TCREUR_Public/170207.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

           Tuesday, February 7, 2017, Vol. 18, No. 27


                            Headlines


A L B A N I A

ALBANIA: S&P Affirms 'B+/B' Sovereign Credit Ratings


B E L A R U S

BELARUS: Fitch Affirms 'B-' LT IDR; Outlook Stable


F R A N C E

CGG SA: Seeks Consent of Noteholders to Appoint Mandataire


G E R M A N Y

KTG ENERGIE: District Court to Decide on Insolvency Plan


I R E L A N D

NEWHAVEN CLO: Fitch Affirms 'B-(EXP)' Rating on Cl. F-R Notes


K A Z A K H S T A N

DELTA BANK: S&P Lowers Counterparty Credit Rating to 'CC'


L U X E M B O U R G

FLINT GROUP: S&P Affirms 'B' Long-Term CCR on Debt Repricing
RUMO LUXEMBOURG: S&P Rates Proposed $300MM Sr. Unsec. Notes 'BB-'


N E T H E R L A N D S

CARLYLE GLOBAL 2013-1: S&P Assigns Prelim. B- Rating on E-R Notes
EURO-GALAXY II: S&P Affirms BB+ Rating on Class E Notes


P O R T U G A L

PORTUGAL: Fitch Affirms Long-Term IDRs at 'BB+', Outlook Stable


R U S S I A

SOGLASIE INSURANCE: S&P Affirms 'B+' Counterparty Credit Rating


T U R K E Y

EREGLI DEMIR: S&P Revises Outlook to Negative & Affirms 'BB' CCR
ISTANBUL TAKAS: Fitch Lowers Issuer Default Ratings to 'BB+'
VESTEL ELEKTRONIK: S&P Affirms 'B-' CCR & Revises Outlook to Neg.


U K R A I N E

UKRAINE: Holds Insolvent Banks' Asset Auctions via ProZorro.Sales


U N I T E D   K I N G D O M

DECO 2005-UK: S&P Affirms 'D' Ratings on Two Note Classes
DECO 6: Fitch Lowers Ratings on Four Note Classes to 'Dsf'
PREMIER OIL: Eyes Falkland Islands Project Following Debt Deal
TOWD POINT: S&P Assigns Prelim. BB Rating to Cl. E-Dfrd Notes

* UK: Set to Face Sharpest Rise in Business Failures in 2017


                            *********



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A L B A N I A
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ALBANIA: S&P Affirms 'B+/B' Sovereign Credit Ratings
----------------------------------------------------
S&P Global Ratings affirmed its 'B+/B' long- and short-term
foreign and local currency sovereign credit ratings on the
Republic of Albania.  The outlook is stable.

                          RATIONALE

The affirmation of the 'B+' rating reflects the sovereign's
progress in recent years with regards to fiscal consolidation,
economic development, and institutional effectiveness.  S&P
believes that the policy anchor provided by the International
Monetary Fund's Extended Fund Facility arrangement (IMF EFF) that
concludes in February 2017 contributed significantly toward
improvements in Albania's fiscal framework, including the
formalized deficit brake, the "organic budget" law, and generally
strengthened institutional oversight, preventing the accumulation
of arrears.  Although S&P considers that there is a risk of
fiscal slippages ahead of the upcoming general elections in June
2017, in S&P's view, this risk is lower than in the previous
general election year of 2013, when financing pressures had
emerged. Overall, S&P notes that Albania outperforms its peers in
the same rating category on the fiscal performance side.  The
current exchange rate regime is more stable than peers' and
Albania has made improvements in its institutional set-up.

This progress on the fiscal side coincides with increased and
improving economic growth, as well as enhancements to the
nation's institutional set-up.

Aided by the country's cooperation with international
organizations -- such as the International Bank for
Reconstruction and Development (IBRD); the EU, in the context of
preparatory measures in the EU accession process; and the IMF
EFF -- the government of the Republic of Albania has implemented
several institutional reforms over the past years.  These aim to
strengthen the rule of law and fight the informal sector.
Although there is further progress to be achieved, successful
implementation of these reforms would, in S&P's view, improve the
economy's business environment, attracting foreign direct
investment and increasing the country's economic growth outlook.

The current IMF program for Albania will run out at the end of
February 2017, and S&P do not expect negotiation of another
arrangement to start ahead of the general election in June 2017.

Last year's judicial reform represents a particularly noteworthy
piece of legislation regarding Albania's institutional framework.
If this reform is fully implemented, creating a more independent
judiciary, it would improve the country's business environment.
For example, it would increase the effectiveness of enforcement
of property rights and offer a more-effective bankruptcy
resolution process.  Further institutional reforms are being
debated, such as the electoral reform.  However, this is unlikely
to be enacted ahead of the upcoming elections, given the tight
schedule.

"On the fiscal side, we estimate that the government outperformed
its own 2016 budgetary plan, posting a general government deficit
of around 1.7% of GDP.  This is much lower than the deficit of
5.2% only two years earlier in 2014, which was also adversely
affected by the clearance of arrears that were mainly accumulated
ahead of the general elections in 2013.  We attribute the
favorable 2016 estimate mainly to lower-than-budgeted government
spending, which more than offset lower-than-budgeted revenues.
The grey economy weighed on revenues, despite significant reform
efforts with respect to tax compliance.  As a result of the
strengthened fiscal framework, we consider the possibility of
fiscal slippages ahead of the general election in 2017 to be far
lower than in the last election year, 2013," S&P said.

During 2017-2020, S&P projects a slightly delayed path of fiscal
consolidation compared with the government's plan and expect the
deficit to be at 1% of GDP by 2020 (versus 0.6% of GDP, as
planned by the government).  Deficit-reducing measures will
likely include higher tax revenues due to increased tax
compliance and the introduction of new taxes.  As a result, S&P
expects the general government debt burden to decline to about
60% of GDP in 2020 from 71% at the end of 2016.  Although the
average maturity of government debt has lengthened considerably
over the past three years, for the domestic portion of debt,
average maturity remains relatively short, at 763 days as of the
third quarter of 2016. Domestic debt currently accounts for
around 53% of the total public-sector debt stock and around 40%
of total government debt is denominated in foreign currency.
Albania's banking system still holds the largest share of
domestic debt, and about 25% of the banking system's assets are
government securities.

S&P expects Albania's fiscal performance will be supported by
solid economic growth of about 3.8% per year on average in real
terms during 2017-2020.  S&P expects the growth to be primarily
based on strong domestic demand, with rising consumption and
private investment.  S&P expects the negative impact of net
exports on economic growth in recent years, due to a terms-of-
trade shock in the extracting industry, will recede.  In 2016,
S&P noted particularly strong growth in tourism, where capacity
has been increasing.

At the same time, Albania's external vulnerabilities remain high.
S&P estimates Albania's gross external financing needs, at around
118% of current account receipts and usable reserves in 2017, are
significant.  Its external indebtedness is relatively low as
financing for the current account deficit has historically been
more in the form of net foreign investment, particularly in the
energy sector, than in debt-creating inflows.  Narrow net
external debt, by S&P's measures, will amount to 20.7% of current
account receipts in 2017.  S&P expects this share will stay
roughly constant over its forecast horizon.

Progress on the Trans-Adriatic Pipeline (TAP) project, which will
connect Albania with Italy and the Caspian Sea, appears on track.
The project is to be executed by 2018 and will cost an estimated
EUR1.5 billion.  Given that the largest share of the TAP will be
executed in 2017, S&P estimates the foreign direct investment
(FDI) inflow at above 11% of GDP in 2017.  Further FDI inflows
are related to Albania's energy sector, particularly projects in
the hydropower sector.  However, S&P sees a risk that Albania's
large projected FDI flows could fall in the coming years,
especially as Albania's net external liability position is much
weaker than its narrow net external debt position, surpassing it
by over 120% of current account receipts in 2017.  The
improvement of the institutional environment could therefore help
by attracting a broader base of FDI inflows in the coming years.

S&P expects that the current account deficit, estimated at 12.5%
of GDP on average over the coming four years, will continue to be
financed mainly by foreign direct investment.  S&P further
estimates a relatively steady transfer balance of around 7% of
GDP over our forecast horizon (compared with an average 13% of
GDP over 2004-2008).  In this respect, Albania has been hit by
the economic developments in Greece, where a significant Albanian
diaspora lives, but migration of Albanians to other countries
will help by further diversifying remittance sources.

Improvements in the legal system could also play an important
role in reducing the share of nonperforming loans (NPLs) in
Albania's financial sector.  NPLs in Albania have consistently
remained high at around the 20% mark.  This hampers lending and
constrains economic recovery.  S&P projects that the deposit-
funded financial sector will remain in a net external creditor
position over the next few years.  Capital buffers and liquidity
in the banking system remain well above minimum capital
requirements.  The continuous increase of the financial sector's
net foreign assets--partly reflecting high liquidity--mirrors the
country's weak growth performance and limited lending
opportunities for banks in recent years.  S&P estimates growth of
bank credit to the entire domestic sector to have slightly picked
up to about 2.6% in 2016. Subsidiaries of Greek banks maintain a
sizable presence in Albania and the authorities have taken
measures to limit exposure to their parents and prevent contagion
risks to the rest of the sector.

Since the second quarter of 2016, the central bank has maintained
a rather accommodative policy to try and meet its 3% target
inflation rate.  Nevertheless, it missed the target again in
2016. The central bank has set and kept the policy rate at a
historically low level of 1.25%.  The high share of foreign
currency loans and foreign currency deposits, both currently
estimated at around 53%, hinders the effectiveness of Albania's
monetary policy, as it does in several economies across the
region.  S&P projects that the target inflation rate will not be
reached before 2019.

