TCREUR_Public/170728.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

            Friday, July 28, 2017, Vol. 18, No. 149


                            Headlines


B O S N I A

AGROKOR DD: Liquidates Bosnia Unit, 161 Jobs Affected


F R A N C E

ELSAN SAS: Moody's Assigns B1 Corp. Family Rating, Outlook Stable
HOLDING MEDI-PARTENAIRES: Moody's Withdraws B1 CFR
TEREOS FINANCE: Fitch Withdraws 'BB' Senior Unsecured Rating


G E R M A N Y

HECKLER & KOCH: Moody's Hikes CFR to B3, Outlook Stable
SOLARWORLD AG: Nears Rescue Deal, Investors May Finance Sites


I R E L A N D

AVOLON HOLDINGS: Fitch Affirms 'BB' IDR, Outlook Stable
CADOGAN CLO VIII: S&P Affirms B- (sf) Rating on Class F Notes


I T A L Y

SAM FINANCE: Moody's Raises Sr. Sec. Facility Rating to Ba1
SIENA MORTGAGES 07-5: Fitch Keeps B- Class C Notes Rating on RWE


K A Z A K H S T A N

EXIMBANK KAZAKHSTAN: S&P Keeps 'B-/B' CCR on CreditWatch Negative


N E T H E R L A N D S

HEMA BONDCO: Moody's Rates EUR600MM Senior Secured Notes B2
HEMA BV: S&P Raises Corp. Credit Rating to 'B-', Outlook Stable
LEOPARD CLO V: Moody's Hikes Rating on Class F Notes to B2(sf)
QUEEN STREET I: Moody's Affirms Ba1(sf) Rating on Class E Notes


R U S S I A

ENERGOGARANT JSIC: S&P Affirms 'BB-' Counterparty Credit Rating
RESO-GARANTIA: S&P Upgrades IFS Rating to 'BB+', Outlook Stable
* Russian RMBS 90+day Delinquencies Drop n 5-Mos. Ended May 2017


S W E D E N

ERICSSON: S&P Lowers CCR to 'BB+' on Weak Revenue, Outlook Stable


U N I T E D   K I N G D O M

DOUNREAY TRI: Files Insolvency Documents, Appoints Administrators
FCR MEDIA: High Court Judge Appoints Interim Examiner
LHC3 LIMITED: Fitch Assigns 'BB-'(EXP) Long-Term IDR
LHC3 PLC: Moody's Assigns Ba2 Corp. Family Rating, Outlook Stable

* UK: Number of Bankrupt Businesses in Scotland Down in June 2017


X X X X X X X X

* BOOK REVIEW: Competitive Strategy for Healthcare Organizations


                            *********



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B O S N I A
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AGROKOR DD: Liquidates Bosnia Unit, 161 Jobs Affected
-----------------------------------------------------
According to Bloomberg News' Misha Savic and Jasmina Kuzmanovic,
Hina newswire, citing Agrokor's state-appointed commissioner Ante
Ramljak, reports that the company's Velpro wholesaler unit in
Bosnia that employed 161 is being "liquidated".

Mr. Ramljak, as cited by Hina, said "That's the most significant
loss of jobs, for everything else we are in a stable phase and
can expect growth and improvement," Bloomberg relates.

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

                            *   *   *

The Troubled Company Reporter-Europe reported on June 7, 2017,
that Moody's Investors Service downgraded Croatian retailer and
food manufacturer Agrokor D.D.'s corporate family rating (CFR) to
Ca from Caa2 and the probability of default rating (PDR) to D-PD
from Ca-PD. The outlook on the company's ratings remains
negative.  Moody's also downgraded the senior unsecured rating
assigned to the notes issued by Agrokor due in 2019 and 2020 to C
from Caa2.  The rating actions reflect Agrokor's decision not to
pay the coupon scheduled on May 1, 2017 on its EUR300 million
notes due May 2019 at the end of the 30 day grace period. It also
factors in Moody's understanding that the company is not paying
interest on any of the debt in place prior to Agrokor's decision
in April 2017 to file for restructuring under Croatia's law for
the Extraordinary Administration for Companies with Systemic
Importance.

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



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F R A N C E
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ELSAN SAS: Moody's Assigns B1 Corp. Family Rating, Outlook Stable
-----------------------------------------------------------------
Moody's Investors service has assigned a B1 corporate family
rating (CFR) and B1-PD probability of default rating (PDR) to
Elsan SAS. Moody's has also assigned B1 ratings to the existing
EUR1,305 million loan facilities and EUR210 million revolving
credit facility (RCF). All ratings have a stable outlook.

RATINGS RATIONALE

Elsan's B1 CFR reflects (1) the company's positioning as one of
France's largest private hospital operators and the leader within
Medicine, Surgery and Obstetrics (MSO) (2) a track record of
solid organic growth driven, among others, by its ambulatory
segment which Moody's believes will continue to benefit from
solid fundamentals (3)Elsan's overall high degree of visibility
in terms of future operating performance supported by favourable
demographics and the role of Social Security (the French National
Health System) as the payor; (4) Moody's expectations of future
improvement in profitability as synergies from the acquisitions
of Vitalia (in November 2015) and Medipole Partenaires (in June
2017) near run rate potential; (5) the overall high barriers to
entry resulting from the need to obtain necessary authorisations
and attract qualified personnel and (6) a solid liquidity
profile.

These factors are balanced by (1) Elsan's high leverage which
Moody's estimates will be close to 6x (after Moody's adjustments
of pensions and rents commitments) over the next 24 months (2)
Moody's expectations of an ongoing challenging market environment
in France where continued pressure on tariffs will limit near-
term potential for organic growth; (3) a certain degree of event
risk as Moody's expects Elsan to continue being among the more
active players in the consolidation of the French private
hospital market, though Moody's note that the number of larger
targets is decreasing as the industry consolidates.

On June 29, 2017, Elsan acquired Medipole Partenaires becoming
one of the leading private hospital groups in France. With
revenues of around EUR2.1 billion, the combined entity displays a
similar scale to that of Ramsay Generale de Sante (Ba3, positive)
and is the number one player within MSO among private hospitals
in France. Following the transaction, which was financed by a mix
of equity (EUR425 million) and an incremental EUR730 million loan
facility, Moody's estimates the pro-forma adjusted gross
debt/EBITDA to be around 6.0x. Moody's adjusted debt of around
EUR2.5 billion includes an adjustment in excess of EUR1 billion
reflecting the present value of the substantial future lease
commitments, resulting from the company's ongoing sale and
leaseback's activity. Moody's expects that high lease liabilities
combined with continued pressure on tariffs will maintain
leverage between 6.0x and 5.5x in the next 24 months.

However, Moody's expects some de-leveraging towards 5.5x to be
supported by the cost synergies plan that the company estimates
to reach, which Moody's believes to be achievable. In spite of
the size of the transaction, Moody's considers execution risk to
be low and notes that Elsan has a very strong track record in
acquiring and integrating hospitals as exemplified by its
successful acquisition of Vitalia in November 2015.

STRUCTURAL CONSIDERATIONS

The B1 rating assigned to the EUR1,305 million worth of senior
secured term loans and the EUR210 million worth of senior secured
revolving credit facility (RCF) reflects their pari passu ranking
in the capital structure and the upstream guarantees from
material subsidiaries of the group. They both are secured upon
collateral that essentially consists of share pledges. The B1-PD
PDR, in line with the CFR, reflects Moody's assumption of a 50%
family recovery rate typical for bank debt structures with a
limited or loose set of financial covenants.

LIQUIDITY

Moody's expect Elsan's liquidity profile to remain good over the
next 12 months. In addition to positive free cash flows which
should gradually progress towards EUR60 million in the next 12-18
months, incremental liquidity cushion is provided by cash on
balance sheet estimated to be above EUR150 million at closing and
access to RCF of EUR210 million (of which EUR185 million is
currently undrawn).

RATIONALE FOR STABLE OUTLOOK

The outlook on the ratings is stable and reflects Moody's
expectations that Elsan will gradually de-leverage its balance
sheet towards 5.5x Moody's adjusted debt/ EBITDA in the next 24
months. The stable outlook leaves no headroom for deviations
against projections and the credit is weakly positioned in the
rating category. Whereas bolt on acquisitions financed by free
cash flow can be accommodated in the rating category, there is no
room for further debt financed acquisitions.

WHAT COULD CHANGE THE RATING UP/DOWN

In view of the company's current high leverage, upward pressure
on the ratings is unlikely to materialize in the foreseeable
future. Positive rating pressure could nonetheless arise if Elsan
succeeds in bringing leverage down below 5.0x Moody's adjusted
debt/EBITDA.

Conversely, negative pressure would likely be exerted on the
rating should Elsan fail in bringing down leverage from its
current high point and towards 5.5x Moody's adjusted debt/
EBITDA.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.

Elsan is one of the leading France-based private hospital
company. Pro forma for the transaction with Medipole Partenaires,
the company reported revenues of EUR2.0 billion and an EBITDAR of
EUR409 million in 2016. Founded in 2000, Elsan is among the
youngest French hospitals groups. Pro-forma for the contemplated
acquisition of Medipole Partenaires, the company will have a
strong footprint across France with a market share of around 20%
in the Medicine, Surgery and Obstetrics (MSO) segment. The
combined group operates 123 facilities (of which 98 MSO) with c.
23,000 employees and more than 6,500 practitioners. Elsan is
owned by CVC (71%), managers and founders (15%), and Tethys
Invest (14%).


HOLDING MEDI-PARTENAIRES: Moody's Withdraws B1 CFR
--------------------------------------------------
Moody's Investors Service has withdrawn Holding Medi-Partenaires
S.A.S. B1 corporate family rating, Ba3-PD probability of default
rating and stable outlook.

RATINGS RATIONALE

Moody's has withdrawn the ratings and outlook of Medipole
Partenaires following a reorganization of the company. Medipole
Partenaires was acquired by Elsan SAS (Elsan, B1, stable) on the
June 29, 2017 and become part of Elsan. As part of the
acquisition, all Medipole Partenaires outstanding debt was
repaid.

Holding Medi-Partenaires S.A.S. was founded in 1991 and before
the acquisition was one of the leading private hospital groups in
France. As of the end of 2016 Medipole Partenaires operated 40
facilities, treated around 1.1 million patients and reported
revenue of EUR891.7 million and EBITDA of EUR125.2 million.


TEREOS FINANCE: Fitch Withdraws 'BB' Senior Unsecured Rating
------------------------------------------------------------
Fitch Ratings has withdrawn its expected hybrid issuance rating
for Tereos Finance Groupe 1, a fully owned subsidiary of Tereos
Union de Cooperative a Capital Variable (Tereos), as its
forthcoming debt issuance is no longer expected to convert to
final ratings.

Fitch currently rates Tereos:

Tereos Union de Cooperatives Agricoles a Capital Variable:
-- Long-Term Issuer Default Rating (IDR): 'BB';
Tereos Finance Groupe 1:
-- Senior unsecured rating: 'BB';

The Rating Outlook is Stable.


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G E R M A N Y
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HECKLER & KOCH: Moody's Hikes CFR to B3, Outlook Stable
-------------------------------------------------------
Moody's Investors Service has upgraded to B3 from Caa1 the
corporate family rating (CFR) and to B3-PD from Caa1-PD the
probability of default rating (PDR) of German defence
manufacturing company Heckler & Koch GmbH (Heckler & Koch). At
the same time, Moody's upgraded to B3 from Caa1 the rating on the
company's EUR295 million senior secured notes due 2018 (of which
EUR220 million are outstanding). The outlook on all ratings is
stable.

The upgrade reflects Heckler & Koch's successful securing of
private financing to repay notes maturing in May 2018 worth
EUR220 million. The proposed refinancing will significantly
reduce the company's short-term liquidity risk, lower interest
costs and could potentially lead to significant capital structure
improvements," says Jeanine Arnold, a Moody's Vice President --
Senior Credit Officer and lead analyst for Heckler & Koch.

