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        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 14, 2017, Vol. 18, No. 32


                            Headlines


B E L G I U M

FIELDLINK NV: S&P Affirms Then Withdraws 'B-' Corp. Credit Rating


F R A N C E

LION SENECA: Moody's Confirms B3 Corporate Family Rating


G E R M A N Y

WIENERBERGER AG: Moody's Affirms Ba2 Corporate Family Rating


G R E E C E

GREECE: Financial Leaders Call for New Debt Deal with Creditors


I C E L A N D

ORKUVEITA REYKJAVIKUR: Fitch Hikes Issuer Default Rating to 'BB'


I R E L A N D

EIRCOM HOLDINGS: S&P Raises CCR to 'B+' on Continued Improvement


I T A L Y

SIENA MORTGAGE 07-5: Fitch Lowers Rating on Class C Notes to B-sf


L U X E M B O U R G

EURASIAN RESOURCES: Moody's Affirms Caa1 Corporate Family Rating
MILLICOM INT'L: Egan-Jones Cuts Sr. Unsec. Ratings on Debt to B+


N E T H E R L A N D S

CANDIDE FINANCING 2011-1: Moody's Lifts B Notes Rating from Ba1
OI BRASIL: Int'l Bondholder Committee Appeals Dutch Rulings
ST PAUL CLO I: Moody's Affirms B1 Rating on Class E Sr. Notes


R O M A N I A

GARANTI BANK: Fitch Keeps b+ Viability Rating; Outlook Stable


R U S S I A

BANK ZENIT: Moody's Raises Long-Term Deposit Ratings to Ba3
HYDROMASHSERVICE JSC: Fitch Rates RUB3-Bil. Bonds 'B+(EXP)'
SAMARA CITY: Fitch Affirms IDRs at 'BB+', Outlook Stable


S P A I N

IM CAJAMAR 5: Fitch Raises Rating on Class B Notes to BB+


S W I T Z E R L A N D

TRANSOCEAN LTD: Egan-Jones Hikes Senior Unsecured Ratings to B+


T U R K E Y

TURKIYE SISE: S&P Revises Outlook to Neg. & Affirms 'BB' CCR


U N I T E D   K I N G D O M

CO-OPERATIVE BANK: Put Up for Sale by Board Amid Capital Woes
FOOD RETAILER: To Enter Administration After CVA Failed
HONOURS PLC: Moody's Lowers Rating on Class B Notes to B2
INTYPE LIBRA: Aquatint Acquires Assets Out of Liquidation
KING & WOOD: Attempts to Raise Capital Rejected Prior to Collapse


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B E L G I U M
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FIELDLINK NV: S&P Affirms Then Withdraws 'B-' Corp. Credit Rating
-----------------------------------------------------------------
S&P Global Ratings said it has affirmed its 'B-' long-term
corporate credit rating on Belgium-based distributor FieldLink
NV. Subsequently, S&P withdrew its ratings on FieldLink and on
its debt at the issuer's request.  The outlook was stable at the
time of withdrawal.

On Jan. 9, 2017, FieldLink fully repaid its EUR285 million senior
secured notes at a premium of 3.9375%.  In December 2015, the
company had placed a EUR125 million senior unsecured convertible
bond (not rated) maturing in 2021 guaranteed by Greenyard
(ultimate parent of the entire group) and convertible into newly
issued ordinary shares of Greenyard.

Within the wide refinancing transaction for the group, Greenyard
signed a new term loan facility and revolving credit facility for
a total of EUR375 million, due 2021.

At the time of the withdrawal, FieldLink's business risk profile
reflected the volatile, seasonal, and commodity-oriented fruit
and vegetable industry.  The company operates as a distribution
player, and its exposure to private labels limits its pricing
power.  In S&P's view, the European fruit and vegetable market is
mature, which represents a potential cap in terms of future
growth for the industry as whole.  The company's main clients are
big European food retailers, which limits FieldLink's bargaining
power.

Positively, the company is the largest distributor in Europe.  It
has been able to build strong and long-term relationships with
its main clients, and has recently demonstrated its ability to
replace the loss of an important German retail client in 2015 in
a relatively quick and efficient way.

More recently, the company reported some moderate improvements
both in terms of top-line growth and profitability.  The market
environment seems to have improved moderately and the company is
taking advantage of this by gradually increasing volumes and
prices.  Furthermore, the recent refinancing transaction improved
the group's debt maturity profile.


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F R A N C E
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LION SENECA: Moody's Confirms B3 Corporate Family Rating
--------------------------------------------------------
Moody's Investors Service has confirmed the ratings of Lion /
Seneca France 2 SAS, including its B3 corporate family rating
(CFR) and B3-PD probability of default rating (PDR). Moody's also
confirmed the Caa2 rating on the EUR75 million worth of Senior
Unsecured Notes due 2019 issued by Lion / Seneca France 2 SAS and
the B2 rating on the EUR365 million worth of Senior Secured Notes
due 2019 issued by 3AB Optique Developpement. The outlook on all
ratings is stable.

The rating action concludes the review for upgrade initiated on
24 October 2016 following the company's filing of its document de
base with the AMF related to an Initial Public Offering (IPO).

RATINGS RATIONALE

The rating confirmation follows the announcement made by Afflelou
via the French press that its contemplated public listing will be
postponed for the time being due to unfavorable market
conditions.

As part of the IPO, Afflelou had projected to raise EUR225
million and to use the proceeds to reduce its outstanding debt,
notably to redeem its senior secured and senior unsecured notes.
Whilst the IPO has been postponed, Moody's understands that an
IPO remains a possibility which would significantly strengthen
the credit profile of Afflelou, though its timing and condition
are difficult to predict at this stage.

The B3 CFR of Afflelou primarily reflects (1) the company's high
leverage at around 6.4x in the 12 months to 31 October 2016
(gross debt to EBITDA as adjusted by Moody's), (2) its limited
scale and narrow geographic scope despite ongoing diversification
initiatives, (3) its presence in very competitive and fragmented
markets where substantial spending in advertising and promotion
are fundamental to maintaining competitiveness, and (4) the risk
of further tightening of the French optical regulatory
environment.

At the same time the CFR also incorporates (1) Afflelou's
significant presence in the French optical retail market, (2) its
strong brand recognition through advertising largely based around
the founder, and (3) its improving top line growth in recent
quarters and solid profitability compared to rated other peers
supported by the company's franchise model.

The stable outlook reflects Moody's expectations that Afflelou
will continue to improve its operating performance in the coming
quarters, helped by improving consumer sentiment in France and
positive sales momentum, as seen in recent quarters. The
company's marketing initiatives and increased presence in
preferred care networks should also help improve Afflelou's
operating performance and free cash flow generation.

Afflelou's liquidity profile remains satisfactory supported by
cash on balance sheet of EUR19.7 million and an undrawn EUR30
million revolving credit facility as at end-October 2016.

WHAT COULD CHANGE THE RATING UP/DOWN

Positive pressure could arise if (1) Afflelou were to demonstrate
a sustainable improvement in its earnings trend; (2) its adjusted
ratio of debt/EBITDA (as adjusted by Moody's) were to fall
materially below 6.0x on a sustainable basis; and (3) its
adjusted ratio of RCF/net debt (as adjusted by Moody's) were to
approach 15%.

On the other hand, downward pressure could arise if (1)
Afflelou's free cash flow were to turn negative; or (2) its
debt/EBITDA (as adjusted by Moody's) were to approach 7.0x. Also
any weakening of the liquidity profile would also exert immediate
downward pressure on the rating.

PRINCIPAL METHODOLOGY

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

Lion / Seneca France 2 SAS is the ultimate parent holding company
of Alain Afflelou group. Headquartered in Paris, France, Afflelou
is the third largest optical retailer in the French market by
total sales volume and number two in Spain by number of
stores/sales. The company also has smaller operations in nine
other countries, notably Portugal. The company mainly operates a
franchise model mainly under the commercial names "Alain
Afflelou" and "Optical Discount" and at the end of October 2016,
the company had 1,403 stores, of which 1,215 were franchisees and
188 were directly-owned. In the twelve months to 31 October 2016
(Q1-2017), the company's revenues amounted to approximately
EUR348 million (against EUR705 million of total sales for the
whole store network).


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G E R M A N Y
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WIENERBERGER AG: Moody's Affirms Ba2 Corporate Family Rating
------------------------------------------------------------
Moody's Investors Service has affirmed the Corporate Family
Rating (CFR) and Probability of Default Rating (PDR) of
Wienerberger AG at Ba2 and Ba1-PD respectively. Concurrently the
agency has also affirmed the Ba1 ratings assigned to the EUR100
million and EUR300 million senior unsecured bonds and the Ba3
ratings assigned to the junior subordinated hybrid bonds. The
outlook on all ratings has been changed to positive from stable.

The change in the outlook to positive from stable reflects the
continued swift deleveraging path of Wienerberger since Moody's
last upgraded the company in February 2016 and Moody's
expectations that the company will continue to experience benign
market conditions supportive of further deleveraging over the
next 12 months at least", says Stanislas Duquesnoy, a Vice
President -- Senior Credit Officer at Moody's.

RATINGS RATIONALE

Wienerberger has posted a solid operating performance since
Moody's last upgrade in February 2016 despite weak market
conditions for pipes. The group's adjusted EBITDA rose 6% between
year-end 2015 and LTM September 2016 whilst its retained cash
flow improved by 8% over the same period supported by
conservative financial policies. Coupled with a very solid free
cash flow generation (EUR106 million as per LTM September 2016),
Wienerberger's credit metrics continued to improve with RCF/net
debt improving to 22.9% as per LTM September 2016 from 20.4% at
year-end 2015. Moody's expects RCF/Net debt to move towards 24%
at year-end 2016 due to seasonal working capital inflows in Q4
and the group's reported EBITDA guidance of EUR405 million
(before approximately EUR10 million negative FX effects) for
2016. Moody's also highlight that pro-forma of the redemption of
the EUR221.8 million subordinated hybrid notes (EUR16 million
reduction in adjusted interest) Moody's would expect the ratio of
RCF/net debt to be around 25%, a strong ratio for a Ba2 rated
building materials company.

Wienerberger should continue to benefit from supportive market
conditions over the next 12 months at least supported by modest
single-family housing starts and more vigorous multi-family
housing starts in Europe. Housing starts in the US should also
continue to increase with a stronger contribution from single-
family housing starts in the medium-term, a positive for
Wienerberger as its products portfolio is more geared towards
single-family houses.

Moody's expects Wienerberger to continue deleveraging its balance
sheet as a result of further improvements in operating
performance, conservative financial policies and free cash flow
generation applied to debt reduction (next maturity is 2018 when
the EUR100 million senior unsecured bond comes due). Overall
Moody's forecasts RCF/Net debt to increase above 25% over the
next 12 months and debt/EBITDA to move towards 3.0x paving the
way for a rating upgrade.

LIQUIDITY

The liquidity position of Wienerberger is adequate. The company
had EUR130 million of cash on balance sheet and EUR257 million
availability under its EUR400 million revolving credit facility
(unrated) at a point in time where the seasonal working capital
consumption remains high. Wienerberger has comfortable headroom
under its financial covenants with a September 2016 reported net
leverage of 1.5x versus a 3.5x level to be in compliance with its
covenant.

STRUCTURAL CONSIDERATIONS

Wienerberger is financed primarily through senior unsecured bank
debt and bonds raised by Wienerberger AG and there are no
material amounts of secured / priority debt in the capital
structure. In addition, the group's capital structure contains
one Ba3 rated EUR272 million hybrid bond with a call option in
February 2021, which is contractually subordinated to the
company's unsecured borrowings. Based on Moody's methodology for
assigning debt and equity treatment to hybrid securities of
speculative-grade non-financial companies the hybrid bonds are
treated as debt. The Ba1 instrument ratings and Ba1-PD PDR
reflect the inclusion of the Hybrid bond in the LGD waterfall as
the most subordinated class of debt.

The redemption of EUR221.8 million of subordinated hybrid capital
from a EUR150 million senior unsecured term loan (unrated) and
cash on balance sheet has reduced the loss absorption for senior
unsecured creditors notwithstanding that EUR278 million of senior
subordinated capital (unrated) remain on balance sheet post
redemption and will continue to offer some loss absorption. The
strong rating positioning of Wienerberger, as illustrated by
credit metrics almost in line or even exceeding Moody's triggers
for a rating upgrade offers us sufficient comfort to maintain at
present the Ba1 instrument ratings assigned to the EUR300 million
and EUR100 million senior unsecured bonds issued by Wienerberger.
An upgrade to Ba1 would however trigger Moody's reassessments of
whether the senior unsecured ratings should be aligned with the
group's Corporate Family Rating rather than one notch higher as
is currently the case. However, if Wienerberger's performance is
not improving in line with Moody's current expectations, and
Moody's have to change the outlook back to stable, Moody's could
consider downgrading the instrument ratings of the senior
unsecured bonds to be in line with the CFR in order to reflect
the diminishing loss absorption following the redemption of the
2007 Hybrid bond.

