TCREUR_Public/170906.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Wednesday, September 6, 2017, Vol. 18, No. 177



NYRSTAR NV: S&P Alters Outlook to Negative & Affirms B- CCR


CITY OF SOFIA: S&P Affirms 'BB+' Long-Term Issuer Rating


AIR BERLIN: Zeitfracht Expresses Interest to Join Bidding Race
AIR BERLIN: Germania Drops Legal Challenge Against Bridge Loan
EUROGRAPHICS AG: Court Opens Insolvency Proceedings


AEOLOS SA: Fitch Hikes Rating on Floating Rate Notes to B-


ATAC: Rome's Mayor Seeks Approval of Debt Restructuring
FIAT CHRYSLER: S&P Alters Outlook to Positive on Strong Leverage


ENERGA SA: Fitch Rates New EUR250-Mil. Hybrid Bonds BB+
PREFABET-BIALE BLOTA: Court Opens Arrangement Proceedings




NIZHNIY NOVGOROD: Fitch Affirms BB Long-Term IDR, Outlook Stable
RUSSIAN INTERNATIONAL: Put on Provisional Administration
SOVCOMBANK PJSC: Fitch Affirms BB- Long-Term IDR, Outlook Stable


KD GROUP: Fitch Affirms 'BB' IDR, Outlook Stable


MASARIA INVESTMENTS: S&P Assigns Prelim 'B' Corp Credit Rating
REYAL URBIS: Madrid Mercantile Court Orders Liquidation

U N I T E D   K I N G D O M

ANGLO AMERICAN: Moody's Withdraws Ba1 Corporate Family Rating
CELF LOAN III: Moody's Hikes Rating on Class E Notes to Ba2
EMBLEM FINANCE 2: S&P Affirms BB+ Rating on Series 2 Notes
ICELAND VLNCO: Moody's Affirms B2 CFR, Outlook Stable
INDIVIOR PLC: Patent Ruling is Credit Negative, Moody's Says

REDTOP ACQUISITIONS: S&P Places 'B' CCR on CreditWatch Negative
VIRIDIAN GROUP: Fitch Raises Rating on Sr. Senior Notes to BB-



NYRSTAR NV: S&P Alters Outlook to Negative & Affirms B- CCR
S&P Global Ratings revised the outlook on Belgium-based zinc
producer Nyrstar N.V. to negative from stable. At the same time,
S&P affirmed its 'B-' long-term corporate credit rating on the

S&P said, "We also affirmed our 'B-' issue-level ratings on the
EUR400 million senior unsecured notes due 2024 and the existing
EUR350 million senior unsecured notes due 2019. In addition, we
affirmed the recovery rating at '4', indicating our expectation of
average recovery prospects (30%-50%; rounded estimate 35%).

"Our outlook revision reflects our opinion that Nyrstar's leverage
will be higher than we had previously forecast at the end of this
year. This higher leverage will stem from weaker-than-expected
results for the first two quarters of the year, and additional
capital expenditure (capex) that includes EUR70 million restart
capex for Myra Falls, split evenly between 2017 and 2018. It also
reflects that the deleveraging we expect in our 2018 base case
depends on movements in several key variables such as treatment
charges, exchange rates (particularlyEUR/USD), and zinc prices.
Performance in Metals Processing, which is responsible for 95% of
EBITDA, has been affected by lower-than-expected treatment
charges, pressured by intense competitive dynamics between zinc
concentrate processors. The reduced supply of concentrate, on the
one hand, and abundant processing capacities on the other has
created this pressure. While zinc prices have been high this year,
they didn't offset the negative impact of weak metal processing
conditions given the small size of upstream activities.

"Positively, however, we take into account the successful ramp-up
of the company's landmark Port Pirie redevelopment project, as
well as the recent turnaround in the performance of the North
American mining assets. We understand that the Port Pirie project
is well on track for hot commissioning to commence by end-
September and the first feed of the new top submerged lance
furnace will happen this October. There are presently no further
cost overruns, compared to the revised guidance provided in
February. We also understand the streamlining of the mining
portfolio is on track, with the Latin American operations sold and
the focus now on optimizing the North American mines for free cash
flow generation, including the ramp-up of Middle Tennessee and
restart of Myra Falls. The mining division generated EUR15 million
EBITDA in the first six months, compared to EUR1 million in the
same period of last year and EUR7 million in the second half of
last year, supported by higher zinc prices, lower treatment
charges, and operational improvements. Zinc in concentrate
production was up 6% year-on-year to 53 kilotons (kt) in first-
half 2017.

"Under our base case, we therefore project Nyrstar's S&P Global
Ratings-adjusted EBITDA to be EUR250 million-EUR270 million in
2017, below our previous forecast of EUR300 million-EUR350
million. The downward revision of our projected EBITDA reflects
lower realized treatment charges, compared to the same period last
year, and the lack this year of a price escalation mechanism, as
well as unfavorable foreign exchange movements. We expect EBITDA
to recover to EUR400 million-EUR450 million in 2018, supported by
contributions from Port Pirie and the Mid-Tennessee mine ramp-up,
as well as our revised price assumption for zinc in 2018 of
$2,700/ton versus $2,400/ton previously.

"Under our new base case, we also forecast cash flows from
operations (before changes in working capital) of EUR100 million-
EUR130 million in 2017. Due to sizable capex, however, we expect
the company to generate negative FOCF of EUR220 million-EUR250
million. While we expect only limited working capital outflow in
2017 under our base case, the volatile nature of zinc prices may
result in material working capital outflows (for example in first-
quarter 2017, the working capital outflow was about EUR50 million
on the back of zinc prices reaching about $2,700/ton). For 2018,
while we were previously expecting the company to generate up to
EUR100 million FOCF, we now anticipate it will be EUR0 million-
EUR50 million due to higher capex and lower earnings.

"While we forecast Nyrstar's adjusted debt to EBITDA to be above
5x at end-2017, our base-case assumption is for deleveraging to be
below 5x at end-2018. That said, a deterioration in macroeconomic
conditions, zinc prices, and treatment charges compared to our
current expectation would put further pressure on credit metrics.
We note the company's commitment to a mid-term deleveraging target
of 2.0x-2.5x debt to EBITDA."

The following assumptions underpin S&P's base-case estimations:

-- Treatment charges of $155-$160 per dry metric ton (dmt) in
    2017 compared to $182/dmt in 2016, increasing to $160-
    $170/dmt in 2018.

-- S&P Global Ratings' zinc prices of $2,800/ton for the rest of
    2017; $2,700/ton in 2018; and $2,600/ton for 2019. The first
    half average zinc price was $2,690/ton.

-- About 1 million metric tons of zinc production in the Metals
    Processing division, in line with 2016 and compared to
    company guidance of 1.0 million-1.1 million kt.

-- EUR/USD average exchange rate of 1.09 in 2017 and 1.14 in
    2018, compared to 1.03 and 1.08 previously versus 1.19
    current spot.

-- EBITDA contribution of EUR30 million from Port Pirie for

-- The company expects the contribution to increase to EUR130
    million from 2020 onward, post ramp-up.

-- Contribution of about EUR50 million from the mining business
    in 2017 and EUR100 million in 2018.

-- Capex of about EUR320 million-EUR360 million in 2017,
    tapering to about EUR200 million in 2018.

-- Capex for 2017 includes the completion of the Port Pirie lead
    smelter project, which is on track for hot commissioning in
    September and above-average maintenance capex.

-- Under S&P's price assumption, it expects limited working
    capital inflow. That said, if prices rebounded, the company
    would see further working capital funding needs and therefore
    higher debt levels.

-- No dividends.

As of June 30, 2017, the company had reported gross debt of EUR1.2
billion including: EUR91 million convertible bonds outstanding due
September 2018; EUR115 million convertible bonds outstanding due
July 2022; EUR350 million notes due September 2019; EUR400 million
notes due March 2024; and EUR146 million drawn under the
structured commodity trade finance (SCTF) working capital
facility. S&P also includes in its measure of gross debt EUR118
million zinc prepays, EUR203 million silver prepays, and EUR139
million perpetual securities.

S&P said, "Our assessment of Nyrstar's business risk profile as
weak predominantly reflects the nature of its metal processing
activities (95% of 2016 EBITDA). The zinc-refining industry is
fragmented and volatile, and is currently subject to overcapacity
leading to reduced refining margins. Despite being one of the
largest zinc producers globally, Nyrstar has limited ability to
differentiate itself from peers given the commodity nature of the
product. Our assessment is constrained by the company's relatively
small scale in the context of the global metals and mining
industry, as well as by its very low and volatile profitability.
Positively, however, it has high operating diversity as there is
no revenue concentration relating to any one asset. We believe
that the company's competitive position will strengthen somewhat
after the redevelopment of Port Pirie. Once reaching full capacity
in 2018, the facility will allow Nyrstar to extract value from
high-margin metal-bearing feed materials, including lead and

"The negative outlook reflects our expectation that Nyrstar's
debt-to-EBITDA this year will be above the 5x that we consider
commensurate with a 'B-' rating. It also reflects that
deleveraging in 2018 will depend on the industry and macroeconomic
environments, and notably the level of treatment charges and
theEUR/USD exchange rate. The outlook also takes into account the
weakening liquidity position due to upcoming prepay maturities and
increased capex in the coming 12 months.

"We could lower the rating if we see that the company is not able
to deleverage and bring its debt-to-EBITDA ratio to below 5x in
2018. This could happen if treatment charges remain at current low
levels and/or theEUR/USD exchange rate remains above our
assumptions of 1.14. Operational setbacks in the ramp-up of Port
Pirie or in the company's mining assets could also put pressure on
leverage and consequently the rating.

"We could also lower the rating if we see the liquidity position
weaken, for instance if the company cannot renew its Trafigura
line or renew its short-term prepayment facilities.

"We could revise the outlook to stable if Nyrstar delivers on its
operational improvements, including the completion of the ramp-up
of the new Port Pirie project in Australia over the coming 12
months. Together with more favorable industry conditions, this
should lead to a material recovery in EBITDA in line with our
current base case."


CITY OF SOFIA: S&P Affirms 'BB+' Long-Term Issuer Rating
On Sept. 1, 2017, S&P Global Ratings affirmed its 'BB+' long-term
issuer credit rating on the Bulgarian City of Sofia. The outlook
remains positive.


The positive outlook continues to reflect the outlook on Bulgaria.

Upside Scenario

S&P will upgrade Sofia in the next 12 months if we take a similar
action on Bulgaria.

Downside Scenario

S&P said, "We could revise the outlook to stable if we took a
similar action on Bulgaria. However, we view a downside scenario
based on Sofia's stand-alone credit profile (SACP) as unlikely,
since our SACP assessment of 'bbb' is two notches higher than the
long-term rating on the city."


