/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/170509.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Tuesday, May 9, 2017, Vol. 18, No. 91 Headlines F R A N C E BOUYGUES SA: Egan-Jones Upgrades Sr. Unsecured Debt Ratings to BB G E R M A N Y RICKMERS HOLDING: Bondholders Criticize Restructuring Scheme I R E L A N D HOUSE OF EUROPE: S&P Affirms 'CC' Ratings on 7 Note Classes IRISH BANK: Creditors Have to Wait Years to Recover Claims I T A L Y ALITALIA: KBRA Comments on Impact of Administration on Lessors M A L T A VISTAJET GROUP: S&P Lowers CCR to 'CCC+' on Weaker Liquidity N E T H E R L A N D S WOOD STREET CLO V: S&P Cuts Ratings on 2 Note Classes to BB- N O R W A Y NORWEGIAN AIR: Egan-Jones Cuts Commercial Paper Ratings to C R U S S I A BALTIC FINANCIAL: S&P Discontinues 'B-' Ratings Ff. Merger ER-TELECOM: S&P Puts 'B+' CCR on CreditWatch Negative S P A I N REPSOL SA: Egan-Jones Raises Sr. Unsecured Ratings to BB- U N I T E D K I N G D O M AMIGO LOANS: S&P Affirms 'B+' Issuer Rating, Outlook Stable TOREX RETAIL: High Court Tosses Suit v. RBS Restructuring Unit TRYDAN RETAIL: Sales Decline Prompts Liquidation WESTINGHOUSE ELECTRIC: Bankruptcy May Impact Moorside Project ********* =========== F R A N C E =========== BOUYGUES SA: Egan-Jones Upgrades Sr. Unsecured Debt Ratings to BB ----------------------------------------------------------------- Egan-Jones Ratings, on April 18, 2017, raised the local currency and foreign currency senior unsecured ratings on debt issued by Bouygues SA to BB from BB-. Bouygues SA is a France-based group that operates in two sectors: Telecommunications and Media, and Construction. ============= G E R M A N Y ============= RICKMERS HOLDING: Bondholders Criticize Restructuring Scheme ------------------------------------------------------------ The financially troubled Rickmers Holding AG tries to convince its creditors to consent to an extensive restructuring scheme in order to save the group from potential insolvency. Bondholders are requested to participate in a voting without meeting about this scheme from May 8, until May 10. Unfortunately, many aspects of the proposed restructuring scheme remain uncertain or proof to be a disadvantage, especially for bondholders. Key Aspects for Bondholders of Rickmers Holding AG -- Rickmers Holding AG intends to pay interests of 8.875% due June 11 -- but only if bondholders consent to the proposed restructuring scheme. -- All other claims of bondholders -- especially the claim for repaying the capital -- will be transferred by Rickmers Holding AG to a Luxembourgian corporation (LuxCo), which will be founded for this purpose only. LuxCo will then be the sole contracting party and the bondholders' only debtor. -- In return LuxCo will acquire 75.1% of the shares in Rickmers Holding AG. Therefore Rickmers Holding AG will increase its capital. LuxCo is supposed to sell the acquired shares within three years. Of the proceeds it will repay bondholders (after paying other costs, taxes etc.) As there are other creditors besides the bondholders (e.g. HSH Nordbank), bondholders will get only 57.6% of the proceeds. Julia Breier-Struss, Schirp Neusel & Partner said: "Bondholders can't be certain that Rickmers Holding AG really pays the interests of 8.875% in June. It may very well be the intention of Rickmers Holding AG, but bondholders are supposed to advance their trust. Especially because the restructuring scheme is not bound to the condition that interests will really be paid, even though it would be easy to declare that." Election of Joint Representative and Accreditation A joint representative of bondholders should not be nominated by the issuer as he is obliged to exclusively represent their interests and has to analyze the concept critically before joining negotiations. It is also advantageous to choose somebody who is well experienced and has filled this position before. With the candidates presented so far, that is not the case. Therefore we have been asked by bondholders to candidate as well and countermotions have been submitted referring to our candidature. But the joint representative should not be empowered to decide all by himself whether he, as the bondholders' representation, consents to the scheme or not. Instead, the bondholders' meeting should vote on the final scheme and give voting instructions to the joint representative. Ms. Breier-Struss said: "At present, bondholders do not have enough information to come to a well informed decision regarding the proposed restructuring scheme. Therefore we call on the issuer to provide more information. Until this will have been effected, we do not suggest to consent." In the event that the voting without meeting lacks the quorum of at least 50% of participating bondholders, a second voting is to be called where bondholders will be able to meet in person. Right now, this would be the most favorable option. About the Rickmers Group The Rickmers Group is an international service provider in the maritime transport sector and a vessel owner, based in Hamburg. In the Maritime Assets segment the Rickmers Group is active as Asset Manager for its own vessels and also for those of third parties. The Group initiates and coordinates shipping projects, organizes financing and acquires, charters and sells ships. In the Maritime Services business segment the Rickmers Group provides ship management