TCREUR_Public/170117.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

           Tuesday, January 17, 2017, Vol. 18, No. 12


                            Headlines


B E L G I U M

ETHIAS SA: Fitch Affirms 'BB' Rating on Subordinated Debts


G R E E C E

MARINOPOULOS GROUP: Athens Court Approves Restructuring Plan


I R E L A N D

GRIFOLS WORLD: Moody's Rates USD4.4BB Sr. Credit Facilities Ba2
PERMANENT TSB: S&P Raises Counterparty Credit Rating to 'BB'
VULCAN LTD: S&P Lowers Rating on Class D Notes to 'D (sf)'

* IRELAND: Insolvencies in Irish Service Sector Up 65% in 2016


I T A L Y

MONTE DEI PASCHI: EU Banking Watchdog Not Concerned Over Rescue


L U X E M B O U R G

AI MISTRAL: Moody's Assigns (P)B1 Rating to USD495MM Term Loan


M O L D O V A

MOLDOVA: Moody's Affirms B3 Gov't. Issuer Ratings, Outlook Stable


R U S S I A

BULGAR BANK: Put on Provisional Administration, License Revoked


S P A I N

CELLNEX TELECOM: S&P Assigns 'BB+' Rating to EUR335MM Sr. Notes


U N I T E D   K I N G D O M

ASSURED GUARANTY: Moody's Raises IFS Rating From Ba2
LEHMAN BROTHERS: Court to Rule on Administrators' GBP10BB Claim
TALKTALK TELECOM: Fitch Assigns 'BB-' LT Issuer Default Rating
TATA STEEL UK: Parent Offers to Pay Millions to Pension Scheme
TAURUS CMBS 2006-2: Fitch Affirms 'Dsf' Ratings on 3 Note Classes

VEDANTA RESOURCES: S&P Raises CCR to B+ on Higher Commodity Price
* UK: Administration Figures Up After Brexit Vote, KPMG Says


                            *********



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B E L G I U M
=============


ETHIAS SA: Fitch Affirms 'BB' Rating on Subordinated Debts
----------------------------------------------------------
Fitch Ratings has affirmed Ethias S.A.'s Insurer Financial
Strength (IFS) Rating at 'BBB' and Long-Term Issuer Default
Rating (IDR) at 'BBB-' and removed them from Rating Watch
Positive (RWP). The Outlooks are Positive.

The rating actions follow an announcement by Ethias that it
completed on Dec. 23, 2016, an offer (Switch VI) to certain
policyholders of 'First A' products aimed at strengthening its
Solvency II position and reducing the sensitivity of its Solvency
II coverage ratio to changes in interest rates.

                        KEY RATING DRIVERS

The Positive Outlook reflects Fitch's expectation that the Switch
VI operation will make both Ethias' Solvency II margin and
Fitch's Prism Factor Based Model (FBM) score less sensitive to
interest rate changes.  Fitch therefore expects Ethias' capital
and earnings profile to improve in 2017.  Fitch will assess
Ethias' Prism FBM score when 2016 financials become available.

Despite the cost, estimated by the company at EUR191m, associated
with the Switch VI operation, Fitch views this initiative
positively as it has improved Ethias' capital position and is
likely to have reduced the group's sensitivity to interest rate
changes.

Ethias is exposed to interest-rate risk as life technical
liabilities are subject to high minimum guaranteed returns and
also because of a duration gap between assets and liabilities in
life accounts.  However, the gap shrank significantly to 2.2
years as of end-September-June 2016 from 3.2 years in 2015,
following reinvestments in long-term Belgian treasury notes and
the purchase of hedging derivatives.

In November 2016, Ethias launched a commercial initiative, Switch
VI, to incentivize customers to redeem capital-intensive "First
A" products.  Customers were given a 25% premium on the surrender
value in redemptions.  The offer aimed at reducing Ethias'
exposure to interest rate risk associated with the First A
products, under which guarantees are paid until the policyholder
reaches the age of 99.

Upon the closing of the offer on Dec. 23, 2016, out of EUR1.4
bil. outstanding reserves (BGAAP), EUR762 mil. were redeemed and
a further EUR20 mil. are pending.  As a result, the amount of
reserves associated with First A products was reduced by around
55%; the average guarantee has remained unchanged at 3.44%.

The Switch VI marks another step in Ethias' efforts to reduce the
amount of contracts related to "First A" products.  Since 2014,
around 80% of reserves related to these products have been
redeemed by policyholders.

The group's regulatory Solvency II ratio fell to 116% in 9M16
(excluding transitional measures), driven by lower interest
rates, but should improve by 22% since the closing of Switch VI,
according to Ethias' estimates.

                       RATING SENSITIVITIES

The ratings could be upgraded if Ethias' duration gap between
assets and liabilities within its life accounts improves from 2.2
years at end-September 2016, provided the Prism FBM score remains
at "Strong" or better based on 2016 financials.

The Outlook is likely to be revised to Stable if Ethias' score in
Prism FBM weakens to "Adequate" based on 2016 financials or the
duration gap fails to improve.

FULL LIST OF RATING ACTIONS

Ethias S.A.:

  IFS Rating affirmed at 'BBB'; Off RWP; Outlook Positive
  Long-Term IDR affirmed at 'BBB-'; Off RWP; Outlook Positive
  Undated subordinated debt affirmed at 'BB'; Off RWP
  Dated subordinated debt affirmed at 'BB'; Off RWP

Ethias Droit Commun AAM:

  IFS Rating affirmed at 'BBB'; Off RWP; Outlook Positive


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


MARINOPOULOS GROUP: Athens Court Approves Restructuring Plan
------------------------------------------------------------
The National Herald reports that the anxious wait for unpaid
Marinopoulos supermarket chain workers ended when a court
approved a restructuring plan to save the bankrupt operation.

The approval came Jan. 16 from the three-justice Athens First
Instance Court in a decision that will allow the profitable
Skavenitis chain to take over what used to be Greece's biggest
chain, which had broken off its relationship with French giant
Carrefour, The National Herald relates.

A previously negotiated deal for the merger, one in which all
four of Greece's systemic banks are participating as creditors
and financiers, has a deadline of Feb. 14, The National Herald
relays, citing the business newspaper Naftemporiki.

An interim funding arrangement had run out with the payment of a
required holiday bonus to Marinopoulos' employees and 30% of
December 2016's payroll, The National Herald recounts.
Marinopoulos has almost 10,800 staff on its payroll, The National
Herald discloses.



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


GRIFOLS WORLD: Moody's Rates USD4.4BB Sr. Credit Facilities Ba2
---------------------------------------------------------------
Moody's Investors Service has assigned a Ba2 rating to the
proposed USD4.425 billion senior secured bank credit facilities
to be issued by Grifols World Wide Operations Ltd. and Grifols
Worldwide Operations USA, Inc., wholly-owned subsidiaries of
Grifols S.A. (Grifols), a global healthcare company primarily
focused on human blood plasma-derived products and transfusion
medicine.

The proposed senior secured bank credit facilities include a $1.3
billion term loan B due 2025, a $2.825 billion term loan A due
2023, and a $300 million equivalent revolving credit facility
(RCF) due 2023. Grifols plans to use the proceeds from the new
term loans to refinance existing term loans.

The rating assignment reflects the following inter-related
drivers:

-- Moody's estimates that Grifols' leverage, as measured by
    Moody's-adjusted debt/EBITDA, will remain unchanged at 4.8x
    because the refinancing will not change the company's quantum
    of debt

-- Moody's expects that the refinancing will extend the
    company's debt maturity profile and provide some interest
    expense savings thereby slightly improve its free cash flows

Grifols' all other ratings remain unchanged, namely: the Ba3
corporate family rating (CFR), the Ba3-PD probability of default
rating (PDR), B2 rating of the USD1 billion senior unsecured
notes due 2022, and Ba2 rating of currently outstanding senior
secured bank credit facilities, including USD700 million term
loan A due 2020, USD3.25 billion term loan B due 2021, EUR400
million term loan B due 2021, and USD300 million RCF due 2019.
The additional USD1.7 billion term loan due 2023 (rated Ba2),
arranged to finance the acquisition of Hologic's NAT blood
screening business, is not part of the refinancing and it will be
fungible (mutually interchangeable) with the new USD1.3 billion
term loan. The outlook on all ratings remains stable.

RATINGS RATIONALE

Grifols S.A.'s (Grifols) Ba3 corporate family rating (CFR)
reflects: (1) the company's good scale with a high degree of
vertical integration and leading market positions in human blood
plasma-derived products; (2) the barriers to entry including, but
not limited to, a high degree of capital-intensity and regulatory
constraints in a consolidated market; and (3) the favourable
fundamental drivers, with volume growth supported by improving
diagnostics.

Conversely, the rating reflects: (1) the company's narrow, albeit
improving, diversification, with a high dependence on human blood
plasma-derived products and vulnerability to market imbalances
and negative pricing movements; (2) our view of the potential
high impact -- albeit low probability -- of safety risks relating
to product contamination; and (3) leverage of 4.9x at closing of
the acquisition of Hologic's NAT blood screening business, with
slow deleveraging expected.

Moody's expects that pro forma for the acquisitions and
refinancing Grifols will maintain good liquidity supported by no
meaningful debt amortizations until 2023; undrawn $300 million
revolving credit facility and cash of around EUR500 million;
positive free cash flows of around EUR200 million in 2017; and
good headroom under its senior secured bank credit facilities'
single financial covenant.