S&P said, "Our rating on Sofia reflects our expectation that, over
2018-2019, the city will continue posting robust operating
balances averaging 9% and its liquidity will remain exceptional,
even with continued large capital expenditures (capex). The high
capital expenses will result in deficits, which we expect will be
contained and funded by new debt over our forecast period. The
main constraints to the rating continue to be the evolving and
unbalanced institutional framework under which Sofia operates and
the city's financial management, as shown by limited long-term
budgetary planning.

"Although we assess Sofia's SACP at 'bbb', we generally cap the
long-term rating on local and regional governments (LRG) at the
long-term rating on the respective sovereign. We believe the
institutional and financial framework in Bulgaria limits LRGs'
ability to meet our conditions to be rated above the sovereign. In
particular, we consider the LRGs' autonomy to be limited by their
still-high dependence on central government grants, which subject
their budgets to volatility stemming from intergovernmental
relations, as well as by the still relatively centralized system,
with low predictability of the outcome of reforms."

Institutional framework and financial management constrain Sofia's
creditworthiness, but its economy remains stronger than the
national average. The Bulgarian political environment continues to
limit the predictability of Sofia's finances, due to the important
role the central government plays in the intergovernmental system.
Given the ongoing decentralization process, S&P cannot rule out
the possibility of unexpected changes in the distribution of
revenues and government-mandated spending. Therefore, the
institutional framework continues to restrict our assessment of
the creditworthiness of all Bulgarian municipalities, including

Another constraint is management's expertise. S&P said, "We view
the city's long-term planning and budgeting as limited and its
control over municipal companies as weak. Yet we recognize that
Sofia's management maintains a conservative approach by taking on
debt only for key infrastructure projects and by keeping high
levels of cash. Adequate overall budget execution is also
reflected in the city's financials."

S&P said, "Furthermore, we view Sofia's economic profile as
constrained by Bulgaria's particularly low GDP per capita
(US$7,300 in 2016) compared with that of international peers.
Although we see a structural improvement in the country's economic
fundamentals as unlikely in the short-to-medium term, we view
wealth levels in Sofia as higher than the national average, which
reflects the city's well-diversified economy. Economic activity is
concentrated in the services sector (85% of Sofia'sGDP), and the
city has a clear strategy based on promoting itself as an
investment destination and a digital capital."

A solid liquidity position and strong operating performance will
help limit new debt, despite an ambitious capital program. S&P
said, "We understand that state transfers to the city for funding
state-delegated tasks, principally to pay for maintenance and
wages, are calculated on a per-capita basis. Therefore, we have
now revised our approach in examining all Bulgarian entities and
include both local and state-delegated revenues and expenditures,
roughly doubling Sofia's budget. Because operating revenue and
expenditure flows were similar, this change had no major effect on
our assessment, but some of our ratios have changed.

"More specifically, we foresee continued solid operating results
over 2017-2019, with surpluses now averaging 8.8% of operating
revenues, backed by ongoing measures to improve collections,
alongside better economic conditions and adequate control over
expenses. Nonetheless, the city has a large capital program, which
we expect will keep related expenses high and drive the balance
after capital accounts into negative territory. The program
includes, for example, the third phase of the municipal metro
extension, extensive work on the water and sewage network and road
infrastructure, and renovation of educational institutions.

"While a share of these projects is planned to be mostly funded by
EU or national funds, some will be co-financed by the city, which
for Sofia could result in volatile overall performance. We expect
that, as it has done over the past few years, Sofia will continue
to finance its deficits with new debt issuances, with the
debtholders most likely beingEURopean entities. We forecast
nominal direct debt will rise to about Bulgarian lev (BGN) 728
million (about EUR370 million) in 2019 from BGN643 million in
2016, although it will still account for 68% of operating revenues
as these increase further.

"Under our base case, Sofia's capex would average about 15% of
total expenditures in 2017-2019. Sofia enjoys high flexibility in
adjusting its local revenues within certain brackets set by the
central government. Following our change in analytical approach,
these revenue sources now amount to about 60% of operating
revenues, which we consider high. Nevertheless, we continue to see
the city's willingness to use this flexibility as limited.

"We expect the city's liquidity coverage ratio will remain sound
over the next 12 months. Adjusted for the expected deficit, free
cash reserves and liquid assets will continue to cover the debt
falling due over the next 12 months by almost 3x. Sofia also
generates strong internal cash flow, as reflected in high
operating surpluses that cover more than 200% of annual debt
service. However, as for other Bulgarian municipalities, we view
Sofia's access to external liquidity as limited, due to weaknesses
in the domestic banking system.

"We continue to assess Sofia's contingent liabilities as higher
than its peers'. Sofia has ownership stakes in multiple companies,
but the transport companies and the heating company, Toplofikacia-
Sofia, are the most important ones, accounting for about 80% of
the municipal companies' liabilities. Another contingent liability
is Sofia's ownership of Municipal Bank A.D., which may incur
additional costs under a stress scenario. Overall, we believe
that, if these risks materialize, the associated liabilities for
the city would be equivalent to
15%-30% of the city's consolidated revenues."

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable (see 'Related Criteria And Research'). At
the onset of the committee, the chair confirmed that the
information provided to the Rating Committee by the primary
analyst had been distributed in a timely manner and was sufficient
for Committee members to make an informed decision.

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.

The committee agreed that budgetary flexibility had deteriorated
and that the debt burden had improved. All other key rating
factors were unchanged. Key rating factors are reflected in the
Ratings Score Snapshot above.

The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision.
The views and the decision of the rating committee are summarized
in the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating action
(see 'Related Criteria and Research').


                                To                     From
  Sofia (City of)
   Issuer Credit Rating
    Foreign and Local Currency  BB+/Positive/--   BB+/Positive/--


AIR BERLIN: Zeitfracht Expresses Interest to Join Bidding Race
Maria Sheahan at Reuters reports that German family-owned
logistics company Zeitfracht said on Sept. 5 it had expressed its
interested in bidding for insolvent airline Air Berlin, citing
opportunities for air freight business.

"Ideally, we would like to keep Air Berlin intact in its
entirety," Reuters quotes the company as saying in a statement on
Sept. 5, adding it expected to be given access to Air Berlin's
books swiftly so it could submit a formal offer by the Sept. 15

                      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: Germania Drops Legal Challenge Against Bridge Loan
Reuters reports that German airline Germania said it has dropped
its legal challenge against the government bridge loan for Air

As reported by the Troubled Company Reporter-Europe on Sept. 5,
2017, The Financial Times related that Brussels 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 assets.

                       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.

EUROGRAPHICS AG: Court Opens Insolvency Proceedings
Reuters reports that a court opens insolvency proceedings in self-
administration for Eurographics AG.

The business operations of the companies will continue to the full
extent, Reuters notes.

Eurographics AG is based in Germany.


AEOLOS SA: Fitch Hikes Rating on Floating Rate Notes to B-
Fitch Ratings has placed 13 Greek structured finance tranches on
Rating Watch Positive (RWP) and upgraded Aeolos S.A.'s floating
rate notes.


Sovereign Upgrade
The rating actions follow the upgrade of Greece's Long-Term Issuer
Default Rating (IDR) to 'B-'/Positive from 'CCC' and the revision
of its Country Ceiling to 'B' from 'B-' (see "Fitch Upgrades
Greece to 'B-' from 'CCC'; Outlook Positive" dated 18 August 2017
at Fitch may upgrade the tranches placed on
RWP after a detailed analysis of the current portfolio of each

Aeolos S.A. Credit Linked to Sovereign Rating
Aeolos S.A. is a Greek ABS transaction linked to the sovereign. As
a result, its upgrade to 'B-'/Positive reflects the August 2017
action on the Greek sovereign. The transaction securitises the
receivables due from route charges levied on airlines for their
use of the Greek airspace. The proceeds of the notes issue were
used to purchase the receivables from the Hellenic Republic, which
granted an unconditional and irrevocable undertaking to provide
any shortfall amounts due by the issuer on the notes and expenses.


Further changes to the Greek sovereign IDR, Country Ceiling or
Rating Cap may result in corresponding changes on tranches rated
at the cap or credit linked to the Greek sovereign rating.

A change in legislation that entails higher repossession activity
would cause the agency to revise its assumptions and could also
impact the ratings.

The rating actions are:
Estia Mortgage Finance II Plc
Class A (XS0311458052): 'B-sf'; placed on RWP

Estia Mortgage Finance Plc
Class A (XS0220978737): 'B-sf'; placed on RWP
Class B (XS0220978901): 'B-sf'; placed on RWP

Grifonas Finance No. 1 Plc
Class A (XS0262719320): 'B-sf'; placed on RWP
Class B (XS0262719759): 'B-sf'; placed on RWP
Class C (XS0262720252): 'B-sf'; placed on RWP

Kion Mortgage Finance Plc
Class A (XS0275896933): 'B-sf'; placed on RWP
Class B (XS0275897311): 'B-sf'; placed on RWP
Class C (XS0275897741): 'B-sf'; placed on RWP

Sinepia DAC
Class A1 (XS1460667394): 'B-sf'; placed on RWP
Class A2 (XS1460667550): 'B-sf'; placed on RWP
Class A3 (XS1460667808): 'B-sf'; placed on RWP
Class A4 (XS1460668012): 'B-sf'; placed on RWP

Aeolos S.A.
Floating rate notes (XS0140322743): upgraded to 'B-'
from 'CCC'/RE100%; Outlook Positive


ATAC: Rome's Mayor Seeks Approval of Debt Restructuring
Gavin Jones at Reuters reports that Rome's mayor on Sept. 1
launched an attempt to save Atac, the city's ailing public
transport company, from bankruptcy, asking creditors to support a
restructuring of its EUR1.3 billion (US$1.54 billion) of debt.

Virginia Raggi, a prominent face of Italy's anti-establishment 5-
Star Movement, said she would ask magistrates to approve the plan
for a "total renewal" of the company to keep it operating as a
public body, Reuters relates.

Atac's workforce, of around 12,000 people, has been criticized as
bloated and its fleet of buses, trams and metros as old and badly
maintained. Calls have grown for it to be privatized, Reuters

According to Reuters, Ms. Raggi, who was elected in June last
year, rejects this solution and on Sept. 1 the company's board
approved the restructuring plan, which will require the backing of
her city government and its suppliers.

ATAC's former chief quit in July after just three months in the
job, saying he was unable to salvage the firm and feared possible
legal action tied to any eventual collapse, Reuters recounts.

