TCREUR_Public/170425.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, April 25, 2017, Vol. 18, No. 81



CYPRUS: Fitch Affirms BB- Long-Term IDRs, Outlook Positive


SENVION SA: Moody's Assigns B1 CFR, Outlook Positive
TELE COLUMBUS: Fitch Assigns 'B' Long-Term Issuer Default Rating
ZF FRIEDRICHSHAFEN: S&P Affirms BB+ CCR & Revises Outlook to Pos.


GREECE: Creditors Set to Restart Bailout Talks Today


ARBOUR CLO II: Moody's Assigns (P)B2 Rating to Cl. F-R Sr. Notes
CELF LOAN III: Moody's Hikes Rating on Class E Notes to Ba3
HARVEST CLO VII: Fitch Corrects April 12 Rating Release
RYE HARBOUR: Fitch Assigns 'B-sf' Rating to Class F-R Notes


DECO 14: Moody's Affirms C(sf) Rating on Class D Notes
SEA TRUCKS: Creditors Propose Liquidation After Funds Blocked


NOVO BANCO: DBRS Places CCC (high) Debt Ratings Under Review


AUTOBANN: Moody's Rates Proposed RUB3BB Sr. Unsecured Bonds B1
AGROPROMCREDIT LLC: Moody's Affirms B2 Long-Term Deposit Ratings
KEMEROVO REGION: Fitch Affirms BB- Long-Term IDR, Outlook Stable
KHAKASSIA REPUBLIC: Fitch Cuts LT IDRs to B+, Outlook Stable
MAGADAN OBLAST: S&P Revises Outlook to Stable & Affirms 'B+' ICR

MARI EL REPUBLIC: Fitch Affirms BB IDRs, Outlook Stable
UDMURTIA REPUBLIC: Fitch Cuts LT IDRs to B+, Outlook Stable


T-2: Constitutional Court Annuls Receivership


BANCO POPULAR: Moody's Cuts LT Sr. Unsecured Debt Ratings to B1


TURKIYE IS BANKASI: Moody's Assigns (P) Baa1 Rating to Euro-Bonds


FINBANK ODESA: Placed in Temporary Administration
PRIVATBANK: Needs at Least UAH30BB in Additional Capitalization

* UKRAINE: Arrears of Insolvent Banks on Refinancing Loans Down

U N I T E D   K I N G D O M

ASSETCO: Grant Thornton Faces GBP3.5MM Fine Over Audit
BLUEHAT GROUP: Placed in Liquidation Due to Mismanagement
DIAMONDCORP PLC: At Risk of Going Into Administration
ENTERPRISE THE BUSINESS: Directors Banned for Flouting Rules
GLEESON BESSENT: High Court Winds Up Pension Trustee Companies

MAD CATZ: Europe Unit Placed in Administration
MOTO FINANCE: Fitch Assigns B+ Rating to GBP150MM 2nd Lien Notes
OLIVER ADAMS: Placed Into Voluntary Liquidation
PULSE FLEXIBLE: Falls Into Administration, 350 Jobs at Risk
Q HEALTHCARE: Dentist Disqualified as a Director for 7 Years



CYPRUS: Fitch Affirms BB- Long-Term IDRs, Outlook Positive
Fitch Ratings has affirmed Cyprus's Long-Term Foreign- and Local-
Currency Issuer Default Ratings (IDRs) at 'BB-'. The Outlooks are
Positive. The issue ratings on Cyprus's senior unsecured bonds
have also been affirmed at 'BB-'. The Country Ceiling has been
affirmed at 'BBB-' and the Short-Term Foreign- and Local-Currency
IDRs and issues at 'B'.


The economic recovery, now in its third year following the 2013
banking crisis and ensuing bail-out programme, is supportive of
the ongoing financial sector, fiscal, and economic adjustment.
GDP grew by 2.8% in 2016, up from 1.7% in 2015, and led by strong
domestic demand across sectors. Tourism enjoyed record growth,
with a near 20% increase in arrivals. Fitch projects GDP growth
of 2.7% in 2017 and 2.5% in 2018, aided by the labour market
recovery and a strong pipeline of investments.

A number of factors continue to weigh heavily on Cyprus's credit
profile. The banking sector's exceptionally weak asset quality
poses a significant downside risk to the recovery. Very high
gross general government debt (GGGD), at 107.8% of GDP in 2016
relative to the 'BB' median of 46%, and net external debt (NXD)
at over 150% of GDP (estimate as of 3Q16) relative to the 'BB'
median of 18%, limit the private and public sectors' abilities to
finance economic activity and deal with external or domestic
shocks, and imply that there may be the prospect of further
economic rebalancing over the medium term.

The banking sector is benefiting from improved macro conditions,
as evidenced by higher liquidity, with deposits up 6% in February
versus a year earlier. The Bank of Cyprus, placed into resolution
in 2013 and recapitalised partly through a bail-in of depositors,
fully repaid its remaining ECB emergency liquidity assistance
balance in January. Overall sector deleveraging is ongoing, with
assets down to 3.8x GDP in 2016 from almost 6x in 2009.

The ratio of non-performing exposures (NPEs) to total loans was
46.2% at end-2016, still the highest of Fitch-rated sovereigns,
and up from 45.3% a year earlier. Measuring the stock of NPEs
(excluding the shrinking loan book) shows a EUR3 billion or 11%
decline from 2015. A narrower measurement of NPEs (90-day past
due) shows a decline in the ratio, to 33.9% in 2016 from 35.8% a
year earlier. Unreserved problem loans, represented by gross NPEs
minus system-wide provisions also improved, albeit from an
extremely elevated level, to EUR14 billion from EUR16 billion
(79% of GDP from 93% a year earlier).

Banks' efforts to manage their loan books have accelerated since
the new foreclosure framework was introduced in 2015, as
reflected in a higher number of restructurings. Early feedback on
the restructuring process has been uneven across banks; with the
overall current re-default rate estimate of 28% indicating some
initial progress towards resolution of NPEs. However, this
remains tentative and highly reliant on a macroeconomic and
property market recovery. The property sector is illiquid, but
indicators point to a stabilisation in prices and pickup in
activity (sales contracts up 38% and building permits up 18% in
2016 versus 2015).

The budget recorded a surplus of 0.4% of GDP in 2016 compared
with a deficit of 0.1% a year earlier (excluding the bank recap).
GGGD-to-GDP ended the year at 107.8%, reflecting the accumulation
of cash reserves. Fitch expects the cyclical recovery to support
small fiscal surpluses of 0.1% of GDP in 2017 and 0.4% in 2018,
leading to a decline in GGGD-to-GDP to around 100% by 2018. Risks
to the fiscal outlook are tilted to the downside, as presidential
elections and the expiry of wage settlements in 2018 could lead
to fiscal relaxation. The financing outlook is comfortable, with
cash buffers covering needs until 1Q18.

The current account deficit widened to 5.3% of GDP in 2016, from
2.9% a year earlier. The result is distorted by the inclusion of
special purpose entity flows (NPEs, mainly non-resident shipping
industry), and authorities estimate that excluding these
entities, the current account would have recorded a deficit of
around 0.5% of GDP, narrowing from 1.5% in 2015. For 2017 and
2018, Fitch projects the deficit (including NPEs) to remain
elevated at around 5% of GDP, reflecting growth of consumption-
led imports and a modest recovery in oil prices.

Estimated at over 150% of GDP as of 3Q16, NXD reflects the highly
indebted private and public sectors. Also, the NXD figure was
revised up substantially following the shift of external
statistics compilation to the BPM6 framework in June 2014, owing
to the inclusion of capital-intensive ship-owners as Cypriot
economic units irrespective of the location of their activities.

Negotiations for a deal between Greek and Turkish Cypriots to
reunify the island have resumed in April following a two month
halt. The likelihood of success, terms and economics of a
potential Cyprus reunification remain uncertain. A reunification
would benefit both sides in the long term by boosting the
economy, but would entail short-term costs and uncertainties.

Focus on reaching an agreement, the economic recovery, and exit
from bailout programme could have reduced the urgency and
diverted political capital away from structural reform
implementation, where progress has been slow; and in some areas
has stalled, including the privatisation of the telecom operator
and the public administration wage reform package. Presidential
elections could further delay progress in politically sensitive

Cyprus's rating is supported by a high level of GDP per capita, a
skilled labour force, and strong governance indicators relative
to 'BB' peers.


Fitch's proprietary SRM assigns a score equivalent to a rating of
'BBB+' on the Long-Term FC IDR scale.

In accordance with its rating criteria, Fitch's sovereign rating
committee decided to adjust the rating indicated by the SRM by
more than the usual maximum range of +/-3 notches because of
Cyprus's experience of financial crisis.

Consequently, the overall adjustment of five notches reflects the

- Public Finances: -1 notch, to reflect very high government
debt levels. The SRM is estimated on the basis of a linear
approach to government debt/GDP and does not fully capture the
higher risk at higher debt levels.

- External Finances: -2 notches, to reflect Cyprus's
vulnerability to external shocks as a small open economy, its
high net external debt relative to peers (not captured in the
model), and the fact that benefits of euro reserve currency
(included in the model) as part of the eurozone were not fully
passed on to Cyprus as evident in its loss of market access
during the crisis.

- Structural Features: -2 notches, to reflect the risks posed by
the large and weak banking sector on public finances (as a
potential contingent liability), the economic recovery, and macro

Fitch's SRM is the agency's proprietary multiple regression
rating model that employs 18 variables based on three year
centred averages, including one year of forecasts, to produce a
score equivalent to a LT FC IDR. Fitch's QO is a forward-looking
qualitative framework designed to allow for adjustment to the SRM
output to assign the final rating, reflecting factors within
Fitch criteria that are not fully quantifiable and/or not fully
reflected in the SRM.


Future developments that may, individually or collectively, lead
to an upgrade include:

- Marked improvement in overall asset quality of the banking
- Further track record of economic recovery and reduction in
   private sector indebtedness
- Decline in the government debt to GDP ratio
- Narrowing of the current account deficit and reduction in
   external indebtedness
- A sustained track record of capital market access at
   affordable rates

The Outlook is Positive. Consequently, Fitch does not currently
anticipate developments with a high likelihood of leading to a
downgrade. However, future developments that may, individually or
collectively, lead to negative rating action include:

- Failure to improve asset quality in the banking sector
- Deterioration of budget balances or materialisation of
   contingent liabilities resulting in a stalling in the decline
   in government debt to GDP
- A return to recession
- A loss of capital market access.

In its debt sensitivity analysis, Fitch assumes a primary surplus
averaging 2.1% of GDP, trend real GDP growth averaging 2%, an
average effective interest rate of 3.3% and GDP deflator
inflation of 1.7%. On the basis of these assumptions, the debt-
to-GDP ratio would have peaked at almost 108% in 2016, and will
edge down to around 85% by 2025.

Gross debt-reducing operations such as future privatisations are
not considered in Fitch's debt dynamics. Fitch projections also
do not include the impact on growth of potential future gas
reserves off the southern shores of Cyprus, the benefits from
which are several years into the future, although now less


SENVION SA: Moody's Assigns B1 CFR, Outlook Positive
Moody's Investors Service assigned a B1 corporate family rating
(CFR) and a B1-PD probability of default rating (PDR) to Senvion
S.A., the holding company of the Senvion group (Senvion). The
outlook on Senvion S.A is positive. At the same time Moody's
affirmed the B2 rating of the EUR400 million senior secured notes
issued by Senvion Holding GmbH and guaranteed, among others, by
Senvion TopCo GmbH. The outlook on the ratings of Senvion Holding
GmbH remains positive. The B1 CFR, B1-PD PDR and positive outlook
assigned to Senvion TopCo GmbH have been withdrawn. Please refer
to the Moody's Investors Service's Policy for Withdrawal of
Credit Ratings, available on its website,


"Moody's decision to keep Senvion's ratings at the current level
and to keep the outlook at positive reflects the fact that
Moody's continues to expect a strengthening of credit quality
supported by a shift of business to new and higher-growth markets
and restructuring measures initiated to reduce costs, so that an
upgrade may be considered in the next 12-18 months", said Oliver
Giani, Moody's lead analyst for Senvion. "While Moody's
understand that 2017 will be a transitional year to effect the
re-focusing of the group's operations, Moody's take comfort from
Senvion's existing orderbook which provides for good revenue
visibility, recent success in winning orders in new territories
as well as generally positive industry fundamentals that should
support global demand for wind turbines. This should allow
improving credit quality beyond 2017", he added. Given the change
of the reporting entity in the course of the stock market listing
in March 2016 the CFR has been moved to Senvion S.A.

In 2016 Senvion's profitability was materially impacted by a
provision of EUR55 million booked to cover a blade issue the
company encountered in its offshore activities, which follows a
total of EUR96 million trailing edge provision built since 2013
in this respect. While Moody's in its analytical assessment
decided not to adjust profitability for this provisioning the
rating agency acknowledges that absent of this Senvion would have
met the triggers set for an upgrade which clearly shows the
strong positioning of the rating within the B1 rating category.

The windturbine industry is currently facing a material change in
demand, with a decline in gigawatt installed per year in the
traditional markets expected to be more than compensated by
growing demand in other markets such as Eastern European
countries, Latin America and India. Senvion has shifted its focus
to these growing markets and its current order book shows an
increasing share of business generated in the targeted regions.
While Moody's believes that Senvion's strategy should support its
long-term competitiveness, building a track record of profitable
growth in new territories is a requirement for a higher rating.

In addition, the operational framework is currently changing in
many countries moving away from feed-in tariffs seen from the
early days of the industry to auction based bidding processes. In
response to the resulting strong pricing pressure Senvion
announced a material restructuring program in March which targets
efficiency improvements and representing a net reduction of
approximately 15% of its total workforce. Although the expected
cost of this program has not been disclosed, Moody's expects that
in 2017 Senvion's profitability will stay below the 5% EBITA
margin level expected for a higher rating. Also, restructuring
costs combined with payouts related to the replacement of a
particular set of blades will in Moody's base case result in
negative free cash flow generation in at least 2017.

Senvion's CFR of B1 primarily reflects its (1) structurally low
profitability with low-to-mid-single-digit Moody's-adjusted EBITA
margins, which, while broadly in line with other wind turbine
generator (WTG) manufacturers, is below the vast majority of many
other manufacturing companies; (2) limited product and end
industry diversification; and (3) geographical concentration
risk, with three key markets (i.e., Germany, France and UK)
representing almost 60% of the group's annual capacity
installation in 2016; and (4) still very short track record of
conservative financial policies aimed at deleveraging.

Senvion's B1 CFR is supported by its (1) size and market
leadership positions, ranking number six worldwide and typically
number two to three in its key markets; (2) historically
relatively stable and resilient profitability compared to some
other WTG competitors as well as some other similarly rated
manufacturing companies, owing to low vertical integration with a
very high share of component outsourcing leading to a fairly
variable cost base and an increasing share of highly profitable
and fairly stable and predictable service business (roughly 12.5%
of revenues); (3) healthy order book with roughly 1.3 years of
sales (excluding service backlog) as of December 2016, providing
good revenue visibility in the short-term.

The positive outlook reflects an increasing likelihood that in
the next 12-18 months Senvion will be able to further grow its
orderbook in new territories that allows the group to return to
topline growth after 2017, allowing it to sustainably generate a
Moody's-adjusted EBITA margin above 5% and to reduce its Moody's-
adjusted leverage to or below 3.0x debt/EBITDA.


Upward pressure on the rating could arise if Senvion were to
demonstrate its ability to (1) sustainably generate an Moody's-
adjusted EBITA margin above 5%; (2) further build on its track
record of meaningful positive free cash flow generation; (3)
reduce its Moody's-adjusted leverage to or below 3.0x
debt/EBITDA; and (4) further diversify the group in terms of end

Moody's could downgrade Senvion in case (1) Moody's-adjusted
EBITA margin were to remain sustainably well below 5%, indicating
that the company is unable to withstand competitive pressure in
the market; (2) free cash flow turned negative for a prolonged
period; (3) of indications that Moody's-adjusted leverage will
remain sustainably above 4.0x; or (4) liquidity profile


The B2 rating on the EUR400 million senior secured bond, which is
one notch below the CFR, principally reflects the bond's
subordinated position in the loss given default waterfall with
regards to the super senior secured syndicated facility (unrated)
in a default scenario, even though the facility and the bond
share the same guarantor and collateral package. The facility is
large enough (i.e., EUR125 million revolving credit facility and
EUR825 million letter of guarantees facility) to justify the
notching of the senior secured bond below the CFR. The EUR825
million letter of guarantees facility, although not a cash
credit, also enjoys super seniority status versus the notes.

