TCREUR_Public/170314.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 14, 2017, Vol. 18, No. 052


                            Headlines


A R M E N I A

UNIBANK OJSC: Moody's Raises Long-Term Deposit Ratings to B2


B E L G I U M

NYRSTAR NV: Moody's Hikes Corporate Family Rating to B3


B O S N I A

BOSNIA AND HERZEGOVINA: S&P Affirms B/B Sovereign Credit Ratings


C R O A T I A

CROATIA: Moody's Affirms Ba2 Bond Ratings, Outlook Stable


F R A N C E

OBOL FRANCE 3: S&P Assigns 'B+' CCR, Outlook Stable


G E R M A N Y

EUROMAR COMMODITIES: ECOM Agrees to Buy German Factory
KLITSCH GMBH: Provisional Insolvency Administrator Appointed


I T A L Y

BANCA CARIGE: Moody's Affirms Ba1 on Residential Mortgage Bonds


K A Z A K H S T A N

HALYK BANK: Fitch Puts 'BB' IDR on Rating Watch Negative


L U X E M B O U R G

LEHMAN BROTHERS: April 20 Claims Filing Deadline Set
MATTERHORN TELECOM: Moody's Rates EUR525MM Sr. Secured Notes B2
YOUNG'S SEAFOOD: S&P Affirms Then Withdraws 'CCC+' CCR


N E T H E R L A N D S

MESDAG BV: S&P Lowers Rating on Class C Notes to 'D'


P O R T U G A L

NOVO BANCO: Aethel Submits EUR3.8-Bil. Non-Binding Offer
PORTO CITY: Fitch Affirms 'BB+' LT Issuer Default Ratings


R U S S I A

KALUGA REGION: Fitch Withdraws 'BB' LT Issuer Default Ratings
LIPETSK REGION: Fitch Raises Long-Term IDRs to 'BB+'
MTS BANK: Fitch Affirms 'B+' Long-Term IDR, Outlook Stable
TULA REGION: Fitch Affirms 'BB' Long-Term IDRs, Outlook Stable


S P A I N

AYT CAJA HIPOTECARIO 1: Fitch Affirms CC Rating on Class D Notes
AYT COLATERALES NOSTRA I: Fitch Affirms 'B' Rating on Cl. D Notes
AYT GENOVA VIII: Fitch Affirms BB+ Rating on Class D Notes


S W E D E N

UNILABS HOLDING: S&P Affirms 'B' CCR on Planned Acquisition


U N I T E D   K I N G D O M

DRACO ECLIPSE 2005-4: S&P Withdraws 'B-' Rating on Cl. E Notes
HERCULES PLC: S&P Lowers Rating on Class D Notes to 'D'
INNOVIA GROUP: Moody's Withdraws B1 Corporate Family Rating
MERLIN ENTERTAINMENTS: Moody's Rates Proposed EUR200MM Notes Ba2
MUST HAVE: Evaluates Strategic Alternatives After Administration

NORTH DEVON THEATRES: In Administration, Claim Process Ongoing


VIVID TOY: Private Equity Firm Set to Take Over Business

X X X X X X X X

* DBRS Assigns Issuer Ratings to 43 European Banking Groups


                            *********



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A R M E N I A
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UNIBANK OJSC: Moody's Raises Long-Term Deposit Ratings to B2
------------------------------------------------------------
Moody's Investors Service has upgraded the long-term local and
foreign-currency deposit ratings of Armenia's Unibank OJSC
(Unibank) to B2 from B3 and changed the outlook on the deposit
ratings to stable from positive.

The rating agency has also upgraded Unibank's baseline credit
assessment (BCA)/adjusted BCA to b3 from caa1. Concurrently,
Moody's affirmed the bank's Counterparty Risk Assessment (CR
Assessment) of B2(cr)/Not Prime(cr) and its short-term local and
foreign-currency deposit ratings of Not Prime.

RATINGS RATIONALE

The upgrade of Unibank's deposit ratings is driven by the recent
strengthening of its capital position, as a series of capital
injections increased the bank's total regulatory capital by 68%
in 2016 compared to year-end 2015. As a result, as of January 1,
2017, Unibank reported a regulatory capital adequacy ratio of
17.38%, well above the required minimum of 12%, and its cushion
against potential credit losses has strengthened accordingly.
Moody's estimates that Unibank's ratio of problem loans to the
sum of tangible common equity and loan loss reserves was 59% as
of year-end 2016, compared to 100% as of year-end 2015.

The recent trends in Unibank's asset quality, profitability and
funding structure were also moderately positive and supportive of
the ratings upgrade. Moody's estimates that the proportion of
problem loans has declined to approximately 18% as of year-end
2016 from 20% a year ago, with the improvement driven by Unibank
repossessing collateral held against some of its largest problem
loans. The bank's pre-provision income increased to 2.3% of
average assets in 2016 from 1.6% in 2015, driven by strong growth
of fee and commission income. Finally, Unibank's reliance on
market funding has reduced considerably, as the bank channeled
new equity funding to repay interbank loans.

Although Unibank's financial metrics substantially improved
following the capital increase, Moody's sees downside risks to
the bank's enhanced capital position stemming from (1) the gap
between problem loans and loan loss reserves, which remains
material at more than 40% of the bank's shareholders' equity, and
(2) Unibank's significant non-core assets, which include
collateral repossessed from some large problem borrowers and
amount to 20% of its equity as of year-end 2016.

Moody's assesses the likelihood of government support to Unibank
as moderate. As a result, the bank's B2 deposit ratings
incorporate one notch of government support uplift from its BCA
of b3.

WHAT COULD MOVE THE RATINGS UP/DOWN

Material improvements to the bank's asset quality and
profitability would be credit positive for Unibank's BCA.

Negative pressure on the ratings could develop if Unibank's asset
quality deteriorates further, eroding the bank's capital cushion.
A material weakening of the bank's market positions, leading
Moody's to revise its assessment of the Armenian government's
willingness to support Unibank, would also negatively affect the
bank's deposit ratings.

PRINCIPAL METHODOLOGY

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



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B E L G I U M
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NYRSTAR NV: Moody's Hikes Corporate Family Rating to B3
-------------------------------------------------------
Moody's Investors Service has upgraded the corporate family
rating (CFR) and probability of default rating (PDR) of Nyrstar
NV by one notch to B3 and B3-PD from Caa1 and Caa1-PD
respectively. Concurrently, the rating agency has upgraded to B3
from Caa1 the rating of the existing EUR350 million senior
unsecured guaranteed notes due 2019 issued by Nyrstar Netherlands
(Holdings) B.V., a subsidiary of Nyrstar, and has assigned a
definitive B3 from (P)B3 rating on the new EUR400 million senior
unsecured guaranteed notes due 2024 issued by Nyrstar Netherlands
(Holdings) B.V. The outlook on all ratings is stable.

This rating action concludes the review for possible upgrade
initiated by Moody's on February 27, 2017. The conclusion of the
review was triggered by the successful completion of the EUR 400
million issuance of the notes, which is above the initial target
of EUR 350 million set by the company in its announcement of
February 27, 2017.

RATINGS RATIONALE

The upgrade of the CFR by one notch to B3 reflects Moody's
favourable assessment of the actions taken by the company to
proactively address its liquidity needs over the next 12 to 18
months, by placing new EUR 400 million notes due 2024. The
proceeds of the notes will be used to fund a voluntary tender
offer for the EUR 120 million convertible notes due 2018
(acceptance equal to EUR 29.5 million) and to repay, but not
cancel, drawings under the existing EUR 400m revolving structured
commodity trade finance facility due June 2019 and under the
committed Trafigura (unrated) revolving facility due December
2017. As a result of the transaction, the liquidity position of
the company has become adequate to address the company's negative
free cash flow of c. EUR 160 million projected by the rating
agency for 2017, as well as to mitigate the refinancing risk in
September 2018 related to EUR90.5 million of residual convertible
notes not tendered to Nyrstar's offer and then becoming due.

The increased liquidity headroom would better accommodate the
additional capex for the next operational milestones of the Port
Pirie redevelopment project. Moody's assessment of the liquidity
position of Nyrstar also assumes that the company will be able to
(i) delay the amortisation of the Port Pirie perpetual notes, if
needed, and (ii) extend or roll-over the US$250 million Trafigura
revolving facility when it matures later this year. The rating
agency expects that Trafigura, the main shareholder of Nyrstar
with a 24.6% equity stake, will continue to be supportive.

The rating upgrade also reflects Moody's expectation that the
favourable pricing environment for zinc, the key commodity for
Nyrstar, will support the performance of the company and its
deleveraging efforts. Under its conservative zinc prices
assumptions of US$2,205/tonne, Moody's expects that the company
will start to gradually reduce its adjusted gross debt/EBITDA
ratio towards 6x by the end of 2017 from over 7x at the end of
2016. Further deleveraging to c. 4x would be possible in 2018,
assuming supportive pricing conditions and progress on the Port
Pirie project in line with management guidance. In 2018 the
company should also start generating positive free cash flow of
c. EUR 35m, assuming moderate capex at c. EUR 180m, down from c.
EUR 300m anticipated for 2017, modest working capital
requirements at c. EUR 20m, and no dividends being paid.

STRUCTURAL CONSIDERATIONS

The exiting senior notes due 2019 and the new notes due 2024 are
rated at B3, as they rank pari-passu and are issued by the same
entity, Nyrstar Netherlands (Holdings) B.V., a subsidiary of
Nyrstar.

Both series of notes rank behind the senior secured EUR400
million revolving borrowing base facility but ahead of other
senior unsecured obligations of the group. Such obligations were
raised at the level of various holding companies and are not
benefitting from the guarantees of the operating subsidiaries,
unlike the existing and new notes, which continue to benefit from
the senior unsecured guarantees by the main operating
subsidiaries. As of December 31, 2016, the issuer and the
guarantors for the notes represented 83.9% of Nyrstar's total
underlying EBITDA and 73.6% of its assets.

Rating outlook

The stable outlook reflects Moody's expectation that the company
will maintain an adequate liquidity position and comfortable
headroom under its financial covenants at all times, and that it
will be able to gradually reduce its adjusted gross leverage from
the peak level of 7.3x at the end of 2016. At the same time, the
stable outlook assumes that the company will progress on its
major Port Pirie redevelopment project in line with the revised
budget and timetable. The stable outlook reflects stable industry
conditions and would accommodate a possible reduction in zinc
prices from current high levels at c. US$2,700/tonne towards
Moody's more conservative price assumption at c. US$2,205/tonne
over the next 12 to 18 months.

What could change the rating up

A rating upgrade, albeit unlikely in the near term, would be
considered if the company were able to deleverage to below 4x on
a sustained basis and turn to generate positive free cash flows,
hence strengthening further its liquidity position. The company
would also need to complete the commissioning phase of the Port
Pirie project in line with the revised guidance and demonstrate
that it is on track to deliver an initial EBITDA uplift in 2018.

What could change the rating down

A downgrade, albeit currently considered unlikely, would be
considered if the company's liquidity weakens materially, which
should occur in case of a material and currently unforeseen
downturn in the zinc market, or in case of material
underperformance of the core business and/or of its Port Pirie
project development. Much weaker credit metrics than currently
anticipated under Moody's conservative assumptions, and
materially reduced headroom under the financial maintenance
covenants will also exert negative rating pressure.

The principal methodology used in these ratings was Global Mining
Industry published in August 2014.

Listed in Belgium and headquartered in Switzerland, Nyrstar NV is
a medium-sized integrated smelting and mining company, owning
nine mines (out of which five are currently operating), six
smelters and a fumer. Smelting facilities are located in Northern
Europe, the US and Australia. During 2016 the company is
completing its AUD 660 million (approximately EUR 440 million)
Port Pirie smelter redevelopment project in Australia (the 'Port
Pirie project'), which would enable a major expansion of its
metal processing business, once fully ramped-up by end of 2019.
The company is currently seeking to exit the mining business and
transform itself into a metal processing only business.

Nyrstar is listed on Euronext Brussels exchange with a market
capitalization of c. EUR0.8 billion and reported 2015 revenues of
EUR2,763 million. The single main shareholder of Nyrstar is
Trafigura (unrated), with a 24.6% equity stake.



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B O S N I A
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BOSNIA AND HERZEGOVINA: S&P Affirms B/B Sovereign Credit Ratings
----------------------------------------------------------------
S&P Global Ratings affirmed its 'B/B' long- and short-term
foreign and local currency sovereign credit ratings on Bosnia and
Herzegovina (BiH).  The outlook is stable.

                            RATIONALE

The affirmation is based on BiH's sound fiscal performance and
expected decreasing general government deficits, as well as
robust indirect tax revenues that the country uses to service its
external debt.  The ratings are also supported by BiH's still
comparably low debt burden, benefitting from favorable
predominantly concessional terms and conditions.  The ratings on
BiH are constrained by the country's political divisions, the
country's rising external indebtedness and substantial external
financing requirements, as well as its limited monetary policy
flexibility and comparably low per capita income levels.

In February 2017, the decision of the Bosniak member of BiH's
tri-partite state presidency to appeal an International Court of
Justice Ruling on genocide during the 1992-1995 war sparked
tensions among BiH's constituent ethnicities, as the decision had
not been previously agreed on.  The risk of an ensuing political
blockade over the coming weeks is still elevated, and comes at a
time when the authorities need to fulfill several prior actions
in order to complete the first review under BiH's three-year
EUR550 million extended fund facility (EFF) with the
International Monetary Fund (IMF).  This underlines how BiH's
multilayered and fragile institutional set-up and persisting
divisions between the different entities' governments complicate
policymaking, because the legislation for complying with the
IMF's conditionality -- for example an increase on excise tax on
fuel -- has already been delayed and its implementation is
currently at risk due to the current political deadlock.
Nevertheless, despite delays to the completion of the first
review of the EFF arrangement with the IMF, expects BiH to
continue to fulfill the current program's conditions, albeit with
occasional considerable lags.

