TCREUR_Public/170216.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Thursday, February 16, 2017, Vol. 18, No. 034



FINANCIERE GAILLON: Fitch Raises Long-Term IDR to 'BB-'
HOUSE OF EUROPE I: Fitch Cuts Ratings on 4 Note Classes to 'Dsf'


MILANO SERRAVALLE-MILANO: Fitch Withdraws 'BB+' LT Debt Rating
VENETO BANCA: Italian Government Eyes EUR5-Bil. State Rescue


APERAM SA: Moody's Hikes Sr. Unsecured Bond Rating From Ba2


EURO-GALAXY III: Fitch Corrects January 17 Rating Release
GROSVENOR PLACE III: Moody's Affirms Ba3 Rating on Cl. E Notes


PHOSAGRO: Fitch Affirms BB+ IDR & Revises Outlook to Positive


BANKIA SA: Highest Criminal Court Launches Probe Into Flotation


TURKIYE VAKIFLAR: Fitch Assigns BB Rating to Tier 2 Notes


UKRAINE: UAH4BB Returned on Insolvent Banks' Refinancing Credits

U N I T E D   K I N G D O M

ARROW GLOBAL: Moody's Raises Corporate Family Rating to Ba3
BRAKEWORLD: Has Fallen Into Administration, Cuts 18 Staff
CO-OPERATIVE BANK: Core Ethical Mandate May Hamper Sale to Rival
CYRENIANS CYMRU: Former Head Faces Fraud Charges After Collapse
EDCON HOLDINGS: Moody's Withdraws 'Ca' Corporate Family Rating

FOOD RETAILER: Budgens Store Faces Closure, 34 Jobs at Risk
HELIOS TOWERS: Moody's Assigns B2 Corporate Family Rating
HERO ACQUISITIONS: Moody's Affirms B1 Corporate Family Rating
NEERG ENERGY: Fitch Assigns Final B+ Rating to USD475MM Sr. Notes
TES GLOBAL: Moody's Lowers Corporate Family Rating to Caa1

TUBS & TILES: In Administration After "Difficult Trading Period"



FINANCIERE GAILLON: Fitch Raises Long-Term IDR to 'BB-'
Fitch Ratings has upgraded Financiere Gaillon 8's Long-Term
Issuer Default Rating (IDR) to 'BB-' from 'B'. The Outlook is

The rating action primarily reflects the repayment of a EUR370m
bond at FG8 level, which reduced funds from operations (FFO)-
adjusted gross leverage to 3x in 2016 from around 10x in 2015.
Fitch expects the company to maintain similar levels over the
next few years.

Following the bond repayment, all debt now sits with the
operating company, Kaufman & Broad (K&B), a French housebuilder.
The rating of FG8, a holding company, reflects structural
subordination to K&B, which Fitch views as a "BB" credit. Fitch
understands that while FG8 retains control over K&B, there are no
guarantees or restrictions in place between the parent and
operating company.


Strong Housing Market: The French market, which began recovering
in 2015, was very active in 2016. New housing starts are expected
to have settled at around 375,000 for 2016, up 20% compared with
2014. Key drivers remain decreasing borrowing rates (1.32% at
end-2016 vs. 2.2% at end-2015) and new government incentives,
such as the interest-free loan programme, PTZ+.

Fitch, however, sees hints of upwards pricing pressure, at least
in the secondary market. While Fitch expects 2017 to start with a
similarly positive trend, higher borrowing costs (French 10-yr
government bond (OAT) yield increased steadily from November) and
the effects of the upcoming presidential on the political
environment could slow growth.

Higher Cash Generation: K&B's 2016 results were positive both
from a financial and operating perspective. The backlog increased
to EUR1.3bn at end-2016 from EUR1.1bn at end-2015 as both
investors and first-time-buyers returned to the market. Revenue
and EBITDA were up sharply and the strong backlog bodes well for
K&B's 2017 financials.

Successful Transactions: FG8 sold part of its stake in K&B to
repay its existing EUR370m bond at the FG8 level. K&B also paid
EUR80 million of dividends, bought back EUR50 million of its own
shares and refinanced existing debt, extending its maturities to
2021. The company also increased the size of its undrawn
revolving credit facility (RCF) to EUR100m. FG8 remains the
controlling shareholder of K&B, holding 36% of capital, but 56%
of voting rights. Nevertheless, FG8's influence has reduced
somewhat as one of its board members was replaced with an
independent, in line with its lower shareholding.

One-off Decrease in Leverage: Overall leverage fell dramatically
after the repayment of the EUR370m bond and double-digit growth
in EBITDA. Nonetheless, leverage at K&B's level increased
marginally, given an exceptional dividend and share buybacks. The
company recently announced a new dividend policy of 75% of net
income, which will likely limit debt reduction. The company's
relatively volatile FFO will likely drive any future changes in

Low Margin Volatility: K&B has below-average margins compared
with other European house builders, although this is a function
of a lower-risk business model. K&B has a current policy of
maintaining pre-sale rates above 60%, limiting downside price
risk and improving working capital. Higher pre-sales ensure
greater customer stage payments ahead of large cash outflows
required for land acquisition. In France, house builders
typically use land options, rather than outright acquisitions of
land. These options are typically only exercised if planning
permission and high pre-sales are obtained.

Low Working Capital: Land options limit development and volume
risk, allowing K&B to cancel a project with minimal cash loses.
The company has one of the lowest working capital requirements in
the sector with a working capital/turnover ratio typically
averaging around 16%. During 2007 and 2008, however, this ratio
reached 32%, primarily driven by lower pre-sale rates of around
30%, meaning fewer customer payments were funding working capital
needs. In 2016, components of working capital grew in line with
expansion, but did not lead to significantly higher working
capital requirements.

Pre-sale Discipline Remains Key: In an environment of high
volumes and potential price increases, housebuilders may be
tempted to reduce pre-sale ratios. The risk of interest rates
rising has increased over the past few months and a surge could
freeze the market again. Nevertheless, K&B remains a conservative
company with a pre-sale ratio of 60%-70%, which mitigates this


K&B is the third-largest housebuilder in the French market,
operating across French regions with a focus on dynamic areas.
The market benefits from a favourable VEFA regulatory framework
and the land option system. These are positive factors compared
with other rated EMEA housebuilders such as Taylor Wimpey.
Following last year's debt reduction, K&B is expected to maintain
roughly EUR200 million of debt on its balance sheet, which
translates to a FFO adjusted gross leverage of around 3.0x.


- Revenue growth in 2017, before slowing down thereafter
- Stable EBITDA margins
- Dividend pay-out ratio at 75%


Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action

- FFO adjusted gross leverage below 2.5x on a sustained basis.
- Maintaining prudent development with pre-sale rates of at
least 65% and working capital/turnover ratio below 15%.

Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action

- Evidence of weakening risk management policies with pre-sale
rates decreasing below 60% and increasing working
capital/turnover ratio to above 20%, impacting liquidity.
- FFO-adjusted gross leverage above 3.5x on a sustained basis.
- Significant deterioration of the French housing market.
- Debt raised at the FG8 level.


No Debt at FG8: K&B recently refinanced its debt (tranche A & B),
extending most maturities to 2021. Its new RCF (EUR100m, mostly
undrawn at end-2016) and cash position (EUR118m) cover short-term
needs. There is no longer any debt at the FG8 level.

HOUSE OF EUROPE I: Fitch Cuts Ratings on 4 Note Classes to 'Dsf'
Fitch Ratings has downgraded House of Europe Funding I PLC's
class A, B and C notes, affirmed one principal protected junior
note and withdrawn the ratings:

EUR119m Class A: downgraded to 'Dsf' from 'Csf'; withdrawn
EUR65m Class B: downgraded to 'Dsf' from 'Csf'; withdrawn
EUR50m Class C: downgraded to 'Dsf' from 'Csf'; withdrawn
EUR50m Class C: downgraded to 'Dsf' from 'Csf'; withdrawn
EUR5m Certificates: affirmed at 'AAsf' Outlook Stable; withdrawn


In December 2016, all assets and certificate protection assets
were transferred to the noteholders and certificate holders,
respectively. In exchange the notes and certificates were

For the class A through C notes, Fitch views this as a distressed
debt exchange as the outstanding portfolio balance at the time of
the cancellation was EUR114m, which does not cover the
outstanding note balance of the class A notes and the exchange
avoids a probable payment default on the notes. Fitch has
therefore downgraded the notes to 'Dsf'.

Fitch rated the certificates on a principal only basis and they
were backed by French government bonds. Therefore for the
certificate holder (who receives the bonds) the exchange does not
constitute a material reduction in economic terms and Fitch has
affirmed the rating at 'AAsf'/Stable and withdrawn it.

Not applicable.


