TCREUR_Public/170524.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

           Wednesday, May 24, 2017, Vol. 18, No. 102


                            Headlines


A Z E R B A I J A N

AZERBAIJAN: Moody's Puts Ba1 Rating on Review for Downgrade
INTERNATIONAL BANK: Investors Balk at 20% Debt Writedown


B E L G I U M

LSF9 BALTA: S&P Puts 'B' CCR on CreditWatch Positive


C R O A T I A

AGROKOR DD: Other Governments Take Steps to Protect Economies
VIADUKT: Files Request to Enter Pre-Bankruptcy Proceedings


C Y P R U S

RCB BANK: Moody's Puts B3 Deposit Ratings on Review for Upgrade


G E R M A N Y

SGL CARBON: S&P Affirms 'CCC+' CCR & Revises Outlook to Positive
TALISMAN-7 FINANCE: Fitch Cuts Ratings on 4 Note Classes to 'Dsf'


G R E E C E

GREECE: EU Finance Ministers Fail to Reach Bailout Deal


I R E L A N D

CADOGAN SQUARE IX: Moody's Assigns (P)B2 Rating to Cl. F Notes
EUROPEAN RESIDENTIAL 2017-NPL1: DBRS Finalizes BB Rating on C Debt


I T A L Y

ALITALIA SPA: Taps Rotschild to Manage Sale of Business


N E T H E R L A N D S

BABSON EURO 2014-2: Fitch Assigns 'B-(EXP)' Rating to Cl. F Debt
DRYDEN 51 CLO: Moody's Assigns B2(sf) Rating to Class F Notes
SPECIALTY CHEMICALS: Moody's Assigns B1 CFR, Outlook Stable
YELLOW MAPLE: S&P Puts 'B' CCR on CreditWatch Positive


P O L A N D

ZABRZE CITY: Fitch Affirms BB+ Long-Term IDR, Outlook Stable


P O R T U G A L

PORTUGAL: Economic Recovery Supports Credit Profile, Moody's Says


R U S S I A

KRASNOYARSK REGION: Fitch Affirms BB+ IDR, Outlook Stable
VOLZHSKIY CITY: Fitch Affirms B+ IDR & Revises Outlook to Pos.


S P A I N

BANCO POPULAR ESPANOL: Fitch Cuts Issuer Default Rating to 'B'
FEDERAL PASSENGER: Fitch Affirms 'BB+' IDRs, Outlook Stable
MADRID RMBS II: S&P Raises Rating on Class C Notes to BB
TDA IBERCAJA 5: S&P Affirms D Rating on Class E Notes


U N I T E D   K I N G D O M

HAMILTON BURNS: Enters Administration Amid Financial Woes
KEYSTONE MIDCO: Moody's Confirms B2 CFR, Outlook Stable
MOY PARK: S&P Puts 'BB' Long-Term CCR on CreditWatch Negative
PEARL GROUP: Four Marketing Buying U.S. Assets for $1.1 Million
STYLE GROUP: Failure to Find Investors May Spur Administration


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A Z E R B A I J A N
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AZERBAIJAN: Moody's Puts Ba1 Rating on Review for Downgrade
-----------------------------------------------------------
Moody's Investors Service has placed Azerbaijan's Ba1 long-term
issuer rating and senior unsecured rating on review for downgrade.
The rating outlook had been negative since April 29, 2016.

The decision to initiate a review for downgrade was prompted by
the unexpected announcement of a restructuring plan for the
country's largest bank, state-owned International Bank of
Azerbaijan (IBA, Caa3/on review for downgrade), which led to IBA's
default on 10 May. While the intention to restructure the bank was
announced in 2015, the mode of restructuring outlined last week
was unexpected and could imply that Azerbaijan's credit profile is
weaker than Moody's had previously expected.

The government has announced plans to issue new foreign-currency
denominated bonds and assume most or all of IBA's foreign-currency
loans. Moody's also expects the government will have to provide
additional funding to raise IBA's Tier 1 capital adequacy ratio.
Despite an injection of another AZN600 million into the bank in
January 2017, IBA still has negative equity.

The review will allow Moody's to assess whether the IBA
restructuring announcement, shortly after significant financial
support had been provided, indicates a higher level of financial
stress than Moody's previously assumed, which could lead to larger
fiscal costs and worsen the government's debt profile beyond
Moody's previous expectations.

The review will also assess whether greater financial stress is
likely to further delay Azerbaijan's economic recovery beyond
Moody's previous forecasts.

Moody's plans to conclude the review within 90 days of its
announcement.

In a related rating action, Moody's has also placed on review for
downgrade the Ba1 senior unsecured foreign currency rating for
Southern Gas Corridor CJSC.

Azerbaijan's long-term local-currency bond and bank deposits
country ceilings remain unchanged at Ba1. The long-term foreign-
currency bond ceiling remains unchanged at Ba1 and the long-term
foreign-currency bank deposits ceilings remain unchanged at Ba2.

RATINGS RATIONALE

RATIONALE FOR THE REVIEW FOR DOWNGRADE

HIGHER FINANCIAL STRESS COULD RAISE GOVERNMENT DEBT ABOVE PREVIOUS
EXPECTATIONS

The unexpected announcement of IBA's restructuring plan implies
that the financial health of the bank and the banking system in
general may be weaker than Moody's had previously assessed,
raising the possibility of higher fiscal costs for the government
of restructuring the banking system. Whilst Moody's previously
expected that government debt was at or near its peak, it is now
possible that the government debt burden rises materially further.

Despite a relatively small banking system overall, with banking
assets amounting to 52% of GDP in 2015, Azerbaijan's banking
restructuring is likely to lead to large fiscal costs by
historical and international standards. Already, the government's
prior support to IBA combined with the impact of the depreciation
of the manat currency (AZN) has contributed to the near
quadrupling of its gross government debt-to-GDP ratio to 40% in
2016 from 11.2% in 2014.

Currency and maturity mismatches account for substantial losses
for IBA and other Azerbaijani banks, which were hit hard by the
collapse of oil and gas prices and the resulting depreciation and
recession. Despite the shift of AZN10 billion (16.5% of 2016 GDP)
in IBA's non-performing loans (NPLs) to a 'bad bank' (Aqrarkredit)
owned by the central bank over the past two years, Moody's
estimates that system-wide NPLs remain high at 30% of total loans.

Beside the direct fiscal costs of restructuring, the exacerbation
of financial distress in Azerbaijan could renew downward pressure
on the manat exchange rate, which had regained a small part of its
lost ground since January. The Azeri government's direct and
guaranteed debt is predominantly denominated in foreign currency
and the economy and banking system are significantly dollarized,
such that a further depreciation of the exchange rate would both
raise the value of the government's foreign-currency debt and lead
to additional weakness in the already fragile financial health of
Azerbaijan's banks, raising contingent liability risks further.

Relative to peers, the Azerbaijan government's debt burden is not
onerous at present. However, should the cost of IBA restructuring
be combined with exchange rate depreciation in the context of very
slow economic growth, the debt ratio could rise significantly.

HIGHER THAN EXPECTED FINANCIAL STRESS ALSO INCREASES UNCERTAINTY
ABOUT THE MEDIUM-TERM GROWTH PROSPECTS

Azerbaijan's Economic Strength is low, reflecting the economy's
dependence on hydrocarbons. In an era of "low for longer" oil and
gas prices, the economy is not likely to grow quickly in the next
few years. Whereas rapid GDP growth in the years from 2005-2013,
at 11.4% per year on average, helped keep the debt that the Azeri
government took on to improve the cost competitiveness of its
hydrocarbons production, Azerbaijan's capacity to repay new
investment through strong revenue growth is now much lower.

Moreover, even when the new gas pipeline to Turkey comes on stream
in 1-3 years, allowing Europe to diversify its supply of gas away
from Russia, and production starts at the Shah Deniz 2 development
gas field in 2018-19, Azerbaijan will have to compete with sources
of gas supply to Europe from other price-competitive suppliers.

Previously, Moody's had expected that GDP would contract by 1% in
2017, after a 3.8% fall in 2016, and then register positive growth
of 1.8% in 2018. However, part of the support for GDP growth was
expected to come from a resumption of credit extension by healing
banks. In light of IBA's situation and the likelihood that more
banks will need to undergo rehabilitation, the restoration of
credit growth as well as economic recovery is likely to be
delayed.

The review will assess whether the decision to allow IBA to
default indicates a higher level of financial stress across
Azerbaijan's financial sector than was previously expected, and
the implications of that for medium-term growth prospects.
Significant and prolonged stress in the banking sector may
postpone the economic recovery further. Credit availability in the
economy contracted by 24% in 2016. IBA's default may further
undermine the availability of funding for the country's banks and
the provision of credit. It may also indicate a higher level of
financial stress in the economy than Moody's previously thought.

Azerbaijan has very large fiscal reserves, worth roughly 90% of
GDP at the end of 2016, which could provide a significant buffer
to economic shocks and constitute material support to the
sovereign rating. At this stage however, the authorities'
willingness and capacity to deploy these financial means to
supporting the economy is uncertain.

WHAT COULD MOVE THE RATING DOWN

At the conclusion of the current review for downgrade, Moody's
could downgrade Azerbaijan's government rating if the rating
agency concluded that the increase in government debt resulting
from the severe financial stress at IBA and other banks in the
system would lead to a material weakening of Azerbaijan's fiscal
strength beyond its current expectations.

Moody's could also downgrade the rating should it conclude that
the effect of the banking sector restructuring and, more
generally, the impact of the oil shock on the economy durably
undermined Azerbaijan's economic strength to levels below its
current assessment.

WHAT COULD LEAD TO A RATING CONFIRMATION AT THE CURRENT LEVEL

Moody's would confirm Azerbaijan's Ba1 government rating should it
conclude that the banking system stress is not likely to
meaningfully raise the government's debt burden, nor significantly
constrain economic growth potential beyond what it currently
anticipates.

GDP per capita (PPP basis, US$): 17,439 (2016 Actual) (also known
as Per Capita Income)

Real GDP growth (% change): -3.8% (2016 Actual) (also known as GDP
Growth)

Inflation Rate (CPI, % change Dec/Dec): 15.6% (2016 Actual)

Gen. Gov. Financial Balance/GDP: 0.3% (2016 Actual) (also known as
Fiscal Balance)

Current Account Balance/GDP: -3.6% (2016 Actual) (also known as
External Balance)

External debt/GDP: 35.1% (2016 Actual)

Level of economic development: Low level of economic resilience

Default history: No default events (on bonds or loans) have been
recorded since 1983.

On May 16, 2017, a rating committee was called to discuss the
rating of the Azerbaijan, Government of. The main points raised
during the discussion were: The issuer's economic fundamentals,
including its economic strength, have not materially changed. The
issuer has become increasingly susceptible to event risks.

The principal methodology used in these ratings was Sovereign Bond
Ratings published in December 2016.


INTERNATIONAL BANK: Investors Balk at 20% Debt Writedown
--------------------------------------------------------
Luca Casiraghi, Natasha Doff and Nariman Gizitdinov at Bloomberg
News report that investors dismayed at being forced to accept a
20% principal writedown in a debt restructuring of The
International Bank of Azerbaijan were met with a warning that it
may be shut down if creditors fail to back the plan, with the
finance minister saying the lender never had the benefit of full
sovereign guarantee.

The bank proposed swapping US$3.3 billion of its foreign currency
debt and deposits into a mix of new sovereign securities and the
lender's own bonds, Bloomberg relays, citing a presentation in
London on May 23.

The proposed plan will become binding if approved by creditors
accounting for two-thirds of the company's affected debt by value,
Bloomberg states.

Azerbaijan wants to complete the restructuring on Aug. 24,
Bloomberg notes.

"Creditors are very angry about the haircut," Bloomberg quotes
Lutz Roehmeyer, who manages about US$2.2 billion including IBA
bonds at Landesbank Berlin Investment and plans to vote against
the plan, as saying.  "This proposal shows the unwillingness to
pay of the sovereign while at the same time having the full
ability to pay.  This will make funding long term costlier to
Azerbaijan."

"We would like this restructuring plan approved as soon as
possible," Rufat Aslanli, head of Azerbaijan's Financial Markets
Supervisory Authority, as cited by Bloomberg, said.  "Otherwise,
the regulator could resort to options that include temporary
administration, a transfer of assets and license revocation."

According to Bloomberg, the bank's finances have continued to
deteriorate even after the government spent AZN9.93 billion
(US$5.9 billion) on buying its toxic assets, while also placing
more than US$1.3 billion on deposit to provide liquidity.

At the end of last year, the bank had a foreign-currency gap of
US$2.8 billion and a liquidity buffer of only U$509 million,
Bloomberg discloses.

The International Bank of Azerbaijan is Azerbaijan's biggest bank.



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B E L G I U M
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LSF9 BALTA: S&P Puts 'B' CCR on CreditWatch Positive
----------------------------------------------------
S&P Global Ratings placed its 'B' long-term corporate credit
rating on Belgium-based rugs and carpet manufacturer LSF9 Balta
Issuer S.A. on CreditWatch with positive implications.

At the same time, S&P placed on CreditWatch positive the 'BB-'
issue rating on the EUR45 million super senior revolving credit
facility (RCF) and the 'B' issue rating on the EUR290 million
senior secured notes.  The recovery rating on the RCF is unchanged
at '1'.  The recovery rating on the senior secured notes is also
unchanged at '4', and indicates S&P's expectation of recovery
prospects at about 40%.

S&P's CreditWatch placement reflects its understanding that if the
IPO is successful, the company will be able to reduce its leverage
metrics by repaying debt with the proceeds of the offer.

The net primary proceeds that Balta expects from the IPO
transaction are EUR137.6 million, and the company guidance is to
reduce its pro forma net debt-to-EBITDA ratio to approximately
2.5x from a pro forma ratio of 3.9x as of first-quarter 2017.

On completion of the transaction, S&P therefore assumes an
improvement in the financial risk profile of the company and we
forecast that Balta will be able to maintain an adjusted debt-to-
EBITDA ratio below 5x on a sustainable basis.  The possible
improvement in the financial risk profile could lead to a higher
long-term rating on the company.

Balta is progressing broadly in line with S&P's base case in terms
of operating performance.  S&P assumes that Balta will benefit
from synergies over the next few quarters coming from greater
integration between Balta and the recently acquired U.S.-based
company, Bentley Mills Inc. Balta acquired Bentley Mills with a
debt-funded transaction in the first quarter of the 2017.

First-quarter 2017 pro forma total revenues for the last 12 months
(including the Bentley acquisition) are about EUR680 million and
the adjusted EBITDA margin is 14.6%.  The company reported a net
debt of EUR385 million, corresponding to pro forma adjusted
leverage of 3.9x.

The potential evolution of the long-term rating would depend on
the consolidation of the company's market positioning, with
supportive positive cash flow generation, and its progression on
the deleveraging process.

S&P expects to resolve the CreditWatch after the company completes
the IPO, which is likely to occur over the next few months.  S&P
will likely raise the ratings on the company by one notch if the
IPO is successful and the group is able to reduce its gross
reported debt as planned.

S&P notes that the company does not foresee that the change in
ownership structure will trigger the "change of control" clause
under the existing debt facilities of the group.  If these clauses
were to be triggered, however, this could affect how S&P will
resolve the CreditWatch.  Before resolving it, S&P will assess the
company's updated capital structure, financial policy, and
ownership structure following the IPO.