RATINGS RATIONALE

The rating action follows Heckler & Koch's announcement that it
has secured private financing in order to repay the net EUR220
million notes maturing in May 2018. In Moody's view, this
significantly reduces the company's short-term liquidity risk.
The net EUR220 million notes will be refinanced via a five-year
EUR130 million private loan, a EUR40 million private placement
and a EUR50 million shareholder loan.

In addition, shareholder loan repayments and early bond
repayments over the last 12- 18 months have substantially
strengthened the company's gross adjusted leverage to around 6.0x
adjusted debt/EBITDA. In Moody's opinion this represents a much
more sustainable capital structure and, if shareholders approve
the conversion of the EUR50 million shareholder loan to equity at
the AGM on the 15 August (as Heckler & Koch largely expects they
will), Moody's forecasts that leverage will be stronger still at
around 5.0x by end-2017.

However, Heckler & Koch's rating remains constrained by the
company's relatively weak liquidity in the context of the
company's cash flow needs. Moody's forecasts liquidity will only
remain around EUR20 million over the next 12 months. This is
because the revolving credit facility (previously EUR30 million)
was not extended as per end of June 2017.

Moody's recognizes the significant progress Heckler & Koch has
made toward improving its operating performance and to more
effectively manage what can be volatile and difficult to predict
working capital outflows. That said, the company has yet to
establish a strong track record in this regard. Interest costs on
the EUR130 million loan and the EUR40 million private loan are
expected to be substantially lower than the company's current
cost of funding, but at around EUR6.5 million bi-annually, this
is high in the context of only EUR20 million of liquidity.

Moody's takes some comfort from Heckler & Koch's ability to raise
additional debt of EUR40 million to support liquidity, but these
funds are not committed. Moody's considers minimum available
liquidity of around EUR30 million, would be more adequate in
terms of the company's operating model and cost of debt, and
would be a key consideration for further positive rating action.

RATIONALE FOR STABLE OUTLOOK

The stable outlook reflects Moody's view that Heckler & Koch's
more sustainable operating model as well as more effective
working capital management will ensure solid free cash flow
generation through 2019. The rating agency expects that this will
support Heckler & Koch's liquidity (unrestricted cash) so that it
remains in excess of EUR20 million and grows steadily through
2018. Moody's expects that the company's gross adjusted leverage
will remain comfortably below 6.5x.

WHAT COULD MOVE THE RATINGS - UP

* Continued operating profit growth, supported by strong top line
growth in and operating profit margins in excess of 18%

* Tender wins and no material contract losses, to ensure the
company's earnings sustainability.

* Positive FCF generation continues to support the company's
liquidity such that it increases to in excess of EUR30 million on
a sustainable basis

* Expectations that Moody's adjusted gross debt/EBITDA will
remain sustainably below 5.5x

WHAT COULD MOVE THE RATINGS -- DOWN

* Eroding liquidity such that total liquidity is likely to be
sustainably below EUR20 million, and/or an inability for Heckler
& Koch to meet its interest obligations

* Moody's adjusted gross debt/EBITDA is forecast to be
sustainably in excess of 6.5x

Liquidity

As at June 30, 2016, unrestricted cash was around EUR20 million.
The EUR30 million RCF will not be extended. Moody's considers
EUR20 million of cash to be adequate to support the company's
working capital needs and interest payments, but it does not
provide very much headroom to sustain unexpected cash outflows,
for example for litigation costs. Moody's understands that the
loan facility allows Heckler & Koch to raise an additional EUR20
million under the private loan and a further EUR20 million under
the private placement, but these are not committed facilities and
therefore not included in Moody's liquidity analysis. The private
loan is subject to one financial covenant, but Moody's understand
there is substantial headroom under this.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Global
Aerospace and Defense Industry published in April 2014.


SOLARWORLD AG: Nears Rescue Deal, Investors May Finance Sites
-------------------------------------------------------------
Mark Osborne at PV-Tech reports that bankrupt integrated PV
module manufacturer SolarWorld AG is close to securing a new
owner as a group of unidentified investors are to finance
continued manufacturing operations at sites in Freiberg and
Arnstadt in Germany by mid-August 2017.

According to PV-Tech, a statement from the provisional insolvency
administrator, law firm Horst Piepenburg, said the group of
investors could takeover of the production sites before the end
of July, saving around 450 jobs as a deal had essentially been
brokered for the two manufacturing plants.

However, Horst Piepenburg noted that the employees at SolarWorld
AG's holding company at its Bonn offices "would have to be
irrevocably released to the expected opening of the insolvency
proceedings on August 1, 2017," PV-Tech relates.

A further 1,200 jobs at the Freiberg and Arnstadt sites remain at
risk, according to the insolvency administrator yet discussions
would take place with the new owners on retaining as many jobs as
possible, PV-Tech notes.

Previously, Horst Piepenburg had said that significant job losses
were inevitable by the end of July as funding would end and a
deal to purchase SolarWorld AG was being hampered by the overall
complexity of the situation, PV-Tech recounts.

SolarWorld AG is based in Bonn, Germany.


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I R E L A N D
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AVOLON HOLDINGS: Fitch Affirms 'BB' IDR, Outlook Stable
-------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) for Avolon Holdings Limited at 'BB' and the IDR and senior
unsecured debt rating of Avolon subsidiary, Park Aerospace
Holdings Limited at 'BB'. The Rating Outlook is Stable.

These actions are being taken in conjunction with a broader
aircraft leasing industry peer review conducted by Fitch, which
includes eight publicly rated firms.

KEY RATING DRIVERS
IDRs, SECURED DEBT, UNSECURED DEBT

The rating affirmation reflects Avolon's high quality commercial
aircraft portfolio; enhanced scale following the acquisition of
CIT Group Inc.'s aircraft leasing business in April 2017; strong
profitability; robust risk controls; and strong management track
record. The ratings are constrained by Avolon's predominantly
secured, wholesale funded debt profile; elevated leverage;
aggressive growth via its order book and stated acquisition
appetite; qualitative considerations surrounding Avolon's still
new ownership structure; and execution risk related to the
ongoing integration of the CIT commercial aircraft leasing
business.

Rating constraints applicable to the aircraft leasing industry
more broadly include the monoline nature of the business;
vulnerability to exogenous shocks; potential exposure to residual
value risk; sensitivity to oil prices; reliance on wholesale
funding sources; and increased competition.

With respect to Avolon's ownership structure, Fitch believes
there is the potential for conflicting objectives or risk
appetites between Avolon, its parent Bohai Capital Holding Co.,
Ltd. (Bohai), and Bohai's majority owner HNA Group (HNA). This
structure is viewed as a rating constraint, particularly given
that the interrelationships are still relatively new and
unproven. In addition, in Fitch's opinion, the credit risk
profiles and funding and liquidity needs of Avolon's direct and
indirect owners increase the potential for capital extraction
from Avolon during periods of stress, subject to certain
covenants in Avolon's debt documents that govern the unsecured
notes and term loans. That being said, Bohai and Avolon have
committed to an insulation framework. With respect to corporate
governance, the Avolon Board is comprised of nine directors,
including four independents, resulting in HNA Group and Bohai
having a minority Board presence.

As of March 31, 2017, pro forma for the CIT acquisition, Avolon
is the third largest aircraft lessor in the world, with 850
owned, managed and committed aircraft. At the 2017 Paris Air
Show, Avolon signed a memorandum of understanding for 75 B737 MAX
8 aircraft, which would increase the total fleet to 925 aircraft.
As of March 31, 2017, pro forma for the CIT acquisition, the
owned fleet was approximately 68% narrowbody (including regional
jets) and 32% widebody. Top owned aircraft are A320 family
including 10 delivered A320neos (45.0%), B737 NG (29.4%), A330
(11.1%), E190/195 (4.4%) and CRJ 900 (2.5%). In addition to the
diversification benefits that come with size, Fitch believes that
increased scale will provide certain strategic benefits to
Avolon, such as a larger presence in the growing Asia-Pacific
market, deeper funding relationships with aviation investors,
increased purchasing/negotiating power, an ability to transact
with larger and more highly-rated airlines, and more available
channels to re-lease planes when needed. Conversely, with broader
reach comes increased likelihood of exposure to challenged
airlines and/or geographies during periods of stress. Avolon
currently serves approximately 150 airline customers across 63
countries.

Avolon's leverage (gross debt to tangible equity), pro forma for
the CIT acquisition, is elevated at 4.3x initially but is
expected to decline to 3.0x by year-end 2018 as a result of
capital retention, which is in line with the company's stated
leverage target of 2.5x-3.0x. Avolon's reported net debt to
equity ratio was 2.3x as of March 31, 2017. Fitch calculates
tangible common equity as total shareholders' equity less
maintenance right assets, lease premium assets and goodwill.
Maintenance right assets and lease premium assets booked as a
result of the CIT acquisition currently have an adverse impact on
Avolon's leverage ratio, though the maintenance right and lease
premium assets will amortize over time.

Leverage is expected to be more elevated at Bohai, which has a
weaker credit profile than Avolon, in Fitch's view. A portion of
the CIT portfolio acquisition was funded by debt issued by Bohai
and downstreamed to Avolon in the form of equity. Elevated double
leverage increases the risk of capital extraction from Avolon in
the event of stress at Bohai, although Fitch believes that,
relative to the current ratings, this risk is moderated by the
aforementioned insulation framework, Board composition and debt
covenants.

Fitch expects that Avolon's lease revenue yields will be
approximately 12% over the next several years, indicating strong
profitability prospects from contractual leases. The company's
average remaining lease term is currently 6.7 years, supporting
cash flow predictability absent material lessee bankruptcies.

Fitch considers Avolon's asset quality to be strong. The average
fleet age is 4.9 years, which is relatively young relative to the
aircraft lessor peer group and supports demand in the current
market environment. In addition, from predecessor Avolon's
inception in 2010 through 1Q17, impairments have been negligible,
and residual value gains ranged from 0.3%-1.3% of the net book
value of flight equipment during that period. CIT Group Inc.
incurred minimal impairments on its commercial aircraft from 2008
to 2016, peaking at 0.3% of the net book value of flight
equipment in 2014 and has also posted residual value gains up to
0.5% from year-end 2012 to year-end 2016.

Avolon's pro forma order book as of March 31, 2017 totals 285
planes, including new technology aircraft such as the A320neo,
A321neo, A330neo, B737 MAX 8/9, and B787-8/9. The order book
represented 33.5% of the combined fleet (51.7% of the owned
fleet) at March 31, 2017, and Avolon has signalled that further
growth is possible. The order book and other funding requirements
will create a need for consistent access to the debt markets in
Fitch's opinion.

Nevertheless, near-term liquidity is viewed as adequate as pro
forma liquidity sources (cash and liquid investments, next 12
months funds from operations, available undrawn debt facilities,
and expected proceeds from aircraft disposals) adequately cover
uses (capital expenditures, debt principal repayments, pre-
delivery payments, and other corporate uses) by 2.6x over the
next 12 months. The company recently extended its warehouse
facility to 2021 and raised nearly $9 billion in debt during
1Q17, including $3 billion in senior unsecured notes and $5.5
billion in term loan borrowings.

Avolon's funding profile is comprised primarily of secured debt
(full recourse and non-recourse term facilities, export credit
agency and Export-Import Bank backed facilities, securitizations,
a warehouse facility, and lines of credit). Approximately 18% of
Avolon's debt was unsecured as of March 31, 2017, which remains
consistent with a below investment grade rating profile given the
limited financial flexibility in a stressed market scenario.

Avolon has made progress on the CIT integration, as all risk
committees and reporting now operate on a consolidated basis. The
company expects all employee integration to be completed by 2Q17
followed by data migration to common systems by the end of 3Q17.

The Stable Outlook reflects that Avolon will continue to maintain
scale and strong fleet characteristics, but that execution risk
remains elevated. Fitch will continue to monitor the CIT
integration, adherence to the insulation framework, and leasing
activity. As of March 31, 2017 pro forma, 92% of commitments and
lease expirations are placed in 2017 but only 41% are placed in
2018.

The secured debt ratings of Avolon subsidiaries are one notch
above Avolon's Long-Term IDR and reflect the aircraft collateral
backing these obligations which suggest good recovery prospects.

