and liabilities of
$787,054,813 as of Nov. 30, 2016.

The Debtors are represented by attorneys Scott Simpson, Jay
Goffman, Mark McDermott, Mark Chehi and Sarah Pierce of Skadden
Arps Slate Meagher & Flom LLP.  The Debtors also tapped Houlihan
Lokey, Inc., as investment banker; and Epiq Bankruptcy Solutions,
LLC as claims and noticing agent.


ROUST CORPORATION: Case Summary & 11 Unsecured Creditors
--------------------------------------------------------
Debtor affiliates filing separate Chapter 11 bankruptcy petitions:

     Debtor                                          Case No.
     ------                                          --------
     Roust Corporation                               16-23786
       aka Central European Distribution Corporation
       aka CEDC
     777 Westchester Avenue, Suite 101
     White Plains, NY 10604

    CEDC Finance Corporation LLC                     16-23787

    CEDC Finance Corporation International, Inc.     16-23788

About the Business: Roust Corporation, formerly Central European
Distribution Corporation, is a vodka producer.  The Company's
business primarily involves the production and sale of its own
spirit brands, and the importation of a range of spirits and
wines.  It operates its business based upon three primary
segments: Poland, Russia and Hungary.  In Poland, its brand
portfolio includes Absolwent, Zubrowka, Zubrowka Biala, Soplica,
Bols and Palace brands. Its other brands include Absolwent
Grapefruit, Absolwent Apple Mint, Zubrowka Zlota, Soplica Plum and
Soplica Blackcurrant.  It produces and sells vodkas primarily in
three vodka sectors: premium, mainstream and economy.  Its primary
operations are conducted in Poland, Russia, Ukraine and Hungary.
It has around six operational manufacturing facilities located in
Poland and Russia.  It also produces ready-to-drink alcoholic
beverages, such as wine-based Amore, gin-based Bravo Classic and
Elle.

Chapter 11 Petition Date: December 30, 2016

Court: United States Bankruptcy Court
       Southern District of New York (White Plains)

Judge: Hon. Robert D. Drain

Debtors' Counsel: Jay M. Goffman, Esq.
                  Mark A. McDermott, Esq.
                  Raquelle L. Kaye, Esq.
                  Julie Lanz, Esq.
                  SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
                  Four Times Square
                  New York, NY 10036
                  Tel: (212) 735-3000
                  Fax: (212) 735-2000
                  E-mail: Jay.Goffman@skadden.com
                          mark.mcdermott@skadden.com
                          raquelle.kaye@skadden.com
                          jlanz@skadden.com

Debtors'
Investment
Banker:          HOULIHAN LOKEY, INC.

Debtors'
Claims &
Noticing
Agent:            EPIQ BANKRUPTCY SOLUTIONS, LLC

Total Assets: $1.98 billion

Total Liabilities: $1.74 billion

The petitions were signed by Grant Winterton, chief executive
officer.

Debtors' Consolidated List of Largest Unsecured Creditors:

   Entity                          Nature of Claim   Claim Amount
   ------                          ---------------   ------------
White & Case LLP                      Trade Debt        $376,692
200 S. Biscayne Blvd.,
Miami, FL 33131
Tel: +1 305-371-2700
Fax: +1 105-358-5744/5766

Moody's Investors Service Ltd.        Trade Debt         $80,265

Hoagland, Longo, Moran, Dunst &       Trade Debt         $32,100
Doukas, LLP

Jones Day                             Trade Debt         $24,015

Broadridge ICS                        Trade Debt         $21,896

WSE Warsaw Gielda Papierow            Trade Debt         $16,533
Wartosciowych

KPMG LLP                              Trade Debt         $13,300

PR News Wire                          Trade Debt          $7,395

Thomson Reuters                       Trade Debt          $4,641

Premiere Global Services              Trade Debt          $2,382

American Stock Transfer & Trust       Trade Debt          $2,076
Company, LLC



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


KAZMUNAYGAS INTERNATIONAL: S&P Affirms 'B-' CCR, Outlook Stable
---------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' long-term corporate credit
rating on Romania-based oil refining and marketing company
KazMunayGas International N.V. (KMGI).  The outlook is stable.

The affirmation follows KMGI's announcement of a change to its
shareholder structure.  CEFC and KMG group have signed a pack of
documents to create a joint venture, including share purchase and
shareholders agreements, a long-term crude oil supply agreement
replacement, and financing commitment.  New shareholder CEFC gains
a 51% stake in KMGI.  For the transaction to go through, KMGI
requires approval from Romanian authorities and the European
Commission, and the necessary confirmations from the involved
financial institutions.  KMGI expects to receive these in the
first half of 2017.

CEFC has already publicly committed to invest $3.0 billion as a
mix of equity and debt into KMGI and its future growth, which will
be a clear positive for KMGI's credit profile.

That said, S&P understands that the transaction also depends on
the outcome of the current court case against KMGI, initiated by
the Romanian authorities.  CEFC has some protection against a
negative outcome of this claim, in particular should this lead to
substantial financial liability.  S&P understands that the court
case could last for more than 12 months, which reduces the
predictability of KMGI's future ownership.

Given this uncertainty, S&P sees a risk that a situation could
develop in which none of the shareholders are willing to provide
group support to KMGI.  That said, this is not currently S&P's
base-case scenario.  S&P understands that the KMG group has
maintained its commitment to guarantee KMGI's $200 million credit
line and crude oil supply agreement.  At the same time, KMGI's
operational performance has improved, with higher margins and
expected positive free operating cash flow.  KMGI demonstrated
record high results in 2015, with EBITDA of above $150 million and
funds from operations (FFO) to debt above 15%.  S&P also forecasts
that the company will be able to maintain its results at these
levels.

In 2016, S&P assumes that the company will generate EBITDA of
$150 million-$170 million, despite the decline of margins in
European refining, because of structural improvements in
refineries and growth in other business segments.  In general, S&P
thinks the company's credit profile could improve on a stand-alone
basis in 2017, especially if its performance in the second half of
2016 exceeds S&P's expectations.

The key constraining factor for KMGI's credit profile is the
still-high share of short-term financing in the capital structure.
S&P anticipates that KMGI's key lending banks will generally
continue to roll over their short-term credit lines.  That said,
weak liquidity constantly exposes the company to refinancing risk,
which constrains the stand-alone credit profile.

