TCREUR_Public/170127.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

           Friday, January 27, 2017, Vol. 18, No. 20



NOVARTEX SAS: S&P Cuts CCR to 'CC' on Announced Debt Revamp


AQUILAE CLO II: S&P Raises Rating on Class E Notes to B-
DEPFA ACS: Moody's Withdraws ba3 Baseline Credit Assessment
OAK HILL V: Fitch Assigns 'B-sf' Final Rating to Class F Notes
ST. PAUL'S CLO IV: S&P Affirms 'B' Rating on Class E Notes


UNIONE DI BANCHE: Moody's Affirms Ba3 Subordinated Debt Rating


CREDIT EUROPE: Moody's Affirms Ba2 LT LC & FC Deposit Ratings
DRYDEN 48: S&P Assigns 'B-' Rating to Class F Notes
ZOO ABS II: Moody's Affirms Rating on Class E Notes at 'Ca'


BANCO COMERCIAL: Fitch Affirms 'BB-' LT Issuer Default Rating


IG SEISMIC: Moody's Lowers CFR to Caa1, Outlook Stable


IM SABADELL RMBS 2: S&P Puts Cl. C's B- Rating on Watch Neg.

U N I T E D   K I N G D O M

AMIGO HOLDINGS: Moody's Assigns B1 Corporate Family Rating
BELLE VUE: Financial Management Concerns Prompt Liquidation
DIAMONDCORP PLC: At Risk of Administration if Placing Fails
LB RE FINANCING: February 23 Claims Filing Deadline Set
ROY HOMES: Enters Administration Following Financial Woes

* UK: Scottish Hospitality Companies Less at Risk of Failure
* UK: Corporate Insolvencies in Scotland Down 4th Quarter 2016


* Downward Trend in Global Insolvencies Coming to an End
* Auto Parts Supplier Debt-Fuelled Consolidation to Continue
* BOOK REVIEW: The Sorcerer's Apprentice - Medical Miracles



NOVARTEX SAS: S&P Cuts CCR to 'CC' on Announced Debt Revamp
S&P Global Ratings said that it had lowered its long-term
corporate credit rating on Novartex S.A.S., the parent company of
France-based mass-market apparel and footwear retailer Vivarte
Group, to 'CC' from 'CCC'.  The outlook is negative.

At the same time, S&P lowered its issue rating on the
EUR500 million super senior bonds issued by subsidiary Vivarte to
'CC' from 'CCC'.  The recovery rating on these notes is '4',
reflecting S&P's expectation of average recovery for creditors in
the event of a default, in the lower half of the 30%-50% range.

S&P also lowered its issue rating on the EUR780 million senior
reinstated debt issued by subsidiary Novarte to 'C' from 'CC'.
The recovery rating on these notes is '6', reflecting S&P's
expectation of negligible (0%-10%) recovery for creditors in the
event of a default.

The downgrade reflects S&P's view of Vivarte Group's announcement
that it plans to restructure its existing debt facilities in the
next couple of months.

Following the appointment of a judicial administrator in July
2016, in order to act as mediator between the company and its
lenders, S&P expects Vivarte Group to shortly produce an exchange
offer proposal to its current lenders.

According to the group's management, the existing
EUR780 reinstated debt will be converted into equity alongside
the convertible bonds (EUR800 million)and the maturity on the
EUR500 million super senior bonds will be extended by two years,
with unchanged interest rate assumptions.

S&P would consider such a debt restructuring as a default under
its criteria, for both the reinstated debt and the super senior
bonds, because for both instruments, lenders are to receive less
than the original promise.

On a S&P Global Ratings-adjusted basis, Vivarte Group's capital
structure includes, alongside the senior debt,the EUR800 million
of convertible bonds ("obligations remboursables en actions" or
ORA), which S&P treats as debt, and EUR395 million of operating-
lease adjustments.  The group's S&P Global Ratings-adjusted
leverage is above 10x, equivalent to 27x on a gross reported
basis.  The reported leverage does not include the ORA, but is
nonetheless significantly higher than the adjusted leverage,
owing to the short-term nature of the group's operating lease.
For Vivarte Group, our operating lease adjustments added an
additional EUR395 million to debt and EUR234 million to EBITDA in
the last fiscal year ended Aug. 31, 2016.

Vivarte Group's operating performance is weak and S&P expects it
to remain so in the next couple of years.  Soft trading in
footwear and apparel markets in France and a decline in full-
price sales in the product mix have resulted in profitability and
cash generation weakening further.  S&P believes that reported
free operating cash flow will continue to be strongly negative
over the near term, as evidenced by the EUR153.6 million outflow
for fiscal year 2016, which compares with the EUR184 million
outflow posted for the fiscal year to Aug. 31, 2015.

S&P's assessment of the goup's business risk profile as
vulnerable primarily reflects weak operating performance over the
past few years, mainly linked to the continuous decline of the
group's value brand, La Halle, which represents about 40% of the

After three years of negative like-for-like sales and declining
profitability, Vivarte Group's EBITDA reached an all-time low in
August 2016, of EUR54.3 million, corresponding to a reported
EBITDA margin of about 2.4%.

Sales have been hit by a tough economic environment and
unfavorable weather conditions in France, but, in S&P's view, the
decline also reflects inappropriate positioning and inadequately
located and ageing stores, in particular for the La Halle brand.
S&P believes the previous management failed to reposition the
group as a more fashion content oriented segment and did not
react sufficiently swiflty to restructure La Halle.  In S&P's
opinion, the multiple management changes over the past couple of
years blurred the company's strategic vision.  S&P has therefore
reviewed its management and governance score from fair to weak.
However, S&P notes that a new management team has recently been
appointed and S&P will be monitoring the impact of the new
strategy on the group's results.

The negative outlook reflects S&P's view under its criteria that
distressed exchange offers and loan modifications are tantamount
to a default.

S&P will lower its corporate credit rating on Novartex to 'SD'
and S&P's issue rating on the company's debt instruments to 'D'
if and when the distressed exchange is complete.  S&P understands
that this could happen over the next couple of months, though
timing remains uncertain.  Nevertheless, S&P believes that the
default will likely occur within the next 12 months.

S&P views a revision of the outlook to stable as remote at this
stage, given the group's announcement that it has already
proposed the restructuring of its existing financial debt
liabilities to its lenders.  However, following the conclusion of
the exchange, S&P will review its ratings based on the company's
pro forma capital structure.


AQUILAE CLO II: S&P Raises Rating on Class E Notes to B-
S&P Global Ratings raised its credit ratings on Aquilae CLO II
PLC's class C, D, and E notes.  At the same time, S&P has
affirmed its 'AAA (sf)' rating on the class B notes and withdrawn
its 'AAA (sf)' rating on the class A notes.

The rating actions follow S&P's credit and cash flow analysis of
the transaction using data from the trustee report dated Dec. 12,
2016 and the application of S&P's relevant criteria.

Upon publishing S&P's updated methodology and assumptions for
assigning recovery ratings to corporate debt instruments, S&P
placed those ratings that could potentially be affected under
criteria observation.  Following S&P's review of this
transaction, its ratings that could potentially be affected by
the criteria are no longer under criteria observation.

"We conducted our cash flow analysis to determine the break-even
default rate (BDR) for each rated class of notes.  The BDR
represents our estimate of the maximum level of gross defaults,
based on our stress assumptions, that a tranche can withstand and
still fully repay the noteholders.  We used the portfolio balance
that we consider to be performing, the reported weighted-average
spread, and the weighted-average recovery rates that we
considered to be appropriate.  We incorporated various cash flow
stress scenarios using our standard default patterns, levels, and
timings for each rating category assumed for each class of notes,
combined with different interest stress scenarios as outlined in
our criteria," S&P said.

Since S&P's previous review of the transaction, the underlying
portfolio has amortized, resulting in the class A notes being
fully redeemed, and the class B notes amortizing to the 37% of
their initial balance.  Overall, the deleveraging of the class A
and B notes has resulted in increased available credit
enhancement for all classes of rated notes.

S&P's cash flow results show that the available credit
enhancement for the class B and C notes is now commensurate with
a 'AAA (sf)' rating.  S&P has therefore raised to 'AAA (sf)' from
'A+ (sf)' its rating on the class C notes and affirmed its 'AAA
(sf)' rating on the class B notes.

In addition, the transaction's exposure to 'CCC' category rated
assets (rated 'CCC+', 'CCC', or 'CCC-') has decreased, with no
exposure compared with EUR0.943 million (equivalent to 0.74% of
the performing portfolio) at our previous review.  The
transaction experienced one new default and currently holds two
defaulted assets representing 3.63% of the performing balance,
compared with one asset representing 0.79% at our previous

Predominantly driven by the class A and B notes' amortization,
S&P considers the available credit enhancement for the class D
and E notes to be commensurate with higher ratings than those
currently assigned.  S&P has therefore raised to 'BBB+ (sf)' from
'BB+ (sf)' its rating on the class D notes and to 'B- (sf)' from
'CCC+ (sf)' its rating on the class E notes.

At the same time, S&P has withdrawn its 'AAA (sf)' rating on the
class A notes following their full redemption.

Aquilae CLO II is a cash flow collateralized loan obligation
(CLO) transaction that closed in November 2006 and securitizes
loans to primarily speculative-grade corporate firms.


Aquilae CLO II PLC
EUR316.5 Million Floating-Rate And Deferrable Floating-Rate Notes

Class         To               From

Ratings Raised

C             AAA (sf)         A+ (sf)
D             BBB+ (sf)        BB+ (sf)
E             B- (sf)          CCC+ (sf)

Rating Withdrawn

A             NR               AAA (sf)

Rating Affirmed

B             AAA (sf)

NR--Not rated.

DEPFA ACS: Moody's Withdraws ba3 Baseline Credit Assessment
Moody's Investors Service has withdrawn the Aa2 ratings assigned
to the public sector covered bonds issued by DEPFA ACS BANK (the
"issuer"; deposits Baa2; adjusted baseline credit assessment ba3;
counterparty risk (CR) assessment Baa2(cr)).


Moody's has withdrawn the ratings because it believes it has
insufficient or otherwise inadequate information to support the
maintenance of the ratings.

On Nov. 4, 2016, the issuer confirmed the repurchase and
cancellation of EUR4.0 billion of its covered bonds and the
related sale of EUR4.1 billion of its cover pool assets. In
addition, the covered bond programme had some sizeable
redemptions scheduled for the final quarter of 2016. Moody's
inability to assess the impact of these changes on the rating
assigned to the covered bonds, and on the programme's over-
collateralisation and credit and market risks in particular,
coupled with the expectation that Moody's will continue to have
insufficient information going forward, necessitates the
withdrawal of the ratings.