WHAT COULD CHANGE THE RATING UP / DOWN

The ratings might come under upward pressure in case of a further
reduction in leverage towards 3.0 times and an RCF/net debt of
sustainably well above 20%. At the same time operating margin
would need to improve into the high single digits (forecasted at
6% in 2016).

A material deterioration in Wienerberger's operating performance
which would result in a rising leverage with debt/EBITDA towards
4.5x (forecasted at 3.5x for 2016) would lead to negative
pressure on the current ratings. RCF/net debt falling sustainably
below 15% (forecasted at around 24% for 2016) would also exert
negative pressure on the ratings.

The principal methodology used in these ratings was Building
Materials Industry published in January 2017.


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G R E E C E
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GREECE: Financial Leaders Call for New Debt Deal with Creditors
---------------------------------------------------------------
Tim Wallace at The Telegraph reports that Greece should agree a
new deal with its creditors as quickly as possible to avoid
another crisis rocking the eurozone, the continent's financial
leaders have urged.

The currency area's most troubled nation should meet with the
International Monetary Fund and other countries to thrash out a
set of economic and financial reforms rapidly to avoid a
prolonged period of chaos, The Telegraph relays, citing EU
financial services chief Valdis Dombrovskis.

According to The Telegraph, Mr. Dombrovskis told German newspaper
Welt am Sonntag "The reforms in the program are aimed at
improving the competitiveness of the Greek economy and to give
Greeks hope of a stable and secure future."

"Now is not the time to turn the clocks back to financial
instability."

He was speaking after Greek Prime Minister Alexis Tsipras told
his party the creditors would cut the country's debts "sooner or
later", The Telegraph notes.

That is a crucial bone of contention in the upcoming Eurogroup
meeting at which the bailout will be discussed, The Telegraph
states.

The IMF wants other eurozone countries to offer debt relief to
Greece, writing off some of their loans in a bid to stop its
debts running out of control once more, The Telegraph discloses.

But other countries reject that idea, with Germany's finance
minister arguing it breaks the terms of the Lisbon Treaty, The
Telegraph relays.

According to The Telegraph, the Eurogroup meeting next Monday
represents a key chance to turn the current arguments into
concrete action, providing some certainty to Greece, its
creditors and the financial markets, as well as the citizens
affected.

"According to sources close to the negotiations, the EU and IMF
have found a compromise and will demand from Greece fiscal
measures worth circa 2% of GDP, which would partly be triggered
if Greece fails to meet the agreed 3.5% primary surplus target,"
The Telegraph quotes Berenberg's Carsten Hesse as saying.  "It is
likely that Greece will accept the measures, with the Greek
finance minister, Euclid Tsakalotos, keen to come to an agreement
sooner rather than later.  However, this could take some time as
PM Alexis Tsipras might hope to get a better deal further down
the line."


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ORKUVEITA REYKJAVIKUR: Fitch Hikes Issuer Default Rating to 'BB'
----------------------------------------------------------------
Fitch Ratings has upgraded Orkuveita Reykjavikur's (RE) Long-Term
Issuer Default Rating (IDR) to 'BB' from 'BB-'. The Outlook is
Stable.

The upgrade reflects the company's progress on deleveraging,
aided by improved macroeconomic conditions in Iceland
(BBB+/Positive) and the significant appreciation of the Icelandic
Krona (ISK), the company's track record in outperforming targets
on the 2011-2016 business plan and expected continued shareholder
support, including parent guarantees on debt.
The Stable Outlook takes into account the steady regulatory
environment and the company's remaining high exposure to market
risks and high financial leverage.

KEY RATING DRIVERS
Progress on Deleveraging: Fitch forecasts funds from operations
(FFO) adjusted net leverage at 5.4x and interest cover at 5.6x
for 2016, down from 6.4x and 6.3x, respectively, in 2015. The
decrease in leverage in 2016 is driven by debt reduction, helped
by the continuing appreciation of the Icelandic Krona. Proceeds
from the aluminium-linked bond in 2016, increasing prices of
aluminium on forward markets, increases in tariffs, and no
dividends payments are also drivers of the deleveraging.

We forecast FFO-adjusted net leverage to average around 5.2x and
interest cover to average 5.3x during 2016-2020. The company's
ability to continue deleveraging beyond 2016 depends on
shareholders' continued support to the company by means of
maintaining similar measures to those agreed for the 2011-2016
business plan, especially keeping tariffs linked to inflation
measures and zero or low dividend payments. Additional drivers
include the price of aluminium and future movements of Icelandic
Krona. Although not expected, a substantial depreciation of the
Icelandic Krona could have a negative impact on RE's debt in
local currency equivalent, mitigating debt reduction measures.

Shareholder Support Expected to Continue: Beyond 2016, Fitch
expects shareholders to continue to provide support through fully
cost-reflective tariffs linked to inflation, returns on
investments at similar levels to those agreed in the company's
2011-2016 five-year business plan, and moderate dividends.

IDR Uplift for Shareholder Links: The IDR incorporates a single-
notch uplift over RE's standalone rating to reflect moderate-to-
strong links between the company and its three municipality
shareholders, the City of Reykjavik (approx. 93.5%), the
Municipality of Akranes (approx. 5.5%) and the Municipality of
Borgarbyggd (approx.1%). The shareholders' support includes the
conditional parent guarantees of over 81% of outstanding debt
(expected to decrease in future as the guaranteed debt amortises)
and subordinated shareholder loans from its municipality
shareholders representing a further 9% of outstanding debt.

Regulated and Supported Earnings: RE's rating is supported by a
significant proportion of EBITDA over the next five years being
derived from regulated businesses. For 2016 Fitch expects the
company's EBITDA from regulated networks to have reduced to 65%
from 67% in 2015 as a result of a steep decrease in Building Cost
Index (BCI) and a moderate decrease in Consumer Price Index (CPI)
to which regulated tariffs are linked. Fitch expects the EBITDA
share of the regulated networks to decrease to around 62% by 2020
as a result of lower expected tariff increases over the forecast
period.

Market Risk Mitigated by Hedging: RE's cash flows are exposed to
currency fluctuations (largest exposures being to USD and EUR),
interest rates and to aluminium prices to which some of the
company's generation contracts are linked. In Fitch views, this
exposure, though mitigated through hedging, may affect the pace
at which RE will deleverage if currency fluctuations are
substantial.

At Sept. 30, 2016, the company's total debt was ISK147.6 billion,
of which 68.9% (ISK101.7 billion equivalent) was denominated in
foreign currencies compared with around 14% (ISK5.7 billion
equivalent of Fitch's revenue estimate for 2016) of the company's
revenues in foreign currencies. Variable-rate debt was 69.6% and
interest rate hedges along with fixed-rate loans covered on
average 61% of the variable-rate debt for 2017-2020, before
declining. The company has also hedged 50% of its exposure to
aluminium prices a year ahead and some of its exposure up to
2019. RE has also hedged some of its foreign currency exposure up
to 2021.

DERIVATION SUMMARY
RE has higher leverage than its peers. For comparison, Fitch
forecasts average three-year FFO-adjusted net leverage of 5.5x
for RE, 3.1x for UK's renewable electricity operator Melton
Renewable Energy UK PLC (BB/Stable) and 4.2x for UK renewable
power company Infinis Plc (BB-/Negative). In contrast to its
peers the company is highly exposed to market risk, including
foreign exchange risk, and aluminium and interest risk price. No
country ceiling or operating aspects impacts the rating; however,
parent/subsidiary linkage is applicable and the IDR incorporates
a single-notch uplift to reflect this.

KEY ASSUMPTIONS
Fitch's key assumptions within Fitch rating case for the issuer
include:
  - Majority of wholesale electricity generation earnings are
linked to aluminium forward prices. Retail earnings, including
earnings from the regulated business, are inflation-linked
throughout 2020. Assumptions for inflation from Statistics
Iceland (CPI; 1.8% for 2016, peaking at 3.4% in 2018 and reducing
to 2.6% in 2020); aluminium price per tonne at USD1,611 for 2016,
USD1,700 for 2017 and 2018, USD1,750 for 2019 and USD1,800 for
2020 as per Fitch's commodity price assumptions, and more
conservative cost of debt compared with management's;
  - a 4% annual appreciation of ISK trade currency-weighted index
(implying ISK depreciation against other currencies) from 2018
for FX- denominated debt;
  - EBITDA on average of ISK26.6 billion for 2016-2020;
  - Capex is to average around ISK14 billion a year for 2016-2020
following capex deferrals since 2012;
  - Inflows from the bond to the amount of ISK4.3 billion in 2016
(received October 2016) and ISK4.3 billion in 2018;
  - No dividends in 2016, dividend pay-out of 30% from 2017
onwards allowing positive free cash flow (FCF) on average ISK4.6
billion for 2016-2020.

RATING SENSITIVITIES
Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action
  - Continued tariff increases and operational outperformance and
continued net repayments of debt leading to FFO adjusted net
leverage below 5.0x and FFO fixed charge coverage over 5.0x on a
sustained basis.
  - Increased support from the parent, including unconditional
guarantees or prolonged restrictions on dividends.

Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action
  - Restrictions on tariff increases and higher investments, or
lack of proceeds on the bond asset, leading to FFO-adjusted net
leverage above 6x and FFO fixed charge coverage under 4.5x on a
sustained basis;
  - Weaker parent support, including de-linkage of tariffs to
inflation or a significant reduction of the conditional parent
guarantees for the company's debt.

LIQUIDITY
Adequate Liquidity: At 30 September 2016 RE had ISK10.5 billion
in cash and cash equivalents and ISK8.5 billion of undrawn
committed facilities against short-term debt maturities of
ISK19.5 billion. Fitch assesses the company's current liquidity
as adequate to cover operational requirements over the next 24
months due to Fitch expectations that it will remain
significantly FCF-positive over the next five years.


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EIRCOM HOLDINGS: S&P Raises CCR to 'B+' on Continued Improvement
----------------------------------------------------------------
S&P Global Ratings raised its long-term corporate credit rating
on Ireland-based telecommunications group eircom Holdings
(Ireland) Ltd. (eir) to 'B+' from 'B'.  The outlook is stable.

At the same time, S&P raised its issue ratings on the senior
secured loan and revolving credit facility (RCF) issued by eir's
financing subsidiary eircom Finco s.a.r.l. and senior secured
notes issued by eir's another financing subsidiary eircom Finance
DAC to 'B+ from 'B'.  The recovery rating on the debt is
unchanged at '3', indicating S&P's expectation of meaningful
recovery prospects in the event of default, in the lower half of
the 50%-70% range.

S&P also assigned 'B+' long-term corporate credit ratings to
eircom Finco s.a.r.l. and eircom Finance DAC, in line with the
rating on eir.

The upgrade follows eir's continued positive performance in
calendar year 2016 and S&P's view that its improving EBITDA and
free operating cash flow (FOCF) generation sustainably support
deleveraging to about 5x S&P Global Ratings-adjusted debt to
EBITDA. Eir reported solid revenue growth of 3.6% in the
financial year (FY) ending June 2016, followed by underlying
revenue growth (before a cut to the mobile termination rate and
foreign exchange impacts) of about 2% year-on-year in the first
half of FY2017. Furthermore, eir's reported underlying EBITDA,
before exceptional charges, has improved.  S&P expects lower
exceptional charges going forward and some additional cost
efficiencies, and S&P thinks that eir's adjusted EBITDA margin
will improve toward 40% in FY2017 and FY2018.  Eir has also
improved its debt maturity profile and cost of debt through
completed refinancings in 2016. Together with the increase in
profitability, the group's FOCF generation has strengthened
substantially, in S&P's view.  The higher rating is also
supported by improved liquidity, partly due to the implementation
of a EUR150 million RCF and increased covenant headroom.

Eir continues to benefit from its leading position in the Irish
fixed-line telecommunications market and its dominant position in
the fixed-line broadband market.  Eir is the overall fixed-line
leader with a 48% share of total market revenues as of Sept. 30,
2016, according to regulator ComReg.  The company also leads in
retail fixed-line broadband subscriptions with a 33% market
share, and has a 69% share of total subscriptions in the retail
and wholesale fixed-line broadband market.  Eir's business risk
profile is also supported the company's ability to offer network-
based convergent bundles, including broadband, fixed-line
telephone, mobile, and TV, and more recently also original
content.  Eir is the only player in Ireland with fully on-net
bundled offers.  In S&P's opinion, eir's investments in its fiber
network support its position in the fixed broadband market, and
should assist further growth, offsetting the declining legacy
voice revenues.  In addition, S&P thinks eir's mobile network is
well invested, with 95% of the Irish population covered by a 4G
(fourth generation) mobile network.

