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        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 31, 2017, Vol. 18, No. 107


                            Headlines


A Z E R B A I J A N

PASHA BANK: Fitch Cuts IDR to B+ & Revises Outlook to Stable
SOCAR: IBA Restructuring No Impact on Fitch's BB+ Rating


G R E E C E

NAVIOS ACQUISITION: S&P Alters Outlook to Stable & Affirms B CCR
NAVIOS HOLDINGS: S&P Alters Outlook to Stable & Affirms B- ICR
NAVIOS MIDSTREAM: S&P Cuts CCR to B on Navios Acquisition Link


I R E L A N D

CLONTARF PARK: Moody's Assigns (P)B2 Rating to Class E Notes


I T A L Y

CASAFORTE SRL: Fitch Keeps B- Notes Rating on Watch Evolving
MONTE DEI PASCHI: In Talks to Sell Bad Loan Portfolio


L U X E M B O U R G

EUROPROP EMC-VI: Fitch Withdraws D Ratings on Three Note Classes
LECTA SA: S&P Puts 'B' LT Corp. Credit Rating on CreditWatch Pos.


N E T H E R L A N D S

CADOGAN SQUARE III: Moody's Raises Rating on Cl. E Notes to Ba2
HIGHLANDER EURO: Moody's Affirms Ca(sf) Rating on Cl. E Notes


P O L A N D

REGNON SA: Katowice Court Okays Restructuring Plan


R U S S I A

AGRIBUSINESS HOLDING: Fitch Affirms B+ Issuer Default Ratings
FONCAIXA FTGENCAT 3: Fitch Affirms C Rating on Cl. E Notes
SVIAZ-BANK: Fitch Lowers Long-Term IDR to BB-, Outlook Negative


S P A I N

CAIXABANK SA: S&P Rates New Perpetual AT1 Capital Notes 'BB-'
FONCAIXA FTGENCAT 4: Fitch Affirms CC Rating on Class E Notes


S W E D E N

NOBINA AB: S&P Alters Outlook to Positive & Affirms 'BB' CCR


T U R K E Y

BURSA MUNICIPALITY: Fitch Cuts LT IDR to BB, Outlook Stable
IZMIR MUNICIPALITY: Fitch Affirms BB+ LT IDR, Outlook Stable
TURKIYE GARANTI: Fitch Assigns BB+ Rating to Tier 2 Capital Notes


U N I T E D   K I N G D O M

CO-OPERATIVE BANK: Aims to Launch Debt-for-Equity Swap
HEATHROW FINANCE: Moody's Rates New GBP275MM Sr. Sec. Notes Ba3
QUOTIENT LIMITED: Reports MosaiQ Progress & Financial Results
REDX: Administrators Appointed, Share Trading Halted
TOREX RETAIL: Ex-CEO Seeks to Overturn Ruling in RBS Suit


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A Z E R B A I J A N
===================


PASHA BANK: Fitch Cuts IDR to B+ & Revises Outlook to Stable
------------------------------------------------------------
Fitch Ratings has downgraded Azerbaijan-based Pasha Bank's (PB)
Long-Term Issuer-Default Rating (IDR) to 'B+' from 'BB-'. Fitch
has also downgraded the National Long-Term Rating of PB's Turkish
subsidiary, Pasha Yatirim Bankasi A.S. (PBTR), to 'BBB+(tur)' from
'A(tur)'. The Outlooks on both ratings have been revised to Stable
from Negative.

KEY RATING DRIVERS

The downgrade of PB's Long-Term IDR and Support Ratings is driven
by the default of International Bank of Azerbaijan (IBA;
'Restricted Default') on its foreign currency non-deposit
obligations (See 'Fitch Downgrades International Bank of
Azerbaijan to 'RD'' on 24 May 2017 on www.fitchratings.com). In
Fitch's view, the default of IBA, which is the largest bank in the
country and government-owned, means that state support for less
systemically-important, privately-owned banks cannot be relied
upon. Accordingly, Fitch has revised PB's Support Rating Floor
downwards to 'No Floor' and downgraded the bank's Long-Term IDR to
'B+', which now reflects Fitch's view of PB's intrinsic strength,
as expressed by the bank's Viability Rating (VR) of 'b+'.

Fitch still views PB's systemic importance as significant, as the
bank is a part of the largest privately-owned banking group in the
country, and together with its sister bank Kapital Bank holds
around 15% of sector deposits. Fitch also acknowledges the
benefits of PB being ultimately owned by a structure closely
connected to the Azerbaijani authorities. However, Fitch's
assessment of the track record of sovereign support for the
banking sector as a whole as negative is now critical for the
determination of the bank's SRF.

The previously Negative Outlook on PB's IDR reflected that on the
Azerbaijan sovereign. The Stable Outlook is now based on the
relative stability of PB's intrinsic credit profile (which now
drives the IDR) and Fitch expectations for limited changes to the
bank's performance and other financial metrics in the next 12-18
months.

PBTR's National Rating is driven by potential support from the
parent, PB, which owns 99.9% of PBTR's shares. The downgrade of
PBTR's National Rating is driven by the downgrade of PB's Long-
Term IDR. The Stable Outlook on PBTR mirrors that on PB.

Fitch's view on the probability of support for PBTR considers
favourably, in addition to ownership, (i) the strategic importance
of the subsidiary to its shareholder and its close integration,
(ii) the sizable equity injection already made into PBTR, and
(iii) the two banks' common branding. However, the support
assessment also considers (i) PBTR's current rapid growth from a
low base and gradually increasing leverage, which could make the
potential cost of any future support more significant; (ii) PBTR's
limited record of operations; and (iii) the cross-border nature of
the parent-subsidiary relationship.

PBTR's asset quality metrics are so far strong; however, the book
is unseasoned. PBTR's Fitch Core Capital ratio was a high 45% at
end-1Q17, reflecting large initial capital injections made by PB.

RATING SENSITIVITIES
IDRS, SUPPORT RATING AND SUPPORT RATING FLOOR

Downside pressure on PB's IDRs could result from a marked
weakening of the bank's asset quality and capitalisation. Upside
for PB would probably require a stabilisation of the operating
environment, stronger asset quality and continuation of the
currently high capital ratios.

PBTR's National Long-Term Rating and Outlook are primarily
sensitive to changes in PB's Long-Term IDR and Outlook. PBTR's
rating could also be affected should Fitch change its view on PB's
commitment to PBTR or assign a VR to PBTR. A VR may be assigned in
case of a longer track record of operations, a deeper stand-alone
franchise and lower dependence on PB's funding.

The rating actions are:

Pasha Bank
Long-Term IDR: downgraded to 'B+' from 'BB-'; Outlook Stable
Short-Term IDR: affirmed at 'B'
Viability Rating: 'b+', unaffected
Support Rating: downgraded '5' from '3'
Support Rating Floor: revised to 'No Floor' from 'BB-'

Pasha Yatirim Bankasi A.S.
National Long-term Rating: downgraded to 'BBB+(tur)' from
'A(tur)'; Outlook Stable


SOCAR: IBA Restructuring No Impact on Fitch's BB+ Rating
--------------------------------------------------------
Fitch Ratings says Azerbaijan's incentive to support SOCAR in case
of need is still strong and is therefore maintaining the alignment
between SOCAR's and the state's ratings despite the announced
unexpected restructuring of the systemically important state-owned
International Bank of Azerbaijan's (IBA) foreign currency debt.
SOCAR is rated 'BB+' with Negative Outlook.

SOCAR continues to be the government's vehicle for Azerbaijan's
oil and gas interests, a significant contributor to the state's
budget and the largest employer in the country. The extent of
potential state support is more dependent on the sovereign's
ability to provide financial support, given the volatile oil
environment, a weak domestic currency and a struggling banking
sector. Those credit constraints are already reflected in
Azerbaijan's rating.

Fitch may reassess the ties between SOCAR and the state if SOCAR's
financial profile comes under pressure (funds from operations
(FFO) gross leverage above 5.0x for an extended period of time),
as this would signal the state's willingness to let SOCAR shoulder
a bigger share of the spending related to key Azeri gas projects -
the development of Shah Deniz, South Caucasus Pipeline (SCP)
expansion, and the construction of Trans-Anatolian and Trans
Adriatic gas pipelines (TANAP and TAP). Such a development is
likely to lead to a negative rating action.

Additionally, Fitch continues to align the ratings of JSC
Azerenerji' with those of the state, its sole shareholder,
reflecting state guarantees for the majority of Azerenerji's debt,
its strategic importance to the Azerbaijani economy and strong
operational links, including tariff and capex approval by the
government, as well as a track record of direct tangible state
support. Fitch assume that the share of state-guaranteed debt will
remain fairly stable in the medium term and there are no plans at
present to privatise Azerenerji. State guarantees for Azerenerji's
debt are included in the government's debt.

Fitch views Azerenerji's liquidity as weak and conditional on
continued tangible support from the government. At end-1H16, cash
of about AZN11 million was insufficient to cover short-term debt
of around AZN432 million. Liquidity risk is somewhat mitigated by
the state guarantees on the company's outstanding debt. Following
the decree signed at end-2015, the state intends to provide equity
injections of USD172 million and EUR204 million to Azerenerji to
assist the company in repaying its foreign currency loans over
2016-2025. The state also plans to assist Azerenerji's main
customer, state-owned Azerisiq JSC, to pay overdue trade payables
to Azerenerji so that the latter may reduce overdue trade payables
to SOCAR, another state-owned entity. The government also agreed
to provide a AZN360 million low interest, long-term loan to
Azerenerji so that it can pay its tax due.

Given Azerenerji's unsustainable standalone profile, Fitch expects
it to receive state guarantees for any new debt. Fitch may
reassess the links with the state in case of weakening state
support, for example, in an un-remedied liquidity squeeze, which
will result in the negative rating action for Azerenerji.

On May 24, Fitch downgraded IBA's IDRs to 'Restricted Default' on
the bank's restructuring plan. The proposed restructuring will
represent a distressed debt exchange (DDE) according to Fitch's
criteria as it will impose a material reduction in terms on
certain senior, third-party creditors through a combination of
write-downs, tenor extensions and interest rate reductions.



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


NAVIOS ACQUISITION: S&P Alters Outlook to Stable & Affirms B CCR
----------------------------------------------------------------
S&P Global Ratings revised its outlook on Marshall Islands-
registered tanker shipping company Navios Maritime Acquisition
Corp. (Navios Acquisition) to stable from negative and affirmed
its 'B' long-term corporate credit rating on the company.

S&P said, "We also lowered our issue rating on Navios
Acquisition's senior secured debt to 'B' from 'B+'. We revised our
recovery rating to '3' from '2', which reflects our expectation of
meaningful recovery prospects (50%-70%; rounded estimate 60%) in
the event of a payment default.

"The revision of our outlook on Navios Acquisition reflects that
we consider Navios Holdings' improved liquidity position has
diminished the potential drag on Navios Acquisition's credit
quality and stabilized the group credit profile (GCP). Navios
Holdings' improved ratio of liquidity sources to uses mainly
reflects the rebound in dry-bulk shipping rates from historical
lows over the past few quarters (with, for example, the year-to-
date one-year time-charter (T/C) rate for a large capesize vessel
increased to $13,000 per day (/day) from $7,300/day in 2016,
according to Clarkson Research), which will bolster Navios
Holdings' cash flow generation in the next 12 months. Furthermore,
following an arbitration tribunal ruling, Navios South American
Logistics Inc.'s (Navios Logistics; Navios Holdings' 63.8%-owned
subsidiary) major contract with Vale S.A. is in full force,
removing the cash flow uncertainty in the logistics operations.
Under the take-or-pay contract, Navios Logistics will generate a
minimum of $35 million in annual EBITDA for handling 4 million
tons of iron ore via its port terminal in Uruguay for Vale over a
20-year period that starts in the third quarter of 2017."

Navios Acquisition owns and operates a fleet of 36 modern tankers
and has a 59% stake in the dividend-paying master limited
partnership Navios Maritime Midstream Partners L.P. (Navios
Midstream), which was formed in 2014, and owns and operates a
fleet of six very large crude carriers (VLCC).

S&P said, "We believe that Navios Acquisition's financial and
liquidity position is linked to its lower-rated 46.1%-owner Navios
Holdings because of the entities' related business relationships.
As such, we analyze the entities on an integrated basis. This is
reflected in the overlaps in management and board of directors of
both companies, their common business ties, and shared name,
corporate history, and corporate support functions. In September
2016, Navios Acquisition provided a two-year 8.75% $70 million
secured credit facility to Navios Holdings for general corporate
purposes. Navios Midstream, the unconsolidated affiliate of Navios
Acquisition, also falls under the GCP because of the entities'
material business interactions, as signified by Navios
Acquisition's extension of a de facto rate guarantee for Navios
Midstream's vessels. We assess the GCP at 'b', based on view of
the weighted average of the creditworthiness of the group members
Navios Holdings, Navios Acquisition, and Navios Midstream.

"We have also revised downward our assessment of Navios
Acquisition's stand-alone credit quality (SACP) to 'b' from 'b+'.
This reflects our assessment that its financial risk profile has
weakened to highly leveraged."

The company's credit measures failed to improve in 2016 to be
consistent with the prior financial profile of aggressive, owing
to lower tanker rates and Navios Acquisition's weaker EBITDA and
cash flow performance, combined with slower deleveraging than S&P
previously expected. S&P expects ratios will continue lagging
behind the aggressive category in 2017-2018, unless tanker rates
significantly rebound, which we do not expect in the next 12
months, considering no clear supply-side relief and demand-side
stimulus in oil shipping, with the industry likely facing an
oversupply. S&P forecasts S&P Global Ratings' adjusted ratios of
funds from operations (FFO) to debt of 8%-9% and debt to EBITDA of
6.0x-7.0x for Navios Acquisition, which is consistent with the
higher end of our highly leveraged financial profile.