MILANO SERRAVALLE-MILANO: Fitch Withdraws 'BB+' LT Debt Rating
Fitch Ratings has withdrawn Milano Serravalle-Milano
Tangenziali's senior unsecured Long-term debt rating of

Fitch is withdrawing the rating as MSMT has chosen to stop
participating in the rating process, following the expiration of
the contractual terms. Therefore, Fitch will no longer have
sufficient information to maintain the ratings. Accordingly,
Fitch will no longer provide ratings (or analytical coverage) for

Fitch's last review of MSMT was on June 9, 2016 (see "Fitch
Affirms Milano Serravalle at 'BB+'; Outlook Negative").

Not applicable

VENETO BANCA: Italian Government Eyes EUR5-Bil. State Rescue
Rachel Sanderson, Alex Barker and Claire Jones at The Financial
Times report that Italy is looking at a EUR5 billion state rescue
of two struggling regional banks as the eurozone's third-largest
economy takes renewed steps to shore up its troubled banking

The rescues of Veneto Banca and Banca Popolare di Vicenza, which
still require regulatory approval, would be a "precautionary
recapitalization", the FT relays, citing people with direct
knowledge of the discussions.  This is a mechanism that allows
eurozone states to pump state money into banks without infringing
state aid rules, the FT discloses.

Veneto Banca and Banca Popolare di Vicenza, in the north-eastern
industrial Veneto region, have suffered a plunge in liquidity and
capital, the FT states.

The two banks, which are in talks to merge, were taken over last
year by Atlante, Italy's government sponsored, privately backed
rescue fund, the FT recounts.  But the lenders have continued to
leak deposits, further eroding their capital base, say people
with direct knowledge of the events, the FT relays.

According to the FT, a person familiar with the plan being
prepared for the European Commission said it was seeking approval
to start recapitalization procedures for the two banks for "about
EUR5 billion", a figure far higher than estimates a year ago and
a sign of the banks' worsening capital position.

People familiar with the process said Italy has made no request
to Brussels for a recapitalization of the two Veneto banks, the
FT relates.

The Commission has signed off an Italian liquidity support scheme
and given specific approval for Veneto banks to access it, in
spite of their shortfall in capital, the FT discloses.  After
tapping the liquidity support, the banks are required to submit a
restructuring plan to Brussels, the FT states.

Veneto Banca S.p.A. is an Italian bank headquartered in
Montebelluna, Italy.


APERAM SA: Moody's Hikes Sr. Unsecured Bond Rating From Ba2
Moody's Investors Service has upgraded the rating of Luxembourg-
based stainless steel manufacturer Aperam S.A., assigning a long-
term issuer rating of Baa3. Concurrently, Moody's has upgraded
the senior unsecured convertible bond rating of Aperam to Baa3
from Ba2. The outlook on all ratings is stable.

"Our decision to upgrade Aperam to investment grade reflects the
company's strong operating performance, robust cash flow
generation and successful efforts to de-lever over the past three
years, as well as its ability to further reduce debt and maintain
profitability over the coming 12-24 months," said Hubert
Allemani, a Moody's Vice President -- Senior Analyst and lead
analyst for Aperam.

Moody's also withdrew Aperam's corporate family rating (CFR) of
Ba1 and probability of default rating (PDR) of Ba1-PD following
its upgrade to Baa3, as per the rating agency's practice for
corporates with investment grade ratings.


The upgrade of Aperam's rating to Baa3 reflects the group's
sustainable improvement of its profitability, robust business
profile supported by its good geographical and product
diversification as well as strong cash flow generation. The
successful and sustainable gains from its cost-reduction program
'Leadership Journey' reinforces Aperam's business profile.

Over the last three years, Aperam has consistently improved its
profitability and cash flow generation. Aperam's efforts and
dedication to lowering its cost base and improve efficiencies
across its production plants, particularly in Europe, has led to
the company more than doubling its reported EBITDA margin to
approximately 12% at end-2016 from 5% in 2013. Moody's believes
that the current EBITDA margin is sustainable, further supporting
the investment grade rating.

The higher EBITDA and improved working capital management
resulted in the company generating positive free cash flow (FCF)
over the last three years, which has partially been used to repay
debt. Aperam's Moody's-adjusted leverage at end-2016 was low at
approximately 1.4x, which Moody's believes should give the
company sufficient headroom to weather next downcycle in the
stainless steel sector. Moody's also anticipates that Aperam's
Moody's-adjusted leverage will decrease further in 2017 to under
1x due to the possible conversion of the outstanding USD200
million convertible bond due September 2020 into equity.

Aperam's Baa3 issuer rating reflects (1) the company's improved
operating performance and active capital structure management;
(2) its strong market position in Europe and high market share in
the Brazilian flat stainless steel market; (3) a background of
improved global demand from the main end-markets of automotive,
consumer goods and capital goods; and (4) market supportive anti-
dumping duties for stainless steel in the EU from China and
Taiwan until 2020 and import tariffs in Brazil.

Moody's believes that Aperam has been able to capitalise on the
slowdown of Chinese imports into the European market supporting
volume output and capacity utilisation rate. In Brazil, the other
main market for Aperam, the company enjoys local status and has a
high market share in flat-rolled stainless sheets and should
benefit from improved market conditions after two years of

However, these positives are mitigated by (1) the cyclicality of
Aperam's end markets, with high correlation to GDP growth level
and consumer spending; (2) the highly competitive industry, still
showing global excess capacity despite restructuring by several
European players; (3) the company's exposure to raw material
price volatility, particularly nickel and scrap; and (4) exposure
to the uncertain Brazilian market which represents a high
proportion of the company's profitability.


The liquidity position of Aperam is solid. The group had about
USD325 million in cash on balance sheet at end-2016 and full
availability under its USD400 million Borrowing Base credit
facility (BBF). The company can also rely on a True Sales of
Receivables program of EUR280 million to manage working capital
requirements and EUR50 million capex facility with European
Investment Bank. This should be more than sufficient to cover all
operational cash requirements over the next 12 months consisting
mainly of working capital consumption and capex. Cash on hand and
cash generated by operations should also support the payment of
an increased dividend of USD116 million this year and the
announced share buyback program of maximum amount of USD100
million. Moody's notes that the share buyback program is planned
over the first nine months of the year and that it could be
scaled back if internal cash generation should be less than


Aperam's current capital structure remains unusual compared to
investment grade rated peers. Aperam has still a mix of secured
and unsecured debt, more typical of high yield issuers. Its
secured debt is the USD400 million BBF, which is secured by
inventories and receivables, and benefits from upstream
guarantees of certain operating subsidiaries. The BBF was undrawn
at the end of 2015 and 2016, and Moody's understands from the
company that it intends to replace it with an unsecured revolving
credit facility within the year. Those two points have been
factored in Moody's decision to avoid to notch down the rating of
the outstanding USD200 million convertible bond due 2020 because
of the subordination to the secured BBF, and align its rating to
the long term issuer rating of Baa3.


The stable outlook on Aperam's ratings reflects the rating
agency's expectation that the company will continue to focus on
operational improvement over the next 12 to 18 months to support
or increase its profitability and free cash flow generation.
Moody's also expects that Aperam's leverage will remain low and
that it will not pursue any debt-financed acquisitions.


Moody's does not currently anticipate any upward pressure on the
Baa3 issuer rating. While Aperam currently displays strong credit
metrics for the rating and enjoys a strong position in its
industry, it displays limited diversification in a cyclical
industry. An upgrade would likely require a further strengthening
of the business profile with a greater diversification.

Negative pressure would arise if (1) underlying markets slow and
EBIT margins decline to 7% or less; (2) Moody's adjusted
debt/EBITDA rises above 2.5x for a prolonged period; (3) free
cash flow becoming negative on an ongoing basis; or (4) the
company increases pro forma leverage as a result of a debt-
financed acquisition.

List of affected ratings:


Issuer: Aperam S.A.

-- Issuer Rating (Foreign Currency), Assigned Baa3


Issuer: Aperam S.A.

-- Senior Unsecured Conv./Exch. Bond/Debenture, Upgraded to Baa3
from Ba2


Issuer: Aperam S.A.

-- Probability of Default Rating, Withdrawn , previously rated

-- Corporate Family Rating, Withdrawn , previously rated Ba1

Outlook Actions:

Issuer: Aperam S.A.

-- Outlook, Remains Stable


The principal methodology used in these ratings was Global Steel
Industry published in October 2012.

Aperam S.A. is a leading global stainless and specialty steel
producer based on an annual production capacity of 2.5 million
tons in 2016. Aperam is the largest stainless and electrical
steel producer in South America (mainly Brazil), the second
largest stainless steel producer in Europe and fourth largest
producer in nickel alloys worldwide. In 2016, Aperam had sales of
$4.2 billion and shipments of 1.9 million tonnes.