OAK HILL V: Fitch Assigns 'B-sf' Final Rating to Class F Notes
Fitch Ratings has assigned Oak Hill European Credit Partners V
Designated Activity Company notes final ratings:

Class A-1: 'AAAsf'; Outlook Stable
Class A-2: 'AAAsf'; Outlook Stable
Class B-1: 'AAsf'; Outlook Stable
Class B-2: 'AAsf'; Outlook Stable
Class C: 'Asf'; Outlook Stable
Class D: 'BBBsf'; Outlook Stable
Class E: 'BBsf'; Outlook Stable
Class F: 'B-sf'; Outlook Stable
Subordinated notes: not rated

Oak Hill European Credit Partners V Designated Activity Company
is a cash flow collateralised loan obligation (CLO).

'B'/'B-' Portfolio Credit Quality
Fitch expects the average credit quality of obligors to be in the
'B' category. Fitch has credit opinions or public ratings on all
obligors in the identified portfolio. The weighted average rating
factor of the identified portfolio is 32.8.

High Recovery Expectation
At least 90% of the portfolio will comprise senior secured
obligations. Fitch views the recovery prospects for these assets
as more favourable than for second-lien, unsecured and mezzanine
assets. Fitch has assigned Recovery Ratings to all of the assets
in the identified portfolio. The weighted average recovery rate
of the identified portfolio is 68.2%.

Unhedged Non-euro Assets Exposure
The transaction is allowed to invest in non-euro-denominated
assets. Unhedged non-euro assets are limited to a maximum
exposure of 2.5% of the portfolio subject to principal haircuts
and may remain unhedged for up to 90 days after settlement. The
manager can only invest in unhedged assets if, after the
applicable haircuts, the aggregate balance of the assets is above
the reinvestment target par balance.

Partial Interest Rate Hedge
Up to 12.5% of the portfolio can be invested in fixed-rate
assets, while fixed-rate liabilities account for 5% of target
par. The transaction is thus partially hedged against rising
interest rates.

Net proceeds from the issuance of the notes will be used to
purchase a EUR460m portfolio of European leveraged loans and
bonds. The portfolio is managed by Oak Hill Advisors (Europe),
LLP. The reinvestment period is scheduled to end in February

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

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

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

Additional sensitivity runs may be found in the accompanying new
issue report, which will shortly be available on

Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.

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

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

The information below was used in the analysis.
   - Loan-by-loan data provided by the arranger as at 22 November
   - Transaction documents provided by the arranger as at 25
January 2017

A description of the transaction's representations, warranties
and enforcement mechanisms (RW&Es) that are disclosed in the
offering document and which relate to the underlying asset pool
was not prepared for this transaction. Offering documents for
EMEA leveraged finance CLO transactions do not typically include
RW&Es that are available to investors and that relate to the
asset pool underlying the security. Therefore, Fitch credit
reports for EMEA leveraged finance CLO transactions will not
typically include descriptions of RW&Es. For further information,
see Fitch's Special Report titled "Representations, Warranties
and Enforcement Mechanisms in Global Structured Finance
Transactions," dated May 31, 2016.

ST. PAUL'S CLO IV: S&P Affirms 'B' Rating on Class E Notes
S&P Global Ratings assigned its credit ratings to the class A-1-
R, A-2-R, and B-R notes from St. Paul's CLO IV Ltd., a
collateralized loan obligation (CLO) managed by Intermediate
Capital Managers Ltd.  At the same time, S&P has affirmed its
ratings on the class C, D, and E notes.  S&P has also withdrawn
its ratings on the original class A-1, A-2, and B notes.

The replacement notes, issued via a supplemental trust deed, have
a lower spread over Euro Interbank Offered Rate (EURIBOR) than
the original notes they replace.  The cash flow analysis
demonstrates, in S&P's view, that the replacement notes have
adequate credit enhancement available at the current rating

The transaction has experienced overall stable performance since
S&P's previous rating affirmations on July 24, 2014.  All
coverage ratios are well above the minimum triggers, and the
post-refinance structure has improved S&P's cash flow results.

On the Jan. 25, 2017 refinancing date, the proceeds from the
issuance of the replacement notes redeemed the original notes,
upon which S&P withdrew the ratings on the original notes and
assigned ratings to the replacement notes.

The existing class C, D, and E notes were not refinanced as part
of the changes, but have benefitted from them due to the lower
spread payable on the refinanced notes.  In S&P's view, the
credit enhancement available to these notes is commensurate with
the currently assigned ratings.  Therefore, S&P has affirmed its
ratings on the class C, D, and E notes.


Current date after refinancing

Class     Amount     Interest            BDR     SDR  Cushion
       (mil. EUR)    rate (%)            (%)     (%)      (%)
A-1-R    248.25      EURIBOR plus 1.01   67.98   61.49   6.49
A-2-R     55.75      EURIBOR plus 1.72   61.06   53.53   7.53
B-R       23.50      EURIBOR plus 2.50   58.73   47.48  11.25
C         21.00      EURIBOR plus 3.40   54.03   41.79  12.24
D         29.00      EURIBOR plus 4.80   41.38   35.03   6.35
E         14.00      EURIBOR plus 6.00   32.13   29.14   2.99

Current date before refinancing

Class     Amount     Interest            BDR     SDR  Cushion
       (mil. EUR)    rate (%)            (%)     (%)      (%)
A-1-R    248.25      EURIBOR plus 1.40   66.81   61.49   5.32
A-2-R     55.75      EURIBOR plus 1.80   59.85   53.53   6.32
B-R       23.50      EURIBOR plus 2.60   57.53   47.48  10.05
C         21.00      EURIBOR plus 3.40   52.65   41.79  10.86
D         29.00      EURIBOR plus 4.80   39.80   35.03   4.77
E         14.00      EURIBOR plus 6.00   30.20   29.14   1.06

BDR--Break-even default rate. SDR--Scenario default rate.


St. Paul's CLO IV Ltd.
EUR434.91 Million Secured And Secured Deferrable Floating-Rate
Notes and Subordinated Notes

Ratings Assigned

Replacement class   Rating

A-1-R               AAA (sf)
A-2-R               AA (sf)
B-R                 A (sf)

Ratings Affirmed

Class               Rating

C                   BBB (sf)
D                   BB (sf)
E                   B (sf)

Ratings Withdrawn

Original           Rating
class         To             From

A-1           NR             AAA (sf)
A-2           NR             AA (sf)
B             NR             A (sf)

NR--Not rated.


UNIONE DI BANCHE: Moody's Affirms Ba3 Subordinated Debt Rating
Moody's Investors Service has affirmed all ratings and
assessments of Unione di Banche Italiane S.p.A. (UBI Banca): (1)
the deposit ratings of Baa2/Prime-2; (2) the long-term senior
debt rating of Baa3; (3) the subordinated debt rating of Ba3; (4)
the baseline credit assessment (BCA) and adjusted BCA of ba2; and
(5) the Counterparty Risk Assessments (CR Assessments) of
Baa2(cr)/Prime-2(cr). Furthermore, the rating of the backed
Commercial Paper issued by UBI Banca International S.A. was
affirmed at Prime-3. The outlook on UBI Banca's long-term deposit
and senior debt ratings remains stable.

The rating action reflects the bank's announcement on 12 January
2017 that it has launched a binding offer for 100% of the capital
of three unrated domestic banks (Nuova Banca delle Marche, Nuova
Banca dell'Etruria e del Lazio and Nuova Cassa di Risparmio di
Chieti) that are owned by the Italy's Resolution fund for a
symbolic price of one euro. The affirmation captures Moody's view
that the combined entity's credit profile remains commensurate
with a BCA of ba2 after integrating the three banks into UBI
Banca. The offer was approved by the Bank of Italy on 18 January
2017 and the deal is expected to close in the first of half of
2017, once the necessary conditions have been satisfied and the
required authorisations obtained.



Nuova Banca delle Marche, Nuova Banca dell'Etruria e del Lazio
and Nuova Cassa di Risparmio di Chieti currently have total
assets of EUR23 billion, equivalent to around 21% of UBI Banca's
total assets as of 30 September 2016.

The affirmation of UBI Banca's BCA is based on Moody's view that
the combined entity's credit profile, following the integration
of the three domestic banks and UBI Banca's proposed capital
increase up to EUR400 million, remains commensurate with a BCA of
ba2. This is underpinned by the terms and conditions of the
binding offer presented by UBI Banca and approved by the Bank of
Italy, according to which, prior to the closing of the
acquisition: (1) EUR2.2 billion of gross non-performing loans in
the balance sheet of the three banks should be removed; (2) the
Resolution Fund should provide an estimated EUR450 million of new
equity ensuring a combined Common Equity Tier 1 (CET1) ratio of
at least 9.1%; (3) around EUR200 million of further provisions
will be allocated by the Resolution Fund to cover real estate
related assets and other contingencies; and (4) EUR130 million of
restructuring costs should be recognised.

In affirming the standalone BCA, the rating agency also takes
into account UBI Banca's plans to improve the three banks' very
weak profitability over time, namely through synergies and cost
rationalization. UBI Banca has also announced that it expects to
achieve a fully loaded CET1 of 13.5% in 2020 (vs. 12.8% target in
its 2019-2020 business plan) once the badwill generated at the
time of the acquisition is fully recognized through the group's
profit and loss account, the deferred tax assets stemming from
the three banks are fully used at a combined group level, and the
roll out of internal regulatory capital models (aligned to that
of UBI Banca) is completed for the three acquired banks.

However, Moody's notes that UBI Banca's plans to generate revenue
benefits following the acquisition of the three banks could be
challenged by the weak creditworthiness of these entities, which
in current weak operating environment for Italian banks, could
result in a more protracted integration process.

UBI Banca's BCA of ba2 also reflects Moody's consideration that:
(1) the bank's asset risk will be unaffected by the integration
of the three banks, with estimated gross problem loans at around
15% of gross loans, which is on a stabilizing trend relative to
UBI Banca's past performance but weak on a broad international
comparison; and (2) UBI Banca's sound liquidity position will
continue to be underpinned by the combined group's large retail
funding base and ample cushion of liquid assets in the form of
unencumbered European Central Bank eligible assets.