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C R O A T I A
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AGROKOR DD: Other Governments Take Steps to Protect Economies
-------------------------------------------------------------
Clare Nuttall at bne Intellinews reports that governments across
the countries where troubled food and retail giant Agrokor d.d. is
active are taking steps to protect their economies against the
impact of the debt crisis at the Croatian company.

The problems at Agrokor put at risk tens of thousands of jobs --
the group employs around 60,000 people across the region including
40,000 in Croatia -- as well as the businesses of its many
suppliers, bne Intellinews discloses.

In an attempt to mitigate the fallout, new legislation has been
adopted in both Croatia and neighboring Slovenia, while ministers
in other countries such as Bosnia and Herzegovina are mulling
similar steps, bne Intellinews relates.

When it became clear that Agrokor would be unable to make upcoming
debt repayments, Zagreb stepped in to appoint an emergency
management team at the group, led by Ante Ramljak, bne Intellinews
recounts.  The company announced on May 11 that as of end March,
Agrokor's 19 largest subsidiaries, which include Agrokor itself as
well as retailers Konzum, Tisak and frozen foods producer Ledo,
had liabilities amounting to HRK40.4 billion (EUR5.44 billion),
bne Intellinews relays.

As the crisis unfolded, the Croatian parliament approved an
emergency law on assistance to systemically important companies
that cannot pay their debts, bne Intellinews notes.  The law,
which came into force on April 6, applies to companies with
liabilities of more than EUR1 billion that employ over 5,000
people, bne Intellinews states.

"The aim of this law is primarily to protect the interests of the
Croatian economy, all stakeholders in the situation -- workers,
employees, suppliers, those who are leaning on suppliers,
creditors, the company itself -- in a way that would allow it a
high quality and sustainable restructuring," bne Intellinews
quotes Prime Minister Andrej Plenkovic as saying ahead of the
parliament vote.

The Agrokor crisis is also a hot political issue in Slovenia,
where Agrokor took over local retail chain Mercator in 2014, a
deal that was opposed by many ordinary Slovenians who dislike
seeing former state assets fall into private hands, bne
Intellinews says.  After Croatia, Slovenia's economy is arguably
most at risk from a collapse of the group, given the approximately
10,000 people it employs, according to bne Intellinews.

In April, the Slovenian government adopted its own law -- known as
"Lex Mercator" -- amid unconfirmed speculation that Agrokor had
been diverting funds from Mercator, Bloomberg discloses.  The law
was approved by the parliament and came into force on May 6,
Bloomberg notes.

The new law is intended to prevent the diversion of funds from
companies defined as strategically important; Mercator is
currently the only company that meets the criteria of having at
least 6,000 employees and annual revenues of over EUR1 billion,
bne Intellinews says.

Meanwhile, the governments of other countries in the region such
as Bosnia and Serbia -- where Agrokor is also a major employer --
have not yet taken such steps but are monitoring the situation
closely, bne Intellinews discloses.

According to bne Intellinews, officials from Bosnia, Montenegro,
Serbia and Slovenia set up a joint ministerial team in response to
the Agrokor crisis at a meeting in Belgrade on April 19 that was
not attended by Croatia.  The team will exchange information
daily, and launch joint actions to preserve jobs, protect
suppliers and ensure the stable operation of Agrokor Group
companies, bne Intellinews relays, citing a Serbian government
statement.

In Bosnia, MPs in the lower house of parliament called on May 10
for the government to take control of Agrokor's local subsidiaries
to protect employees and prevent capital outflows, bne Intellinews
discloses.  On the same day, the foreign trade and economic
relations ministry delivered a note to members of the upper house
of parliament warning that thousands of jobs might be in danger
and tens of millions of euros at risk as a result of the crisis,
bne Intellinews recounts.

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

                            *   *   *

The Troubled Company Reporter-Europe reported on May 10, 2017
that S&P Global Ratings lowered its corporate credit rating on
Agrokor d.d. to SD/--/SD (SD: selective default) from
CC/Negative/C. S&P lowered its issue rating on the
three series of Company's senior unsecured notes to 'D' from
'CC'.

S&P understands that, on May 1, 2017, Agrokor missed a coupon
payment on its EUR300 million senior secured notes due 2019.  On
April 6, 2017, Croatia enacted a law -- "Law on Procedures for
Extraordinary Management in Companies of Systematic
Significance" -- that restricts Agrokor from making any interest
or principal payments on its debt over the next 12 months.  Under
the standstill agreement, Agrokor signed with its main lenders,
its bank debt payments are currently frozen.  Under S&P's
criteria, it considers all the above to be tantamount to a
default, because S&P does not expect Agrokor to be able to make a
payment within the grace period of 30 days.

The TCR-Europe on April 17, 2017, reported that Moody's Investors
Service has downgraded Agrokor D.D.'s corporate family rating
(CFR) to Caa2 from Caa1 and its probability of default rating
(PDR) to Ca-PD from Caa1-PD. The outlook on the company's ratings
remains negative.  "Our decision to downgrade Agrokor's rating
reflects its filing for restructuring under Croatian law, which
in Moody's views makes a default highly likely," Vincent Gusdorf,
a Vice President -- Senior Analyst at Moody's, said.  "It also
takes into account uncertainties around the restructuring
process, as creditors' ability to get their money back hinges on
numerous factors that will become apparent over time."


VIADUKT: Files Request to Enter Pre-Bankruptcy Proceedings
----------------------------------------------------------
SeeNews reports that Viadukt said on May 23 it has filed a request
with Zagreb commercial court to enter pre-bankruptcy proceedings.

The request was lodged on May 18, the company said in a Zagreb
bourse filing without disclosing further details, SeeNews relates.

In March, state-owned motorway operator Hrvatske Ceste terminated
a deal for the building of Ciovo bridge it had signed with Viadukt
in 2015, SeeNews recounts.  At the same time, Viadukt's bank
accounts were blocked, SeeNews notes.

These events culminated in financial problems for the company,
which have erased over 80% of the value of Viadukt's shares in
less than three months, SeeNews discloses.

Viadukt is a Croatian construction company.



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C Y P R U S
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RCB BANK: Moody's Puts B3 Deposit Ratings on Review for Upgrade
---------------------------------------------------------------
Moody's Investors Service has placed on review for upgrade RCB
Bank Ltd. (RCB Bank's) B3 long-term deposit ratings and its b3
baseline credit assessment (BCA). The review will focus on the
extent to which: (1) RCB Bank will further strengthen the business
links with its main shareholder, Bank VTB, JSC (foreign currency
deposits: Ba2, foreign currency senior unsecured debt: Ba1,
baseline credit assessment: b1, outlook: stable) while continuing
to grow its own business in parallel; and (2) the financial
performance of the bank will continue to improve exerting upward
pressure on its BCA.

During the review period, the rating agency will also focus on the
bank's liability structure mainly the proportion of corporate
deposits as well as the stability of these deposits, which will
affect the loss absorption buffer the rating agency assumes.
Further, given the increasingly long lasting relationship between
RCB Bank and Bank VTB, the rating agency will re-examine the
ability and likelihood that Bank VTB will support RCB Bank in case
of need.

RATINGS RATIONALE

The rating action will focus on the extent to which RCB Bank will
continue to grow its own business while at the same time
strengthening the business links with Bank VTB, which guarantees
the majority of RCB Bank's loans. Although fluctuating, loans
guaranteed by Bank VTB have typically accounted for around 70% of
RCB Bank's total loans. Given the increasingly long lasting links
with Bank VTB, the rating agency will incorporate in its review a
reassessment of the capacity and likelihood that Bank VTB will
support RCB Bank in case of need.

The review will also focus on expectations that RCB Bank's
financial performance will continue to improve, reflecting the
improving operating conditions both in Russia, where the majority
of RCB Bank's clients operate, and in Cyprus where the bank is
gradually building domestic operations. The bank's ratio of non-
performing loans to gross loans stood at a low 0.47% as of
December 2015 while capital buffers remained strong with the Tier
1 ratio at 22.0%.

The rating agency also expects RCB Bank to continue to improve its
funding diversification by increasing its access in the inter-bank
market as well as through its growing deposit franchise in Cyprus.
Although RCB Bank has a high reliance on funding provided from
Bank VTB, refinancing risk is low as this funding is matched
against loans guaranteed by Bank VTB.

During the review period the rating agency will also focus on the
bank's liability structure mainly the proportion of corporate
deposits as well as the stability of these deposits.

WHAT WOULD MOVE THE RATING UP/DOWN

The ratings are currently on review for upgrade. RCB Bank's
ratings will be upgraded if the bank continues to grow its own
business while at the same time strengthening the business links
with Bank VTB and maintaining its strong financial fundamentals,
mainly its current capital buffers and low level of NPLs. A higher
loss absorption buffer, reflecting better stability of the bank's
corporate deposits, as well as an increased capacity and
likelihood by Bank VTB to support RCB Bank in case of need, would
also result in an upgrade.

Downward pressure on the ratings could develop if the financial
performance of the bank worsens materially or if VTB Bank
disengages from RCB Bank resulting in a material weakening in RCB
Bank's franchise.

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

On Review for Upgrade:

Long-Term Local-Currency Deposit Rating: Placed on Review for
Upgrade, currently B3 Rating under Review from Stable

Long-Term Foreign-Currency Deposit Rating: Placed on Review for
Upgrade, currently B3, Rating under Review from Stable

Adjusted Baseline Credit Assessment, Placed on Review for Upgrade,
currently b3

Baseline Credit Assessment, Placed on Review for Upgrade,
currently b3

Counterparty Risk Assessment, Placed on Review for Upgrade,
currently B1(cr)

Outlook changed to Rating under Review from Stable



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G E R M A N Y
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SGL CARBON: S&P Affirms 'CCC+' CCR & Revises Outlook to Positive
----------------------------------------------------------------
S&P Global Ratings revised the outlook on Germany-based graphite
and carbon materials producer SGL Carbon SE to positive from
stable and affirmed the long-term corporate credit rating at
'CCC+'.

At the same time, S&P affirmed its 'B' issue rating on the EUR250
million seven-year 4.875% fixed-rate senior secured notes due
2021.  The recovery rating on these notes remains '1'.

The outlook revision follows the company's progress with the
divestment of the graphite electrodes business, which is expected
to be fully executed in the coming months.  S&P considers that the
generation of over EUR200 million of proceeds will be a key
milestone in the transformation of the company's portfolio, as
well as the process of restoring its balance sheet strength and
improving its liquidity position.

2016 was an important year for SGL, as it started several
processes that S&P expects to have a major effect on the business.
The company entered an agreement to sell its graphite electrodes
(GE) business to the Japanese company Showa Denko K.K.  The sale
is expected to be finalized by third-quarter 2017.  SGL also
intends to sell the cathodes and furnace linings product group as
part of the decision to dispose the entire performance products
(PP) unit (which includes the GE business).  The disposal of the
whole PP unit will create a more lean structure, with more
emphasis on "high-tech" activity and less commodity focus, which
is highly volatile.  During the year, the company also initiated
an administrative cost reduction plan ("Project CORE"), which it
expects to bring cost savings of up to EUR25 million by end of
2018.

SGL's successful rights issue of around EUR180 million (finalized
in December 2016) and the expected proceeds from the sale of the
assets (if and when finalized), suggest better financial results
and more sustainable capital structure and liquidity going
forward.  S&P believes that it could raise the rating once the
proceeds from the sale are generated.

S&P still assesses the company's financial risk profile as highly
leveraged, but S&P could see some of the financial ratios
improving to a higher category in the medium term, once the sale
proceeds allow management to decrease its overall debt balance.
In addition, the sustainability of the capital structure is
supported by the shift in strategy that SGL has taken in the past
year, with the decision to sell the commodity-focused and highly
volatile PP business unit, including the GE unit and other units
that are cash-generative but not in line with the new strategic
focus.

S&P views SGL's remaining two other divisions -- namely carbon
fibers and materials (CFM) and graphite materials and systems
(GMS) -- as more diversified, customer-specific, and profitable,
with an EBITDA margin of around 12%.  S&P also takes into account
that the company has completed the ramp-up of its joint venture
with BMW, which is expected to continue and contribute to earnings
in future years.  S&P notes that both segments' EBITDA
contributions remain limited compared with earnings from the PP
unit, but S&P anticipates that the focus on these units will
enable management to improve their volumes and operating
efficiency, hence increasing revenues and profitability in the
near term.

Under S&P's base-case scenario, it projects that SGL's adjusted
EBITDA will be around EUR85 million in 2017 and EUR95 million in
2018 (compared with EUR70 million in 2016).  S&P anticipates that
debt to EBITDA will improve to 9x in 2017 and below 8x in 2018,
from 11x in 2016.

These assumptions underpin its base-case scenario:

   -- A 5% annual increase in EBITDA resulting from improved
      sales and EBITDA margins.

   -- Capital expenditure (capex) at most at depreciation level,
      at around EUR50 million-EUR60 million annually.

   -- Proceeds from the sale of the assets are not taken into
      account in S&P's base case, as they are still waiting final
      authorizations.  No dividends assumed.

However, if the sale proceeds flow in as expected, and are used to
repay down debt as management plans, this could result in a much
better capital structure -- with debt to EBITDA dropping to 6x as
soon as 2017, and below 6x on a sustainable basis in 2018 and
beyond.

S&P continues to classify SGL's business risk profile as weak.
This assessment reflects the company's relatively small EBITDA
base.  S&P views the diversity of the business as supportive for
the rating.  The company has solid market shares in the major GMS
end-use markets, namely solar energy, batteries, semiconductors,
and chemicals.  In most cases, these markets are very
concentrated, with a small number of major players.  S&P notes
that the investments made in the CFM business in previous years
have started generating positive results in the past couple of
years, and SGL now considers this business as one of the company's
growth engines.  The joint-venture with BMW also places SGL in a
good position in view of the long-term prospects for the carbon
fiber industry, with no material financial obligations.

The positive outlook reflects a one-in-three probability that S&P
will raise the rating on SGL to 'B-' from 'CCC+' in the next six
months.

An upgrade is contingent on SGL successfully executing the
divestment of the GE business.  The company expects the divestment
to complete in the coming months.  Under this scenario, S&P also
expects a material improvement in the company's liquidity
position.

In S&P's view, an upgrade should also be supported by these:

   -- Continued growth in SGL's graphite specialties and carbon
      fiber business, leading to higher EBITDA, turning free
      operating cash flows positive over the medium term.

   -- Further clarity around the sale of the cathodes business,
      including the timeline and potential proceeds.

S&P is likely to revise the outlook to stable, or could
potentially lower the rating, if S&P sees delays with the
divestment of the GE business, which would result in a
deterioration of the company's liquidity position, and limited
prospects of meeting the debt maturities in the second half of
2018.

Furthermore, there could also be pressure on the rating in the
medium term if the company were not able to turn the currently
negative free operating cash flow positive.  Such a scenario is
possible if the graphite materials and carbon fibers units present
slower growth than in S&P's base-case scenario.