The principal methodology used in these ratings was Global
Manufacturing Companies published in July 2014.

Senvion S.A., is a publicly quoted entity holding 100% of share
capital at Senvion TopCo GmbH. Senvion TopCo GmbH is the holding
company of the Senvion group at the top of the restricted group.
Headquartered in Hamburg, Germany, Senvion is one of the leading
manufacturers of wind turbine generators (WTG). The group
develops, manufactures, assembles and installs WTGs with rated
outputs ranging from 2 MW to 6.2 MW, covering all wind classes in
both onshore and offshore markets. The group does not engage in
project development or wind farm ownership. Senvion employs a
workforce of more than 4,500 worldwide and generated revenues of
more than EUR2.2 billion in 2016, with cumulative installed
capacity worldwide of approximately 15.5 GW. In March 2016,
private equity firm Centerbridge Partners sold around 26.4% stake
in Senvion S.A to private investors in an IPO.

TELE COLUMBUS: Fitch Assigns 'B' Long-Term Issuer Default Rating
Fitch Ratings has assigned Tele Columbus AG a Long-Term IDR of
'B' with a Positive Outlook. Fitch also assigned a
'BB-'/'RR2'rating to Tele Columbus's senior secured debt

Tele Columbus is the third-largest cable provider in Germany
after Kabel Deutschland (a subsidiary of Vodafone) and Unitymedia
(B+/Stable; a subsidiary of Liberty Global), with around 3.6
million connected homes.

The Outlook is Positive as Fitch expects the company to continue
improving EBITDA and free cash flow generation due to wider take-
up of additional services. This gives Tele Columbus strong
deleveraging flexibility from the high estimated 5.4x funds from
operations (FFO) adjusted net leverage at end-2016. However,
deleveraging may be slowed by introduction of dividend payments
in the medium term, in Fitch views.


Strong Regional Market Shares
We expect Tele Columbus to maintain strong regional market
shares, shielded by limited overlap with other cable companies in
its key operating territories. The company holds above 50% cable
market shares in the regions where 2.4 million of its 3.6 million
connected homes are located.

Rational Competition
Peer cable competition is rational and primarily based on legacy
cable infrastructure, with limited appetite for opportunistic new
development. Cable operators typically have exclusive access to
their client housing associations (HAs), with only incumbent
Deutsche Telekom (BBB+/Stable) able to offer a full range of
competing premium services such as broadband connection, premium
TV and mobile service on own broadband infrastructure. Fitch
believes content is unlikely to become a key competitive driver
as there is abundant quality content on free-to-air TV channels.

Long-Term Contract Relationships
Tele Columbus benefits from long-term contracts with HAs, which
ensures stability of its core revenues, protects against
excessive competition with other cable companies and helps reduce
churn. About 95% of its subscribers live in homes that are part
of HAs. Bulk contracts with these HAs for basic TV service have a
typical duration of eight to 10 years.

A relationship with the HA is likely maintained for a long time
once it has been established. A switch to a new cable operator
would require new equipment installation and/or network rewiring,
which HAs are generally keen to avoid.

Focused Strategy Reduces Execution Risks
The company's strategy is to focus on upselling additional
services to its existing connected homes taking its basic TV
service, rather than expanding into new areas. This shields it
from execution risks associated with entering new areas without
established relationships. Therefore, most of its capex is
success-driven, as network upgrades are typically only started
after reaching an agreement with HAs.

Positive Growth Outlook
Relatively low revenue generating units (RGUs) per customer of
1.6x and a high 51% of existing customers on slow (below 30
MB/sec) broadband connections at end-3Q16 suggests that take-up
of additional services will continue to increase. The company
guided for mid-single-digit percentage yoy revenue and roughly
10% yoy normalised EBITDA growth in 2017.

Fitch expects low-single-digit revenue and EBITDA growth in the
medium term. The core regions of operations are in eastern
Germany, which has lower broadband penetration than western
Germany, resulting in a stronger growth outlook.

Integration Synergies Help EBITDA Generation
Fitch expects the enlarged Tele Columbus to achieve substantial
integration synergies following the merger of Tele Columbus,
Primacom and Pepcom in 2015. The company is targeting EUR40
million of synergies (both opex and capex) on a run-rate basis by
end-2018, with moderate restructuring costs equal to around one
time of the run-rate spread across the integration period.

Strong Deleveraging Profile
Fitch expects Tele Columbus to keep reducing its leverage, driven
by growing EBITDA and improving free cash flow (FCF) generation
resulting from modest capex declines. Fitch projects FFO adjusted
net leverage to decline to about 5x by end-2017 from the 5.4x
estimated at end-2016, and to go to below 5x in 2018.

Deleveraging may be slowed but is unlikely to be reversed by the
introduction of dividend payments in the medium term. The
company's debt covenants are consistent with moderate dividend
distributions following the refinancing in March 2017.

Moderate Acquisition Risks
Fitch views Tele Columbus's acquisition risks as moderate. Its
strategy is to participate in further cable consolidation, but
there are no large companies in the market, limiting potential
M&A risks. Fitch expects the company to take a prudent approach
to further acquisitions.

Robust Expected Recoveries
Fitch rates the company's debt instruments at 'BB-', two notches
above the IDR, due to strong, above 70%, expected recoveries.


Tele Columbus has a significantly smaller operational scale than
its closest domestic peer Unitymedia, the second-largest cable
company in Germany. Unitymedia has similar leverage but its
rating benefits from better infrastructure, a larger footprint
and sustainably strong FCF.

Liberty Global's cable subsidiaries Virgin Media, VodafoneZiggo
and UPC Holding are rated 'BB-' due to lower leverage, solid
financial profiles and stronger market positions. Cable companies
typically have looser leverage thresholds than mobile and fixed-
line operators due to the more sustainable nature of their
business and stronger FCF.

Strong Liquidity
Tele Columbus does not face any significant refinancing exposure
before 2025. Liquidity is strong, with EUR55 million cash at end-
2016, and an untapped EUR75 million capex facility and a EUR50
million revolving facility, both maturing in 2020.


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

- Stable homes connected at around 3.6 million in 2017-2020
- Low-single-digit percentage growth in total RGUs a year in
- Gradual increase in RGU per unique subscriber from 1.6x in
   2016 to 1.8x by 2020
- Mid-single-digit revenue growth in 2017 slowing to low single
   digits in 2018-2020
- Normalised EBITDA margin of above 50% in 2017-2020
- Capex at 34% of revenue in 2017, gradually declining in 2018-
- Introduction of moderate dividends in the medium term


Positive: Future developments that may, individually or
collectively, lead to positive rating action include:

- FFO-adjusted net leverage sustained below 5.0x and supported
   by robust free cash flow generation.

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

- FFO adjusted net leverage rising and remaining above 6.0x
- Significant shortening of the remaining contract life with
   housing associations

ZF FRIEDRICHSHAFEN: S&P Affirms BB+ CCR & Revises Outlook to Pos.
S&P Global Ratings revised its outlook on Germany-based
automotive component supplier ZF Friedrichshafen AG (ZF) to
positive from stable.  At the same time, S&P affirmed its 'BB+'
long-term corporate credit rating on ZF.

S&P also affirmed its 'BB+' issue ratings on the senior unsecured
debt instruments issued by ZF and subsidiaries ZF North America
Capital Inc. and TRW Automotive Inc.  The '3' recovery rating on
these instruments is unchanged, reflecting S&P's expectation of
meaningful recovery for debtholders (50%-70%; rounded estimates:
55% for the ZF and ZF North America debt and 65% for the TRW
debt), in the event of a payment default.

The outlook revision to positive reflects ZF's debt reduction, of
about EUR1.6 billion in 2016, through disposal proceeds and free
operating cash flow (FOCF) generation.  Credit measures are now
at the upper end of our target range for the rating of 25%-30%
fund from operations (FFO) to debt, with 29% posted at the end of
December 2016.  S&P expects further strengthening of credit
ratios in 2017 and it sees a one-in-three possibility that S&P
will upgrade ZF within a year if the company develops according
to S&P's expectations, which includes ZF maintaining its
financial policy framework, and the ratio of FFO to adjusted debt
remaining consistently above 30%.  This includes limited
additional debt incurred in future potential acquisitions in a
consolidating auto-supplier industry.

S&P's assessment of ZF's business risk profile is based on the
entity's leading market position in transmissions, powertrain,
and chassis technology, as well as active and passive safety
components, following its takeover of U.S.-based supplier company
TRW in May 2015.

Increasing demands for fuel efficiency and safety requirements
will likely continue to underpin demand for ZF's components.  ZF
offers its broad product range to a variety of original equipment
manufacturers in both the premium and volume segments.  Although
the company bears some exposure to the volatile commercial
vehicles market, this risk is mitigated by its enlarged scope and
scale of business activities, consolidating TRW.

ZF's sales are sensitive to fluctuations in new vehicle
production, since S&P estimates that ZF's more stable aftermarket
business, including TRW, represents less than 10% of total sales.
The company's operating leverage is an additional major
constraint to the business risk profile.  S&P expects ZF's EBITDA
margin to be at about the middle of the 9%-15% range that S&P
sees as average for the auto component supplier industry.  As a
result, any improvement of the business risk profile would be
closely tied to sustainable improvement of profitability beyond
15%, which S&P regards as unlikely at this stage.

The positive outlook reflects a one-in-three possibility that S&P
will upgrade ZF by one notch within the coming year.

S&P could upgrade ZF if the company maintains its financial
policy framework, and S&P expects its ratio of FFO to debt to
remain consistently above 30%.  Supportive factors include S&P's
expectation of positive FOCF and potential disposal proceeds.
S&P could also consider an upgrade if the businesses risk profile
strengthened, for example through sustainable profitability and
operating improvements.

S&P could consider revising the outlook to stable if the company
does not continue its deleveraging, such that the ratio of FFO to
debt remains below 30%.  This could occur, for example, if the
company participates further in the consolidation of the industry
by way of debt-financed acquisitions.  S&P could also consider
revising the outlook to stable if it expected a material
deterioration in the company's trading results, because of lower
demand in the automotive sector.


GREECE: Creditors Set to Restart Bailout Talks Today
The Associated Press reports that representatives of Greece's
bailout creditors are due in Athens to restart talks on further
cutbacks, European officials said on April 24, as they confirmed
that the country last year vastly exceeded its budget targets.

According to the AP, Commission spokesman Margaritis Schinas said
the negotiations are expected to start today, April 25, and
should last several days, with the objective of reaching an
agreement "as soon as possible."

That would clear the way for further talks on easing Greece's
debt burden, currently at 179% of GDP, the AP notes.

Following long delays in the negotiations, Greece has already
agreed to further slash pensions in 2019 and drastically expand
the tax base in 2020 by reducing the current tax-free threshold,
the AP relates.

The forthcoming talks are expected to focus on the final details
of these measures, which will be worth about EUR3.6 billion
(US$3.85 billion), the AP discloses.

Greeks have suffered seven years of repeated income cuts and tax
hikes after the public finances imploded in 2010, forcing the
country to rely on international bailouts, the AP recounts.

To secure the rescue loans, successive governments imposed harsh
cutbacks, amid a rapidly shrinking economy that has lost a
quarter of its pre-crisis value, and record-high unemployment,
the AP relays.  The current, third bailout signed by the left-led
government in 2015 runs until mid-2018 -- after which the country
is expected to be in a position to start borrowing again from
international bond markets, the AP states.


ARBOUR CLO II: Moody's Assigns (P)B2 Rating to Cl. F-R Sr. Notes
Moody's Investors Service has assigned provisional ratings to
eight classes of notes (the "Refinancing Notes") to be issued by
Arbour CLO II Designated Activity Company:

-- EUR1,750,000 Class X Senior Secured Floating Rate Notes due
    2030, Assigned (P)Aaa (sf)

-- EUR235,750,000 Class A-R Senior Secured Floating Rate Notes
    due 2030, Assigned (P)Aaa (sf)

-- EUR22,000,000 Class B-1R Senior Secured Fixed Rate Notes due
    2030, Assigned (P)Aa2 (sf)

-- EUR21,000,000 Class B-2R Senior Secured Floating Rate Notes
    due 2030, Assigned (P)Aa2 (sf)

-- EUR22,250,000 Class C-R Senior Secured Deferrable Floating
    Rate Notes due 2030, Assigned (P)A2 (sf)

-- EUR22,750,000 Class D-R Senior Secured Deferrable Floating
    Rate Notes due 2030, Assigned (P)Baa2 (sf)

-- EUR26,500,000 Class E-R Senior Secured Deferrable Floating
    Rate Notes 2030, Assigned (P)Ba2 (sf)

-- EUR10,250,000 Class F-R Senior Secured Deferrable Floating
    Rate Notes 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 address the expected
loss posed to noteholders. The provisional ratings reflect 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 2028 (the "Original Notes"), previously issued
on January 15, 2015 (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.

Arbour II 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.

Oaktree Capital Management (UK) LLP (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 May 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.

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.

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: EUR389,750,000

Diversity Score: 35

Weighted Average Rating Factor (WARF): 2700

Weighted Average Spread (WAS): 3.50%

Weighted Average Coupon (WAC): 4.50%

Weighted Average Recovery Rate (WARR): 42%

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 local currency country risk ceiling
below Aa3 with a further constraint of 5% to exposures with local
currency country risk ceiling 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.

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 2700 to 3105)

Rating Impact in Rating Notches:

Class X Notes: 0

Class A-R Notes: 0

Class B-1R Notes: -2

Class B-2R Notes: -2

Class C-R Notes: -2

Class D-R Notes: -2

Class E-R Notes: -1

Class F-R Notes: -1

Percentage Change in WARF -- increase of 30% (from 2700 to 3510)

Rating Impact in Rating Notches:

Class X Notes: 0

Class A-R Notes: -1

Class B-1R Notes: -3

Class B-2R Notes: -3

Class C-R Notes: -4

Class D-R Notes: -2

Class E-R Notes: -2

Class F-R Notes: -3

Further details regarding Moody's analysis of this transaction
may be found in the related pre-sale report, published January
22, 2015 and available on

CELF LOAN III: Moody's Hikes Rating on Class E Notes to Ba3
Moody's Investors Service announced that it has taken rating
actions on the following classes of notes issued by CELF Loan
Partners III plc:

-- EUR293M (Current outstanding balance of EUR10.04M) Class A-1
    Senior Secured Floating Rate Notes due November 1, 2023,
    Affirmed Aaa (sf); previously on March 8, 2016 Affirmed
    Aaa (sf)

-- EUR52M Class A-2 Senior Secured Floating Rate Notes due
    November 1, 2023, Affirmed Aaa (sf); previously on March 8,
    2016 Affirmed Aaa (sf)

-- EUR28M Class B-1 Senior Secured Deferrable Floating Rate
    Notes due November 1, 2023, Affirmed Aaa (sf); previously on
    March 8, 2016 Upgraded to Aaa (sf)

-- EUR8M Class B-2 Senior Secured Deferrable Fixed Rate Notes
    due November 1, 2023, Affirmed Aaa (sf); previously on
    March 8, 2016 Upgraded to Aaa (sf)

-- EUR31.5M Class C Senior Secured Deferrable Floating Rate
    Notes due November 1, 2023, Upgraded to Aaa (sf); previously
    on March 8, 2016 Upgraded to Aa2 (sf)

-- EUR29M Class D Senior Secured Deferrable Floating Rate Notes
    due November 1, 2023, Upgraded to A3 (sf); previously on
    March 8, 2016 Upgraded to Baa3 (sf)

-- EUR19.5M Class E Senior Secured Deferrable Floating Rate
    Notes due November 1, 2023, Upgraded to Ba3 (sf); previously
    on March 8, 2016 Affirmed B1 (sf)

-- EUR11M (Current rated balance of EUR7.4M) Class R Combination
    Notes due November 1, 2023, Affirmed Aaa (sf); previously on
    March 8, 2016 Upgraded to Aaa (sf)

CELF Loan Partners III plc, issued in October 2006, is a single
currency Collateralised Loan Obligation ("CLO") backed by a
portfolio of mostly high yield European loans. The portfolio is
managed by CELF Advisors LLP. This transaction passed its
reinvestment period in November 2013.