Albania's central bank has intervened only marginally in the
foreign exchange market in the past years, mainly relating to
increasing its foreign currency reserves in line with its
targets. Otherwise, it maintains a free-floating exchange rate
regime.  The only significant open market operations of the Bank
of Albania included three-month liquidity injections regarding
enforcing its
policy rate.

                             OUTLOOK

The stable outlook reflects S&P's view of the balanced risks to
the ratings on Albania from continued fiscal consolidation and a
declining government debt-to-GDP ratio.  These factors are set
against vulnerabilities stemming from Albania's external
financial position.

S&P could raise the ratings if structural reforms established a
track record of more robust institutions and strengthened
economic growth prospects.  Faster-than-forecast government debt
reduction to below 60% of GDP, combined with a reduction in
interest payments as a share of government revenues, would also
be positive for the ratings.

S&P could lower the ratings if it observed deterioration in
government finances, for example, due to a significant deviation
from S&P's current forecast, along with pressures on borrowing
conditions.  S&P could also lower the ratings if it saw
significant deterioration in Albania's external position and
ability to fund its high current account deficit.

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable.  At the onset of the committee, the chair
confirmed that the information provided to the Rating Committee
by the primary analyst had been distributed in a timely manner
and was sufficient for Committee members to make an informed
decision. After the primary analyst gave opening remarks and
explained the recommendation, the Committee discussed key rating
factors and critical issues in accordance with the relevant
criteria. Qualitative and quantitative risk factors were
considered and discussed, looking at track-record and forecasts.

The committee agreed that the external assessment had
deteriorated.  All other key rating factors were unchanged.

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

RATINGS LIST

                                        Rating
                                        To            From
Albania (Republic of)
Sovereign Credit Rating
  Foreign and Local Currency            B+/Stable/B   B+/Stable/B
Transfer & Convertibility Assessment   BB            BB
Senior Unsecured
  Foreign Currency                      B+            B+


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B E L A R U S
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BELARUS: Fitch Affirms 'B-' LT IDR; Outlook Stable
--------------------------------------------------
Fitch Ratings has affirmed Belarus's Long-Term Foreign and Local
Currency Issuer Default Ratings (IDRs) at 'B-' with a Stable
Outlook. The Short-Term Foreign-Currency and Local-Currency IDRs
have been affirmed at 'B' and the Country Ceiling at 'B-'

KEY RATING DRIVERS
Belarus's ratings balance high external vulnerabilities and a
track record of frequent crises with relatively strong public
finances and structural indicators, notably, GDP per capita and
human development well above peers.

Gross international reserves rose by USD800m to USD4.9bn in 2016
but remain below pre-2014 levels. The net reserve position
improved and turned slightly positive in 2016. However, Fitch
estimates that liquid assets as a share of short-term liabilities
(at 39% in 2017) is the lowest in the 'B' category.

Fitch estimates that Belarus's current account deficit rose to 5%
of GDP (USD2.4bn) in 2016, up from 3.7% (USD2bn) in 2015. The
prospect of growth underperformance, and a gradual increase in
international oil prices could contain current account deficits
at 4.4% in 2017 and 2018. Nevertheless, Belarus's gross external
financing requirement (not including short-term debt), as a
percentage of international reserves, is 146%, among the highest
of Fitch-rated emerging market sovereigns. Net external debt (55%
of GDP) and external debt service (23% of CXR) are double their
respective 'B' medians.

A protracted dispute with Russia regarding gas prices that
started in 2016 could further pressure external accounts, FX
generation capacity and economic activity. Sovereign foreign
currency debt service is forecast at USD3.4bn in 2017, with
external debt payments accounting for USD1.8bn. The government's
financing plan increases the reliance on non-debt foreign
currency revenues, partly derived from oil customs duties and
exports, and a return to international capital markets. In
addition, the financing plan expects a resumption of Eurasian
Development Bank (EDB) disbursements (total of USD1bn). The third
disbursement, based on end-September performance criteria, has
still to be received.

Belarus faces a USD800m international bond maturity in January
2018. Reducing financing risks will likely depend upon unlocking
delayed disbursements from the EDB programme and/or tapping
additional sources of foreign exchange. Although the IMF and the
government have reportedly discussed the potential for a
programme, the timing and outcome remain uncertain and Fitch have
not factored IMF disbursements into Fitch forecasts.

Macroeconomic performance is much weaker than peers. The economy
remained in recession in 2016 contracting by 2.6% in 2016 due to
weak growth in trade partners, real wage contraction, tighter
policy stance and the gas price dispute with Russia. Fitch
expects the economy to remain in recession in 2017, but the pace
of contraction to decelerate due to a relative improvement in
consumption and investment. The positive impact of the oil price
and neighbours' recovery could be limited by reduced oil imports
volume from Russia.

Inflation declined to 10.6% in 2016, below the 12% goal set by
the central bank. Average inflation could hover around 11% in
2017 due to expected utility tariffs' adjustments. The central
bank has maintained a tight policy stance and is working on a
strategy to move toward a full-fledged inflation targeting regime
by 2020. However, the effectiveness of monetary policy is
constrained by programme lending and high levels of financial
dollarisation.

Fitch estimates the consolidated general government remained in
surplus (1.6% of GDP) in 2016 reflecting revenue measures, no
real growth for the wage bill and capital spending cuts. The
social protection fund recorded a small surplus (0.3% of GDP).
Fitch estimates that including off-balance sheet expenditure, the
government reached a surplus in 2016 at 0.6% of GDP. Authorities
have presented a three-year budget (2017-2019) in order to anchor
expectations and stress their commitment to reducing off-balance
sheet spending and programme lending.

Government debt was 52% of GDP at end-2016, below the 56% 'B'
median. Fitch includes government guarantees, totalling 11% of
GDP, in its total debt calculations, due to the high likelihood
that the state will need to meet state-owned enterprises'
repayment obligations. Debt is highly exposed to currency risk,
as 80% is foreign currency denominated.

Regulatory NPLs (the three riskiest categories) more than doubled
to 14.2% of gross credit exposure at end-November 2016 from 6.8%
at end-2015 and further increases are likely. The system's
capitalisation level is 18.5%. The Asset Quality Review (AQR)
finalised in July did not provide sufficient information to
assess the state of the financial sector and fully evaluate its
resilience to shocks. The large presence of the public sector
(50% of assets) creates fiscal risks for the sovereign.

Political power is concentrated in the hands of President
Lukashenko who has been in power since 1994. The opposition is
weak, and Fitch assumes that Lukashenko will remain in power over
the medium term. Russia remains a key partner for Belarus from a
trade, financing and political perspective. The gas price dispute
with Russia, which echoes various energy disputes in the 2000s,
remains unresolved thus creating uncertainty for the 2017
economic and financing outlook.

SOVEREIGN RATING MODEL (SRM) and QUALITATIVE OVERLAY (QO)
Fitch's proprietary SRM assigns Belarus a score equivalent to a
rating of 'B+' on the Long-Term FC IDR scale.

Fitch's sovereign rating committee adjusted the output from the
SRM to arrive at the final LTFC IDR by applying its QO, relative
to rated peers, as follows:

   - Macro: -1 notch, to reflect a history of poor economic
policy management leading to frequent crises and weak potential
growth relative to peers
   - External finances: -1 notch, to reflect a very high gross
external financing requirement, low net international reserves
and reliance on often ad hoc external financial support to meet
external debt obligations; and high net external debt/GDP.

Fitch's SRM is the agency's proprietary multiple regression
rating model that employs 18 variables based on three year
centred averages, including one year of forecasts, to produce a
score equivalent to a LTFC IDR. Fitch's QO is a forward-looking
qualitative framework designed to allow for adjustment to the SRM
output to assign the final rating, reflecting factors within
Fitch criteria that are not fully quantifiable and/or not fully
reflected in the SRM.

RATING SENSITIVITIES
The Stable Outlook reflects Fitch's assessment that upside and
downside risks to the rating are currently balanced. Nonetheless,
the following risk factors could, individually or collectively,
trigger negative rating action:
   - Materialisation of severe external financing stresses and
increased risk of failure to meet foreign currency debt repayment
obligations.
   - Deterioration in public finances resulting in a significant
rise in government debt.

The following risk factors could individually or collectively,
trigger positive rating action:
   - A reduction in external financing pressures, supported by a
recovery in international reserves.
   - An improvement in Belarus's medium-term growth potential,
stemming from implementation of structural reform agenda.

KEY ASSUMPTIONS
Fitch's assumes that Belarus will receive ad-hoc financial
support from Russia.


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F R A N C E
===========


CGG SA: Seeks Consent of Noteholders to Appoint Mandataire
----------------------------------------------------------
Francois de Beaupuy and Tom Freke at Bloomberg News report that
CGG SA is seeking consent from holders of the company's senior
notes and creditors under TLB to appoint a mandataire ad hoc
without triggering an event of default.

The company said it has not yet decided on whether to appoint a
mandataire, Bloomberg relates.

According to Bloomberg, the request aims to get approval of
holders, at the requisite majority, of each series of senior
notes and TLB.

CGG SA is a French offshore oilfield surveyor.

                           *   *   *

As reported by the Troubled Company Reporter-Europe on Jan. 20,
2017, Moody's Investors Service downgraded the ratings of CGG SA,
including the Corporate Family Rating (CFR) to Caa3 from Caa1 and
the Probability of Default Rating (PDR) to Ca-PD from Caa1-PD.
Moody's also downgraded the ratings on the outstanding senior
notes to Ca from Caa2.  Moody's said the outlook on all ratings
is negative.



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G E R M A N Y
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KTG ENERGIE: District Court to Decide on Insolvency Plan
--------------------------------------------------------
Erhard Krasny at Bloomberg News reports that the district court
is set to decide on KTG Energie's insolvency plan on Feb. 10.