The affirmation of UBI Banca's long-term deposits at Baa2 and the
senior debt ratings at Baa3 reflects the affirmation of the
bank's BCA and adjusted BCA at ba2. The rating agency continues
to incorporate, via its Advanced Loss Given Failure (LGF)
analysis, three notches of uplift for the deposit ratings and two
notches of uplift for the senior debt ratings. Moody's maintains
its assessment that the probability of government support for UBI
Banca is low, which results in no uplift for both the deposit and
the senior debt ratings.

The stable outlook that Moody's has assigned to UBI Banca's
deposit and senior debt ratings reflects the rating agency's
expectation that the bank's credit profile will remain resilient
over the next 12-18 months and also incorporates its view that
the bank's financial fundamentals are likely to show some modest
improvement as the restructuring plan and the integration of the
three banks unfolds.


As part of rating action, Moody's has also affirmed at Baa2(cr)
the long-term CR Assessment of UBI Banca. The CR Assessment is
driven by standalone assessment of UBI Banca and by the
considerable amount of bail-in-able debt and junior deposits
likely to shield operating liabilities from losses, accounting
for three notches of uplift relative to the bank's adjusted BCA
of ba2.


An upgrade of UBI Banca's BCA could be driven by: (1) a
substantial increase in capitalization; (2) a material
improvement in the bank's asset risk profile; and (3) a
sustainable recovery in the bank's recurring earnings.

A downgrade of the bank's BCA could develop as a result of: (1) a
reversal in current asset risk trends with an increase in the
stock of problem loans; (2) a weakening of UBI Banca's risk-
absorption capacity as a result of deteriorating profitability or
capital levels; and/or (3) a significant deterioration of the
bank's liquidity profile.

As the bank's debt and deposit ratings are linked to the
standalone BCA, any change to the BCA would also likely affect
these ratings.

UBI Banca's senior debt rating could be downgraded if a reduction
in the volume of senior debt outstanding is not offset by new
issuance of senior and/or subordinated debt so that current loss-
given failure is preserved for these securities.


Issuer: Unione di Banche Italiane S.p.A.


-- Long-term Counterparty Risk Assessment, affirmed Baa2(cr)

-- Short-term Counterparty Risk Assessment, affirmed P-2(cr)

-- Long-term Deposit Ratings, affirmed Baa2 Stable

-- Short-term Deposit Ratings, affirmed P-2

-- Long-term Issuer Rating, affirmed Baa3 Stable

-- Senior Unsecured Regular Bond/Debenture, affirmed Baa3 Stable

-- Senior Unsecured Medium-Term Note Program, affirmed (P)Baa3

-- Subordinate Regular Bond/Debenture, affirmed Ba3

-- Subordinate Medium-Term Note Program, affirmed (P)Ba3

-- Adjusted Baseline Credit Assessment, affirmed ba2

-- Baseline Credit Assessment, affirmed ba2

Outlook Actions:

-- Outlook remains Stable

Issuer: UBI Banca International S.A.


-- Backed Commercial Paper, affirmed P-3

Outlook Action:

-- No Outlook assigned


The principal methodology used in these ratings was Banks
published in January 2016.


S&P Global Ratings said that it assigned its 'B' corporate credit
rating to Netherlands-based Casablanca International Holdings
Ltd. (Apple Leisure Group).  The outlook is negative.

At the same time, S&P assigned a 'B' issue-level rating and '3'
recovery rating to the company's proposed $125 million senior
secured revolving credit facility due in 2022 and $600 million
first-lien term loan due in 2024, to be issued by co-borrowers
Casablanca US Holdings Inc. and Casablanca Foreign Holdings Ltd.
The '3' recovery rating indicates S&P's expectation for
meaningful (50%-70%; lower half of range) recovery for lenders in
the event of a payment default.

S&P also assigned a 'CCC+' issue-level rating and '6' recovery
rating to the company's proposed $225 million second-lien term
loan due in 2025, also to be issued by co-borrowers Casablanca US
Holdings Inc. and Casablanca Foreign Holdings Ltd.  The '6'
recovery rating reflects S&P's expectation for negligible (0%-
10%) recovery for lenders in the event of a payment default.

KKR and KSL entered into an agreement to purchase the assets of
ALG Intermediate Holdings B.V. and its subsidiaries from Bain
Capital LLC, and will create new entities under the Casablanca
name.  S&P plans to withdraw all ratings on ALG Intermediate
Holdings B.V. and its subsidiaries upon completion of the
transaction and the repayment of ALG's existing debt.

The 'B' corporate credit rating on Apple Leisure Group primarily
reflects sufficient leverage capacity to accommodate the
leveraging impact of the proposed financing, despite the large
amount of debt being raised to fund the LBO of the company.  In
addition, the rating is modestly supported by the planned
inclusion of positive CFO generated by the company's Unlimited
Vacation Club (UVC) subsidiary to the credit group, although S&P
expects this could cause substantial variability in consolidated
cash flows at Apple Leisure Group from time to time.  The
negative outlook reflects the substantial leverage being assumed
to complete the transaction and a resulting weak near term cash
flow from operations to debt measure.

UVC is a vacation club through which members can book vacations
at AMResorts properties for a 25% discount, among other benefits.
The cost depends on the membership tier, and can range from
$3,000 to $70,000.  On average, members pay about half of the
membership price up front and pay the remainder in installments
over three to five years.  Upon joining UVC, members also receive
a number of free weeks that they earn as they pay off the
installment loan.

Despite receiving most of the cash for each contract sale over a
period of three to five years, UVC is required to recognize the
revenue from the sale over a period of up to 50 years due to
extension options in some contracts and the associated GAAP
accounting rules.  A lesser, but still substantial, portion of
costs is also deferred.  As a result, UVC generates negative
EBITDA in current periods despite having positive CFO.  Since
accrual accounting causes a significant amount of EBITDA to be
deferred, and S&P believes there is some uncertainty regarding
deferred EBITDA recognition in future periods because members can
cancel their membership and stop paying on the installment loan
at any time, S&P believes that CFO best represents the underlying
economics of the business.  Therefore S&P will use CFO to debt as
its primary credit measure to assess leverage.

While S&P acknowledges that UVC adds a significant amount of cash
flow to the business (S&P estimates that about 40% of the
company's consolidated CFO will come from UVC), S&P believes
these cash flow streams will exhibit very high volatility from
year to year, possibly even in good economic environments.  The
expected fluctuations could come from variability in future
contract sales, member cancellation rates, the amount of cash UVC
requires up front, and the amount of deposits UVC receives in a
given year from members who book discounted travel.  Variability
could also come from unexpected increases in costs, as exhibited
by recent increases in sales costs in order to remain
competitive.  S&P expects to see variability even in good
economic environments due to the above factors; however, UVC has
a limited track record and its performance is untested over a
full economic cycle.  S&P believes contract sales could be highly
variable in an economic downturn given the highly discretionary
nature of the product.  S&P also believes that installment
payments on existing contracts could fall in an economic downturn
because members can cancel at any time.

S&P believes that UVC offers Apple Leisure Group the opportunity
to compete for consumers who might otherwise purchase a timeshare
or other vacation product and not return to the company's
AMResorts network.  However, this big-ticket, discretionary
product faces sales execution risks similar to timeshares, in
that there is a lack of consumer awareness and knowledge about
the product, and it may be difficult for the average consumer to
accurately assess the value they are receiving, creating some
resistance to purchasing the product.  These are challenges the
company must overcome to successfully close a sale.  S&P believes
UVC has a small addressable market compared to timeshare, and has
a comparably limited track record of consumer satisfaction.

Overall, S&P's assessment of Apple Leisure Group's business risk
profile reflects the high levels of competition for discretionary
leisure spending by the company's mostly U.S. and Canadian
customer base, high levels of competition and travel-related
event risk in the company's mostly Mexican and Caribbean all-
inclusive resort market destinations, and limited geographic and
business diversity compared with those of other global leisure
companies. Partly mitigating these risk factors are the company's
growing portfolio of management contracts in the company's
AMResorts resort management business, its focus on the affluent
North American travel market, and its good position in, and the
increasing popularity of the all-inclusive resort vacation

In addition, S&P's business risk assessment incorporates its
expectation that EBITDA margin (in the non-UVC operating
companies) is low and compares unfavorably with that of other
leisure sector companies, primarily because of the relatively
modest mark-up the company receives on the gross sale of vacation
packages (which can include hotel room, airfare, transportation,
and other amenities).  The company's 2013 acquisitions of Travel
Impressions' U.S., Mexican, and European wholesale vacation
packaging business and's direct-to-consumer,
mass-market vacation site further intensify Apple Leisure Group's
low-margin profile.  Given its low EBITDA margin, a key risk
factor includes inventory risk in booking vacation packages
involving the chartering of flights.  S&P believes ALG manages
this risk factor by chartering flights largely in its most
traveled routes to its managed resorts.

S&P's assessment of Apple Leisure Group's financial risk reflects
the control of the company by financial sponsors KKR and KSL, as
well as S&P's expectation for CFO to debt to be in the 10%-15%
range through 2018, and S&P's expectation that this number will
be highly volatile from year to year.

Under S&P's base-case scenario, S&P assumes these:

   -- U.S. real GDP growth of 1.6% in 2016, 2.4% in 2017, and
      2.3% in 2018.
   -- U.S. consumer spending growth of 2.6% in 2016, 2.5% in
      2017, and 2.3% in 2018.
   -- Stable international travel to Mexico. Flu and violence
      concerns, as well as the global economic crisis, depressed
      foreign travel to Mexico in 2008 and 2009.  AMResorts has
      about 60% of its total rooms under management located in
      Mexico.  S&P also expects stable travel to the Caribbean
      despite the emergence of the Zika virus in 2016.
   -- At AMResorts S&P has assumed a mid-single-digit percentage
      decline in revenue per available room (RevPAR) in 2016 and
      low-single-digit percentage growth in 2017.  S&P has
      incorporated net rooms growth in the mid-teens percentage
      area in 2016 and in the 20% area in 2017 due to rooms
      coming online from new management contracts.  As a result,
      S&P believes revenue grew in the mid-single-digit
      percentage area in 2016 and will grow in the mid-single-
      digit percentage area in 2017.  S&P believes that the
      perception of contagious illness, violence, extreme
      weather, or terrorism, which could depress North American
      travel to Mexico and the Caribbean (and many other travel
      markets), are the key risk factors in the segment over the
      next two years.