According to Moody's, the rating actions taken on the notes are
the result of deleveraging of the Class A-1 Notes in November
2016 when Class A-1 Notes where paid EUR48.71 million or 17% of
their original balance. In addition, principal proceeds of
EUR53.6 million are reported in the March 2017 trustee report
which will be used to fully pay down Class A-1 Notes and
deleverage Class A-2 Notes on May 2017 payment date.

As a result of the deleveraging, over-collateralisation (OC)
ratios have increased across the capital structure. According to
the trustee report dated March 2017, Class A, Class B, Class C,
Class D and Class E OC ratios are reported at 311.45%, 197.09%,
149.17%, 121.88% and 108.53% respectively, compared to November
2016 levels of 299.2%, 189.3%, 143.3%, 117.1% and 104.3%

The ratings of the combination notes address the repayment of the
rated balance on or before the legal final maturity. For the
Class R Combination Notes, the 'rated balance' at any time is
equal to the principal amount of the combination notes on the
issue date times a rated coupon of 1.5% per annum accrued on the
rated balance on the preceding payment date, minus the sum of all
payments made from the issue date to such date, either interest
or principal. The rated balance will not necessarily correspond
to the outstanding notional amount reported by the trustee.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analysed the underlying collateral pool as having a
performing par and principal proceeds of EUR140.62 million and
EUR53.55 million respectively, defaulted par of EUR1.58 million,
a weighted average default probability of 21.14% (consistent with
a WARF of 2960 over a weighted average life of 4.42 years), a
weighted average recovery rate upon default of 50.32% for a Aaa
liability target rating, a diversity score of 19 and a weighted
average spread of 3.33%.

The default probability derives from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool. The estimated average recovery rate on
future defaults is based primarily on the seniority of the assets
in the collateral pool. Moody's generally applies recovery rates
for CLO securities as published in "Moody's Approach to Rating SF
CDOs". In some cases, alternative recovery assumptions may be
considered based on the specifics of the analysis of the CLO
transaction. In each case, historical and market performance and
a collateral manager's latitude to trade collateral are also
relevant factors. Moody's incorporates these default and recovery
characteristics of the collateral pool into its cash flow model
analysis, subjecting them to stresses as a function of the target
rating of each CLO liability it is analyzing.

Methodology Underlying the Rating Action:

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

Factors that would lead to an upgrade or downgrade of the

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it assumed a lower weighted average recovery rate for
the portfolio. Moody's ran a model in which it reduced the
weighted average recovery rate by 5%; the model generated outputs
that were unchanged for Classes A-1, A-2, B-1, B-2 and C Notes,
and within one to two notches of the base-case results for
Classes D and E Notes.

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
notes, in light of uncertainty about credit conditions in the
general economy. CLO notes' performance may also be impacted
either positively or negatively by 1) the manager's investment
strategy and behaviour and 2) divergence in the legal
interpretation of CDO documentation by different transactional
parties because of embedded ambiguities.

Additional uncertainty about performance is due to the following:

1) Portfolio amortisation: The main source of uncertainty in this
transaction is the pace of amortisation of the underlying
portfolio, which can vary significantly depending on market
conditions and have a significant impact on the notes' ratings.
Amortisation could accelerate as a consequence of high loan
prepayment levels or collateral sales by the collateral manager
or be delayed by an increase in loan amend-and-extend
restructurings. Fast amortisation would usually benefit the
ratings of the notes beginning with the notes having the highest
prepayment priority.

2) Recoveries on defaulted assets: Market value fluctuations in
trustee-reported defaulted assets and those Moody's assumes have
defaulted can result in volatility in the deal's over-
collateralisation levels. Further, the timing of recoveries and
the manager's decision whether to work out or sell defaulted
assets can also result in additional uncertainty. Moody's
analysed defaulted recoveries assuming the lower of the market
price or the recovery rate to account for potential volatility in
market prices. Recoveries higher than Moody's expectations would
have a positive impact on the notes' ratings.

In addition to the quantitative factors that Moody's explicitly
modelled, qualitative factors are part of the rating committee's
considerations. These qualitative factors include the structural
protections in the transaction, its recent performance given the
market environment, the legal environment, specific documentation
features, the collateral manager's track record and the potential
for selection bias in the portfolio. All information available to
rating committees, including macroeconomic forecasts, input from
other Moody's analytical groups, market factors, and judgments
regarding the nature and severity of credit stress on the
transactions, can influence the final rating decision.

HARVEST CLO VII: Fitch Corrects April 12 Rating Release
This announcement corrects the version published on April 12,
which incorrectly stated the rating sensitivity to recovery

Fitch Ratings has assigned Harvest CLO VII Designated Activity
Company notes final ratings:

EUR2 million Class X notes due 2018: 'AAAsf'; Outlook Stable
EUR174.9 million Class A-R notes due 2031: 'AAAsf'; Outlook
EUR39.2 million Class B-R notes due 2031: 'AAsf'; Outlook Stable
EUR21 million Class C-R notes due 2031: 'Asf'; Outlook Stable
EUR14.6 million Class D-R notes due 2031: 'BBBsf'; Outlook Stable
EUR18.6 million Class E-R notes due 2031: 'BBsf'; Outlook Stable
EUR9.4 million Class F-R notes due 2031: 'B-sf'; Outlook Stable

Harvest CLO VII Designated Activity Company is a cash flow
collateralised loan obligation (CLO). The issuer has amended the
capital structure and extended the maturity of the notes. Class
F-R has been introduced and the obligor concentration limits have
been reduced for the top 10 obligors to 20% of the portfolio from
25%. The maximum Fitch industry exposure has also been introduced
with the top industry limit at 17.5% and the top three at 40%.

Following the change in payment frequency of the notes to
quarterly from semi-annually a frequency switch mechanism has
been introduced. The transaction features a four-year
reinvestment period, which is scheduled to end in 2021. The
subordinated notes were not refinanced; but the maturity has been


'B' Portfolio Credit Quality
Fitch assesses the average credit quality of obligors at the 'B'
category. The weighted average rating factor of the underlying
portfolio is 34.2. The aggregate collateral balance is EUR301.9
million, which is above the target par of EUR300 million.

High Recovery Expectations
At least 90% of the portfolio comprises senior secured
obligations. Recovery prospects for these assets are typically
more favourable than for second-lien, unsecured and mezzanine
assets. The weighted average recovery rate of the identified
portfolio is 64.6%.

Diversified Asset Portfolio
The underlying assets are now more diversified, with the top 10
largest obligors representing 20% of the portfolio, down from 25%
at closing and following the introduction of limits at 17.5% for
the top Fitch industry and at 40% for the top three Fitch

Limited Interest Rate Risk
Unhedged fixed-rate assets cannot exceed 5% of the portfolio
while there are no fixed-rate liabilities. The covenant was
amended down from 10% at closing. The impact of unhedged interest
rate risk was assessed in the cash flow model analysis.

Limited FX Risk
All non-euro-denominated assets have to be hedged with perfect
asset swaps as of the settlement date, limiting foreign exchange
risk. The transaction is permitted to invest up to 30% of the
portfolio in non-euro-denominated assets.


A 25% increase in the probability of default would cause a
downgrade up to two notches for the rated notes. A 25% decrease
in recovery prospects would cause a downgrade of up to two
notches for the rated notes.

Long-Term IDR affirmed at 'BB+'; Outlook Stable
Short-Term IDR affirmed at 'B'
National Long-Term Rating affirmed at 'AA+(idn)'; Outlook Stable
National Short-Term Rating affirmed at 'F1+(idn)'
Viability Rating affirmed at 'bb+'
Support Rating affirmed at '3'
Support Rating Floor affirmed at 'BB'

RYE HARBOUR: Fitch Assigns 'B-sf' Rating to Class F-R Notes
Fitch Ratings has assigned Rye Harbour CLO, Designated Activity
Company's refinancing notes final ratings:

Class X: 'AAAsf'; Outlook Stable
Class A-1R: 'AAAsf'; Outlook Stable
Class A-2R: 'AAAsf'; Outlook Stable
Class B-1R: 'AAsf'; Outlook Stable
Class B-2R: 'AAsf'; Outlook Stable
Class C-1R: 'Asf'; Outlook Stable
Class C-2R: 'Asf'; Outlook Stable
Class D-R: 'BBBsf'; Outlook Stable
Class E-R: 'BBsf'; Outlook Stable
Class F-R: 'B-sf'; Outlook Stable

Rye Harbour CLO, Designated Activity Company (the issuer) is a
cash flow collateralised loan obligation (CLO). The issuer has
amended the capital structure by repaying existing rated notes
and issuing refinancing notes with a longer maturity. Notable
changes include a reset of the weighted average life (WAL) test
threshold to nine years from the refinancing closing date and an
increase in the limit on the exposure to the 10 largest obligors
to 20% from 18%.

The transaction features a five-year reinvestment period
scheduled to end in 2022. The subordinated notes were not
refinanced, but their maturity was extended.


'B' Portfolio Credit Quality
Fitch assesses the average credit quality of obligors at the 'B'
category. The weighted average rating factor (WARF) of the
underlying portfolio is 33.06.

The adjusted collateral principal amount (ACPA) is approximately
EUR349 million, which is below the target par of EUR350 million.
The ACPA is a measure of transaction assets which applies
haircuts to the carrying value of 'CCC' rated assets representing
more than 7.5% of total assets, defaulted obligations, deferring
obligations, and discount obligations.

High Recovery Expectations
At least 90% of the portfolio comprises senior secured
obligations. Recovery prospects for these assets are typically
more favourable than for second-lien, unsecured and mezzanine
assets. The weighted average recovery rate (WARR) of the
identified portfolio is 67.0%.

Limited Interest Rate Risk
Interest rate risk is naturally hedged for most of the portfolio
as fixed-rate liabilities and assets represent up to 12.9% and
10% of the current par balance, respectively. The amount of
fixed-rate liabilities will drop three years after the
refinancing closing date, as the class B-2R notes switch to
paying a floating rate of interest.

Unhedged Non-Euro Assets Exposure
The manager may invest up to 5% in unhedged and FX forward hedged
non-euro assets. Unhedged assets may not account for more than
2.5%. If the assets are not sold 90 days after their purchase,
the manager will try to obtain perfect asset swaps. Any unhedged
asset in excess of the allowed limits or held for longer than 90
days will receive a zero balance for the calculation of the OC
tests. Unhedged assets may only be purchased if, after a haircut
of 20% in the case of sterling assets and 50% for all other
assets, the portfolio notional is still above target par. No
haircut is applied to FX forward hedged assets in the transaction

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

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


A 25% increase in the obligor default probability would lead to a
downgrade of up to two notches for the rated notes. A 25%
reduction in recoveries would lead to a downgrade of up to three
notches for the rated notes.


DECO 14: Moody's Affirms C(sf) Rating on Class D Notes
Moody's Investors Service has upgraded the rating of Class C and
affirmed the rating of Class D Notes issued by DECO 14 -- Pan
Europe 5 B.V.

-- EUR65M Class C Notes, Upgraded to B1 (sf); previously on Jun
    23, 2016 Affirmed Caa1 (sf)

-- EUR101M Class D Notes, Affirmed C (sf); previously on Jun 23,
    2016 Affirmed C (sf)

Moody's does not rate the Class E, Class F, Class G and the Class
X Notes.


The upgrade action reflects the positive impact of repayment
proceeds received since the last review in June 2016 as well as
the recovery expectations for the remaining four loans. Since the
last review, approximately EUR142 million have been applied to
repay the outstanding notes.

The rating on the Class D Notes is affirmed because the rating is
commensurate with the expected loss assessment for the defaulted
loans in the pool (100% of the current pool balance).

The decline in the Euribor rate to negative levels has been one
of the drivers behind a decrease in the issuer income triggering
interest shortfalls on the Class D to Class G Notes at the
January 2017 interest payment date (IPD). Additionally, the
repayment of the higher margin Armilla Clarice 2 loan and the
Arcadia loan balance in combination with the high issuer senior
costs have further increased the mismatch between issuer income
and note interest. In the absence of loan level interest
shortfalls, the liquidity facility covers the issuer's senior
expenses but does not cover Note level interest shortfalls.
Therefore, the risk of interest shortfalls affecting the most
senior class of Notes has increased.

Moody's rating action reflects a base expected loss in the range
of 70% - 80% of the outstanding balance, compared with 40% - 50%
at the last review. Moody's derives this loss expectation from
the analysis of the default probability of the securitised loans
(both during the term and at maturity) and its recovery
expectation for the collateral.

For a summary of Moody's key assumptions for the loans in the
pool please refer to the section SUMMARY OF LOAN ASSUMPTIONS

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was Moody's
Approach to Rating EMEA CMBS Transactions published in November

Other factors used in these ratings are described in European
CMBS: 2016-18 Central Scenarios published in April 2016.

Factors that would lead to an upgrade or downgrade of the

The main factor or circumstance that could lead to an upgrade or
downgrade of the ratings is a material change in the recovery
assumptions for the underlying defaulted loans.


As of the January 2017 IPD, the transaction balance has declined
by 88% to EUR185 million from EUR1,491 million at closing in
March 2007 due to the pay off of nine loans originally in the
pool. The Notes are currently secured by three, first-ranking
legal mortgages over 11 commercial properties ranging in size
from 22% to 36% of the current pool balance. The pool has a high
concentration in terms of geographic location: 100% Germany based
on UW market value and high concentration in terms of property
type: 71% mixed use and 29% retail based on UW market value.
Moody's uses a variation of the Herfindahl Index, in which a
higher number represents greater diversity, to measure the
diversity of loan size. Large multi-borrower transactions
typically have a Herf of less than 10 with an average of around
5. Currently, the pool has a Herf of 1.9.

Realised losses have increased to 0.23% from 0.20% of the
original securitised balance compared to the last review.

Moody's estimate of the base expected loss is now in the range of
0% - 10% of the original pool balance compared with 10% - 20% at
the last review.

As of January 2017 IPD, the remaining four loans were in special


Below are Moody's key assumptions for the Top 3 loans:

CGG - Tambelle REDO 3 (36.5% of pool) - LTV: 211.5% (Whole)/
182.0% (A-Loan); Total Default Probability: N/A - Defaulted;
Expected Loss: 50% - 60%

Arcadia (34.4% of pool) - LTV: 3460.3% (Whole)/ 2561.9% (A-Loan);
Total Default Probability: N/A - Defaulted; Expected Loss: 90% -

Cottbus Shopping Centre (21.7% of pool) - LTV: 263.9% (Whole)/
263.9% (A-Loan); Total Default Probability: N/A - Defaulted;
Expected Loss: 70% - 80%

SEA TRUCKS: Creditors Propose Liquidation After Funds Blocked
Luca Casiraghi at Bloomberg News reports that a group of Sea
Trucks Group creditors proposed liquidation after the company's
founder tried to block access to funds and an affiliate used
"unlawful military force" to retain vessels in Nigeria.

Holders of more than 61% of Sea Trucks' US$456 million notes due
March 2018 have called for a vote on May 2 about demanding
repayment and potentially winding up the company, Bloomberg
relays, citing a statement issued by the bonds' trustee on
April 24.

Lagos, Nigeria-based Sea Trucks missed interest payments in
December and March, Bloomberg recounts.  It won a standstill from
creditors in January, Bloomberg discloses.

According to Bloomberg, the statement said bondholders have
become "deeply concerned" after lawyers for Sea Trucks'
founder Jacobus Roomans attempted to prevent the company from
accessing bank accounts last week.  It said West African Ventures
Ltd., another company owned by Mr. Roomans, has twice used force
to stop Sea Trucks from retrieving ships, Bloomberg states.

The statement said half of bondholders will need to vote on
liquidation at the Oslo meeting to form a quorum, according to
Bloomberg.  It said the proposal will pass if 50% of votes are in
favor, Bloomberg notes.

Sea Trucks Group Limited provides offshore installation,
accommodation, and support services to the oil and gas industry
worldwide.  It provides offshore accommodation, rigid pipelay
installation, offshore construction, surf installation, and
marine support services; and marine services to oil and
construction companies in shallow and deep-water projects to
accommodation hook-up and fabrication activities.  The company
was founded in 1977 and is based in Lagos, Nigeria.  It has
offices in Nigeria, Angola, Ghana, Congo, the United Arab
Emirates, the Netherlands, the United States, Australia,
Singapore, and China.