services for its own vessels as well as for those owned by third parties; these services comprise technical and operational management, crewing, newbuild supervision, consultancy and insurance-related services. ============= I R E L A N D ============= HOUSE OF EUROPE: S&P Affirms 'CC' Ratings on 7 Note Classes ----------------------------------------------------------- S&P Global Ratings raised its credit rating on House of Europe Funding V PLC's class A1 notes. At the same time, S&P has affirmed its ratings on the class A2, A3a, A3b, B, C, D, E1, and E2 notes. The rating actions follow S&P's credit and cash flow analysis of the transaction using data from the February 2017 trustee report, and the application of S&P's relevant criteria. Since S&P's Feb. 19, 2016 review, it has observed several changes to key performance indicators in this transaction. These changes include: -- Due to portfolio amortization, the exposure to assets rated in the 'CCC category' ('CCC+', 'CCC', and 'CCC-') has increased in percentage terms (up to 20% from 15%). -- Defaulted assets (assets rated below 'CCC-') have increased to 17.9% from 10.6%, resulting in further par losses in the transaction. -- The weighted-average spread is in the same range, but with a small improvement (currently 0.69%, up from 0.62%). -- All par coverage tests continue to be below the required thresholds. The breaches of coverage tests have resulted in an increase in the outstanding balance of the deferrable notes (classes C, D, and E). The interest due on these notes is used to cure the coverage tests. -- According to S&P's analysis, deleveraging has increased the concentration risk in the portfolio, which S&P has captured in its supplemental tests. The number of obligors in the pool has decreased to 34 from 42. S&P determined the scenario default rates (SDRs) by running the portfolio data (from February 2017) through the CDO Evaluator model, which is an integral part of S&P's methodology for rating and monitoring collateralized loan obligation (CLO) transactions. Through a Monte Carlo simulation, the CDO Evaluator assesses a portfolio's credit quality, taking into consideration each asset's credit rating, size, and maturity, the estimated correlation between each pair of assets, and any bivariate emerging market risk. The portfolio's credit quality is presented in terms of a probability distribution for potential portfolio default rates. From this probability distribution, the CDO Evaluator derives a set of SDRs, each of which identifies the minimum level of portfolio defaults each CLO tranche is expected to be able to withstand to support a specific rating level. S&P then compare the SDRs to the results generated in our cash flow analysis for each rated tranche within the CLO transaction. Although the SDRs generally reflect the amount of credit support required at each rating level based on the credit characteristics of the portfolio, S&P uses its proprietary cash flow model to determine the applicable percentile break-even default rate (BDR) for each tranche, given the stresses specified by S&P's criteria for generating cash flow analysis at various rating levels. The cash flow analysis and BDRs take into account the transaction's capital structure, interest and principal diversion mechanisms, payment mechanics, and general characteristics of the portfolio collateral. For each rated tranche, the BDRs represent an estimate of the maximum level of gross defaults--based on S&P's cash flow stress assumptions--that a tranche can withstand and still fully repay the noteholders. S&P incorporated various cash flow stress scenarios using its shortened and additional default patterns and levels for each rating category assumed for each class of notes, combined with different interest stress scenarios as outlined in S&P's collateralized debt obligation (CDO) of asset-backed securities (ABS) criteria. With just over 6% of the class A1 notes' original principal balance remaining outstanding, the available credit enhancement for the class A1 notes has increased since S&P's previous review. S&P has therefore raised to 'A (sf)' from 'BBB+ (sf)' its rating on the class A1 notes. S&P also applied supplemental tests outlined in its CDO of ABS criteria (the largest obligor default test and the largest industry default test). These supplemental tests are additional quantitative elements in S&P's analysis that are separate and distinct from the Monte Carlo default simulations S&P run in the CDO Evaluator and the cash flow analysis generated for each transaction. S&P considers that adding these tests to its simulation model enhances its overall analysis because the tests are intended to address both event and model risks that may be present in rated transactions. S&P's ratings on the notes are not capped by the supplemental tests. Although the class A1 notes could achieve a rating above 'A (sf)' based on S&P's cash flow analysis and the supplemental test analysis, the rating action is based on the maximum achievable rating following the application of S&P's current counterparty criteria. BNP Paribas Securities Services (London Branch) is the account bank for this transaction. The downgrade provisions in the transaction documents require the account bank to be replaced with another financial institution having a minimum eligible short-term rating of at least 'A-1+'. As