Reform progress and institutional stability would also be crucial
to any meaningful progress toward being granted EU candidate
status, following BiH's membership application in early 2016.
BiH already benefits from sizable EU and World Bank funding and
technical assistance, and S&P understands that the World Bank's
financial assistance in the form of a development policy loan in
2017 would not necessarily be linked to the IMF's conditionality
and that the EU would extend budgetary support to back BiH's long
path of alignment with the block.  However, confrontations along
party lines and between the country's constituent entities remain
frequent and will likely intensify ahead of the general elections
in the third quarter of 2018.

In the absence of disbursements from the IMF's EFF program, S&P
anticipates that the entity governments would be -- as in the
past -- forced to close their budget gaps and rely on the
domestic capital markets to cover their financing needs.

While S&P thinks that the governments could rely on domestic
banks to cover their financing needs in 2017, and external
financing pressures should remain subdued, S&P considers the EFF
program as a very important anchor for the country's structural
reform agenda.  Failure to fulfill the conditionality under the
arrangement would therefore mean that the realization of crucial
infrastructure projects would be threatened, hindering the shift
toward more investment-driven economic growth and stifling the
growth potential of the economy.

"Under our current assumption of delayed progress on the
authorities' reform agenda, economic growth in 2017-2020 will
continue to be driven by net exports and private consumption,
supported by remittances.  We have lowered our economic growth
forecast compared with our previous projections, as we think that
the progress on structural reform, including improvements in the
business environment, which is mostly instilled by international
lenders' conditionality will likely be slow, and we therefore now
project real GDP growth of 2.6% on average per year during 2017-
2020 compared with around 3% in our previous base case.  That
said, the labor market has improved over the course of 2016.  The
unemployment rate decreased to 25.4% from 27.7% in 2015, although
it remains at a very high level.  This improvement reflects an
increase in employment registered in BiH -- and not merely net
outward migration, which we expect to continue as long as the
country's economic perspectives remain dim," S&P said.

As a result of the likely lower imports growth S&P sees as being
related to foreign-financed investment projects, it has lowered
its forecast for the current account deficit in 2017-2020.  S&P
expects a gradual widening of the current account deficit to 7%
of GDP in 2020 from 4% of GDP in 2017.  Furthermore, the lower
external indebtedness of BiH in 2017-2020 compared with S&P's
previous forecast reflects lower external borrowing by the
government as a result of potential constraint on international
concessional inflows.  S&P believes that these trends are
reflective of the country's external vulnerability to shifts in
official funding and external financing pressures from underlying
political risks to EFF program implementation.

Furthermore, S&P continues to expect the country's external
indebtedness to trend higher, with narrow net external debt
increasing to over 50% of current account receipts by 2020.  At
the same time, S&P estimates debt-creating inflows (net of
amortization) will amount to about US$225 million (1.4% of GDP)
and net foreign direct investment (FDI) will amount to
US$250 million (1.5% of GDP) in 2017, with inflows to the capital
account making up the rest.  S&P thinks that structural reforms
could also help attract more FDI which S&P currently projects at
just under 2% of GDP in 2017-2020, in particularly S&P believes
that political uncertainty continues to hamper investor
confidence.

"We project the consolidated general government fiscal deficit
will narrow to 0.8% of GDP in 2020, compared with 1% in 2017.
Our fiscal forecast therefore anticipates a slower reduction of
general government deficits than the government's projections
agreed in the context of the EFF arrangement.  In the absence of
disbursements under the EFF, the entities will likely curtail
capital investment spending in order to balance their budgets.
If there were no disbursements for a prolonged period, we
anticipate that the decline in public investment could have a
negative effect on economic growth and in turn also on tax
revenues.  Furthermore, we would expect the further build-up of
arrears on the entities and lower levels of government under such
a scenario.  Importantly, indirect tax revenues have shown sound
growth in 2016, and they are used to service BiH's state level
external debt before they are allocated to the various government
entities.  As a result of the gradual budgetary consolidation, we
expect general government debt to stabilize at about 40% of GDP
by 2020.  We expect that the majority of government debt will
continue to be denominated in foreign currency over our forecast
horizon through 2020.  At the same time, we highlight that
external government debt is primarily concessional," S&P said.

The banking system appears relatively well capitalized and
represents a limited contingent liability for the government, in
S&P's view.  Nonperforming loans (NPLs; loans overdue 90 days or
more), although on a decreasing trend over the past 12 months,
remain at 12.1% of total loans as of Sept. 30, 2016.  S&P
understands that, while BiH's banking system is stable, some
banks may be undercapitalized.  Vulnerabilities at smaller
domestic banks with weaker corporate governance practices have
surfaced over the past couple of years, for example at Banka
Srpske (owned by the government of the Republika Srpska, one of
the country's two autonomous entities) in late 2015, which has,
however, been resolved as precondition of the IMF arrangement.
In that regard, S&P also notes the recent adoption of new banking
legislation, in line with EU directives, in both entities as a
step toward improved supervision.

BiH has a currency board regime and its currency, the
konvertibilna marka (BAM), is pegged to the euro.  The currency
board provides stability and has been successful in containing
inflationary pressures.  While appropriate for the country, it
restricts policy response, in S&P's view.  S&P also views the
high share of loans denominated in or indexed to foreign currency
(more than 50% of total system loans) as constraining the
monetary flexibility of BiH's central bank.  Although reserves
covered monetary liabilities by 1.07x as of end-December 2016,
the central bank cannot act as a lender of last resort under BiH
law.  S&P understands that BiH is committed to maintaining the
independence of the central bank and preserving the stability of
the currency board, which entails adequate coverage of the
monetary base by the central bank's foreign currency reserves.

                              OUTLOOK

The stable outlook on BiH reflects S&P's assessment of the
balance of risks between the exacerbated political uncertainty
that is putting compliance with international financing
conditionality at risk and the country's relatively stable fiscal
performance.

S&P could lower the ratings if the availability of external
financing for BiH's current account deficit was called into
question -- potentially alongside a protracted period of non-
availability of foreign financing -- and government financing
constraints emerged.  Although the state's external debt
repayments are funded by indirect tax receipts, under such a
scenario the debt-servicing risks could rise.  In case of delays
in payments to official creditors, as well as difficulties with
debt service at the entities levels, S&P could lower the ratings
by more than one notch.

An easing of tensions between BiH's two entities, improved
relations with and within the state institutions, and increased
effectiveness of policymaking would, in S&P's view, gradually
enable reform implementation, reduce dependence on foreign
financing, and ultimately benefit the investment and business
climate.  If such developments were to translate into prospects
for more sustained economic growth, S&P could in turn consider
raising its ratings on BiH.

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable.  At the onset of the committee, the chair
confirmed that the information provided to the Rating Committee
by the primary analyst had been distributed in a timely manner
and was sufficient for Committee members to make an informed
decision.

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.

The committee agreed that the fiscal assessment: flexibility and
performance had improved.  All other key rating factors were
unchanged.

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

RATINGS LIST

                                        Rating        Rating
                                        To            From
Bosnia and Herzegovina
Sovereign Credit Rating
  Foreign and Local Currency            B/Stable/B    B/Stable/B
Transfer & Convertibility Assessment   BB-           BB-



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C R O A T I A
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CROATIA: Moody's Affirms Ba2 Bond Ratings, Outlook Stable
---------------------------------------------------------
Moody's Investors Service has changed Croatia's outlook to stable
from negative and affirmed its Ba2 senior unsecured bond and Ba2
long-term issuer ratings.

The key drivers for changing the outlook to stable and affirming
the Ba2 rating:

(1) Croatia's stronger than expected medium-term economic growth
     following its emergence from a six-year recession in 2015,
     with growth of around 2.5% on average in coming years.

(2) The reversal in the upward trajectory of Croatia's public
     sector debt burden as a result of improved growth.

(3) In spite of these positive economic and fiscal trends, the
     rating continues to be constrained at the Ba2 level by
     structural weaknesses in Croatia's economy in the absence of
     a structural reform agenda.

Croatia's long-term and short-term foreign-currency bond ceilings
remain unchanged at Baa3/P-3, the long-term foreign-currency
deposit ceiling remain unchanged at Ba3. The short-term foreign-
currency deposit ceiling remain unchanged at Not Prime (NP). At
the same time, the local-currency bond and deposit country
ceilings were unchanged at Baa1.

RATINGS RATIONALE

FIRST DRIVER: CROATIA'S STRONGER THAN EXPECTED MEDIUM-TERM
ECONOMIC GROWTH

Moody's expects Croatia's economy to grow by 2.5% per annum on
average over the next few years, which is much lower growth than
the pre-crisis average of 4.5% between 2000 and 2007 but is only
slightly weaker than the average 2.8% expected for its Central
and Eastern European (CEE) peers over the same period. Moody's
believes that the improved growth prospects will have a positive
impact upon budgetary performance and contribute to a reduction
in general government debt. These credit trends are materially
different to what Moody's had assumed a year ago when it assigned
a negative outlook on the government rating.

Croatia's economic momentum has strengthened, after the economy
emerged from a six-year recession in 2015. Real GDP growth
accelerated to an estimated 2.9% (year-on-year) in 2016,
significantly exceeding growth in 2015 (1.6%) as well as Moody's
forecasts of 2.1%. Growth has become broad based, reflected by a
good performance in exports of goods and services, a pick up in
household consumption and investments, as well as public
consumption. Particularly notable is the rise in government
consumption (above 2% in Q2/Q3) -- the highest rise since 2009,
which comes in spite of spending restraint and political events
that resulted in early elections.

Moody's expects Croatia's economic growth to expand further this
year, with additional support provided by the government's more
accommodative fiscal policy. Private consumption will probably
expand further on the back of tax cuts introduced by the
government from 2017 as well as further improvements to the
labour market.

At the same time, private investment will benefit from ample
liquidity in the Croatian banking system as well as good
financing conditions which are both likely to have a positive
impact upon credit expansion. Credit growth began to recover in
mid-2016 and it is expected to enter positive growth territory
this year. Economic growth will also be supported by public
investment which will benefit from increased absorption of EU
funds. A reduction in domestic political uncertainty, after the
formation of a new government in the second half of 2016, will
also probably have a positive impact upon the economy.

On the external side, Moody's expects exports of goods and
services to remain strong at 4%, although they will be somewhat
weaker as compared with 2016 and 2015 given the moderation in
tourist growth. That said, the political uncertainty in competing
tourist destinations, such as North Africa and Turkey, will
continue to benefit Croatia. Moody's expects strengthening
domestic demand to drive import growth, which will offset export
growth resulting in a negative contribution of net exports to
overall real GDP growth.

SECOND DRIVER: THE REVERSAL IN THE UPWARD TRAJECTORY OF CROATIA'S
DEBT BURDEN

Croatia entered the global financial crisis with a modest debt
burden of around 39% of GDP in 2008, but this rose rapidly to an
estimated 86.7% of GDP in 2015 due to low nominal growth, high
budget deficits, and the assumption of state-owned enterprise
debt, as well as costs related to the restructuring of state
enterprises. However, against a backdrop of better-than-expected
public finance performance, Croatia's debt-to-GDP ratio is likely
to have declined to around 84% of GDP at year-end 2016, and
Moody's expects a further gradual decline in Croatia's debt-to-
GDP burden, to 82.9% of GDP in 2017 and to 81.4% in 2018.

Croatia is expected to exit the EU's Excessive Deficit Procedure
at the end of this year, given that the government managed to
reduce its fiscal deficit significantly to an estimated 1.8% of
GDP last year, below the EU's Maastricht 3% threshold and thus in
line with the EU's recommendation from 2014. The fiscal deficit
declined from 3.3% in 2015, with the reduction in the 2016
deficit being driven by the restraint in public spending as well
as windfall revenues resulting from a more buoyant economy.

Moody's expects the general government deficit to widen this
year, following a significant reduction in 2016. The deficit
should increase to 2.1% of GDP against the background of tax
reforms introduced by the new government. The tax reforms will
lower personal income tax as well as corporate taxation, a
measure that is intended to stimulate consumption and economic
growth. At the same time, the government made changes to VAT
rates, by reshuffling groups of goods and services between
existing rates.

THIRD DRIVER: RATING CONSTRAINED AT THE Ba2 LEVEL BY STRUCTURAL
WEAKNESSES IN CROATIA'S ECONOMY IN THE ABSENCE OF A STRUCTURAL
REFORM AGENDA

Various structural weaknesses in Croatia's economy remain
unaddressed given the absence of a comprehensive reform agenda
from the government. For example, the decline in the country's
unemployment rate is driven by an ageing population and
emigration, leading to a decline in the labour force. Also,
Croatia's current high budgetary spending and rigid expenditure
structure remain credit weaknesses -- with social benefits,
pensions and wages accounting for around 60% of total
expenditure -- and this results in limited flexibility to adjust
public finances.

Croatia's debt affordability has improved in 2016, reflected in a
declining interest to revenue ratio estimated to be 7.6% from
just above 8% in 2015, but it is still significantly higher than
the 2008 level of 4.6%. The high cost of servicing the debt takes
a toll on the economy, as it squeezes out other government
expenditure and constrains the ability of fiscal policy to
respond to cyclical downturns. Furthermore, in spite of a
projected decline over the next few years, Croatia's debt-to-GDP
burden will remain above the median for Ba-rated countries.

WHAT COULD RESULT IN AN UPGRADE

Upward pressure upon Croatia's Ba2 rating might arise if the
coalition government formed in October 2016 were to utilise the
current more stable political environment in order to advance its
programme of economic and fiscal reforms in a way that would
further the country's long-term economic potential and secure the
downward trajectory in public indebtedness beyond the next few
years.