The Ba2 senior secured bank credit facilities rating reflects the
loss absorption cushion provided by the senior unsecured notes
rated B2. The Ba3-PD probability of default rating (PDR) is in
line with the Ba3 CFR reflecting Moody's 50% corporate family
recovery rate. Moody's notes that a smaller quantum of senior
unsecured notes (compared to the current USD1 billion) may put
pressure on the senior secured debt rating.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook reflects Moody's view that Grifols' leverage
will slowly decrease to 4.5x over the next 12-18 months. The
stable outlook does not incorporate significant capital structure
changes from shareholder friendly actions or large debt-financed
acquisitions.

WHAT COULD CHANGE THE RATING UP/DOWN

Positive rating pressure could develop if:

- Grifols' leverage, as measured by Moody's-adjusted
   debt/EBITDA, were to decrease below 4.0x sustainably;

- CFO/Debt were to improve sustainably above 15%; and

- Stable operating performance were to continue with market
   share gains in major products

Negative rating pressure could develop if:

- Grifols' leverage, as measured by Moody's-adjusted
   debt/EBITDA, were to remain over 5.0x for a prolonged period;

- CFO/Debt were to fall towards 5%;

- Profitability, as measured by Moody's-adjusted EBITDA margin,
   were to drop notably;

- Liquidity were to deteriorate significantly; or

- Quality concerns were to emerge about Grifols' major products

List of Affected Ratings

Assignments:

Issuer: Grifols World Wide Operations Ltd.

Backed Senior Secured Bank Credit Facilities, Assigned Ba2
(LGD3)

The principal methodology used in these ratings was Global
Medical Product and Device Industry published in October 2012.


PERMANENT TSB: S&P Raises Counterparty Credit Rating to 'BB'
------------------------------------------------------------
S&P Global Ratings took various rating actions on Irish banks.
Specifically, S&P:

   -- Raised the long- and short-term counterparty credit ratings
      on Bank of Ireland (BOI) to 'BBB/A-2' from 'BBB-/A-3'.  The
      outlook is stable.

   -- Raised the ratings on Allied Irish Banks PLC (AIB) to
      'BBB-/A-3' from 'BB+/B'.  The outlook is stable.

   -- Raised the ratings on Permanent TSB PLC (PTSB) to 'BB/B'
      from 'BB-/B'.  The outlook is stable.

   -- Affirmed the 'BBB/A-2' ratings on Ulster Bank Ireland DAC
      (UBI).  The outlook remains stable.

   -- Affirmed the 'BBB-/A-3' ratings on KBC Bank Ireland PLC
      (KBCI).  The outlook remains stable.

                             RATIONALE

The rating actions reflect S&P's view that economic risks have
decreased for Irish banks, as S&P believes that brisk economic
growth and the sustained recovery in property prices are helping
to reduce the negative impact of past economic imbalances.

As a result S&P has raised the anchor, the starting point for
rating a typical Irish bank, to 'bbb-' from 'bb+'.  An improved
economic risk score also reduces the risk-weightings for Irish
exposures within S&P's risk-adjusted capital (RAC) framework.
For example, the risk weighting for Irish mortgages reduces to
45% from 54%.  S&P has incorporated these revised assumptions
into its ratings on the five rated Irish banks, as explained
further.

S&P now believes that the Irish economy is in an "expansionary
phase" in contrast to S&P's previous view of a "correction
phase". Over the next two-to-three years we assume relatively
brisk economic growth and continued property price inflation.
S&P also believes that 2016 was the last year of material loan
book deleveraging, and assume that total loan growth will turn
positive by 2018.

S&P assumes that Ireland's real GDP will have increased by about
3.5% in 2016.  S&P forecasts a real GDP growth rate of 3.0% in
2017-2019.  S&P will continue to keep a close eye on any impact
on the Irish economy following the U.K.'s referendum vote to
leave the EU.  While its exact form remains unknown, Brexit could
have a notable negative effect on Ireland's economic and fiscal
performance over the medium term.

Nationally, house prices rose by 7.1% over the 12 months to
October 2016 according to official data, maintaining the steady
recovery since the trough in early 2013.  Commercial property
capital values have also improved, and office vacancy rates have
fallen.  This sector remains a risk for the Irish banking system
given S&P's estimate that about 14% of loans are construction and
property loans and around 15%-20% of these are riskier land and
development books, which S&P believes is a high proportion.

S&P assumes flat total credit growth in 2017, rising to about 1%
in 2018.  Credit growth has been negative in Ireland since the
financial crisis.  In recent months, however, S&P has observed
positive credit growth in consumer credit.  Mortgage loans, which
account for the vast majority of household debt, continued to
decrease during 2016, as has lending to non-financial
corporations.  S&P expects business lending in particular,
however, to pick up, as long as the brisk pace of economic growth
is maintained.

Against this favorable backdrop S&P assumes domestic system-wide
credit losses to have been exceptionally low in full-year 2016,
with net provision releases for the third straight year.  This
compares with S&P's assumption in our August 2016 Banking
Industry Country Risk Assessment (BICRA) publication of 25 basis
points (bps) of credit losses in 2016.  The minimal impact of
Brexit, to date, helps to explain the difference.  For 2017 and
2018 S&P maintains its view of a more normal level of around 30
bps credit losses.

The banking system's large stock of nonperforming loans (NPLs;
defined as impaired loans plus loans that are 90 days past due
but are not impaired) and still high level of mortgage arrears
(including a resilient bunch of very long-term 720 days plus
arrears) remain among the most significant challenges facing the
industry.  S&P estimates that NPLs will account for around 16% of
domestic systemwide loans at end-2016 (down from a peak of around
35% at end-2013) although provision coverage of NPLs at around
50% appears satisfactory.  While S&P expects further reduction in
NPLs (we assume to about 12% by end-2018), a more material
reduction appears unlikely because the remaining stock represents
the more difficult cases.  Furthermore, legal bottlenecks and the
slow process of creditors being able to recover collateral act as
a hurdle to rapid reductions in NPLs.

Provision releases and a recovery in net interest margins (NIM)
have helped most Irish banks to return to profitability at a
satisfactory level.  In S&P's opinion, a number of factors may
act as a brake on a further improvement in industry profitability
henceforth:

   -- S&P expects future NIM expansion to be modest as long as
      interest rates remain low.  Low interest rates make the
      large low margin tracker mortgage portfolios a particular
      pain point.  In addition, S&P understands there is some
      public and political pressure on Irish banks to reduce
      pricing on standard variable rate mortgages and near-term
      net loan growth is expected to remain subdued.  Margins
      will be impacted as Irish banks gradually build up their
      minimum requirement for own funds and eligible liability
     (MREL) requirements.

   -- Margins currently benefit from the relative absence of debt
      securities and subordinated instruments.

   -- While Irish banks have done much work to "right size" their
      operations for a smaller loan book and footprint, S&P
      believes that they will need to continue to invest in their
      digital capability and other operational requirements.
      There is the possibility of exceptional charges such as
      customer redress related to the Central Bank of Ireland's
      ongoing industrywide investigation on documentation and
      disclosure for legacy tracker mortgages.

Finally, S&P notes that the Irish banking system is dominated by
wholly or partly government-owned institutions and S&P expects
this to remain the case for a few more years.  The government has
reduced its stake in PTSB to 75% following the successful capital
raise in early 2015.  Otherwise there has been little progress of
note since the re-capitalization of the sector in 2011; in
particular there is no clear evidence of when the sale of the
first tranche of AIB's shares will occur.  That said, S&P
acknowledges that 2016 was a difficult year for European banks'
equity valuations in general.

                             OUTLOOKS

BOI

S&P has maintained its stand-alone credit profile (SACP) at
'bbb'. S&P has removed the one-notch negative adjustment within
the counterparty credit rating, as S&P believes that the
financial performance and prospects of the bank have normalized
and are now in line with European peers rated at the same level.

The stable outlook on BOI reflects S&P's expectation that the
bank will continue to steadily reduce its NPL ratio to a mid-
single-digit level over the two-year outlook timeframe, and that
its relatively large U.K. business will not be a source of
weakness for the group.

An upgrade might follow if S&P deemed that BOI's subordinated
buffers would exceed S&P's 4.75% threshold for additional loss-
absorbing capacity (ALAC) over a two-year horizon, or potentially
longer, in response to clear regulatory requirements.

A lowering of the ratings is deemed relatively unlikely at this
time but could arise if its business and earnings predictability
falters.

                               AIB

S&P has raised AIB's SACP by one notch to 'bbb-' from 'bb+' to
reflect the improvement in its anchor.

The stable outlook reflects S&P's view of AIB's stable intrinsic
creditworthiness and S&P's expectation that it will continue
making steady progress in reducing its stock of NPLs to levels
more aligned with that of peers in the coming 18-24 months.

S&P could lower the ratings on AIB if S&P observed that the
economic recovery had stalled, indicating that the economic risks
faced by Irish banks were not declining, as well as if Brexit had
adverse effects on AIB's earnings profile and its ability to
reduce NPLs.

S&P could upgrade AIB if S&P observed that its capitalization, as
measured by S&P's RAC ratio, improved to a level sustainably
above 10% and NPLs continued to reduce to levels more in line
with those of peers, in particular domestic peer Bank of Ireland.
Although less likely at this stage, an upgrade could also arise
if S&P included one notch of ALAC support in our long-term rating
on AIB. The bank's ALAC buffer would need to increase
substantially to exceed the required thresholds (5% for a bank
with an anchor of 'bbb-').

The stable outlook on AIB Group (U.K.) PLC (AIB UK), AIB's wholly
owned subsidiary, continues to reflect S&P's view of its
consistent intrinsic creditworthiness.

                               PTSB

S&P has raised PTSB's SACP by one notch to 'bb' from 'bb-' to
reflect an improvement in its anchor.

The stable outlook reflects S&P's view that PTSB's operating
performance and earnings capacity will gradually recover over the
next 12-18 months.

