TCREUR_Public/170317.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

           Friday, March 17, 2017, Vol. 18, No. 55



RCB BANK: S&P Assigns 'BB-/B' Counterparty Credit Ratings


SOLOCAL GROUP: Moody's Raises Corporate Family Rating to Caa1
VIVARTE SAS: Creditors Sign EUR846MM Debt Conversion Accord


AVOCA CLO XII: Moody's Assigns (P)B2 Rating to Class F-R Notes
BUS EIREANN: Unions, Management Clarify Stances


ALITALIA SPA: Aims to Cut Costs to Return to Profitability
F-E GOLD: Fitch Corrects March 8 Rating Release


ORIENT EXPRESS: Moody's Affirms Caa1 LT Deposit Ratings


AYT KUTXA I: Fitch Corrects March 14 Rating Release
BANCO POPULAR: Moody's Affirms Ba1 LT & ST Deposit Ratings
KUTXABANK SA: Moody's Affirms Ba1 LT Deposit & Sr. Debt Ratings


UNILABS MIDHOLDING: Moody's Affirms B3 CFR, Outlook Positive

U N I T E D   K I N G D O M

BRITISH AIRWAYS: Fitch Raises Long-Term IDR from BB+
EXCEL PUBLISHING: More Details on Administration Unveiled
HIGHER EDUCATION: Fitch Affirms 'CCsf' Ratings on 2 Note Classes
NEMUS II: S&P Lowers Ratings on Two Note Classes to D
PREMIER OIL: Lenders Agree to Debt Refinancing Terms

PRESSUREFAB: Went Into Administration Owing More Than GBP400,000
WELLGRAIN LTD: Enters Administration Owing Up to GBP15 Million


* BOOK REVIEW: The Money Wars



RCB BANK: S&P Assigns 'BB-/B' Counterparty Credit Ratings
S&P Global Ratings assigned its 'BB-/B' long- and short-term
counterparty credit ratings to Cyprus-based RCB Bank Ltd.  The
outlook is stable.

The long-term rating on RCB Bank reflects S&P's 'bb-' anchor, the
starting point in assigning an issuer credit rating.  S&P derives
RCB Bank's anchor from a combination of our '8' economic risk
under our Russian Banking Industry Country Risk Assessment
(BICRA) and S&P's score of '8' for industry risk under its Cyprus
BICRA (our BICRAs are on a scale of 1 -- the strongest -- to
10 -- the weakest).  RCB Bank's economic risk score reflects that
the majority of its loans are granted to customers in Russia and
Commonwealth of Independent States (CIS), with only 11% to
Cypriot customers.  S&P's anchor for RCB Bank compares favorably
with S&P's 'b+' anchor for Cypriot banks operating mainly in
Cyprus, because of its view of lower economic risk in Russia.

However, Russian economic risks are higher than for peers in
large emerging markets, such as China, Brazil, or India,
incorporating S&P's view of the contraction in the Russian
economy in 2015-2016. Although S&P considers that the Russian
economy may start growing in 2017, the economic environment will
remain testing for Russian banks over the next two years.  The
economy still relies heavily on commodities and lacks the
structural reforms that would improve the efficiency of its non-
export sectors.  Weak economic growth and geopolitical tensions
between Russia and the West have also caused deterioration in
foreign and domestic investors' confidence.  S&P expects lending
growth in 2017 will remain slow, at below 10% a year, with credit
costs remaining high at 3.5%-4.5%.  This will sustain pressure on
the profitability and capitalization of most Russian banks.

S&P's view of industry risks in Cyprus is underpinned by very low
profitability prospects, an imbalanced funding profile, and a
weak regulatory track record.  S&P expects Cypriot banks will
remain close to breakeven in 2016 and 2017, owing to low interest
rates, high nonperforming assets, and substantial provisioning
needs.  The system is still recovering from the imbalances that
led to the banking crisis.  Banks' funding base carries a
substantial weight of non-resident deposits.  Banks continue to
deleverage and pricing remains high.  Nevertheless, S&P views
positively the substantial banking sector consolidation achieved
in the past three years (total assets decreased by over 46%), the
relatively low reliance on European Central Bank funding compared
to other southern European countries, and the return of some
deposits following the full lift of capital controls in 2015.

RCB Bank's moderate business position balances its high
concentration in servicing joint large corporate clients,
together with shareholders and its much better credit and
earnings performance through the last credit cycle than its
domestic peers, and a stable and conservative management team.
With total assets of $8.3 billion on Oct. 1, 2016, RCB Bank was
the third-largest bank in Cyprus with a market share of about 13%
by assets after domestically-focused Bank of Cyprus and
Cooperative Central Bank. RCB Bank is owned by VTB Bank (a 46.29%
stake as of Jan. 1, 2017), Otkritie FC Bank (19.85%), and
Crendaro Investments Ltd (33.86%).

The bank operates in three main business areas:

   -- Corporate and Investment Business Division, offering
      corporate and transaction banking services, including
      structured finance, capital markets, and investment
      products to large CIS and international corporates, usually
      joint clients with its shareholders.  S&P expects this
      business area will remain the largest balance sheet and
      revenue contributor in the next two years, but S&P could
      see some volatility due to large transaction sizes.
      International Business Division, serving midsize companies
      and affluent individuals with core business interests
      outside of Cyprus.

   -- Domestic Business Division, attending to midsize local
      companies and affluent residents of Cyprus.  The bank
      targets to actively increase domestic business to capture
      10%-15% market share in its target segments within the next
      five years, fully funded by local deposits.  The expansion
      should be supported by economic recovery, with average
      annual real GDP growth in Cyprus that S&P forecasts at
      about 2.5% in 2016-2019.  S&P expects the domestic business
      will remain relatively limited in size and contribution to
      profits and the balance sheet, despite expected growth.

Largely owing to its international operations, RCB Bank weathered
the crisis in Cyprus in 2013 well.  It remained profitable, well-
capitalized, with significantly better asset quality than its
domestic peers' and benefited from clients' deposits inflows from
domestic banks.

S&P regards the bank's management team as experienced.  S&P
considers RCB Bank's corporate governance to be adequate, and its
internal anti-money laundering control system to be sound, with
some areas that appear to be stricter than the regulatory
framework.  Moreover, S&P anticipates the bank will remain fully
compliant with the current sanctions on Russia.

S&P's assessment of RCB Bank's capital and earnings as strong
reflects S&P's view that the bank's loss absorption capacity will
remain at its current strong levels owing to moderate loan
growth, stable asset quality, and some recovery in net interest
margin. Accordingly, S&P projects that S&P Global Ratings' risk-
adjusted capital (RAC) ratio for RCB Bank will remain comfortably
above 10% in the next 18 months, against 11.6% at year-end 2015.
The bank's regulatory common equity Tier 1 ratio was 21.3%, and
total capital adequacy ratio was 23.5% as of Sept. 30, 2016.

RCB Bank has exhibited consistent profitability over the past 10
years, including during the 2008-2009 global banking crisis and
the 2013 crisis in Cyprus.  Average return on equity was 22.4% in
2011-2015.  Operating revenues are dominated by net interest
income.  Trading income is represented by bond portfolio
revaluation and foreign currency gains.  Fees and commissions
relate mainly to servicing deals and will likely rise in 2017.
Provisions will remain low because of the predominance of cash-
collateralized loans and low nonperforming loans (NPLs).

S&P considers the bank's risk position to be adequate, reflecting
its high single-name lending concentrations to joint clients with
shareholders and its own CIS clients as well as full coverage of
these loans by risk mitigation arrangements in the form of cash
collateral, and stronger asset quality in non-shareholders'
related business than domestic peers.

NPLs accounted for 0.8% of total loans as of Sept. 30, 2016.
This is significantly below NPLs at 49% in the Cypriot banking
system as of Aug. 1, 2016.  The reasons for this are:

   -- RCB Bank's exposure to domestic clients is very limited;
   -- All loans with joint clients with shareholders are fully
      covered by risk mitigation arrangements provided by them;
   -- CIS clients were rigorously selected and have withstood
      difficult macroeconomic conditions in the CIS.

Provisions covered NPLs by 82% as of Sept. 30, 2016, reflecting
additional collateral.  S&P expects the bank will somewhat
increase provisions in the next 12 months to reflect planned
growth of its domestic business.

Lending to own risk clients (not cash collateralized) covers a
variety of sectors.  The bank is making special efforts to expand
in the Cypriot market.  Because of the relatively small size of
own risk portfolio, the share of its own 20-largest loans
accounted for about 71% of total own loans as of year-end 2015,
which is a substantial concentration in global comparison.  The
concentration in the own-risk loans portfolio is naturally
decreasing as the portfolio grows.

S&P assess RCB Bank's funding as average.  This reflects S&P's
view that its three main businesses are self-funded.  S&P also
understands that loans to joint clients are fully matched by VTB
Bank deposits.  Corporate and retail customer deposits--
complemented by funding from European Investment Bank and
European Investment Fund--fully fund own loans to CIS and Cypriot

The loan-to-deposit ratio of 57% as of Sept. 30, 2016, in the
own-risk loan business compares well to the system average of
111% as of Aug. 1, 2016.  Customer deposits are adequately
diversified, with 36% retail deposits and the rest corporate
deposits.  About 51% of deposits were term deposits on the same
date.  The concentrations in deposit funding are comparable to
peers'.  The top-20 customer deposits, excluding cash collateral
on loans, accounted for 35% of total customer deposits as of
Sept. 30, 2016.

S&P's assessment of the bank's liquidity as adequate reflects a
sufficient liquidity buffer of about $2 billion (or about one-
quarter of the balance sheet) as of Dec. 1, 2016, represented by
cash, interbank deposits, and trading securities.

