TCREUR_Public/170629.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

           Thursday, June 29, 2017, Vol. 18, No. 128


                            Headlines


B E L G I U M

ETHIAS SA: Fitch Hikes Subordinated Debt Ratings to BB+


F R A N C E

BANIJAY GROUP: S&P Assigns Prelim. 'B+' CCR, Outlook Stable


G E R M A N Y

METRO WHOLESALE: Moody's Assigns (P)Ba1 Corporate Family Rating


G R E E C E

ALPHA BANK: Moody's Hikes Mortgage Covered Bonds Rating to B3
ESTIA MORTGAGE II: Moody's Raises Rating on Class A Notes to Caa1
FREESEAS INC: Terminates RBSM LLP as Accountants
GREECE: On Target to Tap Bond Markets, EU Creditors Say


I R E L A N D

TORO EUROPEAN 4: Moody's Assigns (P)B2 Rating to Class F-R Notes


I T A L Y

ALITALIA SPA: Ryanair Reiterates Interest in Acquisition
BANCA POPOLARE: Fitch Lowers Issuer Default Ratings to 'D'


K A Z A K H S T A N

EURASIAN BANK: S&P Affirms 'B/B' Counterparty Credit Ratings
KAZKOMMERTSBANK: Moody's Hikes Deposit Ratings to Ba2


N E T H E R L A N D S

EURO-GALAXY IV: Moody's Assigns (P)B2 Rating to Class F-R Notes


N O R W A Y

LOCK LOWER: Moody's Raises CFR to Ba2, Outlook Positive


S W E D E N

OVAKO GROUP: S&P Affirms 'B-' CCR on Improved Earnings


T U R K E Y

* TURKEY: Customs Tax Cut May Bankrupt Red Meat Producers


U K R A I N E

CHORNOMORNAFTOHAZ JSC: Poroshenko Vetoes Bill to Allow Moratorium
MHP SA: S&P Raises CCR to 'B' Following Eurobond Placement


U N I T E D   K I N G D O M

BIBBY OFFSHORE: S&P Lowers CCR to 'CCC-', Outlook Negative
CO-OP BANK: Reaches GBP700M Rescue Deal with Hedge Fund Investors
MABEL TOPCO: S&P Affirms 'B' CCR on Planned Refinancing


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B E L G I U M
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ETHIAS SA: Fitch Hikes Subordinated Debt Ratings to BB+
-------------------------------------------------------
Fitch Ratings has upgraded Ethias S.A.'s Insurer Financial
Strength (IFS) Rating to 'BBB+' from 'BBB' and Long-Term Issuer
Default Rating (IDR) to 'BBB' from 'BBB-'. The Outlooks are
Stable.

The upgrades reflect the completion of Ethias's recovery plan in
May 2017 and resulting strengthening of capital profile and
reduced exposure to interest rate risk. Ethias is planning
further actions aimed at strengthening its capital position,
although these may negatively impact profitability in 2017.

KEY RATING DRIVERS

The ratings reflect Ethias's strong capital position, as
indicated by Fitch's Prism FBM, good profitability, albeit
potentially volatile, and strong franchise in Belgium. Offsetting
these factors are Ethias's moderate exposure to interest rate
risk, and the reliance of its parent company, Vitrufin, on Ethias
for funding the payment of interest and principal on its EUR278
million debt. This is likely to exert pressure on Ethias's
capital and cash flow over the next two years.

On May 12, 2017 Ethias announced the completion of the recovery
plan that it initiated in October 2016, following a request by
the National Bank of Belgium (NBB). The plan comprised
strengthening its capital position and reducing the sensitivity
of its Solvency II coverage ratio to low interest rates. Fitch
expects one further measure outlined by the NBB, financial
reinsurance on credit spreads of corporate bonds, to be carried
out in 2017. Ethias also integrated Whestia, a small insurance
subsidiary, at end-June 2017, marginally benefiting Ethias's
solvency position.

The recovery plan included measures to reduce Ethias's exposure
to interest-rate risk associated with the capital-intensive
'First A' products, under which guarantees are paid until the
policyholder reaches the age of 99. The main measure, a 'Switch
VI' offer, where customers were offered a 25% premium on contract
value in case of surrenders marked another step in Ethias's
efforts to reduce the amount of contracts related to First A
products. Since 2014, around 80% of reserves related to these
products have been redeemed by policyholders.

Ethias launched a new 'Switch VII' offer on May 29, 2017,
offering policyholders of First A products a financial incentive
to redeem their contracts. If the offer is successful, Ethias's
capital profile is likely to further improve in 2017. The offer
closes on July 7, 2017. In addition, Ethias is in discussion with
potential buyers for the remaining part of the First A portfolio.
The disposal may come at a cost, but it would contribute to
significantly reducing Ethias's exposure to interest rate risk.

Ethias has a strong but still volatile capital position,
reflecting its exposure to interest-rate risk. At end-2016,
Ethias's group regulatory Solvency II ratio was 146%, excluding
transitional arrangements. It improved to 157% in 1Q17 following
data enhancements. Ethias targets a Solvency II ratio of 150%.
Fitch's Prism FBM score for Ethias was 'Strong' based on end-2016
data, after deduction of the Vitrufin debt (2015: 'Strong').
Ethias's financial leverage (FLR) ratio, including Vitrufin's
debt, was 28% at end-2016 (2015: 33%).

Vitrufin relies on Ethias for dividends to pay the interest and
principal on its EUR278 million debt, which matures in January
2019. Ethias has historically pre-funded all interest expenses
related to the Vitrufin debt via dividend payments that are
deducted from Ethias's solvency capital. In 2018, Ethias plans to
pay further dividends of EUR278 million (EUR45 million ordinary
dividend on 2017 result and EUR233 million as a dividend in
account on 2018 result) to Vitrufin.

Ethias's IFRS net income was EUR424 million in 2016, after a
profit of EUR638 million in 2015 and a significant loss in 2014
of EUR598 million. Despite the profit in 2016, Ethias's financial
performance is sensitive to interest-rate changes and can be
volatile.

Fitch estimates that the Switch VII offer could cost Ethias up to
EUR150 million, depending on the acceptance rate. Further, the
announced intention to dispose the remaining First A reserves
could result in a one-off loss for Ethias. This would negatively
impact profitability in 2017, despite being positive for Ethias's
capital profile.

Ethias is exposed to interest-rate risk as life technical
liabilities are subject to relatively high minimum guaranteed
returns. However, Fitch views this risk to be reducing as
liabilities reduce. Therefore, the agency places limited reliance
on the duration gap between assets and liabilities, despite the
potential for it to increase with changes in business mix.

RATING SENSITIVITIES

The ratings could be upgraded on redemption of Vitrufin's debt
and if Ethias's Prism score remains at least "Strong", the
Solvency II ratio above 150% and FLR below 25%.

The ratings are likely to be downgraded if Ethias's Prism FBM
falls to "Adequate" or FLR increases to above 35%.

FULL LIST OF RATING ACTIONS

Ethias S.A.:

-- IFS Rating upgraded to 'BBB+' from 'BBB'; Outlook Stable
-- Long-Term IDR upgraded to 'BBB' from 'BBB-'; Outlook Stable
-- Undated subordinated debt upgraded to 'BB+' from 'BB'
-- Dated subordinated debt upgraded to 'BB+' from 'BB'

Ethias Droit Commun AAM:

-- IFS Rating upgraded to 'BBB+' from 'BBB'; Outlook Stable


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BANIJAY GROUP: S&P Assigns Prelim. 'B+' CCR, Outlook Stable
-----------------------------------------------------------
S&P Global Ratings assigned its preliminary 'B+' long-term
corporate credit rating to French TV production company Banijay
Group SAS.  The outlook is stable.

S&P also assigned its preliminary 'B+' issue rating to the
group's EUR350 million senior secured notes, the EUR60 million
term loan A, and the EUR35 million revolving credit facility
(RCF).  The preliminary recovery rating on this debt is '3',
indicating S&P's expectation of meaningful recovery in the 50%-
70% range (rounded estimate: 65%) in the event of payment
default.

The final ratings will depend on S&P's receipt and satisfactory
review of all final documentation and final terms of the
transaction.  Accordingly, the preliminary ratings should not be
construed as evidence of final ratings.  If S&P Global Ratings
does not receive final documentation within a reasonable time
frame, or if final documentation and final terms of the
transaction depart from materials and terms reviewed, it reserves
the right to withdraw or revise the ratings.

S&P's preliminary rating reflects its SACP of 'bb-' on Banijay
and S&P's view that the credit quality of its controlling
shareholder caps the overall preliminary rating at 'B+'.

The group operates in the competitive and fragmented film and
television programming industry, and is exposed to the inherent
volatility of viewers' tastes.  Demand and pricing for Banijay's
content is linked to the broadcasters' performance.  Broadcasters
are currently undergoing structural changes due to audience
fragmentation and new entrants, while they remain exposed to
cyclical spending on advertising.  S&P's assessment of Banijay
also reflects the group's relatively small size -- with pro forma
revenues of about EUR0.8 billion in 2016 -- compared with other
TV producers such as Endemol Shine (EUR1.9 billion) or Fremantle
(EUR1.6 billion).  Also, S&P understands that one of the
rationales for the merger with Zodiak Media in 2016 was to
reinforce Banijay's library in scripted content, but the latter
is typically less profitable than nonscripted shows.  The
development of scripted formats over the coming years, driven by
increasing demand for high quality drama in particular, could
weigh on the EBITDA margin and on working capital due to the
longer production cycle and more-capital-intensive nature of
scripted shows versus nonscripted shows.  However, S&P
understands scripted-show revenues should not exceed 20% over the
long term, compared with 11% in 2016.

S&P's preliminary rating on Banijay also reflects the group's
strong positions in its key markets: France, the U.S., and the
Nordics, where it generated more than 60% of its revenues in
2016. Banijay Group is an independent TV production group with a
diversified library of over 500 formats and more than 20,000
hours of catalogue content across numerous genres.  One of the
key strengths of Banijay is its successful creative talent
retention, with a very high retention rate, which preserves
independence and entrepreneurial spirit.  S&P also factors in the
predictability of the group's cash flows, with 84% of revenues
already contracted for 2017, mainly due to contracts signed early
in the production process and coming from returning seasons of
successful shows.  A key feature of Banijay's business model is
also its pre-funding model where a majority of the shows are pre-
financed by the broadcasters, which allows the group to have more
flexibility on its cost base.  Lastly, the bulk of Banijay's
revenues are derived from nonscripted shows and daily shows
which, together with tight cost control, allows the group to
report an S&P Global Ratings-adjusted EBITDA margin of above 12%,
which is in line with S&P's estimate of the industry average and
above that of certain peers such as Endemol Shine, All3Media, and
Fremantle.

S&P also takes into account Banijay's proposed capital structure,
including a new EUR60 million term loan and EUR350 million of
bond issuance, whose proceeds will be used to repay the group's
existing debt of about EUR308 million and pay for the acquisition
of Castaway, which produces the show "Survivor" in the U.K.  S&P
forecasts that the group will have aggressive debt leverage over
the next couple of years.  S&P projects a ratio of S&P Global
Ratings-adjusted debt to EBITDA of between 4.5x and 5.0x in 2017,
reducing toward 4.0x in 2018.  S&P includes in its debt
calculation the earn out and put option liabilities, but also the
EUR25 million outstanding of a convertible bond provided by
Vivendi and issued at the Banijay Group Holding level.  This
instrument does not meet S&P's criteria for equity treatment.
S&P's assessment of Banijay's 'bb-' stand-alone credit profile is
further supported by the company's positive cash generation,
which S&P expects to be to about EUR50 million annually.

The stable outlook on Banijay reflects S&P's expectation that in
the next 12 months, the company's adjusted debt to EBITDA will be
between 4.5x and 5.0x including the proposed transaction, and
will decline to about 4.0x by the end of 2018.  The stable
outlook also captures S&P's assumptions that the group's EBITDA
growth will be driven by a growing TV production market and the
full consolidation effect of acquisitions, while profitability
will slightly decline, owing to a growing share of revenues from
scripted shows.  It also incorporates S&P's view of the weaker
credit quality of Banijay's controlling shareholder, which
results in the rating being capped at 'B+'.

S&P could downgrade Banijay if its operating performance falls
materially below S&P's expectations of 10% growth in revenues and
adjusted EBITDA margins of between 13% and 14% for 2017 and 2018,
resulting in an adjusted debt-to-EBITDA ratio increasing to above
5.0x on a sustainable basis, and/or leading to free operating
cash flow materially falling short of our forecast of EUR40
million-EUR45 million for 2017.  In addition, if S&P estimates
that the creditworthiness of the controlling shareholder is
deteriorating following an increase in the group's debt or a
decline in the market value of its liquid investment, S&P could
also take a negative rating action.