The equalization of the unsecured debt with Avolon's IDRs
reflects modest unsecured debt as a portion of total debt, as
well as the pool of unencumbered assets, which provide support to
unsecured creditors and suggest average recovery prospects.

RATING SENSITIVITIES
IDRs, SECURED DEBT, UNSECURED DEBT

Positive rating momentum would be primarily dependent upon the
successful integration of CIT's commercial aircraft leasing
business without incurring undue costs and/or impairing
relationships with customers, manufacturers or funding providers.
Positive rating momentum will also be conditioned upon execution
on planned deleveraging at Avolon, resulting in debt to tangible
common equity approaching the company's stated leverage target of
2.5x-3.0x, as well as execution on planned deleveraging at Bohai,
resulting in reduced double leverage.

Negative rating momentum would be primarily driven by an
inability to successfully integrate CIT's commercial aircraft
leasing business resulting in outsized financial costs and/or
impairment of relationships with customers, manufacturers or
funding providers. A sustained increase in gross debt to tangible
common equity above 4.0x, as a result of an increased risk
appetite, asset underperformance or capital extraction by
Avolon's owners, may also result in negative rating momentum.

Additionally, a perceived weakening of the structural insulation
of Avolon from its direct and indirect owners; a perceived
weakening of the credit risk profiles of Avolon's direct or
indirect owners or inconsistent operational or capital
maintenance practices; higher-than-expected repossession
activity; sustained deterioration in financial performance or
operating cash flows; and/or a material weakening of liquidity
relative to financing needs may result in negative pressure on
the ratings.

Fitch has affirmed the following ratings:

Avolon Holdings Limited
-- Long-Term IDR at 'BB'; Outlook Stable;
-- Senior secured debt at 'BB+'.

Avolon TLB Borrower 1 (Luxembourg) S.a.r.l.
-- Long-Term IDR at 'BB'; Outlook Stable;
-- Senior secured debt at 'BB+'.

Avolon TLB Borrower 1 (US) LLC
-- Long-Term IDR at 'BB'; Outlook Stable;
-- Senior secured debt at 'BB+'.

CIT Aerospace International
-- Senior secured debt at 'BB+'.

CIT Aerospace LLC
-- Senior secured debt at 'BB+'.

CIT Aviation Finance III Limited
-- Senior secured debt at 'BB+'.

CIT Group Finance (Ireland)
-- Senior secured debt at 'BB+'.

Park Aerospace Holdings Limited
-- Long-Term Issuer Default Rating at 'BB'; Outlook Stable;
-- Senior unsecured notes at 'BB'.

Avolon is headquartered in Ireland and is a wholly-owned indirect
subsidiary of the Chinese public company, Bohai Capital Holding
Co., Ltd. Avolon is the world's third largest aircraft leasing
business as of March 31, 2017 pro forma, with 850 owned, managed
and committed aircraft valued at approximately $43 billion.


CADOGAN CLO VIII: S&P Affirms B- (sf) Rating on Class F Notes
-------------------------------------------------------------
S&P Global Ratings affirmed its credit ratings on all classes of
notes issued by Cadogan Square CLO VIII D.A.C. following the
transaction's effective date.

The collateral manager declared the effective date on June 12,
2017, by which date it had committed to purchase a total of
EUR463.65 million of eligible assets according to the trustee
report available to us. The transaction documents contain
provisions directing the trustee to request S&P Global Ratings to
affirm the ratings issued on the closing date after reviewing the
effective date portfolio (typically referred to as an "effective
date rating confirmation").

S&P said, "Today's affirmations reflect our opinion that the
portfolio collateral purchased by the issuer, as reported to us
by the trustee and collateral manager, in combination with the
transaction's structure, provides sufficient credit support to
maintain the ratings that we assigned on the transaction's
closing date.

"We have performed a quantitative and qualitative analysis of the
transaction in accordance with our criteria to assess whether the
initial ratings remain commensurate with the credit enhancement
based on the effective date collateral portfolio. Our analysis
relies on the use of CDO Evaluator to estimate a scenario default
rate at each rating level based on the effective date portfolio,
full cash flow modeling to determine the percentile break-even
default rate (BDR) at each rating level, and the application of
our supplemental tests. The BDR represents our estimate of the
maximum level of gross defaults, based on our stress assumptions,
that a tranche can withstand and still fully pay interest and
principal to the noteholders.

"Following our review of the transaction, we have affirmed our
ratings on all classes of notes.

"After we issue an effective date rating affirmation, we will
periodically review whether, in our view, the current ratings on
the notes remain consistent with the credit quality of the
assets, the credit enhancement available to support the notes,
and other factors. We will subsequently take rating actions as we
deem necessary."

Cadogan Square VIII is a European cash flow corporate loan
collateralized loan obligation (CLO) securitization of a
revolving pool, comprising primarily euro-denominated senior
secured loans and bonds granted to broadly syndicated corporate
borrowers.

RATINGS LIST

  Cadogan Square CLO VIII DAC
  EUR479.14 Million Floating And Fixed-Rate Notes (Including
  Subordinated Notes)

  Class              Rating

  Ratings Affirmed

  A-1                AAA (sf)
  A-2                AAA (sf)
  B-1                AA (sf)
  B-2                AA (sf)
  C                  A (sf)
  D                  BBB (sf)
  E                  BB (sf)
  F                  B- (sf)


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


SAM FINANCE: Moody's Raises Sr. Sec. Facility Rating to Ba1
-----------------------------------------------------------
Moody's Investors Service upgraded Santander Asset Management
Investment Holdings Limited's Corporate Family Rating (CFR) to
Ba1 from Ba2 and changed its outlook to positive from stable.
Concurrently, Moody's upgraded the senior secured facility
ratings of SAM Finance Lux S.A.R.L. to Ba1 from Ba2, also
changing the outlook to positive from stable. Moody's also
assigned an initial Probability of Default rating (PDR) to SAM of
Ba1-PD.

RATINGS RATIONALE

The upgrade to Ba1 reflects SAM' s (1) steady AUM growth (6.6%
CAGR) and revenue growth (3.2% CAGR) over the last three years;
(2) strong and stable AUM resilience with retention and
replacement rates superior to similarly rated peers, and (3)
improving financial profile supported by improving pre-tax
profitability following the termination of the Pioneer
acquisition a year ago.

The change in outlook to positive is driven by the likely
beneficial impact the company's pending sale of its stake in
Allfunds Bank S.A., a European mutual distribution platform, will
have on its leverage profile. SAM has indicated that it expects
to use proceeds from the transaction to pay down outstanding
debt. The positive outlook is also supported by the fact that
Banco Santander has agreed to buy back Warburg Pincus' and
General Atlantic's ownership interests in SAM. With the company
fully owned by Banco Santander S.A. (Spain) (LT bank deposits A3
stable/Senior unsecured MTN (P)A3, BCA baa1) again, SAM will be
able to focus on its core strengths and develop further synergies
with the bank. Some synergies and growth opportunities are
already being implemented. Moody's believes this will translate
in increased revenue generation and client diversification for
the asset manager within the next couple of years. In addition,
Moody's expects SAM's debt to be fully paid back which will
translate into a substantial improvement of its financial
flexibility.

SAM's Ba1 corporate family rating reflects the company's (1)
global reach with leading market positions in the Iberian
Peninsula (Iberia), Latin America and the UK, (2) a sizeable base
of assets under management (AUM); (3) a stable retail investor
base; and (4) a long-term distribution agreement with Banco
Santander S.A. (Spain), which bolsters the stability of its
earnings.

These strengths are counterbalanced by SAM's limited product
diversification (predominantly comprising savings-like retail
products) and moderate-to-high leverage levels compared with Ba-
rated peers. In addition, the Latin American markets in which SAM
operates are more volatile than its core European markets, which
could translate into greater revenue volatility.

What Could Change the Rating - Up

- Market share gains in the company's core businesses and
   institutional channels

- Sustained reduction in the total adjusted debt/EBITDA below
   2.5x

- Sustained profitability, resulting in consistent pre-tax
   income margins above 25%

What Could Change the Rating - Down

- Increase in total debt/EBITDA above 4.5x

- Erosion of competitiveness and market presence

- Sustained increase in operational costs, leading to a material
   decline in profitability

- Significant outlays for strategic investments over the next 12
   months, substantially reducing available liquidity

LIST OF AFFECTED RATINGS

Issuer: SAM Finance Lux S.A.R.L.

Upgrades:

-- Senior Secured Bank Credit Facility, Upgraded to Ba1 from Ba2

Outlook Actions:

-- Outlook, Changed To Positive From Stable

Issuer: SAM Investment Holdings Limited

Upgrades:

-- Corporate Family Rating, Upgraded to Ba1 from Ba2

Assignments:

-- Probability of Default Rating, Assigned Ba1-PD

Outlook Actions:

-- Outlook, Changed To Positive From Stable

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Asset
Managers: Traditional and Alternative published in December 2015.


SIENA MORTGAGES 07-5: Fitch Keeps B- Class C Notes Rating on RWE
----------------------------------------------------------------
Fitch Ratings has upgraded two and affirmed one tranche of Siena
Mortgages 09-6 S.r.l. (SM09-6). The agency has also maintained
the junior notes of Siena Mortgages 07-5 S.p.A. (SM07-5) and
Siena Mortgages 07-5 S.p.A. Series 2 (SM07-5 Series 2) on Rating
Watch Evolving (RWE) on:

SM07-5
Class C (ISIN IT0004304249): 'B-sf'; maintained on RWE

SM07-5 Series 2
Class C (ISIN IT0004353824): 'B-sf'; maintained on RWE

SM09-6
Class A (ISIN IT0004488794): affirmed at 'AAsf'; off RWE; Outlook
Stable
Class B (ISIN IT0004488810): upgraded to 'AAsf' from 'Asf'; off
RWE; Outlook Stable
Class C (ISIN IT0004488828): upgraded to 'A-sf' from 'BBB-sf';
off RWE; Outlook Stable

The prime Italian RMBS transactions were originated and are
serviced by Banca Monte dei Paschi di Siena (BMPS; B-/RWE/B).

KEY RATING DRIVERS

Effective Structural Changes
Following the placement of SM09-6 on RWE, the originator has made
structural amendments by increasing the cash reserve target to
EUR145 million (8.3% of the current note balance), from EUR106.5
million. Part of the proceeds from the buyback of defaulted
assets was used to replenish the cash reserve to its new target
level.

BMPS also increased the class A protection ratio (ratio between
outstanding balance of class B and C and outstanding balance of
the rated notes), one of the triggers associated with the
amortisation of the cash reserve, to 44% from 32%. Subject to
certain other triggers, the cash reserve can amortise to the
higher of 5% of the outstanding rated note balance and EUR39.9
million.

We consider these structural changes to be positive to the
ratings, resulting in the affirmation of the senior notes and
multi-notch upgrades for the mezzanine and junior notes.

Linked Ratings
The only source of credit support for the junior notes of SM09-6
is the cash reserve, currently held at Deutsche Bank AG, London
branch (A-/Negative/F1). Given the excessive exposure to this
counterparty, Fitch has linked the rating of junior notes to the
minimum between the account bank rating trigger (A/F1) and
Deutsche Bank AG, London branch's Issuer Default Rating (IDR).

In February 2017 Fitch linked the ratings of the junior notes in
SM07-5 and SM075 Series 2 to the IDR of the swap provider as the
ratings depend on cash flows from the swap.

RWE Maintained
Fitch maintained the junior notes of SM07-5 and SM075 Series 2 on
RWE because the ratings are currently linked to the IDR of the
swap provider (BMPS). The resolution of the RWE on the notes is
dependent on the resolution of the RWE on the bank. As a result,
it could take longer than the typical six-month period.

Stable Asset Performance
Asset performance remains stable in SM09-6, with late stage
delinquencies at 0.9% of the current pool, down from 1.9% 12
months ago. Gross cumulative defaults are at 5% of the initial
pool balance. The high seasoning of the deal (105 months)
combined with the low original loan-to-value ratio (65.1%) means
that asset performance will remain stable.

Recovery Rate Cap
Given the lengthy recovery timing that is typical for the Italian
market, Fitch has capped the maximum recovery rates at 100% of
the outstanding defaulted balance.

