TCREUR_Public/170222.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

          Wednesday, February 22, 2017, Vol. 18, No. 038


                            Headlines


G R E E C E

GREECE: Makes EUR2-Bil. Loan Repayment to EU Creditors
GREECE: Creditors Rule Out Quick Resolution of Bailout Issues


I T A L Y

AUTOSTRADA BRESCIA: Fitch Affirms BB+ Rating on EUR600MM Bond
INTESA SANPAOLO: Fitch Affirms BB- Rating on AT1 Notes
UBI BANCA: Fitch Lowers LT Subordinated Debt Rating to BB+


K A Z A K H S T A N

EXIMBANK KAZAKHSTAN: S&P Puts 'B-' Rating on CreditWatch Negative
NOMAD INSURANCE: A.M. Best Affirms B- FSR & Alters Outlook to Neg


N E T H E R L A N D S

REGENT'S PARK: Moody's Lifts Rating on EUR13.8MM Notes From Ba2


R U S S I A

ALFA-BANK: S&P Revises Outlook to Pos. & Affirms 'BB/B' Ratings
BANK SOVETSKY: DIA to Oversee Provisional Administration
METALLOINVEST: S&P Revises Outlook to Stable & Affirms 'BB' CCR
MOSCOW: Moody's Affirms Ba1 Issuer Rating, Outlook Stable
TIMER BANK: Deposit Agency to Oversee Provisional Administration

UNITY REINSURANCE: A.M. Best Withdraws bb+ Issuer Credit Rating


U K R A I N E

KERNEL HOLDING: S&P Assigns 'B' CCR, Outlook Stable
* UKRAINE: NBU Confirms Lawfulness of Actions v. Insolvent Banks


U N I T E D   K I N G D O M

BUDGENS: Went Into Administration, Jobs at Risk
ITHACA ENERGY: S&P Puts 'B-' CCR on Watch Pos. After Takeover
TONY'S MEATS: In Liquidation, Operations Continue


                            *********



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


GREECE: Makes EUR2-Bil. Loan Repayment to EU Creditors
------------------------------------------------------
Mehreen Khan at The Financial Times reports that Greece has made
a EUR2 billion loan repayment to its European creditors on Feb.
20, in a sign that the country remains a "reliable" partner in
its ongoing bailout talks, according to its EU partners.

The successful repayment comes amid fears the country could face
a fresh liquidity crisis this summer when the government is due
to repay a EUR7 billion debt bill -- an obligation it is not
expected to meet without a fresh injection of bailout cash, the
FT relates.

Eurozone finance ministers were meeting in Brussels for their
latest meeting on the country's bailout progress on Feb. 20, but
are not expected to sign off on Athens long-awaited second
bailout review that would unlock around EUR6 billion of creditor
cash for the economy, the FT notes.

Divisions between the EU and the International Monetary Fund over
the level of debt restructuring and budgetary targets built into
the EUR86 billion bailout mean hopes for an agreement have been
pushed back at least a month, with investors eyeing March or
April's Eurogroup as the next realistic deadline for an
agreement, the FT discloses.

The EUR2 billion repayment to the European Stability Mechanism
was part of funds used to recapitalize the Greek banking system
in 2015, the FT states.


GREECE: Creditors Rule Out Quick Resolution of Bailout Issues
-------------------------------------------------------------
Szu Ping Chan at The Telegraph reports that Greece's creditors
have dashed hopes of a quick resolution to the country's looming
cash crunch, even as talks paved the way for debt inspectors to
return to Athens.

Jeroen Dijsselbloem, the head of the Eurogroup, said that there
had been a "clear shift" in creditor demands following a meeting
of finance ministers in Brussels on Feb. 20, The Telegraph
relates.

According to The Telegraph, Greece needs around EUR7 billion
(GBP6 billion) in fresh rescue funds before July in order to
cover substantial debt repayments to the European Central Bank
and private creditors.

The Dutch finance minister, as cited by The Telegraph, said new
measures would be "designed and agreed on the ground" in Athens,
with a greater emphasis on growth.

However, he played down reaching a solution before Dutch
elections next month or even the French presidential election in
May and said creditors were "looking towards the summer" for an
agreement, The Telegraph notes.

"There is still a lot of work to do, a lot of issues to discuss
and calibrate so I want to temper expectations," The Telegraph
quotes Mr. Dijsselbloem as saying.  "There is no need for a
disbursement in March, April or May."

Mr. Dijsselbloem also signaled that differences remained between
Greece, Brussels and the IMF over the reforms needed to unlock
the next loan tranche and secure the Washington-based
institution's participation in Greece's third, EUR86 billion
rescue package, The Telegraph discloses.

According to The Telegraph, a spokesman for the IMF also played
down the idea of a swift deal, stating that further progress
would be needed to bridge differences on "important issues".



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


AUTOSTRADA BRESCIA: Fitch Affirms BB+ Rating on EUR600MM Bond
-------------------------------------------------------------
Fitch Ratings has revised the Outlook on Autostrada Brescia
Verona Vicenza Padova's (ABVP) EUR600m senior secured bond to
Stable from Negative and affirmed the rating at 'BB+'.

The revision of the Outlook reflects Fitch views that regulatory
risk has receded. The Italian government's interministerial
committee for economic planning (CIPE) on 10 August 2016 formally
backed the approval of a level of weighted average cost of
capital (WACC) to be included in the company's regulatory
business plan with a view to support the concession's large
investment plan. The Italian Ministry of Infrastructure (grantor)
has to yet formally approve the business plan but Fitch
sensitivities show that the current rating can sustain a slightly
lower WACC than Fitch expect.

The 'BB+' rating reflects ABVP's solid asset profile, the
terminal value (TV) cost recovery concession structure that is
untested in Italy and its weak debt structure, which comprises
one single bullet maturity with high exposure to refinancing
risk.

KEY RATING DRIVERS
Revenue Risk: Volume - Midrange
ABVP operates a small network of 235km strategically located at
the centre of the A4 corridor linking the east-west stretch of
northern Italy, a wealthy and industrialised catchment area.
Traffic is 73% light vehicles traffic covering a mix of short and
medium distances. Traffic in vehicles km experienced a peak to
trough of 8% in 2012-2013 as austerity measures led to a collapse
in domestic consumption. This is slightly better than Italian
peers Autostrade per l'Italia (-11%) and Sias (-12%). In Fitch
views, the inherent uncertainty of traffic related to the new
Valdastico Nord stretch is not material for the rating given the
small proportion of cash flow expected from this part of the
network.

Revenue Risk: Price - Midrange
The price mechanism allows a return on the asset base and
recovery of operating costs and depreciation of assets.
Historical fairly low tariff increases (0.5% in 2005-2009) as
well as the recent tariff suspension or cap indicate some
political interference. However, the grantor appears to be
committed to allowing ABVP to recover the tariff shortfall when
the updated business plan is approved.

Infrastructure Development & Renewal - Midrange
ABVP has extensive experience in delivering investments on its
network. The company now faces an ambitious and largely debt
funded 2017-2026 capex programme of around EUR2.1bn, including
the Valdastico Nord, a greenfield project covering the north-east
of Italy in ABVP's network. The final design and location of a
section of this project is still under discussion and exposed to
cost risk. The concession framework provides comfort as higher
than expected capex would ultimately increase the TV paid at
concession maturity. Furthermore, the grantor's extensive
oversight in the tender and execution phase of Valdastico Nord
mitigates the execution risk of the overall capex plan.

Debt Structure - Weaker
The rated bond is senior secured, bullet and fixed-rate. Caps on
distribution and lock-up covenants are protective features as are
the broad set of ring-fencing provisions included in the
concession agreement.

The bond is exposed to refinancing risk. Future creditors will
rank pari-passu and share the security package with bondholders.
ABVP will remain cash flow-negative post interest payment until
2023 due to high capex requirements. New lenders considering
refinancing the bond in 2020 will therefore rely on the TV
payment at concession maturity. A delay in the receipt of the TV
payment would mechanically delay the reimbursement of that loan
and ABVP would continue to run the concession. This would
incentivise lenders to roll over their debt until the TV is paid.
However, in Fitch views, the uncertainty on banks' and the
capital market's appetite for financing such transaction
structures leaves bondholders exposed to material refinancing
risk.

Debt Service
Minimum project life coverage ratio (PLCR) under the updated
Fitch rating case (FRC) is 1.3x, up from 1.2x in last year's
review. PLCR is relevant as a large part of debt raised over the
concession period will be reimbursed through the TV payment. The
average interest coverage ratio is above 5x, while projected
five-year leverage is 5.0x. The ratios would have been higher if
Fitch had given full credit to regulatory protections on pass-
through costs. Over the concession period, the TV/net debt
remains largely above 1.3x ensuring adequate coverage of the
outstanding debt.

The breakeven sensitivities are robust. The interest rate would
have to climb to 15.4% in base case (13.7% in FRC), before the
PLCR reaches 1.0x.

Peers
ABVP is not directly comparable to any peers. Its transaction
structure is fully based on the TV payment at concession maturity
rather than the usual path of debt-funded capex and subsequent
debt repayment by free cash flow available by concession
maturity.

ABVP is significantly smaller than national and regional toll
road operators such as Atlantia (A-/Stable), Sias (BBB+/Stable),
Abertis (BBB+/Stable) and Brisa (BBB/Stable). Compared to its
Italian peers, ABVP's traffic performances were slightly better
during the economic downturn. Like most of its peers, ABVP's debt
structure is bullet but ambitious debt funded capex programme
until 2026, refinancing risk related to the TV payment scheme and
the high concentration of debt maturities position the rating at
sub-investment grade.