TALISMAN-7 FINANCE: Fitch Cuts Ratings on 4 Note Classes to 'Dsf'
-----------------------------------------------------------------
Fitch Ratings has downgraded Talisman -7 Finance plc's all notes
and withdrawn all ratings as follows:

  EUR24.1 million class C (XS0304911224) downgraded to 'Dsf' from
  'CCsf'; Recovery Estimate (RE) 100%, withdrawn

  EUR66.5 million class D (XS0304911901) downgraded to 'Dsf' from
  'CCsf'; RE 30%, withdrawn

  EUR47.1 million class E (XS0304912388) downgraded to 'Dsf' from
  'Csf'; RE 0%, withdrawn

  EUR68.9 million class F (XS0304912891) downgraded to 'Dsf' from
  'Csf'; RE 0%, withdrawn

This transaction was originally a securitisation of 10 commercial
mortgage loans originated by ABN AMRO Bank NV with a cumulative
balance of EUR1,826 million at closing. The loans themselves were
backed by 56 properties located in Germany.

KEY RATING DRIVERS

The notes remained outstanding at their legal final maturity in
April 2017. Three loans remain to support the notes, each one
secured by a single property.

A sales and purchase agreement regarding the property backing the
Haydn loan has been signed for a gross sales price of EUR24.65
million. The funds, net of associated liquidation costs, will be
applied to the notes at the July interest payment date. The Mozart
loan is secured by one office property located in Duisburg valued
at EUR6.9 million in 2014, while the Wagner loan is secured by a
technological park in Cologne valued at EUR35.4 million in 2013.

Fitch expects ultimate proceeds from the sale of the collateral to
be around EUR45 million leading to the full repayment of class C
notes and the partial repayment of the class D notes. Fitch has
withdrawn the ratings on all notes following the issuer's default.

RATING SENSITIVITIES

Not applicable.



===========
G R E E C E
===========


GREECE: EU Finance Ministers Fail to Reach Bailout Deal
-------------------------------------------------------
Szu Ping Chan and Hannah Boland at The Telegraph report that
eurozone finance ministers failed to agree on a deal which would
have released vital rescue funds for Athens on May 22, after
Greece's creditors rejected calls for an upfront commitment to
reduce the country's debt burden.

Jeroen Dijsselbloem, who leads the Eurogroup of finance ministers,
said the ministers had held an "in-depth discussion" on debt
sustainability and said they were "very close" to an agreement,
The Telegraph relates.

However, he added that they had "not reached an overall agreement
on that part of the discussion", The Telegraph notes.

"We were unable to close a possible gap between what could be done
and what some of us had expected should be done or could be done.
We need to close that by looking at additional options or by
adjusting our expectations.

"Both are possible and both perhaps should be done, and that I
think will bring us to a more positive and definite positive
conclusion at the next Eurogroup in June," The Telegraph quotes
Mr. Dijsselbloem as saying.

Talks are expected to continue over the coming weeks ahead of the
next meeting on June 15, The Telegraph discloses.

According to The Telegraph, officials were at odds with the
International Monetary Fund (IMF) over the critical issue of debt
relief, which is a condition of the Fund's participation in
Greece's third, EUR86 billion (GBP74 billion) bail-out.

The IMF had stressed that debt relief was necessary to ensure the
country can return to fiscal health, and had called for details on
the scope and timing of relief before it joined the program, The
Telegraph notes.


                      *     *     *


On May 10, 2017, the Troubled Company Reporter-Europe reported
that the preliminary agreement between Greece and its
international creditors is a positive step towards unlocking funds
to enable the country to meet its July debt maturities, Fitch
Ratings says.  It is also a prerequisite for discussions on
longer-term debt relief but the eventual timing and outcome of
these remains uncertain.

The Greek government and the country's international creditors
said on May 2 that they had reached a preliminary agreement on
the second review of Greece's third bailout program.  Greece has
committed to further cut pensions, raise some taxes, and reform
labor and energy markets.  If the Greek parliament approves these
measures, eurozone finance ministers could approve the release of
around EUR7 billion of European Stability Mechanism (ESM) funds.
The funds will be partly used for clearance of general government
arrears with the private sector as well as for covering EUR6.3
billion of debt due for repayment in July.

Fitch said, "This would be consistent with our baseline
assumption when we affirmed Greece's 'CCC' sovereign rating in
February.  We took into account Greece's broad program
compliance and the eurozone authorities' desire to avoid a fresh
Greek crisis.  We also acknowledged that popular and political
opposition in Greece to elements of the program remains high,
which create substantial implementation risk.  But we think
government MPs are more likely to approve the reforms than reject
them."

As reported by the Troubled Company Reporter-Europe on March 1,
2017, Fitch Ratings affirmed Greece's Long-Term Foreign and Local
Currency Issuer Default Ratings (IDRs) at 'CCC'.  The issue
ratings on Greece's long-term senior unsecured foreign- and local-
currency bonds are also affirmed at 'CCC.  The Short-term Foreign
and Local Currency IDRs and the rating on Greece's short-term debt
have all been affirmed at 'C', and the Country Ceiling at 'B-'.
Greece's 'CCC' IDRs reflect the following key rating drivers:

The Greek government is broadly complying with the terms of the
EUR86 billion European Stability Mechanism (ESM) program.  The
second review of the program remains incomplete and there are
disagreements among the country's European creditors and the IMF
around the long-term sustainability of Greek public debt.  The
delay in the completion of the second review increases the risk
that the recent economic recovery will be undermined by a hit to
confidence or by the Greek government building up arrears with the
private sector to preserve liquidity.



=============
I R E L A N D
=============


CADOGAN SQUARE IX: Moody's Assigns (P)B2 Rating to Cl. F Notes
---------------------------------------------------------------
Moody's assigns provisional ratings to seven classes of notes to
be issued by Cadogan Square CLO IX D.A.C.:

-- EUR220,321,000 Class A-1 Senior Secured Floating Rate Notes
    due 2030, Assigned (P)Aaa (sf)

-- EUR31,579,000 Class A-2 Senior Secured Fixed Rate Notes due
    2030, Assigned (P)Aaa (sf)

-- EUR69,300,000 Class B Senior Secured Floating Rate Notes due
    2030, Assigned (P)Aa2 (sf)

-- EUR28,600,000 Class C Senior Secured Deferrable Floating Rate
    Notes due 2030, Assigned (P)A2 (sf)

-- EUR20,350,000 Class D Senior Secured Deferrable Floating Rate
    Notes due 2030, Assigned (P)Baa2 (sf)

-- EUR24,200,000 Class E Senior Secured Deferrable Floating Rate
    Notes due 2030, Assigned (P)Ba2 (sf)

-- EUR12,100,000 Class F Senior Secured Deferrable Floating Rate
    Notes due 2030, Assigned (P)B2 (sf)

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

RATINGS RATIONALE

Moody's provisional ratings of the rated notes address the
expected loss posed to noteholders by the 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, Credit Suisse Asset
Management Limited ("CSAM"), has sufficient experience and
operational capacity and is capable of managing this CLO.

Cadogan Square CLO IX D.A.C. is a managed cash flow CLO with a
target portfolio made up of EUR440,000,000 equivalent par value of
mainly European corporate leveraged loans. At least 90% of the
portfolio must consist of senior secured loans or senior secured
bonds, and up to 10% of the portfolio may consist of second-lien
loans, unsecured loans, mezzanine obligations and high yield
bonds. The portfolio may also consist of up to 12.5% of fixed rate
obligations and between 0% and 4% of principal hedged assets and
unhedged assets denominated in U.S. Dollars, Sterling, Swiss
Francs, Swedish Krona, Norwegian Krone and Danish Krone. The
portfolio is expected to be around 90% ramped up as of the closing
date and to be comprised predominantly of corporate loans to
obligors domiciled in Western Europe. The remainder of the
portfolio will be acquired during the seven months ramp-up period
in compliance with the portfolio guidelines.

CSAM 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, collateral purchases are permitted using principal
proceeds from unscheduled principal payments and proceeds from
sales of credit risk/improved obligations, and are subject to
certain restrictions.

In addition to the eight classes of notes rated by Moody's, the
Issuer will issue EUR46.5M of subordinated notes, which will not
be rated.

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

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

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. CSAM's investment decisions and management of the
transaction will also affect the notes' performance.

Loss and Cash Flow Analysis:

Moody's modelled 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 modelling assumptions:

Par amount: EUR440,000,000

Diversity Score: 39

Weighted Average Rating Factor (WARF): 2750

Weighted Average Spread (WAS): 3.5%

Weighted Average Coupon (WAC): 6.0%

Weighted Average Recovery Rate (WARR): 44.5%

Weighted Average Life (WAL): 8 years.

Stress Scenarios:

Together with the set of modelling assumptions above, Moody's
conducted additional sensitivity analysis, which was an important
component in determining the provisional rating 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 3163 from 2750)

Ratings Impact in Rating Notches:

Class A-1 Senior Secured Floating Rate Notes: 0

Class A-2 Senior Secured Fixed Rate Notes: 0

Class B Senior Secured Floating Rate Notes: -1

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: 0

Percentage Change in WARF: WARF +30% (to 3575 from 2750)

Ratings Impact in Rating Notches:

Class A-1 Senior Secured Floating Rate Notes: 0

Class A-2 Senior Secured Fixed Rate Notes: 0

Class B Senior Secured Floating Rate Notes: -3

Class C Senior Secured Deferrable Floating Rate Notes: -4

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

Methodology Underlying the Rating Action:

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


EUROPEAN RESIDENTIAL 2017-NPL1: DBRS Finalizes BB Rating on C Debt
------------------------------------------------------------------
DBRS Ratings Limited finalised its provisional ratings on the
following classes of Notes issued by European Residential Loan
Securitisation 2017-NPL1 (the Issuer):

-- EUR182,760,000 Class A at A (sf)
-- EUR16,805,000 Class B at BBB (sf)
-- EUR14,705,000 Class C at BB (high) (sf)

The rating on the Class A Notes addresses the timely payment of
interest and ultimate payment of principal. The ratings on the
Class B and Class C Notes address the ultimate payment of interest
and ultimate payment of principal. The Class P and Class D Notes
are unrated and will be retained by LSF IX Paris Investments DAC
(the Seller). The rating of BB (high) (sf) assigned to the Class C
Notes differs from the provisional rating of BB (sf) assigned on 6
April 2017. The change in the rating is a consequence of including
a Class C Reserve Fund and an increase in the credit enhancement
supporting the Class C Notes.

The transaction benefits from three reserve funds: the Class A
Reserve Fund, the Class B Reserve Fund and the Class C Reserve
Fund. The Class A Reserve Fund will have an initial balance equal
to 4.5% of the Class A Notes and can amortise to 4.5% of the
outstanding balance of the Class A Notes. The Class B Reserve Fund
will be funded to an initial balance of 10.0% of the Class B Notes
and does not have a target balance. Credits to the Class B reserve
will be made outside of the waterfall based on the proceeds of the
interest rate cap allocated proportionately to the size of the
Class B Notes relative to the cap notional. The Class C Reserve
Fund will be funded to an initial balance of 15.0% of the Class C
Notes and does not have a target balance. Credits to the Class C
reserve will be made outside of the waterfall based on the
proceeds of the interest rate cap allocated proportionately to the
size of the Class C Notes relative to the cap notional.

The underlying collateral primarily consists of Irish non-
performing residential mortgages. There is a small percentage
(2.35%) of performing residential mortgages. The portfolio is
granular, as the largest borrower accounts for 1.01% of the
analysed portfolio. All mortgages are concentrated in Ireland and
33.14% are located in Dublin. The mortgage loans were originated
by Bank of Scotland (Ireland) Limited and are secured by Irish
residential properties. Lone Star Funds, through the respective
seller, acquired the mortgage loans in February 2015. Servicing of
the mortgage loans is conducted by Start Mortgages DAC (Start),
which are also expected to continue as Administrators of the
assets for the transaction. As of the closing date, primary
servicing activities have been delegated to Homeloan Management
Limited (HML) under a subservicing agreement. There is no
obligation on Start to continue to delegate to HML. Also, HML is
not a party to the transaction documents. Hudson Advisors Ireland
DAC will be appointed as the Issuer Administration Consultant and,
as such, will act in an oversight and monitoring capacity.

Following the step-up date in May 2021, the margin above one-month
Euribor payable on the Class A, Class B and Class C Notes
increases. The issuer will enter into an Interest Rate Cap
agreement with Barclays Bank Plc. The cap agreement will end on
the payment date falling in May 2022, on which date the coupon cap
on the notes becomes applicable. The issuer will pay the interest
rate cap fees in full on the closing date and in return will
receive payments to the extent one-month Euribor is above 0% for
the first two years and 0.5% for the remaining three years. The
Issuer can unwind or sell part of the Interest Rate Cap at the
marked-to-market position provided the notional of the Interest
Rate Cap notional does not fall below the outstanding balance of
the Class A, Class B and Class C Notes.

The coupon payable on the Rated Notes becomes subject to a capped
rate on the payment date falling in May 2022. The coupon caps on
the Class A, Class B and Class C Notes are equal to 5.00%, 6.00%
and 6.00%, respectively.

The issuer may sell part of the portfolio subject to sale
covenants. The sale price must be at least 70% of the aggregate
current balance of the mortgage loans which are subject to a sale.
Portfolio Sale Proceeds up to 70% of the outstanding principal
balance, net of costs, will be part of the Available Funds.

The Class P Notes may receive excess amounts from any portfolio
sale as repayments of principal. Excess amounts are calculated as
the sale proceeds, which are greater than 70% the current balance
of the relevant mortgage loans net of portfolio sale costs. The
Class P Notes can also receive amounts arising from the unwinding
or sale of the Interest Rate Cap. As a consequence, the Class P
Notes may amortise before the Rated Notes. Payments received to
the Class P Notes are capped at the initial balance of the Class P
Notes. Following repayment in full of the Class P Notes, any
amount otherwise due to be paid to the Class P Notes will be
applied as available funds.

Elavon Financial Services DAC, U.K. Branch (Elavon), is the Issuer
Transaction Account Bank. DBRS privately rates Elavon. DBRS has
concluded that Elavon meets DBRS's criteria to act in such
capacity. The transaction documents contain downgrade provisions
relating to the Transaction Account bank where, if downgraded
below BBB (low), the Issuer will replace the account bank. The
downgrade provision is consistent with DBRS's criteria for the
initial rating of A (sf) assigned to the Class A Notes. The
interest rate received on cash held in the account bank is not
subject to a floor of 0%, which can create a potential liability
for the issuer. DBRS has assessed potential negative interest
rates on the account bank in the cash flow analysis.



=========
I T A L Y
=========


ALITALIA SPA: Taps Rotschild to Manage Sale of Business
-------------------------------------------------------
Mamta Badkar at The Financial Times reports that Alitalia on
May 22 said it has named Rothschild as financial advisor to manage
its sale after falling into administration earlier this month.

Italy's largest airline began administration proceedings on May 2
after its staff rejected the airline's restructuring plan in mid-
April that would have cut salaries, personnel and other costs, the
FT relates.

That vote forced Alitalia's investors to withdraw their commitment
to a new financing package, the FT discloses.

                        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%.

                      *     *     *

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.