KMGI is Romania's second-largest oil refiner and marketer, but S&P
still sees it having a vulnerable business risk profile.  The
company's operations are vertically integrated through its
trading, fuel retailing business, and petrochemicals activities.
It has one of the most modern and complex refineries in Romania
and the Black Sea basin.  Nevertheless, KMGI's operations are
linked to the output of the Petromidia refinery, so S&P sees asset
concentration and lack of critical size as key rating factors.

S&P continues to view KMGI as a highly leveraged company because
of its sizable maturities, of which a significant portion matures
within 12 months.  At the same time, S&P notes that KMGI's
improved margins and positive free operating cash flow generation
forecast, which may enable it to gradually reduce leverage.

S&P considers that the company can maintain its conservative
financial approach, concentrating on operating efficiency and
moderate capital expenditure (capex) to support its retail segment
development.  If the company demonstrates a track record at this
level, this could indicate that a stronger financial assessment
applies.

The stable outlook balances the positive trends in KMGI's
operating performance against the risk that it could lose the
timely support from the KMG group.  In S&P's base case, it assumes
that CEFC will gradually replace the support from KMG, in line
with the public commitment it has made.  However, S&P sees a risk
that because of the uncertainty arising from the litigation,
CEFC's support might not be timely.

In S&P's base case, it assumes that KMGI's debt leverage will
gradually improve to about 4.5x in 2017 from 4.8x in 2015, and
that liquidity will at least not weaken from the current level.

At the same time, S&P notes that any potential rating action would
require more clarity on the outcome of the current litigation and
transactions announced earlier this year (separately or in
conjunction), such as the 26.7% shares buy-back program and the
sources of the $150 million investment in the joint Kazakh-
Romanian energy fund that KMGI announced earlier in 2016.
Furthermore, S&P would require more clarity on the replacement of
the $1.1 billion hybrid loan from KMG that matures in 51 years.

S&P may lower the rating if it sees a weakening in KMGI's
liquidity, as a result of underperformance or an aggressive
approach to refinancing.  S&P could also lower the rating if, as a
result of uncertainty over KMGI's ownership, neither the KMG group
nor CEFC are willing and able to provide support to KMGI.

An upgrade will require more clarity over the current court case
against KMGI as that might trigger a change in KMGI's ownership.
It will also depend upon S&P's view on the credit profile provided
by CEFC, its commitment to KMGI, and willingness to provide
support to the company.  Notably, S&P thinks that the company's
publicly communicated plans to inject equity and finance the capex
could support KMGI's credit profile and result in ratings upside.
S&P would see FFO to debt of sustainably above 15% and adequate
liquidity as prerequisites for a higher rating.



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


PIK GROUP: S&P Affirms 'B' CCR on Morton Share Acquisition
----------------------------------------------------------
S&P Global Ratings affirmed its 'B' long-term corporate credit
rating on Russia-based residential real estate developer JSC PIK
Group.  The outlook is negative.

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

S&P has removed both ratings from CreditWatch, where it placed
them with negative implications on Nov. 7, 2016.

The affirmation of the 'B' rating follows PIK's completion of its
acquisition of all Morton Group's shares.  S&P believes the
company's increased scale and market share partly offsets the
resulting increase in leverage.  S&P also believes that PIK's
liquidity remains adequate, since the company has managed to
refinance most of Morton's short-term debt with medium-term
instruments.  PIK issued a Russian ruble (RUB) 10 billion three-
year bond in early December and obtained additional RUB10 billion
of credit facilities maturing in 2018.  After the refinancing, S&P
estimates that the combined group's short-term debt accounts for
about 14% of total debt as of Dec. 23, 2016.  S&P also understands
that PIK is in the process of obtaining a waiver for a covenant
breach on its RUB8 billion VTB loan, which S&P expects will happen
in the coming weeks.

Morton is one of the largest housing developers in the greater
Moscow region, and PIK's acquisition of it has created the largest
residential property developer in Russia.  S&P expects the
combined entity's revenues will total about RUB120 billion (about
$2 billion) in 2017.  The combined entity's land amounts to 15
million square meters, while production capacities for industrial
construction will exceed 1.5 million square meters.  S&P therefore
now regards PIK's competitive position as fair rather than weak.
At the same time, S&P notes that the locations of Morton's assets
are somewhat weaker than those of PIK, due to larger exposure to
the suburban Moscow region, which has experienced a more
significant decline in demand.  S&P continues to assess PIK's
business risk profile as weak.

S&P understands that PIK has fully financed the deal with cash and
debt, and Morton had RUB27 billion of short-term debt when
acquired.  This led to a significant increase in PIK's leverage,
with gross debt to EBITDA expected to exceed 5x at year-end 2016,
excluding a contribution from Morton, due to uncertainty related
to its profitability.  The combined group's debt is likely to
approach RUB65 billion at year-end 2016.  At the same time, S&P
expects gradual deleveraging as a result of a turnaround at Morton
and its integration, with the ratio of gross debt to EBITDA
improving to 3.4x in 2017 and decreasing below 2x in 2018.

As a result, S&P has revised its financial risk profile assessment
downward to aggressive from significant.  This continues to
include a one-notch negative adjustment to reflect the multiyear
volatility of working capital, which is specific to developers and
homebuilders, due to the capital-intensive business and length of
projects.

Additionally, S&P sees the company's appetite for land acquisition
as a significant risk to its leverage and liquidity position.  S&P
therefore assess the company's financial policy as negative.

S&P now views PIK's capital structure as neutral to its credit
profile because the average debt term is now more than two years.

PIK's activity continues to be geographically concentrated in the
greater Moscow area, including Moscow city and Moscow region,
exposing the company to risks of local regulation changes and
supply and demand imbalances.

The negative outlook on PIK indicates the possibility of a
downgrade if the combined entity is unable to sustain
profitability broadly comparable with that demonstrated by PIK on
a stand-alone basis in 2016, or if its operating cash flows are
materially weaker than expected.  The risk of this occurring
arises from challenges related to Morton's turnaround and
integration with PIK, and related costs.  Weaker-than-expected
profitability and presales might prevent PIK from deleveraging to
the extent factored into S&P's base case.

Downside scenario

S&P could lower the rating in the next 12 months if the combined
entity's revenue or profitability is materially lower than S&P
expects.  S&P might also lower the rating if operating cash flow
is lower than in its base case, for example because of lower
demand for new apartments and lower presales, combined with still-
large cash outflows for new developments, preventing the company
from reducing debt to EBITDA to less than 4x in 2017.