KTG Energie AG is a Germany-based company engaged in the biogas
industry.



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


NEWHAVEN CLO: Fitch Affirms 'B-(EXP)' Rating on Cl. F-R Notes
-------------------------------------------------------------
Fitch Ratings has assigned Newhaven CLO DAC's refinancing notes
expected ratings, as follows:

EUR1.5m class X notes: 'AAA(EXP)sf'; Outlook Stable
EUR205.9m class A-1R notes: 'AAA(EXP)sf'; Outlook Stable
EUR10m class A-2R notes: assigned 'AAA(EXP)sf'; Outlook Stable
EUR35m class B-R notes: assigned 'AA(EXP)sf'; Outlook Stable
EUR23.5m class C-R: affirmed at 'A(EXP)sf'; Outlook Stable
EUR18.6m class D-R: affirmed at 'BBB(EXP)sf'; Outlook Stable
EUR20.4m class E-R: affirmed at 'BB(EXP)sf'; Outlook Stable
EUR10.0m class F-R: affirmed at 'B-(EXP)sf'; Outlook Stable

Newhaven CLO DAC is a cash flow collateralised loan obligation
securitising a portfolio of mainly European leveraged loans and
bonds. Net proceeds from the issuance of the notes will be used
to refinance the current outstanding notes. The portfolio is
managed by Bain Capital Credit Ltd.

KEY RATING DRIVERS
'B' Portfolio Credit Quality
Fitch assesses the average credit quality of obligors to be in
the 'B' category. Fitch has public ratings or credit opinions on
106 of 107 obligors in the identified portfolio. The covenanted
maximum The Fitch weighted average rating factor (WARF) of the
identified portfolio is 32.97 and the maximum covenanted WARF to
assign expected ratings is 33.0.

High Recovery Expectation
At least 90% of the portfolio comprises senior secured
obligations. Recovery prospects for these assets are typically
more favourable than for second-lien, unsecured and mezzanine
assets. The weighted average recovery rate (WARR) of the
identified portfolio is 67.77%, compared with the minimum
covenanted WARR of 67.0%.

Maturity Extension Risk
The deal deviates from other European CLOs as the collateral
manager has the discretion to vote in favour of maturity
extensions up to a cumulative limit of 25% of the initial target
par balance, with the caveat that the extended maturity is no
later than 18 months before the maturity of the notes.

Fitch believes that limiting the extended maturity to 18 months
before the maturity of the notes would prevent the introduction
of long-dated assets in the portfolio, therefore exposing the
transaction to market value risk. Fitch also got comfort from the
fact that the asset manager will only be allowed to vote in
favour of an amendment to avoid distressed situations in the
manager's judgement, caused by limited access to refinancing by
the obligors in the portfolio.

Exposure to Unhedged Non-Euro Assets
The transaction is allowed to invest up to 5% of the portfolio in
non-euro-denominated assets. Unhedged non-euro-denominated assets
are limited to a maximum exposure of 2.5% of the portfolio
subject to principal haircuts, and any other non-euro-denominated
assets will be hedged with FX forward agreements from settlement
date up to 90 days. The manager can only invest in unhedged or
forward-hedged assets if after the applicable haircuts, the
aggregate balance of the assets is above the reinvestment target
par balance. Investment in non-euro-denominated assets hedged
with perfect asset swaps as of the settlement date is allowed up
to 30% of the portfolio.

Documentation Amendments
The transaction documents may be amended, subject to rating
agency confirmation or noteholder approval. Where rating agency
confirmation relates to risk factors, Fitch will 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
maturity.

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

TRANSACTION SUMMARY
The issuer has amended the capital structure and extended the
maturity of the notes as well as the reinvestment period. The
transaction features a four-year reinvestment period, which is
scheduled to end in 2021. The maturity has been extended by two
years to 2030.

The issuer has introduced the new class X notes, ranking senior
to the class A notes. Principal on these notes is scheduled to
amortise in equal instalments during the first two payment dates.
Class X notional is excluded from the OC tests calculation, but a
breach of this test will divert interest and principal proceeds
to the repayment of the class X notes. Non-payment of scheduled
principal on the class X notes on the specific dates will not
represent an event of default according to the transaction
documents and unpaid principal will be due at the next payment
date.

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


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K A Z A K H S T A N
===================


DELTA BANK: S&P Lowers Counterparty Credit Rating to 'CC'
---------------------------------------------------------
S&P Global Ratings said that it has lowered its long-term
counterparty credit rating on Kazakhstan-based Delta Bank JSC and
its ratings on the bank's senior unsecured debt issues to 'CC'
from 'CCC-'.  S&P reinstated its 'CCC-' rating on the KZT10
billion 9.5% bond due Jan. 18, 2017, which was inadvertently
withdrawn on the maturity date, before lowering it to 'CC'.

The 'C' short-term counterparty credit rating on Delta Bank was
affirmed.

At the same time, S&P lowered its Kazakhstan national scale
ratings on Delta Bank to 'kzCC' from 'kzCCC-'.

All the ratings remain on CreditWatch with negative implications,
where S&P placed them on Jan. 23, 2017.

The rating actions follow Delta Bank's nonpayment of the
KZT9.8 billion principal on its senior unsecured bond due on
Jan. 18, 2017, issued under its first bond program.  The bank
repaid the coupon of KZT469 million on Jan. 31, 2017.  On Feb. 1,
2017, a grace period of 10 business days started for the
repayment of the principal on the bond.

In S&P's view, the bank's current liquid assets are not
sufficient to repay the bond in full.

Delta Bank is still awaiting support from the National Bank of
Kazakhstan (NBK), which Delta Bank requested in late December
2016.  S&P understands that the NBK's support is contingent on a
liquidity injection from the bank's owner, which has not yet
materialized.  S&P considers it unlikely that the anticipated
support from the owner and the NBK will come within the bond's
grace period.  Therefore, S&P sees an increased probability of
Delta Bank defaulting on its bond.

S&P expects to resolve the CreditWatch by mid-February 2017, when
the current grace period expires.

S&P will lower the ratings to 'SD' or 'D' if the bank has not
repaid the bond in full or has stopped servicing some or all of
its other obligations.

S&P could affirm the ratings or even raise them if the bank's
liquidity position were to stabilize, enabling it to service its
debt obligations in full and on time.


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


FLINT GROUP: S&P Affirms 'B' Long-Term CCR on Debt Repricing
------------------------------------------------------------
S&P Global Ratings affirmed its long-term corporate credit rating
on Luxembourg-headquartered ink and print consumables provider
Flint Group (ColourOZ Holdco Sarl) at 'B'.

S&P also affirmed its 'B' issue rating on Flint's senior secured
debt, which includes its existing first-lien debt and revolving
credit facility (RCF) and the new incremental first-lien loans of
up to EUR100 million.  The recovery rating remains at '3',
indicating S&P's expectation of recovery in the higher half of
the 50%-70% range in the event of a default.

At the same time, S&P has affirmed its issue rating on the
second-lien debt at 'CCC+'.  The recovery rating on this debt
remains at '6', indicating S&P's expectation of negligible
recovery (0%-10%) in a default scenario.

The affirmation reflects S&P's expectation that the proposed
transaction will lower Flint's cash interest payments and, in
combination with the full-year contribution of the four
acquisitions in 2016, will strengthen Flint's adjusted funds from
operations (FFO) cash interest coverage ratio to 3.5x in 2017 and
2018, up from S&P's estimate of about 3.0x for 2016.  At the same
time, S&P forecasts that the group's adjusted debt-to-EBITDA
ratio in 2017 and 2018 will remain at about 6x or slightly below,
which S&P views as commensurate with the rating.  The elevated
adjusted debt level of about EUR2.3 billion compared with EUR1.9
billion in 2014, results from the string of acquisitions in 2015
and 2016 for a total purchase price of about EUR380 million and
the company's securitization program initiated in 2016, which
adds about EUR90 million to adjusted debt as of Sept. 30, 2016.
At the same time, S&P expects adjusted EBITDA to increase to
about EUR360 million-EUR370 million by 2018, up from EUR290
million in 2015.

S&P expects that Flint will continue to use its significant free
operating cash flow (FOCF) to fund bolt-on acquisitions rather
than reduce debt.  After acquiring Xeikon at the end of 2015 for
EUR228 million, Flint announced the purchase of four companies
for a total of EUR152 million in 2016.  The company's S&P Global
Ratings-adjusted debt to EBITDA reached 7.4x at year-end 2015
(6.6x pro forma the acquisition of Xeikon) and an estimated 6.9x
(6.2x pro forma the 2016 acquisitions) in 2016.

S&P expects Flint will continue its external growth strategy,
focused on bolt-on acquisitions.  Combined with organic growth in
the packaging segment, this should lead to higher EBITDA, despite
the structural decline in the print media industry, supporting
S&P's assessment of Flint's business risk profile as fair.  On
the negative side, such a strategy does not allow for
deleveraging, even though S&P forecasts solid FOCF generation for
2017 and 2018, with FOCF to debt of about 7%, and FFO covering
cash interest 3.5x.

In addition to the structural decline in print media, Flint's
business risk profile is constrained by the industry's fragmented
and highly competitive nature, in S&P's view.  S&P views print-
media end markets as quite diverse, with commercial printing,
advertising, and magazines accounting for more than 50%, followed
by newspapers, catalogues, books, and directories.  Although S&P
sees substitution risk arising from the development of digital
technologies as gradual, S&P believes the biggest shift has
likely already occurred, with digital printing staying at low
volumes.

