TCREUR_Public/170523.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 23, 2017, Vol. 18, No. 101



NYRSTAR NV: S&P Revises Outlook to Stable & Affirms 'B-' CCR


FM POLSTERMOBEL: Starts Search for Investor to Save Business
LOCOMORE: Files for Insolvency Process
* GERMANY: Business Insolvencies Drop 13.6% in February 2017


GREECE: Euro-Area Ministers Seek Compromise with IMF on Bailout


CADOGAN SQUARE IX: S&P Assigns Prelim. 'BB' Rating to Cl. E Notes


MONTE DEI PASCHI: ECB Challenges Italy's EUR8.8-Bil. Bailout Plan
MONTE DEI PASCHI: Fitch Affirms 'C' Viability Rating


ORTHO-CLINICAL DIAGNOSTICS: Moody's Rates $350M Revolver Debt B1


BABSON EURO 2014-2: Moody's Gives (P)B2 Rating to Class F Debt
NIBC BANK: Fitch Affirms B+ Rating on Hybrid Tier 1 Securities


ENERGY HOLDING: Files for Insolvency After Losing Lawsuit


IBA-MOSCOW: Moody's Reviews B2 Deposit Rating for Downgrade


ZELVOZ: Serbian Bankruptcy Agency Agrees to Sell Business


TURKIYE GARANTI: Moody's Assigns (P)Ba3 Subordinated Debt Rating


KYIV CITY: S&P Affirms 'B-' Long-Term ICR, Outlook Stable
ODESA PORTSIDE: Prosecutor General Urged to Block Bankruptcy

U N I T E D   K I N G D O M

HERCULES ECLIPSE 2006-4: Fitch Affirms 'CC' Rating on Cl. E Debt
PREMIER FOODS: Fitch Alters Outlook to Negative & Affirms B IDR
STRAND CAPITAL: Put Into FCA's Special Administration Regime
* UK: East Midlands Haulage Firms Face Insolvency



NYRSTAR NV: S&P Revises Outlook to Stable & Affirms 'B-' CCR
S&P Global Ratings revised the outlook on Belgium-based zinc
producer Nyrstar N.V. to stable from positive.  At the same time,
S&P affirmed its 'B-' long-term corporate rating on the company.

At the same time, S&P affirmed its 'B-' issue-level ratings on
the new EUR400 million senior unsecured notes due 2024 and the
existing EUR350 million senior unsecured notes due 2019.  In
addition, S&P revised the recovery rating to '4', indicating its
expectation of average recovery prospects (30%-50%; rounded
estimate 45%), from '3'.

S&P's outlook revision reflects Nyrstar's weak results in first-
quarter 2017 and the recent less-favorable agreements it has
signed with its zinc concentrate suppliers.  S&P now expects
higher negative free operating cash flow in 2017, and slower
deleveraging.  S&P cannot be sure if the less favorable terms
with suppliers signal a structural change in the industry with
implications beyond 2017.

Recently, Nyrstar concluded its negotiations with its zinc
concentrate suppliers for 2017.  The discussions took place on
the back of soaring zinc prices and overcapacity in the zinc
industry. The new agreements reflect zinc treatment charges (TC;
the discount between the refined zinc price and the zinc
concentrate) of about $172/ton, compared to $203/ton in 2016 and
$245/ton in 2015.  In addition, for the first time, the
agreements for 2017 don't include a price escalation mechanism (a
profit-share framework that creates a link to actual zinc
prices).  In S&P's view, it previously saw the price escalation
mechanism as a key driver for the company's profitability,
especially on the back of strong fundamentals for zinc prices.
The new agreements have translated into a decrease in EBITDA of
about EUR50 million compared to S&P's previous base case.  At
this stage, S&P assumes some recovery in TC in 2018, and the
return of the price escalation mechanism.

Under S&P's base-case scenario, it projects Nyrstar's S&P Global
Ratings-adjusted EBITDA to be EUR300 million-EUR350 million in
2017, below S&P's previous forecast of EUR350 million-
EUR400 million.  The drop in projected EBITDA is explained by
lower TC and the lack of a price escalation mechanism this year,
as well as a lower contribution from the mining division.  S&P
expects EBITDA to recover to EUR400 million-EUR450 million in
2018, supported by a contribution from the Port Pirie project.
In 2016, the company reported EBITDA of EUR190 million and
EUR55 million in first-quarter 2017.

These assumptions underpin its estimations:

   -- Zinc prices of about $2,500/ton for the rest of 2017.  The
      1Q average zinc price was $2,778/ton.

   -- About 1 million metric tons of zinc production in the
      metals processing division.

   -- Euro/U.S. dollar average exchange rate of 1.03 in 2017 and
      1.08 in 2018.

   -- No EBITDA contribution from Port Pirie until 2018.
      According to the company, the project is expected to
      generate attractive returns of about EUR130 million post

   -- Contribution of about EUR50 million from the mining
      business both in 2017 and 2018.  Capital expenditure
     (capex) of about EUR300 million-EUR320 million in 2017,
     tapering to about EUR150 million in 2018.  Capex for 2017
      includes the completion of the Port Pirie lead smelter
      project, which is on track for hot commissioning in
      September and above-average maintenance capex.

   -- Under S&P's price assumption, it expects limited working
      capital investment inflow.  That said, if prices rebounded,
      the company would see further working capital funding needs
      and thus higher debt levels.

   -- No dividends.

Under S&P's new base case, it forecasts cash flows from
operations (before changes in working capital) of EUR170 million-
EUR200 million in 2017.  That said, due to the substantial capex
in 2017, S&P expects the company to generate negative free
operating cash flows of EUR120 million-EUR150 million.  While S&P
expects only limited working capital outflow in 2017 under its
base case, the volatile nature of zinc prices may result in
material working capital outflow (for example in the first
quarter of 2017, the company saw a working capital outflow of
about EUR80 million on the back of zinc prices reaching about
EUR2,800/ton).  As for 2018, S&P expects that with stronger cash
flow from operations and lower capex, the company would be able
to generate up to EUR100 million of free operating cash flows.

S&P expects Nyrstar's debt-to-EBITDA to be 5.0x-5.5x in 2017,
improving to about 4x in 2018.  That said, the absence of a price
escalation mechanism in 2018 would put further pressure on credit
metrics.  S&P notes the company's commitment to a mid-term
deleveraging target of 2.0x-2.5x debt to EBITDA.

The stable outlook reflects S&P's view that Nyrstar's credit
metrics will continue to improve in 2017 and 2018 (albeit at a
more modest pace than S&P previously expected) on the back of
oversupply in the zinc refining market.  S&P's outlook also
reflects the completion of the Port Pirie project later on 2017,
supporting positive free operating cash flows starting 2018.

Under S&P's base case it assumes that the company would be able
to improve its debt to EBITDA to about 5.0x by the end of 2017,
with further improvement in the coming years.

S&P could consider an upgrade if Nyrstar showed an ability to
achieve meaningful improvements in its operating performance and
complete the ramp-up of the new Port Pirie project in Australia,
after the recent delay. Rating upside could build if Nyrstar
strengthens its balance sheet and maintains adequate liquidity,
leading to lower leverage over time.  In S&P's view, a
sustainable debt to EBITDA of 4.0x-4.5x would be commensurate
with a higher rating.

While selling existing mining assets is not in S&P's base case,
there could be additional upside for the existing rating if the
company sold its remaining mining assets for a significant
amount, resulting in lower adjusted debt.

S&P could downgrade Nyrstar if S&P sees a further increase in the
company's absolute debt above S&P's base case, delaying further
the deleveraging process.  Such a scenario could happen if zinc
prices continue to increase, demanding further investment in
working capital, or in the case of no meaningful recovery of TC
in 2018.

In addition, pressure on the rating could build if S&P saw the
company's liquidity position deteriorate, for instance, if it
could not absorb potential swings in working capital and/or could
not refinance some of the short-term prepayment facilities.  S&P
will continue to monitor the company's refinancing plans for the
sizable facilities due in 2019 (EUR500 million BBF and
EUR350 million senior unsecured notes).


FM POLSTERMOBEL: Starts Search for Investor to Save Business
Cabinet Maker reports that FM Polstermobel, or better known as FM
Munzer, has begun the search for an investor in order to save the

FM Munzer filed for insolvency with the District Court in Coburg
on Feb. 24, 2017, with insolvency specialist Dr. Jochen Zaremba
appointed as provisional insolvency administrator by law firm

Cabinet Maker says Dr. Zaremba has now expressed the company's
intentions to recruit an investor to secure the future of the
firm, which has recently made some transitional restructuring to
make the business more appealing to potential investors.