S&P's current short- term rating on BNP Paribas Securities Services (London Branch) is lower, at 'A-1', than the required trigger under S&P's counterparty criteria, the maximum rating on the notes in this transaction can be no higher than our 'A' long-term rating on the counterparty. S&P has affirmed its ratings on all other classes of notes based on its credit and cash flow analysis. House of Europe Funding V is a cash flow mezzanine structured finance CDO transaction that closed in October 2006. RATINGS LIST House of Europe Funding V PLC EUR1 bil fixed- and floating-rate notes and annuity notes Rating Class Identifier To From A1 XS0272910661 A (sf) BBB+ (sf) A2 XS0272911479 B+ (sf) B+ (sf) A3a XS0272911552 CC (sf) CC (sf) A3b XS0272911982 CC (sf) CC (sf) B XS0272912287 CC (sf) CC (sf) C XS0272912873 CC (sf) CC (sf) D XS0272913095 CC (sf) CC (sf) E1 XS0272913335 CC (sf) CC (sf) E2 XS0272913764 CC (sf) CC (sf) IRISH BANK: Creditors Have to Wait Years to Recover Claims ---------------------------------------------------------- Joe Brennan at The Irish Times reports that creditors of Anglo Irish Bank and Irish Nationwide will have to wait years to find out whether they will recover all that they are owed, as the cost of liquidating the institution that was established to wind down the failed lenders has soared to EUR222.6 million. The liquidators of Irish Bank Resolution Corporation (IBRC) said on May 5 that they held EUR1.919 billion of net cash as of Feb. 6, the fourth anniversary of the Government's decision to liquidate the company, The Irish Times relates. However, they said the exact dividend for "unsecured creditors will not be known for a number of years, primarily as a result of the large level of litigation outstanding", The Irish Times notes. This follows a move last year to return 25% of what was owed to unsecured creditors, led by the State, which has a claim in for EUR1.1 billion, The Irish Times states. According to The Irish Times, unsecured creditors' final recovery depends largely on the outcome of a legal case between the family of businessman Sean Quinn and IBRC, which is not expected to be heard until next year at the earliest, but more likely in 2019 or 2020. The Quinns claim Anglo Irish lent them billions of euro illegally in 2008 to shore up their investment in the bank, The Irish Times discloses. The liquidators currently estimate that unsecured creditors will receive between 75% and 100% of what they are owed, The Irish Times states. However, at the back of the queue are a group of junior bondholders, owed EUR285 million, who refused to share in Anglo Irish's and Irish Nationwide's losses at the height of the crisis, The Irish Times says. All told, the liquidators received 3,000 claims from creditors last year, of which 2,100 have been reviewed and adjudicated, with the remaining either being considered or queried, The Irish Times recounts. IBRC is a defendant in 143 legal cases, The Irish Times discloses. It has a remaining loan book of EUR3.7 billion, The Irish Times relays, citing the latest liquidation progress report. About Irish Bank Resolution Irish Bank Resolution Corp., the liquidation vehicle for what was once one of Ireland's largest banks, filed a Chapter 15 petition (Bankr. D. Del. Case No. 13-12159) on Aug. 26, 2013, to protect U.S. assets of the former Anglo Irish Bank Corp. from being seized by creditors. Irish Bank Resolution sought assistance from the U.S. court in liquidating Anglo Irish Bank Corp. and Irish Nationwide Building Society. The two banks failed and were merged into IBRC in July 2011. IBRC is tasked with winding them down and liquidating their assets. In February, when Irish lawmakers adopted the Irish Bank Resolution Corp., IBRC was placed into a special liquidation in the Irish High Court to complete liquidation and distribution of the two banks' assets. IBRC's principal asset as of June 2012 was a loan portfolio valued at some EUR25 billion (US$33.5 billion). About 70 percent of the loans were to Irish borrowers. Some 5 percent of the portfolio was under U.S. law, according to a court filing. Total liabilities in June 2012 were about EUR50 billion, according to a court filing. Most assets in the U.S. have been sold already. IBRC is involved in lawsuits in the U.S. IBRC was granted protection under Chapter 15 of the U.S. Bankruptcy Code in December 2013. Kieran Wallace and Eamonn Richardson of KPMG have been named the special liquidators. ========= I T A L Y ========= ALITALIA: KBRA Comments on Impact of Administration on Lessors -------------------------------------------------------------- Kroll Bond Rating Agency on May 5 disclosed that on May 2, 2017, the shareholders of Italy's flag carrier, Alitalia, voted unanimously to file for extraordinary administration in Italy, a form of creditor protection under Italian law that is similar to U.S. Chapter 11 bankruptcy-code protection. An extraordinary administration typically seeks to restructure large-scale organizations burdened with significant debt and other liabilities. Under Italian law, administrators will be appointed to determine whether the airline should reorganize or be liquidated for the benefit of creditors. Alitalia was the subject of a bail-out in 2014 by means of a significant capital injection from Etihad Airways, with goals of achieving profitability during 2017. However, increased competition on routes operated by U.K.