TCREUR_Public/170905.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

         Tuesday, September 5, 2017, Vol. 18, No. 176



PASHA BANK: Fitch Affirms B+ Long-Term IDR, Outlook Stable


AGROKOR: Loses Bid for Recognition of Croatia Insolvency Process


AIR BERLIN: EU Competition Approves EUR150MM Bridging Loan
AIR BERLIN: Bidders Circle Ahead Of September Deadline
BREMER LANDESBANK: Moody's Withdraws B2 BCA Rating


AVOCA CLO XIII: Moody's Assigns B2(sf) Rating to Cl. F-R Notes
AVOCA CLO XIII: Fitch Assigns B- Rating to Class F-R Notes


ATAC: Commences Debt Restructuring Procedures to Avert Collapse
WIND TRE: Fitch Raises Junior Debt Rating to B+


KAZKOMMERTSBANK: Fitch Raises Long-Term IDRs to BB-


PORTUGAL: Moody's Alters Outlook to Pos. & Affirms Ba1 LT Ratings


FABRIKA AKUMULATORA: Rejects Batagon's New EUR5.05MM Offer


MASARIA INVESTMENTS: Moody's Assigns B2 CFR, Outlook Stable


ARCHROMA HOLDINGS: Moody's Assigns B2 CFR, Outlook Stable


KYIV CITY: Moody's Hikes Long-Term Issuer Rating to Caa3

U N I T E D   K I N G D O M

BASLER UK: In Administration After Parent Fails to Find Buyer
COUNTY WASTE: Placed In Administration, 20 Jobs at Risk
DEBT FREE: Sold Out of Administration for GBP1.35 Million
HOCHSCHILD MINING: Fitch Affirms BB+ Issuer Default Ratings
KIN WELLNESS: Opts to Appoint Administrators to Facilitate Sale

NEW LOOK: Fitch Lowers Long-Term Issuer Default Rating to CCC


* EMEA Auto Loan and Lease ABS Delinquency Slightly Improves



PASHA BANK: Fitch Affirms B+ Long-Term IDR, Outlook Stable
Fitch Ratings has affirmed Azerbaijan-based Pasha Bank's (PB)
Long-Term Issuer-Default Rating (IDR) at 'B+'. The Outlook is


The affirmation reflects limited changes since Fitch last reviews.
PB's 'B+' Long-Term IDR is based on the bank's intrinsic strength,
as expressed by its Viability Rating (VR) of 'b+'. The latter
remains primarily constrained by the weak operating environment
(as evidenced by numerous recent failures in the banking sector);
dependence of the bank's business model and performance on the
stability of cheap related party funding; and the limited track
record of its sizable foreign operations.

At the same time, the rating positively considers PB's systemic
importance; solid consolidated capitalisation, although this is
somewhat weaker on a standalone basis due to the sizeable
deduction of investments into foreign subsidiaries; manageable
asset quality and ample liquidity. The Stable Outlook reflects
Fitch's expectation that despite the potential for some further
asset quality deterioration, this should be covered by pre-
impairment profits and additionally mitigated by the bank's solid
capital buffer.

Fitch stopped factoring in support from the Azerbaijan authorities
into PB's ratings after the default of International Bank of
Azerbaijan (IBA; 'Restricted Default') on its foreign currency
non-deposit obligations.  In Fitch's view, the default of IBA,
which is the largest bank in the country and government-owned,
means that state support for less systemically-important,
privately-owned banks cannot be relied upon. At the same time,
Fitch views PB's systemic importance as significant, as the bank
is a part of the largest privately-owned banking group in the
country, and together with its sister bank Kapital Bank holds
around 27% of sector deposits. Fitch also acknowledges the
benefits of PB being ultimately owned by a structure closely
connected to the Azerbaijani authorities.

PB's Fitch Core Capital (FCC) ratio increased to around 38% at
end-2016 from 31% at end-2015 due to solid 2016 earnings (ROE of
15%) and slight 5% deleveraging. In Fitch's view, PB is unlikely
to consume this large capital buffer in the near term given
moderate growth plans (and limited actual growth in 1H17) and
reasonable earnings. At the same time, the bank's regulatory
(standalone) capitalization is notably weaker (Tier 1 and total
capital ratios of 25.5% and 15.2%, respectively, at end-1H17
versus minimum levels of 5% and 10%), mainly because PB's
investments in two fully-owned foreign subsidiaries are deducted
from its total regulatory capital. Regulatory capital is
additionally pressured by the gradual phasing-in (by mid-2018) of
the regulatory deduction of related-party credit exposures
(including to subsidiary banks) from capital for capital adequacy
calculation purposes.

According to PB's unconsolidated disclosures, NPLs (loans 90+ days
overdue) slightly increased to around 13% of gross loans at end-
1Q17 from around 11% at end-2016 while restructured loans slightly
contracted to 7% from 8%. The share of PB's foreign currency loans
remained significant at around 45% of total loans, posing a
downside risk to asset quality. However, some of PB's largest
borrowers may benefit from access to foreign currency revenue or
state support. Loan book concentration is high, with the 25
largest exposures amounting to around 69% of gross loans or 1.8x
FCC at end-1Q17. Of these, Fitch considers higher risk loans
(which are not NPLs, but may require additional provisioning in
the future) to be at least 21% of gross loans or 55% of FCC at

At the same time, PB's loan book is rather small - only around 28%
of assets at end-1Q17 (standalone) - and assets outside of the
loan book are of decent quality: most interbank placements (49% of
assets) and investments (4%) were either sovereign or investment
grade risk, while cash and cash equivalents accounted for a
sizeable 16%, approximately.

PB's performance is supported by a low funding cost of 2.5%, which
is below the market average of around 4%, reflecting a high share
of related party funding. This allows the bank to preserve a good
net interest margin of 5.6%, while issuing loans at relatively low
rates. PB's 2016 profitability was also supported by sizeable
volatile gains, including AZN57.8 million dealing income, AZN8.7
million translation gain and AZN2.3 million gain on FX
derivatives. Net of these gains and uncollected accrued interest,
core earnings are moderate, with adjusted 2016 cash-based pre-
impairment profit equalling around 0.5% of average assets. PB's
unconsolidated regulatory accounts indicate that profitability may
have moderately declined in 1H17.

PB's total available liquidity, net of potential wholesale debt
repayments, comfortably covered around half of the bank's end-1Q17
customer accounts or all of the third-party unrestricted accounts
(excluding related parties and deposits pledged as collateral
against loans). However, this should be viewed against high single
name concentration of liabilities (at end-1Q17 the three largest
customers contributed 32% of total liabilities).


Downside pressure on PB's ratings could result from a marked
weakening of its asset quality and capitalisation. Upside would
probably require an improvement of the operating environment,
stronger asset quality and preservation of high capital ratios.
Further development of PB's franchise resulting in a marked
increase in the bank's systemic importance or improvements in the
track record of sovereign support for the banking sector as a
whole could also be credit-positive.

The rating actions are:

Long-Term IDR: affirmed at 'B+'; Outlook Stable
Short-Term IDR: affirmed at 'B'
Viability Rating: affirmed at 'b+'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'


AGROKOR: Loses Bid for Recognition of Croatia Insolvency Process
Jasmina Kuzmanovic, Luca Casiraghi and Gordana Filipovic at
Bloomberg News report that a Serbian court has dismissed Agrokor
d.d.'s request to recognize Croatian insolvency procedures in the
country, complicating efforts to restructure the largest company
in the former Yugoslavia.

According to Bloomberg, the decision by the Commercial Court in
Belgrade on Aug. 30 adds to an earlier ruling in the Serbian
capital, which temporarily banned sales of Serbian assets as
demanded by Agrokor's biggest creditor, Sberbank PJSC of Russia.
Agrokor, as cited by Bloomberg, said it's appealing both verdicts.

Ante Ramljak, appointed by the Croatian government to oversee the
overhaul, said on Aug. 31 that the latest court decision raised
the threat that Sberbank may try to repossess the Serbian assets,
Bloomberg relates.

Sberbank fell out with Agrokor's new management over the
restructuring process, which also included freezing debt
repayments for at least another year, Bloomberg recounts.

"It's important that there is no capital flight from Agrokor units
in Serbia and we want to protect our economy from the spillover,"
Bloomberg quotes Serbian Prime Minister Ana Brnabic as saying on
Aug. 31 when asked about the Commercial Court verdict.

A district court in the Slovenian capital Ljubljana ruled in favor
of Agrokor on a similar case in July, though the decision has
since been appealed by both Sberbank and the Slovenian government,
Bloomberg notes.

Sberbank also filed three arbitration claims against Agrokor in
London last month in a bid to recover EUR1.1 billion it lent to
the business, Bloomberg discloses.

Whether arbitration takes place may depend on the result of
Agrokor's ongoing efforts to shut off all legal action in London
through a High Court ruling, Bloomberg relays, citing people
familiar with the matter said in August.

                         About Agrokor DD

Founded in 1976 and based in Zagreb, Crotia, Agrokor DD 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).

On April 10, 2017, the Zagreb Commercial Court allowed the
initiation of the procedure for extraordinary administration over
Agrokor and some of its affiliated or subsidiary companies.  This
comes on the heels of an April 7, 2017 proposal submitted by the
management board of Agrokor Group for the administration
proceedings for the Company pursuant to the Law of Extraordinary
Administration for Companies with Systemic Importance for the
Republic of Croatia.

Mr. Ante Ramljak was simultaneously appointed extraordinary
commissioner/trustee for Agrokor on April 10.

In May 2017, Agrokor dd, in close cooperation with its advisors,
established that as of March 31, 2017, it had total liabilities of
HRK40.409 billion.  The company racked up debts during a rapid
expansion, notably in Croatia, Slovenia, Bosnia and Serbia, a
Reuters report noted.

On June 2, 2017, Moody's Investors Service downgraded 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.

On June 8, 2017, Agrokor's Agrarian Administration signed an
agreement on a financial arrangement agreement worth EUR480
million, including EUR80 million of loans granted to Agrokor by
domestic banks in April. In addition to this amount, additional
buffers are also provided with additional EUR50 million of
potential refinancing credit. The total loan arrangement amounts
to EUR1,060 million, of which a new debt totaling EUR530 million
and the remainder is intended to refinance old debt.


AIR BERLIN: EU Competition Approves EUR150MM Bridging Loan
Rochelle Toplensky at The Financial Times reports that Brussels
has approved Germany's EUR150 million bridging loan to Air Berlin,
keeping the country's second largest airline flying through the
summer while the state negotiates the sale of the company's

According to the FT, European Competition officials said: "Rescue
and restructuring aid are among the most distortive types of state
aid and can only be granted to companies once these have exhausted
all other market options."

To minimize competitive harm, the loan installments will be paid
only after the regulator is shown each week that "all existing
liquidity has been used", the FT discloses.

The loan is limited to a maximum of EUR150 million and will need
to be fully repaid within six months, the FT states.  If the money
cannot be repaid, Germany will have to submit a winding-down plan
to the EU competition officials for approval, the FT relays.

Early indications that Lufthansa, Germany's biggest carrier, was
in talks to buy some of Air Berlin's assets led Ryanair to brand
the state bailout a "conspiracy" to protect national carrier, the
FT notes.

                        About Air Berlin

In operation since 1978, Air Berlin PLC & Co. Luftverkehrs KG is
a global airline carrier that is headquartered in Germany and is
the second largest airline in the country.

In 2016, Air Berlin operated 139 aircraft with flights to
destinations in Germany, Europe, and outside Europe, including
the United States, and provided passenger service to 28.9 million
passengers.  Within the first seven months of 2017, the Debtor
carried approximately 13.8 million passengers.  It employs
approximately 8,481 employees.  Air Berlin is a member of the
Oneworld alliance, participating with other member airlines in
issuing tickets, code-share flights, mileage programs, and other
similar services.