RATING SENSITIVITIES

The rating would be downgraded in the event of adverse changes to
the regulatory framework or the TV scheme. Sustained operational
underperformance or material cost overruns on the Valdastico Nord
project not being recognised in TV could also be rating-negative.
Failure to refinance its bond well in advance would be credit
negative as would an increase in current refinancing risk.

ABVP's issue rating would also be negatively affected if Italy's
rating was downgraded by more than one notch.

The rating could be downgraded if the minimum PLCR weakens to
1.1x under the FRC. Conversely, a substantially higher than
expected PLCR would be rating positive but unlikely to trigger an
upgrade until there is clear evidence of the refinancing process.

SUMMARY OF CREDIT

ABVP operates one of the busiest Italian toll road networks under
an unusual concession structure where capex and related debt are
recovered through a TV payment. The TV is paid by a new
concessionaire at concession maturity (2026) or, in case of
delays, two years later by the grantor) in 2028. If the TV is not
paid, ABVP will continue to operate the concession. In Fitch's
view, the TV mechanism is robust as its payment is contractually
calculated on net book value, allowing ABVP to recover realised
investments. However, the TV scheme is unusual and substantially
untested in Italy, which may affect banks' appetite to refinance
such transaction structures.

Fitch views the grantor's obligation to pay the TV as
subordinated to Italy's financial obligations but given Italy's
current rating (BBB+/Negative), this does not currently represent
a constraint on ABVP's rating. However, ABVP's rating would be
negatively affected if Italy's rating was downgraded by more than
one notch.

Operational Update

In 2016, light and heavy vehicles contributed to 3.8% growth in
vehicles km from the previous year, in line with other European
large toll road network (APRR +3.7%, Vinci Autoroute +3.2%). The
growth reflects eurozone consumption growth in 2016 from growing
employment and real incomes. Tariffs increased in 2017 by 1.6%,
following a tariff freeze (0%) in 2016. The capex plan slowed
compared with 2015, mainly due to closure of the works on the
Valdastico Sud.

FRC
The FRC assumes 1.2% average traffic growth until 2021, slowing
down to 0.9% thereafter. Fitch expects +1.5% inflationary growth
in tariff in 2018 followed by large increases thereafter of +4%
to 6% yoy to sustain the capex plan on Valdastico Nord. Compared
with the sponsor's case, the FRC also includes more conservative
assumptions on opex, capex, cost of bond refinancing facility and
long-term WACC.

TV is equal to the non-depreciated value of the reversible asset
at concession handover.

Change in Ownership

Fitch views positively Abertis Infraestructuras', S.A.'s recent
acquisition of 51% of ABVP. Fitch continues to analyse ABVP on a
standalone basis, but Fitch believes that Abertis's indirect
ownership of ABVP will bring extensive operational expertise in
cost control and capex execution as well as soft qualitative
support in the refinancing phase of the rated debt.


INTESA SANPAOLO: Fitch Affirms BB- Rating on AT1 Notes
--------------------------------------------------------
Fitch Ratings has affirmed Intesa Sanpaolo S.p.A.'s Long-Term
Issuer Default Rating (IDR) at 'BBB+' and its Viability Rating
(VR) at 'bbb+'. Fitch has also affirmed subsidiary Banca IMI's
Long-Term IDR at 'BBB+'. The Outlooks are Negative.

In addition, Fitch has assigned 'BBB+(dcr)' Derivative
Counterparty Ratings (DCRs) to IntesaSP and Banca IMI as part of
its roll-out of DCRs to significant derivative counterparties in
western Europe and the US. DCRs are issuer ratings and express
Fitch's view of banks' relative vulnerability to default under
derivative contracts with third-party, non-government
counterparties.

KEY RATING DRIVERS

VRs, IDRS, DCR AND SENIOR DEBT
IntesaSP's Long-Term IDR is driven by the bank's VR, which
reflects the diversified and stable business model of IntesaSP,
combined with its leading domestic franchise in various market
segments. IntesaSP's company profile has helped the group to
generate profitability that has remained above domestic peers' in
a challenging operating environment. The bank's good execution
track record has enabled it to generate consistent profitability
through the economic cycle, which differentiates the bank
domestically.

The ratings also reflect Fitch's view of the group's resilient
capitalisation and robust funding structure, but also the group's
asset quality, which remains weak compared with international
peers, and the high level of unreserved impaired loans, which
weighs on capitalisation.

The Negative Outlook primarily reflects Fitch's view that
IntesaSP's ratings are likely to be downgraded if Italy's Long-
Term IDR (BBB+/Negative) is downgraded as Fitch believes a
further deterioration in the Italian operating environment poses
a downside risk to the bank.

IntesaSP's diversified revenues, which include a high portion of
fee income, have helped the group's performance, which has proved
more resilient to the low-interest rate environment than its
domestic peers. Operating profitability also benefits from a
limited contribution from more volatile gains on securities,
which renders IntesaSP's revenue structure more reliable than
peers'. The bank generated some one-off gains in 2016, which it
used to increase the coverage of its impaired exposures, for loan
write offs and to offset extraordinary charges related to the
banking sector.

IntesaSP's asset quality is its key weakness. IntesaSP's asset
quality metrics compare well domestically but, despite some
modest improvements, remain weaker than those seen at
international peers. However, IntesaSP has started to address its
large portfolio of impaired loans by increasing write-offs,
higher coverage and some limited portfolio disposals. Together
with a reduced inflow of new impaired loans, slightly improved
recoveries and mild increase in lending volumes, this led to an
improvement in the bank's gross impaired loan ratio to about 15%
at end-2016 from 17% at end-2015. In Fitch opinions, the coverage
of impaired loans at 52.5% at end-2016 was adequate. The bank
targets a 10.5% gross impaired loan ratio by end-2019, which
Fitch believes is achievable. However, IntesaSP's strategy to
target a gradual workout of impaired loans means that future
improvements in asset quality ratios will at least partly depend
on Italy's operating environment.

Unreserved impaired loans still represented above 70% of Fitch
Core Capital at end-2016, but improved from over 80% at end-2015.
The granularity of the group's loan exposure partly mitigates the
risk of sudden shocks in asset performance. Fitch believes that
this ratio could improve in the medium-term if IntesaSP manages
to improve asset quality. The bank maintains regulatory capital
ratios with satisfactory buffers above regulatory requirements:
at end-2016, IntesaSP reported a 12.9% fully-loaded CET1 ratio
and a 6.3% leverage ratio.

IntesaSP's funding is adequately diversified and benefits from
stable and ample customer deposits and from an established access
to different forms of wholesale funding. Liquidity is stable and
backed by a large portfolio of liquid assets, which provides an
adequate buffer of unencumbered assets.

Fitch has assigned a DCR to IntesaSP since the bank has
significant derivatives activity and is swap counterparty to
Fitch-rated structured finance transactions. The DCR is at the
same level as the Long-Term IDR because in Italy, derivative
counterparties have no preferential legal status over other
senior obligations in a resolution scenario.

The ratings of the senior debt issued by IntesaSP's funding
vehicles, Intesa Sanpaolo Bank Ireland, Intesa Sanpaolo Bank
Luxembourg, S.A. and Intesa Funding LLC, are equalised with that
of the parent since it is unconditionally and irrevocably
guaranteed by IntesaSP.

SUPPORT RATING (SR) AND SUPPORT RATING FLOOR (SRF)

IntesaSP's SR and SRF reflect Fitch's view that senior creditors
cannot rely on receiving full extraordinary support from the
sovereign in the event that the bank becomes non-viable. The EU's
Bank Recovery and Resolution Directive (BRRD) and the Single
Resolution Mechanism (SRM) for eurozone banks provide a framework
for resolving banks that require senior creditors participating
in losses, if necessary, instead of or ahead of a bank receiving
sovereign support.

SUBORDINATED DEBT AND OTHER HYBRID SECURITIES

Subordinated debt and other hybrid capital issued by the bank are
all notched down from IntesaSP's VR in accordance with Fitch's
assessment of each instrument's respective non-performance and
relative loss severity risk profiles, which vary considerably.

AT1 notes are rated five notches below the bank's VR, comprising
two notches for loss severity relative to senior unsecured
creditors and three notches for incremental non-performance risk
relative to the VR. The notching for non-performance risk
reflects the instruments' fully discretionary interest payment.

SUBSIDIARY AND AFFILIATED COMPANY

The ratings of IntesaSP's Italian subsidiary Banca IMI reflect
Fitch's view of its core function and extremely high integration
within the group.

Fitch has assigned a DCR to Banca IMI since the bank has
significant derivatives activity and is swap counterparty to some
Fitch-rated structured finance transactions. The DCR is at the
same level as the Long-Term IDR because under Italian
legislation, derivative counterparties have no preferential
status over other senior obligations in a resolution scenario.

RATING SENSITIVITIES

VRs, IDRS, DCR AND SENIOR DEBT
IntesaSP's ratings are primarily sensitive to deterioration in
the operating environment in Italy and to Italy's sovereign
ratings. If Italy's sovereign rating is downgraded, IntesaSP's
VR, IDRs, DCR and debt ratings would be downgraded.

IntesaSP's ratings could also be downgraded if the bank does not
meet its impaired loan reduction targets and its capital remains
highly exposed to unreserved impaired loans. Similarly,
deterioration in the bank's funding and liquidity would put
pressure on the ratings, as would prioritising dividend
distribution over capital retention in case of need.

