TCREUR_Public/170307.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

           Tuesday, March 7, 2017, Vol. 18, No. 047



AGROKOR DD: S&P Lowers CCR to 'B-' on Rising Refinancing Risks


SOLOCAL GROUP: Completes EUR400-Million Rights Issue


ADAM OPEL: PSA Reaches Deal with GM to Buy Lossmaking Business


BRUNEGG: Files for Bankruptcy, Employees Laid Off


DECO 9 - PAN EUROPE: S&P Lowers Ratings on 3 Tranches to CCC-
TORO EUROPEAN 3: Fitch Assigns B-(EXP) Rating to Cl. F Notes


VITTORIOSA GAMING: Declared Bankrupt, Faces Liquidation


NIZHNIY NOVGOROD: Fitch Affirms 'BB' IDRs, Outlook Stable
PENZA REGION: Fitch Withdraws BB LT Issuer Default Ratings


AYT HIPOTECARIO BBK I: Fitch Hikes Rating on Class C Notes to BB+


MATTERHORN TELECOM: Moody's Affirms B2 CFR, Outlook Negative
MATTERHORN TELECOM: S&P Affirms B CCR on Planned Recapitalization


VECTOR BANK: Declared Insolvent by Nat'l Bank of Ukraine

U N I T E D   K I N G D O M

AGENT PROVOCATEUR: Bought Out of Administration by Sports Direct
DUBOIS NAVAL: Assets Sold at Auction Following Liquidation



AGROKOR DD: S&P Lowers CCR to 'B-' on Rising Refinancing Risks
S&P Global Ratings lowered its long-term corporate credit rating
to 'B-' from 'B' on Croatia-based food retailer and food
manufacturing group Agrokor d.d.  The outlook is negative.

S&P also affirmed its 'B' short-term corporate credit rating on

At the same time, S&P lowered to 'B-' from 'B' its issue rating
on the three senior unsecured bonds issued by Agrokor and due in

The downgrade reflects S&P's view that Agrokor's capital
structure is negatively affected by rising refinancing risks
linked to upcoming debt maturities in 2018.  At the same time,
the group remains highly leveraged (adjusted debt to EBITDA over
6x), with a lower-than-projected EBITDA base for 2016-2017 due to
underperforming retail operations in Slovenia.  Currently, access
to capital markets also appears to be very uncertain.  That said,
S&P sees no short-term liquidity constraints for the group until
early March 2018.

The immediate refinancing risk, in S&P's view, is the
EUR535 million subordinated PIK loan (not rated).  The borrower
is Adria Group Holding B.V. (held by Mr. Todoric, the main
shareholder of Agrokor group) and this loan served to fund the
EUR544 million acquisition of Slovenian retailer Mercator in June
2014.  S&P understands that this loan, which can accrue at 10.5%
per year, needs to be refinanced or extended by March 8, 2018, or
Agrokor's senior lenders can ask for the immediate repayment of
EUR840 million of Agrokor's bank debt.  This would immediately
weigh on the group's liquidity position and likely lead S&P to
lower the ratings further.

S&P also notes that bank debt covenants indicate that Agrokor
group's debt leverage should decrease to 5.0x reported net debt
to EBITDA by September 2018 (versus 5.8x as of September 2016),
which S&P do not currently foresee in its current base case
unless there is a change in the capital structure or a sustained
uptick in the group's operating performance.

Currently, S&P does not see debt levels decreasing substantially
in 2017 while the group's operating performance has been slightly
deteriorating, mostly due to its Slovenian retail business
Mercator (40% of Agrokor group's revenues).  Although Mercator
has disposed of a number of noncore retail assets, increased
competition should remain and S&P believes that a turnaround in
Mercator's profitability will take more than 12 months.  This has
led S&P to slightly lower its forecasts for 2016-2017, with
EBITDA interest coverage of about 1.7x-2.0x (compared to 2.1x-
2.5x) and adjusted debt to EBITDA of 6.0x-6.5x (compared to 5.5x-
6.0x).  That said, S&P anticipates that the group's free
operating cash flow (FOCF) will remain positive in 2016-2017.

S&P sees current high market volatility as limiting the group's
ability to raise new debt or equity on capital markets, and
potentially making negotiations to change the capital structure
more challenging.  That said, S&P views positively that Agrokor
refinanced EUR840 million of senior bank debt (20% of total debt
including the PIK loan) in 2016 and that there are no large
senior debt maturities in 2017-2018.  Still, in the medium term,
Agrokor appears to be quite reliant on its two main lenders, VTB
and Sberbank, to refinance large debt maturities due in 2019-

S&P understands that the group is actively working on prolonging
its upcoming debt maturities and optimizing its financing costs.
S&P also notes that Agrokor is one of the largest employers in
Croatia with more than 30,000 employees and accounts for 16% of
the country's GDP.