-based carriers and significantly higher labor costs led to the ultimate failure of Etihad Airways' profitability goals for Alitalia. During late April 2017, labor unions representing Alitalia workers rejected a plan that called for job reductions and pay cuts for workers. Following the failure of these negotiations, Etihad Airways signaled an unwillingness to invest additional capital into the company and shareholders ultimately agreed to file for extraordinary administration proceedings on May 2, 2017. Over the past year, Kroll Bond Rating Agency (KBRA) has closely monitored the developments relating to Alitalia through discussions with aircraft lessors/servicers and industry participants as well aircraft manufacturers and has published a comment with respect to the impact on its rated ABS transactions. KBRA rates a number of aircraft lessors and is also following the developments with Alitalia's restructuring and its impact on the lessors, some of whom have notable exposure to the airline. KBRA is also considering the potential effects of this filing with respect to certain aircraft types that may be under more pressure, given the airline's potential plans for decreasing participation in certain markets. As such, KBRA will publish a more comprehensive commentary on the aircraft lessors and the market as a whole once more data is gathered from relevant market participants. About Kroll Bond Rating Agency KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP). 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%. ========= M A L T A ========= VISTAJET GROUP: S&P Lowers CCR to 'CCC+' on Weaker Liquidity ------------------------------------------------------------ S&P Global Ratings said that it had lowered its corporate credit rating on the private jet services operator VistaJet Group Holding Ltd. and its core subsidiaries VistaJet Malta Finance P.L.C. and VistaJet Co Finance LLC to 'CCC+' from 'B-'. The outlook is negative. At the same time, S&P lowered the issue rating to 'CCC-' on the $300 million notes issued by VistaJet Malta Finance P.L.C. and VistaJet Co Finance LLC and guaranteed by VistaJet. The downgrade to 'CCC+' and negative outlook follows S&P's view that VistaJet will likely default on its debt obligations or seek material modification to its financial leasing obligations, absent significant improvement of its operational performance in line with management expectations and external measures that would materially improve its liquidity. S&P estimates the company's financial leasing and interest obligations for the 18 months until Sept. 30, 2018, to be $575 million (including bullet repayments in the third quarter of 2018 for five aircraft) and believes that these can be fully served only if the company receives a material equity injection or if the company renegotiates its repayment profile, which S&P might consider as a distressed restructuring. S&P thinks that the company's current capital structure, with an actual adjusted debt to EBITDA of about 12x as of the end of 2016, is unsustainable because the improving operational performance still does not keep up with the agreed aggressive debt amortization schedule. S&P understands that VistaJet raised $31.5 million in primary nonvoting equity in the first quarter of 2017, which was below S&P's expectations and which was not sufficient to ease its constrained liquidity position, in S&P's view. The company had only two aircraft on order in December 2016, to be delivered by September 2017. However, it decided to take one additional aircraft in 2017, which exacerbates the liquidity position. As of Dec. 31, 2016, the group has eight firm aircraft orders with Bombardier and with related parties, which are controlled by the founder but not consolidated with the group. According to the company the group has engaged in discussions to remarket certain positions, including those with related parties and could reduce its commitments to three aircrafts and $140 million capital commitments. The company also confirmed that it can cancel the three remaining aircraft deliveries to VistaJet at no cash cost to the group, if needed. VistaJet announced that it had sold 2,500 new subscription based annual flight hours (FSP) in the first quarter of 2017, which is a significant improvement over the 1,400 sold in the first quarter of 2016, and is slightly above the quarterly average new FSP hours sold in 2016. Furthermore, S&P understands that the company entered into a deferral agreement with one of its lenders related to an aircraft financing facility. The deferral agreement postponed $10.2 million of amortization payments originally scheduled for March 2017 until June 2017. The deferred amount will accrue interest at an increased rate until it is repaid in June. In addition, an administrative fee was paid so that the investor received adequate offsetting compensation for the three months deferral in S&P's view. Over the last three years, VistaJet has increased its fleet size from 31 aircraft (in fiscal 2013) to 71 (fiscal 2016). VistaJet's rapid growth and expansion in new markets has affected the average utilization per aircraft, which remains below historic figures. However, VistaJet is making progress in ramping up its customer base although this does not keep up with the fleet size and the company's original expectations. The