A downgrade could also follow if PIK's debt maturity profile
shortens or its liquidity materially deteriorates.  PIK's
liquidity position depends on its ability to continue maintaining
large cash balances, extending its bank lines, and passing put
options on its bonds.

Upside scenario

S&P could revise the outlook to stable if PIK's credit protection
metrics were to improve, with the combined entity showing
profitability comparable with that of PIK in 2015-2016, and
stronger credit metrics, with gross debt to EBITDA below 4x.
Rating upside would also depend on PIK's ability to maintain an
adequate capital structure, successfully integrate Morton's
assets, and generate substantial positive operating cash flow.



===============
S L O V E N I A
===============


SLOVENSKE ELEKTRARNE: S&P Assigns 'BB' CCR, Outlook Stable
----------------------------------------------------------
S&P Global Ratings assigned its 'BB' long-term corporate credit
rating to Slovenian state-owned electricity generation company
Holding Slovenske Elektrarne (HSE).  The outlook is stable.

S&P's 'BB' rating is based on its view that HSE has a weak
business risk profile and a highly leveraged financial risk
profile, leading to a stand-alone credit profile (SACP) of 'b+'.

The rating is two notches above the SACP to reflect S&P's view of
the moderately high likelihood that the Slovenian government would
provide timely and sufficient extraordinary support to HSE in the
event of financial distress.  In accordance with S&P's criteria
for government-related entities, this view reflects S&P's
assessment of HSE's:

   -- Important role for the Slovenian government as both a
      provider of an essential service and a key player in the
      implementation of state energy policies.  The company
      produces more than 70% of the domestic power output.  The
      default of HSE for any reason would lead to serious power
      generation disruptions in Slovenia and jeopardize
      customers' power supply.  Therefore, the state is likely to
      step in to ensure HSE continues its operations; and

   -- Strong link with the government, as Slovenia is the 100%
      shareholder.  This enables the government to maintain
      control over all important decision making.  There are no
      planned ownership changes and a legal ordinance directs
      that HSE is a strategic investment that has to remain in
      majority state ownership.  All of HSE's major decisions
      require the validation of the Supervisory Board and, in
      most cases, also shareholder or Ministry of Finance
      approvals.  However, S&P also factors into its assessment
      HSE's shift in financing strategy to the capital markets
      based on the group's inherent strengths, instead of credit
      facilities guaranteed by the state as previously.

HSE's production capacity is limited and diversification is
relatively low with only a few hydro and thermal plants.  Even
though the company holds about 68% of the electricity market in
Slovenia in terms of production, its installed capacity is about
1.8 gigawatts, which is relatively low in comparison with its
rated peers.  In addition, HSE's thermal business is not
profitable -- unit costs exceed electricity prices -- but the
company expects that the introduction of the new coal plant Unit 6
will improve efficiency in its thermal business from 2017.  S&P's
business risk assessment also factors in earnings volatility
stemming from the group's inherent exposure to power prices and,
to a lesser extent, hydrology risks.

At the same time, HSE benefits from its dominant market position
and highly efficient hydropower business, which helps to improve
the group's overall efficiency.  S&P also believes the Slovenian
power market is somewhat protected, as reflected by the high
electricity prices in the country.  The group also owns coal mines
which support its thermal business.  S&P also factors some ongoing
government support into our assessment.  The company has good
relationships with the government, which takes part in regulatory
discussions to properly align HSE's strategy.  S&P expects that
the government will continue to provide ongoing support and back
HSE's continuing restructuring and deleveraging.

S&P's view of HSE's financial risk profile as highly leveraged
reflects the group's high debt and still weak cash flow
generation, mainly due to its large and mostly debt-financed
investment in the newly built thermal power plant.  S&P
understands that one of the group's key strategic objectives is to
reduce debt as heavy investments are now completed and maintenance
investments will be limited until the end of the decade.  HSE
reached its weakest point in 2015 with S&P Global Ratings-adjusted
ratio of funds from operations (FFO) to debt at 8.1% on the back
of the test and trial period for the new Unit 6 plant.  After
that, S&P forecasts that FFO to debt will be close to 12% in 2016
and will remain above 12% thereafter.  S&P's expectation of an
improvement in HSE's financial profile is based on the ramp up of
Unit 6, its implementation of a cost cutting program, and the
absence of further large investments, which S&P expects will
result in positive free operating cash flows (FOCF).  This should
in turn support the group's financial policy which is skewed
toward financial debt reduction.  S&P expects HSE to make no
dividend payments in the medium term while leverage remains
elevated and the market environment weak.

S&P applies a positive comparable rating analysis modifier to
reflect its assessment that HSE's business risk profile is at the
higher end of the weak category.  Compared with its peers, HSE
benefits from ongoing government support and the likely prospect
of improved operating efficiency.

S&P's base case assumes:

   -- Repayment of contractual debt maturities, mainly the bridge
      to bond facility using proceeds from the syndicated loan
      facility.  Average annual amortization of about
      EUR70 million in 2017-2020.

   -- Completion of the capital expenditure (capex) cycle,
      meaning limited future capex with free cash flow used for
      deleveraging.  S&P anticipates that the group's investments
      will be about EUR200 million over 2016-2020.  Average
      production volumes over 2016-2020 planned at 7,800 gigawatt
      hours (GWh).

   -- Average production from renewable sources (hydro) over
      2016-2020 planned at 3,500 GWh, which represents 45% of
      electricity production in the HSE Group and about 63% of
      electricity produced from renewable energy sources in
      Slovenia.

   -- Trading volumes planned above 27 terawatt hours.

   -- EUR8 million annually that we have accounted for as
      ancillary revenues from a new contract agreed in December
      2015.

   -- Slovenian power prices aligned with Hungarian prices at
      about EUR37 and EUR35 per megawatt hour in 2017 and 2018,
      respectively.

   -- No scheduled dividend payments.

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

   -- FFO to debt to increase to close to 12% in 2016 and improve
      above 12% from 2017 onward.

   -- Positive FOCF from 2016 onward.

The stable outlook reflects S&P's view of HSE's strategic focus on
debt reduction and its prudent financial policy, including the
absence of dividend payments, which S&P expects will support the
maintenance of the current financial profile.  S&P believes that
HSE's adjusted FFO to debt of above 12% is commensurate with the
current SACP of 'b+'.  The outlook also incorporates S&P's
expectation that HSE will generate free cash flow on a sustainable
basis from 2016 and will maintain sufficient headroom on its
financial covenants.