The group's fixed-line growth has been driven by increased
broadband revenues thanks to fiber expansion, with 57% of the
broadband base now on fiber.  Eir's fiber network reaches 1.6
million Irish premises (68% of total), with the target of
reaching 1.9 million premises (81% of total) by the end of
calendar year 2018.  In addition, increased penetration of triple
play and quad play (broadband, fixed-line telephone, TV, and
mobile) offers has contributed to growth in revenue generating
units (now 2.15 per household), and S&P expects this trend to
continue.  These offers have been bolstered by eir's acquisition
of Setanta Sports (providing exclusive access to BT's sports
content) and introduction of the eir Sport brand, which has
approximately 200,000 customers.  While it's early days, this has
proved effective in reducing retail broadband churn rates.  Eir's
EBITDA growth has been supported by the decline in operating
costs due to pay and non-pay cost savings derived from eir's
simplification program.  S&P estimates further improvement in
underlying margins due to savings from staff reductions as well
as product rationalization, process simplification, and IT
transformation.

These strengths are partly offset by the highly competitive
telecommunications market in Ireland, with alternative platforms
and competition from bigger and better-capitalized players such
as Vodafone and Sky.  This leaves eir with limited pricing power
despite a strong market position in the fixed-line segment, and
overall constrains the potential penetration of bundles compared
with other European markets. High competition is also illustrated
by eir's only modest revenue growth in the retail business
relative to high capital expenditure (capex), and fairly high
retail fixed broadband churn.  Furthermore, eir is a No. 3 player
in the mobile market with an 18.5% revenue market share, and the
group's presence in the TV market is also very small.  In
addition, eir reports low profitability from mobile operations.
S&P also views eir's sole focus on the Irish market, which S&P
thinks is relatively small, as limiting growth and
diversification opportunities.

As a result of improving EBITDA, refinancings, and a voluntary
debt repayment of EUR52 million in October 2016, eir has
strengthened its cash flow and leverage ratios.  Nevertheless,
S&P estimates that eir's FOCF generation remains modest due to
continued high capex.  S&P expects a limited decline in capex
over the medium term as eir continues its fiber rollout and is
likely to participate in the national broadband plan.  Due to
S&P's expectation of only moderate debt-repayment capacity and
remaining exceptional charges, S&P forecasts that eir's S&P
Global Ratings-adjusted leverage will remain high in FY2017 and
FY2018.  S&P's key adjustments to eir's reported gross debt
relate to adding the present value of operating lease liabilities
and the IAS 19 accounting net pension liabilities (about EUR0.5
billion in total), and to deducting surplus cash, which S&P
assumes would be readily available for debt repayment.  S&P
thinks about
EUR10 million of eir's reported cash balances and short-term
investments do not qualify as surplus cash.

S&P's base case assumes:

   -- Flat or marginally declining revenues in FY2017 due to the
      cut in mobile termination rates, with about 1% growth on an
      underlying basis, followed by about 1% growth in FY2018 and
      FY2019.  S&P thinks that fixed-line growth continues to be
      supported by increased broadband revenues thanks to fiber
      expansion and bundled offerings, including eir Sport.  In
      mobile, S&P anticipates a continued increase in postpaid
      mobile subscribers--who receive a monthly bill, as opposed
      to paying up front, and generate higher average revenue per
      user (ARPU).  In S&P's view, this growth should more than
      offset its assumption of a general mobile ARPU decline,
      which results from intense competition and bundling.

   -- About EUR50 million exceptional costs in FY2017 and about
      EUR20 million in both FY2018 and FY2019, compared with more
      than EUR60 million in FY2016.  S&P includes these costs in
      its EBITDA calculation.

   -- Adjusted EBITDA margin up to about 37% in FY2017 from 35.3%
      in FY2016 due to decrease in operation expenses thanks to
      cost-efficiency projects.  S&P forecasts further
      improvement to about 39%-40% in FY2018 and FY2019 thanks to
      lower exceptional costs and some additional cost savings.

   -- Capex-to-sales ratio at about 22% in FY2017 and remaining
      above 20% in FY2018 and FY2019, as investments in fiber
      remain high over the medium term.

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

   -- Adjusted debt to EBITDA of about 5.6x-5.8x in FY2017,
      declining to about 5.0x in FY2018 and below 5.0x in FY2019,
      compared with 6.1x in FY2016.  FOCF of about EUR60 million-
      EUR70 million in FY2017, and further rising to above
      EUR85 million in FY2018 and FY2019, compared with
      EUR16 million in FY2016.  Adjusted EBITDA cash interest
      coverage of about 4.5x in FY2017 and 5x in FY2018 and
      FY2019, compared with 3.4x in FY2016.

The stable outlook on eir reflects S&P's view that the group's
margins and FOCF will continue to grow over the next 18 months,
supporting adjusted EBITDA margin of above 35% and deleveraging
to about 5x adjusted debt to EBITDA on a sustainable basis.

S&P sees limited likelihood of an upgrade over the next 12 months
due to narrow deleveraging prospects beyond its base case, and
the highly competitive fixed and mobile markets in Ireland.
However, S&P could raise the rating if eir's financial profile
were to substantially strengthen beyond its base case, including
adjusted leverage decreasing sustainably below 4.5x.
Alternatively, an upgrade could be supported by evidence of a
strengthened business risk profile, such as significant progress
in bundle penetration, meaningfully lower customer churn, and the
adjusted EBITDA margin improving to above 40%.  S&P currently do
not envisage these over the next 18 months.

Prospects of a downgrade are also limited due to eir's solid
liquidity and margins.  S&P could lower the rating if margins and
FOCF were to decline, for example, as a result of increasingly
aggressive behavior by the group's principal competitors or
higher restructuring costs, which would constrain medium-term
deleveraging.


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


SIENA MORTGAGE 07-5: Fitch Lowers Rating on Class C Notes to B-sf
-----------------------------------------------------------------
Fitch Ratings has taken rating actions on the Siena Mortgage
series, as follows:

Siena Mortgages 07-5 S.p.A. (SM07-5)
Class A (ISIN IT0004304223): affirmed at 'AA+sf'; Outlook
Negative
Class B (ISIN IT0004304231): affirmed at 'Asf'; Outlook Stable
Class C (ISIN IT0004304249): downgraded to 'B-sf' from 'BBB-sf';
placed on Rating Watch Evolving (RWE)

Siena Mortgages 07-5 S.p.A. Series 2 (SM07-5 S2)
Class A (ISIN IT0004353808): downgraded to 'AA-sf' from 'AA+sf';
Outlook Stable
Class B (ISIN IT0004353816): downgraded to 'BBBsf' from 'Asf';
Outlook Stable
Class C (ISIN IT0004353824): downgraded to 'B-sf' from 'BBB-sf';
placed on RWE

Siena Mortgages 09-6 S.r.l. (SM09-6)
Class A (ISIN IT0004488794): 'AA+sf'; placed on RWE
Class B (ISIN IT0004488810): 'Asf'; placed on RWE
Class C (ISIN IT0004488828): 'BBB-sf'; placed on RWE

Siena Mortgages 10-7 S.r.l. (SM10-7)
Class A3 (ISIN IT0004658289): affirmed at 'AA+sf'; Outlook
Negative

The four prime Italian RMBS transactions were originated and are
serviced by Banca Monte dei Paschi di Siena (BMPS; B-/RWE/B).

KEY RATING DRIVERS
Buyback of Defaulted Assets
In 4Q16 BMPS repurchased nearly all the outstanding defaults from
the portfolios of SM07-5, SM07-5 S2 and SM09-6. In SM07-5 and
SM07-5 S2 the proceeds from the repurchase did not result in
repayment for the rated notes but flowed through to the
uncollateralised class D notes, in the form of interest payments,
as per transaction documentation. This is because the cash
reserves were fully funded at the time of repurchase and no
unprovisioned defaults were outstanding.

In SM09-6 the effect of the buyback and subsequent available fund
allocation will only be known at the February 2017 payment date.
Fitch estimates that only a small portion of the funds will be
needed to replenish the cash reserve, which is currently below
target, and that the remaining funds will be paid to the
uncollateralised class D notes. As the full effects of this
repurchase are yet to be determined, the agency has placed SM09-
6's notes on RWE.

In its analysis of RMBS structures, Fitch models recovery income
from outstanding defaults to occur gradually over time. In
investment grade rating scenarios, reserve funds are generally
depleted and/or outstanding principal deficiency ledgers are
recorded, therefore Fitch's models assume that recovery proceeds
are usually retained in the structure and used for provisioning
or reserve fund replenishment.

In reality the recent repurchase of the defaulted assets by BMPS
occurred as a lump sum and the excess spread has flown out of the
structure. As a result, notwithstanding the stable asset
performance, the allocation of available funds following the
buyback of defaulted assets has had a detrimental effect on the
transactions. This is reflected in the downgrade of the junior
notes in SM07-5 and of all SM07-5 S2's notes.

Reliance on Swap Payments
As per Fitch's counterparty criteria for structured finance
transactions, BMPS is no longer eligible to perform the role of
swap counterparty in SM07-5, SM07-5 S2 and SM09-6. Therefore, the
originator has capped the notes' coupons in order to mitigate the
interest rate exposure between assets and liabilities.

The repurchase of defaulted assets has meant that the class C
notes are now heavily reliant on the swap payments to cover
shortfalls because recovery proceeds are no longer available.
Fitch has therefore linked the rating and Outlook of the class C
notes in SM07-5 and SM07-5 S2 to the rating of BMPS.

Uncertainty in SM09-6
The effect of the default buyback will only materialise on the
February 2017 payment date. Fitch estimates that the majority of
the repurchase proceeds will be used to pay class D interest. In
addition, the drop in the pipeline of outstanding defaults may
also trigger amortisation of the cash reserve. This decline in
credit support available to the notes should be offset by
portfolio amortisation. Given the uncertainty over the combined
effect of these two factors, Fitch has placed the notes on RWE.

Misalignment with Documentation Triggers
Fitch notes that in all the transactions the documentation
defines the interest deferral triggers as the ratio between gross
cumulative defaults and initial pool balance. To date, the
triggers have always been reported as a ratio between outstanding
defaults and initial pool balance. While none of the deferral
triggers have been breached to date, Fitch notes that the
calculation is not aligned with the documentation. Fitch
understands that BMPS will amend its future reports with correct
trigger calculations.

Asset Performance Remains Stable
The downgrades are mainly driven by the allocation of available
funds following the buyback of defaulted assets. In fact, the
asset performance remains stable, as the proportion of late stage
arrears (loans with three or more instalments overdue) ranges
between 0.8% of the current pool in SM10-7 and 1.5% in SM09-6. At
the same time, Fitch estimates the volume of gross cumulative
defaults between 1.6% (SM07-5) and 4.8% (SM09-6) of the initial
pool.

Given the high portfolio seasoning (between 90 months in SM10-7
and 140 months SM07-5), Fitch believes that the asset performance
will remain stable.

Payment Interruption and Commingling Risk
The available liquidity, combined with the appointed back-up
servicer (Securitisation Services S.r.l.), are sufficient to
mitigate payment interruption risk on the senior notes.

As the reserve funds have previously been utilised for
provisioning purposes, Fitch did not consider such funds to be
available to meet interest obligations on the mezzanine notes.
This analysis has limited the upgrade potential for the mezzanine
notes of SM07-5.

Commingling risk is adequately mitigated due to the available
commingling reserves.

Recovery Rate Cap
Despite low current loan-to-value ratios (between 42.3% in SM07-5
and 51.2% SM10-7), given the lengthy recovery timing that is
typical for the Italian market, Fitch has capped the maximum
recovery rates at 100% of the outstanding defaulted balance.

Maturity Extensions
Exposure to loans with extended maturities is between 1.2% (SM07-
5 S2) and 2.4% (SM09-6) of the current pool. In line with its
criteria, Fitch has treated such loans as late stage arrears, in
order to account for the potentially weaker credit profile of
such borrowers.

Underwriting Hit
At the initial analysis of SM10-7, Fitch applied an underwriting
hit of 5% due to risks over asset performance. Given the
extensive payment history of borrowers in the pools that Fitch
now has, the performance of the underlying portfolios is
reflected in the performance adjustment factor used in the
analysis. For this reason Fitch has not applied any lender
adjustment in the analysis.

Missing Portfolio Information
The proportions of second homes and foreign borrowers were not
included in the loan level data. Fitch derived the missing data
from the analysis undertaken at transactions' closing. Fitch
modelled between 7.7% (SM10-7) and 15.5% (SM07-5) of the current
pool as second homes and between 3.2% (SM10-7) and 5.2% (SM07-5
S2) as foreign borrowers.

Regional Concentration
SM07-5 and SM07-5 S2 show regional concentration in Tuscany,
while SM10-7 is concentrated in Lazio and Tuscany. Fitch applied
foreclosure frequency adjustments in line with its criteria (30%
increase) to the proportions of the pools in excess of the
region's population percentage.