S&P assess the bank's stand-alone credit profile at 'bb-'.  S&P
do not factor any notches of support into its ratings on RCB Bank
to reflect VTB Bank's 46.29% stake in the bank.

The stable outlook on RCB Bank reflects S&P's expectation that
the bank's business and financial profiles will remain stable
over the next 12 months, supported by provision of funding and
cash collateral by its shareholders and improved macroeconomic
prospects in Russia and Cyprus.

S&P could take a negative rating action on RCB Bank in the next
12 months if it observed:

  -- Rapid growth in its non-cash collateralized loans, such that
     S&P's forecast RAC ratio declined to below 10%; or

   -- Material deterioration in its asset quality.

A positive rating action on the bank is unlikely over the next 12
month, as it would rely on a much stronger economic and operating


SOLOCAL GROUP: Moody's Raises Corporate Family Rating to Caa1
Moody's Investors Service has upgraded to Caa1 from Ca the
corporate family rating (CFR) and to Caa1-PD/LD from Ca-PD/LD the
probability of default rating (PDR) of SoLocal Group S.A.
(SoLocal), France's largest provider of local media advertising
and information. At the same time, the rating agency placed the
ratings on review for further upgrade.

The rating action follows the completion of SoLocal's revised
financial restructuring plan (FRP), announced on 3 November 2016,
with the allocation of new shares and notes to creditors on 13
and March 14, 2017, in place of the loan and note obligations
previously due.

"While Moody's saw SoLocal's distressed exchange as a default,
the subsequent financial restructuring has significantly improved
its leverage to 2.5x from 5.7x triggering upgrade," says Colin
Vittery, a Moody's Vice President -- Senior Analyst, and lead
analyst for SoLocal.

Concurrently, Moody's has appended the PDR with the limited
default (/LD) designation. The Ca rating on the senior secured
notes issued by PagesJaunes Finance & Co. S.C.A. remains
unchanged but will be withdrawn upon completion of the announced



The upgrade reflects the closing of the FRP, by which SoLocal has
materially reduced its leverage. Moody's calculates that adjusted
pro forma leverage (based on audited accounts for the financial
year December 31, 2016) has reduced from 5.7x to 2.5x. The review
will focus on the analysis of the Conquer 2018 business plan, as
well as the new capital structure and future liquidity profile.
At this point, further
upward pressure on the ratings is likely to be limited to one


On Jan. 4, 2017, Moody's changed SoLocal's PDR to Ca-PD/LD
following a payment default on the coupon of the EUR350 million
senior secured notes and expiry of the associated grace period.
With the completion of the FRP, noteholders will receive this
coupon payment and the payment default will be cured. However,
the FRP constitutes a distressed exchange, a default under
Moody's definitions and consequently the PDR has been appended
with the "/LD" designation to reflect this. The "/LD" designation
will be removed after three business days.


In light of action, Moody's anticipates positive rating pressure
following the satisfactory review of the final capital structure.

Upward rating pressure may arise following a satisfactory review
of the post-restructuring business plan and capital structure, as
well as the company's financial policies, including liquidity

Downward pressure on the ratings is unlikely due to the company's
more sustainable capital structure following the distressed
exchange. However, downward pressure could result from (1) a
weakened liquidity profile; or (2) a failure to grow internet
revenues in line with management guidance of between 3% and 5%;
or (3) renewed covenant pressure.



Issuer: SoLocal Group S.A.

-- LT Corporate Family Rating, Upgraded to Caa1 from Ca; Placed
    Under Review for further Upgrade

-- Probability of Default Rating, Upgraded to Caa1-PD /LD from
    Ca-PD /LD; Placed Under Review for further Upgrade (/LD

Outlook Actions:

Issuer: SoLocal Group S.A.

-- Outlook, Changed To Rating Under Review From Negative


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

SoLocal is the largest provider of local media advertising and
information in France. It also offers, digital marketing, website
creation and hosting services. It operates mainly in France,
which accounted for 97% of its 2016 revenue. SoLocal also
operates in Spain, Austria and the UK. In 2016, SoLocal reported
recurring revenue of EUR812 million and a Moody's Adjusted EBITDA
of EUR 236 million. SoLocal is publicly quoted on the Paris stock

VIVARTE SAS: Creditors Sign EUR846MM Debt Conversion Accord
David Whitehouse at Bloomberg News reports that creditors of
Vivarte SAS have unanimously agreed and signed an accord to
convert EUR846 million of debt into capital.

According to Bloomberg, Vivarte CEO Patrick Puy told Les Echos in
an interview that the agreement leaves the company with EUR572
million of debt taken on in 2014.

Mr. Puy told Les Echos that maturity on this debt has been
extended two years to 2021, says the report.

Vivarte SAS is a French fashion retailer.  It owns brands
including Kookai and Naf Naf.


AVOCA CLO XII: Moody's Assigns (P)B2 Rating to Class F-R Notes
Moody's Investors Service has assigned provisional ratings to
eight classes of notes (the "Refinancing Notes") to be issued by
Avoca CLO XII Designated Activity Company:

-- EUR 2,000,000 Class X Senior Secured Floating Rate Notes due
    2030, Assigned (P)Aaa (sf)

-- EUR 190,000,000 Class A-1R Senior Secured Floating Rate Notes
    due 2030, Assigned (P)Aaa (sf)

-- EUR 50,000,000 Class A-2R Senior Secured Floating Rate Notes
    due 2030, Assigned (P)Aaa (sf)

-- EUR 53,000,000 Class B-R Senior Secured Floating Rate Notes
    due 2030, Assigned (P)Aa2 (sf)

-- EUR 22,000,000 Class C-R Deferrable Mezzanine Floating Rate
    Notes due 2030, Assigned (P)A2 (sf)

-- EUR 22,000,000 Class D-R Deferrable Mezzanine Floating Rate
    Notes due 2030, Assigned (P)Baa2 (sf)

-- EUR 23,000 000Class E-R Deferrable Junior Floating Rate Notes
    due 2030, Assigned (P)Ba2 (sf)

-- EUR 10,000,000 Class F-R Deferrable Junior Floating Rate
    Notes due 2030, Assigned (P)B2 (sf)

Moody's issues provisional ratings in advance of the final sale
of financial instruments, but these ratings only represent
Moody's preliminary credit opinions. Upon a conclusive review of
a transaction and associated documentation, Moody's will
endeavour to assign definitive ratings. A definitive rating (if
any) may differ from a provisional rating.


Moody's provisional ratings of the notes addresses the expected
loss posed to noteholders. The provisional ratings reflects the
risks due to defaults on the underlying portfolio of assets, the
transaction's legal structure, and the characteristics of the
underlying assets.

The Issuer has issued the Refinancing Notes in connection with
the refinancing of the following classes of notes: Class A Notes,
Class B Notes, Class C Notes, Class D Notes, Class E Notes and
Class F Notes due 2027 (the "Original Notes"), previously issued
on September 17, 2014 (the "Original Closing Date"). On the
Refinancing Date, the Issuer will use the proceeds from the
issuance of the Refinancing Notes to redeem in full its
respective Original Notes. On the Original Closing Date, the
Issuer also issued one class of subordinated notes, which will
remain outstanding.

Avoca XII is a managed cash flow CLO. The issued notes are
collateralized primarily by broadly syndicated first lien senior
secured corporate loans. At least 90% of the portfolio must
consist of senior secured loans and eligible investments, and up
to 10% of the portfolio may consist of second lien loans,
unsecured loans, mezzanine obligations and high yield bonds.

KKR Credit Advisors (Ireland) Unlimited Company (the "Manager")
manages the CLO. It directs the selection, acquisition, and
disposition of collateral on behalf of the Issuer. After the
reinvestment period, which ends in April 2021, the Manager may
reinvest unscheduled principal payments and proceeds from sales
of credit risk obligations, subject to certain restrictions.

The transaction incorporates interest and par coverage tests
which, if triggered, divert interest and principal proceeds to
pay down the notes in order of seniority.

Loss and Cash Flow Analysis:

Moody's modeled the transaction using a cash flow model based on
the Binomial Expansion Technique, as described in Section
of the "Moody's Global Approach to Rating Collateralized Loan
Obligations" rating methodology published in October 2016.

The cash flow model evaluates all default scenarios that are then
weighted considering the probabilities of the binomial
distribution assumed for the portfolio default rate. In each
default scenario, the corresponding loss for each class of notes
is calculated given the incoming cash flows from the assets and
the outgoing payments to third parties and noteholders.
Therefore, the expected loss or EL for each tranche is the sum
product of (i) the probability of occurrence of each default
scenario and (ii) the loss derived from the cash flow model in
each default scenario for each tranche. As such, Moody's
encompasses the assessment of stressed scenarios.

The key model inputs Moody's used in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. For modeling
purposes, Moody's used the following base-case assumptions:

Performing par and principal proceeds balance: EUR400,000,000

Diversity Score: 37

Weighted Average Rating Factor (WARF): 2750

Weighted Average Spread (WAS): 3.70%

Weighted Average Coupon (WAC): 6.00%

Weighted Average Recovery Rate (WARR): 44%

Weighted Average Life (WAL): 8 years

Moody's has analysed the potential impact associated with
sovereign related risk of peripheral European countries. As part
of the base case, Moody's has addressed the potential exposure to
obligors domiciled in countries with local currency country risk
ceiling of A1 or below. Following the effective date, and given
the portfolio constraints, only up to 10% of the pool can be
domiciled in countries with foreign currency government bond
ratings below Aa3 with a further constraint of 5% to exposures
with foreign currency government bond ratings below A3. Given
this portfolio composition, the model was run with different
target par amounts depending on the target rating of each class
of notes as further described in the methodology. The portfolio
haircuts are a function of the exposure size to peripheral
countries and the target ratings of the rated notes and amount to
0.75% for the class A Notes, 0.5% for the Class B Notes, 0.375%
for the Class C Notes and 0% for Classes D, E and F Notes.