=====================
N E T H E R L A N D S
=====================


BABSON EURO 2014-2: Fitch Assigns 'B-(EXP)' Rating to Cl. F Debt
-----------------------------------------------------------------
Fitch Ratings has assigned Babson Euro CLO 2014-2 B.V.'s
refinanced notes expected ratings as follows:

EUR297.4 million Class A-1 notes: 'AAA(EXP)sf': Outlook Stable
EUR31.6 million Class A-2 notes: 'AAA(EXP)sf'; Outlook Stable
EUR37.9 million Class B-1 notes: 'AA(EXP)sf'; Outlook Stable
EUR21.1 million Class B-2 notes: 'AA(EXP)sf'; Outlook Stable
EUR35.0 million Class C notes: 'A(EXP)sf'; Outlook Stable
EUR28.5 million Class D notes: 'BBB(EXP)sf'; Outlook Stable
EUR38.0 million Class E notes: 'BB(EXP)sf'; Outlook Stable
EUR16.5 million Class F notes: 'B-(EXP)sf'; Outlook Stable

STRUCTURAL HIGHLIGHTS

The weighted average life (WAL) test can be reset to 6.5 years
instead of the then current six years after the end of the non-
call period in May 2019 but only if some conditions are met. All
collateral quality tests and most portfolio tests would need to be
satisfied as of the end date of the non-call period.

In addition, the adjusted collateral principal amount will need to
be above EUR543 million, ie less than EUR6 million below the
target par of EUR549 million, to preserve the available credit
enhancement at the time of the potential WAL test reset.

The proceeds of this issuance will be used to redeem the old
notes. The refinanced CLO envisages a further four-year
replenishment period, with a new identified portfolio comprising
the existing portfolio, as modified by sales and purchases
conducted by the manager in the ramp-up period following the
closing date. The portfolio will be managed by Barings (U.K)
Limited. The reinvestment period will end in May 2021.

KEY RATING DRIVERS

'B'/ 'RR2' Average Credit Quality
The average credit quality of the current portfolio is in the 'B'
category, as based on Fitch ratings and credit opinions on the
obligors currently in the pool. The Fitch weighted average rating
factor (WARF) of the current portfolio is 30.8. The Fitch weighted
average recovery rate (WARR) of the current portfolio is 69.5%,
which is in line with an average 'RR2' recovery rating.

Concentration Limits Ensure Diversification
The transaction includes limits to top 10 obligor concentration
which in line with recent European CLO. The transaction also
includes limits to maximum industry exposure based on a different
classification from Fitch industries. The maximum exposure to the
largest, and to each of the next four largest industries is
covenanted at 15% and 12%, respectively.

Market Risk Exposure Mitigated
Between 3% and 16% of the portfolio may be invested in fixed rate
assets, while fixed rate liabilities account for 9.3% of the
target par amount providing a partial interest rate hedge. The
transaction is allowed to invest up to 20% of the portfolio in
non-euro-denominated assets but only if hedged with perfect asset
swaps.

RATING SENSITIVITIES

A 25% increase in the obligor default probability could lead to a
downgrade of up to two notches for the rated notes. A 25%
reduction in expected recovery rates could lead to a downgrade of
up to two notches for all rated notes except the class E for which
it could lead to a four-notch downgrade.


DRYDEN 51 CLO: Moody's Assigns B2(sf) Rating to Class F Notes
-------------------------------------------------------------
Moody's Investors Service has assigned definitive ratings to eight
classes of notes issued by Dryden 51 Euro CLO 2017 B.V. (the
"Issuer" or " Dryden 51 CLO"):

-- EUR205,500,000 Class A-1 Senior Secured Floating Rate Notes
    due 2031, Definitive Rating Assigned Aaa (sf)

-- EUR31,579,000 Class A-2 Senior Secured Fixed Rate Notes due
    2031, Definitive Rating Assigned Aaa (sf)

-- EUR31,500,000 Class B-1 Senior Secured Floating Rate Notes
    due 2031, Definitive Rating Assigned Aa2 (sf)

-- EUR21,053,000 Class B-2 Senior Secured Fixed Rate Notes due
    2031, Definitive Rating Assigned Aa2 (sf)

-- EUR27,000,000 Class C Mezzanine Secured Deferrable Floating
    Rate Notes due 2031, Definitive Rating Assigned A2 (sf)

-- EUR20,000,000 Class D Mezzanine Secured Deferrable Floating
    Rate Notes due 2031, Definitive Rating Assigned Baa2 (sf)

-- EUR22,000,000 Class E Mezzanine Secured Deferrable Floating
    Rate Notes due 2031, Definitive Rating Assigned Ba2 (sf)

-- EUR12,500,000 Class F Mezzanine Secured Deferrable Floating
    Rate Notes due 2031, Definitive Rating Assigned B2 (sf)

RATINGS RATIONALE

Moody's definitive ratings of the rated notes address the expected
loss posed to noteholders by the legal final maturity of the notes
in 2031. The definitive 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, PGIM Limited, has sufficient experience
and operational capacity and is capable of managing this CLO.

Dryden 51 Euro CLO 2017 B.V. is a managed cash flow CLO. At least
90% of the portfolio must consist of senior secured loans and
senior secured bonds. The portfolio is expected to be 98% ramped
up as of the closing date and to be comprised predominantly of
corporate loans to obligors domiciled in Western Europe.

PGIM Limited 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
improved and credit risk obligations, and are subject to certain
restrictions.

In addition to the eight classes of notes rated by Moody's, the
Issuer issued EUR45.25M of subordinated notes, which will not be
rated.

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.

Defaulted obligations are neither excluded nor carried at Moody's
collateral value when used to decide the bucket size hurdle in
Current Pay Obligation, Below-Par Exception definition. Above
these hurdles Current Pay Obligation (2.5%) and Below-Par
Exception (5%) are treated as defaulted obligations and Below-Par
Securities respectively. This is not the usual market practice and
could weaken the effectiveness of the principal coverage tests.

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

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. PGIM Limited's investment decisions and
management of the transaction will also affect the notes'
performance.

Loss and Cash Flow Analysis:

Moody's modelled 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 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 modelling assumptions:

Par Amount: EUR400,000,000

Diversity Score: 40

Weighted Average Rating Factor (WARF): 2800

Weighted Average Spread (WAS): 4.0%

Weighted Average Coupon (WAC): 6.0%

Weighted Average Recovery Rate (WARR): 41%

Weighted Average Life (WAL): 8 years

Moody's has analysed the potential impact associated with
sovereign related risk of peripheral European countries. As part
of the base case, Moody's has addressed the potential exposure to
obligors domiciled in countries with local currency country risk
ceiling of A1 or below. For countries which are not member of the
European Union, the foreign currency country risk ceiling applies
at the same levels under this transaction. Following the effective
date, and given the portfolio constraints and the current
sovereign ratings in Europe, such exposure may not exceed 15% of
the total portfolio. As a result and in conjunction with the
current foreign government bond ratings of the eligible countries,
as a worst case scenario, a maximum 15% of the pool would be
domiciled in countries with A3 local or foreign currency country
ceiling. The remainder of the pool will be domiciled in countries
which currently have a local or foreign currency country ceiling
of Aaa or Aa1 to Aa3. Given this portfolio composition, the model
was run with different target par amounts depending on the target
rating of each class 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 2.00% for the Classes A-1 and A-2 Notes, 1.25% for the
Classes B-1 and B-2 Notes, 0.50% 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 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 3220 from 2800)

Ratings Impact in Rating Notches:

Class A-1 Senior Secured Floating Rate Notes: 0

Class A-2 Senior Secured Fixed Rate Notes: 0

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

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

Class C Mezzanine Secured Deferrable Floating Rate Notes: -2

Class D Mezzanine Secured Deferrable Floating Rate Notes: -2

Class E Mezzanine Secured Deferrable Floating Rate Notes: 0

Class F Mezzanine Secured Deferrable Floating Rate Notes: 0

Percentage Change in WARF: WARF +30% (to 3640 from 2800)

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: -3

Class B-2 Senior Secured Fixed Rate Notes: -3

Class C Mezzanine Secured Deferrable Floating Rate Notes: -4

Class D Mezzanine Secured Deferrable Floating Rate Notes: -2

Class E Mezzanine Secured Deferrable Floating Rate Notes: -1

Class F Mezzanine Secured Deferrable Floating Rate Notes: 0


SPECIALTY CHEMICALS: Moody's Assigns B1 CFR, Outlook Stable
-----------------------------------------------------------
Moody's Investors Service has assigned a B1 corporate family
rating ('CFR') and a B1-PD probability of default rating (PDR) to
Specialty Chemicals International B.V., the parent company of
Specialty Chemicals International Inc. ('SCI' or the 'company'),
the new group which will combine the activities of Polynt group
and and Reichhold group. The new combined group is expected to be
a leading global supplier of composite resins. Concurrently,
Moody's has assigned a provisional (P)B2 rating to the c. EUR413m
equivalent of US/Dutch term loans ('US/Dutch TLs', split into a
US$ and EUR tranche) to be borrowed by Specialty Chemicals Holding
II B.V., Reichhold LLC2, Specialty Chemicals International Inc.,
Reichhold Holdings International B.V. and Polynt Composites USA,
Inc., five sub-holdings indirectly owned by Specialty Chemicals
International B.V.. The outlook on all ratings is stable.

The US/Dutch TLs, together with c. EUR197 million of new Italian
notes (unrated), and equity contributions from private equity
funds affiliated with InvestIndustrial (the current owner of
Polynt group) and Black Diamond Capital Management, L.L.C. (the
current majority owner of the Reichhold group), will be used to
finance the purchase of Polynt and Reichhold and the repayment of
their existing indebtedness, except for c. EUR35 million of local
facilities which will be rolled-over. The definitive share
purchase agreement for the combination was signed on May 2, 2016.
However, the transaction closing occurred on May 17, 2017, after
all antitrust approvals were granted.

The rating on the US/Dutch TLs is provisional, as it is based on
the review of draft documentation and on a pro-forma capital
structure at closing. After conclusive review of the final
documentation, Moody's will assign a definitive rating on the debt
instruments. Definitive ratings may differ from provisional
ratings.

RATINGS RATIONALE

The B1 CFR acknowledges SCI's (i) leading position in its
reference industry segments, with a c. 35% market share both in US
and Europe for unsaturated polyester resins (UPRs), and a strong
presence in gelcoat and plasticizers; (ii) balanced geographic
diversification, with Europe accounting for c. 40% of revenues,
North America for 35% and the rest being equally split between
Asia and rest of the world; (iii) strong operational
diversification, with 44 plants across several countries which
should enable closer proximity to customers in markets which are
mainly regional due to the high relative incidence of transport
costs; (iv) backward integration in Europe where Polynt produces
intermediates (namely maleic anhydride, phthalic anhydride,
trimellitic anhydride) which are inputs for the production of
composites and specialties. The vertically integrated business
model and the patented in-house developed process technology,
including proprietary technology for oxidation catalysts used to
produce the intermediates, are relevant factors to ensure the
company's competitive position and an above average sector
operating profitability in a business which has commodity and
intermediate chemical features.

The rating also considers (i) the high cyclicality of the main end
user markets of the company, namely infrastructure/construction
and automotive, which in a global downturn can lead to a much
faster drop in demand for the products offered by the company
compared to GDP, as observed for instance during 2008/2009, when
UPR demand in the US and Europe declined by more than 25% year-on-
year; (ii) the limited growth potential of the largest end user
markets of the company, especially in mature US and European
markets where the bulk of the company's operations are located;
and (iii) the relatively moderate operating profitability of the
company in the high single digit range. Different level of
operating profitability between Polynt and Reichhold reflects the
higher value added composites and specialties offered by the
former compared to the more commoditized composites product
portfolio of Reichhold, which lacks specialties and also does not
benefit from the backward integration in intermediates, which is a
peculiar advantage of Polynt.

Assuming a stable operating environment in the main end user
markets for the company in both its reference European and US
markets, which is consistent with the rating agency's overall
stable outlook on the broader chemical industry in both regions,
the main driver for a possible further improvement in the
company's EBITDA margin would be via the achievement of cost
synergies. Moody's believes that the achievement of the identified
cost synergies would allow to defend the company's EBITDA margin
even in a mild downturn scenario of declining volumes and volatile
raw materials. The relatively modest fixed costs of the company,
and the limited sensitivity of its average operating margin (on a
EUR per kg basis) to changes in raw material prices are important
risk mitigating considerations.

Moody's CFR is also underpinned by the expectation that the
company will be able to maintain credit metrics commensurate with
the rating. The CFR assumes that the starting adjusted gross
debt/EBITDA of the company in 2017, pro-forma for the capital
structure at closing, will be slightly below 4x, and that a
gradual deleveraging towards 3x could be achieved by 2019, when
management expect to obtain all the synergies targeted. The CFR is
also supported by the expectation that other main credit metrics,
including cash flow and interest coverage ratios, will gradually
improve in 2018 and 2019, from already solid levels anticipated
for 2017. The main caveats to the achievement of the projected
financial improvements relate to (i) potentially higher than
anticipated integration execution risks, and (ii) a material
deterioration in the reference industry fundamentals. However,
Moody's expects that the company would be able to generate
positive FCF both in a more stable and in a downside scenario,
given it should be able to generate adjusted Funds from Operations
(FFO) of between EUR70 million in a weak year and EUR110 million
in a good year. These levels would be more than sufficient to fund
projected capex requirements of c. EUR60 million p.a. and limited
working capital related outflows on average during the year.
Projected positive FCF, together with a cash balance of EUR40
million at closing and a EUR60m available committed revolving
credit facility (RCF), should allow the company to maintain a good
liquidity position.

Projected free cash flows, combined with the mainly 'bullet
repayment' feature of the debt structure, should also support the
build-up of cash on balance sheet over time, which would then
represent an important buffer ahead of a possible future cyclical
downturn. A cash sweep mechanism contemplated in the debt
documentation would also lead to mandatory debt prepayments from
2019 onwards, subject to excess cash being generated in the
preceding year. Such mechanism could lead to a faster deleveraging
than currently contemplated.

The financial flexibility afforded by the good liquidity and
moderate leverage pro-forma for the capital structure at
transaction closing would accommodate small bolt-on debt funded
acquisitions, which Moody's believes the company may start to
consider in the future as an important strategic option to grow
the business further, especially in some of the niches presenting
higher growth potential.

OUTLOOK

The stable outlook reflects Moody's expectation that the company
maintains a good liquidity throughout the forecast period,
successfully implements synergies in the next two years to support
its operating profitability, generates free cash flows and
gradually deleverages. The stable outlook also assumes a smooth
integration process between Polynt and Reichhold, a robust
governance in place between the two private equity owners, and
overall stable conditions in the company's reference end markets
over the next 12-18 months.

STRUCTURAL CONSIDERATIONS

The pro-forma debt structure considered is composed of EUR413m
equivalent US/Dutch senior secured TLs, c. EUR197m of Italian
senior secured notes, which rank pari passu with the US/Dutch TLs,
a super senior RCF of EUR60m and a senior secured ABL facility of
up to EUR45m, as well as c. EUR30m of existing unsecured bank
loans which will be rolled over at closing, and which collectively
rank below the other main debt instruments.

In accordance to Moody's Loss Given Default for Speculative-Grade
Companies methodology, and assuming an average family recovery
rate of 50% typical for covenant lite capital structures which
include both bank loans and notes, the US/Dutch TLs are rated
(P)B2, one notch below the B1 CFR. The notching differential
reflects the relative position of the US/Dutch TLs in a
hypothetical liquidation waterfall scenario upon enforcement of
the security package provided. Moody's understands that according
to the security principles and the terms of the intercreditor
agreement, the proceeds of an enforcement of the collateral would
be used to repay the super senior RCF and the ABL facility first,
and then the Italian notes and the US/Dutch TLs.