EURO-GALAXY III: Fitch Corrects January 17 Rating Release
Fitch Ratings issued a corrected release on Euro-Galaxy III CLO
B.V., replacing the version published on Jan. 17, 2017 to correct
the unhedged non-euro-denominated asset limitation. Unhedged non-
euro-denominated assets are limited to a maximum exposure of 2.5%
as opposed to the 5% previously reported.

Fitch Ratings has assigned bv Euro-Galaxy III CLO B.V.'s
refinanced notes final ratings:

  EUR67 million Class A-R senior secured variable funding notes:
  'AAAsf'; Outlook Stable

  EUR153 million Class A senior secured floating-rate notes:
  'AAAsf'; Outlook Stable

  EUR9.5 million Class B-1senior secured fixed-rate notes:
  'AAsf'; Outlook Stable

  EUR38.5 million Class B-2 senior secured floating-rate notes:
  'AAsf'; Outlook Stable

   EUR23.3 million Class C senior secured deferrable floating-
   rate notes: 'Asf'; Outlook Stable

   EUR20 million Class D senior secured deferrable floating-rate
   notes: 'BBBsf'; Outlook Stable

   EUR23.5 million Class E senior secured deferrable floating-
   rate notes: 'BBsf'; Outlook Stable

   EUR8.4 million Class F senior secured deferrable floating-rate
   notes: 'B-sf'; Outlook Stable

Euro-Galaxy III CLO B.V. is a cash flow CLO. Net proceeds from
the refinancing notes were used to redeem the existing notes at
par and to invest in additional leveraged loans and bonds. The
additional investment follows a EUR42.25m increase in the
portfolio target par amount to EUR370m from EUR327.75m. The
portfolio is managed by Pinebridge Investments Europe Limited.
The transaction features a four-year reinvestment period, which
is scheduled to end in 2021, during which time Credit Industriel
et Comercial will act as junior collateral manager.


Average Portfolio Credit Quality

The average credit quality of obligors in the portfolio is in the
'B' category. Fitch has either public ratings or credit opinions
on 100% of the assets in the portfolio. The weighted average
rating factor (WARF) of the current portfolio is 31.8, as per the
January 2016 trustee report, below the maximum covenanted WARF of

High Expected Recovery

At least 90% of the portfolio will comprise senior secured
obligations. Fitch views the recovery prospects for these assets
as more favourable than for second-lien, unsecured and mezzanine
assets. The weighted average recovery rate (WARR) of the current
portfolio is 72.6%, as per the January 2016 trustee report, above
the minimum covenanted WARR of 67%.

Partial Interest Rate Hedge

Between 0% and 7.5% of the portfolio may be invested in fixed-
rate assets while fixed-rate liabilities represent 2.5% of the
total amount outstanding at origination. The transaction
therefore has a partial hedge against rising interest rates.

Unhedged Non-Euro Assets

Unhedged non-euro-denominated assets are limited to a maximum
exposure of 2.5% of the portfolio and the manager can only invest
in unhedged assets if, after applicable haircuts, the aggregate
balance of the assets is above the reinvestment target par.

Limited FX Risk
Asset swaps are used to mitigate currency risk on non-euro-
denominated assets. Exposure to any single swap provider may not
exceed 20% of the portfolio.


The issuer has issued new notes to refinance the original
liabilities. The refinancing notes bear interest at a lower
margin over EURIBOR or lower fixed-rate coupon than the notes
being refinanced and cannot be refinanced at a future date. The
issuer has amended the capital structure and extended the
maturity of the notes.

In conjunction with the refinancing, certain provisions of the
transaction documents have been amended. The amendment addresses
Volcker Rule concerns and results in the introduction of voting,
non-voting and non-voting exchangeable notes.


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

GROSVENOR PLACE III: Moody's Affirms Ba3 Rating on Cl. E Notes
Moody's Investors Service has upgraded the ratings on Class C and
Class D notes issued by Grosvenor Place CLO III B.V.:

-- EUR20,000,000 Class C Deferrable Interest Floating Rate Notes
    due 2023, Upgraded to Aaa (sf); previously on Oct 8, 2015
    Upgraded to Aa3 (sf)

-- EUR28,500,000 Class D Deferrable Interest Floating Rate Notes
    due 2023, Upgraded to A2 (sf); previously on Oct 8, 2015
    Affirmed Ba1 (sf)

Moody's also affirmed the ratings on the following notes issued
by Grosvenor Place CLO III B.V.:

-- EUR36,500,000 (Current balance outstanding: EUR8.37M) Class B
    Deferrable Interest Floating Rate Notes due 2023, Affirmed
    Aaa (sf); previously on Oct 8, 2015 Upgraded to Aaa (sf)

-- EUR14,000,000 Class E Deferrable Interest Floating Rate Notes
    due 2023, Affirmed Ba3 (sf); previously on Oct 8, 2015
    Affirmed Ba3 (sf)

Grosvenor Place CLO III B.V., issued in August 2007, is a
collateralised loan obligation (CLO) backed by a portfolio of
mostly high-yield senior secured European loans. The portfolio is
managed by CQS Cayman Limited Partnership. The transaction's
reinvestment period ended in October 2013.


The upgrades to the ratings on the Class C and Class D notes are
primarily a result of the significant improvement in their over-
collateralization (OC) ratios since the payment date in October
2016 when EUR54.05 million was used to pay Class A-3 notes in
full (42% of the original balance) and partially redeem class B
notes (77% of the original balance).

According to the trustee report dated December 2016 the Class B,
Class C, Class D and Class E OC ratios are reported at 1004.52%,
296.33%, 147.82% and 118.62% compared to October 2016 levels of
221.5%, 167.7%, 124.6% and 110.7%, respectively.

The OC ratios are expected to further increase at the next
payment date in April 2017 when the principal balance of
approximately EUR15.39 million, as reported in the December 2016
trustee report, will be used to fully redeem Class B notes and
start amortizing Class C notes.

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
performing par of EUR40.44 million and USD30.95 million,
principal proceeds balance of EUR6.96 million and USD8.90
million, a weighted average default probability of 19%
(consistent with a WARF of 2,914 over 3.89 years), a weighted
average recovery rate upon default of 45.87% for a Aaa liability
target rating, a diversity score of 9 and a weighted average
spread of 4.10%.

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

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.

Factors that would lead to an upgrade or downgrade of the

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it assumed 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 consistent with the base-case results.

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)Foreign currency exposure: The deal has a significant exposure
to non-EUR denominated assets. Volatility in foreign exchange
rates will have a direct impact on interest and principal
proceeds available to the transaction, which can affect the
expected loss of rated tranches.

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.


PHOSAGRO: Fitch Affirms BB+ IDR & Revises Outlook to Positive
Fitch Ratings has affirmed PhosAgro's Long-Term Foreign-Currency
Issuer Default Rating (IDR) and senior unsecured rating at 'BB+'
and has revised the Outlook on the IDR to Positive from Stable.

The Outlook revision reflects Fitch's expectation of PhosAgro
reaching its positive leverage guideline over the rating horizon
of 1.5x FFO net adjusted leverage by 2019 following the
completion of its expansion capex programme. This is underpinned
by PhosAgro's strong market position and market-leading cost
competitiveness which continues to support its strong cash
generation capacity and allows it to reduce leverage at a time of
low fertiliser prices and moderate capex.


Phosphate Pricing Bottoming Out: Phosphate fertiliser prices
dropped by 25%-30% during 2016. In particular, diammonium
phosphate (DAP) FOB US Gulf was at USD325/t in January 2017, up
from its USD315/t low in December 2016, but lower than the 2016
average of USD345/t and the 2015 average of USD459/t. Fitch
Ratings expects DAP pricing to have bottomed out as additional
capacity from Office Cherifien des Phosphates (OCP: BBB-
/Negative) and Ma'aden (not rated) is offset by capacity
reduction in China, and also supported by feedstock (ammonia)
price increases and robust demand.

Fitch however sees the longer-term DAP price increase being
limited despite feedstock price increases. This is due to low
global operating rates higher up the cost curve as well as due to
the flattening of the global cost curve driven by new above-
mentioned capacity.

Urea Pricing Modest Recovery: Urea pricing reached a trough in
mid-2016 and has been increasing since 4Q16 into 2017. An
increase in coal prices is driving up Chinese urea producers'
costs, and as a result there is a tightening in the regional
supply/demand balance, reinforced by a build-up of inventory
ahead of the spring application season. In addition, tighter
domestic pricing and low operating rates in China leading to
China exporting less urea suggest an increase in urea prices,
aided by a moderation in post-2017 global urea capacity

Strong Performance Despite Pressure: PhosAgro's credit profile
has remained strong during the ongoing broad market pressure if
compared to its peers like Mosaic (BBB-/Stable) due to the rouble
depreciation pushing it to the first position on the DAP cash
cost curve since 2015, as the majority of its costs are rouble-
denominated. PhosAgro also has a smaller capex programme than
peers such as OCP, which peaked in 2016 and which will be reduced
after 2016 as it completes its 760kt ammonia and 500kt urea
plants, as well as mining and beneficiation capex.