S&P's assessment remains constrained by Navios Acquisition's high
adjusted debt stemming from the underlying industry's high capital
intensity and the company's historically large expansionary
investments. Navios Acquisition's adjusted debt peaked in 2015,
after the company paid all installments for vessels on order, and
S&P expects that it will continue to gradually decline in 2017-
2018. S&P assumes that any further potential disposals of vessels
to affiliate Navios Midstream or additions to renew the fleet will
be carried out in a way that supports credit measures in line with
the rating, such that the adjusted FFO to debt remains above 6%.

Navios Acquisition's relatively narrow business scope and
diversity, with a focus on the tanker industry, and its
concentrated, albeit high-quality, customer base constrain its
business risk profile. The underlying industry's high risk due to
capital intensity, high fragmentation, frequent demand-supply
imbalances, lack of meaningful supply discipline, and volatility
in charter rates and vessel values also weigh on the rating. That
said, S&P believes that oil shipping has more favorable
characteristics in general compared with dry-bulk and container
shipping. This is because the credit quality of the oil shipping
sectors' customer base is higher and hence the counterparty risk
lower. The dry-bulk and containership time charters are typically
fragile and S&P continues to observe more charter defaults on dry
and container contracts than in oil shipping.

S&P considers these risks to be partly offset by Navios
Acquisition's competitive position, which incorporates the
company's strong profitability, as compared with peers in the
transportation cyclical scope. S&P factors in its view of low
volatility in the company's EBITDA margins and returns on capital,
thanks to its conservative chartering policy, competitive
operating break-even rates, and predictable operating expenses.
S&P also thinks that Navios Acquisition's competitive position
benefits from its attractive fleet profile, composed of modern and
high-quality tankers.

S&P said, "The stable outlook reflects our view that Navios
Acquisition will maintain its rating-commensurate credit measures,
which takes into account that (i) credit ratios will continue to
weaken this year because of temporarily softer tanker
rates according to our base case, but they will subsequently
rebound in 2018; (ii) Navios Holdings' liquidity position will
stabilize; and (iii) our assessment of the GCP will remain
unchanged."

Under the assumption of unchanged business risk, S&P considers a
ratio of adjusted FFO to debt of above 6% as commensurate with the
current rating on Navios Acquisition. This compares with the
weighted average ratio of close to 9% that S&P forecasts for 2017-
2018 and points to reasonable headroom the company has for
financial underperformance against S&P's base case.

Rating pressure would arise from an unforeseen drop in tanker
rates significantly below S&P's already discounted base-case
forecast or an increase in Navios Acquisition's debt due to fleet
expansion, resulting in adjusted FFO to debt falling below 6% with
limited prospects for an immediate recovery.

Furthermore, Navios Acquisition's creditworthiness could feel
squeezed by possible deterioration of Navios Holdings' cash flow
generation and liquidity, resulting in a downward revision of the
GCP.

An upgrade could follow if the financial performance of Navios
Acquisition and Navios Holdings improves significantly and
simultaneously. For Navios Acquisition, this would mean a rebound
of adjusted FFO to debt to more than 12%, which could stem from
tanker rates not deteriorating, but achieving 2016 levels. For
Navios Holdings, this would mean that the company's free cash flow
generation turns positive, its adjusted FFO to debt strengthens
sustainably to above 6%, and its liquidity position stabilizes so
that a sources-to-uses shortfall is remote.

An upgrade from an improvement in Navios Acquisition's credit
quality alone is unlikely because Navios Acquisition's SACP would
need to improve by a few notches to help lift the GCP to 'b+',
because the GCP caps the rating on Navios Acquisition. This would
require tanker rates to perform consistently at least $7,000/day
higher than S&P's forecast in 2018-2019 and Navios Acquisition's
absolute EBITDA to increase by 35% with excess cash flows
applied for debt reduction. S&P views this scenario as unlikely,
given its expectation of a moderately oversupplied tanker sector
in 2017-2018.


NAVIOS HOLDINGS: S&P Alters Outlook to Stable & Affirms B- ICR
--------------------------------------------------------------
S&P Global Ratings said it had revised its outlook on Marshall
Islands-registered shipping company Navios Maritime Holdings Inc.
(Navios Holdings) to stable from negative. At the same time, S&P
affirmed the issuer credit rating at 'B-'.

S&P said, "We also affirmed our 'B-' issue rating on the company's
senior secured debt. The recovery rating is unchanged at '3',
reflecting our expectation of meaningful (50%-70%) recovery in the
case of a payment default (rounded estimate: 65%).

"We also affirmed our 'CCC' issue rating on the company's senior
unsecured debt. The recovery rating is unchanged at '6',
reflecting our expectation of negligible recovery (0%-10%) in the
event of a payment default (rounded estimate: 0%)."

The outlook revision reflects Navios Holdings' improved liquidity
position, mainly reflecting drybulk shipping rates that have
rebounded from their historical lows over the past few quarters.
For example the one-year time charter rate for a large Capesize
vessel averaged $13,000 per day (/day) in January-May 2017, up
from $7,300/day in 2016, according to Clarkson Research. This will
bolster the company's cash flow generation in the next 12 months.

Furthermore, the arbitration tribunal ruling that the major
contract with Vale S.A. (BBB-/Positive/--) was in full force and
effect, in the favor of Navios South American Logistics Inc.'s
("Navios Logistics", Navios Holdings' 63.8%-owned subsidiary),
removed the cash flow uncertainty in the logistics operations.
Under the take-or-pay contract, Navios Logistics will generate a
minimum of $35 million in annual EBITDA for handling 4 million
tons of iron ore via its port terminal in Uruguay for Vale for 20
years (starting in the third quarter of this year).

Founded in 1954 as a subsidiary of U.S. Steel, Navios Holdings
controls a fleet of 66 drybulk vessels (of which 40 are owned and
26 chartered-in) and provides transportation and logistics
services in South America (Hydrovia region).

S&P said, "We have revised upward our assessment of Navios
Holdings' stand-alone credit profile to 'b-' from 'ccc+'. This
reflects the improved cash flow generation prospects, mainly
because of recovered charter rates in Navios Holdings' core
drybulk shipping business, supported by the narrowing industry
demand-and-supply imbalance, complemented by the company's
proactively lowered cost breakeven rates, working capital
optimization and efficiency measures, and limited capital spending
requirements after Navios Logistics completed the expansion of
port terminal in South America. Furthermore, the agreement with
Vale to perform under the contract's terms adds to cash flow
predictability.

"We anticipate drybulk charter rates to recalibrate to more
sustainable (above their operating breakeven) levels in 2017,
based on promising demand dynamics so far this year for iron ore
and coal from Asia (which is by far the largest global importing
region of iron ore and coal) and industry supply-side adjustments.
In our view, the recent notable improvement in charter rates from
the fourth quarter of 2016 (albeit following record lows seen in
early 2016) is vulnerable to uncertain sustainability of commodity
imports from China, in particular. Nevertheless, our expectations
of slowing global fleet expansion in 2017 and 2018, combined with
sustained low-single-digit trade growth, will likely result in an
overall improvement in rates this year. We believe that this trend
will continue into 2018 when persistent vessel scrapping, deferral
or cancellation of ships on order, and limited contracting of new
tonnage will likely curtail supply pressure. Against this
backdrop, we forecast that Navios Holdings will achieve a free
operating cash flow breakeven this year, which incorporates the
company's continued working capital optimization measures. This
compares with a cash balance of about $141 million on Dec. 31,
2016."

Navios Holdings' business risk profile mainly reflects the
company's weak profitability on the back of below-industry-average
return on capital metrics and relatively high volatility of
profitability compared with the broader transportation industry.
We also factor in the shipping industry's high risk, which stems
from the industry's capital intensity, high fragmentation,
frequent imbalances between demand and supply, lack of meaningful
supply discipline, and volatility in charter rates and vessel
values.

Positives are Navios Holdings' competitive position, which
benefits from its expanding and more predictable-than-traditional-
shipping transportation and logistics business in South America;
its holdings in affiliates, which pay dividends under normal
operating conditions; and its solid reputation as a quality
operator of a relatively young and cost-efficient vessel fleet
underpinned by a good grip on cost efficiencies and control, as
reflected in below the industry-average daily vessel operating
costs.

S&P's assessment of Navios Holdings' financial risk profile
incorporates the company's high adjusted debt, which reflects the
underlying industry's high capital intensity, the company's track
record of large expansionary investments, and a prolonged period
of depressed charter rates, and which will result in average
credit measures commensurate with the lower end of S&P's highly
leveraged category in 2017-2018.

S&P analyzes Navios Holdings and the Marshall Islands-registered
oil- and oil product shipping company Navios Acquisition on an
integrated basis because of their linked business relationships.
Navios Holdings owns 46.1% of Navios Acquisitions. In September
2016, Navios Acquisition provided a two-year, 8.75%, $70 million
secured revolving credit facility to Navios Holdings for general
corporate purposes. Crude tanker owner and operator Navios
Maritime Midstream Partners L.P. (Navios Midstream), 59%-owned
unconsolidated affiliate of Navios Acquisition, also falls under
the group credit profile (GCP) because of the entities' material
business interactions, as signified by Navios Acquisition's
extension of a de facto rate guarantee for Navios Midstream's
vessels. We determine the GCP of 'b' as the weighted average of
the creditworthiness of the group members Navios Holdings, Navios
Acquisition, and Navios Midstream.

The stable outlook reflects S&P's view that Navios Holdings' free
cash flow generation will be at least break even this year and its
liquidity position will stabilize for the next 12 months, thanks
to gradually improving drybulk charter rates, increased EBITDA at
Navios Logistics, and Navios Holdings' competitive and predictable
cost structure. "We furthermore incorporate our view that the GCP
will remain unchanged," S&P said.

S&P stated, "We could downgrade Navios Holdings if its efforts to
stabilize its liquidity are ineffective and if we consider its
liquidity sources-to-uses ratio will fall below 1.0x, constituting
a likely default risk within the next 12 months. In particular, we
think this might happen due to an unexpected drop in drybulk
charter rates below our base-case forecast or inability to
refinance the unsecured bond due February 2019 in a timely manner.

"Furthermore, an unlikely material deterioration of Navios
Acquisition's cash flow generation and liquidity, resulting in a
downward revision of the GCP to 'ccc+', would squeeze Navios
Holdings' creditworthiness.

"An upgrade could follow if Navios Holdings' free cash flow
generation turns firmly positive, liquidity position stabilizes so
that the sources to uses shortfall is remote, and adjusted FFO to
debt strengthens sustainably to above 6.0%. This would be possible
in the medium term if drybulk charter rates perform consistently
with our base-case forecast and Navios Holdings gradually reduces
debt. However, we consider debt reduction as unlikely in the next
12 months, given Navios Holdings' confirmed appetite for
opportunistic debt-funded vessel acquisitions.

"An upgrade would be also contingent on the GCP remaining at the
current 'b'."


NAVIOS MIDSTREAM: S&P Cuts CCR to B on Navios Acquisition Link
--------------------------------------------------------------
S&P Global Ratings said that it has lowered its long-term
corporate credit rating on Marshall-Islands-registered owner and
operator of crude oil tankers Navios Maritime Midstream Partners
L.P. (Navios Midstream) to 'B' from 'B+'. The outlook is stable.

S&P said, "We also lowered our issue rating on Navios Midstream's
senior secured debt to 'B' from 'BB-'. At the same time, we
revised the recovery rating to '3' from '2' to reflect our
expectation of meaningful recovery (50%-70%; rounded
estimate 65%) in the event of a default."

The downgrade stems from S&P's view that Navios Midstream's
financial position is linked to that of its 59% owner and general
partner Navios Maritime Acquisition Corp. (Navios Acquisition) and
the wider Navios group, including Navios Maritime Holdings Inc.
(Navios Holdings), which is of lower credit quality.

Navios Acquisition owns and operates a fleet of 36 crude oil
carriers and oil product tankers. Navios Holdings controls a fleet
of 66 dry-bulk vessels (40 owned and 26 chartered) and provides
transportation and logistics services in the South American
Hydrovia region.

S&P said, "We now assess the creditworthiness of Navios Midstream
and Navios Acquisition on an integrated basis because of the
entities' material business relationships. For example, Navios
Acquisition has provided a de facto rate guarantee for Navios
Midstream's vessels. Navios Holdings also falls under the
group credit profile because we believe Navios Acquisition's
financial and liquidity position is linked to that of its 46.1%
owner Navios Holdings. There are also overlaps in management and
the board of directors across the Navios group of companies, as
well as common business ties and shared name affiliation,
corporate history, and support functions.

"We believe that Navios Midstream's most recent tanker-employment
deals -- which include the placement of two vessels into very
large crude carrier (VLCC) pools that typically operate on
volatile spot rates, and employment of one vessel at less-
attractive terms than previously -- have increased the company's
exposure to Navios Acquisition's financial capacity to deliver on
its rate-backstop commitments for Navios Midstream's three VLCCs,
which represent half of Navios Midstream's fleet. This contradicts
our previous assumption that Navios Midstream will continue
achieving charter rates that are equal to or higher than the
backstop rates so that the backstops are not triggered, and that
each company operates independently from a financial standpoint.
At the same time, we maintain our view of Navios Midstream's
stand-alone credit quality (SACP) at 'b+'."

The key consideration in S&P's assessment of Navios Midstream's
weak business risk profile is the company's relatively narrow
scope and diversity, with a predominant focus on crude oil
shipping, a business model relying on six VLCCs to generate
comparatively small absolute EBITDA of $55 million-$60 million
(according to S&P's base case), and a concentrated customer base.
S&P expects overall oil shipping conditions will weaken but remain
relatively supportive over the next 12 months, meaning that tanker
rates are unlikely to fall below operating-cost break-even levels.
Still, S&P anticipates that rates will plunge this year from the
relatively strong levels seen in 2015 and the first half of 2016,
as the accelerated delivery of new tonnage outstrips growth in
tanker demand. The main support to Navios Midstream's competitive
position comes from its time-charter profile. The average charter
duration was 4.1 years (including the rate backstops from Navios
Acquisition) as of April 27, 2017. Furthermore, the company's
profitability benefits from its fixed and predictable cost base,
which underpins comparatively low volatility of EBITDA margins and
the return on capital. Combined, these factors counterbalance most
of the industry's cyclical swings in the medium term, provided the
counterparties honor their original commitments.