What Could Change the Rating -- Up

Moody's does not currently anticipate any upward pressure on the
B1 CFR. While the company displays good liquidity and positive
free cash flow generation, it has limited historical and
operational financial track record as a new combined group and is
exposed to cyclical markets which were severely affected in past
cyclical downturns. An upgrade would likely require a material
deleveraging, with an adjusted debt/EBITDA at 3x or below on a
sustained basis, and an adjusted RCF/Debt ratio sustainably above
15%. Liquidity would also need to remain good and be supported by
positive free cash flows.

What Could Change the Rating - Down

Negative rating pressure could arise if underlying markets
deteriorate, translating into material operational and financial
underperformance. A downgrade would be considered if the company's
adjusted gross debt/EBITDA would exceed 4.5x on a sustained basis
and/or if its adjusted RCF/debt ratio falls below 10%. Any
significant distribution to shareholders and/or corporate action,
including debt funded M&A, significantly delaying the deleveraging
prospects of the company could also contribute to a rating
downgrade.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Global
Chemical Industry Rating Methodology published in December 2013.

Headquartered in Italy, Specialty Chemicals International B.V. is
a large global supplier of composite resins, with market shares in
both the US and Europe in unsaturated polyester resins, a chemical
intermediate used in various applications, most notably in
construction and transportation. The company results from the
combination of Italian based Polynt, which grew organically and
via international acquisitions over the past 20 years, and US
based Reichhold group, which emerged from Chapter 11 procedure in
March 2015 and recovered its operational and financial performance
since then. The company has 44 plants across the world, but mainly
in Europe and in the US, which account for 41% and 35% of the
company's 2016 revenues respectively. The company generated pro-
forma combined sales of c. EUR1.97bn in 2016. The significant
shareholders are funds affiliated with InvestIndustrial and Black
Diamond Capital Management, L.L.C., two international private
equity funds which will own, directly and indirectly, a majority
stake in the company (split equally once it is formed following
the closing of the combination). The residual stake will be held
indirectly by legacy institutional investors which obtained a
minority shareholding in Reichhold as a consequence of the debt
for equity swap which was agreed in 2015 for the Chapter 11
process.


YELLOW MAPLE: S&P Puts 'B' CCR on CreditWatch Positive
------------------------------------------------------
S&P Global Ratings placed its 'B' long-term corporate credit
rating on The Netherlands-based Yellow Maple Holding B.V., the
holding company of Bureau van Dijk Electronic Publishing B.V.
(BvD), on CreditWatch with positive implications.

S&P also placed its 'B' issue rating on BvD's EUR25 million senior
secured revolving credit facility due 2020 and its EUR728 million
outstanding under the senior secured term loan B due 2021 on
CreditWatch positive.  The recovery rating of '3' (50%-70%;
rounded estimate of 55%) on these instruments remains unchanged.

At the same time, S&P withdrew the 'CCC+' issue rating and '6'
recovery rating on the group's second-lien debt, which was repaid
with the proceeds of the February 2017 refinancing.

The rating action follows Moody's Corp.'s (BBB+/Negative/A-2)
announcement that it has entered into a definitive agreement to
acquire BvD for EUR3.0 billion (approximately $3.27 billion).

Moody's has indicated it expects the transaction will be financed
with a combination of offshore cash and new debt financing.

S&P understands that that there is a high likelihood that Moody's
will repay Yellow Maple's debt upon successful completion of the
transaction, which S&P expects by the end of August 2017.

The CreditWatch reflects that S&P could raise its ratings on
Yellow Maple by several notches on Moody's successful close of the
acquisition.

S&P expects to resolve the CreditWatch within the next three
months.



===========
P O L A N D
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ZABRZE CITY: Fitch Affirms BB+ Long-Term IDR, Outlook Stable
------------------------------------------------------------
Fitch Ratings has affirmed the Polish City of Zabrze's Long-Term
Foreign- and Local-Currency Issuer Default Ratings (IDR) at 'BB+'
and National Long-Term rating at 'BBB+(pol)'. The Outlooks are
Stable.

The affirmation reflects Fitch's view that Zabrze's operating
performance will remain modest but in line with a 'BB+' rating.
The ratings also incorporate the city's moderate direct debt and
its substantial indirect risk.

KEY RATING DRIVERS

Fitch project that Zabrze's operating margin will hover around a
moderate 5% in 2017-2019. The annual debt service (instalment plus
interests) estimated at around PLN50 million annually (2016:
PLN49.7 million) will be 1.25x the operating balance estimated by
us at PLN40 million on average. From 2019, the city's operating
performance may be supported by additional revenue from property
tax following the completion of two large private investments in
the city.

In 2016, Zabrze reported a modest operating performance with
operating margin at 4.1% (or 4.5% excluding inflating effect of
500+ Programme) and the operating balance covering 60% of debt
service. Zabrze's operating performance was slightly lower than
projected by Fitch mainly due to lower proceeds from property tax
and some additional one-off operating spending.

Fitch expects that in the medium term, Zabrze's direct debt will
remain stable in relative terms, below 55% of current revenue (or
PLN445 million nominally in 2019). Fitch estimates the city's
capital expenditure will average around PLN100 million annually or
11% of total expenditure, which is relatively low compared with
other Polish cities rated by Fitch. Fitch expects capex to be at
least half funded by capital revenue (mainly by EU grants) and
from new debt. As in previous years, Zabrze will apply for EU
grants from the 2014-2020 budget to co-finance its investments.
Fitch expects that the city's debt-to-current balance ratio (debt
payback) will stabilise at 16 years in the medium term (2016: 21
years).

Zabrze's indirect risk (debt of municipal companies and guarantees
issued by the city) peaked at end-2016 at PLN342 million but Fitch
expects it to decrease, as per the city administration's medium-
term goal. Fitch expects that net overall risk to current revenue
may improve to around 80% in 2019 from a peak of 106% in 2016.
Until 2019 the city's capital spending on its shareholdings will
be high, at about PLN50 million annually, reducing Zabrze's capex
financing flexibility for other purposes. Zabrze provides support
for companies mainly through capital injections and guarantees.

Fitch also expects that the city's somewhat weak liquidity
situation will continue in the medium term. Zabrze relies on a
committed external liquidity line of PLN50 million as its cash
balances do not cover all liquidity needs during the year.

Zabrze is a medium-sized city by Polish standards (176,000
inhabitants), located in the Slaskie region and part of the Upper
Silesian Agglomeration (2 million inhabitants). GDP per capita in
2014 (last available data) for the Gliwicki sub-region, where
Zabrze is located was 121.5% of the national average but this
probably overestimates Zabrze's performance. The city's
unemployment rate of 7.4% at end-March 2017 was below the national
rate (8.1%). As is typical for the Slaskie region, Zabrze's local
economy is dominated by industry and construction, which
represented 46% of the sub-region's GVA in 2014, well above the
average 34% in Poland.

Fitch assesses the regulatory regime for Polish LRGs as neutral.
LRGs' activities and financial statements are closely monitored
and reviewed by the central administration. LRGs' finances are
public and LRGs are obliged to disclose their financial accounts
on time and in details. The main revenue sources such as income
tax revenue, transfers and subsidies from the central government
are centrally distributed according to a legally defined formula,
which limits the central government's scope for discretion.

RATING SENSITIVITIES

A sustained improvement in Zabrze's operating performance leading
to a debt payback ratio of below 10 years, coupled with net
overall risk stabilisation below 100% of current revenue would
lead to an upgrade.

The ratings could be downgraded if net overall risk grows above
130% of current revenue accompanied by weak operating performance,
leading to a debt payback ratio exceeding 20 years.



===============
P O R T U G A L
===============


PORTUGAL: Economic Recovery Supports Credit Profile, Moody's Says
-----------------------------------------------------------------
Portugal's Ba1 rating with a stable outlook reflects credit
strengths such as the country's economic recovery and its stronger
labour market, set against constraints which include very high
government debt, Moody's Investors Service said in a new report.

"Portugal's credit profile is supported by the economic recovery,
its return to private capital markets, the economy's
diversification and relatively high average wealth levels," said
Evan Wohlmann, a Moody's Vice President -- Senior Analyst and co-
author of the report. "Portugal's key credit constraint relates to
its very high government debt. Although Moody's expects debt to
start declining as a share of GDP this year, any debt reduction
will only be gradual."

Portugal's gross public debt ratio remains one of the highest in
the EU and the highest in the Ba1 space.

In Moody's baseline scenario, the debt-to-GDP ratio will gradually
decline, supported by an average primary surplus of 2.3% over the
next two years and a moderate nominal GDP growth, but will still
remain around 125% of GDP in 2020.

After improving to 1.8% of GDP in 2017, Moody's forecasts that
Portugal's general government deficit will deteriorate slightly in
2018 to 2.0% of GDP, compared to a deficit of 1.0% next year
forecast by the Portuguese authorities given the rating agency's
assumption of more moderate growth and a stronger increase in
expenditure. However, the deficit will remain below the 3%
Maastricht threshold set by the European Commission.

Moody's expects Portugal's economic recovery to continue, with an
increase in GDP growth to 1.7% in 2017, before moderating to 1.4%
in 2018.

Investment will play a greater role in driving economic activity
over the next two years, supported by a rise in transport and
machinery investment in the second half of 2016, the end of
political uncertainty which likely weighed on investment at the
start of last year and increased absorption of EU funds that will
drive public and private investment.

Despite the short-term pick-up in growth, longer-term economic
prospects remain moderate. This reflects ongoing constraints,
including continuing high private sector debt levels, compounded
by weakness in the banking sector.

Although a number of positive developments in 2017 helped to
strengthen the stability of the banking sector, susceptibility to
event risks for the sovereign remains material.

The high-level of non-performing loans, especially in the
corporate sector, remains a significant legacy issue in the
system, which perpetuates the ongoing negative cycle between weak
banks, subdued investment and low economic growth.

Portugal's government bond rating could be upgraded if fiscal
consolidation and debt reduction accelerate significantly compared
to expectations. Much stronger economic growth would also be
beneficial for the rating.

Conversely, the rating could come under pressure if there were
signs that the government's commitment to fiscal consolidation and
debt reduction were to wane or that political support for prudent
fiscal policies was not forthcoming. This would put at risk the
sustainability of the public debt trend.



===========
R U S S I A
===========


KRASNOYARSK REGION: Fitch Affirms BB+ IDR, Outlook Stable
---------------------------------------------------------
Fitch Ratings has revised Krasnoyarsk Region's Outlook to Stable
from Negative and affirmed the Long-Term Foreign- and Local-
Currency Issuer Default Ratings (IDRs) at 'BB+' and Short-Term
Foreign-Currency IDR at 'B'. Krasnoyarsk's outstanding senior
unsecured domestic bonds have been affirmed at 'BB+'.

The revision of the Outlook to Stable reflects the improvement of
the region's fiscal performance above Fitch's expectation
underpinned by economic recovery.

KEY RATING DRIVERS

The Outlook revision reflects the following rating drivers and
their relative weights:

HIGH
The region's fiscal performance improved in 2016 beyond Fitch's
expectations. The operating margin increased to 6.7% from an
average 2.4% in 2014-2015 underpinned by strong growth of tax
proceeds by 14% and curtailment of operating spending. Fitch
expects the operating margin will average 9% in 2017-2019 due to
further expansion of the region's strong tax base and control over
operating expenditure.

In 2016, the budget deficit before debt shrank to 7% of total
revenue, which is the lowest result since 2012. Fitch expects the
region's deficit will continue to narrow over the medium term
despite intensified capital spending in 2017-2018. In 2019
Krasnoyarsk will host Universiade - the international sport
competition among students. In preparation for this event, the
large-scale investment programme should be completed before 2019.
Part of the investment is co-financed by the federal government.

The agency projects the region's direct risk will remain moderate
by international standards, at below 65% of current revenue in
2017-2019. In 2016 the direct risk remained almost unchanged
relative to current revenue at 53.6% versus 52.4% in 2015. The
composition of the direct risk favourably changed towards higher
proportion of low-cost budget loans, which accounted for 26% of
the total in 2016 (2015: 20%). The dominant 63% of the direct risk
refers to issued debt while bank loans compose the residual 11%.

The region has given up using one-year bank loans, but the
maturity profile remains concentrated in 2017-2019 when 76% of
maturities are due. This leads to persistent refinancing pressure.
In 2017 the region has to refinance RUB23.8 billion of debt
obligations, which represents 25% of the direct risk. Of the total
amount, RUB14.4 billion is amortising domestic bonds while the
remainder RUB9.4 billion is budget loans.

The region plans to issue a new domestic bond in 2H17 when most of
the outstanding maturities are due. The budget loans will be
refinanced by new loans from the federal government. Krasnoyarsk
already received RUB6.84 billion of the budget loans in 1Q17, and
will get another RUB2 billion later in the year.

MEDIUM

The region has a strong industrialised economy weighted towards
non-ferrous metallurgy and mining. Krasnoyarsk's wealth metrics
are above the national median with GRP per capita at 172% of the
national median. This justifies the region's high fiscal capacity
with taxes representing almost 90% of the operating revenue.
Negatively, the region's tax revenue is concentrated with top 10
taxpayers contributing around 50% of total tax proceeds in 2015-
2016. The list of largest taxpayers includes PJSC MMC Norilsk
Nickel (BBB-/Stable/F3), Polyus Gold International Limited (BB-
/Positive/B) and Rosneft. Tax concentration makes the region's
revenue base volatile and dependent on business cycles and
commodity price fluctuations.

The region's ratings also reflect the following key rating
drivers:

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

RATING SENSITIVITIES

An operating balance above 10% of operating revenue accompanied by
sound debt metrics, with direct risk-to-current balance below
average debt maturity could lead to an upgrade.

Resumed deterioration of budgetary performance leading to
operating balance insufficient to cover interest expenditure
accompanied by growth of direct risk above 65% of current revenue
could lead to a downgrade.


VOLZHSKIY CITY: Fitch Affirms B+ IDR & Revises Outlook to Pos.
--------------------------------------------------------------
Fitch Ratings has revised the Outlook on the Russian City of
Volzhskiy's Long-Term Foreign- and Local-Currency Issuer Default
Ratings (IDRs) to Positive from Stable and affirmed the IDRs at
'B+'. The agency has also affirmed the city's Short-Term Foreign-
Currency IDR at 'B'. The city's outstanding senior unsecured debt
has been affirmed at 'B+'.

The revision of the Outlook to Positive reflects Volzhskiy's
improved budgetary performance with surplus before debt variation
for two consecutive years and Fitch's expectation that the city
will keep a positive current balance and moderate debt in the
medium term. The ratings also factor in the small size of
Volzhskiy's budget and the city's high dependence on the decisions
of the regional and federal authorities, which lead to volatile
performance and low shock resilience.