This has included cutting 24 jobs from its 120 workforce to
improve 'competitiveness', Dr. Zaremba confirmed in a statement,
the report relays.

"We are doing everything we can to make FM Munzer even more
productive and interesting to partners," the report quotes Uwe
Scharunge, who took over the helm at FM as its new CEO in April,
as saying.

It is understood that company, which has been established for 68
years, has until the end of May to find an investor, the report

FM Polstermobel is German-based upholstery manufacturer
established in 1949.  The company currently employed around 125
staff and reported declining sales in recent years, Cabinet Maker

LOCOMORE: Files for Insolvency Process
-------------------------------------- reports that open access operator Locomore
announced on May 11 that that it had filed for insolvency at the
district court in Charlottenburg.

Locomore launched a partly crowd-funded daily return service
between Berlin and Stuttgart in December 2016 using refurbished
coaches and with a focus on sustainability, the report says. It
said the number of passengers and revenue per passenger had been
growing continuously, 'but not fast enough to be fully cost-
effective'. As its financial reserves had now been exhausted, the
company filed for insolvency after negotiations with an investor
proved unsuccessful, according to relates that Locomore said it believed that
its presence had enhanced the long-distance passenger market, and
it was 'intensively looking' for investors who could save the
business. Initial discussions were already taking place, the
report cites.

The report says the May 12 Stuttgart - Berlin service was
expected to run as planned, but passengers were advised to check
whether any further services would operate.
notes that the company stressed that its train crew were not
responsible for the situation, and asked passengers to treat then
'fairly and respectfully' and be understanding if they were
unable to answer questions.

Responding to the 'sad news', the Alliance of Rail New Entrants
association of open access operators said the new operator had
been 'very brave'. ALLRAIL said Locomore had 'provided super
service for five months and deserve a great deal of respect for
that,' says

* GERMANY: Business Insolvencies Drop 13.6% in February 2017
Alliance News, citing figures from Destatis, reports that
Germany's business insolvencies deceased notably in February.

German local courts reported 1,580 business insolvencies in
February, which represented a fall of 13.6% from the
corresponding month last year, Alliance News relates.

In the commercial sector, there were 299 cases with the largest
number of business incidents, followed by construction industry
with 254 insolvency applications, according to Alliance News.

In the hospitality sector, 183 applications for insolvency,
scientific and technical services were filed, adds Alliance News.


GREECE: Euro-Area Ministers Seek Compromise with IMF on Bailout
Viktoria Dendrinou and Rainer Buergin at Bloomberg News report
that euro-area finance ministers gathered in Brussels on May 22,
seeking a compromise with the International Monetary Fund on debt
relief for Greece that could signal the final act in the seven-
year-old drama for the continent's most indebted state.

The IMF is reluctant to participate in a bailout unless the euro
area ensures the country's EUR315 billion (US$355 billion) debt
load is sustainable, Bloomberg states.  Some nations like Germany
that are resisting a change to Greece's debt profile won't
release any new funds until the Washington-based fund joins the
program, Bloomberg notes.  Athens, Bloomberg says, needs the new
aid installment before it has to repay about EUR7 billion to
lenders in July.

According to Bloomberg, two European Union officials with
knowledge of the talks said the so-called Eurogroup meeting began
after finance ministry deputies failed to resolve the outstanding
issues, as disagreements between the IMF and Germany over
Greece's economic outlook and required debt relief persisted.

An EU official said Eurogroup chief Jeroen Dijsselbloem,
German Finance Minister Wolfgang Schaueble and the head of the
IMF's European Department tried to bridge their differences in a
separate meeting before the start of the gathering, Bloomberg
notes.  There was no significant progress though, Bloomberg
relays, citing the official.

A key issue of contention is the outlook for Greece's economy
after 2018, when the current bailout expires, Bloomberg states.
The IMF has raised doubts about Greece's ability to maintain such
an optimistic budget performance for decades, while key creditors
have been pushing for a more positive outlook, Bloomberg
discloses.  Less ambitious fiscal targets would increase the
amount of debt relief needed, Bloomberg notes.


CADOGAN SQUARE IX: S&P Assigns Prelim. 'BB' Rating to Cl. E Notes
S&P Global Ratings assigned its preliminary credit ratings to
Cadogan Square CLO IX DAC's class A-1, A-2, B, C, D, E, and F

The preliminary ratings assigned to Cadogan Square CLO IX's notes
reflect S&P's assessment of:

   -- The diversified collateral pool, which consists primarily
      of broadly syndicated speculative-grade senior secured term
      loans and bonds that are governed by collateral quality
      tests.  The credit enhancement provided through the
      subordination of cash flows, excess spread, and

   -- The collateral manager's experienced team, which can affect
      the performance of the rated notes through collateral
      selection, ongoing portfolio management, and trading.  The
      transaction's legal structure, which is expected to be
      bankruptcy remote.

S&P considers that the transaction's documented counterparty
replacement and remedy mechanisms adequately mitigate its
exposure to counterparty risk under S&P's current counterparty

Following the application of S&P's structured finance ratings
above the sovereign criteria, it considers the transaction's
exposure to country risk to be limited at the assigned
preliminary rating levels, as the exposure to individual
sovereigns does not exceed the diversification thresholds
outlined in S&P's criteria.

At closing, S&P considers that the transaction's legal structure
will be bankruptcy remote, in line with its legal criteria.

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

Cadogan Square CLO IX is a European cash flow corporate loan
collateralized loan obligation (CLO) securitization of a
revolving pool, comprising euro-denominated senior secured loans
and bonds issued mainly by European borrowers.  The collateral
manager is Credit Suisse Asset Management Ltd., an indirect,
wholly owned subsidiary of Credit Suisse Group AG.


Preliminary Ratings Assigned

Cadogan Square CLO IX DAC
EUR452.95 Million Secured Fixed- And Floating-Rate Notes
(Including EUR46.50 Million Unrated Notes)

Class                   Prelim.         Prelim.
                        rating           amount
                                       (mil. EUR)
A-1                     AAA (sf)         220.32
A-2                     AAA (sf)          31.58
B                       AA (sf)           69.30
C                       A (sf)            28.60
D                       BBB (sf)          20.35
E                       BB (sf)           24.20
F                       B- (sf)           12.10
Sub. notes              NR                46.50

NR--Not rated.


MONTE DEI PASCHI: ECB Challenges Italy's EUR8.8-Bil. Bailout Plan
Sonia Sirletti, Boris Groendahl and Lorenzo Totaro at Bloomberg
News report that Italy's plan for an EUR8.8 billion (US$9.8
billion) bailout of Banca Monte dei Paschi di Siena SpA faces
resistance from the European Central Bank, which is concerned the
lender may struggle to maintain capital buffers as it tries to
get back on its feet.

According to Bloomberg, people with knowledge of the matter said
the ECB's oversight arm has signaled that the current rescue plan
doesn't do enough to ensure that Monte Paschi will comfortably
meet supervisory capital requirements in the next few years, as
the bank offloads about EUR30 billion of bad loans through a

Five months after Monte Paschi requested help, the Italian
government, the ECB, the European Commission and the bank have
yet to reach a final agreement on how the bank should be
restructured as part of the bailout or how much capital it will
need to return to viability, Bloomberg notes.

Italy is trying to prop up Monte Paschi using a provision in the
EU's bank-failure rules that allows governments to provide state
aid to viable banks to address a capital shortfall identified in
a stress test, Bloomberg discloses.

Two of the people said raising more funds now has been ruled out,
Bloomberg relays.  They said the ECB recently asked for changes
to Monte Paschi's securitization plan to ensure a greater role
for private investors, according to Bloomberg.  One person, as
cited by Bloomberg, said the ECB objected to the bank's proposal
to assign the junior tranches to the Italian Treasury, which
would have absorbed capital.

According to Bloomberg, three people said the talks are
proceeding constructively and confidence is high that a deal will
be reached.

Banca Monte dei Paschi di Siena SpA -- is
an Italy-based company engaged in the banking sector.  It
provides traditional banking services, asset management and
private banking, including life insurance, pension funds and
investment trusts.  In addition, it offers investment banking,
including project finance, merchant banking and financial
advisory services.  The Company comprises more than 3,000
branches, and a structure of channels of distribution.  Banca
Monte dei Paschi di Siena Group has subsidiaries located
throughout Italy, Europe, America, Asia and North Africa.  It has
numerous subsidiaries, including Mps Sim SpA, MPS Capital
Services Banca per le Imprese SpA, MPS Banca Personale SpA, Banca
Toscana SpA, Monte Paschi Ireland Ltd. and Banca MP Belgio SpA.