WHAT COULD RESULT IN A DOWNGRADE

Croatia's rating might be downgraded if, in the coming years, the
country proves unable to implement a comprehensive structural
reform programme, given that such failure would be likely to lead
to weaker growth and to increases in Croatia's public debt in the
long term. Given the lack of fiscal space, a weakening in the
growth outlook based upon both domestic and external factors
would be credit negative. Downward pressure upon the rating might
also result from an assessment that Croatia's external
vulnerability metrics have deteriorated to an extent that they
fall significantly below those of Ba2-rated peers.

GDP per capita (PPP basis, US$): 21,625 (2015 Actual) (also known
as Per Capita Income)

Real GDP growth (% change): 2.9% (2016 Actual) (also known as GDP
Growth)

Inflation Rate (CPI, % change Dec/Dec): -0.3% (2016 Actual)

Gen. Gov. Financial Balance/GDP: -1.8% (2016 Estimate) (also
known as Fiscal Balance)

Current Account Balance/GDP: 2.8% (2016 Estimate) (also known as
External Balance)

External debt/GDP: 91.5% (2016 Estimate)

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 March 7, 2017, a rating committee was called to discuss the
rating of Croatia, Government of. The main points raised during
the discussion were: The issuer's economic fundamentals,
including its economic strength, have increased. The issuer's
fiscal or financial strength, including its debt profile, has
increased.

The principal methodology used in these ratings was Sovereign
Bond Ratings published in December 2016.

The weighting of all rating factors is described in the
methodology used in this credit rating action, if applicable.



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


OBOL FRANCE 3: S&P Assigns 'B+' CCR, Outlook Stable
---------------------------------------------------
S&P Global Ratings assigned its 'B+' long-term corporate credit
rating to Obol France 3 SAS (France Newco 3), a holding company
to be created for the possible acquisition of a higher stake in
OGF, France's leading funeral services provider.  The outlook is
stable.

At the same time, S&P assigned its 'B+' issue rating to the
proposed EUR960 million term loan B and EUR60 million revolving
credit facility (RCF) to be issued by Obol France 3 SAS (France
Newco 3).  The recovery rating is '3', indicating S&P's
expectation of meaningful (50%-70%; rounded estimate: 50%)
recovery in the event of a payment default.

Ontario Teachers' Pension Plan (OTPP) is considering an increase
in its stake in OGF to 74% from 40%.  Pamplona Capital
Management, the current majority owner, will retain a minority
stake of 20%, and its management will roll over into the new
structure.

OTPP intends to establish the holding company Obol France 3 SAS
(France Newco 3) to carry out the OGF transaction, and the group
intends to raise about EUR960 million of a term loan B and
EUR878 million of new equity, mainly in the form of preferred
shares, to finance the acquisition.

OGF is a vertically integrated operator that supplies the full
spectrum of funeral products and services, including burial and
cremation services, monuments and cemetery works, pre-need
insurance contracts, and coffin manufacturing. OGF operates
mainly in France, where it benefits from a nationwide network of
1,107 branches, 549 funeral homes, and 64 crematoriums.  The
group reported revenue of EUR551 million and EBITDA of EUR131
million in the fiscal year ended March 31, 2016.

OGF benefits from operations in a highly resilient market, which
is only modestly correlated with economic cycles.  The funeral
industry is characterized by visible drivers of volume, growing
population, aging baby boomers, no technology risk, and
relatively inelastic pricing.

S&P considers that the risk of changes to the regulatory
framework in France is currently limited.  While the funeral
sector is exposed to reputational risk, OGF has built sound brand
awareness and enjoys a strong track record of customer
satisfaction. Nevertheless, S&P thinks that OGF's business risk
profile is constrained by its relatively small size, and its lack
of geographical diversification, given it is a pure domestic
player.

S&P views OGF's owners as private equity firms that pursue an
aggressive financial strategy to maximize shareholder return and
thus S&P considers them as financial sponsors.  S&P estimates
that the group's adjusted debt-to-EBITDA ratio will average about
11x over the next three years.  S&P's debt estimates include the
new proposed instruments totaling EUR960 million and EUR834
million preferred shares that we consider as debt-like, as well
as EUR45 million of operating leases and pension obligations.  If
S&P excluded the preferred shares instruments, leverage would be
at about 6x.  S&P does not deduct any cash from its debt
calculation.

S&P expects the group to record adjusted EBITDA of at least
EUR171 million in 2017 and EUR181 million in 2018, driven by
improved operating efficiency and synergies.  S&P considers that,
after the buy-out, the long-dated maturity profile of at least
five years limits refinancing risk.  S&P also projects that the
group should comfortably cover its future cash interest
obligations, given the expected pricing of the debt tranches,
with funds from operations (FFO) to cash interest above 3.5x and
fixed-charge coverage about 3.0x.

OGF's proposed refinancing includes an upsized RCF to
EUR60 million and a EUR960 million term loan B that will be used
to repay all outstanding debt, as well as to make a EUR323
million distribution to shareholders, including the reimbursement
of the existing shareholder loan. The new EUR834 million of
preferred shares will accrue interest at 9.25%.

OGF's relatively asset-light business model, combined with
predictable demand, translates into stable and good cash flow
generation. S&P expects a minimum free operating cash flow (FOCF)
of about EUR37 million-EUR40 million in the fiscal year ending
March 31, 2018, broadly in-line with S&P's expectations for
fiscal 2017, reflecting higher interest costs.  S&P projects that
FOCF will improve further to at least EUR45 million in fiscal
2019, on the back of EBITDA growth.  The company's capital
expenditures (capex) will mainly cover renovations and updates of
the branches and funeral home network.  Over the next 12 months
S&P expects capex to reach EUR45 million-EUR48 million, including
investments to upgrade facilities and IT.

S&P expects that the group will continue to pursue a strategy of
add-on acquisitions to increase its scale and geographical
presence.  In 2016 the group acquired Atrium, one of the largest
private crematorium operators in France, increasing its market
share in crematorium management to 37% from 29%.  The group also
acquired in 2016 Serenium, a network of funeral homes with
operations mainly in western France, a region where OGF's
presence was previously relatively limited.  In S&P's view, these
acquisitions reinforce OGF's network and market leadership.  In
fiscal 2017, S&P estimates that total mergers and acquisition
reached EUR158.5 million (including Serenium, Atrium, Guizard,
and other small bolt-on acquisitions).  Despite sizable
integrations, OGF's profitability should continue to increase,
improving its EBITDA margin to 27.0% from current 26.4%.  In
addition to efficiency gains in terms of planning and
subcontracting, one of the main savings will be on purchasing
(e.g., coffin costs once Serenium's existing supplier is replaced
with OGF's factory supply).

S&P's stable outlook on France Newco 3 reflects S&P's expectation
that, over the next 12 months, the group will maintain an
adjusted EBITDA margin above 25%.  This implies a good operating
performance in a favorable pricing environment.  The stable
outlook also reflects S&P's view that the group will maintain
solid FOCF and a FFO cash interest coverage ratio comfortably
above 2x.

S&P could lower the rating on the group in the case of a
significant decline in profitability or negative FOCF.  A ratio
of FFO cash interest coverage approaching 2x, stemming from
heightened regulatory pressures on prices or a major operational
failure at one of the sites, could also prompt a downgrade.

An upgrade is unlikely over the next 12 months, as S&P projects
debt to EBITDA will remain above 5x, S&P's threshold for a highly
leveraged financial risk profile.  However, S&P may raise the
ratings if the group were to sustainably reduce its leverage
below 5x with commitment from the financial sponsors.  In S&P's
view, this would most likely occur if there were additional
changes in the capital structure or terms and conditions of the
instruments.



=============
G E R M A N Y
=============


EUROMAR COMMODITIES: ECOM Agrees to Buy German Factory
------------------------------------------------------
Michael Hogan at Reuters reports that Swiss commodities trading
group ECOM has agreed to buy the factory of German cocoa grinder
Euromar Commodities GmbH, which declared insolvency in December.

According to Reuters, Rolf Rattunde, Euromar's insolvency
administrator, said on March 13 ECOM plans to resume production
at Euromar's plant at Fehrbellin near Berlin.

Mr. Rattunde, as cited by Reuters, said a sale contract for
Euromar's factory, equipment and site has been signed with ECOM
and approved by Euromar's interim committee of creditors.  German
cartel authorities must still approve the purchase, Reuters
notes.

He said some 25 groups had expressed interest in Euromar and four
had been involved in the final round of negotiations, Reuters
relays.

Euromar had suffered liquidity problems caused by exchange rate
fluctuations in the British pound, in which cocoa is traded, and
swings in cocoa prices, Reuters discloses.


KLITSCH GMBH: Provisional Insolvency Administrator Appointed
------------------------------------------------------------
Reuters reports that a provisional insolvency administrator has
been appointed to Klitsch GmbH, a 100% unit of uhr.de AG

Klitsch GmbH is a 100% unit of uhr.de AG.



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


BANCA CARIGE: Moody's Affirms Ba1 on Residential Mortgage Bonds
---------------------------------------------------------------
Moody's Investors Service has taken the following rating actions:

- Banca Carige S.p.A. - Mortgage Covered Bonds (commercial)
   issued by Banca Carige S.p.A. downgraded to Baa3 from Baa2

- Banca Carige S.p.A. Mortgage Covered Bond Programme 3 (CPT)
   issued by Banca Carige S.p.A. downgraded to Baa1 from A3

- Banca Carige S.p.A. - Mortgage Covered Bonds (residential)
   issued by Banca Carige S.p.A. affirmed at Ba1

RATINGS RATIONALE

The rating action is prompted by Moody's downgrade on March 9,
2017 of Banca Carige S.p.A.'s Counterparty Risk Assessment to
Caa1(cr) from B3(cr). For additional details.

The Timely Payment Indicator (TPI) assigned to these transactions
is:

- Probable for Banca Carige S.p.A. - Mortgage Covered Bonds
   (residential)

- Probable High for Banca Carige S.p.A. - Mortgage Covered Bonds
   (commercial)

- Very High for Banca Carige S.p.A. Mortgage Covered Bond
   Programme 3 (CPT)

Moody's TPI framework does constrain the rating of these covered
bonds at their current levels.

KEY RATING ASSUMPTIONS/FACTORS

Moody's determines covered bond ratings using a two-step process:
an expected loss analysis and a TPI framework analysis.

EXPECTED LOSS: Moody's uses its Covered Bond Model (COBOL) to
determine a rating based on the expected loss on the bond. COBOL
determines expected loss as (1) a function of the probability
that the issuer will cease making payments under the covered
bonds (a CB anchor); and (2) the stressed losses on the cover
pool assets should the issuer cease making payments under the
covered bonds (i.e., a CB anchor event).

The CB anchor for these programmes is CR assessment plus 1 notch.
Moody's may use a CB anchor of CR assessment plus one notch in
the European Union or otherwise where an operational resolution
regime is particularly likely to ensure continuity of covered
bond payments.

The cover pool losses are an estimate of the losses Moody's
currently models following a CB anchor event. Moody's splits
cover pool losses between market risk and collateral risk. Market
risk measures losses stemming from refinancing risk and risks
related to interest-rate and currency mismatches (these losses
may also include certain legal risks). Collateral risk is derived
from the collateral score, which measures losses resulting
directly from the cover pool assets' credit quality.

Banca Carige S.p.A. - Mortgage Covered Bonds (residential)

The CB anchor for Banca Carige S.p.A. - Mortgage Covered Bonds
(residential) is the CR assessment plus 1 notch. Moody's may use
a CB anchor of CR assessment plus one notch in the European Union
or otherwise where an operational resolution regime is
particularly likely to ensure continuity of covered bond
payments.

The cover pool losses of Banca Carige S.p.A. - Mortgage Covered
Bonds (residential) are 17.8%, with market risk of 12.5% and
collateral risk of 5.3%. The collateral score for this programme
is currently 7.9%. The over-collateralisation in this cover pool
is 39.3%, of which Banca Carige S.p.A. provides 22% on
a"committed"basis. The minimum OC level that is consistent with
the Ba1 rating is 0.5%. These numbers show that Moody's is not
relying on "uncommitted" OC in its expected loss analysis.

For further details on cover pool losses, collateral risk, market
risk, collateral score and TPI Leeway across covered bond
programmes rated by Moody's please refer to "Moody's Global
Covered Bonds Monitoring Overview", published quarterly. All
numbers in this section are based on Moody's most recent
modelling (based on data, as of 30/09/2016).

Banca Carige S.p.A. - Mortgage Covered Bonds (commercial)

The CB anchor for Banca Carige S.p.A. - Mortgage Covered Bonds
(commercial) is the CR assessment plus 1 notch. Moody's may use a
CB anchor of CR assessment plus one notch in the European Union
or otherwise where an operational resolution regime is
particularly likely to ensure continuity of covered bond
payments.

The cover pool losses of Banca Carige S.p.A. - Mortgage Covered
Bonds (commercial) are 33.2%, with market risk of 11.9% and
collateral risk of 21.2%. The collateral score for this programme
is currently 31.7%. The over-collateralisation in this cover pool
is 119.7%, of which Banca Carige S.p.A. provides 32% on
a"committed"basis. The minimum OC level that is consistent with
the Baa3 rating is 19.5%. These numbers show that Moody's is not
relying on "uncommitted" OC in its expected loss analysis.

For further details on cover pool losses, collateral risk, market
risk, collateral score and TPI Leeway across covered bond
programmes rated by Moody's please refer to "Moody's Global
Covered Bonds Monitoring Overview", published quarterly. All
numbers in this section are based on Moody's most recent
modelling (based on data, as of 30/09/2016).

Banca Carige S.p.A. Mortgage Covered Bond Programme 3 (CPT)

The CB anchor for Banca Carige S.p.A. Mortgage Covered Bond
Programme 3 (CPT) is the CR assessment plus 1 notch. Moody's may
use a CB anchor of CR assessment plus one notch in the European
Union or otherwise where an operational resolution regime is
particularly likely to ensure continuity of covered bond
payments.