Treatment of Modular Loans
In a rising interest rate scenario, the agency modelled capped
floating rate loans (27.2% of the current pool) at their cap
rate. At the same time, modular loans (3.9% of the current pool)
have been assumed to switch to a fixed rate at the next available
contractual switch date.

Fitch notes that in a rising Euribor scenario the structures
generate large excess spread because the cost of the capped notes
is significantly lower than the interest revenues generated by
the underlying mortgages. As a result, the agency tested specific
scenarios where it applied a cap also to the assets in order to
reduce the benefit associated to the cap protection. The
adjustment had a limited impact on the ratings.

RATING SENSITIVITIES

Fitch expects remedial action to be promptly taken by the issuer
account bank of SM09-6 (Deutsche Bank) should it become
ineligible. Failure to undertake committed remedial actions may
lead to a multi-notch downgrade.

Changes to Deutsche Bank and BMPS's Long-Term IDR will trigger
rating changes on the junior notes.

Changes to Italy's Long-Term IDR (BBB/Stable) and the rating cap
for Italian structured finance transactions, currently 'AAsf',
could trigger rating changes on the notes rated 'AAsf'.


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


EXIMBANK KAZAKHSTAN: S&P Keeps 'B-/B' CCR on CreditWatch Negative
-----------------------------------------------------------------
S&P Global Ratings maintained its 'B-/B' long- and short-term
counterparty credit ratings and 'kzB+' Kazakhstan national scale
rating on EximBank Kazakhstan JSC (KazExim) on CreditWatch with
negative implications. S&P originally placed the ratings on
CreditWatch on Feb. 20, 2017.

The continued CreditWatch placement reflects the pending progress
that KazExim has made in recent months in addressing the
stretched liquidity and refinancing wall that it faced at the
start of the year. In June, KazExim replaced a Kazakhstan tenge
(KZT) 10 billion loan from the Kazakh government's Unified
Pension Fund due in February 2020 with a KZT13 billion domestic
bond with a five-year maturity. S&P said, "This lengthened the
maturity of the bank's liabilities and, in our view, demonstrated
the authorities' continued support for the bank. Still, the bank
needs to refinance the KZT10 billion loan due to the National
Bank of Kazakhstan (NBK) in November 2017. Its current liquid
assets of KZT10.9 billion are not sufficient to cover this
repayment without breaching regulatory liquidity coefficients.
Although we expect that KazExim will find a way to handle this
maturity, we would view a delay in refinancing beyond September
as a sign of weakened creditworthiness.

"We continue to view KazExim's liquidity as moderate--a weaker
assessment than for many of its Kazakh peers. This assessment
acknowledges that the bank is currently in compliance with all
regulatory liquidity ratios, and that the increase in liquid
assets to KZT10.9 billion (13% of total assets) pushed its
regulatory coefficient of current liquidity up to 0.7x as of July
14, 2017, comfortably above the minimum of 0.3x.

"Moreover, we understand that KazExim plans to maintain liquid
assets at about KZT8 billion on average, taking into account
planned deposit withdrawals. This leaves the bank with little
flexibility to react to unplanned outflows. We also note that the
bank expects to maintain its regulatory coefficient on average at
about 0.5x, a level comparable to other small Kazakh banks but
well below the 1.5x that larger domestic banks tend to maintain.

"We understand that KazExim plans to refinance the November 2017
loan due to the NBK by receiving deposits of KZT12 billion for
about five years from companies related to the bank's
shareholders. We regard this plan as credible, but not without
significant execution risks. At this stage, we think it remains
plausible but not certain that the NBK would extend its liquidity
support to KazExim in the event of a further refinancing delay.

"In addition, KazExim has KZT4.5 billion of deposits from
government-related entities (GREs) due in the fourth quarter of
2017. We have seen some GREs withdraw deposits from some small
Kazakh banks over the past few months, but KazExim has not been
affected. The bank expects all GRE deposits to be rolled over for
another year at maturity. We regard this as a credible
assumption. Nevertheless, further strengthening of the bank's
funding profile would help to retain the confidence of these
GREs, as well as of its other depositors.

"Our stand-alone credit profile (SACP) and long-term issuer
credit rating on the bank are at 'b-' and 'B-', respectively, in
line with our "Criteria For Assigning 'CCC+', 'CCC', 'CCC-', And
'CC' Ratings," published Oct. 1, 2012, on RatingsDirect. We are
maintaining them at the current levels because we currently see
no clear scenarios of default within the next 12 months. We
expect the bank will refinance the NBK loan due in November 2017
with deposits from related parties, or that the NBK will agree in
advance to extend this loan until KazExim is able to find
funding.

"Nevertheless, the CreditWatch placement reflects our view that,
if sustained, KazExim's current moderate liquidity buffer and
below average funding profile could mean that the bank eventually
fails to retain the support of its creditors. This represents a
possible challenge to its sustainability in the longer term.

"In our view, KazExim has a modest franchise in the Kazakh
banking sector and concentrates on companies in the energy, real
estate, and construction sectors. We expect the bank will achieve
moderate planned growth and marginal profitability in the next 18
months, thus maintaining adequate capital. We note that the
bank's profitability remained depressed in second-quarter 2017,
in line with the first-quarter level, with a return on assets of
0.12% in first-half 2017 compared with 0.26% in the same period
in 2016. We observe that the bank's profitability has been
significantly lower than the system average in the past few
years.

"We plan to resolve our CreditWatch on KazExim by mid-September
2017.

"We will lower our ratings on KazExim if it is unable to execute
its plans to find long-term financing to replace the NBK loan due
in November 2017.

"We will affirm our ratings if KazExim substantially lengthens
the maturity of its wholesale funding due in 2017, consequently
demonstrating that it retains the support of creditors, while
committing to maintain its liquidity close to the system
average."

S&P will also look to see that the bank satisfies the following
conditions:

-- Ability to roll over the majority of its GRE deposits due in
    2017;
-- No unplanned material customer funds outflows;
-- No reduction of liquid assets below KZT8 billion; and
-- No progress toward the minimum regulatory liquidity
    coefficients.


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


HEMA BONDCO: Moody's Rates EUR600MM Senior Secured Notes B2
-----------------------------------------------------------
Moody's Investors Service has assigned a definitive B2 rating to
the EUR600 million senior secured floating rate notes due 2022
issued by HEMA Bondco I B.V and a definitive Caa2 rating to the
EUR150 million senior unsecured notes due 2023 issued by HEMA
Bondco II B.V. The outlook is stable.

RATINGS RATIONALE

Moody's definitive ratings for the senior secured and senior
unsecured notes are in line with the provisional ratings assigned
on July 10, 2017. Moody's rating rationale was set out in a press
release on that date. The final terms of the facilities were in
line with the drafts reviewed for the provisional instrument
rating assignments.

However, Moody's notes that the senior secured floating rate
notes were downsized by EUR10 million to EUR600 million and the
Euribor + 6.25% margin on the senior secured floating rate notes
is higher than Moody's assumption when assigning the provisional
rating. As a consequence the overall annual interest expense is
approximately EUR4 million higher than anticipated by Moody's
leaving Moody's Adjusted EBIT interest cover ratio at 1.1x in
2017, which is weaker than anticipated and closer to the Rating
Agency's trigger for downgrade. Hema B.V. (HEMA) remains weakly
positioned in the B3 rating category.

RATING OUTLOOK

The stable outlook reflects Moody's expectation of continued
growth from new store openings together with moderate like-for-
like growth leading to a gradual deleveraging in the next 12-18
months to around 6.5x while maintaining positive free cash flow
generation. The stable outlook also incorporates Moody's
expectation that the company will successfully refinance the
approximately EUR115 million PIK toggle notes at Dutch Lion B.V.,
HEMA's parent company, well ahead of its maturity in 2020 and
does not factor in debt-funded acquisitions.

WHAT COULD CHANGE THE RATING UP /DOWN

The company is weakly positioned in the B3 rating category and as
such, an upgrade is unlikely in the short term. However, positive
pressure on the ratings could result from a sustained improvement
in operating performance resulting in solid top line growth and
improving margins, significantly positive free cash flow, and
leverage at or below 5.5x on a sustained basis.

Downward pressure on the ratings could arise should HEMA's
operating performance weaken, if the company does not deleverage
from its current levels or if its EBIT/interest coverage moves
below 1.0x. Negative rating pressure would also arise should the
company's free cash flow generation deteriorate leading to a
weakening in the company's liquidity profile.

PRINCIPAL METHODOLOGY

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

CORPORATE PROFILE

Hema B.V. (HEMA) is a general merchandise retailer, operating as
of April 2017 a network of 711 stores principally in Benelux (89%
of total stores), France (8% of total stores), Germany, Spain and
the UK. HEMA designs, markets, sells and distributes its products
under its own brand name "HEMA", through its own stores, branded
franchise stores and e-commerce platform. In LTM April 2017, HEMA
generated net sales of EUR1,206 million and adjusted EBITDA of
EUR110 million. HEMA B.V. is owned by the private equity firm
Lion Capital.


HEMA BV: S&P Raises Corp. Credit Rating to 'B-', Outlook Stable
---------------------------------------------------------------
S&P Global Ratings said that it raised its long-term corporate
credit rating on Netherlands-based general merchandise and food
retailer Hema B.V. to 'B-' from 'CCC+'. The outlook is stable.

S&P said, "We removed the corporate credit rating on Hema from
CreditWatch positive, where we placed it on July 11, 2017 (see
"Netherlands-Based Retailer Hema 'CCC+' Rating On CreditWatch
Positive On Refinancing Plan; Proposed Secured Notes Rated,"
published on RatingsDirect)."

At the same time, S&P affirmed the ratings on the new debt
issuance:

-- A 'B-' issue rating to the EUR600 million senior secured
    notes issued by Netherlands-based Hema Bondco I B.V. The
    recovery rating is '4', indicating S&P's expectation for
    average recovery (30%-50%; rounded estimate: 45%) of
    principal in the event of a payment default.
-- A 'CCC' issue rating to the EUR150 million senior unsecured
    notes issued by Netherlands-based Hema Bondco II B.V. The
    recovery rating is '6', indicating S&P's expectation for
    negligible recovery of principal in the event of a payment
    default.
-- A 'B+' issue rating to the new EUR100 million senior secured
    revolving credit facility (RCF) issued by Hema. The recovery
    rating is '1', indicating S&P's expectation for very high
    recovery (90%-100%) of principal in the event of a payment
    default.

S&P said, "Following their repayment, we have withdrawn the issue
ratings on the EUR250 million floating-rate and EUR315 million
fixed-rate senior secured notes issued by Hema Bondco I B.V. and
the EUR150 million unsecured senior notes issued by Hema Bondco
II B.V. We also withdrew the rating on the EUR80 million senior
secured RCF issued by Hema.

"The upgrade follows Hema's successful refinancing of its
existing notes, the first of which was due in June 2019. We
consider that this refinancing has stabilized the group's capital
structure and liquidity position, and comfortably extended its
debt maturities."

This refinancing transaction follows a sharp improvement in the
group's operating performance. The 2015 financial year (FY)
ending January 2016 was very difficult for the group--the group's
reported EBITDA for the year more than halved to EUR41.8 million.
By contrast, Hema reported EBITDA of EUR87.3 million for the 12-
month period ending April 2017. S&P considers that this
improvement indicates that the new management's turnaround plan
is bearing fruit. Under Hema's future operating model, it aims to
revitalize its Benelux operations by optimizing inventory levels
and improving its offering in core categories. It also aims to
increase its omnichannel capability and achieve international
expansion, especially by expanding the number of its French
stores.

Hema benefits from its strong brand recognition and niche market
positions in its core markets in The Netherlands, Belgium, and
Luxembourg. The company sells almost all its products under the
Hema brand. On the one hand, this supports the company's
bargaining power with suppliers, resulting in a high gross
margin. On the other hand, it exposes Hema to adverse trends in
currency or raw materials prices, or potential adverse brand
perception.