S&P said, "Our assessment of the financial risk profile
incorporates Navios Midstream's relatively high adjusted debt of
about $203 million as of Dec. 31, 2016, which reflects the
underlying industry's high capital intensity, as well as the
company's expansionary investments and dividend distributions. We
expect that, owing to less-attractive employment of the VLCC Nave
Celeste, combined with subdued rate conditions that limit the
contribution from profit-sharing, Navios Midstream's EBITDA base
will decline to about $55 million-$60 million this year from
around $63 million in 2016.

"In addition, we believe that -- despite solid free cash flow
generation underpinned by low cash interest and maintenance
capital expenditure (capex) -- there is limited scope for
deleveraging because the company will maintain its generous
dividend distributions. Accordingly, its credit measures
will weaken, with the S&P Global Ratings-adjusted funds from
operations (FFO) to debt at about 23%-24% in 2017 and 2018
compared with about 25% in 2016. We also believe that Navios
Midstream will carry on its periodic and partly debt-funded
expansion (the timing and related cost are currently uncertain).
We believe that any potential additions to the fleet will be
funded in a manner that limits the dilution of financial metrics."

The stable outlook reflects S&P's expectation that Navios
Midstream will maintain business and financial strength
commensurate with the current rating over the next 12 months,
despite softened tanker rate conditions. In addition, S&P'
anticipates that the group credit profile (GCP), which reflects
the weighted average creditworthiness of Navios Midstream, Navios
Acquisition, and Navios Holdings, will not affect Navios
Midstream's stand-alone credit quality.

Assuming no change to Navios Midstream's business risk profile,
S&P considers a ratio of adjusted FFO to debt higher than 12% to
be commensurate with the current rating. This compares with the
23%-24% we forecast for 2017-2018 and points to ample headroom for
financial underperformance against S&P's base case.

S&P may downgrade Navios Midstream if its SACP weakened to 'b-' or
lower, such as following a significant and unexpected
deterioration of credit metrics, with adjusted FFO to debt falling
below 12%, or erosion of the business risk profile to vulnerable
accompanied by weaker ratios. This could happen if counterparties
failed to deliver on their contracts and Navios Midstream amended
charter agreements or re-employed vessels at open-market rates
that are materially below the previous rates, resulting in
diminished EBITDA and profitability.

Further strain could come from possible decline of Navios
Acquisition's or Navios Holdings' credit measures or liquidity,
leading S&P to revise its assessment of the GCP downward.

We believe the potential for an upgrade is limited in the next 12
months, given our expectation that shipping industry conditions
will remain subdued, S&P said.

S&P may, however, upgrade Navios Midstream if the GCP strengthened
to 'b+', which could, for example, happen if Navios Acquisition's
and Navios Holdings' financial performance improved significantly
and simultaneously. For Navios Acquisition, this would mean a
rebound of adjusted FFO to debt to more than 12%, possibly
stemming from average tanker rates outperforming S&P's base case,
for example, achieving the 2016 levels. For Navios Holdings, this
would imply securely positive free operating cash flow, stable
liquidity sources that amply cover uses, and adjusted FFO to debt
sustainably above 6.0%.



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


CLONTARF PARK: Moody's Assigns (P)B2 Rating to Class E Notes
------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following provisional ratings to notes to be issued by Clontarf
Park CLO Designated Activity Company:

-- EUR240,000,000 Class A-1 Senior Secured Floating Rate Notes
    due 2030, Assigned (P)Aaa (sf)

-- EUR20,000,000 Class A-2A1 Senior Secured Floating Rate Notes
    due 2030, Assigned (P)Aa2 (sf)

-- EUR23,000,000 Class A-2A2 Senior Secured Floating Rate Notes
    due 2030, Assigned (P)Aa2 (sf)

-- EUR10,000,000 Class A-2B Senior Secured Fixed Rate Notes due
    2030, Assigned (P)Aa2 (sf)

-- EUR21,000,000 Class B Senior Secured Deferrable Floating Rate
    Notes due 2030, Assigned (P)A2 (sf)

-- EUR20,500,000 Class C Senior Secured Deferrable Floating Rate
    Notes due 2030, Assigned (P)Baa2 (sf)

-- EUR25,000,000 Class D Senior Secured Deferrable Floating Rate
    Notes due 2030, Assigned (P)Ba2 (sf)

-- EUR10,750,000 Class E 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 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, Blackstone / GSO Debt
Funds Management Europe Limited, has sufficient experience and
operational capacity and is capable of managing this CLO.

Clontarf Park CLO Designated Activity Company is a managed cash
flow CLO. At least 96% of the portfolio must consist of secured
senior obligations and up to 4% of the portfolio may consist of
unsecured senior loans, second lien loans, mezzanine obligations,
high yield bonds and/or first lien last out loans. The portfolio
is expected to be approximately 85% ramped up as of the closing
date and to be comprised predominantly of corporate loans to
obligors domiciled in Western Europe. This initial portfolio will
be acquired by way of participations which are required to be
elevated as soon as reasonably practicable. The remainder of the
portfolio will be acquired during the six month ramp-up period in
compliance with the portfolio guidelines.

Blackstone / GSO Debt Funds Management Europe 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 impaired obligations,
and are subject to certain restrictions.

In addition to the eight classes of notes rated by Moody's, the
Issuer will issue EUR43,300,000 of subordinated notes. Moody's
will not assign a rating to this class of notes.

The transaction incorporates interest and par coverage tests
which, if triggered, will 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. Blackstone / GSO Debt Funds Management Europe
Limited's investment decisions and management of the transaction
will also affect the notes' performance.

Loss and Cash Flow Analysis:

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

Moody's used the following base-case modeling assumptions:

Par Amount: EUR400,000,000

Diversity Score: 40

Weighted Average Rating Factor (WARF): 2800

Weighted Average Spread (WAS): 3.65%

Weighted Average Coupon (WAC): 5.00%

Weighted Average Recovery Rate (WARR): 43.5%

Weighted Average Life (WAL): 8 years

Stress Scenarios:

Together with the set of modelling assumptions above, Moody's
conducted an additional sensitivity analysis, which was an
important component in determining the 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-2A1 Senior Secured Floating Rate Notes: -2

Class A-2A2 Senior Secured Floating Rate Notes: -2

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

Class B Senior Secured Deferrable Floating Rate Notes: -2

Class C Senior Secured Deferrable Floating Rate Notes: -1

Class D Senior Secured Deferrable Floating Rate Notes: 0

Class E Senior Secured Deferrable Floating Rate Notes: 0

Percentage Change in WARF: WARF +30% (to 3640 from 2850)

Ratings Impact in Rating Notches:

Class A-1 Senior Secured Floating Rate Notes: 0

Class A-2A1 Senior Secured Floating Rate Notes: -3

Class A-2A2 Senior Secured Floating Rate Notes: -3

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

Class B Senior Secured Deferrable Floating Rate Notes: -3

Class C Senior Secured Deferrable Floating Rate Notes: -2

Class D Senior Secured Deferrable Floating Rate Notes: -1

Class E Senior Secured Deferrable Floating Rate Notes: -2



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


CASAFORTE SRL: Fitch Keeps B- Notes Rating on Watch Evolving
------------------------------------------------------------
Fitch Ratings is maintaining Casaforte S.r.l.'s class A and B
notes due 2040 on Rating Watch Evolving (RWE):

  EUR1,049.1 million class A: 'B-sf' remain on RWE
  EUR155 million class B: 'B-sf'; remain on RWE

The transaction is a securitisation of rental income derived from
the leasing of 683 bank branches and offices in Italy. These real
estate assets are let to Banca Monte dei Paschi di Siena (MPS; B-
/RWE) and its subsidiaries until July 2033.

KEY RATING DRIVERS

The ratings are credit-linked to the 'B-' Issuer Default Rating of
MPS, which has been on RWE since 4 August 2016, last maintained on
18 May.

RATING SENSITIVITIES

Resolution of the rating watch on MPS will result in a
corresponding action on Casaforte S.r.l.


MONTE DEI PASCHI: In Talks to Sell Bad Loan Portfolio
-----------------------------------------------------
Silvia Aloisi at The New York Times reports that Monte dei Paschi
di Siena said on May 29 it was in exclusive talks with a domestic
fund and a group of investors over the sale of its bad loan
portfolio, which it needs to offload before it can be taken over
by the state.

Italy's fourth biggest bank had EUR26 billion (US$29.04 billion)
in gross defaulting debts at the end of last year and has set a
June 28 deadline for the talks with Quaestio, the fund which
manages Italy's banking industry rescue fund Atlante and will also
conduct negotiations on behalf of other investors, The Times
discloses.

The bank did not name those investors but sources have said they
are U.S. private equity fund Fortress and Italian bad loan manager
Credito Fondiario, in which U.S. fund Elliott has a 44% stake, The
Times notes.

Monte dei Paschi, which emerged as Europe's weakest bank in stress
tests in July last year, has requested a state bailout to help to
fill an EUR8.8 billion capital shortfall after failing to raise
funds on the market in December, The Times recounts.

The bank expects to get a nod from European regulators by the end
of June, a source close to the matter, as cited by The Times,
said, after months of negotiations over the terms of its bailout
and a restructuring plan that is set to include thousands of job
cuts.

According to The Times, the source said this would pave the way
for the Italian government to take a stake of around 70% in the
bank as early as in July.

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

                            *   *   *

The Troubled Company Reporter-Europe reported on May 23, 2017,
that Fitch Ratings  affirmed Banca Monte dei Paschi di Siena's
(MPS) Viability Rating (VR) at 'c' and maintained the bank's 'B-'
Long-Term Issuer Default Rating (IDR) on Rating Watch Evolving
(RWE).  The VR of 'c' indicates that failure of the bank under
Fitch criteria is inevitable because it requires an extraordinary
injection of capital in order to remain viable. Following the EBA
stress tests in the summer of 2016, the European Central Bank
identified a capital shortfall of EUR8.8 billion arising from its
large volumes of doubtful loans (sofferenze). The shortfall
arises as a result of the losses the bank will bear once it
deconsolidates the entirety of its sofferenze.



===================
L U X E M B O U R G
===================


EUROPROP EMC-VI: Fitch Withdraws D Ratings on Three Note Classes
----------------------------------------------------------------
Fitch Ratings has downgraded EuroProp (EMC-VI) S.A.'s class A, B
and C notes due April 2017, and affirmed class D, E and F notes.
All ratings have simultaneously been withdrawn following maturity
of the notes.

EUR35.9 million class A (XS0301901657) downgraded to 'Dsf' from
'CCsf'; Recovery Estimate (RE) 100%; withdrawn

EUR30 million class B (XS0301902622) downgraded to 'Dsf' from
'Csf'; RE revised to 80% from 100%; withdrawn

EUR35 million class C (XS0301903356) downgraded to 'Dsf' from
'Csf'; RE revised to 0% from 30%; withdrawn

EUR6.6 million class D (XS0301903513) affirmed at Dsf'; RE0%;
withdrawn

EUR0 million class E (XS0301903943) affirmed at Dsf'; RE0%;
withdrawn

EUR0 million class F (XS0301904248) affirmed at Dsf'; RE0%;
withdrawn

KEY RATING DRIVERS

The downgrades and withdrawals reflect the default of all tranches
on maturity. The downwards revision of the RE reflects the
uncertainty regarding adverse property selection and increased
transaction costs. Three loans with some collateral available for
distribution remain outstanding (one "zombie" loan, Epic Horse, is
no longer backed by collateral).

The largest position, the EUR48.4 million Signac loan, was
rescheduled to June 2018 as part of a plan agreed under safeguard
proceedings. While the 2016 targets have been missed, Fitch
expects full repayment of the loan in due course.

The EUR75.6 million Sunrise II loan, of which 50% is securitised
in this transaction, has repaid EUR68.4 million since the last
rating action via asset sales. Thirteen assets remain with
reported vacant possession and market values of EUR29.8 million
and EUR43.9 million respectively (both 2012 valuations). A EUR7.3
million cash reserve can be used for capital expenditure and other
costs and may ultimately contribute towards recovery proceeds.
Fitch expects EUR10 million -EUR15 million of recoveries for
EuroProp from this loan.

The EUR16.3 millon Henderson loan is secured on a mixed-use
property located in Buchholz, Germany. The collateral suffers from
long-term vacancy. Fitch expects little recovery from this
borrower.

RATING SENSITIVITIES

There will be no more commentary on the transaction following the
withdrawal of the ratings.

Allowing for wind-up and other costs, Fitch expects note principal
recoveries in the region of EUR60 million.


LECTA SA: S&P Puts 'B' LT Corp. Credit Rating on CreditWatch Pos.
-----------------------------------------------------------------
S&P Global Ratings said that it had placed its 'B' long-term
corporate credit rating on Luxembourg-registered paper producer
Lecta S.A., on CreditWatch with positive implications. At the same
time, S&P affirmed the 'B' short-term corporate credit rating.

The CreditWatch placement follows the announcement by Lecta on May
26 that it intends to raise EUR315 million from the sale of new
shares on the Madrid, Barcelona, Bilbao, and Valencia stock
exchanges. Apart from EUR40 million of fees and expenses, the
company plans to use EUR275 million of expected proceeds to redeem
part of its outstanding EUR600 million notes.