The ratings of the senior debt issued by Intesa Sanpaolo Bank
Ireland, Intesa Sanpaolo Bank Luxembourg, S.A. and Intesa Funding
LLC, are sensitive to the same considerations that affect the
senior unsecured debt issued by the parent.

SUPPORT RATING AND SUPPORT RATING FLOOR

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

SUBORDINATED DEBT AND OTHER HYBRID SECURITIES

The ratings of the securities are sensitive to a change in the
bank's VR. The ratings are also sensitive to a change in the
notes' notching, which could arise if Fitch changes its
assessment of their non-performance relative to the risk captured
in the VR. For AT1, issues this could reflect a change in capital
management or flexibility or an unexpected shift in regulatory
buffers and requirements, for example.

SUBSIDIARY AND AFFILIATED COMPANIES

As Banca IMI's ratings are based on its parent's Long-Term IDR,
they are sensitive to changes in IntesaSP's propensity to provide
support respectively and to changes in the parent's Long-Term
IDR.

The rating actions are:

IntesaSP

Long-Term IDR: affirmed at 'BBB+'; Outlook Negative
Short-Term IDR: affirmed at 'F2'
Viability Rating: affirmed at 'bbb+'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'
Derivative Counterparty Rating: assigned at 'BBB+(dcr)'
Senior debt (including debt issuance programmes): affirmed at
  'BBB+'/ 'F2'
Commercial paper/certificate of deposit programmes: affirmed at
  'F2'
Short-term deposits affirmed at 'F2'
Senior market-linked notes: affirmed at 'BBB+emr'
Subordinated lower Tier II debt: affirmed at 'BBB'
Subordinated upper Tier II debt: affirmed at 'BB+'
Tier 1 instruments: affirmed at 'BB'
AT1 notes: affirmed at 'BB-'

Banca IMI S.p.A.:

Long-Term IDR: affirmed at 'BBB+'; Outlook Negative
Short-Term IDR: affirmed at 'F2'
Support Rating: affirmed at '2'
Derivative Counterparty Rating: assigned at 'BBB+(dcr)'
Senior debt (including programme ratings): affirmed at 'BBB+'

Intesa Sanpaolo Bank Ireland plc:

Commercial paper/short-term debt affirmed at 'F2'
Senior unsecured debt: affirmed at 'BBB+'

Intesa Sanpaolo Bank Luxembourg, S.A.:

Commercial paper/short-term debt: affirmed at 'F2'
Senior unsecured debt: affirmed at 'BBB+'

Intesa Funding LLC:

US commercial paper programme: affirmed at 'F2'


UBI BANCA: Fitch Lowers LT Subordinated Debt Rating to BB+
----------------------------------------------------------
Fitch Ratings has downgraded UBI Banca's Long-Term Issuer Default
Rating (IDR) to 'BBB-' from 'BBB' and its Viability Rating (VR)
to 'bbb-' from 'bbb'. The Outlook is Negative.

UBI's ratings were downgraded because Fitch believes that even if
the bank achieves its targeted reduction of non-performing loans
(NPLs), capitalisation will remain burdened by a high level of
unreserved NPLs, which the bank expects to remain at a high 80%
of tangible equity by 2020, in the absence of any NPL sale. The
high level of unreserved impaired loans exposes the bank to
changes in the valuation of the collateral for these loans, and
the bank is therefore highly vulnerable to a further
deterioration of the Italian operating environment. The Negative
Outlook reflects Fitch's view that a further deterioration in
Italy's economic environment would make reaching the bank's
targets under its strategic plan more difficult, which would put
capitalisation under pressure.

KEY RATING DRIVERS
VR, IDRs AND SENIOR DEBT
UBI's Long-Term IDR is driven by its VR, which reflects the
bank's weak asset quality, only acceptable capitalisation, and
modest performance. The VR also reflects the bank's respectable
domestic franchise as a second-tier bank, particularly in
northern Italy, and adequate funding and liquidity.

The quality of UBI's loan portfolio with a 14% gross impaired
loan ratio at end-2016 is weak compared to international banks,
but it compares favourably with domestic peers. UBI reported
EUR12.5bn of gross impaired loans at end-2016, which it intends
to reduce by a moderate EUR1.5bn by end-2020. In Fitch's opinion,
the bank's plans are not sufficiently ambitious to strengthen the
quality of its loan portfolio to become more in line with the
averages in other western European countries. UBI increased the
coverage of impaired loans to about 41% at end-2016 in order to
bring it closer to domestic and international peers, but
unreserved impaired loans remain high. The bank relies on
collateral, often in the form of real estate, which is illiquid.
Because of the lengthy recovery times in Italy, the bank to date
has not been able to reduce its impaired loans meaningfully.

UBI's end-2016 regulatory capital ratios were only acceptable.
The bank reported a fully loaded CET1 ratio of 11.2% and a
leverage ratio of 5.62%, both of which are well above regulatory
requirements. Fitch's assessment of the bank's capitalisation
incorporates Fitch views that capital is at risk from unreserved
impaired loans. Fitch expects UBI's regulatory capital ratios to
strengthen moderately over the next three years as the ratios
should benefit from the badwill release from the acquisition of
three small bridge banks created following a resolution process
in late 2015, a EUR400m planned capital increase and tax
benefits.

UBI's profitability has been highly sensitive to the economic and
interest-rate cycle, and Fitch believes that earnings remain
vulnerable to any further deterioration in the domestic operating
environment. However, operating profit should over the coming
three years gradually benefit from cost savings and from a
greater focus on fee-generating wealth management businesses.
Restructuring costs and loan impairment charges related to its
strategic plan were booked in 1H16, which affected 2016 earnings
but should not be repeated in 2017.

Customer funding is stable at 70% of total funding. The bank's
liquidity is acceptable and debt maturities manageable.

SUPPORT RATING (SR) AND SUPPORT RATING FLOOR (SRF)
The SR and SRF reflect Fitch's view that senior creditors can no
longer rely on receiving full extraordinary support from the
sovereign in the event that a bank becomes non-viable. The EU's
Bank Recovery and Resolution Directive (BRRD) and the Single
Resolution Mechanism (SRM) for eurozone banks provide a framework
for resolving banks that require senior creditors participating
in losses, if necessary, instead of or ahead of a bank receiving
sovereign support.

SUBORDINATED DEBT
The subordinated debt issued by the bank is one notch lower than
UBI's VR to reflect the below-average recovery prospects for the
notes given their subordinated nature. No additional notching was
applied for incremental non-performance risk as the write-down of
the notes will only occur only after the point of non-viability
is reached and there is no prior coupon flexibility.

RATING SENSITIVITIES
VR, IDRs AND SENIOR DEBT
The Negative Outlook reflects Fitch's view that UBI's ratings
could be downgraded if a further weakening of the Italian
economic environment makes it more difficult for the bank to
reduce its net impaired loans as this would affect Fitch's
calculation of the bank's capitalisation. The ratings are also
sensitive to UBI's ability to reach its targeted reduction of
gross and net impaired loans. An upgrade of UBI's ratings would
require asset quality improvements that are significantly above
the bank's targets and a structural improvement in profitability.

UBI's ratings are also sensitive to a further weakening in
earnings generation, which could lead to a downgrade if it puts
capital under further pressure.

SUBORDINATED DEBT
The subordinated debt rating is sensitive to the same factors
that affect the bank's VR. The notes' rating is also sensitive to
a change in notching, which could be triggered if Fitch
reassesses the notes' loss severity or incremental non-
performance risk.

SUPPORT RATING (SR) AND SUPPORT RATING FLOOR (SRF)
An upgrade of the SR and upward revision of the SRF are
contingent on a positive change in the sovereign's propensity to
support UBI. While not impossible, this is highly unlikely, in
Fitch's view.

The rating actions are:

Long-Term IDR: downgraded to 'BBB-' from 'BBB'; Outlook Negative
Short-Term IDR affirmed at 'F3'
Viability Rating: downgraded to 'bbb-' from 'bbb'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'
Senior debt (including programme ratings): long-term rating
  downgraded to 'BBB-' from "BBB", short-term rating affirmed at
  'F3'
Subordinated debt: long-term rating downgraded to 'BB+' from
  'BBB-'



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


EXIMBANK KAZAKHSTAN: S&P Puts 'B-' Rating on CreditWatch Negative
-----------------------------------------------------------------
S&P Global Ratings said that it had placed its 'B-' long-term
counterparty credit rating on Eximbank Kazakhstan JSC
(KazEximbank) on CreditWatch with negative implications.  S&P
affirmed its 'C' short-term rating on the bank.

Additionally, S&P lowered its Kazakhstan national scale rating on
KazEximbank to 'kzB+' from 'kzBB-' and also placed it on
CreditWatch with negative implications.

The CreditWatch placement reflects S&P's view that a marked
change in the bank's funding structure in 2016 and associated
sharp reduction in its liquid assets have left it less able to
meet unplanned fund outflows than its domestic peers.  The bank
continues to comply with its minimum regulatory liquidity ratios,
and S&P sees no significant near-term default risk, helped by the
absence of large bond maturities in 2017 and very limited use of
confidence-sensitive retail deposits.  S&P also notes the current
funding support provided by the National Bank of Kazakhstan (NBK)
and the recent equity injection by the bank's shareholder.
However, S&P considers that, if sustained, the current position
could mean that KazEximbank would likely eventually fail to
retain the support of its creditors.  At this stage, it is
unclear to S&P if its funding and liquidity position will improve
in the near future.  If it does not, S&P will very likely
downgrade the bank.