Air Berlin has racked up losses of about EUR2 billion over the
past six years, and has net debt of EUR1.2 billion.

On Aug. 15, 2017, Air Berlin applied to the Local District Court
of Berlin-Charlottenburg, Insolvency Court for commencement of an
insolvency proceeding.  On the same day, the German Court opened
preliminary insolvency proceedings permitting the Debtor to
proceed as a debtor-in-possession, appointed a preliminary
custodian to oversee the Debtor during the preliminary insolvency
proceedings, and prohibited any new, and stayed any pending,
enforcement actions against the Debtor's movable assets.

To seek recognition of the German proceedings, representatives of
Air Berlin filed a Chapter 15 petition (Bankr. S.D.N.Y. Case No.
17-12282) on Aug. 18, 2017.  The Hon. Michael E. Wiles is the
case judge.  Thomas Winkelmann and Frank Kebekus, as foreign
representatives, signed the petition.  Madlyn Gleich Primoff,
Esq., at Freshfields Bruckhaus Deringer US LLP, is serving as
counsel in the U.S. case.

AIR BERLIN: Bidders Circle Ahead Of September Deadline
Bradley Gerrard, writing for Telegraph, reports that the battle
for parts of Air Berlin, the trouble airline that fell into
administration earlier this month, ramped up in the last week of
August as it emerged that German airline Lufthansa is eyeing
several of Air Berlin's long-haul aircraft.

It is understood about six companies are in the race to bid for
assets belonging to Air Berlin by a September 15 deadline,
including Thomas Cook's Condor and low-cost players such as
easyJet and Ryanair, according to Telegraph.

The report discloses former Formula One driver Niki Lauda is also
interested in buying back Niki, the Austrian airline he founded,
which merged with Air Berlin six years ago.

Meanwhile, easyJet and Ryanair are keen to take on some of the
routes flown by Air Berlin by buying the slots the German carrier
owns at airports rather than planes, the report relays.

The report says various carriers have been circling Air Berlin
since it filed for administration earlier this month but the
airline's future is complicated by the fact it has various
agreements with other airlines.

The report discloses that these include agreements with Tui, which
signed a deal with Air Berlin a decade ago for it to fly a
portfolio of routes using about 700 Tui staff and some of its

The report relays earlier this year, German regulators also
allowed Lufthansa to wet lease 38 jets from Air Berlin meaning
these two carriers are also intertwined.

The report notes Air Berlin is the second carrier to get into
difficulty this year after Alitalia filed for administration in
May. Both carriers hit trouble when their largest shareholder,
Etihad, refused to invest any more money in the companies.

BREMER LANDESBANK: Moody's Withdraws B2 BCA Rating
Moody's Investors Service has taken a number of rating actions on
Bremer Landesbank Kreditanstalt Oldenburg GZ (BremerLB). The
actions follow BremerLB's merger with its parent Norddeutsche
Landesbank GZ (NORD/LB, deposits Baa2 negative / senior unsecured
Baa3 negative, Baseline Credit Assessment (BCA) b2), effective as
of September 1, 2017 and applying retroactively from 1 January
2017. As a result of the merger, NORD/LB will assume all the
assets and liabilities of BremerLB.

The following rating actions have been taken:

- Affirmation of outstanding senior unsecured debt instruments
   at Baa3 with a negative outlook

- Affirmation of outstanding backed subordinate securities at

- Withdrawal of BremerLB's other ratings, rating inputs and
   their outlooks where applicable.



The affirmation of the senior unsecured debt ratings at Baa3
reflects the assumption by NORD/LB of these still outstanding
securities and the pari passu ranking of these instruments with
the Baa3-rated senior unsecured instruments of NORD/LB. The
negative outlook on these debt securities now reflects the
negative outlook on NORD/LB's ratings.

In the case of the affirmation of the Aa1-rated backed subordinate
instruments, the rating agency's assessment reflects the
guarantees provided by NORD/LB's owners, the Land of Lower Saxony,
the Land of Saxony-Anhalt (Aa1 stable) and the Land of
Mecklenburg-Western Pomerania, as well as the savings banks
associations of these states, which also extend to these assumed


Moody's has withdrawn the deposit and issuer ratings as well as
several long-term and short-term program ratings and rating inputs
of BremerLB because the entity has ceased to exist with effect
from September 1, 2017, following the merger with NORD/LB.


There is currently limited upward pressure on the senior unsecured
debt ratings of NORD/LB, as indicated by the negative outlook.

Moody's may stabilise the outlook on NORD/LB's ratings, if the
bank continues to execute successfully on its de-risking plan over
the 12 to 18 months outlook horizon, while preserving its core
capital above current levels and while maintaining a sufficient
margin above regulatory capital requirements.

Moody's may downgrade the ratings of NORD/LB if its BCA and
adjusted BCA are downgraded. NORD/LB's BCA may be downgraded if
(1) additional loan loss provisioning needs in the context of
NORD/LB's shipping portfolio reduction cannot be sufficiently
covered by underlying pre-provision income, thereby negatively
affecting capitalisation or if (2) rating migration trends in its
shipping portfolio become worse than the rating agency's current

Furthermore, the ratings of NORD/LB may be downgraded if the
amount of equal-ranking or subordinated debt for an individual
debt class declines beyond current expectations, leading to a less
favourable outcome under Moody's Advanced LGF analysis.

Moody's may upgrade the Aa1-rated backed subordinate ratings of
NORD/LB in case the creditworthiness of one of its guarantors
improves to the Aaa level. Downward pressure on these ratings
could develop in case the guarantors' creditworthiness weakens.



Senior Unsecured (Local), affirmed at Baa3 Negative (debts assumed

Backed Subordinate (Local), affirmed at Aa1 (debts assumed by


LT Bank Deposits (Foreign and Local), previously Baa2 Negative

ST Bank Deposits (Foreign and Local), previously P-2

LT Issuer Rating (Foreign), previously Baa3 Negative

Senior Unsecured medium-term note program (Local), previously

Commercial Paper (Local), previously P-2

Other Short Term (Local), previously (P)P-2

Subordinate medium-term note program (Local), previously (P)B1

ST Counterparty Risk Assessment, previously P-2(cr)

LT Counterparty Risk Assessment, previously Baa2(cr)

Baseline Credit Assessment, previously b2

Adjusted Baseline Credit Assessment previously ba3


Outlook, Changed to No Outlook from Negative


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


AVOCA CLO XIII: Moody's Assigns B2(sf) Rating to Cl. F-R Notes
Moody's Investors Service has assigned definitive ratings to nine
classes of notes (the "Refinancing Notes") issued by Avoca CLO
XIII Designated Activity Company ("Avoca CLO XIII" or the

-- EUR2,000,000 Class X Senior Secured Floating Rate Notes due
    2030, Definitive Rating Assigned Aaa (sf)

-- EUR240,000,000 Class A-R Senior Secured Floating Rate Notes
    due 2030, Definitive Rating Assigned Aaa (sf)

-- EUR14,000,000 Class B-1R Senior Secured Fixed Rate Notes due
    2030, Definitive Rating Assigned Aa2 (sf)

-- EUR24,000,000 Class B-2R Senior Secured Floating Rate Notes
    due 2030, Definitive Rating Assigned Aa2 (sf)

-- EUR15,000,000 Class B-3R Senior Secured Floating Rate Notes
    due 2030, Definitive Rating Assigned Aa2 (sf)

-- EUR22,000,000 Class C-R Deferrable Mezzanine Floating Rate
    Notes due 2030, Definitive Rating Assigned A2 (sf)

-- EUR22,000,000 Class D-R Deferrable Mezzanine Floating Rate
    Notes due 2030, Definitive Rating Assigned Baa2 (sf)

-- EUR23,000,000 Class E-R Deferrable Junior Floating Rate Notes
    due 2030, Definitive Rating Assigned Ba2 (sf)

-- EUR11,500,000 Class F-R Deferrable Junior Floating Rate Notes
    due 2030, Definitive Rating Assigned B2 (sf)


Moody's definitive rating of the Notes addresses the expected loss
posed to noteholders. The rating reflects the risks due to
defaults on the underlying portfolio of assets, the transaction's
legal structure, and the characteristics of the underlying assets.

The Issuer will issue the Refinancing Notes in connection with the
refinancing of the following classes of notes: Class A Notes,
Class B Notes, Class C Notes, Class D Notes, Class E Notes and
Class F Notes due 2027 (the "Original Notes"), previously issued
on December 16, 2014 (the "Original Closing Date"). On the
Refinancing Date, the Issuer will use the proceeds from the
issuance of the Refinancing Notes to redeem in full its respective
Original Notes. On the Original Closing Date, the Issuer also
issued one class of subordinated notes, which will remain

Avoca CLO XIII is a managed cash flow CLO. The issued notes are
collateralized primarily by broadly syndicated first lien senior
secured corporate loans. At least 90% of the portfolio must
consist of senior secured loans, senior secured bonds and eligible
investments, and up to 10% of the portfolio may consist of second
lien loans, unsecured loans, mezzanine obligations and high yield

KKR Credit Advisors (Ireland) Unlimited Company (the "Manager")
manages the CLO. It directs the selection, acquisition, and
disposition of collateral on behalf of the Issuer. After the
reinvestment period, which ends in October 2021, the Manager may
reinvest unscheduled principal payments and proceeds from sales of
credit impaired and credit improved obligations, subject to
certain restrictions.

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

Loss and Cash Flow Analysis:

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

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

The key model inputs Moody's used in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. For modeling
purposes, Moody's used the following base-case assumptions:

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

Diversity Score: 40

Weighted Average Rating Factor (WARF): 2780

Weighted Average Spread (WAS): 3.70%

Weighted Average Recovery Rate (WARR): 42.5%

Weighted Average Life (WAL): 8.5 years

Moody's has analysed the potential impact associated with
sovereign related risk of peripheral European countries. As part
of the base case, Moody's has addressed the potential exposure to
obligors domiciled in countries with local currency country risk
ceiling of A1 or below. Following the effective date, and given
the portfolio constraints, up to 10% of the pool can be domiciled
in countries with local currency government bond rating below Aa3
with a further constraint of 5% to exposures with local currency
government bond rating below A3. However, the eligibility criteria
require that an obligor be domiciled in a Qualifying Country. At
present, all Qualifying countries have a local currency government
bond rating of at least A3. Therefore at present, it is not
possible to have exposures to countries with a local currency
government rating of below A3.

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was "Moody's
Global Approach to Rating Collateralized Loan Obligations"
published in August 2017.

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

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

Stress Scenarios:

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

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

Percentage Change in WARF -- increase of 15% (from 2780 to 3197)

Rating Impact in Rating Notches

Class X Notes: 0

Class A-R Notes: 0

Class B-1R Notes: -2

Class B-2R Notes: -2

Class B-3R Notes: -2

Class C-R Notes: -2

Class D-R Notes: -2

Class E-R Notes: -1

Class F-R Notes: 0

Percentage Change in WARF -- increase of 30% (from 2780 to 3614)

Rating Impact in Rating Notches

Class X Notes: 0

Class A-R Notes: -1

Class B-1R Notes: -4

Class B-2R Notes: -4

Class B-3R Notes: -4

Class C-R Notes: -4

Class D-R Notes: -3

Class E-R Notes: -1

Class F-R Notes: -1

AVOCA CLO XIII: Fitch Assigns B- Rating to Class F-R Notes
Fitch Ratings has assigned Avoca CLO XIII Designated Activity
Company's refinancing notes final ratings:

Class X: 'AAAsf'; Outlook Stable
Class A-R: 'AAAsf'; Outlook Stable
Class B-1R: 'AAsf'; Outlook Stable
Class B-2R: 'AAsf'; Outlook Stable
Class B-3R: 'AAsf'; Outlook Stable
Class C-R: 'Asf'; Outlook Stable
Class D-R: 'BBBsf'; Outlook Stable
Class E-R: 'BBsf'; Outlook Stable
Class F-R: 'B-sf'; Outlook Stable
Subordinated notes: not rated

Avoca CLO XIII Designated Activity Company is a cash flow
collateralised loan obligation (CLO) securitising a portfolio of
mainly European leveraged loans and bonds. Net proceeds from the
issue of the notes will be used to refinance the current
outstanding notes. The portfolio is managed by KKR Credit Advisors
(Ireland) Unlimited Company.