S&P would lower the rating on HSE if it revises the SACP by one
notch.  This could happen if the debt reduction that S&P expects
no longer looks likely.  S&P could also take a negative rating
action if S&P anticipates constraints to HSE's SACP, in
particular, if adjusted FFO to debt falls below 12% for an
extended period or if HSE breaches its financial covenants.  This
could result from potential operational difficulties at one of its
plants or a further decline in power prices, especially if
combined with a decision to exercise a call option to buy back a
36% stake in Hidroelektrarne na Spodnji Savi d.o.o.

S&P could raise the long-term rating by one notch if financial
debt starts to materially reduce on the back of stronger free cash
flow generation, resulting in sustainable improvements in credit
metrics, with adjusted FFO to debt reaching 15%.  This improvement
is likely to result from the effective ramp up of Unit 6, which
should generate positive margins from its thermal production
business.  Chances of an upgrade could also arise from any
potential political measures to improve HSE's profitability,
including the remuneration of ancillary services.  At this stage,
S&P do not see this financial improvement materializing over the
next 12 to 18 months.

A one-notch upward revision of the SACP would also translate into
a one-notch uplift of the long-term rating.  If S&P raises the
sovereign credit rating on Slovenia by one or more notches, the
rating on HSE will not change, all else being equal.



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


ASHTEAD GROUP: S&P Raises Rating on $900MM 2nd-Lien Notes to BB+
----------------------------------------------------------------
S&P Global Ratings said that it has reviewed its recovery and
issue-level ratings for U.K.-based equipment rental company
Ashtead Group PLC that were labeled as "under criteria
observation" (UCO) after publishing the revised recovery ratings
criteria on Dec. 7, 2016.  With S&P's criteria review complete, it
is removing the UCO designation from these ratings and are raising
the issue rating to 'BB+' from 'BB' on the $900 million second-
lien notes due 2022 and the $500 million second-lien notes due
2024.  S&P is also revising the recovery rating on these debt
instruments upward to '2' from '3', indicating S&P's expectation
of substantial recovery (70%-90%) in case of an event of default.

The rating actions on the issue-level ratings stem only from the
application of S&P's revised recovery criteria and do not reflect
any change in its assessment of the corporate credit ratings for
issuers of the affected debt issues.

Key Analytical Factors:

   -- Following the publication of S&P's revised recovery ratings
      criteria on Dec. 7, 2016, S&P reviewed Ashtead's recovery
      and issue-level ratings.  As a result of this review, S&P
      raised its issue rating on the group's $900 million second-
      lien notes due 2022 and the $500 million second-lien notes
      due 2024 to 'BB+' from 'BB'.  The '2' recovery rating on
      this debt indicates S&P's expectation of substantial
      recovery, in the lower half of the 70%-90% range, in the
      event of a payment default.  The recovery rating is
      supported by the company's strong asset base and the strong
      collateral package provided to noteholders, although on a
      second-ranking priority basis.  The recovery rating is
      constrained by the existence of a large $2.6 billion super
      senior asset-backed lending (ABL) facility that S&P assumes
      to be 60% drawn at default.

   -- S&P's hypothetical default scenario assumes lower-than-
      expected fleet utilization rates combined with reduced
      secondary prices for fleet equipment assets and a
      refinancing risk associated with the ABL facility expiring
      in 2020.  S&P considers that Ashtead would be reorganized
      as a going concern due to its strong brand and distribution
      network.  However, S&P uses a discrete sset valuation
      approach because it believes that the group's enterprise
      value would be closely related to asset values.

Simulated default assumptions:

   -- Year of default: 2020
   -- Jurisdiction: United Kingdom

Simplified recovery waterfall:

   -- Gross recovery value: GBP2,227 million
   -- Net recovery value for waterfall after admin expenses (5%):
      GBP2,116 million
   -- Estimated first priority claim (ABL): GBP1,260 million
   -- Value available for second-lien notes claims: GBP855
      million
   -- Estimated second-lien notes claim: GBP1,142 million
   -- Recovery range: 70%-90% (in the lower half of the range)
   -- Recovery rating: 2


AVANTI COMMUNICATIONS: S&P Lowers CCR to 'CC', Outlook Negative
---------------------------------------------------------------
S&P Global Ratings lowered its long-term corporate credit rating
on U.K.-based fixed-satellite services (FSS) provider Avanti
Communications Group PLC to 'CC' from 'CCC-'.  The outlook is
negative.

At the same time, S&P lowered its issue rating on the company's
$685 million senior secured notes to 'CC' from 'CCC'.  The
recovery rating remains unchanged at '2' indicating S&P's
expectation for substantial recovery (70%-90%; lower half of the
range) for debtholders in the event of a payment default.

The downgrade follows Avanti's recent offer to exchange
$708 million of its senior secured notes (including accrued
interest) due in 2019 for a combination of $497 million amended
notes with a payment-in-kind (PIK) toggle feature and subordinated
position maturing in 2022/2023, and $211 million of newly issued
senior PIK toggle notes maturing in 2021/2022.  S&P considers this
transaction to be a distressed exchange.

The transaction also includes a cash capital raise of $130 million
in additional newly issued senior PIK toggle notes consisting of
an $82 million note issuance at transaction close, and $50 million
on a delayed draw basis.  Avanti expects the combination of
amended existing notes and new funding will provide sufficient
liquidity through the construction and launch of its HYLAS 4
satellite in the first half of the fiscal year ending June 30,
2018.

Furthermore, the company is offering existing noteholders the
option to roll additional existing notes into the senior PIK
toggle notes if they participate in the capital raise, so the
final balance between amended notes and senior PIK toggle notes
could change.  The refinancing also includes an option to raise
super senior debt to replace the issued PIK notes.

Avanti is a small player in the FSS industry and is still in the
process of developing a limited fleet of satellites.  Despite
Avanti's relatively good contract backlog of $402 million as of
the end of March 2016 and contract wins of over $70 million during
the fourth quarter of fiscal year 2016, the company has recently
seen lower-than-expected growth in revenues, which has led to
insufficient liquidity to meet its funding requirements through
the second quarter of fiscal year 2017.

The negative outlook reflects S&P's expectation that it would
lower the corporate credit rating at completion of the proposed
transaction.

Once the transaction closes, S&P expects to lower the corporate
credit rating to 'SD' (selective default) and the issue-level
rating on the senior secured notes to 'D' (default).  S&P would
then re-evaluate the entity under its new capital structure and
consider an upgrade if S&P believes its credit profile had
improved.