FIAT CHRYSLER: S&P Alters Outlook to Positive on Strong Leverage
S&P expects global automaker Fiat Chrysler Automobiles (FCA) will
maintain strong operating margins, free cash flow, and leverage
metrics that may support a higher rating within the next year.
This is despite risks from a U.S. auto market slowdown and the
possibility of fines from the ongoing civil lawsuit filed by the
U.S. Department of Justice, related to certain diesel engine

S&P Global Ratings revised its outlook on The Netherlands-based
global automaker Fiat Chrysler Automobiles N.V. (FCA)and FCA US
LLC (FCA US, a U.S. subsidiary formerly known as Chrysler Group
LLC) to positive from stable.

S&P said, "At the same time, we affirmed our 'BB' long-term
corporate credit ratings on FCA and FCA US and our 'B' short-term
corporate credit rating on FCA.

"We also affirmed the 'BB' issue rating on FCA's senior unsecured
notes and left the '3' recovery on these notes unchanged. We
affirmed our 'BBB-' issue rating on FCA US' term loan B. The '1'
recovery rating on the loan remains unchanged.

"The outlook revision reflects the possibility that we could raise
the corporate credit rating on FCA and FCA US by one notch to
'BB+' within the next 12 months. FCA is making good progress in
increasing its operating profitability, with all of its segments
contributing positively. For the 12 months ended June 30, 2017,
the company posted an adjusted EBITDA margin of around 8.6%, up
from 6.2% the year before. This has led to solid leverage metrics
for the current 'BB' rating, namely funds from operations (FFO) to
debt at 52%, up from 29% the previous year, and debt to EBITDA at
1.4x, versus 2.2x a year earlier.

"We now see FCA's EBITDA margin more firmly in the 6%-10% range,
matching the sector average. This does not, however, affect our
assessment of FCA's business risk profile, which we continue to
regard as aligned with those of peers Renault and Volvo Car
inEURope, the Middle East, and Africa (EMEA). The overreliance of
the company's earnings on the North American market remains a
constraint to improving the business risk profile.

"In the North American Free Trade Agreement (NAFTA) area, we
expect that the company will continue to benefit from its
portfolio shift to SUVs and pick-up trucks through the Jeep and
Ram brands. The NAFTA area is FCA's biggest segment in volume
terms (55% of total shipments in 2016) and contributed about 85%
to total EBIT (as adjusted by the company) in 2016. Although we
expect that U.S. car sales will decrease by about 2% in 2017 and
remain flat in 2018, consumers will likely continue to shift away
from small cars and favor larger vehicles, helped by low gas
prices. Light trucks accounted for roughly 63% of total U.S.
light-vehicle sales in the first quarter of 2017.

"In EMEA, FCA's product mix is geared more toward small cars.
Although the market remains highly competitive through aggressive
pricing, we assume that FCA will continue to strengthen its
operating margins from a low base, supported by volume growth, a
favorable product mix and better fixed-cost absorption due to
higher capacity utilization, offsetting marketing and product
launch costs."

Maserati -- the company's luxury segment mainly present in North
America, China, and Europe -- will also likely further expand its
contribution to total operating profits, thanks to the continued
success of its Levante model launch and updates of existing

S&P expects that FCA's cost reduction initiatives should protect
from material losses in Latin America over the next two years,
after an EUR87 million loss in 2015 and breakeven in 2016, owing
to soft demand in the Brazilian market in the past couple of

FCA's financial risk profile remains supported by the company's
conservative financial policy, with stated objective to reduce its
industrial debt using its very large cash balances, which amounted
to EUR17.6 billion at year-end 2016. S&P's adjusted debt figure
for the company amounted to around EUR13 billion, including EUR5.3
billion for pensions, EUR1.4 billion for factoring, EUR1 billion
for operating leases, and netting cash balances of EUR16.4 billion
and captive finance debt of EUR2.3 billion. At year-end 2016,
FCA's adjusted free operating cash flow (FOCF) to debt amounted to

Headquartered in London, FCA operates in the NAFTA area, and in
EMEA, Latin America, and the Asia-Pacific regions. With 4.7
million cars sold in 2016, FCA ranks eighth worldwide behind
automakers such as Volkswagen, GM, and Ford, but ahead of Renault
and Volvo Car. It reported net revenues of about EUR111 billion in

S&P said, "The positive outlook reflects the one-in-three
possibility that we could upgrade FCA within the next 12 months.
The outlook also incorporates our view of the company's progress
in turning around its loss-making segments and rebalancing its
product portfolio toward larger vehicles that are more profitable,
and its focus on free cash flow generation. Despite softening
market conditions in the NAFTA area -- FCA's biggest segment -- we
expect that the company will maintain its ratio of FFO to debt
above 45%, with FOCF to debt to reach 15% by the end of 2018.

"We could raise our ratings on FCA if it demonstrated its ability
to increase cash flow generation and sustain its FOCF-to-debt
ratio at 15% at least, while managing working capital swings,
pricing incentives, capex needs to support product launches, and
tougher regulatory standards, and also avoiding any material legal
fines. We would also seek to observe that the company was
maintaining its FFO to debt above 45% to consider a higher rating.

"We could revise our outlook to stable if FCA had to pay material
fines in relation to the DoJ lawsuit or experienced a more rapid
deterioration than anticipated of the U.S. car market that
weakened its leverage ratios, such that FFO to debt fell below 35%
and FOCF to debt remained below 10% on a sustained basis."


ENERGA SA: Fitch Rates New EUR250-Mil. Hybrid Bonds BB+
Fitch Ratings has assigned Energa S.A.'s proposed EUR250 million
(PLN1.1 billion) hybrid bonds an expected rating of 'BB+(EXP)'.
The proposed securities qualify for 50% equity credit. The final
rating is contingent on the receipt of final documents conforming
materially to the preliminary documentation reviewed.

The hybrid bonds are to be subscribed by the European Investment
Bank (EIB). The proceeds will be used to finance capex in
distribution. The bonds' rating and assignment of equity credit
are based on Fitch's hybrids methodology, dated 27 April 2017
('Non-Financial Corporates Hybrids Treatment and Notching
Criteria' available at').



Ratings Reflect Deep Subordination: The proposed notes are rated
two notches below Energa's Long-Term Issuer Default Rating (IDR;
BBB/Stable) given their deep subordination and consequently, lower
recovery prospects in a liquidation or bankruptcy scenario
relative to the senior obligations. The notes are subordinated to
all senior debt.

Net Leverage to Rise: Fitch forecasts Energa's funds from
operations (FFO) adjusted net leverage to increase to about 3.5x
in 2018-2020 (without considering the proposed hybrids with 50%
equity credit) due to large capex. This is the maximum leverage
commensurate with the 'BBB' rating and leaves the company with no
rating headroom. The EUR250 million hybrid bonds with 50% equity
credit marginally improve Energa's FFO adjusted net leverage by
about 0.3x.

Support to Capital Structure: If the group's financial profile has
improved by the first call date of the hybrids (2023 for tranche
A) management may decide to refinance the hybrids with senior
unsecured debt. If the group's leverage is close to the net
debt/EBITDA covenant of 3.5x, which is included in some long-term
funding agreements, management is expected to replace the hybrid
with a similar instrument. Both scenarios are compatible with
Fitch's interpretation of permanence. The important aspect is that
the hybrid capital will support the capital structure in a stress

Equity Treatment Given Equity-Like Features: The proposed
securities qualify for 50% equity credit as they meet Fitch's
criteria with regard to deep subordination, remaining effective
maturity of at least five years, full discretion to defer coupons
for at least five years and limited events of default. These are
key equity-like characteristics, affording Energa greater
financial flexibility. Equity credit is limited to 50% given the
hybrid's cumulative interest coupon, a feature considered more
debt-like in nature.

Effective Maturity Dates: The proposed notes are due 16 years from
the issue date (tranche A for EUR125 million) and 20 years from
the issue date (tranche B for EUR125 million). The coupon step-up
of 75bps from the first call date in 2023 (tranche A) and in 2027
(tranche B) is within Fitch's aggregate threshold rate of 100bps.
However, the second coupon step-up of 50bps from 2028 (tranche A)
and from 2032 (tranche B) leads to aggregated step-up of 125bps,
which is above Fitch's threshold. As a result, the effective
maturity date is 2028 (tranche A) and 2032 (tranche B) according
to Fitch's hybrid criteria. The equity credit of 50% would change
to 0% five years before the effective maturity date.

This means that the hybrids are eligible for 50% equity credit for
six years in tranche A and 10 years in tranche B, which is a
comparatively short period. The issuer has the option to redeem
the notes on the first reset date (2023 for tranche A and 2027 for
tranche B) and the second reset date (2028 for tranche A and 2032
for tranche B).

Cumulative Coupon Limits Equity Treatment: The interest coupon
deferrals are cumulative, which results in 50% equity treatment
and 50% debt treatment of the hybrid notes by Fitch. Despite the
50% equity treatment, Fitch treats coupon payments as 100%
interest. The company will be obliged to make a mandatory
settlement of deferred interest payments under certain
circumstances, including the payment of a dividend.

Incentive-based Contribution: Fitch is aware that contractual
arrangements between EIB and Energa include the possibility for an
incentive-based contribution towards the capital project related
to the Juncker plan, if Energa complies with its obligations under
the project agreement with EIB. These include carrying out the
project in accordance with the technical description and within a
specified final date, implementation and operation of the project
in compliance with EU and Polish environmental legislation and
meeting few corporate governance requirements specified in the
project agreement.


Distribution Supports Credit Profile: Energa's creditworthiness
benefits from a high EBITDA contribution from regulated
electricity distribution (81% of 1H17 EBITDA), characterised by a
lower business risk and better cash flow predictability than
conventional generation. Fitch expects the share of regulated
EBITDA to average close to 80% in 2016-2020, contributing to cash
flow visibility. Despite allocating fairly large capex for power
generation by 2025 (about 30% in 2016-2025), distribution
continues to dominate Energa's capex plan with about 65% in 2016-

Ostroleka C Project Increases Business Risk: In Fitch views, the
reinstatement of Ostroleka C coal-fired power plant project in
2016 increases business risk for Energa given weak market
conditions for conventional power generation. Risks related to
Ostroleka C are mitigated by the planned construction of the plant
in a 50:50 partnership with another Polish integrated utility,
ENEA S.A (BBB/Stable), which has recent experience in constructing
a coal-fired plant. The risks of Ostroleka C are also mitigated by
the expected introduction of a capacity market in Poland and a
favourable coal price formula in the supply contract with domestic
coal mining group Polska Grupa Gornicza Sp. z o.o. (PGG),
supporting the margin on power generation.