Methodology Underlying the Rating Action:

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

Factors that would lead to an upgrade or downgrade of the

The performance of the notes is subject to uncertainty. The
performance of the notes is sensitive to the performance of the
underlying portfolio, which in turn depends on economic and
credit conditions that may change. The Manager's investment
decisions and management of the transaction will also affect the
performance of the notes.

Stress Scenarios:

Together with the set of modeling assumptions above, Moody's
conducted an additional sensitivity analysis, which was a
component in determining the provisional ratings assigned to the
rated notes. This sensitivity analysis includes increased default
probability relative to the base case.

Below is a summary of the impact of an increase in default
probability (expressed in terms of WARF level) on the notes
(shown in terms of the number of notch difference versus the
current model output, whereby a negative difference corresponds
to higher expected losses), assuming that all other factors are
held equal.

Percentage Change in WARF -- increase of 15% (from 2750 to 3163)

Rating Impact in Rating Notches:

Class X Notes: 0

Class A-1R Notes: 0

Class A-2R Notes: 0

Class B-R Notes: -2

Class C-R Notes: -2

Class D-R Notes: -2

Class E-R Notes: -1

Class F-R Notes: 0

Percentage Change in WARF -- increase of 30% (from 2750 to 3575)

Rating Impact in Rating Notches:

Class X Notes: 0

Class A-1R Notes: -1

Class A-2R Notes: -1

Class B-R Notes: -3

Class C-R Notes: -4

Class D-R Notes: -2

Class E-R Notes: -1

Class F-R Notes: -1

Further details regarding Moody's analysis of this transaction
may be found in the related pre-sale report, published in August
2014 prior to the Original Closing Date and available on

BUS EIREANN: Unions, Management Clarify Stances
Martin Wall at The Irish Times reports that trade unions have
acknowledged that the eradication of inefficiencies at Bus
Eireann may result in some staff earning less than at present.

In letters to the company on March 15, they said that any losses
incurred by members as part of any new survival plan could be
addressed as part of future discussions, The Irish Times relates.

However, unions have insisted that Bus Eireann should continue to
provide "industry-leading" terms and conditions for its
employees, The Irish Times notes.

Unions also acknowledged that staff numbers may have to be
reduced as part of an overall survival plan for the State-owned
transport company, The Irish Times relays.

Trade unions representing the 2,600 staff at the company wrote to
the company after Bus Eireann sought clarifications on trade
unions on their position in relation to proposed cuts in earnings
for staff, The Irish Times discloses.

According to The Irish Times, following the collapse of previous
talks on March 6 on a plan to address the financial crisis at Bus
Eireann, management had maintained that while the unions were
prepared to accept and acknowledge that inefficiencies existed,
they had refused "to accept any reduction of earnings, including
unnecessary overtime earnings".

However, at a board meeting on March 15, a worker director is
understood to have disputed this position and indicated that
there might be scope for flexibility on the part of the unions,
The Irish Times notes.

Bus Eireann has argued that it lost over EUR9 million last year,
recorded a deficit of EUR1.5 million in January this year and on
current trends will face insolvency by May, The Irish Times

The company's board met on March 15 to consider its future
strategy in the aftermath of the breakdown of talks between
unions and management at the company on a survival plan, The
Irish Times discloses.


ALITALIA SPA: Aims to Cut Costs to Return to Profitability
James Politi at The Financial Times reports that Alitalia has
vowed to cut costs by EUR1 billion over the next three years in a
bid to return to profitability by 2019, as Italy's flagship
airline embarks on yet another high-stakes restructuring plan.

After a long meeting on March 15, the board of the Italian
carrier also announced that Luigi Gubitosi, the former chief
executive of Rai, the state-owned television network, would
become a director, replacing Roberto Colaninno, the FT relates.

According to the FT, once shareholders approved the funding for
Alitalia's new plan, he would become executive chairman, paving
the way for Luca di Montezemolo, the current chairman, to step

After reaching a landmark deal with Etihad, the UAE-based
carrier, in 2014, Alitalia had aimed to break even by this year,
the FT relays.  But that effort failed dramatically, forcing
Alitalia to go back to the drawing board, the FT notes.

"The aviation industry is ferociously competitive and never
stands still," the FT quotes Cramer Ball, Alitalia's chief
executive, as saying.  "Only through radical change will
Alitalia's fortunes be turned around".

The airline, as cited by the FT, said it would submit the plan to
the Italian government on March 16, and the restructuring would
be subject to an agreement with trade unions on a new collective
works agreement.

The plan, the FT says, is expected to result in layoffs, though
the precise figure is unclear.

                         About Alitalia

Alitalia-Compagnia Aerea Italiana has navigated its way through
a successful restructuring.  After filing for bankruptcy
protection in 2008, Alitalia found additional investors, acquired
rival airline Air One, and re-emerged as Italy's leading airline
in early 2009.  Operating a fleet of about 150 aircraft, the
airline now serves more than 75 national and international
destinations from hubs in Fiumicino (Rome), Milan, Turin, Venice,
Naples, and Catania.  Alitalia extends its network as a member of
the SkyTeam code-sharing and marketing alliance, which also
includes Air France, Delta Air Lines, and KLM.  An Italian
investor group owns a majority of the company, while Air France-
KLM owns 25%.

F-E GOLD: Fitch Corrects March 8 Rating Release
Fitch Ratings issued a corrected version of the press release
published March 8, 2017, to include more information on data

Fitch Ratings has upgraded F-E Gold S.r.l's (F-E Gold) class A2,
B and C notes as follows:

EUR36.3 million Class A2 notes upgraded to 'AA+sf' from 'AAsf';
Negative Outlook

EUR19.8 million Class B notes upgraded to 'BBB+sf' from 'BB+sf';
Stable Outlook

EUR3.6 million Class C notes upgraded to 'BB+sf' from 'BB-sf';
Stable Outlook

F-E Gold is the third securitisation of financial lease
receivables originated in Italy by Fineco Leasing S.p.A (now
UniCredit Leasing, unrated), a subsidiary of the UniCredit Bank
SpA. The transaction was originated in 2006 and had an 18-month
revolving period that ended in September 2007. The transaction
originally featured pro rata amortisation and as amortisation has
switched to sequential three times (April 2013, October 2014 and
July 2015), the repayment of the notes will remain sequential
until the final maturity.

The upgrades reflect a significant increase in credit enhancement
(CE) over the last 12 months. As of end-2016, CE on the class A2
notes has increased to 65.1% from 46.1% a year ago. Over the same
period, CE on the class B notes increased to 32.2% from 22.8%,
and on the class C notes to 26.2% from 18.6%. The increased CE is
a result of the amortisation of the class A2 notes, which have
paid down EUR24.9 million over the last year. The portfolio has
now amortised down to 6% of the initial balance. The rating of
the class A notes is capped at the Country Ceiling of 'AA+' which
is six notches above the sovereign rating of Italy

Pool concentration has increased due to portfolio amortisation.
The top 10 lessees represent 12% of the non-defaulted portfolio,
while the largest obligor makes up 1.9% of this balance, compared
with 11% and 1.7% respectively a year ago. The pool is almost
exclusively made up of real estate leases, which represent 99% of
the non-defaulted portfolio.

The performance of the portfolio has also stabilised over the
last year with average period defaults of 0.58% over the last 12
months. Cumulative losses are at 5.2% of the initial balance,
while the portion of leases in arrears remains high, with total
30+ delinquencies at 11.7% of the current portfolio balance. The
high delinquencies, which were taken into account in Fitch's
analysis, are mitigated by the increased CE on the notes.


Expected impact on the notes' rating of increased defaults (class

Current Ratings: 'AA+sf'/'BBB+sf'/'BB+sf'
Increase defaults base case by 10%: 'AA+sf'/'BBB-sf'/'BB+sf'
Increase defaults base case by 25%: 'AA+sf'/'BB+sf'/'BBsf'

Expected impact on the notes' rating of reduced recoveries (class
Current ratings: 'AA+sf'/'BBB+sf'/'BB+sf'
Reduce recovery base case by 25%: 'AA+sf'/'BBB+sf'/'BB+sf'

Expected impact on the notes' rating of increased defaults and
reduced recoveries (class A2/B/C):
Current ratings: 'AA+sf'/'BBB+sf'/'BB+sf'
Increase default base case by 10%; reduce recovery base case by
10%: 'AA+sf'/'BBB-sf'/'BB+sf'


ORIENT EXPRESS: Moody's Affirms Caa1 LT Deposit Ratings
Moody's Investors Service has affirmed the Caa1 long-term local-
and foreign-currency deposit ratings of Orient Express Bank, as
well as the bank's Caa1 local-currency senior unsecured debt
rating. At the same time, the rating agency has changed the
outlook on these ratings to stable from negative. The bank's Not-
Prime short-term local-currency and foreign-currency deposit
ratings were affirmed. Concurrently, Moody's affirmed Orient
Express Bank's baseline credit assessment (BCA) and adjusted BCA
of caa1. The overall outlook on Orient Express Bank was changed
to stable from negative.

Moody's has also affirmed Orient Express Bank's long-term and
short-term Counterparty Risk Assessments (CR Assessments) of
B3(cr) / Not-Prime(cr).