The bank's liquidity has materially fallen over 2016, reflecting
a significant reduction in the share of liquid assets as of year-
end 2016.  Broad liquid assets, according to S&P Global Ratings'
definition, reduced to Kazakhstani tenge (KZT) 2.1 billion (about
US$6.6 million) or 2.7% of total assets from KZT6.8 billion or
9.6% a year earlier.  They covered short-term wholesale funding
only by 20% at year-end 2016 compared to 95% a year earlier.
Although the bank is currently in compliance with all regulatory
liquidity ratios, its regulatory coefficient of current liquidity
(a liquidity measure with a three-month horizon) was only 0.4x as
of Feb. 9, 2017, versus the minimum of 0.3x.  Kazakh small peers
are currently reporting a typical ratio of at least 0.7x and
larger Kazakh banks of at least 1.0x.

S&P notes that small banks, such as KazEximbank, and certainly
those with high funding concentrations, tend to maintain solid
liquidity cushions in order to bolster the confidence of their
creditors and other customers.  S&P now views KazEximbank's
liquidity profile as demonstrably weaker than those S&P observes
at peers and leaving the bank with little flexibility to react to
even a moderate level of unplanned outflows.  Thus, S&P has
revised its assessment of liquidity to moderate from adequate.

In S&P's view, the bank's funding profile has also significantly
weakened over 2016, reflecting higher funding concentrations and
large wholesale debt repayments in 2017.  This is demonstrated by
a marked deterioration in the bank's funding metrics.  Its stable
funding ratio reduced to 87% as of year-end 2016 from 98% a year
earlier, while its loan-to-deposit ratio weakened to 190% from
126% on the same dates.  The latter was about twice as weak as
the banking system average of just below 100% as of year-end
2016.

The following developments contributed to the weakening of the
bank's funding profile and, at this stage, S&P do not expect them
to reverse in 2017.  Thus, S&P has revised its view of the bank's
funding profile to below average, in comparison with Kazakh peers
who S&P assesses as having average funding profiles.

   -- First, in 2016, the bank's shareholders withdrew their
      sizable deposit to fund their other business interests,
      which undermined S&P's previous assumption of the stability
      of the bank's related-party deposits.  Deposits from
      related parties accounted for 31% of total deposits as of
      year-end 2016, down from 54% a year earlier.  As a result,
      the bank's total deposits reduced by about 18% over 2016.

   -- Second, KazEximbank has significantly increased its
      reliance on short-term bank funding to compensate for
      reduction in customer deposits and to fund high loan growth
      of 18% in 2016.  KazEximbank has received two loans from
      the NBK, accounting for about 30% of total funding as of
      year-end 2016.  This comes at a time when the NBK has
      chosen to not provide liquidity support to some small banks
      in Kazakhstan.  Instead it expected the banks' shareholders
      to first provide some capital and liquidity support.  By
      contrast, S&P notes the recent KZT500 million capital
      injection by KazEximbank's shareholder and at this time S&P
      expects that the NBK may well remain supportive of
      KazEximbank's funding.  However, this assumption is key
      because the KZT10 billion loan from the NBK due in November
      2017 accounts for about 15% of KazEximbank's liabilities.

   -- Third, due to high concentrations of the depositor base,
      the bank is highly vulnerable to withdrawal of funds by
      large depositors.  The top 20 depositors accounted for
      about 64% of deposits as of year-end 2016.  Within them are
      a number of government-related entities (GREs).  S&P has
      seen some GREs withdraw deposits from some small Kazakh
      banks over the  past three months, but so far KazEximbank
      has not been affected by this development.  Eximbank has
      KZT6.7 billion of GRE deposits due to mature in 2017, and
      therefore needs to retain the confidence of these GREs, as
      well as of its other depositors.

As a result of the above-mentioned reassessment of the funding
and liquidity profiles, S&P's stand-alone credit profile for
KazEximbank now stands at 'ccc+', compared with 'b-' previously.

S&P's long-term issuer credit rating on the bank remains at 'B-',
in line with S&P's "Criteria For Assigning 'CCC+', 'CCC', 'CCC-'
And 'CC' Ratings," as S&P sees no clear scenarios of default
within the next 12 months, not least given the funding support of
the NBK, unless KazEximbank experiences unplanned customer funds
outflows and is not able to roll over the majority of maturing
debt in 2017.  Nevertheless, the CreditWatch placement reflects
S&P's view that, if sustained, Eximbank's current modest
liquidity buffer and deteriorated funding profile could mean that
the bank eventually fails to retain the support of its creditors.
This suggests a possible challenge to its sustainability in the
medium term.

S&P will likely downgrade the bank within the next three months
if it does not significantly bolster its liquidity buffer, and so
strengthen its liquidity and funding metrics, bringing them to
the levels that are comparable to those of its domestic peers
with adequate liquidity and average funding profiles.  While
S&P's assessment is both qualitative and quantitative, it notes
that Kazakh banks tend to maintain a stable funding ratio of
above 100% and a ratio of broad liquid assets to short-term
wholesale funding above 1.0x.  While less likely, a downgrade
could be hastened by any material unplanned customer funds
outflows, or if S&P thinks that KazEximbank might fail to comply
with the minimum regulatory liquidity ratios.

S&P would expect to take the ratings off CreditWatch and affirm
them if KazEximbank increases its liquidity cushion
significantly, bringing it close to system-average levels.  At
the same time, S&P would need to see some progress in bolstering
its non-NBK funding sources, so demonstrating that it retains the
support of creditors.


NOMAD INSURANCE: A.M. Best Affirms B- FSR & Alters Outlook to Neg
-----------------------------------------------------------------
A.M. Best has revised the outlooks to negative from stable and
affirmed the Financial Strength Rating of B- (Fair) and the Long-
Term Issuer Credit Rating of "bb-"for Nomad Insurance Company JSC
(Nomad), the wholly owned subsidiary of Nomad Insurance Group
Limited, a private non-operating company (both entities are
domiciled in Kazakhstan).

The outlook revisions to negative reflect Nomad's lower-than-
expected risk-adjusted capitalisation at year-end 2016, which was
due to an increase in the company's net retained underwriting
risk following the non-renewal of its quota share reinsurance
protection for motor third-party liability. The company's
retention ratio increased to 81% in 2016 from 41% in the previous
year, and A.M. Best expects it to stay at this level in 2017.
Nomad's risk-adjusted capitalisation is expected to improve in
2017 and 2018, supported by positive retained earnings. However,
should this improvement not materialise, a further negative
rating action is likely.

In addition, the Credit Ratings (ratings) reflect Nomad's
established business profile in its domestic market and its track
record of positive, but volatile, operating performance. The
ratings also take into account the company's exposure to
Kazakhstan's high country risk.

Nomad achieved a strong result in 2016, demonstrated by a
reported combined ratio of 83.8%. The company benefits from a
track record of profitable underwriting performance, although a
one-off negative underwriting result was reported in 2015
(combined ratio: 184%). An overall profit was reported in 2015
due to significant foreign exchange gains.

Nomad's investment performance continues to benefit from strong
investment yields derived from its portfolio of cash, short-term
deposits and fixed income securities. However, prospective
investment returns are subject to volatility due to the low
credit quality of the company's invested assets and the high
level of financial system risk in Kazakhstan.

Nomad maintains an established business profile, ranking as the
fifth-largest insurer in Kazakhstan's non-life market.
Nonetheless, A.M. Best believes that a high level of competition
from a large number of insurers operating in a relatively small
insurance market and the impact of Kazakhstan's fluctuating
regulatory environment reduce Nomad's ability to defend its
competitive position.



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


REGENT'S PARK: Moody's Lifts Rating on EUR13.8MM Notes From Ba2
---------------------------------------------------------------
Moody's Investors Service has upgraded the ratings on the
following notes issued by Regent's Park CDO B.V.:

-- EUR51M Class C Senior Secured Deferrable Floating Rate Notes
    due 2023, Upgraded to Aaa (sf); previously on Sep 27, 2016
    Upgraded to Aa1 (sf)

-- EUR24M Class D Senior Secured Deferrable Floating Rate Notes
    due 2023, Upgraded to Aa3 (sf); previously on Sep 27, 2016
    Upgraded to A3 (sf)

-- EUR13.8M Class E Senior Secured Deferrable Floating Rate
    Notes due 2023, Upgraded to Baa3 (sf); previously on Sep 27,
    2016 Affirmed Ba2 (sf)

Moody's has also affirmed the ratings on the following notes:

-- EUR393M (current outstanding balance Euro 383,404) Class A
    Senior Secured Floating Rate Notes due 2023, Affirmed Aaa
    (sf); previously on Sep 27, 2016 Affirmed Aaa (sf)

-- EUR40.2M Class B-1 Senior Secured Floating Rate Notes due
    2023, Affirmed Aaa (sf); previously on Sep 27, 2016 Affirmed
    Aaa (sf)

-- EUR12M Class B-2 Senior Secured Fixed Rate Notes due 2023,
    Affirmed Aaa (sf); previously on Sep 27, 2016 Affirmed
    Aaa(sf)

Regent's Park CDO B.V., issued in October 2006, is a
collateralised loan obligation (CLO) backed by a portfolio of
mostly high-yield senior secured European loans. The portfolio is
managed by Blackstone Debt Advisors L.P. The transaction's
reinvestment period ended in January 2013.