Upside is unlikely over the next 12 months.  However, S&P could
raise its preliminary rating on Banijay if its performance and
deleveraging are stronger than S&P's above mentioned forecast,
and at the same time, it observes an improvement in the credit
quality of the controlling shareholder.


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METRO WHOLESALE: Moody's Assigns (P)Ba1 Corporate Family Rating
---------------------------------------------------------------
Moody's Investors Service has concluded the review of Metro AG's
ratings initiated on December 16, 2016. The rating agency has
confirmed Metro AG's Baa3 long-term and Prime-3 (P-3) short-term
issuer ratings which are the ratings of the future Ceconomy AG.
Metro AG will be renamed Ceconomy AG after the demerger has been
concluded. The outlook is stable.

Concurrently, Moody's has assigned a provisional (P)Ba1 corporate
family rating (CFR) to METRO Wholesale & Food Specialist AG
(MWFS). The rating will be transitioned into a definitive rating
at the conclusion of the demerger expected in the coming weeks.
Metro AG's and METRO Finance B.V.'s long-term and short-term
senior unsecured MTN program ratings were downgraded to
(P)Ba1/(P)NP from (P)Baa3/(P)P-3 respectively, and METRO Finance
B.V.'s senior unsecured instrument ratings were downgraded to Ba1
from Baa3. The outlook on MWFS' and METRO Finance B.V.'s ratings
is stable. At the same time, Moody's downgraded to Ba1 from Baa3
all existing debt instruments issued by Metro AG -- which will be
transferred to MWFS - and issued by METRO Finance B.V., and
downgraded to NP from P-3 the senior unsecured commercial paper
ratings of Metro AG.

"Moody's decision to assign a (P)Ba1 rating to MWFS and the
confirmation of the Baa3 rating of Ceconomy AG reflects Moody's
views that the split of Metro AG's liabilities with almost the
entire funded debt being transferred to MWFS results in a
different credit risk for the two stand-alone companies." says
Sven Reinke, a Moody's Senior Vice President -- and lead analyst
for Metro AG and MWFS.

RATINGS RATIONALE

METRO AG / CECONOMY AG

Moody's rating action assumes that the demerger will go ahead as
planned and that Metro AG will spin off the MWFS business
alongside METRO Finance B.V. and that all publicly listed debt
instruments as well as most of the existing funded debt will be
transferred to MWFS. Metro AG will subsequently be renamed
Cecomony AG. Ceconomy comprises Metro AG's current Media-Saturn
business which is Europe's largest Electronics retailer.

The rating agency's view that Ceconomy is adequately positioned
in the Baa3 rating category is driven by the company's large
scale and geographic diversification with operations in 15
European countries, and the strong market position and brand
recognition in most countries it operates in. Ceconomy has an
extensive store network with more than 1,000 outlets and growing
multi-channel capabilities. The rating agency positively
recognizes the progress in recent years towards an integrated
multi-channel business with strongly growing online sales which
now account for around 9% of Ceconomy's revenues. At the same
time, Moody's view of Ceconomy's rating also reflects the
discretionary nature of the demand for most of the company's
products and the highly competitive market environment with
growing online competition.

Ceconomy had a mixed operating performance in H1 fiscal 2017 with
flat revenues and lower EBIT of EUR280 million compared with
EUR322 million in H1 fiscal 2016. However, the company's cash
flow from operating activities remained healthy at EUR277 million
supported by positive working capital cash flow of EUR84 million.

Importantly, Ceconomy has a strong balance sheet with only EUR285
million of funded debt and a high cash level of EUR1,032 million
per March 31, 2017. Ceconomy's pro forma adjusted gross debt /
EBITDA ratio stands at 3.4x and Moody's expects the metric to
trend down over the next 12-18 months owing to gradually rising
operating profitability and falling exceptional items. The high
cash balance, which increased during H1 fiscal 2017 driven by a
EUR250 million Schuldschein promissory note issuance, and the 10%
equity stake in MWFS, provide Ceconomy with a strong financial
position and additional liquid assets.

RATIONALE FOR STABLE OUTLOOK

The stable outlook reflects Moody's expectations that Ceconomy
will gradually improve its operating profitability while relying
on fewer exceptional items -- which the rating agency does not
necessarily adjust for. Improving operating profitability and the
possible monetization of the equity stake in MWFS would increase
the company's financial flexibility as well as the headroom in
the Baa3 rating category. In addition, Moody's expects that any
potential acquisitions would be structured in a way which would
protect Ceconomy's investment grade rating.

WHAT COULD CHANGE THE RATING UP/DOWN

Given the challenging market environment and relatively thin
operating profit margins, upward pressure on the rating is
unlikely to develop over the next 12 -- 18 months. However,
positive rating pressure could occur if Ceconomy's gross leverage
were to fall below 3.0x, with retained cash flow/net debt moving
above 25% on a sustainable basis while maintaining a good
liquidity profile.

Conversely, negative rating pressure would likely occur if
Ceconomy's gross leverage were to exceed 3.5x and retained cash
flow/net debt fall below 15% on a continued basis. A material
deterioration in the company's liquidity profile would also
likely result in negative pressure being exerted on the rating or
outlook.

MWFS

Moody's rating assumes that the demerger will go ahead as planned
and that almost all of Metro AG's existing funded debt will be
transferred to MWFS. In the rating agency's view, MWFS does not
have a sufficiently strong credit profile for Baa3 rating as it
assumes almost the entire funded debt of the Metro AG. As of
March 31, 2017, MWFS' funded debt amounts to EUR 5,167 million.
The company's pro forma adjusted gross debt / EBITDA ratio is
estimated at around 4.9x as of March 31, 2017 which Moody's
believes is too high for an investment grade rating in particular
in the light of MWFS' historic weakness in terms of operating
cash flow generation. However, Moody's notes that March marks the
high point of MWFS' leverage owing to the seasonal working
capital cash flow pattern. The rating agency expects MWFS'
financial profile to strengthen over the next 18 -- 24 months
owing to the growing higher-margin food delivery business and a
material reduction of restructuring related costs.

Moody's positively acknowledges the strong business profile with
the large scale and geographic diversity of MWFS' Cash & Carry
food wholesale business which operates around 751 stores and 79
depots in 35 countries. MWFS has leading market positions in many
of these countries. The rating also reflects the increasing focus
on the higher margin food delivery services, which was recently
strengthened with the acquisition of the French food delivery
company Pro a Pro, as well as the large portfolio of real estate
assets with a book value of around EUR5 billion which provides
financial flexibility and opportunities for value creation and
cash flow generation.

However, Moody's also notes the constrained profitability of MWFS
in its German home market, which has increased the company's
reliance on cash flow generation in emerging markets such as
Russia. Although recently stabilized, MWFS' Real German food
retail business' EBIT margin remains low as the segment remains
under pressure from its larger competitors who mostly operate
supermarket and discount formats. During H1 of fiscal 2017, MWFS'
sales increased only slightly by 0.5% driven by positive currency
effects and negatively impacted by adverse calendar effects owing
to the timing of Easter which fell into April in 2017 but into
March in 2016. MWFS' EBIT before special items rose to EUR603
million compared with EUR496 million in H1 of fiscal 2016.
However, the increase was mainly driven by property disposal
gains of EUR118 million which Moody's adjusts for. Additionally,
MWFS' operating cash flow generation was negative in H1 of fiscal
2017 as the company recorded a higher working capital cash
outflow of EUR489 million which was EUR90 million higher than in
H1 of fiscal 2016.

RATIONALE FOR STABLE OUTLOOK

The stable outlook reflects the rating agency's expectations that
MWFS will improve EBITDA generation alongside falling exceptional
items -- which the rating agency does not necessarily adjust
for -- which would result in rising Moody's adjusted EBITDA and
positive free cash flow generation. However, such improvement is
in Moody's view only expected to occur gradually from fiscal 2018
onwards.

WHAT COULD CHANGE THE RATING UP/DOWN

Positive pressure could develop if MWFS successfully executes its
strategy of stable operating profit generation, alongside
reducing exceptional item recognition and improving cash flow
generation partially driven by more efficient capital spending.
Quantitatively, positive rating pressure could occur if MWFS'
gross leverage were to fall below 4.25x, with retained cash
flow/net debt of at least 15% on a sustainable basis while
maintaining a satisfactory liquidity profile.

Conversely, negative rating pressure would likely occur if MWFS's
gross leverage were to exceed 5.0x and retained cash flow/net
debt fall below 10.0% on a continued basis. A material
deterioration in the company's liquidity profile would also
likely result in negative pressure being exerted on the rating or
outlook.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Retail
Industry published in October 2015.

Ceconomy AG (Ceconomy), based in Dusseldorf, Germany, is Europe's
largest Electronics retailer, and is focused on two main brands:
Media-Markt and Saturn. In the financial year 2016, the company
reported revenues and EBIT (before special items) of EUR21.9
billion and EUR466 million, respectively.

MWFS, based in Dusseldorf, Germany, is one of the world's largest
food wholesale companies and also operates the fifths largest
German food retailer, Real. In the financial year 2016, the
company reported revenues and EBIT (before special items) of
EUR36.5 billion and EUR1,106 million.


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ALPHA BANK: Moody's Hikes Mortgage Covered Bonds Rating to B3
-------------------------------------------------------------
Moody's Investors Service has upgraded the following ratings of
the mortgage covered bonds across five Greek covered bond
programmes:

-- Upgraded to B3 from Caa2, the mortgage covered bonds issued
    by Alpha Bank AE (counterparty risk (CR) assessment
    Caa2(cr)), under its Direct Issuance Global programme.

-- Upgraded to B3 from Caa2, the mortgage covered bonds issued
    by Eurobank Ergasias S.A. (CR assessment Caa2(cr)), under its
    Covered Bonds 1 programme.

-- Upgraded to B3 from Caa2, Eurobank Ergasias S.A., under its
    Covered Bonds 2 programme.

-- Upgraded to B3 from Caa2, the rating on the mortgage covered
    bonds issued by National Bank of Greece S.A. (CR assessment
    Caa2(cr)), under its Global covered bond programme.

-- Upgraded to B3 from Caa2, the mortgage covered bonds issued
    by National Bank of Greece S.A. under its Covered Bond 2
    programme.

Please click on this link
http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF454688for
the list of Affected Credit Ratings. The list is an integral part
of this Press Release and identified each affected issuer.

RATINGS RATIONALE

The rating actions on the covered bond ratings referenced above
follow (1) the rating actions on the relevant issuer ratings and
CR assessments; and (2) following the Greek sovereign rating
upgrade to Caa2 from Caa3, the increase of Greece's long-term
country ceilings for bonds to B3, which now constrains the
covered bond ratings at the B3 level.

KEY RATING ASSUMPTIONS/FACTORS

Moody's determines covered bond ratings using a two-step process:
an expected loss analysis and a timely payment indicator (TPI)
framework analysis.

EXPECTED LOSS: Moody's uses its Covered Bond Model (COBOL) to
determine a rating based on the expected loss on the bond. COBOL
determines expected loss as (1) a function of the probability
that the issuer will cease making payments under the covered
bonds (a CB anchor event), and (2) the stressed losses on the
cover pool assets following a CB anchor event.

The cover pool losses are an estimate of the losses Moody's
currently models following a CB anchor event. Moody's splits
cover pool losses between market risk and collateral risk. Market
risk measures losses stemming from refinancing risk and risks
related to interest-rate and currency mismatches (these losses
may also include certain legal risks). Collateral risk measures
losses resulting directly from the cover pool assets' credit
quality. Moody's derives collateral risk from the collateral
score.

The CB anchor for the programmes is the CR assessment plus one
notch. The CR assessment reflects an issuer's ability to avoid
defaulting on certain senior bank operating obligations and
contractual commitments, including covered bonds. Moody's may use
a CB anchor of the CR assessment plus one notch in the European
Union or otherwise where an operational resolution regime is
particularly likely to ensure continuity of covered bond
payments.

TPI FRAMEWORK: Moody's assigns a "timely payment indicator"
(TPI), which measures the likelihood of timely payments to
covered bondholders following a CB anchor event. The TPI
framework limits the covered bond rating to a certain number of
notches above the CB anchor.

FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE
RATINGS:

The CB anchor is the main determinant of a covered bond
programme's rating robustness. A change in the level of the CB
anchor could lead to an upgrade or downgrade of the covered
bonds. The TPI Leeway measures the number of notches by which
Moody's might lower the CB anchor before the rating agency
downgrades the covered bonds because of TPI framework
constraints.