Under this scenario, S&P's typical upside and downside scenarios
for the outlook do not apply.


BHS GROUP: Liquidators Conduct In-Depth Probe Into Property Deals
-----------------------------------------------------------------
Graham Ruddick at The Guardian reports that the liquidators of BHS
are conducting a detailed investigation into property transactions
that took place during the regimes of Sir Philip Green and Dominic
Chappell, including whether the directors of the retailer breached
their duties.

Insolvency practitioners have a legal duty to review the conduct
of the directors of a collapsed company, but the scope and depth
of the BHS investigation is rare, The Guardian notes.

FRP Advisory is undertaking a "massive exercise in data
collation", The Guardian relays, citing one source close to the
winding up of BHS.

BHS collapsed into administration last April, leading to the loss
of 11,000 jobs and leaving a รบ571m pension deficit, The Guardian
recounts.  According to The Guardian, a parliamentary
investigation into the failure of the department store chain
concluded that it had been systematically plundered under the
ownership of Messrs. Green and Chappell.

A spokesman for FRP, as cited by The Guardian, said: "We will be
continuing our process of making recoveries through liquidation on
behalf of all creditors and continuing with our statutory duties."

However, the firm revealed more details about its work in a
progress report sent to creditors of BHS at the end of November,
just before the retailer moved from administration, The Guardian
recounts.

"The concurrent administrators [FRP] have commenced their
enquiries into a number of historic matters of concern and key
transactions, including those raised by the parliamentary enquiry
into the company's failure, and they are working with their legal
advisers, Jones Day, to determine appropriate avenues of further
investigation," The Guardian quotes the FRP as saying.

"It would not be appropriate to comment in detail on the nature
and level of the concurrent administrators' investigations at this
juncture.  However, within the parameters of the court order,
these have included a review of the possible claims and challenges
available to an insolvency office holder pursuant to the Companies
Act 2006 and Insolvency Act 1986, including those relating to
antecedent transactions and wrongful trading."

FRP was brought in to be the joint administrator to BHS with Duff
& Phelps -- then the sole liquidator -- by the Pension Protection
fund, the biggest creditor, The Guardian recounts.

Mr. Green, who spent Christmas and New Year in Florida, remains in
talks with the Pensions Regulator about a settlement for the BHS
pension scheme, The Guardian relates.  He has until March to reach
a deal before the regulator moves to the next stage of its legal
proceedings against him, The Guardian notes.

According to The Guardian, Mr. Chappell said the period since BHS
collapsed had been "extremely difficult" and that Retail
Acquisitions did "everything we possibly could" to save the
retailer.

BHS Group was a high street retailer offering fashion for the
whole family, furniture and home accessories.


CAMBRIDGE TOY SHOP: Closes its Doors
------------------------------------
Jade Burke at ToyNews reports The Cambridge Toy Shop has closed
its doors and owner Vivienne Watson cited high rent and increased
parking fees as reasons for the shop's closure.

Ms. Watson revealed that it was no longer viable to keep trading
after 12 years in the business, according to the report.

According to Ms. Watson, Sidney Sussex College, Cambridge, is
charging higher rent, which has started to impact negatively on
the toy business, the report says.

The toy retailer said on its website: "A huge thanks to all of our
loyal customers who have helped us to keep the last independent
toy shop in Cambridge open for so long," the report adds.


COLONNADE UK 2016-1: DBRS Assigns (P)BB Rating to Tranche K Debt
----------------------------------------------------------------
DBRS Ratings Limited assigned provisional ratings to 11 tranches
of an unexecuted unfunded financial guarantee (the senior
guarantee) regarding a portfolio of corporate loans and credit
facilities (the Colonnade UK 2016-1 portfolio) originated or
managed by Barclays Bank PLC and its affiliates as follows:

   -- GBP 2,883,300,000 Tranche A at AAA (sf)

   -- GBP50,750,000 Tranche B at AA (high) (sf)

   -- GBP21,350,000 Tranche C at AA (sf)

   -- GBP21,350,000 Tranche D at AA (low) (sf)

   -- GBP35,000,000 Tranche E at A (high) (sf)

   -- GBP13,300,000 Tranche F at A (sf)

   -- GBP31,150,000 Tranche G at A (low) (sf)

   -- GBP44,800,000 Tranche H at BBB (high) (sf)

   -- GBP12,950,000 Tranche I at BBB (sf)

   -- GBP20,300,000 Tranche J at BBB (low) (sf)

   -- GBP15,750,000 Tranche K at BB (high) (sf)

The ratings address the likelihood of a reduction to the
respective Tranche Notional Amounts resulting from Borrower
Defaults within the Guaranteed Portfolio of the notional Loan
Portfolio Financial Guarantee within the eight-year Credit
Protection Period. The borrower default events are limited to
failure to pay, bankruptcy and restructuring events.

The ratings take into consideration only the creditworthiness of
the reference portfolio. The ratings do not address either
counterparty risk or the likelihood of any event of default or
termination events under the agreement occurring.

The transaction is a synthetic balance-sheet collateralised loan
obligation structured in the form of a financial guarantee. The
loans were originated or purchased by Barclays' Corporate Banking
Large Corporate division over their regular course of business.

Barclays bought protection under a similar financial guarantee for
the first loss piece but has not executed the contracts relating
to the rated tranches. Under the unexecuted guarantee agreement,
Barclays will transfer the remaining credit risk (from 10% to
100%) of the same GBP3.50 billion portfolio.

The ratings assigned by DBRS are expected to remain provisional
until the moment the underlying agreements are executed. Barclays
may have no intention of executing the senior guarantee. DBRS will
maintain and monitor the provisional ratings throughout the life
of the transaction or while it continues to receive performance
information.

Under the senior guarantee, Barclays will buy protection against
principal losses as well as, prior to the occurrence of a credit
event, interest accrued and unpaid on the reference portfolio for
a period of eight years. The transaction has a three-year
replenishment period during which Barclays can add new reference
obligations or increase the notional amount of existing reference
obligations. The replenishment will follow rules-based selection
guidelines that are designed to ensure the new reference
obligations are not adversely selected. In addition, the new
reference obligations also need to comply with the eligibility
criteria and portfolio profile tests which are established to
ensure that the credit quality of new reference obligations
proposed are similar or better than that of the reference
obligations they replace.