RATINGS RATIONALE

The rating actions on the notes are primarily a result of the
deleveraging of the Class A senior notes following amortisation
of the underlying portfolio since the last rating action in
September 2016.

The Class A notes have paid down by EUR94.7 million (24% of the
original principal amount) since the last rating action in
September 2016 and EUR392.6 million (99.6% of the original
balance). As a result of the deleveraging, over-collateralisation
(OC) has increased. According to the trustee report dated 16
January 2017 the Class A/B, Class C, Class D and Class E OC
ratios are reported at 178.94%, 132.93%, 118.58% and 111.65%
compared to July 2016 levels of 163.49%, 127.78%, 115.87%, and
109.98%, respectively. Moody's notes that the 26 January
principal payments are not reflected in the OC ratios reported.

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 EUR152 million, principal proceeds balance of
EUR10.9 million, defaulted par of EUR12.4 million, a weighted
average default probability of 16.66% over a weighted average
life of 4.25 years (consistent with a WARF of 2478), a weighted
average recovery rate upon default of 48.28% for a Aaa liability
target rating, a diversity score of 21 and a weighted average
spread of 3.40% and a weighted average coupon of 5.50%.

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. Moody's generally applies recovery rates
for CLO securities as published in "Moody's Approach to Rating SF
CDOs". 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 analysing.

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
ratings:

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 were
unchanged for classes A, B, and C and within one notch of the
base-case results for classes D and E.

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
notes, 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:

* 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.

* Around 5.06% of the collateral pool consists of debt
obligations whose credit quality Moody's has assessed by using
credit estimates. As part of its base case, Moody's has stressed
large concentrations of single obligors bearing a credit
estimate.

* Recovery of defaulted assets: Market value fluctuations in
trustee-reported defaulted assets and those Moody's assumes have
defaulted can result in volatility in the deal's 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.

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


ALFA-BANK: S&P Revises Outlook to Pos. & Affirms 'BB/B' Ratings
---------------------------------------------------------------
S&P Global Ratings revised its outlook on Russia-based JSC Alfa-
Bank to positive from stable.  S&P affirmed its 'BB/B' long- and
short-term counterparty credit ratings on the bank.

S&P also affirmed its 'ruAA' Russia national scale rating on the
bank.

At the same time, S&P revised the outlook on ABH Financial Ltd.
(ABHLF), Alfa-Bank's Cyprus-based owner, to positive.  S&P also
affirmed its 'B+/B' long- and short-term counterparty credit
ratings on ABHLF.

The outlook revision reflects S&P's opinion that Alfa-Bank has
maintained a higher quality risk profile in recent years that has
proved to be more resilient than peers', despite the ongoing
economic problems besetting the Russian economy.  S&P believes
that the bank's credit costs will be about 1.7% in 2017-2018 and
will likely stay below the system average of 3.5%-4.5%, given its
well-ingrained risk-management procedures and controls, its
proactive reaction in terms of collateral foreclosure, S&P's
expectation that no material problem loans will arise, and S&P's
view the majority of problem loans are well provisioned.
Nonperforming loans (NPLs; overdue more than 90 days) at the
group level were at 6.5% at end-June 2016, down from 7.1% at
year-end 2015, mostly due to write-offs.  On a stand-alone basis,
Alfa-Bank's share of NPLs was 4.5% at end-June 2016, compared
with a system average of 10%.

The bank does, however, maintain a significant single-party
concentration in loans, in S&P's view, with top-20 loans to the
total loan portfolio hovering at around 42%-44% over the last
several years, which somewhat reflects its large corporate
financing focus.  At the same time, S&P understands that when the
economy decelerates, Alfa-Bank's loan portfolio shrinks and the
bank tends to rely more on large borrowers with higher-than-
average credit quality.

S&P also observes that the group's exposure to Ukraine reduced
significantly over last several years due to significant
provisions for loan impairment, as well as debt repayments.

At the end of 2016, Alfa-Bank issued $700 million perpetual
subordinated loans, which strengthened the bank's capitalization
and improved its capital buffers.

The subordinated loans contain the following provisions: (i) a
noncumulative interest-cancellation that can be executed at the
bank management's discretion, and (ii) a mandatory noncumulative
interest and principal write-down, in accordance with the
requirements of Russian Central Bank Regulation No. 395-P.

S&P thinks that the optional interest cancellation feature
provides the bank with loss-absorption capacity as long as the
bank is a going concern, which is consistent with S&P's
assignment of intermediate equity content to this instrument.
S&P understands that Alfa-Bank has full flexibility to cancel
interest payment at its discretion.  S&P understands that the
central bank allows Alfa-Bank to include the respective
subordinated loan amount in the calculation of its regulatory
capital, qualifying as outstanding additional Tier 1 capital
(specifically, additional capital of the bank's core capital).

There are no step-up clauses and the instrument is perpetual.
Any repayment of the loan is not allowed in the first five years
and will require prior consent of the central bank.  The interest
rate is set at 8%.

Therefore, S&P regards such perpetual subordinated loans as
having intermediate equity content and include it into
calculation of S&P's total adjusted capital.  S&P believes that,
despite still-difficult operating environment in Russia, Alfa-
Bank will be profitable over the next two years and continue to
show internal capital generation capacity that is better than
domestic peers'. S&P also expects Alfa-Bank's asset quality will
remain better than the system average and envisage credit costs
of about 1.7% (which is below the system average of 3.5%-4.5%).
As a result, S&P expects its risk-adjusted capital (RAC) ratio
will strengthen in the next two years to 9.0% from 7.2% as of
end-2015, but remaining adequate and a neutral factor to S&P's
ratings on Alfa-Bank.

The positive outlook on Alfa-Bank and its holding company ABHFL
reflects the possibility that S&P could raise its long-term
rating on the bank in the next 12-24 months if it observed the
group, despite the still difficult operating environment in
Russia, managing to continue to improve its risk metrices and
preserve its risk profile strengths compared to peers.

A positive rating action would require that Alfa-Bank continues
to benefit from sound capitalization (with its RAC ratio standing
sustainably above 7% over 2017-2018), maintains prudent risk
management with better asset quality than the industry average,
and does not allow concentrations higher than current levels or
engage in aggressive acquisitions.

S&P could revise the outlook to stable if it observed significant
changes in the group's risk appetite that could result in asset
quality deterioration to system-average levels, higher than
currently envisaged credit costs, or if S&P was to believe that
the group's capital is no longer sufficient to cover the risks it
bears.


BANK SOVETSKY: DIA to Oversee Provisional Administration
--------------------------------------------------------
The Bank of Russia approved amendments to the Plan for the
participation of the state corporation Deposit Insurance Agency
in the implementation of measures to prevent the bankruptcy of
the Joint-stock company Bank Sovetsky, according to the press
service of the Central Bank of Russia.

Within the implementation of the Plan for the participation the
Agency is entrusted with the functions of the provisional
administration of Bank Sovetsky starting February 20, 2017.

Throughout the activity of the provisional administration, the
powers of shareholders as regards their participation in the
authorised capital, as well as those of the governing bodies of
Bank Sovetsky are suspended.

The prime task of the provisional administration is to examine
the financial standing of Bank Sovetsky.


METALLOINVEST: S&P Revises Outlook to Stable & Affirms 'BB' CCR
---------------------------------------------------------------
S&P Global Ratings revised its outlook on the Russian iron ore
producer JSC Holding Company Metalloinvest to stable from
negative.  At the same time, S&P affirmed its 'BB' long-term
corporate credit rating.  S&P also affirmed its 'BB' issue
ratings on the company's bonds issued through Metalloinvest
Finance Ltd.

The outlook revision follows S&P's observation of a positive
trend in iron ore prices and S&P's expectation that Metalloinvest
will report strong financial results for the second half of 2016,
thanks to the company management's actions to deleverage,
alongside its higher-than-industry-average profitability.

S&P recently revised upward its price assumptions for iron ore.
Also, S&P notes that the average benchmark price for iron ore
(62% Fe, CFR China) for 2016, at US$58 per dry metric ton (/dmt),
is stronger than S&P's assumptions of $40-$50/dmt for the same
period and that current spot prices and pellet premiums are
robust.  The combination of these favorable prices with
Metalloinvest management's deleveraging efforts (such as
moderating capital expenditures [capex] and shareholders'
distributions) and healthy profitability supported by a weakened
Russian ruble, in S&P's opinion, should support much stronger
financial results for the second half of 2016, including a
healthier liquidity position, than for the first half of last
year and the second half of 2015--periods characterized by low
prices and weak market conditions.  S&P estimates the company
will have S&P Global Ratings-adjusted EBITDA of about $1.2
billion-$1.3 billion, a funds from operations (FFO)-to-debt ratio
of 25%-30%, and adjusted debt to EBITDA of 2.5x-3.0x for full
year 2016.  In addition, S&P now assess the company's liquidity
as strong, versus adequate previously.

S&P recognizes that market conditions might somewhat soften over
the next two years due to fluctuations in iron ore demand, new
capacity additions globally, and the potential restart in 2017 of
mining company Samarco's pellet operations in Brazil (reflected
in S&P's iron ore price assumptions, which are lower than current
spot rates).  However, S&P assumes Metalloinvest will continue
demonstrating its commitment to deleveraging by exercising a
weighted approach toward capex and dividends.  Also, the
company's solid market positions and very low production costs
will help it maintain credit metrics comfortably within the
thresholds for the current rating.