A multiple-notch downgrade of the covered bonds might occur in
certain limited circumstances, such as (1) a sovereign downgrade
negatively affecting both the CB Anchor and the TPI; (2) a
multiple-notch downgrade of the CB Anchor; or (3) a material
reduction of the value of the cover pool.

RATING METHODOLOGY

The principal methodology used in these ratings was "Moody's
Approach to Rating Covered Bonds" published in December 2016.


ESTIA MORTGAGE II: Moody's Raises Rating on Class A Notes to Caa1
-----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of three notes
in three Greek RMBS. The rating action reflects:

-- The decrease in country risk and the related Greece local-
    currency country ceiling on June 23, 2017,

-- The collateral quality of the underlying pool.

Moody's also affirmed the ratings of the four notes that had
sufficient credit enhancement to maintain current rating on the
affected notes.

Issuer: Estia Mortgage Finance II PLC

-- EUR1137.5M Class A Notes, Upgraded to Caa1 (sf); previously
    on Sep 29, 2015 Confirmed at Caa2 (sf)

Issuer: Grifonas Finance No. 1 Plc

-- EUR897.7M Class A Notes, Upgraded to B3 (sf); previously on
    Sep 29, 2015 Confirmed at Caa2 (sf)

-- EUR23.8M Class B Notes, Affirmed Caa3 (sf); previously on Sep
    29, 2015 Confirmed at Caa3 (sf)

-- EUR28.5M Class C Notes, Affirmed Caa3 (sf); previously on Sep
    29, 2015 Confirmed at Caa3 (sf)

Issuer: KION Mortgage Finance Plc

-- EUR553.8M Class A Notes, Upgraded to B3 (sf); previously on
    Sep 29, 2015 Confirmed at Caa2 (sf)

-- EUR28.2M Class B Notes, Affirmed Caa3 (sf); previously on Sep
    29, 2015 Confirmed at Caa3 (sf)

-- EUR18M Class C Notes, Affirmed Caa3 (sf); previously on Sep
    29, 2015 Confirmed at Caa3 (sf)

RATINGS RATIONALE

The rating action is prompted by:

-- the increase in the Greece local-currency country ceiling to
    B3.

Reduced Country Risk

Moody's has upgraded Greece's long-term issuer rating as well as
all senior unsecured bond and programme ratings to Caa2 and
(P)Caa2 from Caa3 and (P)Caa3, respectively. The outlook has been
changed to positive from stable.

The long-term country ceilings for foreign-currency and local-
currency bonds have been raised to B3 from Caa2, to reflect the
reduced risk of Greece exiting the euro area, and the long-term
ceiling for foreign-currency and local-currency deposits has been
raised to Caa2 from Caa3. Moody's maintains a two-notch gap
between the bond and the deposit ceilings to reflect the ongoing
capital controls. The short-term foreign-currency bond and bank
deposit ceilings remain unchanged at Not Prime (NP).
https://www.moodys.com/research/--PR_368411

As a result, the maximum achievable ratings for structured
finance transactions backed by Greek receivables is raised to
B3(sf).

MILAN CE is a key input in the RMBS methodology used to calibrate
the loss distribution in the cash flow model, however given the
low level of the Greek country ceilings, and the relatively high
level of expected losses, a MILAN CE that would generate the
desired loss distribution cannot be established. Therefore
Moody's did not carry out the cash flow analysis to determine the
note rating, but rather used a qualitative approach:

-- The ratings were positioned according to the ratio of the
    notes credit enhancement to the portfolio expected loss
    (CE/EL).

-- The position in the capital structure as well as notes size
    were also taken into account in the ratings. Such approach is
    further adjusted in view of maximum achievable rating.

Moody's upgraded the senior notes of KION Mortgage Finance Plc
and Grifonas Finance No. 1 PLC to B3(sf) given the sufficient
CE/EL. Moody's upgraded Estia Mortgage Finance II PLC senior
notes to Caa1(sf), in line with the performance in terms of
arrears and cumulative defaults.

Moody's affirmed four subordinated notes in KION Mortgage Finance
Plc and Grifonas Finance No. 1 PLC at Caa3(sf) which had
sufficient credit enhancement to maintain current rating on the
affected notes.

The principal methodology used in these ratings was "Moody's
Approach to Rating RMBS Using the MILAN Framework" published in
September 2016.

The analysis undertaken by Moody's at the initial assignment of
ratings for RMBS securities may focus on aspects that become less
relevant or typically remain unchanged during the surveillance
stage.

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

Factors or circumstances that could lead to an upgrade of the
ratings include (1) performance of the underlying collateral that
is better than Moody's expected, (2) deleveraging of the capital
structure, (3) improvements in the credit quality of the
transaction counterparties and (4) a decrease in sovereign risk.

Factors or circumstances that could lead to a downgrade of the
ratings include (1) an increase in sovereign risk, (2)
performance of the underlying collateral that is worse than
Moody's expected, (3) deterioration in the notes' available
credit enhancement and (4) deterioration in the credit quality of
the transaction counterparties.

Please note that on March 22, 2017, Moody's released a Request
for Comment, in which it has requested market feedback on
potential revisions to its Approach to Assessing Counterparty
Risks in Structured Finance. If the revised Methodology is
implemented as proposed, the credit ratings of the above
mentioned transactions are not expected to be affected. Please
refer to Moody's Request for Comment, titled " Moody's Proposes
Revisions to Its Approach to Assessing Counterparty Risks in
Structured Finance" for further details regarding the
implications of the proposed Methodology revisions on certain
Credit Ratings".


FREESEAS INC: Terminates RBSM LLP as Accountants
------------------------------------------------
FreeSeas Inc. provided notice to RBSM LLP, the Company's prior
independent registered public accounting firm, that the Company
had terminated its engagement with the firm.  In replacement of
RBSM, the Company has retained Fruci & Associates II, PLLC, as
the Company's independent registered public accounting firm, as
disclosed in a Form 8-K report filed with the Securities and
Exchange Commission.

                       About FreeSeas Inc.

Headquartered in Athens, Greece, FreeSeas Inc., formerly known as
Adventure Holdings S.A., was incorporated in the Marshall Islands
on April 23, 2004, for the purpose of being the ultimate holding
company of ship-owning companies.  The management of FreeSeas'
vessels is performed by Free Bulkers S.A., a Marshall Islands
company that is controlled by Ion G. Varouxakis, the Company's
Chairman, President and CEO, and one of the Company's principal
shareholders.

The Company's fleet consists of six Handysize vessels and one
Handymax vessel that carry a variety of drybulk commodities,
including iron ore, grain and coal, which are referred to as
"major bulks," as well as bauxite, phosphate, fertilizers, steel
products, cement, sugar and rice, or "minor bulks."  As of Oct.
12, 2012, the aggregate dwt of the Company's operational fleet is
approximately 197,200 dwt and the average age of its fleet is 15
years.

Freeseas reported a net loss of US$52.94 million on US$2.30
million of operating revenues for the year ended Dec. 31, 2015,
compared to a net loss of US$12.68 million on US$3.77 million of
operating revenues for the year ended Dec. 31, 2014.  As of
Dec. 31, 2015, FreeSeas had US$18.71 million in total assets,
US$35.47 million in total liabilities and a total shareholders'
deficit of US$16.76 million.

RBSM LLP, in New York, issued a "going concern" qualification on
the consolidated financial statements for the year ended Dec. 31,
2015, citing that the Company has incurred recurring operating
losses and has a working capital deficiency.  In addition, the
Company has failed to meet scheduled payment obligations under
its loan facilities and has not complied with certain covenants
included in its loan agreements and is in default in other
agreements with various counter parties.  Furthermore, the vast
majority of the Company's assets are considered to be highly
illiquid and if the Company were forced to liquidate, the amount
realized by the Company could be substantially lower that the
carrying value of these assets.  These conditions, among others,
raise substantial doubt about the Company's ability to continue
as a going concern.


GREECE: On Target to Tap Bond Markets, EU Creditors Say
-------------------------------------------------------
Independent.ie reports that representatives from Greece's
European creditors said the country is on target to tap bond
markets for money again by the end of this year and exit its
bailout program next summer.

According to Independent.ie, officials from the European
Commission, European Central Bank and a eurozone rescue fund said
recent austerity measures that included further cuts to pensions
and economic reforms will further solidify Greece's public
finances over the years ahead.

Greece was first bailed out back in 2010 when it was effectively
locked out of bond markets because investors were asking for sky-
high interest rates in return for money, Independent.ie recounts.

Without the money, Greece would have gone bankrupt and most
likely have had to ditch the euro currency, Independent.ie notes.

Now those so-called yields are tumbling, a real sign that
investors think lending to Greece is a viable option,
Independent.ie states.

Once Greece is able to borrow money in the bond markets to fund
its debt repayments, it will not need any more bailout cash from
its creditors, according to Independent.ie.

In a note of caution, Nicola Giammarioli, Greece mission chief
for the eurozone's rescue fund, the European Stability Mechanism,
as cited by Independent.ie, said legislation was not enough --
now the Greek government had to implement them.

The return to market will be a key moment for Greece, which has
relied on bailout money for the past seven years, Independent.ie
states.

In return, successive governments have had to enact big spending
cuts and tax rises, a combination that contributed to a deep
recession and a surge in poverty and unemployment, Independent.ie
discloses.


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


TORO EUROPEAN 4: Moody's Assigns (P)B2 Rating to Class F-R Notes
----------------------------------------------------------------
Moody's Investors Service has assigned provisional ratings to
nine classes of notes (the "Refinancing Notes") to be issued by
Toro European CLO 4 Designated Activity Company ("Toro 4" or the
"Issuer"), formerly known as Toro European CLO 1 Designated
Activity Company:

-- EUR 1,750,000 Class X-R Secured Floating Rate Notes due 2030,
    Assigned (P)Aaa (sf)

-- EUR 240,000,000 Class A-R Secured Floating Rate Notes due
    2030, Assigned (P)Aaa (sf)

-- EUR 19,500,000 Class B-1-R Secured Floating Rate Notes due
    2030, Assigned (P)Aa2 (sf)

-- EUR 13,000,000 Class B-2-R Secured Fixed Rate Notes due 2030,
    Assigned (P)Aa2 (sf)

-- EUR 15,000,000 Class B-3-R Secured Floating Rate Notes due
    2030, Assigned (P)Aa2 (sf)

-- EUR 25,000,000 Class C-R Secured Deferrable Floating Rate
    Notes due 2030, Assigned (P)A2 (sf)

-- EUR 20,750,000 Class D-R Secured Deferrable Floating Rate
    Notes due 2030, Assigned (P)Baa2 (sf)

-- EUR 26,500,000 Class E-R Secured Deferrable Floating Rate
    Notes due 2030, Assigned (P)Ba2 (sf)

-- EUR 10,500,000 Class F-R Secured Deferrable Floating Rate
    Notes due 2030, Assigned (P)B2 (sf)

RATINGS RATIONALE

Moody's ratings of the notes address the expected loss posed to
noteholders. The ratings reflect the risks due to defaults on the
underlying portfolio of assets, the transaction's legal
structure, and the characteristics of the underlying assets.

The Issuer has issued the Refinancing Notes in connection with
the refinancing of the following classes of notes: Class A Notes,
Class B Notes, Class C Notes, Class D Notes, Class E Notes and
Class F Notes due 2028 (the "Original Notes"), previously issued
on September 12, 2014 (the "Original Closing Date"). On the
Refinancing Date, the Issuer will use the proceeds from the
issuance of the Refinancing Notes to redeem in full its
respective Original Notes. On the Original Closing Date, the
Issuer also issued one class of subordinated notes totalling EUR
33 million, which will remain outstanding. On the Refinancing
Date, an additional class of subordinated note totalling EUR5.3
million will also be issued.

Toro 4 is a managed cash flow CLO with a target portfolio made up
of EUR 400,000,000 par value of mainly European corporate
leveraged loans. At least 90% of the portfolio must consist of
senior secured loans, senior secured bonds and eligible
investments, and up to 10% of the portfolio may consist of second
lien loans, unsecured loans, mezzanine obligations and high yield
bonds. The portfolio may also consist of up to 10% of fixed rate
obligations. The portfolio is expected to be 88% ramped up as of
the closing date and to be comprised predominantly of corporate
loans to obligors domiciled in Western Europe.

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

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

Loss and Cash Flow Analysis:

Moody's modeled the transaction using a cash flow model based on
the Binomial Expansion Technique, as described in Section 2.3.2.1
of the "Moody's Global Approach to Rating Collateralized Loan
Obligations" rating methodology published in October 2016.