However, Hema operates in highly fragmented and competitive
retail markets and still has limited geographic diversification,
as it generates the bulk of its earnings in The Netherlands,
which is showing lukewarm economic recovery. S&P said, "In
addition, we consider that the nonfood retail segment faces
strong price competition from discounters and online retailers,
as well as high seasonality and volatility based on the
discretionary nature of purchases.

"Although we forecast an improvement in the group's
profitability, management's ongoing investment plans for the
business will continue to constrain free cash generation.
Furthermore, we expect this refinancing transaction to be broadly
leverage-neutral. As a result, we expect Hema's adjusted debt-to-
EBITDA ratio to be above 7x in FY2017 and FY2018.

"We exclude from our debt adjustments the loans provided by the
private equity shareholder, Lion Capital, which have a principal
amount of EUR269.6 million (cumulative value of about EUR956
million at the end of FY2016). In our view, the overall terms and
conditions of the instruments are aligned with equity interest.
The instruments can only be transferred proportionally with
common equity and they are subordinated to the senior secured
credit facilities.

"However, we include senior payment-in-kind (PIK) notes that are
currently due 2020 and have a principal amount of EUR85 million
(cumulative value of about EUR115 million at the end of FY2016),
issued by Dutch Lion B.V., in our adjusted debt calculation. Our
view of the Hema group encompasses all the group entities up to
Dutch Lion B.V., which we view as the top holding company of the
group.

"We recognize that some of Hema's S&P Global Ratings-adjusted
credit ratios are better than its unadjusted ratios. In
particular, our lease adjustments tend to inflate adjusted funds
from operations (FFO) to cash interest coverage, given Hema's
operating lease structure. We therefore complement our analysis
by monitoring other ratios, such as EBITDAR coverage, which
measures an issuer's cash-interest and lease-related obligations
(defined as reported EBITDA including rent cost coverage of cash
interest plus rent). That said, Hema's unadjusted EBITDAR
coverage, which is around 1.4x, also indicates its high
leverage."

In S&P's base case, it assumes:

-- Moderate GDP growth in both Belgium and The Netherlands, with
    S&P's forecast GDP of 2.2% in 2017 and 1.9% in 2018 for The
    Netherlands; and 1.6% in 2017 and 2018 for Belgium.
-- Continued modest recovery in the eurozone, with GDP growth of
    2% in 2017 and 1.7% in 2018. Economic growth will continue to
    be primarily driven by domestic demand. The uninterrupted
    rise in consumer confidence indicators, while energy prices
    have been starting to rebound, suggests that better
    conditions in the labor markets will continue to support
    domestic spending. The overall picture remains favorable for
    consumers, with broadly supportive macroeconomic and
    consumption factors overall for the group.
-- Top-line growth of about 4% annually over the next two years,
    driven by about 20-25 new store openings a year, as well
    like-for-like growth in the region of 2.0%-2.5%. That said,
    S&P anticipates competition in the retail segment will remain
    quite strong.
-- Although operations will likely continue to improve in 2017
    and 2018, S&P anticipates that the pace of turnaround could
    slow down somewhat.
-- Gross margin improved sharply by about 320 basis points (bps)
    in 2016, but S&P expects it to broadly remain stable in 2017
    and 2018. Combined with cost control, this could result in
    the adjusted EBITDA margin growing by more than 30 bps in
    FY2017.
-- Despite improving profitability, S&P expects that free cash
    flow generation will be constrained by increasing capital
    expenditure (capex) of above EUR50 million next year.

Based on these assumptions, S&P forecasts the following credit
metrics for 2017 and 2018:

-- An adjusted debt-to-EBITDA ratio of 7.5x in 2017 improving
    marginally to 7.1x in 2018.
-- An adjusted free operating cash flow to debt of around 4% to
    5% due to significant capex investment.
-- EBITDAR coverage ratio (which we use as the key supplementary
    ratio) of around 1.4x in both years.

S&P said, "The stable outlook reflects our expectation that
Hema's management will continue to turn around its operations and
like-for-like sales and profitability will continue to improve
moderately. It also reflects our view that the company will
gradually improve its offering in its core Benelux market and
execute prudently on its international expansion strategy.

"After the refinancing, we forecast the adjusted debt-to-EBITDA
ratio to peak at about 7.5x and gradually improve toward 7.1x
over 2018, with the EBITDAR interest coverage ration remaining
around 1.4x over the next 12 months.

"We could consider a negative rating action if HEMA's operating
turnaround stalls and its profitability weakens. This could arise
if, for example, the group experiences setbacks in its
international expansion or if there is an unexpected drop in
revenues or decline in operating margins in the Benelux
operations. This could occur on the back of higher labor and
product cost inflation, resulting in our adjusted debt to EBITDA
approaching 9x. In such a situation we see reported FOCF turning
negative, and a squeeze on margins leading to EBITDAR interest
coverage falling toward 1.2x.

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

"We currently consider another upgrade unlikely in the near term
due to high leverage and limited deleveraging prospects due to
management's plans to increase capex. However, we could raise the
ratings if the group expands its EBITDA base and significantly
improves its FOCF generation, resulting in adjusted debt to
EBITDA falling below 5.0x, and EBITDAR cash interest coverage
approaching 2.2x on a sustainable basis. This would also be
contingent on our assessment of the financial policy commitment
from the private equity sponsors."


LEOPARD CLO V: Moody's Hikes Rating on Class F Notes to B2(sf)
--------------------------------------------------------------
Moody's Investors Service announced that it has upgraded
following classes of notes issued by Leopard CLO V. B.V.:

-- EUR26M Class D Secured Deferrable Floating Rate Notes due
    2023, Upgraded to Aaa (sf); previously on Feb 9, 2017
    Upgraded to Aa2 (sf)

-- EUR13M Class E-1 Secured Deferrable Floating Rate Notes due
    2023, Upgraded to Aa3 (sf); previously on Feb 9, 2017
    Upgraded to Ba1 (sf)

-- EUR3M Class E-2 Secured Deferrable Fixed Rate Notes due 2023,
    Upgraded to Aa3 (sf); previously on Feb 9, 2017 Upgraded to
    Ba1 (sf)

-- EUR7M Class F Secured Deferrable Floating Rate Notes due
    2023, Upgraded to B2 (sf); previously on Feb 9, 2017 Upgraded
    to B3 (sf)

Moody's has also affirmed the ratings of the following notes:

-- EUR13M (current balance: EUR9,663,768.50) Class C-1 Secured
    Deferrable Floating Rate Notes due 2023, Affirmed Aaa (sf);
    previously on Feb 9, 2017 Affirmed Aaa (sf)

-- EUR7M (current balance: EUR5,203,567.66) Class C-2 Secured
    Deferrable Fixed Rate Notes due 2023, Affirmed Aaa (sf);
    previously on Feb 9, 2017 Affirmed Aaa (sf)

Leopard CLO V B.V., issued in May 2007, is a collateralised loan
obligation ("CLO") backed by a portfolio of mostly high yield
European loans. The portfolio is managed by M&G Investment
Management Limited. The transaction's reinvestment period ended
in July 2013.

RATINGS RATIONALE

The upgrades of the ratings of the notes are primarily a result
of the full redemption of classes A and B and the pending full
redemption of class C notes and subsequent increases of the
overcollateralization ratios (the "OC ratios") of all remaining
classes of notes. Moody's expects the class C notes to redeem in
full on the payment date in July 2017. There is approximately
EUR18.68 million of principal proceeds coming from asset sales
and amortisations to be distributed. As a result of the
deleveraging the OC ratios of the remaining classes of notes have
increased. According to the May 2017 trustee report, the classes
D, E and F ratios are 166.78%, 119.85 and 106.72% respectively
compared to levels just prior to the payment date in January 2017
of 141.51%, 113.88% and 104.85%. The OC ratios will increased
further following the payment in July 2017.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analysed the underlying collateral pool as having a
performing par and principal proceeds balance of EUR69.7 million,
a weighted average default probability of 22.22% (consistent with
WARF of 2903 and a weighted average life of 5.0 years), a
weighted average recovery rate upon default of 43.58% for a Aaa
liability target rating, a diversity score of 11.

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

Methodology Underlying the Rating Action:

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

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

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it lowered the weighted average recovery rate by 5
percentage points; the model generated outputs that were in line
with the base-case results for classes C, D and E and within a
notch for Class F.

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

Additional uncertainty about performance is due to the following:

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

* Around 7.16% of the collateral pool consists of debt
obligations whose credit quality Moody's has assessed by using
credit estimates. As part of its base case, Moody's has stressed
large concentrations of single obligors bearing a credit estimate
as described in "Updated Approach to the Usage of Credit
Estimates in Rated Transactions," published in October 2009 and
available at
http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_120461.

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

* Foreign currency exposure: The deal has exposures to non-EUR
denominated assets. Volatility in foreign exchange rates will
have a direct impact on interest and principal proceeds available
to the transaction, which can affect the expected loss of rated
tranches

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


QUEEN STREET I: Moody's Affirms Ba1(sf) Rating on Class E Notes
---------------------------------------------------------------
Moody's Investors Service announced that it has upgraded
following classes of notes issued by Queen Street CLO I B.V.:

-- EUR41.3M Class C1 Senior Secured Deferrable Floating Rate
    Notes due 2023, Upgraded to Aaa (sf); previously on Feb 22,
    2016 Upgraded to Aa1 (sf)

-- EUR1.2M Class C2 Senior Secured Deferrable Fixed Rate Notes
    due 2023, Upgraded to Aaa (sf); previously on Feb 22, 2016
    Upgraded to Aa1 (sf)

-- EUR12.95M Class D1 Senior Secured Deferrable Floating Rate
    Notes due 2023, Upgraded to Aa1 (sf); previously on Feb 22,
    2016 Upgraded to A3 (sf)

-- EUR5.8M Class D2 Senior Secured Deferrable Fixed Rate Notes
    due 2023, Upgraded to Aa1 (sf); previously on Feb 22, 2016
    Upgraded to A3 (sf)

Moody's has also affirmed the ratings of the following notes:

-- EUR38.75M (current oustanding balance of EUR17.99M) Class B
    Senior Secured Floating Rate Notes due 2023, Affirmed Aaa
    (sf); previously on Feb 22, 2016 Affirmed Aaa (sf)

-- EUR20M Class E Senior Secured Deferrable Floating Rate Notes
    due 2023, Affirmed Ba1 (sf); previously on Feb 22, 2016
    Upgraded to Ba1 (sf)

Queen Street CLO I B.V., issued in January 2007, is a
collateralised loan obligation ("CLO") backed by a portfolio of
mostly high yield European loans. The portfolio is managed by
Ares Management Limited. The transaction's reinvestment period
ended in April 2013.

RATINGS RATIONALE

The upgrades of the ratings of the notes are primarily a result
of the full redemption of class A and partial redemption of class
B and subsequent increase of the overcollateralization ratios
(the "OC ratios") of all classes of notes. Moody's expects the
class B notes to redeem in full on the payment date in October
2017. There is approximately EUR27.62 million of principal
proceeds coming from asset sales and amortisations to be
distributed. As a result of the deleveraging the OC ratios of the
remaining classes of notes have increased. According to the June
2017 trustee report, the classes B, C, D and E ratios are
652.15%, 194.00%, 148.10% and 118.25% respectively compared to
levels just prior to the payment date in April 2017 of 224.37%,
146.28%, 126.80% and 111.04%.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analysed the underlying collateral pool as having a
performing par and principal proceeds balance of EUR117.36
million, a weighted average default probability of 18.22%
(consistent with WARF of 2732 and a weighted average life of 4.0
years), a weighted average recovery rate upon default of 43.40%
for a Aaa liability target rating, a diversity score of 13.

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

Methodology Underlying the Rating Action:

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

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

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it lowered the weighted average recovery rate by 5
percentage points; the model generated outputs that were in line
with the base-case results for classes B and C and within a notch
for classes D and E.

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

Additional uncertainty about performance is due to the following:

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

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

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

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


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


ENERGOGARANT JSIC: S&P Affirms 'BB-' Counterparty Credit Rating
---------------------------------------------------------------
S&P Global Ratings affirmed its 'BB-' long-term insurer financial
strength and counterparty credit ratings on Russia-based insurer
Energogarant JSIC. The outlook is stable.