   -- At the distribution companies S&P has assumed relatively
      flat passenger volume in 2016 and a mid-single-digit
      percentage area decline in revenue, driven by a difficult
      airline pricing environment.  S&P estimates the airline
      price decline also drove a decline in customer deposits in
      2016, causing a negative working capital swing in 2016 in
      this segment.  S&P assumes mid-single-digit percentage
      growth in passenger volume and revenue in 2017.

   -- At AMStar, S&P believes revenue grew in the mid-teens
      percentage area in 2016 and is expected to grow in the 10%
      area in 2017, due to increases in excursion and transfer
      volume because of increased referrals from the distribution

   -- At UVC, S&P believes contract sales grew in the 30% area in
      2016, and will grow in the 10% area in 2017, due to more
      product options and improved sales execution.  S&P expects
      CFO at UVC to decline modestly in 2016 and to nearly double
      in 2017, primarily due to the increase in contract sales
      and due to a decrease in receivables as UVC collects cash
      from installment loans originated in previous years.

   -- As a result of these expectations, S&P believes total
      revenue at Apple Leisure Group was down in the low-single-
      digit percentage area in 2016.  S&P's revenue growth
      expectation is driven primarily by the significant revenue
      contribution from the distribution businesses.  S&P
      estimates CFO decreased by about 20% in 2016 due to
      significantly lower customer deposits in the distribution
      business.  S&P expects 2017 revenue to grow in the mid-
      single-digit percentages, and total CFO to increase by
      nearly 50% due to increased customer deposits from a return
      to a more favorable airline pricing environment.

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

   -- Weak CFO to debt estimated around 10% in 2016 (pro forma
      for the incremental debt to be issued in the proposed
      transaction), improving to the low-teens percentage area in
      2017 and to around 15% in 2018.

   -- Free operating cash flow (FOCF) to debt around 10% in 2017
      and 2018.

Based on likely sources and uses of cash over the next 12 to 18
months, incorporating S&P's performance expectations and the
proposed transaction, Apple Leisure Group has an adequate
liquidity profile.  S&P expects liquidity sources to exceed uses
by at least 1.2x and for net sources to remain positive, even if
forecasted EBITDA declined by 15%.

Principal Liquidity Sources:

   -- Unrestricted cash on hand of about $70 million, pro forma
      for the transaction.  Availability under the proposed
      $125 million revolver, which S&P expects to be undrawn at
      the close of the transaction.

   -- Just over $100 million in annual cash flow from operations
      in 2017 and in 2018.

Principal Liquidity Uses:

   -- Negative net working capital balances because of a high
      level of deferred revenue from the UVC business and
      customer deposits prior to travel in its Apple Vacations,
      Travel Impressions, and segments.  S&P
      has assumed that changes in working capital accounts
      through 2018 are managed in a manner that supports free
      cash flow generation.

   -- A modest amount of capital expenditures through 2018.

   -- Amortization payments on its first-lien term loan are 1%
      annually, and there is a free cash flow sweep of 50% over
      $10 million in the terms of the first-lien credit facility.
      This percentage declines to 25% and 0% when first-lien net
      leverage (as measured in the proposed draft credit
      agreement) is at 3.75x and 3.25x, respectively.

   -- ALG does not have a maturity until its first-lien revolver
      matures in 2022.

The negative outlook reflects S&P's expectation for leverage at
Apple Leisure Group to be high over the near term, with estimated
pro forma 2016 CFO to debt around 10% and in the low-teens
percentage range in 2017.  S&P also believes this measure could
be highly variable, so there is minimal near term cushion
compared to the 10% CFO to debt threshold at which S&P would
consider lower ratings.

S&P could lower the rating if cash flows deteriorate and S&P
believes CFO to debt will be sustained below 10%, on average.
This could result from a meaningful downturn in the economic
cycle, an event that weakens travel to Mexico or the Caribbean,
poor inventory management of the company's chartered flights, an
increase in member cancellations or decline in contract sales in
the UVC business, or sustained negative swings in customer
deposits and other working capital accounts.

S&P could revise the outlook to stable once it believes that CFO
to debt will improve to and stays at around 15%, on average.
Higher ratings are unlikely at this time given the financial
sponsor ownership and S&P's expectation for leverage to remain
high over time as a result.  However, S&P could consider higher
ratings if it was confident that CFO to debt would be sustained
around 20%, on average.

CREDIT EUROPE: Moody's Affirms Ba2 LT LC & FC Deposit Ratings
Moody's Investors Service has affirmed the long-term local and
foreign-currency deposit ratings of Ba2 of Credit Europe Bank
N.V. (CEB NV) and revised the outlooks upon them to stable from
negative. Concurrently, Moody's affirmed CEB NV's short-term
local and foreign-currency deposit ratings of Not Prime and its
standalone baseline credit assessment (BCA) and adjusted BCA of
b1. CEB NV's subordinated debt rating of B2 and long-term and
short-term Counterparty Risk (CR) assessments of Ba1(cr) and Not
Prime(cr) have also been affirmed.

Moody's Investors Service has also affirmed the long-term and
short-term deposit ratings of CEB NV's Russian subsidiary Credit
Europe Bank Ltd. (CEBL) at B1 and Not Prime, its senior unsecured
debt rating of B1 and subordinated debt rating of B2, its BCA of
b2 and adjusted BCA of b1 and changed the outlook to stable from
negative on the long-term debt and deposit ratings. At the same
time, the rating agency affirmed CEBL's long-term and short-term
CR assessments of Ba3(cr) and Not Prime(cr).



The revision of CEB NV's deposit outlook to stable from negative
reflects the reduction of the bank's asset risks in Russia, which
contributed to a 38% decrease in loan loss charges at CEBL in the
first six months of 2016. In addition, a significant decrease in
funding costs and operating expenses in the country should help
support CEBL's profitability and consequently that of its parent
CEB NV in the second half of 2016 and in 2017.

The credit profiles of CEB NV and its Russian subsidiary CEBL are
interlinked as CEBL still represented 18% of CEB NV's
consolidated assets at end-June 2016, despite a significant
decrease from 31% two years earlier. CEB NV's BCA of b1 is
positioned one notch higher than that of CEBL, as the Dutch bank
benefits from a more stable asset base in the Netherlands,
stronger funding characteristics through a more moderate use of
wholesale funding and greater geographic diversification offering
protection against credit risk deterioration at the Russian

Nonetheless, CEB NV was recently impacted by significant loan
loss charges from elsewhere. The bank recorded a total of EUR20
million of provisions in Romania, mostly taken in the first half
of 2016, in relation to a new Romanian law enabling customers to
cancel their mortgage loans in exchange for relinquishing the
property. Although Moody's believes that the bulk of the
provisioning charges have already been recorded, this underlines
asset risk beyond its Russian lending. As the new law was
declared unconstitutional in December 2016, the provisions should
be partly reversed. Exposures to Turkey, a country which has
undergone significant domestic political disruptions since July
2016, also represented 18% of credit exposures at end-June 2016.

In this context, Moody's views the bank's regulatory capital
ratios as only moderate in view of the significant emerging
market risks incurred by the bank. CEB NV's Common Equity Tier 1
capital ratio was 12.2% and the total capital ratio was 18.2% as
of end-June 2016.

The long-term deposit rating of Ba2 results from (1) the bank's
standalone BCA of b1; (2) the application of Moody's Advanced
Loss Given Failure (LGF) analysis, resulting in a two-notch
uplift from the b1 BCA; and (3) no uplift for government support,
reflecting a low probability of support.

CEB NV's BCA of b1 reflects the bank's moderate capital cushion
and its risk profile skewed towards geographical markets
contributing to higher earnings volatility, notably Russia,
Romania and Turkey. The bank's BCA is thus constrained by its
Russian subsidiary CEBL.

Moody's two-notch uplift under its LGF analysis also takes into
account some balance sheet volatility, possibly resulting in a
lower subordinated debt buffer as a percentage of the balance
sheet, which in the rating agency's view will lead to a level of
loss-given-failure on long-term deposits higher than that
suggested by the latest balance sheet in a resolution scenario.


The stable outlook on CEBL's long-term deposit ratings reflects
the bank's resilience to difficult market conditions in Russia
and the stabilization of its risk profile. In particular, rating
action reflects: (1) the steadying of CEBL's asset quality; (2)
the bank's track record of profitable performance in recent years
and Moody's expectation of an improving profitability trend over
the next 12-18 months, supported by lower funding and credit
costs; and (3) sound capital adequacy.

Formation of new problem loans at CEBL has slowed in 2016, and
Moody's expects the stabilization and gradual improvement in the
bank's asset quality over the next 12-18 months, aided by the
economic recovery.

CEBL's profitability stabilized in 2016 and Moody's expects it to
gradually improve over the next 12-18 months supported by growing
business volumes, ongoing recovery of its net interest margin and
decreasing provisioning charges.

CEBL continues to maintain healthy capital ratios which will be
sufficient to support its future growth. As at 30 September 2016,
CEBL reported Tier 1 ratio of 17.7% and Total capital adequacy
ratio (CAR) of 20.5%.

Moody's also expects that CEBL's liquidity and funding position
will remain manageable and benefit from the bank's increasing
focus on customer deposits, gradually reducing reliance on market

In addition, rating action on CEBL also reflects Moody's view
that the contraction in the Russian economy is ending and that
nascent economic growth of 1.5% in 2017 will benefit the bank's
financial metrics.

The debt and deposit ratings of CEBL incorporate Moody's
assessment of a moderate probability of affiliate support from
CEB NV, which results in rating uplift of one notch above the
bank's BCA of b2.


The stable outlook on CEB NV's long-term deposit rating indicates
there is currently no expectation of particular upward or
downward pressure on the ratings over the next 12-18 months.

An upgrade of CEB NV's deposit rating could be triggered by (1) a
visible improvement in the bank's asset risks, notably but not
exclusively at Russian subsidiary CEBL; (2) an increase in the
bank's capitalisation; and (3) an improvement in profitability
together with reduced earnings volatility. Moody's could also
upgrade the deposit rating if the agency believed that the
protection afforded by the bank's subordinated debt had

Conversely, a downgrade of CEB NV's deposit rating could be
triggered by increased asset risks, lower capitalisation or
reduced profitability.