S&P could raise the ratings if it observed an earlier return to
statutory profitability and evidence of solid business
generation, which would indicate that the bank's business model
is sustainable, and if S&P observed improvements in its funding
profile to a level sustainably closer to that of peers.

Although less likely, an upgrade could also follow if S&P
perceived a clear path to the group building a sufficiently large
ALAC buffer over S&P's two-to-four-year projection period.  This
would only benefit the ratings on the operating company, PTSB,
because ALAC support would not accrue to the non-operating
holding company's creditors due to structural subordination.

S&P could lower the ratings if PTSB's path to earnings recovery
became derailed, or if S&P perceived that PTSB's franchise had
been negatively affected by its prolonged restructuring,
indicated by reducing market shares and even weaker profitability
in its core banking proposition.

                               UBI

S&P has affirmed its ratings on UBI and maintained the outlook as
stable, based on S&P's assessment of the entity's highly
strategic importance to the Royal Bank of Scotland group.  At the
same time, S&P assess UBI's SACP as 'bb+'.  The SACP reflects the
entity's well established franchise as the third-largest bank in
the Republic of Ireland; its strong capitalization balanced
against some concentration in its exposures, particularly to
tracker mortgages; and its sound funding and liquidity position.

The stable outlook on UBI reflects S&P's stable view of the
supported group credit profile (GCP) of the Royal Bank of
Scotland PLC (RBS), UBI's ultimate parent.  An upgrade or
downgrade of RBS would result in a similar action on UBI.

S&P could also consider an upgrade if it revised UBI's group
status to core from highly strategic, which would enable S&P to
equalize the ratings on UBI with RBS.  Such an assessment would
primarily require UBI to demonstrate operating performance and a
risk profile in line with that of the parent.

KBCI

KBCI's SACP remains unchanged at 'bb'.

The stable outlook on KBCI balances S&P's view that, over the
coming 18-24 months, it will remain profitable and its projected
RAC ratio will remain above 7%, against the very large stock of
NPAs.

S&P continues to view the bank as a strategically important
subsidiary of Belgium bancassurance group KBC, while S&P
understands that the group plans to publicly communicate its
strategic plans for its Irish business in the first quarter of
2017.

While S&P views KBCI's strategy as logical, S&P still considers
management's attempt to reposition the KBCI franchise as a work
in progress.  S&P could therefore lower the ratings if it
believes that the bank is lagging behind its peers in terms of
working through its large stock of NPLs, or if S&P considers that
management is unlikely to develop KBCI into a retail-focused bank
that can generate solid business while remaining profitable on a
statutory basis.

S&P could also take a negative action if it observes that the
links between KBCI and KBC are weakening and if KBC decides that
Ireland is no longer a strategic priority, which could lead S&P
to revise its group status assessment and the uplift for
potential group support that S&P factors into its ratings on
KBCI.  Group support from KBC--both extraordinary and ongoing
support--is key to KBCI's investment grade ratings.

Although less likely, S&P could raise the ratings on KBCI by
removing the negative adjustment notch, if S&P sees strong
indications that the bank is making significant progress in
working through its NPLs while generating recurring and
sustainable profits, which would indicate the strategic
repositioning is working successfully.  S&P could also upgrade
KBCI within the coming 18-24 months if it observes that
capitalization, as measured by our RAC ratio is sustainably
maintained at a level exceeding 10%.

BICRA SCORE SNAPSHOT*
Ireland                       To                   From
BICRA Group                   5                    6
Economic risk                 5                    6
Economic resilience           Low risk             Low risk
Economic imbalances           Intermediate risk    High risk
Credit risk in the economy    Very high risk       Very high risk

Industry risk                 6                    6
Institutional framework       High risk            High risk
Competitive dynamics          Intermediate risk    Intermediate
risk
Systemwide funding            High risk            High risk

Trends
Economic risk trend           Stable               Stable
Industry risk trend           Stable               Stable

*Banking Industry Country Risk Assessment (BICRA) economic risk
and industry risk scores are on a scale from 1 (lowest risk) to
10 (highest risk).

Ratings List

                         Allied Irish Banks PLC

Upgraded; CreditWatch/Outlook Action
                                 To                 From
Allied Irish Banks PLC
Counterparty Credit Rating      BBB-/Stable/A-3    BB+/Pos./B
Senior Unsecured                BBB-               BB+
Subordinated                    BB                 B+
Commercial Paper                A-3                B

Allied Irish Banks N.A. Inc.
Commercial Paper*               A-3                B
Commercial Paper*               BBB-               BB+

Ratings Affirmed

AIB Group (U.K.) PLC
Counterparty Credit Rating      BB+/Stable/B

Allied Irish Banks PLC
Subordinated                    D

                             Bank of Ireland

Upgraded; CreditWatch/Outlook Action

                                To                 From
Bank of Ireland
Counterparty Credit Rating     BBB/Stable/A-2     BBB-/Pos./A-3
Certificate Of Deposit
  Local Currency                BBB                BBB-
Senior Unsecured               BBB                BBB-
Subordinated                   BB+                BB
Junior Subordinated            BB-                B+
Preference Stock               BB-                B+
Commercial Paper               A-2                A-3

Bank of Ireland U.K. Holdings PLC
Junior Subordinated            BB-                B+


                              KBC Group N.V.

Ratings Affirmed

KBC Bank Ireland PLC
Counterparty Credit Rating           BBB-/Stable/A-3
Commercial Paper**                   A-1

                           Permanent TSB PLC

Upgraded; Ratings Affirmed
                                To                 From
Permanent TSB PLC
Counterparty Credit Rating     BB/Stable/B        BB-/Stable/B
Certificate Of Deposit
  Local Currency                BB                 BB-
Senior Unsecured               BB                 BB-

Permanent TSB Group Holdings PLC
Counterparty Credit Rating     B+/Stable/B        B/Stable/B


                   The Royal Bank of Scotland Group PLC

Ratings Affirmed

Ulster Bank Ireland DAC
Counterparty Credit Rating      BBB/Stable/A-2
Certificate Of Deposit          BBB/A-2

* Guaranteed by Allied Irish Banks PLC
** Guaranteed by KBC Bank N.V


VULCAN LTD: S&P Lowers Rating on Class D Notes to 'D (sf)'
----------------------------------------------------------
S&P Global Ratings lowered to 'D (sf)' from 'CCC- (sf)' its
credit rating on Vulcan (European Loan Conduit No. 28) Ltd.'s
class D notes.  At the same time, S&P has affirmed its 'D (sf)'
ratings on the class E, F, and G notes.

The rating actions reflect the interest shortfalls that occurred
on the November 2016 interest payment date (IPD).  All classes of
notes received no interest, including the class D notes, which is
the most senior class of notes.

Vulcan (European Loan Conduit No. 28) closed in August 2007 with
notes totaling EUR1.1 billion.  The notes were backed by 15 loans
secured by 88 properties across Europe.  Since closing, eleven
loans have fully repaid and two loans repaid at a loss.  There
are 23 properties securing the two remaining loans.  One of the
loans is in special servicing while the other loan has been
extended. The notes have a current outstanding balance of EUR29.3
million and their legal final maturity is in May 2017.

S&P understands that the transaction experienced interest
shortfalls because of spread compression between the loans and
the notes.  The interest collections from the remaining loan pool
are no longer sufficient to cover issuer expenses and the notes'
interest.  As a result, the class D notes experienced an interest
shortfall.

S&P's ratings in Vulcan (European Loan Conduit No. 28) address
the timely payment of interest, payable quarterly in arrears, and
the payment of principal no later than the May 2017 legal final
maturity date.

The class D notes experienced interest shortfalls at the November
2016 IPD.  The interest shortfalls represent a failure of the
notes to pay timely interest, which S&P believes is unlikely to
be repaid.  S&P has therefore lowered to 'D (sf)' from 'CCC-
(sf)' its rating on the class D notes, in line with S&P's
interest shortfall criteria.

At the same time, S&P has affirmed its 'D (sf)' ratings on the
class E, F, and G notes as they have previously had non-accruing
interest amounts allocated to them.  This is in line with S&P's
criteria.

RATINGS LIST

Vulcan (European Loan Conduit No. 28) Ltd.
EUR1.076 bil commercial mortgage-backed variable- and floating-
rate notes
                                   Rating
Class             Identifier       To           From
D                 92909YAB0        D (sf)       CCC- (sf)
E                 92909YAC8        D (sf)       D (sf)
F                 XS0314747956     D (sf)       D (sf)
G                 XS0314748418     D (sf)       D (sf)


* IRELAND: Insolvencies in Irish Service Sector Up 65% in 2016
--------------------------------------------------------------
Craig Fitzpatrick at Newstalk reports that the Irish service
sector saw an increase in the number of terminated businesses in
2016, despite the overall number of insolvencies declining in
line with strong economic growth.

There was a 65% rise in service firms folding, with 329
insolvencies recorded compared to 200 in 2015, Newstalk says.

David Van Dessel -- dvandessel@deloitte.ie -- Partner in
Restructuring Services with Deloitte, believes the contrary
situation is a working capital issue, Newstalk discloses.

According to Newstalk, Mr. Van Dessel told Business Breakfast: "A
lot of the service sector companies would be an SME size.  These
companies would typically tend not to have a lot of equity
finance.  They tend to be debt capital reliant and . . . the
banks -- although they've been very supportive of companies
during the recession -- are in a scenario now when they're
issuing new debt, they must be careful [that they're] they're
lending to viable entities."

Mr. Van Dessel believes companies are striving to avail of the
opportunities an improving economy presents, "pushing things too
far and falling over the edge" in the process, Newstalk relays.