The cash flow model evaluates all default scenarios that are then
weighted considering the probabilities of the binomial
distribution assumed for the portfolio default rate. In each
default scenario, the corresponding loss for each class of notes
is calculated given the incoming cash flows from the assets and
the outgoing payments to third parties and noteholders.
Therefore, the expected loss or EL for each tranche is the sum
product of (i) the probability of occurrence of each default
scenario and (ii) the loss derived from the cash flow model in
each default scenario for each tranche. As such, Moody's
encompasses the assessment of stressed scenarios.

The key model inputs Moody's used 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. For modeling
purposes, Moody's used the following base-case assumptions:

Performing par and principal proceeds balance: EUR400,000,000

Diversity Score: 36

Weighted Average Rating Factor (WARF): 2900

Weighted Average Spread (WAS): 3.80%

Weighted Average Coupon (WAC): 5.00%

Weighted Average Recovery Rate (WARR): 44.0%

Weighted Average Life (WAL): 8 years

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:

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

Stress Scenarios:

Together with the set of modeling assumptions above, Moody's
conducted an additional sensitivity analysis, which was a
component in determining the provisional ratings assigned to the
rated notes. This sensitivity analysis includes increased default
probability relative to the base case.

Below is a summary of the impact of an increase in default
probability (expressed in terms of WARF level) on the notes
(shown in terms of the number of notch difference versus the
current model output, whereby a negative difference corresponds
to higher expected losses), assuming that all other factors are
held equal.

Percentage Change in WARF -- increase of 15% (from 2900 to 3335)

Rating Impact in Rating Notches:

Class X Notes: 0

Class A-R Notes: 0

Class B-1-R Notes: -2

Class B-2-R Notes: -2

Class B-3-R Notes -2

Class C-R Notes: -2

Class D-R Notes: -2

Class E-R Notes: -1

Class F-R Notes: 0

Percentage Change in WARF -- increase of 30% (from 2900 to 3770)

Rating Impact in Rating Notches:

Class X Notes: 0

Class A-R Notes: -1

Class B-1-R Notes: -3

Class B-2-R Notes: -3

Class B-3-R Notes -3

Class C-R Notes: -4

Class D-R Notes: -2

Class E-R Notes: -1

Class F-R Notes: -3


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


ALITALIA SPA: Ryanair Reiterates Interest in Acquisition
--------------------------------------------------------
Peter Hamilton at The Irish Times reports that Ryanair has
reiterated its interest in buying defunct Italian carrier
Alitalia but only if the company is restructured.

According to The Irish Times, in an interview with Italian media
company Ansa, Ryanair chief executive Michael O'Leary said the
Irish airline would be interested in buying Alitalia if it was
committed to making major changes.  Mr. O'Leary added that the
company was not necessarily interested in buying airport slots,
The Irish Times notes.

In May, Ryanair said it planned to offer Alitalia a deal to take
over the bankrupt Italian carrier's short-haul business while
also selling long-haul flights on its website, The Irish Times
recounts.

At the time, chief commercial officer David O'Brien said Ryanair
was planning to propose a transfer deal to the government-
appointed commissioners charged with saving Alitalia, The Irish
Times relays.

                          About Alitalia

Alitalia - Societa Aerea Italiana S.p.A., is the flag carrier of
Italy.  Alitalia operates 123 aircraft with approximately 4,200
flights weekly to 94 destinations, including 26 destinations in
Italy and 68 destinations outside of Italy.  It has a strong
global presence, flying within Europe as well as to cities across
North America, South America, Africa, Asia and the Middle East.
During 2016, the Debtor provided passenger service to
approximately 22.6 million passengers.  Its air freight business
also is substantial, having carried over 74,000 tons in 2016.
Alitalia is a member of the SkyTeam alliance, participating with
other member airlines in issuing tickets, code-share flights,
mileage programs and other similar services.

Alitalia previously navigated its way through a successful
restructuring.  After filing for bankruptcy protection in 2008,
Alitalia found additional investors, acquired rival airline Air
One, and re-emerged as Italy's leading airline in early 2009.

Alitalia was the subject of a bail-out in 2014 by means of a
significant capital injection from Etihad Airways, with goals of
achieving profitability during 2017.

After labor unions representing Alitalia workers rejected a plan
that called for job reductions and pay cuts in April 2017, and
the refusal of Etihad Airways to invest additional capital,
Alitalia filed for extraordinary administration proceedings on
May 2, 2017.

On June 12, 2017, Alitalia filed a Chapter 15 bankruptcy petition
in Manhattan, New York, in the U.S. (Bankr. S.D.N.Y. Case No.
17-11618) to seek recognition of the Italian insolvency
proceedings and protect its assets from legal action or creditor
collection efforts in the U.S.  The Hon. Sean H. Lane is the case
judge in the U.S. case.  Dr. Luigi Gubitosi, Prof. Enrico Laghi,
and Prof. Stefano Paleari are the foreign representatives
authorized to sign the Chapter 15 petition.  Madlyn Gleich
Primoff, Esq., Freshfields Bruckhaus Deringer US LLP, is the U.S.
counsel to the Foreign Representatives.


BANCA POPOLARE: Fitch Lowers Issuer Default Ratings to 'D'
----------------------------------------------------------
Fitch Ratings has downgraded Banca Popolare di Vicenza's Long-and
Short-Term Issuer Default Ratings (IDRs) to 'D' from 'CCC' and
'C' respectively and removed them from Rating Watch Evolving
(RWE). Fitch also downgraded Vicenza's Viability Rating (VR) to
'f' from 'cc'. The Rating Watch on Vicenza's senior debt has been
revised to Positive (RWP) from RWE.

Fitch has also affirmed Intesa Sanpaolo's (IntesaSP) IDRs and VR
at 'BBB'/'F2' and 'bbb' respectively. The Outlook on Intesa is
Stable. At the same time Fitch has affirmed Veneto Banca's state-
guaranteed notes at 'BBB'.

The rating action follows the announcement that Vicenza and
Veneto Banca were placed into liquidation after the Italian
government passed a law decree (n.99, 25 June 2017) on Sunday. On
23 June, the European Central Bank determined that the banks were
'failing or likely to fail' as a result of lack of capital and,
on the same date, the Single Resolution Board concluded that a
resolution action was not necessary in the public interest, so
that normal Italian insolvency proceedings would achieve the
resolution objectives.

The decree includes the sale of certain bank assets and
liabilities to IntesaSP. These assets include performing loans,
financial assets, tax assets, customer deposits, senior bonds
(including state-guaranteed notes), assets under management and
administration, branches and staff as well as certain
subsidiaries. IntesaSP has not acquired the two banks' equity and
subordinated debt as well as claims, litigations, non-performing
exposures and other subsidiaries and shareholdings. The terms of
the transaction allow IntesaSP to return the assets and
liabilities to the two banks if the government decree is not
converted into law, which requires a vote in both chambers of the
Italian government within 60 days of the government decree being
promulgated, or if the final law results in an increased cost to
IntesaSP.

KEY RATING DRIVERS
IDRS, VR AND SENIOR DEBT
Vicenza
The downgrade of Vicenza's Long- and Short-Term IDRs to 'D' and
of the VR to 'f' reflects that the bank has been placed into
liquidation.

The RWP on Vicenza's senior unsecured bonds reflects Fitch's
expectation that these will be upgraded to the same level as
IntesaSP's senior debt once the government decree has been
converted into law, which will make the transfer of senior debt
to IntesaSP final.

IntesaSP
The affirmation of the ratings reflects Fitch opinions that the
transaction does not affect the VR of the bank. Fitch believes
that the transaction is neutral to the bank's risk appetite,
capitalisation and asset quality.

IntesaSP receives a cash contribution from the Italian government
to cover the impact of the asset transfer on its capital ratios,
which will allow the bank to maintain a transitional CET1 ratio
of 12.5%. The cash contribution will also cover integration and
rationalisation costs related to the acquisition. In addition,
the government will guarantee against potential risks,
obligations and claims on IntesaSP related to events prior to the
sale. Vicenza's and Veneto's non-performing exposures will remain
in the banks that have been placed under liquidation. IntesaSP
has the right to return up to EUR4 billion high-risk performing
loans to the banks in liquidation by 31 December 2020 if these
loans become impaired. In total, IntesaSP will receive EUR4.875
billion in cash from the Italian government and EUR1.5 billion as
public guarantees against potential legal risks.

IntesaSP's ratings continue to reflect the bank's diversified and
stable business model, combined with a leading domestic franchise
in various market segments, which will become stronger in North-
Eastern Italy following the transfer of Vicenza's and Veneto
Banca's selected activities. IntesaSP's company profile has
helped the group generate profitability that has remained above
domestic peers' in a challenging operating environment. The
bank's sound execution track record has enabled IntesaSP to
generate consistent profitability through the economic cycle,
which differentiates the bank from its domestic peers. The
ratings further reflect Fitch's view of the group's resilient
capitalisation and robust funding structure, but also the group's
asset quality, which remains weak compared with international
peers, and a high level of unreserved impaired loans, which
weighs on capitalisation.

IntesaSP's Short-Term IDR of 'F2' is the higher of the two
possibilities for a 'BBB' Long-Term IDR under Fitch criterias,
reflecting that the bank's short-term liquidity profile is
supported by ready access to central bank facilities given the
ECB's accommodative policy.

The ratings of the senior debt issued by IntesaSP's funding
vehicles, Intesa Sanpaolo Bank Ireland, Intesa Sanpaolo Bank
Luxembourg, S.A. and Intesa Funding LLC, are equalised with that
of the parent because the debt is unconditionally and irrevocably
guaranteed by IntesaSP and Fitch expects the parent to honour
this guarantee.

DCR

IntesaSP
IntesaSP's DCR is at the same level as the bank's Long-Term IDRs
because in Italy derivative counterparties have no preferential
legal status over other senior obligations in a resolution
scenario.

SUPPORT RATING (SR) AND SUPPORT RATING FLOOR (SRF)

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

SUBORDINATED DEBT AND OTHER HYBRID SECURITIES

Vicenza, IntesaSP
The subordinated Tier 2 debt issued by Vicenza is downgraded to
'C'/Recovery Rating 'RR6' to reflect poor recovery prospects for
the subordinated bondholders that remain in the bank that is
being liquidated. The Italian state will become a senior creditor
of the liquidated bank, which means that recovery prospects for
junior creditors out of the liquidation are poor.

Subordinated debt and other hybrid capital securities issued by
IntesaSP are notched down from the VR in accordance with Fitch's
assessment of each instrument's respective non-performance and
relative loss severity risk profiles.

Tier 2 subordinated debt is rated one notch below the VR for loss
severity to reflect below-average recovery prospects. No notching
is applied for incremental non-performance risk because write-
down of the notes will only occur once the point of non-viability
is reached and there is no coupon flexibility before non-
viability.

The legacy Upper Tier 2 debt rating reflects its higher loss
severity given its subordination to senior unsecured and
subordinated Tier 2 obligations (two notches) and incremental
non-performance risk (one notch) for its cumulative coupon
deferral subject to constraints.

Legacy Tier 1 notes are notched down four times from the VR, two
notches for loss severity for deep subordination and another two
for non-performance risk as coupon deferral is constrained by
look-back clauses.

Additional Tier 1 notes are rated five notches below the VR, two
notches for loss severity relative to senior unsecured creditors
and three notches for incremental non-performance risk, the
latter notching reflecting the instruments' fully discretionary
interest payment.

SENIOR STATE-GUARANTEED SECURITIES

Vicenza, Veneto Banca
The long-term rating of the state-guaranteed debt is based on
Italy's direct, unconditional and irrevocable guarantee for the
issues, which covers payments of both principal and interest.
Italy's guarantee was issued by the Ministry of Economy and
Finance under Law Decree 23 December 2016, n. 237, subsequently
converted into law 15/2017. The ratings reflect Fitch's
expectation that Italy will honour the guarantee provided to the
noteholders in a full and timely manner. The state guarantee
ranks pari passu with Italy's other unsecured and unguaranteed
senior obligations. As a result, the notes' long-term ratings are
in line with Italy's 'BBB' Long-Term IDR.

Under the decree, the notes are being transferred to IntesaSP.
IntesaSP will have the right to cancel the guarantee.

RATING SENSITIVITIES
IDRS, VR AND SENIOR DEBT

Vicenza
Fitch expects to withdraw Vicenza's IDRs and VR once the decree
is converted into law without material amendments and the sale is
formally completed in line with original expectations. Fitch
expects to simultaneously upgrade Vicenza's senior unsecured debt
that has been transferred to IntesaSP to 'BBB', in line with
IntesaSP's senior debt rating. If the decree is not converted
into law or if the transaction does not proceed as planned, which
Fitch currently does not expect, the senior debt would likely be
downgraded as losses to senior creditors would become more
likely.