The credit facilities under the reference portfolio can be drawn
in various currencies but any negative impact from currency
movements is neutralised and therefore movements in the foreign
exchange rate should not have a negative impact on the rated
tranches.

However, each reference obligation can reference a broad number of
interest rate indices around the world. The interest rate index,
spread and interest payment frequency will determine the amount of
additional risk that the guarantee has to cover. To address this
risk, DBRS has calculated stressed interest rates based on its
"Unified Interest Rate Model for European Securitisations"
methodology as well as the spread and weighted average payment
frequency covenants defined as part of the transaction's portfolio
profile tests. DBRS also took comfort from the portfolio profile
test that limits to only 2% the guaranteed obligations which can
be denominated in a currency other than US Dollar, Sterling,
Canadian Dollar, Euro, Swedish Krone, Norwegian Krone, Danish
Krone and Australian Dollar (such other currency a Minority
Currency). DBRS assumed a stressed interest rate index of 6.85%
for the obligations denominated in eligible currencies and a
stressed interest rate index of 34.25% for the obligations
denominated in a Minority Currency. The analysis above was used to
haircut the standard recovery rate assumptions applied. For
example, at the AAA (sf) stress level the recovery rate was
reduced to 24.5% from 28.5%. This adjustment was made to account
for the additional risk posed by the accrual interest coverage of
the guarantee.

For the recovery rate, DBRS assumed all reference obligations to
be senior unsecured and applied the recovery rates defined in its
"Rating CLOs and CDOs of Large Corporate Credit" methodology and
adjusted as per the analysis mentioned above.

DBRS used the CLO Asset Model to determine expected default rates
for the portfolio at each rating level. To determine the credit
risk of each underlying reference obligation, DBRS relied on
either public ratings or a ratings mapping to DBRS ratings of
Barclays' internal ratings models. The mapping was completed in
accordance with DBRS's "Mapping Financial Institution Internal
Ratings to DBRS Ratings for Global Structured Credit Transactions"
methodology.

The portfolio is composed exclusively of guaranteed obligations
whose obligors are incorporated in the United Kingdom as defined
in the eligibility criteria. The eligibility criteria excludes
obligations that are either subordinated, defined as either
project finance or structured finance, currently in credit watch
or those that have defaulted or been in arrears in the previous 12
months. The maximum borrower group concentration allowed will be
1.5% for borrower groups with the better internal rating score
with lower limits the lower the score of the borrower group.


COLONNADE UK 2016-2: DBRS Assigns (P)BB Rating to Tranche K Debt
----------------------------------------------------------------
DBRS Ratings Limited assigned provisional ratings to 11 tranches
of an unexecuted unfunded financial guarantee (the senior
guarantee) regarding a portfolio of corporate loans and credit
facilities (the Colonnade UK 2016-2 portfolio) originated or
managed by Barclays Bank PLC and its affiliates as follows:

   -- GBP 543,708,000 Tranche A at AAA (sf)

   -- GBP 9,108,000 Tranche B at AA (high) (sf)

   -- GBP 4,026,000 Tranche C at AA (sf)

   -- GBP 4,488,000 Tranche D at AA (low) (sf)

   -- GBP 6,600,000 Tranche E at A (high) (sf)

   -- GBP 2,508,000 Tranche F at A (sf)

   -- GBP 6,336,000 Tranche G at A (low) (sf)

   -- GBP 7,986,000 Tranche H at BBB (high) (sf)

   -- GBP 2,442,000 Tranche I at BBB (sf)

   -- GBP 3,828,000 Tranche J at BBB (low) (sf)

   -- GBP 2,970,000 Tranche K at BB (high) (sf)

The ratings address the likelihood of a reduction to the
respective Tranche Notional Amounts resulting from Borrower
Defaults within the Guaranteed Portfolio of the notional Loan
Portfolio Financial Guarantee within the eight-year Credit
Protection Period. The borrower default events are limited to
failure to pay, bankruptcy and restructuring events.

The ratings take into consideration only the creditworthiness of
the reference portfolio. The ratings do not address either
counterparty risk or the likelihood of any event of default or
termination events under the agreement occurring.

The transaction is a synthetic balance-sheet collateralised loan
obligation structured in the form of a financial guarantee. The
loans were originated or purchased by Barclays' Corporate Banking
Large Corporate division over their regular course of business.

Barclays bought protection under a similar financial guarantee for
the first loss piece but has not executed the contracts relating
to the rated tranches. Under the unexecuted guarantee agreement,
Barclays will transfer the remaining credit risk (from 10% to
100%) of the same GBP660 million portfolio.

The ratings assigned by DBRS are expected to remain provisional
until the moment the underlying agreements are executed. Barclays
may have no intention of executing the senior guarantee. DBRS will
maintain and monitor the provisional ratings throughout the life
of the transaction or while it continues to receive performance
information.

Under the senior guarantee, Barclays will buy protection against
principal losses as well as, prior to the occurrence of a credit
event, interest accrued and unpaid on the reference portfolio for
a period of eight years. The transaction has a three-year
replenishment period during which Barclays can add new reference
obligations or increase the notional amount of existing reference
obligations. The replenishment will follow rules-based selection
guidelines that are designed to ensure the new reference
obligations are not adversely selected. In addition, the new
reference obligations also need to comply with the eligibility
criteria and portfolio profile tests which are established to
ensure that the credit quality of new reference obligations
proposed are similar or better than that of the reference
obligations they replace.

The credit facilities under the reference portfolio can be drawn
in various currencies but any negative impact from currency
movements is neutralised and therefore movements in the foreign
exchange rate should not have a negative impact on the rated
tranches.

However, each reference obligation can reference a broad number of
interest rate indices around the world. The interest rate index,
spread and interest payment frequency will determine the amount of
additional risk that the guarantee has to cover. To address this
risk, DBRS has calculated stressed interest rates based on its
"Unified Interest Rate Model for European Securitisations"
methodology as well as the spread and weighted-average payment
frequency covenants defined as part of the transaction's portfolio
profile tests. DBRS also took comfort from the portfolio profile
test that limits to only 2% the guaranteed obligations which can
be denominated in a currency other than US Dollar, Sterling,
Canadian Dollar, Euro, Swedish Krone, Norwegian Krone, Danish
Krone and Australian Dollar (such other currency a Minority
Currency). DBRS assumed a stressed interest rate index of 6.85%
for the obligations denominated in eligible currencies and a
stressed interest rate index of 34.25% for the obligations
denominated in a Minority Currency. The analysis above was used to
haircut the standard recovery rate assumptions applied. For
example, at the AAA (sf) stress level the recovery rate was
reduced to 24.5% from 28.5%. This adjustment was made to account
for the additional risk posed by the accrual interest coverage of
the guarantee.