The cover pool losses of Banca Carige S.p.A. Mortgage Covered
Bond Programme 3 (CPT) are 14.9%, with market risk of 9.9% and
collateral risk of 5%. The collateral score for this programme is
currently 5%. The over-collateralisation in this cover pool is
45%, of which Banca Carige S.p.A provides 20.5% on a committed
basis. The minimum OC level that is consistent with the Baa1
rating is 9%. These numbers show that Moody's is not relying on
"uncommitted" OC in its expected loss analysis.

For further details on cover pool losses, collateral risk, market
risk, collateral score and TPI Leeway across covered bond
programmes rated by Moody's please refer to "Moody's Global
Covered Bonds Monitoring Overview", published quarterly. All
numbers in this section are based on Moody's most recent
modelling (based on data, as of 30/06/2016).

TPI FRAMEWORK: Moody's assigns a "timely payment indicator"
(TPI), which measures the likelihood of timely payments to
covered bondholders following a CB anchor event. The TPI
framework limits the covered bond rating to a certain number of
notches above the CB anchor.

The TPI assigned to these transactions is

- Probable for Banca Carige S.p.A. - Mortgage Covered Bonds
  (residential)

- Probable High for Banca Carige S.p.A. - Mortgage Covered Bonds
  (commercial)

- Very High for Banca Carige S.p.A. Mortgage Covered Bond
  Programme 3 (CPT)

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

The CB anchor is the main determinant of a covered bond
programme's rating robustness. A change in the level of the CB
anchor could lead to an upgrade or downgrade of the covered
bonds. The TPI Leeway measures the number of notches by which
Moody's might lower the CB anchor before the rating agency
downgrades the covered bonds because of TPI framework
constraints.

The TPI Leeway for these programmes is limited, and thus any
reduction of the CB anchor may lead to a downgrade of the covered
bonds.

A multiple-notch downgrade of the covered bonds might occur in
certain circumstances, such as (1) a country ceiling or sovereign
downgrade capping a covered bond rating or negatively affecting
the CB Anchor and the TPI; (2) a multiple-notch downgrade of the
CB Anchor; or (3) a material reduction of the value of the cover
pool.

RATING METHODOLOGY

The principal methodology used in these ratings was "Moody's
Approach to Rating Covered Bonds" published in December 2016.



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


HALYK BANK: Fitch Puts 'BB' IDR on Rating Watch Negative
--------------------------------------------------------
Fitch Ratings has placed the "BB" long-term Issuer Default Rating
("IDR") of the People's Bank of Kazakhstan and its stability
rating "bb" on the list Rating Watch Negative Fitch has also
placed the long-term IDR of " CCC" Kazkommertsbank in the list
Rating Watch Developing" and downgraded the bank's sustainability
level "ccc" to "f".

These rating actions follow the recent statements of banks and
the Kazakh authorities on the potential acquisition of National
Bank of Kazakhstan controlling stake in KKB.

Key Rating Factors: IDR ratings STABILITY Halyk Bank

Status Rating Watch Negative for the ratings of Halyk Bank of
Kazakhstan reflects the potential negative impact on the
capitalization and asset quality as a result of a potential
acquisition of CMC.

Fitch expects that the People's Bank of Kazakhstan will acquire
CMC, unless the latter first receive significant direct or
indirect financial support. The National Bank of the Republic of
Kazakhstan ("NBK"), said that such support is likely to be
provided in the purchase of distressed assets KKB form of "bad
loans Fund" ("FPC"). CMC said that such support should provide
"coverage of possible risks associated with the loan of JSC" BTA
Bank "to the CMC", which is a major risk on the balance sheet and
the CMC was 6 the amounts of fixed capital in Fitch's methodology
at the end of 1 half of 2016

Despite the expected support, in Fitch's view, there is a
significant risk that the bad assets of KKB can be transferred
from the balance sheet of the bank fully or may not have an
adequate backup to the transaction. Senior officials in
Kazakhstan have recently announced their intention to provide 2
trillion. KZT FPC for further purchases of bad assets, and of
this amount has already provided $ 1.1 trillion. tenge. At the
same time the net risk to BTA was equal to 2.4 trillion. tenge.

Capitalization of Halyk Bank of Kazakhstan can significantly
diminish as a result of the acquisition of CMC. If the
consolidated core capital methodology Fitch at the National Bank
of Kazakhstan will remain unchanged after the transaction (that
is, he will pay for KKB amount equal to the net asset value after
clearing balance CMC) and its consolidated risk-weighted assets
will be increased by the amount of the assets of KKB (net risk-
weighted assets associated with risk for BTA), the fixed capital
of the People's Bank of Kazakhstan in Fitch's methodology could
be reduced from 19.5% (at the end of Q3. 2016) to 11.3%.

Potential additional requirements in the reservation of assets
KKB may put additional pressure on the financial stability of the
People's Bank of Kazakhstan, although, in Fitch's view, it will
continue to be supported by a strong capital generation of
profit. Profit before provisions for loan losses (annualized)
from the People's Bank of Kazakhstan was high at 7% of average
assets for 9 months. 2016 Profit before impairment at KKB
(adjusted for accrued but not received in cash interest income
and other non-recurring items) was negative for the first 9
months. In 2016, but should be positive if the loans to BTA, will
be replaced earning assets.

Fitch does not expect any significant negative impact of the
transaction on the profile of a strong funding and liquidity
National Bank of Kazakhstan. Any payments in cash for KKB are
likely to be small relative to the liquidity reserve at the
National Bank of Kazakhstan, and Fitch does not expect that a
significant part of KKB debt payments will be accelerated as a
result of a purchase transaction. The consolidated ratio of loans
/ deposits (based on the elimination of the risks of BTA) should
be about 64% compared with 79% at the end of Q3. 2016 at the
National Bank of Kazakhstan.

Key Rating Factors: IDR ratings STABILITY CMC

Status Rating Watch Developing" on the Long-term IDRs of KKB CCC
reflects the potential increase of the ratings as a result of the
acquisition of the company with a higher rating, and the expected
clearing of the loan portfolio and the ability to downgrade to a
level RD (limited default), if any losses will be passed on to
priority creditors in the framework of restoring the bank's
financial stability (the authorities did not make indications
that such losses will be passed). Ratings may also be downgraded
if the transaction does not take place and, consequently, will
not be implemented by the main scenario of the financial recovery
KKB offered by the authorities.

Lowering KKB stability rating at the level ccc to f reflects
Fitch's view that the bank is in financial difficulties and
require external support to solve the problem of a significant
lack of capital. In Fitch's view, the planned sale of a major
asset FPC de facto constitutes a recognition of the Kazakh
authorities scope of the problems with asset quality and
financial sustainability of KKB. Fitch does not lowered IDR KKB
after dropping strength rating as the bank continues to service
its obligations and may receive external support without passing
the losses on the priority of creditors.

Key Rating Factors: Support rating and level of support for long-
term IDR of the People's Bank Support affirmation of Kazakhstan
"4" and the level of support the long-term IDR B represents
exceptional systemic importance of the bank, but also shifting
the story the authorities for damages priority creditors in the
resolution of situations with distressed banks.

Status Rating Watch Positive" rating stability KKB "5" represents
the potential of its increase in the case of acquisition of CCB
bank with higher ratings. Status Rating Watch Positive" by the
level of support for long-term IDR of "no support level" takes
into account as a positive factor the bank plans to provide
substantial financial support.

Key Rating Factors: DEBT RATINGS

Status Rating Watch on the ratings of bank debt are consistent
with their long-term IDR. Fitch Places-term subordinated and
perpetual debt KKB in the list Rating Watch Developing" (but not
lowered them in accordance with the rating of stability), to
reflect the uncertainty about whether they will absorb losses
within the resolution of the situation with the bank.

Key Rating Factors: SUBSIDIARIES STRUCTURE OF NATIONAL BANK OF
KAZAKHSTAN

Status Rating Watch Negative for the due support of the long-term
IDRs and Support Rating subsidiaries of Halyk Bank of Kazakhstan
- JSC Halyk Finance (HF) and JSC Halyk Bank Georgia -
corresponds to the status Rating Watch Negative by ratings
parent.

FACTORS THAT MAY AFFECT FUTURE RATINGS

Fitch expects to hold rating on the People's Bank of Kazakhstan
acts KKB, HF and JSC Halyk Bank Georgia after the completion of
the acquisition (or failure to acquire) and the availability of
sufficient information on the financial structure of the profile
after the transaction. Action on Rating Watch status of decision
may take more than six months, although, as Fitch's
understanding, if the parties to carry out the planned deal,
they're going to finish it fast enough.

The ratings of Halyk Bank of Kazakhstan and its subsidiaries may
be reduced if, in Fitch's view, the acquisition will lead to a
substantial weakening of asset quality and / or the bank's
capitalization. At the same time, the ratings could be affirmed
at current levels, if, in Fitch's view, any weakening in asset
quality or capitalization will be moderate, or in case of failure
of the transaction.

KKB can be raised to a level close to the ratings of Halyk Bank
of Kazakhstan, if it is purchased by the latter and if Fitch
considers that the National Bank of Kazakhstan will have a strong
commitment to support subsidiary. KKB Ratings could be lowered if
the framework to resolve the situation with the bank will
shifting losses to priority creditors, or in case of failure of
the transaction without the offer of alternative scenario to
resolve the situation, which would be favorable to creditors.

The rating actions are:

Halyk Bank of Kazakhstan

Long-term foreign and local currency 'BB' placed on the list
Rating Watch Negative

Short-term foreign and local currency IDRs affirmed at B level
rating "bb" stability is placed on the list Rating Watch
Negative'

support Rating: affirmed at' 4 '

support Rating Floor: affirmed at B

rating of senior unsecured debt "the BB' placed on the list
Rating Watch Negative .

Kazkommertsbank

Long-term IDR at CCC placed on the list Rating Watch Developing"
foreign and local currency short-term IDR at C foreign and local
currency placed on the list Rating Watch Developing" resilience
rating downgraded to ccc to f Rating support '5' is placed on the
list rating Watch positive support rating Floor 'no Floor' is
placed on the list rating Watch positive Senior unsecured debt:
long-term rating "the CCC" is placed on the list rating Watch
Developing", Recovery rating RR4 'Senior unsecured debt: short-
term rating C placed on the list Rating Watch Developing "Rating-
term subordinated debt CC is placed on the list Rating Watch
Developing ", Recovery Rating RR5 assets C Ranking of perpetual
debt placed in list rating Watch Developing", Recovery rating
RR6.

JSC Halyk Bank Georgia

Long-term IDR of 'BB-' placed on the list Rating Watch Negative
Short-term IDR affirmed at B level, Support Rating '3' is placed
on the list Rating Watch Negative.

JSC Halyk Finance

Long-term IDR at 'BB' placed on the list Rating Watch Negative
foreign and local currency Short-term foreign and local currency
ratings affirmed at B Support Rating '3' is placed on the list
Rating Watch Negative



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


LEHMAN BROTHERS: April 20 Claims Filing Deadline Set
----------------------------------------------------
Jacques Delvaux and Laurent Fisch, court-appointed liquidators of
Lehman Brothers Luxembourg) S.A., disclosed that by commercial
court order II no. 286/2017 dated February 24, 2017, the
Luxembourg District Court sitting in commercial matters, 2nd
Chamber has, in the judicial liquidation process of the limited
liability company (societe anonyme) of Luxembourg with
denomination Lehman Brothers (Luxembourg) S.A., in judicial
liquidation (Trade Register (RCS) filing reference B39564) with
registered office at 29, Avenue Monterey L-2163 Luxembourg-City,
set the closing of accounts ("arrete de compte") in view of the
distribution of a fourth dividend on April 20, 2017.

Creditors that do not file their claim(s) before April 20, 2017,
will not be taken into account for the distribution of the
dividend to be done in conformity with the rules contained in
article 508 of the Luxembourg Commercial Code.


MATTERHORN TELECOM: Moody's Rates EUR525MM Sr. Secured Notes B2
----------------------------------------------------------------
Moody's Investors Service has assigned a B2 rating to the EUR525
million (equivalent to CHF562 million) senior secured floating-
rate notes of Matterhorn Telecom SA (MT) due 2023 with a loss
given default assessment of 3 (LGD3), and a Caa1 rating to the
EUR117 million (equivalent to CHF125 million) senior notes of
Matterhorn Telecom Holding SA (MTH) due 2023, with a loss given
default assessment of 6 (LGD6). MTH and MT are the ultimate
holding company and intermediate holding company of Salt Mobile
SA, respectively. The outlook on all ratings is negative.

This debt issuance follows the consent solicitation to issue
additional CHF400 million of debt in order to fund part of an
extraordinary dividend of CHF500 million to its 100% owner, NJJ
Capital ("NJJ"), and the launch of a tender offer for the
company's existing EUR265 million (equivalent to CHF286 million)
senior secured floating rate notes. The senior unsecured notes
will be issued as part of the existing senior secured bonds
indenture dated April 23, 2015.

All other ratings and outlooks remain unchanged including MTH's
B2 Corporate Family Rating (CFR), its B2-PD Probability of
Default Rating (PDR), as well as the ratings on the debt
instruments issued by MTH and MT.

RATINGS RATIONALE

The B2 rating assigned to the senior secured notes reflects their
ranking behind the CHF100 million super senior revolving credit
facility, but ahead of the senior notes. Since the senior secured
notes are the largest piece of debt in the capital structure,
their rating is in line with the company's B2 CFR. The Caa1
rating on the senior unsecured notes reflects Salt's high
leverage and their contractually and structurally subordinated
position relative to the company's senior secured obligations.

Moody's changed the outlook on Salt's ratings to negative
following the announcement of a CHF500 million extraordinary
dividend payment to NJJ. The negative outlook reflects the
company's more aggressive financial policy than anticipated,
which increases leverage above Moody's ratio guidance levels for
the B2 rating of adjusted gross debt/EBITDA of 5x.