S&P views this as credit positive, because it would materially
lower Lecta's leverage and improve its cash flow generation
through lower interest payments, effectively enabling a further
positive transformation of its business portfolio. If the IPO is
executed as planned, S&P estimates that Lecta's credit metrics
would strengthen materially, such that funds from operations to
debt would be in the 20%-30% range, as opposed to around 10%
currently.

S&P aims to resolve the CreditWatch placement within three months
or once Lecta has completed its IPO later this year. S&P thinks
that an eventual upgrade could be by one or several notches,
depending on its assessment of the company's dividend policy and
leverage targets following the IPO.



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


CADOGAN SQUARE III: Moody's Raises Rating on Cl. E Notes to Ba2
---------------------------------------------------------------
Moody's Investors Service has upgraded the ratings on the
following notes issued by Cadogan Square CLO III B.V.:

-- EUR27.5M Class C Senior Secured Deferrable Floating Rate
    Notes due 2023, Upgraded to Aaa (sf); previously on Mar 1,
    2016 Upgraded to Aa1 (sf)

-- EUR30M Class D Senior Secured Deferrable Floating Rate Notes
    due 2023, Upgraded to A1 (sf); previously on Mar 1, 2016
    Upgraded to Baa1 (sf)

-- EUR18.75M Class E Senior Secured Deferrable Floating Rate
    Notes due 2023, Upgraded to Ba2 (sf); previously on Mar 1,
    2016 Upgraded to Ba3 (sf)

Moody's also affirmed the ratings on the following notes:

-- EUR342.65M (current outstanding balance of EUR32.7M) Class A
    Senior Secured Floating Rate Notes due 2023, Affirmed Aaa
    (sf); previously on Mar 1, 2016 Affirmed Aaa (sf)

-- EUR36.1M Class B Senior Secured Floating Rate Notes due 2023,
    Affirmed Aaa (sf); previously on Mar 1, 2016 Affirmed
    Aaa (sf)

Cadogan Square CLO III B.V., issued in December 2006, is a
collateralised loan obligation (CLO) backed by a portfolio of
mostly high-yield senior secured European loans managed by Credit
Suisse Asset Management Limited. The transaction's reinvestment
period ended in January 2013.

RATINGS RATIONALE

The rating actions on the notes are primarily a result of the
deleveraging of the Class A Notes, following amortisation of the
underlying portfolio. The notes have paid down by approximately
EUR49.6 million in the last 12 months (16% of the closing
balance). As a result, the over-collateralisation (OC) ratios of
all classes of rated notes have increased significantly. As per
the trustee report dated April 2017, Class A/B, Class C, Class D,
and Class E OC ratios are reported at 230.99%, 165.05%, 125.86%
and 109.59% compared to April 2016 levels of 174.69%, 141.78%,
117.61%, and 106.28%, respectively. Moody's notes that EUR43.3
million of principal proceeds is currently reported and the OC
ratios will further increase after the next payment date in July
2017.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analysed the underlying collateral pool as having a
performing par and principal proceeds balance of EUR165.8 million,
defaulted par of EUR15.5 million, a weighted average default
probability of 24.2% (consistent with a WARF of 3570 and a WAL of
3.92 years), a weighted average recovery rate upon default of
45.0% for a Aaa liability target rating, a diversity score of 18
and a weighted average spread of 3.88% and a weighted average
coupon of 7.8%.

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

Methodology Underlying the Rating Action:

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

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

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

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

Additional uncertainty about performance is due to the following:

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

* Around 15.9% of the collateral pool consists of debt obligations
whose credit quality Moody's has assessed by using credit
estimates. As part of its base case, Moody's has stressed large
concentrations of single obligors bearing a credit estimate as
described in "Updated Approach to the Usage of Credit Estimates in
Rated Transactions" published in October 2009 and available at
http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_120461.

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

* Long-dated assets: The presence of assets that mature beyond the
CLO's legal maturity date exposes the deal to liquidation risk on
those assets. Moody's assumes that, at transaction maturity, the
liquidation value of such an asset will depend on the nature of
the asset as well as the extent to which the asset's maturity lags
that of the liabilities. Liquidation values higher than Moody's
expectations would have a positive impact on the notes' ratings.

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


HIGHLANDER EURO: Moody's Affirms Ca(sf) Rating on Cl. E Notes
--------------------------------------------------------------
Moody's Investors Service announced that it has taken rating
actions on the following classes of notes issued by Highlander
Euro CDO B.V.:

-- EUR41.25M (currently EUR21.1M outstanding) Class C Primary
    Senior Secured Deferrable Floating Rate Notes due 2022,
    Affirmed Aaa (sf); previously on Oct 28, 2016 Upgraded to Aaa
    (sf)

-- EUR25M Class D Primary Senior Secured Deferrable Floating
    Rate Notes due 2022, Upgraded to A2 (sf); previously on
    Oct 28, 2016 Upgraded to Baa2 (sf)

-- EUR13.75M (currently EUR18.2M outstanding) Class E Secondary
    Senior Secured Deferrable Floating Rate Notes due 2022,
    Affirmed Ca (sf); previously on Oct 28, 2016 Affirmed Ca (sf)

Highlander Euro CDO B.V., issued in August 2006, is a
collateralised loan obligation (CLO) backed by a portfolio of
mostly high-yield senior secured European loans. The portfolio is
managed by CELF Advisors LLP. The transaction's reinvestment
period ended in August 2012.

RATINGS RATIONALE

The rating actions taken on the notes are the result of
deleveraging of the Class C Notes following amortisation of the
portfolio since the last rating action in October 2016.

The Class C Notes paid down by EUR18.2 million (or 44% of the
Class C Notes' original balance) on the March 2017 payment date.
As a result of the deleveraging, over-collateralisation (OC)
ratios have increased for Classes C and D. According to the
trustee report dated April 2017, the Class C and Class D OC ratios
are reported at 288.85% and 132.14% respectively, compared to
September 2016 levels of 197.65% and 120.74% respectively. The OC
ratio for Class E is reported at 94.73% as of April 2017,
marginally up from the September 2016 level of 94.10%.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analysed the underlying collateral pool as having a
performing par EUR41.2 million, principal proceeds of EUR19.6
million, defaulted par of EUR9.38 million, a weighted average
default probability of 19.20% (consistent with a WARF of 2944 over
a weighted average life of 3.77 years), a weighted average
recovery rate upon default of 45.34% for a Aaa liability target
rating, a diversity score of 6 and a weighted average spread of
3.81%.

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

Methodology Underlying the Rating Action:

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

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

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

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

Additional uncertainty about performance is due to the following:

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

2) Around 22.3% of the collateral pool consists of debt
obligations whose credit quality Moody's has assessed by using
credit estimates. As part of its base case, Moody's has stressed
large concentrations of single obligors bearing a credit estimate
as described in "Updated Approach to the Usage of Credit Estimates
in Rated Transactions" published in October 2009 and available at
http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_120461.

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

4) Lack of portfolio granularity: The performance of the portfolio
depends to a large extent on the credit conditions of a few large
obligors with low non-investment-grade ratings, especially when
they default. Because of the deal's lack of granularity, Moody's
substituted its typical Binomial Expansion Technique analysis with
a simulated default distribution using Moody's CDROMTM software
and an individual scenario analysis.

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



===========
P O L A N D
===========


REGNON SA: Katowice Court Okays Restructuring Plan
--------------------------------------------------
Reuters reports that Regnon SA on May 29 disclosed that the court
in Katowice approved the company's restructuring plan.

According to Reuters, under the restructuring plan, proceeds from
the sale of a logistics center will be used to pay back majority
of creditors.

In September 2016, the company filed a motion for opening of the
rehabilitation proceedings under restructuring law to the court in
Katowice.

Regnon SA, formerly Pronox Technology SA w upadlosci ukladowej, is
a Poland-based company engaged in the provision of value-added
services in the area of consumer electronics and information
technology (IT).



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


AGRIBUSINESS HOLDING: Fitch Affirms B+ Issuer Default Ratings
-------------------------------------------------------------
Fitch Ratings has affirmed Russia-based Agribusiness Holding
Miratorg LLC's (Miratorg) Long-Term Foreign- and Local-Currency
Issuer Default Ratings (IDRs) at 'B+'. The Outlook is Stable.
Fitch has also downgraded Miratorg Finance LLC's senior unsecured
rating on its RUB5 billion bond due in April 2021 to 'B-'/'RR6'
from 'B'/'RR5'.

The ratings' affirmation reflects Miratorg's strong market
position in Russia, its high degree of vertical integration across
the value chain, and Fitch expectation that the group will
maintain moderate leverage over 2017-2020 (including guaranteed
but unconsolidated projects) and good access to bank financing.
The ratings factor in state support for the sector and Fitch view
that recent changes in the mechanism of interest rate
reimbursements will be largely neutral for Miratorg's credit
profile. However, the company's unique and complex group structure
constrains the ratings at 'B+'.

KEY RATING DRIVERS

Vertically Integrated Business Model: Miratorg's ratings are
supported by the group's leading position in the Russian pork
market and its vertical integration across the value chain, from
crop growing and fodder production to livestock breeding,
slaughtering and product delivery. This enables the company to
maintain higher-than-peer EBITDA margins and to smooth out the
business's inherent volatility.

EBITDA Resilience: In 2016 the group's EBITDA decreased, but was
better than Fitch forecast, proving the resilience of Miratorg's
business model to adverse changes in meat prices and fodder costs.
The group's resilience to external factors should be further
enhanced in 2017-2018 as Miratorg executes its efficiency
improvements in its pork division, increases its output of
poultry, semi-finished food and packaged meat, and reaches self-
sufficiency in grain.

Sub-Standard Corporate Governance: Fitch does not apply any
company-specific notching to Miratorg's ratings for corporate
governance, but they are constrained at 'B+' by a complex group
and governance structure. The group provides financial support to
its related parties involved in the rearing and processing of
poultry and cattle.

Suretyships for Related-Party Obligation: Miratorg guarantees the
debt of Bryansky Broiler LLC, Kalinigradskaya Myasnaya Kompaniya
LLC and AF Blagodatenskaya LLC (since 2016). The three related-
party entities are owned by Miratorg's shareholders and involved
respectively in poultry production, cattle breeding and veal
production. Guaranteed debt was around RUB24 billion at end-2016
(in addition to total group debt of RUB81 billion), while the
total EBITDA of these projects was around RUB2 billion.

Fitch's ratings take into account debt and profits of these
related parties in view of the group's track record of developing
certain businesses through related-party entities and later
bringing them onto the balance sheet. Miratorg is likely to
consolidate the poultry business in 2017. This business has most
of the debt (around RUB18 billion at end-2016).

Support to Related-Party Beef Project: The company's shareholders
are also developing a beef business, partly with the financial
help of Miratorg. Miratorg does not guarantee the debt of this
project but has been making some cash contributions through
related-party loans and favourable payment terms, as it
distributes the beef produced by this related party. In 2016 such
support decreased as the project obtained long-term working
capital lines in addition to capex financing (without recourse to
Miratorg).

Fitch's rating perimeter excludes beef production business due to
its ring-fenced nature and Fitch expectation that it should remain
outside Miratorg's consolidation scope over the rating horizon.
Nevertheless, Fitch conservatively assume additional cash support
from Miratorg through related-party loans of around RUB5 billion
per year in 2018-2020. Higher-than-expected outflows to related
parties may put pressure on Miratorg's credit metrics and
liquidity.

Pork Production Doubling Not Assumed: Fitch rating does not factor
in the potential doubling of pork production that Miratorg
envisages over the medium term. Timing, funding and other features
of this project are still being studied and management intends to
launch it only if the regulatory environment improves.
Nevertheless, if the project is approved, this could result in a
downgrade of Miratorg's ratings in view of the large amount of
potential investments (estimated by the company at RUB160
billion), which are likely to be debt-funded.

Moderate Leverage: Fitch expects Miratorg to maintain moderate FFO
adjusted gross leverage within 3.0x-3.5x (including debt and
profits of guaranteed projects which contribute 0.5x to leverage),
which is comfortable for the rating.

State Support for the Sector: Being an agricultural producer,
Miratorg enjoys a favourable tax regime and subsidised interest
rates. This helps its cash flow generation, leading to improved
financial flexibility. As food self-sufficiency remains one of key
objectives of the Russian government, Fitch expects state support
to agricultural producers to be maintained.

DERIVATION SUMMARY

Miratorg has smaller business size and a weaker ranking on a
global scale than international meat processors Tyson Foods Inc.
(BBB/Stable), Smithfields Foods Inc. (BBB/Stable) and BRF S.A.
(BBB/Negative), but has a slightly stronger credit profile than
Marfrig Global Foods S.A. (BB-/Stable) and Minerva S.A. (BB-
/Stable). However, the operating environment in Russia contributes
to a lower rating for Miratorg relative to global peers.

Miratorg has similar credit metrics and a similar vertically
integrated business model to the largest Ukrainian poultry
producer, MHP S.A. (B-/RWP). MHP's business profile is slightly
stronger due to access to export markets, but this is offset by
higher exposure to FX risks. MHP's LC IDR of 'B' is lower than
Miratorg's because it is constrained by the large portion of its
operations that take place in Ukraine, which has a Sovereign
Local-Currency IDR of 'B-'.

KEY ASSUMPTIONS

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

- revenue growth in the low teens in 2017, driven by growing
   sales volumes of distributed beef and poultry, and of its own
   pork production, and mid-single-digit growth thereafter;

- EBITDA margin around 25% over 2017-2020;

- outflow of RUB12 billion related to poultry business
   acquisition in 2017;

- capex at 9%-10% of revenue over 2017-2020;

- no material deterioration in working-capital turnover;

- maintenance of state support to the sector, including interest
   rate subsidies;

- additional loans to related parties of not more than RUB5
   billion per year over 2018-2020;

- no dividends.