For the recovery rate, DBRS assumed all reference obligations to
be senior unsecured and applied the recovery rates defined in its
"Rating CLOs and CDOs of Large Corporate Credit" methodology and
adjusted as per the analysis mentioned above.

DBRS used the CLO Asset Model to determine expected default rates
for the portfolio at each rating level. To determine the credit
risk of each underlying reference obligation, DBRS relied on
either public ratings or a ratings mapping to DBRS ratings of
Barclays' internal ratings models. The mapping was completed in
accordance with DBRS's "Mapping Financial Institution Internal
Ratings to DBRS Ratings for Global Structured Credit Transactions"
methodology.

The portfolio is composed exclusively of guaranteed obligations
whose obligors are incorporated in the United Kingdom as defined
in the eligibility criteria. The eligibility criteria excludes
obligations that are either subordinated, defined as either
project finance or structured finance, currently in credit watch
or those that have defaulted or been in arrears in the previous 12
months. The maximum borrower group concentration allowed will be
2.0% for borrower groups with the better internal rating score
with lower limits the lower the score of the borrower group.


KING & WOOD: Files Notice of Intent to Appoint UK Administrators
-----------------------------------------------------------------
Matthew Guarnaccia, writing for Bankruptcy Law360, reported that
King & Wood Mallesons confirmed that it has filed a notice of
intention to appoint administrators in U.K. court, setting the
stage for a possible descent into administration.

According to the report, the notice does not definitively mean KWM
will enter into administration, a process which seeks to "rescue"
companies on the verge of insolvency without requiring a
liquidation of assets.  The recent action is not a required
prerequisite for administration, but instead merely protects KWM
from any legal action seeking to recover funds owed.

The Troubled Company Reporter, citing a report by Max Walters at
Law Gazette, said the firm's European arm is expected to go into
administration in January.  The firm, which is around GBP30
million in debt, has been courting potential takeover offers but
the Gazette reported on Dec. 14 that some of these had failed.

A spokesperson declined to confirm reports that administrators
will be called in on Jan. 16, 2017, the Gazette notes.

Major firms including Reed Smith and Mayer Brown are thought to be
in talks with several KWM partners about lateral moves while the
firm is also examining the possibility of transferring training
contracts to other firms, the Gazette discloses.

A KWM spokesperson told the Gazette, "We continue to work with our
financial advisers to explore all available options and, in the
interim, speculation and rumor serve no positive purpose.  As soon
as we are in a position to confirm further details, we will of
course do so."

Earlier this year, the Gazette reported that KWM would be cutting
15% of partners in its Europe and Middle East practice, the
Gazette recounts.

There were hopes that the Chinese arm of the business might bail
out the European and Middle East arm, the Gazette states.  That
option foundered last month however, leaving a rescue merger as
only viable remaining option, the Gazette relays.

                   About King & Wood Mallesons

King & Wood Mallesons is a multinational law firm headquartered in
Hong Kong.  With more than 2,200 lawyers and $1 billion in
revenue, King & Wood Mallesons is a product of two large scale
mergers: in 2012, China's King & Wood PRC Lawyers merged with
Mallesons Stephen Jaques of Australia, and then what became King &
Wood Mallesons merged with SJ Berwin of the United Kingdom in
2013.

KWM is the first and only global law firm based in Asia and is the
largest law firm headquartered outside of the United States or
European Union.  It is the 6th largest firm in the world by number
of lawyers and one of the top thirty by revenue.

The firm's Chinese, Australian and UK divisions each maintain
separate finance units but operate under a single brand name.

                       European Arm's Woes

KWM's European and Middle East (EUME) operation as of November
2016 had 130 partners and more than 500 lawyers altogether.  Its
offices in Europe and the Middle East are London, Cambridge,
Madrid, Brussels, Luxembourg, Milan, Paris, Frankfurt, Munich,
Dubai and Riyadh.  In 2015, the division accounted for 27 percent
of the firm's global revenue.

The Australian, Chinese, Hong Kong portions of KWM are financially
separate and have different management from the European
operations.

KWM Europe faced cash flow issues because of a slowdown in
business and partner defections.  In 2016, it was unable to make
timely payments to partners.

The firm subsequently announced a plan to inject $18 million of
capital by raising it from partners.  But the recapitalization
plan failed due to a number of partner departures.  Among those
who jumped ship are managing partner Rob Day and its head of
investments practices Michael Halford, left.

On Nov. 10, 2016, the firm announced that KWM global managing
partner Stuart Fuller would step down and that a process was
underway to select a new leader.

On Nov. 16, 2016, KWM announced a proposed bail-out, under which
the Chinese division agreed to infuse GBP14 million of additional
capital to KWM Europe, provided that 60% of partners agree to a 12
month "lock-in" and provide some additional capital.  However,
insufficient partners committed to the deal.

By the end of November 2016, KWM announced that it was considering
a range of strategic options, including a merger of the European
division.

In early December 2016, reports say that KWM Europe was in
negotiations to enter pre-packaged administration proceedings in
the UK.

KWM Europe announced on Dec. 9, 2016, that it has received "a
number of indicative purchase offers."


LIFESTYLE LIVING: FRP Advisory Appointed as Administrators
----------------------------------------------------------
David Casey at Insider Media reports that an independently owned
holiday and residential park operator which caters primarily for
the over 50s market has entered administration with insolvency
specialists from FRP Advisory brought in to find a buyer.

Jason Baker and Miles Needham of FRP Advisory have been appointed
joint administrations of Lifestyle Living UK, which operates six
parks across England, the report discloses.

The group provides a range of purpose-built and individually
designed luxury lodges and static caravan units. It is understood
to employs about 50 staff.

"Our priority is to maintain the day-to-day operations of the
caravan parks to ensure that customers and users continue to enjoy
the products and facilities offered by Lifestyle Living," the
report quotes Jason Baker, joint administrator and partner of FRP
Advisory, as saying.  "We continue to trade the business and
ensure that the holiday and residential parks operate as normal
while actively marketing the business for sale.  We have already
engaged with interested parties and invite other interested
parties to make early contact."