MONTE DEI PASCHI: Fitch Affirms 'C' Viability Rating
Fitch Ratings has affirmed Banca Monte dei Paschi di Siena's
(MPS) Viability Rating (VR) at 'c' and maintained the bank's 'B-'
Long-Term Issuer Default Rating (IDR) on Rating Watch Evolving

The rating actions follow a periodic review of the ratings.


The VR of 'c' indicates that failure of the bank under Fitch
criterias is inevitable because it requires an extraordinary
injection of capital in order to remain viable. Following the EBA
stress tests in the summer of 2016, the European Central Bank
identified a capital shortfall of EUR8.8 billion arising from its
large volumes of doubtful loans (sofferenze). The shortfall
arises as a result of the losses the bank will bear once it
deconsolidates the entirety of its sofferenze.

After failing to raise EUR5 billion capital through a capital
increase in December 2016, MPS requested a precautionary
recapitalisation from Italy's Ministry of Finance, under Law
Decree n. 237 dated December 23, 2016, subsequently converted
into Law 15/2017. Failure, as per Fitch's definitions, is
inevitable also because receiving public funds requires creditor
burden sharing, which Law 15/201 addresses through the mandatory
conversion of junior and subordinated bondholders into equity.
The mandatory conversion qualifies as a distressed debt exchange
(DDE) under Fitch criterias since it represents a material
reduction in terms.

The VR also continues to reflect the very weak asset quality of
MPS and the pressure this puts on its capital. Gross impaired
loans at end-1Q17 accounted for about 36% of gross loans, and net
impaired exposures (sofferenze and unlikely-to-pay exposures)
accounted for approximately four times its Fitch Core Capital
(FCC) at the same date.

Since the beginning of the year the bank has issued EUR11 billion
state-guaranteed senior notes and increased its customer deposits
by about EUR5.5 billion, which led to a strengthening of its
liquidity. However, MPS's VR reflects Fitch's view that funding
and liquidity are unstable without any formal extraordinary
support mechanisms.

MPS's Long-Term IDR and senior debt are rated above the VR to
reflect Fitch's view that the probability that senior creditors
will have to bear losses is lower than the probability of failure
for the bank. This is because senior creditors benefit from the
partial or full conversion or write down of junior debt, which
may take place either in the precautionary recapitalisation
process or through the use of resolution powers.

The RWE on the senior debt ratings reflect Fitch's expectation
that these could be upgraded if the bank is recapitalised with
public money, and the partial conversion of junior and
subordinated debt, and doubtful loans deconsolidated. The RWE
also reflects Fitch's view that the ratings could be downgraded
if the precautionary recapitalisation is not authorised, which
would increase the risk of a resolution of the bank.

The Short-Term IDR remains on Rating Watch Negative (RWN) because
it is mapped from the Long-Term IDR, and an upgrade would require
a Long-Term IDR of at least 'BBB-', which Fitch does not expects.


The SR and SRF reflect Fitch's view that although external
support is possible, including through a precautionary
recapitalisation, it cannot be relied upon. Senior creditors can
no longer expect to receive full extraordinary support from the
sovereign in the event that the bank becomes non-viable. The EU's
Bank Recovery and Resolution Directive (BRRD) and the Single
Resolution Mechanism (SRM) for eurozone banks provide a framework
for the resolution of banks that requires senior creditors to
participate in losses, if necessary, instead of or ahead of a
bank receiving sovereign support.


MPS's legacy lower and upper Tier 2 securities are rated in line
with Fitch criterias for rating non-performing issues. The
institutional holders of these securities will be valued at 100%
of their nominal value, but the terms of the mandatory conversion
requires these securities to be converted in new shares issued by
the bank and Fitch believes that significant uncertainty exists
over the prospects for realising the notional value. Therefore
the 'RR3' Recovery Rating for these issues reflects the
likelihood of large economic losses being sustained by

The legacy Tier 2 securities held by retail investors are rated
'CC'/RWE to reflect that if the final terms of the precautionary
recapitalisation are materially worse than those included in Law
15/2017 or the precautionary recapitalisation does not go ahead
bondholders are at risk of losses.

The ratings, including the 'RR6' Recovery Rating, of the Tier 1
instruments and preferred securities reflect their non-
performance and the likelihood of severe economic losses being
sustained by bondholders


The notes' long- and short-term ratings are based on the Republic
of Italy's direct, unconditional and irrevocable guarantees for
the issues, which cover the notes' payments of principal and
interest. Italy's guarantees were issued by the Ministry of
Economy and Finance under Law Decree n. 237 dated December 23,
2016, subsequently converted into Law 15/2017.

The ratings reflect Fitch's expectation that Italy will honour
the guarantees provided to the noteholders in a full and timely
manner. The state guarantees rank pari passu with Italy's other
unsecured and unguaranteed senior obligations.



If the bank's restructuring, which is likely to comprise the
disposal of impaired loans and capital strengthening through the
injection of public money and the mandatory debt conversion to
equity, is successfully completed, MPS's creditworthiness would
improve. This would result in an upgrade of the VR, Long-Term IDR
and senior debt ratings. Upon receipt of the state money and/or
conversion of the junior debt into new shares, Fitch would
downgrade MPS's VR to 'f' and subsequently upgrade it to the
level reflecting the bank's profile following the capital

An upgrade would primarily reflect improved asset quality and
lower pressure on capital from net impaired exposures as well as
reduced risk of further pressures on funding. The extent of the
upgrade will depend on Fitch assessments of the bank's
capitalisation and asset quality after the transaction, the
bank's business profile after the transaction, the bank's
earnings potential, and the strategic objectives included in the
bank's new restructuring plan. Fitch will monitor the bank's
ability, post-completion of the transaction, to implement its new
strategy and expect any resulting earnings improvements to be
gradual. This is likely to constrain the VR in the 'b' range
immediately following the recapitalisation.

If, for any reason, the precautionary recapitalisation does not
proceed as planned, Fitch would likely downgrade MPS's VR to 'f'
and downgrade the Long-Term IDR and senior debt ratings to a
level commensurate with Fitch views of heightened risk of senior
creditors bearing losses.

Fitch expects to resolve the RWE when the terms of the bank's
restructuring are made public, which could take longer than the
typical six months.


The ratings of bonds subject to mandatory conversion would be
withdrawn shortly after the completion of the transaction, as
those securities are extinguished in the exchange.

If the precautionary recapitalisation is not approved and the
bank is resolved or the terms of the creditor burden sharing in
the precautionary recapitalisation process require subordinated
notes to be entirely wiped out to bear the losses, then the
ratings of the securities could be downgraded to 'C', the lowest
issue rating, and Recovery Ratings downgraded to as low as 'RR6'.


The notes' long- and-short term ratings are sensitive to changes
in Italy's IDRs. Any downgrade or upgrade of Italy's IDRs would
be reflected in the notes' ratings.


An upgrade of the SR and any upward revision of the SRF would be
contingent on a positive change in the sovereign's propensity to
support MPS. While not impossible, this is highly unlikely, in
Fitch's view.

The rating actions are:

Long-Term IDR: 'B-'; maintained on RWE
Short-Term IDR: 'B' maintained on RWN
Viability Rating: affirmed at 'c'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'
Debt issuance programme (senior debt): 'B-'/'RR4'; maintained on
Senior unsecured debt: 'B-'/'RR4'; maintained on RWE
Lower Tier 2 subordinated debt: 'CC'/'RR3'; maintained on RWE
Upper Tier 2 subordinated debt: 'CC'/'RR3'; maintained on RWE
Preferred stock and Tier 1 notes: affirmed at 'C'/'RR6'
State-guaranteed debt: affirmed at 'F2'/'BBB'


ORTHO-CLINICAL DIAGNOSTICS: Moody's Rates $350M Revolver Debt B1
Moody's Investors Service assigned a B1 rating to Ortho-Clinical
Diagnostics SA's $350 million senior secured revolving credit
facility expiring 2021. Ortho's senior secured first lien term
loan due 2021, also rated B1, will be upsized by $200 million.
The transaction proceeds will be used to refinance existing
revolver borrowings and push out the expiration by two years. The
transaction is credit positive because it alleviates some of
Ortho's near-term liquidity pressures. However, the transaction
has no impact on Ortho's other existing ratings, including its B3
Corporate Family Rating (CFR), B3-PD Probability of Default
Rating, B1 senior secured credit facility ratings, and Caa2
senior unsecured note ratings. The outlook remains negative.