The stabilization of the outlook on Orient Express Bank's ratings
reflects the improving trends in the bank's asset quality and
profitability, which Moody's expects will be sustained in 2017.
At the same time, the ratings incorporate downside risks to the
bank's financial fundamentals stemming from its merger with
Uniastrum Bank (not rated) at end-January 2017. Uniastrum Bank's
size is material for the merged bank, as the former's total
assets accounted for approximately 60% of the pre-merger Orient
Express Bank's total assets at 1 January 2017.

Orient Express Bank's problem loan ratio was trending down in the
nine months of 2016 and decreased to 15% at 1 October 2016 from
26% at the beginning of the year. These problem loans were fully
covered by loan loss reserves. At the same time, the pre-merger
Uniastrum Bank's loan performance may come under pressure as
there was a significant proportion of restructured loans in the
bank's loan book. According to Orient Express Bank management
information, at 1 January 2017, 16% of pre-merger Uniastrum
Bank's total gross loans were overdue by more than 90 days, and
on top of this another 16% of gross loans were restructured.
Uniastrum Bank's loan loss reserves stood at 19% of total gross
loans, which Moody's views as insufficient to cover the high
proportion of restructured loans.

Despite the need for the merged bank to further build-up its loan
loss reserves, Moody's expects it to be marginally profitable in
2017. The main drivers of expected improvements in profitability
are: (1) cost reduction achieved through the merger; and (2)
gradually moderating provisioning charges. The rating agency
estimates that in the next 12 to 18 months, the merged bank will
be able to reduce administrative expenses by 20%-25% of the two
pre-merger banks' aggregate expenses, mainly due to the branch
network optimization and decrease in headcount. Moody's also
expects that credit losses in 2017 will be around 7% of the
bank's loan book.

Orient Express Bank's modest capital adequacy remains one of the
key constraints for the bank's Caa1 deposit rating. At 1 February
2017, the merged bank's regulatory Tier 1 and total capital
adequacy ratios stood at 6.96% and 9.06%, respectively, only
marginally above the minimum regulatory requirements of 6% and
8%. This capital adequacy level seems particularly weak in the
context of a sizeable non-core asset holding acquired by Orient
Express Bank as part of its merger deal with Uniastrum Bank. The
non-core assets are mainly represented by plots of land and
comprise about one third of the merged bank's total equity. If
the market value of these non-core assets declines, this will
have a substantial negative effect on the bank's capital metrics.


The possibility of upgrade of Orient Express Bank's ratings in
the coming 12 months is low. However, over the longer-term,
positive rating pressure could materialize if the improving trend
in the bank's asset quality, profitability and capital adequacy
level is sustained.

Downward pressure might develop on Orient Express Bank's ratings
as a result of the merged bank's failure to maintain the recently
emerged improving trends in its asset quality and profitability.


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

Headquartered in Khabarovsk, Russia, Orient Express Bank
reported -- prior to its merger with Uniastrum Bank -- total
assets of RUB146 billion under unaudited IFRS financial
statements as of September 30, 2016. The bank's IFRS profits for
the nine months of 2016 stood at RUB2.1 billion.

Headquartered in Moscow, Russia, Uniastrum Bank reported -- prior
to its merger with Orient Express Bank -- total assets of RUB96
billion under unaudited IFRS financial statements as of 30
September 2016. The bank's IFRS profits for the nine months of
2016 stood at RUB974 million.


AYT KUTXA I: Fitch Corrects March 14 Rating Release
Fitch issued a commentary replacing the version published on
March 14, 2017, to clarify the rating rationale:

Fitch Ratings has downgraded AyT Kutxa Hipotecario I, FTA's
(Kutxa I) class C notes and affirmed the remaining notes. It has
also affirmed AyT Kutxa Hipotecario II, FTA (Kutxa II), as

Kutxa I
Class A (ES0370153001) affirmed at 'AA+sf'; Outlook Stable
Class B (ES0370153019) affirmed at 'Asf'; Outlook Stable
Class C (ES0370153027) downgraded to 'Bsf' from 'BBBsf'; Outlook

Kutxa II
Class A (ES0370154009) affirmed at 'Asf'; off Rating Watch
Negative (RWN); Outlook Stable
Class B (ES0370154017) affirmed at 'BBsf'; off RWN; Outlook
Class C (ES0370154025) affirmed at 'CCCsf'; revised Recovery
Estimate (RE) to 45% from 65%

The two RMBS transactions comprise Spanish residential mortgages
originated and serviced by Kutxabank, SA (BBB/Positive/F3).


Decreasing Excess Spread
The downgrade of Kutxa I's class C notes reflects the notes'
sensitivity to the decreasing excess spread trend which is
expected to continue in the medium to long term, combined with
stable credit enhancement (CE) that is insufficient to support
the credit and cash flow stresses. The transaction's gross excess
spread is mainly influenced by the interest rate hedging
agreement in place, under which the SPV receives Euribor plus a
margin of 50bps in return for receiving interest collected from
the borrowers.

Credit Enhancement Trends
We expect CE to remain stable for Kutxa I as pro-rata
amortisation is likely to continue. CE is 16.9%, 9.2% and 3.6%
for the class A, B and C, notes, respectively. On the other hand,
Fitch anticipates structural CE to continue increasing for Kutxa
II's senior notes, as Fitch expects the transaction to maintain
sequential paydown over the coming years, with the class A notes
benefiting from structural CE of 17.7% as of the last interest
payment date.

Dissimilar Performance
Cumulative gross defaults on Kutxa II's portfolio of 6.0% remain
above the average observed for Spanish RMBS of 5.6% of the
original balance, which contrasts with Kutxa I's gross cumulative
default ratio of just 0.6%. Fitch expects gross cumulative
defaults to remain stable for both transactions, as the current
arrears pipeline shows a downward trend, with arrears over 90
days ranging between 0.6% and 0.26% for Kutxa II and Kutxa I,

Restructured Loan Exposure
2.5% of the Kutxa I and 2.4% of Kutxa II portfolios have been
subject to maturity extensions. Fitch has increased the default
rate expectation attached to maturity extension loans to that
linked to late stage arrears, as the agency views these instances
as riskier than standard loans with no changes to their
respective original maturity. The agency has captured this
additional stress in its analysis and found the CE for Kutxa II's
class A and B notes is sufficient to mitigate the risk. This was
reflected in the notes' removal from RWN.

Commingling Exposure and Payment Interruption Risk
Fitch believes the transactions are exposed to commingling losses
of around 50% of the monthly collections in the event of a sudden
default of the collection account bank. This is based on
information provided by the servicer regarding borrower payment
distribution, which indicates payments are concentrated on a few
dates of every month. The agency has captured this additional
stress in its analysis.

The transactions do not have dedicated liquidity sources to
mitigate payment interruption risk in the event of servicer
disruption. Fitch views Kutxa I's available liquidity sources
(ie. reserve fund) sufficient to protection under a scenario of
stress. However, Fitch views Kutxa II's reserve as insufficient
considering it is at 54% of its target amount and could be
further depleted in scenarios of stress by default provisioning
needs. Therefore, Kutxa II's class A notes' rating is subject to
a 'A+sf' rating cap, five notches above the rating of the
collection account bank, 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.

The rating of Kutxa I's class A notes is sensitive to changes in
Spain's Country Ceiling of 'AA+' and consequently changes to the
highest achievable 'AA+sf' rating for Spanish structured finance

BANCO POPULAR: Moody's Affirms Ba1 LT & ST Deposit Ratings
Moody's Investors Service has affirmed Banco Popular Espanol,
S.A.'s long- and short-term deposit ratings at Ba1/Not-Prime and
its long- and short-term senior unsecured programme debt ratings
at (P)Ba2/(P)Not-Prime. Concurrently, Moody's has affirmed the
Ba2 long-term senior unsecured debt ratings of Banco Popular's
backed entities. Moody's has also changed the outlook on the
long-term deposit and backed debt ratings to negative from

The rating action follows the publication by Banco Popular of its
2016 results, witnessing slower progress towards its strategic
goals for 2016-2018 than anticipated by Moody's. Despite a
capital raise and increase in provisioning, the bank fell short
of its target to accelerate the disposal of problematic assets
and to significantly increase its problem loan coverage. In
Moody's opinion, Banco Popular is now under pressure to
accelerate the execution of its de-risking strategy, in the face
of ongoing significant challenges to asset quality and its risk
absorption capacity. The bank's new management is currently
reviewing the existing asset disposal plan and may redefine its
strategic targets, and seek alternative measures to enhance the
bank's risk profile.

The negative outlook on the long-term deposit and backed debt
ratings captures the near-term strategic challenges and pressures
on Banco Popular's credit profile and reflects the downward
rating pressure that could develop if the bank does not meet
Moody's expectation regarding further balance sheet deleveraging,
which could result in higher loss given failure and therefore
lower notches of rating uplift for these instruments under
Moody's Advanced Loss Given Failure (LGF) analysis.

All other ratings of Banco Popular and its supported entities
have also been affirmed. Banco Popular's Counterparty Risk
Assessment was also affirmed at Baa3(cr)/Prime-3(cr).



The affirmation of the b1 BCA and adjusted BCA reflects Banco
Popular's unchanged weak risk absorption capacity, measured as
the bank's non-performing assets (NPAs, defined as non-performing
loans and real estate assets) to balance-sheet cushions, as well
as the bank's ongoing significant asset quality challenges and
its deteriorated bottom-line profitability. The bank's BCA also
reflects Banco Popular's strong franchise in the profitable small
and medium-sized enterprises (SME) market and its adequate
liquidity and funding profile which is mainly composed of retail
deposits (66% of total funding at end-December 2016).