S&P said, "The affirmation reflects our expectation that
Energogarant's financial profile will likely remain balanced in
the next 12-18 months, supported by its improved capital buffers
and strong liquidity. We note, however, that the difficult
operating environment for motor insurance providers and changing
regulations on allocations of insurance companies' investments
could weigh on the company's profitability over this year.

"We have revised our assessment of Energogarant's financial risk
profile to less than adequate from weak, based on our revised
view of capital and earnings to upper adequate from lower
adequate. The company has improved its capital buffers owing to
the capitalization of last year's historically high earnings of
Russian ruble (RUB) 360 million ($5.94 million) compared with a
five-year average of RUB49.4 million. This was mostly due to
stronger results in the motor segment, on the back of increased
net earned premiums. The company's overall combined (loss and
expense) ratio, the industry's main underwriting profitability
metric, improved to 104.9% in 2016 from 107.0% a year earlier.

"We believe, however, that Energogarant's earnings may be
volatile in the next 12 months and have consequently affirmed our
'BB-' ratings on the company. Our assessments of its vulnerable
business risk profile and less-than-adequate financial risk
profile lead us to assign a 'bb' anchor, from which we deduct one
notch to obtain the rating, reflecting the following factors: Net
income appeared exceptionally high in 2016 compared with low
results in 2012-2015, so we could consider a positive rating
action if we saw a track record of sustainable bottom-line
performance with return-on-revenue exceeding 3%, supporting
capital adequacy at the upper-adequate level or above.

"In our view, the challenging economic environment could pose
risks to the company's earnings in the next 12 months, especially
in the motor segment. This includes unpredictable liability
settlements on motor risks and extension of the unified agent
system enforced by the regulator to smooth obligatory motor
third-party liability policy distribution in problematic regions
until mid-2018. We anticipate that the positive effect from
noncash reimbursement will be marginal, if any, in 2017, as we
expect around 95% of the company's claims will continue be
settled in cash. This is because noncash reimbursement has many
limitations, including those related to the location of repair
service providers and time limits for vehicle repair to be
executed.

"We also believe that the company's investment returns may be
under pressure in the next 12 months, taking into account
declining interest rates and the need to reshuffle the investment
portfolio because of changing regulations on investment
allocation for insurance companies in Russia.

"We forecast Energogarant's profitability will be moderate in
2017-2019, with return on revenue staying around 2% and return on
equity at about 3% on average. We base this on our assumptions of
a combined ratio of 105%-107% and investment yields around 7.0%
in the same period.

"The stable outlook reflects our opinion that Energogarant will
maintain a balanced financial profile through 2017-2018, despite
the unfavorable operating environment for insurance companies in
Russia. We expect the company will keep its competitive position
and, consequently, market share in the major business lines it
writes. We also expect the quality of the company's investment
portfolio will remain in the 'BB' category.

"We could take a negative rating action if Energogarant's capital
adequacy weakened to below what we consider to be lower adequate.
This could occur through significant deterioration of earnings,
due to sizable underwriting or investment losses.

"We could also lower our ratings if the average credit quality of
the company's investment portfolio weakened to the 'B' category,
or if its appetite for foreign currency risk increased
substantially.

"We could take a positive rating action if Energogarant
demonstrated its ability to maintain sound profitability in the
challenging operating environment, with return on revenue staying
above 5% and supporting capital adequacy at the upper-adequate
level."


RESO-GARANTIA: S&P Upgrades IFS Rating to 'BB+', Outlook Stable
---------------------------------------------------------------
S&P Global Ratings raised its insurer financial strength and
counterparty credit ratings on Russia-based Insurance Company
RESO-GARANTIA to 'BB+' from 'BB'. The outlook is stable.

S&P said, "The upgrade reflects our view of RESO-GARANTIA's
improved capital adequacy, which supports further business growth
and provides a sufficient cushion in case of adverse operating
conditions or unexpectedly large claims. In addition, we note
that management is focused on a prudent asset policy that aims to
invest in assets with an average credit quality of no less than
'BB'. This has resulted in a gradual derisking of its investment
portfolio over the past two years, with a shift toward higher-
quality instruments. The company's asset-allocation policy
remains limited by regulatory requirements, however. Thus, we do
not expect average credit quality to be significantly above the
'BB' level, but we expect that the overall strategy will be more
prudent than in the past, with deposits mainly placed with
domestic systemically important banks and bonds of government-
related entities (GREs).

"In our view, RESO-GARANTIA's capital adequacy materially
improved according to our measures after sound underwriting
performance in 2015-2016 and strong retained earnings relieved
some of the pressure from goodwill on acquisitions made in
previous years. The company has not distributed profits in 2012-
2016, which has supported its capital adequacy. We expect that
there is a possibility of a modest dividend payout in 2018, which
in our view would not undermine the insurer's capital adequacy.
Internal capital generation has compensated for the goodwill
generated from the company's investments in RESO-Leasing. We
still consider the company's capital to be modest in absolute
terms, at about Russian ruble (RUB) 47 billion (or $837 million)
as of March 31, 2017, compared with that of international peers.

"While we have improved our view of capital adequacy to
moderately strong from lower adequate, our assessment of RESO-
GARANTIA's financial risk profile remains unchanged at less than
adequate. That is due to the 'BB' average credit quality of
invested assets. At the same time, we anticipate that RESO-
GARANTIA's strong competitive position will be supported by sound
underwriting performance (with net combined ratio around 97%-
98%), which is better than market average, on the back of gross
premium growth of around 10% annually. The company is well
positioned in the motor market and has good brand recognition,
product expertise, and a loyal distribution network. We view
these factors as a significant strength in relation to the
company's peers.

"The net combined (loss and expense) ratio was close to 87% in
2016, and is better than peers' in the Russian market. This was
primarily due to better risk selection and higher tariffs
compared to peers'. In our base-case scenario, we assume RESO-
GARANTIA will demonstrate a higher net combined ratio than the
five-year average, because of the market trends that signify
potential increase in the claims ratio. This is due to
implementation of non-cash claims reimbursement introduced in
2017. The returns on revenue and returns on equity are likely to
be at least 7% and 12%, respectively, largely because, according
to our estimates, the company's net profit in 2017 will be above
RUB5 billion. However, the final figure will depend on the
company's future investment results, underwriting performance,
and its appetite for acquisitions.

"The stable outlook reflects our view that in 2017-2018 RESO-
GARANTIA will be able to show sound underwriting performance with
net profits of at least RUB5 billion-RUB6 billion per year and a
net combined ratio of 97%-98%, on the back of challenging
operating environment, while maintaining its strong competitive
position within the next 12 months. We expect that the company
will keep leverage at less than 40% and the fixed-charge coverage
above 4x, and that it will not engage in unexpected expensive
acquisitions within the next 12-18 months.

"We could lower the rating if the company's financial risk
profile were to deteriorate over the next 12 months, for instance
due to:

-- A decline in capital adequacy to less than adequate, owing,
    for example, to very high dividend payouts, unexpected
    underwriting or investment losses, an increase in financial
    leverage beyond 40%, or fixed-charge coverage consistently
    below 4x; or
-- An increase in single-name concentration risk in the
    investment portfolio beyond 10%, or concentration in a single
    sector beyond 30%, in each case excluding Russian sovereign
    bonds, deposits of systemically important banks in Russia,
    and bonds of GREs; or The average credit quality of invested
    assets dropping below 'BB'.

"We consider a positive rating action unlikely at this stage,
given risks embedded in the sovereign rating, still large
investments of the insurer in the domestic bonds, and deposits
with the average credit quality of 'BB'. However, we could
consider a positive rating action if we raised our sovereign
foreign currency rating on Russia to 'BBB-' or higher, and at the
same time we considered that RESO-GARANTIA's average credit
quality had improved or we revised upward our assessment of
insurance industry and country risk for Russia."


* Russian RMBS 90+day Delinquencies Drop n 5-Mos. Ended May 2017
----------------------------------------------------------------
The performance of the Russian residential mortgage-backed
securities (RMBS) has improved, as 90+ day delinquencies
decreased during the five months ended May 2017, according to the
latest indices published by Moody's Investors Service.

The 90+ day delinquencies index on rouble-denominated portfolios
decreased to 1.5% of the current portfolio balance in May 2017
from 1.8% in December 2016. During the same period, the
cumulative defaults increased to 4.4% of the original portfolio
balance in May 2017 from 4.1% in December 2016. The constant
prepayment rate on rouble-denominated portfolios increased to
11.7% in May 2017 from 10.6% in December 2016. During the same
period, total redemption rate on rouble-denominated portfolios
increased to 20.4% from 18.6%.

As of May 2017, 40 Moody's-rated Russian RMBS transactions had an
outstanding balance of $2,987 million, representing an annual
increase of 0.6%. However, 39 rouble-denominated Russian RMBS
transactions had an outstanding balance of RUB172,143 million,
representing an annual decrease of 15.0%.

Moody's publishes its indices mid-month to www.moodys.com in the
Structured Finance sub-directory.

In addition, Moody's publishes a weekly summary of structured
finance credit, ratings and methodologies, available to all
registered users of its website, at www.moodys.com/SFQuickCheck.


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


ERICSSON: S&P Lowers CCR to 'BB+' on Weak Revenue, Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings said it has lowered its long-term corporate
credit rating on Swedish telecom supplier Ericsson
(Telefonaktiebolaget L.M.) to 'BB+' from 'BBB-'. The outlook is
stable.

S&P said, "We consequently also lowered our short-term Nordic
regional scale rating to 'K-4' from 'K-3'. We affirmed our 'A-3'
short-term rating on the company.

"At the same time, we lowered our issue ratings on Ericsson's
unsecured bonds to 'BB+' from 'BBB-' and assigned our '3'
recovery rating to the debt, reflecting our expectation of 65%
recovery prospects in the event of a hypothetical payment
default.

"The downgrade reflects our view that the expected recovery in
the wireless infrastructure market is likely to be more
protracted. Ericsson is also likely to incur additional costs for
the realignment of existing customer projects. In our view, these
factors make it unlikely that the company will stabilize revenues
and achieve EBITDA margins and cash flows by 2018 that are
commensurate with an investment-grade rating. Based on current
market and operating trends, we think Ericsson's revenues will
continue to decline next year, albeit at a slower pace than in
2017, compared with flattish revenues in our previous forecast.
Moreover, the company is projecting additional charges of SEK3
billion-SEK5 billion in connection with adjustments to existing
customer contracts. Nevertheless, we still think Ericsson will be
able to improve profitability over time, but expect our adjusted
EBITDA margins to remain well below 10% until at least 2019. We
think margin recovery will be supported by the gradual phase-in
of cost savings, the exiting, renegotiating, or transforming of
unprofitable managed services contracts, as well as a continued
ramp-up of the Ericsson radio system and new product portfolio in
the IT and cloud segment. In addition, pay-outs for restructuring
and other nonrecurring items will weigh on cash flows, leading us
to project only about break-even free operating cash flow (FOCF)
next year.

"Overall, we think Ericsson's portfolio of wireless solutions is
competitive, but faces headwinds originating from a pronounced
slump in demand for wireless equipment and fierce competition
from other players including Nokia and Huawei. According to the
most recent forecast by research firm Dell'Oro' from July 18,
2017, the global radio access network equipment market is set to
decline in low-single digits in both 2018 and 2019, after a high-
single digit percentage decline in 2017. Furthermore, visibility
on future market conditions remains low, in our view. We
acknowledge that Ericsson is dedicated to absorbing topline
pressure with accelerated cost savings, but project that these
measures will lift EBITDA margins only gradually over several
years, starting from 2018, while constraining profitability in
the near term.

"The ratings continue to be supported by a strong balance sheet
with meaningful reported net cash of at least about SEK20 billion
in our forecast for 2017-2018, and well-spread debt maturities.
However, given constraints on revenues and low margins, coupled
with outflows for restructuring and other nonrecurring items, we
forecast FOCF of less than SEK3.5 billion in 2017 and only break-
even or negative FOCF in 2018, which is much lower than
historically. At the same time, we note that in 2017 Ericsson cut
dividend payments by more than 70% compared with 2016, and we
think the company could be willing to further reduce
distributions to preserve cash if industry conditions remain very
challenging.