These weaknesses are partly offset by Flint's successful growth
strategy and strong market positions in print media and
packaging. S&P notes that Flint's management has been very
successful in maintaining its profits in print media, thanks to
the strengthening of its leading market shares and ongoing
restructuring initiatives.  The other key supportive factor is
the company's increasing focus on the packaging business, which
now accounts for more than 60% of EBITDA, pro forma the
acquisitions.

The stable outlook reflects S&P's expectation of continued
gradually strengthening EBITDA, supported by organic growth and
the full-year contribution of last year's acquisitions, as well
as future bolt-on acquisitions.  This, combined with solid FOCF
generation, should allow the company to keep debt to EBITDA at 6x
or slightly below over 2017 and 2018.

S&P could lower the rating if sizable debt-financed acquisitions
pushed leverage well above 6x without near-term prospects of
recovery, or if the company's liquidity deteriorated.  Although
less likely in S&P's view, it could also take a negative rating
action if the company's growth strategy were to become less
successful, leading to declining EBITDA.

S&P sees upside as currently unlikely, given the company's
ambitious growth strategy, which could require further bolt-on
acquisitions and therefore prevent consistent deleveraging.
Should leverage fall sustainably below 5.5x and the company's
financial policy appear supportive, this could unlock upside
potential for the rating.


RUMO LUXEMBOURG: S&P Rates Proposed $300MM Sr. Unsec. Notes 'BB-'
-----------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating to Rumo
Luxembourg S.a.r.l.'s proposed senior unsecured notes of
$300 million due 2024. The parent company, Rumo S.A. (Rumo;
BB-/Negative/--), and North Network, the subsidiary responsible
for the operations of most portion of Rumo's rail network, will
fully and unconditionally guarantee the notes.  Rumo will partly
use the proceeds to refinance debt and fund North Network's
capex.  The issuance is part of the group's funding needs for its
considerable capex plan, which will require investments of about
R$7 billion until 2020.

S&P has assigned a '4' recovery rating to Rumo Luxembourg's
proposed senior unsecured notes, given the average recovery
expectation of 30%-50%, in the higher end of the range.  The
recovery reflects mainly group's fairly high debt level and its
secured debt.  While the current amount of secured debt doesn't
impact the issue-level rating on the new notes, further issuances
of secured debt could prompt S&P to lower the rating on the
proposed debt.  Also, the holding company, Rumo, provides several
corporate guarantee to the group's several debts, including the
proposed notes.

S&P assumes the group would restructure rather than be liquidated
in its recovery scenario because S&P believes Rumo's economic
importance to the region where it operates to be meaningful, and
that due to the size of its operations it's unlikely that Rumo
would be immediately replaced by other players in the railroad
segment or competing transportation modes, such as trucking.
Rumo's emergence EBITDA of R$986 million reflects the capital
intensity of the industry as well as size of the group's
operations.  S&P applies a 5.5x multiple, which it uses as an
average for the industry in a default scenario, and is in line
with comparable peers, such as MRS LogĀ°stica S.A. (BB/Neg./--).

Payment waterfall would provide some level of priority to debt
issued by Rumo's subsidiaries, and any debt issued at the holding
would be structurally subordinated to their debt.  Likewise,
deficiency claims that have corporate guarantee from the holding
company would be treated as pari-passu with Rumo's unsecured
debt. Therefore, the recovery for the notes reflects the expected
recovery of North Network's unsecured debt plus the additional
recovery at the holding company through the unconditional
guarantee to the notes.  S&P also assumes that the Rumo group
will continue to access the debt markets mostly on an unsecured
basis, as seen in its existing capital structure.

Simulated default and valuation assumptions

   -- Year of default: 2021
   -- EBITDA at emergence: R$986 million
   -- Implied enterprise value multiple: 5.5x

Simplified waterfall

   -- Gross enterprise value at default: R$5.4 billion
   -- Administrative costs: 5%
   -- Net value available to creditors: R$5.1 billion
   -- Secured debt claims: R$1.1 billion
   -- Unsecured debt claims: R$9.1 billion
   -- Recovery expectation: 30%-50%

RATINGS LIST

Rumo S.A.
  Corporate credit rating               BB-/Negative/--

Rating Assigned

Rumo Luxembourg S.a.r.l.
  $300M sr. unsec. notes due 2024       BB-
   Recovery rating                      4H


=====================
N E T H E R L A N D S
=====================


CARLYLE GLOBAL 2013-1: S&P Assigns Prelim. B- Rating on E-R Notes
-----------------------------------------------------------------
S&P Global Ratings assigned its preliminary credit ratings to
Carlyle Global Market Strategies Euro CLO 2013-1 B.V.'s class A-
1-R, A-2-R, B-R, C-R, D-R, and E-R notes.  The issuer will not
redeem the unrated subordinated class S-1 and S-2 notes, which
will remain outstanding, with an extended maturity to match the
newly issued notes.  At closing, the issuer will also issue a
third tranche of subordinated notes (class S-3).

The preliminary ratings assigned to the notes reflect S&P's
assessment of:

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

   -- The credit enhancement provided through the subordination
      of cash flows, excess spread, and overcollateralization.

   -- The collateral manager's experienced team, which can affect
      the performance of the rated notes through collateral
      selection, ongoing portfolio management, and trading.

   -- The transaction's legal structure, which is expected to be
      bankruptcy remote.

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

Under S&P's structured finance ratings above the sovereign
criteria, the transaction's exposure to country risk is 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.

At closing, S&P anticipates that the transaction's legal
structure will be bankruptcy remote, in line with its European
legal criteria.

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

Carlyle 2013-1 is a European cash flow corporate loan
collateralized loan obligation (CLO) securitization of a
revolving pool, comprising euro-denominated senior secured loans
and bonds issued mainly by European borrowers. CELF Advisors LLP
is the collateral manager.

RATINGS LIST

EUR415.20 Million Floating-Rate Notes (Including EUR46.2 Million
Unrated Subordinated Notes)

Class                   Prelim.         Prelim.
                        rating           amount
                                       (mil. EUR)

A-1-R                   AAA (sf)         236.0
A-2-R                   AA (sf)           56.0
B-R                     A (sf)            24.0
C-R                     BBB (sf)          23.0
D-R                     BB (sf)           20.0
E-R                     B- (sf)           10.0
S-3                     NR                 4.2

NR--Not rated.


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

Since S&P's previous review in March 2016, the issuer has used
principal proceeds from the portfolio to amortize the class A
notes.  As a result, the credit enhancement increased for all the
rated notes.

CAPITAL STRUCTURE
                  Notional                 CE
        Current      as of  Current     as of
       notional   Mar.2016       CE  Mar.2016  Interest
Class  (mil. EUR)  (mil. EUR)   (%)       (%)       (%)  Def.
A         81.92     165.63     56.6     40.2   6mE+0.23    No
B         36.00      36.00     37.5     27.2   6mE+0.60    No
C         27.50      27.50     22.9     17.2   6mE+1.00   Yes
D         20.00      20.00     12.3     10.0   6mE+2.25   Yes
E          9.58       9.58      7.3      6.5   6mE+4.75   Yes
F         38.00      38.00      0.0      0.0        N/A   N/A

CE -- Credit enhancement = (performing assets balance + principal
cash + expected recovery on defaulted assets -- tranche balance
[including tranche balance of all senior tranches])/(performing
assets balance + principal cash + expected recovery on defaulted
assets).

6mE--Six-month Euro Interbank Offered Rate (EURIBOR).
N/A--Not applicable.

Note: For both S&P's March 2016 and the rating actions, the
figures above represent the most recently available data at that
time, and which S&P used in its analysis.

Since S&P's previous review, the credit quality of the collateral
backing the notes has improved.

RATING DISTRIBUTION[1]
                      Current    As of March 2016
                   review (%)          review (%)
Principal cash[2]          11                   2
Investment-grade            6                   3
'BB' category              33                  29
'B' category               48                  60
'CCC' category              2                   6
[1]As a percentage of our estimated aggregate collateral balance.
[2]This includes our expected recovery on defaulted assets.

As a result of these developments, and following the application
of S&P's criteria, it believes that the available credit
enhancement for the class B, C, and D notes is now commensurate
with higher ratings than those previously assigned.  Therefore,
S&P has raised its ratings on these classes of notes.

S&P's analysis also indicates that the available credit
enhancement for the class A and E notes is commensurate with the
currently assigned ratings.  S&P has therefore affirmed its
ratings on these classes of notes.

Euro-Galaxy II CLO is a cash flow collateralized loan obligation
(CLO) transaction managed by Pinebridge Investments Europe Ltd. A
portfolio of loans to U.S. and European speculative-grade
corporates backs the transaction.  Euro-Galaxy II CLO closed in
August 2007 and its reinvestment period ended in October 2014.

RATINGS LIST

Class            Rating
           To              From

Euro-Galaxy II CLO B.V.
EUR415 Million Senior Secured Floating-Rate Notes

Ratings Raised

B          AAA (sf)        AA+ (sf)
C          AA+ (sf)        A+ (sf)
D          BBB+ (sf)       BBB- (sf)

Ratings Affirmed

A          AAA (sf)
E          BB+ (sf)


===============
P O R T U G A L
===============


PORTUGAL: Fitch Affirms Long-Term IDRs at 'BB+', Outlook Stable
---------------------------------------------------------------
Fitch Ratings has affirmed Portugal's Long-Term Foreign and Local
Currency Issuer Default Ratings (IDR) at 'BB+' with a Stable
Outlook. The issue ratings on Portugal's senior unsecured foreign
and local currency bonds have also been affirmed at 'BB+. The
Country Ceiling has been affirmed at 'A+' and the Short-Term
Foreign and Local Currency IDRs and short-term debt at 'B'.