'B'/'B+' Portfolio Credit Quality: Fitch assesses the average
credit quality of obligors in the 'B'/'B+' range. The agency has
public ratings or credit opinions on all the obligors in the
current portfolio (outstanding portfolio at the latest payment
date). The weighted average rating factor of the outstanding
portfolio at the latest reporting date of 31 July 2017 was 31.9.

High Expected Recoveries: At least 90% of the portfolio will
comprise senior secured loans and bonds. The weighted average
recovery rate of the outstanding portfolio at the latest reporting
date of 31 July 2017 was 68%.

Limited Interest Rate Risk Exposure: Between 0% and 5% of the
portfolio can be invested in fixed-rate assets, while most of the
liabilities pay a floating-rate coupon. The fixed-rate exposure is
more limited than is typical, but fixed-floating basis risk still
exists. Fitch modelled both 0% and 5% fixed-rate buckets and found
that the rated notes can withstand the interest rate mismatch
associated with each scenario.

Diversified Asset Portfolio: This deal contains a covenant that
limits the top 10 obligors in the portfolio to 20% of the
portfolio balance. This ensures that the asset portfolio will not
be exposed to excessive obligor concentration.

8.5 Year Weighted Average Life: The maximum weighted average life
of the transaction is 8.5 years, slightly longer than the typical
eight years. A longer weighted average life allows for a longer
period for defaults to occur, which results in higher expected
default rates.


A 25% increase in the obligor default probability could lead to a
downgrade of up to three notches for the rated notes. A 25%
reduction in expected recovery rates could lead to a downgrade of
up to four notches for the rated notes.


ATAC: Commences Debt Restructuring Procedures to Avert Collapse
DPA reports that Rome's public transport company ATAC, Italy's
most indebted and dysfunctional public utility, has started debt
restructuring procedures in a last-ditch attempt to stave off

According to DPA, ATAC's board on Sept. 1 announced that with
debts of almost EUR1.4 billion (US$1.66 billion), the company will
seek court protection from creditors while it drafts plans to
repay at least some of its creditors and turn around its

The ATAC's restructuring will likely require major sacrifices for
its nearly 12,000 employees, DPA notes.  Trade unions have already
called a strike for September 12 against the debt restructuring
plan, DPA relates.

ATAC has long been plagued by nepotism, corruption, delays on its
network and rampant fare dodging, DPA states.

Only half of its 1,900 buses actually work, DPA relays, citing Il
Messaggero newspaper.  According to DPA, if ATAC's creditors
reject repayment plans offered to them, the company would likely
go bankrupt, dragging Rome's city council towards insolvency.

WIND TRE: Fitch Raises Junior Debt Rating to B+
Fitch Ratings has affirmed Wind Tre S.p.A.'s Issuer Default Rating
(IDR) at 'B+' with a Stable Outlook (Wind Tre, the company
resulted from the merger of previously rated Wind
Telecomunicazioni S.p.A and H3G S.p.A.). Fitch has simultaneously
affirmed Wind Tre's senior secured debt at 'BB'/'RR2'. The
company's junior debt was upgraded to 'B+'/'RR4' on stronger
expected post-merger recoveries.

The company has an improved market position after the merger, but
Iliad's entry creates some uncertainty while expected spectrum
payments over the next two years could limit deleveraging efforts.


Market Stabilisation: The Italian mobile market has stabilised in
the last twelve months which has had a positive impact on all
players, including Wind Tre. Market mobile service revenue grew by
1% yoy on average in each quarter during this period. Price
competition is abating, with some operators starting to slightly
increase tariffs, though often doing so with increased data
allowances. The company's predecessors Wind and H3G were the most
aggressive operators. Fitch anticipates Wind Tre is likely to
focus on their integration rather than further price-disruptive

Iliad Entry Creates Uncertainty: However, this stability may be
challenged by the forthcoming arrival of Illiad -- this newcomer
is expected to launch operations at end-2017/early 2018. Illiad's
entry is unlikely to be overly disruptive as the company faces a
number of hindrances, but some impact is inevitable. Fitch
believes Wind Tre may lose approximately 15% of its mobile service
revenues over the next three years under a reasonably conservative
scenario. This loss is likely to be partially compensated by
wholesale roaming revenue from Iliad.

Iliad is targeting taking up to 10% of the Italian mobile market.
Fitch believes low-ARPU customers of Wind Tre are at most risk, as
Iliad is likely to focus on the price-sensitive customer segment.
Italian mobile tariffs are already among the lowest in Europe, and
therefore room for further price declines is limited, in Fitch
views. Iliad is also lacking a wide retail distribution platform
which may impede its growth plans. These factors mitigate the risk
of a disruptive impact of Iliad's market entry, but do not
completely rule it out.

Spectrum Weighs on Cash Flow: Spectrum payments will be a drag on
the company's cash flow in the short to medium term, mitigating
deleveraging efforts. The Italian government was reported to be
looking to raise EUR1.8 billion from the 900 MHz and 1800MHz
spectrum renewal (the current license expires on 30 June 2018).
Wind Tre is expected to pay an approximately EUR440 million
renewal fee, which is likely to increase its leverage by 0.2x, by
Fitch estimates. On top of this, 5G spectrum investment is likely
in the short to medium term, with an EU-wide deadline for 700MHz
spectrum allocation set for mid-2020.

Synergies Impact Delayed: Wind Tre's EBITDA growth over the next
two years will be helped by significant post-merger synergies. The
company is targeting EUR700 million of run-rate synergies, of
which 90% is planned to be achieved by 2019. However, the positive
impact on cash flows will be dampened by substantial restructuring
expenses, which the management estimated at at least EUR600
million over 2017-2018. Fitch therefore projects that the
company's cash flow may only show a notable improvement in 2019.

Leverage: Fitch expects Wind Tre's leverage to remain high at
slightly above 5x FFO adjusted net leverage in 2017-2018 (it was
5.1x at end-2016). Deleveraging should primarily be driven by
modest EBITDA growth on the back of post-merger synergies, the
positive contribution from the roaming agreement with Illiad, and
the receipt of EUR450 million from the spectrum sale that was
agreed in 2016, but for which proceeds are expected to be received
over 2017-2019.

These positives will probably be offset by substantial
restructuring costs, spectrum investments and continuing high
capex as the company is seeking to improve its network quality.
Fitch believes the largest threat to deleveraging comes from
renewed market pressures after Iliad's entry and higher-than-
expected 5G spectrum costs.

Debt Structure After Merger: Fitch understand Wind Tre, as a
successor company to Wind Telecomunicazioni S.p.A (Wind), became
the guarantor of debt issued by finco Wind Acquisition Finance
S.A. and previously guaranteed by Wind. The existing bond
documentation states that the successor company assumes all the
obligations of Wind in terms of the guarantee, priority agreement
and security. Following the merger of all operating companies into
Wind Tre, secured bondholders benefit from a wider collateral base
enhanced by contributions from Hutchison's H3G. Junior debt
holders benefit from stronger expected recoveries in view of
larger post-merger EBITDA.


Wind Tre, as a single-country operator, benefits from relatively
large scale and well-established operating positions in Italy. It
has larger revenue and subscriber market shares than Swiss-based
Sunrise Communications Holding S.A. (BB+/Stable) or Polish P4 Sp.
z.o.o. (BB-/Stable). However, Wind Tre is significantly more
leveraged than its peers which justifies a multi-notch difference
in ratings, while high interest payments on a large amount of debt
consume more than a quarter of EBITDA, putting pressure on FCF
generation. Roughly equally sized and mobile-only Telefonica
Deutschland Holding AG is rated 'BBB'/Positive' in view of its
exceptionally low leverage, strong pre-dividend free cash flow and
the lack of significant market pressure.


Fitch's key assumptions within the rating case for Wind Tre
include the following:

- Iliad's market entry in early 2018 resulting in mobile revenue
   pressures of up to mid-single-digit percentages yoy in 2018-
- flat to low-single-digit percentage positive fixed-line
   revenue dynamics;
- Post-merger EBITDA synergies growing to EUR375 million by
- EUR600 million of integration costs spread over 2017-2019;
- spectrum renewal payment in 2017;
- 5G spectrum investment in 2018 assuming that Wind Tre takes
   approximately one-third of auctioned frequencies, with the
   total auction proceeds expected in the range of EUR2.5
- capex in line with the management guidance of EUR7 billion
   spread over six years.


- The recovery analysis assumes that Wind would be considered a
   going concern in bankruptcy and that the company would be
   reorganised rather than liquidated.
- Fitch has assumed a 10% administrative claim
- The going-concern EBITDA estimate of EUR2.15 billion reflects
   Fitch's view of a sustainable, post-reorganisation EBITDA
   level upon which Fitch base the valuation of the company
- The going-concern EBITDA is 15% below expected 2017 EBITDA,
   assuming likely operating challenges at the time of distress
- An EV multiple of 5x is used to calculate a post-
   reorganisation valuation and reflects a mid-cycle multiple.


Future developments that may individually or collectively lead to
positive rating action include:

- FFO adjusted net leverage sustainably below 4.8x driven by
   successful integration of Wind and H3G.

Future developments that may individually or collectively lead to
negative rating action include:

- a deterioration in leverage beyond FFO adjusted net leverage
   sustainably above 5.5x;
- continuing operating and financial pressures leading to
   negative FCF generation.


Adequate Liquidity: Wind Tre does not face any significant
refinancing exposure before 2019 when EUR850 million of its debt
becomes due. Fitch expects the company to generate sufficient
internal cash flow to finance its capex, with any liquidity gaps
covered by undrawn EUR400 million RCF with a maturity in November
2019. 5G spectrum investments will probably require additional
financing, by Fitch estimates.


Wind Tre S.p.A.
Long-Term IDR: affirmed at 'B+'; Stable Outlook
Short-Term IDR: affirmed at 'B'
Senior credit facilities: affirmed at 'BB'/'RR2'

Wind Acquisition Finance S.A.
Senior secured fixed and floating-rate notes: affirmed at
Senior notes: upgraded to 'B+'/'RR4' from 'B'/'RR5'


KAZKOMMERTSBANK: Fitch Raises Long-Term IDRs to BB-
Fitch Ratings has affirmed Halyk Bank of Kazakhstan's (HB) Long-
Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at
'BB' and removed them from Rating Watch Negative (RWN). Fitch has
also upgraded Kazkommertsbank's (KKB) Long-Term IDRs to 'BB-' from
'CCC' and removed them from Rating Watch Evolving (RWE). The
Outlooks on both banks' Long-Term IDRs are Stable.

