TCREUR_Public/170428.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

           Friday, April 28, 2017, Vol. 18, No. 84



ARDSHINBANK: Fitch Affirms B+ IDR & Revises Outlook to Stable


AGROKOR DD: Sberbank Mulls Selling Loans Granted to Firm


DONG ENERGY: S&P Affirms 'BB+' Rating on Sub. Hybrid Issues


LION/SENECA FRANCE: Fitch Affirms B IDR, Removes from Watch Pos.


IHO VERWALTUNGS: Fitch Assigns BB+ First-Time IDR


GREECE: Delivers Fiscal Targets, Bailout May Come Next Month
PUBLIC POWER: S&P Retains 'CCC-' CCR on CreditWatch Negative


BLACKROCK EUROPEAN III: S&P Preliminary Rates Cl. F Notes B-


ALITALIA SPA: To Receive Government Bridge Loan, Minister Says


KAZAKHSTAN TEMIR: S&P Affirms 'BB-' CCR on Improving Performance


ARCELORMITTAL: Egan-Jones Raises Sr. Unsec. Debt Ratings to BB-


FORNAX ECLIPSE 2006-2: Fitch Cuts Ratings on 2 Note Classes to C


SILK BIDCO: S&P Lowers CCR to 'B-' on Aggressive Growth Spending


DIGI COMMUNICATIONS: S&P Raises CCR to 'BB-' on Solid Performance

S L O V A K   R E P U B L I C

NEXIS FIBERS: Submits Proposal to Start Restructuring Process


BANCO POPULAR ESPANOL: Egan-Jones Cuts Sr. Unsec. Ratings to BB-


PRIVATBANK: S&P Raises Counterparty Credit Ratings to 'CCC+/C'

U N I T E D   K I N G D O M

ANGLO AMERICAN: Egan-Jones Hikes Sr. Unsec. Debt Ratings to BB
SEADRILL LTD: Egan-Jones Cuts Commercial Paper Ratings to C
TRAVELEX HOLDINGS: S&P Affirms 'B-' CCR on Proposed Refinancing

* UK: Scottish Business Insolvencies Down 7% in 2016-2017


* BOOK REVIEW: Landmarks in Medicine - Laity Lectures



ARDSHINBANK: Fitch Affirms B+ IDR & Revises Outlook to Stable
Fitch Ratings has affirmed the Long-Term Foreign-Currency Issuer
Default Ratings (IDRs) of Ardshinbank (Ardshin) and Ameriabank
(Ameria) at 'B+'. Fitch has revised the Outlook on Ardshin to
Stable from Negative. The Outlook on Ameria is Stable. Fitch has
also assigned Ameria a 'B+' Long-Term Local-Currency IDR.

The banks' IDRs and senior debt ratings are driven by their 'b+'
Viability Ratings (VRs ), which consider the banks' reasonable
financial metrics, underpinned by the recovering economy and
relative currency stability, available capital and liquidity
buffers and solid domestic franchises (end-2016 market shares by
total assets: 17% for Ameria and 13% for Ardshin). The ratings
also factor in the banks' large balance-sheet concentrations and
high loan dollarisation (70%-74% range).

The revision of Ardshin's Outlook to Stable reflects Fitch's
expectation that potential asset quality pressures, in
particular, arising from the restructured/risky exposures could
be gradually absorbed through the bank's earnings without eroding
the bank's capital.

The banks' Support Rating Floors of 'No Floor' and Support
Ratings of '5' reflect Fitch's view that the Armenian authorities
have limited financial flexibility to provide extraordinary
support to banks, if necessary, given the banking sector's large
foreign currency liabilities relative to the country's
international reserves. Potential support from the private
shareholders is also not factored into the ratings, as it cannot
be reliably assessed.

The share of non-performing loans (NPLs, loans more than 90 days
overdue) declined to 3.0% of gross loans at end-2016 from 4.9% at
end-2015, mostly reflecting the denominator effect from portfolio
growth (up by 60%) but also some recoveries in corporate segment.
Reserve coverage of NPLs was moderate at 60% (end-2015: 34%),
reflecting the bank's reliance on loan collateral.

The recent credit growth was mainly driven by cash-covered
exposures to related parties and other clients. According to
management, these exposures reduced by 20% in 1Q17. Additional
potential risks stem from high FX-lending (74% of loans), mostly
to unhedged borrowers, and significant borrower concentrations
with many large loans also having long tenors and bullet
repayments. At end-2016, the 25 largest groups of borrowers
(excluding cash-covered loans) accounted for 45% of loans or 2.6x
Fitch Core Capital (FCC).

Pre-impairment performance remained reasonable in 2016 (estimated
at 3.5% of average loans in 2016; 2015: 4.3%) although margins
fell to 3.5% from 4.6%, pressured by competition and recent
growth of the lower-margin cash-backed loan segment. Impairment
charges remained sizeable at 41% of pre-impairment profit in 2016
(2015: 51%), constraining ROAE at 10% in 2016, same as in 2015.

At end-2016, Ameria's regulatory capital buffer (regulatory
capital ratio, CAR, of 16% and FCC ratio of 13.6%) could allow
the bank to potentially absorb 4.7% of additional credit losses
without breaching the regulatory capital requirements. However,
this should be viewed in light of the bank's risk profile.

Deposit funding (64% of end-2016 liabilities) is visibly
concentrated, although the bank holds a large cushion of liquid
assets, which is net of upcoming wholesale maturities, was
equivalent to 33% of customer deposits (excluding those pledged
as loan collateral). Non-deposit funding is significant (36% of
liabilities, including 16% raised from IFIs) although refinancing
needs are moderate up until 2020.

The recent merger with a smaller domestic Areximbank (Arexim) had
a neutral effect on Ardshin's ratings, as Arexim contributed a
minor 8% to the combined assets of a merged bank, while its
balance sheet had been largely cleaned-up by the previous owners
prior to the merger.

At end-2016, the NPL ratio of the merged bank was 1.7%, down from
3.2% at end-2015 driven by write-offs (largely in the retail
portfolio) and recovery of a single large corporate exposure.
Reserve coverage of NPLs was high at 92%. Restructured exposures
made up further 3% of gross loans, down from 5% at end-2015, but
were weakly provisioned as the bank relies on collateral. The
unreserved NPLs and restructured loans equalled a moderate 20% of

However, further risks stem from unreserved receivables from debt
collection agencies (2% of gross loans or 12% of FCC) to which
Arexim sold some of its NPLs collateralised by real estate. At
end-2016 Ardshin had AMD12 billion (21% of FCC) of repossessed
assets. In Fitch's view, recovery prospects on these
exposures/assets are uncertain and realisation of collateral
takes considerable time. However, Fitch believes that if Ardshin
has to create reserves against these receivables or mark down
repossessed assets, they could be gradually absorbed by bank's
pre-impairment profits without putting pressure on the bank's

Also, as for other banks in Armenia, Fitch note high FX-lending
(70%) and significant concentration (top 25 largest groups of
borrowers accounted for 47% of loans or 2.9x FCC at end-2016) as
potential risk.

Pre-impairment profit was reasonable at 3.4% of average loans in
2016 (2015: 3.0%), supported by stable margins and commission
incomes, and also helped by the improved operating efficiency.
Loan impairment charges were high at 53% of pre-impairment
profits (2015: 66%), weighing on the bottom line. ROAE, net of a
one-off effect from Arexim's consolidation, remained modest at 9%
in 2016 (2015: 4%, standalone).

The regulatory capital buffer (regulatory CAR of 14.7% at end-
2M17, reflecting sizeable AMD17 billion deductions for
repossessed assets and real estate) could allow the bank to
absorb a moderate 2.9% of credit losses without breaching the
regulatory minimum capital ratio of 12%. End-2016 FCC (net of
dividend paid in 1Q17) was estimated at a solid 14.5%.

Ardshin's customer funding has historically been stable, although
deposit concentrations are high. The risks are mitigated by
Ardshin's large liquidity cushion, comprising unrestricted cash,
short-term interbank and unencumbered sovereign bonds. Liquid
assets at end-2M17 covered about 30% of customer accounts. Non-
deposit funding is significant (37% of liabilities, including 13%
from IFIs), while the bank's 2017 refinancing needs are
manageable (10% of liabilities or 55% of the liquidity buffer).

Ameria's and Ardshin's credit metrics are sensitive to the
performance of the economy and stability of the local currency.
Marked weakening of banks' asset quality metrics, or the need to
create additional provisions against unreserved problem
exposures, resulting in weaker earnings and capital pressures,
without sufficient support being provided by the shareholders,
may result in downgrades. Improvements in the economy and the
banks' financial metrics would be positive for their credit
profiles, although an upgrade is unlikely in the medium term, as
banks are rated in line with the sovereign.

Changes to the banks' Long-Term IDRs would impact the senior
unsecured debt ratings.

The rating actions are as follows:

Long-term Foreign-Currency IDR: affirmed at 'B+', Outlook Stable
Short-term Foreign-Currency IDR: affirmed at 'B'
Long-term Local-Currency IDR: assigned at 'B+', Outlook Stable
Short-term Local-Currency IDR: assigned at 'B'
Viability Rating: affirmed at 'b+'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'
Senior Unsecured Debt: affirmed at 'B+'; Recovery Rating 'RR4'

Long-Term IDR: affirmed at 'B+', Outlook revised to Stable from
Short-Term IDR: affirmed at 'B'
Viability Rating: affirmed at 'b+'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'
Senior unsecured debt (issued by Dilijan Finance B.V.): affirmed
at 'B+', Recovery Rating 'RR4'


AGROKOR DD: Sberbank Mulls Selling Loans Granted to Firm
Kira Zavyalova at Reuters reports that Sberbank's First Deputy
Chairman Maxim Poletayev said the bank is considering selling
EUR1.1 billion (GBP920.1 million) in loans it granted to indebted
Croatian food and retail group Agrokor.

"We are also considering a possibility of selling Agrokor's debt
and are in talks with buyers on the international markets,"
Mr. Poletayev said in an interview with Reuters.

Agrokor, Croatia's biggest private firm, piled up debts worth
some HRK45 billion (US$6.42 billion), or six times its equity,
during a rapid expansion in the region, Reuters relays, citing
according to the latest available official data from last

Agrokor is the biggest employer in the Balkan region with some
60,000 staff, Reuters notes.

Mr. Poletayev said Sberbank, one of the biggest lenders to
Agrokor, was ready to go to court to seek a suitable solution in
restructuring the company's debt, Reuters relates.