KEY RATING DRIVERS
Portugal's 'BB+' IDRs reflect the following key rating drivers:

Portugal's sovereign ratings are supported by sturdy
institutions, a strong business environment and one of the
highest rates of per capita income in the 'BB' category. These
factors are balanced by high levels of public and private
indebtedness, a weak growth performance and legacy problems in
the financial system.

There was a recovery in the economy in 2H16, helped by rising
exports and renewed consumer confidence tied to a rise in
employment. However, following a weak performance in 1H, Fitch
estimates annual growth of 1.3% in 2016, well below the original
1.8% expected in the budget. Higher outlays of EU funds and fewer
domestic policy changes should lead to a pick-up in investment
this year, with growth reaching 1.5%. This is in line with Fitch
eurozone growth projections but well below the 'BB' median of
3.5%.

Domestic macroeconomic risks have moderated, but Portugal remains
vulnerable to external developments. Exports have proven
resilient in the face of a sharp fall in demand from key emerging
markets such as Angola, but rising protectionist threats around
the world or weaker eurozone growth are still important downside
risks. Upcoming elections in key European countries could also
lead to political and market volatility, which in turn could
increase Portugal's borrowing costs and affect confidence and
investment.

Fiscal performance improved in 2016, with the general government
deficit estimated at close to 2.3% of GDP (compared with Fitch
original forecast of 2.7%). Despite relatively weak revenue
growth, the government managed to deliver its deficit target by
implementing a strict consolidation strategy, with total
expenditure estimated at around 46% of GDP, the lowest level
since 2008. However, this was partly achieved by restricting
public investment, which compounds challenges in boosting medium-
term growth.

The 2017 budget has a similar consolidation strategy but with
fewer changes to the tax framework and more realistic
macroeconomic assumptions. However, the deficit may be affected
by the upcoming recapitalisation of state-owned Caixa Geral de
Depositos (CGD), which requires EUR2.7bn of direct public
support. Fitch expects the deficit to be close to 3% of GDP, with
the CGD transaction accounting for about 1.1% of GDP.

The improvement in the primary balance in recent years should
have supported debt dynamics, but recurrent bank
recapitalisations mean that public sector debt rose again in
2016, to around 130% of GDP (funds to recapitalise CGD were
raised last year). Public debt has remained practically unchanged
at this level since 2013 and compares with the eurozone area of
90% and 'BB' median of 51%. Fitch forecast the general government
debt/GDP ratio will fall to 123.5% by 2020, broadly in line with
official projections (which now exclude positive stock-flow
adjustments from disposals of bank assets).

The government is revamping its efforts to address the legacy
problems of the banking sector. Nonetheless, there has yet to be
much progress in key areas such as the sale of Novo Banco (a
buyer has been identified but the process is not complete) or the
implementation of a systemic solution to impaired portfolios. A
recurrent uncertainty is the potential sovereign exposure from
these developments, including higher contingent liabilities.
Asset quality in the banking sector remains weak, with NPLs
(measured as credit at risk) at 12.6% in 3Q16. On the upside, the
system's solvency is being upheld by capital increases at the two
largest banks.

Any policy-driven changes to the banking sector will require a
concerted political effort by the government led by Prime
Minister Costa to obtain the support of the junior-partners (the
Communist Party and Left Block). Thus far Mr Costa has a track
record of managing party differences well, which assures
political stability. However, the downside is that there is
little scope to implement ambitious structural reforms in other
economic areas. This includes tackling high levels of private
sector leverage, which weigh on medium-term growth. Non-financial
corporate debt remained unchanged from end-2015 to 3Q16, at
around 110% of GDP.

A mild improvement in terms of trade and strong services exports
tied to tourism has helped Portugal maintain a current-account
surplus in 2016 Fitch expects the surplus to remain steady at an
average 0.2% of GDP in 2017-18. Given weak saving ratios
(particularly at the household level) a strong pickup in domestic
demand could risk a return to current account deficits, but this
is unlikely. Portugal's increase export potential is helping
reduce net external debt, although Fitch estimates it at around
130% of GDP in 2016, compared with 20.7% for the 'BB' median and
2% for the 'BBB' median.

Portugal ranks well above its rating peers, and 'BBB' peers, in
terms of human development and governance, highlighting the
strength of its institutions and their resilience during the
recent crisis.

SOVEREIGN RATING MODEL (SRM) and QUALITATIVE OVERLAY (QO)
Fitch's proprietary SRM assigns Portugal a score equivalent to a
rating of 'A-' on the Long-Term FC IDR scale.

In accordance with its rating criteria, Fitch's sovereign rating
committee decided to adjust the rating indicated by the SRM by
more than the usual maximum range of +/-3 notches because: in
Fitch view the country is recovering from a crisis.

Consequently, the overall adjustment of four notches reflects the
following adjustments:-

- Macro: -1 notch, to reflect high corporate indebtedness, low
investment, adverse demographic trends and financial sector
weakness that constrain the medium-term growth outlook
- Public Finances: -1 notch, to reflect very high levels of
government debt. The SRM is estimated on the basis of a linear
approach to government debt/GDP and does not fully capture the
higher risk at high debt levels.
- External Finances: -2 notch. The model gives 2-notch
enhancement for reserve currency but one-notch uplift is more
appropriate for Portugal given the country's recent crisis and
need for an IMF programme. Moreover, net external debt as a
percentage of GDP is one of the highest in the world.

Fitch's SRM is the agency's proprietary multiple regression
rating model that employs 18 variables based on three year
centred averages, including one year of forecasts, to produce a
score equivalent to a LT FC IDR. Fitch's QO is a forward-looking
qualitative framework designed to allow for adjustment to the SRM
output to assign the final rating, reflecting factors within
Fitch criteria that are not fully quantifiable and/or not fully
reflected in the SRM.

RATING SENSITIVITIES
Future developments that could individually or collectively
result in positive rating action include:
- A sustained downward trend in the general government debt/GDP
levels, for example as a result of improved fiscal performance.
- Improvement in Portugal's external balance sheet supported by
current account surpluses
- Stronger long-term growth prospects.

Future developments that could individually or collectively
result in negative rating action include:
- Renewed stress in the financial sector that requires
substantial financial support from the state.
- Failure to make progress in reducing general government
debt/GDP ratios or unwinding external imbalances.
- Weaker economic growth prospects that have a negative impact
on the banking sector or public finances.

KEY ASSUMPTIONS
In its debt sensitivity analysis Fitch assumes a primary surplus
averaging 1.8% of GDP, trend real GDP growth averaging 1.4%, an
average effective interest rate of 3.9% and deflator inflation of
1.7%. On the basis of these assumptions, the debt-to-GDP ratio
would fall to 121.6% by 2025. Fitch debt dynamics do not include
any government bank asset disposals as the timing and values of
such operation remain uncertain.


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


SOGLASIE INSURANCE: S&P Affirms 'B+' Counterparty Credit Rating
---------------------------------------------------------------
S&P Global Ratings said that it had affirmed its 'B+'
counterparty credit and financial strength ratings and its 'ruA'
Russia national scale rating on Russian insurer SOGLASIE
Insurance Co. Ltd.

The ratings were subsequently withdrawn at SOGLASIE's request.
The outlook was negative at the time of the withdrawal.

The affirmation reflected S&P's view of SOGLASIE's vulnerable
business risk profile and very weak financial risk profile.  S&P
combined these factors to derive the 'b+' anchor, the starting
point for further analysis.  S&P choses an anchor of 'b+' instead
of 'b' based on the insurer's relative financial risk strength
and recent trends.  In particular, SOGLASIE managed to improve
its underwriting performance based on Russian accounting
standards for the first nine months of 2016, and S&P noted some
improvements in risk management practices over the last couple of
years.

The company's business risk profile was a reflection of its
competitive standing in Russia among the top 10 insurance
players. The competitive position was constrained by limited
geographic diversification.  The company operates only in Russia
and diversification into other countries over the medium term is
highly unlikely.

SOGLASIE's financial risk profile was pressured by weak bottom-
line results that constrain its capital adequacy.  At the same
time, the high risk position was an additional constraint, which
reflects a low level of liquid assets and significant proportion
of property and equity investments in the insurer's investment
portfolio.

In S&P's view, due to the negative operating environment,
including adverse court decisions regarding obligatory motor
third-party liability insurance and lower demand for insurance,
SOGLASIE's bottom-line results may be weaker than the company's
own forecast for 2017-2018.

S&P regarded SOGLASIE's liquidity as less than adequate because
of its low level of liquid assets and still-negative operating
cash flow.

At the time of withdrawal, the negative outlook indicated the
possibility of a further downgrade over the next 12 months if
SOGLASIE's competitive position and financial risk profile
continue to weaken, pressured by the negative operating
environment and without shareholder support.


===========
T U R K E Y
===========


EREGLI DEMIR: S&P Revises Outlook to Negative & Affirms 'BB' CCR
----------------------------------------------------------------
S&P Global Ratings said that it has revised its outlook on
Turkish flat steel producer Eregli Demir ve Celik Fabrikalari
T.A.S. (Erdemir) to negative from stable.

At the same time, S&P affirmed its 'BB' long-term corporate
credit rating on Erdemir.

The outlook revision on Erdemir follows a similar action on
Turkey.  The sovereign outlook revision stemmed from what S&P
considers to be rising constraints on policy makers' ability to
tame inflationary and currency pressures, which could weaken the
financial strength of Turkey's companies and banks, undermining
growth and fiscal outcomes, during a period of rising global
interest rates.  S&P therefore sees a one-in-three chance that
lower growth could result in significantly weaker credit metrics
for Erdemir than S&P currently envisage in its base-case
scenario.