IntesaSP
IntesaSP's ratings could be downgraded if the bank does not meet
its impaired loan reduction targets and its capital remains
highly exposed to unreserved impaired loans. Similarly,
deterioration in the bank's funding and liquidity would put
pressure on the ratings, as would prioritising dividend
distribution over capital retention in case of need. IntesaSP's
ratings remain sensitive to deterioration in the operating
environment in Italy and to Italy's sovereign ratings.

Its Short-Term IDR would be downgraded if the bank is unable to
successfully manage the tapered ECB asset buying programme and
replace central bank funding with market funding.

An upgrade of the ratings would require a significant improvement
of the bank's asset quality and, given the bank's overwhelmingly
domestic operations, an upgrade of Italy's sovereign rating.

The ratings of the senior debt issued by Intesa Sanpaolo Bank
Ireland, Intesa Sanpaolo Bank Luxembourg, S.A. and Intesa Funding
LLC are sensitive to the same considerations that affect the
senior unsecured debt issued by the parent.

DCR

IntesaSP
The DCR is sensitive to changes to IntesaSP's Long-Term IDR.

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

Fitch expects to withdraw Vicenza's SR and SRF once the other
issuer ratings are withdrawn.

SUBORDINATED DEBT AND OTHER HYBRID SECURITIES

IntesaSP, Vicenza
IntesaSP's subordinated debt and hybrid securities' ratings are
primarily sensitive to changes in the VR, from which they are
notched. The ratings are also sensitive to a change in the notes'
notching, which could arise if Fitch changes its assessment of
their non-performance relative to the risk captured in the VRs or
their expected loss severity. For Additional Tier 1 issues this
could reflect a change in capital management or flexibility, or
an unexpected shift in regulatory buffers and requirements, for
example.

Fitch expects to withdraw Vicenza's subordinated debt once Fitch
withdraws the bank's other ratings.

SENIOR STATE-GUARANTEED SECURITIES

Vicenza,Veneto Banca
The notes' ratings are sensitive to changes in Italy's Long-Term
IDR.

If IntesaSP decides to cancel the guarantees on this senior debt,
Fitch will no longer rate the notes based on the guarantee but
might assign ratings based on IntesaSP's senior debt rating.

The rating actions are:

Vicenza
Long-Term IDR: downgraded to 'D' from at 'CCC'/RWE
Short-Term IDR: downgraded to 'D' from 'C'/RWE
Viability Rating: downgraded to 'f' from 'cc'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'
Long-term senior unsecured notes and EMTN programme: 'CCC'/'RR4'
placed on RWP from RWE
Short-term rating on EMTN programme: 'C' placed on RWP from RWE
Subordinated debt: downgraded to 'C'/'RR6' from 'CC'/'RR5'
State-guaranteed debt: affirmed at 'BBB'

Veneto Banca
State-guaranteed debt: affirmed at 'BBB'

IntesaSP
Long-Term IDR: affirmed at 'BBB'; Outlook Stable
Short-Term IDR: affirmed at 'F2'
Viability Rating: affirmed at 'bbb'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'
DCR: affirmed at 'BBB (dcr)'
Senior debt (including debt issuance programmes): affirmed at
'BBB'/'F2'
Commercial paper/certificate of deposit programmes: affirmed at
'F2'
Short-term deposits: affirmed at 'F2'
Senior market-linked notes: affirmed at 'BBBemr'
Subordinated Tier II debt: affirmed at 'BBB-'
Subordinated upper Tier II debt: affirmed at 'BB'
Tier 1 instruments: affirmed at 'BB-'
AT1 notes: affirmed at 'B+'

Intesa Sanpaolo Bank Ireland plc
Commercial paper/short-term debt affirmed at 'F2'
Senior unsecured debt: affirmed at 'BBB'

Intesa Sanpaolo Bank Luxembourg, S.A.
Commercial paper/short-term debt: affirmed at 'F2'
Senior unsecured debt: affirmed at 'BBB'

Intesa Funding LLC
US commercial paper programme: affirmed at 'F2'


===================
K A Z A K H S T A N
===================


EURASIAN BANK: S&P Affirms 'B/B' Counterparty Credit Ratings
------------------------------------------------------------
S&P Global Ratings revised its outlook on Kazakhstan-based JSC
Eurasian Bank to negative from stable.  S&P affirmed its 'B/B'
long- and short-term counterparty credit ratings on the bank.

S&P also affirmed its long-term Kazakhstan national scale rating
of 'kzBB'.

The outlook revision reflects S&P's view that Eurasian Bank's
capitalization might be negatively affected by the operating
environment in Kazakhstan.  Although S&P understands that the
bank's shareholders are currently expressing their willingness to
support the bank via additional equity inflows, S&P can't exclude
the possibility that their propensity to support the bank might
diminish.  S&P now sees higher probability of such a scenario --
although it's not its base case -- because of the continued
adverse economic environment in Kazakhstan and volatile commodity
prices, which expose affiliated metals and mining company
Eurasian Resources Group (ERG; CCC+/Stable/C) to respective risks
(S&P believes ERG is the main asset of the Eurasian Bank
shareholders). In addition, the bank's volatile profits over the
past two years and S&P's expectations of weak financial results
over the coming 12-18 months put the spotlight on Eurasian Bank's
ability to maintain moderate capitalization.  This factor is one
of the major rating constraints.

During 2016, Eurasian Bank's capitalization was strengthened by a
Kazakhstani tenge (KZT) 15 billion capital injection from current
shareholders, which resulted in a risk-adjusted capital (RAC)
ratio of 5.1% as of Dec. 31, 2016.  Under S&P's base case for the
next 12-18 months, it expects shareholders to provide additional
injections.  Therefore, S&P projects its RAC ratio will remain
higher than 5.25% over the same period, based on these
assumptions:

   -- Almost flat annual loan portfolio growth in 2017-2018, as a
      response to adverse economic conditions;
   -- Slightly positive or flat total asset dynamics in 2017-
      2018;
   -- Willingness and ability of the shareholders to provide
      additional equity support up to KZT31.6 billion, in
      addition to KZT6 billion already provided in 2017;
   -- Cost of risk of about 4.0%-4.5% in 2017, in line with 4.1%
      observed during the first quarter of 2017 (this is
      significantly higher than historical figures, due to the
      expected tightening of provisioning requirements in
      Kazakhstan and transition to International Financial
      Reporting Standards (IFRS) 9, which might force the bank to
      create additional reserves on existing loans);
   -- Cost of risk of about 3.0%-3.5% in 2018, which is broadly
      in line with S&P's nonperforming assets projections; and
   -- Losses of 10%-15% of average equity in 2017 and 0%-5% in
      2018.

S&P views the bank's quality of earnings as weak, owing to
volatility of earnings throughout the financial year.  S&P also
understands that the bank's ability to earn sustainable profits
over the past two years was significantly impaired by challenging
operating conditions in Kazakhstan and S&P expects this to
continue over the coming 12-18 months.  This negatively affects
the bank's business stability and therefore S&P assess Eurasian
Bank's business position as moderate only.  On the positive side,
S&P's view is balanced by the bank's leading market positions in
consumer lending, especially auto loans, its risk-averse
strategy, and its relatively diversified business model.

In addition, S&P believes that possible unexpected pressures on
funding and liquidity, in light of an uncertain external
environment and Eurasian Bank's significant planned repayments
over the next 12 months, might distort the stability of Eurasian
Bank's operations.  S&P can't exclude this possibility and
reflect it in the negative outlook as well.  This is because S&P
has observed that some small and midsize banks in Kazakhstan have
experienced unforeseen outflows of funding, including deposits
from government-related entities, since the beginning of 2017.

Finally, S&P's assessment of the risk position is currently
moderate, which is in line with the majority of other banks S&P
rates in the country.  The bank's reported quality of assets as
well as its amount of potentially problem loans is broadly
commensurate with the system averages.  According to IFRS, the
bank's share of nonperforming loans (overdue more than 90 days)
represented 12.8% of total lending on March 31, 2017, compared
with 10.5% at year-end 2015.  S&P expects this ratio to fluctuate
in the range of 12%-14% over the next 12-18 months.  By S&P's
estimations, potential problem exposures might form an additional
19% of loans, including 13% that are restructured loans.

The negative outlook on Eurasian Bank reflects S&P's concerns
that the shareholders' willingness or ability to support the
bank's loss absorption capacity might diminish over the next 12-
18 months or that the bank might face unforeseen liquidity
shortages amid the negative and unpredictable operating
environment in Kazakhstan.

S&P would take a negative rating action if its projected RAC
ratio for Eurasian Bank fell below S&P's base-case expectations
over the next 12-18 months, due to substantially higher-than-
expected losses, or if the bank deviated from its current
strategy aiming at limited growth, in the absence of sufficient
equity injections from the owners to offset such pressure.
Likewise, continuous stress on the bank's liquidity might trigger
a downgrade.

S&P could consider revising the outlook to stable if it sees a
lower risk of its projected RAC ratio falling below S&P's base-
case expectations over the next 12-18 months.  Improvement in the
currently high economic and industry risks in the Kazakh banking
sector might also support an outlook revision back to stable.


KAZKOMMERTSBANK: Moody's Hikes Deposit Ratings to Ba2
-----------------------------------------------------
Moody's Investors Service has upgraded Kazkommertsbank's deposit
ratings to Ba2 from B3, senior unsecured debt rating to B1 from
Caa2 and baseline credit assessment (BCA) /Adjusted BCA to b3/b1
from ca/ca. The rating agency also upgraded to Ba1 from Ba2 Halyk
Savings Bank of Kazakhstan's (Halyk) deposit ratings and affirmed
its ba3 BCA/Adjusted BCA and Ba3 senior unsecured debt ratings.
The outlook on both banks' long-term ratings is now negative, in
line with the outlook on the sovereign rating of Kazakhstan.

RATINGS RATIONALE

-- KAZKOMMERTSBANK

The upgrade of Kazkommertsbank's BCA to b3 from ca and its long-
term deposit ratings to Ba2 from B3 is driven by the Kazakhstan
authorities' decision to: (1) provide the bank with substantial
financial support to address its solvency problems related to its
high stock of problem assets; as well as (2) its takeover by
Halyk, which will then inject additional capital into
Kazkommertsbank.

Government authorities will provide financial support to BTA,
Kazkommertsbank's largest borrower, to fully repay is KZT2.4
trillion loan that was a major contributor to Kazkommertsbank's
capital shortfall. Halyk will inject KZT185 billion of additional
capital to cover the additional expected impairment of
Kazkommertsbank's remaining assets. Moody's expects that the
government support package will ultimately enable the recovery of
Kazkommertsbank's regulatory capital ratios above regulatory
minima, while eliminating additional asset impairment risks, thus
materially enhancing its solvency. This will also provide
considerable liquidity to Kazkommertsbank, enabling it to repay
expensive funding and substantially increase its interest-earning
assets over time. This will thereby substantially improve its
operating revenue and help the bank to achieve profitability in
the longer term.

Moody's considers that there is now a very high probability of
affiliate support for Kazkommertsbank from Halyk. This is
reflected in two notches of rating uplift, and the upgrade of
Kazkommertsbank's adjusted BCA to b1 from ca. Moody's also
continues to believe that there is a very high probability of
government support for depositors, resulting in two notches of
rating uplift, leading to the Ba2 long-term deposit ratings of
KKB.

-- HALYK SAVINGS BANK OF KAZAKHSTAN (Halyk)

The affirmation of Halyk's ba3 BCA and Ba3 senior unsecured debt
ratings reflects the balance of drivers that affect Halyk's
financial metrics following its takeover of recapitalized but yet
weaker Kazkommertsbank.

While government support to Kazkommertsbank substantially reduces
acquisition risks for Halyk, the transaction will increase
Halyk's risk-weighted assets. It also reduces its standalone
capitalisation given the KZT185 billion injection into
Kazkommertsbank. As a result, Halyk's current very strong
consolidated Tangible Common Equity to Risk Weighted Assets ratio
of 18.7% (Moody's adjusted; YE2016) will deteriorate. This,
however, is offset by Halyk's very strong ongoing earnings that
should enable the bank's solvency metrics to recover over the
next 12 to 18 months: the rating agency expects Halyk to report
annual net income at above 2% of its consolidated risk weighted
assets. This, and the recently announced plans to sell a 60%
stake in Altyn Bank JSC, its local subsidiary, should enable
Halyk to consolidate its TCE/RWA ratio at above 16% by YE2018,
assuming no dividend payouts. As a result, Moody's expect Halyk's
financial profile to remain commensurate with a BCA of ba3, i.e.
where it is currently positioned.