More clarity on the extent of Agrokor's debt is expected by the
end of June because all the creditors, including both banks and
suppliers, have until June 10 to submit their claims, Reuters

Agrokor's owner Ivica Todoric handed control of the company to
the Croatian government earlier this month under an emergency law
to handle a restructuring of the business, Reuters recounts.

According to Reuters, Mr. Poletayev said the possibility of
providing new loans to Agrokor and future talks on bailing out
the Balkan firm will depend on the status of that EUR100 million

Mr. Poletayev said that Sberbank's loan had kept Agrokor
operations afloat for two months, without which "the company
would have gone bankrupt a month earlier", Reuter relays.

Zagreb-based Agrokor is the biggest food producer and retailer in
the Balkans, employing almost 60,000 people across the region
with annual revenue of some HRK50 billion (US$7 billion).

                            *   *   *

The Troubled Company Reporter-Europe reported on April 10, 2017,
that S&P Global Ratings said it lowered its long- and short-term
corporate credit ratings on Croatian retailer Agrokor d.d. to
'CC/C' from 'B-/B'.  The outlook is negative.  At the same time,
S&P lowered the issue rating on the senior unsecured notes to
'CC' from 'B-'.

On April 2, 2017, a spokesperson for the Agrokor group said that
the company reached an agreement with its bank creditors to
freeze debt payments.  The creditor group includes Sberbank, VTB,
and Erste Bank, which together account for most of the EUR2.5
billion loan debt for the Agrokor group, as of Sept. 30, 2016.

The TCR-Europe on March 31, 2017, reported that Moody's Investors
Service downgraded the Croatian retailer and food manufacturer
Agrokor D.D.'s corporate family rating (CFR) to Caa1 from B3 and
its probability of default rating (PDR) to Caa1-PD from B3-PD.
Moody's has also downgraded the senior unsecured rating assigned
to the notes issued by Agrokor and due in 2019 and 2020 to Caa1
from B3. The outlook on the company's ratings remains negative.

"Our downgrade of Agrokor's rating reflects Moody's views that
the company is no longer able to sustain its high level of trade
payables, which may constrain its liquidity position," says
Vincent Gusdorf, a Vice President -- Senior Analyst at Moody's.
"This comes at a time when the company has limited means to raise
additional sources of liquidity owing to its restricted access to
credit markets and its reliance on a limited number of banks."


DONG ENERGY: S&P Affirms 'BB+' Rating on Sub. Hybrid Issues
S&P Global Ratings said that it has affirmed its 'BBB+/A-2' long-
and short-term corporate credit ratings on Denmark-based power
and gas company DONG Energy A/S.  The outlook is stable.

At the same time, S&P affirmed its 'BBB+' rating on the company's
senior unsecured issues and S&P's 'BB+' rating on its
subordinated hybrid issues.

The affirmation follows continuous improvement in the company's
financial performance, as well as revenue and EBITDA growth in
the company's subsidized offshore wind projects.  This, coupled
with the renegotiation of gas purchase contracts, which has
strongly benefitted the Distribution and Customer Solutions
division, led to stronger credit measures than our projections
for 2016, with funds from operations (FFO) to debt at 66.1%
versus 37.5% in 2015. The company is also likely to divest its
oil and gas assets, although the timing and financial impact is
yet unknown.  These factors could result in DONG Energy's credit
measures remaining stronger than expected for the 'bbb' stand-
alone credit profile and 'BBB+' ratings in the near term.

In S&P's view, the company's large expansion into offshore wind
projects -- primarily in the U.K., Germany, the Netherlands, and
at a later stage in the U.S. and Taiwan -- will be supported by
the group's strategy to sell 50% of the assets early on or before
construction begins, to cover some of the costs.  However,
overall, S&P assumes that the expansion will result in negative
free cash flow after capital expenditures and dividends in 2017.

At the same time, DONG Energy has announced its intention to
divest its oil and gas business.  Given that segment's poor
performance in the recent past, including a Danish krone (DKK)
14.8 billion (about EUR2.0 billion) impairment due to low
commodity prices, announced in February 2016 and booked in the
2015 accounts, S&P do not expect the divestment will adversely
affect the company's business risk profile.  The financial impact
of the divestment will be clearer once a sale is announced, but
S&P notes that there are significant decommissioning liabilities
attached to these assets.  Also, given the company's financial
policy, which targets FFO to debt of about 30%, S&P expects that
the company will likely use its current financial headroom for
growth in its core offshore wind business, either through new
investments, potentially selling fewer stakes in existing wind
farms, or -- eventually -- for returns to shareholders.

With the divestment of the oil and gas business, S&P expects DONG
Energy will increasingly focus its investments in the offshore
wind industry, where it currently enjoys a leading market share
of around 30%.  S&P considers that DONG Energy's business risk
profile benefits from the large contribution of subsidized
earnings from its offshore wind operations.  Wind power
operations accounted for about 50% of 2016 EBITDA.  Given the
group's intention to increase its 3.6 gigawatts (GW) of
constructed capacity to 7.4GW by 2020, S&P expects EBITDA from
long-term contracted or subsidized activities will represent more
than 80% of DONG Energy's EBITDA in 2020.

S&P do not expect the recent zero-subsidy bids (or zero bids) for
two offshore wind plants in Germany will significantly affect
DONG Energy's future strategy.  This is because the company
expects to benefit from quite unique circumstances, such as
significantly bigger turbines, probably 13 megawatts (MW) to
15MW, which should be in the market in 2024; and the opportunity
to combine the two projects into one large project with the
option of adding additional volume in next year's auction.  S&P
also acknowledges that the risk is limited by a EUR59 million bid
bond if DONG Energy does not pursue the project, with the final
investment decision expected in 2021.  Zero bids point to the
increasing pressure on the profitability of offshore wind plants,
notably in Europe, resulting from technological improvements and
increasing competition.

DONG Energy also has a strong and integrated position in the
Danish energy market, with leading positions in electricity and
heat generation, as well as gas and electricity sales.  In
addition, while the timing is still uncertain, S&P's base case is
that the oil and gas assets will be divested within the next two
years.  S&P believes the relatively small scale and geographic
concentration of the oil and gas assets are partly mitigated by
their location in what S&P views as low-risk countries, including
the U.K., Denmark, and Norway.  Also, the group has continued to
show a good track record of operating performance, in controlling
costs in the oil and gas segment and in renewable energy
production.  However, weather conditions could influence
production levels.

In the past, DONG Energy's profitability has been affected by
large impairments of its oil and gas assets and by lower power,
oil, and gas prices in Europe.  However, as the group's business
mix moves toward a greater portion of earnings from its wind
segment, S&P expects its EBITDA margins will remain at 30%-34%
over the next two years.

S&P further acknowledges that DONG Energy benefits from stable
EBITDA from its regulated electricity distribution in Denmark.
Given the relatively low proportion of total EBITDA (less than
10%), S&P do not, however, see this as adding any material
stability to cash flows; therefore S&P benchmarks DONG Energy's
credit metrics against S&P's standard volatility table.

S&P do not anticipate any changes in the Danish government's
willingness or ability to support DONG Energy following the
disposal of the oil and gas business.  In line with a broad
political agreement, the Danish government will retain majority
ownership (at least 50%) of DONG Energy at least until 2020, and
S&P expects the company will continue to maintain a strong link
with the Danish government.

The stable outlook reflects S&P's assumption that the operating
performance of DONG Energy's wind power segment will remain
credit supportive over the next two years, with an expected
average EBITDA margin of about 60%.  S&P expects that DONG
Energy's relationship with the Danish government will remain
stable, and that there will be no significant changes to the
company's current strategy or financial policies, which support
FFO to debt of about 30%.

S&P could lower the rating if DONG Energy's operating performance
were to deteriorate significantly over the next two years, given
the increasing pressure on the profitability of offshore wind
plants, notably in Europe, resulting from technological
improvement and increasing competition.  S&P could also lower the
rating by one notch if credit metrics weakened, with FFO to debt
consistently at about 25% over the next two years; S&P sees this
as unlikely at the moment but it could occur, for example, due to
delays in new projects coming on stream, higher dividends, or
greater capital expenditures.  S&P could also lower the rating by
one notch if it considers that the likelihood of government
support had reduced.  This could happen, for example, if the
government was less willing or able to support its investment in
DONG Energy or it no longer held a majority share, which S&P sees
as unlikely over the next two years.

S&P sees rating upside as currently limited, given DONG Energy's
existing financial policy (targeting FFO to debt of about 30%).
However, S&P could raise the rating if DONG Energy were to revise
its financial policy, leading to stronger, durable credit
measures, such as FFO to debt sustainably at 35%-40%, based on
its business mix after divesting the oil and gas assets.


LION/SENECA FRANCE: Fitch Affirms B IDR, Removes from Watch Pos.
Fitch Ratings has removed the Long-Term Issuer Default Rating
(IDR) of France-based optical retailer Lion/Seneca France 2
S.A.S. (Afflelou) from Rating Watch Positive (RWP) and affirmed
the IDR at 'B'. The Outlook is Stable.

Fitch has also affirmed 3AB Optique Developpement S.A.S.'s EUR365
million senior secured notes due 2019 and super senior Revolving
Credit Facility (RCF) ratings at 'BB-'/RR2 and Lion/Seneca France
2 S.A.S.'s EUR75 million senior notes due 2019 rating at

The removal of the Long-Term IDR from RWP follows the company's
decision to put on hold its IPO and refinancing plans. At the
same time, strong network performance and the prospects of stable
and improving cash flow generation, along with a slight
improvement of the leverage metrics until notes' maturity in two
years support the IDR affirmation at 'B' with a Stable Outlook.


IPO Plans Put on Hold
Fitch has removed the IDR from RWP following Afflelou's decision
to put on hold an IPO and debt refinancing in 2016/2017. Fitch
understand that the company is evaluating various options,
ranging from debt refinancing to exit by the sponsor, and may
return to the bond holders with a new full or partial redemption
proposal, particularly as the non-call period for the existing
notes expires in October 2017.

Stable Operating Performance
Afflelou's strong interim results and ongoing business
development initiatives, such as store network expansion,
selective add-on acquisitions into online retail, foreign
networks and hearing aids, back Fitch's expectations of stable
performance in FY17-18. Cooperation with major national care
networks is beginning to bear fruit, which is reflected in higher
network activity and increased earnings. Such operating
developments reflect a successful implementation of the business
strategy and adaptation of the company to the evolving trading

Strong Cash Flow Generation
Fitch projects Afflelou will generate consistently positive free
cash flows with mid-to-high single-digit FCF margins. This
assumption is supported by steadily expanding EBITDA, which is
driven by higher network activity. In addition, Afflelou's
efforts to reduce the number of directly-owned stores through
sale or closure should relieve cash flows and credit metrics,
underpinning the asset-light nature of Afflelou's business model
as a franchisor model. Small-scale acquisitions are embedded in
the current ratings, as they can be comfortably funded by
internal cash.