NOVO BANCO: DBRS Places CCC (high) Debt Ratings Under Review
DBRS Ratings Limited placed the senior ratings of Novo Banco,
S.A.'s (NB or the Bank) Under review with Negative Implications
(URN). These include the Issuer, Senior Long-Term Debt and
Deposits rating of CCC (high), and the Short-Term & Deposit
rating of R-5. DBRS has confirmed the Critical Obligations
Ratings (COR) at BB (low) / R-4, with Stable Trend. Please see
full ratings table at the end of this press release.

The placing of the senior debt ratings Under review with Negative
Implications (URN) reflects DBRS's view that the risk for the
Bank's bondholders has increased following the announcement of a
liability management exercise involving senior bondholders as
part of the agreement to sale NB announced on March 31, 2017.

On March 31, 2017 the Portuguese government in representation of
the sole shareholder of NB, the Resolution Fund (RF) announced an
agreement to sell a 75% stake in the Bank to an American fund,
Lone Star. The transaction is also subject to a liability
management exercise of senior debt, prior to Lone Star's capital
injection, to reinforce NB's capital position.

The sale also requires regulatory approvals including from the
European Central Bank and the European Commission. According to
the Ministry of Finance's communication, Lone Star has agreed to
buy a 75% stake with the condition of injecting EUR 1 billion
fresh capital over the next three years upon closure of the deal.
Of this total, EUR 750 million will be injected upfront once the
sale is approved. A further EUR 250 million will be injected by
Lone Star over the next three years. The RF will retain a 25%
stake in NB.

During the review period, which could last longer than 3 months,
DBRS will focus on the terms and conditions of the liability
management exercise which are still unknown at this stage. DBRS
would likely view any liability management exercise as a
distressed exchange if the terms of the exchange are
disadvantageous to bondholders. In such an event, DBRS
anticipates that the Bank's senior debt ratings would be
downgraded to "D" to reflect the fact that according to DBRS's
methodology the offer is considered as coercive for the senior
debtholders and the notes have defaulted as per DBRS's Default
Definition, which include securities described as a Distressed
Exchange. The issuer rating would likely be considered as
Selective Default. As per DBRS's default definition, DBRS would
consider that the issuer has failed to satisfy an obligation on a
debt issue but DBRS views this as being "Selective" if the issuer
is expected to continue to meet obligations in a timely manner on
other securities and/or classes of securities.

The Critical Obligations Ratings were not lowered along with the
senior debt and deposit rating and remains at BB (low) / R-4.
This reflects DBRS' expectation that, in the event of a
resolution of the Bank, certain liabilities related to critical
activities (such as payment and collection services, obligations
under covered bond program, payment and collection services,
etc.) have a greater probability of avoiding being bailed-in and
being included in a going-concern entity.


The ratings are currently Under Review with Negative
Implications. Any upside pressure is unlikely in the short term.
However, a successful sale of the Bank together a fresh capital
injection could have positive implications.
Separately, DBRS has also withdrawn the BBB (low) rating on the
Senior and Unsubordinated Notes Guaranteed by the Republic of
Portugal as this debt has been repaid/cancelled.


AUTOBANN: Moody's Rates Proposed RUB3BB Sr. Unsecured Bonds B1
Moody's Investors Service has assigned a B1 rating (with a loss-
given default assessment of LGD4) to the proposed RUB3 billion
senior unsecured rouble-denominated bonds due in 2024 to be
issued by the Russian road construction company Autobann (LLC
SOYUZDORSTROY) via its subsidiary Avtoban-Finance, JSC. The
outlook on the rating is stable.

Avtoban-Finance will issue the bonds for the sole purpose of
financing loans to Autobann's key operating companies - OAO DSK
Autobann and OAO KhMDS, and will rely on these two main operating
subsidiaries of the group to service the bonds. Moody's expects
that the issuance proceeds will be mostly used for repayment of
part of the group's existing debt.


The B1 rating assigned to the domestic bond is in line with
Autobann's B1 corporate family rating (CFR), which reflects its
(1) small scale relative to its global peers; (2) reliance on the
Russian road construction market, which is under ongoing pressure
from the constrained state budget; (3) high project and customer
concentration; (4) in-year liquidity volatility, with costs
incurred throughout the year but contract receipts clustered
towards the end of each year; and (5) corporate governance risks
associated with the company's single shareholder structure.

More positively the rating takes into account Autobann's (1) low
risk business model, whereby most projects relate to the
construction of important federal roads and are performed under
contracts with state bodies; (2) leading position and a
reputation as a reliable contractor with strong in-house
expertise, which differentiates it from many of its competitors
in the market, characterised by high barriers to entry; (3) good
visibility of future revenue and cash flows owing to its healthy
order backlog and solid bidding opportunities even during down-
cycles; (4) conservative approach to project evaluation and track
record of successful project completion.

Despite some step up in leverage following the shift to longer-
term debt financing and weaker operating margins, the company
preserves healthy financial and liquidity profile supported by
conservative financial policies, modest and flexible investment
needs and meaningful backup liquidity provided by banks against
state-funded contracts.


The B1 senior unsecured rating assigned to Avtoban-Finance's
proposed RUB3 billion domestic bonds is at the same level as
Autobann's CFR, which reflects Moody's assumptions that (1) the
bonds will rank pari passu with other unsecured and
unsubordinated obligations of Autobann; and (2) there is no
material debt secured with tangible assets in the company's total

The bondholders will benefit from the surety provided by DSK
Autobann, as well as support from the holding company,
Soyuzdorstroy, and OAO KhMDS, who will provide an irrevocable
offer to acquire the bonds in the case of a breach of payment
obligations by Avtoban-Finance to prevent the bond default.

The surety is in a form that should give bondholders the ability
to make a guarantee claim on DSK Autobann for repayment of the
bonds if Avtoban-Finance defaults. However, under Russian
suretyship law DSK Autobann has certain rights to raise defences
to bondholder claims and therefore to avoid or reduce its

While the rating agency recognizes that the surety is arguably as
strong a guarantee as can be given by a non-financial corporate
in Russia, this potential bondholder exposure is something
Moody's considers to be inconsistent with the equalization of the
rating of Avtoban-Finance's bonds with the rating of Autobann
based solely on the strength of the surety.

The irrevocable offers provided by Soyuzdorstroy and KhMDS
entitle bondholders to require both entities to enter into a
purchase agreement for their bonds if certain events occur, such
as payment default by Avtoban-Finance or its insolvency. In
substance, the offer appears to be similar to a put option. There
are some uncertainties surrounding the enforceability of put
options under Russian law although there is some evidence to
suggest that the Russian legal system will uphold irrevocable

Bondholders' claims under the irrevocable offer are in any event
subject to relatively tight timescales and formal notice
requirements, which could expose bondholders to a risk that their
rights under the offer may lapse whilst a potential default
remains outstanding under the bonds if they do not act quickly
and accurately.

The assessment also positively considers that the credit support
providers' (DSK Autobann, Soyuzdorstroy and KhMDS) self-interest
in maintaining the creditworthiness and business viability of
Avtoban-Finance is quite substantial. While this interest does
not fully mitigate potential legal deficiencies in the surety and
irrevocable offers, it is sufficient for the bonds to be aligned
with Autobann's rating at the B1 level. The factors considered
were (1) the degree to which the operations of the companies are
interwoven; (2) the degree of business and financial disruption
that would result for Autobann or its corporate family if
payments by Avtoban-Finance are not made on time; and (3) the
extent to which the support package, while generally deficient in
some respects, still represents a relatively strong commitment
within the current limitations of Russian Law.


The stable outlook on Autobann's B1 CFR reflects Moody's
expectations that the company's business model will remain
largely resilient to the economic down cycle and cost inflation
risks and that it will maintain stable construction volumes and
adequate profitability. The outlook assumes that the company's
leverage measured by reported debt/EBITDA will sustainably remain
at or below 2.0x, and coverage measured by EBITA/interest at or
above 3.0x.


Given the company's current scale of operations and limited
diversification, an upgrade in the medium term is unlikely. A
continuing track record of strong financial performance and
conservative financial policies, and maintenance of good
visibility over future cash flows alongside conservative
liquidity management would have a positive effect on the ratings.

Autobann's rating could come under downward pressure if the
company were to face material deterioration in its business and
financial profile, with leverage measured by reported debt/EBITDA
increasing substantially above 2.0x, and EBITA/interest falling
materially below 3.0x, both on sustainable basis.


The principal methodology used in this rating was Construction
Industry published in March 2017.

Headquartered in Moscow, Russia, Autobann (LLC Soyuzdorstroy) is
the second-largest Russian infrastructure construction company in
terms of contracts portfolio, specialising in road construction.
The company participates in large-scale federal road construction
projects as well as regional projects. In 2015, Autobann reported
RUB27.6 billion in revenue and RUB2.7 billion in EBITDA.

AGROPROMCREDIT LLC: Moody's Affirms B2 Long-Term Deposit Ratings
Moody's Investors Service has affirmed the B2 long-term local-
and foreign-currency deposit ratings of Commercial Bank
Agropromcredit (LLC). Concurrently, the rating agency affirmed
the bank's baseline credit assessment (BCA) and adjusted BCA of
b2, its long-term Counterparty Risk Assessment (CR Assessment) of
B1(cr), the Not Prime short-term local- and foreign-currency
deposit ratings and the Not Prime(cr) short-term CR Assessment.
The outlook on the bank's long-term deposit ratings and the
overall outlook on its ratings remained negative.


The affirmation of Agropromcredit's ratings reflects: (1) recent
strengthening of the bank's capital position, as its regulatory
Tier 1 ratio (N1.2) reached 15.6% as of April 1, 2017; (2) its
solid liquidity cushion, with unencumbered liquid assets
accounting for almost 50% of total assets as of April 1, 2017;
and (3) Moody's view that the contraction in the Russian economy
has ended, translating into expectations of no further
significant formation of problem loans for the bank.

However, the negative outlook on Agropromcredit's ratings
reflects Moody's view that, despite a gradual relief from asset
risk pressures, the bank's business remains challenged in the
face of continued losses at pre-provision level, and its eventual
return to sustainable profitability will require significant cost
optimization. An additional source of downside risk weighing on
the bank's currently comfortable capital cushion and overall
credit profile is its significant exposure to non-core assets
(land plots and an equity stake), which accounted for
approximately 16% of Agropromcredit's total assets and over 100%
of its equity as of year-end 2016.


A positive rating action on Agropromcredit's ratings is unlikely
in the next 12-18 months, given the negative outlook. However,
Moody's may change the outlook on the long-term ratings to stable
if the bank demonstrates its ability to return to, and sustain,
positive profitability at pre-provision and post-provision

Agropromcredit's ratings could be downgraded if its persistent
loss-making performance and/or potential downward revaluation of
its non-core assets put significant negative pressure on the
bank's currently comfortable capital position.


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

KEMEROVO REGION: Fitch Affirms BB- Long-Term IDR, Outlook Stable
Fitch Ratings has affirmed Russian Kemerovo Region's Long-Term
Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'BB-
' with a Stable Outlook and Short-Term Foreign Currency IDR at
'B'. The region's senior debt long-term rating has been affirmed
at 'BB-'.

The affirmation and Stable Outlook reflects Fitch's base case
scenario regarding expected consolidation of the region's
operating performance and stabilisation of debt metrics over the
medium term.


The 'BB-' rating reflects the region's modest operating balance,
albeit still sufficient to cover interest payments, narrowed
deficit before debt and stable direct risk with a high proportion
of low-cost budget loans. The rating also factors in the region's
exposure to refinancing pressure, moderately concentrated economy
and the weak institutional framework for Russian sub-nationals.

Fitch expects the region will consolidate its operating balance
at 5%-7% over the medium term, which will cover the interest
payments by 2x. Consolidation of the operating performance will
be supported by continuous control of operating expenditure and
increasing taxes as a result of upward trend in the region's
prime sectors - mining and metals. In 2016, the operating margin
accounted for 4.9%, a slight change from 5.7% in 2015.

Taxes make up 80% of the region's operating revenue and increased
by 5.8% in 2016, mainly supported by an increase in corporate
income tax (CIT) and excises. CIT is one of the largest
contributors to the regional budget, and was positively affected
by the improved profits of local exporters, following the
stabilisation of market price on key commodities and depreciation
of local currency in 2015. The growth in excises on fuel, which
boosted the overall increase of excises by 53% in 2016, will
likely decelerate in 2017 due to changed allocation. The
operating expenditure grew by a moderate 4.4% in 2016, below
operating revenue growth.

Fitch expects the region will narrow the deficit before debt to
2%-3% of total revenue in 2017-2019 due to a projected decline in
capital expenditure. In 2015-2016 the region recorded a moderate
deficit at 5%, which is significantly lower than the average 13%
in 2012-2014. Gradual narrowing of the budget deficit will
contribute to a deceleration of debt growth in 2017-2019.

Fitch expects direct risk will remain below 65% of current
revenue in the medium term. As of 1 January 2017, direct risk was
RUB62.9 billion, or 64% of current revenue, up from RUB58.4
billion (61% of current revenue) in 2015. Positively, more than
40% of direct risk in 2016 related to low-cost federal budget
loans bearing a 0.1% annual interest rate, which help the region
save on interest.

Kemerovo remains exposed to refinancing pressure, like most of
its national peers. In 2017-2019 it has to repay 84% of the total
debt stock. The maturities due in 2017 (as of 1 March 2017) total
RUB18.7 billion, of which RUB12.1 billion is budget loans. The
latter will be partially refinanced by new five-year RUB3.9
billion budget loans, to be contracted from the federal
government. In 2H17 the region also plans to issue a new RUB9
billion domestic bond, while the residual part of the obligations
will be refinanced by bank loans. The region's liquidity position
remained modest at RUB0.7 billion in 2016, slightly down from
RUB0.9 billion in 2015.

The region's economy is characterised by developed industrial
base dominated by coal and metal industries. Local companies
provide an extended tax base for the region in favourable years,
but also lead to a revenue decline during negative terms of trade
shocks. According to the administration's estimates, the regional
economy grew by 1.4% in 2016, while the national economy
demonstrated a 0.2% contraction. Fitch forecasts 1.4% growth of
national GDP in 2017, and Fitch believes the region's economy
will also follow this trend.

The region's credit profile remains constrained by the weak
institutional framework for Russian 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
Kemerovo's forecasting ability.


An inability to maintain a positive operating balance on a
sustained basis, along with an increase in direct risk above 90%
of current revenue, could lead to a downgrade.

An improvement in the operating balance to 6%-8% of operating
revenue and maintaining a debt payback ratio (direct risk-to-
current balance) at around 10 years (2016: 29.9 years) on a
sustained base could lead to an upgrade.

KHAKASSIA REPUBLIC: Fitch Cuts LT IDRs to B+, Outlook Stable
Fitch Ratings has downgraded Russian Republic of Khakassia's
Long-Term Foreign- and Local Currency Issuer Default Ratings
(IDRs) to 'B+' from 'BB-'. The Outlooks are Stable. The Short-
Term Foreign-Currency IDR has been affirmed at 'B'. Khakassia's
outstanding senior unsecured domestic bonds have been downgraded
to 'B+' from 'BB-'.

The downgrade reflects fiscal performance in 2016 that was worse
than Fitch expected, sharp growth of direct risk to above 100% of
current revenue, and persistent refinancing pressure with more
than two-thirds of debt stock due in 2017-2019.


The downgrade reflects the following key rating drivers and their
relative weights:


The republic's debt burden sharply increased in 2016. Direct risk
grew to RUB22.8 billion, or 110.5% of current revenue in 2016
from 84% in 2015. The increase was fuelled by an extremely high
budget deficit, which accounted for 33% of total revenue in 2016
compared with an already high average of 18% in 2013-2015. Fitch
expects direct risk growth will decelerate in 2017-2019 due to
expected narrowing of the deficit. Nevertheless, direct risk will
remain high at between 125%-145% of current revenue, according to
Fitch's base case.