The latest published insolvency figures also show that the
overall number of insolvencies fell by 2% in 2016 to 1,032,
Newstalk notes.  It is still far higher than the base level seen
during the final years of the Celtic Tiger, though Mr. Van Dessel
believes that the period of prosperity was "an outlier", Newstalk
states.


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


MONTE DEI PASCHI: EU Banking Watchdog Not Concerned Over Rescue
---------------------------------------------------------------
Francesco Guarascio at Reuters reports that the head of the
eurozone banking watchdog said on Jan. 11 she had no concerns
about how EU bank failure rules had been applied in the public
rescue of Italy's Banca Monte dei Paschi di Siena.

According to Reuters, Single Resolution Board chair Elke Koenig
told a news conference the Italian government and the EU
supervisory authorities "are doing a good job" in the Monte
Paschi case.

Rome used a clause in EU rules on banking liquidation to reduce
losses on Monte dei Paschi's creditors when it decided to rescue
the ailing bank in December, Reuters discloses.

"I would not be concerned by that rule," Reuters quotes
Ms. Koenig as saying.

The European Commission and the European Central Bank will assess
the Italian government's rescue plan and the bank's business plan
when they are finalized in coming weeks to check their compliance
with EU banking and competition rules, Reuters relates.

Ms. Koenig said that the SRB, which is in charge of overseeing
the orderly liquidation of failing banks, "is closely following
all relevant developments in Italy and also in other member
states", Reuters relays.

The EU's new rules on bank liquidation have been operational
since 2016 and are aimed at reducing taxpayers' costs in bank
bailouts, Reuters notes.

Ms. Koenig, as cited by Reuters, said that some of the conditions
for the precautionary recapitalization were fulfilled but
declined to comment on whether a liquidation of Monte dei Paschi,
Italy's third largest lender, would pose a threat to the
country's financial stability -- another condition for the
precautionary recapitalization.

Banca Monte dei Paschi di Siena SpA -- http://www.mps.it/-- is
an Italy-based company engaged in the banking sector.  It
provides traditional banking services, asset management and
private banking, including life insurance, pension funds and
investment trusts.  In addition, it offers investment banking,
including project finance, merchant banking and financial
advisory services.  The Company comprises more than 3,000
branches, and a structure of channels of distribution.  Banca
Monte dei Paschi di Siena Group has subsidiaries located
throughout Italy, Europe, America, Asia and North Africa.  It has
numerous subsidiaries, including Mps Sim SpA, MPS Capital
Services Banca per le Imprese SpA, MPS Banca Personale SpA, Banca
Toscana SpA, Monte Paschi Ireland Ltd. and Banca MP Belgio SpA.


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


AI MISTRAL: Moody's Assigns (P)B1 Rating to USD495MM Term Loan
--------------------------------------------------------------
Moody's Investors Service has assigned provisional (P)B1
instrument ratings to the proposed USD495 million first lien term
loan due 2024, the USD57.5 million revolving credit facility due
2022 and the USD30 million acquisition facility due 2022 which
are expected to be issued by AI Mistral (Luxembourg) Subco
S.ar.l., a subsidiary of AI Mistral Holdco Ltd. The outlook on
all aforementioned instrument ratings is stable. As part of the
transaction, AI Mistral (Luxembourg) Subco S.ar.l. will also
issue USD192.5 million second lien term loans due 2025 (unrated).

AI Mistral Holdco Ltd ("AI Mistral") and Al Mistral (Luxembourg)
Subco S.ar.l. are newly incorporated entities. AI Mistral is
expected to be the future holding company of V.Group, the global
provider of maritime services, and the topco entity of the new
proposed restricted group.

At the same time, Moody's has placed all ratings of Vouvray Midco
Limited, current parent and holding company of V.Group, under
review for downgrade, including its B1 corporate family rating
(CFR) and B1-PD probability of default rating (PDR).

Should the acquisition of V.Group by AI Mistral and the repayment
of the outstanding debt instruments conclude as envisaged,
Moody's would expect to move the CFR from Vouvray Midco Limited
to AI Mistral Holdco Ltd, to reflect the new corporate structure.
Moody's current expectation is also that the CFR will be
downgraded to B2 from B1, principally due to the anticipated
increase in Moody's adjusted leverage of the business from 4.6x
(LTM September 2016) to a post-transaction pro-forma leverage for
FY 2016 of 7.0x.

The Moody's adjusted opening leverage has been determined on a
pro-forma basis taking into account the acquired EBITDA of Bibby
and Selandia, FX normalisation and the full year impact of cost
reductions coming from certain redundancy activities completed in
the last part of 2016 but excluding the expected synergies from
Selandia. In addition the 2016PF Moody's EBITDA includes a pro-
forma cost adjustment for management incentives and contingencies
of approximately USD4 million.

Moody's expects the company to deleverage in next 12 months as
the company returns to organic growth and the synergies
identified flow through the EBITDA in 2017. Moody's currently
expects that the company's will reduce its Moody's adjusted
leverage to 6.6x by the end of 2017 and to 6.1x by the end of
2018. Any delay in achieving the identified synergies and the
expected deleveraging trajectory will put immediate pressure on
the rating.

The ratings on the outstanding USD365 million term loans due 2021
issued by Vouvray US Finance LLC and the USD35 million RCF due
2019 issued by Vouvray Acquisition Limited remain unchanged and
would be withdrawn upon repayment.

Moody's issues provisional ratings in advance of the final sale
of securities. Upon closing of the transaction and a conclusive
review of the final documentation, Moody's will endeavour to
assign definitive ratings. A definitive rating may differ from a
provisional rating.

RATINGS RATIONALE

The action reflects the announcement of the new capital structure
that Advent International (Advent) intends to put in place to
finalise the acquisition of V.Group. At the closing of the
transaction, Advent will have approximately 75% of AI Mistral
share capital while both OMERS and the management will retain a
minority stake in the Group of approximately 20% and 5%
respectively. The transaction, which is expected to be completed
by the end of February 2017, is conditional upon standard
antitrust and regulatory approvals.

The ratings reflect V.Group's (1) high opening financial
leverage; (2) relatively small scale; (3) lack of organic growth
in both revenue and managed fleet in the last two years; and (4)
dependence on key operational personnel, specifically fleet
superintendents and skilled crew. This is partially offset by the
company's (1) leading market position in the marine operations
segment; (2) diversified customer portfolio with long-term
relationships and low churn rates; (3) positive cash flow
generation; and (4) track record of deleveraging.

V.Group's liquidity, pro-forma for the transaction, is expected
to remain good, with sufficient internal resources to service
debt. At closing of the transaction, the company is expected to
have cash balance of USD15 million, which the management
considers sufficient to run the business, and access to a USD57.5
million revolving credit facility, that may be initially drawn up
to approximately USD5-10 million, and a USD30 million acquisition
facility. The proposed RCF is expecting to have a springing first
lien net leverage covenant when drawn more than 35%.

The new first lien term loans will amortize at 1% per annum. In
addition the provisional debt documentation reviewed includes a
cash sweep mechanisms for excess cash above USD10 million. Based
on the proposed transaction, the next debt maturity will be the
revolving credit facility and the acquisition facility in 2022.

The business model requires low levels of maintenance capex and
working capital outflows, as the business grows, and it is
further mitigated by up-front deposits paid by clients on
contract signing. Free cash flow -- calculated after capex, taxes
and interests payments - is expected to be above USD30 million in
the next 12-18 months. The company is unlikely to retain
significant cash on balance sheet, applying residual cash flow
toward acquisitions or further debt repayment.

WHAT COULD CHANGE THE RATING UP/DOWN

In light of the action, Moody's anticipates negative rating
pressure following its review of the final capital structure.
Moody's current expectation is that the CFR will be downgraded to
B2 from B1.

PRINCIPAL METHODOLOGY

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

CORPORATE PROFILE

Headquartered in the United Kingdom, V.Group is a leading global
maritime service provider, specialising in the outsourced
technical management of high value maritime assets and the
provision of a wide-range of supporting technical, workforce and
commercial services. V.Group operates in the commercial shipping,
cruise, energy and defence sectors. Pro-forma for the Bibby Ship
Management and Selandia acquisitions, the company currently has
989 vessels under management, of which 662 in technical
management, and a crew pool of 48,000 seafarers. V.Group has a
network of 70 offices across 31 countries.

Pro-forma for the acquisition of Bibby and Selandia, V.Group is
expected to reach pro-forma revenue of USD561 million and
management pro-forma adjusted EBITDA of USD100-105 million for
the FY2016.


=============
M O L D O V A
=============


MOLDOVA: Moody's Affirms B3 Gov't. Issuer Ratings, Outlook Stable
-----------------------------------------------------------------
Moody's Investors Service affirmed Moldova's B3 government issuer
ratings and changed the outlook to stable from negative.

RATINGS RATIONALE

The key drivers for changing the rating outlook to stable are the
following:

(1) Reduced government funding risks as a result of the new IMF
credit facility that began in November 2016, which unleashed
additional multilateral and bilateral financing.

(2) The adoption of new banking regulatory framework intended to
enhance the governance of the banking system, which reduces the
likelihood that additional contingent liabilities from the sector
would need to be assumed by the government or central bank.

The rationale for affirming the B3 government rating reflects the
calmer political environment after multiple changes of government
leadership in 2014-15 when a huge bank fraud was being unearthed.
Government debt has risen sharply due to the costs of covering
the central bank's recapitalization of the banking system but
debt remains manageable, with debt affordability still low
because of the high share of concessional debt in the
government's debt mix. That said, Moldova's rating remains
significantly constrained by the country's high levels of
poverty, a small economic base, structural impediments to growth
and very weak institutional strength. Also reflected in the B3
rating is political risk related to the separatist Transnistria
conflict.