Leverage High, But Adequate
Fitch projects tight leverage headroom in FY17, with FFO adjusted
leverage only marginally below 7.0x, improving towards 6.5x
during FY19 when the notes become due. In the absence of
scheduled amortisations and slow anticipated earnings growth,
Fitch see no material deleveraging over the rating horizon, and
in fact since the notes' issuance in 2014. At the same time,
Fitch views such a financial risk profile as adequate for the
assigned IDR of 'B' given Afflelou's cash-generative business

Refinancing Poses Little Risk
Refinancing considerations will weigh more on the rating as the
notes approach maturity in April 2019. At the same time, Fitch
does not consider refinancing to carry a high execution risk
given Afflelou's positive track record with the public debt
markets and the familiarity of the investors with the business
model. Thus, in Fitch's base case projections Fitch assumes that
Afflelou will be able to refinance maturing notes in a timely
manner at least on the same terms.


Afflelou's Long-Term IDR of 'B'/Stable reflects a symbiotic
business model with healthcare and retail components.

The business benefits from the favourable reimbursement policy
for eyecare in France. This provides for greater operational
stability compared with conventional retailers, who face less
predictable consumer behavior, and as a result, are exposed to
higher sales and earnings uncertainties. Consequently, Afflelou's
operational resilience tolerates a slightly higher degree of
financial risk, or one notch above its pure retail peers such as
Mobilux 2 SAS (B/Stable), New Look Retail Group Ltd (B-/Stable)
and Financiere IKKS S.A.S. (CCC). When compared to the healthcare
peers Synlab Unsecured Bondco PLC (B/Stable) and Cerberus
Nightingale 1 S.A. (B/Stable), Afflelou is rated at the same
level despite a slightly lower leverage, as its business model
contains a higher level of risk due to the retail interface.


Fitch's key assumptions within the rating case for Afflelou
- sales growth of 6% in FY17 decelerating to 1%-2% in FY19-20,
   marking the ongoing transition to closer cooperation with care
- EBITDA margin at 21%;
- trade working capital outflow of EUR8 million in FY17
   gradually reducing to EUR1-2 million outflow thereafter, in
   line with the pace of the network activity;
- capex at 4% of sales;
- bolt-on acquisitions of EUR5 million p.a. offset by asset
   and/or store disposal of EUR1 million;
- refinancing assumed on the same terms as the current
   structure, as Fitch regards such a refinancing option would
   bear little execution risk.


Positive: Future developments that could lead to positive rating
action include:
- Consistently improving EBITDA as a result of increased network
   activity and no negative impact from regulatory changes;
- FCF margin of at least 5% sustainably;
- FFO gross adjusted leverage moving sustainably towards 5.5x;
- FFO fixed charge cover improving towards 2.5x.

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

- Deterioration of EBITDA and FCF margins as a result of
   continued weak network activity, impact of regulatory changes,
   adverse supplier mix changes or further material increase of
   the DOS segment;
- FFO gross adjusted leverage above 7.0x with no evidence of
   deleveraging, for example because of operating
   underperformance or on-going acquisition activity;
- Unsuccessful integration of new acquisitions;
- FFO fixed charge cover of 1.8x or below.


Comfortable Liquidity Position
Fitch projects the issuer will generate comfortable organic
liquidity of EUR12 million in FY17 followed by EUR25-30 million
per year thereafter, supported by the strong network performance
and the impact of the national care networks. This strong
internal liquidity should comfortably accommodate small scale
business additions of up to EUR5 million per year. Fitch also
point to the presence of a committed RCF of EUR30 million
available until November 2018, which Fitch project will remain
undrawn until maturity.


IHO VERWALTUNGS: Fitch Assigns BB+ First-Time IDR
Fitch Ratings has assigned German automotive and industrial
supplier Schaeffler AG first-time Issuer Default and senior
secured ratings of 'BBB-'. The Outlook on the Issuer Default
Rating (IDR) is Stable. Fitch has also assigned a first-time IDR
and a senior secured rating of 'BB+' to Schaeffler's immediate
parent and 75.1% owner, IHO Verwaltungs GmbH (IHO-V). The Outlook
on the IDR of IHO-V is Stable.

The 'BBB-' ratings on Schaeffler incorporate a one-notch uplift
from the consolidated rating of the IHO-V group (which includes
Schaeffler and the dividend stream from IHO-V's investment in
Continental AG, BBB+/Stable). Fitch views the linkage between
Schaeffler and IHO-V as weak to moderate under its "Parent and
Subsidiary Linkage" criteria, allowing Schaeffler to be rated
higher than its parent. The ratings of Schaeffler reflect its
solid business profile, exemplified by large size, good customer
diversification and strong positions in automotive supply
markets, coupled with a moderate financial profile. It has stable
cash flows, good financial flexibility and an improving capital

The 'BB+' ratings of IHO-V reflect the weaker credit profile of
the combined group relative to Schaeffler's standalone credit
profile. The ratings of IHO-V include Schaeffler as well as the
dividend income from the company's 36% direct holding in
Continental. The FFO-adjusted net leverage metric of the combined
group is significantly higher than that of Schaeffler, above
3.0x, a level more commensurate with the low-end of the 'BB'
rating category.

IHO-V's 36% equity stake in Continental (valued at about
EUR14.4bn at April 2017) is a significant asset. The value of
this minority stake is not explicitly reflected in Fitch's credit
metrics, only the dividends received. Fitch would expect a
partial stake in this listed company could be sold down fairly
swiftly, which could allow IHO-V to repay all its gross debt. The
presence of this potential liquidity source supports weaker
credit metrics at the IHO-V level.

Strong Business Profile: Schaeffler's ratings are underpinned by
a business profile that Fitch views as in the 'BBB' category. The
company benefits from its large scale, its positioning on high
value-added parts, a top-ranking position in quality and
reliability-driven market segments, and a solid track record of
innovation. Fitch expects the long-standing relationships with
large and renowned original equipment manufacturers (OEMs) and
its sound end-market diversification to continue. Schaeffler also
benefits from its broad industrial footprint, with presence in
both developed and emerging markets, matching OEMs' production

Solid Growth Prospects: Fitch expects Schaeffler to outperform
the light-vehicle production growth rate over the foreseeable
future. The group has demonstrated its capacity to sustainably
increase the value of its content per vehicle by enhancing
existing products, developing integrated systems and accompanying
changes in requirements and standards by bringing innovative
solutions into the markets.

Strong organic growth is likely in the aftermarkets businesses,
where the massive increase in car sales in China will provide
growth opportunities. In China, the company is also likely to
benefit more from its greater exposure to the fast-growing local
OEMs than its peers (34% of local sales compared with typically

Positioned to Benefit from Electrification: The extent and the
speed of the transition from hybrid to fully electric vehicles
will be critical for Schaeffler because of its focus on
mechanical parts for drivetrains. In this context, the group's
longstanding relationships with the major OEMs, strong innovation
ability and global manufacturing footprint position it favourably
to maintain growth in line with the industry. The company already
has several customer projects and series contracts for its hybrid
modules and e-axles.

Sound Operating Profitability: Schaeffler's operating margin of
more than 12% over the past five years is well above Fitch
expectations for a 'BBB-' rating. In Fitch's  view, Schaeffler's
strong profitability reflects the high added value of its
production, a high level of vertical integration and exposure to
the more profitable aftermarket businesses. The strong operating
margins provide headroom to maintain investment-grade metrics
despite the drag on the Automotive division's margins of higher
R&D expenditure, a greater share of systems in sales leading to
higher purchase content, a risk of growing raw materials prices
and slower growth rates in key markets.

Mid-Term FCF Pressure: Fitch expects mid-term pressure on free
cash flow (FCF) margins, which will be only slightly positive
over the next two years. This will result from continuously high
investments to support the growth strategy and increasing
dividends. Weak expected FCF generation for the current rating is
therefore more the result of high investment and increasing
dividends, which could be reduced or cut in case of financial
stress, rather than a sign of weak underlying profitability.

Financial Flexibility Restored: Fitch expects Schaeffler's funds
from operations (FFO) net leverage to increase to nearly 2x at
end-2018 from lower FFO and pressure on FCF generation, before
reducing again to around 1.5x by end-2020 due to improving cash
generation as the upswing in the investment cycle ends. This
level of leverage will be more commensurate with Fitch's
expectations for a 'BBB-' rating. Schaeffler has gradually
reduced its leverage through a combination of increasing FFO and
positive FCF. Fitch also expects IHO-V's net leverage to reduce
from around 3.5x in 2017 to around 2.5x by 2020.

Parent-Subsidiary Linkage Established: The ratings of Schaeffler
are one notch higher than the IDR of IHO-V, due to the higher
underlying rating on Schaeffler and the weak to moderate linkage
between Schaeffler and IHO-V. Limited documentary constraints on
upstreaming of dividends do not ring-fence Schaeffler from
additional leverage at IHO-V. Fitch expects dividend payments to
remain predictable, and support a modest deleveraging at

Schaeffler's business profile compares adequately with auto
suppliers in the 'BBB' rating category. Schaeffler benefits from
stronger business diversification than peers, outranked only by
Robert Bosch and Continental.

Like other large and global suppliers, including Continental and
Delphi, it has a broad and diversified exposure to large
international OEMs. However, the share of its aftermarket
business is smaller than that of tyre manufacturers such as
Michelin and Continental. Schaeffler also has stronger operating
and cash flow margins than a typical auto supplier that does not
benefit from exposure to the tyre businesses. However,
Schaeffler's financial structure is typically weaker than 'BBB'
rated peers'.

Fitch used its "Parent and Subsidiary Linkage" criteria to derive
the ratings of Schaeffler. No Country Ceiling or operating
environment aspects affect the rating.

Fitch's key assumptions within its rating case for the issuer
- +3.0%-4.0% top line growth over the next four years;
- a decline in the gross profit margin in the Automotive
- an increase in the gross profit margin in the Industrial
- growing R&D intensity;
- working-capital outflows each year;
- average capex intensity of 9.0% over 2017-2020;
- pay-out ratio of 35%;
- no material acquisitions.