The rating actions follow HB's acquisition of 96.81% of KKB's
ordinary shares and the latter's recapitalisation in July 2017.
The acquisition was performed after the provision of financial
support for KKB by the state authorities of Kazakhstan and HB,
which primarily involved the following:

- The state-controlled problem loan fund (PLF) provided KZT2.4
   trillion to KKB's largest problem borrower, BTA, which repaid
   almost the entire amount of BTA's outstanding loans from KKB.
- KKB utilised the proceeds from the BTA loan repayment mainly
   to repay its own KZT0.6 trillion stabilisation loan from the
   National Bank of Kazakhstan (NBK) and KZT0.2 trillion of repo
- KKB also purchased KZT1 trillion of long-term tenge-
   denominated sovereign bonds with an average coupon rate of
- KKB created KZT0.6 trillion of additional reserves, mostly for
   impaired loans.
- HB contributed KZT0.2 trillion to KKB's common equity.
- KKB generated an additional KZT0.2 trillion (pre-tax) gain on
   restructuring of deposits from the PLF.
- KKB entered into a KZT1 trillion foreign-currency swap with
   the NBK to be able to close its open currency position.



The affirmation of HB's 'BB' Long-Term IDRs, which are based on
its 'bb' VR, and the removal of these ratings from RWN, reflect
Fitch's view that the acquisition of KKB should have only a
moderate negative impact on the bank, whose post-acquisition
credit profile should still be commensurate with the ratings.

The 'bb' VR continues to be driven by HB's strong domestic
franchise, solid, albeit somewhat weakened profitability and
capitalisation, as well as its limited refinancing risks and
robust liquidity. The rating also takes into account HB's elevated
loan impairment levels and the risks of potential further
provisioning needs with respect to KKB's loans and property

Fitch estimates HB's consolidated NPLs (after adding KKB's on a
gross basis) to have increased to 22% of loans after the
acquisition from 10% at end-1H17, while other impaired loans
(mainly, restructured/distressed and high-risk bullet repayment
loans) would have risen to 18% from 11%. Impairment reserves
should have increased to 31% of gross loans from 11% at end-1H17,
covering 77% of NPLs and impaired loans, which is a significant
risk-mitigating factor.

Capital is now less robust than before the acquisition due to
weaker IFRS ratios and an increased unreserved amount of NPLs and
other impaired loans. The consolidated Fitch core capital (FCC)
ratio is expected to have dropped to 14% post-acquisition from 22%
of risk-weighted assets (RWAs) at end-1H17. Meanwhile, NPLs and
other impaired loans, less specific reserves, increased to 0.3x
and 0.6x FCC from 0.1x and 0.3x of FCC at end-1H17, respectively.

Regulatory capitalisation is relatively unaffected, as equity
investments in KKB are not deducted from HB's regulatory capital.
HB's core Tier I, Tier I and total capital ratios all stood at 22%
of regulatory RWAs at end-July 2017, almost unchanged from end-
June 2017.

HB's consolidated profitability ratios will likely fall somewhat
initially, due to KKB's weak pre-impairment performance. Fitch
expects HB's pre-impairment profit/ net loans and operating
profit/RWAs ratios to fall by about 2 ppts from an annualised 8.4%
and 4.8%, respectively, in 1H17. Internal capital generation could
also reduce to low double digits from 20% for 1H17. Positively,
pre-impairment profit should still be sufficient to fully reserve
NPLs and impaired loans over three years.

The consolidated bank's liquidity and funding profile has remained
strong with highly liquid assets estimated at about 60% of total
assets, partly thanks to KKB's purchase of repoable sovereign


The upgrade of KKB's Long-Term IDRs to 'BB-' from 'CCC' reflects
Fitch's view of a moderate probability of support for the bank, if
needed, from HB. The Stable Outlook on KKB's Long-Term IDRs
reflects that on its parent. Fitch classifies KKB as a
strategically important subsidiary for HB given the former's
significant 40% share in the group's consolidated assets, as well
as the parent bank's direct ownership, control and supervision
over its new subsidiary.

The one-notch ratings differential between HB and KKB's ratings
reflects uncertainty about KKB's performance prospects and hence
HB's future commitment to the subsidiary, KKB's large size
relative to HB (which could constrain HB's ability to support in
certain circumstances) and the currently untested institutional
support to the bank. The cross-default linkage of KKB with HB
provides only a moderate incentive to support, in Fitch's view,
given HB's limited own Eurobonds (2% of group post-acquisition
assets), which would be subject to acceleration.

The upgrade of KKB's VR to 'b' from 'f' (failure) follows the
improvement in KKB's balance sheet structure and its
capitalisation. This was primarily a result of the repayment in
cash of loans by the distressed asset management company BTA,
which equalled 60% of KKB's pre-acquisition loans. HB's KZT185
billion equity injection in KKB, coupled with the KZT170 billion
pre-tax gain on restructuring of the PLF deposits also helped to
improve reserve coverage of impaired loans.

The 'b' VR continues to reflect KKB's weak asset quality in light
of its still high NPLs at 38% of post-acquisition gross loans and
28% of other impaired loans and its low estimated post-
recapitalisation FCC ratio of 8% of RWAs. High loan impairment
reserve coverage, at about 57% of gross loans (or 87% of combined
NPLs and impaired loans) mitigates risks to a significant degree,
but the unreserved amount of NPLs and impaired loans at a sizeable
0.9x FCC and 1.6x FCC, respectively, remain considerable. KKB's
property investments, which may also be a source of risk,
comprised a further 1.1x FCC.

Fitch expects KKB's pre-impairment profit is now close to break-
even, meaning that any reserve creation would lead to losses.
However, potential future improvement in funding and operating
costs, combined with a gradual build up interest-earning assets,
could be moderately positive.

KKB's liquidity profile significantly improved as the ratio of
liquid assets to total liabilities jumped to 70% from 11% at end-
1H17. The repayment of expensive funding, combined with the
potential ordinary benefits of parental support, could improve
depositor confidence, funding stability and reduce funding costs.


The affirmation of HB's SR at '4' and SRF at 'B' reflects Fitch's
view of a moderate probability of sovereign support. This
considers positively the bank's exceptional systemic importance
and close government relations. However, the ratings remain
constrained by Kazakhstan's mixed track record of support to
systemically important banks.

The upward revision of KKB's SRF to 'B' from 'No Floor' reflects
its alignment with HB's SRF, as in Fitch's view any sovereign
support would likely be made available to both banks. The
withdrawal of the SRF reflects the fact that institutional
(shareholder) support has now, in Fitch's view, become the primary
source of support for KKB. The upgrade of KKB's SR to '3' from '5'
mirrors Fitch's upgrade of the bank's Long-Term IDRs and reflects
the potential for support from HB.


The senior unsecured debt ratings of both banks are aligned with
their respective Long-Term IDRs, reflecting Fitch's view of
average recovery expectations in case of default.

The upgrade of KKB's perpetual debt rating to 'B' from 'C'
reflects the fact that this is now notched off the bank's Long-
Term IDR, as Fitch believes the parent bank would likely
neutralise the non-performance risk on its subsidiary bank's
perpetual debt, if required. The two-notch difference between
KKB's Long-Term IDR and the perpetual debt rating reflects the
likely high loss severity in case of default, as the notes are
deeply subordinated instruments.


The removal from RWN and affirmation of the support-driven Long-
Term IDRs and SRs of HB's subsidiaries - JSC Halyk Finance (HF)
and JSC Halyk Bank Georgia (HBG) - mirrors the rating action on
their parent.


An upgrade of HB's ratings is unlikely in the near term, as it
would require successful integration of KKB, a reduction in
residual asset quality risks and normalisation of the latter's
performance. HB's ratings could be downgraded in case of further
deterioration in asset quality leading to significant capital

An upgrade of KKB's IDR to the level of HB would be possible if
the bank becomes more deeply integrated with HB leading to a
higher propensity to support it. This may be the case if HB
develops a clear strategy for the bank and aligns KKB's risk
management more closely with its own, and if KKB demonstrates an
ability to generate considerably stronger core profits. KKB's IDRs
could be downgraded should the parent's ability or propensity to
support KKB reduce.

KKB's VR could also be downgraded if, in Fitch's view, it needs
significant additional impairment reserves, or if core
profitability is persistently weak, either of which could result
in an erosion of core capital.

An upgrade of KKB's VR would require its legacy problem loans to
be substantially reduced without impairing the bank's capital
position. Improved capitalisation and stronger core profitability
could also be positive for the rating.

HF and HBG's ratings will likely remain linked to HB's Long-Term

Debt ratings will likely move in tandem with the respective bank's
Long-Term IDRs.

The rating actions are:

Halyk Bank of Kazakhstan

Long-Term Foreign- and Local-Currency Issuer Default Ratings
(IDRs): affirmed at 'BB', removed from Rating Watch Negative
(RWN); Outlook Stable

Short-Term Foreign- and Local-Currency IDRs: affirmed at 'B'

Viability Rating: affirmed at 'bb', removed from RWN

Support Rating: affirmed at '4'

Support Rating Floor: affirmed at 'B'

Senior unsecured debt: affirmed at 'BB', removed from RWN


Long Term Foreign- and Local-Currency IDRs: upgraded to 'BB-'
  from 'CCC'; removed from RWE; Outlook Stable

Short Term Foreign- and Local-Currency IDRs: upgraded to 'B' from
  'C'; removed from RWE

Viability Rating: upgraded to 'b' from 'f'

Support Rating: upgraded to '3' from '5'; removed from RWP

Support Rating Floor: revised up to 'B' from 'NF'; removed from
  RWP; withdrawn

Senior unsecured debt long-term rating: upgraded to 'BB-' from
  'CCC'; removed from RWE

Senior unsecured debt short-term rating: upgraded to 'B' from
  'C'; removed from RWE

Perpetual debt rating: upgraded to 'B' from 'C'; removed from
  RWE; recovery rating withdrawn at 'RR6'

JSC Halyk Bank Georgia

Long-Term IDR: affirmed at 'BB-', removed from RWN, Outlook
Short-Term IDR: affirmed at 'B'
Support Rating: affirmed at '3', removed from RWN

JSC Halyk Finance

Long-Term Foreign- and Local-Currency IDRs: affirmed at 'BB',
  removed from RWN, Outlook Stable
Short-Term Foreign- and Local-Currency IDRs: affirmed at 'B'
Support Rating: affirmed at '3', removed from RWN


PORTUGAL: Moody's Alters Outlook to Pos. & Affirms Ba1 LT Ratings
Moody's Investors Service has changed the outlook to positive from
stable on Portugal's Ba1 domestic and foreign long-term issuer and
senior unsecured ratings, as well as on the (P)Ba1 senior
unsecured MTN programme rating. Concurrently, these long-term
ratings as well as Portugal's (P)NP other short-term and NP
commercial paper ratings have been affirmed.

The drivers of the change in outlook to positive from stable are:

1. The improving resilience of Portugal's economic growth given
the recovery in investment;

2. Portugal's ongoing fiscal improvements which support Moody's
expectation that fiscal consolidation will be maintained; and

3. Portugal's improving government debt structure and its sizeable
cash buffers which mitigate risks to government financing.

In a related rating action, Moody's has changed the outlook to
positive from stable on Parpublica-Participacoes Publicas (SGPS),
SA's Ba1 senior unsecured rating and (P)Ba1 senior unsecured MTN
programme rating, and has affirmed these ratings. Moody's rates
SGPS at the same level as the Portuguese government to reflect (1)
the company's 100% government ownership; (2) the very close links
between the company and the government; and (3) strong evidence of
government financial support for the company, even though SGPS
lacks an explicit guarantee from the government.

Portugal's local and foreign currency long-term bond and deposit
ceilings remain unchanged at A1. The short-term foreign currency
bond and deposit ceilings are also unaffected and remain at P-1.




Moody's expects that the broad-based economic recovery underway
will increase the resilience of Portugal's growth to shocks,
supporting its credit profile. Furthermore, improving investment
dynamics, in so far as they are directed to productive
opportunities, could also bolster potential growth in Portugal,
which Moody's estimates to be currently at around 1.5%.