Moody's made no changes to Moldova's country ceilings. The
country ceilings for long-term foreign- and local-currency debt
as well as long-term local-currency deposits remain at B2 whereas
the long-term foreign-currency bank deposit ceiling stays at
Caa1.

RATIONALE FOR CHANGING THE RATING OUTLOOK TO STABLE FROM NEGATIVE

FIRST DRIVER: REDUCTION IN GOVERNMENT FUNDING RISKS

The first driver for changing the outlook to stable is the
reduction in government funding risks. The new IMF credit
facilities (an Extended Credit Facility and an Extended Fund
Facility (ECF/EFF)) approved in November unleashed official
lending that had been withheld for more than a year. When Moldova
was cut off from official external lending for about 17 months
from mid-2015 due to concerns raised by the banking crisis, the
government was forced to finance its budget deficits exclusively
from the country's small domestic market (including the new debt
raised to reimburse the central bank for the bank bailout), which
is more expensive and generally carries shorter maturities. The
government along with the private sector also amassed external
payment arrears to suppliers.

The resumption of the IMF programme and subsequently, World Bank
and EU financing, allowed the government to start paying down its
domestic debt and put a schedule in place for clearing the
arrears. As soon as external financing resumed, the government
started repaying its domestic debt in net terms. So long as the
government remains on track with IMF programme criteria, inflows
of foreign grants will also resume, constituting an important
source of deficit financing, along with loans at concessional
rates. However, the IMF criteria are ambitious, and the operating
environment remains difficult, such that we do not rule out
intermittent delays in programme disbursements.

SECOND DRIVER: ADOPTION OF NEW BANK REGULATORY FRAMEWORK ALONG
WITH OTHER REFORMS

The second driver for stabilizing the outlook relates to the
adoption of key structural reforms both in connection with the
IMF program and in technical consultation with the IMF and other
multilateral lenders and donors. The ECF/EFF approval required
the Moldovan authorities to implement several prior actions, many
of which concerned long-delayed banking sector regulatory
reforms.

The central bank's operational independence has been enhanced,
its management has been replaced by independent professionals and
the rules governing the surveillance and supervisory capacity of
other regulatory institutions have been strengthened. These
measures will increase transparency regarding who owns stakes in
banks and strengthen related-party lending restrictions and anti-
money laundering initiatives. These measures should reduce the
likelihood that additional contingent liabilities from the sector
would need to be assumed by the government or central bank.

That said, effective implementation of the reforms will likely be
dependent on continued technical support from the IMF. The
banking system remains extremely fragile: two of the three big
banks currently operating are under central bank supervision and
the third is under its administration. The new regulations are
untested and rely heavily on legal enforcement in a country where
judicial corruption is rampant, therefore financial stability is
vulnerable to significant implementation risks. In particular,
the identification and unwinding of related-party lending remain
important challenges to the success of the revamped framework,
and the time that such processes take prior to the new resolution
system can become operational will likely exceed expectations.

Another new structural reform relates to the old age pension
system. Changes introduced as of 1 January 2017 are likely to
improve fiscal sustainability and potentially raise the
underlying growth rate. The reform aims to lengthen working lives
by gradually raising the retirement age from 60 for men and 57
for women to 65 and 62, respectively, over the next ten years in
response to the ageing and shrinking of the working age
population. Pension payments are being unified across
professions. On average, taking into account the incentives put
in place to stay longer in the workforce, the payments will be
higher than before the reform whereas indexation of benefits will
be more systematic. As a consequence, these changes have been
readily accepted by the population.

Similarly, the pending rollout of a comprehensive public
administration reform is meant to increase its productivity and
potentially curb the influence of vested interests. In this case,
however, the effort is to streamline and strengthen government
functions, which will be unpopular. The number of government
ministries will be cut from 16 to nine, with some being
eliminated and others combined. Following staff reductions, the
plan is to improve the compensation of those civil servants that
stay on in order to reduce corruption. Already the wages in tax
administration functions have been doubled as part of the effort.
Revenue mobilization is also part of the strategy, such as by
broadening and deepening the tax base and increasing energy
tariffs to cost recovery levels.

RATIONALE FOR AFFIRMING MOLDOVA'S B3 GOVERNMENT RATING

All in all, the reforms undertaken in recent months and those in
planning stages represent important progress in rationalizing
Moldova's economy and avoidance of new financial crises. An
Association Agreement and Deep and Comprehensive Free Trade
Agreement (AA/DCFTA) with the EU became effective in July 2016,
which reflects the growing importance of the EU as a trading
partner as well as source of funds.

Still, the government's track record of consistent reform
implementation is poor due to weak institutions and high levels
of corruption. The economy is also subject to significant
structural impediments to growth -- including continued mass
emigration and a still-fragile banking system -- as well as the
volatility engendered by the economy's heavy reliance on
agriculture. Very low wealth levels and the country's small and
narrow economic base will continue to constrain creditworthiness.
For these reasons, the government's rating is well-positioned at
B3.

FACTORS THAT COULD LEAD TO UPWARD RATING PRESSURE

Upward pressure on the rating could arise if the contingent
liability risks posed by the country's weak banking system were
to diminish further and meaningfully or the new resolution
framework proves to be sufficiently robust to sharply reduce the
risk of additional liabilities crystallizing on the government's
balance sheet. In either case, timely compliance with the current
IMF program over the next year would be a crucial condition to
assure that banking reforms make additional progress. Addressing
long-standing structural impediments to achieving higher growth
rates would also provide upward rating pressure.

FACTORS THAT COULD LEAD TO A DOWNGRADE

Moldova's government rating could be downgraded if the
authorities fail to continue the work associated with the IMF
program and lose official support, or alternatively, should they
fail to comply with the medium-term fiscal consolidation effort
in order to avoid substantial further deterioration in the
government's debt and debt service requirements.

The principal methodology used in these ratings was Sovereign
Bond Ratings published in December 2016.

The weighting of all rating factors is described in the
methodology used in this credit rating action, if applicable.

GDP per capita (PPP basis, US$): 5,047 (2015 Actual) (also known
as Per Capita Income)

Real GDP growth (% change): -0.5% (2015 Actual) (also known as
GDP Growth)

Inflation Rate (CPI, % change Dec/Dec): 13.5% (2015 Actual)

Gen. Gov. Financial Balance/GDP: -2.3% (2015 Actual) (also known
as Fiscal Balance)

Current Account Balance/GDP: -6.5% (2015 Actual) (also known as
External Balance)

External debt/GDP: 98.0% (2015 Actual)

Level of economic development: Very Low level of economic
resilience

Default history: At least one default event (on bonds and/or
loans) has been recorded since 1983.

On January 10, 2017, a rating committee was called to discuss the
rating of the Moldova, Government of. The main points raised
during the discussion were: The issuer's institutional strength/
framework, have not materially changed. The systemic risk in
which the issuer operates has decreased. Other views raised
included: The issuer's economic fundamentals, including its
economic strength, have not materially changed. The issuer's
fiscal or financial strength, including its debt profile, has not
materially changed. The issuer's susceptibility to event risks
has decreased.


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


BULGAR BANK: Put on Provisional Administration, License Revoked
---------------------------------------------------------------
The Bank of Russia, by its Order No. OD-73, dated January 16,
2017, revoked the banking license of Yaroslavl-based credit
institution joint-stock company Bulgar Bank or JSC Bulgar Bank
from January 16, 2017.

The Bank of Russia took such an extreme measure -- revocation of
the banking license -- because of the credit institution's
failure to comply with federal banking laws and Bank of Russia
regulations, revealed unreliability of reporting, the repeated
application over the past year of supervisory measures envisaged
by the Federal Law "On the Central Bank of the Russian Federation
(Bank of Russia)", and given a real threat to the interests of
creditors and depositors.

The credit institution failed to meet the supervisor's
requirements to provide financial statements which bear reliable
data on its liabilities to individuals to the Bank of Russia. In
addition, due to a low quality of assets incapable of generating
sufficient cash flow, JSC Bulgar Bank failed to timely honour its
liabilities to creditors.  Since the beginning of this year, the
bank has stopped servicing its customers.  The management and
owners of the bank did not take measures to bring its activities
back to normal.  In these circumstances the Bank of Russia
decided to withdraw JSC Bulgar Bank from the banking market.

The Bank of Russia, by its Order No. OD-74, dated January 16,
2017, appointed a provisional administration JSC Bulgar Bank for
the period until the appointment of a receiver pursuant to the
Federal Law "On Insolvency (Bankruptcy)" or a liquidator under
Article 23.1 of the Federal Law "On Banks and Banking
Activities".  In accordance with federal laws, the powers of the
credit institution's executive bodies are suspended.

JSC Bulgar Bank is a member of the deposit insurance system.  The
revocation of banking license is an insured event envisaged by
Federal Law No. 177-FZ "On Insurance of Household Deposits with
Russian Banks" regarding the bank's obligations on deposits of
households determined in accordance with the legislation.  This
Federal Law provides for the payment of insurance indemnity to
the bank's depositors, including individual entrepreneurs, in the
amount of 100% of their balances but not exceeding the total of
RUR1.4 million per depositor.

According to the financial statements, as of December 1, 2016,
JSC Bulgar Bank ranked 447th by assets in the Russian banking
system.


=========
S P A I N
=========


CELLNEX TELECOM: S&P Assigns 'BB+' Rating to EUR335MM Sr. Notes
---------------------------------------------------------------
S&P Global Ratings said that it has assigned its 'BB+' issue
rating to the proposed EUR335 million senior unsecured notes due
2025, to be issued by Spain-based wireless telecom and
broadcasting infrastructure operator Cellnex Telecom S.A.