Treatment of Modular Loans
In a rising interest rate scenario, the agency modelled floating
rate loans (between 16% of the current pool in SM07-5 and 84.4%
in SM07-5 Series 2) at their cap rate. At the same time, modular
loans (between 3.6% in SM09-6 and 84.4% in SM07-5) have been
assumed to switch to a fixed rate at the next available
contractual switch date.

Fitch notes that in a rising Euribor scenario the structures
generate large excess spread because the cost of the capped notes
is significantly lower than the interest revenues generated by
the underlying mortgages. As a result, the agency tested specific
scenarios where it applied a cap also to the assets in order to
reduce the benefit associated to the cap protection. The
adjustment had a limited impact on the ratings.

RATING SENSITIVITIES
A large drop in defaulted assets in SM09-6 portfolio combined
with reserve fund amortisation and insufficient credit
enhancement build-up may lead to multi-notch downgrades.

Replenishment of the cash reserve and portfolio amortisation that
result in strong credit enhancement build-up may offset the
detrimental effect caused by the buyback of outstanding defaults.

Fitch expects remedial action to be promptly taken by the issuer
account bank of SM09-6 and SM10-7 (Deutsche Bank; A-/Rating Watch
Negative/F1) should it become ineligible. Failure to undertake
committed remedial actions may lead to a multi-notch downgrade.

Changes to BMPS's Long-Term Issuer Default Rating (IDR) will
trigger rating changes on the junior notes.

Changes to Italy's Long-Term IDR (BBB+/Negative) and the rating
cap for Italian structured finance transactions, currently
'AA+sf', could trigger rating changes on the notes rated 'AA+sf'.

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
pools and the transactions. There were no findings that were
material to this 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 transactions'
initial closing. The subsequent performance of the transactions
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.

SOURCES OF INFORMATION
The information below was used in the analysis.
   - Loan level data dated 26 November 2016 (SM07-5), 25 November
2016 (SM07-5 S2), 20 October 2016 (SM09-6), 24 October 2016
(SM10-7) provided by EDW.
   - Servicer reports dated 07 December 2016 (SM07-5), 14
December 2016 (SM07-5 S2), 03 November 2016 (SM09-6), 10 November
2016 (SM10-7) and provided by the servicer.
   - Investor reports dated 20 December 2016 (SM07-5), 28
December 2016 (SM07-5 S2), 15 November 2016 (SM09-6) and 22
November 2016 (SM10-7) and provided by the calculation agent.


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


EURASIAN RESOURCES: Moody's Affirms Caa1 Corporate Family Rating
----------------------------------------------------------------
Moody's Investors Service has affirmed the Caa1 corporate family
rating (CFR), caa2 baseline credit assessment (BCA) and Caa1-PD
probability of default rating (PDR) of Luxembourg-based
integrated mining group Eurasian Resources Group S.a r.l. (ERG).
At the same time, Moody's has maintained the negative outlook on
all of ERG's ratings.

The rating agency also added the limited default (/LD) indicator
to ERG's PDR following the restructuring of its bank facilities
by its main lenders, which Moody's views as a form of distressed
exchange and is a default according to the rating agency's
definitions. The LD indicator will be removed after approximately
three days.

RATINGS RATIONALE

The Caa1 CFR rating for Eurasian Resources Group Sarl is based on
Moody's' mining methodology which assesses the standalone credit
quality of the company, and Moody's rating methodology for
government-related issuers (GRIs), as the Government of
Kazakhstan owns a 40% stake in ERG through the State and
Privatisation Committee. According to these methodologies, the
CFR reflects a combination of (1) ERG baseline credit assessment
(BCA) of caa2; (2) the Baa3 sovereign rating of the Kazakh
government; (3) the high default dependence between the company
and the government; and (4) Moody's assessment of moderate
government support to ERG in the event of financial distress. The
Caa1 CFR continues to incorporate one notch of uplift from the
caa2 BCA.

The affirmation of ERG's caa2 BCA primarily reflects Moody's
assessment of the company's liquidity as weak, in spite of the
expected benefits from the recently finalized debt restructuring
with Sberbank (Ba2 negative) and Bank VTB JSC (Ba2 negative), the
company's main lenders. The amended terms under both loans will
allow to save cash interests for c. $200m in 2017 and a similar
amount in 2018, via a reduction of the margin by 1% p.a. and the
deferral of c.300bps of cash margin for 24 months starting from
October 2016. Furthermore, both banks agreed to amend the level
of financial maintenance covenants to allow higher headroom for
the next testing dates, albeit such headroom might be reduced if
the company's performance does not improve, as covenants become
tighter over time. A further benefit is the extension of the debt
maturity of the US$3bn VTB facility to 2022 from 2020 originally,
with a further 3 years extension option. Moody's believes that
the debt restructuring, albeit credit positive, provides only a
temporary relief and mainly defers refinancing risk. From Q4 2018
onwards the PIK component of the annual interests will no longer
be in place and higher cash interests at 7% p.a. will be
reinstated, while the interests deferred in 2017 and 2018 will
need to be repaid. Furthermore, from 2019 onwards the annual debt
amortization will rise, from relatively modest debt repayments in
2017 and 2018.

The appending of the "/LD" indicator to the PDR results from the
completion in December 2016 of the restructuring of the bank
facilities borrowed from Sberbank and Bank VTB. Moody's views the
terms agreed with the lenders as a distressed exchange,
reflecting the adjusted interest rates, including PIK elements,
and extended maturity, which is a form of default under Moody's
definition. Moody's will remove the "/LD" designation from the
PDR after three days. Moody's understands that the debt
restructuring completed by ERG does not constitute an event of
default under any of the company's debt agreements.

In spite of the lower cash interests to be paid in 2017 and 2018
on the Sberbank and VTB facilities, Moody's expects that the
current and projected available liquidity will not be sufficient
to address ERG's cash requirements projected over the next 12
months, particularly if prices for ferroalloys, copper, aluminum
and iron ore, the main commodities for ERG, deteriorate from
current levels and become more aligned to the baseline prices
Moody's assumes for 2017.

A major weakness of ERG's liquidity is the very limited
availability (c. US$ 5m as of December 2016) under the committed
bank facilities, which makes the company entirely reliant upon
unrestricted cash balance of US$ 317m at the end of 2016 and
projected free cash flows. Free cash flows should turn to
slightly positive in 2017 at c. US$25m under Moody's baseline
commodity prices assumptions and provided ERG's capex and working
capital needs do not exceed US$1.1bn in aggregate and dividends,
if reinstated, are not higher than US$140m. However, available
cash and projected free cash flows will be tight to address
scheduled debt repayments, net of rolled-over facilities, for c.
US$225m in 2017, as well as funding for c. US$50m the buy-out of
minority stakes in the company owning a copper-cobalt project
('project RTR') in the Democratic Republic of Congo ('DRC', B3
stable).

Given the modest liquidity headroom, a cash shortfall may stem
from a reduction in commodity prices below Moody's baseline
levels, much higher than expected capex and working capital
requirements, or larger than anticipated dividend payments. Any
possible material capex overrun to develop ERG's US$770m project
RTR in the DRC could also exert negative pressure on liquidity,
if this translates into more equity funding from ERG becoming
required, on top of USD$128m already committed and of over
US$600m of project financing already signed-up by a consortium of
primary Chinese lenders. Moody's notes that the company's
decision to launch a major project in DRC and its consideration
to reinstate dividends subject to excess liquidity being
available signal a financial policy more aggressive than
previously considered.

ERG's Caa1 BCA rating continues to reflect, as partially risk
mitigating considerations, the strengths associated to its
business profile, namely (1) good access to high-grade and long-
reserve-life mining assets in Kazakhstan; (2) a competitive cost
structure as a result of high-quality mines and efficient
processing plants, especially in the profitable ferroalloys core
business; (3) good operational and commodity diversity, with
several operating mines and processing facilities in Kazakhstan
and, for copper, in the Democratic Republic of Congo (DRC, B3
stable), and (4) important market shares in EMEA for ferrochrome,
iron ore and aluminium.

Furthermore, Moody's acknowledges that main credit metrics are
likely to improve over the next 12 to 18 months from current
relatively weak levels. The rating agency estimates that the
adjusted gross debt/EBITDA ratio of ERG will gradually reduce
during 2017 towards 4x from c. 5x at the end of 2016, driven by
higher EBITDA, while adjusted gross debt should remain high at c.
US$7.2bn at the end of 2017. The projected improvement in
adjusted EBITDA, from c. US$1.5bn in 2016 to c. US$1.8bn in 2017,
is underpinned by a better pricing environment this year compared
to 2016 for ERG's key commodities, and by the Kazakh tenge (KZT)
remaining weak vs the US$ at a level of c 330 KZT/US$. Given most
of ERG's costs are denominated in KZT while revenues are mainly
in US$, ERG's performance in 2016 was significantly supported by
the weaker KZT, and a similar benefit is assumed for this year.

Moody's also considers that the probability of financial support
that the Kazakh government would provide to ERG, in case of need,
is appropriately captured by an assessment of 'moderate'
according to Moody's GRI methodology, given the strategic
relevance of the company to the local economy, and considering
the involvement of the government in the direction and management
of the company, with two out of five Board members directly
appointed by the government. Even if the government has never
formally or publicly committed to any sort of explicit or verbal
guarantee or financial support for ERG, Moody's understands that,
if the company were to be forced to ask for financial support
from its shareholders, the process to obtain it in a timely
manner is already clearly described in the shareholder agreement
of ERG Sarl, which has been signed by all shareholders, i.e., the
three founding shareholders, Mr. Machkevitch, Mr. Ibragimov and
Mr. Chodiev, owning in aggregate a 60% stake, and the Kazakh
government as the single largest shareholder with a 40% stake.
This is an important factual element for Moody's assumption of
moderate government support, and for the justification of keeping
one notch uplift to the BCA.

RATIONALE FOR NEGATIVE OUTLOOK

The negative outlook reflects Moody's expectation that ERG's
liquidity will remain weak and exposed to downside risks. The
outlook also factors in the possibility of a negative outcome of
the ongoing UK Serious Fraud Office investigation, which may
result in fines and penalties and make it even more difficult for
the company to access the international credit markets in the
future.

What could change the rating up

Positive pressure could build over time if ERG were able to
improve its liquidity position with an overall assessment of
adequate, and show some sustainable improvements in key credit
metrics, namely the gross debt/EBITDA ratio, on a Moody's
adjusted basis, falling below 5x on a sustained basis, the
interest cover ratio (EBIT/Interest) increasing above 1.5x, and
free cash flow turning positive. Further positive rating pressure
could be considered if Moody's had reason to reassess the
assumptions relating to the degree of support from and dependence
on the Kazakh government, based on new elements indicating a
stronger support than what the rating agency is currently
factoring into the rating. Such assumptions are relevant, given
that ERG's CFR reflects the application of Moody's rating
methodology for government-related issuers.

What could change the rating down

Moody's would consider downgrading ERG's ratings in case of
further weakening of the BCA. This could occur in a scenario
where the company's liquidity deteriorates, if Moody's believes
the company is unlikely to continue to get support from its
lenders. Furthermore, a material deterioration in the key credit
metrics could also exert negative rating pressure. Such a
deterioration would be reflected into a gross debt/EBITDA ratio
exceeding 6x on a Moody's adjusted basis, and an interest cover
ratio falling below 0.5x. A negative outcome of the pending SFO
investigation, resulting in material fines and penalties and high
reputational damage, would also exert negative pressure on the
rating. Furthermore, a reassessment of the degree of support from
the Kazakh government, to a weaker level than currently
contemplated, would also lead to negative rating pressure.

The principal methodology used in these ratings was Global Mining
Industry published in August 2014. Other methodologies used
include the Government-Related Issuers methodology published in
October 2014.

Eurasian Resources Group Sarl (ERG) is the holding company and
owner of ENRC Ltd (formerly ENRC Plc), a vertically integrated
mining group with main operating assets in Kazakhstan, and a
number of early-stage development assets in Brazil and Africa.
The group is primarily focused on the mining and processing of
ferroalloys, iron ore, aluminium, copper and cobalt. ERG is also
the world's-largest ferrochrome producer (by chrome content) and
one of the leading global exporters of iron ore. In 2015, ERG
reported revenues of $4.3 billion. ERG is 40% owned by the Kazakh
government (Baa3 negative) and accordingly falls within the scope
of Moody's rating methodology for Government Related Issuers
(GRI).


MILLICOM INT'L: Egan-Jones Cuts Sr. Unsec. Ratings on Debt to B+
-------------------------------------------------------------
Egan-Jones Ratings, on Jan. 17, 2017, downgraded the senior
unsecured ratings on debt issued by Millicom International
Cellular SA to B+ from BB-.

Millicom International Celular S.A. (MIT) is a Luxembourg-based
global telecommunications and media group providing mobile,
voice, data, cable television, broadband and financial services.
Millicom offers its mobile communications services in Bolivia,
Colombia, Paraguay, El Salvador, Guatemala and Honduras under the
brand name Tigo.