S&P's base case assumes:

-- Consolidated revenues to decline by a high-single-digit
    percentage in 2017, and by 2%-5% in 2018, driven by
    weaknesses in the networks and media divisions, and by
    declining IT and cloud infrastructure sales in 2017. Revenues
    declined by 9.8%
    year-on-year in 2016.
-- Annual restructuring costs of about SEK8 billion in 2017 and
    SEK3 billion-SEK5 billion in 2018, compared with SEK7.6
    billion in 2016. We include these costs in our EBITDA
    calculation. We assume the cash flow impact for 2017 charges
    to be equally split over 2017 and 2018.
-- Provisions related to customer projects totaling SEK9.5
    billion-SEK11.5 billion in 2017, decreasing to SEK1.0
    billion-SEK3.0 billion in 2018, which we assume will be
    included in EBITDA. A meaningful portion of these will affect
    cash flows over 2017-2019.
-- Reported gross margin of about 30% in 2017, rising to 32%-34%
    in 2018 thanks to the phase-in of cost savings, compared with
    29.8% in 2016. Negative adjusted EBITDA margins of about 0%-
    3% in 2017, expanding to 5.5%-7.5% in 2018, supported by
    higher gross margins and reductions in operating expenses,
    compared with 6.3% in 2016.
-- Annual capital expenditures (capex), including capitalized
    development cost of about 2.5%-3.5% of revenues in 2017 and
    2018, lower than 4.8% in 2016 due to strict capex management
    and lower capitalization of development costs.
-- Some spending on small, bolt-on acquisitions.
-- Significant cash inflows from better working capital
    management in 2017 and to a lesser extent also in 2018.
-- Annual dividend payment of SEK3.3 billion in 2017. S&P
    assumes similar dividends in 2018.

Based on these assumptions, S&P arrives at the following adjusted
credit measures for 2017-2018:

-- Reported FOCF of SEK3 billion-SEK3.5 billion in 2017,
    breakeven or negative FOCF in 2018, compared with SEK3.5
    billion in 2016.
-- Funds from operations (FFO) to debt above 60% in 2018 (not
    meaningful in 2017 due to negative adjusted FFO), compared
    with 62% in 2016.
-- Adjusted debt to EBITDA to temporarily peak at 1.0x-1.4x in
    2018 (not meaningful in 2017 due to negative adjusted
    EBITDA), compared with 0.9x in 2016.
-- Reported net cash position improving slightly in 2017 from
    SEK31.2 billion at the end of 2016 thanks to disposals of
    noncore assets.

S&P adjusts Ericsson's reported gross debt by adding the
following key items:

-- Present value of operating lease liabilities of about SEK12.5
    billion in 2016.
-- Net unfunded pension liabilities of about SEK19 billion in
    2016.
-- S&P also deducts from Ericsson's debt the surplus cash that
    it assumes would be readily available for debt repayment. S&P
    considers cash reserves above about SEK3 billion as surplus.

S&P said, "The stable outlook reflects our expectation that
Ericsson will continue to execute its transformation strategy,
helping to slow its revenue decline to 2%-5%, and improve its
adjusted EBITDA margins to comfortably more than 5% in 2018. At
the same time, we expect that cash outflows for restructuring and
other provisions will result in about breakeven or modestly
negative FOCF next year.

"We expect Ericsson will maintain a very conservative balance
sheet, with reported net cash of at least SEK20 billion. We could
lower the ratings if continued weak demand, strong price
competition, market share losses, or higher-than-expected
nonrecurring costs prevented Ericsson from improving adjusted
EBITDA margins to at least 5% in 2018. In addition, continued
significant negative discretionary cash flow generation or a
meaningful deterioration in the group's reported net cash
position below SEK20 billion could lead to a downgrade.

"We could raise the rating if Ericsson's operating performance
strengthened sustainably. This could be reflected in the adjusted
EBITDA margin improving to about 10% or more and stabilizing
revenues, accompanied by sustainable annual FOCF of about SEK9
billion. In addition, we would expect Ericsson to preserve an
adjusted debt-to-EBITDA ratio of below 1.5x and FFO to debt above
60%."


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


DOUNREAY TRI: Files Insolvency Documents, Appoints Administrators
-----------------------------------------------------------------
Jessica Shankleman at Bloomberg News reports that plans for a
10-megawatt floating offshore wind farm off the coast of Scotland
were thrown into doubt after its developer, Dounreay Tri Ltd.,
filed insolvency documents.

According to Bloomberg, company spokesman Simon James said
Dounreay Tri failed to reach financial close on the project.  It
appointed administrators on July 7, Bloomberg relays, citing
regulatory documents filed to Companies House in London.

"The project is still live, but the issue is around the finance,"
Bloomberg quotes Mr. James as saying by phone on July 26.

The planned wind farm, which is owned by Swedish developer
Hexicon AB, issued a EUR45 million (US$52 million) bond in March
to help finance construction, Bloomberg recounts.

Dounreay Tri had been rushing to commission the project by the
end of September 2018 to get U.K. subsidies before the government
phases out its Renewable Obligation program, Bloomberg notes.


FCR MEDIA: High Court Judge Appoints Interim Examiner
-----------------------------------------------------
Mary Carolan at The Irish Times reports that a High Court judge
has appointed an interim examiner to two related companies
involved in specialised sales and marketing and in publishing the
Golden Pages directory and employing 103 people.

The petition for court protection and examinership follows a
decision by the FCR media group, of which both companies are
part, to withdraw from its interests in the Irish market, The
Irish Times relates.

As a result of that, Dublin-based FCR Media Ltd cannot continue
to meet its obligations as they fall due, it was stated in the
petition for examinership, The Irish Times discloses.  Its debts
to creditors as of July 21st last were EUR5.5 million, The Irish
Times relays.

It said liquidation of the company would mean a EUR8.9 million
deficit of liabilities over assets and would not be in the
interests of the company, its employees or creditors, The Irish
Times notes.

FCR Media Ltd publishes the Golden Pages directory and it said
the occasion of the 50th edition of Golden Pages in 2018-2019 may
be an "appropriate time" to terminate its publication, according
to The Irish Times.

FCR Media Ltd employs 103 people, 24 of whom were put on notice
of redundancy last July, while FCR Tech UAB, incorporated in
Lithuania, is its sole shareholder and holds the intellectual
property rights to Golden Pages, The Irish Times discloses.

On the petition of the two companies, presented by Declan Murphy
on July 26, Mr. Justice Robert Haughton, as cited by The Irish
Times, said he was satisfied from evidence before the court the
two companies had a reasonable prospect of survival provided
certain conditions were met, including approval of a survival
scheme, securing investment and restructuring or refinancing
secured debt.

He appointed Neil Hughes interim examiner and returned the
petition for hearing on Aug. 5, The Irish Times relates.

He noted the alternative to examinership was a winding-up with a
deficit of EUR8.9 million liabilities over assets, The Irish
Times relays.


LHC3 LIMITED: Fitch Assigns 'BB-'(EXP) Long-Term IDR
----------------------------------------------------
Fitch Ratings has published Allfunds Bank, S.A.'s (AFB) Long-Term
Issuer Default Rating (IDR) of 'BBB' with Stable Outlook and a
Viability Rating (VR) of 'bbb'. At the same time, the agency has
assigned LHC3 Limited (LHC3) an expected Long-Term IDR of 'BB-
(EXP)' with Stable Outlook, and its senior secured payment-in-
kind (PIK) toggle notes an expected rating of 'BB-(EXP)'.

AFB, headquartered in Spain, is a leading European business-to-
business open architecture fund distribution platform connecting
fund groups with distributor clients and offering a one-stop
solution for fund intermediation and order routing, and
investment-related services. In March 2017, AFB's ultimate
majority shareholders (Banco Santander S.A. rated A-/Stable and
Intesa SanPaolo rated BBB/Stable) agreed to sell AFB to Hellman &
Friedman (H&F, a private equity firm) and GIC, Singapore's
sovereign wealth fund (together the acquirers). While the
transaction is subject to the receipt of all regulatory
approvals, it is expected to close in 2H17.

LHC3 is the holding company set up by the acquirers to buy AFB,
which includes plans to issue seven-year senior secured PIK
toggle notes totalling EUR575 million. The expected ratings will
convert to final ratings upon finalisation of the planned
acquisition of AFB and issuance of the notes provided that this
is undertaken in a manner consistent with Fitch's expectations,
as outlined below.

The final rating of the senior secured PIK toggle notes is
contingent on the receipt of final documents conforming to
information already provided to Fitch. Failure to issue the
instruments would result in the withdrawal of LHC3's expected
Long-Term IDR and senior secured debt rating.

KEY RATING DRIVERS
AFB
IDRS AND VR

AFB's ratings are driven by standalone creditworthiness, as
reflected on the bank's VR. The VR reflects the niche but strong
franchise of AFB in the open architecture fund distribution
business in Europe and its consistent growth in assets under
administration, which supports profitability although it leads to
some concentration in revenue. The VR also factors in the bank's
overall low risk appetite and a track record of limited
operational losses. The ratings also reflect a small equity base
in absolute terms and relative to the bank's total business
volume.

AFB is the leading fund distributor in its traditional markets of
Italy and Spain and has a solid position in other European
countries. In Fitch views AFB can use its robust fund
distribution platform to continue expanding its presence
geographically and increasing its assets under administration
(AuA), which at end-2016 totalled EUR253 billion.

AFB's earnings profile benefits from a highly automated IT
platform that supports an efficient and growing business, which
feeds into healthy commission income. However, 89% of total
revenue in 2016 was related to fund distribution and
intermediation activities. This high revenue concentration makes
earnings sensitive to margin pressure from regulatory changes and
increased competition.

Operational and litigation risks are the main risks to which ABF
is exposed to as these risks are an inherent part of its
business. High automatisation of processes, sound controls, IT
investments and a highly regulated environment minimise these
risks. Operational losses to date have been minimal.

At end-2016 AFB maintained comfortable buffers over regulatory
capital requirements, with a fully-loaded CET1 ratio of 22.7%. In
Fitch views the new ownership structure, with EUR575 million debt
at the holding company level, will likely result in high dividend
payouts but the bank is committed to maintaining a minimum CET1
ratio of 17.5% at all times, which in Fitch views is adequate. In
Fitch assessments of capitalisation Fitch also takes into account
the bank's small total equity base against the bank's high
exposure to operational risk.

The Stable Outlook reflects Fitch's expectation that AFB will
continue to increase its business volumes consistently and
achieve greater geographical diversification without worsening
its risk profile or eroding its capital base. This should support
its earnings generation capacity.

SUPPORT RATING AND SUPPORT RATING FLOOR

AFB's Support Rating of '5' and Support Rating Floor of 'No
Floor' reflect Fitch's belief that senior creditors of the bank
can no longer rely on receiving full extraordinary support from
the sovereign in the event that the bank becomes non-viable. The
EU's Bank Recovery and Resolution Directive (BRRD) and the Single
Resolution Mechanism (SRM) for eurozone banks provide a framework
for resolving banks that is likely to require senior creditors
participating in losses, instead of or ahead of a bank receiving
sovereign support.

LHC3
IDR AND DEBT RATING

The Long-Term IDR of LHC3 is primarily driven by the structural
subordination of LHC3's creditors, its reliance on dividend
upstream from AFB to service its debt and high but improving
gross cash flow leverage. The rating also takes into account
LHC3's adequate standalone liquidity management, adequate up-
stream dividend predictability and commitments made towards the
regulator to reducing net cash flow leverage over the life of the
bond.

Once the acquisition is completed, AFB will represent LHC3's only
significant asset and thus the issuer will not have a material
source of income other than dividends from AFB. There will be no
cross-guarantees of debt between LHC3 and AFB, and the ratings
reflect the structural subordination of LHC3's creditors to those
of AFB. In Fitch's view, debt issued by LHC3 is sufficiently
isolated from AFB so that failure to service it, all else being
equal, may have limited implications for the creditworthiness of
AFB.