Capex Moderate After 2018: PhosAgro's capex will remain
significant over 2017 and 2018 as it aims to further secure its
raw material supply and attain full vertical integration through
the construction of new low-cost ammonia and urea plants in
Cherepovets, expansion at the Kirovsk phosphate mining site and
further efficiencies in its production lines. Fitch views
PhosAgro's investment strategy as neutral. 2015 and 2016 were
peak years in capex, with capex to EBITDA moderately exceeding
the company's target of 50% due to a combination of the FX impact
on capex (30% is driven by hard currencies) and operational cash-
flow pressure from weaker fertiliser markets.

Most projects are close to completion, with expectations that
capex will normalise at a level considerably below the company's
target of 50% capex to EBITDA after 2018.

Management Commitment to Reduce Leverage: Management has a
publicly announced target to de-lever to 1x net debt/EBITDA,
which it came close to reaching in 2015 after paying back debt
and posting record earnings. The company deviated from the target
in 2016 due to the fertiliser price fall combined with the
temporary capex peak and a dividend payout that was linked to the
previous year's strong performance. Large capex projects will
come to an end in 2017 and with prices expected to bottom out at
current levels, Fitch forecasts PhosAgro will be able to achieve
its positive guideline after 2018 and foresees a general
reduction in leverage over the rating horizon.

A combination of dividend policy (up to 50% of net income) and
capex policy (up to 50% of EBITDA) would translate into neutral
free cash-flow generation and an ability to stay at a targeted
leverage level given broadly stable fertiliser and FX markets.
However, significant market volatility, similar to that in 2015-
2016, may translate into a deviation from the company's
commitment to reduce leverage. Remedial measures such as a
temporary dividend and/or a capex cut would become critical to
the company's ability to revert to the targeted leverage level
within a reasonable period.


PhosAgro's 'BB+' rating corresponds to a 'BBB' standalone rating
excluding the two-notch corporate governance discount which is
the highest rating amongst all Fitch-rated fertiliser companies.
This reflects PhosAgro's strong operational cash-flow generation
which largely covers its capex and dividends, as well as
operations being in the first quartile of the global phosphate
fertilisers cost curve. Its phosphate peers include OCP (BBB-
/Negative) and Mosaic (BBB-/Stable), both leveraged at over 4x on
low fertiliser pricing and expected by Fitch to deleverage
towards 3x over the rating horizon as OCP completes its capex
programme and Mosaic deleverages after its acquisition of Vale's
fertiliser assets.

PhosAgro's Russian peers include EuroChem (BB/Negative) and
Uralkali (BB-/Negative), both on Negative Outlook. EuroChem is
facing low fertiliser prices and is expected to reduce leverage
after its 2017 capex peak as its potash projects come online.
Uralkali's 2015-2016 share buybacks, amidst low fertiliser
pricing, are driving its Negative Outlook. The ability to reduce
leverage in a depressed price environment is key in current
market circumstances.

No country-ceiling, parent/subsidiary or operating environment
aspects impact the rating.


Fitch's key assumptions within Fitch ratings case for the issuer

- DAP/MAP FOB Tampa to average at USD330/t in 2017-2018 before
   moving up to USD350/t by 2020;
- USD/RUB forecast to move from 61 in 2017 towards 57 in 2020;
- Dividend payout assumed to moderate at 40% in 2017 before
   increasing towards 50% in 2019-2020.


Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action

- Post-2017 positive FCF leading to debt reduction and FFO
   adjusted net leverage at or below 1.5x

- Evidence of moving towards management's leverage target of net
   debt-to-EBITDA of 1x

Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action

- FFO adjusted net leverage sustainably at or above 2.5x

- EBITDAR margin sustainably below 20%


Liquidity Remains Healthy: PhosAgro maintained strong liquidity
throughout 9M2016 with its cash position (RUB23bn at end-3Q16)
exceeding its short-term debt (end-3Q16: RUB17bn). Fitch
expectations of positive free cash-flow generation in 2017
coupled with significant committed undrawn facilities add comfort
to the issuer's liquidity level.


OJSC PhosAgro

Foreign-Currency Long-Term IDR: affirmed at 'BB+'; Outlook
revised to Positive from Stable;

Foreign-Currency Short-Term IDR: affirmed at 'B';

Foreign-currency senior unsecured rating: affirmed at 'BB+';

Local-Currency Long-Term IDR: affirmed at 'BB+'; Outlook revised
to Positive from Stable;

Local-currency senior unsecured rating: affirmed at 'BB+'

PhosAgro Bond Funding Limited:

Foreign-currency senior unsecured rating on the loan
participation notes: affirmed at 'BB+'


BANKIA SA: Highest Criminal Court Launches Probe Into Flotation
Tobias Buck at The Financial Times reports that Spain's highest
criminal court has launched a probe against the former heads of
the central bank and the stock market regulator, declaring them
formal suspects over their failure to stop the ill-fated
flotation of Bankia.

The bailout and nationalization of Bankia marked the nadir of
Spain's 2012 financial crisis and forced the government to
request financial aid from its EU partners, the FT notes.

The sprawling savings bank went on to absorb more than EUR20
billion in state support and posted the biggest loss in Spanish
corporate history, the FT recounts.  Bankia has returned to
profit since but remains in state hands, the FT states.

On Feb. 13, investigating magistrates at the Audiencia Nacional
decided to take legal aim at eight senior officials who were in
charge of supervising the bank and its disastrous 2011 initial
public offering, the FT relates.

They include, most prominently, Miguel Angel Fernandez Ordonez,
the former governor of the Bank of Spain, and Julio Segura
Sanchez, the ex-president of the CNMV market regulator, the FT

Fernando Restoy, a senior CNMV official who went on to serve as
deputy director of the Bank of Spain until the end of last year,
was also declared a formal suspect, the FT relays.

The decision means the eight suspects will have to appear in
court for a hearing, but they have not yet been charged, the FT
says.  The magistrates have also yet to decide what criminal
offences the officials may have committed, the FT relays, citing
the 15-page court document.

On May 10, 2011, just over two months before the IPO, one
internal email warned that Bankia had "very severe and growing
problems of profitability, liquidity and solvency", the FT
recounts.  The message repeated the assessment made in previous
emails, including in capital letters and marked in red, that
Bankia was "unviable", the FT notes.

Despite these warnings, the lender was floated on the Madrid
stock exchange on July 20 2011, at an issue price of EUR3.75, the
FT states.   Hundreds of thousands of retail shareholders -- many
of them Bankia clients -- bought into the IPO, only to see the
value of their stock wiped out the following year, the FT

Bankia SA is a Spanish banking conglomerate that was formed in
December 2010, consolidating the operations of seven regional
savings banks.  As of 2012, Bankia is the fourth largest bank of
Spain with 12 million customers.


TURKIYE VAKIFLAR: Fitch Assigns BB Rating to Tier 2 Notes
Fitch Ratings has assigned Turkiye Vakiflar Bankasi T.A.O.' s
(Vakifbank; BB+/Stable/bb+) issue of Basel III-compliant Tier 2
capital notes due 2027 a final rating of 'BB'. The size of the
issue is USD228 million.

The final rating is one notch below the expected rating which
Fitch assigned to the notes on 16 January 2017. This reflects the
downgrade of Vakifbank's Viability Rating, the anchor rating from
which the subordinated debt rating is notched, on 2 February

The notes qualify as Basel III-compliant Tier 2 instruments and
contain contractual loss absorption features, which will be
triggered at the point of non-viability of the bank. They are
subject to permanent partial or full write-down upon the
occurrence of a non-viability event (NVE). There are no equity
conversion provisions within the terms.

An NVE is defined as occurring when the bank has incurred losses
and has become, or is likely to become, non-viable as determined
by the local regulator, the Banking and Regulatory Supervision
Authority (BRSA). The bank will be deemed non-viable when it
reaches the point at which either the BRSA determines that its
operating licence is to be revoked and the bank liquidated, or
the rights of the bank's shareholders (except to dividends), and
the management and supervision of the bank, should be transferred
to the Savings Deposit Insurance Fund on the condition that
losses are deducted from the capital of existing shareholders.

The notes have a 10-year maturity (2027) and a call option after
five years (2022).


The notes are rated one notch below Vakifbank's Viability Rating
(VR) of 'bb+' in accordance with Fitch's "Global Bank Rating
Criteria". The notching includes zero notches for incremental
non-performance risk relative to the VR and one notch for loss
severity. Extraordinary state support is not factored into the
rating as Fitch believes sovereign support cannot be relied upon
to extend to bank junior debt obligations in Turkey.

Fitch has applied zero notches for incremental non-performance
risk, as the agency believes that write-down of the notes will
only occur once the point of non-viability is reached and there
is no coupon flexibility prior to non-viability.