Strong economic activity in the first half of 2017 (2.8% year-on-
year), the highest since 2000, supports Moody's assessment of a
marked pick-up in GDP growth to 2.5% in 2017, above expectations
for euro area average growth. Importantly for Moody's assessment,
the contributors to growth have broadened in recent quarters to
include investment, alongside private consumption. Notably, strong
growth in gross fixed capital formation (GFCF) since the second
half of 2016 has widened from spending on machinery and equipment
to a recovery in the construction sector, which accounts for
around half of total GFCF in Portugal. At the same time, an
acceleration in exports, including from the tourism sector, has
helped improve the contribution of external demand.

Moody's expects investment activity to remain buoyant and continue
to contribute to growth over the forecast horizon, benefitting
from improving economy-wide sentiment as companies respond to
expected increased demand. This compares to the first half of
2016, when uncertainty likely weighed on firms' spending
decisions. Private investment will also benefit from the positive
spill-overs related to EU fund inflows, averaging around 2% of GDP
per year, helping to drive public sector investment.

The strength of the economic recovery is further supported by
positive labour market developments, with the unemployment rate
reaching around 9% in June 2017 according to Eurostat (seasonally
adjusted), sharply lower since Moody's last rating action in July
2014 (when it stood at around 14%) and the lowest monthly reading
since November 2008. At the same time, the economy will benefit
from higher employment, which grew 2.9% in Q1 2017 from 1.4% in
2016 (Eurostat, seasonally adjusted), with most of the new jobs in
permanent positions. Nevertheless, elevated long-term and youth
unemployment remain persistent credit concerns.


Portugal's fiscal consolidation efforts exceeded expectations in
2016, resulting in a decline in the budget deficit to 2% of GDP,
from 4.4% in 2015, largely due to a significant cut in capital
expenditures and tight control over spending on goods and
services, supporting Moody's assessment of a prudent budget
outlook. In particular, the headline deficit in 2016 was below
both the budget target of 2.4% and the European Commission's (EC)
Maastricht threshold of 3% for the first time since Portugal
joined the euro area, allowing Portugal to exit the EC's Excessive
Deficit Procedure in June 2017.

Despite the role of one-off revenues, the structural deficit
improved by 0.3% in 2016, above the requirement of an unchanged
structural balance, according to the EC's assessment. Notably, the
underlying budget deficit, excluding one-off impacts from the
banking sector, has been on a downward trend since 2010 and
Portugal's structural fiscal adjustment of around 6.4 percentage
points between 2010 and 2016 was the third largest in the EU.

Moody's believes that the significant cut in expenditures achieved
in 2016 provides a strong base for a continued prudent fiscal
position and support's Moody's expectation that the budget deficit
will remain below 3% of GDP in the coming years. In particular,
budget execution data shows expenditure growth to July 2017
running well below the full year budget (0.5% versus 4.4%), which
supports Moody's forecast of a further small reduction in the
deficit to 1.8% this year.

Importantly, the improvement in the budget deficit helped
Portugal's primary balance move to a surplus of 2.2% of GDP in
2016, from 0.2% in 2015, one of the highest in the EU. Moody's
expects the primary balance to average around 2.3% over the next
two years, more conservative than the authorities' estimate of
2.9% as set out in the April 2017 Stability Programme, which
should support a gradual reduction in the government debt burden
starting in 2017.


Active debt management policies have helped increase the
resilience of Portuguese state debt to market developments,
including from a gradual increase in interest rates.

Moody's notes that the average residual maturity of the state's
direct debt has improved from around six years in early 2012 to
around eight years as at mid-2017, in part reflecting buy-backs in
the government bond market, which has helped to smooth the
government's debt redemption profile. Furthermore, the refinancing
at lower interest rates has led to an incremental decline in the
average cost of debt outstanding from 4.1% in 2011 to 3.2% in
2016. Notably, Portugal's debt structure has benefitted from the
refinancing of programme-era debt, including the recent waiver to
repay early around an additional EUR9.3bn of International
Monetary Fund (IMF) obligations.

Furthermore, Moody's considers efforts to widen the investor base
have increased the resilience of government financing to shocks.
In addition, Portugal's government liquidity also benefits from a
sizeable year-end cash buffer which averages around 40-50% of the
following year's state borrowing requirements, providing around a
six-month window before needing to access the market.
Nevertheless, Moody's expects Portuguese government bond yields to
remain more sensitive to changes in investor sentiment than most
peripheral European sovereigns, such that the risk of a material
confidence shock will continue to weigh on Moody's assessment of
government liquidity risk.


Portugal's Ba1 issuer rating is supported by its relatively
wealthy economy, with GDP per-capita on a purchasing-power parity
(PPP) basis at $28,933 in 2016, above the median for Ba1 rated
peers ($17,304). In addition, the large size of Portugal's economy
is able to support a diverse and competitive economy, reflected in
its higher ranking compared to similarly rated peers on
international competitiveness surveys.

Portugal's very strong institutional strength is also an important
factor supporting its Ba1 rating, evidenced by the country's
significantly higher score than Ba1 peers on indicators such as
the Worldwide Governance Indicators. Portugal's strong track
record in implementing structural reforms allowed the economy to
rebalance to an important extent towards its tradable sectors,
supporting a marked improvement in its current account balance to
an expected surplus of 0.6% on average over the next two years
compared to a deficit of around 6% in 2011.

At the same time, Portugal's Ba1 issuer rating incorporates the
weaknesses within its credit profile. The main credit challenge
remains Portugal's very high public sector debt burden, one of the
highest in the EU, which Moody's expects to decline only gradually
from around 130% of GDP at end 2016 to reach around 120% by 2021,
limiting the available fiscal space to withstand future shocks.
Relatedly, Portugal's debt affordability, measured by interest
payments to revenues, remains weaker than the median of Ba1 peers.

A further vulnerability of Portugal's credit profile is the
continuing high levels of debt in the private sector, notably
among non-financial corporates, compounded by the weaknesses in
the banking sector, which constrains Portugal's longer-term growth
prospects. Notably, despite recent progress on the
recapitalisation strategies for some of the largest banks in the
system, the sector remains burdened by a very large stock of non-
performing assets and low levels of profitability, which weighs on
the ability for the sector to support productive investment
opportunities. Portugal's large negative net international
investment position represents a further vulnerability.


Portugal's government bond rating would be upgraded to investment
grade should Moody's conclude that positive economic and fiscal
trends are likely to be sustained and that the very high debt
burden will move to a steady, downward trend. That conclusion
would be supported by sustained fiscal improvements pointing to a
more consistent record of primary surpluses, by evidence that
economic growth remains broad-based, supporting the economy's
resilience to shocks, and by further progress in the
recapitalisation of the weakest banks. The positive outlook
signals that Moody's would expect to draw such a conclusion, or
not, over the next 12-18 months, and quite possibly within 12


The positive outlook signals that the rating is unlikely to move
down over the next 12-18 months. However, the outlook could be
stabilised were Moody's to conclude that the commitment of the
government to fiscal consolidation and debt reduction, or its
capacity to achieve that objective, were to wane. Weaker than
expected economic growth or a sharp rise in interest costs,
including from a negative confidence shock, would require further
fiscal measures to achieve a consistent reduction in the debt
burden, which, if not forthcoming, would undermine the basis for a
positive outlook. Material delays in the recapitalisation of the
weakest banks, increasing the risks of contingent liabilities for
the government finances, would be similarly negative for the

GDP per capita (PPP basis, US$): 28,933 (2016 Actual) (also known
as Per Capita Income)

Real GDP growth (% change): 1.4% (2016 Actual) (also known as GDP

Inflation Rate (CPI, % change Dec/Dec): 0.9% (2016 Actual)

Gen. Gov. Financial Balance/GDP: -2.0% (2016 Actual) (also known
as Fiscal Balance)

Current Account Balance/GDP: 0.7% (2016 Actual) (also known as
External Balance)

External debt/GDP: [not available]

Level of economic development: High level of economic resilience

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

On August 29, 2017, a rating committee was called to discuss the
rating of the Government of Portugal. The main points raised
during the discussion were: The issuer's economic fundamentals,
including its economic strength, have increased. The issuer's
fiscal or financial strength, including its debt profile, has
increased. Other views raised included: The issuer's institutional
strength/ framework, have not materially changed. The issuer's
susceptibility to event risks has not materially changed.

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


FABRIKA AKUMULATORA: Rejects Batagon's New EUR5.05MM Offer
SeeNews reports that the creditors of Serbia's insolvent car
battery maker Fabrika Akumulatora Sombor (FAS) have rejected the
sweetened EUR5.05 million (US$6 million) acquisition offer made by
Swiss-based Batagon International.

The bid was rejected because the offered sum only equals one-fifth
of the value of FAS' assets, SeeNews relays, citing news portal
SoInfo reported on Aug. 30.

According to SeeNews, SoInfo quoted the insolvency administrator
of FAS, Predrag Ljubovic, as saying "I have informed Batagon that
the offer has been rejected and gave the company the opportunity
to improve its bid or leave the sale process of FAS."

Batagon International increased the price it is offering to pay
for FAS EUR5.05 million after the creditors rejected two previous
offers, of EUR3 million and EUR4.5 million earlier this month,
SeeNews recounts.

SoInfo said earlier in August the value of the assets of FAS is
estimated at EUR24.57 million, SeeNews notes.


MASARIA INVESTMENTS: Moody's Assigns B2 CFR, Outlook Stable
Moody's Investors Service has assigned a B2 corporate family
rating (CFR) and B2-PD probability of default rating (PDR) to
Masaria Investments S.A.U., which will be the holding company of
international apparel retailer Cortefiel following the
transaction. Concurrently, Moody's has assigned a B2 instrument
rating to the EUR600 million senior secured floating and fixed
rate notes.

The proceeds of the transaction along with EUR400 million equity
injection from private equity owners, CVC and PAI, will be used to
refinance existing indebtedness. The outlook on the ratings is


The B2 CFR reflects Cortefiel's (1) strong brand awareness and its
established and differentiated market position; (2) high
profitability underpinned by a strong supply chain and a
successful multi-channel distribution model; (3) and strong free
cash flow generation with good deleveraging prospects.

However, the B2 rating also reflects Cortefiel's (1) exposure to
fashion risk, discretionary spending and the cyclical nature of
its product offering; (2) overreliance on the competitive and
highly fragmented Spanish market; (3) and leveraged capital
structure. The rating agency estimates that, pro forma for the
transaction, Moody's adjusted gross leverage, defined as gross
debt to EBITDA, will be around 4.7x.

"Moody's expects Cortefiel will achieve top line growth at least
in the mid-single digit range over the next 18-24 months, driven
by like-for-like sales growth and store expansion on the back of
the new management's strategic growth plan. However, the recent
outstanding operating performance may be difficult to sustain over
the medium term due to the highly fragmented and competitive
nature of the Spanish apparel market" said Victor Garcia
Capdevila, a Moody's analyst and lead analyst for Cortefiel.

Moody's views the company's liquidity profile as adequate. At
closing of the transaction, Cortefiel will have EUR31 million in
cash on the balance sheet and access to a EUR200 million revolving
credit facility, which coupled with Moody's expectations of a
positive free cash flow generation of around EUR60 million, will
allow the company to meet its cash requirements comfortably over
the next 12-18 months.

The B2 instrument rating assigned to the senior secured notes is
in line with the CFR. The company's PDR of B2-PD, is also in line
with the CFR. The PDR reflects the use of a 50% family recovery
rate resulting from a capital structure comprised of senior
secured bonds and super senior revolving credit facilities.