Following the publication of S&P's revised recovery ratings
criteria on Dec. 7, 2016, it reviewed the recovery and issue-
level ratings on the group.  As a result of this review, S&P
changed its valuation approach from a market multiple to a
discrete asset valuation, based on Cellnex's tower portfolio, and
subsequently revised upward the recovery rating on existing rated
unsecured debt to the higher half of the 50%-70% range from the
lower half, previously.  Although recovery prospects exceed 70%,
S&P caps the recovery rating at the higher half of the '3' range
given the unsecured nature of the instruments.

At the same time, S&P assigned a recovery rating of '3' to the
proposed notes, indicating S&P's expectation of recovery in the
higher half of the 50%-70% range in the event of a default, in
line with the existing unsecured debt.

                         RECOVERY ANALYSIS

The issue rating on the proposed EUR335 million unsecured notes
is 'BB+' with a recovery rating of '3'.

Recovery prospects for the noteholders are capped at the higher
half of the 50%-70% range despite recovery prospects in excess of
70%, constrained by the unsecured nature of the instruments.

S&P simulates a hypothetical default in 2022 as a result of
operating underperformance, most likely the result of loss of
contracts, increased competition, and an inability to keep pace
with technological advancements.

S&P values Cellnex as a going concern, reflecting its strong
asset base in Spain and Italy and underpinned by S&P's view that
the business would retain more value as an operating entity and
would rather reorganize in a bankruptcy scenario.  Few towers,
however, could be sold to other operators to generate liquidity.
S&P consequently uses a discrete asset valuation to evaluate the
recovery prospects associated with the underlying assets, derived
from a discount to recent average market valuations in Europe.

Simulated default assumptions

   -- Year of default: 2022
   -- Jurisdiction: Spain

Simplified waterfall

   -- Gross enterprise value at default: EUR2.8 billion
   -- Administrative costs: 5%
   -- Net value available to creditors: EUR2.6 billion
   -- Priority claims*: about EUR46 million
   -- Unsecured debt claims*: EUR2.5 billion
      -- Recovery expectation: 50%-70% (higher half of the range)

* All debt amounts include six months of prepetition interest.
RCF assumed to be 85% drawn on the path to default.


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


ASSURED GUARANTY: Moody's Raises IFS Rating From Ba2
----------------------------------------------------
Moody's Investors Service has upgraded the insurance financial
strength (IFS) rating of Assured Guaranty (London) Ltd. (Assured
Guaranty London -- formerly MBIA UK Insurance Limited) to Baa2
from Ba2 following its acquisition by Assured Guaranty Corp.
(AGC -- IFS rating A3/stable). This rating action concludes a
review for upgrade that was initiated on September 29, 2016.
Prior to the company's acquisition by AGC, MBIA UK Insurance
Limited was a wholly owned subsidiary of MBIA Insurance
Corporation (MBIA Corp. -- IFS rating Caa1/developing). The
outlook for the rating is stable.

The transaction does not affect the ratings of any other Assured
Guaranty entities, nor does it have any impact on the ratings of
the MBIA group companies, including MBIA Inc. (senior debt
Ba1/negative), National Public Finance Guarantee Corporation (IFS
rating A3/negative) or MBIA Corp.

RATINGS RATIONALE

Moody's stated that the rating action on Assured Guaranty London
reflects its acquisition by AGC and the resulting improvement in
its overall credit profile as part of the Assured Guaranty group
of companies. In particular, Moody's notes that Assured Guaranty
London benefits from being owned by a well-capitalized AGC, as
opposed to being a subsidiary of MBIA Corp., which has a very
weak liquidity and capital position.

According to Moody's, Assured Guaranty London's Baa2 insurance
financial strength rating reflects its meaningful stand-alone
capital resources relative to its insured exposures and implicit
support from its parent, AGC. These strengths are tempered by the
company's limited stand-alone business profile as a company in
run-off and by its highly concentrated portfolio of European
infrastructure finance exposures that includes a number of very
large single risks, which exposes the company to heightened
idiosyncratic risk.

Assured Guaranty has stated that it intends to maintain Assured
Guaranty London as a subsidiary of AGC and that it is actively
working to combine the company with its other affiliated European
insurance companies, subject to various regulatory and court
approvals. These subsidiaries include Assured Guaranty (Europe)
Ltd. (IFS rating A2/stable); Assured Guaranty (UK) Ltd. (IFS
rating A3/stable) and CIFG Europe S.A. (not rated).

RATING DRIVERS

The following factors could result in an upgrade of the rating:
1) upgrade of AGC's rating; 2) a corporate guaranty or other form
of strong explicit support from a higher rated Assured Guaranty
affiliate; 3) a corporate reorganization that results in the
merger of Assured Guaranty London into a higher rated Assured
Guaranty affiliate; and 4) improvement in Assured Guaranty
London's stand-alone credit profile as evidenced by significantly
decreased levels of single risk exposures as a percentage of
capital.

Conversely, the following factors could lead to a downgrade of
the rating: 1) downgrade of AGC's rating; 2) evidence of
diminished levels of implicit support from AGC; and 3)
significant deterioration in the firm's stand-alone capital
adequacy profile.

RATING LIST

The following rating has been upgraded:

  Assured Guaranty (London) Ltd. -- insurance financial strength
  to Baa2 from Ba2

Outlook actions:

Issuer: Assured Guaranty (London) Ltd.

Outlook, Changed to Stable from Rating Under Review

TREATMENT OF WRAPPED TRANSACTIONS

Moody's ratings on securities that are guaranteed or "wrapped" by
a financial guarantor are generally maintained at a level equal
to the higher of the following: a) the rating of the guarantor
(if rated at the investment grade level); or b) the published
underlying rating (and for structured securities, the published
or unpublished underlying rating). Moody's approach to rating
wrapped transactions is outlined in Moody's methodology "Rating
Transactions Based on the Credit Substitution Approach: Letter of
Credit-backed, Insured and Guaranteed Debts" (December 2015).

Assured Guaranty (London) Ltd. (formerly MBIA UK Insurance
Limited) is a financial guaranty insurance company based in the
United Kingdom. Assured Guaranty London is a wholly-owned
subsidiary of Assured Guaranty Corp., which is a wholly-owned
subsidiary of Assured Guaranty Ltd. As of 31 December 2015,
Assured Guaranty London reported net par outstanding of
approximately GBP9.7 billion and total claims paying resources of
approximately GBP535 million.

The principal methodology used in this rating was "Financial
Guarantors" published in April 2016.


LEHMAN BROTHERS: Court to Rule on Administrators' GBP10BB Claim
---------------------------------------------------------------
Jane Croft and Martin Arnold at The Financial Times report that a
GBP10 billion claim by the administrators of Lehman Brothers'
European operations was set to come before London courts on
Jan. 16, more than eight years after the US investment bank
collapsed.

The case pits scores of businesses and thousands of former Lehman
bankers, who claim they are still owed money, against the hedge
funds and distressed debt investors that bought the investment
bank's European bonds after its collapse, the FT discloses.

Lehman failed in 2008 mainly because of its lack of liquidity but
its European operations were well capitalized, the FT recounts.
Since then its senior unsecured creditors have received more than
GBP35 billion, and PwC, the administrator, is now looking at a
potential surplus of between GBP7 billion and GBP8 billion to be
distributed to creditors, who are still claiming missed interest
and foreign exchange losses, the FT discloses.

On Jan. 16, the London commercial court was set to hold its first
case management hearing for the lawsuit brought by LBIE, which is
seeking to recoup any claims it faces beyond its surplus from a
separate entity called Lehman Brothers Ltd., the FT relates.

The crucial question for the court will concern the inter-estate
legal relationship between the two entities, the FT states.

LBIE was converted into an unlimited liability company many years
before its collapse, which it argues means it can claim back any
losses against its shareholders, including Lehman Brothers Ltd.,
the FT recounts.

Lehman Brothers Ltd, which has about GBP400 million cash, was the
target of a GBP10 billion claim by LBIE in 2014, the FT relays.
Philip Marshall, the QC representing Lehman Brothers Ltd, is
expected to argue that it was a mistake that led to it owning a
single share in LBIE and, as a result, it would be
disproportionate to allow the claim against it to proceed, the FT
notes.

                     About Lehman Brothers

Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States.  For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.

Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555).  Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history.  Several other affiliates followed
thereafter.

Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.

The Debtors' bankruptcy cases were assigned to Judge James M.
Peck.  Judge Shelley Chapman took over the case after Judge Peck
retired from the bench to join Morrison & Foerster.

A team of Weil, Gotshal & Manges, LLP, lawyers led by the late
Harvey R. Miller, Esq., serve as counsel to Lehman.  Epiq
Bankruptcy Solutions serves as claims and noticing agent.

Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, served
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., served as the
Committee's  investment banker.

On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)).  James W. Giddens was appointed as
trustee for the SIPA liquidation of the business of LBI.  He is
represented by Hughes Hubbard & Reed LLP.

The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion.  Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees.  Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.

Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history.  The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.

                          *     *     *

According to a report by Wall Street Journal Pro Bankruptcy, the
team winding down Lehman Brothers Holdings Inc. was slated to pay
out $3.8 billion to creditors in October 2016.  This was the 11th
distribution since Lehman failed in 2008, and brought the total
payout to more than $113.6 billion.  The bulk of the cash --
$83.6 billion -- has gone to pay so-called third-party, or non-
Lehman claims, WSJ related.

Bondholders were projected to receive about 21 cents on the
dollar when Lehman's bankruptcy plan went into effect in early
2012.  According to the WSJ report, Lehman said in a court filing
that the bondholders will have recovered more than 40 cents on
the dollar after the 11th distribution is completed; while
general unsecured creditors of Lehman's commodities unit will
have received nearly 79 cents on the dollar following the latest
distribution.