The 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 planned.

RATIONALE FOR NEGATIVE OUTLOOK

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.

WHAT COULD CHANGE THE RATING UP/DOWN

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).

LIST OF AFFECTED RATINGS

Assignments:

Issuer: Matterhorn Telecom Holding SA

  -- Backed Senior Unsecured Regular Bond/Debenture, Assigned
     Caa1 (LGD6)

Issuer: Matterhorn Telecom SA

  -- Backed Senior Secured Regular Bond/Debenture, Assigned B2
     (LGD3)

PRINCIPAL METHODOLOGY

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.


YOUNG'S SEAFOOD: S&P Affirms Then Withdraws 'CCC+' CCR
------------------------------------------------------
S&P Global Ratings said that it affirmed its 'CCC+' long-term
corporate credit rating on frozen food company Young's Seafood
(Lion/Gem Luxembourg 3 S.a.r.l.).  S&P subsequently withdrew the
rating at the company's request.  The outlook was stable at the
time of the withdrawal.

S&P also withdrew its 'CCC+' issue-level and '4' recovery rating
on the company's payment-in-kind toggle notes due 2019.



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


MESDAG BV: S&P Lowers Rating on Class C Notes to 'D'
----------------------------------------------------
S&P Global Ratings lowered to 'D (sf)' from 'CC (sf)' its credit
rating on MESDAG (Charlie) B.V.'s class C notes.  At the same
time, S&P has affirmed its 'D (sf)' ratings on the class D and E
notes.

Following the repayment of the two remaining loans (Dutch Offices
I and Dutch Offices II) at a loss, the issuer applied a principal
deficiency ledger (PDL) amount to the class C, D, and E notes
reverse sequentially on the October 2016 interest payment date
(IPD).

The interest payment on all classes of notes is based on the net
amount of the balance and the balance of the PDL.  As such, given
that the class C, D, and E notes' current principal balance
(including the PDL amount) is zero, they did not receive any
interest payments on the January 2017 IPD.

S&P's ratings in MESDAG (Charlie) address the timely payment of
interest and the payment of principal no later than the legal
final maturity date in October 2019.

The rating actions reflect S&P's view that, given the outstanding
PDL amount, the class C, D, and E notes have experienced interest
shortfalls.  S&P also expects that these classes of notes will
experience principal losses on their final payment date.  S&P has
therefore lowered to 'D (sf)' from 'CC (sf)' its rating on the
class C notes, and affirmed its 'D (sf)' ratings on the class D
and E notes, in line with S&P's criteria.

RATINGS LIST

MESDAG (Charlie) B.V.
EUR493.65 mil commercial mortgage-backed variable- and floating-
rate notes

                                           Rating     Rating
Class             Identifier               To         From
C                 XS0289823568             D (sf)     CC (sf)
D                 XS0289824533             D (sf)     D (sf)
E                 XS0289824889             D (sf)     D (sf)



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


NOVO BANCO: Aethel Submits EUR3.8-Bil. Non-Binding Offer
--------------------------------------------------------
Margot Patrick and Patricia Kowsmann at The Australian report
that a last-minute gatecrasher is trying to up-end Portugal's
plan to sell a bank it spawned from the ashes of collapsed lender
Banco Espirito Santo.

Aethel, a little-known London-based fund, submitted a EUR3.8
billion (US$5.33 billion) non-binding offer to buy the bank, Novo
Banco, late last month, sources, as cited by The Australian,
said, putting pressure on the Bank of Portugal to re-open a sale
process that was all but complete.  The central bank has said it
is in final negotiations with Dallas-based Lone Star Funds to buy
Novo Banco, making a re-opening of the sale process unlikely
unless the deal falls apart, The Australian relates.

On March 13, Finance Minister Mario Centeno said he hoped the
sale to Lone Star would be concluded in weeks, The Australian
relays.

Aethel, The Australian says, is attempting to assemble a
consortium of Banco Espirito Santo bond holders, who are suing
the Bank of Portugal for moving their bonds from Novo Banco to a
"bad bank" where they are unlikely to be repaid.

The Bank of Portugal has said the move was legal as part of its
powers to wind up failing banks, The Australian notes.

Among the bond holders Aethel is trying to recruit are Elliott
Management, New Zealand Superannuation Fund and Silver Point
Capital, The Australian says, citing sources familiar with the
Aethel offer.

The Bank of Portugal has been trying for two years to sell Novo
Banco, the "good bank" created when Banco Espirito Santo became
insolvent and was seized by the central bank in 2014, The
Australian recounts.

Aethel would also put up EUR1 billion of new capital, for a 91%
stake, The Australian relays, citing people familiar with the
matter.

The sources said Aethel proposed paying EUR2.8 billion into
Portugal's bank resolution fund, which owns Novo Banco, but also
wanted the fund to use that money to repay bondholders, according
to The Australian.

Headquartered in Lisbon, Novo Banco, S.A. provides various
financial products and services to private, corporate, and
institutional customers.

                        *     *     *

As reported in the Troubled Company Reporter-Europe on Dec. 23,
2016, DBRS Ratings Limited confirmed Novo Banco, S.A.'s (NB or
the Bank) Senior Long-Term Debt and Deposits rating at CCC
(high), and changed the trend to Stable from Negative. At the
same time, the agency confirmed the Short-Term & Deposit rating
of R-5 with a Stable trend.


PORTO CITY: Fitch Affirms 'BB+' LT Issuer Default Ratings
---------------------------------------------------------
Fitch Ratings has affirmed the City of Porto's Long-Term Foreign
and Local Currency Issuer Default Ratings (IDR) at 'BB+'. The
Outlooks are Stable. The Short-Term Foreign Currency IDR has been
affirmed at 'B'.

The affirmation reflects Fitch's base case scenario of stable
budgetary performance and low debt metrics, despite moderately
growing debt levels over the medium-term. The Stable Outlook
reflects that on Portugal (BB+/Stable).

KEY RATING DRIVERS

Rating Constraint
Porto's ratings remain constrained by the Portuguese sovereign,
in accordance with Fitch's criteria. The intrinsic credit profile
of Porto is stronger than its ratings indicate, due to the city's
healthy budgetary performance, low debt, as well as sound
liquidity. A prudent administration and Porto's role as service
centre in north Portugal are also credit- positive.

As with other Portuguese cities, the accounts and budgets of
Porto are overseen by the central government and its financial
liabilities are approved by the National Court of Accounts. The
limited role of the intermediate tiers of government (province
and region) in Portugal strengthens the link between the central
government and cities.

Solid Budgetary Performance
Porto has maintained high operating margins through cycles, at
above 17% since 2009. This, coupled with flexibility on capex,
has allowed the city to report a surplus before debt variation
every year over the same period. The 2016 preliminary accounts
confirm the city's consistent performance with an operating
margin of 24%, partly driven by one-off tax and fee revenue.
Preliminary tax revenues of EUR105.2 million in 2016 were up
21.2% year on year.

The 2017 draft budget presents a moderate operating revenue
forecast of EUR153.1 million. It includes a property tax
reduction of 10%, with a marginal effect on overall operating
revenue. Nevertheless, it allocates higher opex and capex mostly
to street and housing refurbishment, as well as fostering local
economic activity. Fitch expects opex to grow above 5% and a
marked increase in capex of 30%, after several years of low
investments.

Fitch's base case scenario expects softer, albeit still robust,
budgetary indicators for Porto in 2017, with an operating margin
around 15% and the capital account partly funded with debt.

Low Debt, Moderate Increase Expected
Porto reduced outstanding debt to EUR33.3 million in 2016, from
EUR80.1 million in 2015, following a EUR28.7 million
expropriation settlement used to redeem debt ahead of schedule.
Debt-to-current revenue was at a record low of 18% at end-2016
according to preliminary results, and the administration plans to
take on new debt in 2017 of around EUR20 million, to fund
rehabilitation of housing and public infrastructure. Fitch
expects gradual debt growth, towards 50% of current revenues over
the medium-term, after several years of deleveraging.

Porto has no contingent liabilities and retains control over the
public sector, which posted a surplus in 2016.

Elections Forthcoming
Elections are scheduled in October 2017, and Fitch expects a
continuation of the city's prudent financial policy. Disclosure
of information is satisfactory and precise, including the annual
financial results of all public bodies within its scope.

With an estimated population of 218,000 in 2014, the City of
Porto is the second-largest cultural, administrative and economic
Portuguese centre, providing services to a greater metropolitan
area of 14 municipalities with 1.7 million inhabitants. GDP
resumed growth in 2014, and is expected to grow around 1.5%-2%
p.a. over the next two years, driven by the healthy performance
of the external and hospitality sectors.

RATING SENSITIVITIES

Porto's intrinsic credit profile is well above the sovereign's,
and will continue to be strong under Fitch base case scenario.
However, Porto's IDRs are constrained by the sovereign IDRs and
are therefore sensitive to changes of the sovereign rating.



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


KALUGA REGION: Fitch Withdraws 'BB' LT Issuer Default Ratings
-------------------------------------------------------------
Fitch Ratings has withdrawn Russian Kaluga 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 Kaluga Region for commercial
reasons and due to a lack of information. Fitch will no longer
provide ratings or analytical coverage on Kaluga Region.

RATING SENSITIVITIES
Not applicable


LIPETSK REGION: Fitch Raises Long-Term IDRs to 'BB+'
----------------------------------------------------
Fitch Ratings has upgraded Russian Lipetsk Region's Long-Term
Foreign and Local Currency Issuer Default Ratings (IDR) to 'BB+'
from 'BB' and affirmed the Short-Term Foreign Currency IDR at
'B'. The National Long-Term Rating has been upgraded to 'AA(rus)'
from 'AA-(rus)' and withdrawn. The Outlook on the Long-Term
Ratings is Stable.

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

The upgrade reflects the region's better-than-expected operating
performance, which resulted in a low deficit before debt
variation and corresponding decrease in debt.

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 December 23, 2016).

KEY RATING DRIVERS

The 'BB+' ratings reflect the region's sound budgetary
performance with an operating margin close to 15% and sound
liquidity. They also take into account the high concentration of
the regional economy in ferrous metallurgy, which makes Lipetsk
region vulnerable to steel market fluctuations, leading to
volatile tax revenue.

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

High:

Sound Budgetary Performance
Lipetsk Region continued to demonstrate sound operating results
on a sustained basis, despite a drop in the operating margin in
2016. The latter decreased to 13.1% from a peak of 14.7% in 2015,
after a stronger rouble negatively affected the revenue of the
region's top taxpayer, export-oriented Novolipetsk Steel Plant
(BBB-/Stable). Positively, financial sector profits accelerated
significantly. Other contributors were excise duties, which rose
38% due to a tariff increase for petrochemicals, while personal
income tax proceeds grew 5.5% amid growth of salaries across all
sectors. Deficit before debt variation stood at a modest 0.9%.

Fitch forecasts the region will stabilise its operating margin at
13%-15% over the medium-term. Its industrialised economy with a
focus on the steel sector will gain from Russia's economic
recovery. Fitch projects Russia's GDP will return to a growth of
1.3% in 2017, and that the region will run modest deficits of 1%-
2% over the medium term, leading to broadly stable debt.
The volatility of the region's finances is partly mitigated by
the administration's prudent approach, which sets aside excess
tax proceeds in cash reserves and keeps expenses under control.
This led to a cash balance of RUB4.4 billion at end-2016, which
constituted about 10% of the region's full-year operating
revenue.

Medium:

Direct Risk Decrease
Direct risk decreased further to 37.5% of current revenue in 2016
from 43.2% in 2015, while the debt payback ratio improved to a
sound 3.6 years from 3.9 years. The administration used
accumulated cash reserves to pay down the region's most expensive
loans and finance the deficit, saving interest expenses. Fitch's
baseline scenario forecasts the region's direct risk will
stabilise at below 40% in the medium-term.

As with most regions in Russia, Lipetsk Region is exposed to
refinancing pressure in 2017-2019 when 91% of direct risk
(RUB15.9 billion as of end-2016) matures. Despite a concentrated
debt maturity profile, the region has manageable refinancing
risks due to moderate debt levels, sound liquidity and access to
federal loans. For 2017 refinancing needs are limited to RUB4.5
billion (26% of total outstanding debt), which is fully covered
by cash reserves.

The ratings also consider the following rating factors:

Strong but Concentrated Economy
Lipetsk Region has a fairly well-developed industrialised economy
with a focus on the ferrous metallurgy sector, supporting wealth
metrics above the national median. In 2016, gross regional
product grew 2.2%, which is better than the wider Russian economy
(a 0.4% fall). The ferrous metallurgy sector contributed 58% of
the region's industrial output and around 37% of total tax
proceeds in 2016, making the regional economy vulnerable to
fluctuations in the domestic and international steel markets.

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.

RATING SENSITIVITIES

An operating margin sustainably above 15%, accompanied by sound
debt metrics with a direct risk-to-current balance (2016: 3.6
years) being in line with the weighted average debt maturity
profile (2016: 2.5 years), would lead to an upgrade.

Growth of direct risk, accompanied by deterioration in the
operating margin leading to debt payback to above 10 years on a
sustained basis, would lead to a downgrade.


MTS BANK: Fitch Affirms 'B+' Long-Term IDR, Outlook Stable
----------------------------------------------------------
Fitch Ratings has affirmed PJSC MTS Bank's (MTSB) Long-Term
Issuer Default Rating (IDR) at 'B+'. The Outlook is Stable.

KEY RATING DRIVERS

IDRS, SUPPORT RATING

The affirmation of MTSB's IDRs, and National Long-Term and
Support Ratings reflects Fitch's view that the bank would likely
be supported, in case of need, by its majority shareholder,
Sistema Joint Stock Financial Corp. (Sistema; BB-/Stable) and/or
its subsidiaries. This view is mainly based on the (i) the track
record of capital support, including RUB15 billion of equity,
provided in 2016; (ii) MTSB's role as a treasury for the group;
and (iii) the brand association with PJSC Mobile TeleSystems
(MTS, BB+/Stable), a major operating subsidiary of the group.