critical customer base necessary to efficiently operate the fleet network and utilize the planes has not been reached, in S&P's view. Operating efficiency is, therefore, below S&P's expectations and threatens the company's competitive advantage as the ramp-up of new customers lags original targets. S&P's issue ratings incorporate the material number of aircraft and key operating entities that are mainly domiciled in Malta. Because S&P has not performed a jurisdictional survey of Malta, S&P do not apply a recovery analysis. Instead, S&P determines the difference between the corporate credit rating and the issue rating by considering the amount of priority obligations ranking ahead of the senior unsecured bondholders. Because VistaJet's current capital structure mainly consists of finance leases and all the aircraft are secured, it has a very limited number of unencumbered assets. S&P calculates that priority obligations would take up more than 70% of the group's total assets, and therefore S&P's issue rating is two notches below the corporate credit rating, at 'CCC-'. S&P has revised down its assessment of VistaJet's liquidity (to weak from less than adequate) based on S&P's belief that the ratio of liquidity sources to uses for the upcoming 12 months reflects a material deficit. The negative outlook reflects the probability that S&P could lower the ratings further if VistaJet's high expansion rate does not translate into stronger cash flow generation over the next few quarters and that the absence of additional equity injections would lead to a further deteriorating liquidity profile. S&P could also lower the ratings if it believes the company will seek restructuring or miss interest payments on its debt, resulting in a default on its debt obligations. This could include changing its existing debt terms such that its lenders would receive less than the original promise of the security. S&P could revise the outlook to stable or raise the rating if VistaJet's liquidity position stabilizes, thanks to measures to boost liquidity sources, or significant improvement to cash flow generation. ===================== N E T H E R L A N D S ===================== WOOD STREET CLO V: S&P Cuts Ratings on 2 Note Classes to BB- ------------------------------------------------------------ S&P Global Ratings raised to 'AAA (sf)' from 'AA+ (sf)' its credit rating on Wood Street CLO V B.V.'s class B notes. At the same time, S&P has affirmed its ratings on the class A-T, A-D, A- R, A-2, C-1, C-2, D, and Combo P notes, and have lowered S&P's ratings on the class E-1 and E-2 notes. The rating actions follow S&P's analysis of the transaction's performance and the application of its relevant criteria. Upon publishing S&P's updated criteria for analyzing foreign exchange risk in global structured finance transactions, it placed those ratings that could potentially be affected under criteria observation. Following S&P's review of this transaction, its ratings that could potentially be affected by the criteria change are no longer under criteria observation. Since S&P's Dec. 1, 2016 review, on aggregate the class A-T, A-R, and A-D notes have amortized by a euro equivalent of approximately EUR70.33 million, which represents nearly a 60% reduction in the principal amount outstanding of these notes. Taking into account the notes' amortization and the evolution of the total collateral amount, overcollateralization has increased for all of the rated classes of notes since S&P's previous review. However, asset amortization and defaults in the portfolio have caused the portfolio's aggregate collateral balance to decrease further, and the portfolio has therefore become more concentrated than it was at S&P's previous review. S&P subjected the capital structure to our cash flow analysis to determine the break-even default rate (BDR) for each class of notes at each rating level. The BDRs represent S&P's estimate of the level of asset defaults that the notes can withstand and still fully pay interest and principal to the noteholders. S&P has estimated future defaults in the portfolio in each rating scenario by applying its updated corporate collateralized debt obligation (CDO) criteria. S&P's review of the transaction highlights that the available credit enhancement for the class B notes is commensurate with a higher rating than that currently assigned. Therefore, S&P has raised to 'AAA (sf)' from 'AA+ (sf)' its rating on the class B notes. While the available credit enhancement for all other classes of notes has also increased since S&P's previous review, the increase is insufficient to pass S&P's credit and cash flows at higher rating levels. S&P has therefore affirmed its ratings on the class A-T, A-D, A-R, A-2, C-1, C-2, D, and P Combo notes. For the class E-1 and E-2 notes (the most junior in the capital structure), both the results from S&P's largest obligor default supplemental test and credit and cash flow analysis are commensurate with lower ratings than those currently assigned. In S&P's view, the increase in the pool concentration and losses in the overall portfolio have affected the results under S&P's analysis. As a result, S&P has lowered to 'BB- (sf)' from 'BB+ (sf)' its ratings on the class E-1 and E-2 notes. Wood Street CLO V is a cash flow collateralized loan obligation (CLO) transaction that securitizes loans granted to