Moody's upgrade of its deposit ratings to Ba1 from Ba2 reflects
Halyk's increased systemic importance following the takeover of
Kazkommertsbank, which is the country's second largest bank by
deposits. Kazkommertsbank's consolidation into Halyk should
enable the latter to become an undisputed leader in Kazakhstan
and secure a dominant market position with about 35% in deposits
and about 30% in loans. Moreover, government support to
Kazkommertsbank signals authorities' increasing readiness to
support the country's largest lenders in case of need, and
demonstrates the government's strong commitment and readiness to
allocate funds to restore the system's creditworthiness while
consolidating the banking system. As a result, Moody's revised
assumption of a "very high" probability of government support now
translates into two notches of uplift, compared to one notch
previously. In reassessing potential support for depositors,
Moody's affirmed Halyk's Ba3 senior unsecured debt ratings,
reflecting a continued low probability of government support.
Moody's existing approach of rating Kazakh banks' debt reflects
the history of previous resolutions in Kazakhstan and, more
recently, in some other regions where public funds have been
injected to bail-out depositors of failed banks while debt
holders are more likely to suffer losses.

-- OUTLOOKS

Negative outlook on Halyk's long-term ratings is driven by the
negative outlook assigned to the Baa3 sovereign rating of
Kazakhstan. As such, any deterioration in the creditworthiness of
Kazakhstan could lead to a downgrade of Halyk's long-term
ratings, in view of lower government support uplift and increased
asset risks, given the substantial direct exposure of both banks
to the sovereign-related debt. Kazkommertsbank's long-term debt
and deposit ratings and Halyk's BCA and debt ratings could also
be downgraded if, following Kazkommertsbank's consolidation,
Halyk's financial profile does not recover in line with the
agency's expectations.

PRINCIPAL METHODOLOGY

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

LIST OF AFFECTED RATINGS

Issuer: Kazkommertsbank

-- LT Bank Deposits (Local & Foreign Currency), upgraded to Ba2
    negative from B3 positive

-- ST Bank Deposits (Local & Foreign Currency) of Not Prime,
    affirmed

-- LT Counterparty Risk Assessment, upgraded to Ba1(cr) from
    B2(cr)

-- ST Counterparty Risk Assessment of Not Prime(cr), affirmed

-- Senior Unsecured Regular Bond/Debenture (Foreign Currency),
    upgraded to B1 negative from Caa2 positive

-- Senior Unsecured MTN (Foreign Currency), upgraded to (P)B1
    from (P)Caa2

-- BACKED Junior Subordinate (Foreign Currency), upgraded to
    B3(hyb) from Ca(hyb)

-- Baseline Credit Basement (BCA)/Adjusted BCA, upgraded to
    b3/b1 from ca/ca

Outlook Actions:

-- Outlook, Changed To Negative from Positive

Issuer: Halyk Savings Bank of Kazakhstan

-- LT Bank Deposits (Local & Foreign Currency), upgraded to Ba1
    negative from Ba2 developing

-- ST Bank Deposits (Local & Foreign Currency) of Not Prime,
    affirmed

-- LT/ST Counterparty Risk Assessment, upgraded to Baa3(cr) /
    Prime-3(cr) from Ba1(cr) / Not Prime(cr)

-- Senior Unsecured Regular Bond/Debenture (Local & Foreign
    Currency) affirmed Ba3, negative from developing

-- Baseline Credit Basement (BCA)/Adjusted BCA of ba3, affirmed

Outlook Actions:

-- Outlook, Changed To Negative from Developing


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


EURO-GALAXY IV: Moody's Assigns (P)B2 Rating to Class F-R Notes
---------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following provisional ratings to notes to be issued by Euro-
Galaxy IV CLO B.V.:

-- EUR 1,500,000 Class X-R Senior Secured Floating Rate Notes
    due 2030, Assigned (P)Aaa (sf)

-- EUR 189,100,000 Class A-R Senior Secured Floating Rate Notes
    due 2030, Assigned (P)Aaa (sf)

-- EUR 40,600,000 Class B-R Senior Secured Floating Rate Notes
    due 2030, Assigned (P)Aa2 (sf)

-- EUR 22,100,000 Class C-R Senior Secured Deferrable Floating
    Rate Notes due 2030, Assigned (P)A2 (sf)

-- EUR 15,700,000 Class D-R Senior Secured Deferrable Floating
    Rate Notes due 2030, Assigned (P)Baa2 (sf)

-- EUR 19,000,000 Class E-R Senior Secured Deferrable Floating
    Rate Notes due 2030, Assigned (P)Ba2 (sf)

-- EUR 9,600,000 Class F-R Senior Secured Deferrable Floating
    Rate Notes due 2030, Assigned (P)B2 (sf)

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

RATINGS RATIONALE

Moody's provisional ratings of the rated notes address the
expected loss posed to noteholders by the legal final maturity of
the notes in 2030. The provisional ratings reflect the risks due
to defaults on the underlying portfolio of loans given the
characteristics and eligibility criteria of the constituent
assets, the relevant portfolio tests and covenants as well as the
transaction's capital and legal structure. Furthermore, Moody's
is of the opinion that the Lead Collateral Manager, PineBridge
Investments Europe Limited, has sufficient experience and
operational capacity and is capable of managing this CLO.

The Issuer will issue the Refinancing Class X-R Notes, the
Refinancing Class A-R Notes, the Refinancing Class B-R Notes, the
Refinancing Class C-R Notes, the Refinancing Class D-R Notes, the
Refinancing Class E-R Notes and the Refinancing Class F-R Notes
(the "Refinancing Notes") in connection with the refinancing of
the Class A-1 Senior Secured Floating Rate Notes due 2028, the
Class A-2 Senior Secured Floating Rate Notes due 2028, the Class
B-1 Senior Secured Fixed Rate Notes due 2028, the Class B-2
Senior Secured Floating Rate Notes due 2028, the Class C Senior
Secured Deferrable Floating Rate Notes due 2028, the Class D
Senior Secured Deferrable Floating Rate Notes due 2028, the Class
E Senior Secured Deferrable Floating Rate Notes due 2028 and the
Class F Senior Secured Deferrable Floating Rate Notes due 2028
("the Refinanced Notes") respectively, previously issued on June
30, 2015 (the "Original Closing Date"). The Issuer will use the
proceeds from the issuance of the Refinancing Notes to redeem in
full the Original Notes that will be refinanced. On the Original
Closing Date, the Issuer also issued EUR 38,400,000.00 of unrated
Subordinated Notes, which will remain outstanding.

Euro-Galaxy IV CLO B.V. is a managed cash flow CLO. At least 90%
of the portfolio must consist of senior secured loans and senior
secured bonds. The portfolio is expected to be fully ramped up as
of the Issue Date and to be comprised predominantly of corporate
loans to obligors domiciled in Western Europe.

PineBridge Investments Europe Limited ("PineBridge") will manage
the CLO and Credit Industriel et Commercial SA will act as Co-
Collateral Manager (together, the "Collateral Managers"). The
Collateral Managers will direct the selection, acquisition and
disposition of collateral on behalf of the Issuer and may engage
in trading activity, including discretionary trading, during the
transaction's four-year reinvestment period. Thereafter,
purchases are permitted using principal proceeds from unscheduled
principal payments and proceeds from sales of credit improved and
credit risk obligations, and are subject to certain restrictions.

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

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

The rated notes' performance is subject to uncertainty. The
notes' performance is sensitive to the performance of the
underlying portfolio, which in turn depends on economic and
credit conditions that may change. The Collateral Managers'
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. As such, Moody's
encompasses the assessment of stressed scenarios.

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

Par Amount: EUR 320,000,000

Diversity Score: 38

Weighted Average Rating Factor (WARF): 2800

Weighted Average Spread (WAS): 3.60%

Weighted Average Recovery Rate (WARR): 43.5%

Weighted Average Life (WAL): 8 years

As part of the base case, Moody's has addressed the potential
exposure to obligors domiciled in countries with local currency
country risk ceiling (LCC) of A1 or below. As per the portfolio
constraints, exposures to countries with a LCC of A1 or below
cannot exceed 10%, with exposures to countries with LCCs of Baa1
to Baa3 further limited to 5%. Given these portfolio constraints
and the current sovereign ratings of eligible countries, the
total exposure to countries with a LCC of A1 or below may not
exceed 10% of the total portfolio. As a worst case scenario, a
maximum 5% of the pool would be domiciled in countries with LCCs
of Baa1 to Baa3 while an additional 5% would be domiciled in
countries with LCCs of A1 to A3. The remainder of the pool will
be domiciled in countries which currently have a LCC of Aa3 and
above. Given this portfolio composition, the model was run with
different target par amounts depending on the target rating of
each class of notes as further described in the methodology. The
portfolio haircuts are a function of the exposure size to
countries with LCC of A1 or below and the target ratings of the
rated notes, and amount to 0.75% for the Classes X-R and A-R
Notes, 0.50% for the Class B-R Notes, 0.375% for the Class C-R
Notes and 0% for Classes D-R, E-R and F-R Notes.

Stress Scenarios:

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

Percentage Change in WARF: + 15% (from 2800 to 3220)

Ratings Impact in Rating Notches:

Class X-R Senior Secured Floating Rate Notes: 0

Class A-R Senior Secured Floating Rate Notes: 0

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

Class C-R Senior Secured Deferrable Floating Rate Notes: -2

Class D-R Senior Secured Deferrable Floating Rate Notes: -2

Class E-R Senior Secured Deferrable Floating Rate Notes: -1

Class F-R Senior Secured Deferrable Floating Rate Notes: 0

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

Ratings Impact in Rating Notches:

Class X-R Senior Secured Floating Rate Notes: 0

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

Class B-R Senior Secured Floating Rate Notes: -3

Class C-R Senior Secured Deferrable Floating Rate Notes: -4

Class D-R Senior Secured Deferrable Floating Rate Notes: -3

Class E-R Senior Secured Deferrable Floating Rate Notes: -2

Class F-R Senior Secured Deferrable Floating Rate Notes: -3

Further details regarding Moody's analysis of this transaction
may be found in the upcoming pre-sale report, available soon on
Moodys.com.

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.


===========
N O R W A Y
===========


LOCK LOWER: Moody's Raises CFR to Ba2, Outlook Positive
-------------------------------------------------------
Moody's Investors Service has upgraded the long-term corporate
family rating (CFR) of Lock Lower Holdings AS, the parent company
of Lindorff AB, to Ba2 from B2. The ratings agency also upgraded
the ratings assigned to debt issued by Lock AS, a subsidiary of
Lock Lower Holdings AS: senior secured notes with a combined
equivalent amount of EUR1.5 billion were upgraded to Ba2 from B2
and the EUR430 million revolving credit facility (RCF) was
upgraded to Ba1 from B1. Additionally, Moody's upgraded the
ratings assigned to the two senior notes with a combined
equivalent amount of EUR440 million issued by Lock Lower Holdings
AS to B1 from Caa1. Moody's has also changed the outlook to
positive.

The rating action follows the completion of Lindorff's merger
with Intrum Justitia AB (Ba2 CFR; positive outlook) on June 27,
2017 and concludes the review on Lindorff's ratings that has been
in place since the merger plans were announced on November 14,
2016.

A list of affected ratings is provided at the end of this press
release.

RATINGS RATIONALE

Following the completion of the merger between Lindorff and
Intrum Justitia, Moody's has aligned the CFR of both Lindorff and
Intrum Justitia at Ba2 based on the pro-forma financials of the
combined Intrum and Lindorff.

On May 26, June 16, and June 19, 2017, Lindorff and its
subsidiary Lock AS issued notices of conditional redemption for
all outstanding bonds and Moody's expects repayment to investors
on June 28 and June 29, 2017 after which, the rating agency
expects to withdraw all ratings assigned to Lindorff and its
debts.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Finance
Companies published in December 2016.

LIST OF AFFECTED RATINGS

Issuer: Lock AS

Upgrades:

-- Senior Secured Regular Bond/Debenture, Upgraded to Ba2 from
    B2, Outlook Changed To Positive From Rating Under Review

-- Senior Secured Bank Credit Facility, Upgraded to Ba1 from B1,
    Outlook Changed To Positive From Rating Under Review

Outlook Action:

-- Outlook, Changed To Positive From Rating Under Review

Issuer: Lock Lower Holdings AS

Upgrades:

-- LT Corporate Family Rating, Upgraded to Ba2 from B2, Outlook
    Changed To Positive From Rating Under Review

-- Senior Unsecured Regular Bond/Debenture, Upgraded to B1 from
    Caa1, Outlook Changed To Positive From Rating Under Review

Outlook Actions:

-- Outlook, Changed To Positive From Rating Under Review


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


OVAKO GROUP: S&P Affirms 'B-' CCR on Improved Earnings
------------------------------------------------------
S&P Global Ratings affirmed its 'B-' long-term corporate credit
rating on Swedish engineering steel producer Ovako Group AB.  The
outlook is stable.