RATING SENSITIVITIES

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

An upgrade is unlikely in the coming two years, unless there is an
improvement in corporate governance, including better group
structure transparency and diminishing cash support to related
parties, and subject to:

- FFO adjusted gross leverage sustainably around 3.0x (both
   including and excluding guaranteed projects);

- FFO fixed charge cover sustainably above 3.0x ;

- FCF margin close to mid-single digits, coupled with the
   management's commitment to a conservative capital structure.

- Adequate liquidity

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

- FFO adjusted gross leverage consistently above 4.0x (both
   including and excluding guaranteed projects)

- FFO fixed charge cover sustainably below 2.0x

- Material deterioration in free cash flow (FCF) generation
   driven, for example, by lower EBITDA margin, and/or larger-
   than-expected loans to related parties

- Liquidity shortage caused by the limited availability of bank
   financing in relation to short-term maturities or refinancing
   at more onerous terms than expected

LIQUIDITY, DEBT AND GROUP STRUCTURE

Insufficient but Improved Liquidity: As of end-2016, Fitch-
adjusted unrestricted cash balances of RUB21 billion, committed
undrawn credit facilities of RUB19 billion were not sufficient to
cover short-term debt of RUB49 billion. Nevertheless, there was an
improvement in liquidity ratio versus previous years due to higher
cash balances supported by stronger internal cash generation and
decreased support to the beef project in 2016.

As usual, the major part of debt maturing in 2017 was represented
by working-capital facilities and Fitch expects Miratorg to extend
these credit lines upon maturity.

Complex Group Structure: Miratorg's audited consolidated accounts
include entities that are not owned by the parent but rather by
its ultimate shareholders. Consolidation is based on agreements
for the preliminary sale and purchase of such entities signed
between its shareholders and the parent. According to management,
these agreements represent potential voting rights that could be
exercised at any time until 2020. Among these entities the most
material to the group are Miratorg Finance LLC, the bond issuing
vehicle, and TK Miratorg LLC, the major trading company that
distributes Miratorg's products as well as poultry and beef
produced by its related parties.

Poor Recoveries for Unsecured Bondholders: The downgrade of the
rating of Miratorg Finance LLC's local RUB5 billion bonds due
April 2021 to 'B-'/RR6 from 'B'/RR5 reflects a deterioration in
recovery prospects in the event of default. Fitch's going-concern
scenario valuation approach points to poor recoveries, leading to
a two-notch discount to the senior unsecured rating compared with
Miratorg's IDR of 'B+'.

The reduction in the recovery rate follows an increase in prior-
ranking debt to RUB95 billion from RUB85 billion. Fitch treats
secured and unsecured debt at operating companies, including
guaranteed debt of related parties, as debt ranking prior to the
bonds. Although bondholders have an option to put the bonds to TK
Miratorg LLC, this, in Fitch view, is insufficient to eliminate
subordination issues as TK Miratorg LLC makes only a marginal
contribution to the group's EBITDA and assets.

FULL LIST OF RATING ACTIONS

Agri Business Holding Miratorg LLC
-- Long-Term Foreign and Local-Currency IDRs: affirmed at 'B+';
    Outlook Stable

Miratorg Finance LLC
-- senior unsecured rating of RUB5 billion local bond due April
    2021: downgraded to 'B-'/RR6 from 'B'/RR5'


FONCAIXA FTGENCAT 3: Fitch Affirms C Rating on Cl. E Notes
----------------------------------------------------------
Fitch Ratings has upgraded Foncaixa FTGENCAT 3 FTA's class B, C
and D notes:

Class A(G) notes (ISIN ES0337937017): affirmed at 'AA+sf', Outlook
Stable

Class B notes (ISIN ES0337937025): upgraded to 'AAsf' from 'Asf',
Outlook Stable

Class C notes (ISIN ES0337937033): upgraded to 'BBB+sf' from
'BBBsf', Outlook Stable

Class D notes (ISIN ES0337937041): upgraded to 'BB+sf' from
'BBsf', Outlook Stable

Class E notes (ISIN ES0337937058): affirmed at 'CCsf', Recovery
Estimate increased to 30% from 0%

KEY RATING DRIVERS

The upgrades reflect increased credit enhancement (CE) as a result
of natural portfolio amortisation of the senior and mezzanine
notes. CE for the class A notes has increased by 8.2% to 44.5% and
for the class D notes by 1.7% to 9.2%.

The transaction features an unusual swap whereby on a net basis,
the issuer receives interest on defaulted loans. The swap could be
collateralised if necessary, but Fitch considers it fairly
illiquid and have not given any credit to the receipt of interest
payments from defaulted assets in rating stresses above the swap
counterparty rating.

The transaction also includes 64% flexible loans, which allow
borrowers to redraw amounts up to an agreed maximum. As any
redraws will not form part of the securitisation, but are ranked
pari passu with the securitised amount in a default event, Fitch
treated all flexible loans as fully drawn and adjusted the
collateral backing the respective securitised loans accordingly.

Over the last three years, the average delinquency over 90 days
has been stable at around 3.4%. The annual default probability
assumption Fitch used in this review is in line with last year at
around 4.0%. Delinquencies over 90 days have decreased to 2.8%
from 3.4%, current defaults to EUR6.1 million from EUR6.2 million
and the weighted average recovery rate has increased to 75.4% from
73.7%. The portfolio factor is 10.7% from 13%. Increases in
portfolio concentration have been marginal over the past 12 months
with respect to the top 10 obligors, which represent 6.6% of the
performing portfolio, compared with 5.7% at the previous review.
However, the percentage of obligors with exposure above 50bp has
increased substantially to 7.1% from 3.8%, resulting in potential
concentration risk once the portfolio factor will decrease
further.

RATING SENSITIVITIES

Applying a 1.25x default rate multiplier to all assets in the
portfolio would result in a downgrade of up to two notches for all
of the notes in both transactions. Applying a 0.75x recovery rate
multiplier to all assets in the portfolio would result in a
downgrade of up to four notches for all of the notes in both
transactions.

SVIAZ-BANK: Fitch Lowers Long-Term IDR to BB-, Outlook Negative
---------------------------------------------------------------
Fitch Ratings has downgraded Sviaz-Bank's (SB) Long-Term Issuer
Default Ratings (IDRs) to 'BB-' from 'BB'. Fitch has also affirmed
the Long-Term IDRs of Globexbank (GB) at 'BB-' and Eurofinance
Mosnarbank (EMB) at 'B+'. The Outlooks on SB and GB are Negative.
EMB has a Stable Outlook.

KEY RATING DRIVERS

IDRS, SUPPORT RATING, SUPPORT RATING FLOOR (SRF), SENIOR DEBT
SB and GB

The downgrade of SB's IDR by one notch to 'BB-', thus equalising
it with GB, reflects Fitch's view that the probability of both
banks being supported by their sole shareholder state-owned
Vnesheconombank (VEB; BBB-/Stable) is now broadly similar due to
them being defined in VEB's new strategy as non-strategic
investments to be sold by end-2017. However, in Fitch's view the
sale may take longer or not happen at all due to VEB's sale price
expectations, generally low investor interest in banking assets
and weaknesses in the banks' stand-alone profiles, which are
reflected in low Viability Ratings (VRs) of 'b' and 'b-' for SB
and GB, respectively.

At the same time, SB's and GB's Long-Term IDRs of 'BB-' and
Support Ratings of '3' continue to reflect the moderate
probability of support, in case of need, from VEB, taking into
account: (i) their full ownership by VEB; (ii) the track record of
equity and liquidity support to date; and (iii) potential
reputational risk for VEB in case of them defaulting. However, the
IDRs are three notches below that of VEB due to: (i) the banks'
limited strategic importance for VEB and (ii) VEB's stated
intention to sell the banks.

The Negative Outlooks on both banks' IDRs reflect Fitch's view
that selling the banks to highly-rated new owners, for example
quasi-sovereign entities or foreign banks, is less likely than to
more lowly-rated private entities. The latter would likely result
in a downgrade of the banks' Support Ratings, and therefore also
their Long-Term IDRs.

SB's senior unsecured debt ratings were downgraded by one notch in
line with the bank's Long-Term Local-Currency IDR. The rating on
RU000A0JS710 local bonds was withdrawn as almost the entire issue
had been repaid early. The ratings of debt issued by SB apply to
debt issued prior to 1 August 2014.

EMB
EMB's ratings reflect the bank's standalone profile, as expressed
by a VR of 'b+', and do not take into account potential support
from the Russian and Venezuelan authorities. This is due to
continued delays to the ratification of an intergovernmental
agreement, initially signed by Russia (BBB-/Stable) and Venezuela
(CCC) in 2011 to transform the bank into an international
financial institution (IFI), equally owned by the two governments
directly or through government agencies. Currently, EMB is owned
by Gazprombank (BB+/Stable; 25% plus one share), VTB Bank (25%
plus one share) and the National Development Fund of Venezuela
(50% minus two shares).

VRs
SB and GB
The affirmation of SB's and GB's VRs at, respectively, 'b' and 'b-
' reflects that the moderate improvements in their credit profiles
expected when the ratings were previously reviewed have largely
taken place, mainly as a result of recapitalisation/clean-up
undertaken by VEB in 2016-1Q17. GB's VR is one notch lower than
SB's, reflecting a weaker financial position, including more
vulnerable asset quality, a still high real estate exposure,
weaker performance and a tighter capital position.

SB's asset quality is acceptable, with non-performing loans (NPLs,
overdue more 90 days) comprising a moderate 8% of gross loans at
end-2016 (120% reserved). Restructured loans made up a further 5%
of loans, but these are mostly performing or covered by hard
collateral with reasonable loan-to-values (LTVs).

GB's NPLs ratio was a higher 27% at end-2016, but reserve coverage
of these was a solid 112%. However, further risks stem from 10% of
impaired restructured loans (total restructured loans are a higher
26%), which are weakly reserved, and investment property (a
further 0.5x Fitch Capital Core (FCC) ratio). Positively, in 2016
VEB (through its subsidiary, VEB-Capital) bought from GB a 30%
stake in real-estate developer Rose Group, resulting in this
entity being deconsolidated from GB's accounts; the bank's
remaining 43% stake (equal to 20% of FCC) is expected to be bought
out in 2017. VEB also refinanced GB's high-risk RUB7 billion loan
exposure to the real estate and construction sector in 2016 and
plans to refinance a further RUB4 billion by mid-2017, which will
reduce the volume of restructured loans.

Given the banks' asset quality problems, VEB recapitalised them in
2016, albeit with some delay, by injecting RUB15 billion of new
equity into GB and converting into common equity subordinated debt
of RUB15 billion in GB and RUB16 billion in SB. Consequently GB
and SB's FCC ratios both improved to 10% at end-2016 from 1% and
4% at end-2015, respectively. However, GB's capitalisation is
weaker, as it is undermined by a substantial share of non-
provisioned restructured loans, while its pre-impairment profit
was negative in 2016-1Q17.

The banks' performance has been weak (both reported a 66% negative
return on average equity in 2016), as they created substantial
reserves. However, SB's underlying profitability is somewhat
better, as it was break-even on a pre-impairment basis, while GB
had a small pre-provision loss.

Liquidity is acceptable at both banks, although somewhat tighter
in GB. Liquid assets covered, respectively, 30% and 15% of SB's
and GB's liabilities at end-4M16. Refinancing risks are limited
given a low share of wholesale funding.

EMB
The affirmation of EMB's Long-Term IDRs reflects limited changes
to the bank's credit profile since the previous review in December
2016, and Fitch expectation of stable performance and credit
metrics in the next 12-18 months.

EMB's ratings are constrained by a limited and concentrated
franchise, moderate profitability, volatile funding and a lack of
a defined alternative strategy in case the transformation plan is
cancelled. At the same time, the ratings factor in EMB's solid
capitalisation, ample liquidity and reasonable asset quality.

Credit risk stems primarily from EMB's sizeable securities book
(around 43% of assets at end-2016), interbank placements (21%),
loan book (8%) and off-balance sheet contingencies (equal to 23%
of assets). These are of mostly good quality, while higher-risk
Venezuelan exposures (in the form of sovereign and quasi-sovereign
bonds) were a moderate 17% of FCC at end-2016.
The securities book is of good quality (excluding the
aforementioned Venezuelan bonds) with the majority rated 'BB+' and
above, and Fitch estimates that about 80% of the portfolio was
repo-able with the Central Bank of Russia. Interbank exposure is
entirely investment-grade. The loan book is small with NPLs (13%
of gross loans) being 1.3x covered by reserves at end-2016. A
further 36% of loans were restructured, but EMB received a state
guarantee for more than half of these (20% of end-2016 loans) in
January 2017. Off-balance sheet exposures are of moderate risk and
mostly represented by covered letters of credit.

EMB's tier 1 and total regulatory capital ratios were a strong
21.8% and 23.9%, respectively, at end-4M17, providing a solid
buffer against market and credit risks.

EMB's profitability is moderate (return on assets of 0.8% and
return on equity of 2.6% in 2016) reflecting the bank's high share
of low-yielding liquid assets and a high equity base.
EMB's balance sheet has been volatile, driven by sporadic inflows
of large short-term placements by Venezuelan entities, reflecting
the bank's focus on trade finance and settlement operations.
However, these have been prudently covered with liquid assets. At
end-2016, EMB's total available liquidity, net of potential debt
repayments within one year, was sufficient to repay a high 39% of
customer accounts.

RATING SENSITIVITIES

SB and GB
SB's and GB's IDRs and SRs could be downgraded if (i) the Russian
Federation, and hence VEB, are downgraded; (ii) if the propensity
of VEB to provide support weakens; or (iii) banks are sold to
lower rated/unrated investors (in which case the IDRs will be
downgraded to the level of the banks' respective VRs). Upgrades
are less likely, but could stem from (i) a higher propensity of
VEB to support them, for example, if the sale does not happen and
VEB incorporates them into its strategy, or (ii) if the banks are
sold to a highly rated strategic investor.

SB's and GB's VRs could be downgraded in case of significant asset
quality deterioration or weak performance resulting in material
capital erosion without timely recapitalisation. Upside is limited
and would require a significant improvement of the banks' asset
quality and core profitability.