Refinancing pressure also remains high as 71% of total debt stock
is due in 2017-2019. In 2017, Khakassia has to roll over RUB5.9
billion of its debt obligations, of which RUB4.5 billion is bank
loans. The republic plans to issue a new RUB6.1 billion domestic
bond in 2H17, when most of the maturities are due. The
composition of the republic's direct risk differs unfavourably
from that of its national peers, most of which highly rely on
subsidised federal budget loans. The share of budget loans in
Khakassia's debt portfolio, which bear a 0.1% annual interest
rate, declined to a low 12% in 2016 from 20% in 2015.

The administration plans to negotiate with federal government on
receiving additional RUB7.5 billion low-cost federal budget loans
to refinance its commercial debt on more favourable terms. In
Fitch's view, it is unlikely that the region will manage to
contract this amount in full, although some additional help from
the federal government is possible. The republic has previously
failed to meet the restrictions on subnationals' debt stock and
budget deficits imposed by the national finance ministry in
return for financial support from the state in the form of budget
loans. Fitch will view positively the replacement of part of
commercial debt by low-cost budget loans as it will ease pressure
on interest spending. To date, the federal government has
approved only RUB0.75 billion of budget loans for the republic in

The republic's current balance remains suppressed as a result of
growing interest spending. The latter grew to RUB1.9 billion in
2016 from RUB1.1 billion in 2015, fuelled by overall growth of
debt and the increasing proportion of commercial debt in the
republic's portfolio in 2016. Fitch projects Khakassia's current
balance will remain under pressure and will hover around zero in
2017-2019 (2016: 2.06%).

The agency expects the republic's deficit before debt will narrow
in the medium term due to a decline in capex, but will remain
high at 10%-15% of total revenue. In 2016 the republic completed
two large investment projects -- the construction of a perinatal
centre and development of a republican historical museum complex,
both of which were co-financed by the federal government. The
administration intends to limit commencement of new large-scale
projects over the medium term, which would lead to material
decrease in capital spending. Fitch projects capex will average
14% of total spending in 2017-2019 versus an average 26% in 2013-

The region's ratings also reflect the following key rating

Khakassia's wealth metrics are in line with the national median.
However, the republic's economy is strongly concentrated in the
hydro-power generation, mining and non-ferrous metallurgy
sectors. The top 10 taxpayers contributed 46.1% to the republic's
tax revenue in 2016 (2015: 49.5%). Taxes accounted for 74% of
operating revenue in 2016, which makes the region's budget prone
to volatility. Fitch forecasts Russia's national economy to
demonstrate a mild restoration at 1.4% in 2017 (2016: contraction
by 0.2%), which in turn will spill over to Khakassia's economy
and tax base.

The republic's credit profile remains constrained by the weak
institutional framework for Russian local and regional
governments (LRGs), which has a shorter record of stable
development than many of its international peers. Weak
institutions lead to lower predictability of Russian LRGs'
budgetary policies, which are subject to the federal government's
continuous reallocation of revenue and expenditure
responsibilities within government tiers.


Continuous growth of direct risk accompanied by an increase in
refinancing pressure and a persistently negative current balance,
would lead to a downgrade.

Sustainable narrowing of the budget deficit leading to
stabilisation of the debt accompanied by eased refinancing
pressure and operating balance sufficient for interest payments
could lead to an upgrade.

MAGADAN OBLAST: S&P Revises Outlook to Stable & Affirms 'B+' ICR
S&P Global Ratings revised its outlook on Russia's Magadan Oblast
to stable from negative.  At the same time, S&P affirmed its 'B+'
long-term issuer credit rating and 'ruA' Russia national scale
rating on the oblast.


The stable outlook reflects S&P's expectation that Magadan
Oblast's commitment to cost control would allow the region to
keep its deficit after capital accounts consistently below 10% of
total adjusted revenues, which together with continuous access to
bank and budget loans will allow it to maintain its current
liquidity position for the next 12 months.

Downside Scenario

S&P could lower the ratings if Magadan Oblast were to report a
weaker budgetary performance or have difficulty securing
sufficient committed bank facilities, resulting in pressure on
its liquidity position.  This would be reflected by a drop in the
debt service coverage ratio to below 80%.

Upside Scenario

S&P could take a positive rating action if the oblast's liquidity
position improved, either due to lower budget deficits or
stronger liquidity buffers, or both.  Stronger revenues and
budget consolidation measures that would allow the oblast to
further improve its budgetary performance, resulting in
consistent operating surpluses, could also lead to an upgrade.


The outlook revision stems from S&P's view that the pressure on
Magadan Oblast's liquidity position has declined.  This is a
result of two factors.  First, S&P now expects the oblast will
post lower budgetary deficits on the back of stronger tax
revenues reported in 2016 and continued cost control.  Second,
the oblast will likely have good access to refinancing either
from the financial market or the federal government.  Domestic
financial markets have stabilized over the last 12 months and
Russia's federal government has shown its commitment to providing
low-interest budget loans to the local and regional governments
(LRGs).  In S&P's view, these will enable the oblast to meet its
higher debt service requirements in 2017 and 2018.

S&P believes that lower deficits will also allow the oblast to
keep its tax-supported debt below 60% of consolidated operating
revenues until 2019, and therefore S&P now regards Magadan
Oblast's debt burden as low.

Magadan Oblast will likely demonstrate stronger balances and low
debt in the near term.  S&P believes that, in the coming three
years, the oblast's balances will be stronger than S&P's previous
forecast, thanks to stronger gold and silver production as well
as the federal government's new mineral extraction tax breaks
with effect from 2016, which will likely result in higher inflows
of corporate profit tax (CPT) and, potentially, personal income
tax (PIT).  S&P assumes that the growth of these main taxes will
partly mitigate the effect of the centralization of 1% of CPT
from the LRGs this year.  S&P also believes that budgetary
performance would be supported by the consistent application of
austerity measures, of which the oblast has a solid track record
over the past few years.  These measures include tighter cost
control mechanisms, containment of capital expenditures, and a
refined approach to subsidies to municipal governments, including
stricter spending limits. Another important factor is that the
oblast will need to stick to these measures in order to continue
benefiting from the federal government's low-interest budget
loans, because that support comes on the condition that deficits
and debt remain low.  S&P believes all this will result in a
year-on-year increase in operating spending in the coming three
years that is below the national inflation rate.  At the same
time, S&P considers that the oblast's budget revenues are exposed
to the volatility of precious metal prices (for gold and silver),
which are characterized by significant fluctuations and could
have a large negative effect on the oblast's budgetary receipts.

S&P continues to view Magadan Oblast's liquidity as less than
adequate.  The oblast has posted a satisfactory debt service
coverage ratio, but S&P considers that it has limited access to
external liquidity, given the weaknesses of the domestic capital

S&P anticipates that the oblast's free cash and committed credit
facilities will cover more than 80% of debt service falling due
within the next 12 months.  The total amount of available credit
facilities, in which S&P includes budget loans from the federal
government aimed at refinancing commercial debt, will likely
average Russian ruble (RUB) 4 billion (about $71 million) over
the next year.  The oblast has confirmed access to RUB1.37
billion in budget loans for this year and is currently organizing
a new RUB2.6 billion bank facility that is expected to be in
place by the end of the second quarter, before the main debt
facilities are due (mostly in the second half of the year).  S&P
understands the oblast also intends to repay in 2017 about RUB2
billion of bank debt due in 2018, using this new bank facility.
This will somewhat smooth the hike in debt service in 2018.

Thanks to lower budget deficits, the oblast will likely keep its
debt burden below 60% of consolidated operating revenues by the
end of 2019.  The oblast has been increasingly using cheap budget
loans to refinance its commercial debt as its management
continues efforts to reduce debt, and loans from the government
now represent about 30% of total debt.

S&P believes that Magadan Oblast's contingent liabilities are
somewhat higher than the average for Russian regions, given the
oblast's remote location and severe subarctic climate conditions.
However, S&P notes that the related higher costs are already
factored into and financed directly from the budget (including,
for example, travel expenses, a subsidized utility, and possible
emergency costs).  Also, Magadan Oblast has only one self-
supporting government-owned entity, a gold refining plant that
has so far not required support from the oblast's budget.  S&P
estimates the oblast's overall exposure to government-related
entities (GREs) at less than 20% of its operating revenues while
S&P projects that GRE and municipal sector payables will be below
2% of the oblast's consolidated operating revenues over the
medium term.

A weak economy in the context of a volatile and unbalanced
institutional framework.  Like other Russian regions, Magadan
Oblast has very limited control over its revenues and
expenditures within the centralized institutional framework,
which remains unpredictable, with frequent changes to taxing
mechanisms affecting regions.  The federal government regulates
the rates and distribution shares for most taxes and transfers,
leaving only about 5% of operating revenues that the region can

S&P views Magadan Oblast's financial management as weak in an
international comparison, as S&P do for most Russian LRGs, mainly
due to the lack of reliable budgeting and long-term financial
planning.  Still, S&P acknowledges the oblast's relatively
prudent management of the entities it owns, and a track record of
cost containment over the past two years.

Magadan Oblast's modifiable revenues (mainly transport tax and
nontax revenues) are low and don't provide much flexibility; S&P
forecasts they will account for less than 10% of the oblast's
operating revenues on average over the next three years.  Magadan
Oblast's revenue flexibility is also constrained by the high
share of federal grants, which will continue to account for
roughly 30% of its operating revenues on average in the near
term.  On the expenditure side, the oblast's leeway remains
limited by the large share of inflexible social spending and
small size of its self-financed capital program.

Although S&P views Magadan Oblast's economy as weak in an
international context, S&P notes that the oblast's three-year
average GDP per capita is about $13,700, which is higher than the
Russian average. Located in Russia's Far East, the oblast's
wealth comes from having 15% of the country's gold reserves and
50% of its silver reserves.

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

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 liquidity position will likely
remain stable and the debt burden 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.


                                     To              From
Magadan Oblast
Issuer Credit Rating
  Foreign and Local Currency         B+/Stable/--    B+/Neg./--
  Russia National Scale              ruA/--/--       ruA/--/--
Senior Unsecured
  Local Currency                     B+              B+
  Russia National Scale              ruA             ruA

MARI EL REPUBLIC: Fitch Affirms BB IDRs, Outlook Stable
Fitch Ratings has affirmed the Russian Mari El Republic'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 agency has also affirmed the republic's outstanding
senior debt at 'BB'.

The affirmation reflects Fitch's view regarding the republic's
stable fiscal performance and short-term, albeit moderate, direct
risk, which are commensurate with the ratings. Ratings also
factor in modest size of the republic's budget and its local
economy and weak institutional framework for Russian


Fitch expects Mari El to record a stable fiscal performance in
2016-2018, with an operating margin hovering at 10%-12% (2016:
14.1%). This will be underpinned by prudent management aimed at
cost control, and an expected modest growth of tax revenue in
line with expected economic growth and higher transfers from the
federal government.

Fitch expects that the republic's tax capacity will remain below
the national average and that federal transfers will constitute a
significant proportion of Mari El's budget, averaging about 40%
of revenue annually in 2017-2019. The modest size of the
republic's budget and local economy leads to a lower self-
financing ability to absorb potential shocks compared with 'BB'
rated national peers and make its budgetary system highly
dependent on federal budget financial support.

The republic recorded a material narrowing of the deficit before
debt variation towards 1.4% of total revenue, an improvement from
an average 10% in 2014-2015. The deficit shrinking was
underpinned by an improved capital balance due to reduced capital
expenditure. The latter accounted for 15.1% of total expenditure,
down from about 20% of the republic's five-year average. Fitch
projects the region will keep a moderate deficit at about 2%-3%
of total revenue in the medium term, which will be also driven by
restrictions on debt stock and budget deficits imposed by the
Ministry of Finance in return for financial support.

Fitch expects Mari El's direct risk will remain in the range of
66%-68% of current revenue over the medium term, a moderate
increase from 62.6% in 2016. Direct risk in 2016 accounted for
RUB13.4 billion, marginal growth from RUB13 billion a year
earlier. The debt mostly consists of medium-term bank loans (68%
at end-2016) followed by low-cost budget loans from the federal
government (29%) and the residual 3% is outstanding domestic

Mari El is exposed to material refinancing risk, which leads to
high dependence on access to capital market to refinance its
debt. The debt maturity profile is stretched to 2034, but about
98% of the risk is concentrated in 2017-2019. This results in a
weighted average maturity of its debt of about two years, which
is short in an international context. The republic is planning to
tap the domestic bond market in 2017, which should lengthen the
maturity profile and ease refinancing risk.

Russia's institutional framework for subnationals is a constraint
on the republic's ratings. Frequent changes in both the
allocation of revenue sources and the assignment of expenditure
responsibilities between the tiers of government limit Mari El's
forecasting ability and negatively affect the republic's
strategic planning, and debt and investment management.

Mari El's socio-economic profile is historically weaker than the
average Russian region, which restrains the republic's tax-base.
Fitch expects moderate recovery of the national economy at 1.4%
yoy in 2017 (2016: -0.2%) and Mari El's economy will likely
follow this trend in 2017-2019.


Maintenance of sound operating performance, coupled with an
extension of the debt repayment profile leading the debt payback
towards the weighted average debt maturity could lead to an

Conversely, weak budgetary performance with close to zero current
margin accompanied by continuous direct risk increase above 70%
(2016: 62.6%), could lead to a downgrade.

UDMURTIA REPUBLIC: Fitch Cuts LT IDRs to B+, Outlook Stable
Fitch Ratings has downgraded Russian Republic of Udmurtia's Long-
Term Foreign- and Local-Currency Issuer Default Ratings (IDR) to
'B+' from 'BB-'. The Outlook is Stable. Fitch has affirmed the
Short-Term Foreign Currency IDR at 'B' and downgraded the
region's long-term local-currency senior debt ratings to 'B+'
from 'BB-'.

The downgrade reflects the republic's consistently weak operating
performance, which is insufficient to cover interest expenses,
leading to a negative current balance and accumulation of debt.


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


Increased Direct Risk
We expect direct risk to increase towards 100% of current revenue
by end-2019 underpinned by the expected budget deficit. In 2016
direct risk increased to 81% of current revenue (2015: 79.4%),
which is no longer commensurate with the 'BB-' rating category.
Udmurtia's debt portfolio is weighted towards market debt, which
constituted 58% as of 1 March 2017. It includes four bond issues
with five to 10-year maturity and one to three-year bank loans.
The rest is budget loans at a subsidised interest rate of 0.1%.

Refinancing Pressure Persists
Like most regions in Russia, Udmurtia is exposed to refinancing
pressure. A large amount of debt is short term, with 82% of total
direct risk due in 2017-2019 (RUB43.2 billion as of 1 March
2017). This is mostly budget loans (RUB20.2 billion) and bank
loans (RUB20.1 billion). In 2017, the republic's maturities are
RUB14.5 billion or 28% of total direct risk. Fitch expects the
remaining 2017 maturities will be rolled over with a mix of a new
budget loan of RUB3.4 billion, a bond issue (up to RUB10 billion)
and bank loans.

The republic's liquidity was RUB145 million as of end-2016.
Udmurtia depleted its cash reserves in 2015 to finance part of
its budget deficit. Immediate refinancing risk is mitigated by
RUB2 billion of undrawn bank credit lines and a standby credit
line of RUB4 billion from the Russian Treasury.


Weak Performance, Deteriorating Management
Udmurtia's operating results remained weak in 2016. Despite
improvement of operating margin to 4.7% in 2016 (2015: 2.6%), it
remained insufficient to cover interest expenses (2016: 5.3% of
operating revenue) leading to a current balance of negative 0.6%
(2015: negative 2.9%). Deficit before debt increased to 11.2%
from 8.6% amid increased capex. Previously the republic failed to
meet the restrictions on subnationals' debt stock and budget
deficits imposed by the national finance ministry in return for
financial support from the state in the form of budget loans.
Decreased Fiscal Flexibility
In Fitch's view, the republic's fiscal flexibility significantly
deteriorated in 2016, despite a sizable increase in tax revenues.
Udmurtia reported an inflow of corporate income tax proceeds
(+43% yoy), mainly from the oil sector due to technical changes
in the tax calculation, while oil output remained flat (+1.9%).
The oil sector's contribution to the republic's tax revenues grew
to 28% in 2016 from 19% in 2015. The positive effect was offset
by a subsequent rise in operating spending. In Fitch views, the
increased concentration in revenue sources accompanied with
growing rigid expenses makes Udmurtia's budgetary performance
vulnerable to negative fluctuations.