The one notch for loss severity reflects Fitch's view of below-
average recovery prospects for the notes in case of an NVE. Fitch
has applied one notch, rather than two, for loss severity, as
partial, and not solely full, write-down of the notes is
possible. In Fitch's view, there is some uncertainty as to the
extent of losses the notes would face in case of an NVE, given
that this would be dependent on the size of the operating losses
incurred by the bank and any measures taken by the authorities to
help restore the bank's viability.



As the notes are notched down from Vakifbank's VR, their rating
is primarily sensitive to a change in the VR. The notes' rating
is also sensitive to a change in notching due to a revision in
Fitch's assessment of the probability of the notes' non-
performance risk relative to the risk captured in Vakifbank's VR,
or in its assessment of loss severity in case of non-performance.

Vakifbank's ratings are listed below:

Long-Term Foreign IDR: 'BB+'; Stable Outlook
Short-Term Foreign IDR: 'B'
Long-Term Local Currency IDR: 'BBB-'; Stable Outlook
Short -Term Local Currency IDR: 'F3'; Stable Outlook
National Long-Term Rating: 'AAA(tur)'; Stable Outlook
Viability Rating: 'bb+'
Support Rating: '2'
Support Rating Floor: 'BB+'
Long-term senior unsecured rating: 'BB+'
Short-term senior unsecured rating: 'B'
Subordinated debt rating: 'BB'
T2 capital notes rating: 'BB'


UKRAINE: UAH4BB Returned on Insolvent Banks' Refinancing Credits
Interfax-Ukraine reports that the National Bank of Ukraine (NBU)
in 2016 returned over UAH4 billion on refinancing credits of
insolvent banks.

According to Interfax-Ukraine, the NBU reported on its website
that it received UAH2.3 billion thanks to payments on securities,
UAH1.04 billion thanks to payment of credits, UAH448.6 million
thanks to sale of 172 facilities and UAH295.3 million from other

The NBU said that the sum in 2016 was larger thanks to
optimization of operation of NBU structural divisions servicing
the credit return, Interfax-Ukraine relates.  In addition, the
Individuals Deposit Guarantee Fund stirred up work to sell
property used as collateral and send funds from payment of
credits, Interfax-Ukraine notes.

Total debt of insolvent banks to the NBU as of January 1, 2017
was UAH51.8 billion, Interfax-Ukraine discloses.

U N I T E D   K I N G D O M

ARROW GLOBAL: Moody's Raises Corporate Family Rating to Ba3
Moody's Investors Service has upgraded to Ba3 from B1 the
Corporate Family Rating (CFR) of Arrow Global Group PLC (Arrow).
Moody's has also upgraded to Ba3 from B1 the ratings of the
backed senior secured notes issued by Arrow Global Finance plc, a
wholly-owned subsidiary of Arrow. The outlook is stable on all

The upgrade reflects Moody's view that Arrow's franchise and
credit fundamentals have materially improved over the past two
years and are now consistent with a Ba3 rating. The agency
expects Arrow to continue to maintain its strong earnings
generation capacity and debt leverage at current levels going


The key drivers of rating action are the strengthening of Arrow's
franchise in Europe and the increasing diversification of its
business model through a shifting away from the debt purchasing
segment and an increased contribution from asset management
services. Additional elements supporting the rating upgrade were
the moderate debt leverage, which has been consistently lower
than peers, its continuously strong earnings generation capacity
and lengthened maturity profile.

Over the past two years, Arrow consolidated its presence in the
UK and expanded in other European countries, such as Portugal,
Belgium and the Netherlands and more recently announced the
acquisition of a small company, operating in the servicing
business in the Italian structured finance market. This
increasing geographical diversification, which the agency
believes has been conducted with a prudent approach, strengthened
Arrow's franchise, making it one of the leading players in the
region. Positively, these mergers also led to earnings
diversification: revenues from asset management services
accounted for 19% of total revenues in the first nine months of
2016, compared to just 9% of 2015.

Despite the numerous mergers and the related costs, Arrow has
maintained solid earnings generation capacity: net income over
average managed assets has averaged 5% in the period 2013 -- 2015
and, excluding one-off items, Moody's expects this ratio to
further improve in 2016. Debt leverage, calculated as gross debt
over adjusted EBITDA, has been moderate and lower than rated
peers, ending at 3.5x at end-September 2016.

Finally, owing to the refinancing of its sterling bond in
September, Arrow was able to lengthen its maturity profile, which
had a debt duration of 6.2 years at end-September 2016, and lower
its cost of funding. Both elements will support profitability
over the outlook period.


The outlook is stable reflecting the favorable market conditions,
the company's lengthened maturity profile, strong earnings
generation capacity and the agency's expectation that the company
will continue to maintain its debt leverage metrics at levels
consistent with a Ba3 rating.


Arrow's CFR could be upgraded following sustainable improvements
in: (i) profitability ratios, with adjusted EBITDA over interest
expenses above 5.5x; (ii) debt leverage metrics, with gross debt
on adjusted EBITDA below 3x; and/or (iii) capital position,
measured as Tangible Common Equity over Tangible Managed Assets,
above 10%.

The ratings could be downgraded because of an unexpected
deterioration in leverage and profitability metrics, such as: (i)
gross debt on adjusted EBITDA climbing above 5.5x; and/or the
adjusted EBITDA over interest expenses going below 2x.


Issuer: Arrow Global Finance plc


-- BACKED Senior Secured Regular Bond/Debenture (Local & Foreign
    Currency), Upgraded to Ba3 Stable from B1 Stable

Outlook Action:

-- Outlook, Remains Stable

Issuer: Arrow Global Group PLC


-- LT Corporate Family Rating, Upgraded to Ba3 Stable from B1

Outlook Action:

-- Outlook, Remains Stable


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

BRAKEWORLD: Has Fallen Into Administration, Cuts 18 Staff
Laurence Kilgannon at Insider Media Limited reports Brakeworld, a
Leeds-headquartered vehicle brake and filter supplier, has fallen
into administration, with 18 staff made redundant.

The report notes but insolvency specialists Michael Kienlen and
Mark Ranson from Armstrong Watson were appointed joint
administrators on January 31, 2017, according to Insider Media

They are now in the process of overseeing a wind-down of the
business, the report relays.

An initial 18 redundancies have been made and the business is
continuing to trade while the administrators manage an orderly
sale of the company's stock, the report notes.

Established in 1986, Brakeworld operates from a site in Bramley
close to the M62 and M1 distributing parts to independent motor
factors and buying consortia across the country.

CO-OPERATIVE BANK: Core Ethical Mandate May Hamper Sale to Rival
Ben Martin at The Telegraph reports that Co-operative Bank's core
ethical mandate is expected to pose a major obstacle to a sale of
the troubled lender to a rival firm.

The bank, which put itself up sale on Feb. 13 in a bid to solve
its financial woes, has a strict policy that forbids it from
funding host activities, including those that contribute to
climate change or animal testing of cosmetics, The Telegraph
discloses.  The mandate sets the lender apart from other high-
street banks, The Telegraph notes.

However, while its management has been at pains to characterize
the policy as an asset during the sale process, experts believe
it is more likely to act as a deterrent to another bank buying
the loss-making business, The Telegraph states.

Co-op Bank has been forced to explore a sale amid mounting
concern about its deteriorating capital buffer and rivals such as
Clydesdale and Santander are seen as possible bidders, The
Telegraph relays.

Speculation has been growing about the lender's future ever since
it warned last month that it would not meet capital requirements
set out by the Bank of England's Prudential Regulation Authority
until at least 2020, The Telegraph relates.  As well as a sale,
it is also looking at other ways of stabilizing its finances,
including converting bond investors into equity, The Telegraph

Its woes can be traced back to 2009 merger with building society
Britannia, which saddled it with a host of bad loans and led to
the discovery in 2013 of GBP1.5 billion black hole in its
finances, The Telegraph recounts.

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

CYRENIANS CYMRU: Former Head Faces Fraud Charges After Collapse
BBC News reports that Robert Mark Davies, the former head of
finance at Cyrenians Cymru, a homeless charity, in Swansea has
been charged with fraud.

Mr. Davies was arrested in 2014 following an investigation by
South Wales Police's Economic Crime Unit, BBC relates.  According
to BBC, he will appear at Cardiff Magistrates Court on Feb. 21
accused of fraud by abuse of position.

The charity went into administration in February 2015, BBC

Cyrenians Cymru offered a range of services to homeless and
disadvantaged adults.

EDCON HOLDINGS: Moody's Withdraws 'Ca' Corporate Family Rating
Moody's Investors Service has declared Edcon Holdings Limited's
capital restructuring to be a distressed exchange and an
effective default on the company's rated debt instruments.