EMB
Should EMB become an IFI, this would likely lead to an upgrade of
its IDRs, although the level of the ratings would depend on the
ratings of Russia and Venezuela, Fitch's assessment of the bank's
policy role and the extent of the shareholders' capital
commitments.

Capital deterioration as a result of a significant increase in
leverage or material losses, or contingent risks from the
shareholders would lead to a downgrade. Upside for EMB's VR is
currently limited given the bank's narrow franchise and moderate
performance.

The rating actions are:

SB

Long-Term Foreign and Local Currency IDRs: downgraded to 'BB-'
from 'BB'; Outlooks Negative

Short-Term Foreign Currency IDR: affirmed at 'B'

Viability Rating: affirmed at 'b'

Support Rating: affirmed at '3'

Senior unsecured debt (RU000A0JS1F5 and RU000A0JS793):
downgraded to 'BB-' from 'BB'

Senior unsecured debt (RU000A0JS710): downgraded to 'BB-' from
'BB' and withdrawn

GB

Long-Term Foreign and Local Currency IDRs: affirmed at 'BB-';
Outlooks Negative

Short-Term Foreign Currency IDR: affirmed at 'B'

Support Rating: affirmed at '3'

Viability Rating: affirmed at 'b-'

EMB

Long-Term Foreign and Local Currency IDRs: affirmed at 'B+';
Outlooks Stable

Short-Term Foreign Currency IDR: affirmed at 'B'

Viability Rating: affirmed at 'b+'

Support Rating: affirmed at '5'

Support Rating Floor: affirmed at 'No Floor'



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


CAIXABANK SA: S&P Rates New Perpetual AT1 Capital Notes 'BB-'
-------------------------------------------------------------
S&P Global Ratings said it had assigned a 'BB-' long-term issue
rating to the proposed perpetual additional Tier 1 (AT1) capital
notes to be issued by CaixaBank S.A. (BBB/Positive/A-2).

S&P said, "We understand from the proposed AT1 notes' terms and
conditions that the instrument will comply with the EU's latest
capital requirements directive (CRD IV), which is the EU's
implementation of Basel III. We also understand that the notes
will rank senior to ordinary shares, but will be subordinated
to more senior debt, including CaixaBank's Tier 2 debt."

In accordance with S&P's methodology on hybrid capital ("Bank
Hybrid Capital And Nondeferrable Subordinated Debt Methodology And
Assumptions," published Jan. 29, 2015), S&P is assigning the AT1
notes a 'BB-' rating, four notches below its'bbb' assessment of
CaixaBank's stand-alone credit profile.

S&P calculates this four-notch difference as follows:

One notch to reflect subordination risk.

Two additional notches to take into account the risk of
nonpayment at the full discretion of the issuer and the hybrid's
expected inclusion in Tier 1 regulatory capital.

One further notch reflecting the proposed issue's mandatory
contingent capital clause leading to equity conversion.
According to this clause, the conversion would occur if
CaixaBank's common equity Tier 1 ratio fell below 5.125%, which
S&P does not consider as a going concern trigger.

Compliance with the minimum regulatory capital requirements is
necessary to avoid the risk of potential restrictions in the
payment of coupons on AT1 notes. S&P views this risk as limited
for CaixaBank at this stage since the bank's Common Equity Tier 1
ratio of 11.9% (phased-in) as of end-March 2017 is well above the
7.375% minimum level set by the regulator under the Supervisory
Review and Evaluation Process.

S&P acknowledges the existence of a legacy hybrid instrument (not
rated, EUR30 million outstanding), ranking pari passu with the
planned AT1 issuance, which, unlike the proposed instrument, has a
mandatory nonpayment clause linked to a narrow earnings
definition. S&P said, "In our view, in this case, the existence of
this clause does not increase the probability of default of the
proposed AT1 issuance, as we see unlikely that CaixaBank would
decide to skip coupon payments on the new AT1 if it were to
mandatorily cancel coupon payments on the legacy instrument.
Furthermore, CaixaBank recently announced its intention
to redeem in full the legacy instrument by the end of June 2017."

"We intend to assign intermediate equity content to the notes,
once the regulator approves them, for inclusion in the bank's
regulatory Tier 1 capital. The instruments meet the conditions for
intermediate equity content, in our opinion, because they are
perpetual, with a call date expected to be five or seven years
from issuance. In addition, they do not contain a coupon step-up
and have loss-absorption features on a going-concern basis due to
the bank's flexibility to suspend the coupon at any time," S&P
said.


FONCAIXA FTGENCAT 4: Fitch Affirms CC Rating on Class E Notes
-------------------------------------------------------------
Fitch Ratings has upgraded Foncaixa FTGENCAT 4 FTA's class A(G), B
and C notes:

Class A(G) notes (ISIN ES0337937017): upgraded to 'A+sf' from
'BBBsf', Outlook Stable

Class B notes (ISIN ES0338013024): upgraded to 'BBBsf' from
'BB+sf', Outlook Positive

Class C notes (ISIN ES0338013032): upgraded to 'BBBsf' from 'BB-
sf', Outlook Positive

Class D notes (ISIN ES0338013040): affirmed at 'CCCsf', Recovery
Estimate 0%

Class E notes (ISIN ES0338013057): affirmed at 'CCsf', Recovery
Estimate 0%

KEY RATING DRIVERS

The upgrades reflect increased credit enhancement (CE) as a result
of natural portfolio amortisation of the senior and mezzanine
notes. CE for the class A(G) notes has increased by 3.1% to 22.4%
and for the class C notes by 1.3% to 9.1%.

The ratings of class B and C notes are capped by the rating of the
swap counterparty CaixaBank (BBB/Positive/F2). The transaction
features an unusual swap whereby on a net basis, the issuer
receives interest on defaulted loans. The swap could be
collateralised if necessary, but Fitch considers it fairly
illiquid and have not given any credit to the receipt of interest
payments from defaulted assets in rating stresses above the swap
counterparty rating.

The transaction also includes 66% flexible loans, which allow
borrowers to redraw amounts up to a agreed maximum. As any redraws
will not form part of the securitisation, but are ranked pari
passu with the securitised amount in a default event, Fitch
treated all flexible loans as fully drawn and adjusted the
collateral backing the respective securitised loans accordingly.

The average delinquency over 90 days has stabilised at around 4%
over the last three years. The annual default probability
assumption is unchanged at 4.3%. The performance since the last
review has been mixed. Delinquencies over 90 days have increased
to 4.7% from 4.0% but the weighted average recovery rate has
increased substantially to 67% from 59%. The portfolio factor is
15% from 19%. Increases in portfolio concentration have been
marginal over the past 12 months with respect to the top 10
obligors, which represent 6.1% of the performing portfolio,
compared with 5.5% at the previous review.

RATING SENSITIVITIES

Applying a 1.25x default rate multiplier to all assets in the
portfolio would result in a downgrade of up to one notch for all
of the notes in both transactions. Applying a 0.75x recovery rate
multiplier to all assets in the portfolio would result in a
downgrade of up to two notches for all of the notes in both
transactions.



===========
S W E D E N
===========


NOBINA AB: S&P Alters Outlook to Positive & Affirms 'BB' CCR
------------------------------------------------------------
S&P Global Ratings revised its outlook on Sweden-based bus
operator Nobina AB to positive from stable. At the same time, the
'BB' long-term corporate credit rating was affirmed.

The outlook revision incorporates Nobina's continued strong
operating performance and S&P's expectation that profitability
could increase in the current and following financial years, as
the contract portfolio matures. S&P thinks that stronger
profitability could lead it to view the business risk profile more
favorably and consequently upgrade the company in the next 12
months.

Based in Sweden, Nobina has contracts with local public transport
authorities (PTAs) in the Nordic region and generated sales of
Swedish krona 8.9 billion (about EUR937 million) in 2016-2017
(fiscal year ended Feb. 28, 2017). The company has steadily
improved its operations in recent years through careful bidding
for new contracts, an improved cost position, and increased
efficiency.

It has also grown in size through new contract wins, resulting in
an average annual revenue growth rate of 4.7% in the past five
years (including 6.5% just in fiscal 2017), while at the same time
improving its profit margins. In fiscal 2017, the company again
reported all-time high sales and earnings, supported by positive
contract migration effects, increasing bus-for-rail traffic, and
positive indexation effects. S&P acknowledges the lower contract
migration in the current fiscal year than in the previous two,
which could strengthen margins because contracts are generally
less profitable in the first few years because of start-up costs.

In addition, while profitability in Sweden and Finland is
satisfactory, with an EBIT margin of about 7.0%, we think there's
room for gradual improvement in Norway and Denmark, where margins
are considerably thinner. As a result, S&P thinks that Nobina
could achieve its stated profitability target of earnings before
tax to revenues of 4.5% (equivalent to an S&P Global Ratings-
adjusted EBITDA margin of about 16.5%). This compares with
respective margins of 4.0% and 16.2% in fiscal 2017.

S&P still views Nobina's competitive environment as harsh. It
faces competition not only from privately-owned peers but also
from bus-operating subsidiaries of large state-owned European
transportation groups, such as Deutsche Bahn, SNCF, and Norges
Statsbaner, which in the past have entered into loss-making
contracts to gain market share, consequently distorting the
market. Although S&P understands that profitability across the
sector has improved, it still views the competitive bidding
process as a potential threat to profitability. S&P considers
Nobina's limited size and scope as a constraint to the rating
compared with other rated transport providers, such as StageCoach
and FirstGroup.

S&P said, "We continue to view very positively the company's
contract-based business model, given that it derives 97% of total
revenues from local PTAs under long-term contracts. The high
degree of cost indexation is also an advantage, in our view, since
it adds predictability to its earnings. We do not think the
retirement of the current CEO Ragnar NorbÑck as of June 1, 2017,
will alter Nobina's strategy considerably. We note, though, the
incoming CEO's limited experience in public transport operations."

Nobina's credit metrics were stronger than S&P expected in 2016-
2017, with funds from operations (FFO) to debt of 24% and debt to
EBITDA of 3.5x. S&P does not think they will improve significantly
in the coming years, despite potentially stronger earnings and
cash flows. This is due to Nobina's financial policy, which
stipulates maintenance of net debt to EBITDA of 3.0x-4.0x to
maximize shareholder value. However, S&P views positively Nobina's
improving finance conditions, with average borrowing rates falling
significantly in the past two years. In addition, S&P also views
positively Nobina's access to multiple finance leasing providers
and an increasing share coming from financial counterparties (as
opposed to the bus manufacturers) as this increases Nobina's
bargaining power vis a vis its suppliers.

The positive outlook takes into account S&P expectations of
continued improving earnings and margins in fiscal 2018 as the
contract portfolio matures. "We expect that the company will
maintain a careful and selective approach when bidding for new
contracts and that costs will be contained under the index clauses
in its contracts. We further expect that the company will stick to
its financial policy of maintaining leverage at 3.0x-4.0x and that
dividend payments and any possible acquisitions will fit into this
policy," said S&P.

S&P stated: "We could raise the rating to 'BB+' if we were to view
Nobina's business risk profile more favorably. This could
materialize if the company improves its profitability so that it
achieves and maintains its targeted 4.5% EBT margin while also
maintaining a cautious approach when bidding for new contracts.
While a potential upgrade is likely to be driven by our view of
improving business risk, we would expect the company to maintain
credit metrics in line with its financial policy, that is debt to
EBITDA below 4.0x and FFO to debt of above 20%.

"We could revise the outlook to stable if we were to assess upside
potential for the rating as remote. This could materialize if
Nobina's profitability weakened, for example due to the incurrence
of unexpected costs or increasing competition, which would
pressure profitability across the industry. We could also revise
the outlook to stable or downgrade Nobina if its financial profile
weakened to such an extent that FFO to debt would be significantly
below 20% for an extended period. This could be the result of a
large acquisition, although we see such a scenario as remote at
the moment."



===========
T U R K E Y
===========


BURSA MUNICIPALITY: Fitch Cuts LT IDR to BB, Outlook Stable
-----------------------------------------------------------
Fitch Ratings has downgraded Metropolitan Municipality of Bursa's
(Bursa) Long-Term Foreign- and Local-Currency Issuer Default
Ratings (IDR) to 'BB' from 'BB+' and the National Long-Term Rating
to 'AA-(tur)' from 'AA(tur). The Outlooks are Stable.

The downgrade of the ratings reflects Bursa's higher-than-expected
debt increase, induced by a significant increase in capex, which
together with higher opex, led to a deterioration of the debt-to-
current balance ratio above Fitch negative ratings action trigger
of four years at 5.4 years at end-2016. The Stable Outlooks
reflect Fitch's view that the expected debt ratios will remain in
line with the current rating

KEY RATING DRIVERS

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

HIGH
Fitch estimates that Bursa will not be able to cut back capex
investments prior to local elections, which would lead the debt
payback ratio to increase further on average to six years in 2017-
2019, above Fitch negative ratings action trigger at four years.
Furthermore, accumulation of the expected debt would increase its
debt burden on average to 145% of current revenue, which is higher
in comparison to its international peers on the same rating level.

Among its national peers, the debt stock of Bursa has the lowest
share of unhedged external debt (2016: 42.3%), but expected
currency volatility could increase fiscal pressure on the debt
servicing costs of the city's unhedged liabilities. The latter
would make up 40% of its total debt stock in 2017-2019. However,
the lengthy weighted average maturity of Bursa's total debt stock,
at 10.9 years, and predictable monthly cash flows with Treasury
repayment guarantee mitigate immediate refinancing risk.

Net overall risk-to-current revenue increased significantly to
208% in 2016 from 141% in 2015, which is mainly limited to the
debt stock of the city's water and waste water management
affiliate BUSKI. The indebtedness of Bursa's companies is
otherwise low at 3.2% of the city's operating revenue at end-2016.