At the same time, the one-notch difference between the ratings of
Sistema and MTSB reflects the bank's weak performance to date,
and its limited franchise and therefore strategic importance for
the group.

VIABILITY RATING

MTSB's 'b-' Viability Rating (VR) reflects weaknesses in the
bank's credit profile, in particular asset quality and financial
performance. At the same time the VR is supported by improved
core capital buffer following RUB15 billion equity injection in
2016 and by adequate liquidity.

Non-performing loans (NPLs, including all loans over 90 days)
fell to 39% of loans at end-2016 from 42% at end-2015, due to
RUB14 billion write-offs. NPLs were moderately reserved by 88%
with the unreserved portion equal to 22% of Fitch Core Capital
(FCC) at end-2016. Positively, restructured exposures were a low
3% of total loans (8% at end-2015) and lending in foreign
currency (FC) was also moderate at 16%.

In 2016 the bank revised its underwriting policies and reduced
its risk appetite (eg. it ceased providing large long-term
corporate investment loans, and in retail it is focusing on
cross-selling to its existing lower-risk clients and on lending
in MTS retail chain) resulting in markedly reduced NPL
origination (calculated as net increase in NPLs plus write-offs
divided by average performing loans) to a low 1.5% (2.9% in
retail) in 2016, from double digits in 2015.

MTSB's capitalisation improved with the FCC ratio increasing to
17% at end-2016 from 8% at end-2015, mostly due to fresh equity
injection in 2016. However, Tier 1 capital under local GAAP was
moderate at 9.5% at end-1M17 (minimum is 7.25% including capital
conservation buffer) with the difference compared with FCC being
mostly due to (i) consolidation of MTSB's subsidiary East-West
United Bank (EWUB) under IFRS and (ii) deduction of deferred tax
asset and investment into EWUB from Tier 1 capital under local
GAAP. Fitch estimates that the bank's regulatory capital cushion
was sufficient to potentially increase loan impairment reserves
up to 42% from the current 38% without breaching minimum capital
requirements. Additional moderate loss absorption capacity is
also available through pre-impairment profit, which was equal to
2% of average loans in 2016.

MTSB's liquidity position is strong, supported by significant and
stable related-party funding (43% of total liabilities at end-
2016). Funding concentration, apart from related-party funds, is
moderate (the 20-largest not related clients accounted for a
moderate 11% of end-2016 total accounts). Liquidity risk is also
mitigated by MTSB's significant liquidity cushion, which covered
more than 50% of total customer accounts (or a still reasonable
15% after repaying all parental funding) at end-2016.

RATING SENSITIVITIES

IDRS, SUPPORT RATING

An upgrade/downgrade of Sistema would likely result in a similar
rating action on MTSB's support-driven ratings. Failure of the
parent to provide timely support, if needed, could result in a
downgrade of the support-driven ratings.

VR
MTSB's VR could be downgraded if asset quality further
deteriorates significantly and erodes capital. The VR could be
upgraded on improvements in asset quality resulting in stronger
financial performance.

The rating actions are:

Long-Term IDR affirmed at 'B+', Stable Outlook
Short-Term IDR affirmed at 'B'
Viability Rating affirmed at 'b-'
Support Rating affirmed at '4'


TULA REGION: Fitch Affirms 'BB' Long-Term IDRs, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has affirmed the Russian Tula Region's Long-Term
Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB'
with Stable Outlooks and Short-Term Foreign Currency IDR at 'B'.
The region's National Long-Term Rating has been affirmed at 'AA-
(rus)' with a Stable Outlook and withdrawn.

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

The affirmation reflects Fitch's base case scenario regarding
Tula Region's stable budgetary performance and moderate direct
risk over the medium term.

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

KEY RATING DRIVERS

The 'BB' ratings reflect the satisfactory operating balance of
Tula, which comfortably covers its interest payments, its smaller
deficit before debt and moderate direct risk. The ratings also
factor in the region's moderate social-economic profile and a
weak institutional framework for Russian sub-nationals.

Fitch projects Tula's operating balance to consolidate at about
8% of operating revenue over the medium term, which is below the
10.9% recorded in 2016, but still sufficient to cover interest
payments by 4x-5x (2016: 7.7x). In 2016, the operating balance
was supported by a 9.2% growth in tax revenue. The latter will
likely decelerate in 2017, in Fitch's view, due to revised
allocation of excise duty and corporate income tax proceeds
although this will be partly offset by higher transfers from the
federal government.

Fitch expects Tula will likely post a deficit before debt in
2017-2019, which Fitch projects at 3%-4% of total revenue. The
region recorded a small surplus in 2016 after four years of
deficits. The improvement was driven by a higher operating
margin, reduced interest payments and the repayment of RUB1
billion budget loans by municipalities (mostly the City of Tula
(BB-/Stable)). Nevertheless, the region's fiscal flexibility
remains low, in Fitch's view. Most of its operating expenditure
is social-oriented and quite rigid, while capex is already
reduced to low levels (2016: 13% of total expenditure).

Fitch forecasts Tula's direct risk to remain moderate at below
35% of current revenue in 2017-2019 (2016: 25.4%). In 2016,
direct risk stabilised at RUB15.7 billion, after the region
refinanced about RUB5 billion bank loans with federal budget
loans. As a result, Tula's debt portfolio is dominated by budget
loans (59%), followed by bonds (38%) and bank loans (3%). The
budget loans have low 0.1% interest rates, which should help the
region to save on interest payments over the medium term.

Despite the moderate debt burden, the region is exposed to
refinancing risk as its debt maturity is short in the
international context. In 2017, Tula needs to refinance RUB5.5
billion, or 35% of direct risk, which it will fund using bank
loans and budget loans; the federal government has approved a
RUB1.2 billion budget loan for Tula in 2017. Additional intra-
year funding support comes from RUB4 billion short-term treasury
loans, allowing Tula to defer more costly bank borrowings to
year-end.

The region's economy is moderate in the national context with GRP
per capita slightly below the national median. However, it
benefits from a well-diversified processing industry and grows
faster than the national average. According to the region's
estimation, Tula's GRP grew 4.8% yoy in 2015 and 2.5% in 2016,
while Russia's GDP contracted. The administration expects growth
to continue at 2.5%-3% p.a. in 2017-2018, supported by processing
industries and a national economic recovery, which Fitch
forecasts at 1.3%-2% for 2017-2018.

The region's credit profile remains constrained by the weak
institutional framework for Russian local and regional government
(LRGs). It has a short track record of stable development
compared with many of its international peers. The frequent
reallocation of revenue and expenditure responsibilities within
tiers of government reduces the predictability of LRGs' budgetary
policies and hampers Tula's forecasting ability.

RATING SENSITIVITIES

Sound budgetary performance with an operating margin above 10% on
a sustained basis, accompanied by moderate direct risk below 40%
of current revenue, would lead to an upgrade.

Conversely, deteriorated budgetary performance with an operating
margin consistently below 5%, accompanied by a weak debt payback
exceeding 10 years (2016: 2.7years), could lead to a downgrade.



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


AYT CAJA HIPOTECARIO 1: Fitch Affirms CC Rating on Class D Notes
----------------------------------------------------------------
Fitch Ratings has affirmed eight and downgraded two tranches of
three Spanish RMBS deals. The transactions comprise Spanish
residential mortgage loans serviced by Banco Mare Nostrum
(BB/Stable/B).

KEY RATING DRIVERS

Partly Unhedged Transaction
The downgrade of Class A and B of Caixa Penedes 1 TDA (Penedes 1)
is mainly due to the partly unhedged nature of the transaction.
The securitisation notes pay a floating coupon rate linked to
three-month Euribor, but 35.7% of the underlying mortgages pay a
fixed interest rate. Fitch views current and projected credit
enhancement (CE) insufficient to withstand cash flow stresses
associated with this unhedged portion of the collateral,
especially when interest rates are rising. The rest of the
portfolio is linked to 12-month Euribor and there is a hedging
arrangement that mitigates basis risk.

Stable or Improving Credit Enhancement
Fitch expects structural CE to remain stable over the short to
medium term for AyT Caja Murcia Hipotecario I (Murcia 1) and
Penedes 1 as these transactions will continue paying pro rata.
Fitch expects CE for AyT Caja Granada Hipotecario 1 (Granada 1)
to increase, especially for the senior notes, as this transaction
is amortising sequentially. The agency considers these CE trends
sufficient to withstand the rating stresses, leading to the
affirmations of all notes of Murcia 1 and Granada 1, and also of
Penedes 1 class C.

Stable Asset Performance
The transactions, except Granada 1, have had sound asset
performance compared with the average Fitch-rated Spanish RMBS.
Three-month plus arrears (excluding defaults) as a percentage of
the current pool balance are at 0.3% for Penedes 1 and at 0.5%
for Murcia 1, broadly in line with Fitch's index of three-months-
plus arrears (excluding defaults) of 0.9%. Granada 1's three-
month arrears have been considerably higher at 4.1%.

Cumulative defaults relative to the original portfolio balances
are 0.3% for Murcia 1, 3.2% for Penedes 1 and 6.6% for Granada 1,
compared with a sector average of 5.6%. Fitch believes these
levels are likely to rise further in Granada 1 as the late-stage
arrears will probably roll into the defaulted category.

Maturity Extensions
Fitch estimates, based on information provided, that 9.1% of the
Granada 1 portfolio has been offered maturity extensions. In its
analysis, Fitch has increased the foreclosure frequency
assumption for these loans as these maturity extensions are
signals of weaker borrower profiles. The incidence of maturity
extensions in Murcia 1 and Penedes 1 is marginal, at 1.4% and
0.9% respectively of current portfolio balances.

Exposure to Floor Clause
Around 80% of the borrowers in Granada 1 have an interest rate
floor clause on their mortgage loans, which could be nullified
following recent court rulings (see "Spanish Mortgage Floor
Decree Will Aid RMBS Assessment" at www.fitchratings.com). The
Stable Outlook on this transaction reflects Fitch's view that
current ratings are unlikely to be affected if all exposed loans
have the interest rate floor clause removed.

Commingling Exposure
Fitch believes Granada 1 and Murcia 1 are exposed to commingling
losses in the event of default of the collection account bank as
around 50% and 100%, respectively, of monthly collections are
concentrated on one day of the month. The agency captured this
additional stress in its analysis and found current CE sufficient
to mitigate the risk.

RATING SENSITIVITIES

If the open interest rate risk component was fully offset in
Penedes 1, the class A notes could be upgraded to the 'AAsf'
category, all else being equal.

If Murcia 1 reverted to sequential amortisation, the class A
notes could be upgraded as structural CE would increase, all else
being equal.

A worsening of the Spanish macroeconomic environment, especially
employment conditions, or an abrupt shift of interest rates could
jeopardise the underlying borrowers' affordability. This could
have negative rating implications, especially for junior tranches
that are less protected by structural CE.

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO RULE 17G-10

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

DATA ADEQUACY

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

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

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

SOURCES OF INFORMATION

The information below was used in the analysis.

Loan level data sourced from the European Data Warehouse with the
following cut-off dates:

- November 2016 for Granada 1
- October 2016 for Murcia Hipotecario 1
- September 2016 for Penedes 1

Issuer and servicer reports provided by Haya Titulizacion and
Titulizacion de Activos (transaction trustees) since close and
until:

- December 2016 for Granada 1
- January 2017 for Murcia 1
- December 2016 for Penedes 1

Maturity extensions data provided by transaction trustees with a
cut-off date as of December 2016

MODELS
ResiEMEA.

EMEA RMBS Surveillance Model.

EMEA Cash Flow Model.

The rating actions are:

AyT Caja Granada Hipotecario 1:
Class A notes (ISIN ES0312212006): affirmed at 'Asf'; Outlook
Stable
Class B notes (ISIN ES0312212014): affirmed at 'CCCsf'; Recovery
Estimate (RE) revised to 90% from 95%
Class C notes (ISIN ES0312212022): affirmed at 'CCsf'; RE 0%
Class D notes (ISIN ES0312212030): affirmed at 'CCsf'; RE 0%

AyT Caja Murcia Hipotecario I:
Class A notes (ISIN ES0312282009): affirmed at 'AA-sf'; Outlook
Stable
Class B notes (ISIN ES0312282017): affirmed at 'Asf'; Outlook
Stable
Class C notes (ISIN ES0312282025): affirmed at 'BB+sf'; Outlook
Stable

Caixa Penedes 1 TDA, FTA
Class A (ISIN ES0313252001) downgraded to 'A+sf' from 'AA+sf' ;
Outlook Stable;
Class B (ISIN ES0313252019) downgraded to 'BBBsf' from 'A+sf';
Outlook Stable;
Class C (ISIN ES0313252027) affirmed at 'BBsf'; Outlook Stable


AYT COLATERALES NOSTRA I: Fitch Affirms 'B' Rating on Cl. D Notes
-----------------------------------------------------------------
Fitch Ratings has affirmed AyT Colaterales Global Hipotecario Sa
Nostra I,:

Class A notes (ISIN ES0312273123): affirmed at 'Asf'; Outlook
Stable
Class B notes (ISIN ES0312273131): affirmed at 'BBBsf'; Outlook
Stable
Class C notes (ISIN ES0312273149): affirmed at 'BBsf'; Outlook
Stable
Class D notes (ISIN ES0312273156): affirmed at 'Bsf'; Outlook
Stable

This Spanish RMBS transaction was originated and is serviced by
Banco Mare Nostrum (BB/Stable/B).