Ratings assigned:

Ortho-Clinical Diagnostics SA

  Senior secured revolving credit facility expiring 2021 at B1
  (LGD 3)

Ratings unchanged and to be withdrawn upon close:

  Senior secured revolving credit facility due 2019 at B1 (LGD 3)


Ortho's B3 Corporate Family Rating reflects Moody's expectation
that the company will continue to operate with very high
financial leverage. Moody's estimates that pro forma adjusted
debt to EBITDA will decline modestly to approximately 7.5 times
over the next 12 to 18 months, down from 7.7 times as of January
1, 2017. The B3 CFR also reflects Ortho's challenging liquidity
situation. Moody's anticipates continued negative free cash flow
over the next 12 months as Ortho continues to experience
significant expenses associated with the process of becoming a
stand-alone company. The aforementioned transaction greatly
reduces the threat of Ortho's financial covenant being tested,
which only occurs when the revolver is at least 30% drawn.

Temporing these challenges are Ortho's large scale and good
diversity by customer, product and geography. Further, the
lengthy separation process from Johnson & Johnson (Aaa stable)
will come to an end during the third quarter of 2017. Moody's
expects Ortho's IT implementation and restructuring costs to
moderate in late-2017. Moody's views Ortho's business model as
fundamentally stable, given the recurring nature of approximately
80% of revenues that is generated from sales of consumables and
reagents. In the longer term, Moody's believes that Ortho is well
positioned to grow earnings through achieving cost effectiveness
as a fully stand-alone company and further penetrating emerging

The negative outlook reflects Moody's view that the company faces
elevated near-term liquidity pressure despite having a
fundamentally sound core business.

The ratings could be upgraded if Ortho consistently generates
positive free cash flow, and if adjusted debt to EBITDA is
sustained below 6.5 times.

The ratings could be downgraded if Ortho experiences further
deterioration in liquidity or is unable to reduce its financial

Ortho-Clinical Diagnostics produces in-vitro diagnostics
equipment and associated assays and reagents. Ortho's largest
segment, Clinical Laboratories develops clinical chemistry and
immunoassay tests, targeting primarily small and medium-sized
hospitals. The company's Immunohematology products are used by
blood banks and hospitals to determine patient-donor
compatibility in blood transfusions. Ortho also develops and
markets equipment and assays for blood and plasma screening for
infectious diseases. Revenues are about $1.7 billion. Ortho is
owned by the Carlyle Group.

The principal methodology used in these ratings was Global
Medical Product and Device Industry published in October 2012.


BABSON EURO 2014-2: Moody's Gives (P)B2 Rating to Class F Debt
Moody's Investors Service announced that it has assigned the
following provisional ratings to notes ("Refinancing Notes") to
be issued by Babson Euro CLO 2014-2 B.V. (the "Issuer" or "Babson
Euro 2014-2"):

-- EUR297,400,000 Class A-1 Senior Secured Floating Rate Notes
    due 2029, Assigned (P)Aaa (sf)

-- EUR31,600,000 Class A-2 Senior Secured Fixed Rate Notes due
    2029, Assigned (P)Aaa (sf)

-- EUR37,900,000 Class B-1 Senior Secured Floating Rate Notes
    due 2029, Assigned (P)Aa2 (sf)

-- EUR21,100,000 Class B-2 Senior Secured Fixed Rate Notes due
    2029, Assigned (P)Aa2 (sf)

-- EUR35,000,000 Class C Senior Secured Deferrable Floating Rate
    Notes due 2029, Assigned (P)A2 (sf)

-- EUR28,500,000 Class D Senior Secured Deferrable Floating Rate
    Notes due 2029, Assigned (P)Baa2 (sf)

-- EUR38,000,000 Class E Senior Secured Deferrable Floating Rate
    Notes due 2029, Assigned (P)Ba2 (sf)

-- EUR16,500,000 Class F Senior Secured Deferrable Floating Rate
    Notes due 2029, Assigned (P)B2 (sf)

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


Moody's provisional ratings of the rated notes address the
expected loss posed to noteholders by legal final maturity of the
notes in 2030. The provisional ratings reflect the risks due to
defaults on the underlying portfolio of loans given the
characteristics and eligibility criteria of the constituent
assets, the relevant portfolio tests and covenants as well as the
transaction's capital and legal structure. Furthermore, Moody's
is of the opinion that the collateral manager, Barings (U.K.)
Limited (formerly Babson Capital Management (UK) Limited and
Babson Capital Europe Limited) ("Barings"), has sufficient
experience and operational capacity and is capable of managing
this CLO.

The Issuer has issued the Refinancing Notes in connection with
the refinancing of the following classes of notes: Original Class
A Notes, Original Class B Notes, Original Class C Notes, Original
Class D Notes and Original Class E Notes due 2027 (the
"Refinanced Notes"), previously issued on November 4, 2014 (the
"Original Issue Date"). On the refinancing date, the Issuer will
use the proceeds from the issuance of the Refinancing Notes to
redeem in full its respective Refinanced Notes. On the Original
Issue Date, the Issuer also issued one class of subordinated
notes, which will remain outstanding.

Babson Euro CLO 2014-2 is a managed cash flow CLO. At least 90%
of the portfolio must consist of secured senior obligations and
up to 10% of the portfolio may consist of unsecured senior
obligations, second-lien loans, mezzanine obligations and high
yield bonds. The percentage of the portfolio that can pay
interest at a fixed rate will vary between 3% and 16%, whilst
Classes A-2 and B-2 are the only classes paying fixed rate
interest. The portfolio will be fully ramped up as of the closing
date and to be comprised predominantly of corporate loans to
obligors domiciled in Western Europe.

Barings will manage the CLO. It will direct the selection,
acquisition and disposition of collateral on behalf of the Issuer
and may engage in trading activity, including discretionary
trading, during the transaction's four-year reinvestment period.
Thereafter, purchases are permitted using principal proceeds from
unscheduled principal payments and proceeds from sales of credit
risk and credit improved obligations, and are subject to certain

The transaction incorporates interest and par coverage tests
which, if triggered, divert interest and principal proceeds to
pay down the notes in order of seniority. It also incorporates a
feature by which the WAL could be extended from 8 to 8.5 years at
the end of the non-call period subject to certain conditions.

Factors that would lead to an upgrade or downgrade of the

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

Loss and Cash Flow Analysis:

Moody's modeled the transaction using CDOEdge, a cash flow model
based on the Binomial Expansion Technique, as described in
Section 2.3 of the "Moody's Global Approach to Rating
Collateralized Loan Obligations" rating methodology published in
October 2016. The cash flow model evaluates all default scenarios
that are then weighted considering the probabilities of the
binomial distribution assumed for the portfolio default rate. In
each default scenario, the corresponding loss for each class of
notes is calculated given the incoming cash flows from the assets
and the outgoing payments to third parties and noteholders.
Therefore, the expected loss or EL for each tranche is the sum
product of (i) the probability of occurrence of each default
scenario and (ii) the loss derived from the cash flow model in
each default scenario for each tranche. As such, Moody's
encompasses the assessment of stressed scenarios. Moody's used
the following base-case modeling assumptions:

Par Amount: EUR549,000,000

Diversity Score: 44

Weighted Average Rating Factor (WARF): 3000

Weighted Average Spread (WAS): 3.65%

Weighted Average Coupon (WAC): 4.90%

Weighted Average Recovery Rate (WARR): 41.5%

Weighted Average Life (WAL): 8 years.

Moody's has analysed the potential impact associated with
sovereign related risk of countries with non-Aaa ceilings. As
part of the base case, Moody's has addressed the potential
exposure to obligors domiciled in countries with local currency
country risk ceiling of A1 or below. Given the portfolio
constraints and the current sovereign ratings of eligible
countries, such exposure may not exceed 10% of the total
portfolio, where exposures to countries local currency country
risk ceiling of A3 or below cannot exceed 5% (with none allowed
below Baa3). As a result and in conjunction with the current
foreign government bond ratings of the eligible countries, as a
worst case scenario, a maximum 5% of the pool would be domiciled
in countries with Baa3 local currency country ceiling and 5% in
A3 local currency country ceiling. The remainder of the pool will
be domiciled in countries which currently have a local currency
country ceiling of Aaa. Given this portfolio composition, the
model was run with different target par amounts depending on the
target rating of each class of notes as further described in the
methodology. The portfolio haircuts are a function of the
exposure size to peripheral countries and the target ratings of
the rated notes and amount to 0.75% for the Class A-1 and A-2
Notes, 0.50% for the Class B-1 and B-2 Notes, 0.375% for the
Class C Notes and 0% for Classes D, E and F Notes.