KEY RATING DRIVERS

The revision of the Outlook on the city's IDRs reflects the
following rating drivers and their relative weights:

HIGH

Improved Budgetary Performance
The city demonstrated sound operating results in 2016 with an 8.7%
operating margin and 3.3% surplus before debt variation. This was
due to operating revenue growth driven by personal income tax and
increase of property use charges amid strict control of operating
expenditure. This resulted in the current balance returning to
positive (2016: 5.6% of current revenue) having been volatile in
the past. In general, during 2014-2016 the city notably improved
operating performance and recorded an average 5.7% operating
margin compared with negative 2.5% operating margin on average
during 2011-2013.

Fitch expects Volzhskiy's operating balance to stabilise at 4%-5%
of the operating revenue, which will be sufficient to cover
interest expenditure, so the current balance remains low positive
in 2017-2019. The deficit before debt will stay low and average 1%
of total revenue in the medium term.

MEDIUM

Moderate Direct Risk
The city's direct risk reached a moderate 27.9% of current revenue
at end-2016, a continuous decrease since 2013 when it peaked at
43.7%. Fitch expects the city's absolute direct risk to marginally
increase in 2017-2019, which will lead to direct risk
stabilisation relative to current revenue at below 30% in the
medium term.

The city is exposed to ongoing refinancing pressure despite its
moderate overall debt burden, given its weak cash position and
short-term repayment profile. A significant part of the city's
debt (RUB500 million or 50% of total direct risk at April 1, 2017)
is represented by bank loans due within 2017-2018. The remaining
debt is represented by RUB270 million outstanding domestic bonds,
which have a smooth amortising structure during 2017-2019 and
RUB204 million treasury facilities.

The latter is a short-term 50-days loan, provided by federal
treasury at 0.1% annual interest rate. The city uses this funding
to cover intra-year cash mismatches and it has to be redeemed by
the year-end, when the city usually attracts revolving credit
lines with commercial banks. This approach allows the city to save
on interest payments.

The ratings also consider the following rating factors:

Industrialised Economy

With 325,970 inhabitants, Volzhskiy is the second-largest city in
the Volgograd region (B+/Stable) after the regional capital, the
City of Volgograd. The city's economy is dominated by processing
industries and, together with the City of Volgograd, forms a
strong regional industrial agglomeration. The city's
administration expects that industrial production will demonstrate
moderate growth at 1%-2% in the medium term, which is in line with
Fitch's expectation for Russia's economy gradual recovery.

Weak Institutional Framework

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

Management Assessed as Neutral

The city's budgetary policy is dependent on the decisions of the
regional and federal authorities. This leads to a steady flow of
earmarked current transfers received from the regional budget,
which averaged for 49% of operating revenue in 2014-2016. The city
demonstrates prudent debt management aiming at limiting fiscal
deficit and maintenance of moderate debt.

RATING SENSITIVITIES

Consolidation of improved budgetary performance with a sustainable
positive current balance, and maintenance of moderate direct risk,
could lead to an upgrade.



=========
S P A I N
=========


BANCO POPULAR ESPANOL: Fitch Cuts Issuer Default Rating to 'B'
--------------------------------------------------------------
Fitch Ratings has downgraded Banco Popular Espanol S.A.'s
(Popular) Long-Term Issuer Default Rating (IDR) to 'B' and
Viability Rating (VR) to 'b' and placed them on Rating Watch
Negative (RWN) following the deterioration of the bank's capital
metrics in 1Q17.

The downgrade of Popular's ratings reflects its deteriorated
capital position from already weak levels and Fitch's opinion that
there is increased risk about the bank's ability to execute a
material remedial action to restore its solvency and accelerate
the reduction of problem assets. At end-March 2017 Popular's fully
loaded common equity Tier 1 (CET1) ratio was a very low 7.3%,
having deteriorated from the 8.2% reported at end-2016.

The RWN reflects further downside risks in the absence of a
remedial action in the short term, which would leave the bank with
limited capital buffers over regulatory requirements, reduce its
flexibility to divest problem assets without jeopardising solvency
and impact investor and customer confidence, ultimately weakening
its funding and liquidity profile.

KEY RATING DRIVERS
IDRS, VR AND SENIOR DEBT

Popular's ratings are driven by very weak asset quality metrics
undermined by the bank's large problematic exposure to real estate
developers and thin capital buffers relative to peers. In
addition, they reflect Fitch views of the difficulties the new
senior management team has encountered in executing material
remedial actions soon after its appointment.

Impairment charges remained high in 1Q17 and translated into a net
loss of EUR137 million in the quarter. This contributed to the
weakening of the capital ratios, also dented by the identified
shortfalls in impairment reserves, adjustments required by the
auditors and capital deductions related to the financing of
shares, as announced by the bank on April 3, 2017. Capital
encumbrance by unreserved problem assets increased to a high 4.2x
fully loaded CET1. The bank currently meets its regulatory capital
requirements, but Fitch believes its solvency is highly vulnerable
to further adverse events.

Popular's asset quality is the weakest among Fitch-rated Spanish
banks. The stock of problem assets (non-performing loans (NPLs)
and net foreclosed assets) improved only modestly in 1Q17 and
still accounted for a very high 27% of gross loans and
foreclosures at end-March 2017. The reserve coverage for problem
assets improved marginally but remains slightly below domestic
peers at around 47%.

Fitch understands that the new senior management team has the
mandate to restore the bank's capital position and implement a
credible strategy to work out the bank's large problem assets in
the short term. In April the bank publicly announced two possible
actions: a capital increase or a corporate transaction. However,
it is still uncertain which strategy the bank will execute and the
timeframe for completion. In Fitch views, delaying the decision or
its execution increases the risk of a further deterioration in
Popular's credit fundamentals. Popular's franchise and liquidity
buffers are particularly sensitive to customer and investor
sentiments.

The bank's funding profile is underpinned by its retail deposit
base, which proved stable during the first three months of 2017.
At end-March 2017 available liquidity buffers were acceptable in
light of upcoming wholesale debt maturities.

The 'RR4' Recovery Rating reflects average recovery assumptions
for senior debt.

SUPPORT RATING AND SUPPORT RATING FLOOR

Popular's Support Rating (SR) of '5' and Support Rating Floor
(SRF) of 'No Floor' reflect Fitch's belief that senior creditors
can no longer rely on receiving full extraordinary support from
the sovereign in the event that the bank becomes non-viable. The
EU's Bank Recovery and Resolution Directive and the Single
Resolution Mechanism for eurozone banks 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.

SUBORDINATED DEBT AND OTHER HYBRID SECURITIES

Popular's subordinated (lower Tier 2) debt issues are rated one
notch below the bank's VR to reflect the below-average loss
severity of this type of debt compared with average recoveries.
Popular's preferred stock and perpetual Tier 1 convertible notes
are rated three notches below the bank's VR to reflect the higher
loss severity risk of these securities (two notches) compared with
average recoveries as well as moderate incremental risk of non-
performance relative to its VR (one notch).

RATING SENSITIVITIES
IDRS, VR AND SENIOR DEBT

Fitch expects to resolve the RWN on Popular's ratings upon the
announcement of a firm strategy or within the next six months if
the bank's credit fundamentals deteriorate further. Fitch will
downgrades Popular's ratings if the bank does not take the
necessary steps to strengthen capitalisation and enable a faster
reduction of problem assets. Fitch anticipates that in the absence
of a decisive strategy to restore capital ratios in the short
term, Popular will be highly vulnerable to even modest shocks on
asset quality or further adjustments that could jeopardise its
solvency. At the same time, the risk of customer sentiment
deterioration could increase and ultimately erode Popular's
franchise and destabilise its customer deposit base.

Conversely, Fitch will remove the RWN and affirm the ratings if
the bank takes remedial actions that result in a material
improvement of capitalisation and asset quality.

The ratings do not factor in the possibility of a corporate
transaction including the acquisition of Popular by another
financial institution. If such a transaction was to materialise
Fitch would assess the rating implications for Popular.

SUPPORT RATING AND SUPPORT RATING FLOOR

An upgrade of the SR and upward revision of the SRF would be
contingent on a positive change in the sovereign's propensity to
support its banks. This is highly unlikely, in Fitch's view.

SUBORDINATED DEBT AND OTHER HYBRID SECURITIES

The ratings of the instruments are primarily sensitive to a change
in the bank's VR, which drive the ratings, but also to a change in
Fitch's assessment of the probability of their non-performance
relative to the risk captured in the bank's VR.

The rating actions are as follows:

Banco Popular Espanol S.A.:

Long-Term IDR: downgraded to 'B' from 'B+', placed on RWN
Short-Term IDR: 'B', placed on RWN
Viability Rating: downgraded to 'b' from 'b+', placed on RWN
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'
Long-term senior unsecured debt programme: downgraded to 'B'/RR4
  from 'B+/RR4', placed on RWN
Short-term senior unsecured debt programme and commercial paper:
  'B', placed on RWN
Subordinated lower Tier 2 debt: downgraded to 'B-'/RR5 from
  'B'/RR5, placed on RWN
Perpetual Tier 1 convertible notes: downgraded to 'CC'/RR6 from
  'CCC'/RR6

BPE Financiaciones S.A.:

Long-term senior unsecured debt and debt programme (guaranteed by
  Popular): downgraded to 'B'/RR4 from 'B+/RR4', placed on RWN
Short-term senior unsecured debt programme (guaranteed by
  Popular): 'B', placed on RWN

Popular Capital, S.A.:

Preferred Stocks: downgraded to ''CC'/RR6 from CCC'/RR6


FEDERAL PASSENGER: Fitch Affirms 'BB+' IDRs, Outlook Stable
-----------------------------------------------------------
Fitch Ratings has affirmed JSC Federal Passenger Company's (FPC)
Long-Term Foreign- and Local-Currency Issuer Default Ratings
(IDRs) at 'BB+' with Stable Outlook.

Fitch classifies FPC as a credit-linked entity to the Russian
Federation (BBB-/Stable). This is supported by state ownership and
control via JSC Russian Railways (RZD; BBB-/Stable), high
strategic importance, tight oversight by the government, and
regular state support in the form of subsidies and tax allowances.
Close ties with the state are a key rating factor, which in
Fitch's view imply a high likelihood of support, if needed. Fitch
has applied a one-notch differential with the sovereign rating due
to the company's midrange integration with the budgetary system
and legal status.

Fitch now rates the company using its Public Sector Entity
criteria to better reflect its policy role and links with the
Russian Federation. Fitch previously rated FPC using its Corporate
Parent and Subsidiary Linkage criteria.

KEY RATING DRIVERS

Legal Status Assessed as Mid-range
FPC is a national passenger railway transportation monopoly, which
is indirectly wholly owned by the Russian Federation via RZD.
FPC's status of natural monopoly entails tight state regulation
and monitoring. There is no plan for company privatisation. Fitch
does not anticipate any change in FPC's legal status in the medium
term.

Occasionally, FPC qualifies as a principal subsidiary of RZD
according to RZD's Eurobond documentation, i.e. constitutes above
10% of RZD group's revenue, and therefore may be captured in RZD's
cross default provision. At end-2016 FPC's revenue share was 9.5%,
up from 9.1% in 2015 (10.3% in 2014), which is below 10%. However,
FPC's constant proximity to the 10% threshold implies RZD's
increased propensity to keep FPC's credit quality sound.

Strategic Importance Assessed as Stronger
FPC has a 95% share of passenger railway transportation in Russia.
It conducts the highly important social function of connectivity
for the vast territories of Russia and provides affordable long-
distance passenger transportation. In 2016 FPC dispatched 93.8
million passengers and had around a 40% share of total long-
distance passenger transportation in the country. The company also
employs about 65,900 people, making it one of the largest
commercial employers in Russia.

Control Assessed as Stronger
The state directly exercises strong control and oversight over
FPC's activities by setting tariffs and conducting regular state
audit as well as indirectly via RZD representatives on the
company's board of directors. RZD also has tight operating control
over FPC, i.e. the parent company sets debt limits, collects
reports and KPI-performance on a quarterly basis and processes
FPC's day-to-day cash flows through its treasury. FPC's strategy
is dictated by the transport strategy of Russia 2030 and other
official strategic documents.

Integration Assessed as Mid-range
Fitch considers the entity's integration into the general
government sector as moderate. The company's accounts are not
consolidated in the central government's budget and its debt is
not consolidated with state debt. However, there is a track record
of state support to the company and Fitch expects FPC to continue
receiving tangible financial support in the medium term.

FPC receives on-going annual subsidies from the federal budget to
compensate losses due to lower than economically required tariffs
in regulated part of its business, i.e. socially important segment
(66% of FPC's passenger turnover in 2016). The subsidies accounted
for around 10%-12% of company's revenue in 2012-2016. Fitch
expects direct subsidies to fall in 2017-2019 to 4% of operating
revenue owing to provision of tax allowances from 2016.

Since 2016, the company has been subject to a favourable tax
regime. In 2016, federal law decreased value added tax (VAT) on
long-haul passenger transportation by rail to 10% from 18%. In
2017 the VAT rate was further decreased to zero until 2030, thus
cutting the necessity for direct federal subsidies. In 2016, the
indexation of net-of-VAT part of the tariff was 11.3%, while the
tariff for end customers effectively increased by 4% in the
regulated segment.

In Fitch's view, the full VAT relief represents a permanent
unappropriated quasi-subsidy in 2017of RUB15.4 billion in the
regulated segment and RUB10 billion in the deregulated segment.
This allowance will fund the company's social function of
maintaining affordable population mobility and provide additional
cash flow for the purchase of new rolling stock.

The Russian state supports FPC's long-term development and
modernisation. By end-2016, FPC had received RUB0.3 billion of
earmarked capital subsidies to largely compensate the interest
rate on loans for the purchase of two-storey passenger train cars.
The government also issued a guarantee covering 25% of a RUB2.5
billion loan provided by VTB bank. State-owned banks provided 75%
of FPC's debt funding as of end-2016.

Operating Performance

FPC's business profile continues to benefit from the company's
position as the monopoly in passenger railway transportation in
Russia. However, the company's growth is limited by a still
developing long-term tariff system, rather old rolling stock
(around 18 years on average) and its exposure to increasing
competition with airlines on high-intensity routes with a range of
below 1,500 km. The share of airlines in long-haul passenger
traffic increased to 49% of total long-haul passenger turnover in
2016, up from about 33% in 2010.

FPC's operational performance improved in 2016 underpinned by
start of economic recovery in Russia and introduction of tax
allowances. Passenger turnover increased in 2016 to 89.5 billion
passenger km (2015: 86.1), while funds from operations (FFO)
generation improved markedly to RUB21.7 billion (2015: RUB15.9
billion). FPC reported 7% increase in passenger volume in the
deregulated segment and 4% growth in regulated. Fitch expects
railway transportation volumes to increase as Russian economy
returns to growth. Fitch forecasts Russia's GDP growth of 1.4% in
2017 (2016: 0.2% fall).

Debt

At end-2016, FPC's net debt to EBITDA ratio (Fitch calculated) was
a comfortable 0.2x. Fitch expects an increase in the company's
consolidated direct debt to RUB23 billion by end-2017 (2016:
RUB19.7 billion), while net debt to EBITDA ratio will remain below
1x. Debt growth is mostly capex-driven taking into account active
phase of FPC's rolling stock renovation programme. Debt structure
is dominated by long-term bank loans. The company's FX exposure is
negligible.