At the same time, Moody's has withdrawn Edcon's Ca corporate
family rating (CFR) and Ca-PD/LD probability of default rating as
well as the Ca rating to the super senior PIK notes due 2019, the
C rating to the senior secured notes due March 2018 and the C
rating to senior secured PIK toggle notes due June 2019 issued by
Edcon Limited (rated debt).


Edcon announced that it had finalised the changes to the Group's
organisational structure and restructuring of its debt
obligations, effective February 1, 2017. The capital
restructuring, under Moody's definitions, is considered a
distressed exchange and an effective default on the company's
rated debt instruments as it represents a diminished financial
obligation relative to the previous agreements.

Moody's withdrawal of Edcon's CFR is due to the capital
restructuring which has resulted in the rated debt obligations no
longer outstanding.

List of affected ratings:


Issuer: Edcon Holdings Limited

-- Corporate Family Rating (Foreign Currency), Withdrawn,
    previously rated Ca

-- Probability of Default Rating, Withdrawn, previously rated
    Ca-PD /LD

Issuer: Edcon Limited

-- Backed Super Senior Secured 8% PIK notes maturing 2019,
    Withdrawn , previously rated Ca (LGD3)

-- Backed Senior Secured 9.5% notes maturing 2018, Withdrawn,
    previously rated C (LGD5)

-- Backed Senior Secured 12.75% PIK toggle notes maturing 2019,
    Withdrawn , previously rated C (LGD5)

Outlook Actions:

Issuer: Edcon Holdings Limited

-- Outlook, Changed To Rating Withdrawn From Stable

Issuer: Edcon Limited

-- Outlook, Changed To Rating Withdrawn From Stable

The Local Market analyst for this rating is Dion Bate, 27-11-217-

FOOD RETAILER: Budgens Store Faces Closure, 34 Jobs at Risk
Owen Hughes at Daily Post reports that North Wales's only Budgens
supermarkets is at risk of closure after its operator went into

The chain only arrived in the region last year with their first
store in Buckley in Flintshire, Daily Post notes.

But now that supermarket could close with 34 jobs hanging in the
balance, Daily Post states.

The closure threat came about after Food Retailer Operations
Limited (FROL) went into administration, Daily Post relays.

According to Daily Post, the stores affected include Buckley and
Aberystwyth in Ceredigion, where 23 staff are employed.  They
remain open for shoppers, Daily Post discloses.

Since its acquisition of the stores from Co-op in July 2016, the
company has experienced difficult trading conditions, Daily Post

This has resulted in the company being placed into administration
despite sustained efforts to make the business more commercially
viable, according to Daily Post.

"FROL has faced significant headwinds in the form of pricing
pressures, intense competition and structural change across the
food retail sector," Daily Post quotes Mike Denny, Joint
Administrator, PwC, as saying.

"We are continuing to trade all 34 stores, whilst engaging with
interested parties for the sites and the other leasehold
interests of the Company."

FROL operates 34 convenience stores across the UK, which trade
under the Budgens brand and employs 872 people.

HELIOS TOWERS: Moody's Assigns B2 Corporate Family Rating
Moody's Investors Service has assigned a B2 corporate family
rating (CFR) and B2-PD probability of default rating to Helios
Towers Africa Ltd. (HTA), a holding company and guarantor of HTA
Group, Ltd.

At the same time, Moody's has assigned a B2 rating with a loss
given default (LGD) assessment of LGD4 to HTA's proposed $600
million senior guaranteed notes due 2022 issued by HTA Group,
Ltd. The proceeds will be used to repay HTA's existing debt of
$374 million and provide $62 million in financing to increase its
Tanzanian operation stake to 100% from 76%. The remaining amount
will be used to fund $31 million in site acquisitions, $110
million in capital expenditures along with $23 million in
estimated fees and expenses associated with issuing the new

The outlook on the ratings is stable.

This is the first time that Moody's has assigned ratings to HTA.

"The B2 corporate family rating reflects HTA's status as the only
independent operator in the mobile communications towers market
in the Democratic Republic of the Congo (DRC, B3 stable),
Tanzania (unrated) and the Republic of the Congo (ROC, B3
negative), and its number three position in Ghana (B3 stable) by
revenue market share, with around 19%," says Douglas Rowlings, a
Moody's Assistant Vice President and Analyst.

"In markets where HTA is the only independent operator, it owns
over 50% of the towers - with mobile network operators (MNOs)
owning the rest - ensuring strength of HTA's position against
significant challenges being mounted by other independent mobile
communications towers operators," adds Rowlings.



The ratings consider the annuity-like contracted cash flow
streams which are primarily US dollar and euro linked with no
cash extraction issues to date from its countries of operations.
HTA's seasoned management team has strong established
relationships with the MNOs across all four countries where it
operates. Cash flow stability is offered by long-term contract
terms for tower services (typically 10-15 years) provided to the
MNOs and representing $3.2 billion in revenues over the next 14
years. Counterparty risk is mitigated by approximately 81% of
contracted future revenues being derived from five MNOs, with
parent entities that carry ratings of Ba1 and above.

HTA's ratings are constrained by the mid-tier scale of its tower
portfolio comprising 6,500 towers and 11,807 tenants at 31
October 2016. Likewise, this limits revenue generation- which
Moody's estimates will register around $345 million in 2017. HTA
has moderate leverage levels - as measured by debt/EBITDA - which
Moody's expects to be around 5x at the end of 2017. The ratings
embed elevated geopolitical risk in all four countries of


The B2 rating (LGD4) assigned to HTA's proposed $600 million
worth of senior notes reflects their pari passu position in the
capital structure versus HTA's $60 million revolving credit


HTA benefits from a strong liquidity profile supported by surplus
cash balances, which Moody's estimates will remain in excess of
$100 million over the next 18 months, once operating companies'
cash requirements of around $30 million are removed.

This is further strengthened by a $60 million revolving liquidity
facility, which Moody's expects will remain undrawn for the next
18 months and will only be utilised for unforeseen liquidity

Additional liquidity flexibility is afforded by HTA's long-dated
debt maturity profile.


The outlook on the ratings is stable. Moody's expects that HTA
will grow and delever in accordance with its business model.

The ratings further presume supportive regulatory, political and
economic environments in all four operating countries, and
particularly in the DRC and Tanzania, given their more material
contribution to cash flow generation.


Downward pressure on the ratings could emanate from: (1) a
debt/EBITDA sustainably above 6.5x; (2) a weakened liquidity
profile; (3) adverse contractual, regulatory, economic and/or
political developments materially impacting HTA's ability to
operate profitably and sustainably. In particular, Moody's would
consider a downgrade of the ratings if the company makes
acquisitions substantially beyond Moody's expectations -- in
terms of size or price paid -- or there is a deterioration in the
financial profile of one of its major tenants, which would in
turn cause HTA's credit metrics to weaken.

HTA could see upward ratings pressure over the next two years,
based on its plan to deliver tower and tenant co-location growth,
with a debt/EBITDA sustainably below 5x.

The principal methodology used in these ratings was Global
Communications Infrastructure Rating Methodology published in
June 2011.

The Local Market analyst for this rating is Douglas Rowlings,

Headquartered in London, HTA Holdings Ltd. is the only
independent tower company providing services in the DRC, Tanzania
and the ROC, with a number three market position in Ghana. HTA
has tower service contracts with the local mobile operating
entities of Vodafone Group Plc (Baa1 stable), Orange (Baa1
stable), Bharti Airtel Ltd. (Baa3 stable), MTN Group Limited
(MTN, Baa3 negative), and Millicom International Cellular S.A.
(Ba1 negative). For the 10 months to 31 October 2016, HTA
reported revenues of $228.5 million and EBITDA of $69.9 million.

HERO ACQUISITIONS: Moody's Affirms B1 Corporate Family Rating
Moody's Investors Service has affirmed Hero Acquisitions
Limited's (HSS) B1 corporate family rating (CFR) and B1-PD
probability of default rating (PDR). Concurrently, Moody's has
downgraded to B2 from B1 the instrument rating on the GBP136
million outstanding senior secured notes maturing in 2019 issued
by HSS Financing plc, a subsidiary of HSS. Moody's has changed
the outlook on all the ratings to negative from stable.


"The change of outlook reflects (1) HSS' adjusted leverage which
has remained at an elevated level since 2015, (2) the moderate
de-leveraging prospects for the business over the next 12 months
in the context of a high level of competition and Moody's
expectation of a slowing gross domestic product (GDP) growth in
the United Kingdom (UK), and (3) the relatively weaker liquidity
position with limited headroom under the revolving credit
facility (RCF)", says Sebastien Cieniewski, Moody's lead analyst
for HSS.

The downgrade of the instrument rating on the senior secured
notes to B2 reflects (1) the large amount of RCF ranking ahead,
(2) Moody's expectation that a significant portion of this RCF
will remain drawn for a prolonged period of time due to the
projected limited free cash flow (FCF) generation, and (3) the
overall higher risk profile of the group compared with that at
the time of the initial public offering (IPO) due to the
increased leverage.