Stress Scenarios:

Together with the set of modelling assumptions above, Moody's
conducted an additional sensitivity analysis, which was an
important component in determining the provisional ratings
assigned to the rated notes. This sensitivity analysis includes
increased default probability relative to the base case. Below is
a summary of the impact of an increase in default probability
(expressed in terms of WARF level) on each of the rated notes
(shown in terms of the number of notch difference versus the
current model output, whereby a negative difference corresponds
to higher expected losses), holding all other factors equal.

Percentage Change in WARF: WARF + 15% (to 3450 from 3000)

Ratings Impact in Rating Notches:

Class A-1 Senior Secured Floating Rate Notes: -1

Class A-2 Senior Secured Fixed Rate Notes: -1

Class B-1 Senior Secured Floating Rate Notes: -2

Class B-2 Senior Secured Fixed Rate Notes: -2

Class C Senior Secured Deferrable Floating Rate Notes:-2

Class D Senior Secured Deferrable Floating Rate Notes: -2

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes: -1

Percentage Change in WARF: WARF +30% (to 3900 from 3000)

Ratings Impact in Rating Notches:

Class A-1 Senior Secured Floating Rate Notes: -1

Class A-2 Senior Secured Fixed Rate Notes: -1

Class B-1 Senior Secured Floating Rate Notes: -4

Class B-2 Senior Secured Fixed Rate Notes: -4

Class C Senior Secured Deferrable Floating Rate Notes: -4

Class D Senior Secured Deferrable Floating Rate Notes: -3

Class E Senior Secured Deferrable Floating Rate Notes: -2

Class F Senior Secured Deferrable Floating Rate Notes: -3

Methodology Underlying the Rating Action:

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

NIBC BANK: Fitch Affirms B+ Rating on Hybrid Tier 1 Securities
Fitch Ratings has affirmed NIBC Bank NV's (NIBC) Long-Term Issuer
Default Rating (IDR) at 'BBB-' and Viability Rating (VR) at
'bbb-'. The Outlook on the Long-Term IDR is Positive.



NIBC's ratings reflect its niche franchise and business model,
appetite for lending to some cyclical industries, but overall
adequate asset quality. The ratings are underpinned by the bank's
strong capital and leverage ratios. The Positive Outlook on the
Long-Term IDR reflects NIBC's structurally improving earnings,
which provide an increasingly adequate buffer against potential
losses in the loan book.

NIBC's business model is focused on providing tailored asset-
based lending and capital markets solutions to its target segment
of medium-sized companies. In addition, it offers residential
mortgage loans in the Netherlands and online savings. Revenues
are mainly driven by net interest income and depend on NIBC's
pricing power, which is overall lower than major Dutch banks.
However, NIBC was able to achieve higher margins in recent years
mainly through loan repricing as it has been focusing on its core
businesses and niches. Fitch believes this reflects NIBC's
ability to price risks at an appropriate level, ensuring revenue
is the first line of defence against losses rather than capital.

NIBC's lending is a combination of a granular Dutch residential
mortgage loan book (around half of total loans at end-2016) and a
relatively concentrated corporate book. Non-performing mortgage
loans are low and in line with larger Dutch banks, supporting
NIBC's overall asset quality, which compares well with similarly
rated peers. In corporate lending, the bank's business model
exposes it to some cyclical industries (particularly shipping,
offshore services and commercial real estate, in total over 40%
of corporate loans) and lower rated corporate borrowers, for
which the bank typically mitigates the risks by high

Corporate loan quality is under pressure due to the stress
experienced by the shipping (in particular, container and dry
bulk) and offshore sectors. The share of non-performing exposures
in these two sectors increased to almost 4% and slightly over 9%,
respectively, at end-2016. A further 13% of shipping and 11% of
offshore exposures were performing forborne, and their
performance may be more sensitive to shocks than the rest of the
loan book. Fitch expects the pressure on loan quality from these
two sectors to persist, but Fitch also expects that overall it
will be largely offset by accelerated recoveries of the legacy
impaired commercial real estate exposures.

NIBC's capital and leverage ratios are strong, providing a good
buffer, and compare well with domestic and international peers.
Overall, capitalisation is broadly commensurate with the bank's
risk profile. At end-2016, the Fitch core capital/risk-weighted
assets ratio was 18% and the fully-loaded Basel III leverage
ratio was solid at over 7%. Capital ratios at the level of NIBC's
immediate parent NIBC Holding NV, where the regulatory capital
requirements are set, are also solid and support Fitch
assessments of the bank's capitalisation. The bank's exposure to
unreserved impaired loans is manageable at around 20% of equity,
despite moderate coverage and reliance on collateral..

NIBC reduced its reliance on wholesale funding by attracting
retail savings, which at end-2016 made up around half of non-
equity funding excluding derivatives, and by tapping
institutional deposits through its subsidiary in Germany. NIBC
also maintains access to the wholesale funding markets, as
demonstrated by the recent issues of benchmark senior unsecured
bonds. The bank remains structurally dependent on the market to
fund part of its loan book and is hence sensitive to investor
sentiment. Liquidity is comfortable, underpinned by a reasonable
buffer of liquid assets in the absence of sizeable wholesale
funding repayments in 2017.


The Support Rating '5' and Support Rating Floor of 'No Floor'
reflect Fitch's view that senior creditors can no longer rely on
receiving full extraordinary support from the sovereign if NIBC
becomes non-viable. This reflects the bank's lack of systemic
importance in the Netherlands, as well as the implementation of
the EU's Bank Recovery and Resolution Directive (BRRD) and the
Single Resolution Mechanism (SRM). These provide a framework for
resolving banks that is likely to require senior creditors
participating in losses, if necessary, instead of or ahead of a
bank receiving sovereign support.

Similarly, while there is a possibility that its owner, a
consortium led by the private equity firm JC Flowers & Co, may
support NIBC in case of need, Fitch is unable to adequately
assess the owner's capacity to support. As a result potential
support from its ultimate shareholders is not factored into
NIBC's Support Rating.


NIBC's hybrid Tier 1 securities are rated four notches below the
VR, reflecting the higher than average loss severity risk of
these securities (two notches from the VR) as well as a high risk
of non-performance (an additional two notches).



Fitch will likely upgrade the ratings if the improvement in
profitability is sustained and if NIBC demonstrates it can
maintain the quality of its loan book through containing and
managing down the amount of non-performing and forborne loans.

If profitability weakens as a result of lower revenues or
consistently higher loan impairment charges, or if the bank
experiences a consistently high inflow of new problem loans,
Fitch will likely revise the Outlook to Stable. A significant
shock to asset quality resulting in a material erosion of NIBC's
capitalisation or sharp deterioration of the bank's liquidity
position, although not expected, could result in a downgrade.


Any upgrade of the Support Rating and upward revision of the
Support Rating Floor would be contingent on a positive change in
the Netherland's propensity to support its banks, as well as NIBC
significantly growing its systemic importance. While not
impossible, this is highly unlikely in Fitch's view.


The ratings of hybrid Tier 1 securities are sensitive to changes
in NIBC's VR as well as Fitch's assessment of the probability of
their non-performance relative to the risk captured in NIBC's VR.

The rating actions are:

  Long-Term IDR: affirmed at 'BBB-'; Outlook Positive
  Short-Term IDR: affirmed at 'F3'
  Viability Rating: affirmed at 'bbb-'
  Support Rating: affirmed at '5'
  Support Rating Floor: affirmed at 'No Floor'
  Senior unsecured debt Long-Term/Short-Term ratings: affirmed at
  Hybrid Tier 1 securities: affirmed at 'B+'


ENERGY HOLDING: Files for Insolvency After Losing Lawsuit
--------------------------------------------------------- reports that Energy Holding, one of the most
important energy traders in Romania, has filed for insolvency., citing, relates that the company
asked for protection against creditors after having lost a
lawsuit against the power producer Hidroelectrica in January.

According to the report, Energy Holding asked Hidroelectrica for
EUR250 million damages after the power producer canceled its
contracts with energy traders in 2012, after going into
insolvency. Several other traders went to court against the
company but lost. The report says the traders had very good
contracts with the state-owned power producer, which allowed them
to buy electricity at below market prices and make huge profits
from selling it.

In 2008, Energy Holding had a net profit of EUR24.4 million at a
turnover of EUR226 million, the report discloses citing official

Meanwhile, the contracts were damaging for Hidroelectrica,
forcing the company into insolvency, says
After cancelling those contracts, Hidroelectrica became the most
profitable state company while Energy Holding's business fell
sharply. The trader's sales went down from EUR170 million in 2011
to EUR43 million in 2015.