Law 6360 implemented in March 2014 has enlarged the city's
boundaries by increasing the number of Bursa's districts to 17
from seven, creating significant capex investments for BUSKI.
Fitch therefore expects net overall risk to remain high at about
200% of the city's current revenue in 2017-2019.

MEDIUM

Fitch expects the operating margin will decrease on average to 31%
yoy (2016: 34%) on the back of opex pressure, which Fitch
estimates to surpass operating revenue growth by about 2% in 2017-
2019 before gradually declining. The city's operating revenue base
would remain robust and grow on average by 15% during the same
period, but lax cost control in the pre-election period would put
pressure on operating performance.

At end-2016, opex increased 19.7% yoy due to increase in goods and
services costs mainly related to the city's new responsibilities
as well as capex-related service purchases. However, operating
revenue growth remained subdued at 4.3% due to adverse effects
from the national economy.

A significant spike in capex led to a large deficit before
financing at 39% of total revenue in 2016, with an overall deficit
of 12% of total revenue. The overall deficit would be mainly
covered by new borrowings, increasing the city's debt burden. In
Fitch's view, strict control of opex and moderate capex, coupled
with continued solid operating revenue growth, would help shrink
the deficit before financing to 5% of total revenue over the
medium term, which would be fully covered by cash.

A weakened operating balance and increasing interest costs as a
result of a capex-induced debt increase means the current balance
will be under pressure and cover on average 49% of expected capex
(2016: 37%). This will lead to a large budget deficit before
financing, averaging 12% of total revenue.

Coverage of capex by current balance remains weak, resulting in
substantially higher debt funding. The city's authority's
budgetary policy and financial planning is improving so that
funding of large capex investments could be covered in a timely
manner. .Furthermore, the administration's disclosure of financial
planning or additional information on the various funding
instruments for its capex programmes is highly transparent.

Bursa's ratings also reflect the following key rating drivers:

Bursa's credit profile is constrained by the weak Turkish
institutional framework, reflecting a short track record of a
stable inter-governmental relationship between the central
government and local governments with regard to allocation of
revenues and responsibilities in comparison with their
international peers.

Bursa is Turkey's fourth-largest contributor to GDP, contributing
on average 4% in 2004-2014 (last available statistics). The
metropolitan city is the fourth-largest city of Turkey by
population, and accounted for 2.9 million people in 2016. The city
is the main hub for the country's automobile and automotive
industry, followed by steel production, textile and food-
processing industries.

RATING SENSITIVITIES

A negative rating action would be triggered by Bursa's inability
to adjust capex in relation to its current balance and to apply
cost control, undermining the sustainability of budgetary
performance, and by a debt-to-current revenue ratio above 170%.

Sustainable reduction of overall risk closer to 100% from its
current 145% and continuation of sound fiscal performance with a
current margin sufficient to cover at least 60% capex together
with opex being in line with the city's budget could trigger a
positive rating action


IZMIR MUNICIPALITY: Fitch Affirms BB+ LT IDR, Outlook Stable
------------------------------------------------------------
Fitch Ratings has affirmed the Metropolitan Municipality of
Izmir's Long-Term Foreign-Currency Issuer Default Rating (IDR) at
'BB+' and Long-term Local-Currency IDR at 'BBB-'. The Outlooks on
the IDRs are Stable. Fitch has upgraded the National Long-Term
Rating to 'AAA(tur)' from 'AA+(tur)' with a Stable Outlook.

The affirmation is driven by Izmir's sustainable strong operating
performance, with operating margins above 50% in 2016 and the
city's prudent management as well as its resilient local economy
supporting the local tax base. The affirmation also takes into
account the municipality's core responsibilities and corresponding
operating spending and high capital expenditure needs.

The upgrade of the National Rating is based on the fact that city
has continued to record strong operating margins while
accelerating capex projects prior to upcoming elections and
fulfilling its additional responsibilities following the
enlargement of the metropolitan area while maintaining healthy
liquidity levels.

The Stable Outlook reflects Fitch's expectations of continued
sound fiscal performance with operating margins well above 50% in
2017-2019 and its debt payback to remain below two years.

KEY RATING DRIVERS

In line with Fitch expectations, Izmir's well-diversified local
economy remained resilient to adverse shocks. Combined with
controlled operating expenditure, it achieved an operating margin
of a high 52.7% at end-2016, despite nation's depressed real GDP
growth in 2016 compared with the five-year average. According to
Fitch's baseline scenario, Izmir's operating margin should remain
above 50% in 2017-2019, supporting the ratings.

Fitch expects direct debt to increase 54% to TRY2.7 billion 2019
(2016: TRY 1.7 billion). This takes into account an expected large
realisation of capex and a further annual depreciation of the
euro/Turkish lira by 5.75%. The debt metrics are expected to
remain stable with a debt to current revenue ratio of on average
55% (2016: 53%) and a debt payback of 1 year (2016: 1.1 years).

Izmir's foreign currency debt is unhedged, exposing it to foreign
currency risk. Approximately 10% of the 56.6% increase of direct
debt in 2016 was due to the depreciation of the Turkish lira, as
79.5% of its debt was euro-denominated at end-2016. The lengthy
maturity (weighted average maturity at 9.8 years), the amortising
nature of its total debt and healthy liquidity levels are
mitigating factors for refinancing and liquidity risks.

Izmir is exposed to contingent liabilities. Its municipal
companies were increasingly loss-making in 2016, after public
services were increased. Based on this, Fitch expects Izmir to
post a deficit before debt variation averaging 12% in 2017-2019,
down from 26% in 2016. The 2016 deficit was partly due to write
offs of realised losses of its municipal companies related to
previous years losses, which needed to be accounted for on the
metropolitan municipality's budget subject to a law regulation of
the Ministry of Interior in 2012. However, the write off of losses
was not compensated for by cash by the city, which instead reduced
its relevant equity on its balance sheet.

In 2017-2019, Fitch expects the realisation of these losses to
account for about 36% of the deficit, down from 45.3% in 2016. The
city expects the write off of the previous year's losses to be
completed off by 2019.

With a population of 4.22 million in 2016, Izmir is Turkey's
third-largest municipality in terms of population. Its wealth
indicators are above the national average and its local GDP of
TRY127.4 billion in 2014 (according to the latest available
statistics) accounts for 6.2% of national GDP, making Izmir the
nation's third-largest GDP contributor. The city is an important
transport and industrial hub and accounts for 6% of the country's
export. Its dynamic socio-economic profile and high standard of
living exposes it to a high number of less qualified job seekers
as well as migrant flows, resulting in the unemployment rate
(2016: 14%) being persistently above the national average (11.1%).

RATING SENSITIVITIES

Izmir's ratings are capped by the sovereign and an upgrade of the
sovereign ratings could result in a similar rating action on
Izmir's ratings. A reduction of foreign currency exposure to below
35% of its outstanding debt, improving financial strength with
budgetary surplus before financing and continuation of the prudent
management policies would support Izmir's intrinsic credit
profile.

Any negative rating action on Turkey would be mirrored on Izmir's
IDRs. A sharp increase in Izmir's direct debt to current balance
above two years, driven by capex and local currency devaluation
could also lead to a downgrade.


TURKIYE GARANTI: Fitch Assigns BB+ Rating to Tier 2 Capital Notes
-----------------------------------------------------------------
Fitch Ratings has assigned Turkiye Garanti Bankasi A.S.'s
(Garanti; BBB-/Stable/bb+) USD750 million issue of Basel III-
compliant Tier 2 capital notes due 2027 a final rating of 'BB+'.

The final rating is the same as the expected rating assigned on
May 15, 2017.

The notes qualify as Basel III-compliant Tier 2 instruments and
contain contractual loss absorption features, which will be
triggered at the point of non-viability of the bank. According to
the terms, the notes are subject to permanent partial or full
write-down upon the occurrence of a non-viability event (NVE).
There are no equity conversion provisions in the terms.

An NVE is defined as occurring when the bank has incurred losses
and has become, or is likely to become, non-viable as determined
by the local regulator, the Banking and Regulatory Supervision
Authority (BRSA). The bank will be deemed non-viable when it
reaches the point at which either the BRSA determines that its
operating license is to be revoked and the bank liquidated, or the
rights of its shareholders (except to dividends), and the
management and supervision of the bank, should be transferred to
the Savings Deposit Insurance Fund on the condition that losses
are deducted from the capital of existing shareholders.

The notes have a 10-year maturity and a call option after five
years.

KEY RATING DRIVERS

The notes are notched down once from Garanti's Long-Term Issuer
Default Rating (IDR) of 'BBB-' in accordance with Fitch's "Global
Bank Rating Criteria". This reflects Fitch's view that BBVA would
support Garanti's Tier 2 debt holders should the need arise. The
notching includes one notch for loss severity and zero notches for
non-performance risk.

Fitch has applied zero notches for incremental non-performance
risk, as the agency believes that the risk of the notes absorbing
losses is broadly in line with the risk of the bank defaulting on
its senior debt, with both depending on the extent to which the
bank, in case of need, can receive and utilise support from its
controlling shareholder, BBVA.

The one notch for loss severity reflects Fitch's view of below-
average recovery prospects for the notes in case of non-
performance. Fitch has applied one notch, rather than two, for
loss severity, as partial, and not solely full, write-down of the
notes is possible. In Fitch's view, there is some uncertainty
about the extent of losses the notes would face in case of an NVE
given that this would be dependent on the size of the operating
losses incurred by the bank and any measures taken by the
authorities to help restore the bank's viability.

RATING SENSITIVITIES

As the notes are notched down from Garanti's support-driven Long-
Term Foreign-Currency IDR, their rating is sensitive to a change
in this rating. The notes' rating is also sensitive to a change in
notching due to a revision in Fitch's assessment of the
probability of the notes' non-performance risk relative to the
risk captured in Garanti's Long-Term IDR, or in its assessment of
loss severity in case of non-performance.

Garanti's ratings are listed below:

  Long-Term Foreign Currency (FC) and Local Currency (LC) IDRs:
  'BBB-'; Outlook Stable

  Short-Term FC and LC IDRs: 'F3'

  Viability Rating: 'bb+'

  Support Rating: '2'

  National Long-Term Rating: 'AAA(tur)'; Outlook Stable

  Senior unsecured long-term debt: 'BBB-'

  Senior unsecured short-term debt: 'F3'

  T2 capital notes: 'BB+'



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


CO-OPERATIVE BANK: Aims to Launch Debt-for-Equity Swap
------------------------------------------------------
Emma Dunkley and Martin Arnold at The Financial Times report that
The Co-operative Bank is aiming to strike a deal within two weeks
that shores up its balance sheet amid mounting concern that large
depositors, including charities and mutual groups, face large
losses if it is wound up.

The beleaguered bank is hoping to launch a debt-for-equity swap
-- where some investors swap their bonds for shares at a loss --
within a fortnight, in order to complete the process before GBP400
million of senior bonds mature in September, the FT relays, citing
two bankers briefed on the process.

The Co-op Bank announced in January that it must raise more
capital after revealing that it is set to fall short of the
regulatory threshold for reserves over the next few years, the FT
recounts.

The bank is planning to raise about GBP450 million from the
debt-for-equity swap. But it must also raise about GBP300 million
in new equity, the FT discloses.

According to the FT, bankers close to the plans cite four
companies -- Cyrus Capital Partners, GoldenTree Asset Management,
Silver Point Capital, and Blue Mountain -- as the most likely of
the existing tier-two bondholders to pump in more capital.

However, should the bank not strike a deal to raise GBP300
million, it could ultimately lead to an orderly wind-down of the
bank in a crucial test of the Bank of England's resolution powers,
the FT notes.

Bankers close to the Co-op Bank maintain that it is still pursuing
a sales process at the same time, with at least one party
understood to be interested, the FT relates.

However, the Co-op Bank has not yet been able to find a buyer for
the whole company, despite initial expressions of interest, the FT
discloses.

                    About Co-operative Bank

The Co-operative Bank plc is a retail and commercial bank in the
United Kingdom, with its headquarters in Balloon Street,
Manchester.

In 2013-2014, the Bank was the subject of a rescue plan to address
a capital shortfall of about GBP1.9 billion.  The Bank mostly
raised equity to cover the shortfall from hedge funds.

In February 2017, the Bank's board announced that they were
commencing a sale process for the Bank and were "inviting offers."

The Troubled Company Reporter-Europe reported on February 17, 2017
that Moody's Investors Service downgraded Co-operative Bank plc's
standalone baseline credit assessment (BCA) to ca from caa2. The
downgrade of the bank's BCA to ca reflects Moody's view that the
bank's standalone creditworthiness is increasingly challenged and
that the bank will not be able to restore its declining capital
position without external assistance.

TCR-Europe also reported on February 23, 2017 that Fitch Ratings
has downgraded The Co-operative Bank p.l.c.'s (Co-op Bank) Long-
Term Issuer Default Rating (IDR) to 'B-' from 'B' and placed it on
Rating Watch Evolving (RWE). The Viability Rating (VR) was
downgraded to 'cc' from 'b'. The downgrade of the VR reflects
Fitch's view that a failure of the bank appears probable as it
likely needs to obtain new equity capital to restore viability.
Fitch believes there is a very high risk that this will include a
restructuring of its subordinated debt that Fitch is likely to
consider a distressed debt exchange, which would result in a
failure according to Fitch definitions.


HEATHROW FINANCE: Moody's Rates New GBP275MM Sr. Sec. Notes Ba3
---------------------------------------------------------------
Moody's Investors Service has assigned a Ba3/LGD5 rating to the
new GBP275 million 3.875% senior secured notes maturing in 2027 to
be issued by Heathrow Finance plc.

Concurrently, Moody's has also affirmed the Ba1 Corporate Family
Rating ("CFR"), the Ba2-PD the Probability of Default Rating
("PDR"), the Ba3 ratings of the GBP263 million 5.375% Senior
Secured Notes due September 2019 and the GBP250 million 5.75%
Senior Secured notes due March 2025. The outlook on all ratings is
stable.