Fitch expects FPC's debt structure will evolve in the medium term
towards dominance of long-term domestic bonds with operating needs
to fund intra-year cash mismatches covered by revolving bank
facilities. In 1Q17 the company registered a RUB50 billion bond
programme and, via this in April 2017 issued a 8.8% RUB5 billion
bond due in 2027 with a put option in 2022. More placements are
possible in 2017 to replace maturing bank loans. In 1Q17, FPC
contracted a RUB7 billion loan from Sberbank at 9.45%, which is to
be repaid within the year.

FPC has a sound liquidity buffer. As of end-2016, the company's
cash and cash equivalents amounted to RUB13.6 billion, which fully
covers debt due in 2017. Funding is comfortable, underpinned by
the company's available committed credit lines of up to RUB40.6
billion from major state-owned banks. This fully offsets medium-
term refinancing risk.

RATING SENSITIVITIES

FPC's rating and Outlook are likely to mirror changes to the
ratings of the sovereign, maintaining a one-notch differential.

Any dilution of linkage with the sovereign through weakening of
strategic role or state control, leading to reduction of state
support, could result in the ratings being further notched down
from the sovereign.

FULL LIST OF RATING ACTIONS

Long-Term Foreign-Currency IDR affirmed at 'BB+', Outlook Stable
Long-Term Local-Currency IDR affirmed at 'BB+', Outlook Stable
Short-Term Foreign-Currency IDR affirmed at 'B'
Short-Term Local-Currency IDR affirmed at 'B'
Local currency senior unsecured rating affirmed at 'BB+'

KEY ASSUMPTIONS

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

- Domestic GDP growth of 1.4% in 2017 and 2.2% in 2018;

- Tariff growth of about 4% in the regulated business and 5% in
   the deregulated business in 2017;

- Capital expenditure and subsidies in line with management's
   expectations.


MADRID RMBS II: S&P Raises Rating on Class C Notes to BB
--------------------------------------------------------
S&P Global Ratings raised its credit ratings on MADRID RMBS II,
Fondo de Titulizacion de Activos' class A2, A3, B, and C notes.
At the same time, S&P have affirmed its ratings on the class D and
E notes.

The rating actions follow S&P's credit and cash flow analysis of
the most recent transaction information that S&P has received as
of the February 2017 investor report.  S&P's analysis reflects the
application of its European residential loans criteria, S&P's
structured finance ratings above the sovereign (RAS) criteria, and
its current counterparty criteria.

The class B, C, D, and E notes feature interest deferral triggers
of 18.30%, 13.20%, 9.40%, and 8.00%, based on outstanding defaults
net of recoveries as a percentage of the closing portfolio
balance, respectively.  The current level of this ratio is 8.04%.
As a consequence, the class E notes' interest deferral trigger is
breached, leading to a class E payment default.

Credit enhancement, considering performing collateral only, for
the class A2, A3, B, C, and D notes has increased since S&P's
previous review, due to the sequential amortization.  The class E
notes are undercollateralized with credit enhancement representing
-1.49%.

S&P's projected losses at the 'AA' rating category have decreased
to 20.17% from 29.95% at S&P's previous review.  This improvement
is due to the increase in the weighted-average seasoning, the
original and current loan-to-value ratios, repossession market
value declines, performance improvement, as well as the decrease
in the arrears levels.

Class           Available credit
               enhancement, excluding
                 defaulted loans (%)

  A2                  68.76
  A3                  26.61
  B                   16.78
  C                    6.24
  D                    1.47
  E                   (1.49)

Severe delinquencies of more than 90 days have decreased to 0.17%
from 0.51% at S&P's last review and S&P's currently lower for this
transaction than its Spanish residential mortgage-backed
securities (RMBS) index.  Cumulative defaults, at 8.04%, are
higher than in other Spanish RMBS transactions that S&P rates.
However, it is worth noting that the six months in arrears default
definition for this transaction is the most conservative that S&P
has seen in Spanish RMBS transactions that it rates.  The reserve
fund is fully depleted due to it being used to provision for
defaults.  Prepayment levels remain low and the transaction is
unlikely to pay down significantly in the near term, in S&P's
opinion.

Banco Santander S.A. (A-/Positive/A-2) is the swap counterparty,
which mitigates basis risk arising from the different indexes
between the securitized assets and the notes.  Under the
transaction documents, Banco Santander will take remedies to
support the current ratings on the notes.  As Banco Santander is
not currently posting collateral, S&P's current counterparty
criteria cap its rating on the class A2 notes at 'AA (sf)'.

Under S&P's RAS criteria, it applied a hypothetical sovereign
default stress test to determine whether a tranche has sufficient
credit and structural support to withstand a sovereign default and
so repay timely interest and principal by legal final maturity.

The class A2 notes benefit from flows diverted from the class E
notes following the interest deferral trigger breach and from
increased credit enhancement.  S&P's credit and cash flow analysis
indicates that the class A2, A3, and B notes now have sufficient
credit enhancement to withstand its stresses at the 'AAA', 'A+',
and 'A-' rating levels, respectively.  However, S&P's RAS criteria
cap its ratings on the class A2 and A3 notes at six and four
notches above the foreign currency long-term sovereign rating on
the Kingdom of Spain and at the sovereign rating level,
respectively.  At the same time, S&P's RAS criteria cap the rating
on the class B notes at the sovereign rating level, 'BBB+'.  S&P
has therefore raised its ratings on the class A2, A3, and B notes.

S&P's credit and cash flow analysis indicates that the class C
notes now pass its stresses at the 'BB' rating level.  S&P has
therefore raised to 'BB (sf)' from 'B- (sf)' its rating on the
class C notes.

The class D notes do not pass any stresses under S&P's cash flow
model and the results show interest shortfalls in the next 12
months.  Therefore, in line with S&P's criteria, it has affirmed
its 'CCC+ (sf)' rating on the class D notes.

S&P has affirmed its 'D (sf)' rating on the class E notes as they
continue to miss interest payments.

In S&P's opinion, the outlook for the Spanish residential mortgage
and real estate market is not benign and S&P has therefore
increased its expected 'B' foreclosure frequency assumption to
3.33% from 2.00%, when S&P applies its European residential loans
criteria, to reflect this view.  S&P bases these assumptions on
its expectation of modest economic growth, continuing high
unemployment, and house price stabilization during 2017.

MADRID RMBS II is a Spanish RMBS transaction, which securitizes
first-ranking mortgage loans. Bankia S.A. originated the pool,
which comprises loans granted to borrowers mainly located in
Madrid.

RATINGS LIST

Class             Rating
           To               From

MADRID RMBS II, Fondo de Titulizacion de Activos
EUR1.8 Billion Mortgage-Backed Floating-Rate Notes

Ratings Raised

A2         AA (sf)          AA- (sf)
A3         A+ (sf)          BBB+ (sf)
B          BBB+ (sf)        BBB (sf)
C          BB (sf)          B- (sf)

Ratings Affirmed

D          CCC+ (sf)
E          D (sf)


TDA IBERCAJA 5: S&P Affirms D Rating on Class E Notes
-----------------------------------------------------
S&P Global Ratings raised its credit rating on TDA Ibercaja 5,
Fondo de Titulizacion de Activos' class A1 notes.  At the same
time, S&P has affirmed its ratings on the class A2, B, C, D, and E
notes.

The rating actions follow the application of S&P's relevant
criteria and its credit and cash flow analysis of the most recent
transaction information that S&P has received, and reflect the
transaction's current structural features.

Long-term delinquencies (defined in this transaction as loans in
arrears for more than 90 days, excluding defaults) have decreased
to 0.74% from 0.92% since S&P's previous full review on Jan. 23,
2015, with cumulative defaulted loans (loans in arrears for more
than 18 months) standing at 1.70% of the initial balance of the
pool.

In S&P's opinion, the outlook for the Spanish residential mortgage
and real estate market is not benign and S&P has therefore
increased its expected 'B' foreclosure frequency assumption to
3.33% from 2.00%, when S&P applies its European residential loans
criteria, to reflect this view.  S&P bases these assumptions on
its expectation that economic growth will mildly deteriorate.  S&P
expects nominal house prices in Spain to rise by 2.5% this year,
after gaining 4.0% in 2016.  S&P foresees slower house price
growth of 2.0% in 2018, as inflation edges up and fiscal policies
tighten.

S&P's credit analysis results show a decrease in both the
weighted-average foreclosure frequency (WAFF) and weighted-average
loss severity (WALS) for each rating level based on the higher
seasoning of the pool, the transaction's improved performance, and
the lower current loan-to-value ratios.

Rating level        WAFF (%)    WALS (%)
  AAA                 22.43       24.77
  AA                  18.22       21.80
  A                   15.82       16.64
  BBB                 12.91       14.10
  BB                  10.04       12.42
  B                    9.12       10.94

The reserve fund is at the required level and is currently at its
floor value of EUR6 million, which represents 1.24% of the current
notes' balance.  Available credit enhancement for all classes of
notes has increased since S&P's previous review, as a consequence
of the amortization of the class A1 and A2 notes.  The class A1
and A2 notes are amortizing pro rata with the junior tranches
since April 2015.  There are interest deferral triggers for the
subordinated notes in this transaction, based on the level of
cumulative defaults over the original balance of the assets
securitized, which is 1.70%.  Given that the lowest interest
deferral trigger (class D trigger) is set at 3.95%, and based on
the pool's historical favorable performance, S&P don't expect the
triggers to be breached in the short to medium term.

Ibercaja Banco S.A. has a standardized, integrated, and
centralized servicing platform.  It is a servicer for a large
number of Spanish residential mortgage-backed securities (RMBS)
transactions, and the historical performance of the Ibercaja Banco
transactions has outperformed our Spanish RMBS index.  S&P
believes that these factors should contribute to the likely lower
cost of replacing the servicer, and have therefore applied a lower
floor to the stressed servicing fee, at 35 basis points (bps)
instead of 50 bps in S&P's cash flow analysis, in line with table
74 of our European residential loans criteria.

The bank account provider in this transaction is Societe Generale
S.A. (Madrid Branch), which has downgrade language commensurate
with a 'AAA (sf)' rating.  The swap counterparty is Banco
Santander S.A. (A-/Positive/A-2).  Considering the remedial
actions defined in the swap counterparty agreement, that the swap
counterparty is not currently posting collateral, and its current
issuer credit rating (ICR), under S&P's current counterparty
criteria the maximum rating the notes in this transaction can
achieve is 'AA (sf)'.

Following the application of S&P's structured finance ratings
above the sovereign (RAS) criteria, counterparty, and European
residential loans criteria, S&P has determined that its assigned
ratings on the class A1 and A2 notes in this transaction should be
the lower of (i) the rating as capped by S&P's RAS criteria,
(ii) the rating as capped by S&P's current counterparty criteria,
and (iii) the rating that the class of notes can attain under
S&P's European residential loans criteria.  In this transaction,
the application of S&P's RAS criteria caps its ratings on the
class A1 and A2 notes at four and two notches, respectively, above
S&P's 'BBB+' foreign currency long-term sovereign rating on the
Kingdom of Spain.

Taking into account the results of S&P's application of its
European residential loans criteria, the class A1 and A2 are able
to pass S&P's 'AAA' and 'A-' rating level stresses, respectively.

Accordingly, S&P has raised to 'AA- (sf)' from 'A+ (sf)' its
rating on the class A1 notes.  At the same time, S&P has affirmed
its 'A- (sf)' rating on the class A2 notes.

S&P has affirmed its 'BB (sf)' and 'B (sf)' its ratings on the
class B and C notes, respectively.  S&P's ratings on the class B
and C notes are linked to its long-term ICR on the servicer,
Ibercaja Banco (BB+/Positive/B), as the available credit
enhancement for these tranches is commensurate with the stresses
we apply at these rating levels, excluding the application of a
commingling loss.

Credit enhancement has increased for the class D notes because of
the partial redemption of the most senior class of notes, but
remains commensurate with the currently assigned rating.
Additionally, S&P believes that the payments on this class of
notes are dependent upon favorable financial and economic
conditions.  Consequently, S&P has affirmed its 'B- (sf)' rating
on the class D notes.  S&P's rating on the class D notes is linked
to its long-term ICR on the servicer, Ibercaja Banco.

The class E notes have not paid all interest due on the latest
interest payment date (February 2017) and S&P has therefore
affirmed its 'D (sf)' rating on this class of notes.

TDA Ibercaja 5 is a Spanish RMBS transaction that closed in May
2007.  The transaction securitizes residential loans originated by
Ibercaja Banco, which were granted to individuals for the
acquisition of their first residence, mainly concentrated in
Madrid and Aragon, Ibercaja Banco's main markets.

RATINGS LIST

TDA Ibercaja 5, Fondo de Titulizacion de Activos
EUR1.207 Billion Secured Floating-Rate Notes

Class              Rating
             To              From

Rating Raised

A1           AA- (sf)        A+ (sf)

Ratings Affirmed

A2           A- (sf)
B            BB (sf)
C            B (sf)
D            B- (sf)
E            D (sf)



===========================
U N I T E D   K I N G D O M
===========================


HAMILTON BURNS: Enters Administration Amid Financial Woes
---------------------------------------------------------
The Journal reports that Glasgow legal practice Hamilton Burns
Ltd. has gone into administration.

A statement from corporate restructuring specialists FRP Advisory
announced that FRP partners Tom MacLennan and Iain Fraser have
been appointed joint administrators of the company, The Journal
relates.

They have agreed deals for the transfer of seven former staff --
four directors and three trainees -- to two other firms, together
with certain work in progress, The Journal discloses.

Hamilton Burns's practice, based at its office in Carlton Place,
comprised principally immigration, criminal, matrimonial and civil
court work, The Journal notes.

"Hamilton Burns WS Ltd had been severely affected by a marked
reduction in legal aid income and a significant decline in general
practice fee income.  The firm also had very high levels of
historic debt which, together with the fall in income, led to
unsustainable pressures on cash flow.  Every effort had been made
to find a solution for the firm; however it became clear that
administration was the only option," The Journal quote joint
administrator Tom MacLennan as saying.


KEYSTONE MIDCO: Moody's Confirms B2 CFR, Outlook Stable
-------------------------------------------------------
Moody's Investors Service has confirmed the B2 corporate family
rating (CFR) and B2-PD probability of default rating (PDR) of
Keystone Midco Limited. Concurrently, Moody's has also confirmed
the B3 instrument rating for the GBP263 million senior secured
notes, issued at subsidiary Keystone Financing Plc. The outlook on
all ratings is stable.

The rating action concludes the review of Keepmoat's ratings
initiated by Moody's on March 16, 2017.

RATINGS RATIONALE

The confirmation of the ratings reflect Keepmoat's intention to
repay GBP163 million of the existing senior secured notes (out of
GBP263 million) from the estimated net proceeds of GBP315 million
the company received from its Regeneration division sale. The
confirmation also reflects the Keepmoat Homes division's strong
growth, more than doubling revenues in the last three years to
March 2017. Moody's expects Keepmoat to maintain its growth
momentum in FY2018 so that Moody's-adjusted leverage will reach
around 4.2x after 6.0x pro-forma for March 2017, including
corporate overhead costs. Moody's would also expect the company to
maintain investment discipline so that annual free cash flow
remains positive.

Keepmoat has launched a tender offer for GBP163 million, or 62%,
of the outstanding notes and intends to issue an optional
redemption at 104.75% following shortly before or after the
deadline for the tender offer on June 13, 2017 up to the same
amount. In addition, Keepmoat has paid a GBP145 million dividend
to shareholders.