Energy Holding was founded in 2000 by Romanian investor Bogdan
Buzaianu, who also has Swiss citizenship. In 2006, the company
was taken over by the Swiss firm Societe Bancaire Privee (SBP).
In 2009, the Holland-based firm BV Marken Investment & Trading
MIT became the majority stakeholder in the company.


IBA-MOSCOW: Moody's Reviews B2 Deposit Rating for Downgrade
Moody's Investors Service has placed on review for downgrade IBA-
Moscow's (IBAM) long-term foreign- and local-currency deposit
ratings at B2, the Baseline Credit Assessment (BCA) at b3,
adjusted BCA at b2, and the long-term Counterparty Risk
Assessment (CRA) at B1(cr). In addition, Moody's has affirmed the
Not Prime short-term deposit ratings and the Not Prime(cr) short-
term CRA.

The rating action primarily reflects the placement of the long-
term foreign- and local-currency deposit ratings on review for
downgrade of its immediate parent -- International Bank of
Azerbaijan (IBA; LT Bank Deposits B1/ senior unsecured debt Caa3
on watch with possible downgrade, BCA ca) on May 15, 2017. The
review will focus on the outcome of IBA's restructuring plan,
receipt of details on further possible government support for IBA
group, and the impact on IBA's deposit ratings.


The placement of the long-term deposit ratings on review for
downgrade reflects uncertainty regarding Azerbaijan government
support for IBA group as well as existing inter-linkages between
IBA and IBA-Moscow.

IBAM's local currency deposit ratings incorporate affiliate
support from the ultimate shareholder, IBA, which is majority
owned by the Ministry of Finance of Azerbaijan, and whose ratings
have been recently placed on review for downgrade.

Additionally, as of Q1 2017, IBAM held a significant liquidity
cushion of 75% of its assets placed in the form of an interbank
loan at IBA, and funding from the parent bank amounted to 20% of
IBAM's liabilities. This underscores the degree of inter-linkages
between IBA and the subsidiary in terms of asset-liability
management and lending activity.

The rating agency will resolve the review for downgrade following
the finalization of the IBA restructuring plan and upon receipt
of details of possible further government support for IBA group.


A negative rating action could occur in case of the downgrade of
IBA's long-term deposit ratings or an adverse change in affiliate
support assumptions.

There is limited upside to IBAM ratings as reflected in the
current review for downgrade. A ratings confirmation could occur
if IBA's deposit ratings are confirmed.


Issuer: IBA-Moscow

Placed On Review for Downgrade:

-- LT Bank Deposits (Local & Foreign Currency), currently B2,
    Outlook Changed To Rating Under Review From Stable

-- Adjusted Baseline Credit Assessment, currently b2

-- Baseline Credit Assessment, currently b3

-- LT Counterparty Risk Assessment, currently B1(cr)


-- ST Bank Deposits (Local & Foreign Currency), Affirmed NP

-- ST Counterparty Risk Assessment, Affirmed NP(cr)

Outlook Actions:

-- Outlook, Changed To Rating Under Review From Stable


ZELVOZ: Serbian Bankruptcy Agency Agrees to Sell Business
SeeNews reports that Serbia's Bankruptcy Supervision Agency said
on May 19 it has agreed to sell insolvent rolling stock repairer
and manufacturer Zelvoz to local company Victory Solutions for
RSD163 million (US$1.4 million/EUR1.3 million).

According to SeeNews, news agency Tanjug quoted sources from the
country's Bankruptcy Supervision Agency as saying the creditors
of Zelvoz approved the sale of the company to Victory Solutions
on May 18.

In February, the agency said the estimated value of the assets of
Zelvoz, including a rail carriage repair hall, the entire capital
of four subsidiaries, spare parts and accounts receivables,
stands at RSD1.153 billion (US$9.9 million/EUR9.3 million),
SeeNews relates.

Zelvoz entered insolvency proceedings in July 2015, with a large
debt to the state and employees, SeeNews discloses.  The Serbian
government unsuccessfully tried to sell the assets of the company
twice, in June and November 2016, as no bidders turned up,
SeeNews notes.


TURKIYE GARANTI: Moody's Assigns (P)Ba3 Subordinated Debt Rating
Moody's Investors Service has assigned a provisional (P)Ba3 (hyb)
long-term foreign-currency subordinated debt rating to Turkiye
Garanti Bankasi A.S.'s (Garanti -- long term foreign currency
deposit rating of Ba2 with a negative outlook, short term foreign
currency deposit rating of NP and BCA of ba2) planned USD-
denominated benchmark-sized offering contractual non-viability
Tier 2 bond issuance (the notes).


The provisional rating assigned to the subordinated debt
obligations of Garanti is positioned two notches below the bank's
adjusted baseline credit assessment (BCA) of ba1, in line with
Moody's standard notching guidance for subordinated debt with
loss triggered at the point of non-viability, on a contractual
basis. The provisional rating does not incorporate any uplift
from government support.

The planned subordinated debt issuance is expected to be Basel
III-compliant and eligible for Tier 2 capital treatment under
Turkish law. The positioning of Garanti's provisional rating two
notches below the bank's adjusted BCA reflects the potential for
greater uncertainty associated with the timing of a principal
write-down compared to "plain vanilla" subordinated debt. In this
respect, Moody's highlights that - as a way for the bank to avoid
a bank-wide resolution - the notes may be forced to absorb losses
ahead of "plain vanilla" subordinated debt, if any exists.

Moody's issues provisional ratings in advance of the final sale
of the securities. The ratings, however, only represent Moody's
preliminary credit opinion. Upon conclusive review of all
transaction and associated documents, Moody's will endeavour to
assign definitive ratings to the notes. A definitive rating may
differ from a provisional rating.


The assigned rating is notched from the ba1 adjusted BCA of
Garanti and any future movements would be in line with changes
upwards or downwards in this reference point.


KYIV CITY: S&P Affirms 'B-' Long-Term ICR, Outlook Stable
S&P Global Ratings affirmed its 'B-' long-term issuer credit
rating on the Ukrainian capital City of Kyiv.  The outlook is


The stable outlook reflects S&P's expectations that Kyiv's strong
budgetary performance and ample cash buffers will enable it to
withstand uncertainties coming from Ukraine's very volatile
institutional framework and also to provide financial support to
its government-related entities (GREs) if needed.

The outlook also factors in S&P's assumption that the city will
keep its tax-supported debt low.

Downside Scenario

S&P might lower the rating if it was to lower its sovereign
ratings on Ukraine, if the city's tax-supported debt were to
increase materially above what S&P envisage in its base-case
scenario, or if the city's liquidity position were to

Upside Scenario

S&P believes that, for the moment, there is no upside potential
for its rating on Kyiv.


S&P expects Kyiv to continue reporting a strong operating
surplus, as well as sound, albeit gradually diminishing,
surpluses after capital accounts, which will allow the city to
post tax-supported debt below a low 30% of consolidated operating
revenues by year-end 2019.  S&P thinks that these factors will
counterbalance the very volatile Ukrainian institutional
framework for local and regional governments (LRGs), the city's
low wealth levels, and a weak payment culture with a recent track
record of defaults.

Low wealth levels, weak financial management, and the very
volatile and underfunded institutional framework are long-term
constraints.  S&P assess Kyiv's economy as weak compared with
peers.  For Ukrainian LRGs, S&P uses national GDP per capita
(about US$2,000) as a proxy, given their high dependence on
transfers from the central government and the very centralized
system.  Although the city's economy is well diversified and is
Ukraine's most prosperous, by international standards the city's
wealth levels are still low.

At the same time, Kyiv contributes more than 20% of national GDP
and enjoys the lowest unemployment rate in Ukraine.

The institutional framework under which Ukrainian regional
governments operate limits Kyiv's budgetary flexibility.  The
framework changes frequently, which substantially affects the
stability of both the city's revenue sources and its spending
responsibilities.  Despite the recent allocation of additional
taxes to local governments, additional spending mandates have not
been imposed so far.  Most of the taxes are regulated by the
central government, which means that modifiable revenues make up
less than 20% of operating revenues.  Moreover, S&P believes that
the city's ability to adjust modifiable revenues is limited.
Kyiv's substantial investment requirements and high share of
social spending continue to restrict its spending flexibility.

S&P believes that the quality of financial management also
constrains the rating.  S&P observes only emerging long-term
planning as well as weak management of debt and liquidity, and
weak oversight over the city's GREs.  Moreover, the city
restructured its debt in 2015, which resulted in nonpayment of
domestic and international debt the same year.