Large Capex: Fitch views the capex plan in the strategy published
in November 2016 as large in the context of Fitch's projections
for 2017-2020 EBITDA. The new strategy assumes total capex of
PLN20.6 billion for 2016-2025, which is about 2% more a year than
the previous plan for 2014-2022.

Financial Flexibility: In addition to the upcoming hybrids issue,
which would slightly improve the leverage ratio, Energa has some
flexibility in the capex plan and may postpone or cancel some
projects. The company also plans further efficiency enhancements.

Financial Policy: One of the key elements of Energa's strategy is
to maintain its investment-grade rating and the net debt/EBITDA
ratio below the covenant of 3.5x. Energa plans to implement two
large projects in generation, Ostroleka C and a 80MW hydro power
plant on the Vistula river, in partnerships to share the projects'
capex and risks and lower the projects' negative impact on credit

Projects Drive Capex Peak: Capex will peak in 2021-2023, the
period for which most of the capex for the Ostroleka C project and
a substantial part of the capex for Vistula is planned. This is
beyond Fitch horizons for the rating. However, if FFO adjusted net
leverage will be above 3.5x in 2021-2023 this may lead to negative
rating action in 2018-2019.

Further Cash Flow Support: Energa expects that both projects will
receive additional cash flow support, for instance, capacity
payments in the case of Ostroleka C. Implementation of Ostroleka C
without a new capacity market mechanism may be negative for the
rating. Fitch does not include any cash inflows related to the
contemplated capacity market in Fitch ratings case forecast until

Rated on Standalone Basis: Energa is 51.52%-owned by the Polish
state (A-/Stable), but Fitch rates it on a standalone basis
because Fitch assess legal, operational and strategic links with
the state as moderate based on Fitch Parent and Subsidiary Rating
Linkage criteria. In Fitch views, the links have had an
incrementally stronger impact on the company under the current
government, which has been in place since November 2015. Examples
include a less-generous dividend policy, which is aligned with
Energa's investment process including the reinstatement of the
Ostroleka C project.


Energa's and TAURON Polska Energia S.A.'s (Tauron, BBB/Stable)
business profiles benefit from the large share of regulated
distribution in EBITDA, which provides good cash flow visibility
at times when another key segment, conventional power generation,
is under pressure. This supports the ratings. Two other Polish
utilities, PGE Polska Grupa Energetyczna S.A. (BBB+/Stable) and
ENEA, have a lower share of regulated distribution than Tauron and


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

- Weighted average cost of capital in the distribution segment
   reduced to 5.7% in 2016 from 7.2% in 2015 (and 6.8% when
   applying the one-off haircut applied by the regulator), before
   gradually increasing to 6% in 2020;

- 5% haircut reducing return on the distribution's regulated
   asset base incorporated from 2018;

- Wholesale baseload power prices falling to about PLN155 per
   MWh by 2019-2020;

- Capex and acquisitions of about PLN10 billion in 2016-2020;

- No dividends in 2018-2020.


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

- Continued focus on the distribution business in capex and
   overall strategy, together with FFO adjusted net leverage
   below 2.5x on a sustained basis, supported by management's
   more conservative leverage target.

- Improvements in the regulatory framework, together with
   distribution networks remaining a dominant earning stream for
   Energa, may lead to an upgrade of Energa's and Energa Finance
   AB (publ)'s senior unsecured rating in a one-notch uplift over
   the Long-Term IDR.

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

- Increase in FFO adjusted net leverage to above 3.5x or FFO
   fixed charge cover below 5x on a sustained basis, for example,
   due to full implementation of capex, acquisitions and weaker-
   than-expected operating cash flow.

- Acquisitions of stakes in coal mines or other form of support
   for state-owned mining companies under financial pressure
   leading to net leverage above 3.5x or substantially worsening
   Energa's business profile.

- A substantial tax payment arising from an increase in the
   nominal value of Energa's shares. This is a cash flow and
   operating environment risk for Energa and other Polish state-
   controlled utilities as the government contemplates an
   increase of the nominal value of their shares. Such an
   increase would be subject to approval at the shareholders'
   meeting. This tax payment is not included in Fitch
   assumptions for the rating case. Fitch treat this as event
   risk and a potential corporate governance issue.


Adequate Liquidity: Energa has sufficient liquidity and a well-
spread debt maturity profile. At end-June 2017 Energa had Fitch-
calculated readily available cash of PLN2.2 billion against short-
term debt of PLN0.4 billion. Energa's committed unused financing
at end-June 2017 amounted to PLN0.9 billion. The first large debt
repayment is not due until 2019, when PLN0.7 billion of net debt
matures. The planned hybrid bonds will further support the
company's liquidity.


Energa S.A.

Long-Term Foreign- and Local-Currency IDRs of 'BBB'; Stable

Foreign- and local-currency senior unsecured ratings of 'BBB'

Proposed hybrid bonds assigned an expected rating of 'BB+(EXP)'

National Long-Term Rating of 'A+(pol)'; Stable Outlook

National senior unsecured rating of 'A+(pol)'

Energa Finance AB (publ), guaranteed by Energa S.A.

Foreign-currency senior unsecured rating of 'BBB'

PREFABET-BIALE BLOTA: Court Opens Arrangement Proceedings
Reuters reports that the court in Bydgoszcz has opened arrangement
proceedings for Prefabet-Biale Blota S.A. Prefabet-Biale Blota
S.A. is a construction company in Poland.


Moody's Investors Service has changed to positive from stable the
rating outlook of Infraestruturas de Portugal, S.A. (IP).
Concurrently, Moody's affirmed the Ba2 corporate family rating,
Ba2 senior unsecured rating, the Ba2-PD probability of default
rating and the (P)Ba2 rating of the EUR3 billion euro medium-term
notes (EMTN) programme.

At the same time, Moody's has affirmed the (P)Ba1 rating of IP's
EUR3 billion EMTN programme, which provides for the issuance of
government-guaranteed notes, and the Ba1 senior unsecured rating
of government-guaranteed notes issued thereunder.

The rating action follows Moody's change in outlook on the Ba1
rating of the Government of Portugal to positive from stable on
September 1, 2017.


The outlook change to positive on IP's ratings reflects the strong
linkages between IP and the Government of Portugal, which has
provided significant support in the form of capital injections to
the company over the past five years. Without this support, IP
would be unable to fully cover its operating and financing
requirements. Moody's expects these capital injections to
continue, thus enabling IP to cover its ongoing investment
programme as well as upcoming debt repayments. As such, IP's
ratings move in line with those of the sovereign.

The very high level of government support incorporated in IP's Ba2
rating reflects (1) its critical role in the management of the
railway and road networks in Portugal; (2) its close oversight by
the Government of Portugal, with the company currently included in
the National State Budget; (3) the expectation that the Government
of Portugal will continue to step in with timely financial support
if required, considering that according to the general principles
applicable under the Portuguese Companies Code, the Government of
Portugal would remain indirectly liable for IP's obligations as
long as the company is 100% state-owned; and (4) high indebtedness
and a weak financial profile.

Moody's continues to make a one-notch rating distinction between
IP and the Government of Portugal, recognising the residual risk,
albeit small in the rating agency's view, that the sovereign may
not be able to make payments in the future or that IP's
unguaranteed debt may not be treated as part of government debt in
any restructuring. Absent such payments, IP would likely have
minimal value as a standalone enterprise. IP's guaranteed debt
continues to be rated at the same level as the Government of


An upgrade of the rating of the Government of Portugal would
likely result in an upgrade of the ratings of IP, with the one-
notch differential between the company's unguaranteed debt ratings
and the government rating expected to be maintained.

Conversely, a downgrade of the rating of the Government of
Portugal would likely result in a downgrade of the rating of IP.
Furthermore, any evidence that the provision of financial support
from the government would not be forthcoming to IP if required
would result in a downgrade of the ratings of IP.

The principal methodology used in these ratings was Government-
Related Issuers published in August 2017.

Infraestruturas de Portugal, S.A. is responsible for the design,
construction, financing, maintenance, operation, restoration,
widening and modernisation of the national road and rail networks
in Portugal. The company is 100% owned by the Government of


NIZHNIY NOVGOROD: Fitch Affirms BB Long-Term IDR, Outlook Stable
Fitch Ratings has affirmed the Russian Nizhniy Novgorod Region's
Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR)
at 'BB' with Stable Outlooks and Short-Term Foreign-Currency IDR
at 'B'. The region's senior unsecured debt ratings have been
affirmed at 'BB'.

The affirmation reflects Fitch's unchanged base case scenario
regarding the region's sound operating performance in the medium
term, still moderate direct risk and diversified economy.


The 'BB' ratings reflect Nizhniy Novgorod's sound budgetary
performance, with a positive operating balance, as well as its
concentrated maturity profile and ongoing budget deficit. The
ratings further take into account a large and diversified local
economy, albeit prone to cyclicality.

Fitch projects the region's budgetary performance will remain
sound with an operating margin of 11%-12% over the medium term.
The agency expects a current balance of around 7%-8% in 2017-2019,
weighed down by interest payments. In 2016, Nizhniy Novgorod's
operating balance improved to a sound 11.7% from 6.1% a year
earlier. This was driven by an increase in corporate income tax
(CIT) proceeds, mainly from the financial sector amid profit
growth from a low base in 2014-2015.

In 1H17, Nizhniy Novgorod recorded a RUB2.6 billion interim
surplus mainly due to controlled operating expenditure and tax
revenue growth. Tax proceeds grew 5.4% on the back of national
economic restoration and broad growth of wages across all sectors.
CIT proceeds increased 4% yoy, while personal income tax
collection grew 9% yoy. In 2H17, Fitch expects higher operating
expenditure and tax reimbursements in financial and steel sectors,
which will lead to a year-end deficit before debt variation of
around 3.9% (2016: 3.8%).

Fitch projects the region's direct risk will increase mildly over
the medium term but remain moderate at around 65% of current
revenue (2016: 62.5%). In 1H17, the region's debt remained
unchanged in absolute volume (RUB73 billion), but the
administration managed to improve the debt profile. The average
maturity increased to 2.9 years from 2.5 years as the region
contracted RUB4.7 billion budget loans at 0.1% interest rate and
partially replaced bank loans.

Like most regions in Russia, Nizhniy Novgorod is exposed to
refinancing pressure in 2017-2019 when 71% of direct risk matures.
As of July 2017 the region's refinancing needs for this year were
RUB18.1 billion (25% of outstanding debt), composed mainly of
budget loans (RUB10.3 billion), bank loans (RUB4 billion) and
bonds (RUB3.8 billion). Fitch expects the region will refinance
debt via a combination of domestic bonds (RUB12 billion placement
later this year) and bank loans. The region also has access to
RUB26 billion of undrawn bank credit facilities.