The stable outlook on CEBL's long-term ratings indicates there is
currently no expectation of particular upward or downward
pressure on the ratings over the next 12-18 months. However, in
the longer term, a positive rating action could result from a
material strengthening of the bank's deposit base and reduced
reliance on market funding. At the same time the ratings could be
downgraded if the bank's risk absorption capacity and financial
fundamentals erode beyond Moody's current expectations, or if
Moody's reassesses the probability of affiliate support from its



Long-term local and foreign-currency deposit ratings, affirmed
Ba2, Outlook changed to Stable from Negative

Short-Term local and foreign-currency deposit ratings, affirmed

Foreign-currency subordinated debt rating, affirmed B2

Adjusted Baseline Credit Assessment, affirmed b1

Baseline Credit Assessment, affirmed b1

Long-term Counterparty Risk Assessment, affirmed Ba1(cr)

Short-Term Counterparty Risk Assessment, affirmed NP(cr)


Long-term local and foreign-currency deposit ratings, affirmed
B1, Outlook changed to Stable from Negative

Short-Term local and foreign currency deposit ratings, affirmed

Long-term local-currency senior unsecured debt rating, affirmed
B1, Outlook changed to Stable from Negative

Long-term foreign-currency subordinated debt rating, affirmed B2

Adjusted Baseline Credit Assessment, affirmed b1

Baseline Credit Assessment, affirmed b2

Long-term Counterparty Risk Assessment, affirmed Ba3(cr)

Short-Term Counterparty Risk Assessment, affirmed NP(cr)


The principal methodology used in these ratings was Banks
published in January 2016.

DRYDEN 48: S&P Assigns 'B-' Rating to Class F Notes
S&P Global Ratings assigned its credit ratings to Dryden 48 Euro
CLO 2016 B.V.'s class A1, A2, B1, B2, C, D, E, and F notes.  At
closing, the issuer also issued unrated subordinated notes.

Dryden 48 Euro CLO 2016 is a broadly syndicated collateralized
loan obligation(CLO) managed by PGIM Ltd., which is the principal
asset management business of Prudential Financial, Inc. (PFI).
This is PGIM's third CLO to date in 2016 following Dryden 46 Euro
CLO 2016 B.V., which closed in October 2016.

The ratings assigned to Dryden 48 Euro CLO 2016's notes reflect
S&P's assessment of:

   -- The diversified collateral pool, which consists primarily
      of broadly syndicated speculative-grade senior secured term
      loans and bonds that are governed by collateral quality

   -- 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 bankruptcy
      remote in accordance with S&P's European legal criteria.

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

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
preliminary 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.


Dryden 48 Euro CLO 2016 BV

EUR414.5 mil fixed and floating-rate notes (including EUR 43 mil.
subordinated notes)


Class     Rating                         (mil. EUR)
A-1       AAA (sf)                       230.0
A-2       AAA (sf)                       10.0
B-1       AA (sf)                        45.5
B-2       AA (sf)                        7.5
C         A (sf)                         25.5
D         BBB (sf)                       20.0
E         BB (sf)                        22.0
F         B- (sf)                        11.0
Sub       NR                             43.0

NR--Not rated

ZOO ABS II: Moody's Affirms Rating on Class E Notes at 'Ca'
Moody's Investors Service announced that it has taken rating
actions on the following classes of notes issued by Zoo ABS II

-- EUR167M Class A-1 Senior Secured Floating Rate Notes due
2096, Affirmed Aaa (sf); previously on Jan 8, 2016 Upgraded to
Aaa (sf)

-- EUR18.75M Class A-2 Senior Secured Floating Rate Notes due
2096, Upgraded to Aa1 (sf); previously on Jan 8, 2016 Upgraded to
Aa3 (sf)

-- EUR10M Class B Senior Secured Floating Rate Notes due 2096,
Upgraded to A2 (sf); previously on Jan 8, 2016 Upgraded to Baa2

-- EUR9.25M Class C Deferrable Interest Secured Floating Rate
Notes due 2096, Upgraded to Ba3 (sf); previously on Jan 8, 2016
Upgraded to B2 (sf)

-- EUR9M Class D Deferrable Interest Secured Floating Rate Notes
due 2096, Affirmed Caa3 (sf); previously on Jan 8, 2016 Affirmed
Caa3 (sf)

-- EUR4.25M Class E Deferrable Interest Secured Floating Rate
Notes due 2096, Affirmed Ca (sf); previously on Jan 8, 2016
Affirmed Ca (sf)

-- EUR5.7M Class P Combination Notes due 2096, Downgraded to Ba1
(sf); previously on Jan 8, 2016 Upgraded to A2 (sf)

-- EUR6M Class Q Combination Notes due 2096, Affirmed Aa3 (sf);
previously on Jan 8, 2016 Upgraded to Aa3 (sf)

-- EUR7M Class R Combination Notes due 2096, Affirmed Aa3 (sf);
previously on Jan 8, 2016 Upgraded to Aa3 (sf)

Zoo ABS II B.V. is a managed cash-flow collateralized debt
obligation backed primarily by a portfolio of Euro dominated
Structured Finance securities. At present, the portfolio is
composed of Prime RMBS (80.49%), CLO (11.15%), ABS consumer/auto
(6.25%), and CMBS (2.11%).


The rating actions on the notes are a result of the deleveraging
of the Class A-1 notes. The downgrade of the class P is a result
of the decrease in the expected interest payments flowing to this
Class until maturity and the increased reliance on the equity
component to fully repay the rated balance.

Class A-1 has repaid EUR25.57M or 17.93% of the tranche original
balance since the December 2015 payment date. The amortisation of
the Class A-1 has also improved the overcollateralization ("OC")
ratios across the capital structure. As per the December 2016
trustee report, the Class A/B, Class C, Class D and Class E
overcollateralization ratios are reported at 151.84%, 126.57%,
108.93% and 102.14% respectively, compared to 125.01%, 113.46%,
104.11% and 100.15%as per the December 2015 trustee report.

The rating on the combination notes addresses the repayment of
the rated balance on or before the legal final maturity. For the
Classes P, Q and R, the rated balance at any time is equal to the
principal amount of the combination note on the issue date minus
the sum of all payments made from the issue date to such date, of
either interest or principal. The rated balance will not
necessarily correspond to the outstanding notional amount
reported by the trustee.

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was "Moody's
Approach to Rating SF CDOs" published in October 2016.

Factors that would lead to an upgrade or downgrade of the

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes:

Amounts of defaulted assets - Moody's considered a model run
where the Caa assets in the portfolio were assumed to be
defaulted. The model outputs for this run are within one notch
from the base-case results.

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
notes, in light of 1) uncertainty about credit conditions in the
general economy 2) divergence in the legal interpretation of CDO
documentation by different transactional parties due to embedded

Additional uncertainty about performance is due to the following:

* Portfolio amortisation: The main source of uncertainty in this
transaction is the pace of amortisation of the underlying
portfolio, which can vary significantly depending on market
conditions and have a significant impact on the notes' ratings.
Amortisation could accelerate as a consequence of high prepayment
levels or collateral sales by the collateral manager. Fast
amortisation would usually benefit the ratings of the notes
beginning with the notes having the highest prepayment priority.

* Recovery of defaulted assets: Market value fluctuations in
trustee-reported defaulted assets and those Moody's assumes have
defaulted can result in volatility in the deal's
overcollateralisation levels. Further, the timing of recoveries
and the manager's decision whether to work out or sell defaulted
assets can also result in additional uncertainty. Recoveries
higher than Moody's expectations would have a positive impact on
the notes' ratings.

In addition to the quantitative factors that Moody's explicitly
modelled, qualitative factors are part of the rating committee's
considerations. These qualitative factors include the structural
protections in the transaction, its recent performance given the
market environment, the legal environment, specific documentation
features, the collateral manager's track record and the potential
for selection bias in the portfolio. All information available to
rating committees, including macroeconomic forecasts, input from
other Moody's analytical groups, market factors, and judgments
regarding the nature and severity of credit stress on the
transactions, can influence the final rating decision.


BANCO COMERCIAL: Fitch Affirms 'BB-' LT Issuer Default Rating
Fitch Ratings has affirmed Banco Comercial Portugues, S.A.'s
Long-Term Issuer Default Rating (IDR) at 'BB-' and Viability
Rating (VR) at 'bb-'. The Outlook on the Long-Term IDR is Stable.
A full list of rating actions is at the end of this rating action

The affirmation follows the bank's announcement on January 9 that
it intends to raise EUR1.33bn capital through a rights issue.
Fitch believes that the capital increase is positive for
Millennium bcp's risk profile, as it will allow the bank to repay
its EUR700m remaining state contingent convertible bonds (cocos).
This in turn will enhance its solvency position and offset
pressure on its ratings from capital erosion. Nevertheless,
capitalisation remains vulnerable to the bank's large exposure to
problem assets.

The ratings reflect the weak asset quality of Millennium bcp,
which puts pressure on its operating profitability and internal
capital generation, as well as on capitalisation. The ratings
also reflect the bank's sound domestic franchise and improved
funding and liquidity.

The bank has made progress in reducing its large volume of
non-performing loans (NPLs as per EBA definition), but these
represented a still high 19.6% of loans at end-June 2016, a ratio
that compares unfavourably with many peers. The reserve coverage
of NPLs was low at about 35% at end-June 2016, resulting in a
high reliance on collateral valuation and realisation and
guarantees. In addition to NPLs, Millennium bcp is also exposed
through holdings of foreclosed assets and investments in
corporate restructuring funds.

Including the share capital increase, the bank's end-3Q16 Fitch
Core Capital (FCC)/risk-weighted assets (RWAs) ratio would have
increased to around 14.2% from 10.3%. Millennium bcp's fully
loaded Common Equity Tier 1 ratio, taking into account the net
effect of the capital increase and the repayment of hybrid
capital instruments, would have been 11.4% (compared with 9.5%)
at the same date. Nevertheless, unreserved NPLs, foreclosed
assets and stakes in corporate restructuring funds represented a
still high 173% of pro-forma FCC at end-September 2016.

Millennium bcp has implemented a restructuring plan since 2012 to
improve profitability. However, the bank's earnings remain well
below most peers' because of large loan impairment charges to
improve coverage of NPLs. Core earnings are improving and
becoming more sustainable, due to lower funding costs and
declining overheads, and will benefit from reduced interest
payments once the bank has repaid its outstanding hybrid capital

The bank's funding and liquidity is generally stable, as lending
is mostly funded through customer deposits. The bank also has
wholesale funding in the form of senior and covered bonds and ECB

The bank's Support Rating and Support Rating Floor reflect
Fitch's belief that senior creditors of the bank cannot rely on
receiving full extraordinary support from the sovereign in the
event that the bank become non-viable. The EU's Bank Recovery and
Resolution Directive and the Single Resolution Mechanism for
eurozone banks provide a framework for resolving banks that is
likely to require senior creditors to participate in losses, if
necessary, instead of or ahead of a bank receiving sovereign

The preference shares have been downgraded to 'CCC' because Fitch
believes economic losses are likely to be moderate before coupon
payment resumes. Fitch estimate this will occur at the next
coupon date after the recapitalisation and approval of 2016

An upgrade of the bank's VR and Long-term IDR would require a
step up in the pace of the reduction of problem assets. This,
combined with improved operating profitability, should help
internal capital generation and reduce the vulnerability of the
bank's capital to unreserved problem assets.