S&P's new base-case projections for 2016-2017 assume:

   -- Flat revenues of Croatian kuna (HRK) 49 billion
      (EUR6.6 billion), reflecting a slight revenue decline in
      retail operations (mostly from Mercator) and low revenue
      growth from food manufacturing.  S&P Global Ratings-
      adjusted EBITDA margin of about 10%, reflecting lower
      profitability at Mercator, offset by cost saving measures
      and higher earnings due to the growth in the beverages and
      ice creams businesses which are higher margin.  Positive
      FOCF of HRK800 million-HRK1,000 million (EUR108 million-
      EUR135 million) annually, with capital expenditure (capex)
      of about 3% of revenues.  Adjusted debt of HRK31 billion-
      HRK33 billion (EUR4.2 billion-EUR4.5 billion), which
      includes borrowings in the consolidated group, PIK toggle
      loans at Adria Group Holding, operating lease commitments,
      and net pension deficit against which we net out
      unrestricted cash balances.

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

   -- EBITDA interest coverage of 1.7x-2.0x; and
   -- Adjusted debt to EBITDA of 6.0x-6.5x.

The negative outlook mainly reflects S&P's view that Agrokor's
PIK loan negotiations and plans to improve its debt structure
might take time to resolve in 2017.

Despite the rising refinancing risk for the upcoming debt
maturities, S&P believes the group faces manageable short-term
liquidity constraints until early March 2018 and limited senior
debt maturities in 2017-2018.

S&P would consider a negative rating action if Agrokor does not
actively and rapidly manage the upcoming debt maturities, such as
the PIK loan, which needs to be refinanced before March 2018.
S&P could also lower the ratings if there was a continued decline
in operating performance -- below S&P's base-case scenario--in
the retail operations.  This would negatively affect FOCF
generation and potentially the group's liquidity position.

S&P could revise the outlook back to stable if Agrokor, in a
timely manner, takes the appropriate financial measures to
address its upcoming debt maturities and progress in deleveraging
its capital structure.

S&P would also view positively a stabilization in Agrokor's
operating performance thanks to an improvement in the
profitability of Mercator's retail operations and continued solid
earnings growth in the ice creams and beverages businesses.  This
could translate into adjusted debt to EBITDA stabilizing or
decreasing toward 5.0x, on a sustainable basis, and EBITDA
interest coverage of at least 2.0x.


SOLOCAL GROUP: Completes EUR400-Million Rights Issue
Aidan Gregory at Global Capital reports that SoLocal Group has
completed its EUR400 million rights issue, which involved a
debt-for-equity swap.

According to Global Capital, the recapitalization, which was
managed by Deutsche Bank, was a key plank of the company's
restructuring effort to reduce its debt from EUR1.1 billion to
around EUR400 million and place it on a secure financial footing
for the future.

                     About SoLocal Group

Solocal Group is a French directories publisher.

                           *   *   *

The Troubled Company Reporter-Europe reported on Jan. 06, 2017,
that Moody's Investors Service assigned a limited default (LD)
indicator to SoLocal Group S.A.'s Ca-PD probability of default
rating (PDR).  The PDR has therefore been changed to Ca-PD/LD.
Concurrently, Moody's has affirmed SoLocal's Ca corporate family
rating (CFR) and the Ca rating on the PagesJaunes Finance & Co.
S.C.A.'s senior secured notes.  Moody's said the outlook on all
ratings remains negative.

As reported by the TCR-Europe on Aug. 15, 2016, Fitch Ratings
downgraded French media group Solocal Group SA's (SLG) Long-Term
Issuer Default Rating to 'C' from 'CC'.  At the same time the
agency has downgraded the senior secured bonds issued by
PagesJaunes Finance to 'C'/'RR4' from 'CCC-'/'RR3'.  The
downgrades reflect management's announced plans to restructure
debt, include an equity rights issue of up to EUR400 mil., debt
for equity exchange and write-down of existing borrowings, the
gross amount of which currently stands at EUR1,164 mil.


ADAM OPEL: PSA Reaches Deal with GM to Buy Lossmaking Business
Michael Stothard and Peter Campbell at The Financial Times report
that Peugeot owner PSA Group has announced a EUR2.2 billion
agreement to buy General Motors' lossmaking Opel division in a
deal that will reshape the European car industry.

According to the FT, the deal to combine France's PSA and
Germany-based Opel, which owns the Vauxhall brand in the UK, will
allow PSA to ramp up its international development.

It will also create the second-largest European carmaker after
Volkswagen and one of Europe's largest manufacturing groups, the
FT notes.

For GM, which has owned Opel for almost 90 years, the deal
announced on March 6 is part of its strategy to streamline global
operations, with its European business having racked up more than
$8 billion in losses since 2010, the FT states.

GM will receive EUR1.32 billion for the Opel manufacturing
business, of which EUR650 million is in cash and EUR670 million
in PSA share warrants, the FT discloses.

PSA and French bank BNP Paribas will pay a further EUR900 million
for the Opel financing arm and operate it as a joint venture,
fully consolidated by BNP, the FT says.

According to the FT, GM will retain most of Opel's pensions
deficit, which the company says is US$9.3 billion, despite
efforts by GM earlier in the talks to load it on to PSA.

The companies said on March 6 that only some smaller pension
funds would be transferred to PSA, along with EUR3 billon to
cover their full settlement, the FT relays.

PSA Group is a French manufacturer of Citroen and Peugeot cars.

Adam Opel GmbH -- is General Motors
Corp.'s German wholly owned subsidiary.  Opel started making cars
in 1899.  Opel makes passenger cars (including the Astra, Corsa,
and Vectra) and light commercial vehicles (Combo and Movano).
Its high-performance VXR range includes souped-up versions of
Opel models like the Meriva minivan, the Corsa hatchback, and the
Astra sports compact.  Opel is GM's largest subsidiary outside
North America.