Since the announcement of the new strategic targets in mid-2016,
Banco Popular has made little progress in its NPAs reduction
plan. The bank's NPA ratio stood at a very high 32% at the end of
2016, up from 30% a year earlier and largely exceeded the system
average of around 16% (latest data available as of end-June
2016). Furthermore, when aggregating refinanced loans which are
not already captured in the NPA ratio, the overall ratio
increases to 36%, indicating the magnitude of the existing
balance-sheet pressures.

While Banco Popular targeted a NPA coverage ratio of 50% in 2016
(up from 38% a year earlier), the rise in NPAs as well as related
provisions raised the coverage ratio to only 45% (compared to
system average of 48% as of 1H 2016). The bank reported
provisions of EUR5.7 billion for 2016, more than three times
those booked in 2015, and ahead of its stated target of EUR4.7
billion. Despite this higher-than-expected provisioning effort,
Moody's notes that Banco Popular's risk absorption capacity,
measured as the ratio of the bank's NPAs to its balance sheet
cushions that include shareholders' equity and reserves, has
remained virtually unchanged at strained levels (133% at end-
December 2016).

Due to the magnitude of provisions booked in 2016, Banco Popular
reported a sizeable loss for the year of EUR3.5 billion, which
largely exceeded the EUR2.5 billion capital raised in the market
in 2016 and decreased the bank's capital ratios. Banco Popular
reported a phased-in Common Equity Tier 1 (CET1) ratio of 12.1%
and a total capital ratio (TCR) of 13.1% at the end of 2016, down
from 13.1% and 13.8% respectively a year earlier. Moody's
estimates that the bank has a buffer to regulatory thresholds of
424 basis points against the phased-in CET1 ratio, and 177 basis
points for TCR, equivalent to EUR2.7 billion and EUR1.1 billion

Having missed 2016 targets, Banco Popular is now under pressure
to accelerate the execution of its de-risking strategy. Moody's
acknowledges that the increase in Banco Popular's NPA coverage
levels is supportive of the bank's efforts to reduce NPAs,
although the rating agency notes that this coverage remains below
that of some domestic peers. As a result, Moody's believes that
it will still be challenging for Banco Popular to sell parts of
its NPA portfolios without potentially additional haircuts.


The affirmation of the long-term deposit and backed senior
unsecured debt ratings at Ba1 and Ba2 respectively reflect: (1)
the affirmation of the bank's b1 BCA and adjusted BCA; (2) the
result of the rating agency's Advanced Loss-Given Failure (LGF)
analysis, which results in an unchanged two notches of uplift for
the deposit ratings and one notch of uplift for the backed senior
debt ratings; and (3) Moody's assessment of moderate probability
of government support for Banco Popular, which results in an
unchanged further one notch of uplift for both the deposit and
the backed senior debt ratings.

The changes in Banco Popular's liability structure over the last
year have narrowed the balance-sheet cushion for deposits and
senior debt. These changes could exert downward pressure on the
ratings of these instruments if the size of the balance-sheet is
not reduced as expected, which would result in a higher loss
given failure for these instruments.


The negative outlook on the long-term deposit and backed debt
ratings reflects the negative pressure that could be exerted on
the bank's ratings if the bank fails to accelerate its de-risking
strategy, consequently reducing the level of NPAs in its balance
sheet and improving its risk absorption capacity.

Banco Popular's negative outlook also reflects the downward
pressure on the bank's ratings if it does not meet Moody's
expectation regarding its liability structure and balance sheet


As part of rating actions, Moody's has also affirmed at
Baa3(cr)/Prime-3(cr) the CR Assessment of Banco Popular, four
notches above the adjusted BCA of b1. The CR Assessment is driven
by the bank's b1 adjusted BCA, the cushion against default
provided to the senior obligations represented by the CR
Assessment by subordinated instruments amounting to 16% of
tangible banking assets and a moderate likelihood of systemic


An upgrade of Banco Popular's ratings is currently unlikely given
the negative outlook. However, the bank's BCA could be upgraded
as a consequence of: (1) a significant improvement of asset risk
indicators, namely a material reduction of the stock of
problematic assets, coupled with an enhanced risk-absorption
capacity; and (2) a sustained recovery of recurrent profitability

Downward pressure could be exerted on Banco Popular's BCA if (1)
the bank fails to improve its risk-absorption capacity due to
continued asset quality weakening and/or additional provisioning
efforts in excess of its organic and inorganic capital generation
capacity; and/or (2) the bank's liquidity profile deteriorates

Any change to the BCA would likely also affect debt and deposit
ratings, as they are linked to the BCA. The deposit and backed
senior unsecured ratings could also change as a result of changes
in the loss-given-failure faced by these securities. In
particular, the long-term deposit and backed debt ratings could
be downgraded if the bank does not reduce the size of its
balance-sheet as expected.

In addition, any changes to Moody's considerations of government
support could trigger downward pressure on the banks deposit and
debt ratings.


Issuer: Banco Popular Espanol, S.A.


-- Long-term Counterparty Risk Assessment, affirmed Baa3(cr)

-- Short-term Counterparty Risk Assessment, affirmed P-3(cr)

-- Long-term Deposit Ratings, affirmed Ba1, outlook changed to
    Negative from Positive

-- Short-term Deposit Ratings, affirmed NP

-- Senior Unsecured Medium-Term Note Program, affirmed (P)Ba2

-- Subordinate Regular Bond/Debenture, affirmed B2

-- Subordinate Medium-Term Note Program, affirmed (P)B2

-- Preferred Stock Non-cumulative, affirmed Caa1(hyb)

-- Other Short Term, affirmed (P)NP

-- Commercial Paper, affirmed NP

-- Adjusted Baseline Credit Assessment, affirmed b1

-- Baseline Credit Assessment, Affirmed b1

Outlook Action:

-- Outlook changed to Negative from Positive

Issuer: BPE Finance International Limited


-- Backed Senior Unsecured Regular Bond/Debenture, affirmed Ba2,
    outlook changed to Negative from Positive

Outlook Action:

-- Outlook changed to Negative from Positive

Issuer: BPE Financiaciones, S.A.


-- Backed Senior Unsecured Medium-Term Note Program,
    affirmed (P)Ba2

-- Backed Subordinate Medium-Term Note Program, affirmed (P)B2

-- Backed Senior Unsecured Regular Bond/Debenture, affirmed Ba2,
    outlook changed to Negative from Positive

-- Backed Subordinate Regular Bond/Debenture, affirmed B2

Outlook Action:

-- Outlook changed to Negative from Positive

Issuer: BPE Preference International Limited


-- Backed Preferred Stock Non-cumulative, affirmed Caa1(hyb)

Outlook Action:

-- No Outlook assigned

Issuer: Banco Pastor, S.A.


-- Backed Subordinate Regular Bond/Debenture, affirmed B2

-- Backed Junior Subordinated Regular Bond/Debenture, affirmed

Outlook Action:

-- No Outlook assigned

Issuer: Pastor Particip. Preferent., S.A. Unipersonal


-- Backed Preferred Stock Non-cumulative, affirmed Caa1(hyb)

Outlook Action:

-- No Outlook assigned

Issuer: Popular Capital, S.A.

-- Backed Preferred Stock Non-cumulative, affirmed Caa1(hyb)

Outlook Action:

-- No Outlook assigned


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

KUTXABANK SA: Moody's Affirms Ba1 LT Deposit & Sr. Debt Ratings
Moody's Investors Service has affirmed Kutxabank, S.A.'s long-
term deposit and senior debt ratings at Ba1 and changed the
outlook on these ratings to positive from stable. The rating
agency has also affirmed the bank's Baseline Credit Assessment
(BCA) and adjusted BCA at ba1 and its short-term deposit ratings
at Not-Prime. The Counterparty Risk Assessment was also affirmed
at Baa2(cr)/Prime-2(cr).

The rating action reflects the positive pressure that could
develop on Kutxabank's ratings if the improving trend observed on
the bank's credit fundamentals -- namely asset risk and capital -
- continues over the next 12-18 months.

A full list of affected ratings can be found at the end of this
press release.



The affirmation of Kutxabank's BCA at ba1 reflects the
progressive strengthening of the bank's fundamentals in recent
years, namely its asset risk and capital metrics, as well as the
resilience of its recurrent profitability metrics and a sound
liquidity profile.

Since 2013, Kutxabank has displayed a constant improvement in its
asset risk indicators, with its non-performing loan (NPL) ratio
declining to 6.8% at end-December 2016 versus a Moody's
calculated system average of 8.6%. Moody's notes positively that
the bank managed to reduce its NPL ratio by around 200 basis
points for the second consecutive year without executing any
portfolio disposals.

At the same time, Kutxabank benefits from strong capital buffers,
with a fully loaded Common Equity Tier 1 ratio of 14.8% and a
regulatory fully loaded leverage ratio of 8.0% as of end-December
2016, which stand among the strongest of European peers. Moody's
capital assessment for Kutxabank also incorporates a portion of
the reserve fund that its major shareholder (BBK Banking
Foundation, unrated) is constituting to abide with the Bank of
Spain's new regulation, and that is exclusively available to
support the bank if its solvency looked set to fall short of
regulatory thresholds.

Kutxabank's BCA also reflects its modest, albeit resilient,
profitability, with the net income over tangible assets standing
at 0.4% at end-December 2016. During 2016, Kutxabank was able to
maintain a stable profit generation capacity despite continued
pressures on operating income and one-off provisions related to
the court ruling that forced Spanish banks to remove interest
rate floor clauses they applied to mortgage loans. These
headwinds were offset by increased trading gains from government
bond sales and significantly lower loan loss provisions.