Lifestyle Living owns and operates both holiday and residential
parks in Carlton Manor Holiday Park, Carlton Colevillle near
Lowestoft, Suffolk; Carlton Meres, Carlton, near Saxmundham,
Suffolk; Redhill Park, Watton, Norfolk; Haveringland Hall Country
Park, Cawston, near Norwich, Norfolk; Lakeland View, Netherton,
near Egremont, Cumbria;  Silecroft Holiday Park, Silecroft, near
Whicham, Cumbria.


PREVA PRODUCE: In Administration, Cuts 20 Jobs
----------------------------------------------
Fakenham Times reports that Preva Produce Ltd, a company which
supplied potatoes to the likes of Walkers and Kettle Foods has
been put into administration, with the loss of 20 jobs.

Preva Produce, which has premises at Foulsham and Snetterton, had
suffered "significant cash flow pressures" which had led to
difficult trading conditions in recent months, said administrators
Price Bailey, the report notes.

They are now looking at the possibility of selling parts of the
business, and have already agreed a deal subject to contract for
the company's 29,000 sq. ft. packing facility at Snetterton, which
was suspended in November because of cash constraints, the report
relays.

Matt Howard -- matt.howard@pricebailey.co.uk -- and Stuart Morton
-- stuart.morton@pricebailey.co.uk -- of chartered accountants
and business advisers Price Bailey were appointed joint
administrators on December 20, 2016, the report relays.

Mr. Howard said: "The management team are working with Price
Bailey to review the company's position and to formulate a
strategy, the report notes.

"Unfortunately, it has been necessary to make 20 redundancies,
leaving 11 staff remaining," Mr. Howard said.

Preva Produce was established in 2001 as an integrated potato
business, which produced chipping and crisping potatoes for
companies such as Walkers, Kettle, Asda and Morrisons.

It describes itself on its website as a "significant grower in
East Anglia", producing salad, pre-pack, chipping and crisping
potatoes, as well as specialists in seed production and handling,
with import links across Europe and the Middle East, the report
relays.

According to Companies House, Preva Produce applied to extend its
latest accounting period by six months to the end of June 2016.
Its most recently filed accounts, for the year ended December 31,
2014, showed the company earn a pre-tax profit of GBP407,669 on a
turnover of GBP11.62 million, with directors welcoming "a strong
return to form in 2014 against a backdrop of depressed prices,
over-production and a retail potato market that has continued to
diminish year-on-year," the report relays.

Stuart Morton, insolvency practitioner at Price Bailey, added: "We
are keen to talk to any interested parties for other parts of the
business.

"While the future of the business is uncertain it is always our
preference to save the business and secure as many jobs as
possible," Mr. Morton added.


* UK: Number of Energy Firms Going Bust Reaches Record High
-----------------------------------------------------------
originalfm.com reports that the number of UK energy companies
going insolvent has reached an all-time high.

A study from accountancy firm Moore Stephens has found 16 oil and
gas businesses went bust last year, according to the report. In
2015, there were two, and there were none in 2012.

The study places the blame on the oil price downturn -- which
slumped from $120 a barrel to just under $50 for most of the year,
the report notes.

The report relays that Jeremy Willmont of Moore Stephens, said:
"The collapse of the price of oil has stretched many UK
independents to breaking point.

"The last 15 years has seen a large increase in the number of UK
oil and gas independents exploring and producing everywhere from
Iraq to the Falkland Islands.

"Unless there is a consistent upward trend in the oil price,
conditions will remain tough for many of those and insolvencies
may continue."


* UK: Cashflow Issue Biggest Risk to 71% of Small Businesses
------------------------------------------------------------
FG Insight, citing a survey by Amicus Commercial Finance, reports
that cashflow has caused issues for 40% of farms and other small
businesses in the last two years.

About 71% of small businesses identified cashflow as the biggest
risk, FG Insight relays. One in five companies said they had lost
contracts due to cashflow problems and 12% either came close to or
became insolvent.

Regionally, companies in the North East have been the worst hit by
cashflow shortages, according to FG Insight.

"Our research shows that most small firms recognise the damage
caused by cashflow problems but that doesn't guarantee their
immunity," FG Insight quotes John Wilde, managing director of
Amicus Commercial Finance, as saying.  "The worst case scenario is
insolvency but in our experience, slow paying invoices are often
to blame."


* UK: Managers Pessimistic About Economic Prospects for 2017
------------------------------------------------------------
The majority of UK managers are pessimistic about the UK's
economic prospects for 2017, yet remain resolutely positive about
their own business, according to the annual Future Forecast from
the Chartered Management Institute.

Almost two-thirds (65%) of the 1,118 UK managers surveyed for this
year's forecast feel negative about the UK's economic outlook for
the next 12 to 18 months, while half (49%) think Brexit will have
a negative impact on economic growth in the next three to five
years.  Looking back over 2016 and the immediate impact of the
referendum, only two in five (39%) organizations described
themselves as experiencing growth, which is the lowest figure
since 2012.  Similarly, 35% of managers lack confidence in current
UK leadership and management's ability to capitalize on post-
Brexit opportunities.

However, despite this negative sentiment around the UK's wider
economic prospects, managers are also seeing opportunity when it
comes to their business.  Over half (57%) remain positive about
their organization's own prospects, while just a quarter (25%)
feel pessimistic -- a figure which has remained steady since last
year. Since the referendum, managers became 6% more confident
(54%) in senior executives' ability to lead their own organization
too.

Managers overwhelmingly believe that investing in skills is
essential to address our post-referendum prospects.  Around three-
quarters (74%) agree that post-Brexit, investing in skills is even
more important but one in five (20%) saying that they did not
receive the training and development they needed to perform their
job effectively in 2016.

There was also wide support for building skills for the next
generation of home-grown leaders and managers through the
apprenticeship program.  Only 18% oppose the Apprenticeship Levy
that will take effect from April 2017, with 47% fully supportive
and the remaining 35% still requiring further guidance or
information to understand how the Levy will affect their business.

Looking to wider external influencers, opinion remains uncertain
on what impact the Trump presidency will have on the UK's economic
prospects -- a situation that reflects the divisive political
context and heightened economic uncertainty of 2016. Two in five
(40%) think Donald Trump's election win is going to have an
overtly negative impact on the UK economy.  Conversely, 31% think
that Trump victory will have a positive impact, whilst 29% said
they weren't sure or that it would have no impact at all.


                            *********

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

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

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


                            *********


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

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

Copyright 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
202-362-8552.


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