BRUNEGG: Files for Bankruptcy, Employees Laid Off
Vala Hafstad at Iceland Review, citing RUV, reports that the
owners of the egg farm Brunegg have filed for bankruptcy.

All employees have been laid off, Iceland Review relays, citing a
press release, which also states that almost all sale of eggs
from the farm came to a halt, following a Kastljos news program
about the farm, which aired on Nov. 28 last year.

According to Iceland Review, in the press release, the owners
state, "No business can survive losing all its income just about
overnight, and be left with related cost and expenses."

The Kastljos news analysis program revealed deplorable conditions
at egg farms operated by the company: poor ventilation, crowding
of hens and their poor condition, as well as unsanitary
conditions at the farms, which were, among other things, invested
with mice, Iceland Review relates.


DECO 9 - PAN EUROPE: S&P Lowers Ratings on 3 Tranches to CCC-
S&P Global Ratings lowered its credit ratings on DECO 9 - Pan
Europe 3 PLC's class B, C, and D notes.  At the same time, S&P
has affirmed its ratings on all other classes of notes.

The rating actions reflect the increasing risk of a payment
default due to the legal final maturity being less than five
months away, in July 2017.

DECO 9 - Pan Europe 3 closed in August 2006, with notes totaling
EUR1.154 billion.  The original 11 loans were secured on
commercial properties in Germany and Switzerland.  Since closing,
10 loans have repaid.  The notes have a current outstanding
balance of EUR130.50 million and their legal final maturity date
is in July 2017.

The remaining loan (Treveria I) was transferred to special
servicing in July 2010, when insolvency and enforcement
proceedings were initiated.  This loan is secured by eight
properties, which are mainly in small cities and towns in Western
Germany.  Although the remaining properties are currently under
offer, the legal complexities and ongoing administrative
processes suggest that the sale process is unlikely to complete
before the transaction's legal final date.

                       RATING RATIONALE

S&P's ratings on the DECO 9 - Pan Europe 3 notes address the
timely payment of interest (payable quarterly in arrears) and the
payment of principal no later than the July 2017 legal final
maturity date.

Due to the approaching legal final maturity date, the class B to
G notes have become more vulnerable to nonpayment; S&P believes
there is at least a one-in-three likelihood of default.  S&P has
therefore lowered to 'CCC- (sf)' its ratings on the class B, C,
and D notes, and affirmed S&P's 'CCC- (sf)' ratings on the class
E, F, and G notes, in line with S&P's criteria for assigning
'CCC' category ratings.

S&P has also affirmed its 'D (sf)' ratings on the class H and J
notes as they have experienced interest shortfalls and are highly
vulnerable to principal losses.


Class             Rating
            To                   From

DECO 9 - Pan Europe 3 PLC
EUR1.154 Billion Commercial Mortgage-Backed Floating-Rate Notes

Ratings Lowered

B           CCC- (sf)            B- (sf)
C           CCC- (sf)            CCC+ (sf)
D           CCC- (sf)            CCC (sf)

Ratings Affirmed

E           CCC- (sf)
F           CCC- (sf)
G           CCC- (sf)
H           D (sf)
J           D (sf)

TORO EUROPEAN 3: Fitch Assigns B-(EXP) Rating to Cl. F Notes
Fitch Ratings has assigned Toro European CLO 3 DAC's notes the
following expected ratings:

Class A: 'AAA(EXP)sf'; Outlook Stable
Class B-1: 'AA(EXP)sf'; Outlook Stable
Class B-2: 'AA(EXP)sf'; Outlook Stable
Class B-3: 'AA(EXP)sf'; Outlook Stable
Class C-1: 'A(EXP)sf'; Outlook Stable
Class C-2: 'A(EXP)sf'; Outlook Stable
Class D: 'BBB(EXP)sf'; Outlook Stable
Class E: 'BB(EXP)sf'; Outlook Stable
Class F: 'B-(EXP)sf'; Outlook Stable
Subordinated notes: not rated

Toro European CLO 3 is a cash flow collateralised loan obligation
(CLO). Net proceeds from the notes issue will be used to purchase
a EUR350 million portfolio of mostly European leveraged loans and
bonds. The portfolio is managed by Chenavari Credit Partners LLP.
The reinvestment period is scheduled to end in 2021.

The assignment of final ratings is contingent on the receipt of
documents conforming to information already received.


'B'/'B-' Portfolio Credit Quality

Fitch places the average credit quality of obligors in the
'B'/'B-' range. The agency has public ratings or credit opinions
on all the obligors in the identified portfolio. The Fitch
weighted average rating factor (WARF) of the identified portfolio
is 33.4, below the covenanted maximum for assigning the expected
ratings of 34.

High Expected Recoveries

The portfolio will be at least 90% senior secured obligations.
The weighted average recovery rate (WARR) of the identified
portfolio is 64.3%, below the covenanted minimum for assigning
expected ratings of 65% as the portfolio has not yet been fully
ramped up.