Erdemir's operating performance remained robust in 2016, with the
third quarter being particularly strong, following increases in
steel prices during the year.  Erdemir has continued to benefit
from Turkey's flat steel industry's supportive supply and demand
balance, as well as the company's high capacity utilization rates
and leading domestic market position.  Furthermore, Turkey
remains a net importer of flat steel.  Although S&P expects some
margin contraction in 2017, since the impact of higher iron ore
and coking coal prices will increase the cost of goods sold,
under S&P's base case it expects margins will stay healthy.

Because of the increase in year-to-date steel prices, S&P
believes that Erdemir can maintain an adjusted debt-to-EBITDA
ratio of 2x-3x over the cycle.  This includes S&P's debt
adjustments, such as debt at ATAER, a special-purpose vehicle
owned by the OYAK (Turkish Armed Forces Assistance) pension fund,
which is Erdemir's largest shareholder.

S&P's assessment of Erdemir's business risk reflects high country
risk, mitigated by the company's position as the only integrated
flat steel producer in Turkey, with high capacity utilization and
above-average profitability.  Erdemir's production covers
approximately 40% of the growing domestic consumption of flat
steel; the arc furnaces that industry rivals use are focused on
long steel production.  In addition, Erdemir sustains higher
profitability than international peers because of its proximity
to local customers and flexible market strategy, which have
facilitated prices consistently above the free-on-board Black Sea
benchmark.

S&P's assessment of Erdemir's financial risk profile reflects
S&P's estimate of its ratio of adjusted debt to EBITDA at less
than 3x (including debt at ATAER).  In 2015, this ratio was 2.2x
including ATAER's debt (2.3x for the 12 months to Sept. 30,
2016,) and 0.2x excluding it.  The $1.35 billion of debt at ATAER
ccounted for most of Erdemir's total adjusted debt of Turkish
lira (TRY) 4.7 billion (about $1.5 billion) at year-end 2015.
Although Erdemir doesn't guarantee ATAER's debt, S&P believes
that its dividends to ATAER remain the main source of funds for
repayment. Although Erdemir's credit metrics fall into S&P's
intermediate category, S&P takes into account the high volatility
of Erdemir's profits and its leverage metrics, as the wide swings
between 2009 and 2012 illustrate.

The negative outlook reflects the possibility of a downgrade over
the next 12-18 months if Erdemir's business is materially
affected by lower growth and steel demand.  S&P's expectation for
the 'BB' rating is that Erdemir will maintain profitability above
the industry average, supported by its strong domestic market
position.  S&P also assumes that Erdemir will maintain credit
metrics in line with S&P's intermediate financial risk category,
including adjusted debt to EBITDA below 3x and FFO to debt above
30% (including ATAER's debt), and that it will generate strong
positive free operating cash flow (FOCF).

S&P could lower the rating if Erdemir's credit metrics weakened,
such that debt to EBITDA increased above 3x and FFO to debt
dropped below 30%; if FOCF turned negative; or if capex or
acquisitions were to increase beyond S&P's forecasts.  This could
result, for example, from a deterioration of market conditions --
such as a significant economic slowdown translating into a fall
in steel consumption -- or of Erdemir's market position, an
increase in shareholder distributions, or overruns and delays on
growth projects.  A downgrade could also be triggered by a
weakening of the company's liquidity position.

An outlook revision to stable could be prompted by domestic steel
demand remaining strong, with a continuously favorable supply-
demand balance for flat steel in Turkey and a stable exchange
rate, helping to underpin Erdemir's competitive position and that
of Turkish manufacturers who use flat steel.


ISTANBUL TAKAS: Fitch Lowers Issuer Default Ratings to 'BB+'
------------------------------------------------------------
Fitch Ratings has downgraded Istanbul Takas ve Saklama Bankasi
A.S.'s) Long- and Short-Term Foreign Currency Issuer Default
Ratings (IDRs) to 'BB+' and 'B' from 'BBB-' and 'F3',
respectively. Fitch has also downgraded Takasbank's Viability
Rating (VR) to 'bb+' from 'bbb-' and affirmed its Local Currency
IDRs at 'BBB-' and 'F3', respectively. The Outlook on the Long-
Term IDRs is Stable. A full list of rating actions is at the end
of this rating action commentary.

The rating actions follow the downgrade of Turkey's sovereign
rating on 27 January 2017.

Takasbank's Foreign Currency IDRs are equally driven by the
bank's standalone credit profile, as captured in the VR, and
Fitch expectations of available sovereign support, as reflected
in Takasbank's Support Rating Floor (SRF). The revision of
Takasbank's SRF to 'BB+' predominately reflects the downgrade of
Turkey's Foreign Currency Long-Term IDR, while the downgrade of
Takasbank's VR primarily reflects Fitch assessment of a more
challenging operating environment and increased credit risk
exposure, including in foreign currency, in Takasbank's treasury
activities following the downgrade of Turkey's largest banks on 2
February 2017.

KEY RATING DRIVERS
VR AND FOREIGN CURRENCY IDRS
Takasbank's VR takes into account its dominant franchise as
Turkey's only central clearing counterparty (CCP) for
standardised derivatives, securities lending and Borsa Istanbul's
money market. It also considers sound risk controls and
counterparty risk management, adequate capitalisation and
leverage as well as a sound funding and liquidity profile. The VR
also reflects material concentration risks in its CCP activities
as well as moderate credit risk appetite in its non-CCP
activities (largely treasury activities for domestic banks and
brokers).

Takasbank has dominant domestic franchises in clearing, custody
and CCP collateral management services. Given Turkey's relatively
narrow capital markets, Takasbank's strategy is primarily to roll
out its clearing and collateral management services to other
product areas, notably offering CCP services for equity, debt
securities and OTC derivative markets in 2017 and 2018.

Takasbank's counterparty risk management in its CCP activities is
broadly in line with international best practice and margining
and default management procedures are sound and adequately
monitored. Guarantee funds (collective funded contributions from
market participants to absorb losses) for the securities lending
and futures and options market are sized to withstand the default
of the two largest counterparties in each market and are
frequently stress tested. Concentration risk, for posted margins
and default fund contributions, is high, reflecting the fairly
concentrated domestic financial sector.

Credit risk in the bank's treasury activity (mostly short-term
money market operations) is relatively moderate. The credit
quality of money market placements is generally acceptable
(typically with BB+ rated institutions), but there is
considerable concentration risk.

Takasbank is also exposed to operational and reputation risks,
which in Fitch opinions are adequately controlled. The bank is
also exposed to legal risks in case of system failures. To date,
operational losses have been immaterial and system availability
has been adequate.

Profitability is solid (operating ROAE of 29% in 9M16), although
a fairly high dividend pay-out ratio weighs on internal capital
generation. Profitability is supported by strong net fee
generation but also net interest income from Takasbank's treasury
operations, which Fitch consider as lower quality non-core
earnings. Interest income earned on placing surplus collateral is
passed on to collateral holders, while Takasbank earns only
commission from this amount. Cost efficiency is sound.

Takasbank is adequately capitalised although its common equity
Tier 1 ratio of 23% at end-3Q16) benefits from low risk
weightings on bank exposures. Fitch estimates that the bank's
capital base is able to withstand significant counterparty
defaults in its CCP activities, even under quite significant
stress. At the same time, defaults in Takasbank's concentrated
treasury portfolio could have a more adverse impact on
capitalisation.

Takasbank's funding and liquidity profile is sound. The majority
of liabilities consists either of interbank funding relating to
treasury activities (with proceeds invested in the interbank
market with matching tenors) or collateral accounts (with
proceeds invested in liquid assets in line with Takasbank's
investment policy). The bank's investment policy allows only for
short-term interbank placements and a small portfolio of
government securities. Interbank placements are typically with a
small number of banks which exposes Takasbank to concentration
risk.

The Stable Outlook on Takasbank's Foreign Currency Long-term IDR
reflects both the Stable Outlook on Turkey's sovereign rating and
Fitch expectations that Takasbank's performance should remain
sound without compromising its currently adequate risk profile.

SUPPORT RATING, SRF, LOCAL CURRENCY IDRS AND NATIONAL RATINGS
Takasbank's Support Rating of '3' and SRF of 'BB+' reflect Fitch
view of a moderate probability of support from the Turkish
sovereign in case of need. The SRF, which underpins Takasbank's
Long-Term Foreign Currency IDR, is aligned with the sovereign's
Long-Term Foreign Currency IDR. The bank's Long-Term Local
Currency IDR of 'BBB-' is also aligned with that of the
sovereign, reflecting Fitch high support expectations and
Turkey's ability to provide support in local currency.
Takasbank's National Long-Term Rating is driven by its Long-Term
Local Currency IDR.

In Fitch's opinion, Takasbank has exceptionally high systemic
importance for the Turkish financial sector and contagion risk
from its default would be considerable given its
interconnectedness. The state's ability to provide extraordinary
foreign currency support to the banking sector, if required, may
be constrained by limited central bank reserves (net of
placements from banks) and the banking sector's sizable external
debt. However, in Fitch view, the foreign currency support needs
of Takasbank in even quite extreme scenarios should be manageable
for the sovereign given the moderate size of Takasbank's balance
sheet and reasonable foreign currency liquidity management..

RATING SENSITIVITIES
VR AND FOREIGN CURRENCY IDRS
Takasbank's VR is primarily sensitive to a material operational
loss or a significantly increased risk appetite, for instance by
assuming more credit risk in its treasury activities or growing
rapidly in new and untested asset classes. In addition, a
downgrade of Turkey's sovereign rating or the ratings of Turkey's
largest banks would likely lead to a downgrade of Takasbank's VR.
A downgrade of Turkey's sovereign rating would lead to a downward
revision of Takasbank's SRF and hence its Foreign Currency IDRs.