LHC3's gross leverage (defined as gross debt/received dividends)
is high although Fitch expects it to improve to more manageable
levels within the next two to three years. In addition, Fitch
believes that net cash flow leverage should reduce materially in
the medium-term, supported by the entity's ability to retain a
proportion of up-streamed dividends.

Standalone liquidity is supported by LHC3's interest reserve
account and an adequately sized revolving credit facility (RCF).
Weaker liquidity metrics in the short-term are in Fitch views
adequately mitigated by the availability of the RCF and Fitch
assessments that dividend up-streamed from AFB is reasonably
predictable.

The expected instrument rating is aligned with LHC3's Long-Term
IDR as Fitch expects the senior PIK notes to have average
recovery prospects.

RATING SENSITIVITIES
AFB
IDRS AND VR

Upside could arise from sustained business volume growth and
broader geographical and client diversification supporting larger
and better-quality revenue. Containing the pressure on margins
would also be beneficial for the ratings. This is provided that
sound capital ratios are maintained and its risk appetite
unchanged

Conversely, negative rating pressure could arise from a
significant decline in business volumes leading to an erosion of
AFB's franchise and increasing earnings pressure. Increases in
its risk appetite, current capitalisation being negatively
impacted by operational or litigation losses or significant
inorganic growth could also adversely affect the ratings.

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

LHC3
IDR AND DEBT RATING

Both the IDR of LHC3 and the rating of the notes would be
negatively sensitive to significant depletion of liquidity within
LHC3 affecting its ability to service its debt obligations. This
would most likely be prompted by a material fall in earnings
within AFB thus restricting its capacity to pay dividends. LHC3's
ratings are highly sensitive to the stability and predictability
of dividend being up-streamed from AFB but a change in AFB's
ratings would not necessarily translate into changes in LHC3's
ratings.

Given the regulatory ring-fence around AFB, the structural
subordination of LHC3 creditors to AFB creditors and LHC3's
reliance on dividend being up-streamed from AFB to service the
notes, rating upside is limited in the medium term.

Fitch view's the senior PIK notes as LHC3's reference
liabilities. Consequently, any payment in kind (instead of cash
payments) would be viewed as non-performance of the notes and
would consequently constitute a default of the issuer under
Fitch's Global Bank Rating Criteria.

CRITERIA VARIATION

Fitch rates LHC3 and its senior debt under the Global Bank Rating
Criteria. Under these criteria, bank holding companies may be
notched down from their main bank subsidiary to reflect
regulatory restrictions on dividends and liquidity transfers,
among other considerations. In assessing the appropriate degree
of notching arising from the regulatory restrictions that apply
to AFB in respect of its ability to up-stream cash to service
LHC3's debt, Fitch has applied a variation to the Global Bank
Criteria. The variation uses the investment company
capitalisation and leverage benchmarks in the Global Non-Bank
Financial Institutions Rating Criteria to assess the adequacy of
the dividend stream from the bank to meet LHC3's debt payments
and therefore the degree of notching between AFB and LHC3.

The rating actions are:

Allfunds Bank, S.A.
Long-Term IDR: published at 'BBB', Outlook Stable
Short Term IDR: published at 'F3'
Viability Rating: published at 'bbb'
Support Rating: published at '5'
Support Rating Floor: published at 'No Floor'

LHC3 Limited
Long-Term IDR: assigned at 'BB-(EXP)', Outlook Stable
Senior secured PIK toggle notes' long-term rating: assigned at
'BB-(EXP)'


LHC3 PLC: Moody's Assigns Ba2 Corp. Family Rating, Outlook Stable
-----------------------------------------------------------------
Moody's Investors Service has assigned a Ba2 Corporate Family
rating (CFR) to LHC3 plc (LHC3), the holding company of Allfunds
Bank S.A. (AFB), an open architecture business to business (B2B)
fund distribution platform. Moody's has also assigned a
provisional (P)Ba2 rating to the senior secured notes issued by
LHC3, which will be issued to help fund the acquisition of AFB.
An overall outlook of stable has been assigned to LHC3 plc.

The rating action is based on Moody's expectation that Allfunds
Bank will be sold by its current owners Santander Asset
Management and Intesa Sanpaolo to Hellman & Friedman ("H&F")
(64%), a private equity investor, together with GIC (36%), the
Singapore sovereign wealth fund. To help fund the acquisition,
Moody's expects LHC3 to issue EUR575 million of senior secured
PIK toggle notes (SSN) and an undrawn EUR60 million super senior
secured revolving credit facility.

RATINGS RATIONALE

AFB is the largest funds distribution platform in Europe, with a
business-to-business proposition, connecting fund distributors
with fund providers across more than 38 countries. Because of its
size and history of operation in Europe, the firm benefits from
the network effects of its current positioning and, through
scale, is able to generate positive operational leverage as it
grows. AFB's strong growth profile is supported by the secular
trends from captive to open architecture as well as increased
outsourcing. While AFB is the largest funds platform in Europe,
with potential for growth through new markets and further
onboarding of clients' assets under administration (AuA), pre-tax
earnings, as a measure of scale, is lower than that of larger US
competitors and broader securities industry service provider
participants.

Given the forthcoming regulatory change through MiFID II, Moody's
expects AFB's income mix to continue to shift from a focus on
margin based on rebate fees to a margin based on intermediation
fees. In the rebate fee model, AFB receives a gross commission
from the fund provider, retains a margin and passes on a rebate
to the platform client. The intermediation fee model is more
transparent, as a single and net commission fee is received
directly by AFB from fund providers and kept exclusively by AFB
as margin. This transition has already started to manifest and is
expected to continue over a number of years. AFB estimates that
intermediation fees will make up approximately 60% of revenues by
2021. By rebalancing the business model towards intermediation
fees, the business may ultimately benefit from a more stable
revenue stream, as intermediation fees are typically fixed and
not related to particular asset classes.

Moody's expects leverage post transaction to be 4.9x on a pro-
forma gross debt to EBITDA basis, which also includes Moody's own
adjustment for operating leases, pertaining to office space. From
this peak leverage, Moody's expects leverage to reduce to less
than 4x within two years due to expected performance of the
business and limitations on distributions until a 4x net leverage
is achieved by the business. It is expected that there will be a
regulatory undertaking for LHC3 plc to maintain a portion of any
net cash received by LHC3 plc (defined as annual dividend income
less annual cash interest paid by LHC3 plc) as cash on its
balance sheet which may be used to refinance the senior secured
notes, make interest payments and for certain administrative
purposes, but not to pay dividends to its shareholders.
Bondholders will also benefit from agreements which ensure
current shareholders will continue to distribute their funds via
this platform for a period of 6 years, with optionality for
further extension.

A key differentiating strength of AFB is its regulatory oversight
as a licensed bank and the liquidity and capital requirements
imposed upon it by the Bank of Spain. AFB have agreed with the
Bank of Spain, to maintain a regulatory minimum CET1 ratio of
greater than 17.5%, with excess amounts available to support
distribution to service the holding company senior secured notes.
AFB is also required to hold a minimum shareholders' equity of
SGD200m by the Monetary Authority of Singapore relating to its
branch in Singapore; this level is below AFB's current capital
position.

Moody's expects that a majority of current management will be
retained and benefit from incentives that align their commitment
with the sponsors. Moody's also expects the business will
maintain its current standard of governance even as the business
establishes operational independence from its current
shareholders. In support of this, board oversight will be
comprised of 3 individuals from H&F, 1 from GIC and 2 independent
non-executive directors. In addition, Moody's expects independent
risk management, compliance and an internal audit function with
reporting lines directly to the board.

WHAT COULD CHANGE THE RATING UP / DOWN

Moody's could upgrade LHC3's CFR if (i) scale were increased
leading to both higher AuA and pre-tax earnings; (ii) leverage
levels inside 3x, either through increased EBITDA generation or
reduction in gross debt and/or (iii) there was an increase in
cash on balance sheet.

Moody's could downgrade LHC3's CFR if (i) leverage increased
above 5x without a likelihood of recovery <5x; (ii) profitability
declined arising from loss of AuA and fee revenues &/or material
increases in operating expenses and/or (iii) shareholder
distributions that pressure the firm's liquidity and ability to
service its debt.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Securities
Industry Service Providers published in February 2017.


* UK: Number of Bankrupt Businesses in Scotland Down in June 2017
-----------------------------------------------------------------
Daily Mail reports that the number of Scottish businesses going
to the wall over three months to the end of June fell from 265
last year to 200 this year.

Meanwhile, more than 30 Scots a day are being declared bankrupt
as soaring numbers lose their battle against rising debt, Daily
Mail discloses.

New figures show 2,839 became bankrupt or took out a protected
trust deed over three months to the end of June, up 17% from
2,420 during the same period the previous year, Daily Mail
relates.



===============
X X X X X X X X
===============


* BOOK REVIEW: Competitive Strategy for Healthcare Organizations
----------------------------------------------------------------
Authors: Alan Sheldon and Susan Windham
Publisher: Beard Books
Softcover: 190 pages
List Price: $34.95
Review by Francoise C. Arsenault
Order your personal copy today at http://bit.ly/1nqvQ7V

Competitive Strategy for Health Care Organizations: Techniques
for Strategic Action is an informative book that provides
practical guidance for senior health care managers and other
health care professionals on the organizational and competitive
strategic action needed to survive and to be successful in
today's increasingly competitive health care marketplace. An
important premise of the book is that the development and
implementation of good competitive strategy involves a profound
understanding of change. As the authors state at the outset:
"What may need to be done in today's environment may involve
great departure from the past, including major changes in the
skills and attitudes of staff, and great tact and patience in
bringing about the necessary strategic training."

Although understanding change is certainly important in most
fields, the authors demonstrate the particular importance of
change to the health care field in the first and second chapters.
In Chapter 1, the authors review the three eras of medical care
(individual medicine, organizational medicine, and network
medicine) and lay the groundwork for their model for competitive
strategy development. Chapter 2 describes the factors that must
be taken into account for successful strategic decision-making.
These factors include the analysis of the environmental trends
and competitive forces affecting the health care field, past,
current, and future; the analysis of the competitive position of
the organization; the setting of goals, objectives, and a
strategy; the analysis of competitive performance; and the
readaptation of the business, if necessary, through positioning
activities, redirection of strategy, and organizational change.
Chapters 3 through 7 discuss in detail the five positioning
activities that are part of the model and therefore critical to
the development and implementation of a successful strategy:
scanning; product market analysis; collaboration; restructuring;
and managing the physician. The chapter on managing the physician
(Chapter 7) is the only section in the book that appears dated
(the book was first published in 1984). In this day of
physicianowned hospitals and physician-backed joint ventures, it
is difficult to envision the physician in the passive role of
"being managed." However, even the changing role of physicians
since the book's first publication correlates with the authors'
premise that their model for competitive strategic planning is
based exactly on understanding and anticipating change, which is
no better illustrated than in health care where change is
measured not in years but in months. These middle chapters and
the other chapters use a mixture of didactic presentation, graphs
and charts, quotations from famous individuals, and anecdotes to
render what can frequently be dry information in an entertaining
and readable format.

The final chapter of the book presents a case example (using the
"South Clinic") as a summary of many of the issues and strategic
alternatives discussed in the previous chapters. The final
chapter also discusses the competitive issues specific to various
types of health care delivery organizations, including teaching
hospitals, community hospitals, group practices, independent
practice associations, hospital groups, super groups and
alliances, nursing homes, home health agencies, and for-profits.
An interesting quote on for-profits indicates how time and change
are indeed important factors in strategic planning in the health
care field: "Behind many of the competitive concerns.lies the
specter of the forprofits.

Their competitive edge has lain until now in the
excellence of their management. But developments in the past
halfdecade have shown that the voluntary sector can match the
forprofits in management excellence. Despite reservations that
may not always be untrue, the for-profit sector has demonstrated
that good management can pay off in health care. But will the
voluntary institutions end up making the same mistakes and having
the same accusations leveled at them as the for-profits have? It
is disturbing to talk to the head of a voluntary hospital group
and hear him describe physicians as his potential competitors."



                            *********

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 * * *