While the company is weakly positioned within its rating
category, Moody's has affirmed the B1 CFR at this stage
reflecting the rating agency's expectation that both leverage and
liquidity could moderately improve over the next 12 months.
However, Moody's also believes the company has little headroom
for underperformance.

Adjusted leverage (as calculated by Moody's) increased to 4.0x as
of 1 October 2016 due to the cash investment made by HSS in the
start-up costs of its new National Distribution and Engineering
Centre (NDEC) which amounted to GBP11.5 million over the last
twelve months -- excluding those non-recurring items adjusted
leverage was 3.5x. Moody's believes that HSS can reduce its
leverage to below 3.5x over the next 12 months if (1) it manages
to significantly decrease non-recurring items and increase cost
efficiencies, despite the full implementation of the new
distribution model being delayed to Q1 2017 from the end of 2016
and (2) maintains a disciplined approach to capital expenditures
leading to moderately positive FCF to be used to reduce drawings
under the RCF.

Moody's projects moderate single-digit revenue growth for HSS in
FY 2017 -- at a lower rate compared to that observed in the first
nine months of FY 2016. HSS experienced a 10.9% revenue growth
over the 40-week period to 1 October 2016 compared with the 39-
week period to 26 September 2015, mainly driven by HSS' services
segment (20% of group revenues) benefitting from new supply chain
management contracts. Revenue growth should slow down in the
absence of any such new large contract signing in FY 2017 while
GDP growth weakens in the UK to around 1.0% in 2017 compared with
c.2.0% in 2016 as projected by the rating agency.

HSS' liquidity has significantly tightened since the company's
IPO in 2015 and consisted of GBP4 million of availability under
the GBP80 million RCF, GBP4.4 million of cash on the balance
sheet, and headroom under the committed finance lease facilities
as of 1 October 2016. However, the rating agency projects the
liquidity to improve from this low level over the next 12 months
reflecting management's November 2016 guidance for a reduction in
net debt by the year-end, the GBP13 million equity injection
(before expenses) from HSS's largest shareholders, Exponent and
Toscafund, in December 2016 and moderately positive FCF.

HSS's PDR at B1-PD, at the same level as the CFR, reflects
Moody's assumptions of a 50% family recovery rate given the mix
of bank debt and bonds in the capital structure. The RCF has a
springing leverage covenant only that also acts as a draw stop,
which requires a minimum EBITDA of GBP35 million and tested only
once 25% of the facility is drawn. The senior secured notes are
rated B2, one notch below the CFR, reflecting the size of the
super senior RCF ranking ahead in the event of enforcement.


The negative outlook reflects the little headroom for
underperformance over the next 12 months for HSS to reduce its
leverage from a high level in 2016 and for improvement of the
liquidity position in the context of a challenging trading
environment and the final stage of implementation of the
company's new operating model.


While there is no upwards pressure on the ratings in the short-
term, the outlook could be stabilized if HSS (1) successfully
executes the final phase of the NDEC implementation leading to a
significant reduction in non-recurring expenses and cost
efficiencies, (2) reduces adjusted leverage (as calculated by
Moody's) to well below 3.5x on a sustainable basis, and (3)
enhances its liquidity position through positive free cash flow
generation increasing the headroom under the RCF facility.


HSS could be downgraded if (1) the company continues experiencing
a high level of non-recurring items, (2) EBITA as reported by the
company remains flat or declines, (3) adjusted leverage is
maintained at or above 3.5x on a sustained basis, and (3) the
company does not improve its liquidity position.

The principal methodology used in these ratings was Equipment and
Transportation Rental Industry published in December 2014.

HSS is a provider of tool and equipment hire and related services
in the UK and Ireland. The company operates mainly in the
business-to-business market (in excess of 90% of total turnover)
through its flagship brand HSS Hire for its core tool and
equipment rental activities. Thanks to acquisitions, the company
has diversified its product offering to include temporary power
solutions, powered access, and temporary cooling and heating
solutions. In February 2015, HSS Hire Group plc, HSS's top
holding company, listed its share capital on the London Stock

NEERG ENERGY: Fitch Assigns Final B+ Rating to USD475MM Sr. Notes
Fitch Ratings has assigned Neerg Energy Ltd's USD475m 6% senior
notes due 2022 a final rating of 'B+' with a Recovery Rating of

The rating on the notes reflects the credit profile of a
restricted group of operating entities under ReNew Power Ventures
Private Limited, a company involved in renewable power generation
in India.

Neerg Energy is a SPV held by a trust and its ownership is not
linked to ReNew Group. The SPV will use the issue proceeds to
subscribe to proposed masala bonds (offshore bonds denominated in
Indian rupee but settled in US dollars) to be issued by the
entities in the restricted group. The SPV will not undertake any
business activity other than investing in the proposed masala

The assignment of the final rating follows a review of final
documentation that conforms to the draft documentation previously
received. The final rating is the same as the expected rating
assigned on 23 January 2017. However, Fitch expects lower
headroom under the current rating due to higher-than-expected
debt at the restricted group, as Neerg Energy raised USD475m
against Fitch previous expectations of USD450m. This is likely to
delay credit metrics improvements, with little cushion to absorb
interim operational weakness. Fitch believes improvement in the
restricted group's leverage, as measured by gross adjusted
debt/EBITDAR, to below 5.0x and EBITDA fixed-charge cover to
around 2x may now extend beyond the agency's earlier expectations
of improvements in the financial year to end-March 2020 (FY20).


Ratings Linked to Restricted Group: Fitch's rating on the US
dollar notes reflects the credit strengths and weaknesses of the
debt structure and assets of the operating entities that form the
restricted group. The US dollar noteholders will benefit from a
first charge over the masala bonds in addition to a charge over
the banks' accounts and 100% of the shares of the SPV. The masala
bonds in turn are secured by a first charge on all assets
(excluding accounts receivables) and cash flows of the operating
entities in the restricted group.

The indentures on the US dollar notes and masala bonds restrict
cash outflows and debt incurrence. The restricted group is not
permitted to incur additional debt or make restricted payments if
they raise the restricted group's ratio of gross debt/EBITDA to
above 5.5x. The restricted group does not have significant prior-
ranking debt, aside from a working capital debt facility of a
maximum of USD30m - secured exclusively against accounts
receivables - and total external debt at the restricted group is
limited to 15% of total assets.

Seasoned Portfolio, Diversified Operations: The restricted group
has total generation capacity of 504MW. Of this, 91% was
operational at end-2016, with over 40% in operation for over two
and a half years, while the rest were launched in the last 12
months. Fitch expects the rest to start operations by the FYE17.

The assets of the restricted group are also diversified by type
(wind: 78% of total capacity; solar: 22%) and location, which
mitigates risks from adverse climatic conditions. The wind assets
are spread across five Indian states; though wind patterns across
larger geographic areas tend to be correlated, they are
complemented by solar power plants.

Price Certainty, Volume Risks: The restricted group's assets
benefit from long-term power purchase agreements (PPAs) for all
of its wind and solar assets, with tenors of 10-25 years in case
of contracts with state utilities, and 7-10 years for direct
sales. Although the long-term PPAs provide protection from price
risk production volumes will vary with wind and solar radiation

Weak Counterparty Profile: The rating also reflects the weak
credit profiles of the key counterparties of the restricted
group -- state-owned power distribution utilities, which account
for about 80% of the restricted group's offtake. The rest of the
offtake is sold directly to corporate customers, increasing the
diversity of counterparties. The utilities in the Indian states
of Andhra Pradesh and Gujarat have a record of timely payments,
but the receivables cycle has been longer for others. However,
there have been no payment defaults by state utilities to the
renewable sector to date, despite payment delays.

Fitch expects an improvement in the financial health of the state
utilities and a reduction in payment delays due to the
introduction of reforms for state distribution utilities in
India. The states that purchase power from the restricted group
have signed up for these reforms.

Foreign-Exchange Risk Largely Hedged: Foreign-exchange risk
arises as the earnings of the restricted group's assets are in
Indian rupees while the notes are denominated in US dollars.
However, the SPV plans to fully hedge the semi-annual coupon
payments and substantially hedge the principal of its US dollar
notes. The proposed redemption premium on the masala bonds to be
issued by the operating entities in the restricted group, which
is payable to the SPV, should provide an additional cushion

Weak but Improving Financial Profile: Fitch expects the
restricted group's financial profile to improve, with leverage
falling below 5.0x. This is supported by higher EBITDA, as some
existing assets chalk up full years of operation and new assets
come online. However, the improvement may be delayed beyond
Fitch's initial expectations of FY20 on account of the higher-
than-expected debt levels at the restricted group. Leverage of
8.0x at FYE16 was mainly due to the debt for projects under
construction. The restricted group plans to expand capacity, but
Fitch does not expect any unplanned capex in the near-term given
note covenant restrictions. Further, the company has flexibility
to defer capex, if required.