primarily European speculative-grade corporate firms. Alcentra Ltd. manages the transaction. The transaction closed in June 2007 and entered its amortization period in November 2014. RATINGS LIST Class Rating To From Wood Street CLO V B.V. EUR515 Million Senior Secured And Subordinated Floating-Rate Notes Rating Raised B AAA (sf) AA+ (sf) Ratings Lowered E-1 BB- (sf) BB+ (sf) E-2 BB- (sf) BB+ (sf) Ratings Affirmed A-T AAA (sf) A-D AAA (sf) A-R AAA (sf) A-2 AAA (sf) C-1 AA- (sf) C-2 AA- (sf) D BBB+ (sf) P Combo AA+ (sf) =========== N O R W A Y =========== NORWEGIAN AIR: Egan-Jones Cuts Commercial Paper Ratings to C ------------------------------------------------------------ Egan-Jones Ratings, on April 6, 2017, downgraded the local currency and foreign currency commercial paper ratings on debt issued by Norwegian Air Shuttle ASA to C from B. Norwegian Air Shuttle ASA is a Norway-based company engaged in the passenger transportation service industry. The Company operates scheduled services with additional charter services. =========== R U S S I A =========== BALTIC FINANCIAL: S&P Discontinues 'B-' Ratings Ff. Merger ---------------------------------------------------------- S&P Global Ratings said that it had discontinued its 'B-' long-term and 'B' short-term counterparty credit ratings, as well as its 'ruBBB' Russia national scale rating on Baltic Financial Agency Bank (BFA). This follows the completion of BFA's reorganization in the form of a merger with BANK URALSIB (PJSC) (B-/Positive/B). On May 2, 2017, BFA announced that its reorganization in the form of the merger with BANK URALSIB was complete and that BANK URALSIB had taken on the legal responsibility of all BFA's previously contracted obligations. ER-TELECOM: S&P Puts 'B+' CCR on CreditWatch Negative ----------------------------------------------------- S&P Global Ratings said that it has placed its 'B+' long-term corporate credit rating and 'ruA' Russia national scale rating on Russia-based Er-Telecom on CreditWatch with negative implications. The CreditWatch placement stems from Er-Telecom's more acquisitive growth strategy than S&P previously expected, which S&P thinks could result in its leverage ratio remaining higher than 3.5x in 2017-2018, compared with around 3.8x at year-end 2016. In particular, in first-quarter 2017, Er-Telecom made a debt-financed acquisition for Russian ruble (RUB) 4.2 billion (about US$75 million), and is currently placing a new RUB3 billion domestic bond that S&P understands will only partly be used to refinance outstanding debt. S&P assumes that the company could somewhat reduce its leverage through contributions from newly acquired entities and potential synergies. However, S&P currently has very limited visibility regarding the company's targets, the expected EBITDA from the newly acquired assets, or the potential integration costs. In particular, S&P is concerned about the company's headroom under the covenant on its RUB27 billion facility from VTB Bank (RUB4.9 billion available at the moment), which limits leverage (net debt to EBITDA) to 4.0x. The already limited headroom could tighten following significant debt-funded acquisitions and increasing cash burn after capital expenditures. However, S&P understands that this facility, which is the key source of Er-Telecom's financing of further growth, alongside domestic bond issuances, will remain available to Er-Telecom until the end of 2017. This is because VTB Bank has approved an extension of this facility's availability period; S&P expects the extension agreement will be signed soon. This, along with the proposed bond issuance, significantly mitigates the short-term liquidity pressure resulting from Er-Telecom's high expansionary spending, in S&P's view. S&P's rating on Er-Telecom factors in the company's position as Russia's second largest broadband operator after the incumbent Rostelecom, offering internet, pay-TV, and fixed telephony services under the DOM.RU brand. This is balanced by exposure to the competitive and saturated Russian broadband market, and by the high country risks of operating in Russia, where all of Er- Telecom's assets are located. S&P also takes into account fierce competition, which, in its view, will continue to put pressure on Er-Telecom's margins. Er- Telecom's adjusted EBITDA margin fell below 30% in 2016 from 34.6% in 2015 and 40.6% in 2014. S&P expects that it will remain under pressure in 2017. S&P aims to resolve the CreditWatch within the next few weeks, after receiving more information on Er-Telecom's use of the proceeds from its proposed bond issuance, as well as its updated budget and strategy, including recently acquired and potential new assets. S&P could lower the ratings by one notch if it forecasts that the leverage ratio will remain higher than 3.5x in 2017-2018, without any short-term recovery prospects. S&P could also lower the ratings if the company does not succeed in extending the availability of the existing RUB27 billion facility. ========= S P A I N ========= REPSOL SA: Egan-Jones Raises Sr. Unsecured Ratings to BB- --------------------------------------------------------- Egan-Jones Ratings, on April 11, 2017, upgraded the local currency and foreign currency senior unsecured ratings on debt issued by Repsol SA to BB- from B+. Based in Madrid, Spain, Repsol S.A., through subsidiaries, explores for and produces crude oil and natural gas, refines petroleum, and transports petroleum products and liquefied petroleum gas (LPG). The Company retails gasoline and other products through its chain of gasoline filling stations. =========================== U N I T E D K I N G D O M =========================== AMIGO LOANS: S&P Affirms 'B+' Issuer Rating, Outlook Stable ----------------------------------------------------------- S&P Global Ratings affirmed its 'B+' long-term issuer credit rating on U.K.