Kutxabank's ba1 BCA is underpinned by its sound liquidity
profile, with customer deposits representing a large 80% of total
funding at end-December 2016 and adequate liquidity buffers with
the liquidity coverage ratio (LCR) ratio standing at 156% as of
the same date.

The affirmation of Kutxabank's deposit and senior debt ratings at
Ba1 also reflects: (1) the affirmation of the bank's BCA and
adjusted BCA at ba1; (2) the result from the rating agency's
Advanced Loss-Given Failure (LGF) analysis, which remains
unchanged when incorporating the most recent data with no uplift
for the deposit and senior debt ratings; and (3) Moody's
assessment of a low probability of government support for
Kutxabank, which results in no uplift for the deposit and the
senior debt ratings.


The change of outlook on Kutxabank's long-term deposit and senior
debt ratings to positive from stable primarily reflects Moody's
expectations that Kutxabank will be able to maintain current
positive trends on its financial fundamentals. The rating agency
expects a further improvement of the bank's asset risk and
capital over the outlook period of 12-18 months, which combined
with resilient profit generation capacity could result in upward
pressure on Kutxabank's ratings. The good performance of the
Spanish economy, as well as the bank's strong focus on reducing
problematic assets and expectation of increased contribution of
fee and commission oriented businesses should continue to support
the bank's currently-observed positive credit trends.

In particular, a stronger assessment of Kutxabank's credit
profile could materialize if: (1) the NPL ratio declines below 6%
over the outlook period while the stock of foreclosed real estate
assets continues to gradually decline; (2) Moody's key capital
metric -- tangible common equity (TCE) to risk-weighted assets
ratio -- stands at around 13% (from 12.2% at end-December 2016);
and (3) profitability remains resilient and bottom line profits
continue to grow at the current pace.


As part of rating action, Moody's has also affirmed at
Baa2(cr)/Prime-2(cr), the CR Assessment of Kutxabank, two notches
above the adjusted BCA of ba1 and reflecting the cushion provided
by the volume of bail-in-able debt and deposits (8.5% of tangible
banking assets at end-December 2016), which would likely support
operating obligations in resolution.


Upward pressure on Kutxabank's BCA could arise from: (1) further
improvement of asset risk indicators, namely a material reduction
of the stock of problematic assets; (2) stronger TCE levels; and
(3) a sustained recovery of recurrent profitability levels, with
lower dependence on volatile revenue streams.

Kutxabank's deposit and senior debt ratings could also experience
upward pressure from movements in the loss-given-failure faced by
these securities. Along these lines, upward pressure on ratings
could develop only upon the issuance of sizable volumes of senior
or subordinated instruments.


Given the positive outlook, Kutxabank's ratings show limited
downward pressures. However, the bank's BCA could be downgraded
as a result of: (1) the reversal in current asset risk trends,
with a substantial increase in the stock of NPLs and/or other
problematic exposures; and (2) significant deterioration of
profitability levels, which would negatively affect Kutxabank's
internal capital-generation and risk-absorption capacity.

A downward movement in Kutxabank's BCA would likely result in
downgrades of all other rating classes. At the same time, based
on the current liability structure, there is certain downward
pressure on debt and deposit ratings in case of a reduction in
the volume of total deposits of approximately 10%. Moody's,
however, considers this scenario unlikely given the very stable
trends of the bank's retail funding.


Issuer: Kutxabank, S.A.


-- Long-term Counterparty Risk Assessment, affirmed Baa2(cr)

-- Short-term Counterparty Risk Assessment, affirmed P-2(cr)

-- Long-term Deposit Rating, affirmed Ba1, outlook changed to
    Positive from Stable

-- Short-term Deposit Rating, affirmed NP

-- Senior Unsecured Regular Bond/Debenture, affirmed Ba1,
    outlook changed to Positive from Stable

-- Senior Unsecured Medium-Term Note Program, affirmed (P)Ba1

-- Subordinate Medium-Term Note Program, affirmed (P)Ba2

-- Adjusted Baseline Credit Assessment, affirmed ba1

-- Baseline Credit Assessment, affirmed ba1

Outlook Action:

-- Outlook changed to Positive from Stable

Issuer: Caja Vital Finance B.V.


-- Backed Senior Unsecured Regular Bond/Debenture, affirmed Ba1,
    outlook changed to Positive from Stable

-- Backed Senior Unsecured Medium-Term Note Program, affirmed

Outlook Action:

-- Outlook changed to Positive from Stable


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


UNILABS MIDHOLDING: Moody's Affirms B3 CFR, Outlook Positive
Moody's Investors Service has affirmed the B3 corporate family
rating and the B3-PD probability of default rating (PDR) of
Unilabs Midholding AB, one of Europe's leading providers of
clinical laboratory testing and medical diagnostic imaging

The rating action follows Unilabs' announcement on 7 February
2017 that it plans to acquire Alpha Medical (unrated), one of the
leading clinical laboratory services network in the Czech
Republic and Slovakia for around EUR430 million. The company has
subsequently announced that it plans to extend and upsize its
senior secured credit facilities and refinance the PIK Toggle
senior notes with new senior unsecured instruments at closing of
the acquisition.

The affirmation of the CFR reflect the following drivers:

-- Moody's estimates that at closing of the acquisition and
    the concurrent refinancing of the senior PIK Toggle notes
    Unilabs' leverage is high at 6.4x, as measured by Moody's-
    adjusted debt/EBITDA (including a full year impact from new
    and lost contracts, estimates for cost initiatives, and
    adjustments for a number of exceptional items)

-- Moody's expects that Unilabs' leverage will trend towards
    6.2x within the next 12-18 months on the back of further
    cost efficiencies, market share gains and good volumes
    of tests

-- Moody's anticipates that the acquisition of Alpha Medical
    will further improve Unilabs' good geographic diversification
    and improve its margins

-- In Moody's view, the acquisition price for Alpha Medical is
    high, however, the sponsor will contribute EUR100 million as
    additional equity

The rating agency has concurrently affirmed the B2 ratings of the
EUR710 million senior secured term loan (to be extended and
upsized to EUR925 million) and the EUR125 million revolving
credit facility (to be extended and upsized to EUR175 million)
borrowed by Unilabs Diagnostics AB.

Moody's has also assigned a Caa2 rating to the EUR265 million
senior unsecured instruments to be issued by Unilabs Subholding

The Caa2 rating of the EUR125 million senior secured notes
(issued by Unilabs Midholding AB) remains unchanged - Moody's
expects to withdraw this rating at closing of the refinancing.

The rating outlook on all ratings is positive.


Unilabs' B3 CFR reflects: (1) the company's good geographical
diversification across different regulatory regimes, which limits
its exposure to adverse changes in one particular regime; (2)
leading positions in several of its key markets with good
underlying fundamental trends that support volumes of clinical
laboratory tests; (3) good execution track record in terms of
delivering cost efficiencies; and (4) good volumes expected in
the Nordics' imaging business.

Conversely, the CFR reflects (1) the company's high leverage of
around 6.4x at closing of the acquisition of Alpha Medical based
on the last twelve months ending 31 December 2016, as measured by
Moody's-adjusted debt/EBITDA; (2) Moody's expectation that
Unilabs will continue to acquire companies in the clinical
laboratory services industry, which may slow down deleveraging;
(3) remaining risk of potential tariff cuts in key markets, in
common with peers, which drives the need to grow externally to
achieve economies of scale.

Moody's expects that after the proposed additional debt Unilabs'
liquidity will be good, supported by (1) positive free cash flows
(before acquisitions) of around EUR30 million in 2017; (2)
sizable EUR175 million revolving credit facility (RCF); and (3)
cash of around EUR40 million. Nonetheless, Moody's expects that
Unilabs will likely use its free cash flows and additional debt
for acquisitions. Unilabs will continue to have one maintenance
covenant (net senior secured leverage) for the benefit of the RCF
lenders only; tested only when the RCF is drawn by more than 40%.
Moody's expects that Unilabs will have good headroom under this
covenant if it is tested.

The B2 ratings of the EUR710 million senior secured term loan (to
be upsized to EUR925 million at closing of the acquisition) and
the EUR125 million RCF (to be upsized to EUR175 million) are one
notch above the B3 CFR. This reflects the loss absorption cushion
to be provided by the EUR265 million senior unsecured instruments
rated Caa2. The B3-PD probability of default rating (PDR) is in
line with the B3 CFR reflecting Moody's 50% corporate family
recovery rate. The shareholder loans borrowed by Unilabs Holding
AB (one level above Unilabs Midholding AB) are outside of the
senior unsecured restricted group and therefore not included in
Moody's leverage calculations.


The positive outlook reflects Moody's expectation that Unilabs'
leverage, as measured by Moody's-adjusted debt/EBITDA, will trend
towards 6.2x over the next 12-18 months. The outlook does not
incorporate significant debt-financed acquisitions or shareholder


Positive rating pressure could develop if:

-- Unilabs' leverage, as measured by Moody's-adjusted
    debt/EBITDA, were to decrease to 6.0x, and

-- The company were to maintain good liquidity

Negative rating pressure could develop if:

-- Unilabs' leverage, as measured by Moody's-adjusted
    debt/EBITDA, were to go above 7.0x for a prolonged period; or

-- The company's cash flow or liquidity profile were to

The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.