The US dollar notes face refinancing risk, as the cash balance at
the restricted group is not likely to be sufficient to repay the
notes at maturity. However, this risk is mitigated by ReNew
Power's relatively sound access to funding and support from its
strong equity investors.

ReNew Power Guarantee: The ratings on the notes are not linked to
ReNew Power's credit quality. ReNew Power provided a guarantee
for the proposed masala bonds at the inception of this
transaction, but the guarantee may not be available through the
life of the notes. This is because it is due to fall away once
the restricted group's gross debt/EBITDA falls below 5.5x.


The ratings on the SPV's bond are in line with high 'B' category
ratings of other rated peers. Star Energy Geothermal (Wayang
Windu) Ltd (B+/Stable) has a better financial profile than the
restricted group, but is constrained by its single-site risk,
while the restricted group's assets are more diversified and
operations are of a larger scale.

The restricted group's operations and financial profile are
comparable to those of Greenko Dutch B.V, whose senior unsecured
notes are also rated 'B+', and stronger than the standalone
assessment of 'B' of the senior unsecured notes of Greenko
Investment Company. The higher rating of Infinis Plc (BB-
/Negative) reflects the benefits of UK regulations on renewables
obligations and a stronger financial profile. Infinis' free cash-
flow generation is underpinned by its contracted position until
1H18, but the Negative Outlook reflects Fitch expectations that
the company's FFO-adjusted net leverage will breach rating
guidelines from FY17.


Fitch's key assumptions within the rating case for issuer

- The plant load factors in line with the P75 estimates (25%
   probability that the projects will not meet the estimates) in
   the medium- to long-term.
- Plant-wise tariff in accordance with PPAs.
- EBITDA margins of about 88%-89%.
- No dividend payouts from the restricted group over next four
   to five years.
- Capex of about INR2bn (30MW) and INR7bn (104MW) in FY19 and
   FY20, respectively, in line with the covenants in the note


Positive: Developments that may, individually or collectively,
lead to positive rating action include:
- EBITDA fixed-charge coverage of 2.5x or more on a sustained
   basis. Fixed charges include the cost of forex hedging; and
- improvement in leverage, as measured by gross adjusted
   debt/operating EBITDAR, to below 5x on a sustained basis.

Negative: Developments that may, individually or collectively,
lead to negative rating action include:

- EBITDA fixed-charge coverage not meeting Fitch's expectation
   of around 2x on a sustained basis over the medium term; and
- failure to adequately mitigate foreign-exchange risk.

Liquidity to Improve: The refinancing of the restricted group's
project debt by the US dollar notes is likely to improve the
group's liquidity. The notes have a five-year maturity, resulting
in minimal debt maturities in the medium term. Fitch expects the
restricted group's cash flow from operations to be sufficient to
cover any capex in the near-to medium-term, although it can take
additional external debt to the extent allowed (15% of the
restricted group's total assets) under the bond indenture for its
capex or acquisitions.

TES GLOBAL: Moody's Lowers Corporate Family Rating to Caa1
Moody's Investors Service has downgraded the ratings of UK-based
education advertisement company TES Global Holdings Limited's
including the Corporate Family Rating (CFR) to Caa1 from B3 and
the Probability of Default Rating (PDR) to Caa1-PD from B3-PD.
Concurrently, Moody's has downgraded the ratings of the GBP200
million senior secured notes due 2020 and the GBP100 million
senior secured floating rate notes due 2020 issued by TES Finance
PLC to Caa1 from B3. The outlook on all ratings is stable.


The downgrade of TES's ratings reflects the negative trading of
transactional advertising business that continues to be affected
by UK schools budgetary constraints. While in Q1 2017 (ended
November 2016), the company reported +26% revenue and +12% EBITDA
growth compared to Q1 2016, the increase was mainly the result of
the consolidation of previously acquired businesses. On a like-
for-like basis both revenue and EBITDA continued to remain flat
or negative.

In the last two years, company's adjusted EBITDA has steadily
declined to GBP43.8 million for the last twelve months to
November 2016 from GBP51 million in fiscal year 2015 and GBP56
million in fiscal year 2014. As such, Moody's adjusted gross debt
to EBITDA ratio increased to 7.2x as of November 2016 from 5.4x
as of August 2014. As acquisitions will be fully consolidated
from April 2017, sustainable deleverage will require the company
to achieve organic growth starting from Q4 2017 (quarter ending
August 2017).

The downgrade also reflects Moody's concerns around the
sustainability of the current capital structure as the revolving
credit facility and the outstanding notes are due in July 2019
and July 2020 respectively.

Moody's positively notes the uptake in the subscription model by
1,000 schools at the end of January 2017. While the transition to
a subscription model will improve revenue and cash flow
visibility, it currently represents only 10% of total revenue on
an annualized basis and the migration carries embedded execution
risks. The transition from print to digital is progressing well
with approximately 83% of advertising volumes now being digital

TES's cash generation, while materially reduced due to declining
EBITDA, remains adequate supported by limited working capital and
capex needs. Moody's expects that TES's Adjusted Free Cash Flow
to Debt will remain in the low single digit territory over the
rating horizon. At the end of November 2017, the company reported
cash and cash equivalents on balance sheet of GBP10 million and
had access to a small undrawn GBP20 million revolving credit
facility (RCF). TES is not exposed to any material term debt
maturities until July 2020 however throughout 2017 the company's
cash flow will be impacted by cash payments of deferred
considerations. The RCF has one springing covenant, based on a
senior secured net leverage ratio, which is tested if the
facility is drawn for more than 30%. The covenant level has step
down to 7.75x. At the end of November 2016, the company reported
a net leverage ratio of 6.6x.


The stable outlook reflects Moody's expectations that there will
be no further material deterioration in the business and the
company will be able to successfully roll out the subscription
model to targeted schools. The outlook also incorporates Moody's
expectations that TES will not embark on any transforming
acquisitions or make debt-funded shareholder distributions.


Moody's does not anticipate any catalysts for an upgrade in the
near term, although upward pressure could be exerted on the
ratings if (1) TES is able to return to sustainable revenue and
EBITDA organic growth; (2) it completes successfully the
transition to a subscription based model for targeted schools;
(3) liquidity profile remains adequate and free cash flow
continues to be positive; and (4) Moody's adjusted gross leverage
ratio moves sustainably below 6.0x.


Downward pressure on the rating could arise if (1) the sustained
weakness in operating performance were to become more pronounced;
(2) free cash flow generation were to turn negative; and/or (3)
the company's liquidity position deteriorates markedly.


- TES Global Holdings Limited's Corporate Family Rating (CFR)
   downgraded to Caa1 from B3

- TES Global Holdings Limited's Probability of Default Rating
   (PDR) downgraded to Caa1-PD from B3-PD

- Long-term rating of the GBP200 million senior secured fixed
   rate notes due 2020 issued by TES Finance PLC downgraded to
   Caa1 from B3

- Long-term rating of the GBP100 million senior secured floating
   rate notes due 2020 issued by TES Finance PLC downgraded to
   Caa1 from B3


The principal methodology used in these ratings was Global
Publishing Industry published in December 2011.

TES Global Holdings Limited (formerly TSL Education Group
Limited) ('TES') is a leading provider of teacher recruitment
classifieds, or vacancy, advertisements for secondary and primary
schools in the UK. The company offers placement of these teacher
recruitment advertisements through its proprietary print and
digital on-line media offering. Its digital platform is the
world's largest network of teachers, providing a marketplace for
content sharing and teacher recruitment. In June 2014, the
company expanded its activities beyond recruitment of permanent
roles, with the acquisition of a leading provider of temporary
supply teachers to UK schools.

For the last twelve months to November 2016, TES reported revenue
of GBP144 million and company's adjusted EBITDA of GBP43.7
million (30.3% margin).

TUBS & TILES: In Administration After "Difficult Trading Period"
HVP News reports that Tubs & Tiles, which had been trading since
1966 as a distributor, and in more recent years, developed a
showroom in Coventry, closed before Christmas 2016, following a
'difficult trading period'.

The appointment of an insolvency practitioner led to an auction
of the assets, which was won by Nicholls & Clarke Group,
according to HVP News.  The Coventry site will be the 18th
Nicholls & Clarke Tiles and Bathrooms showroom in the UK and will
continue to offer the existing range of products, the report

The showroom will also provide trade customers with access to the
Nicholls & Clarke range of 60,000 products, the report relays.
Nicobond adhesives and tiling solutions, bathroom and wetroom
products will be added to the stock in the coming weeks, the
report adds.


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

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

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


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

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

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

This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed to
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members of the same firm for the term of the initial subscription
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