Projected Weak Performance
Fitch forecasts Udmurtia's operating margin will remain around 4%
in 2017-2019, reflecting expanding and rigid operating spending.
The agency estimates the current margin will still be a negative
1%-2% during the same period, weighed down by high interest
expenses at about 6%. The republic will shrink its budget deficit
to 9%-10% of total revenue over the medium term from an average
14% in 2012-2016, which still will lead to debt growth.

The ratings also consider the following rating factors:

Economic Recovery
The republic has a developed industrial economy focussed on the
oil extraction, metallurgy, machine-building and military
sectors. This helps smooth the impact of business cycles and
keeps Udmurtia's wealth metrics in line with the national median.
In 2016 the republic's GRP contracted 0.2%, in line with the
wider Russian economy (down 0.2%). Fitch expects national GDP to
grow 1.4% in 2017.

Weak Institutional Framework
Fitch views the republic's credit profile as 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.


Stabilisation of direct risk at below 70% of current revenue and
sustainable improvement of the operating balance that is
sufficient to cover interest payments could lead to an upgrade.

Inability to curb continuous growth of total indebtedness,
accompanied by an increase in refinancing pressure and a negative
operating balance, would lead to a downgrade.


T-2: Constitutional Court Annuls Receivership
STA reports that the Constitutional Court has repealed a March
2016 court decision that triggered receivership of
telecommunications company T-2, a move that the company's biggest
owner says wraps up all procedures related to the receivership.

T-2 is a Slovenian telecommunications operator.


BANCO POPULAR: Moody's Cuts LT Sr. Unsecured Debt Ratings to B1
Moody's Investors Service downgraded Banco Popular Espanol,
S.A.'s (Banco Popular) long-term deposit ratings to Ba3 from Ba1
and the bank's and its supported entities' long-term senior
unsecured debt ratings to B1 from Ba2 with a negative outlook. At
the same time, the rating agency downgraded: (1) the bank's
standalone baseline credit assessment (BCA) to b3 from b1; and
(2) its counterparty risk assessment (CR Assessment) to Ba2(cr)
from Baa3(cr).

The rating action follows the announcement on April 3, 2017 of
needed adjustments to 2016 financials and reflects Moody's
heightened concerns regarding Banco Popular's creditworthiness,
namely its weakened solvency levels, which are rapidly
deteriorating against the background of still very significant
asset quality challenges. The rating agency notes that Banco
Popular's capitalisation buffers have been further eroded since
year-end 2016 and that the bank's total capital ratio (TCR) has
come closer to its regulatory capital threshold. The rating
agency's increasing concerns regarding Banco Popular's ability to
comply with regulatory capital requirements on an ongoing basis
have led to downgrade the bank's long-term ratings by two
notches. Moody's believes that the bank is under increasing
pressure to urgently improve its risk-absorption capacity and
accelerate the execution of its de-risking strategy.

As part of rating action, Banco Popular's subordinated debt
ratings were downgraded to Caa1 from B2 as well as various
ratings of preference stock to Caa3(hyb) from Caa1(hyb), which
are guaranteed by Banco Popular and issued by several issuing
vehicles. The bank's short-term CRA was downgraded to Not
Prime(cr) from Prime-3(cr). The bank's short-term debt and
deposit ratings of Not Prime were unaffected.



The downgrade by two notches of Banco Popular's standalone BCA
and adjusted BCA to b3 reflects the bank's deteriorated solvency
levels and eroded capital buffers towards regulatory
capitalisation requirements as well as the rating agency's
assessment that the bank's credit profile remains pressured by
its persistently weak asset quality indicators.

Banco Popular's capital position significantly deteriorated in
2016, after the bank reported an EUR3.5 billion loss for the
year, which amply exceeded the EUR2.5 billion capital raised by
the bank in June. As a result, Banco Popular's phased-in Common
Equity Tier 1 (CET1) ratio declined to 12.1% at the end of 2016
from 13.1% a year earlier, and its total capital ratio (TCR) to
13.1% from 13.8%.

In addition, Banco Popular announced on April 3, 2017 that an
internal review had identified needed adjustments to its 2016
financial statements that have further eroded the bank's capital
levels. Banco Popular estimates it will report a TCR of 11.70%-
11.85% at end-March 2017, well below the 13.1% reported at year-
end. Moody's also notes that this ratio is now closer to the
bank's 2017 Pillar II supervisory review and evaluation process
(SREP) total capital requirement of 11.375%. The bank now has a
tight buffer of around 40 basis points against this regulatory
capital ratio, equal to approximately EUR300 million.

Banco Popular is under significant pressure to enhance its risk-
absorption capacity and accelerate the execution of its de-
risking strategy. The rating agency acknowledges that the
increase in coverage of non-performing assets (NPAs; defined as
non-performing loans and real estate assets) in 2016 to 45% is
supportive of the bank's efforts to reduce NPAs. However, this
coverage level remains below that of its domestic peers (average
for the system at 50%) and Moody's views that it will still be
challenging for Banco Popular to sell parts of its NPA portfolios
without additional haircuts.

Since the announcement of the revised strategic targets last
year, Banco Popular has managed to make little progress in its
assets disposal 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
exceeding the system average of around 15%. 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.


The downgrade of Banco Popular's long-term deposit ratings to Ba3
from Ba1 and the bank and its supported entities' senior
unsecured debt ratings to B1 from Ba2 reflect: (1) the downgrade
of the bank's BCA and adjusted BCA to b3; (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 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 senior debt

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 senior
unsecured debt ratings captures the downward rating pressure that
could develop if the bank fails to restore adequate solvency
levels and reduce the very high stock of problematic assets,
thereby raising questions about the future viability of the bank.
A significant deterioration in the bank's liquidity position
could also exert downward pressure on the ratings.

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 its rating actions, Moody's also downgraded the CR
Assessment of Banco Popular to Ba2(cr)/Not Prime(cr) from
Baa3(cr)/Prime-3(cr), four notches above the adjusted BCA of b3.
The CR Assessment is driven by the bank's b3 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 providing three
notches of uplift and a moderate likelihood of systemic support,
leading to another notch of uplift for the CR Assessment.


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 coupled with a higher than expected improvement in the
bank's risk-absorption capacity; and (2) a sustained recovery of
recurrent profitability levels.

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. Banco Popular's senior
unsecured debt and deposit ratings could also change as a result
of changes in the loss-given-failure faced by these securities.
In particular, Banco Popular's senior debt and deposit 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 bank's deposit and
debt ratings.



Issuer: Banco Popular Espanol, S.A.

-- LT Bank Deposits (Local & Foreign Currency), Downgraded to
    Ba3 from Ba1, Outlook Remains Negative

-- Subordinate, Downgraded to Caa1 from B2

-- Senior Unsecured MTN Program, Downgraded to (P)B1 from (P)Ba2

-- Subordinate MTN Program, Downgraded to (P)Caa1 from (P)B2

-- Pref. Stock Non-cumulative, Downgraded to Caa3(hyb) from

-- Adjusted Baseline Credit Assessment, Downgraded to b3 from b1

-- Baseline Credit Assessment, Downgraded to b3 from b1

-- LT Counterparty Risk Assessment, Downgraded to Ba2(cr) from

-- ST Counterparty Risk Assessment, Downgraded to NP(cr) from P-

Issuer: BPE Finance International Limited

-- BACKED Senior Unsecured Regular Bond/Debenture, Downgraded to
    B1 from Ba2, Outlook Remains Negative

Issuer: BPE Financiaciones, S.A.

-- BACKED Senior Unsecured Regular Bond/Debenture, Downgraded to
    B1 from Ba2, Outlook Remains Negative

-- BACKED Subordinate, Downgraded to Caa1 from B2

-- BACKED Senior Unsecured MTN Program, Downgraded to (P)B1 from

-- BACKED Subordinate MTN Program, Downgraded to (P)Caa1 from

Issuer: Banco Pastor, S.A.

-- Subordinate, Downgraded to Caa1 from B2, (assumed by Banco
    Popular Espanol, S.A.)

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

-- BACKED Pref. Stock Non-cumulative, Downgraded to Caa3(hyb)
    from Caa1(hyb)

Issuer: Popular Capital, S.A.

-- BACKED Pref. Stock Non-cumulative, Downgraded to Caa3(hyb)
    from Caa1(hyb)

Outlook Actions:

Issuer: Banco Popular Espanol, S.A.

-- Outlook, Remains Negative

Issuer: BPE Finance International Limited

-- Outlook, Remains Negative

Issuer: BPE Financiaciones, S.A.

-- Outlook, Remains Negative


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


TURKIYE IS BANKASI: Moody's Assigns (P) Baa1 Rating to Euro-Bonds
Moody's Investors Service has assigned a provisional (P) Baa1
long-term rating to the first series of euro-denominated covered
bonds expected to be issued under the mortgage covered bond
programme of Turkiye Is Bankasi A.S. (the issuer, Isbank; local
currency deposit ratings Ba1 negative; adjusted baseline credit
assessment ba2; counterparty risk (CR) assessment Ba1(cr)).

There are mitigants in place to lower the risk of transferability
and convertibility. Therefore the (P) Baa1 assigned to the euro
denominated covered bond is higher than the long-term foreign-
currency bond ceiling of Baa2. The covered bond rating is capped
at the local currency bond ceiling of Baa1.

The covered bonds are full recourse to the issuer. Furthermore,
following a covered bond anchor event (CB anchor event), the
covered bondholders would have priority claims over a pool of
assets (cover pool). The cover pool primarily consists of
mortgage loans originated by Isbank. In addition, 1% of the pool
currently consists of substitute assets. As of the cut-off date
(April 12, 2017), the assets in Isbank's cover pool totaled TL
4.05 billion. The Turkish covered bond law (the CommuniquÇ) will
govern the covered bonds. English and Turkish law will govern the
transaction documents.


A covered bond benefits from (1) the issuer's promise to pay
interest and principal on the bonds; and (2) following a CB
anchor event, the economic benefit of a collateral pool (the
cover pool). The ratings therefore reflect the following factors:

(1) The credit strength of the issuer (CR assessment Ba1(cr)) and
a CB anchor of CR assessment plus zero notches.

(2) Following a CB anchor event the value of the cover pool. The
stressed level of losses on the cover pool assets following a CB
anchor event (cover pool losses) for this transaction is 48.8%.

Moody's considered the following factors in its analysis of the
cover pool's value:

a) The credit quality of the assets backing the covered bonds.
The mortgage covered bonds are primarily backed by Turkish
residential mortgage loans. The collateral score for the cover
pool is 10.4%, in line with the other rated Turkish mortgage
covered bonds.

b) The Turkish legal framework for covered bonds. Notable aspects
of the legislation include:

(i) The ring-fencing of cover pool assets from the issuer's
bankruptcy estate. Also, issuer insolvency does not trigger the
acceleration of the covered bonds.

(ii) The segregation of transaction accounts and cash flows from
the issuer's bankruptcy estate

(iii) Various asset and liability requirements, which include (1)
a nominal value test to ensure that the nominal value of assets
cannot be lower than the nominal value of the covered bonds; (2)
a cash flow test to ensure that the interest and revenues
expected to be generated in one year cannot be lower than that
expected to arise from the covered bonds; (3) a net present value
(NPV) test to ensure that the NPV of the assets must exceed at
least by 2% the NPV of the liabilities and (4) stress test on
interest rates and foreign-currency denominated cashflows.

(iv) A cover pool monitor that is responsible for monitoring the
cover pool on an ongoing basis and observing the compliance with
the CommuniquÇ.

c) The transaction structural features that aim to mitigate
various risks. The features are:

(i) An expected committed over-collateralisation (OC) of 21% for
the first series that aims to mitigate credit risk. Unlike in
most covered bond programmes, committed OC is series-specific and
not programme-based. However, the highest then-existing committed
OC level for any series must be adhered to for the entire
programme. The OC commitment terminates once the series it is
attached to matures; therefore, future series of covered bonds
may have different ratings because they may benefit from
different levels of protection at the time of a CB anchor event.
This feature adds a degree of complexity in the monitoring of
each series issued under the programme.

(ii) An 18-month maturity extension, which aims to mitigate
refinancing risk.

(iii) A currency swap entered into with one or more offshore
banks, which aims to mitigate currency risk, given that cover
assets pay in Turkish liras while the notes are denominated in

(iv) Offshore bank accounts under English law that aim to ring-
fence foreign-currency swap proceeds from Turkey, while ensuring
the swap counterparty receives Turkish liras proceeds from the
issuer in an account opened onshore.

An offshore security agent controls the offshore accounts, which
are assigned for the benefit of the covered bondholders and other
senior creditors. This mechanism significantly lowers the risk
that the Turkish government will interfere successfully with the
offshore accounts in order to repatriate foreign currency
proceeds if it adopts moratorium on the foreign-currency debt
repayments of domestic issuers. As a result of the lower risk of
transfer and convertibility of foreign currency, the deal has
pierced Turkey's foreign-currency ceiling from Baa2 to Baa1, the
local country ceiling.

d) The exposure to market risk, which is 41.8% for this cover

e) The OC in the cover pool is approximately 106% on a nominal
value basis based on data as of the cut-off date (April 12, 2017)
and assuming an issuance of EUR500 million, of which Isbank is
expected to provide 21% on a "committed" basis for the first
series to be issued (see Key Rating Assumptions/Factors, below).

Moody's believes that the strength of the CommuniquÇ and the
programme's structural mechanisms partly mitigate refinancing and
operational risks. Nevertheless, Moody's says that illiquid
scenarios are more likely in a less mature mortgage market, such
as Turkey, so the cover pool would still pose refinancing risk if
an illiquidity scenario were to develop, despite the mitigants.
There are also some risks, such as set-off or commingling, and
some other uncertainties that make it less likely that the issuer
will be able to make timely payments to covered bondholders
following a CB anchor event.

The TPI assigned to this transaction is Improbable.

As of the cut-off date, the total value of the assets included in
the cover pool is approximately EUR4.05 billion, consisting of
99% residential mortgage loans and 1% of substitute assets. The
residential mortgage loans have a weighted-average (WA) seasoning
of 30 months, a WA remaining term of 74 months and a WA loan-to-
value (LTV) ratio of 48.8%. The substitute assets are expected to
consist of around TL 40 million domestic government bonds.

The provisional rating that Moody's has assigned addresses the
expected loss posed to investors. Moody's ratings address only
the credit risks associated with the transaction. Moody's did not
address other non-credit risks, but these may have a significant
effect on yield to investors.

Moody's issues provisional ratings in advance of the final sale
of securities and these ratings only represent Moody's
preliminary opinion. Upon a conclusive review of the transaction
and associated documentation Moody's will endeavour to assign a
definitive rating to the covered bonds.


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 this programme is CR assessment plus 0 notches.
The CR assessment reflects an issuer's ability to avoid
defaulting on certain senior bank operating obligations and
contractual commitments, including covered bonds.

The cover pool losses for this programme are 48.8%. This is an
estimate of the losses Moody's currently models following a CB
anchor event. Moody's splits cover pool losses between market
risk of 41.8% and collateral risk of 7.0%. 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 measures losses
resulting directly from cover pool assets' credit quality.
Moody's derives collateral risk from the collateral score, which
for this programme is currently 10.4%.

The OC in the cover pool is around 106% as of the cut-off date,
assuming an issuance of EUR500 million, of which the issuer is
expected to provide 21% on a "committed" basis for the first
series to be issued. The minimum OC level consistent with the (P)
Baa1 rating is 21%, of which the issuer should provide 21% in a
"committed" form. 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 April 12, 2017).

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.

For Isbank's mortgage covered bonds, Moody's has assigned a TPI
of Improbable.

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

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

Based on the current TPI of "Improbable", the TPI Leeway for this
programme is 0-1 notches. This implies that Moody's might
downgrade the covered bonds because of a TPI cap if it lowers
Isbank's CB anchor, all other variables being equal.

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


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


FINBANK ODESA: Placed in Temporary Administration
The Individuals' Deposit Guarantee Fund on the basis of the
decision of the National Bank of Ukraine (NBU) of April 7, 2017,
on declaring Finbank (Odesa) insolvent on April 10 introduced
temporary administration in the financial institution for one
month, the fund said on its website.

Viktoria Stepanets has been appointed temporary administrator of
the bank.

As reported, the NBU board by decision No. 217-RSh/BT declared
Finbank insolvent.