The stable outlook reflects Moody's expectation of a mid-single
digit sales growth, driven by both like-for-likes sales growth and
new directly operating stores and franchise openings. The stable
outlook also incorporates Moody's expectations of a successful
implementation of the strategic business plan.


Positive rating pressure could develop if Moody's adjusted gross
leverage decreases sustainably below 4.5x while maintaining, or
increasing, current profitability and free cash flow generation


Downward pressure on the ratings could arise if earnings or cash
flow generation weaken as a result of lower than expected like-
for-like sales growth, weaker profitability or if operational
and/or financial risks arise as a consequence of poor execution in
the company's growth strategy. On a quantitatively basis, the
ratings could be downgraded if Moody's adjusted gross leverage
increases above 5.5x or the company's liquidity profile


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


ARCHROMA HOLDINGS: Moody's Assigns B2 CFR, Outlook Stable
Moody's Investors Service has assigned a B2 corporate family
rating (CFR) and a B2-PD probability of default rating (PDR) to
Archroma Holdings Sarl, which has become the new consolidating and
reporting entity for the group following the closing of the
leveraged buy-out (LBO) on August 11th, 2017 and the concurrent
corporate reorganization. As a result of the corporate
restructuring, the B2 CFR and B2-PD PDR assigned at the level of
the previous group's top holding company and reporting entity, SK
Spice Holdings Sarl (Archroma), have been withdrawn.

Moody's has also assigned a definitive B1 rating to the USD680
million equivalent Term Loan B due in 2024 ('new TL B'), to the
USD75 million committed revolving credit facility and the USD75
million equivalent capex credit facility, both due in 2023 ('new
RCF and capex facilities'), and has kept the provisional (P)Caa1
rating which was assigned by Moody's on June 29, 2017 to the
Second Lien facility due in 2025 ('new SL'). The borrower of all
these facilities is Archroma Finance Sarl, a holding company
recently set up for the LBO and 100% controlled by Archroma
Holdings Sarl. Moody's has also withdrawn the B2 rating of the
previous first lien debt (TL B and revolving credit facility)
borrowed by SK SPICE S.A.R.L, because it has been already repaid
in full.

The outlook on all ratings is stable.

This rating action is based on the final terms of the LBO and
refinancing transaction, which are in line with the preliminary
terms the company had indicated when the deal was first announced
on June 29, 2017. The deal closing occurred on August 11th 2017,
when Archroma Finance Sarl used the new TL B and the new SL
facilities to (1) repay the previous rated debt instruments (Term
loan A and B for an aggregate amount of USD608 million equivalent)
in full and (2) make a USD252 million extraordinary distribution
to the shareholders. At the time such transaction was first
announced, Moody's affirmed the CFR of SK Spice Holdings Sarl
(Archroma) at B2 with a stable outlook.


The B2 CFR acknowledges Archroma's (i) leadership position in the
global textile chemical industry, further strengthened following
the acquisition of BASF Textile in 2015; (ii) balanced global
geographic presence, with revenues evenly spread across the
Americas, Asia and EMEA; (iii) broad product portfolio supported
by in-house R&D capabilities (R&D expenses represent c.2% of
revenues) and protected by several patents and trademarks, (iv)
well-maintained manufacturing base with 23 facilities spread
across several different countries and (v) large customer base
spread across its three core business lines of textile chemicals,
paper solutions and emulsions. At the same time, the CFR reflects
the high exposure of the company to (i) mature and declining
markets, particularly Europe that still accounts for about 30% of
its revenues, and (ii) the cyclical textile end market, which
accounts for around 66% of the company's sales. The CFR is also
taking into account the generally less conservative financial
policies of private equity owned companies, and associated high
likelihood of financial events ranging from dividend
recapitalisations to debt funded bolt-on M&A.

The B2 CFR is weakly positioned, because the LBO transaction has
weakened the credit metrics of the company and delays its
deleveraging. Moody's estimates that the adjusted gross
debt/EBITDA pro-forma for the transaction will be equal to 5.8x on
a LTM March 2017 basis vs 4.1x before, which is high for a B2 CFR.
However, the B2 rating is underpinned by Moody's positive view on
the company's liquidity and deleveraging prospects, under the
expectation that Archroma will maintain an EBITDA margin at c. 13%
and will continue to convert a large portion of its future EBITDA
into positive free cash flow (FCF) within an USD45 to USD55
million annual range, assuming capex at c. 2% of sales p.a. and
modest annual working capital requirements.

The projected FCF should support the company's liquidity, which
Moody's considers as good. Positive FCF and absence of meaningful
debt maturities should allow a fast build-up of cash, which should
support a relatively fast deleveraging on an adjusted net debt
basis, from a pro-forma adjusted net debt/EBITDA of 5.5x on a LTM
March 2017 basis to 4.9x by 2018 FYE, and further down to 4.3x in
2019 FYE. Given the bullet amortization profile of the new debt,
Moody's anticipates that deleveraging would be slower on an
adjusted gross debt/EBITDA basis, with a projected ratio slightly
above 5.5x in 2018 and only down towards 5x by 2019, assuming the
company mandatorily prepays part of its debt in 2019 with excess
cash based on the cash sweep terms of the loan documentation.


The new capital structure includes a senior secured USD680 million
TL B, a senior secured RCF of USD75 million and a senior secured
capex facility of USD75 million, both ranking pari-passu with the
new TL B (together, the 'first lien facilities'), and a SL
facility of USD200 million, contractually subordinated to the
first lien facility via an intercreditor agreement.

The collateral for all facilities is represented mainly by pledge
on shares and bank accounts of the material operating
subsidiaries. These will account for over 80% of consolidated
EBITDA and gross assets of Archroma and will guarantee the first
lien facilities and the SL facility. In line with Moody's Loss
Given Default methodology, the rating agency has assumed a 50%
recovery rate across the new debt structure. Based on this
assumption and the new LBO debt structure, Moody's has assigned a
definitive B1 rating on the new TL B and new RCF and capex
facilities, one notch above the CFR.


The stable outlook reflects Moody's expectation that the company
will continue to generate positive FCF and will be able to
deleverage towards 5.5x over the next 12 months, from a level of
5.8x pro-forma at transaction closing. The stable outlook also
assumes a good liquidity position at all times.


Currently Moody's does not consider any upward rating pressure. A
rating upgrade may be considered over time if the company were
able to improve its credit metrics, with a total debt/EBITDA
adjusted ratio of less than 4.5x and a RCF/Debt ratio above 15% on
a sustained basis, while maintaining positive free cash flow
generation and good liquidity.


Moody's would consider downgrading the rating if the company were
to perform materially below expectations, which would translate
into a much weaker financial and liquidity profile compared to
Moody's current expectations. A downgrade could be triggered if
adjusted gross leverage would exceed 5.8x on a sustained basis,
and RCF/Debt would fall below 5%. Debt-financed acquisitions,
which would prevent deleveraging and result in a weaker liquidity
position, may also contribute to exert negative rating pressure.


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

Swiss based Archroma was set up in September 2013, when SK Capital
Partners, the current owner, acquired from Clariant AG (Ba1
developing) its textile chemicals, paper solutions and emulsion
products businesses. Archroma has become the largest global
supplier of textile chemicals, following its acquisition of BASF's
textile chemical business ('BASF Textile') in June 2015. Archroma
has also a marginal presence in the large paper chemicals
industry, with leading positions in selected products,
particularly colorants and optical brightening agents (OBAs), and
in the more regional emulsion products industry, in Latin America.
In FY ending September 2016, Archroma reported consolidated
revenues of USD1.3 billion. SK Capital Partners, the owner of
Archroma, is a mid-sized US based private equity sponsor with a
strong focus on the chemical industry. Upon closing the LBO, the
ownership of Archroma is comprised of SK Capital Partners as
majority shareholder, Management and Clariant AG.


KYIV CITY: Moody's Hikes Long-Term Issuer Rating to Caa3
Moody's Public Sector Europe has upgraded the City of Kyiv's long-
term issuer rating to Caa3 from Ca. At the same time, it has
changed the rating's outlook to positive from stable.

This rating action follows Moody's decision to upgrade the Ukraine
government bond rating to Caa2 from Caa3 and to change the outlook
to positive from stable on August 25, 2017.


Moody's rating action on the City of Kyiv reflects its assessment
of the improvement in the operating environment for Ukrainian sub-
sovereigns, as captured in the rating action on the sovereign bond
rating. The sovereign rating upgrade indicates a reduction in the
systemic risk to which the Ukrainian local governments are exposed
given their close financial and operational linkages with the
central government. In addition, the institutional linkages
intensify the close ties between the two levels of government
through the sovereign's ability to change the institutional
framework under which Ukrainian local governments operate.

Further, Ukrainian local governments depend on revenues that are
linked to the sovereign's macroeconomic and fiscal performance. In
particular, Kyiv's budgetary structure limits its fiscal
independence from the sovereign, as Kyiv derives approximately 65%
of its operating revenue from shared taxes and an additional 25%
from state transfers.

Kyiv has improved its operating surpluses to 37% of operating
revenue in 2016 from 28% in 2015 and 15% in 2014, which was driven
by rapid tax revenue growth and supported by additional taxes
allocated to local governments after the changes in the
institutional framework, and high inflation.

The upgrade of Kyiv's issuer rating also reflects the city's
timely repayment of domestic bonds (series G -- of UAH1.915
billion) in 2016, thus resolving the risk caused by Kyiv's
previous decision to postpone this repayment for another year. The
entire amount was paid from the city's own cash reserves, leaving
the city with no outstanding local currency bonds, which
significantly eases financial pressure from the city's budget.

Kyiv completed a debt restructuring of $448.9 million from two
eurobonds totalling $550 million via an exchange to Ukraine
sovereign debt in December 2015. The city restructured its $300
million bonds due 2016 and 60% of $250 million bonds due 2015.
According to the terms of agreement, the debt restructuring with
Ukraine's Ministry of Finance envisaged the conversion of the
bonds into sovereign debt. Kyiv will make semi-annual payments to
the state budget related to this debt servicing and will repay the
principal by two instalments in 2019 and 2020. The remaining part
of Kyiv's $250 million eurobond ($101.15 million) was not
restructured as one of the bondholders refused the restructuring
terms. However, given the progress made so far in negotiations
with creditors, Moody's expects that the city will restructure its
foreign-currency debt by the end of 2017.

Despite a 25% haircut on the foreign currency debt during
restructuring and successful repayment of the local currency
bonds, Kyiv's debt burden remains relatively high, representing
56% of operating revenue, a decline from 78% in 2015 and 91% in
2014. However, the restructuring of the foreign currency debt has
significantly extended the maturity profile of the city's debt. As
a result, at year-end 2016, the short-term portion of the direct
debt (including defaulted bonds) has been reduced to 17% of direct
debt (from over 30% in 2015 and very high 52% in 2014).

Moody's notes that the growing financial surpluses have increased
Kyiv's cash reserves, averaging 20% of operating revenue in H1
2017 compared with 9% throughout 2016, which provides a
comfortable financial cushion against potential budgetary


The positive outlook on Kyiv's rating reflects the city's
continuity in pursuing positive financial results and debt
reduction in a challenging economic environment. According to the
budget projections, Kyiv will post solid, albeit declining,
operating margin in the range of 30% operating revenue in 2017.
Moody's expects operating margin to fall on the back of
accumulated spending pressures and ongoing minimum wage increases.
However, Moody's expects that the favourable medium-term growth
prospects will translate into rising receipts from shared taxes
and own-source revenues.


A further decrease in the city's debt burden associated with a
continuation of good budgetary results would lead to an upgrade of
Kyiv's rating. Any improvement in the local governments'
expenditure flexibility and ability to raise additional own source
revenues would be considered positively.