Nizhniy Novgorod has a diversified economy with a fairly well-
developed industrialised sector, supporting wealth metrics near
the national median. In 2016 the 10 largest taxpayers contributed
17% of all tax revenues, underlining a broad tax base. The region
is among the top 15 Russian regions in gross regional product
(GRP) volume and has a population of 3.3 million people (2.2% of

Nizhniy Novgorod's economy is driven by internal demand and
therefore prone to cyclicality and correlated with the national
economy. GRP grew slightly by 0.7% in 2016, which was better than
the wider Russian economy (a 0.2% fall). According to the
administration's forecast, the region's GRP will accelerate to 2%
in 2017-2019, following the national trend. Fitch forecasts
national GDP to grow 1.6% in 2017.

Fitch views the region's credit profile as constrained by the weak
Russian institutional framework for sub-nationals, which has a
shorter record of stable development than many of its
international peers. The predictability of Russian local and
regional governments' budgetary policy is hampered by the frequent
reallocation of revenue and expenditure responsibilities within
government tiers.


Sound operating performance with an operating margin above 10% on
a sustained basis, accompanied by a decrease in direct risk below
40% of current revenue and lower reliance on short-term bank
financing, could lead to an upgrade.

An increase in direct risk to above 70% of current revenue,
accompanied by ongoing refinancing pressure or an inability to
maintain a sustainable positive current balance, could lead to a

RUSSIAN INTERNATIONAL: Put on Provisional Administration
The Bank of Russia, by virtue of its Order No. OD-2550 dated
September 4, 2017, revoked the banking license of Moscow-based
credit institution joint-stock company Russian International Bank
from September 4, 2017, according to the press service of the
Central Bank of Russia.

According to the financial statements, as of August 1, 2017, the
credit institution ranked 137th by assets in the Russian banking

The business model of Russian International Bank was to a great
extent focused on high-risk lending to borrowers, including non-
residents, related to the credit institution's ultimate
beneficiary owners.  Due to the poor quality of assets, which had
failed to generate sufficient cash flow, the bank was incapable of
honouring its obligations to creditors on time.  Moreover, the
credit institution failed to comply with laws and Bank of Russia
regulations on countering the legalisation (laundering) of
criminally obtained incomes and the financing of terrorism with
regard to submitting reliable information to the authorised agency
on time.

The Bank of Russia has repeatedly applied supervisory measures to
Russian International Bank, including restrictions (on two
occasions) and a ban on household deposit taking.

The management and owners of Russian International Bank failed to
take effective measures to bring its activities back to normal.
Under the circumstances the Bank of Russia took the decision to
withdraw the credit institution from the banking services market.

The Bank of Russia took such an extreme measure -- revocation of
the banking license -- because of the credit institution's failure
to comply with federal banking laws and Bank of Russia
regulations, repeated violations within a year of Bank of Russia
requirements stipulated by Article 7 (excluding Clause 3 of
Article 7) of the Federal Law "On Countering the Legalisation
(Laundering) of Criminally Obtained Incomes and the Financing of
Terrorism" as well as Bank of Russia regulations issued in
accordance with the said law and application of the measures
stipulated by the Federal Law "On the Central Bank of the Russian
Federation (Bank of Russia)", taking into account a real threat to
the interests of creditors.

The Bank of Russia, by virtue of its Order No. OD-2551 dated
September 4, 2017, appointed a provisional administration to
Russian International Bank for the period until the appointment of
a receiver pursuant to the Federal Law "On the Insolvency
(Bankruptcy)" or a liquidator under Article 23.1 of the Federal
Law "On Banks and Banking Activities".  In accordance with federal
laws, the powers of the credit institution's executive bodies have
been suspended.

Russian International Bank is a member of the deposit insurance
system. The revocation of the banking licence is an insured event
as stipulated by Federal Law No. 177-FZ "On the Insurance of
Household Deposits with Russian Banks" in respect of the bank's
retail deposit obligations, as defined by law.  The said Federal
Law provides for the payment of indemnities to the bank's
depositors, including individual entrepreneurs, in the amount of
100% of the balance of funds but no more than a total of RUR1.4
million per one depositor.

SOVCOMBANK PJSC: Fitch Affirms BB- Long-Term IDR, Outlook Stable
Fitch Ratings has affirmed PJSC Sovcombank's (SCB) Long-Term
Issuer-Default Ratings (IDRs) at 'BB-'. The Outlook is Stable.


The ratings reflect the strong financial metrics of SCB,
especially its long record of sound asset quality and robust
performance, as well as its recent rapid growth and niche

At end-1H17, SCB's reported NPLs were a low 2.4% of gross loans
and were mainly attributable to the bank's unsecured consumer
lending (24% of total loans). The non-retail book was mainly
represented by granular, low to moderate risk exposures to Russian
sub-sovereigns and municipalities and top tier companies, which
are predominantly state-owned or highly rated (BB rating category
or higher). The quality of the bond portfolio (around 56% of total
assets, including those recognised in loans to customers) is also
strong as 86% of bonds are rated 'BB' or higher.

Fitch views SCB's core performance as robust, despite around 30%
of operating profit in 1H17 being derived from positive mark-to-
market (MTM) revaluation of the bond portfolio, which is a non-
recurring income source. Even net of these MTM gains and other
one-off items (the largest one being the gain from the acquisition
of Express Volga Bank in 2016) annualised return on average equity
for 1H17 and 2016 was solid at 30% and 38%, respectively.

Over the last 12 months, SCB has significantly mitigated interest
rate risk stemming from its sizable bond portfolio by entering
into long-term interest rate swaps in US dollars with large,
highly-rated banks with a total notional amount of USD1.1 billion
(RUB65 billion equivalent), which hedges around 70% of the
potential fair value movement in the US dollar-denominated bonds
(53% of trading portfolio at end-1H17). Interest rate risk is
additionally mitigated by the significant capital buffer relative
to potential MTM losses and the bank's track record of managing
this risk.

Market risk also stems from the bank's sizable open long on-
balance sheet currency position, reflecting sizable investments in
USD-denominated bonds financed by rouble customer deposits.
However, in July 2017 SCB entered into sizable one-year currency
swaps with large, highly-rated Russian banks, replacing short-term
swaps with maturities of up to two weeks, which has moderated
currency risk, in Fitch's view.

SCB's capital position has been gradually improving due to
moderate loan growth (CAGR of 20% in 1H17-2016 after rapid
expansion in 2014-2015) and healthy internal capital generation
(about 40% for the same period) and the Fitch Core Capital ratio
was a reasonable 13.5% at end-1H17. The bank's significant
investments in the smaller Rosevrobank (BB-/Stable/bb-) have so
far put limited pressure on SCB's capital position. Fitch believes
SCB could gradually increase its stake in Rosevrobank without a
significant reduction in capital ratios, given its strong internal
capital generation and the potential to deleverage through bond
sales, if required.

SCB has predominantly been funded by fairly granular retail
deposits (50% of total liabilities at end-1H17) and secured repo
borrowings from large Russian banks (a further 34% of
liabilities). Liquidity is supported by a sizable liquidity
cushion, including cash and unpledged securities (29% of end-1H17
total liabilities), and part of the loan book (9% of liabilities)
could also be pledged to raise funding from the Central Bank of

SCB's senior unsecured debt rating is aligned with the bank's
Long-Term Local-Currency IDR, reflecting Fitch's view of average
recovery prospects, in case of default.

The '5' Support Rating and 'No Floor' Support Rating Floor reflect
Fitch's view that support from either the bank's shareholders or
the Russian authorities could not be relied upon, in case of need.


An upgrade of SCB's ratings would require further development of
the bank's franchise and a track record of more balanced, moderate

Downside could stem from sharp deterioration in asset quality
leading to material capital erosion, or mismanagement of liquidity
and market risks arising from the bank's trading activities.

The rating actions are:

PJSC Sovcombank

Long-Term Foreign and Local Currency IDRs: affirmed at 'BB-';
   Outlooks Stable
Short-Term Foreign Currency IDR: affirmed at 'B'
Viability Rating: affirmed at 'bb-'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'
Senior unsecured debt: affirmed at 'BB-'


KD GROUP: Fitch Affirms 'BB' IDR, Outlook Stable
Fitch Ratings has affirmed Slovenian composite insurer Adriatic
Slovenica d.d.'s 'BBB-' (Good) Insurer Financial Strength (IFS)
Rating and holding company, KD Group financna druzba, d.d.'s (KD
Group) 'BB' Issuer Default Rating (IDR). The Outlooks are Stable.


The ratings reflect KD Group's high financial leverage, low
profitability and moderate business profile.

KD Group's high financial leverage of 43% at end-2016 (end-2015:
40%) is a key negative rating driver. Financial leverage increased
in 2016 following the issuance of EUR50 million subordinated notes
in May 2016 by Adriatic Slovenica. Fitch views positively that the
group plans to reduce leverage in the medium term.

Fitch views KD Group's consolidated capitalisation at end-2016 as
"Very Strong" (end-2015: "Adequate"), based on the agency's Prism
factor-based capital model (Prism FBM). Adriatic Slovenica's
regulatory solvency coverage is also strong, with Solvency II
solvency capital requirement (SCR) coverage of 146% at end-2016
(end-2015: 124%) without using any transitional measures. The
group's Prism FBM assessment and its SCR coverage benefited from
the issuance of subordinated Tier 2 notes in May 2016.

However, Fitch views the quality of capital as relatively weak
because the subordinated notes now represent a high share of KD
Group's available capital. KD Group's core capital is relatively
low due to Fitch not giving credit for goodwill, which totalled
EUR50.1 million at end-2016, when assessing available capital.

KD Group reported positive but volatile net profits between 2013
and 2016, following losses in 2009-2012 from its underperforming
bank business, which was sold in 2012, and losses at other non-
core corporate affiliates affected by the financial crisis. In
2016 KD Group's net profit improved to EUR2.3 million (2015:
EUR0.8 million) due to lower revaluation expenses and a release of
deferred tax. Adriatic Slovenica has been consistently profitable,
reporting annual net income of over EUR10 million for each of the
past five years and an average return on equity of 15%.

Fitch considers KD Group to have a moderate business profile. KD
Group is of "Small Size/Scale", according to Fitch's global
benchmarks, with total assets (excluding reinsurance assets) of
EUR788 million and total equity of EUR122 million at end-2016.
However, the group has a strong position in its main market,
Slovenia. Adriatic Slovenica is the third-largest insurer in the
country, and the asset management operations are second, with a
market share of 23% in the Slovenian mutual fund market. Fitch
views this strong position in the local market as rating-positive.

KD Group is in the process of divesting most non-core assets to
focus on its core insurance and asset management businesses. Fitch
expects this to improve the group's performance and generate extra
cash flow over the coming years.