The National Bank noted that following the results of examination
of Finbank, held on April 1, 2016, the NBU board in October 2016
approved the necessary amount of capitalization for the financial
institution. Finbank, in turn, submitted a program of
capitalization to the regulator.

However, as of April 1, 2017 these measures had not been

PRIVATBANK: Needs at Least UAH30BB in Additional Capitalization
Interfax-Ukraine reports that nationalized PrivatBank (Dnipro)
will need additional capitalization in the amount of at least
UAH30 billion.

National Bank of Ukraine Chairman Valeriya Gontareva said this,
while commenting on the preliminary results of the audit of
PrivatBank at the round table "Banking sector reforms in Ukraine:
achievements, challenges and forecasts" organized by the Atlantic
Council analytical center, Interfax-Ukraine relays, citing a
report on the NBU's Facebook page.

"According to the outcome of the audit, which will be made public
by the end of this month, it might turn out the need for
additional capitalization would be even higher.  Together with
the Ministry of Finance, based on these final results, we, as the
owner of the bank, will determine what amount of funds the bank
needs," Interfax-Ukraine quotes Ms. Gontareva as saying.

At the same time, she noted the preliminary audit results were
worse than expected, Interfax-Ukraine discloses.

                        About PrivatBank

PrivatBank is the largest commercial bank in Ukraine, in terms of
the number of clients, assets value, loan portfolio and taxes
paid to the national budget.  PrivatBank has its headquarters in
Dnipropetrovsk, in central Ukraine.

                          *   *   *

The Troubled Company Reporter-Europe reported on April 12, 2017,
that Moody's Investors Service downgraded the long-term foreign-
currency senior unsecured debt rating of Privatbank to C from Ca.
The bank's baseline credit assessment ("BCA"), adjusted BCA, long
and short-term local and foreign currency deposit ratings, and
its long and short-term Counterparty Risk Assessments were
unaffected by rating action.

The downgrade of Privatbank ' senior unsecured debt rating to C
from Ca primarily reflects Moody's expectation that senior debt
holders will sustain material losses as a result of bail-in and
conversion into equity.

The C senior unsecured debt rating does not carry outlooks.
Moody's will then withdraw the C foreign currency senior
unsecured debt rating of Privatbank.

As reported by the Troubled Company Reporter-Europe on Jan. 16,
2017, S&P Global Ratings revised its counterparty credit ratings
on Ukraine-based PrivatBank to 'SD' (selective default) from 'R'.
The rating action follows the Deposit Guarantee Fund's
announcement that PrivatBank's three outstanding loan
participation notes have been bailed in following the placing of
the bank under temporary administration in late December 2016.

* UKRAINE: Arrears of Insolvent Banks on Refinancing Loans Down
Ukrainian News Agency, citing the National Bank of Ukraine press
service's statement, reports that the arrears of insolvent banks
on refinancing loans issued by the NBU decreased by 0.04% to
UAH51.9 billion (as at April 1) over the previous month.

According to Ukrainian News Agency, in particular, the arrears
stood at UAH51.92 billion as of March 1, and at UAH51.9 billion
as of April 1 (it was UAH51.76 billion as of January 1).

Of the amount, UAH45.19 billion is the principal and UAH6.72
billion is interests, Ukrainian News Agency notes.

Insolvent banks repaid UAH over 4 billion of arrears on
refinancing loans issued by the NBU in 2016, Ukrainian News
Agency discloses.

U N I T E D   K I N G D O M

ASSETCO: Grant Thornton Faces GBP3.5MM Fine Over Audit
Ben Martin at The Telegraph reports that Grant Thornton has been
hit with a GBP3.5 million fine and a reprimand by the accountancy
watchdog for its role in a scandal at AssetCo that almost
collapsed six years ago.

According to The Telegraph, the Financial Reporting Council (FRC)
found that the conduct of Grant Thornton, the UK's fifth biggest
auditor, and Robert Napper, a now-retired partner of the firm,
"fell significantly short of the standards reasonably to be
expected" following an investigation into their auditing of
AssetCo's accounts for 2009 and 2010.

It levied a GBP3.5 million fine on the accountancy giant, which
has been lowered to GBP2.275 million to account for a settlement
discount, and a GBP200,000 penalty on Mr. Napper, which has also
been reduced to GBP130,000, The Telegraph discloses.

In a further blow, the FRC has issued Grant Thornton with a
"severe reprimand" for its misconduct and excluded Mr. Napper
from the Institute of Chartered Accountants in England and Wales
for three years, The Telegraph relates.

AssetCo, a spin-off from British Gas, used to supply fire engines
for fleets in London and Lincolnshire but was plunged into
turmoil after it revealed that its 2009 and 2010 results had
included "significant overstatement of profits and assets", The
Telegraph recounts.  It was bailed out in 2011 and sold off its
UK business a year later to focus on the Middle East, The
Telegraph relays.

The FRC, as cited by The Telegraph, said that both Grant Thornton
and Mr. Napper had acknowledged a series of shortcomings in their
dealings with AssetCo, including a failure to disclose that a
2008 business disposal had been a related-party transaction and
failing to identify that by 2010 the company was struggling to
continue as a going concern, when "AssetCo's board was aware that
it had serious cash flow problems".

According to The Telegraph, Gareth Rees QC, the executive counsel
to the FRC, said that Grant Thornton had "admitted widespread and
significant failings in their audit work" of AssetCo and that it
"specifically has accepted there were serious failings in the
execution of certain aspects of the firm's quality control

The watchdog also conceded, however, that the auditors were
"misled" by AssetCo's bosses, The Telegraph notes.  In January,
the FRC issued a formal complaint against the company's former
chief executive, finance chief and financial controller and the
trio are awaiting a tribunal hearing, The Telegraph recounts.

In a separate legal action, AssetCo has also brought a GBP38
million negligence claim against Grant Thornton over its 2009 and
2010 audits, The Telegraph notes.

AssetCo is an Aim-listed fire engine firm.

BLUEHAT GROUP: Placed in Liquidation Due to Mismanagement
--------------------------------------------------------- reports that mismanagement and attempts to diversify
into other markets spelled the end of Bluehat Group, says former
business partner Catalyst Global, as it confirms the UK company
has been liquidated.

According to, Catalyst Global head of business
development Mark Davenport has called the downfall of the team
building company "disappointing", adding that it had terminated
its exclusive contract with Bluehat and that it would not be
offering licenses to any former directors.

Bluehat creditors filed a notice last week calling for a
corporate insolvency meeting in London to decide the agency's
fate, at which it was voted that the company would be liquidated, says.

"We are surprised by the news of the Bluehat Group's liquidation
especially considering that sales of Catalyst Global team
building products have been very strong in the UK over the past
five years. The Catalyst Global network now has over 40 partners
worldwide. During their time with us, Bluehat were consistently
one of the top five performers in the network," the report quotes
Mr. Davenport as saying.  "It's disappointing news. We developed
some great relationships over the years with the staff on the
ground at BlueHat Group who were a skilled and knowledgeable
team. This liquidation at the hands of mismanagement is a great
loss to the industry."

Bluehat attained an exclusive license to market Catalyst products
in the UK in 2011 before signing a deal in 2014 to take over the
operations of Catalyst USA, discloses.

"We are lead to believe that a series of poor business decision
to diversify into events and other markets, distracted Bluehat
Group from their core business of team building in the UK,
leading to their slow demise over the past few years," Mr.
Davenport, as cited by, said.

Catalyst Global has said it has redefined its UK territory and
would be announcing a new partner in Scotland in the coming days, adds.

DIAMONDCORP PLC: At Risk of Going Into Administration
Adam Clark at London South East reports that South Africa-focused
mining company DiamondCorp PLC said it is at risk of going into
administration, following a failure to reach agreement between
its business rescue practitioner and local unions.

DiamondCorp said talks with the Association of Mining &
Construction Union ended with no agreement to allow care and
maintenance of mines to begin, according to London South East.
Therefore, all the company's employees will be laid off,
effective immediately.

The report discloses the failure has put DiamondCorp's hopes of
extra funding in peril, as liquidation priority will be given to
employment-related costs.  This means a deal struck with the
Industrial Development Corporation of South Africa for loans to
the company cannot be put in place, as the debt will not have
senior secured status, the report notes.

DiamondCorp said unless a plan for funding can be found by mid-
May, it will likely need to go into administration, the report

The report says shares in DiamondCorp were suspended at the
company's request in November after storms flooded the mine and
caused operations to be shut down, with operating subsidiary Lace
Diamond Mines put in business rescue.

ENTERPRISE THE BUSINESS: Directors Banned for Flouting Rules
Three directors of a former Bournemouth-based credit union which
went into administration owing more than GBP7 million have
received lengthy bans.

Richard Charles Nichols, Phillip Raymond Neale and Gillian
Birkett were directors of Enterprise The Business Credit Union
Ltd T/A DotcomUnity Credit Union (EBCU) which went into
administration on May 14, 2015 with estimated total creditor
claims totalling GBP7,277,425.

The Secretary of State for Business, Energy and Industrial
Strategy has accepted a disqualification undertaking from Richard
Charles Nichols for a period of 9 years, commencing on 24 April
2017. Mr. Nichols had not disputed that he had failed to ensure
that the rest of the EBCU Board either agreed, or were even aware
of, changes in the contract with a company of which he was also a
director. This caused additional fees of GBP392,629 to be charged
by that company. Additionally, by failing to include the monies
charged and paid out to his other company in EBCU's accounts, he
failed to ensure that EBCU filed accurate accounting information
to the Prudential Regulatory Authority (PRA), at a time when
EBCU's capital position was below the required level and it was
subject to the PRA's regulatory enquiries.

The Secretary of State has also accepted disqualification
undertakings from Phillip Raymond Neale and Gillian Birkett for 6
years each. Both they and Mr. Nichols did not dispute that they
had failed to ensure that EBCU obeyed a voluntary imposition of
requirements, agreed with the PRA on 24 December 2014, to cease
the normal operation of the credit union until such time that it
was able to meet regulatory requirements: In the following weeks
EBCU further damaged the liquidity of the company, by continuing
to issue loans in direct breach of the restriction.

The disqualification prevents Mr. Nichols, Mr. Neale and Mrs
Birkett from directly or indirectly becoming involved in the
promotion, formation or management of a company for the duration
of their disqualification terms without the permission of the

Commenting on the disqualification, David Brooks, Group Leader at
The Insolvency Service, said:

"On December 19, 2014, Mr. Nichols told the Board of EBCU that
the company had 'broken all rules in the book' and 'can't
continue to flout the rules'. However, both he and Mr. Neale and
Mrs Birkett then allowed the company to do just that, leading
directly to its failure.

"In addition, Mr. Nichols allowed a serious conflict of interests
to occur regarding a second company, which carried out all
almost-all administrative functions within the credit union. He
then failed to prioritise his duties to EBCU regarding both the
agreement of a fee structure with that company and the accurate
reporting of the intercompany transactions in its accounts. This
is serious misconduct and the high tariff of disqualification
reflects the seriousness of such behaviour.

"We are grateful for the assistance of the Prudential Regulation
Authority, in particular, in this matter."

Enterprise The Business Credit Union Ltd T/A DotcomUnity Credit
Union was incorporated on June 11, 1996 and latterly traded from
3rd Floor, Enterprise House, Oxford Road, Bournemouth, BH8 9EY.
It was previously named:

    Federation of Small Businesses Credit Union Ltd
    Lancashire and Cumbria FSB Credit Union Ltd

The Company went into administration on May 14, 2015 and then
into liquidation on August 17, 2015, with an estimated deficiency
as regards creditors of GBP1,466,161. Creditor claims up to
October 2016 totaled GBP7,277,425.

Richard Charles Nichols' date of birth is in January 1959 and he
resides in Hampshire.

The Secretary of State accepted a Disqualification Undertaking
from Mr. Nichols for a period of 9 years on April 3, 2017. The
disqualification is due to commence on April 24, 2017. The
matters of unfitness, which Mr. Nichols did not dispute in the
Disqualification Undertaking, were that he failed from July 2014
to March 2, 2015 to ensure that the Board of Enterprise The
Business Credit Union Ltd either agreed, or were aware of,
changes to a contract with a company of which he was director,
leading to additional fees of GBP392,629 being charged.

* the EBCU Board had given interim agreement to an unsigned
contract with the associated company on 22 March 2013 to operate,
create and carry out all functions for the administration of the
Credit Union it operated. Fees for this service included 50% of
all loan interest actually received

* however, the associated company produced to the liquidator an
altered agreement, purportedly signed by EBCU's then Chairman,
altering the loan interest to be 50% of the total interest due
per loan and adding an investment fee for New Savings Accounts,
including ISAs. The Chairman denies knowingly signing the altered
contract and all directors deny agreeing to it. I stated that I
knew the altered contract was being operated from July 2014

* as a consequence the associated company invoiced GBP65,212 in
investment fees and GBP633,117 (before VAT) for loan fees when
the original contract fees are estimated at GBP305,700

He failed to ensure that EBCU filed accurate accounting
information to the Prudential Regulatory Authority, in that:

* the accounts to March 31, 2014, signed on September 23, 2014
and sent to the PRA on October 7, 2014, schedule an amount of
GBP93,070 owed to EBCU by a company of which he was also
director. This figure included GBP23,940 of accrued commission to
be charged by that company for the period to March 31, 2014.
However, by
July 10, 2014, he knew or ought to have known that that company
had invoiced GBP176,362 in respect of the services provided for
the period to March 31, 2014 and net assets had been therefore
overstated by GBP152,422 (before VAT)

* on November 13, 2014, EBCU he emailed a letter to the PRA
stating that it acknowledged that it had a shortfall in its
regulated capital reserves and attached profit and loss and cash
flow accounts supporting its strategy for correcting the position
by March 2015.The profit and loss account stated that the
aforementioned associated company had not charged any fees in the
previous 8 months and intended not to do so in the next 4 months.
However, the company had already invoiced GBP310,508 by that
date, and invoiced another GBP571,621 in the following 4 months.
In addition, the cashflow forecast stated that there would be no
payments to the associated company in respect of fees from
October 2014 to September 2015. However, GBP38,262 had already
been paid to it in October 2014, another GBP13,000 was paid on
the day of the email, and GBP257,293 was paid thereafter

He failed to ensure, from December 24, 2014 to March 2, 2015,
that EBCU met its regulatory requirement to not make new loans,
or make further advances in relation to, or otherwise vary the
terms of, any existing loans. In that period, EBCU was subject to
a Voluntary Imposition Of Requirements agreed with the Prudential
Regulatory Authority to cease the normal operation of the credit
union until such time that it was able to meet regulatory
requirements. EBCU made payments in the period of GBP518,115 in
respect of 134 loans; a regulatory breach which then contributed
to its insolvency.

Gillian Birkett's date of birth is in May 1956 and she resides in
Bournemouth. The Secretary of State accepted a disqualification
undertaking from Mrs Birkett for a period of 6 years on March 9,
2017. The disqualification commenced on 30 March 2017.

Phillip Raymond Neale's date of birth is January 1964 and he
resides in Bournemouth.The Secretary of State also accepted a
disqualification undertaking from Mr. Neale on March 7, 2017 for
a period of 6 years. The disqualification commenced on March 28,

The matters of unfitness, which Mr. Neale and Mrs Birkett did not
dispute in their Disqualification Undertakings, were that they
failed to ensure, from December 24, 2014 to May 8, 2015, that
Enterprise The Business Credit Union Ltd met its regulatory
requirement to not make new loans, or make further advances in
relation to, or otherwise vary the terms of, any existing loans.
In that period, EBCU was subject to a voluntary imposition of
requirements agreed with the Prudential Regulatory Authority to
cease the normal operation of the credit union until such time
that it was able to meet regulatory requirements. EBCU made
payments in the period of GBP635,511.67 in respect of 175 loans;
a regulatory breach which then contributed to its insolvency.

A disqualification order has the effect that without specific
permission of a court, a person with a disqualification cannot:

  -- act as a director of a company
  -- take part, directly or indirectly, in the promotion,
     formation or management of a company or limited liability
  -- be a receiver of a company's property

Disqualification undertakings are the administrative equivalent
of a disqualification order but do not involve court proceedings.
Persons subject to a disqualification order are bound by a range
of other restrictions.