Upside potential for Takasbank's VR is limited given the bank's
concentrated credit exposure and relatively undiversified
business model due to its almost exclusive focus on the fairly
narrow Turkish capital markets. However, an upgrade of Turkey's
sovereign rating or an upgrade of Turkey's largest banks would
likely lead to an upgrade of Takasbank's VR and Foreign Currency
IDRs.

SUPPORT RATING, SRF, LOCAL CURRENCY IDRS AND NATIONAL RATINGS
Rating action on Turkey's sovereign rating would likely be
mirrored in Takasbank's SRF and Local Currency IDRs. A downgrade
of Turkey's Long-Term Local Currency IDR could lead to a
downgrade of Takasbank's National Long-Term Rating.

Takasbank is Turkey's only CCP and is majority-owned by Borsa
Istanbul, Turkey's main stock exchange. Borsa Istanbul in turn is
majority-owned by the Turkish government. Takasbank is operating
under an investment banking licence, and is regulated by three
Turkish regulatory bodies: the Central Bank of Turkey, the
Banking Regulation and Supervision Agency and the Capital Markets
Board.

The rating actions are as follows:

Long-Term Foreign Currency IDR: downgraded to 'BB+' from 'BBB-';
Outlook Stable
Short-Term Foreign Currency IDR: downgraded to 'B' from 'F3'
Long-Term Local Currency IDR: affirmed at 'BBB-'; Outlook revised
to Stable from Negative
Short-Term Local Currency IDR: affirmed at 'F3'
Viability Rating: downgraded to 'bb+' from 'bbb-'
Support Rating: downgraded to '3' from '2'
Support Rating Floor: revised down to 'BB+' from 'BBB-'
National Long-term Rating: affirmed at 'AAA(tur)'; Outlook Stable


VESTEL ELEKTRONIK: S&P Affirms 'B-' CCR & Revises Outlook to Neg.
-----------------------------------------------------------------
S&P Global Ratings revised its outlook to negative from stable on
Turkey-based brown and white goods manufacturer Vestel Elektronik
Sanayi Ve Ticaret A.S. (Vestel).  At the same time, S&P affirmed
its 'B-' long-term corporate credit rating on the company.

The negative outlook reflects S&P's view that Vestel could be
exposed to higher refinancing risks, and that weaker economic
conditions in Turkey could put a dent in the company's operating
performance.  In addition, although the recent sharp depreciation
of the Turkish lira against the U.S. dollar and the euro has no
material impact on Vestel's gross margins, it has led to an
increase in the company's debt.

On Jan. 27, 2017, S&P revised its outlook on Turkey.  S&P now
projects GDP growth of around 2.4% in 2017, down from its
previous projection of 3.2%.  This is likely to dampen Vestel's
domestic revenues, as 36% of the company's revenues are generated
in Turkey.

"Furthermore, we expect Vestel's leverage to increase as a result
of the Turkish lira's depreciation, combined with increased
intracompany lending to the main owner, Zorlu Holding (77.5% of
capital).  As of Sept. 30, 2016, Vestel reported financial net
debt of the equivalent of about US$806 million.  Since then and
until Feb. 2, 2017, the Turkish lira depreciated by 24% against
the U.S. dollar and by 19% against the euro.  In addition,
intracompany loans to Zorlu increased further from about Turkish
lira (TRY) 900 million in June 2016 to about TRY1.1 billion a few
months later at end-September.  As a result, we now estimate that
Vestel's adjusted debt to EBITDA could reach 9x or more in 2017
(compared with about 7x in our previous estimate)," S&P said.

The 'B-' rating continues to reflect S&P's understanding that
Vestel has taken significant actions to extend its maturity
schedule, which was very short-dated as of Sept. 30, 2016.
Furthermore, S&P anticipates that Vestel's liquidity position has
improved over the past months due to strong working capital
inflows upon completion of a large tender project worth
TRY1 billion to provide smart boards for schools.

S&P's assessment of Vestel's business risk profile continues to
reflect the company's volatile operating margins and cash flow
generation, largely because of fierce competition and uneven
demand in the consumer electronics sector.  However, Vestel's
market share in liquid crystal display (LCD) TV sales in Europe
and in the domestic white goods market has increased over the
past several years, and the company has become the Original
Design Manufacturer (ODM) of LCD TVs in Europe.  However, the
company still depends heavily on its key suppliers, which S&P
sees as another main weakness in Vestel's business risk profile.
Although S&P thinks that margins could be volatile, we assess
that they are relatively protected against currency moves, given
that both revenues and operating costs are predominantly
denominated in euro and U.S. dollar.

S&P's assessment of Vestel's financial risk profile primarily
incorporates its high S&P Global Ratings-adjusted gross debt to
EBITDA and strong reliance on various forms of short-term
financing.  S&P expects the company's credit ratios and cash flow
generation will remain highly volatile because it is exposed to
demand swings and its margins are vulnerable to raw material and
cell prices.  This is partly offset by S&P's expectations of
modest positive free operating cash flow (FOCF) and solid cash
interest coverage ratios of between 2.0x and 2.5x in 2016-2017.

The negative outlook on Vestel reflects the potential for a
downgrade in the next 12 months if the company's operating
performance or liquidity weakens or if leverage continues to
rise.

S&P could lower the rating if Vestel experienced declining
revenues and margin prospects due to weaker demand or tighter
availability of consumer financing in Turkey, adverse currency
swings, or heightened competition.  In particular a downgrade
could be prompted by S&P Global Ratings-adjusted EBITDA margins
sustainably below 4% and significantly negative FOCF for more
than 12 months, alongside persistently weak liquidity or further
increases in leverage.

S&P could revise the outlook to stable if the company markedly
extends the maturity profile of its capital structure through
continued active refinancing of short-term domestic bank loans,
as this would result in the company's liquidity sources
sustainably covering its liquidity uses.  In addition, an outlook
revision to stable would hinge on at least break-even FOCF.


=============
U K R A I N E
=============


UKRAINE: Holds Insolvent Banks' Asset Auctions via ProZorro.Sales
-----------------------------------------------------------------
Interfax-Ukraine reports that the Individuals Deposit Guarantee
Fund has said on its website all auctions to sell assets of banks
under liquidation from February 1, 2017 are held only in the
ProZorro.Sales system.

According to Interfax-Ukraine, the fund is selecting third
parties to organize open tenders to expand the circle of
organizers of electronic auctions which platforms are connected
to the ProZorro.Sales system.  A total of 38 bidders submitted
their documents, Interfax-Ukraine discloses.

On June 24, 2016, representatives of the National Bank of
Ukraine, Economic Development and Trade Ministry, Individuals
Deposit Guarantee Fund and Transparency International Ukraine
signed a memorandum of cooperation intending to build the new
ProZorro.Sales system to sell assets of insolvent banks and banks
under liquidation, Interfax-Ukraine relates.



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


DECO 2005-UK: S&P Affirms 'D' Ratings on Two Note Classes
---------------------------------------------------------
S&P Global Ratings affirmed its 'D (sf)' credit ratings on DECO
Series 2005-UK Conduit 1 PLC's class D and E notes.

DECO Series 2005-UK Conduit 1 is a true sale commercial mortgage-
backed securities (CMBS) transaction, which closed in July 2005.
It was originally secured against U.K. commercial real estate
properties.  The last remaining loan in the transaction fully
repaid on the July 2015 interest payment date (IPD).

                         RATING RATIONALE

S&P's ratings in DECO Series 2005-UK Conduit 1 address the timely
payment of interest (payable quarterly in arrears) and the
payment of principal no later than the July 2017 legal final
maturity date.

The class D and E notes have non-accruing interest amounts
allocated and therefore are not receiving full interest payments.
In addition, given that no loans and no properties remain in the
transaction and recoveries have been fully applied, full
principal recovery is not expected.  S&P has affirmed its 'D
(sf)' ratings on the class D and E notes in line with S&P's
criteria.

RATINGS LIST

Class            Rating
          To               From

DECO Series 2005-UK Conduit 1 PLC
GBP236.057 Million Commercial Mortgage-Backed Floating-Rate Notes

Ratings Affirmed

D         D (sf)
E         D (sf)


DECO 6: Fitch Lowers Ratings on Four Note Classes to 'Dsf'
----------------------------------------------------------
Fitch Ratings has downgraded DECO 6 - UK Large Loan 2 Plc's
floating rate notes due April 2017:

GBP23.2m class A2 (XS0235683223) downgraded to 'Dsf' from 'Csf';
Recovery Estimate (RE) revised to 0% from 10%
GBP34.4m class B (XS0235683736) downgraded to 'Dsf' from 'Csf';
RE 0%
GBP29m class C (XS0235684114) downgraded to 'Dsf' from 'Csf'; RE
0%
GBP0m class D (XS0235684544) downgraded to 'Dsf' from 'Csf'; RE
0%

KEY RATING DRIVERS
The downgrade of the class C and D notes reflects the loss
allocations from the write-down of EUR34m of the Brunel Shopping
Centre loan, in July 2016, following sale of the collateral
(which led to principal repayment of GBP65.3m in October 2015).

The downgrade of the class A2 and B notes follows liquidation of
all remaining collateral, comprising two properties securing the
EUR86.6m Mapeley loan (sold in 4Q16). Gross sales proceeds of
GBP7.6m resulted in GBP6.3m of principal repaid to the class A2
notes (after costs and due/unpaid loan interest), crystallising a
substantial loss on this loan and therefore the notes. This loss
will shortly be recognised on the class A2 and B notes.

RATING SENSITIVITIES
The ratings will be withdrawn within 11 months.

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO RULE 17G-10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.