Setback on expected improvements in asset quality and
profitability that put pressure on capital would undermine

An upgrade of the Support Rating and upward revision of the
Support Rating Floor would be contingent on a positive change in
the sovereign's propensity to support the bank. While not
impossible, this is highly unlikely, in Fitch's view.

The ratings of Millennium bcp's preference shares are primarily
sensitive to a change in their performance. An upgrade of the
rating would be contingent on the bank resuming coupon payments
on the instruments.

The rating actions are:

Long-Term IDR affirmed at 'BB-'; Outlook Stable
Short-Term IDR affirmed at 'B'
Viability Rating: affirmed at 'bb-'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'
Senior unsecured debt long-term rating affirmed at 'BB-'
Senior unsecured debt short-term rating affirmed at 'B'
Preference shares downgraded to 'CCC' from 'B-'


IG SEISMIC: Moody's Lowers CFR to Caa1, Outlook Stable
Moody's Investors Service has downgraded to Caa1 from B3 and to
Caa3-PD from B3-PD, respectively, the corporate family rating
(CFR) and probability of default rating (PDR) of IG Seismic
Services Plc (IGSS), the leading seismic services company in
Russia. The outlook on all the ratings has been changed to stable
from negative.


The rating action reflects the anticipated deterioration of
IGSS's operating and financial results in 2016 beyond Moody's
previous expectations. This is the result of suspension or
cancelation of contracts already signed by a number of oil
companies in Q1 2016 amid oil price volatility and only a modest
market recovery starting Q2 2016 when oil prices somewhat

Moody's currently expects IGSS's leverage (measured as adjusted
debt/EBITDA) to surge to nearly 8.0x in 2016 (4.1x in 2015)
driven by the negative operating cash flow under the significant
drop in revenues, decrease in profitability and rising interest
expenses coupled with a resulting step up in debt.

Despite some level of revenue recovery which is expected in 2017,
IGSS's operations and financial metrics will likely remain weak
with adjusted leverage staying at or above 6.0x. Moreover, the
rating agency continues to see downside risks as the industry
stays under pressure and the sustainability of the current oil
price recovery remains uncertain.

The rating action also takes into account the pressure on IGSS's
liquidity profile, given the weak cash flow generation and
significant near-term refinancing risks. At the same time,
Moody's positively acknowledges the evidence of the company's
strong relationship with its key creditor, Bank Otkritie
Financial Corporation PJSC (Bank Otkritie, Ba3 negative) and
expects that it will continue to support IGSS going forward.

In particular, IGSS is planning to refinance its credit
facilities with the bank, which includes (1) a decrease in the
interest rates; (2) a partial deferral of interest payments due
in 2017 and 2018 until 2019; and (3) a postponement of the final
maturities to 2023. Should the refinancing be completed as
anticipated, the company will have only moderate debt service
requirements in 2017-18 and its cash flows will be supported by
significantly lower cash interest payments, which should allow it
to generate neutral or positive free cash flow.

While Moody's sees the proposed refinancing as a positive step
for IGSS towards addressing its liquidity needs, the transaction,
if completed as currently envisaged, would be seen as a
distressed exchange, which is a default under Moody's definition
and hence reflected in the PDR of Caa3-PD. Should the exchange
occur as stipulated, Moody's expects to assign a "/LD" indicator
to the company's PDR upon closing of the transaction. The CFR at
Caa1 reflects Moody's expectation that there will be no nominal
loss to the bank loans upon the completion of the refinancing.

IGSS's Caa1 CFR also continues to factor in its (1) modest scale
by global standards; and (2) exposure to Russia-related
political, economic and legal risks. More positively, the rating
takes into account (1) IGSS's dominant position in the Russian
seismic services market, which benefits from still strong longer-
term fundamentals; (2) its significant presence in all major
hydrocarbon-rich basins in Russia and its high level of customer
diversification; and (3) the company's strategic partner,
Schlumberger Ltd (A1 stable), which supports IGSS's strong
technological expertise.


The stable outlook on the ratings reflects Moody's expectation
that despite some gradual market recovery on the back of
stabilised oil prices, IGSS's operating and financial performance
will remain weak with adjusted debt/EBITDA staying at or above
6.0x with some clear downside risks. At the same time, the
amendments to the credit agreements with the Bank Otkritie, if
signed in due course, will improve IGSS's liquidity position
reducing pressure on its operating cash flow and comfortably
extending the maturity profile.


IGSS's rating could be upgraded if the company is able to achieve
on a sustainable basis (1) reduced leverage with adjusted
debt/EBITDA at below 5.5x; (2) improved interest coverage
measured as EBITDA/interest expense at above 1.5x; and (3)
adequate liquidity profile with comfortable near-term refinancing

A rating downgrade could be triggered by (1) persistently weak
operating environment and/or any negative developments in the
company's business profile that result in a further weakening in
operating performance; or (2) an inability to secure adequate
financing to meet its debt maturities over 12 months or other
signs of limited access to new funding.


The principal methodology used in these ratings was Global
Oilfield Services Industry Rating Methodology published in
December 2014.

Domiciled in Cyprus and headquartered in Moscow, Russia, IG
Seismic Services Plc (IGSS) is the Russia's largest seismic
services company. The company provides high-quality seismic data
acquisition, data processing and interpretation services to a
diversified client base, and has a foothold in all major oil and
gas provinces in the country. In 2015, IGSS generated sales of
$310 million and adjusted EBITDA of approximately $82 million.


IM SABADELL RMBS 2: S&P Puts Cl. C's B- Rating on Watch Neg.
S&P Global Ratings placed on CreditWatch negative its credit
ratings on IM Sabadell RMBS 2, Fondo de Titulizacion de Activos'
class A, B, and C notes.

The CreditWatch negative placements follow the renegotiation,
over the past seven months, of interest rates for a significant
portion of the mortgage loans in the collateral to fixed rates
from floating rates.

At closing, loans referenced to fixed rates represented only
2.23% of the mortgage loans.  Since May 2016, the servicer (Banco
de Sabadell S.A.) has renegotiated the interest rates of the
mortgage loans.  According to the latest information the trustee
published, loans referenced to fixed rates now represent 25.08%
of the collateral pool.  Under the transaction documents, there
is no limit on the percentage of loans in the pool that can be
subject to interest rate renegotiation.  The only limitation, as
long as the renegotiation is in line with the servicer's standard
market practice, is that the weighted-average margin on the loans
in the pool referenced to floating rates cannot be lower than

The transaction does not benefit from an interest swap since the
February 2016 restructuring.  With a significant portion of the
portfolio now paying fixed interest rates, the mismatch between
the assets and liabilities should now be higher than what S&P
previously assumed.  S&P expects that the transaction could now
be exposed to higher interest risk in its high interest rate
scenarios in its cash flow analysis.  Consequently, when
performing a full analysis of this transaction, S&P expects a
negative effect on the ratings.

Therefore, S&P has placed on CreditWatch negative its ratings on
IM Sabadell RMBS 2's class A, B, and C notes.

S&P will resolve these CreditWatch placements in due course once
it has conducted a full analysis of the transaction

IM Sabadell RMBS 2 is a Spanish RMBS transaction, which closed in
June 2008 and securitizes first-ranking mortgage loans that Banco
de Sabadell originated.


Class             Rating
        To                    From

Ratings Placed On CreditWatch Negative

IM Sabadell RMBS 2, Fondo de Titulizacion de Activos
EUR1.4 Billion Residential Mortgage-Backed Floating-Rate Notes

A       A (sf)/Watch Neg      A (sf)
B       BB+ (sf)/Watch Neg    BB+ (sf)
C       B- (sf)/Watch Neg     B- (sf)

U N I T E D   K I N G D O M

AMIGO HOLDINGS: Moody's Assigns B1 Corporate Family Rating
Moody's Investors Service has assigned a definitive B1 Corporate
Family Rating (CFR) to Amigo Holdings Limited (Amigo), the
holding company of the UK-based Amigo group. Moody's has also
assigned a definitive B1 rating to the GBP275 million long-term,
senior secured bond, issued by Amigo Luxembourg S.A., which is
backed by the parent, Amigo Holdings Limited. The outlook is
stable for both issuers.

The rating action confirms the provisional ratings of Amigo and
the debt issued by its subsidiary assigned on January 11, 2017.
The final terms and conditions of the notes, issued on January
13, 2017, are in line with the draft documentation reviewed for
the provisional ratings assigned on January 11, 2017. The Agency
notes that Amigo Holdings Limited is still within the restricted
group and part of the shareholder loan notes issued by the
company has not yet been converted into common equity.

According to the bond's offering memorandum, Amigo Holdings
Limited should be removed from the restricted group within 90
days of the issue date and a new holding company should be
incorporated. This new incorporated holding company will be the
entity that will produce the consolidated accounts for Amigo
Group. Since Moody's expects that Amigo Holdings Limited will be
effectively removed by the restricted group within the set
timeframe and the shareholder loan notes converted into common
equity, it is now changing the rating to definitive from
provisional. Additionally, once the new holding company will be
incorporated, Moody's will assign the B1 CFR to this new company
and withdraw the rating assigned to Amigo Holdings Limited.


Amigo Group is the leader in the UK market for unsecured
guarantor loans, with an estimated 85% share. The guarantor loan
is a personal loan where interest and principal repayments are
guaranteed by a second individual, typically a family member or a
friend of the borrower. Amigo offers only one product, which is a
guarantor loan under which individuals are able to borrow between
GBP500 and GBP7,500 over a term of between 12 and 60 months at a
fixed annual percentage (with the same rate applicable to all

The CFR of B1 is supported by Amigo's market share and simple
business model, strong profitability and liquidity metrics and a
supporting ownership structure which shows an alignment of
interests between the senior management of the company and its
main shareholder. Moody's also sees constraints to the rating
resulting from the firm's monoline business model, relatively
simple risk management framework, albeit mitigated by a strong
compliance culture, and modest asset quality. In addition,
regulatory risk is a key concern, but the agency believes the
likelihood of a change in the regulatory framework in the
unsecured credit market to be very low.