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


CANDIDE FINANCING 2011-1: Moody's Lifts B Notes Rating from Ba1
---------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of 6 notes in
3 Dutch RMBS deals. At the same time, 6 notes have been affirmed.
The upgrade reflects better than expected collateral performance.
Moody's affirmed the ratings of the notes that had sufficient
credit enhancement to maintain current rating on the affected
notes.

RATINGS RATIONALE

The upgrade is prompted by decreased key collateral assumptions,
namely the portfolio Expected Loss (EL) and Milan assumptions due
to better than expected collateral performance.

As part of the rating action, Moody's reassessed its lifetime
loss expectation for the portfolio reflecting the collateral
performance to date.

The performance of the transactions has continued to improve
since last year. Total delinquencies have decreased in the past
year, with 90 days plus arrears currently standing at 0.14% of
current pool balance for CANDIDE FINANCING 2011-1 B.V., 0.34% for
Lowland Mortgage Backed Securities 2 B.V., and 0.44% for Lowland
Mortgage Backed Securities 3 B.V. Cumulative losses currently
stand at 0.21% of original pool balance for CANDIDE FINANCING
2011-1 B.V., 0.10% for Lowland Mortgage Backed Securities 2 B.V.,
and 0.14% for Lowland Mortgage Backed Securities 3 B.V.

Moody's decreased the expected loss assumption to 0.75% as a
percentage of original pool balance for CANDIDE FINANCING 2011-1
B.V., to 0.75% for Lowland Mortgage Backed Securities 2 B.V., and
to 1.25% for Lowland Mortgage Backed Securities 3 B.V.

Moody's has also assessed loan-by-loan information as a part of
its detailed transaction review to determine the credit support
consistent with target rating levels and the volatility of future
losses. As a result, Moody's has decreased the portfolio credit
Milan assumption to 8.00% for CANDIDE FINANCING 2011-1 B.V.,
6.50% for Lowland Mortgage Backed Securities 2 B.V., and 7.90%
for Lowland Mortgage Backed Securities 3 B.V.

The principal methodology used in these ratings was "Moody's
Approach to Rating RMBS Using the MILAN Framework" published in
September 2016.

The analysis undertaken by Moody's at the initial assignment of
these ratings for RMBS securities may focus on aspects that
become less relevant or typically remain unchanged during the
surveillance stage.

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

Factors or circumstances that could lead to an upgrade of the
ratings include (1) performance of the underlying collateral that
is better than Moody's expected, (2) deleveraging of the capital
structure and (3) improvements in the credit quality of the
transaction counterparties.

Factors or circumstances that could lead to a downgrade of the
ratings include (1) an increase in sovereign risk 2) performance
of the underlying collateral that is worse than Moody's expected,
(3) deterioration in the notes' available credit enhancement and
(4) deterioration in the credit quality of the transaction
counterparties.

LIST OF AFFECTED RATINGS

Issuer: CANDIDE FINANCING 2011-1 B.V

-- EUR1050M Class A Notes, Affirmed Aaa (sf); previously on
July 14, 2011 Assigned Aaa (sf)

-- EUR150M Class B Notes, Upgraded to Baa3 (sf); previously on
July 14, 2011 Assigned Ba1 (sf)

Issuer: Lowland Mortgage Backed Securities 2 B.V.

-- EUR379M Class A1 Notes, Affirmed Aaa (sf); previously on
May 13, 2016 Affirmed Aaa (sf)

-- EUR1326.9M Class A2 Notes, Affirmed Aaa (sf); previously on
May 13, 2016 Affirmed Aaa (sf)

-- EUR65.2M Class B Notes, Upgraded to Aaa (sf); previously on
May 13, 2016 Upgraded to Aa1 (sf)

-- EUR63.5M Class C Notes, Upgraded to Aa1 (sf); previously on
May 13, 2016 Upgraded to Aa2 (sf)

-- EUR54.9M Class D Notes, Upgraded to A3 (sf); previously on
May 13, 2016 Upgraded to Baa2 (sf)

Issuer: Lowland Mortgage Backed Securities 3 B.V.

-- EUR338.9M Class A1 Notes, Affirmed Aaa (sf); previously on
May 13, 2016 Affirmed Aaa (sf)

-- EUR1913.5M Class A2 Notes, Affirmed Aaa (sf); previously on
May 13, 2016 Affirmed Aaa (sf)

-- EUR174.2M Class B Notes, Upgraded to Aaa (sf); previously on
May 13, 2016 Upgraded to Aa1 (sf)

-- EUR90M Class C Notes, Affirmed Aa3 (sf); previously on May
13, 2016 Upgraded to Aa3 (sf)

-- EUR27.5M Class D Notes, Upgraded to A3 (sf); previously on
May 13, 2016 Upgraded to Baa2 (sf)


OI BRASIL: Int'l Bondholder Committee Appeals Dutch Rulings
-----------------------------------------------------------
The Steering Committee of the International Bondholder Committee
on Feb. 10 disclosed that it has appealed the decision by the
Amsterdam District Court to deny the conversion of the suspension
of payments of Oi Brasil Holdings Cooperatief U.A. ("Coop") into
bankruptcy.  The Steering Committee understands that the
indenture trustee for the bonds of Portugal Telecom International
Finance B.V. ("PTIF") (together with Coop: the "Dutch Companies")
has appealed a similar decision by the Court with respect to
PTIF.  The Dutch Companies have outstanding bonds in the
aggregate face amount of approximately $6.2 billion, which have
been guaranteed by Oi S.A.  Coop is the largest creditor of Oi
S.A. and its subsidiary Oi Movel S.A.

The Dutch Companies remain subject to oversight by court-
appointed administrators and supervisory judges.  Those
administrators, the Steering Committee, PTIF indenture trustee,
and various other creditors had asked the Court to convert those
proceedings to bankruptcies and to appoint independent
fiduciaries to supplant the conflicted directors appointed by Oi
S.A.

The Amsterdam District Court denied the conversion requests as
premature on account of the Oi group having filed only a "draft"
restructuring plan in the Brazilian insolvency proceedings.  The
Court accepted Coop's assurances that its claims against Oi S.A.
and Oi Movel S.A. will not be harmed; and directed the Dutch
Companies to provide the administrators with the separate-company
and other information they require to ensure a fair outcome.  The
Court also ruled that the conduct of a company prior to the start
of its suspension of payments -- no matter how illegal and
prejudicial -- can never provide a basis to convert those
proceedings to bankruptcy.  The appellate court is expected to
rule this spring.

Allan Brilliant, a Partner at Dechert LLP, US counsel to the
International Bondholder Committee, said: "We respectfully
believe the District Court erred by, among other things, ignoring
the gross misconduct that we allege occurred since mid-2015 and
trusting Coop's assurances that claims against its affiliates
will be respected.  We believe that the appeal we have filed is
based on strong legal grounds and that the conversion into
bankruptcy will prevent further actions that are detrimental to
the interests of the Dutch Companies."

Mr. Brilliant further stated that: "The Steering Committee
remains committed to working with management, the Dutch
administrators, Anatel, and all stakeholders to negotiate a
prompt consensual restructuring of the Dutch Companies and the
rest of the Oi group in a manner consistent with the laws of
Brazil, the Netherlands, and the United States."

That goal will require all parties to make compromises, but the
Steering Committee will be guided by the following principles:

   -- The Oi group should be dramatically de-leveraged to enable
it to make any necessary investments and position itself for
sustainable, profitable growth over the long-term.

   -- Distributions should fairly take into account the
creditors' respective rights and the separateness of entities,
including intercompany claims.

   -- The restructuring should treat similarly situated creditors
equally.

  -- If there is a proven need to raise new capital, all
creditors should be afforded the opportunity to provide it on a
fair and equitable basis.

The International Bondholder Committee holds more than $2 billion
of bonds issued by the Dutch Companies and other members of the
Oi group.  Bondholders interested in joining the Committee should
contact Allan Brilliant at allan.brilliant@dechert.com or Corrado
Varoli at cvaroli@g5evercore.com.  The Committee does not assume
any fiduciary or other duties.


                           About Oi SA

Headquartered in Rio de Janeiro, and operating almost exclusively
within Brazil, the Oi Group provides services like fixed-line
data transmission and network usage for phones, internet, and
cable, Wi-Fi hot-spots in public areas, and mobile phone and data
services, and employs approximately 142,000 direct and indirect
employees.

Ojas N. Shah filed a Chapter 15 petition for Oi S.A. (Bankr.
S.D.N.Y. Case No. 16-11791), Oi Movel S.A. (Bankr. S.D.N.Y. Case
No. 16-11792), Telemar Norte Leste S.A. (Bankr. S.D.N.Y. Case No.
16-11793), and Oi Brasil Holdings Cooperatief U.A. (Bankr.
S.D.N.Y. Case No. 16-11794) on June 21, 2016.  The case is
assigned to Judge Sean H. Lane.

The Chapter 15 Petitioner is represented by John K. Cunningham,
Esq., and Mark P. Franke, Esq., at White & Case LLP, in New York;
and Jason N. Zakia, Esq., Richard S. Kebrdle, Esq., and Laura L.
Femino, Esq., at White & Case LLP, in Miami, Florida.


ST PAUL CLO I: Moody's Affirms B1 Rating on Class E Sr. Notes
-------------------------------------------------------------
Moody's Investors Service has taken rating actions on the
following notes issued by St Paul's CLO I B.V.:

-- EUR211.05M (current outstanding balance of EUR78.95M) Class A
Senior Secured Floating Rate Notes due 2023, Affirmed Aaa (sf);
previously on Oct 3, 2014 Upgraded to Aaa (sf)

-- EUR18.8M Class B Senior Secured Deferrable Rate Notes due
2023, Upgraded to Aaa (sf); previously on Oct 3, 2014 Upgraded to
Aa2 (sf)

-- EUR17.28M Class C Senior Secured Deferrable Rate Notes due
2023, Upgraded to Aa3 (sf); previously on Oct 3, 2014 Upgraded to
A3 (sf)

-- EUR18.05M Class D Senior Secured Deferrable Rate Notes due
2023, Upgraded to Ba1 (sf); previously on Oct 3, 2014 Affirmed
Ba2 (sf)

-- EUR6.35M Class E Senior Secured Deferrable Rate Notes due
2023, Affirmed B1 (sf); previously on Oct 3, 2014 Affirmed B1
(sf)

St Paul's CLO I B.V., issued in May 2007, is a collateralised
loan obligation (CLO) backed by a portfolio of mostly high-yield
senior secured European loans. The portfolio is managed by
Intermediate Capital Managers Limited. The transaction's
reinvestment period ended on 15 July 2014.

RATINGS RATIONALE

The rating actions on the notes are primarily a result of the
significant deleveraging of the Class A notes following
amortisation of the underlying portfolio since the payment date
in January 2016.

Class A notes paid down in aggregate by EUR50.15 million (24% of
the original balance) on the July 2016 and January 2017 payment
dates. According to the January 2017 trustee report, the classes
A/B, C, D and E OC ratios are 135.56%, 120.77%, 108.42% and
104.65% respectively compared to levels just prior to the payment
date in January 2016 of 131.13%, 118.42%, 107.54% and 104.18%
respectively.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analysed the underlying collateral pool as having a
cash and performing par balance of EUR147.10 million, (defaulted
par of EUR1.29 million), a weighted average default probability
of 21.72% (consistent with a WARF of 2550 and a weighted average
life of 4.43 years), a weighted average recovery rate upon
default of 44.52% for a Aaa liability target rating, a diversity
score of 21 and a weighted average spread of 3.73%.

The default probability derives from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool. The estimated average recovery rate on
future defaults is based primarily on the seniority of the assets
in the collateral pool. In each case, historical and market
performance and a collateral manager's latitude to trade
collateral are also relevant factors. Moody's incorporates these
default and recovery characteristics of the collateral pool into
its cash flow model analysis, subjecting them to stresses as a
function of the target rating of each CLO liability it is
analyzing.

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was "Moody's
Global Approach to Rating Collateralized Loan Obligations"
published in October 2016.

Stress Scenarios:

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it assumed a lower weighted average recovery rate for
the portfolio. Moody's ran a model in which it reduced the
weighted average recovery rate by 5%; the model generated outputs
that were unchanged for Class A, C and D and within one notch for
Classes B and E.

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

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
note, in light of uncertainty about credit conditions in the
general economy. CLO notes' performance may also be impacted
either positively or negatively by 1) the manager's investment
strategy and behaviour and 2) divergence in the legal
interpretation of CDO documentation by different transactional
parties because of embedded ambiguities.

Additional uncertainty about performance is due to the following:

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

2) Recoveries on defaulted assets: Market value fluctuations in
trustee-reported defaulted assets and those Moody's assumes have
defaulted can result in volatility in the deal's over-
collateralisation levels. Further, the timing of recoveries and
the manager's decision whether to work out or sell defaulted
assets can also result in additional uncertainty. Moody's
analysed defaulted recoveries assuming the lower of the market
price or the recovery rate to account for potential volatility in
market prices. Recoveries higher than Moody's expectations would
have a positive impact on the notes' ratings.