The stable outlook on Metalloinvest incorporates S&P's view that
the company's strong positions in the iron ore products markets
are underpinned by very low production costs, access to vast iron
ore reserves, diverse customer base, premiums of higher-value-
added products (such as pellets, HBI, and direct reduced iron)
and its benefits of vertical integration into steel.  S&P also
factors in management's demonstrated commitment to deleveraging
and its expectations that the company's metrics will remain in
line with the rating.  In particular, S&P projects FFO to debt of
above 30% and debt to EBITDA below 3.0x under normal market
conditions, and above 20% and below 4.0x, respectively, in the
trough of the cycle.

A downgrade could stem from increasing leverage or weaker
liquidity, owing to, for example, lower margins, a drop in
volumes, or higher shareholder distributions.  S&P could consider
lowering the rating if FFO to debt falls below 30% or debt to
EBITDA exceeds 3.0x without short-term recovery prospects in the
current market environment.

An upgrade might arise if Metalloinvest reports much better
operating and financial performance than S&P currently assumes,
on the back of supportive market developments and a stronger
pricing environment.  This would hinge on sustainably stronger
credit metrics, with FFO to debt of comfortably above 45% and
debt to EBITDA of below 2.0x.


MOSCOW: Moody's Affirms Ba1 Issuer Rating, Outlook Stable
--------------------------------------------------------
Moody's Investors Service has changed to stable from negative the
outlooks on the ratings of 12 regional and local governments
(RLGs) in Russia and two government-related issuers (GRIs),
reflecting reduced systemic risk as the sovereign's credit
profile stabilises. At the same time, it has affirmed the ratings
of these 14 issuers. Concurrently, Moody's has affirmed the
ratings and maintained negative outlooks for four RLGs.

These rating actions follow the stabilisation of Russia's credit
profile as captured by Moody's change of outlook to stable from
negative on Russia's government rating (Ba1) on Feb. 17, 2017.

Specifically, Moody's has changed the outlook to stable and
affirmed the ratings of the following 12 RLGs: City of Moscow
(Ba1), City of St. Petersburg (Ba1), Republic of Bashkortostan
(Ba2), Republic of Tatarstan (Ba2), Autonomous-Okrug (region) of
Khanty-Mansiysk (Ba2), Moscow Oblast (Ba2), Samara Oblast (Ba3),
Chuvashia Republic (Ba3), Krasnodar Krai (B1), Krasnoyarsk Krai
(B1), Oblast of Nizhniy Novgorod (B1) and City of Volgograd (B2).

Additionally, the ratings were affirmed and the outlooks were
changed to stable from negative of the following two GRIs: SUE
Vodokanal of St. Petersburg (Ba2) and OJSC Western High-Speed
Diameter (Ba3).

Conversely, Moody's affirmed the ratings and maintained the
negative outlooks of the following four RLGs: Oblast of Omsk
(Ba3), Republic of Komi (B1), City of Krasnodar (B1) and City of
Omsk (B1).

RATINGS RATIONALE

  -- RATIONALE FOR OUTLOOK CHANGE TO STABLE FROM NEGATIVE AND
AFFIRMATION OF 12 RLGs' AND 2 GRIs' RATINGS

The outlook change to stable from negative of City of Moscow,
City of St. Petersburg, Republic of Bashkortostan, Republic of
Tatarstan, Autonomous-Okrug (region) of Khanty-Mansiysk, Moscow
Oblast, Samara Oblast, Chuvashia Republic, Krasnodar Krai,
Krasnoyarsk Krai, Oblast of Nizhniy Novgorod and City of
Volgograd reflects the decrease in systemic pressure following
the change to stable outlook for Russia.

The revenue base of Russian RLGs will likely grow in 2017 given
the recovery of economic performance helping to sustain RLGs
budgets: real GDP growth is forecasted at 1% for 2017 compared to
-0.2% in 2016. Debt affordability has improved and is supported
by ongoing lending from state-owned banks. The abundant liquidity
of the banking sector (the main donor of fiscal resources for
Russian RLGs) has reduced borrowing rates for RLGs while loan
supply has increased. In addition, the large federal government
programme for refinancing market debt with cheap budget loans has
significantly eased the refinancing pressure of the regions. As a
result, the share of budget loans in the debt structure of the
sector has materially increased. The covenants imposed on these
loans is helping to contain further debt growth, thereby limiting
deficits.

The affirmation of the ratings for these 12 RLGs reflects Moody's
views that the improvement in the systemic risk and broad RLG
sector will nonetheless not be sufficiently material to impact
the credit profile of each entity.

The affirmation of the issuer ratings with stable outlooks of SUE
Vodokanal of St. Petersburg and the backed senior unsecured
rating of OJSC Western High-Speed Diameter reflects their status
as GRIs fully owned by the St. Petersburg government and their
strong credit linkages with the City of St. Petersburg.

Moody's notes that despite deterioration of the standalone fiscal
strength of SUE Vodokanal of St. Petersburg the high ongoing and
extraordinary support from the City of St. Petersburg will
maintain the overall creditworthiness at the current level. The
entity suffers from weak performance and deteriorated liquidity.
Its revenue base was negatively affected by decreased water
consumption, higher property taxes and overcapacity of the
existing facilities relative to current levels of water
consumption.

The affirmation of OJSC Western High-Speed Diameter's bond rating
with a stable entity outlook reflects its link with the City of
St. Petersburg and the guarantee that the Russian government
provides on its bond principal payments.

-- RATIONALE FOR AFFIRMATION OF RATINGS AND MAINTAINING NEGATIVE
OUTLOOKS FOR 4 RLGs

The affirmation of the ratings with negative outlooks of Oblast
of Omsk, Republic of Komi, City of Omsk and City of Krasnodar
reflects Moody's ongoing expectation that their fiscal
performances and growing debt burdens will continue to put
downward pressure on their respective ratings.

Omsk Oblast has demonstrated weak fiscal performance during the
last three years with negative gross operating balances and
fiscal deficits around 7% of total revenues. This has resulted an
increase of the debt burden (net direct and indirect debt) to 80%
of own-source revenues in 2016 from 72% in 2014. While Oblast
budgeted a significant deficit reduction in 2017-18 and
relatively stable debt metrics, the upcoming election cycle could
impair its expense consolidation efforts and prevent it from
achieving these budgetary targets, in turn triggering the
downward pressure on the rating.

Republic of Komi has consistently demonstrated weak budgetary
performance with high deficits recorded over the last three
years. As a result, the debt burden has rapidly increased with
net direct and indirect debt growing to 78% of its own-source
revenues in 2016 from 61% in 2014. While performance improved in
2016 with deficit reduced to 9% of total revenues (14% in 2015),
debt growth will likely continue.

The negative outlook on the City of Omsk reflects (1) the
negative outlook for Omsk Oblast, which means that weak fiscal
conditions and budgetary consolidation would negatively affect
the level of transfers to the city; and (2) expectations that the
low own-source revenues and rigid expense base will continue to
pressurise performance. The city's revenue base depends to a
large extent on transfers from Oblast, which totalled around 50%
of city revenues for the last three years.

The negative outlook on the City of Krasnodar reflects the
expected pressure on its fiscal performance from the fiscal
consolidation of Krasnodar Krai, which could mean lower transfers
from Krai (which accounted for 43% of total revenues in 2016),
which in its turn could result in higher debt metrics and weak
liquidity. As a result of reduced transfers from Krai, City of
Krasnodar has accumulated sizeable overdue payables (estimated at
12% of operating revenues in 2016).

-- WHAT COULD CHANGE THE RATINGS UP/DOWN

City of Moscow, City of St. Petersburg, Republic of
Bashkortostan, Republic of Tatarstan, Autonomous-Okrug (region)
of Khanty-Mansiysk, Moscow Oblast and the two GRIs could
experience upward rating pressure in case of upward changes in
the sovereign rating, provided their budget performances do not
deteriorate. For other entities with stable outlooks, upward
pressure could arise from upward changes in the sovereign rating
as well as improvements of individual financial performances.

For Omsk Oblast the rating will be downgraded if the region fails
to (1) improve its budgetary performance, which should lead to
stabilisation or reduction in debt burden; and (2) decrease
refinancing risk. For other Russian RLGs with negative outlooks
an improvement in their performance leading to the stabilisation
of their debt burden at the current levels could exert
stabilisation of outlooks.

Deterioration in the sovereign's credit quality, and/or
persistent deterioration in the credit metrics of sub-sovereigns,
could exert downward pressure on all sub-sovereigns.