Payment Frequency Switch

The notes pay quarterly, while the portfolio assets can be reset
to semi-annual from quarterly or monthly. The transaction has an
interest-smoothing account but no liquidity facility. Liquidity
stress for the non-deferrable class A and B notes, stemming from
a large proportion of assets potentially resetting to semi-annual
in any one quarter, is addressed by switching the payment
frequency of the notes to semi-annual in such a scenario, subject
to certain conditions.

Limited Interest Rate Risk Exposure

Between 0% and 10% of the portfolio can be invested in fixed-rate
assets, while 2.7% liabilities pay a floating-rate coupon. Fitch
modelled both 0% and 10% fixed-rate buckets and found that the
rated notes can withstand the interest rate mismatch associated
with each scenario.

Hedged Non-Euro Asset Exposure

The transaction is permitted to invest up to 30% of the portfolio
in non-euro assets, provided perfect asset swaps can be entered

Documentation Amendments

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

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


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


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


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

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


VITTORIOSA GAMING: Declared Bankrupt, Faces Liquidation
Neil Camiller at Independent reports that one of three companies
taken to court by the government over unpaid ground rent for the
Casino di Venezia site in Vittoriosa has been declared bankrupt
by a court and is to be liquidated.

The company, Vittoriosa Gaming Ltd (VGL), also owns all the
shares in another of the companies that are being sued,
Independent notes.  According to a court judgment handed down
last week, VGL had run into considerable financial difficulties
and was unable to even pay its utility bills, Independent

It was taken to court by one of its shareholders, Casino
Municipale di Venezia (CMV), which owns 40% of VGL's shares,
Independent discloses.  A company called Bet Live Ltd owns the
remaining 60%, Independent notes.

According to Independent, the court documents show that VGL,
which operated the Casino di Venezia, had fallen on difficult
times and owes millions to its creditors.

A court heard how revenue from online gaming fell from EUR3
million to EUR700,000, while casino revenue fell from EUR2.1
million to EUR600,000, Independent relays.  Between January and
October 2012, VGL incurred a gross loss of EUR766,000 and a net
loss of EUR1.3 million, Independent discloses.

The company failed to audit its accounts for a number of years
but a 2012 exercise showed that VGL owed EUR783,000 to the Social
Security Department, EUR411,000 to its employees, EUR123,000 to
the Lotteries and Gaming Authority and over to EUR200,000 to ARMS
Ltd., Independent notes.  The company also owes its creditors
some EUR4.7 million, Independent states.

The Lotteries and Gaming Authority (now Malta Gaming Authority)
suspended the casino's license over unpaid games tax, but CMV had
stepped in, paying over EUR533,000 to the authority on VGL's
behalf, Independent relates.

However, the bills stacked up again and the license was suspended
for a second time early in 2013, Independent discloses.  The
casino finally closed down in April, Independent recounts.  For a
time, VGL was involved in remote (online) gaming operations but
all activity has since ceased, Independent relays.

In court, VGL, as cited by Independent, said it was in the
process of finding a buyer, insisting that this was a better
solution for its creditors.  But the court, seeing that all
operations had ceased and no bright future appeared to be in
sight, declared the company insolvent and ordered its
liquidation, Independent recounts.


NIZHNIY NOVGOROD: Fitch Affirms 'BB' IDRs, Outlook Stable
Fitch Ratings has revised Russian Nizhniy Novgorod Region's
Outlook to Stable from Negative and affirmed the Long-Term
Foreign and Local Currency Issuer Default Ratings (IDR) at 'BB'
and Short-Term Foreign Currency IDR at 'B'. The Outlook on the
region's National Long-Term Rating has been revised to Stable
from Negative, while the rating has been affirmed at 'AA- (rus)'
and withdrawn.

The region's senior debt ratings have been affirmed at long-term
local currency 'BB'. The region's senior debt National long-term
rating has been affirmed at 'AA- (rus)' and withdrawn.

The revision of the Outlooks reflects better-than-expected
operating performance, which resulted in a smaller deficit before
debt variation and deceleration of debt growth. The affirmation
reflects Fitch's baseline scenario that the region will maintain
sound operating performance and moderate direct risk.

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


The 'BB' ratings reflect the sound budgetary performance of
Nizhniy Novgorod Region with a positive operating balance, but
also its concentrated maturity profile and ongoing budget
deficit. The ratings further take into account a large and
diversified local economy, albeit prone to cyclicality.

The rating action reflects the following rating drivers and their
relative weights:


Improved Budgetary Performance

In 2016, Nizhniy Novgorod Region's operating balance improved to
a sound 11.7% from 6.1% a year earlier. This was driven by a 21%
yoy increase in corporate income tax proceeds, mainly from the
financial sector amid profit growth from a low base in 2014-2015.
Other contributors were excise duties, which rose 28% due to a
tariff increase for petrochemicals and an increase in alcohol
production, while personal income tax proceeds grew 7.7% yoy amid
broad growth of salaries across all sectors. Deficit before debt
variation also narrowed to a modest 3.3% in 2016 from 7.5% in

Fitch forecasts the region will stabilise its operating margin
above the historical level of 10% over the medium-term due to an
acceleration of tax revenue. Its diversified economy will gain
from an economic recovery in Russia. Fitch projects Russia's GDP
will return to growth at 1.3% in 2017. Fitch forecasts the
region's current margin at 7%-8% for 2017-2019, but high interest
payments at about 4% of operating revenue will put pressure on
the region's ratings. The region will run a modest deficit of 3%-
5% over the medium term, leading to broadly stable debt.