As around 60% of the group's invested assets are held in Slovenian
investments and 98% of the group's revenue is in Slovenia (A-
/Stable), the group's financial performance is exposed to the
health of the local economy. In particular, KD Group is exposed to
the risk of losses on non-unit-linked investments and the risk of
lapses on unit-linked liabilities.


KD Group's leverage improving to below 40%, in combination with
stabilised profitability, could lead to an upgrade.

The ratings could be downgraded if the group's consolidated
capital position weakens for a sustained period. Financial
leverage in excess of 50% could also lead to a downgrade.


MASARIA INVESTMENTS: S&P Assigns Prelim 'B' Corp Credit Rating
S&P Global Ratings said that it assigned its preliminary 'B' long-
term corporate credit rating to Masaria Investments, S.A.U., the
parent of Spain-based global apparel retailer Cortefiel. The
outlook is positive.

S&P said, "At the same time we assigned our preliminary 'B' issue
rating to the group's proposed five-year EUR600 million senior
secured notes, split across two fixed and variable rate tranches.
The preliminary recovery rating on these notes is '4', indicating
our expectations of average recovery (30%-50%; rounded estimate:
40%) in the event of default.

"We also assigned our preliminary 'BB-' issue and '1' recovery
ratings to the proposed EUR200 million super senior revolving
credit facility (SSRCF), reflecting our expectation of very high
recovery prospects (90%-100%; rounded estimate: 95%) in the event
of default.

"The ratings are subject to the successful issuance of the bonds,
implementation of the new RCF, and our review of the final
documentation. If S&P Global Ratings does not receive the final
documentation within a reasonable timeframe, or if the final
documentation departs materially from those that we have already
reviewed, we reserve the right to withdraw or revise our ratings."

The ratings reflect Cortefiel's position as a leading Spain-based
apparel retailer, operating through four major, well-recognized
brands: Women's Secret, Springfield, Cortefiel, and Pedro del
Hierro -- each of which target a different customer demographic.
The long-term rating is supported by the moderate amount of
financial debt, a positive trend of earnings growth, its well-
established brands, and a broad geographic footprint. At the same
time, our rating is constrained by execution risk relating to the
company's ambitious turnaround plan, the fiercely competitive
apparel market in which it operates, the company's limited overall
scale, and high rental costs, reducing operational and financial

S&P said, "We expect Cortefiel will solidify its leading position
in the Spanish market and overseas in the near term and maintain
the robust topline growth seen in recent quarters over the next
three years. This is due to both significant improvements in
macroeconomic conditions in Spain and successful implementation of
a turnaround program launched in 2016, which is underpinned by a
new merchandising strategy. The strategic initiatives undertaken
by the group since a new senior management team took over in
September 2016 include refocusing the Cortefiel and Pedro del
Hierro brands on their traditional core customer segments,
purchasing and in-store efficiency measures, and central
restructuring. Performance through the first five months of this
fiscal year ending (FYE) February 2018 suggests these initiatives
are working, with rolling 12-month reported EBITDA ofEUR159
million significantly ahead of the same period last year.

"With a considerable portion of the required restructuring costs
absorbed last year and nearly 10% sales growth--including positive
like-for-like performance across all four brands--in the first
five months of FY2018, we believe these improvements in
profitability are sustainable. We expect reported EBITDA margins
to reach around 14% from the 7% observed last year, translating
into a significant increase in reported EBITDA toEUR165 million in
FY2018 (versusEUR79 million in the previous year). This, combined
with interest cost savings related to lowering the amount of
financial debt should support materially positive reported free
operating cash flow (FOCF) generation from this year onwards, in
our opinion.

"Despite this improvement, we believe execution risk relating to
the implementation of such a comprehensive turnaround in
performance remains elevated, after a prolonged period of like-
for-like sales declines and sub-par reported EBITDA margins of
less than 10%. We anticipate that Cortefiel will maintain its
position as one of the leading apparel retailers in Spain, but we
expect competition to remain fierce, exacerbated by pressure from
the expansion of competitors, discounters, and the continued shift
of consumer spending online. This, along with Cortefiel's modest
scale compared with larger apparel retailers such as Next, Gap,
and Uniqlo, and its exposure to demand volatility as a result of
the largely discretionary nature of clothing, mean it remains
susceptible to changes in customer tastes and purchasing power. We
consider this risk to be somewhat mitigated by the group's broad
geographic footprint, with around 50% of reported EBITDA generated
outside of Spain.

"At the same time, we also view Cortefiel's e-commerce operations,
which contribute around 5% of total revenues -- partly due to low
e-commerce penetration in the Spanish retail market overall -- as
weaker than some other specialty retailers such as New Look,
Debenhams, and SMCP, which generate 10%-20% of their sales online.
This comparative lack of channel diversity somewhat compounds the
risks posed to the group by the seasonality of the business model
and high degree of operating leverage.

"Under the proposed transaction, financial debt will be reduced
fromEUR1,026 million to EUR600 million, funded by cash equity
injected by the majority shareholders. As a result, we forecast
S&P Global Ratings-adjusted leverage will remain comfortably below
5x between FY2018 and FY2020. However, the group's EBITDAR to cash
interest coverage ratio remains materially below 2.2x owing to its
significant operating lease commitments. This, combined with a
lack of track record or tangible commitment from the financial
sponsor owners to maintain a conservative financial policy,
continues to constrain our rating on Cortefiel."

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

-- Spanish real GDP growth of 2%-3% in each of the next three
    calendar years, accompanied by average annual consumer price
    inflation of 1%-3% and reductions in unemployment from 17.3%
    in 2018 to 14.5% by 2019.

-- Revenue growth of around 5% in FY2018, in excess of real GDP
    growth, driven primarily by organic growth thanks to the
    repositioning of the Cortefiel brand. For the following two
    years S&P expects growth of around 4%-5% supported by
    positive like-for-like sales and new store expansion, with
    almost 50 net openings forecast per year.

-- S&P forecasts a substantial uplift in gross margin to 64% for
    next year (compared with 58% last year), reflecting a
    tightening of supplier contract terms, price increases, and
    stricter management of promotional activity.

-- S&P also expects reported EBITDA margins to improve
    significantly, up from 7% in FY2017 to around 14% by FY2018,
    and fairly stable thereafter. We expect this improvement to
    be supported by the closing of certain non-profitable stores
    and personnel reductions in Spain, which have already been

-- Working capital changes to remain aEUR13 million cash outflow
    in FY2018, and neutral over the following years.

Based on these assumptions, S&P arrives at the following credit

-- Adjusted EBITDA ofEUR340 million-EUR350 million in FY2018,
    compared with the EUR233 million generated in FY2017.

-- Adjusted debt-to-EBITDA of around 4.3x in FY2018 and
    declining to 4.0x by FYE February 2020.

-- Adjusted FFO-to-debt of 13%-15% in FY2018, and rising to 15%-
    17% in FY2019; EBITDAR cash interest coverage (defined as
    reported EBITDA before deducting rent expenses, to cash
    interest plus expected rent expenses) of about 1.4x in
    FY2018, increasing to 1.6x by the end of FY2020.

-- Positive reported FOCF of aroundEUR20 million-EUR25 million
    in FY2018, compared with theEUR13 million burn of last year.

-- S&P expects FOCF generation to continue to improve from
    FY2019, in line with profitability and the full-year effect
    of the reduction in interest expense. S&P expects reported
    FOCF generation to reach EUR75 million by FY2020.

S&P said, "The positive outlook reflects our expectation of
improving profitability and a return to positive reported FOCF
generation over the next 12 months thanks to continued execution
of Cortefiel's turnaround plan and a more accommodating
macroeconomic environment in Spain.

"For any upgrade to occur, we would need to see an ability to
deliver in line with our base case, leading to a sustained
improvement in adjusted leverage to 4.0x-4.5x and EBITDAR coverage
of at least 1.6x. Likewise, we would expect reported FOCF to turn
materially and sustainably positive.

"We would also expect continued commitment from the financial
sponsors to maintain a financial policy supportive of improved
credit metrics, along with adequate liquidity.

"We could revise the outlook back to stable if Cortefiel failed to
raise profitability or post sustainably positive reported FOCF,
thereby failing to deleverage in line with our base case. This
could occur if the company encountered setbacks in the execution
of its expansionary and cost saving initiatives or failed to gain
market share, leading to considerably lower earnings,
profitability margins, or cash generation than we anticipate."

Evidence of a more aggressive financial policy focused on debt-
financed shareholder remuneration could also lead to a sustained
weakening of Cortefiel's credit metrics and thereby a negative
rating action.

REYAL URBIS: Madrid Mercantile Court Orders Liquidation
Charles Penty at Bloomberg News reports that Reyal Urbis on
Sept. 5 said in a regulatory filing that the Mercantile court in
Madrid orders opening of liquidation phase for the company.

As reported by the Troubled Company Reporter-Europe on June 22,
2017, Bloomberg News, citing Expansion, related that the company's
main creditors rejected payments plan needed to overcome
insolvency.  According to Bloomberg, the newspaper said auditor
BDO, which is overseeing the proceedings, told the court that the
company doesn't have necessary support of 75% of creditors to
approve the payment plan.  The newspaper, citing the company's
accounts, said Reyal Urbis has EUR4.7 billion of debt and asset
portfolio of EUR1.17 billion, Bloomberg noted.

Reyal Urbis is a Spanish real estate group.

U N I T E D   K I N G D O M

ANGLO AMERICAN: Moody's Withdraws Ba1 Corporate Family Rating
Moody's Investors Service has assigned a Baa3 long term issuer
rating to Anglo American plc and has withdrawn the Ba1 corporate
family rating (CFR) and the Ba1-PD probability of default rating
(PDR). Concurrently, Moody's has upgraded the group's senior
unsecured instrument rating to Baa3 from Ba1, the short term
rating to P-3 from NP, the senior unsecured rating on the
company's medium-term notes (MTN) programme to (P)Baa3 from (P)Ba1
and its short-term rating to (P)P-3 from (P)NP. Moody's also
upgraded Anglo American SA Finance Limited's national scale
ratings to from The outlook on all the ratings has
been changed to stable from positive.

"Upgrading Anglo American's ratings to Baa3 reflect Moody's
expectations that the miner will continue using its improving
operating cash flow and cash balances to reduce debt over the next
2-3 years, and manage new growth investments in a way that
maintains its strengthened financial profile and positive free
cash flow generation", said Elena Nadtotchi, Vice President Senior
Credit Officer and the lead analyst for Anglo.