As the ratings of Schaeffler AG and IHO-V GmbH are linked under
Fitch's "Parent and Subsidiary Linkage" criteria, the
sensitivities related to each company's ratings are also linked:

Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action
- IHO-V FFO-adjusted net leverage trending towards 2x
- Schaeffler's FFO adjusted net leverage at or below 1x
- Schaeffler's FCF at or above 2% on a sustainable basis
- Weakening of formal linkage ties between Schaeffler and IHO-V

Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action
- IHO-V FFO adjusted net leverage above 3.5x
- Schaeffler net leverage above 2.5x
- Schaeffler's EBIT margin below 9% on a sustained basis
- Schaeffler's FCF margin below 1% on a sustained basis
- Strengthening of formal linkage ties between Schaeffler and
- A reduction in IHO-V's stake in Continental AG without
   adequate deleveraging

Heathy Liquidity: Schaeffler's liquidity is supported by EUR0.7
billion of readily available cash at end-2016 according to
Fitch's adjustment for minimum operational cash of EUR0.4
billion, representing about 2.5% of revenue. The group had a
EUR1.3 billion committed and unused revolving credit line at end-
2016, which covers the very limited amount of short-term debt.
The maturity profile is not an immediate risk, with no material
maturity before 2020.

IHO-V's liquidity is also healthy, benefiting from sound interest
cover from expected dividends flow and the absence of a material
maturity before 2021. Liquidity is further supported by access to
a committed and unused EUR0.2 billion revolving credit line at


Schaeffler AG
-- Issuer Default Rating 'BBB-'; Outlook Stable
-- Senior Secured 'BBB-';

IHO Verwaltungs GmbH
-- Issuer Default Rating 'BB+'; Outlook Stable
-- Senior Secured 'BB+'


GREECE: Delivers Fiscal Targets, Bailout May Come Next Month
The Associated Press reports that the European Union's head
office says Greece is delivering on its fiscal targets and that
an agreement to hand more bailout cash to Athens could come next

EU Commission Vice President Valdis Dombrovskis said on April 26
that Greece continues to show progress on its budget targets and
held out hope of an agreement between Greece and its bailout
creditors from the 19-country eurozone and the International
Monetary Fund soon, the AP relates.

Once this happens, Mr. Dombrovkis, as cited by the AP, said "one
could expect also decisions on disbursement, potentially during
the May eurogroup."  An agreement at the May 22 meeting of the
eurozone's finance ministers would stave off concerns of a Greek
bankruptcy, which could otherwise haunt the EU over the summer,
the AP states.

PUBLIC POWER: S&P Retains 'CCC-' CCR on CreditWatch Negative
S&P Global Ratings said that its 'CCC-' long-term corporate
credit rating and all its debt ratings on Greek utility Public
Power Corp. S.A. (PPC) remained on CreditWatch with negative
implications where it placed them on Feb. 9, 2017.

The CreditWatch status reflects S&P's view that PPC's liquidity
leeway has materially deteriorated over the past few months.
This is notably because S&P sees continued weak cash generation
from operations, more limited ability to stretch working capital,
and recent signs of decreasing support from Greek banks.  This
ultimately leads the company to rely solely on the proceeds of
the announced disposal of its transmission network IPTO for
liquidity beyond the third quarter of 2017.  Yet, S&P sees the
disposal process as being complex and completion timing is
uncertain at this stage.

S&P understands that the EUR200 million euronotes maturing May 1,
2017, will be honored, thanks to cash on hand of EUR140 million
(as of March 31, 2017), the company's efforts to postpone trade
payables, and the EUR93 million upstream dividend provided by
IPTO.  S&P expected this dividend to be received in March, but it
was announced only on April 21, 2017.

Following this debt repayment and the payment of delayed trade
payables, S&P expects PPC's cash to be minimal, partly
compensated by a new EUR200 million term loan to be provided by
Greek banks at the beginning of May or very end of April, which
S&P expects to be fully utilized as soon as available.  However,
this will likely be insufficient to cover the remaining EUR300
million of debt maturities in 2017, mostly concentrated in the
fourth quarter.  S&P therefore sees a high degree of reliance
upon the IPTO disposal, for which PPC expects to receive EUR320
million from State Grid and a lower amount from the Greek

However, the timing of the IPTO transaction is not clear at this
stage and S&P assess this as a clear short-term threat for PPC.
Potential sources of further delays are the evaluation of the
Greek state's stake in IPTO, which was recently mandated to a
third-party evaluation company, and the listing of Energiaki
Holding on the Athens Stock Exchange.

Moreover, considering the track record of delays and
postponements over the previous months, S&P sees the risk of this
transaction not taking place before the summer as high.  This,
coupled with the company's lack of access to new liquidity
sources, leads S&P to believe that there is a one-in-two
likelihood that it will downgrade PPC by one notch to 'CC' in the
short term.

S&P also strongly believes that support from systemic banks has
been decreasing over the past few months.  S&P's view is
supported by the fact that the EUR200 million medium-term
facility was not signed well ahead of the euronotes' bullet
maturity by the banks involved.  S&P understands that the delay
in negotiations was generated by the banks' request that PPC
raise collateral, not only on the new loan but also on existing
indebtedness. Additionally, the banks set a series of condition
precedents to be fulfilled before the line would be available,
among which S&P understands is the EUR93 million upstream
dividend from IPTO and total cash from the central government of
EUR130 million, related to past due and future consumption.

S&P expected the facility to be available to PPC at the end of
January 2017, but negotiations with banks took longer than S&P
expected and the contract was signed only on April 24.  S&P
forecasts full utilization of the facility once it comes
available as it will be needed to normalize cash management,
particularly past due trade payables.

Finally, even if PPC were eventually able to bridge 2017
maturities, S&P believes the company's future debt maturities are
unsustainable in the current context of restricted access to
financing.  Therefore, S&P believes that the cash intake from the
IPTO unbundling will represent a cash cushion enabling the
company to survive only for a few additional quarters unless a
material structural change is implemented.

In 2018, the company will have to amortize around EUR400 million
of debt, of which S&P expects only a small part to be refinanced
(around EUR50 million).  Finally, in 2019, PPC will need to pay
or refinance about EUR2 billion, of which EUR1.2 billion is
represented by a syndicated loan with Greek systemic banks.

S&P notes that PPC's capital expenditure (capex) needs are high,
with reduced room for postponements.  For 2017, of around EUR720
million of planned capex, S&P understands that only EUR100
million is uncommitted.  For 2018, S&P's expectation of capex is
around EUR650 million.  Given the challenging operating
conditions and our expectation of a sharp reduction of EBITDA in
2017, and the still-negative working capital development in a
context of still large unpaid power bills, S&P forecasts free
operating cash flow before disposals to be negative this year and
in 2018.

S&P intends to resolve the CreditWatch status once the amount and
timing of cash proceeds from the IPTO transaction are more
certain.  Without these proceeds, S&P doubts that the company
will be able to survive beyond the third quarter of 2017.

In S&P's view, there is at least a 50% probability that it will
lower its rating on PPC by one notch in the next 90 days, once
S&P has concluded its review.


BLACKROCK EUROPEAN III: S&P Preliminary Rates Cl. F Notes B-
S&P Global Ratings assigned preliminary credit ratings to
BlackRock European CLO III DAC's floating-rate class A, B, C, D,
E, and F notes.  At closing, BlackRock European CLO III will also
issue an unrated subordinated class of notes.

BlackRock European CLO III is a European cash flow collateralized
loan obligation (CLO), securitizing a portfolio of primarily
senior secured euro-denominated leveraged loans and bonds issued
by European borrowers.  BlackRock Investment Management (UK) Ltd.
is the collateral manager.

Under the transaction documents, the rated notes will pay
quarterly interest unless there is a frequency switch event.
Following such an event, the notes will permanently switch to
semiannual payment.  The portfolio's reinvestment period will end
approximately four years after closing.

S&P's preliminary ratings reflect its assessment of the
preliminary collateral portfolio's credit quality, which has a
weighted-average 'B' rating.  S&P considers that the portfolio at
closing will be well-diversified, primarily comprising broadly
syndicated speculative-grade senior secured term loans and senior
secured bonds.  Therefore, S&P has conducted its credit and cash
flow analysis by applying its criteria for corporate cash flow
collateralized debt obligations.

In S&P's cash flow analysis, it used the EUR400 million target
par amount, the covenanted weighted-average spread (3.90%), the
covenanted weighted-average coupon (4.80%), and the target
minimum weighted-average recovery rates at each rating level as
indicated by the manager.  S&P applied various cash flow stress
scenarios, using four different default patterns, in conjunction
with different interest rate stress scenarios for each liability
rating category.

Citibank, N.A., London Branch is the bank account provider and
custodian.  At closing, S&P anticipates that the documented
downgrade remedies will be in line with its current counterparty

Following the application of S&P's structured finance ratings
above the sovereign criteria, it considers that the transaction's
exposure to country risk is sufficiently mitigated at the
assigned preliminary rating levels.

At closing, S&P considers that the issuer will be bankruptcy
remote, in accordance with its legal criteria.

Following S&P's analysis of the credit, cash flow, counterparty,
operational, and legal risks, S&P believes its preliminary
ratings are commensurate with the available credit enhancement
for each class of notes.


Preliminary Ratings Assigned

BlackRock European CLO III DAC
EUR415.9 Million Senior Secured Floating-Rate Notes And
Subordinated Notes

Class                 Prelim.         Prelim.
                      rating           amount
                                     (mil. EUR)

A                     AAA (sf)          233.0
B                     AA (sf)            52.0
C                     A (sf)             32.5
D                     BBB (sf)           21.0
E                     BB (sf)            21.0
F                     B- (sf)            11.5
Sub                   NR                 44.9

Sub--Subordinated loan.
NR--Not rated.


ALITALIA SPA: To Receive Government Bridge Loan, Minister Says
The Associated Press reports that Italy's economic development
minister says that failing airline Alitalia will receive a
government bridge loan to keep it operational while a new owner
is sought.

Carlo Calenda told Radio 24 on April 26 that a loan of EUR300
million to EUR400 million (US$326 million-US$435 million) would
keep the airline flying for six months under receivership, the AP

According to the AP, asked if German airline Lufthansa was
interested in buying the company, Mr. Calenda gave a quick "I
hope," then added more cautiously, "It would be interesting to


As reported by the Troubled Company Reporter-Europe on April 27,
2017, Bloomberg News related that Alitalia SpA said it exhausted
all options after workers voted against job cuts aimed at
salvaging the cash-strapped Italian airline, pushing it toward
administration for the second time in a decade.  According to
Bloomberg, the Rome-based airline said a EUR2 billion (US$2.2
billion) recapitalization tied to the savings plan is effectively
dead and Alitalia will start appropriate "legal procedures" as
funds run out.  Chairman Luca Cordero Di Montezemolo "formally"
communicated to the Italy aviation authority that the carrier
decided to start the process of naming an administrator,
Bloomberg disclosed.  The decision to appoint an administrator is
the first step for being placed in a legal reorganization
process, making it almost impossible a last-minute rescue of the
carrier as it exists today, Bloomberg noted.