-based guarantor lender Amigo Loans Ltd. The outlook is stable. At the same time, S&P affirmed its 'B+' issue rating on the senior secured notes issued by wholly owned subsidiary Amigo Luxembourg S.A. S&P also revised its recovery rating on these notes to '4' from '3'. The '4' recovery rating indicates S&P's expectation of meaningful (30%-50%; rounded estimate 40%) recovery in the event of a payment default. Amigo maintains a leading position in the U.K. guarantor lending market, a relatively new sector for the nonstandard lending market. Via its direct subsidiary Amigo Luxembourg, the company has announced plans to raise a further GBP50 million from a tap of its GBP275 million senior secured notes maturing in 2024, leading to a decline in recovery prospects on these notes. S&P understands that the company intends to use the proceeds from the issue for general corporate purposes, including financing growth in the U.K. market. S&P's assessment of Amigo's financial risk profile incorporates approximately GBP162 million in shareholder loan notes, which were partially paid down using proceeds from the company's inaugural issuance. Given the increased amount of senior secured notes and an upsized super senior revolving credit facility (RCF), coupled with S&P's anticipated revenue growth of 30%-35% per year, S&P continues to expect that Amigo will gradually reduce its leverage (debt to EBITDA) over the next few years. This is in part due to our expectation that its debt will remain relatively stable, in addition to EBITDA margins remaining comparatively high as a result of Amigo's strong market position. S&P expects gross debt to EBITDA will stay above 5.0x over the next 12 months, while remaining on a declining trend overall, owing to the company's cash-flow-generative business model. S&P's recovery analysis takes into account Amigo's GBP57 million super senior RCF, in addition to the senior secured notes that will now total GBP325 million. The increased amount of claims at the senior secured creditor level lowers the recovery prospects, given that S&P views Amigo's net enterprise value as broadly unchanged. With S&P's recovery expectations now at approximately 40%, versus 50% previously, S&P has revised its recovery rating to '4' from '3'. The notes continue to be guaranteed by the non-operating holding company Amigo Holdings Ltd. S&P's rating on Amigo is based on the credit profile of the consolidated Amigo group, as S&P foresees no material barriers to cash flows circulating within the group. The stable outlook on Amigo reflects S&P's expectation that the company will steadily reduce its leverage over S&P's one-year outlook horizon. Specifically, S&P anticipates the company's debt-to-EBITDA ratio will trend toward the middle of the 5.0x- 6.0x range. S&P assumes that Amigo will maintain strong EBITDA margins relative to peers, which should enable sustained revenue growth. S&P anticipates that the company will continue to swiftly expand its loan book. "We could lower our rating on Amigo if our credit metrics did not indicate a meaningful reduction in leverage, if its EBITDA growth stagnated, or if we saw the company take on additional debt to finance future growth. Such developments would likely be evidenced by a debt-to-EBITDA ratio not moving toward 5.0x and would affect our assessment of Amigo's financial risk profile. We could also lower the rating if we saw a marked increase in impairments, or a rise in operational risks, which could dent Amigo's cash flow generation and weaken its strength relative to peers. Lastly, we could also take a negative rating action if the U.K. Financial Conduct Authority implemented regulatory changes that limited Amigo's ability to grow with its current business model," S&P said. An upgrade of Amigo is not likely over S&P's one-year outlook horizon, given the pace of the company's credit growth, its leverage, and S&P's comparison of the company with peers. A positive rating action, if one were to occur, would likely result from a marked improvement in Amigo's underlying financial metrics beyond S&P's current base-case assumptions. TOREX RETAIL: High Court Tosses Suit v. RBS Restructuring Unit -------------------------------------------------------------- Oliver Gill at City A.M. reports that a High Court judge has branded a case brought against Royal Bank of Scotland (RBS) by a customer of its restructuring division a "confusing mish mash" of evidence and thrown it out before it even went to trial. Neil Mitchell was hoping to bring legal action against the bank, as well as KPMG and Cerberus, over the way his company, Torex Retail, was treated by RBS' Global Restructuring Group (GRG), City A.M. relates. According to City A.M., Mr. Mitchell, the former chief executive of Torex, claimed the three defendants conspired to push the firm into an insolvency process and flog the assets for less than they were