3) Long-dated assets: The presence of assets that mature beyond
the CLO's legal maturity date exposes the deal to liquidation
risk on those assets. Moody's assumes that, at transaction
maturity, the liquidation value of such an asset will depend on
the nature of the asset as well as the extent to which the
asset's maturity lags that of the liabilities. Liquidation values
higher than Moody's expectations would have a positive impact on
the notes' ratings.

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


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


GARANTI BANK: Fitch Keeps b+ Viability Rating; Outlook Stable
-------------------------------------------------------------
Fitch Ratings has revised Romania-based Garanti Bank S.A.'s (GBR)
Outlook to Stable from Negative, and affirmed the Long and Short-
Term Issuer Default Ratings (IDRs) at 'BBB-'/'F3' and Support
Rating at '2'. GBR's Viability Rating of 'b+' is not affected by
this rating action.

Fitch has revised its assumptions regarding the source of support
for GBR's ratings following the rating action taken on its direct
parent, Turkiye Garanti Bankasi S.A.(Garanti; BBB-/Stable).

The rating action reflects Fitch's view that GBR's ultimate
parent Banco Bilbao Vizcaya Argentaria (BBVA; A-/Stable) would
support GBR if needed (therefore providing a rating 'floor' to
GBR's rating), but would not support GBR over and above the
support it would likely provide for Garanti (which therefore caps
GBR's rating). GBR is fully-owned by Garanti, and Garanti's
ratings in turn, are driven by support from its minority but
controlling shareholder, BBVA.

KEY RATING DRIVERS
IDRS, SUPPORT RATING
GBR's IDRs and Support Rating are driven by Fitch expectations
that there is a high probability that extraordinary support would
be forthcoming from BBVA given the ownership link, reputational
considerations and GBR's small size in relation to BBVA. However,
GBR's strategic importance to the overall BBVA franchise, and
Romania's role in the wider BBVA group is rather limited. As a
result, Fitch notch GBR's Long-Term IDR three times below BBVA's.

Fitch also believes that the propensity of BBVA to support is
unlikely to be greater for GBR than it is for Garanti, so GBR's
IDRs are effectively capped by Garanti's IDRs.

Fitch views GBR as a strategically important subsidiary of
Garanti and, absent the three-notch 'floor' to its Long-Term IDR
from BBVA, would otherwise have notched it down once from
Garanti's Long-Term IDR. This reflects Fitch views that BBVA is
unlikely to oppose support flowing through Garanti to GBR if
needed in a scenario where Garanti itself is relying on BBVA to
service its debt. But the probability of support from BBVA being
used to support GBR is marginally lower than the probability of
support being used by Garanti to service its own debt.

GBR shares Garanti's branding and IT systems, and the risk
management framework for both Garanti and GBR are currently being
aligned with BBVA's. In addition, key management and supervisory
board members are drawn from Garanti. Garanti has provided timely
support to GBR in the past.

RATING SENSITIVITIES
IDRS, SUPPORT RATING
GBR's IDRs are sensitive to changes in BBVA's ratings or to
Fitch's view of BBVA's commitment to Romania. A one-notch
downgrade of BBVA's Long-Term IDR would trigger a downgrade of
GBR's IDRs and Support Rating, even if it has no impact on the
Long-Term IDR of Garanti. This is because absent the current 3
notch 'floor' to its Long-Term IDR from BBVA, Fitch would
otherwise have notched GBR's Long-Term IDR down once from
Garanti's IDR.

An upgrade of BBVA's Long-Term IDR would have no impact on GBR's
ratings as they would be capped by Garanti's Long-Term IDR, which
in turn is capped by Turkey's Country Ceiling (BBB-).

A downgrade of Garanti's IDRs would trigger a downgrade of GBR's
IDRs and Support Rating. A one-notch upgrade of Garanti's Long-
Term IDR would likely have no impact on GBR's IDRs.


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


BANK ZENIT: Moody's Raises Long-Term Deposit Ratings to Ba3
-----------------------------------------------------------
Moody's Investors Service has upgraded Bank ZENIT PJSC's long-
term local- and foreign-currency deposit and local-currency
senior unsecured debt ratings to Ba3 from B1. The bank's Baseline
Credit Assessment (BCA) has been affirmed at b1, while its
adjusted BCA has been upgraded to ba3 from b1. The Counterparty
Risk Assessment (CRA) has been raised to Ba2(cr) from Ba3(cr).
The short-term deposit ratings were affirmed at Not-Prime, while
the short-term CRA was affirmed at NP(cr). The outlook on the
long-term deposit and senior unsecured ratings is negative.

RATINGS RATIONALE

  -- INCORPORATION OF AFFILIATE SUPPORT

The rating action reflects the incorporation of the moderate
likelihood of affiliate support from the bank's controlling
shareholder Tatneft PJSC (Tatneft, LT Corporate Family Rating:
Ba1, Negative), resulting in a one-notch uplift from the bank's
standalone BCA. The uplift is based on the increased ownership of
Tatneft to 50.4% as of end-2016 and the recent announcement of an
additional capital injection of RUB14 billion, which will further
increase Tatneft's ownership stake in the bank. The bank will now
be treated as a material subsidiary and consolidated in Tatneft's
group accounts.

Bank Zenit benefits from close business ties and financial
support from Tatneft. The bank provides payroll services to
Tatneft employees mainly through its subsidiary bank Devon-
Credit. Tatneft has a track record of provided financial support
to Zenit, including a capital injection of RUB6.7 billion in June
2016, and funding from Tatneft of RUB25 billion (8.9% of the
bank's liabilities) as of Q3 2016.

   -- BCA AFFIRMATION

The affirmation of the bank's BCA at b1 reflects an anticipated
capital injection of RUB14 billion, which will strengthen its
loss absorption buffer amid currently weak pre-provision income
and vulnerable asset quality, as well as expectations for lower
losses in the next 12 months.

Moody's expect the bank's problem loans to increase in 2017,
although at a slower pace than before. Moody's believes that the
peak of asset quality deterioration has been passed amid
currently stabilizing operating environment with anticipated
lower credit losses in the next 12 months. Annualized credit
costs accounted for 3.8% as of Q3 2016 compared to 4.2% in 2015.
Bank Zenit asset quality remains under pressure from high single-
name concentrations and exposure to long-term investment
projects, including real estate. The 20 largest credit exposures
accounted for 369% of Tier 1 capital (or 37% of the bank's gross
loans) as of Q3 2016, which is higher than Russian peers' average
of 243%. The bank's exposure to risky project finance accounted
for 37.5%, while construction comprised 18.4% as of Q3 2016,
rendering it vulnerable to cyclical worsening of market
conditions. Bank Zenit's nonperforming loans (NPLs overdue more
than 90 days) accounted for 7.2% as of Q3 2016 (5.8% as of end-
2015) and were fully covered by provisions with loan loss
reserves at 11.6% of gross loans at Q3 2016. Total problem loans
including restructured are likely to be higher. The bank's credit
risk is partially mitigated by good collateral (mainly real
estate) with secured loans comprising 82% of the gross loan book
as of Q3 2016, moderate foreign currency exposure, and the bank's
expertise in this niche corporate segment.

Bank Zenit's pre-provision income is currently insufficient for
covering its credit costs given still narrow net interest margin
(1.86% as of Q3 2016), despite a marginally improving trend since
the beginning 2016. As a result, the bank reported losses with
negative return on assets (ROA) of 2.8% as of end-2016 under
local GAAP. Moody's expects the bank to be loss-making in 2017 as
well, although to a lesser extent, with forecasted negative ROA
at around 1%. The planned Tier 1 capital injection of RUB14
billion, to be completed by 1 July 2017, will improve bank's loss
absorption capacity, enabling it to cover estimated potential
losses, as well as leaving room for planned loans growth.
Overall, Moody's forecasts increase in bank's capital buffer, in
particular its common equity tier 1 (CET1), by around 2%.

WHAT COULD MOVE THE RATINGS UP/DOWN

The negative outlook on the bank's long-term ratings reflects
pressure on its BCA, stemming from currently loss-making
performance with weak pre-provision income.

The outlook could be revised to stable if the bank turns to
profit on a net basis, while maintaining adequate capitalization
and stable asset quality indicators.

Ratings downgrade could occur in the case of significant losses
from material asset quality deterioration, which exceed Moody's
current expectations and would lead to capital erosion.

PRINCIPAL METHODOLOGY

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


HYDROMASHSERVICE JSC: Fitch Rates RUB3-Bil. Bonds 'B+(EXP)'
-----------------------------------------------------------
Fitch Ratings has assigned JSC Hydromashservice's, a wholly-owned
subsidiary of JSC HMS Group (B+/Stable), prospective RUB3bn
guaranteed bonds due to mature in 2020, an expected local
currency senior unsecured rating of 'B+(EXP)'/'RR4'. The ratings
on the bond reflect the role of Hydromashservice as a principal
subsidiary of JSC HMS, and the cross guarantees for debt in the
group.

The Recovery Rating is limited to 'RR4' as the company's
principal operations are in Russia. The assignment of the final
rating is contingent on the receipt of final documents conforming
to information already received.

The ratings reflect HMS's weak business profile, with high
geographic concentration and high exposure to investment levels
in the Russian oil and gas (O&G) sectors. The ratings are further
limited by Fitch's expectation of negative free cash flow (FCF)
for the foreseeable future, due to higher capex and continued
dividend outflow.

KEY RATING DRIVERS

High Concentration in Russia: HMS is a market leader in Russia
(BBB-/Stable) in two of its three main business segments - pumps
(42% market share), and O&G equipment (30%). The company supplies
equipment to all major Russian O&G companies including Rosneft,
Gazprom (BBB-/Stable), Gazprom Neft (BBB-/Stable), Transneft and
Lukoil (BBB-/Stable). HMS also has over 5,000 small and medium-
sized clients that together generate about 75% of its revenues
from standard pumps and compressors, which is the company's
sustainable recurring business. The remaining 25% is generated by
large tailor-made integrated products.

Oil Production Resilience Expected: Fitch's base case assumes
that Russia's high production will be maintained despite price
fluctuations and that Russia will remain a key global exporter of
crude and oil products. Continued high production volumes
underpin Fitch's expectations for continued pump and compressor
sales to replace existing, fully depreciated units. Russia's oil
production is at a record high despite western sectoral and
financial sanctions. It averaged 11.2 million barrels of oil
equivalent per day in October 2016, a post-Soviet record, mainly
supported by ramping up greenfield output.

Share of Aftermarket Services Low: HMS's aftermarket maintenance
services, which typically provide a stable income source in a
cyclical downturn, contribute a low proportion of revenues. This
is because customers usually have their own maintenance service
divisions and aftermarket revenues mainly come from selling spare
parts.

Compressor Business More Volatile: Fitch does not expect the
higher volatility of compressor sales to have a major effect on
the ratings, due to the modest contribution of this segment to
the company's revenues. The company expects the share of large
products in the compressor segment to drive growth. Fitch expects
the volatility of this business to remain high due to a large
exposure to large contracts.

No FX Exposure: HMS is not exposed to exchange rate risk, as
virtually all its debt, revenues and costs are denominated in
Russian rouble. However, the company's operations are
geographically concentrated, with the majority of its products
sold in Russia.

DERIVATION SUMMARY

HMS's 'B+' IDR reflects the company's concentrated geographic and
industry exposure and Fitch expectations that the company will
remain FCF-negative for the foreseeable future. This is offset,
in Fitch's view, by its leading market position in a niche sector
with high barriers to entry, a strong customer base largely
consisting of major Russian O&G companies, a recurring business
and healthy profitability and leverage metrics. Fitch views the
company's liquidity position as adequate.

KEY ASSUMPTIONS

Fitch's key assumptions within Fitch rating case for the issuer
include:
- Moderate revenue growth not exceeding 5% for all segments over
2017-2020;
- EBITDA margin below historical levels, capped at 14%;
- Capex in line with the company's guidance (about 5% of
revenues);
- Dividend pay-out ratio at 60% of prior-year net income.

RATING SENSITIVITIES

Future developments that may, individually or collectively, lead
to positive rating action:
- Sustained positive FCF generation;
- FFO-adjusted net leverage sustained below 2.5x (2016E: 3.1x);
- FFO fixed-charge coverage sustained above 3.5x (2016E: 2.4x).

Future developments that may, individually or collectively, lead
to negative rating action:
- Continuous failure to secure large integrated projects from
major Russian O&G companies;
- FFO-adjusted net leverage sustained above 3.5x;
- FFO fixed-charge coverage sustained below 2.0x.