Debt Growth Deceleration

In 2016, the region's direct risk stabilised at 62.4% of current
revenue (2015: 63.5%) while the debt payback ratio significantly
improved to 8.3 years from 30.1 years. According to Fitch's
baseline scenario, the region's direct risk will stabilise at
below 63% of current revenue by 2019, as the administration
limits capex following the completion of major capital-intensive
projects for Football World Cup 2018.

Refinancing Risk Reduced

The average maturity of the region's debt improved in 2015-2016
to 2.5 years from 1.9 years in 2014. The region reduced the share
of bank loans to 30% in February 2017 from 44% in 2015, while the
share of bonds increased to 43% from 36% and subsidised budget
loans to 27% from 20%. Fitch takes a positive view of the change
of debt structure, but the region remains under pressure from
refinancing risk as most of the bank loans remain short-term
revolving facilities.

The maturity profile is concentrated, as 78% of the region's
direct risk will mature in 2017-2019. As of 1 February 2017 the
region's refinancing needs for this year stood at RUB30.2 billion
(41% of outstanding debt), but these are mitigated by RUB41
billion available revolving bank credit facilities and RUB9
billion standby short-term credit facilities from the Federal
Treasury. The administration plans to refinance debt via a
combination of bank loans, budget loans and RUB12 billion
domestic bond placements later this year.

The ratings also consider the following rating factors:

Diversified Local Economy

Nizhniy Novgorod has a diversified economy with a fairly well-
developed industrialised sector, supporting wealth metrics near
the national median. In 2016 the 10 largest taxpayers contributed
17% of all tax revenues, underlining a broad tax base. The region
is among the top 15 Russian regions in gross regional product
(GRP) volume and has a population of 3.3 million people (1.7% of

Nizhniy Novgorod Region's economy is driven by internal demand
and therefore prone to cyclicality and correlated with the
national economy. GRP saw mild growth of 0.7% in 2016, which was
better than the wider Russian economy (a 0.4% fall). According to
the administration's forecast the region's GRP will grow 1% in
2017 and accelerate to 2%-2.5% in 2018-2019, following the
national trend.

Weak Institutional Framework

Fitch views the region's credit profile as being constrained by
the weak Russian institutional framework for sub-nationals, which
has a shorter record of stable development than many of its
international peers. The predictability of Russian local and
regional governments' budgetary policy is hampered by the
frequent reallocation of revenue and expenditure responsibilities
within government tiers.


Sound operating performance with an operating margin above 10% on
a sustained basis, accompanied by a decrease in direct risk below
40% of current revenue and lower reliance on short-term bank
financing, could lead to an upgrade.

An increase in direct risk to above 70% of current revenue,
accompanied by ongoing refinancing pressure or an inability to
maintain a sustainable positive current balance, could lead to a

PENZA REGION: Fitch Withdraws BB LT Issuer Default Ratings
Fitch Ratings has withdrawn Russian Penza Region's 'BB' Long-Term
Foreign and Local Currency Issuer Default Ratings (IDRs) with
Stable Outlooks and the region's 'B' Short-Term Foreign Currency
IDR. The agency has also withdrawn the region's 'AA-(rus)'
National Long-Term Rating with a Stable Outlook.

Fitch has withdrawn the ratings of Penza Region for commercial
reasons and due to a lack of information. Fitch will no longer
provide ratings or analytical coverage on Penza Region.


AYT HIPOTECARIO BBK I: Fitch Hikes Rating on Class C Notes to BB+
Fitch Ratings has upgraded AyT Hipotecario BBK I's class B and C
notes and affirmed AyT Hipotecario BBK II, as follows:

AyT Hipotecario BBK I:
Class A notes (ISIN ES0312364005): affirmed at 'AA+sf'; Outlook
Class B notes (ISIN ES0312364013): upgraded to 'AA-sf' from
'Asf'; Outlook Stable
Class C notes (ISIN ES0312364021): upgraded to 'BB+sf' from
'BBsf'; Outlook Stable

AyT Hipotecario BBK II:
Class A notes (ISIN ES0312251004): affirmed at 'AA+sf'; Outlook
Class B notes (ISIN ES0312251012): affirmed at 'Asf'; Outlook
Class C notes (ISIN ES0312251020): affirmed at 'BBsf'; Outlook

The transactions comprise residential mortgages originated and
serviced by Kutxabank, S.A. (BBB/OutP/F3).


Increasing Credit Enhancement (CE)

All notes are currently amortising sequentially, leading to
increases in credit enhancement throughout the capital
structures. As such the class A notes of AyT Hipotecario BBK I
now benefit from 32% of subordination, compared with 29% a year
ago. The upgrade on the class B and C notes of BBK I reflects the
notes' subordination now being sufficient to withstand stresses
at higher rating levels. This compares with an increase on AyT
Hipotecario BBK II's class A notes to 24% from 22% over the last
12 months. Credit enhancement on the class C notes of AyT
Hipotecario BBK II has remained stable due to the currently
amortising reserve fund.