                          About Alitalia

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


KAZAKHSTAN TEMIR: S&P Affirms 'BB-' CCR on Improving Performance
S&P Global Ratings affirmed its 'BB-' long-term corporate credit
ratings on Kazakhstan's national railroad company, Kazakhstan
Temir Zholy (KTZ), and its core subsidiary, freight-wagon owner
JSC Kaztemirtrans (KTT).  The outlook is negative.

S&P also affirmed its Kazakhstan national scale ratings on KTZ
and KTT at 'kzBBB+'.

At the same time, S&P affirmed its 'BB-' issue ratings on KTZ's
senior unsecured bonds, including those issued by its financing
subsidiary, Kazakhstan Temir Zholy Finance B.V.

The affirmation primarily reflects the stabilization of KTZ's
operating performance in 2016 and S&P's expectation that the
group's metrics should continue to improve gradually over the
coming few years.  At the same time, S&P acknowledges the group's
significant debt maturities of about Kazakhstani tenge (KZT) 131
billion (US$419 million) due in 2017, which includes KZT75
billion due to KTZ's parent, National Wealth Fund Samruk-Kazyna,
in September.  S&P expects the group to manage these financial
obligations with a combination of capital injections from the
government, cash flow generation, and new debt.

Under S&P's base-case scenario, it expects further improvements
in the group's operating and financial performances to be
supported by the return of freight turnover to modest growth in
the coming years, gradually increasing tariffs, and the group's
ability to control costs.  Despite S&P's expectations that cash
flow metrics should usher in further improvements, it believes
that the company still carries a significant amount of leverage,
while cash flows are picking up gradually.  This should result,
according to S&P's forecast, in debt to EBITDA and funds from
operations (FFO) to debt improving toward 5x and 12%,
respectively, over S&P's 2017-2019 forecast period.  Appreciation
of the tenge could also support KTZ's financial metrics, given
that about 77% of the group's debt is denominated in foreign
currencies, while only about 35% of revenues are currently
generated from transit operations normally priced in Swiss

KTZ's performance continues to stabilize, stemming from just a
0.8% decline in freight turnover in 2016 compared with a 12.4%
decline a year earlier.  An average 10.3% increase in freight
tariffs contributed to the strengthening of the group's financial
results, with revenue growth of 9.4% and a 21.7% jump in the
group's S&P Global Ratings-adjusted EBITDA, resulting in an
EBITDA margin of 25.1%.  This, alongside the reduction of gross
debt in 2016, has meaningfully bolstered the group's leverage to
6.0x debt to EBITDA and 10.2% FFO to debt in 2016 compared with
8.6x and 7.1%, respectively, at end-2015.

In 2017 the group is expected to repay about KZT131 billion of
debt, including KZT75 billion due to National Wealth Fund Samruk-
Kazyna in September.  S&P understands that the group will use
both its cash flows and new debt issuance to meet these
obligations. KTZ also expects to receive about KZT25 billion from
the government to partly refinance its parent's debt.  However,
the final approval has yet to be granted.

KTZ's business risk profile continues to reflect the group's
dominant market share in Kazakhstan's transportation industry and
its relatively favorable, albeit nontransparent, tariff system,
which allows KTZ to recover cost inflation, but not costs from
infrastructure improvements.  The group's relatively large share
of fixed costs caused a reduction in its profitability in 2014-
2015, after freight volumes declined materially following a sharp
drop in commodity prices that led to a slowdown in the Kazakh
economy and tenge depreciation.

S&P believes that KTZ will likely continue to play a leading role
in the Kazakh freight market in the short term, despite recent
improvements in Kazakhstan's pipeline network.  This may lead to
an increase in the transportation of oil by pipeline instead of
by rail, as well as to new entrants and alternative
transportation options gradually opening the railway freight
market to competition.

The group continued to benefit from various forms of government
support in 2016, including KZT22.5 billion of subsidies for
passenger transportation and about KZT128 billion of capital
injections to support expansion projects such as the Zhezkazgan-
Beyneu railway line and Astana railway station, and construction
of the dry port in Khorgos, performed by the group on behalf of
the state.  The government has approved about KZT55 billion of
capital injections for 2017, although S&P believes the amount
will likely increase throughout the year as it did in 2016.

The negative outlook on KTZ and KTT mirrors the outlook on

S&P could lower the ratings on KTZ if S&P downgrades the
sovereign.  S&P could also downgrade KTZ if S&P believes the
likelihood of extraordinary government support has weakened
further, because of the state's reduced willingness or ability to
provide tangible financial aid, subsidies, and equity injections.
Lessened government support could also result from KTZ' partial
privatization.  Downward pressure on the ratings on KTZ could
also materialize in case of significant liquidity deterioration
if, for example, the group does not secure refinancing funds for
the maturing Samruk-Kazyna loans by the end of June as it
currently plans.

S&P would likely revise its outlook on KTZ to stable if S&P
revised its outlook on the sovereign to stable.


ARCELORMITTAL: Egan-Jones Raises Sr. Unsec. Debt Ratings to BB-
Egan-Jones Ratings, on March 27, 2017, raised the senior
unsecured ratings of debt issued by ArcelorMittal to BB from BB-.

Previously, on March 9, 2017, EJR raised the local currency and
foreign currency senior unsecured ratings on the Company's debt.

ArcelorMittal S.A. is a Luxembourg-based multinational steel
manufacturing corporation headquartered in Boulevard d'Avranches,
Luxembourg. It was formed in 2006 from the takeover and merger of
Arcelor by Mittal Steel.


FORNAX ECLIPSE 2006-2: Fitch Cuts Ratings on 2 Note Classes to C
Fitch Ratings has upgraded Fornax (Eclipse 2006-2) B.V.'s class D
notes, downgraded the class E and F notes and affirmed the class
G notes as follows:

EUR5.5 million class D (XS0267554920) upgraded to 'AAsf'' from
BBBsf'; off Rating Watch Negative; Outlook Stable

EUR24.8 million class E (XS0267555570) downgraded to 'Csf' from
'CCsf'; RE (Recovery Estimate) 95%

EUR16.8 million class F (XS0267555737) downgraded to 'Csf' from
'CCsf'; RE 0%

EUR6.7 million class G (XS0267556032) affirmed at 'Dsf'; RE 0%

The transaction is a securitisation of initially 19 CRE loans
originated by Barclays Bank PLC. The three loans remaining are
the EUR39.9 million Cassina Plaza loan, the EUR6.9 million ATU
loan and the EUR7.0 million Kingbu loan. All the loans are
defaulted, with note principal distributed on a sequential pay-
down basis.

The upgrade of the class D notes is driven by the partial
repayment (EUR7.9 million) of the Cassina Plaza loan, which Fitch
understands will fully redeem the remaining class D notes balance
when distributed. This sum is held with the cash manager (The
Bank of New York Mellon, AA/F1+/Stable), to which the class D
notes are therefore credit-linked, as reflected in the upgrade.

The redemption of the class D notes will suspend interest
deferability on the class E notes, whose current interest
shortfall of EUR88,000 is not likely to be cleared, in Fitch's
opinion, owing to large outstanding senior transaction party
invoices. Unless sufficient Cassina Plaza partial sale proceeds
are characterised as interest, the class E notes will incur a
note event of default, reflected in its downgrade to 'Csf'.
Fitch's 95% RE is driven by an expectation of full repayment of
the Kingbu and ATU loans, together with eventual sales proceeds
(net of wind up costs) on the Cassina Plaza loan.

When the class D notes repay, Fitch will downgrade the class E
and F notes to 'Dsf', unless the class E notes shortfall is

Fitch estimates 'Bsf' proceeds of EUR29 million.


SILK BIDCO: S&P Lowers CCR to 'B-' on Aggressive Growth Spending
S&P Global Ratings said it has lowered its long-term corporate
credit rating on Norwegian cruise operator, Silk Bidco AS
(Hurtigruten) to 'B-' from 'B'.  The outlook is stable.

S&P also lowered its issue rating on Hurtigruten's EUR85 million
super senior revolving credit facility (SSRCF) to 'BB-' from
'BB'. The recovery rating on the facility is unchanged at '1+',
indicating S&P's expectations of full (rounded estimate: 100%)
recovery in the event of default.

S&P also lowered its issue rating on Hurtigruten's EUR455 million
senior secured notes to 'B-' from 'B'.  The recovery rating is
unchanged at '4', indicating S&P's expectations of average (30%-
50%; rounded estimate: 40%) recovery in the event of default.

The downgrade reflects S&P's view that the improvement in the
group's credit metrics will take longer than it previously
anticipated while the group will continue to finance its
expansion with additional debt.  The European Free Trade
Association's investigation has been completed and it was
concluded that there was no breach of state aid rules and
therefore no penalties apply. In addition, the company has shown
a robust increase in bookings and will benefit from the expansion
of its Explorer operations already underway in 2017.  However,
S&P projects that the company's credit metrics will remain weak,
particularly debt to EBITDA, which will be persistently above 7x
in 2017-2019.  This is mostly due to the company pursuing an
aggressive expansion program, leading to a material increase in
debt in 2018 and 2019 when the two new vessels will be delivered;
the related contribution to earnings and cash flows will take
longer to realize.  It also faces execution risk related to the
profitable utilization of its drastically expanded capacity.

S&P thinks that, despite our forecast of revenue growth of 8% in
2017, normalized EBITDA (excluding nonrecurring items) will not
be materially higher than in 2015 and 2016.  S&P projects
adjusted EBITDA of Norwegian krone (NOK) 1,030 million in 2017,
assuming NOK90 million nonrecurring items.  This reflects S&P's
assumptions of a 3.5% decrease in operating expenses in 2017
versus 2016 and an adjusted EBITDA margin of 20%.

"In our view, the group's profitability, and consequently its
credit metrics, will remain volatile, as shown in the significant
decline in profitability in 2016.  Hurtigruten's reported revenue
increased to close to 8% in 2016, while occupancy rates improved
by 4% to 68%.  However, overall profitability was hindered by
nonrecurring costs, primarily related to realized losses on
bunker derivatives and cancellation costs related to the
rebuilding of Spitsbergen and two other vessel refurbishing
projects, which we consider to be operating expenses.  As a
result, the S&P Global Ratings-adjusted EBITDA for 2016 decreased
by 30% year-on-year to NOK666 million, although normalized
adjusted EBITDA as per the company (including the nonrecurring
costs) was NOK921 million.  In our view, this highlights
execution risks related to the introduction of new and
refurbished vessels to the fleet, and inherent volatility in the
group's profitability, which has historically been affected by
low occupancy rates during winter, as well as the material impact
of foreign exchange and bunker oil-related derivative contracts
on operating costs.  At the same time, we note that the company's
hedging policy supports the flexibility to cushion the impact of
the fluctuations in oil prices on its earnings.  In addition, the
introduction of the refurbished vehicles that Hurtigruten gained
in 2016 tempers the execution risks related to the delivery and
utilization of the two new vessels in 2018 and 2019, in our
view," S&P said.