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

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

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

Fitch has not reviewed the results of any third party assessment
of the asset portfolio information or conducted a review of
origination files as part of its ongoing monitoring.


PREMIER OIL: Eyes Falkland Islands Project Following Debt Deal
--------------------------------------------------------------
Andrew Ward at The Financial Times reports that Premier Oil is
preparing to seek finance for a US$1.5 billion development off
the Falkland Islands, as the UK company refreshes its strategy
after its long-awaited debt restructuring deal.

Tony Durrant, Premier chief executive, said calmer relations
between the UK and Argentina had improved the outlook for
investing in the Falklands, where Premier has an estimated 520
million barrels of resources in a field called Sea Lion, the FT
relates.

According to the FT, Mr. Durrant said his priority remained
strengthening the balance sheet, after agreeing terms to
refinance US$2.8 billion of existing debts.  However, by ending
uncertainty over Premier's future, the deal with creditors would
allow management to start laying the ground for development of
Sea Lion, the company's biggest untapped asset, the FT discloses.

"The majority of our 2017-18 cash flow will be dedicated to
reducing net debt. . . but from 2019 we will be able to invest,"
Mr. Durrant told the FT.

He planned talks with lenders and investors about Sea Lion this
year, even though a formal go-ahead would not come until later,
the FT relays.

Approval for new projects will be needed from Premier's
creditors, who have been given more say over how the company
spends money, after the Feb. 3 deal to extend debt maturities to
2021 or later, the FT states.

Premier's debt ballooned as it pushed ahead with its US$1.6
billion Catcher oilfield in the North Sea while low prices hit
existing production, the FT notes.

Premier Oil is a London-based oil and gas explorer.


TOWD POINT: S&P Assigns Prelim. BB Rating to Cl. E-Dfrd Notes
-------------------------------------------------------------
S&P Global Ratings assigned preliminary credit ratings to Towd
Point Mortgage Funding 2017 - Auburn 11 PLC's (TPMF-AUB 11) class
A1, A2, B-Dfrd, C-Dfrd, D-Dfrd, and E-Dfrd notes.  At closing,
TPMF-AUB 11 will also issue unrated class Z notes, as well as
SDC, DC1, and DC2 certificates.

TPMF-AUB 11 will be a securitization of first-lien U.K. owner
occupied and buy-to-let residential mortgage loans.

At closing, TPMF-AUB 11 will acquire the beneficial interest in
the portfolio of U.K. buy-to-let and owner occupied mortgages
from Cerberus European Residential Holdings B.V. (the seller;
CERH), using the note issuance proceeds to purchase the rights to
the mortgage loans.  The legal title will remain with Capital
Home Loans Ltd. (CHL).

The preliminary pool totals GBP1.646 billion (as of Dec. 31,
2016,) and S&P expects the final securitized pool to be a subset
of this.  S&P bases its credit analysis on the preliminary pool
and it expects the final pool to be a representative sample of
this.

CHL, which is in S&P's view a specialized and experienced entity
in the buy-to-let sector, originated a number of transactions
before 2008 via its Auburn shelf, but stopped originating as a
result of the global financial crisis.  CHL originated 99.95% of
the loans securitized in this transaction, with Irish Permanent
PLC originating the remaining 0.05%.  CHL is the servicer of the
transaction, and Homeloan Management Ltd. is the back-up
servicer.

As CHL no longer originates, the mortgages in this pool are
highly seasoned, with an average of more than 120 months.

The pool has a high concentration in the south east of England,
including London, at 35.78%.  Furthermore, 98.6% of the mortgages
are interest-only, while the remaining 1.4% pay capital and
interest.

S&P treats the class B to E notes as deferrable-interest notes in
its analysis.  Under the transaction documents, the issuer can
defer interest payments on these notes, and any deferral of
interest would not constitute an event of default, even when this
class of notes is the most senior.  While S&P's preliminary
'AAA (sf)' and 'AA (sf)' ratings on the class A1 and A2 notes,
respectively, address the timely payment of interest and the
ultimate payment of principal, S&P's preliminary ratings on the
class B to E notes address the ultimate payment of principal and
interest.

Interest on the class A1 and A2 notes is equal to three-month
British pound sterling LIBOR plus a class-specific margin.
However, the class B to E notes are somewhat unique in the
European residential mortgage-backed securities (RMBS) market in
that they pay interest based on the lower of the coupon on the
notes (three-month sterling LIBOR plus a class-specific margin)
and the net weighted-average coupon (WAC) cap.  The net WAC on
the assets is based on the interest accrued on the assets
(whether it was collected or not) during the quarter, less senior
fees, divided by the current balance of the assets at the
beginning of the collection period.  This rate is then divided by
the outstanding balance of the class A to E notes as a percentage
of the outstanding balance of the assets at the beginning of the
period to derive the net WAC cap.  The net WAC cap is then
applied to the outstanding balance of the notes in question to
determine the required interest.

In line with S&P's imputed promises criteria, its preliminary
ratings address the lower of these two rates.  A failure to pay
the lower of these amounts will, for the class B to E notes,
result in interest being deferred.  Deferred interest will also
accrue at the lower of the two rates.  S&P's preliminary ratings
however, do not address the payment of what are termed "net WAC
additional amounts" i.e., the difference between the coupon and
the net WAC cap where the coupon exceeds the net WAC cap.  Such
amounts will be subordinated in the interest priority of
payments. In S&P's view, neither the initial coupons on the notes
nor the initial net WAC cap are "de minimis", and nonpayment of
the net WAC additional amounts is not considered an event of
default under the transaction documents.  Therefore, S&P do not
need to consider these amounts in our cash flow analysis, in line
with S&P's criteria for imputed promises.

Within the mortgage pool, the loans are linked to the Bank of
England base rate (BBR) (99.50%), or a variable rate index
(0.50%).  There will be no swap in the transaction to cover the
interest rate mismatches between the assets and liabilities.  S&P
has stressed for basis risk accordingly.

S&P's preliminary ratings reflect its assessment of the
transaction's payment structure, cash flow mechanics, and the
results of S&P's cash flow analysis to assess whether the notes
would be repaid under stress test scenarios.  Subordination, a
liquidity facility (only for the class A1 and A2 notes), and
excess spread (there will be no reserve fund to provide credit
enhancement in this transaction) will provide credit enhancement
to the rated notes that are senior to the unrated notes and
certificates. Taking these factors into account, S&P considers
that the available credit enhancement for the rated notes is
commensurate with the preliminary ratings assigned.

RATINGS LIST

TOWD POINT MORTGAGE FUNDING 2017 - AUBURN 11 PLC
GBP1.646 Billion Residential Mortgage-Backed Notes (Including
Unrated Notes and Certificates)

Class                   Prelim.         Prelim.
                        rating           amount
                                            (%)

A1                      AAA (sf)          73.25
A2                      AA (sf)            5.00
SDC cert.               N/A                 N/A
B-Dfrd                  AA- (sf)           5.25
C-Dfrd                  A+ (sf)            3.75
D-Dfrd                  BBB+ (sf)          3.75
E-Dfrd                  BB (sf)            2.25
Z                       NR                 6.75
DC1 cert.               N/A                 N/A
DC2 cert.               N/A                 N/A

NR--Not rated.
Cert.--Certificates.
N/A--Not applicable.


* UK: Set to Face Sharpest Rise in Business Failures in 2017
------------------------------------------------------------
UK business failures will rise by +5% in the next 12 months as
the economic slowdown, rising input prices and increased late
payment risks begin to take their toll, according to Euler
Hermes, the world's leading trade credit insurer.

This is in sharp contrast with the rest of the continent, where
insolvencies will fall by -4% in Western Europe and -1% in
Central and Eastern Europe this year.  Consumer consumption,
support for exporters from a weaker Euro and supportive fiscal
policy from the European Central Bank will help boost Western
European economies and corporate profitability.

The company's latest Economic Insight, Insolvencies: tip of the
iceberg, reveals that the UK will record the largest increase in
bankruptcies of any EU economy in 2017, with the number of
businesses going insolvent predicted to reach a total of 20,254.
The forecasted upswing in failures will be the first rise in the
UK since 2010 and follows a -3% fall in 2016.

Euler Hermes attributes the increase in UK business failures to
the slowdown in GDP growth that has been apparent since 2015, the
ongoing depreciation of Sterling -- which is set to push up
inflation and input prices and put downward pressure on profit
margins -- and a decline in investment activity following the EU
referendum.

"The UK will be the only major European country to see a sizeable
rise in business insolvencies in 2017.  While the economy has
remained resilient since the EU referendum, there is already
evidence of additional strains on prompt payment in the supply
chain," said Valerio Perinelli, CEO, Euler Hermes, UK and
Ireland.

Euler Hermes predicts that the total number of insolvencies
globally will climb by +1% in 2017, the first rise in seven years
and a reversal of the previous downward trend.  The broad-based
increase in insolvencies will continue in fragile economies in
Latin America (+12%), Africa (+9%), Asia-Pacific (+6%) and
North-America (+1%), while the declines in business failures in
both Western and Central and Eastern Europe is losing momentum
year-on-year.

Ana Boata, European Economist, Euler Hermes, said "Three main
factors explain the global insolvency U-turn.  First, growth in
the volume of and value of trade has stalled and will linger at
+3% for the next few years.  Secondly, global financing
conditions will change in response to increases in US interests
rates and, finally, the rise in the number of larger companies
failing will cause a domino effect on fragile suppliers.
Businesses are more vulnerable to external shocks this year."



                            *********

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

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

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


                            *********


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

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

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

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

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

The TCR Europe subscription rate is US$775 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
contact Peter Chapman at 215-945-7000 or Nina Novak at
202-362-8552.


                 * * * End of Transmission * * *