The rating also incorporates solid capital levels, despite the
reduction following a partial repayment of the shareholder loan,
and a comfortable liquidity position post-issuance of the
proposed bond. Following the transaction, Amigo's leverage,
calculated as Tangible Common Equity (TCE) relative to Tangible
Managed Assets (TMA), will remain solid at 29% from 50% at end-
September 2016, according to Moody's calculation. Moody's
believes that any subsequent improvement would also depend on
Amigo maintaining strong profitability and a disciplined
underwriting criteria. The proposed funding structure is also
expected to improve Amigo's liquidity by providing some
diversification in funding and by lengthening the maturity
profile of its debt facilities. However, Moody's also notes the
concentration in terms of debt maturities, with the GBP57 million
new revolving credit facility maturing in five years and the
senior secured bond in seven years.

Amigo has shown a strong level of profitability significantly
higher than that of peers over the last few years, owing to its
simple and effective business model, whereby it applies an
interest rate typical of near- and subprime clients to customers
which generally have a better credit quality because of the
presence of the guarantor. This, together with disciplined
underwriting criteria, has allowed the company to maintain an
impairment rate well below those of its peers in the near-prime
lending market. However, Moody's believes that competition could
increase over the next few years, driven by the very high margins
of the sector and relatively low barriers to entry.

Moody's views the absence of a dedicated risk management and
internal audit function as a weakness. This is characteristic of
many companies of a similar size to Amigo, but the agency takes
some comfort from the fact that the firm has an experienced
management team and solid compliance culture. The company's focus
on compliance and on mitigating conduct risk is evidenced by the
way employees are assessed and how Amigo's guaranteed loan
product is designed. In addition, the company received its full
authorization to operate from the Financial Conduct Authority in
June 2016. The authorization allows the company to operate on a
permanent basis and indicates that the company's product and
processes are in compliance with regulatory standards in relation
to consumer protection and welfare.


The outlook on Amigo's ratings is stable, reflecting the
company's lengthened maturity profile following the expected
successful issuance of the senior secured note and the agency's
expectation that Amigo will continue to maintain solid internal
capital generation.


Amigo's CFR could be upgraded because of: (i) an improvement in
asset quality metrics, with problem loans falling below 5% of
total gross loans; (ii) a strengthening of the risk management
framework; and (iii) an enhanced degree of diversification away
from the simple guarantor lending model, while maintaining solid
credit fundamentals.

The firm's rating could be downgraded because of: (i) an
unexpected decline in profitability metrics; (ii) a TCE / TMA
ratio falling below 14% for a protracted period; and (iii) a
loosening of underwriting criteria likely to result in higher
credit risk and loan impairments.


The principal methodology used in these ratings was Finance
Companies published in December 2016.


Issuer: Amigo Holdings Limited

-- LT Corporate Family Rating, Assigned B1 Stable from (P)B1

Issuer: Amigo Luxembourg S.A.

-- BACKED Senior Secured Regular Bond/Debenture, Assigned B1
Stable from (P)B1

Outlook Actions:

Issuer: Amigo Holdings Limited

-- Outlook, Remains Stable

Issuer: Amigo Luxembourg S.A.

-- Outlook, Remains Stable

BELLE VUE: Financial Management Concerns Prompt Liquidation
Manchester-based speedway club, Belle Vue Speedway Limited, which
formally owned and managed the Belle Vue Aces, has formally
entered liquidation following concerns over financial management,
as confirmed by liquidator Nick Hancock --
-- of UHY Hacker Young.

The club was originally taken over by Chris Morton MBE and
David Gordon in 2006, and traded out of the Belle Vue Greyhound
Stadium until they moved to the National Speedway Stadium in
2016.  The club is presently held by the British Speedway
Promoter's Association (BSPA) and negotiations are continuing to
agree a franchise for Manchester.

In a further announcement, a decision was taken to liquidate the
company set up to run and promote the new National Speedway
Stadium in Belle Vue Manchester, B V Arena Limited (BV).

The GBP8 million arena in Gorton was completed in April 2016,
following 10 years of strategic planning with Manchester City
Council (MCC).  Although there were initial problems with the
track which delayed several of the opening meetings, there is no
doubt that the project produced an iconic arena and the best
speedway facility in the UK.

The arena went on to host the International Speedway Cup and
several other high profile races.  After failing to meet
important requirements put in place by the National Speedway
Stadium whilst simultaneously accruing significant debt, MCC took
the decision not to renew BV's license to occupy the stadium at
the same time as the BSPA revoked Belle Vue Aces speedway license
resulting in the inevitable liquidation of the companies.

MCC were reviewing the future of the stadium.  An official
decision has been made by the council who have confirmed that
they are "committed" to maintaining a speedway team in the city.
Nick Hancock of UHY Hacker Young comments on the appointment:
"Chris and David's mission was to secure the longevity of
speedway in the Belle Vue region, so it's a shame to see their
speedway license revoked.  Both the arena and the club are iconic
to Manchester, and the construction of a world class stadium was
part of an important regeneration project for East Manchester.
It was a sad day for speedway fans when the club closed, but it
is heartening to know that speedway will remain at the national
speedway stadium."

DIAMONDCORP PLC: At Risk of Administration if Placing Fails
StockMarketWire reports that DiamondCorp faces going into
administration next week unless one of its largest lenders agrees
to certain conditions which will allow a GBP1 million placing to
go ahead.

DiamondCorp is delaying admission of the placing and fee shares
on AIM until Jan. 31 to allow Deloitte & Touche, the rescue
practitioner for the company's majority-owned Lace Diamond Mines,
to reach an agreement with lender Industrial Development
Corporation of South Africa, StockMarketWire discloses.

DiamondCorp has reached an agreement in principle with the
Association of Mining & Construction Union but an agreement is
also needed with IDC to proceed with the placing, StockMarketWire

According to StockMarketWire, a statement said that without an
agreement, the board "will be unable to proceed and DiamondCorp
will likely need to be placed into administration".

DiamondCorp plc is an emerging diamond producer focused on
maximizing shareholder value through the development of high-
margin diamond production assets.  The company is incorporated in
the UK, and operates in the long established diamondiferous
regions of southern Africa.

LB RE FINANCING: February 23 Claims Filing Deadline Set
Pursuant to Rule 2.95 of the Insolvency Rules 1986, Gillian
Eleanor Bruce, Julian Guy Parr and Anthony Victor Lomas, the
Joint Liquidators of LB Re Financing No. 3 Limited, in Creditors'
Voluntary Liquidation, intend to declare a second interim
dividend to the unsecured creditors within a period of two months
from the last date for proving.

Creditors must send their full names and addresses (and those of
their Solicitors, if any), together with full particulars of
their debts or claims to the Joint Liquidators at
PricewaterhouseCoopers, 7 More London Riverside, London, SE1 2RT
by February 23, 2017 ("the last date for proving").  If so
required by notice from the Joint Liquidators, either personally
or by their Solicitors, Creditors must come in and prove their
debts at such time and place as shall be specified in such
notice.  If they default in providing such proof, they will be
excluded from the benefit of any distribution made before such
debts are proved.

Office Holder Details: Gillian Eleanor Bruce, Julian Guy Parr and
Anthony Victor Lomas (IP numbers 9120, 8003 and 7240) of
PricewaterhouseCoopers LLP, 7 More London Riverside, London SE1
2RT.  Date of Appointment: July 23, 2012.  Further information
about this case is available from Bryony Ball at the offices of
PricewaterhouseCoopers LLP at +44 (0) 207 213 3731.

ROY HOMES: Enters Administration Following Financial Woes
BBC News reports that one of the largest suppliers of bespoke
homes in the north of Scotland has ceased trading after getting
into financial difficulties.

Administrators from FRP Advisory have laid off all 17 staff at
Inverness-based Roy Homes Ltd and sister company Roy Homes Timber
Frame Ltd, BBC relates.

The combined annual turnover of the businesses was GBP3.2
million, BBC discloses.

According to BBC, in a statement, FRP Advisory said the
administrations had been caused by serious cash flow problems.

The administrators have placed the companies' assets and goodwill
up for sale, including "a handful of live projects", BBC relays.

"The Roy Homes brand is well-known across Scotland, and is highly
regarded for the quality of designs, construction and full
service package," BBC quotes joint administrator Iain Fraser as

"Unfortunately, the businesses ran into severe financial problems
and administration was the only option.

"The self-build market is expanding rapidly across the UK and we
are hopeful that there will be strong interest in the assets of
these well-known businesses."

* UK: Scottish Hospitality Companies Less at Risk of Failure
Scott Reid at The Scotsman reports that Scotland's hospitality
sector has enjoyed a solid start to the year, with its
restaurants and pubs less at risk of failure than the UK average.

Insolvency and restructuring trade body R3 said the country's
pubs were the most stable in the UK, with 17.8% in the
"higher-risk" band, against a UK average of 22.6% -- or almost
one in four, The Scotsman relates.

Scotland's restaurant sector put in the second best performance,
with 22.5% considered to be at higher than normal risk of
insolvency, compared with a UK average of just under 24%, The
Scotsman discloses.

According to The Scotsman, fifth of Scotland's hotels were deemed
to be at higher than normal risk of going bust -- slightly above
the UK average of 19.4%.

* UK: Corporate Insolvencies in Scotland Down 4th Quarter 2016
Mark Williamson at Herald Scotland reports that the number of
corporate insolvencies fell in the last quarter in spite of any
uncertainty caused by the Brexit vote and the impact of the
downturn in the North Sea.

The Accountant in Bankruptcy said 209 firms entered liquidation
or receivership in the three months to Dec. 31, down 4% from 218
in the preceding quarter, Herald Scotland relates.  The number of
insolvencies, including firms going into compulsory or creditors'
voluntary liquidations, fell by 18.4% annually, from 256 in the
final period of 2015, Herald Scotland discloses.

The AiB figures do not include firms entering the administration
process, which may avoid liquidation, Herald Scotland notes.
Administrations tend to affect larger organizations, Herald
Scotland states.

KPMG noted 969 insolvencies in total in Scotland last year, up 7%
from 904 in 2015, Herald Scotland relays.  According to Herald
Scotland, the number of liquidations rose to 870 from 802.
Ninety nine firms entered administration or receivership in 2016,
down from 102 in 2015, Herald Scotland notes.