Stable Arrears Performance

Fitch expects gross cumulative defaults for AyT Hipotecario BBK I
and AyT Hipotecario BBK II to remain stable at around 1.1% and
1.8% of the original balances, respectively, which remains
significantly below the average observed for Spanish RMBS
transactions of 5.5%. This is supported by arrears over 90 days
continuing to decline over the last 12 months. AyT Hipotecario
BBK I's 90+ day arrears, excluding defaults, are now 0.43% of the
outstanding portfolio balance, down from 0.75% a year ago. The
same metric for BBK II fell to 0.24% from 0.52%.

Restructured Loan Exposure

Fitch has received additional data on modifications of the
underlying portfolio and has found that both transactions have
been subject to maturity extensions worth 0.5% (BBK I) and 0.2%
(BBK II) of the current outstanding balances. While the majority
of the loans subject to such extensions have not been in arrears
over the past four years, Fitch has applied hits for those loans
that have shown to be in arrears in accordance with its Spanish
criteria addendum.


A worsening of the Spanish macroeconomic environment, especially
employment conditions or an abrupt shift of interest rates, could
jeopardise the underlying borrowers' affordability.
The ratings of the class A notes in both transactions are
sensitive to changes in Spain's Country Ceiling of 'AA+' and
consequently changes to the highest achievable 'AA+sf' rating for
Spanish structured finance notes.

The ratings of both class C notes have shown to be sensitive to
changes in excess spread. Further decreases in excess spread
could lead to negative rating actions.


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


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

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

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


MATTERHORN TELECOM: Moody's Affirms B2 CFR, Outlook Negative
Moody's Investors Service has changed the outlooks on Matterhorn
Telecom Holding SA's and Matterhorn Telecom SA's ratings to
negative from stable, following the announcement that MTH plans
to pay CHF500 million worth of extraordinary dividends to its
100% owner, NJJ Capital. MTH and MT are the ultimate holding
company and intermediate holding company of Salt Mobile SA,

The proposed dividend recapitalization will be funded through a
combination of cash and CHF400 million of incremental debt, which
is expected to consist of 50%-50% senior secured and senior
unsecured debt.

Concurrently, Moody's has affirmed MTH's B2 Corporate Family
Rating (CFR), B2-PD Probability of Default Rating (PDR) and the
Caa1 rating on its EUR181 million 4.875% senior unsecured notes
due 2023. Moody's has also affirmed the B2 rating on MT's CHF411
million 3.625% senior secured notes due 2022, EUR1,000 million
3.875% senior secured notes due 2022, and EUR265 million floating
rate senior secured notes due 2022.


The change of outlook to negative reflects the company's more
aggressive financial policy than anticipated, as demonstrated by
the proposed payment of this extraordinary dividend which
increases leverage above Moody's ratio guidance levels for the B2
rating of adjusted gross debt/EBITDA of 5x. The more aggressive
financial policy is also evidenced by the company's re-leveraging
above its maximum 4.5x debt incurrence ratio.

Following this dividend payment, Moody's estimates that NJJ
Capital has recovered around 60% of its initial equity invested
in the business since its acquisition of Salt in February 2015.

Moody's expects the proposed dividend re-capitalisation will
increase gross adjusted debt/EBITDA to 5.2x on a pro-forma basis
for 2016, up from the estimated 4.3x pre-transaction level.
Although leverage could gradually reduce organically supported by
growing EBITDA, this reduction could be slow as future revenue
growth could remain under pressure, and the company may have to
rely on additional cost saving initiatives than currently

Moody's recognizes the material improvement in Salt's EBITDA and
free cash flow reported in 2016, which has led to a substantial
reduction in leverage before the proposed dividend re-
capitalisation. Although Moody's recognises that the execution
risks in Salt's transformation exercise have diminished on the
back of the strong figures reported in 2016, some risks remain in
light of the expectation of changes in competitive dynamics.

In particular, Moody's believes that Salt can be vulnerable to
pressures on underlying revenues because (1) the company is
predominantly a mobile player with the third largest market
share; (2) Moody's expects increasing convergence in Switzerland
could put pressure on mobile prices; and (3) the competitive
environment will remain challenging given the significant
investments that Salt's competitors have made and will continue
to make to support strong quality networks.

Salt's cash flow metrics such as Retained Cash Flow (RCF)/debt
and Free Cash Flow remain adequately positioned for the rating
level despite the increase in leverage. However, Moody's believes
there is uncertainty around the capacity to sustain cash flow
generation supported by improving margins and the maintenance of
structurally low levels of capex given the strong investments and
high-quality networks of Swiss peers.


The negative outlook on the ratings reflects the increase in
leverage to levels above the ratio guidance for the B2 rating of
adjusted gross debt/EBITDA of 5x. The negative outlook also
reflects that the rating is initially weakly positioned with
limited room for operating underperformance.


Downward pressure could be exerted on the rating if the company's
operating performance weakens such that its adjusted debt/EBITDA
rises above 5.0x and its RCF/adjusted debt falls below 10% on a
sustained basis. In addition, downward pressure could be exerted
on the rating if Moody's becomes concerned about the group's
liquidity -- including, but not limited to, a reduction in
covenant headroom.

The rating is on negative outlook and therefore upward rating
pressure is unlikely in the near term. However, the outlook could
be stabilised if Salt demonstrates that operating performance
continues to improve and leads to a gradual de-leveraging path
towards gross adjusted debt/EBITDA sustainably below 5x with
continuing improvement in financial metrics and main KPIs (such
as subscriber growth, reductions in churn rate, etc).