-- RATINGS AFFECTED

-- THE RATINGS OF THE FOLLOWING 14 ISSUERS WERE AFFIRMED WITH
STABLE OUTLOOK

Issuer: Moscow, City of

-- LT Issuer Rating, Affirmed Ba1

-- Outlook, Changed To Stable From Negative

Issuer: St. Petersburg, City of

-- LT Issuer Rating, Affirmed Ba1

-- Senior Unsecured Regular Bond/Debenture, Affirmed Ba1

-- Outlook, Changed To Stable From Negative

Issuer: SUE Vodokanal of St. Petersburg

-- LT Issuer Rating, Affirmed Ba2

-- Outlook, Changed To Stable From Negative

Issuer: OJSC Western High-Speed Diameter

-- BACKED Senior Unsecured Regular Bond/Debenture, Affirmed Ba3

-- Outlook, Changed To Stable From Negative

Issuer: Bashkortostan, Republic of

-- LT Issuer Rating, Affirmed Ba2

-- Outlook, Changed To Stable From Negative

Issuer: Khanty-Mansiysk AO

-- LT Issuer Rating, Affirmed Ba2

-- Outlook, Changed To Stable From Negative

Issuer: Tatarstan, Republic of

-- LT Issuer Rating, Affirmed Ba2

-- Outlook, Changed To Stable From Negative

Issuer: Moscow, Oblast of

-- LT Issuer Rating, Affirmed Ba2

-- Outlook, Changed To Stable From Negative

Issuer: Samara, Oblast of

-- LT Issuer Rating, Affirmed Ba3

-- Outlook, Changed To Stable From Negative

Issuer: Chuvashia, Republic of

-- LT Issuer Rating, Affirmed Ba3

-- Senior Unsecured Regular Bond/Debenture, Affirmed Ba3

-- Outlook, Changed To Stable From Negative

Issuer: Krasnodar, Krai of

-- LT Issuer Rating, Affirmed B1

-- Senior Unsecured Regular Bond/Debenture, Affirmed B1

-- Outlook, Changed To Stable From Negative

Issuer: Krasnoyarsk, Krai of

-- LT Issuer Rating, Affirmed B1

-- Outlook, Changed To Stable From Negative

Issuer: Nizhniy Novgorod, Oblast

-- LT Issuer Rating, Affirmed B1

-- Outlook, Changed To Stable From Negative

Issuer: Volgograd, City of

-- LT Issuer Rating, Affirmed B2

-- Outlook, Changed To Stable From Negative

-- THE RATINGS OF THE FOLLOWING 4 ISSUERS WERE AFFIRMED WITH
NEGATIVE OUTLOOK

Issuer: Omsk, Oblast of

-- LT Issuer Rating, Affirmed Ba3

-- Outlook, Remains Negative

Issuer: Komi, Republic of

-- LT Issuer Rating, Affirmed B1

-- Outlook, Remains Negative

Issuer: Omsk, City of

-- LT Issuer Rating, Affirmed B1

-- Outlook, Remains Negative

Issuer: Krasnodar, City of

-- LT Issuer Rating, Affirmed B1

-- Outlook, Remains Negative

The specific economic indicators, as required by EU regulation,
are not available for these entities. The following national
economic indicators are relevant to the sovereign rating, which
was used as an input to this credit rating action.

Sovereign Issuer: Russia, Government of

GDP per capita (PPP basis, US$): 25,965 (2015 Actual) (also known
as Per Capita Income)

Real GDP growth (% change): -2.8% (2015 Actual) (also known as
GDP Growth)

Inflation Rate (CPI, % change Dec/Dec): 12.9% (2015 Actual)

Gen. Gov. Financial Balance/GDP: -3.4% (2015 Actual) (also known
as Fiscal Balance)

Current Account Balance/GDP: 5.1% (2015 Actual) (also known as
External Balance)

External debt/GDP: 38.0% (2015 Actual)

Level of economic development: Moderate level of economic
resilience

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

On February 16, 2017, a rating committee was called to discuss
the ratings of the Russian sub-sovereign entities. The main
points raised during the discussion were: The systemic risk in
which the issuers operate has materially decreased. Pressure for
idiosyncratic factors for some entities still remains.

The principal methodology used in rating Bashkortostan, Republic
of, Chuvashia, Republic of, Khanty-Mansiysk AO, Komi, Republic
of, Krasnodar, City of, Krasnodar, Krai of, Krasnoyarsk, Krai of,
Moscow, City of, Moscow, Oblast of, Nizhniy Novgorod, Oblast of,
Omsk, City of, Samara, Oblast of, St. Petersburg, City of,
Tatarstan, Republic of, Volgograd, City of, Omsk, Oblast of, was
Regional and Local Governments published in January 2013.

The principal methodology used in rating SUE Vodokanal of St.
Petersburg and OJSC Western High-Speed Diameter was Government-
Related Issuers published in October 2014.


TIMER BANK: Deposit Agency to Oversee Provisional Administration
----------------------------------------------------------------
The Bank of Russia approved amendments to the Plan for the
participation of the state corporation Deposit Insurance Agency
in the implementation of measures to prevent the bankruptcy of
Timer Bank (public joint-stock company), according to the press
service of the Central Bank of Russia.

Within the implementation of the Plan for the participation, the
Agency is entrusted with the functions of the provisional
administration of Timer Bank starting February 20, 2017.

Throughout the activity of the provisional administration the
powers of shareholders as regards their participation in the
authorised capital, as well as those of the governing bodies of
Timer Bank are suspended.

The prime task of the provisional administration is to examine
the financial standing of Timer Bank.


UNITY REINSURANCE: A.M. Best Withdraws bb+ Issuer Credit Rating
---------------------------------------------------------------
A.M. Best has downgraded the Financial Strength Rating (FSR) to B
(Fair) from B+ (Good) and the Long-Term Issuer Credit Rating
(Long-Term ICR) to "bb+" from "bbb-" of Unity Reinsurance
Company, Ltd. (Unity Re) (Russia). The Credit Ratings (ratings)
have been removed from under review with negative implications.
The outlook assigned to the FSR is stable, whilst the outlook
assigned to the Long-Term ICR is negative. Concurrently, A.M.
Best has withdrawn the ratings as the company has requested to no
longer participate in A.M. Best's interactive rating process.

In August 2016, Unity Re's ratings were placed under review with
negative implications after the announcement of its proposed
acquisition by SPAO RESO Garantia (RESO Garantia). The rating
actions follow the completion of this transaction in December
2016 and A.M. Best's assessment of Unity Re's financial
statements and forecasts, as well as the credit profile of its
new parent.

The downgrade reflects the continuation in 2016 of Unity Re's
track record of poor technical performance, which combined with a
negative investment result is expected to lead to an overall
operating loss for 2016. Risk-adjusted capitalisation is expected
to remain supportive of the revised rating level, despite an
anticipated decline in shareholders' funds due to retained losses
in 2016. However, the company will face challenges maintaining a
sufficient buffer within its risk-adjusted capitalisation to
cushion against further unexpected losses given its track record
of negative technical performance and its exposure to a high
level of investment risk stemming from elevated economic and
financial system risks in Russia. RESO Garantia's ownership of
the company is considered to be a neutral factor at Unity Re's
revised rating level.

Unity Re has taken actions to modify the terms of its
unprofitable treaties and strengthen reserves. However, the
impact of these actions is yet to translate into positive
underwriting performance. RESO Garantia's strategic plans for its
newly acquired subsidiary include changing the underwriting
framework to be in line with RESO Garantia's risk appetite,
exiting Unity Re's international markets and discontinuing its
underperforming accounts. As a result, a contraction in premium
volumes is expected in 2017. Whilst the new strategy may improve
Unity Re's earnings profile and reduce its capital requirements
due to lower underwriting leverage, the negative outlook
considers the risk that the benefits of this strategy may not
emerge in the near to medium term.



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


KERNEL HOLDING: S&P Assigns 'B' CCR, Outlook Stable
---------------------------------------------------
S&P Global Ratings said that it assigned its 'B' long-term
corporate credit rating to Kernel Holding S.A., a Ukraine-based
producer and exporter of sunflower oil and grains.  The outlook
is stable.

At the same time, S&P assigned its 'B' issue rating to Kernel's
five-year US$500 million Eurobond.

The ratings reflect S&P's view that Kernel is mainly exposed to
Ukraine, which S&P views as having a high-risk corporate
environment.  S&P takes into account, however, Kernel's leading
market position in sunflower oil processing -- a large industry
in Ukraine thanks to soil and climate conditions -- as well as
the robust operating performance in the group's farming division.
Kernel's operational efficiency is supported by modern and
productive machinery, along with an efficient cluster
organization allowing reactivity in decision-making, coupled with
good logistics assets situated in strategically important
locations across Ukraine.  S&P views positively that the group
withstood the country's biggest economic and financial crisis in
the past decade.

Moreover, 95% of the group's revenues come from exports paid for
in hard currencies, mainly the U.S. dollar, which is another
credit-positive factor.  The group's smaller size compared with
global players in the agri-commodity industry -- such as ADM,
Cargill, or Bunge -- translates into higher customer
concentration risk, with the largest customer representing 30% of
export sales. Kernel mostly trades with the world's largest soft
commodity traders: ADM, Cargill, Bunge, and Louis Dreyfus.  The
group's margins are slightly higher than the 10%-15% range, which
is the industry average.  These margins reflect the strength of
Kernel's farming division, where its main crops (corn, wheat,
sunflower, and soybeans) have above-average crop yields in
Ukraine.  Kernel also has a higher crushing margin in the
sunflower oil business than its Ukrainian peers, owing to the
scale and efficiency of the group's operating assets.  S&P thinks
that the group's vertically integrated business model somewhat
mitigates profit volatility.  In the event of a good harvest in
Ukraine, Kernel's upstream activity (farming) might suffer due to
a mild price environment, although this could be partially
mitigated by increased utilization of Kernel's storage capacity
(silos) and higher volume shipped through the group's
infrastructure (port terminals).  Also, its downstream activity
(seed crushing) would benefit from a higher-volume sunflower
harvest for crushing, which would drive up crushing margins
through higher utilization rates of crushing plants.