Kyiv will likely demonstrate surpluses and maintain low debt.
S&P believes that, in the coming three years, Kyiv's operating
budgetary performance will remain strong.  At the same time, S&P
expects a gradual weakening of performance because of accumulated
spending pressures and ongoing minimum wage increases.  This will
be reflected in the operating balance dropping to 11% of
operating revenues on average in 2017-2019.  This compares with
an exceptionally strong 16% posted in 2014-2016, driven by high
tax revenue growth and supported by additional taxes allocated to
local governments, and very high inflation.  Central government
grants, which contribute up to one-quarter of operating revenues,
were also strong in 2014-2016.

Weaker operating balances and existing capital spending pressures
will dent the city's balances after capital accounts.  However,
S&P expects the city to continue posting fiscal surpluses in the
next two to three years.  In the medium term, service
underfunding and capital spending pressures will remain very
high, which, together with frequently changing fiscal rules
imposed on LRGs, makes budgetary performance very volatile and
difficult to forecast.

Thanks to the projected surpluses after capital accounts, the
city will not have to borrow.  S&P believes that Kyiv's tax-
supported debt will remain low through 2019.  The city's direct
debt consists of intergovernmental debt liabilities to the
central government only.  These mirror the term of the foreign
debt (Eurobonds) that the central government assumed from the
city in 2015.  The formal issuer of these bonds is the Ukrainian
Ministry of Finance.

According to a recent internal agreement between the city and the
central government, if the city invests in municipal transport
infrastructure, the government will write off an equal amount
from the city's intergovernmental obligations.  Some of Kyiv's
obligations will therefore be reduced ahead of schedule after the
city's recent completion of a road construction project.  The
settlement will take place in 2019.  Given that the city's
intergovernmental debt is denominated in U.S. dollars, S&P notes
that the debt burden will be subject to exchange rate volatility.

S&P's calculation of tax-supported debt includes Kyiv's
guaranteed debt at the city's GREs (including loans from
multilateral lending institutions), as well as the commercial
debt of the water utility.  The leasing provider of transport
company Kyivmetro filed a court case against the company that
obliged it to repay the leasing debt.  S&P incorporates this
lease payment into Kyiv's tax-supported debt, since the city
might be required to support the company.

Kyiv has accumulated a significant amount of cash reserves.
However, despite an extremely strong cash position, S&P believes
that the city's access to external liquidity remains uncertain.
S&P conservatively applies a 50% haircut to the city's cash
reserves, as the city keeps them in the Central Treasury and,
given the track record of the central government with regard to
default, S&P believes that access to these reserves could be
interrupted.  Nevertheless, even using this lower figure, the
debt service coverage ratio stays above 100% over the next 12
months. However, S&P believes that the coverage ratio might fall
sharply when the city's intergovernmental debt liability is due.

S&P assesses Kyiv's contingent liabilities as high, owing to
accumulated payables at the level of the city's utility
companies, which still run significant arrears.  S&P expects that
the city might provide help by increasing subsidies or capital,
though the potential support would not exceed 30% of Kyiv's
operating revenues.  S&P also includes in the city's contingent
liabilities US$101 million relating to the remaining amount of
the Eurobonds, which the city hasn't yet restructured.  Although
the city will have to meet these obligations, S&P believes that
the payments won't materially impact the city's liquidity

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

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

The committee agreed that the budgetary performance had improved.
All other key rating factors were unchanged.

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


                                    To              From
Kyiv (City of)
Issuer Credit Rating
  Foreign and Local Currency        B-/Stable/--   B-/Stable/--

ODESA PORTSIDE: Prosecutor General Urged to Block Bankruptcy
Ukrainian News Agency reports that Prime Minister Volodymyr
Groysman has called on the Prosecutor General's Office and the
National Anti-Corruption Bureau (NACB) not to allow artificial
bankruptcy of the Odesa portside plant.

The Cabinet of Ministers Secretariat's Department of Information
and Public Relations announced this in a statement, Ukrainian
News Agency relays.

According to Ukrainian News Agency, Mr. Groysman noted that the
Arbitration Institute of the Stockholm Chamber of Commerce
(Sweden) ruled on July 25, 2016, that the Odesa portside plant
owes the OstChem group of companies a total of USD251,235,154.59,
including penalties.

The Yuzhenskyi municipal court (Odesa region) recently granted
OstChem's petition to recover the debt and all the appeals
against this decision have failed, Ukrainian News Agency

The prime minister called on the National Anti-Corruption
Bureau's head Artem Sytnyk to launch a special investigation into
the activities of officials with the aim of uncovering violations
of the state's interests and preventing one of the largest state
enterprises from going bankrupt, Ukrainian News Agency discloses.

Ukrainian News Agency earlier reported the Specialized High Court
for Civil and Criminal Cases agreed to consider the appeal that
the State Property Fund filed against the Yuzhenskyi municipal
court's decision to enforce the decision of the Arbitration
Institute of the Stockholm Chamber of Commerce that ordered the
Odesa Portside Plant to pay a debt of USD251.235 million to
OstChem Holding Limited.

The Odesa Regional Appeal Court confirmed on May 10 that the
Stockholm Arbitration Institute's decision to order the Odesa
Portside Plant to pay OstChem USD251.2 million is valid in
Ukraine, Ukrainian News Agency relates.

The Odesa Portside Plant made a loss of UAH2,981.47 million in
2016, compared with a net profit of UAH218.514 million in 2015
(based on the international financial reporting standards),
Ukrainian News Agency states.

U N I T E D   K I N G D O M

HERCULES ECLIPSE 2006-4: Fitch Affirms 'CC' Rating on Cl. E Debt
Fitch Ratings has affirmed Hercules (Eclipse 2006-4) plc:

  GBP19.1 million class C (XS0276412375) affirmed at 'B+sf';
  Outlook Stable

  GBP50.9 million class D (XS0276413183) affirmed at 'CCCsf';
  Recovery Estimate (RE) revised to 80% from 90%

  GBP28.9 million class E (XS0276413340) affirmed at 'CCsf'; RE0%


The affirmation reflects the stable performance of the collateral
for the Welbeck loan, which defaulted at maturity in July 2016,
and a lack of progress for the Ashbourne loan, which has been in
special servicing since 2011. The downward revision of the class
D RE is the result of a lower valuation for Welbeck since the
last rating action, as well as ongoing uncertainty for Ashbourne
collateral, which comprises care homes. These assets have failed
to elicit investor interest at the price at which they are being

The GBP27.3 million Welbeck loan is secured on a portfolio of
secondary quality high street retail properties predominantly
used as amusement arcades in England and Scotland. With over a
year left until bond maturity, Fitch expects the Welbeck loan to
be resolved in time. A new valuation received in September 2016
showed a decline in market value by more than 40% from the 2009
appraisal (GBP52.9 million), but the current market value of
GBP30.7 million suggests the sponsor should be motivated to
cooperate with a refinancing or sale to protect its equity.

The distressed ratings on the class D and E notes reflect the
weak performance of the defaulted GBP72 million Ashbourne loan,
secured by a portfolio of 74 nursing and residential care homes
across the UK. Fitch expects a material recovery on the class D
notes, although recoveries may only be realised after bond
maturity due to an already drawn out sale process. Fitch did not
give credit to recoveries from the Ashbourne loan in its 'B+sf'


Delays in realising recoveries from a sale of the Welbeck
collateral may lead to a downgrade of the class C notes.

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


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

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

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

PREMIER FOODS: Fitch Alters Outlook to Negative & Affirms B IDR
Fitch Ratings has revised Premier Foods plc's Outlook to Negative
from Stable, and affirmed the company's Long-Term Issuer Default
Rating (IDR) at 'B'.

Premier Food Finance plc's GBP175 million senior secured
floating-rate notes and GBP325 million senior secured fixed-rate
notes have been affirmed at 'B' with a Recovery Rating of 'RR4'.

Fitch has also assigned an expected rating of 'B(EXP)' with
Recovery Rating of 'RR4' to Premier Foods Finance plc's proposed
GBP210 million floating rate notes maturing 2022. Proceeds from
the notes will be used to repay the existing GBP175 million notes
and other debt. The proposed notes rank pari passu with the
company's existing debt and are guaranteed by the parent Premier
Foods plc and the same subsidiaries that guarantee the revolving
credit facility, the GBP325 million notes due in 2021, hedging
and pension obligations. The final rating on the notes is
contingent upon receipt of final documentation conforming to the
information already received by Fitch.