TALKTALK TELECOM: Fitch Assigns 'BB-' LT Issuer Default Rating
--------------------------------------------------------------
Fitch Ratings has assigned TalkTalk Telecom Group PLC a Long-Term
Issuer Default Rating of 'BB-'/Stable Outlook.  Fitch has also
assigned an instrument rating of 'BB- (EXP)'/'RR4' to the
company's proposed new unsecured notes.  Proceeds from the
issuance will be principally used to repay some of short-term
borrowings under the existing revolving credit facilities.  The
final instrument rating is subject to the final documents
conforming materially to the preliminary documentation reviewed.

TalkTalk's rating is supported by its sustainable market position
as a niche "value-for-money" operator in the UK telecoms market.
There are top-line growth opportunities from higher demand for
data and greater product penetration.  Future costs savings from
its Making TalkTalk Simpler (MTTS) programme, dark fibre
extension and a reduction in wholesale charges should gradually
improve the company's profitability over the next three years.

However, its reliance on regulated BT wholesale products means
TalkTalk's profitability is below the sector average.  TalkTalk
has flexibility in balancing network investments and dividend
distributions, but its weak FCF (post-dividend) profile is a
constraining rating factor.

                        KEY RATING DRIVERS

Niche Value-for-Money Operator: The core strategy of TalkTalk of
providing a value-for-money quad-play service differentiates it
from the other fixed-line operators which have deep financial
resources, high-quality network infrastructure, and in some
cases, exclusive access to media content.  Fitch believes revenue
growth from price increases is likely to be limited, given the
company's value-for-money pricing strategy.

However, with the rollout of fibre, the convergence of bundled
products and the expected improvements in the regulatory
environment, Fitch anticipates opportunities, especially in
Corporate with growing demand in data, and On-net with higher
product penetration.

Favorable Regulatory Framework: The UK telecom regulator (Ofcom)
has a history of strong and pro-competition regulation in curbing
the incumbent's market influence.  The recent move to force a
legal separation of Openreach from BT Group should gradually
shift some of the market power towards operators like TalkTalk
which rely on access to BT's wholesale products.  This should
increase Openreach's independence and sustain TalkTalk's market
position over the medium term.  Nonetheless, the timing and the
magnitude of future reductions in BT's regulated wholesale prices
remains uncertain.

Flexible Financial Policy: TalkTalk has had to rely on external
funding sources to maintain its liquidity profile, because of
high capex requirements and regular dividend distributions.
Fitch do not anticipate TalkTalk will generate positive FCF in
the financial year to March 2017 (FY17) given outflows for capex,
working-capital movements and committed dividends of GBP150m.

However, Fitch believes TalkTalk has the flexibility to manage
its financial policy to accommodate further investments including
in Fibre-to-the-Premise (FTTP), and dividend distributions to
maintain a neutral to positive FCF.  Opportunistic bolt-on
acquisitions and/or investments might result in FCF being
temporarily negative and net leverage above its stated target.

Below-Average but Improving Margins: TalkTalk's profitability has
been lower than the sector average with a last-twelve-month (LTM)
EBITDA margin (Fitch adjusted) of 14.7% as of September 2016.
The margin reflects TalkTalk's business model that is underpinned
by its regulated wholesale access to BT's network, and a Mobile
Virtual Network Operator (MVNO) agreement with Vodafone, later
transferring to O2, and commercial arrangements with Sky.

We believe there are opportunities for further cost savings
driven by the MTTS initiative, extension of dark fibre and
potential reduction in wholesale charges, although there remains
an element of execution risk in the company's plans to meet its
financial targets.

Cyberattack Drags Performance Temporarily: TalkTalk lost 95,000
customers (around 3% of its customer base) following the cyber-
attack in October 2015 in which 15,000 customers had their bank
account details stolen, which it has not recovered since.
Immediately following the attack, the company incurred
exceptional costs of around GBP42 mil. including measures to
bolster online and IT security.  However, Fitch's view is that
any long-lasting effects are limited given the mainly positive
reception from customers to how the company dealt with the
incident, with TalkTalk's trust score with customers higher now
than it was before the attacks.

                          DERIVATION SUMMARY

TalkTalk's 'BB-' rating reflects its established market position
as a value-for-money operator compared to BT Group Plc
(BBB+/Stable), Sky Plc (BBB-/Stable) and Virgin Media Inc
(BB-/Stable) which offer quad-play products with their respective
differentiating niches.  TalkTalk's network coverage of 96% of
the UK gives it better coverage than Virgin and Sky.  TalkTalk's
financial structure is more conservative than Virgin Media, with
a committed financial policy targeting a net debt/EBITDA ratio
(as defined by TalkTalk) of 2.0x.

However, the business model relies upon regulated wholesale
access to BT's network, leading to an EBITDA margin below average
for network operators.  To generate neutral to positive FCF
(post-dividend), TalkTalk will have to balance investment in its
network (including FTTP trials) with regular dividend
distributions.  No Country Ceiling, parent/subsidiary or
operating environment aspects impact the rating.

                           KEY ASSUMPTIONS

Fitch's key assumptions within the rating case for TalkTalk
include:

   -- revenue CAGR growth of 2.6% for FY17-FY19 driven by a
      stabilized broadband subscriber base and steady revenue
      growth in Corporate and On-net;
   -- EBITDA margin improvement to 16.8% by FY19 driven by the
      benefits of the MTTS programme, extension of dark fibre and
      gross margin improvement from lower BT wholesale prices;
   -- combined cash outflows for capex (including investments in
      FTT) and dividends of over GBP300 mil. in FY17, and
      GBP250 mil. to GBP300 mil. thereafter;
   -- exceptional items related to relocation to new site in
      Salford.

                        RATING SENSITIVITIES

Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action.   Continued strong operational
performance, accompanied by a financial policy track record in
managing FTTP investments and dividend distributions, leading to:

   -- positive FCF (pre-dividend) in high-single digits;
   -- comfortable liquidity headroom; and
   -- FFO adjusted net leverage sustainably below 3.3x.

Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action.  A shift in financial policy weighted
towards shareholder remuneration or a material deterioration in
key performance indicators, leading to:

   -- FCF (pre-dividend) in low single digits;
   -- shrinking liquidity headroom; and
   -- FFO adjusted net leverage sustainably above 3.8x.

                              LIQUIDITY

Pro forma for the refinancing, Fitch expects TalkTalk to improve
its liquidity headroom under the existing revolving credit
facilities and debtor securitization.  Fitch views this level of
liquidity as satisfactory.


TATA STEEL UK: Parent Offers to Pay Millions to Pension Scheme
--------------------------------------------------------------
Michael Pooler and Josephine Cumbo at The Financial Times report
that Tata Steel has offered to pay "hundreds of millions" of
pounds to its 130,000 member-strong pension scheme to release a
guarantee the fund holds over its Dutch assets and smooth the way
for a merger with ThyssenKrupp, its German rival.

"We are in meaningful negotiations with the company now," the FT
quotes Allan Johnston, chairman of the scheme's trustee board, as
saying in an interview.  "We've had an improved offer for the
release of the security package."

The Indian group is restructuring its business following an
announcement last spring that it wanted to exit the UK following
years of losses, the FT relays.  It wishes to detach its GBP15
billion pension fund, which it says has become a significant
financial drag, the FT notes.

The pension fund has a guarantee over Tata's Ijmuiden plant in
the Netherlands, which provides financial protection for the
scheme by giving its trustees a right over the assets in certain
circumstances, according to the FT.  Tata wants to buy out these
claims to facilitate a merger of its European business with that
of ThyssenKrupp, the FT states.

According to the FT, Tata Steel has warned regulators that the
pension fund will sink its British steelmaking operations into
insolvency, but is struggling to make the case after an upturn in
the steel market.  The pension scheme is well-funded, though it
has only around one in 13 members still contributing and dwarfs
the size of the operating business, the FT discloses.

As part of a proposed rescue package agreed with trade unions
last month, Tata agreed to keep both blast furnaces at the giant
Port Talbot plant in south Wales running for at least five years,
conditional upon its ability to detach the scheme, the FT notes.

Mr. Johnston said Tata Steel wrote to the Pensions Regulator this
month attempting to demonstrate that its UK subsidiary was close
to insolvency, the FT relates.  This is a pre-requisite for
obtaining a regulated apportionment arrangement, a rarely used
mechanism aimed at helping financially distressed companies by
freeing them of retirement obligations, the FT states.

"I have correspondence between the company and the regulator, and
the regulator is saying, 'We haven't proved yet that insolvency
is inevitable, and it's inevitable within the next 12 months',"
the FT quotes Mr. Johnston as saying.

Following a rise in steel prices, an efficiency drive and
hundreds of redundancies, Tata Steel UK is now understood to be
making a small profit -- a far cry from the GBP1 million it was
losing daily at one point, the FT relays.  But the business
requires large amounts of capital investment, raising doubts
about whether it can stand alone without financial support from
its parent, the FT discloses.

Tata Steel is the UK's biggest steel company.


TAURUS CMBS 2006-2: Fitch Affirms 'Dsf' Ratings on 3 Note Classes
-----------------------------------------------------------------
Fitch Ratings has affirmed Taurus CMBS (UK) 2006-2 plc as:

  GBP103.8 mil. class A (XS0271522103) affirmed at 'BBsf' Outlook
   Stable
  GBP18.6 mil. class B (XS0271523259) affirmed at 'Dsf', Recovery
   Estimate (RE) revised to 100% from 80%
  GBP0 mil. class C (XS0271523846) affirmed at 'Dsf'; RE0%
  GBP0 mil. class D (XS0271524653) affirmed at 'Dsf'; RE0%

The transaction closed in 2006 and was originally a
securitisation of eight commercial mortgage loans with an
aggregate loan balance of GBP447.67 mil.  The collateral
comprised 157 properties located throughout England, Scotland,
Wales and Northern Ireland.