Issuer: Matterhorn Telecom Holding SA

-- LT Corporate Family Rating, Affirmed B2

-- Probability of Default Rating, Affirmed B2-PD

-- Backed Senior Unsecured Regular Bond/Debenture, Affirmed Caa1

Issuer: Matterhorn Telecom SA

-- Backed Senior Secured Regular Bond/Debenture, Affirmed B2

Outlook Actions:

Issuer: Matterhorn Telecom Holding SA

-- Outlook, Changed To Negative From Stable

Issuer: Matterhorn Telecom SA

-- Outlook, Changed To Negative From Stable


The principal methodology used in these ratings was
Telecommunications Service Providers published in January 2017.

MTH and MT are the ultimate holding company and intermediate
holding company of Salt Mobile SA, respectively. Salt is the
number three mobile network operator in Switzerland, with a
subscriber market share of around 17% in post-paid mobile
subscribers. The company has approximately 1.9 million mobile
customers. For the year ended December 2016, the company reported
revenues of CHF1.1 billion and adjusted EBITDA of CHF438 million.

MATTERHORN TELECOM: S&P Affirms B CCR on Planned Recapitalization
S&P Global Ratings said that it had affirmed its 'B' long-term
corporate credit rating on Swiss wireless telecommunications
network operator Matterhorn Telecom Holding S.A. and its
subsidiary Matterhorn Telecom S.A.  The outlook is stable.

Matterhorn Telecom Holding S.A. and Matterhorn Telecom S.A.
together are planning to issue about Swiss franc (CHF) 400
million incremental debt to pay a CHF500 million dividend to NJJ
Capital. The dividend recapitalization is subject to the group
receiving lenders' consent to amend certain clauses of the debt
documentation.  Although the dividend recapitalization will
result in higher adjusted leverage, this is mitigated by
stronger-than-expected operating performance in 2016 stemming
from continued focus on costs and capital expenditure

At the same time, S&P affirmed its 'B' issue rating on
Matterhorn's senior secured debt, with a recovery rating of '3',
reflecting S&P's expectation of meaningful (50%-70%; rounded
estimate: 60%) recovery in the event of a payment default.

S&P has also affirmed its 'CCC+' issue rating on the senior
unsecured notes, with a recovery rating of '6', reflecting S&P's
expectations of negligible recovery (0%-10%; rounded estimate:
0%) in the event of a payment default.

The affirmation reflects S&P's expectation that the higher
adjusted leverage resulting from the dividend recapitalization
will, in S&P's view, be offset by:

   -- Better operating performance than we initially expected;
   -- S&P's expectations that management will further improve
      margins and free operating cash flow (FOCF) generation in
      2017 through its continuous focus on costs and capital
      expenditure (capex) efficiencies; and
   -- A slightly growing subscriber base.

Since it acquired the business in April 2015, NJJ Capital has
worked closely with Matterhorn's management to simplify and
rationalize the group's structure and operations and
substantially lower its cost base.  Matterhorn has indeed
launched a simplified post-pay offering, rationalized its
commercial and marketing approach, focused on the direct
distribution channel (either physical or online) and re-insourced
network maintenance tasks. This resulted in the reported EBITDA
margin improving to about 38.0% in 2016 from 26.4% in 2015 and
stronger FOCF on lower capex and better collections.  What's
more, S&P views positively the fact that the company has reduced
its churn rate and that the group's post-pay subscriber base
started increasing again since the third quarter of 2015.  S&P
also believes that the group benefits from a nationwide and good
quality 4G network, supported by ongoing and targeted
investments, and can leverage significantly larger spectrum per
user than peers to underpin its data-rich contracts.

"That said, we continue to assess Matterhorn's business risk
profile as weaker than that of its two main competitors, the
strong incumbent Swisscom AG followed by the challenger Sunrise
Communication Holdings S.A.  Indeed, Matterhorn remains the No.3
player with a post-pay subscriber market share of 16.6% in
September 2016, slightly up by 30 basis points since December
2015.  What's more, although decreasing, the subscriber churn
rate remains high and slightly higher than that of peers, and
average revenues per user (ARPU) has decreased following the
introduction of Matterhorn's Plus offer.  We also think its
network is still lagging behind that of its main competitors in
terms of indoor coverage," S&P said.

S&P anticipates that mobile revenues will continue to decrease in
2017.  This is because the expected growth in the subscriber base
will not compensate for the decline in ARPU, given that slightly
less than one-fourth of the customer base still has to be
transferred to Matterhorn's lower price offerings.  Finally, S&P
believes that, for Matterhorn to maintain its margin and improve
its credit metrics, it will have to demonstrate its ability to
continuously gain post-pay subscribers and also at least maintain
its current level of costs and capex efficiency in order to
offset some remaining repricing in the base and the structural
decline of pre-pay contract ARPUs.

S&P notes that the group has recently reached an agreement with
Swiss Fiber Net for accessing its fiber-to-the-home network,
setting the basis for the group to offer fixed-line services and
allowing Matterhorn to cross-sell to its existing mobile
subscriber base.  However, S&P currently has an only limited
understanding of the group's strategy around the commercial offer
and competitors' reactions are also very unclear at this stage.
As a result, meaningful operational performance and execution
risks exist in S&P's view, as the group will have to pay a fixed
commitment of Swiss franc (CHF) 104 million over the next six to
seven years to access the fiber network.