KEY RATING DRIVERS

Stable Asset Performance
Asset performance has been sound compared with the Spanish
average. As of end-November 2016 three-months plus arrears
(excluding defaults) as a percentage of the pool balance stood at
0.2%, which compares with Fitch's index of three-months plus
arrears (excluding defaults) of 1% as of that same date.
Cumulative defaults, defined as mortgages in arrears by more than
18 months, represent 3.6% of the original balance.

Stable Credit Enhancement
Credit enhancement provided by both over-collateralisation and
the reserve fund is 14% and 8% for the class B and C notes,
respectively. Credit enhancement for the class D (5.7%) notes is
only provided by a EUR2.5 million reserve fund, which remains
close to its target amount (96%). Based on Fitch's asset
assumptions, the reserve fund will not build up to its required
level, preventing pro rata amortisation going forward.

High Concentration in Balearic Islands
Class A rating is capped at the 'Asf' rating category due to
geographical concentration in the Balearic region, which exposes
the transaction to performance volatility. In Fitch's view, the
strong dependence of the economy of the Balearic Islands on
tourism poses a risk that cannot be addressed through the
structural features of the deal, limiting the notes' ratings to
'Asf'.

Payment Interruption Risk Mitigated
The reserve fund provides sufficient liquidity to cover at least
six months of senior fees and interest on the senior notes in
case of default of the servicer or the collection account bank.

RATING SENSITIVITIES

A worsening of the Spanish macroeconomic environment, especially
employment conditions, or an abrupt shift in interest rates could
jeopardise the ability of the underlying borrowers to meet their
payment obligations. More volatile arrears patterns or a material
increase in default rates, as a result of these macroeconomic
factors, could trigger negative rating actions.

Fitch may also revise the ratings if significant draws on the
reserve fund occur in future payment dates as this may compromise
the ability of the transaction to fully mitigate payment
interruption risk.

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

DATA ADEQUACY

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

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

SOURCES OF INFORMATION

The information below was used in the analysis.

- Loan-by-loan data provided by the European Data Warehouse
   as at Nov. 8, 2016.

- Transaction reporting provided by Haya Titulizacion S.G.F.T.
   as at Nov. 16, 2016.


AYT GENOVA VIII: Fitch Affirms BB+ Rating on Class D Notes
----------------------------------------------------------
Fitch Ratings has upgraded two tranches of AyT Genova Hipotecario
VIII and affirmed the rest. All ratings have been removed from
Rating Watch Negative (RWN).

AyT Genova Hipotecario VIII comprises a pool of residential
mortgage loans originated by Barclays Bank SAU and serviced by
CaixaBank, S.A. (BBB/Positive/F2).

The actions follow additional information provided by the
arranger regarding the restructured loans and their
modifications.

KEY RATING DRIVERS

Robust Credit Enhancement
Following the receipt of new information, Fitch's analysis
concludes that credit enhancement (CE) is sufficient to withstand
rating stresses, leading to today's upgrades and affirmations. CE
across the structure has been stable since 2015 as the
transaction continues to amortise on a pro-rata basis. With all
conditions for pro rata payment and reserve fund amortisation
fulfilled, Fitch expects that CE will remain stable. CE for the
class A2 notes remains at 7.7% and 5.7%, 3.7% and 1.7% for the
class B, C and D notes, respectively.

Stable Arrears Performance
The portfolio's performance has improved slightly since the last
rating action in September 2016. Fitch expects stable performance
to continue, mainly due to the significant seasoning of loans of
more than 10 years. Arrears over three months have decreased to
0.31% currently, from 0.45% in August 2016. Arrears remain well
below the Spanish average of just under 1% observed by Fitch.

Gross cumulative defaults (defined as loans in arrears for more
than 18 months) remained low at 0.6% of the portfolio's initial
balance, and well below the Spanish RMBS average of 5.5% as of
February 2017.

The positive trend in arrears and defaults is reflected in the
Stable Outlook across the transaction.

Exposure to Loan Modifications
The transaction comprises loans that have been subject to
maturity extensions. Fitch received a list of loans subject to
maturity extensions accounting for around 5.3% of the current
portfolio balance. According to Fitch's Spanish criteria
addendum, restructured loans that have a clean payment history
over the past four years do not merit foreclosure frequency
adjustments. These account for 4.3% of the current portfolio
balance. The remaining 1% has been adjusted to reflect an
increase to their base foreclosure frequency depending on the
arrear tenor.

RATING SENSITIVITIES
A worsening of the Spanish macroeconomic environment, especially
employment conditions, or an abrupt shift in interest rates could
jeopardise the ability of the underlying borrowers to meet their
payment obligations.

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO RULE 17G-10
No third-party due diligence was provided or reviewed in relation
to this rating actions.

DATA ADEQUACY

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

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

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

SOURCES OF INFORMATION

The information below was used in the analysis.

- Loan-by-loan data sourced from the European Data Warehouse
   as at Nov. 7, 2016
- Transaction reporting provided by Haya Titulazion as at
   Nov. 15, 2016
- Maturity extension provided by Haya Titulizacion with a cut-of
   date of Aug. 31, 2016

MODELS
ResiEMEA.
EMEA RMBS Surveillance Model.
EMEA Cash Flow Model.

List of ratings actions:

AyT Genova Hipotecario VIII
Class A2 (ES0312344015) affirmed at 'AA+sf'; off RWN; Outlook
Stable
Class B (ES0312344023) upgraded to 'AA+sf' from 'AAsf'; off RWN;
Outlook Stable
Class C (ES0312344031) upgraded to 'A+sf' from 'Asf'; off RWN;
Outlook Stable
Class D (ES0312344049) affirmed at 'BB+sf'; off RWN; Outlook
Stable



===========
S W E D E N
===========


UNILABS HOLDING: S&P Affirms 'B' CCR on Planned Acquisition
-----------------------------------------------------------
S&P Global Ratings said it has affirmed its 'B' long-term
corporate credit rating on Sweden-based diagnostic lab operator
Unilabs Holding AB.  The outlook is stable.

S&P also affirmed its existing issue ratings.

At the same time, S&P assigned its 'B' issue rating to the
proposed EUR215 million term loan B due 2024.  The recovery
rating is '3', reflecting S&P's expectation of meaningful
recovery (50%-70%; rounded estimate 60%) in the event of a
payment default.

S&P also assigned its 'CCC+' issue rating to the proposed
EUR265 million senior debt due 2025.  The recovery rating is '6',
reflecting S&P's expectation of negligible (0%-10%; rounded
estimate 0%) recovery in the event of a payment default.

The affirmation follows Unilabs' plans to raise a new EUR215
million increment to its existing senior secured term loan B
facility and issue senior subordinated debt of up to
EUR265 million.  The group intends to reduce its interest costs
by repricing the existing senior facilities and extending the
maturity to seven years, in line with the new tranche.  The
revolving credit facility (RCF) will also be increased by
EUR50 million with a six and a half year tenor as part of the
amended terms, while the new majority owners, Apax Partners, will
invest new equity instruments totaling EUR100 million.

These proceeds will be partly used to finance the acquisition of
Alpha, which enjoys a leading market position in Slovakia and the
Czech Republic.  Alpha operates over 90 laboratories across the
region carrying out routine and specialty testing, including in
the field of genetics and pathology.  The group has grown through
a combination of organic volumes and acquisitions and reported
EBITDA of approximately EUR38 million in 2016.  Alpha's
profitability is considerably stronger than the existing Unilabs
business and S&P sees the acquisition as supportive of the
group's overall growth strategy.  The combined group should, in
S&P's view, continue its market penetration in its core markets
and, with continued focus on operating efficiency and
productivity, drive the reported EBITDA base to above EUR160
million from 2017 onward.

The group intends to redeem the existing payment-in-kind (PIK)
toggle notes with a value of approximately EUR125 million, as
part of the transaction.  These notes, which have been accruing
interest at 12.5% annually, will be replaced with senior
subordinated debt which will increase the cash paying obligations
for the group.  S&P notes, however, that the average cost of debt
for the group will be reduced as the subordinated debt is
expected to be priced at a lower margin than the existing PIK
notes.  S&P also expects the group to comfortably cover its
increased cash interest costs if they are able to successfully
integrate the Alpha acquisition.  S&P forecasts fixed-charge
coverage metrics of approximately 2.0x-2.2x in 2017 and 2018,
reflecting its expectation that the group will cover its cash
interest costs and rental charges with generated EBITDA.  The
strength of this metric is largely supported by the fact that the
vast majority of operating assets are owned and, as such, it is
not significantly exposed to rising third-party rents.

S&P also views favorably the extension of the debt maturity
profile to at least seven years as this further reduces
refinancing risk for the group.  S&P's forecast fixed-charge
coverage comfortably above 1.5x, combined with positive free
operating cash flow (FOCF) generation above EUR60 million
annually, is viewed as commensurate with S&P's 'B' rating.

"We maintain our highly leveraged financial risk profile
assessment in light of the group's financial sponsor ownership.
This is supported by our core adjusted credit metrics of debt to
EBITDA of 11.5x-12.5x and funds from operations (FFO) to debt of
less than 5% in our forecasts.  Our estimates of debt include the
increased EUR925 million term loan B facility, EUR265 million
senior subordinated debt, approximately EUR950 million of
preference shares and shareholder loans, and close to
EUR120 million of operating lease and pension obligations in our
calculations.  Given the financial sponsor ownership, we do not
net-off any cash balances that are held by Unilabs.  Although we
view the preference shares and shareholder loans as debt like, we
recognize their cash-preserving function.  Excluding these debt-
like instruments, Unilabs' financial risk profile would remain in
line with a highly leveraged assessment, with debt to EBITDA of
more than 7.0x by Dec. 31, 2017 and remaining above 5.0x for the
next two years," S&P noted.

S&P sees Unilabs as a leading player in laboratory and imaging
diagnostics in its core markets, which include Switzerland,
France, Sweden, and Norway.  The industry, however, remains
fragmented and while there is some scope for consolidation for
larger peers, competition remains strong and tightening health
care budgets have resulted in price pressure for lab operators.
Despite this, the group has implemented a new strategy to counter
these challenges and S&P believes -- based on its focus on
engaging relevant stakeholders and ongoing cost management -- it
will be able to win new contracts that will drive earnings
levels.  S&P expects Unilabs' adjusted EBITDA margin to be about
20%-23% over the next two years as management implements its
savings and efficiency program across the group, which should
result in S&P Global Ratings-adjusted EBITDA of EUR175 million-
EUR185 million in 2017, rising to EUR190 million-EUR200 million
in 2018.  S&P expects future revenue growth to be driven by a
combination of bolt-on acquisitions and organic growth as the
group wins new contracts and extends new services to its existing
customers.

S&P notes, however, that the systemic exposure to political
vagary in respective markets remains a risk to Unilabs achieving
earnings growth.  S&P continues to see fiscal budget constraints
in Europe which create challenging market conditions as contract
tariffs become less attractive and competitive rivalry for
contracts increase.  The regulatory environment and medical
reimbursement policies of respective governments are other
variables that could have an adverse impact on the group's
earning potential and, as a result, hinder its leverage and
interest coverage metrics.  The size of the group's operations,
geographic concentration, customer profile, and breadth of
product offering are the main factors that support our fair
business risk assessment, at the higher end of this still
fragmented industry.

In S&P's base case, it assumes:

   -- Revenues will increase by about 20%-22% in 2017, reflecting
      the recent Alpha acquisitions, and 4%-5% annually
      thereafter, driven by increased contract wins and augmented
      by small bolt-on acquisitions.

   -- Unilabs will be able to steadily improve its profitability
      metrics driven by management's focus on increasing
      productivity and cost efficiency.

   -- Annual capital expenditure (capex) is likely to be about
      EUR40 million-EUR50 million annually over the next two
      years.

   -- Annual acquisitions will not exceed EUR60 million.

   -- No dividend payments.

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

   -- Revenues of EUR810 million-EUR830 million in 2017, rising
      to above EUR860 million in 2018.

   -- Stable operating performance resulting in adjusted EBITDA
      margins of 20%-23% in 2017 and 2018.

   -- Adjusted debt to EBITDA of 11.5x-12.5x in 2017 and 2018.

   -- FFO cash interest coverage above 3.0x in 2017 and 2018.

   -- Adjusted fixed-charge coverage of 2.0x-2.2x in 2017 and
      2018.

The stable outlook reflects S&P's view that Unilabs' market
position, increasing scale, and operating model should enable the
group to sustain operating performance and cash flow generation,
despite pressure on reimbursement tariffs across the industry.
In S&P's opinion, Unilabs should maintain an adjusted fixed-
charge coverage ratio of more than 1.5x over the next 12-18
months, enabling it to comfortably cover its interest payments
and rents while generating modest FOCF above EUR60 million.

S&P would consider lowering the ratings if Unilabs' ability to
comfortably cover its fixed-charge obligations deteriorates
substantially such that there is negative FOCF generation.  This
would most likely be the result of considerable failures in
integrating a transformative acquisition, combined with
substantial contract losses in its largest markets such that its
earnings base is sizably depleted.  S&P considers that this would
also negatively impact the group's liquidity position and would
be indicative of a potential threat to orderly refinancing.

S&P would likely take a positive rating action if Unilabs'
adjusted fixed-charge coverage sustainably rose above 2.2x from
2.0x-2.2x currently anticipated in S&P's base-case scenario.  An
upgrade would also be conditional on positive FOCF generation.
The most likely operating trigger for such developments would be
an accelerated return on the ongoing investment program, which
could boost operational efficiency and profitability of the
group's laboratory network, while it continues to increase sales
volumes.



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


DRACO ECLIPSE 2005-4: S&P Withdraws 'B-' Rating on Cl. E Notes
--------------------------------------------------------------
S&P Global Ratings withdrew its 'B- (sf)' credit rating on DRACO
(ECLIPSE 2005-4) PLC's class E notes.  At the same time, S&P has
lowered to 'D (sf)' from 'CCC- (sf)' its rating on the class F
notes.  S&P has subsequently withdrawn, effective in 30 days'
time, its rating on the class F notes.