At the same time, S&P affirmed its 'B-' issue rating on Ovako's
EUR300 million senior secured notes maturing 2019, in line with
the corporate credit rating.  The recovery rating of '4'
indicates S&P's expectations for average recovery prospects (30%-
50%; rounded estimate 45%) in the event of a payment default.

The affirmation reflects Ovako's moderately improved S&P Global
Ratings' adjusted EBITDA at EUR57 million and slightly positive
free operating cash flow generation (FOCF) in 2016, both of which
compared favorably with 2015 figures.  S&P also notes Ovako's
successful implementation of its cost-savings program so far,
which was ahead of schedule in 2016, as well as lower adjusted
debt to EBITDA (leverage) and stable liquidity.  Adjusted debt to
EBITDA came to 11.0x as of end-2016 (or 6.7x excluding the
shareholder loan), but S&P expects it will come down to 8.5x-9.0x
by end-2017.

S&P expects improved credit metrics for Ovako to emanate from a
continued increase in demand for Ovako's long steel products
through 2017.  Volumes were up by 4% in 2016 and 11% in the first
quarter of 2017, along with a stronger order book, which could
mean improved results in 2017 compared with 2016, provided the
sales mix is also supportive and contributes to margins.  Base
prices, however, dragged revenues down last year and may fail to
improve in line with S&P's expectations this year.  S&P expects
the cost-savings program to at least partly mitigate this risk,
since the company has already achieved EUR23 million of cost
efficiencies from EUR18 million initially targeted, hence
expanding the three-year program to EUR50 million from EUR45
million and continuing into 2018.  Restructuring costs incurred
in connection to the program amounted to EUR4 million in 2015 and
EUR7 million in 2016, and will likely continue into 2017 and
2018, but at lower levels.

Under S&P's current base case, it assumes that the industry's key
drivers will moderately improve following meagre recovery for
Ovako in 2016.  Last year, weakness in Ovako's historically
important Nordic markets was offset by growth stemming from
Eastern European and Asian clients (although with a minor
negative impact on S&P's country risk score, which it revised to
low from very low), while markets for high-end steel, such as oil
and gas, remained weak in 2016, impacting revenues negatively.
Nevertheless, Ovako's order intake improved considerably over the
last quarter of 2016 and into the first quarter of this year, up
35% year on year, which should support earnings in the near to
medium term, as customers are booking for deliveries farther into
the future.  S&P expects that the company's restructuring program
will bear fruit in 2017 and 2018, mitigating at least somewhat
any risk of potential market weakening or risks from a weak
product mix.  Therefore, S&P assumes a significant improvement in
EBITDA in 2017, with positive FOCF generation, provided working
capital remains cash neutral or cash generative.

"Our view of Ovako's business risk profile as weak is mostly
constrained by the high cyclicality of the steel industry as a
whole, and by what we see as the company's overall limited scale
and scope in a highly competitive market environment.  Key end
markets for engineering steel include automotive and mechanical
engineering, which we view as sensitive to supply and demand
imbalances and contributing to high earnings volatility.  We also
view Ovako's operational diversity as limited in terms of
products and geographies.  On the positive side, however, our
view of the business risk profile is supported by the group's
leading positions in engineering and specialty steels in the
Nordics. Ovako's profitability is average for the specialty steel
industry, which is still under pressure because of excess
capacities and the fragmented nature of the market.  The company
boosted its EBITDA in 2016, partly owing to its cost-improvement
program, and we expect adjusted margins will exceed 9% in 2017
and 2018," S&P said.

S&P continues to view the group's financial risk profile as
highly leveraged (adjusted debt to EBITDA above 5.0x), despite
the adjusted leverage ratio declining to about 6.7x in 2016 from
7.5x (excluding the shareholder loan) in 2015.  S&P assumes a
decline in leverage to about 6.0x under midcycle market
conditions.  S&P adjusts reported figures for operating leases
and unfunded pension liabilities, while S&P adds the sizable
shareholder loan granted by Triton (EUR242 million in 2016,
increasing by 12% payment-in-kind [PIK] interest each year) to
adjusted debt, arriving at 11.0x leverage in 2016 on a fully
adjusted basis.  As such, on this basis, the shareholder loan
constrains any material deleveraging prospects due to the
capitalizing PIK interest that S&P sees as ultimately supported
only by Ovako's cash flows.

The stable outlook on Ovako reflects S&P's expectation of
somewhat improved steel market conditions and cost-savings
efforts positively impacting operating results and ratios so that
FFO cash interest coverage remains in the range of 2.0x-4.0x
(3.2x as of March 31) and adjusted debt to EBITDA reduces to
below 11.0x (6.0x excluding the shareholder loan [SHL]) (8.7x as
of March 31).  S&P also expects stable liquidity metrics and at
least neutral FOCF.

S&P could raise the rating if Ovako were able to achieve and
maintain FFO cash interest coverage well above 4.0x and adjusted
debt to EBITDA at about 8.0x, including the SHL (4.0x excluding
the SHL).  The revision would also require sustained positive
free cash flow generation and at least adequate liquidity.

S&P would consider lowering the rating if Ovako's FFO cash
interest coverage fell below 2.0x and adjusted debt to EBITDA
including the SHL materially exceeded 11.0x (or 6.0x excluding
the SHL) to the extent that S&P would view leverage
unsustainable. Rating pressure would arise if liquidity weakened
or FOCF turned negative, which could stem from EBITDA being
affected by weaker market conditions or cash consuming working
capital.


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


* TURKEY: Customs Tax Cut May Bankrupt Red Meat Producers
---------------------------------------------------------
Cagan Koc at Bloomberg News reports that Bulent Tunc, head of
Ankara-based Red Meat Producers Association, said Turkey will
"lose" from a decision to cut customs tax on some cattle and
carcass meat imports.

According to Bloomberg, Mr. Tunc said "This tax cut will
definitely not lower prices for consumers.  It will finish off
producers."

Many producers may go bankrupt after the tax cut, Bloomberg
discloses.

Only some middlemen will gain from the ruling, Bloomberg states.
The government needs to pass law on store prices if it wants to
fix the red meat market, Bloomberg says.

When the government implemented a similar ruling in 2012,
consumer prices didn't fall, many producers went bankrupt and the
government had to support them later to get them back on their
feet, Bloomberg recounts.

Gunhan Ulusoy, chairman of Turkish Flour Industrialists'
Federation, told Bloomberg the decision to cut customs tax on
wheat imports may put downward pressure on inflation over the
long term.



=============
U K R A I N E
=============


CHORNOMORNAFTOHAZ JSC: Poroshenko Vetoes Bill to Allow Moratorium
-----------------------------------------------------------------
Ukrainian News Agency reports that President of Ukraine Petro
Poroshenko has vetoed the bill introducing a moratorium on the
bankruptcy of the Chornomornaftohaz state joint-stock company,
which is 100% owned by the Naftogaz of Ukraine national joint-
stock company, until January 1, 2019.

This is seen on the page of the bill on the official website of
the Verkhovna Rada of Ukraine, Ukrainian News Agency notes.

According to Ukrainian News Agency, the bill provides for
unfreezing Chornomornaftohaz's assets and banning collection of
debts from the company until 2019.

The authorities in the Russia-annexed Crimea nationalized
Chornomornaftohaz's assets on the peninsula and within its
continental shelf on March 17, 2014, Ukrainian News Agency
recounts.

The company retained its legal status on territory controlled by
Ukraine and made efforts to documents proving its ownership of
the assets it lost as a result of the annexation of the Crimea
during the period of 2014-2015, Ukrainian News Agency discloses.

Chornomornaftohaz's lost assets is UAH 14.9 billion, according to
Ukrainian News Agency.

Naftogaz of Ukraine and six of its subsidiaries
(Chornomornaftohaz, Ukrtransgaz, Likvo, UkrGasVydobuvannya,
Ukrtransnafta, and Gaz Ukrainy) initiated arbitration proceedings
against Russia in October 2016, demanding compensation for the
losses they incurred as a result of the illegal seizure of their
assets in the Crimea, the value of which Naftogaz of Ukraine
previously estimated at US$2.6 billion, Ukrainian News Agency
relays.


MHP SA: S&P Raises CCR to 'B' Following Eurobond Placement
----------------------------------------------------------
S&P Global Ratings raised its local and foreign currency long-
term corporate credit ratings on Ukraine-based farming group MHP
S.A. to 'B' from 'B-'.  The outlook is stable.

S&P also raised its issue rating on MHP's senior unsecured bonds
to 'B' from 'B-'.  All the group's unsecured debt is rated 'B'.

At the same time, S&P removed the corporate credit rating and the
issue rating on the group's senior unsecured bonds from
CreditWatch with positive implications, where S&P had placed them
on April 18, 2017.

The upgrade and the CreditWatch resolution reflect MHP's
successful Eurobond issuance and the implementation of the
group's financing strategy to lengthen its debt maturity profile
while enhancing its liquidity.  Following the $500 million debt
placement on April 27, 2017, MHP successfully achieved a tender
offer of $245 million on its $750 million Eurobond maturing 2020,
allowing the group to extend the maturity of its overall debt
portfolio.

At the beginning of June, MHP used the remaining proceeds from
the Eurobond issuance to repay the group's short-term debt,
materially diminishing the group's reliance on this type of
financing. Moreover, the group successfully obtained long-term
commitment on upsized prefinancing export facilities (PFXs) to
fund the company's working capital requirements.

The refinancing has led S&P to positively reassess the group's
liquidity to S&P's adequate category, resulting in a stand-alone
credit profile (SACP) that is stronger than S&P's view of
Ukraine's creditworthiness.

S&P therefore checked that MHP passes S&P's conditions for being
rated above the sovereign.  Through S&P's sovereign stress test,
it examined MHP under economic stress, which reduces the group's
revenues, notably in its domestic market, and a currency
devaluation on the group's local currency with a similar
magnitude with the one already experienced by Ukraine in the past
years.  S&P concluded that despite an EBITDA stressed by about
20%, MHP passed S&P's liquidity stress test, thanks to the
significant share of the group's revenues denominated in hard
currencies, which bolstered the short-term liquidity sources.
Moreover, the group successfully complied with a debt service
coverage test specifically designed for exporters prior to being
rated one notch above both the foreign currency sovereign rating
on Ukraine and S&P's transfer & convertibility (T&C) assessment
for Ukraine.

MHP operates in a volatile agricultural industry and faces high
risk from operating in Ukraine, which weighs on S&P's view of the
group's business risk profile.  Despite these constraints, S&P
thinks that the group's fully integrated business model, which
translates into best in class margins, supports the group's
competitive position.

Following MHP's successfully tendered offer of $245 million on
its Eurobond, S&P estimates that the group's debt-to-EBITDA ratio
will remain around 2.5x-3.0x--slightly higher than expected--over
the next two years, with an EBITDA interest coverage of about
3.5x-4.0x.  S&P continues to assess MHP's financial policy as a
negative credit factor because management has large, planned
investments at the Vinnytsia facility, for example, which will
squeeze free cash flow generation.  As a result, S&P believes
that free cash flow generation could slow in 2017.  Furthermore,
the group might have an increasing appetite for external growth
while Ukraine competitors are playing a role in market
consolidation.

The stable outlook primarily reflects S&P's view that MHP will
post resilient operating performance, enabling the group to
maintain its debt to EBITDA close to 3x while FFO to debt will
stay comfortably above 20%.  Moreover, S&P expects MHP to
generate robust positive free cash flow despite large capex that
will hamper free cash flow generation in 2017.  Moreover, the
group's robust EBITDA interest coverage ratio of more than 4x
gives MHP sufficient headroom to cover its debt service and
underpins the current rating.

Rating upside will be contingent on two key factors: A higher
assessment of MHP's SACP and a higher T&C assessment for Ukraine.
On one hand, a stronger SACP could stem from healthy financial
performance in 2017 that strengthens MHP's credit metrics, in
particular FFO to debt well entrenched in the 30%-45% range.
This would point to a stronger financial risk profile and, in
turn, a higher SACP.  On the other hand, because the ratings on
MHP and its debt are capped at one notch above the T&C assessment
for Ukraine, S&P would raise the rating on MHP if S&P was to
revise up the sovereign T&C assessment.  This is because MHP is
an exporter with more than 90% exposure to a single jurisdiction.