The group's significant free cash flow generation in 2015 and
2016 enabled it to strengthen its financial metrics by lowering
its debt burden, ahead of other discretionary spending.  These
financial policy choices have translated into S&P's fully
adjusted debt-to-EBITDA ratio of 1.5x (excluding any adjustments
for readily marketable inventories) and funds from operations
(FFO) to debt of 53.3% in fiscal 2016 (ended June 30).  The
group's debt service coverage ratios have also improved, with an
EBITDA interest coverage of more than 6.5x in fiscal 2016.
Nevertheless, Kernel's annual cash flow generation is affected by
very high intra-year working capital requirements, historically
covered by short-term pre-financing export facilities (PFXs).
Although S&P assumes that the issuance of the US$500 million
Eurobond will substantially reduce the group's reliance on short-
term debt, S&P anticipates that the group will continue to
partially fund its intra-year working capital needs through the
utilization of PFXs, given the US$300 million PFX with a three-
year commitment the group recently received from its core banks
under its refinancing plan.

S&P rates Kernel one notch above the 'B-' long-term foreign
currency sovereign rating on Ukraine.  This is based on S&P's
analysis of the group under its sovereign default stress test.
The test includes both economic stress and potential currency
devaluation.  Furthermore, because S&P's foreign currency long-
term sovereign rating on Ukraine is at 'B-', S&P has developed a
specific scenario under which it has fine-tuned S&P's assumptions
on the group's revenues derived from exports, and S&P applies
more stringent conditions on financing costs.  This translates
into a 5% decrease in the group's exports, a 10% increase of the
group's selling, general and administrative expenses, and a 10%
haircut on available cash on balance, combined with a 20% stress
on the group's EBITDA.  Following the Eurobond issuance and
considering the group's final financing package (Eurobond and
PFX), Kernel passes S&P's stress test because it meets our
liquidity requirement--namely a ratio of sources to uses of 1x.
S&P also takes into account its transfer and convertibility (T&C)
assessment, which caps the rating on Kernel at one notch above
the T&C assessment on Ukraine.  Because the T&C assessment is the
same as the long-term sovereign credit rating on Ukraine, S&P
arrives at its 'B' rating on Kernel.

Under S&P's base-case scenario for its stand-alone credit
assessment of Kernel, we assume:

   -- Stable to slightly declining agricultural commodity prices
      (relevant to Kernel's portfolio) over the medium term.
   -- Fully adjusted EBITDA margins of around 16%-18%.
   -- Stable dividends at $20 million annually.
   -- Capital expenditures (capex) of about $100 million in 2017,
      supporting the group's organic growth in the grain and
      infrastructure divisions, including $35 million of
      maintenance capex alongside a sizable investment linked to
      its deep water port terminal project.
   -- A potential acquisition valued between $100 million and
      $200 million in 2017.

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

   -- Adjusted debt to EBITDA of 2.05x on a three-year weighted
      average basis in 2017-2019.
   -- Adjusted EBITDA interest coverage of more than 6x over a
      three-year weighted average.

The stable outlook on Kernel primarily reflects S&P's view that
the group will post sound operating performance and generate
sizable positive free cash flow.  Furthermore, the group's robust
EBITDA interest coverage ratio of more than 6x gives Kernel ample
headroom to cover its debt service.  At the same time, S&P
considers that the group enjoys a good standing on credit markets
and could maintain its access to capital markets if needed post
refinancing.

A downward revision of S&P's T&C assessment on Ukraine would
result in a downgrade of Kernel.  Although the group successfully
passed S&P's stress test on a foreign currency sovereign default,
it notes that the corporate credit rating on Kernel is capped at
one notch above that on Ukraine.  Therefore if the T&C assessment
on Ukraine slipped by one notch, the ratings on Kernel would take
the same path.

S&P would raise the rating on Kernel if S&P raised the T&C
assessment for Ukraine.  This is because Kernel is an exporter
with more than 90% exposure to a single jurisdiction.  Therefore
the corporate credit rating on Kernel and the issue rating on the
group's debt are capped at one notch above S&P's T&C for Ukraine.


* UKRAINE: NBU Confirms Lawfulness of Actions v. Insolvent Banks
----------------------------------------------------------------
Ukrainian News Agency reports that Ukrainian courts have
confirmed lawfulness of the actions of the National Bank of
Ukraine on 46 lawsuits from banks declared insolvent by the
central bank.

The National Bank of Ukraine said in a statement that it won 46
cases in 2014-2017 and another 61 cases are being considered at
courts, Ukrainian News Agency relates.

The National Bank of Ukraine calls for the judiciary reform,
Ukrainian News Agency notes.

Ukrainian News Agency earlier reported, in January 2017, the
National Bank of Ukraine gave access to documents to the law
enforcement agencies of the country on 11 occasions within
investigation into crimes in the banking sector.



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


BUDGENS: Went Into Administration, Jobs at Risk
-----------------------------------------------
Michael Reynolds of Daily Record reports that owners of the Main
Street unit of foodstore chain Budgens went into administration
over price pressures and "intense competition", leaving 27 staff
in limbo.

The report notes owners Food Retail Operations Ltd (FROL) went
into administration on February 16, leaving almost 900 staff
across the country in limbo.

The Prestwick store was transformed into a Budgens store after
previous owners Co-Op sold it to the English chain, the report
relays.

There are around 27 staff employed at the store, who were
promised "continued employment" when the store changed hands in
June, the report notes.

The report discloses Mike Denny, joint administrator with
PricewaterhouseCoopers, said: "FROL has faced significant
headwinds in the form of pricing pressures, intense competition
and structural change across the food retail sector.

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

The report notes there could be a lifeline for affected staff
though, with former owner Co-Op offering to step in if no buyer
is found.

The Main Street store has long been one of the main shopping
units in Prestwick, originally bearing Fine Fare branding before
becoming a Gateway and a Somerfield before Co-op took over in
2008 as part of a nationwide GBP1.57 billion deal, the report
relays.

The report says a spokeswoman for Budgens confirmed that the
Prestwick store was one of 34 across the country affected, and
the signs in the store were not related to a separate deal for
Tesco to purchase the Booker cash and carry empire, the report
notes.


ITHACA ENERGY: S&P Puts 'B-' CCR on Watch Pos. After Takeover
-------------------------------------------------------------
S&P Global Ratings placed its 'B-' long-term corporate credit
rating on U.K.-based oil and gas development and production
company Ithaca Energy Inc. on CreditWatch with positive
implications.

S&P also placed on CreditWatch positive its 'CCC' issue rating on
Ithaca's $300 million senior unsecured notes due 2019.  The
recovery rating remains '6', indicating S&P's expectation of 5%
recovery in the event of a payment default.

The CreditWatch placement follows the announcement made by
Ithaca's board on Feb. 6, 2017, that it entered a definitive
agreement with Israeli Holding Company Delek Group Ltd. in terms
of a cash takeover bid.  The transaction gives a market value of
$1.24 billion to Ithaca.  At the time of the announcement, Delek
already owned 19.7% of Ithaca.

The deal is subject to a minimum tender condition stipulating
that more than 50% of the common shares, excluding Delek Group's
current stake, are brought.  If the transaction is finalized as
planned, Delek Group will own at least a minimum controlling
stake of 60% of Ithaca's common shares or even acquire full
control.  S&P expects the companies will announce the
transaction's final details within the next 60 days.

Delek Group has a diversified portfolio that includes off-shore
natural gas fields; finance and insurance companies; water
distillation activity; and power plants.  Delek Group has a
market cap of about $2.5 billion.  S&P understands that Delek
Group plans to focus on the upstream energy activities, while
divesting its financial activities.  That said, S&P assumes that
Delek Group views Ithaca as a potential platform for its
international activities.

If the deal materializes, S&P will see Ithaca as part of a wider
and stronger group.  S&P would then assess the likelihood of
extraordinary group support for Ithaca, taking into account
these:

   -- Delek Group's overall long-term strategy and the future
      role of Ithaca in the group's portfolio;

   -- Delek Group's share in Ithaca;

   -- Classification of the group's stake in Ithaca (finance
      versus strategic investment);

   -- Potential changes in Ithaca's capital structure following
      the transaction; and

   -- Delek Group's track record of supporting its subsidiaries
      and the likelihood of support Ithaca, if needed.

Based on S&P's initial assessment, it could consider Ithaca to be
defined as a moderately strategic subsidiary, following the
transaction.  This may lead S&P to raise the long-term rating on
Ithaca by one notch.

The CreditWatch positive indicates that S&P could raise the
rating on Ithaca by a maximum of one notch if the deal closes.
S&P understands that the transaction could be completed as early
as April, after which S&P will resolve the CreditWatch.  During
this period, S&P will assess the future role of Ithaca in Delek
Group's portfolio.


TONY'S MEATS: In Liquidation, Operations Continue
-------------------------------------------------
Daily Post reports that Tony's Meats Ltd. has called in
liquidators.

Alan Brian Coleman -- acoleman@rpg.co.uk -- and Julie Webster --
jwebster@rpg.co.uk -- of administrators Royce Peeling Green
Limited, have been appointed joint liquidators of the company,
Daily Post relates.

According to Daily Post, a meeting of the creditors of the
Company has been held in St Asaph although the company is
continuing to trade out of its Kinmel Bay unit.

Tony's Meats Ltd, which trades as Tony Doyle's Quality Meats,
runs around a dozen mobile meat trucks across the region with
retail premises in Kinmel Bay and Llandudno.  A total of 30 staff
are employed across the region.



                            *********

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

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

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


                            *********


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

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

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

This material is copyrighted and any commercial use, resale or
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                 * * * End of Transmission * * *