The only asset of HF is its shares in Heathrow (SP) Limited
("HSP"). HSP is a holding company, which owns the company that
owns London Heathrow Airport, Europe's busiest and the world's
seventh busiest airport in terms of total passengers.

The HSP group is financed via debt provided through a ring-fenced
secured debt financing structure (the "HSP SDF"). HSP can only
provide cash to service debt at HF if it complies with the
financial terms of the HSP SDF. HF debt holders benefit from a
security interest in HF's shares in HSP. HF is currently financed
by GBP263 million 5.375% Senior Secured Notes due 2019 and GBP250
million 5.75% Senior Secured notes due Mar 2025 (together the
"Existing HF Notes") and with several loan facilities with various
maturity dates to 2028 and which have an outstanding amount of
GBP450 million. The loans, the New HF Notes, and the Existing HF
Notes (together "the HF Debt") rank pari passu among themselves.

Proceeds from the New HF Notes are expected to be used to repay
existing indebtedness of the HF and/or at one of HF's holding
companies, ADI Finance 2. The issuance will result in an increase
in HF's Net Debt to RAB (Regulatory Asset Base) to the high 80s in
percentage terms and a reduction of the headroom against the 90
percent covenant included in the terms of the Notes due Sep 2019.
However, Moody's expects this reduction in the headroom to be
temporary. As all other Notes incorporate a Net Debt to RAB
covenant of 92.5 percent, Moody's expects HF will regain the five
percentage point headroom under the covenant level that HF has
sought to maintain as per its financial policy from September 2019
onwards.

RATINGS RATIONALE

The affirmation of the Ba3 rating of the Existing HF Notes and the
Ba1 CFR, and the assignment of the Ba3 rating of the New HF Notes,
reflects Moody's expectation that HF will maintain a financial
profile commensurate with the current ratings driven by robust
passenger traffic growth, in spite of the fact that the airport is
at capacity in term of take-offs and landings, and outperformance
of the regulatory settlement in terms of operating expense
reductions and commercial revenues.

The Ba1 CFR of HF reflects a PDR of Ba2-PD and a 65% Expected
Family Recovery Rate. The CFR is an opinion of the HF group's
ability to honour its financial obligations and is assigned to HF
as if it had a single class of debt and a single consolidated
legal structure. The Ba3/LGD-5 rating of the New Notes reflects
the structural subordination of the New HF Notes and the other HF
Debt in the HF group structure versus the HSP SDF.

HF's Ba1 CFR reflects (1) its ownership of Heathrow, which is one
of the world's most important hub airports and the largest
European airport, (2) its long established framework of economic
regulation, (3) the resilient traffic characteristics of Heathrow,
(4) the capacity constraints the airport faces, (5) the current
sustained period of lower capital expenditure levels, (6) an
expectation that the HF group will maintain high leverage with Net
debt / RAB in the high 80s percent, and (7) the features of the
HSP SDF which puts certain constraints around management activity
together with the protective features of the HF Debt which
effectively limits HF's activities to its investment in HSP.

RATING OUTLOOK

The rating outlook is stable. This reflects Moody's expectation
that Heathrow will see low single digit growth overall in
passenger volumes and maintain a credit profile commensurate with
the current ratings.

The outlook further assumes that HSP will continue to manage its
debt raising programme in a way that minimises refinancing risk
and allows it to comfortably meet new funding requirements and
that the reduction in the headroom against the HF leverage
covenant is temporary in nature.

WHAT COULD CHANGE THE RATING UP

The ratings could move up if the HF group were to exhibit a
financial profile that evidenced materially lower leverage than
currently expected. This could be suggested by a Net Debt to RAB
ratio likely to be permanently below 80% and an Adjusted Interest
Cover Ratio of permanently more than 1.2 times.

WHAT COULD CHANGE THE RATING DOWN

The ratings could move down if the HF group were to exhibit a
financial profile that evidenced materially higher leverage than
currently expected. This could be suggested by a materially
reduced headroom under its Net Debt to RAB covenant or an Adjusted
Interest Cover Ratio that is consistently less than 1.0 times.

The principal methodology used in these ratings was Privately
Managed Airports and Related Issuers published in December 2014.


QUOTIENT LIMITED: Reports MosaiQ Progress & Financial Results
------------------------------------------------------------
Quotient Limited reported continued progress on the commercial
scale-up of MosaiQ and financial results for its fourth quarter
and fiscal year ended March 31, 2017.

"Tremendous progress continues to be made towards the full
commercial launch of MosaiQ in Europe later this year.  The
initial manufacturing system for MosaiQ Microarrays is now
commissioned and validated.  Working with our partner STRATEC, we
have now taken delivery of the first "commercially ready" MosaiQ
Instrument," said Paul Cowan, chairman and chief executive officer
of Quotient.  "Internal validation studies are now underway for
the initial MosaiQ applications, with European field trials
scheduled to commence early in the third calendar quarter of 2017.
We look forward to sharing the results of the internal validation
studies and European field trials when they are completed later
this summer."

MosaiQ Platform

MosaiQ, Quotient's next-generation automation platform for blood
grouping and disease screening, represents a transformative and
highly disruptive testing platform for transfusion diagnostics,
with an established capability to detect antibodies and antigens.
Feasibility has also been demonstrated with respect to the
detection of nucleic acids (DNA or RNA).  Through MosaiQ, Quotient
aims to deliver substantial value to donor testing laboratories
worldwide with a unified instrument platform to be utilized for
blood grouping and both serological and molecular disease
screening of donated red blood cells and plasma.

Assay Performance

Assay performance for the initial blood grouping and disease
screening applications continues to meet expectations.  The
Company has taken the opportunity over the past four weeks to
further optimize the spot recognition algorithm for the antibody
detection assay.

Quotient has commenced formal internal validation studies for the
MosaiQ IH Microarray and the MosaiQ SDS Microarray (for CMV and
Syphilis).  These studies are designed to mimic the subsequent
field trials.  This work is expected to be completed in July.

Regulatory and Commercial Milestones

   * European Field Trials -- Quotient expects to commence
     European field trials in the third calendar quarter of 2017

   * European Regulatory Approval -- Quotient expects to file for
     European regulatory approval for MosaiQ in the second half
     of 2017

   * European Commercialization -- Quotient has commenced the
     commercialization of MosaiQ in Europe, where it has already
     received invitations to participate in tenders to be awarded
     in mid 2018

   * U.S. Field Trials -- Quotient expects to commence U.S. field
     trials during the second half of calendar 2017

   * U.S. Regulatory Approval -- Quotient expects to file for
     U.S. regulatory approval and clearance for MosaiQ around the
     end of calendar 2017

   * U.S. Commercialization -- If approved for sale, Quotient
     expects to begin marketing MosaiQ in the U.S. in early 2019

Fiscal Fourth Quarter and Full Year Financial Results

"The conventional reagent business generated record results in
terms of revenue and profitability during fiscal 2017, with total
revenues growing 20% year-over-year," said Paul Cowan.  "Quotient
generated product sales and gross profit growth of 12% and 11%,
respectively, during fiscal 2017.  We are targeting a continuation
of solid growth and profitability for this business in the coming
fiscal year."

Capital expenditures totaled $20.2 million in fiscal 2017
("FY17"), compared with $29.0 million in fiscal 2016 ("FY16"),
reflecting continued investment in the Eysins, Switzerland
manufacturing facility and manufacturing equipment for MosaiQ
consumables, along with expenditures related to the construction
of a new conventional reagent manufacturing facility near
Edinburgh, Scotland.

Quotient ended FY17 with $20.8 million in cash and other short
term investments, $80.7 million of long-term debt and $5.0 million
in an offsetting long term cash reserve account.  On April 10,
2017, Quotient completed an equity offering raising $45.2 million,
net of expenses.

Outlook for the Fiscal Year Ending March 31, 2018

   * Total revenue in the range of $33 to $34 million, including
     other revenue (product development fees) of approximately
     $12 million.  Forecast other revenue assumes the receipt of
     milestone payments contingent upon achievement of regulatory
     approval for certain products under development, including
     MosaiQ.  The receipt of these milestone payments involves
     risks and uncertainties.

   * Product sales of $21 to $22 million, compared with FY17
     Product sales of $20 million.

   * Operating loss in the range of $63 to $68 million, including
     non-cash charges for depreciation, amortization and stock
     compensation totaling approximately $15 million.

   * Capital expenditures in the range of $25-$30 million.

Product sales in the first quarter of fiscal 2018 are expected to
be within the range of $5.7 to $6.0 million, compared with $5.7
million for the first quarter of FY17.

Quarterly product sales can fluctuate depending upon the shipment
cycles for red blood cell based products, which account for
approximately two-thirds of current product sales.  These products
typically experience 13 shipment cycles per year, equating to
three shipments of each product per quarter, except for one
quarter per year when four shipments occur.  The timing of
shipment of bulk antisera products to OEM customers may also move
revenues from quarter to quarter.  Some seasonality in demand is
also experienced around holiday periods in both Europe and the
United States.  As a result of these factors, Quotient expects to
continue to see seasonality and quarter-to-quarter variations in
product sales.  The timing of product development fees included in
other revenues is mostly dependent upon the achievement of pre-
negotiated project milestones.

For the three months ended March 31, 2017, Quotient Limited
reported a net loss of $20.30 million on $5.52 million of total
revenue compared to a net loss of $9.51 million on $5.04 million
of total revenue for the same period in 2016.

For the year ended March 31, 2017, the Company recognized a net
loss of $85.06 million on $22.22 million of total revenue compared
to 1oss of $33.87 million on $18.52 million of total revenue for
the year ended March 31, 2016.

As of March 31, 2017, Quotient Limited had $109.97 million in
total assets, $134.06 million in total liabilities and a total
shareholders' deficit of $24.09 million.

A full-text copy of the press release is available for free at:

                     https://is.gd/B5fN7D

                    About Quotient Limited

Penicuik, United Kingdom-based Quotient Limited is a
commercial-stage diagnostics company committed to reducing
healthcare costs and improving patient care through the provision
of innovative tests within established markets.  With an initial
focus on blood grouping and serological disease screening,
Quotient is developing its proprietary MosaiQ technology platform
to offer a breadth of tests that is unmatched by existing
commercially available transfusion diagnostic instrument
platforms.  The Company's operations are based in Edinburgh,
Scotland; Eysins, Switzerland and Newtown, Pennsylvania.

Quotient Limited reported a net loss of US$85.06 million for the
year ended March 31, 2017, a net loss of US$33.87 million for the
year ended March 31, 2016, a net loss of US$59.05 million for the
year ended March 31, 2015, and a net loss of US$10.16 million for
the year ended March 31, 2014.

Ernst & Young LLP, in Belfast, United Kingdom, issued a "going
concern" qualification on the consolidated financial statements
for the year ended March 31, 2017, citing that the Company has
recurring losses from operations and planned expenditure exceeding
available funding that raise substantial doubt about its ability
to continue as a going concern.


REDX: Administrators Appointed, Share Trading Halted
----------------------------------------------------
Sarah Neville at The Financial Times reports that trading of
shares in Redx, a Cheshire-based pharmaceuticals company, has been
temporarily suspended after Liverpool council called in
administrators over an outstanding loan.

The council said that the drug discovery and development company
had missed a repayment deadline for a GBP2 million loan granted
five years ago, the FT relates.

According to the FT, Redx said it had offered Liverpool council
"an immediate payment of GBP1 million in return for a short grace
period in which to repay the outstanding amount" but that the
offer had been rejected.

The company -- which for the half-year to the end of March
reported a pre-tax loss of GBP11 million, up from GBP6.7 million a
year before, mostly as a result of higher operating expenses --
said it had requested an immediate suspension of its shares from
the Alternative Investment Market, Aim, "having been informed that
administrators have been appointed to the company", the FT relays.

Liverpool City Council said it had provided a three-year
investment loan in 2012 to support the company's business
expansion plans in the city, the FT notes.

Despite the council agreeing to extend the repayment deadline by
two years, Redx, which had relocated to Cheshire, had "shown no
willingness to make any repayment of any size during this period
-- even though it had raised substantial funds from shareholders
over the past few years", according to the FT.

No contact with the council had been made in the run-up to the
maturity of the loan, on March 31, and the council had been
"forced to make formal demand of the debt on the company", the FT
discloses.

The council, as cited by the FT, said this demand had not been
satisfied "leaving the council with no option than to appoint
administrators".


TOREX RETAIL: Ex-CEO Seeks to Overturn Ruling in RBS Suit
---------------------------------------------------------
Ben Martin at The Telegraph reports that Neil Mitchell, the boss
of collapsed software firm Torex Retail who claimed Royal Bank of
Scotland forced the business into administration, is attempting to
overturn a High Court judge's decision to dismiss his GBP128
million lawsuit.

According to The Telegraph, Mr. Mitchell, the former chief
executive of Torex Retail, has lodged permission to appeal on the
grounds that Judge Malcolm Davis-White QC should have recused
himself from proceedings because of "apparent bias".

This is because the judge disclosed during the hearing into the
businessman's claims that he banked with RBS and had in the past
acted for one of Torex's administrators, The Telegraph states.

He has been an outspoken critic of RBS ever since Torex's failure
in 2007, when the software business became engulfed in scandal and
was sold to US private equity firm Cerberus for GBP204 million,
The Telegraph notes.

Mr. Mitchell alleges that RBS conspired with Cerberus and KPMG to
sell the business on the cheap and is seeking damages, The
Telegraph discloses.  Judge Davis-White QC ruled that the
businessman's claims were unlikely to be successful in a full
trial and that the alleged conspiracy "makes little sense", The
Telegraph recounts.


                            *********

Monday's edition of the TCR delivers a list of indicative prices
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S U B S C R I P T I O N   I N F O R M A T I O N

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

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

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