LIQUIDITY

Adequate Liquidity: As of 1 October 2016, HMS had reported cash
and short-term deposits of RUB3 billion on its balance sheet
against short-term debt of RUB3.2 billion. Almost all the cash is
held in Russian rouble, with only 4% in Ukrainian hryvnia and
Belarusian roubles for use by local subsidiaries. Over 99% of the
debt is held in Russian rouble. HMS also had RUB10 billion in
available undrawn credit lines from major Russian banks.

As of Oct. 1, 2016, RUB10.3 billion maturities peaked within
2017-2018. The prospective bond RUB3 billion bond issuance in
2017 and the ongoing negotiation of loan extension will help
spread HMS's maturities more evenly. Fitch conservatively
forecast that FCF will be negative over the next three years due
to high capex and dividends. However, Fitch does not expect the
company will have difficulties refinancing over the medium term.


SAMARA CITY: Fitch Affirms IDRs at 'BB+', Outlook Stable
--------------------------------------------------------
Fitch Ratings has affirmed the Russian City of Samara's Long-Term
Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB+'
with Stable Outlooks, and the Short-Term Foreign Currency IDR at
'B'. The city's National Long-Term Rating has been affirmed at
'AA(rus)' with Stable Outlook and withdrawn.

The affirmation reflects the city's stable operating margin and
narrowing fiscal deficit, which will contain direct risk at below
40% of current revenue. The ratings remain constrained by a weak
institutional framework for Russian local and regional
governments (LRGs).

The National-scale rating is being withdrawn because Fitch has
withdrawn its Russian National-scale ratings in response to a new
regulatory framework for credit rating agencies in Russia (see
Fitch Ratings Withdraws National Scale Ratings in the Russian
Federation dated 23 December 2016).

KEY RATING DRIVERS

Weak institutions in Russia lead to lower predictability of local
and regional governments' (LRGs) budgetary policies, narrow their
planning horizon and hamper long-term development plans. The City
of Samara's policies tend to be shaped by frequent changes in
allocation of revenue and expenditure responsibilities between
the tiers of government.

Fitch projects Samara to post stable fiscal performance with an
operating surplus of about RUB2.3 billion-RUB2.8 billion or 11%-
13% of operating revenue over the medium term (2016: 11.3%; 2015:
12%). The agency views this as stabilisation following an average
margin of 16% in 2013-2014. Operating performance stabilised in
2016 due to stable tax revenues and current transfers from Samara
Region.

The city posted a small full-year surplus before debt variation
at 0.75% of total revenue in 2016 after a deficit of 5.6%
recorded in the previous year. The city has a prudent budgetary
policy and targets balanced budgets for 2017-2019. The city
could, however, record small deficits before debt in 2017-2018,
due to sluggish economic recovery in Russia, before turning a
small surplus in 2019.

In Fitch's view direct risk will remain moderate at RUB7.5
billion (or 35%-37% of current revenue) by end-2017, versus
RUB7.3bn in 2016, line with Fitch projections. Fitch expects
Samara to curb direct risk growth to below 40% of current revenue
over the medium term, underpinned by the city's conservative
fiscal management. The city's contingent risk is low, stemming
solely from debt at its public sector entities, which they are
able to fund with their own resources.

Refinancing risk is significant due to the short-term tenor of
Samara's debt portfolio. The city's market debt stock (RUB7
billion) is composed of bank loans, 97% of which mature in 2017.
This is partially offset by accumulated liquidity at end-2016,
comprising cash (RUB599 million) and untapped credit lines (RUB1
billion). Fitch expects the city will manage to roll over the
remaining maturing bank loans, as it has done in previous years.

With a population of above one million, the city is the capital
of Samara Region, which has a well-developed diversified economy
based on processing industries and services. The city receives
steady current and capital transfers from the region, which
support its development needs and fiscal performance. In its
updated forecast Fitch projects a 0.4% decline of Russia's GDP in
2016, followed by 1.3% growth in 2017 and 2% in 2018.

RATING SENSITIVITIES
Strong budgetary performance with an operating margin above 15%
on a sustained basis and moderate debt with a lengthening of the
debt maturity profile that is in line with debt payback (direct
risk-to-current revenue: 4.7 years in 2016) could lead to an
upgrade.

Sustained deterioration of budgetary performance leading to a
direct risk growth above 50% of current revenue (2016: 36.9%)
driven by short-term financing, would lead to a downgrade.


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


IM CAJAMAR 5: Fitch Raises Rating on Class B Notes to BB+
---------------------------------------------------------
Fitch Ratings has upgraded IM Cajamar Empresas 5, FTA's class B
notes and affirmed the class A1 and A2 notes, as follows:

EUR16.2 million Class A1: affirmed at 'A+sf'; Outlook Stable
EUR86 million Class A2: affirmed at 'A+sf'; Outlook Stable
EUR135 million class B: upgraded to 'BB+sf' from 'BBsf'; Outlook
Positive

IM Cajamar Empresas 5, F.T.A. is a granular cash flow
securitisation of a static portfolio of secured and unsecured
loans granted to Spanish small- and medium-sized enterprises by
Cajamar Caja Rural and Caja Rural del Mediteraneo (both now part
of Cajamar Caja Rural, Sociedad Cooperative).

KEY RATING DRIVERS
Continued Deleveraging
The equally-ranking class A1 and A2 notes have received EUR80
million of principal proceeds over the last 12 months. The
deleveraging of the transaction has led to a significant increase
in credit enhancement (CE) for all rated notes and is reflected
in the upgrade of the class B notes. CE for the class A notes
increased to 105% from 79% and for the class B notes to 48% from
36%.

Counterparty Risk Rating Cap
Ratings for the class A1 and A2 notes are capped at 'A+sf' due to
the treasury account bank rating triggers embedded in the
transaction documentation. These triggers are set at a minimum
rating requirement of 'BBB+'/'F2' for the account bank Banco
Santander (A-/Stable/F2).

Positive Outlook on Class B
The class B notes' rating is capped at 'BB+' because in Fitch
base case scenario, interest can be deferred for an extended
period of time. The Positive Outlook, however, reflects Fitch
expectations that if prepayment continues at the current pace the
class A notes will be paid in full within the 18 months, which
would result in the class B notes being the most senior tranche
with no interest deferrals.

Stable Delinquencies
Arrears have decreased slightly over the last 12 months. Loans
more than 90 days past due currently stand at 1.5% of the
underlying portfolio, down from 2.1% a year ago. Fitch has
determined an annual average transaction benchmark probability of
default of 3.6%.

RATING SENSITIVITIES
The loss of the reserve fund would not trigger a rating downgrade
of the class B notes.

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
pool 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.

Prior to the transaction closing, Fitch reviewed the results of a
third party assessment conducted on the asset portfolio
information and concluded that there were no findings that
affected the rating analysis.

Prior to the transaction closing, Fitch conducted a review of a
small targeted sample of the originator's origination files and
found the information contained in the reviewed files to be
adequately consistent with the originator's policies and
practices and the other information provided to the agency about
the asset portfolio.

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.

SOURCES OF INFORMATION
The information below was used in the analysis.
- Loan-by-loan data provided by EDWIN and InterMoney as at
   Nov. 30, 2016
- Transaction reporting provided by InterMoney as at Dec. 22,
   2016
- Collateral reporting provided by InterMoney as at Dec. 31,
   2016


=====================
S W I T Z E R L A N D
=====================


TRANSOCEAN LTD: Egan-Jones Hikes Senior Unsecured Ratings to B+
---------------------------------------------------------------
Egan-Jones Ratings, on Jan. 19, 2017, raised the senior unsecured
ratings on debt issued by Transocean Ltd to B+ from B.

Transocean Ltd. is one of the world's largest offshore drilling
contractors and is based in Vernier, Switzerland.


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


TURKIYE SISE: S&P Revises Outlook to Neg. & Affirms 'BB' CCR
------------------------------------------------------------
S&P Global Ratings revised its outlook on Turkey-based glass
producer Turkiye Sise ve Cam Fabrikalari A.S. (Sisecam) to
negative from stable.  S&P also affirmed its long-term corporate
credit rating at 'BB' and the short-term rating at 'B'.

At the same time, S&P affirmed the issue ratings on Sisecam's
$500 million unsecured notes at 'BB'.  The recovery rating
remains unchanged at '3', indicating recovery expectations in the
lower half of the 50%-70% range.

S&P's revision of the outlook on Sisecam to negative from stable
follows S&P's recent revision of its outlook on its parent,
Turkiye Is Bankasi (Isbank).  The negative outlook on Isbank, in
turn, reflects the negative outlook on Turkey.  S&P anticipates
that Turkish banks' financial profiles and performance will
remain highly correlated with sovereign creditworthiness at the
current rating level, owing to the banks' significant holdings of
government securities and exposure to the domestic environment.

S&P's ratings on Sisecam cannot exceed those of Isbank, which
owns 67% of Sisecam.  In S&P's view, Sisecam would not be
insulated if its parent were distressed.

Although S&P continues to view Sisecam's business risk profile as
fair, S&P is also mindful of the potentially negative effect of
rising country risk in Turkey.  In S&P's view, this could dampen
domestic demand, increase the volatility of export volumes, cause
input prices to rise, and increase pressure on profitability.
The heightened political and economic risks in Turkey may
exacerbate these trends over S&P's 12-month rating horizon.

S&P defines country risk as the broad range of economic,
institutional, financial market, and legal risks that arise from
doing business with or in a specific country and that can affect
a nonsovereign entity's credit quality.  The credit risk for
every rated entity and transaction is influenced to varying
degrees by these types of country-specific risks.  The factors
S&P evaluates are economic risk, institutional and governance
effectiveness risk, financial system risk, and payment
culture/rule of law risk.

S&P's base-case scenario for the financial year ending Dec. 31,
2017 (FY2017) assumes:

   -- Revenues growing to more than Turkish lira (TRY) 9 billion.
   -- Adjusted EBITDA margin of 21%-23%.
   -- Adjusted funds from operations (FFO) of about TRY1.4
      billion-TRY1.6 billion, continuing a trend of robust cash
      flow generation.
   -- Capital expenditure (capex) of up to TRY1.4 billion.
   -- No major acquisitions or divestitures.

Based on these assumptions, S&P arrives at these credit measures
for FY2017:

   -- FFO to debt of more than 65%; and
   -- Debt to EBITDA of 1.0x-1.5x.

The negative outlook on Sisecam reflects that on its parent
Isbank, which in turn reflects the outlook on Turkey.  On a
stand-alone basis, S&P anticipates that Sisecam will maintain its
leading market position in Turkey and that its ambitious global
expansion plans will continue to support its credit metrics--
specifically, S&P Global Ratings-adjusted FFO to debt in excess
of 45% and adjusted debt to EBITDA of less than 1.5x.

S&P would lower its rating on Sisecam if S&P downgraded Isbank.
S&P could also lower its rating on Sisecam if FFO to debt fell to
less than 45% on a persistent basis.  This could occur as a
result of inflated raw material or energy costs, a significant
weakening in demand, or the unsuccessful execution of the group's
sizable capacity expansion plans, any of which could cause ratios
to weaken to a level that S&P views as commensurate with an
intermediate financial risk profile.

S&P views the potential for an outlook revision to stable as
limited at this stage because the ratings on Sisecam are capped
at the level of the rating on Isbank.


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


CO-OPERATIVE BANK: Put Up for Sale by Board Amid Capital Woes
-------------------------------------------------------------
Ravender Sembhy and Gareth Mackie at The Scotsman report that the
board of the Co-operative Bank has hoisted a for sale sign over
the troubled lender as concerns mount over its capital position.

According to The Scotsman, the bank, which has four million
customers, said that its ability to meet longer-term UK bank
regulatory capital requirements has been hampered by low interest
rates and higher-than-anticipated transformation and "conduct
remediation" costs.

As a result, and following an annual planning review, it is
"inviting offers", said the bank, which has two branches north of
the Border, on George Street in Edinburgh and Gordon Street in
Glasgow, The Scotsman relates.

Last week the Co-operative Group, which owns 20% of the bank,
embarked on a top-level shake-up that will see Richard Pennycook
step down as group chief executive, The Scotsman recounts.

The move, which will see food boss Steve Murrells take the helm,
was accompanied by comments from chairman Allan Leighton that the
group could pump more money into the lender, The Scotsman states.

The bank, as cited by The Scotsman, said it is also considering
options other than a sale to build capital, including raising
cash from new and existing investors.

The Co-operative Bank is a retail and commercial bank in the
United Kingdom, with its headquarters in Balloon Street,
Manchester.


FOOD RETAILER: To Enter Administration After CVA Failed
-------------------------------------------------------
The Food Retailer is to enter administration having failed to
secure a Company Voluntary Arrangement.

They launched a Company Voluntary Arrangement (CVA) proposal, but
it was voted down by creditors.  The company is now placing the
business in administration and there will be a sale process to
find a purchaser for all or some of the stores.