Unilabs Midholding AB (Unilabs), headquartered in Geneva,
Switzerland, is a pan-European clinical laboratory services
(around 82% of revenue) and medical diagnostic imaging services
(17%) network. Unilabs' revenue was around EUR792 million for the
last twelve months to 31 December 2016 pro forma for the
acquisition of Alpha Medical. The company is majority owned by
private-equity funds managed and advised by Apax Partners.

U N I T E D   K I N G D O M

BRITISH AIRWAYS: Fitch Raises Long-Term IDR from BB+
Fitch Ratings has upgraded British Airways Plc's (BA) Long-Term
Issuer Default Rating (IDR) to 'BBB-' from 'BB+'. The Outlook is

The upgrade is supported by BA's strong credit metrics and
adherence to prudent financial policy including cost control. The
rating also reflects the company's extensively diversified route
network, strong hub position at Heathrow and strong position on
the cash flow-generative routes to the US. Fitch rates BA on a
standalone basis.


Financials Drive Rating Upgrade: The rating upgrade reflects
Fitch's expectation that the company will report a strong
financial performance over the medium term despite political and
economic uncertainty and the implementation of a disciplined
financial policy. Although Fitch has revised down Fitch EBITDA
forecasts for BA, Fitch expects it to be one of a very few EMEA
airlines generating positive free cash flow (FCF) over 2016-2020.
Fitch anticipates that funds from operations (FFO) gross adjusted
leverage will trend towards 2.5x and that the cash position will
remain high with FFO net adjusted leverage falling below 2x in

BA remains the key contributor to its parent International
Airlines Group's (IAG) cash flows. BA has the flexibility to pay
dividends up to 35% of its net income without incurring
additional pension payments. BA's adherence to prudent financial
policy and cost control is key to its standalone rating.

Brexit Vote Absorbed; Uncertainty Remains: Fitch believes that
the immediate impact of the UK Brexit referendum, which led to
lower corporate travel demand and significant sterling
depreciation, has already been absorbed by BA's credit metrics in
2016. Despite lower-than-expected EBIT in 2016, the company's
financial ratios remained strong. BA plans to address the
uncertain operating environment through more disciplined capacity
growth, capex moderation and an even stronger focus on cost
optimisation. The company's FX exposure is well balanced, which
along with active FX hedging limits the impact of the weak pound
on BA's financials. Its geographical diversity should also help
BA weather the uncertainty and cash-flow volatility following the
Brexit vote.

Heathrow as a Global Hub: BA's strong hub position at Heathrow is
key to its competitiveness and successful implementation of long-
haul strategy. Heathrow is the largest airport in Europe and the
sixth largest in the world in terms of passenger traffic in 2015.
It is also the largest European hub for transatlantic travel. BA
is the leading airline in its Heathrow hub with about 53% of
Heathrow slots. Although BA operates some flights from other
airports in London, its main hub is Heathrow, which is
underpinned by the airport's favourable location, good
transportation links to London and relatively large capacity
suitable for hubbing activities.

Diversified Network; North America Key: BA's strong business
profile is underpinned by: the scale and diversity of its route
network, with over 400 destinations worldwide (including joint
business agreements and code share agreements); its strong
presence on key profitable routes (primarily North America); and
the company's position as the third-largest European airline
based on revenue-passenger-kilometres.

One of BA's competitive advantages is its significant
transatlantic network, which is a key contributor to the
company's cash flow generation. BA is well placed to capitalise
on the UK's strong cultural and financial ties to the US to
withstand the competition in this lucrative market.

Cost Control in Focus: BA continues its rigorous cost management
and plans to implement Plan4 over 2016-2020, which aims at non-
fuel cost reduction during this period. Fitch expects the cost
control measures to become the driver of the company's
profitability in the short-to-medium term in the environment of
political and economic uncertainty. BA has been leading its
European peers on cost metrics and is comparable to US carriers.

Rating on a Standalone Basis: Fitch rates BA on a standalone
basis as Fitch assess the legal and operational ties between IAG
and BA as moderate. This reflects IAG's principle of the
standalone management of its operating entities. In BA's
financing, there are no cross-default provisions to other IAG-
owned entities. There are no cross-guarantees among the entities
in IAG, with independent debt management at subsidiary airlines.
In addition, BA has an independent board of directors.


BA's 'BBB-' rating is supported by its strong business and
financial profiles. BA's business profile compares well with
those of Delta Air Lines (BBB-/Stable), Alaska Air Group Inc.
(BBB-/Stable), Air France-KLM, Lufthansa and American Airlines
Group, Inc. (BB-/Stable) due to BA's extensively diversified
route network, strong hub position at Heathrow, strong position
on the cash flow-generative routes to the US, and rigorous cost
management. BA's financial profile is comparable to that of other
'BBB-' rated airlines due to BA's reduced leverage, strong
coverage metrics and expected positive FCF generation.


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

- Capacity expansion at an average 2% per annum over 2016-2020
- UK GDP growth of 1.8% in 2016, 1.5% in 2017 and 1.3%
- Dividend payout ratio of 35%
- Cash pension payment of GBP300m per year over 2016-2020
- Decline in yields in USD cents in 2016-2017 and relatively
   flat afterwards


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

- Sustained positive FCF generation
- FFO gross adjusted leverage below 2.5x and FFO net adjusted
   leverage below 1.5x on a sustained basis with FFO fixed charge
   cover comfortably above 5x
- Disciplined financial and dividend policy and adherence by IAG
   to the principle of the standalone financial management of its
   operating entities

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

- Intensive capex, generous dividend payments, drop in yields
   or traffic resulting in negative FCF through the cycle and
   a deterioration in credit metrics
- FFO gross adjusted leverage above 3x, FFO net adjusted
   leverage above 2.0x and FFO fixed charge cover below 5x on a
   sustained basis
- Tighter links with the IAG group (for example, cross-
   guarantees or fully integrated balance sheet)


BA has a strong liquidity position. Its cash position of GBP2.5bn
at end-2016 and committed undrawn credit lines of GBP2.0bn (as of
October 2016) are more than sufficient to cover the company's
maturities of GBP721m in 2017 and GBP632m in 2018. The credit
facilities are due in 2021-2022. The debt maturity profile is
well balanced. Assuming a 35% dividend payout ratio, Fitch
expects BA to generate positive FCF over 2016-2020.

EXCEL PUBLISHING: More Details on Administration Unveiled
Simon Austin at Prolific North reports that newly-released
documents have shown Buxton Press CEO Bernard Galloway paid
GBP150,000 for Excel Publishing's business and assets to bring
the firm out administration in January.

The purchase -- by Excel Media Solutions, a company Galloway owns
as sole director -- saved all 43 jobs at Excel Publishing,
Prolific North relates.

However, the total value of Excel Publishing's unsecured creditor
claims top GBP1 million, Prolific North notes.

Excel Publishing entered administration last December after being
hit by a significant reduction in advertising revenues in the
first half of 2016, with losses of GBP174,517 on a GBP1.2 million
turnover in the six months to the end of June, Prolific North
relays.  Losses had also been made in the previous two years,
Prolific North states.

A Time to Pay arrangement was agreed with HMRC but, when turnover
failed to meet forecasts, the company fell into arrears to HMRC
and various trade creditors, Prolific North recounts.

HIGHER EDUCATION: Fitch Affirms 'CCsf' Ratings on 2 Note Classes
Fitch Ratings has affirmed The Higher Education Securitised
Investment No.1 plc's (Thesis) notes, as follows:

GBP29.4m class A3 notes: affirmed at 'CCsf'; Recovery Estimate
(RE) 60%
GBP7.9m class A4 notes: affirmed at 'CCsf'; Recovery Estimate
(RE) 60%

Thesis is a securitisation of income contingent floating-rate
student loan receivables, originated in the UK by the government-
owned Student Loan Company Limited between 1991 and 2006. The
final legal maturity of the notes is in April 2028.

The affirmation reflects Fitch expectations that default of the
class A3 and A4 notes is probable due to the increasing principal
deficiency ledger (PDL), which is expected to continue and begin
writing against the rated notes.

Portfolio Deterioration
Defaulted loans (24+ months in arrears) have increased by GBP3.3m
over the 12 months prior to February 2017, further contributing
to a rise in the GBP62.7m PDL and reducing available credit
enhancement (CE) for the rated notes. The share of deferred loans
that are not in arrears is about 80% of the qualifying portfolio
and the reinstatement rate stands at around 5% of the deferred
portfolio, in line with Fitch's expectations.

Negative Excess Spread Probable
In Fitch's opinion, the transaction is in negative excess spread,
meaning that some principal collections are used to pay for
senior fees and interest due on the accrual facility and the
remaining notes. According to Fitch's calculations, excess spread
for February 2017 is minus 0.8% per year of the non-defaulted

Model Assumptions
Fitch uses its proprietary Granular Asset Loss Analyser model to
support its analysis of UK student loans such as those of Thesis.
Fitch expects an annualised default rate for loans in repayment
status in the 7% to 9% range, increasing to about 19% when
stressing the delinquent share of the portfolio and incorporating
the tail end risk. Fitch assumes a base recovery rate of 20% for
future defaults and a marginal rate for existing defaults. Fitch
applied a default multiple of 4x and a recoveries haircut of 40%,
both at the 'AAAsf' level. In addition, the portfolio of loans in
deferment status is assumed to exit deferment at an annual rate
of 5%, decreasing year on year.

As a result, Fitch determined the notes commensurate with a
rating below 'Bsf' category and therefore the agency applied its
Global Structure Finance Rating Criteria to derive the 'CCsf'


The impact of a change in the repayment status or
default/recovery rate would be unlikely to impact the ratings as
default now appears likely. Any change in the PDL and timing of
default would lead to rating action.