* Downward Trend in Global Insolvencies Coming to an End
In 2016, companies struggled to stay resilient despite robust
support from policymakers, according to Euler Hermes, the
worldwide leader in trade credit insurance.  Strong deflationary
pressure and subdued global demand made life harder for
businesses.  After two years of substantial declines in
insolvencies, the Euler Hermes 2016 Global Insolvency Index --
which weighs countries based on their GDP and represents 84% of
world GDP -- should record a limited decrease of -2%.

"The downward trend in global insolvencies is coming to an end,"
said Ludovic Subran, chief economist at Euler Hermes.  "This is
happening because global growth is not accelerating and will
linger below +3% in the coming years.  Companies are therefore
more vulnerable to external shocks."

At a global level, the contained return of inflation should
provide only limited relief to corporate revenues, while
companies will face higher input costs, upward wage pressure and
tighter financing conditions.  Businesses absorbed the 2008-2009
shock, but remain vulnerable to the lack of a solid macroeconomic
and financial environment.  In 2016 they faced major global

   -- A sluggish global economy (real GDP growth +2.5% in 2016
vs. +2.7% in 2015)

   -- A sharp slowdown in global trade (+1.9%)

   -- Fierce price competition

   -- Volatile exchange rates and international financial flows.

"Bankruptcies are on the rise in Asia Pacific and the Americas,
and Europe's improvement is fading.  We expect global
insolvencies to rise by +1% in 2017," continued Mr. Subran.

Europe appeared immune to the gloom in the rest of the world in
2016, with insolvencies decreasing by -5%.  Meanwhile, Latin
America should post its fifth consecutive increase in
insolvencies (+18%), impacted by recession in Argentina, Brazil
and Venezuela, low commodity prices and currency depreciations.
In Asia Pacific, the Chinese slowdown and a rebound in
insolvencies and protectionism will impact companies.  In North
America, the steady decline in insolvencies has come to an end.

The +45% surge in the number of major bankruptcies (over EUR50
mn) registered in the first three quarters of 2016, compared to
the same period in 2015, is a source of second-round turbulence.
Large bankruptcies will have a domino effect, with adverse
implications for fragile suppliers, particularly for energy
companies.  Europe is the most at risk in terms of number of
cases, while North America reported the largest number in terms
of cumulative turnover.

Furthermore, state-owned enterprises (SOEs) -- i.e. companies in
which the state directly owns 50%+ of share capital -- are not
immune to bankruptcy.  Their relative weight in the economy,
their level of indebtedness, their inefficiencies and the
existence of an exit strategy constitute their major risk

"More than 160 out of the 2,000 largest companies in the world
can be defined as SOEs," added Mr. Subran.  "Overall, SOEs in
China present the highest risk profile, followed by Brazil and

* Auto Parts Supplier Debt-Fuelled Consolidation to Continue
Limited organic growth prospects and cheap debt are fuelling a
pan-European consolidation race among leading European auto parts
suppliers Dakar Finance S.A. (Autodistribution, B2 stable),
Alliance Automotive Holding Limited (AAG, B1 stable) and LKQ
Corporation (LKQ, Ba1 negative) as they turn to mergers and
acquisitions to drive growth and boost market share, says Moody's
Investors Service in a new report.

Moody's report, titled "Wholesale Distribution: Auto Parts --
Europe: Market Leaders Face Pressure to Step up Acquisitions in
Consolidation Race", is available on Moody's
subscribers can access this report via the link provided at the
end of this press release.

"Autodistribution, AAG and LKQ are leading the consolidation
charge in Europe having already gobbled up a number of small and
mid-sized players in different countries, and Moody's expect them
to continue to use historically cheap debt to finance more
acquisitions in 2017-18," says Pieter Rommens, a Moody's Vice
President -- Senior Analyst and author of the report.

AAG has more than doubled its revenue in the last five years.
Only approximately 20% of the revenue growth was organic, with
the remaining 80% stemmed from acquisitions. Moody's expects that
AAG will maintain its aggressive debt-funded acquisition strategy
to continue international expansion and will show limited
deleveraging in 2017.

Conversely, Autodistribution is focused on integrating its
recently acquired Doyen Auto Group and increasing efficiency
gains and cost savings. It has stronger deleveraging potential
than AAG as a result of continued margin improvements and early
redemption of its Pay-If-You-Can facility. For both companies,
free cash flow generation will be limited by continued investment
to fund acquisitive growth, service debt and increase operational

In 2017, organic revenue growth in the sector will be limited
because despite the rising average age of cars in circulation and
increasing technological complexity of parts, the increased
quality and durability of parts and stagnant or declining average
mileage, result in less wear and need for repair.

In addition, car manufacturers and specialized web dealers are
starting to pose a competitive threat to the independent
automotive aftermarket. In July 2016, Peugeot S.A. (Ba2 stable)
announced plans to launch Distrigo, its own multi-branded
automotive spare parts distribution network. This will further
accelerate the race to consolidate as players seek to protect
their market shares.

* BOOK REVIEW: The Sorcerer's Apprentice - Medical Miracles
Author: Sallie Tisdale
Publisher: BeardBooks
Softcover: 270 pages
List Price: $34.95
Review by Henry Berry

Order your own personal copy at

An earlier edition of "The Sorcerer's Apprentice" won an American
Health Book Award in 1986. The book has been recognized as an
outstanding book on popular science. Tisdale brings to her
subject of the wide and engrossing field of health and illness
the perspective, as well as the special sympathies and
sensitivities, of a registered nurse. She is an exceptionally
skilled writer. Again and again, her descriptions of ill
individuals and images of illnesses such as cancer and meningitis
make a lasting impression. Tisdale accomplishes the tricky
business of bringing the reader to an understanding of what
persons experience when they are ill; and in doing this, to
understand more about the nature of illness as well. Her style
and aim as a writer are like that of a medical or science
journalist for leading major newspaper, say the "New York
Times" or "Los Angeles Times." To this informative, readable
style is added the probing interest and concern of the
philosopher trying to shed some light on one of the central and
most unsettling aspects of human existence. In this insightful,
illuminating, probing exploration of the mystery of illness,
Tisdale also outlines the limits of the effectiveness of
treatments and cures, even with modern medicine's store of
technology and drugs. These are often called "miracles" of modern
medicine. But from this author's perspective, with the most
serious, life-threatening, illnesses, doctors and other
healthcare professionals are like sorcerer's trying to work magic
on them. They hope to bring improvement, but can never be sure
what they do will bring it about. Tisdale's intent is not to
debunk modern medicine, belittle its resources and ways, or
suggest that the medical profession holds out false hopes. Her
intent is to do report on the mystery of serious illness as she
has witnessed it and from this, imagined what it is like in her
varied work as a registered nurse. She also writes from her own
experiences in being chronically ill when she was younger and the
pain and surgery going with this.

She writes, "I want to get at the reasons for the strange state
of amnesia we in the health professions find ourselves in. I want
to find clues to my weird experiences, try to sense the nature of
being sick." The amnesia of health professionals is their state
of mind from the demands placed on them all the time by patients,
employers, and society, as well as themselves, to cure illness,
to save lives, to make sick people feel better. Doctors,
surgeons, nurses, and other health-care professionals become
primarily technicians applying the wonders of modern medicine.
Because of the volume of patients, they do not get to spend much
time with any one or a few of them. It's all they can do to apply
the prescribed treatment, apply more of it if it doesn't work the
first time, and try something else if this treatment doesn't seem
to be effective. Added to this is keeping up with the new medical
studies and treatments. But Tisdale stepped out of this problem
solving outlook, can-do, perfectionist mentality by opting to
spend most of her time in nursing homes, where she would be among
old persons she would see regularly, away from the high-charged
atmosphere of a hospital with its "many medical students,
technicians, administrators, and insurance review artists." To
stay on her "medical toes," she balanced this with working
occasional shifts in a nearby hospital. In her hospital work, she
worked in a neonatal intensive care unit (NICU), intensive care
unit (ICU), a burn center, and in a surgery room. From this
combination of work with the infirm, ill, and the latest medical
technology and procedures among highly-skilled professionals,
Tisdale learned that "being sick is the strangest of states."
This is not the lesson nearly all other health-care workers come
away with. For them, sick persons are like something that has to
be "fixed." They're focused on the practical, physical matter of
treating a malady. Unlike this author, they're not focused
consciously on the nature of pain and what the patient is
experiencing. The pragmatic, results-oriented medical profession
is focused on the effects of treatment. Tisdale brings into the
picture of health care and seriously-ill patients all of what the
medical profession in its amnesia, as she called it, overlooks.
Simply in describing what she observes, Tisdale leads those in
the medical profession as well as other interested readers to see
what they normally overlook, what they normally do not see in the
business and pressures of their work. She describes the beginning
of a hip-replacement operation, the surgeon "takes the scalpel
and cuts -- the top of the hip to a third of the way down the
thigh -- and cuts again through the globular yellow fat, and
deeper. The resident follows with a cautery, holding tiny
spraying blood vessels and burning them shut with an electric
current. One small, throbbing arteriole escapes, and his glasses
and cheek are splattered." One learns more about what is actually
going on in an operation from this and following passages than
from seeing one of those glimpses of operations commonly shown on
TV. The author explains the illness of meningitis, "The brain
becomes swollen with blood and tissue fluid, its entire surface
layered with pus . . . The pressure in the skull increases until
the winding convolutions of the brain are flattened out...The
spreading infection and pressure from the growing turbulent ocean
sitting on top of the brain cause permanent weakness and
paralysis, blindness, deafness . . . . " This dramatic depiction
of meningitis brings together medical facts, symptoms, and
effects on the patient. Tisdale does this repeatedly to present
illness and the persons whose lives revolve around it from
patients and relatives to doctors and nurses in a light readers
could never imagine, even those who are immersed in this world.

Tisdale's main point is that the miracles of modern medicine do
not unquestionably end the miseries of illness, or even
unquestionably alleviate them. As much as they bring some relief
to ill individuals and sometimes cure illness, in many cases they
bring on other kinds of pains and sorrows. Tisdale reminds
readers that the mystery of illness does, and always will, elude
the miracle of medical technology, drugs, and practices. Part of
the mystery of the paradoxes of treatment and the elusiveness of
restored health for ill persons she focuses on is "simply the
mystery of illness. Erosion, obviously, is natural. Our bodies
are essentially entropic." This is what many persons, both among
the public and medical professionals, tend to forget. "The
Sorcerer's Apprentice" serves as a reminder that the faith and
hope placed in modern medicine need to be balanced with an
awareness of the mystery of illness which will always be a part
of human life.


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

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

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


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

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

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

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

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

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

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