John Gorle, Usdaw National Officer, says: "This is a very
disappointing result, which creates a great deal of uncertainty
for staff.  It appears that a small number of landlords have
managed to narrowly block the CVA and we have to question their
motives.  This vote has put the livelihoods of hundreds of
shopworkers on the line, when it appears there was an
opportunity, with the support of the property owners, to keep the
business afloat with 10 store closures.

"I will be seeking an urgent meeting with the administrator, when
one has been appointed.  Usdaw's priorities are to save jobs and
keep stores open.  We are talking to the Co-op about possible
redeployment opportunities for any affected employees and we will
explore all avenues to help members seek alternative employment.

"In the meantime our team of Usdaw reps and officials are
providing the support, advice and representation members need at
this very worrying time."

Usdaw (Union of Shop, Distributive and Allied Workers) is the
UK's fourth biggest and the fastest growing trade union with over
440,000 members.  Membership has increased by more than 17% in
the last five years and by nearly a third in the last decade.
Most Usdaw members work in the retail sector, but the Union also
has many members in transport, distribution, food manufacturing,
chemicals and other trades.

Locations of stores at risk: Aberystwyth, Basingstoke,
Birmingham, Blackburn, Buckley, Cardigan, Christchurch,
Crewkerne, Dagenham, Erith, Gillingham, Greenwich - London,
Helston, Littlehampton, Ludlow, Monmouth, Newport, Norwich,
Nottingham, Paisley, Plumstead - London, Prestwick, Rochford,
Shaftesbury, Sheffield, South Benfleet, Southall - London, St.
Neots, Sydenham - London, Tiverton, Totnes, Walsall, Watton,
Weymouth, Wirral, Wisbech.


HONOURS PLC: Moody's Lowers Rating on Class B Notes to B2
---------------------------------------------------------
Moody's Investors Service has downgraded the ratings of the Class
B notes to B2 (sf) from Ba1 (sf), the ratings of the Class C
notes to Caa2 (sf) from B1 (sf) and the Class D notes' ratings to
Caa3 (sf) from Caa1 (sf) in Honours PLC Series 2. At the same
time, Moody's confirmed the ratings of the Class A1 and Class A2
notes' A3 (sf) rating.

Honours PLC Series 2 is static cash securitisation of student
loans extended to obligors in the UK by the Student Loan Company
Limited, a UK public sector organization.

The rating action reflects the impact of estimated future costs
associated with the non-compliance with applicable consumer
credit legislation and the decreased level of excess spread.

Moody's confirmed the ratings of the Class A1 and A2 notes as
they had sufficient credit enhancement to maintain the current
rating on the affected notes. The ratings of the A1 and A2 notes
are constrained at A3 (sf) by operational risk.

Issuer: Honours PLC Series 2

-- GBP291.95M Class A1 Notes, Confirmed at A3 (sf); previously
on Nov 7, 2016 A3 (sf) Placed Under Review for Possible Downgrade

-- GBP54.2M Class A2 Notes, Confirmed at A3 (sf); previously on
Nov 7, 2016 A3 (sf) Placed Under Review for Possible Downgrade

-- GBP33.35M Class B Notes, Downgraded to B2 (sf); previously on
Nov 7, 2016 Downgraded to Ba1 (sf) and Placed Under Review for
Possible Downgrade

-- GBP18M Class C Notes, Downgraded to Caa2 (sf); previously on
Nov 7, 2016 Downgraded to B1 (sf) and Placed Under Review for
Possible Downgrade

-- GBP11.95M Class D Notes, Downgraded to Caa3 (sf); previously
on Nov 7, 2016 Downgraded to Caa1 (sf) and Placed Under Review
for Possible Downgrade

The rating action concludes the review of the Class A1, A2, B, C
and D notes placed on review for downgrade on 7th November 2016:

http://www.moodys.com/viewresearchdoc.aspx?docid=PR_357575

BACKGROUND

From November 2006 to January 2016, Ventura Plc and Capita Plc
were the servicers of Honours PLC series 2 (Capita Plc acquired
Ventura Plc in July 2011). During that period, notices of arrears
sent to a portion of borrowers were not in compliance with
applicable consumer credit legislation.

As a result of the non-compliance with applicable consumer credit
legislation, the issuer has discussed a remediation plan with the
Financial Conduct Authority (FCA) and published its estimated
cost in a notice to noteholders dated 31 October 2016. The issuer
has estimated that GBP22.5 million of interest and charges would
need to be refunded either via account book adjustments or by way
of cash refunds. The issuer also mentioned that at least GBP0.75
million may be owed to the Authority (United Kingdom Government)
in respect of loans repurchased by the Authority under the
cancellation indemnity. Finally, the issuer estimated that the
remediation process is to cost between GBP5 million to GBP10
million for the services of third parties to complete such a
remediation plan.

All the affected tranches have been on review for possible
downgrade since 7 November 2016 following the notice to
noteholders by the issuer on 31 October 2016, which gave the
estimates costs described above.

On 26 January 2017, the servicer, Link Financial Outsourcing
Limited, provided Moody's with a loan-by-loan file, which
includes information on loans affected by the remediation plan in
both the qualifying and non-qualifying portfolio.

RATINGS RATIONALE

The current rating action takes into account the impact of the
estimated cost of the FCA remediation plan and the assumed future
defaults throughout the life of the transaction.

Firstly, Moody's has estimated the Principal Deficiency Ledger
(PDL) by which the qualifying pool balance will be reduced due to
costs related to non-compliance with applicable consumer credit
legislation and the resulting impact on the credit enhancement
available for each class of notes.

Moody's have assumed that this total remediation plan cost will
be fully borne by the transaction, without any recoveries from a
counterclaim against any third party, therefore reducing
significantly future cash flow available to repay the notes.

Secondly, Moody's has modelled future defaults on the outstanding
qualifying portfolio by assessing the proportion of loans leaving
deferment each year that will not be covered by the cancellation
indemnity provided by the UK government.

COSTS RELATED TO NON-COMPLIANCE WITH APPLICABLE CONSUMER CREDIT
LEGISLATION

Moody's have reduced the qualifying pool balance by 12.5% to GBP
143.75 million from GBP 164.23 million. From the loan-by-loan
file received, Moody's has estimated that the qualifying pool
balance would be reduced by GBP8.22 million to adjust the loans
affected by the remediation plan. This assumes that the
qualifying pool balance will be reduced by cash refunds and only
the book adjustments affecting the performing loans. Moody's has
also reduced the qualifying pool balance by the future third
party cost of GBP10 million and the funds owed to the Authority
(United Kingdom Government) estimated to be GBP 2.25 million.

It should be noted that despite the recent additional information
received, these are estimates and the remediation plan has not
received final approval from the FCA.

Amounts to be refunded to the Authority in respect of subsidy
payments that have been made by the Authority have not yet been
investigated and quantified.

PROJECTION OF FUTURE LOSSES

Moody's projected the future default on the outstanding portfolio
by assessing the proportion of loans leaving deferment each year.
In its analysis, the rating agency assumed that the future
deferment threshold would either stay stable or increase with the
average monthly salary in the UK.

Out of the loans that would leave deferment, Moody's estimated
the amount of loans that would benefit from the Authority's
cancelation indemnity which covers loans outstanding for more
than 25 years. For the remaining part of the pool, which is not
covered by this cancelation indemnity, Moody's assumed a default
rate of 12.5%, a recovery rate of 30% and a Portfolio Credit
Enhancement (PCE) of 33.68%.

The principal repayments in the transaction are currently being
paid to noteholders pro-rata with pro-rata payments within class
A being paid sequentially, first to A1 then A2. However, Moody's
expects repayments to noteholders to switch to sequential by the
end of 2017, as costs associated with the remediation will result
in Principal Deficiency Ledger to breach the GBP3 million
threshold. This threshold is one of the "subordination
conditions" that leads the waterfall to change from pro-rata to
sequential.

Loans that continue to be in deferment until maturity in April
2029 will benefit from the cancelation indemnity. In Moody's
view, these loans are unlikely to result in incremental losses to
the transaction.

Moody's has not included in its cash flow analysis any further
payments related to the first loss guarantee granted from the UK
government. It is Moody's understanding that these payments
stopped in January 2016, hence reducing the excess spread
available for the transaction.

Counterparty Exposure

The rating actions take into consideration the notes' exposure to
relevant counterparties, such as servicer, account banks or swap
providers.

The ratings of the A1 and A2 notes are constrained by operational
risk. Moody's considers that the lack of back-up servicing
arrangement and uncertainty of the use of available liquidity are
insufficient to support payments in the event of servicer
disruption. As a result, the ratings of tranches A1 and A2 are
capped at A3(sf).

The principal methodology used in these ratings was "Moody's
Approach to Monitoring Scheduled Amortisation UK Student Loan-
Backed Securities" published in April 2015.

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

Factors or circumstances that could lead to an upgrade of the
ratings include: (1) a decrease in the remediation plan costs;
(2) performance of the underlying collateral that is better than
Moody's expected; (3) deleveraging of the capital structure; and
(4) improvements in the credit quality of the transaction
counterparties.

Factors or circumstances that could lead to a downgrade of the
ratings include: (1) an increase in the remediation plan costs;
(2) performance of the underlying collateral that is worse than
Moody's expected; (3) deterioration in the notes' available
credit enhancement; (4) deterioration in the credit quality of
the transaction counterparties; and (5) an increase in sovereign
risk.


INTYPE LIBRA: Aquatint Acquires Assets Out of Liquidation
---------------------------------------------------------
Max Goldbart at PrintWeek reports that South London printer
Aquatint BSC has bought some of the assets of Intype Libra out of
liquidation and relocated to the latter's Wimbledon base.

The deal went through for an undisclosed sum in December and
Aquatint then proceeded to move into Intype's Wimbledon premises
in Elm Grove on Jan. 3, PrintWeek relates.  Aquatint bought the
goodwill and certain assets, and also took on the lease for Elm
Grove, but the two brands are still operating under their
original names for "customer-retention purposes", PrintWeek
discloses.

Aquatint joint managing director Roger Severn said Intype
officially ceased trading on Nov. 30 and it was over the
following couple of weeks that Aquatint purchased the goodwill
and "hand picked" a few assets, mainly finishing kit, PrintWeek
relates.

According to PrintWeek, a resolution to wind up Intype
voluntarily was passed at a creditors' meeting at the offices of
insolvency practitioner RSM Restructuring Advisory on Jan. 26,
and Alexander Kinninmonth and David Alexander of RSM were
appointed joint liquidators on Feb. 1.

Intype had been in a five-year Company Voluntary Arrangement
(CVA) since June 2013, PrintWeek notes.


KING & WOOD: Attempts to Raise Capital Rejected Prior to Collapse
-----------------------------------------------------------------
Rose Walker at The Am Law Daily reports that it has emerged King
& Wood Mallesons' (KWM) Europe and Middle East (EUME) partners
rejected at least four attempts by management to increase capital
at the firm between 2011 and 2015.

The news comes as former leaders of the failed SJ Berwin business
are expected to face scrutiny from administrators over their role
in the firm's collapse, The Am Law Daily notes.

According to The Am Law Daily, former partners told Legal Week
that four attempts were made between 2011 and 2015 by former EUME
managing partners Rob Day and William Boss to persuade partners
to shore up the business by paying in additional capital.

However, all of these efforts failed to win the support of the
partnership, The Am Law Daily states.

The revelations come as KWM EUME's administrator Quantuma is set
to investigate the role the firm's former senior management team
and accounting practices played in the collapse, The Am Law Daily
relays.

Administrators Quantuma are currently assessing decisions made by
KWM management figures during the lead-up to the firm's collapse
at the start of this year, The Am Law Daily discloses.

As part of the formal administration process, joint
administrators Andrew Hosking -- andrew.hosking@quantuma.com --
and Sean Bucknall -- sean.bucknall@quantuma.com -- will
investigate how the firm's finances were run, The Am Law Daily
relates.

In a statement on Feb. 8, Mr. Hosking, as cited by The Am Law
Daily, said the administrators would be "conducting
investigations into the failure of the firm, which is typical
with any insolvency in order to understand how this came about
and the circumstances that led to the failure".

On Jan. 24, the administrators said partner exits had
"accelerated the ultimate demise" of the firm, The Am Law Daily
recounts.

KWM EUME entered administration on Jan. 17, The Am Law Daily
relates.  At its height in 2007-08, legacy SJ Berwin was ranked
14th in the UK top 50, with revenues of GBP215 million and profit
per equity partner of GBP801,000, The Am Law Daily notes.

                  About King & Wood Mallesons

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

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

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

                       European Arm's Woes

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

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

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

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

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

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

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

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

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



                            *********

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,
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Each Tuesday edition of the TCR contains a list of companies with
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Each Friday's edition of the TCR includes a review about a book
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                            *********


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

Troubled Company Reporter-Europe is a daily newsletter co-
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Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez,
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Copyright 2017.  All rights reserved.  ISSN 1529-2754.

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