S&P expects that the group will continue to incur new debt to
finance its expansion.  In 2016, the group generated negative
free operating cash flows (FOCF) of NOK701 million, primarily due
to capital expenditure (capex) of NOK1.2 billion, of which less
than a quarter (NOK282 million) was maintenance-related capex.
Over half of the expansionary capex was related to the
acquisition and rebuilding of MS Spitsbergen, while the remaining
NOK419 million was spent on the conversion of MS Midnatsol, the
full refurbishment of four vessels, and other project-related
capex. The negative FOCF was financed primarily by drawing down
the group's EUR581 million SSRCF, which is now fully drawn,
together with a EUR20 million incremental facility in the first
quarter of 2017 and a EUR12.5 million shareholder loan.  Although
S&P expects a temporary rebound to mildly positive levels in
2017, S&P thinks that FOCF will return to very negative levels in
2018-2019, due to significant capex in relation to the planned
acquisitions of two new vessels and dry dockings maintenance in
2018-2019.  S&P understands that the latter will be financed with
Export Credit Agency (ECA) debt financing, which is committed and
will be raised outside of the senior secured bond-restricted
group.  Furthermore, S&P expects positive cash flow from
additional customer prepayments generated by bookings already
made for the two new vessels.  Nevertheless, S&P thinks that the
time it would take to reap the contribution of the two new
vessels to the company's EBITDA and cash flow will delay
deleveraging prospects due to the material increase in debt at
the time of delivery of the vessels. In S&P's view, these
acquisitions are subject to high execution risk related to the
successful launch of the new ships.  Because of the group's lack
of committed back-up lines, S&P thinks that a failure or delay in
the vessels' construction could significantly weigh on the
group's liquidity.

Hurtigruten's capital structure includes EUR455 million senior
secured notes and a EUR85 million SSRCF.  In addition, Silk
Holdings SARL, one of the shareholders of the Silk Bidco group,
has issued about NOK1.8 billion (EUR200 million) of interest-
free, preferred equity certificates (PECs) to TDR Capital.
Although S&P views the PECs as debt-like, it recognizes their
cash-preserving function and deep subordination in the capital
structure.  S&P also factors into its adjusted debt metrics in
2018 the debt raised to finance the two new vessels.

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

   -- GDP growth of 1.5% in Hurtigruten's main markets, Norway
      and Germany;

   -- Revenue growth of 7%-9% in 2017, reflecting a higher
      occupancy rate and booking visibility for 2017 on the back
      of the refurbished vessels, combined with flexible ticket
      price.  In addition, S&P expects moderate revenue growth of
      3% in 2018, reflecting relatively stable occupancy rates
      for the first nine months with a positive impact of the
      expected launch of one of the new vessels in 2018 during
      the peak season of the explorer segment;

   -- At the same time, S&P assumes that the adjusted EBITDA
      margin will improve to about 20% in 2017 and 2018 from 15%
      in 2016 in the absence of unplanned significant
      refurbishment of vessels.  S&P projects that the EBITDA
      margin will remain below the 2015 level of 23%;

   -- Capex of about NOK355 million in 2017, increasing to
      NOK1,565 million in 2018 due to the acquisition of two new
      vessels; and

   -- External financing of up to NOK1,100 million to fund one of
      the new vessels in 2018.

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

   -- Adjusted debt to EBITDA of 6.5x-7.5x in 2017 and 7.5x-8.5x
      in 2018 (from 10.5x in 2016);

   -- Funds from operations (FFO) to debt between 8%-9% in 2017,
      decreasing to about 6%-7% in 2018 (from about 6.8% in
      2016); and

   -- EBITDA interest coverage above 2.0x in 2017 and remaining
      borderline 2.0x in 2018 onward.

The stable outlook reflects S&P's view that adjusted debt to
EBITDA will remain significantly above 5x over the next few
years, with limited deleveraging as the company finances its
expansion with additional debt.

S&P could lower the ratings on Hurtigruten if the company
materially underperforms S&P's projection of adjusted EBITDA of
NOK1,030 million in 2017 and NOK1,070 million in 2018.  S&P could
also take a negative rating action if liquidity weakens or the
company's leverage increases to an extent that the capital
structure would no longer be sustainable.

Although unlikely over the next 12 months, S&P could raise its
ratings on Hurtigruten if S&P sees a significant and sustainable
improvement in credit metrics, namely if adjusted debt to EBITDA
declines toward 5.0x and EBITDA to interest improves and remains
solidly above 2.0x.  A positive rating action would also depend
on the company generating positive FOCF on a sustainable basis
and maintaining an adequate liquidity position.

S&P could also consider an upgrade if TDR Capital completes the
IPO it included in its list of strategic options, leading to a
reduction in debt and a sustainable, material improvement in
credit metrics in the next 12 months.


DIGI COMMUNICATIONS: S&P Raises CCR to 'BB-' on Solid Performance
S&P Global Ratings raised its long-term corporate ratings on
Romanian telecommunications and pay-TV operator RCS & RDS S.A.
and its parent DIGI Communications N.V. (Digi) to 'BB-' from
'B+'.  The outlook on both entities is stable.

S&P has also raised its issue rating to 'BB-' from 'B+' on the
senior secured notes issued by Digi.

The upgrade reflects Digi's strong performance in 2016 and S&P's
expectation that its revenue and EBITDA will continue to
strengthen in coming years.  S&P also expects credit ratios will
remain strong despite relatively modest free operating cash flow
(FOCF) stemming from continued high investments in growth

In 2016, Digi delivered revenue growth of 12.4% supported by
solid growth across core segments and in particular in the mobile
segment in Romania.  After reaching sufficient scale, Digi
reached positive EBITDA in the mobile operations in Romania for
the first time in the quarter ended June 30, 2016.  Digi's mobile
market share in December 2016 was 12% and could grow further in
coming quarters, since S&P expects their 4G coverage to gradually
increase and that further investments will result in additional
revenues from mobile telephony and data.  As a result of
increasing scale, S&P expects FOCF for Digi's mobile operations
in Romania to turn positive in 2018, once the network roll-out
has been completed.  Digi's operations have also been solid in
the cable and fixed-line segments in Romania and Hungary.  In
2016, Digi saw subscriber growth in these segments of 5%-7% in
Romania and 10%-13% in Hungary.

Despite S&P's anticipation of larger scale and growing operating
cash flow in coming years, it thinks that FOCF will remain only
modest, although FOCF to debt could approach 5% in 2017.  This is
because Digi has a track record of meaningful capital expenditure
(capex), although to support growth, and S&P expects that the
company could at some stage start mobile operations in Hungary
after acquiring a 5 megahertz (MHz) frequency block in the
1800MHz spectrum in 2014 and most recently four 5MHz frequency
blocks in the 3800MHz spectrum in May 2016.  However, S&P expects
potential investments in Hungary to be contained and spread over
years so that adjusted debt to EBITDA will remain below 3x.

On April 11, 2017, Digi announced its intention to float on the
Romanian stock exchange.  S&P understands at this stage that a
potential listing would have no impact on the capital structure
or the dividend policy (although IPO-related costs or small
dividend payments could impact cash flows in 2017).

S&P's assessment of Digi's business risk profile remains
constrained by the company's relatively small, albeit growing,
scale, limited geographic exposure and intense competition from
large players with stronger financial flexibility.  Digi has some
geographic diversification through its operations as a mobile
virtual network provider in Spain and Italy, still nearly 90% of
Digi's revenues are generated in two relatively small economies,
Romania and Hungary.  Furthermore, Digi is facing strong
competition in these markets and its mobile market share of 12%
in Romania is still far behind market leaders Orange (36%),
Vodafone (32%), and Telekom Romania (21%).  Furthermore, S&P
expects continued strong competition and price pressures in fixed
and cable segments, which S&P expects will leave very little room
for price increases and translate into unchanged average revenue
per user over the coming year.

These weaknesses are partly offset by the company's solid market
shares in its main segments, its state-of-the-art network, a
degree of diversification, and stable profitability.  Digi is the
market leader in Romanian pay-TV and fixed internet, with a
market share of nearly 50% in both segments, and is also the No.
2 in fixed-line telephony with a 34% market share.  The company
has a solid position in those segments in Hungary.  Digi offers
internet speeds of between 300 megabits and 1 gigabit per second
and easy connection, providing a competitive edge.  Furthermore,
Digis' 3G (third generation) network coverage of the Romanian
population was 98% in 2016.  Digi is also rolling out a 4G
network that currently covers about 37% of the Romanian
population, and S&P expects it will reach 70% by 2018.

Digi is diversified in terms of products and technologies,
offering cable and satellite TV, fixed telephony, and internet in
Romania and Hungary.  In Romania, it offers mobile voice and data
services and, in Hungary, it is a reseller of mobile broadband.
S&P forecasts that the company's adjusted EBITDA margin will be
just below 30% in the coming years, a level S&P thinks is aligned
with peers' given Digi's diverse product offering.  S&P's
adjusted EBITDA figure excludes the amortization of content
rights because it views these rights expenditures as recurring
operating expenses. Digi acquires content rights that it
capitalizes and subsequently amortizes.

S&P's assessment of Digi's financial risk profile remains
constrained by the company's minimal FOCF generation.  However,
with continued strong growth and increasing EBITDA, S&P believes
that the company has reached sufficient scale to maintain
positive, albeit small, FOCF in coming years, despite still
meaningful capex.

These weaknesses are partly offset by Digi's lower leverage than
that of most European cable players, funds from operations (FFO)
to debt of about 24% in 2016, and robust EBITDA interest coverage
at about 5.0x.

S&P's rating on Digi also includes significant currency risk
exposure that could affect its debt and profitability.  S&P notes
that currency risk was reduced after the refinancing in October
2016, as the euro-denominated debt is now about 48% of total
debt, compared with 65% previously.  However, S&P still thinks
the company remains exposed to currency risk as cash inflows are
primarily in local currencies where the company has its main
operations.  In addition, profitability could also be impacted by
currency fluctuations because 50% of costs are in foreign
currency.  However, S&P acknowledges that both the Romanian leu
and the Hungarian forint have been relatively stable against the
euro since 2009.