The Prudential Regulation Authority ('PRA') was created as a part
of the Bank of England by the Financial Services Act 2012 and is
responsible for the prudential regulation and supervision of
around 1,700 banks, building societies, credit unions, insurers
and major investment firms. The PRA's objectives are set out in
the Financial Services and Markets Act 2000 (FSMA). Further
information about the work of the PRA is available.

GLEESON BESSENT: High Court Winds Up Pension Trustee Companies
Two Preston-based pension companies were wound up in the public
interest by the High Court on March 28, 2017.

Gleeson Bessent Trustee Services Ltd administered nine
occupational pension schemes and Gleeson Bessent Trustees Ltd,
was the trustee of three of those schemes, namely, the Focusplay
Retirement Benefit Scheme, the Focusplay No 2 Retirement Benefit
Scheme and the P.S.P. Retirement Benefit Scheme.

The court action follows an investigation by the Insolvency
Service which found the companies did not market the various
schemes but approved a series of investments which were then
offered to the general public through a network of introducers
and sub-introducers.

Those who chose to take up the offer were charged an initial fee
of up to GBP1,645 in addition to a percentage annual management
fee which could be as much as GBP2,500, with total fees generated
by the nine schemes being in excess of GBP3.5m over 3 years.

The investigation also found the companies failed to adequately
carry out their trustee role by neglecting to obtain independent
investment advice, failing to comply with their own governance
statements and by failing to adhere to pensions legislation and
guidance issued by the Pensions Regulator; In particular, by
making loans from the schemes to the sponsoring employer as well
as to associated companies and individuals.

The court heard there had been a failure to ensure share
certificates were obtained in return for investments made, that
the companies had operated with a lack of transparency,
particularly in not ensuring that investors were aware their
funds were being put into high risk investments, and that members
of the schemes were offered contrived and artificial employment
in order to comply with guidance then in place.

Scott Crighton, Group Leader with Company Investigations North

"The Insolvency Service will investigate and bring to a halt the
activities of companies that fail to meet the required standard
for dealing with investment funds placed with them by members of
the public and that are found to be operating against the public

"For their own protection, members of the public need to be wary
of any uninvited contact offering them a free pension review and
to be aware that many of the products on offer are unregulated
and high risk or may even be outright scams and the safest course
of action is to simply ignore them."

The petitions to wind-up Gleeson Bessent Trustee Services Ltd and
Gleeson Bessent Trustees Ltd were presented under s124A of the
Insolvency Act 1986 on February 16, 2017. The Official Receiver
was initially appointed as Provisional Liquidator of both Gleeson
Bessent Trustee Services Ltd and Gleeson Bessent Trustees Ltd on
March 16, 2017 and was then appointed as Liquidator of both
companies on March 28, 2017.

MAD CATZ: Europe Unit Placed in Administration
Muhammad Aldalou at Insider reports that jobs have been lost at
the Milton Keynes-based UK arm of global gaming hardware
manufacturer Mad Catz.

Andrew Duncan and Neil Bennett, directors at Leonard Curtis, were
appointed joint administrators to Mad Catz Europe Ltd on April 5,
2017, according to the report.

Insider relates that the business was the UK registered trading
company of Mad Catz Interactive, which was headquartered in San
Diego, California, and listed on the New York Stock Exchange. The
group also had offices across North America, Europe and Asia.

On March 31, 2017, the group's Canadian, US and Hong Kong
companies entered into insolvency processes. Mad Catz Europe was
unable to trade without the support of the wider group and ceased
trading shortly after.

Mad Catz Europe was based in Milton Keynes and Magor, Wales. The
majority of its 31 employees were made redundant on April 5, with
the exception of a small number of staff who have been retained
temporarily to assist the joint administrators, Insider

Insider says the Mad Catz group had been making video game
controllers, battery packs, memory cards, headsets and flight
sticks for almost 30 years.  However, it suffered from liquidity
problems as a result of a co-publishing deal with US video game
developer Harmonix for Rock Band 4, a music video game which
allows players to simulate playing music across different genres
using instrument controllers that mimic playing guitar, drums and

Mad Catz developed new instrument controllers and marketed and
distributed the title worldwide. The game was released for
PlayStation 4 and Xbox One in October 2015. In contrast to the
significant sales and gross profit that was anticipated by the
group, Rock Band 4 sales were weak.

"Over the last two years, Mad Catz has had a rough ride. They
overestimated demand for the game, which is unfortunate because
Mad Catz had solid foundations, producing innovative products for
PlayStation and Xbox, amongst others. Nonetheless, poor sales of
Rock Band 4, and its knock on effects, pushed Mad Catz into
insolvency," the report quotes Andrew Duncan as saying.

MOTO FINANCE: Fitch Assigns B+ Rating to GBP150MM 2nd Lien Notes
Fitch has assigned UK-based Moto Finance Plc's GBP150 million
4.5% Second Lien Notes due October 2022 a final rating of
'B+'/RR3/52%. The notes have been issued as part of the
refinancing by the parent company, the UK-based Moto Ventures
Limited. Fitch has also affirmed Moto Ventures Limited Issuer
Default Rating (IDR) at 'B'. The Outlook is Stable.

The assignment of the final rating and the affirmation of the IDR
follow a review of the final documentation which materially
conforms to the information received at the time the agency
assigned expected rating to the notes on 13 March 2017.

The new notes have replaced the previously outstanding senior
secured notes of GBP175 million due 2020 issued by the same
entity. The notes are structurally and contractually subordinated
to the senior secured bank debt comprising a committed term loan
of GBP450 million, a capex facility of GBP100 million and a
revolving credit facility (RCF) of GBP10 million. The notes
benefit from the same security and guarantor coverage as the
previous notes.

In addition to the planned early redemption of the existing notes
and issuance of new second lien notes, Moto Ventures Ltd. (Moto)
has also refinanced its bank loan facilities at the level of Moto
Investments Ltd. by extending the maturity to March 2022,
repricing the facilities and increasing the headroom under the
lock-up tests, financial covenants and certain permitted baskets.


Stronger Cash Flow; Rising Leverage: The company's rating
affirmation reflects Fitch's expectations of a stable operating
performance with increasing profitability and cash-flow
generation in the context of higher financial indebtedness.

Resilient Business Model: Moto's performance has remained
resilient through the cycle, despite the exposure to inherently
volatile retail demand, and Fitch see this as a strong supportive
factor for the rating. This is because of the less discretionary,
captive nature of motorway travel retail compared to traditional
high street retail, a highly regulated environment limiting
direct competition, and a strong franchise portfolio with
favourable terms which allows a high degree of operational
flexibility. Fitch also do not anticipates near-term changes to
sector regulation. Moreover, given Moto's recent extension of
maturing franchise contracts, Fitch projects steadily improving
profitability from existing sites.

Asset Productivity to Improve: The medium-term capex plan will
improve profitability through the expansion of existing and the
development of new sites, as well as the roll-out of selective
branded stores. Based on Moto's past capex efficiency and Fitch
assessment of the investment return of comparable businesses,
Fitch views the incremental earnings projected by the management
as reasonable. Meanwhile, a considerable step-up in capex and the
simultaneous implementation of numerous asset development
projects entail moderate execution risks. However, increased
profits from the planned expansion will mitigate refinancing
risks related to increased levels of debt.

Negative Free Cash Flows: The rating remains constrained by
negative free cash flows (FCF) due to regular shareholder
distributions. Before considering any dividend distributions,
Moto remains structurally a cash-generative business, capable of
funding a significant part of growth investments. As long as Moto
remains compliant with the lock-up tests and maintenance
covenants, and organic cash generation remains sound, the
negative free cash-flow profile will not put pressure on the

Leverage Headroom Exhausted: Higher projected drawn debt at
refinancing, together with utilisations under the capex facility
between 2017-2019, will lead to some re-leveraging to 7.0x on a
funds from operations (FFO) basis, leaving only small leverage
headroom under the current rating. In the absence of scheduled
debt amortisations and a slow earnings ramp-up from growth
investments, the level of financial risk is projected to remain
persistently high at the entry level of 7.0x based on FFO
adjusted leverage, which is weak for the current 'B' IDR,
although mitigated by demonstrated profit resilience.

Above Average Recovery for Note Holders: According to Fitch
bespoke recovery analysis, higher recoveries would be realised
using a going-concern approach, despite Moto's strong asset
backing. Better recovery expectations by preserving the business
model, as opposed to liquidating its balance sheet, reflect
Moto's structurally cash-generative business and well-managed
franchise portfolio.
Given the stable nature of the asset and cross-referencing with
peers with stable demand features, Fitch apply an EBITDA discount
of 15% leading to a hypothetical post-distress EBITDA of around
GBP90 million, and maintain the 7.5x EV/EBITDA multiple in

Considering the priority of payments on enforcement, the note
holders would rank second after senior secured bank debt lenders
and in a potential distress scenario would achieve a recovery of
52% of nominal value, resulting in an expected instrument rating
of 'B+'(EXP)/RR3/52%, leading to a one-notch uplift from the IDR,
as with the currently outstanding senior notes.


Moto's IDR of 'B'/Stable reflects an infrastructure-like business
profile and operations in a regulated market with high barriers
to entry and limited competitive pressures. Moto's performance
has been resilient through the cycle, reflecting the less
discretionary nature of motorway customers The business is
comparable with catering service providers, such as Elior
(BB/Stable) or Sodexo (BBB+/Stable), or energy service company
Techem (BB-/Stable), all of which face low volume risks given the
high share of contracted revenues and low customer churn. The
constraining factors for the rating are Moto's less diversified
product offering, concentrated geographic footprint with a
presence only in the UK, as well as persistently high financial
leverage. The shareholders' intention to receive regular dividend
distributions signals a financial policy biased towards equity


Fitch's key assumptions within the rating case for Moto include:

- revenue growth at low single-digit rates;
- EBITDA margin gradually improving to above 14% (29% excluding
   fuel) driven by top-line growth;
- capex in line with the business pan with drawdowns in the
   capex facility to finance expansionary capex;
- shareholder distributions in line with the business plan and
   subject to lock-up test.


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

- Positive and sustained post-dividend FCF generation supported
   by steadily improving profitability and the earnings accretive
   expansion programme
- Decline in FFO adjusted leverage to 6.0x or below on a
   sustained basis
- FFO fixed charge cover of 2.0x or higher on a sustained basis

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

- Weak implementation of the capital expansion programme leading
   to steady EBITDA weakening to below GBP100 million on a
   sustained basis
- An increasingly aggressive financial policy translating into
   FFO adjusted gross leverage of above 7.0x on a sustained basis
- FFO fixed charge cover weakening to below 1.5x on a sustained


Satisfactory Liquidity: Organic pre-dividend cash generation is
projected to be positive, at about GBP25 million per year. After
shareholder distributions, Moto's unrestricted cash balance is
estimated at GBP35 million at year-end. Fitch views these levels
as fully sufficient for the company to execute its business plan.
In Fitch calculation of liquidity Fitch excludes GBP5 million as
restricted cash in transit and tills. Fitch projects the five-
year committed RCF of GBP10 million will remain undrawn
throughout the forecast period.

OLIVER ADAMS: Placed Into Voluntary Liquidation
David Keller at BBC News reports an insolvency company was to
start the process of winding up the Northampton-based bakery
Oliver Adams last April 4.

The company had been in a voluntary agreement with creditors over
its debts since last June, but on March 31 the company ceased
trading, according to BBC News.

The report discloses Peter Windatt, from BRI Business Recovery
and Insolvency, said a petition will be presented to Northampton
County Court to put the company into voluntary liquidation, and
then a winding-up order will be made in a few weeks' time.

According to the report he said at the moment he's "not aware" of
any of the shops being taken over by another company, as reported
in the Chronicle and Echo, the report notes.

PULSE FLEXIBLE: Falls Into Administration, 350 Jobs at Risk
Philip Chadwick at Packaging News reports that Pulse Flexible
Packaging has gone into administration with 350 jobs at risk.

Jonny Marston and Howard Smith from KPMG have been appointed
joint administrators to company, which manufactures flexible
packaging for the consumer goods sector, according to Packaging

The report discloses that the majority of staff at Pulse's two
sites, Bury and Saffron Walden, were sent home after the

Production has also ceased although there have been no
redundancies, the report notes.  The administrators are assessing
whether trade can resume in the "immediate term," the report

Marston said that Pulse went into administration due to
"operational challenges that have led to an additional funding
requirement which has prompted it to enter into administration,"
the report relays.  "We are currently assessing whether we can
continue to trade the business while we seek a buyer, and would
encourage any interested parties to contact the joint
administrators as soon as possible," he added.

The report notes the company was born out of a management buyout
from US group Printpack Enterprises.  The firm planned to boost
turnover from GBP60 million to GBP72 million in 2018, the report
relays.  It has a workforce of 350. Pulse has a strong line-up of
customers including M&S, Unilever and Walkers Shortbread, the
report adds.

Q HEALTHCARE: Dentist Disqualified as a Director for 7 Years
Dr. Tapeshwar Anand, the sole director of Q Healthcare Ltd, which
traded as Q Clinic from premises in Harley Street, London, has
signed an undertaking to be disqualified as a director for seven
years after spending over GBP1 million of company money, received
from patients for dental treatments, on a personally-owned
property in Combloux, France.

The funds were spent between July 2009 and March 2013, resulting
in the company falling into arrears with paying its liabilities
to creditors.

At the date the company entered into administration, no value was
listed against the expenditure as an asset, as the company had no
legal interest in the overseas property, resulting in a
deficiency as regards creditors of GBP1,080,093.

In agreeing a disqualification undertaking Dr. Anand accepted
that while a director of Q Healthcare Limited, he breached his
fiduciary duties and failed to act in the best interests of the
company and its creditors. Specifically, by causing the company
to incur expenditure of at least GBP1,040,254 between July 2009
and March 2013 on an overseas property which he owned personally,
and over which the company had no legal charge or security.

Commenting on the disqualification, Martin Gitner, Deputy Head of
Investigations at the Insolvency Service, said:

"It is clear that Dr. Anand breached his duties as a director by
using company funds to finance the refurbishment of a personally
owned property, which means taxpayers and other creditors, lose
out considerably.

"This disqualification should serve as a warning that if
directors behave in this way their conduct will be investigated
fully by the Insolvency Service and they will be removed from the
business environment."

Dr. Anand's date of birth is February 1974 and he currently
resides in New Delhi, India.

Q Healthcare Ltd (CRO No. 04369068) was incorporated on 7
February 2002 and latterly traded from 139 Harley Street, London
W1G 6BG providing dental health treatment.  Dr. Anand was a
director from incorporation.

The Company went into Administration on May 21, 2013 with an
estimated deficiency of GBP1,080,093.

On March 20, 2017, the Secretary of State accepted a
Disqualification Undertaking from Tapeshwar Anand, effective from
April 10, 2017, for 7 years.

At the time of the expenditure the company was insolvent on a
balance sheet basis. The source of funds used to pay for the
overseas property was monies received from patients for the
provision of dental treatments.

A disqualification order has the effect that without specific
permission of a court, a person with a disqualification cannot:

  -- act as a director of a company
  -- take part, directly or indirectly, in the promotion,
     formation or management of a company or limited liability
  -- be a receiver of a company's property

Disqualification undertakings are the administrative equivalent
of a disqualification order but do not involve court proceedings.

Between June 2010 and April 2013 at least 137 reminders, pressing
letters and/or warnings of proposed legal actions were sent by

By March 2011 the company was in arrears with paying its taxation
liabilities to H M Revenue & Customs (HMRC) and by June 2012 HMRC
took enforcement action in respect of unpaid tax liabilities
totalling GBP124,970.

By May 2011 the company was in arrears with making payments to
the key supplier of dental products; in 2012 the key supplier
placed restrictions, and ultimately a stop, on the supply of
further goods to the company as a result of the arrears.

By April 2013 winding up proceedings were being commenced against
the company by two creditors: HMRC for tax liabilities of
GBP87,449 and a credit finance provider for liabilities of

The company went into Administration on 21 May 2013 owing
unsecured liabilities to unconnected parties totalling GBP431,518
(comprising GBP117,029 to patients for dental treatments not
supplied; GBP180,569 to trade & expense suppliers; GBP113,691 to
HMRC for tax; GBP20,229 to a bank) and unsecured liabilities to
me totalling GBP836,684.


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

                 * * * End of Transmission * * *