Although unlikely given the recent sovereign upgrade, a
deterioration of the sovereign credit strength would apply
downward pressure on Kyiv's ratings, given the close financial,
institutional and operational linkages between the two tiers of
government. Significant financial deterioration driven by systemic
or individual factors or an unexpected sharp increase in debt as
well as the emergence of liquidity risks would also exert downward
pressure on the ratings.

The sovereign action required the publication of this credit
rating action on a date that deviates from the previously
scheduled release date in the sovereign release calendar.

The specific economic indicators, as required by EU regulation,
are not available for this entity. The following national economic
indicators are relevant to the sovereign rating, which was used as
an input to this credit rating action.

Sovereign Issuer: Ukraine, Government of

GDP per capita (PPP basis, US$): 8,305 (2016 Actual) (also known
as Per Capita Income)

Real GDP growth (% change): 2.3% (2016 Actual) (also known as GDP

Inflation Rate (CPI, % change Dec/Dec): 12.4% (2016 Actual)

Gen. Gov. Financial Balance/GDP: -2.2% (2016 Actual) (also known
as Fiscal Balance)

Current Account Balance/GDP: -4.1% (2016 Actual) (also known as
External Balance)

External debt/GDP: 121.7% (2016 Actual)

Level of economic development: Very Low level of economic

Default history: At least one default event (on bonds and/or
loans) has been recorded since 1983.

On August 28, 2017, a rating committee was called to discuss the
rating of the Kyiv, City of. The main points raised during the
discussion were: The systemic risk in which the issuer operates
has materially decreased.

The principal methodology used in these ratings was Regional and
Local Governments published in June 2017.

The weighting of all rating factors is described in the
methodology used in this credit rating action, if applicable.

U N I T E D   K I N G D O M

BASLER UK: In Administration After Parent Fails to Find Buyer
Jill Geoghegan, writing for Drapers Online, reports that the UK
arm of mainstream womenswear brand Basler has appointed
administrators, after its German parent company failed to find a

Arron Kendall and Simon Thomas, partners at Moorfields Advisory,
were appointed joint administrators of the UK part of the firm
September 1, according to Drapers Online.

On August 22, Drapers reported that concern was mounting over the
fate of the UK business after the German arm, Basler Fashion
Group, went into liquidation.  Basler Fashion Group had been
looking for a buyer since May this year.

The report relays that Basler UK has three own-brand stores
located at Bond Street in London, Chichester and Epsom, a factory
outlet in York, 17 concessions and more than 100 wholesale
customers throughout the UK and Ireland.

The report notes Moorfields Advisory said it will continue to
trade the Basler UK operations as normal to fulfil wholesale
orders, while conducting stock liquidation through the retail

The report states Mr. Kendall said: "Like many premium clothing
brands, Basler has struggled to keep itself relevant to its core
customer base, which has been exacerbated by difficult trading
conditions and a reduction in discretionary spend."

Basler Fashion Group was founded in Berlin in 1936. Its
headquarters are now in Goldbach.  It employs more than 1,100
people worldwide, and has 1,900 points of sales in more than 60
countries.  It operates more than 40 shops and 80 shop-in-shops
worldwide, as well as 13 outlets.

COUNTY WASTE: Placed In Administration, 20 Jobs at Risk
Sarah Evans, writing for Startford Herald, reports that a waste
management and skip hire company in Southam has been placed in

Matthew Hardy and Andrew Turpin, of Poppleton and Appleby, have
been appointed Joint Administrators over the affairs of County
Waste Limited, formerly known as County Waste Recycling Limited,
according to Startford Herald.

The report discloses the company operated across the Midlands and
employed around 20 staff.

The last set of accounts showed the firm turned over almost GBP4
million, but it does not seem to have been operating since
February of this year, the report relays.

The report notes that Matthew Hardy, who was appointed after a
court hearing regarding the affairs of the company, said: "This is
a complicated case. It appears that the company effectively ceased
trading in February and there is limited access to its books and

"It was a company which operated across the wider Midlands area
and we are currently working through the information that we do
have to obtain a clearer picture of the financial position," the
report quoted Mr. Hardy as saying.

"We have heard from some former employees and some creditors but
we are keen to hear from anyone who has had dealings with the
company, particularly in the last 12 months," Mr. Hardy said, the
report notes.

"That will ensure that the full financial position can be
established and that we are fully aware of anyone who may be owed
money by the company," Mr. Hardy added.

DEBT FREE: Sold Out of Administration for GBP1.35 Million
Nick Jackson at reports that Chorley-based IVA
specialist Debt Free Direct -- a subsidiary of the under-
administration AIM-listed company Fairpoint Group -- has itself
now been sold out of administration for almost GBP1.35 million.

Sandy Kinninmonth -- -- Lindsey Cooper
-- -- and Chris Ratten -- -- from RSM Restructuring Advisory were
appointed joint administrators on Sept. 1,

The Adlington company is an Individual Voluntary Arrangement (IVA)
business with assets of nearly GBP37.5 million that delivers debt
solutions for individuals across the UK and employs 72 people, discloses.

HOCHSCHILD MINING: Fitch Affirms BB+ Issuer Default Ratings
Fitch Ratings has affirmed the Long-Term Foreign and Local
Currency Issuer Default Ratings (IDRs) of Hochschild Mining Plc
(Hochschild), and USD350 million 7.75% senior unsecured notes due
2021 issued by the company's 100%-owned subsidiary in Peru,
Compania Minera Ares S.A.C. (Cia Minera Ares) at 'BB+'. The Rating
Outlook is Stable.


Deleveraging Trend to Continue: Hochschild maintained its net debt
/ EBITDA at 0.6x as of June 30, 2017 compared to year end 2016, as
the company has benefited from increased production at its low
cost Inmaculada mine coupled with better than expected ore grades
at its Pallancata mine. Fitch projects Hochschild's net leverage
to be around 0.4x for 2017 and fall to around 0.1x by 2018, absent
a material change in the company's cost structure, significant
acquisitions, or higher than expected dividends.

Competitive Cost Position: Hochschild's all-in sustaining cost
(AISC) of production of silver equivalents increased to USD12/per
ounce for the first six months ended June 30, 2017 compared to
USD11.2/per ounce in 2016 as the elimination of the Patagonian
port rebate in Argentina, increased costs at Inmaculada and San
Jose mines, and lower output at the Arcata mine impacted its cost
position; however, costs remained within the company's guidance.
Hochild has the ability to cut its exploration costs in order to
reduce its AISC amid periods of a weaker commodity price
environment. Fitch projects Hochschild will report an AISC of
approximately USD12.4/per ounce for 2017, maintaining its strong
cost position.

Sustained Positive FCF Generation: Fitch expects Hochschild to
generate FCF of around USD72 million in 2017 and USD96 million in
2018 following FCF of USD161 million in 2016. The company will
continue to benefit from its low-cost Inmaculada mine which will
offset increased capex for brownfield explorations and increases
to its life of mines at each operation. Hochschild's strong cash
flow generation has resulted in the company reinstating dividend
payments, with USD14 million paid and additional USD7 million to
be paid during 2017.

Strong Liquidity Position: Hochschild reported cash and cash
equivalents of USD144 million as of June 30, 2017 compared to
USD140 million as of December 31, 2016 as solid cash flow
generation from its mines allowed the company to maintain its
liquidity position and repay USD18.5 million of short-term loans.
Hochschild has been aggressive with its debt reduction,
highlighted by USD250 million of debt repaid over the last 30
months. The company's remaining major debt is its USD295 million
of notes due 2021 which are callable in January 2018. Hochschild
will likely refinance its notes with a combination of cash and
bank debt in order to further improve its capital position and
post a net leverage neutral position by 2019.

Pablo Vein Close to Production: Hochschild has completed portions
of the infrastructure development necessary for access to the
Pablo vein the company discovered near its Pallancata mine, which
is expected to further bolster its production and extend the mines
life. Additional capex is being spent to build a ramp to access
the vein coupled with the need to secure a mining permit in order
to commence production by 4Q17. The Pablo vein is expected to have
an AISC estimated at around USD12 to USD13/per ounce of silver


Hochschild is adequately positioned relative to its peers for its
'BB+' rating. The company significantly increased its operating
cash flow generation ability after completion of its Inmaculada
project and finished its cycle of high investments, with both
factors allowing the company to significantly improve its capital
structure relative to peers. The company's scale, diversification
and mine life are slightly weaker than its peers. Although this is
somewhat compensated by its very low production cost for silver
and gold. Its growth strategy is primarily acquisitive in nature
and reliance on brownfield exploration given its small size
relative to larger peers.


-- Average silver price of USD18.00/oz 2017-2020
-- Average gold price of USD1,100/oz in 2017-2020
-- Attributable silver equivalent production of 37 million oz in
    2017, 40 million oz in 2018, 40 million oz in 2019, and 34
    million in 2020.


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

The company's small size and lack of diversification limit
Hochschild's upward rating mobility. Diversification into
additional mines or commodities while maintaining a conservative
capital structure could lead to a positive rating action.
Hochschild's ability to maintain a competitive cost structure
while increasing its production levels and its ability to operate
profitability in a low commodity price environment could also lead
to a positive rating action.

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

Hochschild's ratings could be downgraded or result in a Negative
Outlook following a structural shift in the company's cash cost
position, resulting in sustained low cash flow generation and
persistent negative free cash flow amid a period of lower
commodity prices. Financial performance consistently worse than
Fitch's base case, such as sustained total debt to EBITDA leverage
above 3.5x, could trigger a negative rating action. In addition,
Fitch would view sustained high levels of dividends or share
buyback programs unfavorably.


Hochschild reported cash and cash equivalents of USD144 million as
of June 30, 2017 compared to USD140 million as of December 31,
2016 as solid cash flow generation from its mines allowed the
company to maintain its liquidity position and repay USD18.5
million of short-term loans. Hochschild has been aggressive with
its debt reduction, highlighted by USD250 million of debt repaid
over the last 30 months. The company's remaining major debt is its
USD295 million of notes due 2021 which are callable in January
2018. Hochschild will likely refinance its notes with a
combination of cash and bank debt in order to further improve its
capital position and post a net leverage neutral position by 2019.


Fitch affirms the following ratings:

Hochschild Mining Plc

-- Long-Term Foreign Currency Issuer Default Ratings (IDR) at
-- Long-Term Local currency IDR at 'BB+'.

The Rating Outlook is Stable.

Compania Minera Ares S.A.C.

-- Senior unsecured debt rating at 'BB+'.

KIN WELLNESS: Opts to Appoint Administrators to Facilitate Sale
Kin Group Plc, on July 18, 2017, requested that trading on AIM in
its Ordinary Shares be suspended, pending clarification of its
financial position, following the decision by Belastock Capital
L.P. not to proceed with the three further tranches of the
Convertible Loan Note initially announced on May 15, 2017.

On August 23, 2017, the Company announced that, in order to
facilitate a sale of the Kin Wellness Limited business as a going
concern, the directors of Kin Wellness Limited had executed a
notice of intention to appoint Simon Harris and Ben Woodthorpe of
ReSolve Partners Limited as administrators to Kin Wellness

The Board can now confirm that Simon Harris and Ben Woodthorpe of
ReSolve Partners Limited have been appointed as administrators to
Kin Wellness Limited with effect from August 30, 2017.

As previously announced, the Board understands that with effect
from the appointment of administrators by Kin Wellness Limited,
Kin Group Plc has become a "Rule 15 Cash Shell" under Rule 15 of
the AIM Rules for Companies.  Within six months of becoming an AIM
Rule 15 cash shell, the Company must make an acquisition or
acquisitions which constitute(s) a reverse takeover under Rule 14
of the AIM Rules for Companies.  In the event that the Company
does not complete a reverse takeover under AIM Rule 14 within six
months, the Exchange will suspend trading in the Company's
pursuant to AIM Rule 40.