The upgrade of Anglo's ratings to Baa3 reflects Moody's
expectation that the company will maintain strong operating
performance and will continue to reduce debt and strengthen the
resilience of its leverage profile over the next several years to
be able to maintain investment grade metrics under a number of
pricing scenarios. Management focus on strengthening the balance
sheet coupled with strong H1 2017 results have created the
financial flexibility to deliver this.

Financial policy and investment strategy:

Following the decline in commodity prices in 2015-2016, Anglo
reduced its capital investment and currently maintains investment
at below the depreciation level. Looking ahead to 2019, Moody's
factors an expectation that Anglo will prudently manage any new
growth projects, especially its large Quellaveco copper project in
Peru, with a view to maintaining positive FCF generation. Anglo's
new financial policies have confirmed the company's continuous
focus on maintaining a strong credit profile. In July 2017, the
company said that it will move to the scalable dividend payments
that will depend on profitability of the business and will target
leverage at between 1x and 1.5x net debt/EBITDA through the cycle,
as calculated by the company. Anglo's adherence to the prudent
financial policies, including the dividend policy, will play a key
part in sustaining the improved financial profile and Baa3

Latest reported results, cash flow generation and balance sheet

Taking into account the current upturn in pricing of iron ore and
metallurgical coal, that contributed over 57% to EBITDA in 1H17,
Moody's expects Anglo to deliver exceptionally strong cash flow
debt coverage in 2017 at above 30% (CFO-Dividend) / debt, in line
with strong performance of its peers in 2017, which has improved
its financial flexibility. Going forward, Moody's expects prices
and margins to soften, but Anglo is now in a stronger financial

As of H1 2017, Anglo's financial profile has improved in line with
Moody's earlier expectations for the year. The company's adjusted
EBITDA for the last twelve month has increased to $7.6 billion,
compared to $5.8 billion in 2016.

At the end of H1 2017, Anglo's adjusted debt stood at $15.6
billion and cash balances at $7.4 billion, including $0.6 billion
of restricted cash. Gross debt is now down by $6.6 billion from
its 2015 peak. Anglo's adjusted leverage position has improved and
stood at 2.1x debt/EBITDA compared to 2.9x debt/EBITDA in 2016.
Its cash flow coverage of debt has also improved to 36% (CFO-
Dividend) / debt after factoring $600 million dividend to be paid
in H2 2017, compared to 29% in 2016 when Anglo paid no dividends.

Using Moody's ranges of prices for Anglo's key commodities,
Moody's expects the company's EBITDA to stabilise at around $5.2
billion level in 2018. Moody's factors iron ore price assumption
of $50/t and metallurgical coal price assumption of $120/t for the
next year, lower than $71/tonne and $193/tonne realised average
prices for iron ore and met coal in H1 2017. Moody's expects the
company to maintain leverage at below 2.5x in 2018.


Anglo's strong liquidity position, backed by $7.4 billion in cash
balances reported at the end of H1 2017, $8.8 billion in committed
unused facilities and positive FCF generation, should continue to
support Anglo's credit profile. The company faces limited near
term maturities of $1.4 billion in 2017 and $1.4 billion in 2018.


The stable outlook on the ratings reflects Moody's view that Anglo
will continue to use its cash flow generation and cash balances to
reduce debt and build resilience in the financial profile, and
that major new investment commitments such as Quellaveco will be
managed prudently. The outlook also reflects Moody's expectation
that Anglo's financial policy will continue to prioritize an
investment grade financial profile over shareholder returns.


An upgrade would require Anglo to sustain strong cash flow
generation and coverage of debt, with (CFO-Dividend) / debt at or
above 30% consistently over a period of time. Anglo would also
need to maintain its strong liquidity backed by positive FCF
generation. Moody's will look for the company to demonstrate a
balanced approach to investments, that would allow it to sustain
the improved financial metrics and maintain strong financial
position amid a range of commodity price scenarios. It remains
less resilient to price shocks than higher rated peers such as Rio
Tinto and BHP Billiton.

A reversal of the deleveraging trend, resulting in Anglo
sustaining higher leverage with (CFO-Dividend) / debt consistently
below 25% and debt/EBITDA higher than 2.5x, would put negative
pressure on the Baa3 ratings.

The principal methodology used in these ratings was Global Mining
Industry published in August 2014.

Issuer: Anglo American Capital Plc


-- Backed Senior Unsecured Commercial Paper, Upgraded to P-3
    from NP

-- Backed Senior Unsecured Medium-Term Note Program, Upgraded to
    (P)P-3 from (P)NP

-- Backed Senior Unsecured Medium-Term Note Program, Upgraded to
    (P)Baa3 from (P)Ba1

-- Backed Senior Unsecured Regular Bond/Debenture, Upgraded to
    Baa3 from Ba1

-- Senior Unsecured Regular Bond/Debenture, Upgraded to Baa3
    from Ba1

Outlook Actions:

-- Outlook, Changed To Stable From Positive

Issuer: Anglo American plc


-- Senior Unsecured Medium-Term Note Program, Upgraded to (P)P-3
    from (P)NP

-- Senior Unsecured Medium-Term Note Program, Upgraded to
   (P)Baa3 from (P)Ba1


-- Issuer Rating, Assigned Baa3


-- Probability of Default Rating, previously rated Ba1-PD

-- Corporate Family Rating, previously rated Ba1

Outlook Actions:

-- Outlook, Changed To Stable From Positive

Issuer: Anglo American SA Finance Limited


-- Backed Senior Unsecured Medium-Term Note Program, Upgraded to
    (P)P-3 from (P)NP

-- NSR Backed Senior Unsecured Medium-Term Note Program, Upgraded
    to from

-- Backed Senior Unsecured Medium-Term Note Program, Upgraded to
    (P)Baa3 from (P)Ba1

-- Backed Senior Unsecured Regular Bond/Debenture, Upgraded to
    Baa3 from Ba1

-- NSR Backed Senior Unsecured Regular Bond/Debenture, Upgraded
    to from


-- NSR Backed Senior Unsecured Medium-Term Note Program, Affirmed

Outlook Actions:

-- Outlook, Changed To Stable From Positive

CELF LOAN III: Moody's Hikes Rating on Class E Notes to Ba2
Moody's Investors Service has upgraded the following notes issued
CELF Loan Partners III plc:

-- EUR29M Class D Senior Secured Deferrable Floating Rate Notes
    due November 1, 2023, Upgraded to Aa3 (sf); previously on Apr
    21, 2017 Upgraded to A3 (sf)

-- EUR19.5M Class E Senior Secured Deferrable Floating Rate
    Notes due November 1, 2023, Upgraded to Ba2 (sf); previously
    on Apr 21, 2017 Upgraded to Ba3 (sf)

Moody's has affirmed the following notes:

-- EUR28M (Current outstanding balance of EUR20.4M) Class B-1
    Senior Secured Deferrable Floating Rate Notes due 1 November
    2023, Affirmed Aaa (sf); previously on Apr 21, 2017 Affirmed
    Aaa (sf)

-- EUR8M (Current outstanding balance of EUR5.8M) Class B-2
    Senior Secured Deferrable Fixed Rate Notes due 1 November
    2023, Affirmed Aaa (sf); previously on Apr 21, 2017 Affirmed
    Aaa (sf)

-- EUR31.5M Class C Senior Secured Deferrable Floating Rate
    Notes due November 1, 2023, Affirmed Aaa (sf); previously on
    Apr 21, 2017 Upgraded to Aaa (sf)

-- EUR11M Class R Combination Notes due November 1, 2023,
    Affirmed Aaa (sf); previously on Apr 21, 2017 Affirmed Aaa

CELF Loan Partners III plc, issued in October 2006, is a single
currency Collateralised Loan Obligation ("CLO") backed by a
portfolio of mostly high yield European loans. The portfolio is
managed by CELF Advisors LLP. This transaction passed its
reinvestment period in November 2013.


The rating actions on the notes are primarily the result of the
deleveraging of Classes A-1, A-2, B-1 and B-2 notes, following
amortisation of the underlying portfolio since the last payment
date in May 2017.

In the last payment date the Class A-1 and A-2 notes have been
redeemed in full and Class B-1 and B-2 notes have collectively
paid down by approximately EUR9.8 million. As a result, the
over-collateralisation (OC) ratios of all classes of rated notes
have increased. As per the trustee report dated July 2017, Class
B, Class C, Class D, and Class E OC ratios are reported at 455.1%,
206.7%, 137.6% and 112.3% compared to March 2017 levels of 197.1%,
149.2%, 121.9% and 108.5%, respectively.

The ratings of the combination notes address the repayment of the
rated balance on or before the legal final maturity. For the Class
R Combination Notes, the 'rated balance' at any time is equal to
the principal amount of the combination notes on the issue date
times a rated coupon of 1.5% per annum accrued on the rated
balance on the preceding payment date, minus the sum of all
payments made from the issue date to such date, either interest or
principal. The rated balance will not necessarily correspond to
the outstanding notional amount reported by the trustee.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analysed the underlying collateral pool as having a
performing par of EUR82.9M, principal proceeds balance of EUR32.9
million, defaulted par of EUR5.5 million a weighted average
default probability of 19.6% over a 4.2 weighted average life
(consistent with a WARF of 2855), a weighted average recovery rate
upon default of 44.7% for a Aaa liability target rating, a
diversity score of 14 and a weighted average spread of 3.7%.

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

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:

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it assumed a lower weighted average recovery rate for
the portfolio. Moody's ran a model in which it reduced the
weighted average recovery rate by 5%; the model generated outputs
were unchanged for Classes B-1, B-2, C and E, and within one notch
of the base-case result for Class D.

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

Additional uncertainty about performance is due to the following:

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

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

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

EMBLEM FINANCE 2: S&P Affirms BB+ Rating on Series 2 Notes
S&P Global Ratings affirmed and removed from CreditWatch negative
its 'BB+' credit rating on Emblem Finance Co. No. 2 Ltd.'s series

S&P said, "On May 31, 2017 we placed our 'BB+' rating on Emblem
Finance Co. No. 2's series 2 on CreditWatch negative after our
similar rating action on the reference obligation, Votorantim S.A.
(see "Rating On Emblem Finance Co. No. 2's Series 2 Placed On
CreditWatch Negative After Dependent Action").

"The rating action follows our Aug. 16, 2017 affirmation and
removal from CreditWatch negative of our rating on Votorantim,
which acts as a reference entity in the transaction.

"Under our criteria applicable to transactions such as these, we
generally reflect changes to the rating on the reference
obligation in our rating on the notes.

"We have therefore affirmed and removed from CreditWatch negative
our 'BB+' rating on Emblem Finance Co. No. 2's series 2."

Emblem Finance Co. No. 2's series 2 is a repack transaction.