NEMUS II: S&P Lowers Ratings on Two Note Classes to D
S&P Global Ratings lowered its credit ratings on NEMUS II (Arden)
PLC's class B to F notes.

S&P's ratings address the timely payment of interest and the
ultimate payment of principal no later than the February 2020
legal final maturity date.  On the February 2017 interest payment
date (IPD), the class C to F notes experienced interest

In S&P's view, the transaction experienced interest shortfalls
because of spread compression between the loan and the notes
along with higher than typical issuer fees associated with one
time annual fees incurred this quarter.  With only two loans
remaining, the transaction has become more exposed to cash flow

Although the class B notes have not experienced interest
shortfalls, the risk has increased given the interest shortfalls
that have occurred to the junior classes of notes.  S&P has
therefore lowered to 'BB- (sf)' from 'BB+ (sf)' its rating on the
class B notes.

While the class C notes have experienced interest shortfalls,
they are likely to be repaid within 12 months, in S&P's view.
Consequently, S&P has lowered to 'B (sf)' from 'BB (sf)' its
rating on the class C notes.

S&P believes that there is at least a one-in-two likelihood that
the class D notes may experience another interest payment
default. S&P has therefore lowered to 'CCC (sf)' from 'B+ (sf)'
its rating on the class D notes, in line with its criteria for
assigning 'CCC' category ratings.

For the class E and F notes, the interest shortfalls represent a
failure to pay timely interest, which S&P believes is unlikely to
repay within 12 months.  S&P has therefore lowered to 'D (sf)'
from 'CCC- (sf)' its ratings on these classes of notes, in line
with S&P's criteria.

S&P has not taken any rating actions on the class A notes as this
class is likely to repay on the May 2017 IPD according to the
servicer report.

NEMUS II (Arden) is a U.K. multi-loan commercial mortgage-backed
securities (CMBS) transaction that closed in December 2006.  It
was originally backed by six loans and secured by 22 properties.
Four loans have since fully repaid.


GBP260.87 mil commercial mortgage-backed floating-rate notes

Class            Identifier              To             From
B                XS0278300560            BB- (sf)       BB+ (sf)
C                XS0278300727            B (sf)         BB (sf)
D                XS0278301295            CCC (sf)       B+ (sf)
E                XS0278301378            D (sf)         CCC- (sf)
F                XS0278301535            D (sf)         CCC- (sf)

PREMIER OIL: Lenders Agree to Debt Refinancing Terms
Nicholas Megaw at The Financial Times reports that Premier Oil
confirmed it has cleared a further hurdle to completing its
long-awaited debt refinancing.

Premier Oil, one of the largest independent oil producers in the
North Sea, had been in talks with lenders for nearly a year to
renegotiate its debt pile, which stood at US$2.8 billion at the
end of last year, the FT relays.

The company announced detailed terms of a deal last month but was
still waiting for a final private lender to commit to voting in
favor of the refinancing; on March 15 it confirmed that lender
had signed up to the terms, the FT discloses.

Premier, the FT says, is aiming to complete its refinancing by
the end of May, though shares in the group have remained volatile
as nerves over the agreement persist.

As reported by the Troubled Company Reporter-Europe on March 8,
2017, the FT related that the company was hit hard by the slump
in oil prices two and half years ago, reporting losses for 2014
and 2015, although it recorded a pre-tax profit of US$110 million
for the first half of last year.

Premier Oil is a London-based oil and gas explorer.

PRESSUREFAB: Went Into Administration Owing More Than GBP400,000
Scott Wright at Herald Scot reports that Pressurefab, the Dundee-
based offshore container manufacturer which last year became a
high-profile victim of the oil and gas downturn, went into
administration owing more than GBP400,000 to the invoice finance
arm of Lloyds Banking Group.

A new filing at Companies House shows Lloyds Bank Commercial
Finance was due GBP427,000 at the time joint administrators Tony
Friar and Blair Nimmo of KPMG were appointed last July, according
to Herald Scot.

The report notes the administrators, who have incurred time costs
of nearly GBP161,000 since their appointment, state they do not
expect LBCF to recover the debt in full.

In their progress report for the period July 18 to January 27,
the administrators state: "LBCF were owed approximately
GBP427,000 by the Company, with trade debtor invoices totalling
GBP327,000 having been assigned to LBCF.  It is expected that
LBCF will not recover its debt from the assigned debt books.  We
do not expect that LBCF will receive a recovery from either of
the companies which provided a cross guarantee. Interest and
costs continue to accrue on LBCF's debt," the report notes.

The report relays that PressureFab was built by the award-winning
entrepreneur Hermann Twickler into a GBP6 million turnover
business with 90 staff since he formed it with his own cash in

But the German-born businessman was forced to call in the
administrators after a sharp fall in revenues and insurmountable
cash flow difficulties last July, the report discloses.  Forty
engineering staff were immediately made redundant at the company,
which designed and manufactured specialist rig topside and subsea
equipment at its 250,000 square foot based on the A90, the report

"LBCF are continuing to pursue the outstanding balances on the
ledger, with our assistance where appropriate," the
administrators said.  "We do not anticipate that LBCF will
recover their indebtedness in full, and as such, there will be no
surplus available from the secured debtor balances for the
creditors," they added.

The report notes the administrators say they have incurred time
costs of GBP161,607.75 since their appointment.  They estimate
that their time costs will increase, but signal in their report
that "it is still our intention to draw fees in the region of
GBP144,907.50, in line with the estimated [sic] contained in our
original proposals," the report notes.

The administration is due to end on July 27, but Mr. Nimmo and
Mr. Friar anticipate seeking the period to be extended, the
report relays.

WELLGRAIN LTD: Enters Administration Owing Up to GBP15 Million
John Elworthy at Cambstimes reports that rumors that Wellgrain
were in trouble have been circulating on social media for some
weeks but it was Farmers Weekly that broke news of the

Cambstimes, citing Farmers Weekly, notes that they are reporting
that the National Farmers Union (NFU) is in contact with the
administrator Grant Thornton and has promised to keep its members
informed about how matters will proceed from here.

The report discloses that NFU acting senior legal adviser Lucy
Ralph told the farmers' magazine said: "The news that WellGrain
Limited has entered administration is extremely worrying,
particularly for those NFU members who are owed money by the

"We are working to provide guidance to those NFU members who are
affected by the administration. They are encouraged to contact
NFU Callfirst on 0370 845 8458 as soon as possible."

Matthew Richards and Daniel Smith of Grant Thornton were
appointed administrators to the company at the request of its

The report discloses that Wellgrain had its main office at
Alexander House, Ely, and only three of the 31 staff are being
temporarily retained by the administrators.

The report relays accounts from 2015 show it had a turnover of
GBP86 million with profit before tax of GBP215,000 and net assets
of nearly GBP3 million.


* BOOK REVIEW: The Money Wars
Author: Roy C. Smith
Publisher: Beard Books
Softcover: 370 pages
List Price: $34.95
Review by David Henderson
Get your own personal today at

Business is war by civilized means. It won't get you a tailhook
landing on an n aircraft carrier docked in San Diego, but the
spoils of war can be glorious to behold.

Most executives do not approach business this way. They are
content to nudge along their behemoths, cash their options, and
pillage their workers. This author calls those managers "inertia
ridden." He quotes Carl Icahn describing their companies as run
by "gross and widespread incompetent management."

In cycles though, the U.S. economy generates a few business
warriors with the drive, or hubris, to treat the market as a
battlefield. The 1980s saw the last great spectacle of business
titans clashing. (The '90s, by contrast, was an era of the
investment banks waging war on the gullible.) The Money Wars is
the story of the last great buyout boom. Between 1982 and 1988,
more than ten thousand transactions were completed within the
U.S. alone, aggregating more than $1 trillion of capitalization.
Roy Smith has written a breezy read, traversing the reader
through an important piece of U.S. history, not just business
history. Two thirds of the way through the book, after covering
early twentieth century business history, the growth of financial
engineering after WWII, the conglomerate era, the RJR-Nabisco
story, and the financial machinations of KKR, we finally meet the
star of the show, Michael Milken. The picture painted by the
author leads the reader to observe that, every now and then, an
individual comes along at the right time and place in history who
knows exactly where he or she is in that history, and leaves a
world-historical footprint as a result. Whatever one may think of
Milken's ethics or his priorities, the reader will conclude that
he is the greatest financial genius this country has produced
since J.P. Morgan.

No high-flying financial era has ever happened in this country
without the frothy market attracting common criminals, or in some
cases making criminals out of weak, but previously honest men
(and it always seems to be men). Something there is about
testosterone and money. With so many deals being done, insider
trading was inevitable. Was Michael Milken guilty of insider
trading? Probably, but in all likelihood, everybody who attended
his lavish parties, called "Predators' Balls," shared the same

Why did the Justice Department go after Milken and his firm,
Drexel Burnham Lambert with such raw enthusiasm? That history has
not yet been written, but Drexel had created a lot of envy and
enemies on the Street.

When a better history of the period is written, it will be a
study in the confluence of forces that made Michael Milken's
genius possible: the sclerotic management of irrational
conglomerates, a ready market for the junk bonds Milken was
selling, and a few malcontent capitalist like Carl Icahn and Ted
Turner, who were ready and able to wage their own financial

This book is a must read for any student of business who did not
live through any of these fascination financial eras.

Roy C. Smith is a professor of entrepreneurship, finance and
international business at NYU, and teaches on the faculty there
of the Stern School of Business. Prior to 1987, he was a partner
at Goldman Sachs. He received a B.S. from the Naval Academy in
1960 and an M.B.A. from Harvard in 1966.


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

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

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


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

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

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

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

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

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

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