Management is reacting to the difficult trading environment with
cost-saving initiatives and Premier's cash flow should benefit
from agreements to reduce pension contributions, However, the
Negative Outlook reflects the company's continued exposure to
product competition and to downward price pressure from UK
retailers, and concerns that its cost-saving measures may not be
sufficient to protect operating profit. The rise in raw-material
costs, combined with recent signs of falling consumer confidence,
may constrain Premier's ability to recover to its profit in the
financial year ended April 2, 2016 (FY16) and deliver sufficient
free cash flow to reduce Premier's high leverage to levels more
commensurate with the rating.

Any continuing evidence of eroding volumes and margins, resulting
in downward pressure on profitability will be negative for the
rating. However, Fitch believes that the business profile
demonstrates characteristics in line with the 'BB' rating


Weak Trading Performance: Management aims to deliver GBP20
million in cost savings by FY19 and is confident that these
initiatives may be sufficient to deliver a mild profit recovery.
However, in Fitch ratings case, Fitch does not assume Premier's
EBIT margin will recover after its fall to 10.1% in FY17 from
FY16's high of 11.8%. This resulted from the combination of
higher input costs and continued elevated investments in
advertising & promotion. Any further erosion in volumes or
margins, or increase in raw materials that are not passed on in a
timely manner, that result in reduced profitability will be
negative for the rating.

Brexit Poses Challenges: Fitch views the uncertainty surrounding
the triggering of Article 50, depreciation of the sterling and
falling consumer confidence as key rating drivers for Premier.
The potential for further erosion in profitability is high, which
underpins Fitch Negative Outlook. Premier's ability to pass on
cost increases is heavily reliant on cooperation with the
supermarkets, which leaves its bargaining power weak.

High Leverage: Premier's FFO-adjusted net leverage is very high
at 8.4x at FYE17 and is not commensurate with a 'B' rating. Fitch
expects Premier to deleverage to around 6.0x-6.2x by FY19, which
would be just outside of Fitch negative sensitivity of 6.0x.
Offsetting this weakness, Fitch believes that the business
profile demonstrates characteristics in line with the 'BB' rating
category. Premier has some well-known brands, long-term
relationships with its customers and good opportunities for
international growth, which should support its revenue.

Reliance on Challenging UK Market: Premier's revenue is mainly
generated from the four largest retailers in the UK: Tesco
(BB+/Stable), Asda, J Sainsbury's and Morrisons. These major
retailers have pursued a strategy of protecting the spending
power of consumers by pressuring their suppliers to absorb higher
input costs following the sharp depreciation of the sterling in
2016. Additionally, an ongoing shift in consumer shopping
behaviour from these traditional big retailers to hard
discounters, online and convenience stores is challenging
Premier's performance, prompting it to adapt its product
offerings and keep a lean cost base.

Leading UK Ambient Food Producer: Premier enjoys a strong
position as one of the UK's largest ambient food producers, with
an almost 5% share in the fragmented and competitive GBP28.7
billion UK ambient grocery market. The company enjoys benefits in
manufacturing, logistics and procurement in the UK from its wide
range of branded and non-branded food products, but the company
mainly competes in mature segments such as ambient desserts and
ambient cakes. This product portfolio, which the company
currently has limited financial resources to complement with the
entry into higher-growth categories, limits its growth prospects.
As a result, Premier relies on continuing its marketing and
innovation efforts to protect its market share.

Average Senior Secured Notes' Recoveries: The 'B'/'RR4' senior
secured rating reflects average recoveries (31%-50%), albeit at
the low end (34%), for senior secured noteholders in the event of
default. Fitch assumes that the enterprise value (EV) of the
company and the resulting recovery of its creditors (including
the pension trustees) would be maximised in a restructuring
scenario under Fitch going-concern approach rather than in a
liquidation due to the asset-light nature of the business as well
as the strength of its brands. Furthermore, a default would
likely be triggered by unsustainable financial leverage, possibly
as a result of weak consumer spending affecting sales and profits
and combined with ongoing punitive pension deficit contributions.

Fitch has applied a 25% discount to EBITDA and a distressed
EV/EBITDA multiple of 5.0x, reflecting challenging market
conditions in the UK and the reliance on a single country, which
are partially offset by a portfolio of well-known product brands.
The notes rank equally with the pension schemes for up to GBP450
million and are included as a senior obligation in the debt
waterfall within Fitch recovery calculation.


Premier Foods is one of the largest UK food producers, selling
and distributing a wide range of branded products. Similar to
Labeyrie Fine Foods SAS, it is not well-diversified
geographically and by customer, with most of its revenue
generated from the four major in the UK. Operating margins are
higher than the majority of peers, however the group's FCF
generation is more volatile and leverage is also higher.


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

- Top line growth of 1.4%-1.5% a year from FY18 onwards
- Fairly stable EBIT margin at 10%.
- FFO to remain affected by pension contributions over GBP40
   million a year as per agreements with Pension Trustees
  (however reduced compared to previous forecasts)
- Low and stable capex of at GBP25 million-27 million a year
  (about 3% of sales)
- No dividend distribution or M&A


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

- Trading performance recovering (consistently positive organic
   revenue growth) and the ability to maintain EBIT margin above
   12% after having sufficiently invested in advertising and
   promotions to protect its market position and drive growth.

- Visibility that FFO-adjusted net leverage is reducing below
   6.0x (pension deficit contributions are deducted from FFO).

- FFO fixed-charge coverage above 2.5x on a sustained basis
   (1.5x in FY17).

- FCF margin sustained in positive territory (FY17: 1.5%) after
   adequate capital investments

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

- Evidence of weaker pricing power in the UK market.
- Failure to stabilise performance with continued revenue
   decline and margin deterioration with EBIT falling below 10%.
- Neutral to negative FCF on a sustained basis due to
   profitability erosion, higher or unexpected capex and
   increases in pension contribution or funding costs.
- FFO-adjusted net leverage remaining around 6.0x in FY19
   (pension deficit contributions are deducted from FFO).
- FFO fixed-charge coverage below 1.8x on a sustained basis.


Adequate Liquidity: Premier's liquidity is supported by its
GBP217 million revolving credit facility prolonged to 2021 and
positive projected FCF of up to GBP15 million a year in the next
two years. Refinance risk is manageable.

STRAND CAPITAL: Put Into FCA's Special Administration Regime
Harry Wilson at The Times reports that three thousand investors
in Strand Capital, a small London-based fund manager, are at risk
of losing millions of pounds after the firm became the 15th
business to be placed into resolution by the City watchdog.

Strand Capital was formally placed into the Financial Conduct
Authority's special administration regime on May 17 as
administrators were brought in to begin the process of shutting
down the company, The Times relates.

"Having reached an assessment that it was no longer solvent,
Strand made an application to the court to formally initiate
insolvency proceedings under SAR," The Times quotes the FCA as
saying in a statement.

According to The Times, its latest accounts show the fund had
managed GBP86 million of clients' money and the FCA said that
Strand had about 3,000 customers, who will have to wait for the
administrators to finish.

* UK: East Midlands Haulage Firms Face Insolvency
The reports that more than 1 in 3 haulage firms
in the East Midlands face going to the wall, according to new
figures from a insolvency trade body. relates that the statistics, compiled using
Bureau Van Dijk's Fame database, also reveal an uncertain outlook
for some of the region's hospitality businesses.

According to, the East Midlands agriculture
sector was the UK's top regional performer in April, with fewer
than one-in-six (14.8%) businesses operating with an above
average risk of insolvency. This is in line with the previous
month (March), when the sector also outperformed its regional
peers, with only 14.5% of businesses at higher than average risk
of insolvency, the report relays.

Conversely, the financial resilience of the East Midlands
transport and haulage sector is being tested as the R3 research
reveals that more than one-in-three (36%) local operators have an
above average risk of insolvency, discloses.
This is the highest proportion of any region in the UK and is
almost four points above the national sector average of 32.3%.

Restaurant operators in the area are also struggling, with almost
one-in-four (23.7%) at an elevated risk of insolvency, marking
the highest proportion in any UK region. quotes R3 Midlands Chairman Chris Radford, a
partner at the Nottingham office of Gateley plc, as saying: "The
East Midlands has the most financially stable agriculture sector
in the UK, making it well placed to withstand the challenge of
Brexit and fluctuating markets.

"The current economic climate is, however, providing significant
stumbling blocks for other local sectors. The proportion of firms
struggling financially in the hospitality, transport and haulage
sectors is clearly of concern.

"R3 advises that the monitoring of finances should remain a
priority for all business owners as they seek to weather all
eventualities. If cash flow becomes a major challenge, it is
imperative to seek professional advice sooner rather than later."


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 Joseph Cardillo at

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