The stable outlook reflects S&P's expectation of continued
revenue and EBITDA growth, resulting in adjusted debt to EBITDA
at or below 3.0x and FFO to debt above 25%, and modest but
positive FOCF.  S&P also anticipates continued prudent liquidity

S&P could lower the rating if revenues and EBITDA growth were
weaker than expected, resulting in leverage above 3.5x, FFO to
debt at or below 20%, or if FOCF turned negative.  Although
unlikely, S&P could also take a negative rating action if
liquidity weakened.

Rating upside is unlikely but S&P could raise the rating if
adjusted debt to EBITDA was below 2.5x, FFO to debt above 30%,
and FOCF to debt well above 10%.  Further reduction in currency
risk could also support an upgrade.

S L O V A K   R E P U B L I C

NEXIS FIBERS: Submits Proposal to Start Restructuring Process
The Slovak Spectator reports that creditors are expected to
decide about the fate of the Humenne-based producer of synthetic
fibres for the automotive industry, company Nexis Fibers.

The company struggles with high debts, generated by its previous
owner, and has submitted a proposal to start a restructuring
process, The Slovak Spectator discloses.

According to The Slovak Spectator, the situation, however, is
complicated by the company Chemes, which belongs to the creditors
and in whose building Nexis Fibers resides and from which it has
utilities, the Hospod†rske Noviny daily reported.

Nexis Fibers has submitted a plan according to which the
restructuring plan should last five years, The Slovak Spectator
relates.  If the creditors' committee approved it, Nexis would
start repaying the debts to Chemes in the last three years of the
process, The Slovak Spectator states.

Chemes, however, introduced its own proposal which only counts
three years for restructuring, as the original plan is
unacceptable to them, The Slovak Spectator notes.  Thus it also
proposed the direct sale of the company, also in an international
company, or the creation of a merged firm, The Slovak Spectator
relays, citing Hospodarske Noviny.

Nexis Fibers however disagrees with the plans, according to The
Slovak Spectator.

Moreover, Slovak laws do not allow companies other than debtors
to submit the restructuring proposals, The Slovak Spectator
states.  Thus experts say the Chemes' proposal is irrelevant, The
Slovak Spectator discloses.


BANCO POPULAR ESPANOL: Egan-Jones Cuts Sr. Unsec. Ratings to BB-
Egan-Jones Ratings, on March 9, 2017, lowered the local currency
and foreign currency senior unsecured ratings on debt issued by
Banco Popular Espanol SA to BB- from BB.

Banco Popular Espanol, S.A. is the fourth largest banking group
in Spain.


PRIVATBANK: S&P Raises Counterparty Credit Ratings to 'CCC+/C'
S&P Global Ratings raised its long- and short-term counterparty
credit ratings on Ukrainian PrivatBank to 'CCC+/C' from
'SD/SD'(selective default).  The outlook is stable.

The upgrade reflects S&P's understanding that PrivatBank has been
servicing its obligations in full and on time since late December
2016, when it was nationalized and the holders of its three loan
participation notes (LPNs) and related-party depositors were
bailed in.  S&P do not expect the bailed-in LPN holders and
depositors to file for PrivatBank's bankruptcy in Ukraine, given
that it has been nationalized. The issues PrivatBank defaulted on
were not rated by S&P Global Ratings.

S&P believes that PrivatBank's creditworthiness remains
vulnerable despite its nationalization, and that the bank depends
on favorable business, financial, and economic conditions to meet
its financial commitments.  However, S&P factors in its
projection that the bank is unlikely to default on its
obligations within the next 12 months.

S&P understands from an asset quality review of the bank
conducted by Ernst & Young at the end of March 2017 that the bank
needs substantial additional provisions on corporate loans and
other assets.  Furthermore, the bank's capitalization is low,
with a capital adequacy ratio of 6.4% as of mid-April 2017,
according to Ukrainian regulatory standards. Since nationalizing
PrivatBank at the end of 2016, the government has injected about
Ukrainian hryvnia (UAH) 127 billion (about US$5 billion).  S&P is
uncertain whether the Ukrainian government will speedily inject
additional funds to strengthen PrivatBank's capitalization to the
levels of regional peers', given the financial burden this would
place on the government.  Nevertheless, S&P assumes that the
government will not force the bank into bankruptcy and

At the same time, S&P questions the viability of PrivatBank's
current operating model, at least in the near term.  The majority
of the bank's corporate loans, which represented about 80% of its
total loans, are nonperforming and predominantly funded by retail
deposits.  Although PrivatBank budgets a profit for 2017, S&P do
not exclude that the bank might remain loss-making under
International Financial Reporting Standards in 2017.  This is
because, in S&P's view, fees and commissions from PrivatBank's
strong transaction business and interest income on its portfolio
of government securities might not be sufficient to cover
additional provisioning expenses, as well as interest expenses on
deposits, and administrative expenses.

Moreover, S&P sees additional risks to PrivatBank's
creditworthiness over the medium-term from bailed-in LPN holders
and bailed-in depositors.  S&P understands that the bank
currently faces a few court cases from the bailed-in depositors
in international courts.

Following the bank's nationalization, S&P views PrivatBank as a
government-related entity (GRE).  However, S&P understands that
PrivatBank is not a strategic investment for the government, and
the government stated its intention to sell PrivatBank in the
medium term once the bank is restructured and the market
conditions are suitable.  In S&P's view, the bank's very
important role for the government reflects its leading market
share of about 35% of retail deposits, serving about one-half of
Ukraine's bankable population and its role of processing the
majority of payments in the country.  At the same time, S&P
believes that the bank has a limited link with the government,
pointing to S&P's view that the government's capacity to provide
extraordinary support to GREs is doubtful.  As a result, S&P
believes that the likelihood of PrivatBank receiving timely and
sufficient extraordinary support from the government is
moderately high. However, this assessment, alongside the current
sovereign ratings on Ukraine, does not result in uplift for the
ratings on PrivatBank, according to S&P's criteria for GREs.

The stable outlook reflects S&P's expectations of ongoing state
support following the bank's recent nationalization, and little
default risk in the next 12 months.

S&P could take a negative rating action in the next 12 months if
it saw tangible signs of reduced government support.  S&P would
also view negatively a court order to repay bailed-in bondholders
or bailed-in depositors.

A positive rating action might follow a transition in the bank's
business model into a more viable, profitable business and
strengthening capitalization to levels fully compliant with the
regulatory requirements.

U N I T E D   K I N G D O M

ANGLO AMERICAN: Egan-Jones Hikes Sr. Unsec. Debt Ratings to BB
Egan-Jones Ratings, on March 20, 2017, raised the local currency
and foreign currency senior unsecured ratings on debt issued by
Anglo American PLC to BB from BB-.

Anglo American plc is a multinational mining company based in
Johannesburg, South Africa and London, United Kingdom.

SEADRILL LTD: Egan-Jones Cuts Commercial Paper Ratings to C
Egan-Jones Ratings, on March 30, 2017, downgraded the local
currency and foreign currency commercial paper ratings on debt
issued by Seadrill Ltd. to C from B.

Seadrill is a deepwater drilling contractor, which provides
drilling services to the oil and gas industry. It is incorporated
in Bermuda and managed from London.

TRAVELEX HOLDINGS: S&P Affirms 'B-' CCR on Proposed Refinancing
S&P Global Ratings affirmed its 'B-' long-term corporate credit
rating on U.K.-based foreign exchange services provider Travelex
Holdings Ltd.  The outlook remains negative.

S&P also assigned a 'B-' issue rating to Travelex's proposed
EUR360 million senior secured notes due in 2022.  S&P's recovery
rating on the notes is unchanged at '4', indicating its
expectation of recovery in the lower half of the 30%-50% range in
the event of a payment default.

S&P assigned a 'B+' issue rating to the proposed GBP90 million
super senior revolving credit facility (RCF).  The recovery
rating is '1', indicating S&P's expectation of very high (90%-
100%) recovery in a default scenario.

The rating on the proposed refinancing is subject to S&P's review
of the notes' final documentation.

The negative outlook reflects the contraction of Travelex's
EBITDA in the 12 months to Dec. 31, 2016, and S&P's anticipation
that certain factors contributing to EBITDA volatility are likely
to persist.  Pressure on earnings combined with high leverage and
the bonds and RCF maturing in August 2018 continue to weigh on
the ratings.

For the 12 months ending Dec. 31, 2016, Travelex reported a 38%
decline in EBITDA (48% at constant foreign exchange) attributable
mainly to the wholesale and outsourcing division (now called
Currency Solutions) where revenues fell by 8%.  More precisely,
the group's EBITDA decline stemmed from a fall in banknote orders
from Nigeria because of capital controls, fewer U.K. consumers
traveling abroad due to the weaker pound, and the short-term
impact of the U.K.'s referendum vote to leave the EU.

The retail division held up relatively well, posting 2% like-for-
like revenue globally, but this was partly offset by the effects
of terrorism in France and Belgium. EBITDA margins for the
division fell to 12% from 14% the year before.

For Currency Solutions, reported margins are structurally higher
than the retail division (36.4% in 2016 from 44.9% in 2015), but
are also more volatile because of a more concentrated customer
base.  That said, the lower banknote volumes in Nigeria in 2016
as a result of currency controls is the primary reason for the
material EBITDA decline of the business line (-26% reported).

"We continue to forecast a muted recovery in EBITDA in 2017 and
2018 but the extent and timing of this is less certain than we
previously thought.  We understand that volumes to Nigeria are
starting to recover, but sterling remains weak and security in
Europe is still uncertain.  Travelex continues to invest in its
digital division to offset the structurally declining demand for
cash payments in its mature markets.  Travelex's performance in
2016 has lead us to revise down our assessment of its business
risk profile because its material EBITDA decline indicates its
operating performance depends on some key markets currently
facing disruption," S&P said.

As S&P previously anticipated and excluding the effect of
disposals, Travelex recorded substantially negative free
operating cash flow (FOCF) in 2016 as a result of a change in
payment terms by one its key banknotes suppliers.  S&P
anticipates still-negative FOCF in 2017 due to a moderate
recovery in its key markets, cash-consuming working capital
needs, and in particular the sizable capital expenditure (capex)
program associated with its various IT and software development
projects.  S&P understands, however, that the capex forecast for
2017 and 2018 could be scaled down to preserve free cash flow

Positively, because of the asset disposals realized in 2016, S&P
anticipates that Travelex's liquidity position should remain
satisfactory factoring in the proposed refinancing transaction.
On an ongoing basis, the company will have GBP75 million of
usable cash and GBP70 million available under the proposed GBP90
million super senior RCF.  S&P also notes that Travelex's main
shareholder (Dr. Shetty) has continued to provide funding over
the last 12 months with a GBP68.5 million contribution.