The rating actions reflect the application of principal proceeds
to the class E and F notes on the January 2017 interest payment
date (IPD).

DRACO (ECLIPSE 2005-4) closed in December 2005 with notes
totaling GPB284.98 million.  The original five loans were secured
on commercial properties located in the U.K. Since closing, all
of the loans have repaid.  The last remaining loan, Herbert
House, was repaid at the January 2017 IPD at a loss.

As detailed in the January 2017 IPD cash manager report,
principal proceeds from the Herbert House loan were sufficient to
fully repay the class E notes, and to partially repay the class F
notes. The unpaid balance of GPB1,293,869 on the class F notes
has been written off.

                           RATING RATIONALE

S&P's ratings in on DRACO (ECLIPSE 2005-4) address the timely
payment of interest and the payment of principal no later than
the October 2017 legal final maturity date.

On Jan. 25, 2017, the issuer fully repaid the class E notes.  S&P
has therefore withdrawn its rating on the class E notes.

At the same time, S&P has lowered to 'D (sf)' from 'CCC- (sf)'
its ratings on the class F notes in accordance with S&P's
criteria, as they were not fully repaid on the January 2017 IPD.

S&P has subsequently withdrawn, effective in 30 days' time, its
ratings on the class F notes.

RATINGS LIST

DRACO (ECLIPSE 2005-4) PLC
GPB284.978 mil commercial mortgage-backed floating-rate notes
                                    Rating
Class             Identifier        To                From
E                 XS0238141617      NR                B- (sf)
F                 XS0238142342      D (sf)            CCC- (sf)

NR--Not rated.


HERCULES PLC: S&P Lowers Rating on Class D Notes to 'D'
-------------------------------------------------------
S&P Global Ratings lowered its credit rating on Hercules (Eclipse
2006-4) PLC's class C and D notes.  At the same time, S&P
affirmed its 'D (sf)' rating on the class E notes.

S&P's ratings in HERCULES (ECLIPSE 2006-4) address the timely
payment of interest and the repayment of principal no later than
legal final maturity in October 2018.  On the January 2017
interest payment date (IPD), the class D notes experienced
interest shortfalls for the first time, and the class E notes
experienced further interest shortfalls.

The transaction continues to experience cash flow disruptions due
to spread compression between the remaining loans and the notes,
combined with high prior-ranking transaction costs.  As a result,
there are insufficient funds available to meet all interest
payments due on the notes.

                          RATING ACTIONS

With the risk of higher work-out fees, and the subsequent spread
compression between the loan and the notes, S&P's analysis
indicates that the class C notes have become more vulnerable to
future cash flow disruptions.  In S&P's view, the repayment of
the class C notes is now facing at least a one-in-two likelihood
of interest payment default.  S&P has therefore lowered to
'CCC- (sf)' from 'B-(sf)' its rating on the class C notes, in
line with S&P's criteria for assigning 'CCC' category ratings.

The class D notes have experienced interest shortfalls and S&P do
not expect these to be repaid.  S&P has therefore lowered its
rating to 'D (sf)' from 'CCC (sf)'.

S&P has also affirmed its 'D (sf)' rating on the class E notes,
which continue to experience interest shortfalls and are highly
vulnerable to principal losses.

HERCULES (ECLIPSE 2006-4) is a true sale transaction that closed
in December 2006 and was backed by a pool of seven loans secured
against U.K. commercial properties.  Five loans have repaid since
closing and the outstanding note balance has reduced to GPB98.9
million from GPB814.9 million at closing.

RATINGS LIST

HERCULES (ECLIPSE 2006-4) PLC
GPB814.95 mil commercial mortgage-backed floating-rate notes
                                         Rating
Class            Identifier              To              From
C                XS0276412375            CCC- (sf)       B- (sf)
D                XS0276413183            D (sf)          CCC (sf)
E                XS0276413340            D (sf)          D (sf)


INNOVIA GROUP: Moody's Withdraws B1 Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service has withdrawn the B1 corporate family
rating (CFR) and B1-PD probability of default rating (PDR) of
Innovia Group (Holding 3) Ltd. At the time of the withdrawal
ratings were under review for upgrade. The rating actions follow
the closing of the acquisition of the company by CCL Industries
Inc. (CCL, Baa2 Negative) and subsequent repayment of the
company's rated debts. The instrument ratings on the B2 senior
secured notes issued by Innovia Group (Finance) plc were
withdrawn on 02 March 2017.

RATINGS RATIONALE

Moody's has withdrawn the ratings for reorganisation purposes.

Innovia group is a UK-based manufacturer of biaxially oriented
polypropylene speciality (BOPP) films for labels, tobacco
overwrap and food packaging. The company is also the market
leader in the production of polymer substrate and security
features for banknotes through its Innovia Security division. In
the last twelve months ending September 30, 2016, Innovia
reported sales of EUR508.5 million and a Moody's-adjusted EBITDA
of EUR 74.2 million.


MERLIN ENTERTAINMENTS: Moody's Rates Proposed EUR200MM Notes Ba2
-----------------------------------------------------------------
Moody's Investors Service has assigned a Ba2 rating to the
proposed EUR200 million senior unsecured notes to be issued by
Merlin Entertainments PLC (Merlin). The Ba2 corporate family
rating is unchanged and the outlook on Merlin's ratings is
stable.

"We expect that the net proceeds of the notes will be used for
refinancing part of the company's outstanding bank debt and for
general corporate purpose. The transaction is largely credit
neutral in Moody's views as the higher gross debt balance is
offset by continued EBITDA growth", says Sven Reinke, a Vice
President and Senior Credit Officer at Moody's.

The notes will rank pari passu with all other unsecured
obligations of the issuer and benefit from a negative pledge. The
new notes alongside the EUR500 million notes issued in 2015 and
the bank facilities of GBP250 million and USD540 million
(unrated) are senior unsecured obligations of the issuer and will
represent virtually all of the group's outstanding debt, apart
from finance leases. Moody's understands that the guarantors of
the notes are substantially the same as for the bank facilities
and Moody's ratings for the notes assumes that this will remain
the case going forward as well.

RATINGS RATIONALE

The Ba2 CFR reflects Merlin's strong position as a global
operator of theme parks and attractions, with 117 attractions in
24 countries and over 65 million visitors in 2016. Merlin is the
second-largest operator of visitor attractions globally after
Walt Disney Company (The) (A2 stable). In spite of the company's
resilient performance in recent years, Moody's continue to
believe that the nature of the company's activities leaves it
exposed to economic cycles and weather conditions, as well as
accidents. The company remains moderately leveraged, with
adjusted debt/EBITDA at 4.2x as of June 2016.

Merlin's rating is supported by certain qualitative factors, and
notably its portfolio of internationally recognised brand names
such as The Dungeons, SEA LIFE, LEGOLAND Discovery Centres,
LEGOLAND Parks, Madame Tussauds and the London Eye; its diversity
of theme parks and 'midway' attractions (i.e., city centre or
resort-based attractions with a 1-2 hour dwell time); and also
its mixture of indoor and outdoor activities. Altogether Moody's
believes that these factors have contributed to its relative
resilience to external shocks in recent years.

OUTLOOK

The stable outlook reflects Moody's expectation that the company
will continue to grow earnings organically but that free cash
flow generation will be limited owing to investments into its
growth strategy. Moody's further expects the company to show an
improving performance at the Resort Theme Parks albeit for the
next 6 - 12 months Moody's do not expects Merlin to be able to
return to the revenue and profit levels it generated in this
segment prior to the accident at Alton Towers in 2015.

WHAT COULD CHANGE THE RATING UP/DOWN

Although not envisaged in the near-term, upward pressure to the
rating could occur if leverage, as measured by adjusted
debt/EBITDA, were to fall sustainably below 3.5x.

A more aggressive financial policy, or a significant industry
downturn, neither of which Moody's expects at this time, could
lead to negative ratings pressure if gross leverage were to
increase above 4.5x, or any liquidity concerns. In this regard,
the rating does not incorporate any large-scale debt-funded
acquisitions.

The principal methodology used in this rating was Business and
Consumer Service Industry published in October 2016.


MUST HAVE: Evaluates Strategic Alternatives After Administration
----------------------------------------------------------------
Shelina Begum at Manchester Evening News reports that Anthony
Collier -- anthony.collier@frpadvisory.com -- and Geoff Rowley --
geoff.rowley@frpadvisory.com -- partners at FRP Advisory have
been appointed as joint administrators to Radcliffe-based Must
Have Limited trading as VIP.

They are marketing the business for sale while seeking to
continue to trade the VIP business across the company's outlets
and e-commerce division, Manchester Evening News discloses.

"VIP is a strong and well established brand in the e-cigarette
market," Manchester Evening News quotes Mr. Collier as saying.

"Historically the business has been profitable and cash
generative and we are seeking to continue to trade the business
while a purchaser is sought and invite interested parties to
contact the administrators."

According to Manchester Evening News, in a statement,
Dan O'Neill, ECIG's CEO, said "Despite multiple attempts to
satisfy the tax obligation and other expected near term
obligations, the company is unable to continue to fund the
operations or any obligations of MHL.

"Based on the administration process in the United Kingdom, we
will be evaluating the strategic alternatives available for the
future of the company."

He added: "Legacy financial commitments and MHL's
underperformance in the UK prevented the subsidiary from meeting
its financial obligations."

                  About Must Have Limited

Must Have Limited, doing business as VIP Electronic Cigarette,
designs and manufactures electronic cigarettes. The company was
incorporated in 2004 and is based in Manchester, United Kingdom.
As of April 22, 2014, Must Have Limited operates as a subsidiary
of Electronic Cigarettes International Group, Ltd.


NORTH DEVON THEATRES: In Administration, Claim Process Ongoing
--------------------------------------------------------------
North Devon Theatres' Trust was placed in administration on
January 23, 2017.

As a consequence, the Trust has ceased trading and this means
that:

   -- All upcoming performances are cancelled.
   -- The Trust will not be able to process any refunds for
      tickets purchased for those performances.

If one has purchased a ticket by card, it would be advisable to
contact the card issuer before lodging a claim in the
Administration process.  If one's claim is not for tickets or
gift vouchers, please correspond using the email address
northdevontheatres@bishopfleming.co.uk

Submitting a claim in the administration does not mean one will
receive a refund.

It is anticipated that any dividend (payout) to unsecured
creditors (ticket or gift voucher purchasers are unsecured
creditors) on the matter would be minimal.

The Card Issuer may require a copy of the Notice of appointment
available at https://is.gd/y8Nxx9

If one has not been able to obtain a refund from a card provider,
one is an unsecured creditor of the Trust.

One can fill in the form to lodge its claim in the
administration, one will not receive a refund.

The form is available at:

      http://bishopfleming.co.uk/north-devon-theatres-trust/

Alternatively, one can send the company this information via post
to the following address:

         North Devon Theatres' Trust in Administration
         c/o Bishop Fleming
         Stratus House
         Emperor Way
         Exeter
         EX1 3QS


VIVID TOY: Private Equity Firm Set to Take Over Business
--------------------------------------------------------
Mark Kleinman at Sky News reports that a private equity firm
which targets struggling companies will this week triumph in a
two-way battle for control of Vivid Toy Group, Britain's biggest
toy-maker.

Sky News has learnt that Privet Capital and Hilco, which has
transformed the fortunes of HMV, the entertainment retailer,
tabled takeover bids for Vivid in the last few days.

According to Sky News, sources said on March 12 that Privet was
close to securing a deal to buy Vivid, which has licenses to make
Thunderbirds and Moshi Monsters toys, and could announce a
takeover as soon as March 13.

They added that any transaction would be through a solvent sale
process, and would not require an insolvency mechanism such as a
pre-pack administration, Sky News relays.

Vivid is backed by the investment firm Phoenix Equity Partners,
and has seen a slump in profits after a big bet on a new
Thunderbirds range turned sour, Sky News discloses.

Last month, it asked KPMG's accelerated mergers and acquisitions
team to identify new investors following an earlier sale process
which failed to produce a buyer, Sky News recounts.



===============
X X X X X X X X
===============


* DBRS Assigns Issuer Ratings to 43 European Banking Groups
-----------------------------------------------------------
DBRS Ratings Limited and DBRS Inc on March 7 assigned Issuer
Ratings to 43 banking groups and various banking subsidiaries and
affiliated entities in its European bank rating universe where
they had not been assigned previously. The Issuer Ratings are
assigned based on a bank's fundamentals that are reflected in its
Intrinsic Assessment and are typically at the same level as the
Senior Debt ratings of the bank and also carry the same trend.

The Issuer Rating assigned to Caixa Geral de Depositos S.A. is
Under Review with Negative Implications, and the Issuer Rating
assigned to Banca Monte dei Paschi di Siena SpA is Under Review
with Developing Implications, in line with the existing review of
the senior ratings of those banks.

For a further 9 banking groups (Lloyds Banking Group plc,
Landesbank Berlin AG, Sparkassen-Finanzgruppe, Abanca CorporaciĀ¢n
Bancaria S.A., Banco Bilbao Vizcaya Argentaria, S.A., Caja Rural
de Granada, Liberbank, S.A., ABN AMRO Group N.V. and ING Bank
N.V.) DBRS has removed the Issuer Rating nomenclature from the
Senior Rating and assigned it as an individual rating.

The other ratings of the banks are unaffected by this action.

RATING DRIVERS
The Issuer Ratings are assigned based on a bank's fundamentals
that are reflected in its Intrinsic Assessment and are typically
at the same level as the Senior Debt ratings of the bank. As a
result the Issuer Ratings will move in line with the Senior Debt
ratings and the Intrinsic Assessments of the individual banks.

A full text copy of the ratings is available free at:

                     https://is.gd/gCT1hJ


                            *********

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

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

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


                            *********


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

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

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

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

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

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


                 * * * End of Transmission * * *