A downward revision of S&P's T&C assessment on Ukraine would
result in a downgrade of MHP.  Although the group successfully
passed S&P's stress test on a foreign currency sovereign default,
S&P notes that the corporate credit rating on MHP is capped at
one notch above that on Ukraine.  Therefore if the T&C assessment
on Ukraine was one notch lower, S&P would lower the ratings on
MHP.



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


BIBBY OFFSHORE: S&P Lowers CCR to 'CCC-', Outlook Negative
----------------------------------------------------------
S&P Global Ratings lowered its long-term corporate credit ratings
on Bibby Offshore Holdings Ltd. to 'CCC-' from 'CCC+'.  The
outlook is negative.

At the same time, S&P lowered the issue rating on the company's
super senior revolving credit facility (SSRCF) to 'CCC' from 'B-
'. The recovery rating remains '2', indicating S&P's expectation
of very high (70%-90%, rounded estimate: 85%) recovery prospects
in the event of a payment default.

S&P also lowered its issue rating on Bibby Offshore's GBP175
million senior secured notes to 'CC' from 'CCC+'.  The recovery
rating is '5', indicating that S&P expects recovery in the 10%-
30% range (rounded estimate: 25%) for noteholders in the event of
a payment default.

The downgrade reflects S&P's view that a liquidity crisis or
distressed exchange appears inevitable in the next six months in
the absence of significantly favorable changes in Bibby
Offshore's circumstances, such as shareholder support or very
strong market activity, which S&P don't anticipate at this stage.
S&P views liquidity as weak and the company remains highly
dependent on improvements in industry conditions.  In the absence
of such developments, the capital structure remains
unsustainable, in S&P's view, given the GBP175 million bond
maturing in 2021 and the company's negative EBITDA since the
fourth quarter of 2016 (the last-12-months' reported EBITDA  was
negative GBP37.2 million, although S&P notes the material impact
of one-offs, before which EBITDA was negative GBP24.3 million).
S&P continues to believe that oil market conditions will remain
depressed at least into 2018, which, with a very limited contract
backlog, leaves the visibility of future cash flows at very low
levels.  This is reflected by S&P's business risk assessment of
vulnerable.

With a cash balance of GBP31 million at the end of March 2017,
and negative cash generation for several quarters, the liquidity
position is getting more and more stretched.  In the absence of a
better performance in the second quarter of 2017, liquidity could
fall to precarious levels.  The main risk, in S&P's view, is the
cash burn in operations and the coupon payments of close to
GBP7 million that are paid twice a year on the bonds, which have
become oversized in relation to the company's cash flow
generation.  Nevertheless, S&P notes that the SSRCF was amended
with the support of the company's parent, the Bibby Line Group,
providing an additional GBP8 million of liquidity until November
2017, covering seasonally high activity over the summer and its
working capital requirements.

That said, S&P do not anticipate further shareholder support in
the absence of an improvement in market conditions, and if cash
burn continues at the current trend (-GBP52.6 million in the past
12 months), S&P believes the company could initiate a distressed
exchange.

The outlook is negative.  With a liquidity position that is
weakening and no tangible signs of a market trend inversion, S&P
believes there is a very high likelihood of a liquidity squeeze
or distressed exchange in the coming six months, which S&P would
view as a default.

S&P could lower the ratings if Bibby Offshore or the group's
companies were to engage in distressed exchange offers or debt
repurchases.  A liquidity crisis in the coming months could also
lead to a downgrade.

S&P views any upside scenario as being remote in the coming 12
months.  S&P could nevertheless revise the outlook to stable or
raise the rating if Bibby Offshore's liquidity position improves
on the back of increasing cash balance as a consequence of higher
activity and a less competitive environment leading to a recovery
in profitability.


CO-OP BANK: Reaches GBP700M Rescue Deal with Hedge Fund Investors
-----------------------------------------------------------------
Ben Martin at The Telegraph reports that The Co-operative Bank
has finally agreed to a GBP700 million rescue deal with its hedge
fund investors that will avert a collapse and will effectively
end the historic relationship between the troubled lender and the
wider Co-operative Group.

According to The Telegraph, the loss-making ethical bank has
announced a financing package that will see it raise at least
GBP443 million in a debt-for-equity swap and a further GBP250
million in new equity from the hedge funds that hold its bonds
and shares.  The Co-op Group's 20% stake in the business will
shrink to about 1%, The Telegraph notes.

In a pivotal move, the Group, as cited by The Telegraph, said
that the "the relationship agreement between group and bank which
covers, among other things, the promotion of bank services to
members of group, will naturally fall away and come to a formal
end in 2020".  The lender will continue to bear the Co-op name
and its current branding, however, The Telegraph states.

A deal has also been struck with the trustees of the GBP10
billion Co-op Group pension scheme to split the retirement plan,
which has about 90,000 members, into two legally separate parts,
The Telegraph relays.

Some 21% of the assets and liabilities of the scheme will be
allocated to the new bank retirement plan and the lender will
cease to be liable for the bigger section that will remain with
the Co-op Group, The Telegraph discloses.  A so-called "recovery
plan" has been drawn up for the bank scheme to handle its
deficit, which will involve GBP100 million being paid in over 10
years, The Telegraph states.

                     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.  However, the bank had
originally hoped to strike a deal by mid-June, in order to
complete the debt-for-equity swap process before GBP400 million
of senior bonds mature in September, the FT states.

The Co-op Bank said it was still pursuing an attempt to sell the
entire lender at the same time as advancing talks with existing
investors to raise capital, the FT relays.


MABEL TOPCO: S&P Affirms 'B' CCR on Planned Refinancing
-------------------------------------------------------
S&P Global Ratings said that it affirmed its 'B' long-term
corporate credit rating on Mabel Topco Ltd., the parent of U.K.-
based restaurant chain Wagamama.  The outlook is stable.

At the same time, S&P assigned its 'B' issue rating to the
proposed GBP225 million senior secured notes due 2022.  The
recovery rating is '4', indicating S&P's expectation of average
recovery prospects (rounded estimate: 35%) in the event of a
payment default.

S&P also affirmed its 'B' issue rating and '4' recovery rating on
the existing GBP150 million senior secured notes due 2020, and
S&P's 'BB' issue rating and '1+' recovery rating on the existing
GBP15 million super senior revolving credit facilities (RCF).
S&P will withdraw the issue and recovery ratings on the existing
notes and RCF once the refinancing transaction is completed.

The ratings on the proposed refinancing are subject to the
successful completion of the transaction, and to S&P's review of
the final documentation.  If S&P Global Ratings does not receive
the final documentation within a reasonable timeframe, or if the
final documentation materially departs from the information S&P
has already reviewed, it reserves the right to revise or withdraw
its ratings.

S&P's ratings affirmation follows Wagamama's announcement that it
plans to refinance its GBP150 million 7.875% senior secured notes
due 2020 by issuing GBP225 million senior secured notes due 2022.
Despite the higher debt level, S&P anticipates the group will
benefit from a cash interest saving of GBP2 million per year
thanks to the currently low interest rates.  The refinancing
transaction also involves GBP62 million shareholder returns
through the partial redemption of its unsecured loan notes.
Owing to high capital investment and increased cash pay debt, S&P
sees limited ratings headroom for softening operating performance
after refinancing.

Following the refinancing, S&P forecasts its adjusted debt to
EBITDA will peak at 8.7x (or 6.6x when excluding unsecured loan
notes) in financial year (FY) 2018 (ending April 30).  This is
slightly higher than FY2017, when Wagamama achieved 8.3x adjusted
debt to EBITDA (or 5.3x when excluding the unsecured loan notes).
The rise in total adjusted leverage mainly reflects S&P's
expectations that rising labor costs and food costs in the U.K.
will weigh on the group's earnings.

Post refinancing, S&P also expects its EBITDAR interest coverage
(defined as reported EBITDA before deducting rent costs over cash
interest and rent costs) to be around 1.8x-1.9x in FY2018 and
FY2019, depending on the final coupon rate on the new GBP225
million senior secured notes.

Wagamama is the U.K.'s eighth-largest branded casual dining
restaurant chain operating in the highly fragmented eating-out
market.  The group manages about 124 restaurants specializing in
fresh pan-Asian cuisine under its own brand name in prime
locations across the country.

In S&P's view, Wagamama has established a track record of strong
operating performance.  The restaurant chain achieved an average
of 10% like-for-like sales growth per year over the past three
years, while maintaining S&P's adjusted EBITDA margin at around
22%-23%.  S&P expects the group will continue to experience
strong positive like-for-like sales growth.  However, S&P also
considers that rising labor costs and food input costs in the
U.K. are set to weigh on the group's EBITDA margin, which S&P
anticipates would reduce to around 21.5% in FY2018 from around
23% in FY2017.

Wagamama has been expanding at a steady pace, with five to 10 net
new openings per year.  This has supported its revenue growth of
12%-19% per annum since FY2012.  Although it consumes most
operating cash flow generated as capital spending for growth, S&P
views the group's liquidity as adequate since it retains a
sufficient cash balance and S&P expects the GBP15 million RCF to
remain mostly undrawn.

These assumptions underpin its base-case scenario for Wagamama:

   -- U.K. real GDP growth of 1.7% in 2017 and 1.2% in 2018,
      versus 1.8% in 2016.  S&P anticipates the U.K. eating out
      demand will continue to remain strong.

   -- Strong sales growth of about 12%-13% in FY2018 and 15%-16%
      in FY2019, supported by healthy like-for-like sales growth
      in the U.K., restaurant refurbishments, and new site
      openings.

   -- U.K. consumer price index inflation of 2.6% in 2017 and
      2.3% in 2018, versus 0.6% in 2016.  While the weakened
      pound sterling would likely to continue to contribute to
      cost inflation, S&P expects most restaurant operators would
      not be able to pass on all of the rising costs to
      consumers.

   -- Adjusted EBITDA margin of about 21.5% in FY2018 and 20.7%
      in FY2019.  This is down from around 23% in FY2017 owing to
      rising labor costs and food costs.

   -- Capital expenditure (capex) of about GBP28 million in
      FY2018, increasing to about GBP34 million in FY2019 due to
      accelerated new site openings.

   -- Increasing operating lease obligations in line with new
      site openings.

   -- No additional shareholder returns or acquisitions.

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

   -- Post refinancing, S&P forecasts its adjusted debt to EBITDA
      will peak at 8.7x (6.6x excluding unsecured loan notes) in
      FY2018.  This could improve to 8.4x (6.3x excluding
      unsecured loan notes) in FY2019.

   -- S&P expects its EBITDAR interest cover (defined as reported
      EBITDA before deducting rent costs over cash interest and
      rent costs) to be around 1.8x-1.9x in FY2018 and FY2019.
      Reported free operating cash flow (FOCF) of up to
      GBP5 million per year in FY2018 and FY2019.

The stable outlook reflects S&P's view that Wagamama will
continue to expand rapidly on strong like-for-like sales growth
and new site openings, while effectively managing its EBITDA
margin in anticipation of rising labor costs and food costs.
After refinancing, S&P forecasts an adjusted debt-to-EBITDA ratio
to peak at around 8.5x-9.0x (about 6.4x-6.9x excluding unsecured
shareholder loan notes), and EBITDAR interest coverage of over
1.8x-1.9x over the next 12 months.

Considering high capital investment and increased cash pay debt
after the refinancing, there is limited ratings headroom for
softening operating performance.  S&P could consider lowering the
ratings or revising our outlook to negative if Wagamama's growth
prospects weaken.  This could arise if, for example, the group
experiences an unexpected drop in revenues or decline in
operating margins.  This could occur if there is higher labor and
food cost inflation, resulting in S&P's adjusted debt to EBITDA
exceeding 9.0x including the unsecured shareholder loan notes, if
reported FOCF remains negative, or if a squeeze on margins leads
to EBITDAR interest coverage falling toward 1.5x over the next 12
months.

Ratings downside could also arise if the financial sponsor owners
increase leverage by adopting a more aggressive financial policy
with respect to growth, investments, or shareholder returns.

S&P currently considers an upgrade unlikely due to high leverage
and a lower EBITDA base relative to other restaurant peers.
However, S&P could raise the ratings if the group expands to a
more mature level, deleverages on the back of FOCF generation,
resulting in adjusted debt to EBITDA falling below 5.0x
(including the unsecured shareholder loan notes), and EBITDAR
cash interest coverage approaches 2.2x on a sustainable basis.
This would also be contingent on S&P's view that the financial
policy for Wagamama is becoming conservative.



                            *********

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

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

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


                            *********


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

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

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

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

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

The TCR Europe subscription rate is US$775 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
contact Peter Chapman at 215-945-7000 or Joseph Cardillo at
856-381-8268.


                 * * * End of Transmission * * *