S&P is revising its treatment of the payment-in-kind notes and
noncash-pay preferred shares.  S&P now views these as equity due
to the new inter-creditor agreement, which renders the
shareholder notes more equity-like thanks to explicit full-
subordination wording.  However, S&P still views the $490 million
cash-pay loan at BRS Ventures & Holdings Ltd. (BRSV), Travelex's
holding company, as a debt instrument.  Although S&P understands
Travelex's ability to upstream dividends is limited given the
restrictions set under the current documentation, S&P cannot rule
out upstreaming if Travelex were to meet the requirements set out
in the documentation.

That said, S&P anticipates that following the refinancing
transaction, Travelex's financial profile will remain highly
leveraged.  In particular, given the EBITDA contraction, S&P
forecasts that its key measure of reported EBITDA interest
coverage at the restricted group level (including restructuring
costs but excluding exceptional items) will be very weak, at
about 1.4x in 2016, assuming the company does not upstream
dividends to service the debt at BRSV.

S&P's assessment of Travelex's business risk profile as weak
reflects its significant earnings volatility, its exposure to the
cyclicality and event risks of the travel industry, travelers'
changing preferences (away from cash), and the industry's complex
regulatory environment.  These business risks are partly offset
by its position as the largest nonbank provider of travel money
worldwide, its product and geographic diversification, its strong
franchise, and the favorable long-term trends for air travel

In S&P's base case, which is more conservative than management's
base case, it assumes:

   -- Mid-single-digit revenue growth including from new stores
      and ATMs, and an increase in outsourcing contracts.

   -- A 1-2 basis point improvement in EBITDA margins across the
      business in 2017, with a more pronounced recovery in 2018.

   -- Working capital need of about GBP20 million.

   -- Capex of about GBP43 million.

   -- No dividend payments to shareholders.

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

   -- Adjusted debt to EBITDA of about 5.4x in 2017, excluding
      noncash-pay shareholder loans and preferred shares of about
      GBP754 million but including the holding company's debt of
      $490 million.  Reported unadjusted EBITDA cash interest
      coverage at the restricted group of about 1.8x in 2017 and
      2.4x in 2018.  S&P uses reported coverage ratios because
      its lease adjustments result in artificially improved
      metrics due to the importance of short-term lease

   -- S&P's forecast of FOCF before exceptional items at about
      negative GBP30 million in 2017 and positive GBP15 million
      in 2018.

The negative outlook reflects S&P's opinion that, following a
material EBITDA contraction in 2016, uncertainty remains as to
the extent and timing of EBITDA recovery during 2017 given still-
challenging market conditions in the retail segment and
significant volatility and uncertainty in the wholesale segment.

Although the change in S&P's treatment of shareholder loans -- to
equity from debt -- improves Travelex's adjusted leverage
metrics, the primary rating drivers are earnings volatility in
the context of a weak EBITDA cash interest coverage, as well as
FOCF generation.  In 2016, Travelex reported materially negative
FOCF and EBITDA cash interest coverage of 1.4x, which S&P
forecasts will recover only moderately to about 1.8x in 2017 as
shipments to Nigeria normalize, and the retail segment continues
to grow.

S&P also notes that if Travelex were to report further unexpected
volatility during 2017, S&P could revise down its assessment of
the company's business risk profile, which in turn would require
a commensurate strengthening in credit metrics to keep the rating
at the current level.

S&P could also lower the ratings if Travelex did not successfully
close the currently proposed refinancing transaction.  S&P could
lower the ratings if earnings and FOCF deteriorated beyond its
current base case, for example due to the loss of important
wholesale contracts, further geopolitical deterioration,
continued lower travel volumes out of the U.K., or ongoing
working capital outflows.

S&P could lower the ratings if it believed that the capital
structure was no longer sustainable, for example if S&P's measure
of reported EBITDA interest coverage at the restricted group
level (including restructuring costs but excluding exceptional
items) remained below 1.5x for a sustained period, or if negative
FOCF was not contained in 2017.

If operating performance deteriorated further, S&P would lower
the ratings if shareholder support showed signs of weakening.
That said S&P understands that shareholder support is not
required at present.

To revise the outlook back to stable S&P would need to see
evidence of a sustained recovery in earnings, a sustainable and
material improvement in free cash flow generation, and a restored
reported EBITDA interest coverage at the restricted group level
(including restructuring costs but excluding exceptional items)
at 2.0x.

Given the current trading environment, S&P do not envisage rating
upside at this point.

* UK: Scottish Business Insolvencies Down 7% in 2016-2017
CCH Daily, citing the latest figures from the Accountant in
Bankruptcy (AiB), reports that the number of Scottish businesses
becoming insolvent or entering receivership fell from 903 for the
whole of 2015-16 to 840 in 2016-17, a decline of 7%.

Compared with the third quarter of 2016-17, total corporate
insolvencies dropped by 26% to 155, CCH Daily discloses.  This is
also 33% down on the fourth quarter of 2015-16, when 230
companies failed, CCH Daily relays.

The latest total was made up of 92 compulsory liquidations and 63
creditor voluntary liquidations, CCH Daily states.  For the
second quarter in succession, there were no receiverships
recorded for the quarter, CCH Daily notes.


* BOOK REVIEW: Landmarks in Medicine - Laity Lectures
Introduction by James Alexander Miller, M.D.
Publisher: Beard Books
Softcover: 355 pages
List Price: $34.95
Review by Henry Berry

Order your own personal copy today at
As the subtitle points out, the seven lectures reproduced in this
collection are meant especially for general readers with an
interest in medicine, including its history and the cultural
context it works within. James Miller, president of the New York
Academy of Medicine which sponsored the lectures, states in his
brief "Introduction" that this leading medical organization "has
long recognized as an obligation the interpretation of the
progress of medical knowledge to the public." The lectures
collected here succeed admirably in fulfilling this obligation.
The authors are all doctors, most specialists in different areas
of medicine. Lewis Gregory Cole, whose lecture is "X-ray Within
the Memory of Man," is a consulting roentgenologist at New York's
Fifth Avenue Hospital. Harrison Stanford Martland is a professor
of forensic medicine at New York University College of Medicine.
Many readers will undoubtedly find his lecture titled "Dr. Watson
and Mr. Sherlock Holmes" the most engrossing one. Other
doctorauthors are more involved in academic areas of medicine and
teaching. Reginald Burbank is the chairman of the Section of
Historical and Cultural Medicine at the New York Academy of
Medicine. He lectured on "Medicine and the Progress of
Civilization." Raymond Pearl, whose selection is "The Search for
Longevity," is a professor of biology at Johns Hopkins

The authors' high professional standing and involvement in
specialized areas do not get in the way of their aim to speak to
a general audience. They are all skilled writers and effective
communicators. As the titles of some of the lectures noted in the
previous paragraph indicate, the seven selections of "Landmarks
in Medicine" focus on the human-interest side of medicine rather
than the scientific or technological. Even the two with titles
which seem to suggest concern with technical aspects of medicine
show when read to take up the human-interest nature of these

"The Meaning of Medical Research", by Dr. Alfred E. Cohn of the
Rockefeller Institute for Medical Research, is not so much about
methods, techniques, and equipment of medical research, but is
mostly about the interinvolvement of medical research, the
perennial concern of individuals with keeping and recovering good
health, and social concerns and pressures of the day. "The
meaning of medical research must regard these various social and
personal aspects," Cohn writes. In this essay, the doctor does
answer the questions of what is studied in medical research and
how it is studied. And he answers the related question of who
does the research. But his discussion of these questions leads to
the final and most significant question "for what reason does the
study take place?" His answer is "to understand the mechanisms at
play and to be concerned with their alleviation and cure." By
"mechanisms," Cohn means the natural -- i. e., biological --
causes of disease and illness. The lay person may take it for
granted that medical research is always principally concerned
with finding cures for medical problems. But as Cohn goes into in
part of his lecture, competition for government grants or
professional or public notoriety, the lure of novel
experimentation, or research mainly to justify a university or
government agency can, and often do, distract medical researchers
and their associates from what Cohn specifies should be the
constant purpose of medical research. Such purpose gives medicine
meaning to humankind.

The second lecture with a title sounding as if it might be about
a technical feature of medicine, "X-ray Within the Memory of
Man," is a historical perspective on the beginnings of the use of
x-ray in medicine. Its author Lewis Cole was a pioneer in the
development of x-rays in the late 1800s and early1900s. He mostly
talks about the development of x-ray within his memory. In doing
so, he also covers the work of other pioneers, notably William
Konrad Roentgen and Thomas Edison. Roentgen was a "pure
scientist" who discovered x-rays almost by accident and at first
resented the application of his discovery to practical uses such
as medical diagnosis. Edison, the prodigious inventor who was
interested only in the practical application of scientific
discoveries, and his co-worker Clarence Dally enthusiastically
investigated the practical possibilities of the discoveries in
the new field of radiation. Dally became so committed to his work
in this field that he shortly developed an illness and died. At
the time, no one knew about the dangers of prolonged exposure to
x-rays. But sensing some connection between his co-worker's
untimely death and his work with x-rays, Edison stopped his own

Cole himself became involved in work with x-rays during his
internship at Roosevelt Hospital in New York City in 1898 and
1899. His contribution to this important field was in the area of
interpretation of what were at the time primitive x-rays and
diagnosis of ailments such as tuberculosis and kidney stones.
Cole writes in such a way that the reader feels she or he is
right with
him in the steps he makes in improving the use of x-rays. He adds
drama and human interest to the origins of this important medical
technology. The lecture "Dr. Watson and Mr. Sherlock Holmes" uses
the popular mystery stories of Arthur Conan Doyle to explore the
role of medicine in solving crimes, particularly murder. In some
cases, medical tests are required to figure out if a crime was
even committed. This lecture in particular demonstrates the
fundamental role played by medicine in nearly all major areas of
society throughout history. The seven collected lectures have
broad appeal. All of them are informative and educational in an
engaging way. Each is on an always interesting topic taken up by
a professional in the field of medicine obviously skilled in
communicating to the general reader. The authors seem almost mind
readers in picking out the most fascinating aspects of their
subjects which will appeal to the lay readers who are their
intended audience. While meant mainly for lay persons, the
lectures will appeal as well to doctors, nurses, and other
professionals in the field of medicine for putting their work in
a broader social context and bringing more clearly to mind the
interests, as well as the stake, of the public in medicine.


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

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

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


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

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

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

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

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

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

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