                         KEY RATING DRIVERS

The affirmation is driven by the overall stable performance of
the Mapeley STEPS loan.  Over the last 12 months the Mapeley
STEPS loan has been paid down by GBP7.8 mil. (GBP7.3 mil. of net
disposal proceeds and GBP548,000 of cash sweep).  The interest
coverage ratio (ICR) has increased to 2.25x currently from 1.42x
at the October 2015 interest payment date (IPD).  Fitch
understands from the documentation that interest coverage relies
not only on an underlying service contract and related income,
but also on Mapeley's management of vacated properties, including
the timing of refurbishment and subsequent sale.

Following the disposal of six assets in the last 12 months, the
freehold collateral comprises 71 properties (predominantly
offices).  Apart from a small number of properties vacated, these
freehold properties are occupied by HM Revenue and Customs, a UK
government entity rated 'AA' with Negative Outlook.

Under a service contract expiring in April 2021, under which for
an upfront payment of GBP220 mil., HMRC transferred the ownership
and management of most of its freehold estate to Mapeley as well
as rental liabilities arising from other leased space.  In
exchange, Mapeley negotiated for itself a 20-year stream of
income (not rent) from HMRC, as well as the future vacant
possession value (VPV) of the freehold portfolio.

The securitised loan is serviced from the spread between these
two legs of the contract as well as any net disposal income from
vacated space.  While this means that interest coverage is
variable, Mapeley has been able to meet debt service since 2001
under similar conditions, including by disposing of vacated
assets.  In Fitch's analysis no credit is given to this spread or
to sales, and instead Fitch applies an analysis based on its loan
rating framework.

The loan was issued with both a fixed and a floating interest
rate component (95% and 5% of the balance respectively) with the
balance bearing a fixed rate amortizing according to a predefined
plan after January 2014.  The loan has not followed this same
schedule, with the excess balance reverting to a floating rate
liability.  In Fitch's analysis, as no further property sales are
assumed to occur until the contract matures in 2021, the floating
rate balance progressively grows at the expense of the fixed one.
The loan has been relaxed to allow this unhedged balance to grow
provided the value of a cap struck at 3.5% (and revised every six
months) is escrowed by the borrower.  As this may prove
insufficient in the event rates rise suddenly (in line with
Fitch's interest rate criteria), Fitch assumes the borrower's
unhedged liabilities will grow.

To assess Mapeley's incentives to meet debt service until 2021,
liabilities consisting of fixed and stressed floating interest
payments have been summed together (accounting for interest on
interest) with the loan balance and then compared with the
stressed VPV of the portfolio in the relevant rating scenario.
Fitch has looked to the sufficiency of future equity, as well as
the availability of liquidity, a tail period and credit
enhancement, in affirming the rating of the class A notes, and in
revising the RE of the defaulted class B notes.

                     KEY PROPERTY ASSUMPTIONS

Fitch estimated rental value (triple net): GBP19m
"BBsf" rental value decline: 8.6%
"BBsf" capitalisation rate: 7.3%
"BBsf" structural vacancy: 16.3%
"BBsf" capital expenditure: 7.5%

                       RATING SENSITIVITIES

If the loan defaults during its term, and while Fitch does not
expect this to automatically lead to the termination of the
contract, accumulation of unpaid interest alongside swap breakage
costs could increase total liabilities in 2021 to a level that is
not consistent with the ratings, and therefore prompt a
downgrade.


VEDANTA RESOURCES: S&P Raises CCR to B+ on Higher Commodity Price
-----------------------------------------------------------------
S&P Global Ratings raised its foreign currency long-term
corporate credit rating on Vedanta Resources PLC to 'B+' from
'B'.  The outlook is stable.  At the same time, S&P raised its
long-term issue ratings on the company's issued or guaranteed
notes and loans to 'B+' from 'B'.

Vedanta Resources is a London-headquartered metals and oil
holding company, with most of its operations in India.

"We raised the rating to reflect our expectation that Vedanta
Resources' operating performance will improve over the next 12-18
months owing to higher commodity prices and the company's ramp-up
of its aluminum operations," said S&P Global Ratings credit
analyst Mehul Sukkawala.  "We also anticipate that Vedanta
Resources will continue to have adequate financial flexibility to
manage its refinancing over the period."

S&P expects the EBITDA of Vedanta Resources to consistently
improve over the next 12-18 months and exceed US$3.2 billion in
fiscal 2017 (year ending March 31, 2017,) and materially above
US$3.5 billion in fiscal 2018, compared with US$2.4 billion in
fiscal 2016.  The higher EBITDA is likely to be driven by higher
commodity prices, especially zinc (S&P Global Ratings has also
recently raised its oil price assumptions), as well as the
company's greater scale of operations.

Vedanta Resources continues to raise aluminum capacity at its
second Balco smelter in the Indian state of Chhattisgarh.  It has
started ramping up the fifth potline at its Jharsuguda plant (in
the Indian state of Odisha).  In addition, the company has
completed commissioning its power capacity and continues to
increase iron-ore production.

"We believe the improved operating performance will also
strengthen Vedanta Resources' weak financial position,"
Mr. Sukkawala said.

S&P estimates that the company's free operating cash flow
generation will exceed US$1 billion in fiscal 2018, which will
also support the company's financial position.  The funds from
operations (FFO) cash interest cover is therefore likely to be
more than 2x in fiscal 2018 (compared with 1.5x in fiscal 2016),
and the ratio of FFO to debt should be close to 9% (4% in fiscal
2016).  S&P calculates its financial ratios on a proportionate
consolidation basis to reflect Vedanta Resources' current
organizational structure.

S&P expects Vedanta Resources' to have adequate financial
flexibility over the next 12-24 months and proactively manage its
refinancing.  The company's improving operating performance will
support its access to financial markets.  A significant
improvement in Vedanta Resources' bond yields and the company's
continuing good banking relationships, especially Indian banks,
supports S&P's view.  This factor is important, considering the
company has bank loan maturities of about US$1 billion at the
Vedanta Resources holding company due in fiscal 2018 and
US$500 million in fiscal 2019, in addition to bond maturities of
about US$2 billion in fiscal 2019.

Vedanta Resources will also benefit from the proposed merger of
its majority owned subsidiary Vedanta Ltd. with Cairn India
(Vedanta Ltd.'s majority owned oil and gas company).  S&P
believes Vedanta Resources has made good progress on the
regulatory approvals for the merger and will conclude the deal in
the next few months.  The merger will significantly boost free
operating cash flow generation at Vedanta Ltd. and provide it
easier access to about US$3.5 billion in cash and cash
equivalents at Cairn India.  However, Vedanta Resources'
financial ratios will remain largely unchanged.

"We expect Vedanta Resources to continue to benefit from its low-
cost operations, particularly in the zinc and oil businesses, and
its diversified portfolio of assets.  However, we view volatile
commodity prices, high costs in the copper business in Zambia,
and exposure to high regulatory risk as offsetting factors,"
Mr. Sukkawala said.

The stable outlook reflects S&P's expectation that the likely
improvement in Vedanta Resources' operating performance will
support the company's financial position over the next 12-18
months.  S&P also expects Vedanta Resources to have the financial
flexibility to proactively manage its refinancing risk over the
period.

S&P could lower the rating if Vedanta Resources' operating
performance weakens such that S&P expects FFO cash interest cover
to remain below 1.75x for a sustained period.  This could happen
if commodity prices decline.

S&P could also lower the rating if Vedanta Resources' financial
flexibility weakens, increasing the refinancing risk.  This could
happen on account of weak commodity or financial market
conditions.

S&P could raise the rating if we expect Vedanta Resources' ratio
of FFO to debt to be above 12% on a consistent basis.  This could
mean consolidated EBITDA of more than US$4 billion, which could
be driven by higher commodity prices, continuing high production
levels, and improving cost profile of the company's aluminum
operations.  An upgrade is also contingent on Vedanta Resources
having adequate sources of liquidity to cover its uses over the
next 12 months.


* UK: Administration Figures Up After Brexit Vote, KPMG Says
------------------------------------------------------------
Economia reports that the number of UK businesses entering into
administration has risen in the last six months, according to
analysis from KPMG.

According to Economia, the Big Four firm found that 1,174
companies entered into administration last year, compared with
1,111 in 2015, which was then a 15-year low.

While the first six months of the year continued to see a decline
in insolvencies, the second half of the year saw numbers rise,
Economia relays, citing data collected from notices in the London
Gazette.

The firm, as cited by Economia, said this was partly because of
the uncertainty created by the result of the EU referendum and
currency market fluctuations.

The construction industry was the worst hit, with 174 firms
within the sector becoming insolvent, Economia discloses.  This
was particularly due to an increase in costs for imported raw
materials, which squeezed profit margins, Economia states.

According to Economia, moreover, 89 retailers entered into
administration, as well as 19 social care and nursing homes and
26 companies from within the hotel and leisure sectors.

Blair Nimmo, head of restructuring at KPMG UK, said that the
insolvencies level did not reflect "some of the more gloomy
predictions" seen before the Brexit vote, Economia relates.  He
added that, despite not expecting a sudden spike in insolvency
numbers, he does predict a steady uptick in administrations over
the months ahead, Economia notes.



                            *********

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-
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Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez,
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Peter A. Chapman, Editors.

Copyright 2017.  All rights reserved.  ISSN 1529-2754.

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                 * * * End of Transmission * * *