Keepmoat Homes, the remaining business of Keepmoat, has steadily
grown revenues and EBITDA since 2013 and more than doubled
revenues over the last three years to March 2017. Moody's expects
Keepmoat's accelerated investment in FY2017 to provide for further
significant growth in FY2018. The market environment continues to
appear solid with new build affordable housing to continue to meet
strong demand and a favorable political environment. Nevertheless,
given that Keepmoat is relatively small in terms of revenues and a
pure homebuilding business it is highly exposed to various market
factors including house prices, interest rates, the availability
of mortgage financing or government help-to-buy schemes. Moody's
considers the business highly cyclical. Moreover, the industry
remains capital-intensive although the company's partnership
business model that requires less expenditures for land together
with the company's focus on relatively standard housing within
phased projects should provide some flexibility to quickly adjust
investments should the market environment weaken.

The stable outlook reflects Moody's view that the company should
be in a position to continue to meaningfully grow over the next 12
months.

The confirmed B3 rating on the notes reflects the continued
priority ranking (in case of enforcement) of the GBP75 million
super senior revolving credit facility due 2019 and the meaningful
operating liabilities, such as trade payables and land creditors.

Moody's views the company's liquidity profiled as adequate. The
company will be reliant on the GBP75 million revolving credit
facility during the coming months given the traditionally large
seasonal cash outflow in the first six to nine months of the
company's fiscal year. However, Moody's expects the company to
remain cash flow positive on an annual basis. The revolving credit
facility carries one financial maintenance covenant that acts as
drawstop only in case the facility is not fully drawn. The next
larger debt maturity are the remaining notes in 2019.

What can change the rating up/down

Moody's would consider upward pressure to remain limited given the
business risks mentioned above, but further track record of solid
operating performance, possibly through a period of a less
favorable macroeconomic environment, would support upwards
pressure. Nevertheless continued growth together with a meaningful
and sustained reduction of Moody's-adjusted debt/EBITDA towards
below 2.5x together with solid free cash flow generation could
result in upgrade pressure over time. Conversely, negative
pressure on the rating could result if the market environment
turns negative, leverage remains materially above 4x or the
company's liquidity profile weakens.

The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in April 2015.

Keystone Midco Limited, the owner of Keepmoat Limited (Keepmoat),
is a UK based provider of homebuilding predominantly in
partnership with local authorities and housing associations for
open market sale and affordable housing. The company builds
housing for first-time and lower income buyers, typically with a
standard design and 2-3 bedrooms. In the nine months to December
2016, the company sold 1,742 new build homes, of which 83% were
sold to private individuals (open market) and 17% to registered
social landlords. In terms of its geographic reach, the business
has been historically more focused on Yorkshire, the Midlands and
North England, with recent expansion into the South of England and
Scotland. Since the end of 2014 Keepmoat has been owned by TDR
Capital (85%) and Sun Capital (15%).


MOY PARK: S&P Puts 'BB' Long-Term CCR on CreditWatch Negative
-------------------------------------------------------------
S&P Global Ratings said it has placed its 'BB' long-term corporate
credit and issue ratings on U.K. poultry producer Moy Park
Holdings Europe Ltd. on CreditWatch with negative implications.

The CreditWatch placement reflects S&P's view that it could lower
the ratings on Moy Park to the level of JBS S.A. if the ratings on
its parent are lowered.  This is because Moy Park is a fully
consolidated subsidiary of JBS, is assessed as strategically
important, and cannot be rated higher than its parent.

S&P intends to resolve the CreditWatch placement within the next
90 days, once S&P has more information about JBS' refinancing
strategy and contingent liabilities arising from the corruption
investigations.  S&P could downgrade JBS if S&P perceives a weaker
access to financing arising from reputational risks.  A downgrade
owing to refinancing problems and a severe cash shortfall could
result in S&P lowering the ratings by multiple notches.

If JBS is able to settle the case while maintaining leverage
sustainably below 4.0x and successfully execute refinancing
efforts, easing our concerns over potential liquidity pressures,
S&P could affirm the ratings.


PEARL GROUP: Four Marketing Buying U.S. Assets for $1.1 Million
---------------------------------------------------------------
Debtors Agent Provocateur, Inc., and Agent Provocateur, LLC, ask
the U.S. Bankruptcy Court for the Southern District of New York to
authorize the private sale of substantially all of their assets to
Agent Provocateur International (US), LLC, for $1,100,000, subject
to adjustments.

Agent Provocateur International (US), LLC, is an entity formed by
the Four Marketing Group, which recently bought the assets of the
Debtor's UK-based parent in insolvency proceedings in the UK.

                   Insolvency Proceedings in UK

The Debtors were formed for the purpose of operating U.S. retail
outlets for merchandise supplied by their then parent in the
United Kingdom, Agent Provocateur Ltd., now known as Pearl Group
Ltd. ("Parent").  All merchandise sold by the Debtors in their
stores in the United States was supplied to them by the Parent
pursuant to inventory supply arrangements under which title to the
merchandise remained with the Parent until the point of sale.

Due to the discovery of certain accounting irregularities in
August 2016, it became apparent that the Parent required
significant additional capital to fund its operations and those of
its international subsidiaries, including the Debtors.  In an
effort to restructure, Rothschild & Co. was retained on Dec. 15,
2016 to identify prospective buyers and/or investors in respect of
the Parent and its subsidiaries.  The marketing process continued
over a period of months and covered all of the Parent's assets as
well as those of its subsidiaries, including the Debtors.

The process culminated on Feb. 16, 2017 with the submission of a
number of offers from prospective purchasers.  Each of these
offers was an offer to purchase assets, as opposed to equity
interests in the Parent, and none of them provided sufficient
consideration to satisfy all liabilities in full.  As a result,
the Parent and Barclays concluded that the only way to consummate
a sale would be through a pre-packaged administration under the
applicable insolvency laws of the United Kingdom.

Accordingly, on March 1, 2017, the Parent entered administration
and selected AlixPartners as the UK Administrator.  Immediately
following its appointment on March 2, 2017, the UK Administrator
completed a sale of certain business and assets of the Parent to a
newly formed company created by the Four Marketing Group ("UK
Buyer") which had submitted the highest offer for the Parent's
assets.  Such sale included, among other things, all right, title
and interest the Parent had in inventory (wherever located) and
intellectual property (including the Agent Provocateur brand)
relating to the Parent's business.  The sale to the UK Buyer did
not, however, include equity interests in, or assets of, any of
the Parent's subsidiaries, including the Debtors located in the
United States.

Following the sale, the Parent remains under the control of the UK
Administrator, and the UK Buyer has continued to operate the
Parent's former UK business.  Meanwhile, the Debtors continued to
operate their U.S. stores.  However, without a continued supply of
merchandise from the UK Buyer to replenish their inventory, the
Debtors' survival as operating entities was doomed, and their
business rapidly deteriorated.  Cash flow was severely impacted,
resulting in the Debtors' inability to meet ongoing operating
expenses, including, among other things, payment of rent due under
real estate leases.

                        Sale of U.S. Assets

In the days and weeks leading up to the Petition Date, several
landlords filed and/or threatened to file actions to evict the
Debtors from their U.S. locations.  The Debtors were on the verge
of shutting down their businesses and filing chapter 7 cases in
the Court -- that is, until the UK Buyer emerged to express an
interest in purchasing certain of the Debtors' U.S. operations,
along with continuing to operate a number of stores, thus saving
jobs and generating value for their creditors.

The UK Buyer has proposed to purchase such operations through the
APA with its newly formed subsidiary, the Buyer.  The Debtors
considered all options before bringing the Sale Motion.

The Debtors and the Buyer initially proposed to enter into a DIP
lending arrangement, with financing available to cover operating
expenses in excess of available cash flow, while a competitive
bidding process would be commenced to sell the business pursuant
to customary bidding and auction procedures.  It quickly became
obvious, though, that a competitive bidding process would be
pointless and ineffectual, resulting in no benefit in this
situation.  It has become more apparent than ever that the Buyer
is the only party with the means and motivation to purchase the
business.

Thus, having considered all available options under the
circumstances, the Debtors have determined that a private sale to
the Buyer will result in the greatest recovery.  For all of the
foregoing reasons, the relief requested is a product of sound
business judgment and is in the best interests of the Debtors,
their remaining employees and landlords, and their estates.

                           Terms of APA

The material terms of the APA are:

   a. Purchased Assets:  All assets of the Debtors other than the
Excluded Assets as described in Section 2.1 of the APA.  The
principal assets are the unexpired leases and goodwill.

   b. Assumed and Assigned Contracts and Leases: All executory
contracts and all unexpired leases, subject to the addition or
removal by the Buyer pursuant to the terms of the APA, will be
assigned to the Buyer.

   c. Sale Free and Clear: The transfer of the Assets to the Buyer
will be free and clear of all liens, claims, encumbrances and
interests, other than Permitted Liens as defined in the APA.

   d. Purchase Price: (A) the payment of an amount in cash equal
to (i) $1,100,000, less (ii) the Deposit, less (iii) the amount of
any unpaid DIP Financing Obligations as of the Closing, less (iv)
accrued amounts owing to the Buyer's UK Affiliate as of the
Closing from post-petition sales of inventory owned by the Buyer's
UK Affiliate that was delivered to Sellers subsequent to April 11,
2017 ("Inventory Account Payable"), less (v) accrued amounts owing
to the Buyer's UK Affiliate for corporate service charges assessed
in the amount of $10,000 per week beginning the week of April 10,
2017 through the week of June 30, 2017 ("Corporate Service
Charges"), less [(vi) accrued Assumed Liabilities as of the
Closing (other than Cure Amounts) subject to further discussion]
plus (vii) the Closing Cash, plus (viii) any amount retained by
American Express for security as of the Closing, plus (ix) prepaid
expenses as of the Closing; provided, however, that if the amount
by which actual cash receipts from store sales, including
concessions, during the period from May 8, 2017 through June 30,
2017 is less than $1,985,604 ("Cash Deficit"), the Inventory
Account Payable and/or the Corporate Service Charges will be
reduced, in the aggregate, dollar for dollar up to the amount of
the Cash Deficit; provided further, however, and for the sake of
clarity, that if the Cash Deficit will exceed the Inventory
Account Payable and/or the Corporate Service Charges against which
such reduction will be applied, no further adjustment to the
Purchase Price will occur; and (B) the assumption by Buyer of the
Assumed Liabilities, (including accrued Assumed Liabilities as of
the Closing, subject to further discussion).

   e. Deposit: $100,000

   f. Cure Costs: The Buyer will pay cure costs and any other
amounts required to be paid under sections 365(b)(1)(A), (B) or
(C) of the Bankruptcy Code in order to effectuate the assumption
of the Assigned Contracts and Leases.

   g. Assumption of Liabilities: The Buyer agrees to assume
certain employee obligations owed to those who accept employment
with the Buyer.

   h. Conditions to Closing: Includes entry of the Sale Order and
all required approvals and permits.  If the Sale Order is not
entered by June 15, 2017, the Buyer will have the right to
terminate the APA.

A copy of the APA attached to the Motion is available for free at:

     http://bankrupt.com/misc/Agent_Provocateur_99_Sales.pdf

In connection with the APA, the Debtors ask the Court to approve
assumption and assignment of the Assigned Contracts and Leases.
They submit that the Assumption and Assignment Procedures are
appropriate and give allow all Counter-Parties all necessary due
process protections, including the fair and full right to dispute
the relevant cure amount as well as to oppose the proposed
assumption and assignment. As set forth in the Assumption,
Assignment, and Cure Procedures Motion, the Debtors have asked
that the Court fixes the amount of cure costs due under the
Assigned Contracts and Leases.  Payment of the cure amounts as
determined through the Assumption and Assignment Procedures will
be in full satisfaction of any defaults under the Assigned
Contracts and Leases, whether monetary or non-monetary.

The Debtors submit that the proposed private sale of the Assets to
the Buyer represents the only realistic means of salvaging what
remains of their business as an ongoing enterprise, preserving
employment for a number of employees, satisfying lease and
contractual obligations, and providing some distribution for
unsecured creditors.  Accordingly, the Debtors ask the Court to
enter an Order (i) authorizing the private sale of substantially
of the Assets to the Buyer free and clear of liens, claims and
encumbrances pursuant to the APA; (ii) approving the assumption
and assignment of the Assigned Contracts and Leases and the cure
amounts related thereto pursuant to the Assumption and Assignment
Procedures; and (iii) granting such other relief as may be just
and appropriate.

To implement the foregoing successfully, the Debtors ask that the
Sale Order provides that they have established sufficient cause to
exclude the requested relief from the 14-day stays imposed by
Bankruptcy Rule 6004(h) and 6006(d).

The Purchaser can be reached at:

          AGENT PROVOCATEUR INTERNATIONAL (US), LLC
          c/o Fourmarketing
          20 Garrett Street
          London EC1Y OTW
          Attn: Charles Perez, CEO
          E-mail: charles@fourmarketing.com

The Purchaser is represented by:

          Mark J. Kelson, Esq.
          Howard J. Steinberg, Esq.
          Jack McBride, Esq.
          GREENBERG TRAURIG, LLP
          1840 Century Park East
          Los Angeles, CA 90067
          E-mail: kelsonm@gtlaw.com
                  steinbergh@gtlaw.com
                  mcbridej@gtlaw.com

                    About Agent Provocateur

Agent Provocateur, Inc. was incorporated in 2000 as a California
corporation with stores located in New York, California, and other
parts of the country.  Its affiliate Agent Provocateur, LLC was
formed in 2004 as a Delaware limited liability company with stores
in Nevada.  They were formed for the purpose of operating U.S.
retail outlets for merchandise, women's lingerie, supplied by
their then parent in the United Kingdom, Agent Provocateur Ltd.,
now known as Pearl Group Ltd. ("Parent").

Agent Provocateur, Inc., based in New York, NY, and Agent
Provocateur, LLC, sought Chapter 11 protection (Bankr. S.D.N.Y.
Lead Case No. 17-10987) on April 11, 2017.  Agent Provocateur,
Inc., estimated $1,000,001 to $10 million in assets and
$10,000,001 to $50 million in liabilities.

The Hon. Michael E. Wiles presides over the cases.

William H. Schrag, Esq., at Thompson Hine LLP, serves as
bankruptcy counsel to the Debtors.

An official committee of unsecured creditors was appointed on
May 3, 2017.


STYLE GROUP: Failure to Find Investors May Spur Administration
--------------------------------------------------------------
According to Bloomberg News' Huang Zhe, Sky News, citing
unidentified industry insiders, reports that Style Group Brands
may have to call in administrators if it fails to secure new
investors.

All options are open including talks with potential buyers, Sky
says, citing one retail sector source, who added that outcome
unlikely until next week, Bloomberg relates.

KPMG would handle the process if the closely held company does
appoint administrators, Bloomberg discloses.

Style Group Brands is one of the leading British Fashion Houses
and the UK's largest womenswear concession retailer producing nine
Elegant British Brands (Jacques Vert, Kaliko, Planet, Precis
Petite, Minuet Petite, Windsmoor, Eastex, Dash and Alexon) and is
synonymous with elegant occasionwear.



                            *********

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-
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Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez,
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Copyright 2017.  All rights reserved.  ISSN 1529-2754.

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