The Directors remain in discussions with potential investors to
raise new equity funds for Kin Group Plc by way of a placing.
Such an equity fundraising would require the approval of
shareholders in General Meeting.  As part of these proposals, the
Board expects to issue a proposal for a Company Voluntary
Arrangement with its creditors (within the meaning of Part 1 of
the Insolvency Act 1986) and has appointed Simon Harris and
Ben Woodthorpe -- -- of ReSolve
Partners Limited to act as Nominees to advise and assist with this

At this stage, the Board is continuing to clarify the Company's
financial position, and there is no guarantee that either a
disposal of the business of Kin Wellness Limited or any new equity
fundraising will be completed successfully, and so the suspension
of trading in its ordinary shares on AIM will remain in place
whilst the Directors continue their discussions

The Company will issue further announcements as appropriate.

Kin Group Plc (AIM: KIN) is the AIM-quoted digital wellness
provider for corporate organisations.

NEW LOOK: Fitch Lowers Long-Term Issuer Default Rating to CCC
Fitch Ratings has resolved and removed the Rating Watch Negative
(RWN) and downgraded New Look Retail Group Ltd's Long-Term Issuer
Default Rating to 'CCC' from 'B-'. The agency has also downgraded
New Look's Secured Issuer plc's 2022 senior secured notes to
'CCC'/'RR4' from 'B'/'RR3' and New Look Senior Issuer plc's 2023
senior notes to 'CC'/'RR6' from 'CCC'/'RR6'.

The downgrades reflect New Look's deteriorating operating
performance in both FY17 (ending March 25, 2017) and in Q1FY18.
The competitive threat from pure online retailers, falling UK
consumer confidence, some loss of fashion trendsetter status,
rising input prices following the fall in sterling and Brexit
uncertainty has placed the business model under pressure. Fitch
does not foresee a tangible improvement in profitability or
operating margins in FY18, despite measures to reduce price
promotions and efforts to reduce the group's costs. This combined
with rising leverage and declining liquidity due to negative cash-
flow generation, which is projected to continue in FY18, leads to
a credit profile consistent with a 'CCC' rating. Fitch
nevertheless believe that the group has sufficient cash and
committed debt resources to meet its commitments during FY18.


UK Retail More Competitive: There is intense competition in the UK
fast fashion sector, particularly from pure online players such as
ASOS, Shop Direct and Boohoo which benefit from their asset-light
operating structures. Retailers also now need to respond virtually
instantaneously to new fashion trends, and products need to be
available for sale in very short timescales. This puts pressure on
the responsiveness of New Look's supply chain, something that
management is currently working on to improve across all product
ranges. The appointment of a new chief creative officer with
extensive fast fashion experience should allow the group to
produce a more trend setting product range but likely not fully
reflected before FY19.

Negative Cash Flows Affect Liquidity: Free cash flow (FCF) fell by
over GBP40 million in FY17 and is now negative and not expected to
recover to previous levels in the near term. This has reduced
liquidity, although this remains reasonable. Fitch expects FCF
margin to be negative in FY18 by around -3.0% reflecting negative
FCF of around GBP43 million, which needs to be covered by an RCF
drawdown as the available cash and bank overdraft would not be
enough. This will nevertheless put pressure on the group's net
debt to EBITDA covenant of a maximum of 8.7x at end-March 2018, if
the GBP100 million RCF is drawn by more than 25%.

Weakening Leverage Metrics: FFO adjusted leverage has increased to
a high of 8.4x at FYE17, and in the absence of a significant
improvement in operating performance, Fitch expects a slight
increase in leverage to 8.7x by end-March 2018. Financial
flexibility has also weakened slightly with FFO fixed charge cover
falling to 1.2x at FYE17, and is not expected to significantly
recover in the next few years, thus making the capital structure
unsustainable in the absence of meaningful profit recovery or
equity injection.

Business Model Under Threat: Further to both a challenging FY17
and a poor Q1FY18 trading environment, Fitch has revised downwards
Fitch views on the business model to 'Intact' from 'Sustainable'
given the structural changes in the UK fast fashion sector. Fitch
expects margins to remain under pressure due to rising input
costs, and despite the anticipated reduction in promotions and
discount sales.

Falling UK Consumer Spending: According to Visa Consumer Spending
Index, UK consumer spending has fallen in H117 as a result of
Brexit uncertainty, increased inflation and stagnant wage growth.
Fitch does not expect a recovery in UK spending in H217,
particularly in clothing.

Profit Margins Erosion: Fitch is reducing Fitch forecasts for
EBITDA margin, assuming the competitive environment will endure in
2017 limiting price increases, although the anticipated reduction
in discount offers should assist New Look's operating margins
later in 2017. Gross margins will also be affected by sterling's
depreciation against the US dollar, which is impacting pricing and
competitiveness when New Look's legacy foreign currency hedges
roll off during 2017.

Good Multi-Channel Sales Platform: New Look retains a flexible
multi-channel sales platform, although Fitch projects group
revenue to fall by 2.3% in FY18. This will be driven by a like-
for-like (lfl) sales decline in the UK core retail business,
partially offset by a reasonably stable performance in the group's
e-commerce, international and franchise divisions. Fitch views the
multi-channel sales platform as supporting the recovery of the
business. However, this is only one of the elements required for
the business turnaround.

Strategic Focus on China: Fitch expects New Look's international
segment to break even after FY18, as higher penetration of the
Chinese retail market begins to contribute to profitability
alongside a positive contribution from the majority of its other
international stores. New Look's value fashion and Western styling
proposition remains resilient in China, supported by a growing
network of stores and third-party e-commerce retailers as well as
a favourable operating environment. However, this segment is yet
to be a significant profit contributor to the overall group.

Lower Recovery Expectations: Fitch has downgraded the recovery
rating for the senior secured notes to 'CCC'/'RR4'/44%, due to
lower profitability translating into a lower going-concern
valuation. The Recovery Rating for the senior notes has been
downgraded to 'CC'/'RR6'/0% in line with the IDR downgrade and
weaker recovery expectations upon default. Fitch has applied a
discount of 0% to LTM EBITDA at end-Q1FY18 and a distressed
multiple of 5.0x (previously 5.5x).


New Look is a fast-fashion multichannel retailer operating in the
value segment of the UK clothing and footwear market for women,
men and teenage girls. The group also generates around 20% of
revenue internationally. The e-commerce platform is a key
differentiating factor relative to other sector peers such as
Financiere IKKS S.A.S (CCC) and continues to develop
internationally, which partially helps to offset weaknesses in the
domestic UK retail market where it is heavily exposed. Key credit
metrics are now in the 'CCC'-rated category.


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

- group revenue to decline by 2.3% in FY18 driven by a
   challenging operating environment and reductions in price
   promotions in the UK with lfl sales declines, partially offset
   by growth in other channels such as E-Commerce, International
   and Franchise;

- margin pressure leading to moderate group EBITDA margin of
   9.4% in FY18, which should rise to 10.3% in FY19 as full
   pricing begins to take effect;

- capex to remain stable overall in FY18, while expansionary
   spending for e-commerce and store openings will increase;

- capex to sales will be of the order of 4.9% of sales in FY18
   and 2.5% thereafter;

- no dividend payments or extraordinary non-recurring cash


- The recovery analysis assumes that New Look would be
   considered a going concern in bankruptcy and that the company
   would be reorganised rather than liquidated. Fitch has assumed
   a 10% administrative claim in the recovery analysis.

- New Look's recovery analysis assumes 0% discount to the LTM
   EBITDA at end-Q1FY18 resulting in post-reorganisation EBITDA
   of GBP133.4 million. At this level of EBITDA and after taking
   corrective measures into account, Fitch would expects New Look
   to generate a broadly neutral cash flow with no deleveraging

- It also assumes a distressed multiple EV of 5.0x which is in
   line with clothing retail peers such as Financiere IKKS S.A.S.

- Fitch assumes a fully drawn RCF and bank overdraft in its
   recovery analysis since these credit facilities are usually
   tapped when companies are under distress. Therefore Fitch
   assumes New Look's GBP100 million RCF will be fully drawn and
   the bank overdraft will reach the limit of GBP15 million. In
   addition, Fitch has also added the utilised amount of
   operating facilities of GBP27.8 million onto the fully drawn
   RCF and bank overdraft. The facilities rank in priority to the
   notes in the debt waterfall.

- These assumptions result in a downgrade of New Look's Secured
   Issuer plc's 2022 senior secured notes to 'CCC'/'RR4' with no
   notching above New Look's IDR as recoveries fall in the 31%-
   50% range. Following the payment waterfall, New Look Senior
   Issuer plc's 2023 senior notes' recovery rating is downgraded
   to 'CC'/'RR6' indicating recoveries in the 0%-10% range.


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

- Improvement in the business model through increasing
   diversification and scale, resilient pricing structure, and a
   proven track record of strategy implementation over the medium
   term, including successful expansion in China, leading to
   EBITDA margin at or above 12.5% (10.4% at FY17 (ending at
   March 2017))
- FFO adjusted leverage consistently below 7.0x (FY17: 8.4x) due
   to operational improvements and/or a capital injection
- FFO fixed charge cover trending towards 1.5x (FY17: 1.2x)

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

- Negative FCF generation along with breach in maintenance
   springing covenant on RCF resulting in liquidity erosion
- Failure to overcome profit margin pressure, FX impact, loss of
   market share and weaker consumer confidence in the UK leading
   to EBITDA margin below 8%
- FFO adjusted leverage consistently above 9.0x


Reasonable Although Declining Liquidity: At the end of July 2017
there was GBP65 million of cash together with access to a GBP100
million undrawn RCF and a bilateral GBP15 million overdraft. Fitch
adjusts cash as restricted for GBP1.7 million held as guarantees
over leases, GBP12.1 million held for employee share options and
GBP50 million for working-capital seasonality requirements. Fitch
expects liquidity to come under some pressure from FY18, as Fitch
forecasts the cash outflow to reach GBP43 million by FY18 and this
would have to be covered by drawdowns on its overdraft and RCF.
This could constrain future drawdowns under the RCF facility as
there is a springing covenant under the RCF when more than 25%
drawn, requiring leverage (net debt/EBITDA) to be below 8.7x
(against Fitch estimates of 9.4x in FY18).


New Look Retail Group Limited
-- Long-term IDR downgraded to 'CCC' from 'B-'

New Look Secured Issuer plc
-- Senior Secured Notes downgraded to 'CCC/RR4' from 'B/RR3'

New Look Senior Issuer plc
-- Senior Notes downgraded to 'CC/RR6' from 'CCC/RR6'


* EMEA Auto Loan and Lease ABS Delinquency Slightly Improves
The 60+ Days Delinquencies of the auto loan and auto lease asset-
backed securities (ABS) market in Europe, the Middle East and
Africa slightly improved during the three-month period ended May
2017, according to the latest indices published by Moody's
Investors Service.

The 60+ day delinquency for the overall index slightly reduced to
0.2 % in the three months ended May 2017 from 0.3% in February
2017. For the same period, cumulative defaults improved to 0.7%
from 0.8% in February 2017.

The prepayment rate for the overall index increased to 13.2% in
May 2017 from 12.6% in February 2017.

As of May 2017, the pool balance of all outstanding rated auto ABS
transactions increased to EUR49.3 billion with 85 outstanding
transactions, from EUR47.6 billion in February 2017, constituting
an increase of 3.7%.


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

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

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


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

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

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

                 * * * End of Transmission * * *