worth. The court started considering the evidence in March and on May 5 made its ruling on whether there was a case to be heard, City A.M. discloses. The May 5 ruling by Judge Malcolm Davis-White QC said he was "extremely concerned" about Mr. Mitchell's representations to the court, adding "I have serious doubts as to truth of the witness statement," City A.M relays. He also said the alleged conspiracy "makes little sense" and called some of the details presented to him a "confusing mish mash", City A.M. notes. The case has been closely followed by other parties lining up their own claims against RBS' GRG division, City A.M. states. The bank has already set up a GBP400 million compensation pot for small businesses treated unfairly by the firm's restructuring team, according to City A.M. Torex Retail develops software solutions for the retail; grocery, petrol, and convenience stores; and hospitality sectors in the United Kingdom and internationally. TRYDAN RETAIL: Sales Decline Prompts Liquidation ------------------------------------------------ Owen Hughes at the Daily Post reports that Trydan Retail Ltd. has called in liquidators. The company went into voluntary liquidation and this month Nick West and Phil Wood of BCR were appointed joint liquidators, the Daily Post relates. Mr. West on May 8 told the Daily Post that the directors took the decision after a considerable decline in sales during the last quarter and the "deficiency to creditors" exceeding GBP50,000. Trydan Retail Ltd. is a bed and furniture retailer in Wrexham. WESTINGHOUSE ELECTRIC: Bankruptcy May Impact Moorside Project ------------------------------------------------------------- Ben Marlow and Jillian Ambrose at The Telegraph report that Toshiba's bankrupt nuclear arm may be prevented from providing any emergency funds to its overseas interests, throwing the future of the Moorside nuclear plant in Cumbria into fresh doubt. It has emerged that Westinghouse, the Toshiba-owned American nuclear reactor developer, faces orders not to prop up any joint venture agreements that it entered into before the company filed for Chapter 11 bankruptcy in March, The Telegraph relates. Wall Street private equity giant Apollo has pledged an US$800 million (GB617 million) rescue loan to the Pennsylvania-based company, which is awaiting court approval, while a group of hedge funds is also interested in providing emergency financing, The Telegraph discloses. However, it is understood that many of these prospective new investors want to see any fresh funds funnelled into Westinghouse and its main subsidiaries, not foreign joint venture projects like Moorside, The Telegraph notes. They are calling for partners involved in Toshiba's overseas interests to also step in and provide support, The Telegraph relays. The GBP18 billion Moorside project is a central pillar of the UK's atomic energy program, The Telegraph states. The 3.4 gigawatt plant will power up to 6m homes but it has been thrown into doubt by Toshiba's financial crisis and the bankruptcy of Westinghouse, according to The Telegraph. About Westinghouse Electric Westinghouse Electric Company LLC -- http://www.westinghousenuclear.com/-- is a U.S. based nuclear power company founded in 1999 that provides design work and start-up help for new nuclear power plants and makes many of the components. Westinghouse manufactures and supplies the commercial fuel products needed to run the plants, and it offers training, engineering, maintenance, and quality management services. Almost 50% of nuclear power plants around the world and about 60% of U.S. plants are based on Westinghouse's technology. Westinghouse's world headquarters are located in the Pittsburgh suburb of Cranberry Township, Pennsylvania. On Oct. 16, 2006, Westinghouse Electric was sold for $5.4 billion to a group comprising of Toshiba (77% share), partners The Shaw Group (20% share), and Ishikawajima-Harima Heavy Industries Co. Ltd. (3% share). After purchasing part of Shaw's stake in 2013, Japan-based conglomerate Toshiba obtained ownership of 87% of Westinghouse. Amid cost overruns at U.S. nuclear reactors it was building, Westinghouse Electric Company LLC, along with 29 affiliates, filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Case No. 17-10751) on March 29, 2017. In their petition, the Debtors listed total assets of $4.32 billion and total liabilities of $9.39 billion as of Feb. 28, 2017. The petitions were signed by AlixPartners' Lisa J. Donahue, chief transition and development officer. The Hon. Michael E. Wiles presides over the cases. Gary T. Holtzer, Esq., Robert J. Lemons, Esq., Garrett A. Fail, Esq., and David N. Griffiths, Esq., at Weil, Gotshal & Manges LLP, serve as counsel to the Debtors. AlixPartners LLP serves as the Debtors' financial advisor. The Debtors' investment banker is PJT Partners Inc. Their claims and noticing agent is Kurtzman Carson Consultants LLC. Toshiba Nuclear Energy Holdings (UK) Ltd. is represented by Albert Togut, Esq., Brian F. Moore, Esq., and Kyle J. Ortiz, Esq., at Togut, Segal & Segal LLP. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than US$3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/booksto order any title today. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2017. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. 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