As per S&P's revised base-case scenario, it anticipates that
Matterhorn's adjusted debt to EBITDA will peak at 5.5x-5.6x in
2017 and FOCF to debt will remain above 5%.

The stable outlook on Matterhorn reflects S&P's view that the
group will sustain its recently strengthened EBITDA margin,
gradually soften its revenue decline, thanks to its revamped
commercial strategy and the launch of fixed offers, and maintain
ample liquidity.  Following the dividend recapitalization, S&P
expects that its adjusted debt-to-EBITDA ratio will be above 5x
in 2017-2018, and that the FOCF-to-debt ratio will remain above

S&P could consider a one-notch upgrade if Matterhorn achieves
modest revenue growth, maintains an S&P Global Ratings-adjusted
EBITDA margin of about 45%, and sustainably reduces its adjusted
debt to EBITDA to about 5x or below.  Overall, any future rating
upside would likely be limited to one notch, given the lack of
information about the capital structure of the private holding
company NJJ Capital.

S&P could consider a negative rating action if Matterhorn failed
to sustain the current level of profitability, adopted an even
more aggressive financial policy, or weakened its liquidity
profile.  In particular, if the group's post-pay base were to
shrink, this would not bode well for the group's future
performance.  S&P could also consider a negative rating action if
Matterhorn's adjusted debt to EBITDA deteriorated to more than


VECTOR BANK: Declared Insolvent by Nat'l Bank of Ukraine
Interfax-Ukraine report that the National Bank of Ukraine on
March 3 declared Vector Bank insolvent.

According to Interfax-Ukraine, decision No. 112-rsh/BT was made
by the NBU board on March 2 over the large reduction of liquidity
of the bank and submission of untrue statistics reports.

The NBU said, referring to the statistics report of Vector Bank,
that ending stocks on its correspondent account in the central
bank is critical: as of March 1, 2017 there were UAH76,000 on it
or 0.1% of the bank's liabilities,
Interfax-Ukraine relates.

The only owner of the bank did not provide for the financial
support to prevent bank's insolvency, Interfax-Ukraine notes.

When Vector Bank was placed on the list of troubled banks facts
of hiding the unsettled transactions of clients in accounting
reports were established, Interfax-Ukraine discloses.

"Thus, Vector Bank is not able to implement legal claims of
creditors in the full amount and in the terms approved over a
lack of funds," Interfax-Ukraine quotes the NBU a saying.

Vector Bank is based in Kyiv.

U N I T E D   K I N G D O M

AGENT PROVOCATEUR: Bought Out of Administration by Sports Direct
Josie Cox at Independent reports that Agent Provocateur, the
high-end lingerie chain popular with celebrities, entered
administration on March 2 and was immediately snapped up by Mike
Ashley, owner of discount retailer Sports Direct.

According to Independent, AlixPartners, who had been appointed to
manage the restructuring and administration, said in a short
statement that it had sold the group to Four Holdings,
Mr. Ashley's investment vehicle, but declined to reveal the terms
of the deal.

The company operates more than 100 stores but has for years been
suffering weak sales hit by a slow-down in luxury high street
spending, Independent relates.

Agent Provocateur was founded in 1994 by Joe Corre, the son of
fashion designer Vivienne Westwood.

DUBOIS NAVAL: Assets Sold at Auction Following Liquidation
The assets of the leading design firm set-up by world-renowned
yacht designer Ed Dubois have been sold at auction.
Insolvency and restructuring firm CVR Global were called into
Dubois Naval Architects Ltd. earlier this year after the company
hit financial trouble following the death of Mr. Dubois in March

Terry Evans and Simon Lowes from CVR Global were appointed
joint-liquidators of Dubois Naval Architects of Lymington,
Hampshire, on February 2, 2017.

CVR Global instructed auctioneers Marriott & Co to hold an online
auction of Dubois Naval Architects' assets, which included the
iconic company's name and its intellectual property rights, its
drawings and designs.

The auction, held on February 28, 2017, attracted world-wide
interest and resulted in all lots being sold exceeding the
reserve prices.

Terry Evans, from CVR Global's Southampton office, said: "The
death of Mr. Dubois had a dramatic impact on the fortunes of
Dubois Naval Architects, and the financial constraints the
company experienced in a difficult market resulted in our

"Following an assessment of the company's affairs, it was clear
the business could not continue to trade and we subsequently
instructed Marriott & Co to hold an auction of the company's
business assets.

"We are in the process of completing the procedure, and early
indications are that the outcome will result in the secured
creditor being paid in full.  If the work in progress is
completed satisfactorily, the end result may provide a dividend
to the remaining creditors.

"There has been world-wide interest in the Dubois assets, and we
believe the auction process exceeded expectations."

Gavin Marriott, director of Marriott & Co, added: "We are pleased
to say that the best bids for all the lots at the auction
exceeded the reserve prices, and that we are in the process of
completing the sales accordingly.

"There has been world-wide interest in the Dubois assets, and we
believe that the auction result was excellent."

CVR Global was formed in 2015 following the management buyout of
the business recovery division of Chantrey Vellacott.


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

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

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


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

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

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

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

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

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

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