  Emblem Finance Co. No. 2 Ltd.

  CLP5.082 bil inflation-linked credit-linked notes series 2

  Class       Identifier        To            From
              XS0332880342      BB+           BB+/Watch Neg

ICELAND VLNCO: Moody's Affirms B2 CFR, Outlook Stable
Moody's Investors Service has affirmed the B2 corporate family
rating (CFR) of UK food retailer Iceland VLNCo Limited (Iceland
Foods) as well as the B2 rating on the existing GBP170.2 million
outstanding senior secured fixed rate notes due 2024 issued by
Iceland Bondco plc. Concurrently, Moody's has assigned B2 ratings
to the new GBP430 million senior secured fixed rate notes due 2025
and the new GBP200 million senior secured fixed rate notes due
2027 to be issued by Iceland Bondco plc. Lastly, Iceland Foods'
probability of default rating (PDR) was downgraded to B2-PD from
B1-PD. The outlook on all ratings remains stable.

Net proceeds from the new notes will be used to redeem the
existing GBP271 million outstanding senior secured floating rate
notes due 2020 and GBP357 million outstanding senior secured notes
due 2021. Upon completion of the transaction, Moody's will
withdraw the B2 ratings on these instruments.

The rating action reflects Moody's view that Iceland Foods' CFR is
solidly positioned at B2 following improved credit metrics in the
last twelve months due to good operating performance and voluntary
debt prepayments. The alignment of the PDR at the same level as
the CFR reflects Moody's assumption of a 50% recovery rate in its
Loss Given Default for Speculative-Grade Companies methodology,
which is customary for capital structures comprising senior
secured notes.


Iceland Foods' CFR is solidly positioned at B2 reflecting its
improved credit metrics driven by good operating performance and
voluntary debt prepayments, albeit market conditions remain
challenging. Iceland Foods has reported three consecutive quarters
of strong growth in like-for-like sales and EBITDA. This current
good momentum, albeit against weak comparables, shows that the
rebranding strategy launched in March 2015 to stem the decline in
like-for-like sales has started bearing fruit.

However, Moody's expects the company will continue to face several
headwinds including competition between UK grocers, input cost
inflation, and further increases in the national living wage.
Also, it is still unclear to what extent the cost inflation
resulting from the weaker pound will impact prices and margins,
consumer's disposable incomes, and potentially shopping habits.

While the transaction is leverage neutral, it will reduce the
company's interest burden and extend the debt maturity profile. As
of June 2017, the Moody's-adjusted debt/EBITDA was 5.6x. Pro-forma
for the partial bond redemption of GBP50 million completed after
quarter-end, the Moody's-adjusted debt/EBITDA decreased to 5.4x.
Whilst the financial metrics are solid for the rating category
this is in the context of a relatively challenging competitive and
cost environment.

The CFR also incorporates the company's (1) niche position with a
solid share in frozen food, (2) ability to differentiate from
other retailers through product innovation, (3) home delivery and
online services which provide differentiation against discounters,
and (4) good liquidity profile.


Moody's considers the company's liquidity position to be good,
underpinned by pro-forma cash balances of GBP117 million as of
June 2017, an undrawn revolving credit facility (RCF) of GBP30
million due July 2019, and positive free cash flow generation.
Moody's also assumes that the company will maintain sufficient
headroom under its single drawstop financial covenant only
applicable to its RCF and only tested when drawn above a certain


The senior secured notes are rated B2, the same as the CFR,
reflecting their pari passu ranking with each other and the small
size of the super senior RCF relative to the total debt level.


The stable outlook assumes that there will be no further material
deterioration in industry conditions, like-for-like sales and
margins. It also assumes that the company will continue to pursue
its organic growth strategy and make no material debt-funded
acquisitions as well as adhere to a cautious approach in terms of


Upward rating pressure could develop if (1) like-for-like sales
growth remains positive with stable or improving margins, (2) the
Moody's debt / EBITDA is sustainably below 5.5x, and (3) liquidity
remains good with positive free cash flow.

The ratings could be downgraded if any of the conditions for
maintaining a stable outlook are not met. There could also be
downward rating pressure if (1) the Moody's adjusted debt/EBITDA
ratio rises towards 7.0x or (2) if the company fails to generate
free cash flow or its liquidity profile weakens.


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


Iceland Foods is a privately held UK retail grocer, which
specialises in frozen and chilled foods, alongside groceries.
Since its creation in 1970, Iceland Foods has expanded its reach
in the UK to become a national operator with 888 UK retail stores
as of June 2017. It reported revenues of approximately GBP2.8
billion in fiscal year 2016/17.

INDIVIOR PLC: Patent Ruling is Credit Negative, Moody's Says
Moody's Investors Service commented that an unfavorable patent
ruling received by Indivior PLC is credit negative. The US patents
on Indivior's product Suboxone Film are being disputed in district
court proceedings with generic drug company Dr. Reddy's
Laboratories Ltd. (unrated). Even though the court's ruling upheld
the disputed Suboxone Film patents, it also found that Dr. Reddy's
product would not infringe on any of those patents. The ruling is
a credit negative for Indivior in that it increases the risk of
generic versions of Suboxone Film over the next 12 to 18 months.
There is no impact on the company's B3 Corporate Family Rating at
rated entity RBP Global Holdings Ltd, or the stable rating

REDTOP ACQUISITIONS: S&P Places 'B' CCR on CreditWatch Negative
S&P Global Ratings placed its 'B' long-term corporate credit
rating on Jersey-based Redtop Acquisitions Ltd. on CreditWatch
with negative implications.

At the same time, S&P affirmed the existing issue and recovery
ratings because it expects the existing debt to be repaid under
the terms of the transaction.

The CreditWatch negative placement follows the announcement by
Redtop Acquisitions (CPA Global's holding company) that it has
signed a binding agreement to be acquired by funds advised by
California-based Leonard Green Partners. The latter will take full
ownership of funds affiliated with its existing owner, Cinven. The
acquiring firm is expected to pay about GBP 2.4 billion, which
implies a trailing valuation multiple of about 16x (enterprise
value to reported EBITDA).

S&P said, "Although the terms of the transaction and future
capital structure have yet to be disclosed, given the high
multiple paid and the company's already-high leverage level, we
believe that there is a one-in-two chance that the proposed
transaction could result in weaker credit metrics for the group.
We were previously expecting Redtop to reach a ratio of debt to
EBITDA (excluding the group's preference shares) of 6x-8x in the
financial year ending July 2018, but now see a risk that leverage
will remain elevated for longer.

"The CreditWatch negative placement reflects our view that there
is a one-in-two chance the acquisition financing package could see
leverage not improve as much as we previously expected. This could
lead us to consider lowering the rating. We aim to resolve the
CreditWatch in the next 60 days once the details of the new
capital structure are disclosed."

VIRIDIAN GROUP: Fitch Raises Rating on Sr. Senior Notes to BB-
Fitch Ratings has upgraded Viridian Group Fundco II Limited's
senior secured notes to 'BB-'/RR3 from 'B+'/RR4. Fitch has
affirmed Viridian Group Investments Limited (VGIL) IDR at 'B+'
with a Stable Outlook. Fitch has also affirmed the senior secured
rating of Viridian Group Limited and Viridian Power & Energy
Holdings Limited's super senior revolving credit facility (RCF) at

The company's 'B+' rating reflects near completion of the wind
capacity build with a meaningful increase in expected dividends
paid to the restricted group and free cash flow from the financial
year ending in March 2019 (FY19). Fitch-estimated regulated and
quasi-regulated EBITDA of 70% largely offsets commodity price risk
and the impact of Integrated Single Electricity Market (ISEM) from
May 2018. However, the lower level of wholesale prices takes
estimated FFO adjusted net leverage higher to around 4.5x in FY19
and FY20 before recovering again in FY21. These figures compare
with FFO adjusted net leverage in FY17 of 4.0x. Likewise Fitch
only expect coverage ratios to recover on stronger wholesale
pricing from FY21.

The upgrade of the senior secured rating was driven by the
improvement of the recovery prospects with a Recovery Rating of


New Owner: I Squared, which bought Viridian in April 2016, has a
relatively conservative approach to leverage with an overall
target for debt-to-capitalisation of less than 60% and a long-term
target of net leverage of 4.0x or less. Viridian is I Squared's
only asset in the UK and Ireland across a globally diversified
portfolio. In view of a healthy cash position at 31 March 2017,
Viridian issued in August 2017 a redemption notice for 10% of the
EUR600 million senior secured notes at a redemption price of 103%.
Redemption of the notes took effect on 29 August 2017.

Wind Build Close to Completion: The construction of 75MW of wind
capacity should be complete within the next 18 months, taking the
total to 300MW and lowering the build risk. With the final
expenditure on recent wind acquisitions in FY19, Fitch expects the
dividend stream to start to build significantly from these assets
from FY19 and support free cash-flow generation at the restricted

Regulated and Quasi-Regulated Core: Fitch expects a steady
contribution from regulated and quasi regulated EBITDA at 70-72%
in FY21 as the capacity build in Ireland drives higher renewable
PPA earnings while electricity margins are impacted by lower
electricity prices. Regulated earnings at Power NI are potentially
threatened by a loss of customers and new price control after
March 2019. However, 70% of the current regulated entitlement is
fixed and the company's cost to serve is substantially lower than
that of the Great Britain "big six". These factors should mitigate
the impact of potential regulatory change at segment and commodity
price volatility at the group level.

Commodity Price Risk; Volatility: Earnings and cash flows are
subject to commodity price and currency volatility, reducing
visibility. System Marginal Price (SMP) and EBITDA forecasts have
been lowered, particularly for FY19 and FY20 partly as a result of
the introduction of ISEM from May 2018. Short-term prices should
follow gas prices, but longer term pricing may be affected by the
continued growth of renewables. The weakness of sterling against
the euro has helped to offset the negative price impact in
sterling terms, but this adds a further level of volatility to
earnings and cash flow.

Impact of ISEM: Ireland will replace the current generation market
structure with an integrated single electricity market, ISEM from
May 2018. For Viridian, this means swapping regulated capacity
payments for competitive reliability auctions. This lowers
earnings and cash-flow visibility of generation but there may be a
partial offset from growth in ancillary services. The changes
reflect alignment with EU rules for state aid and are aimed at
better integrating renewables in the fuel mix in future. The
Republic and Northern Ireland have targets of generating 40% of
electricity from renewables by 2020.

Appropriate Credit Metrics: A fall in capex implies positive free
cash-flow generation from FY19. However, the direction of
wholesale prices takes estimated FFO adjusted net leverage higher
to around 4.5x in FY19 and FY20 before recovering in FY21. These
figures compare with FFO adjusted net leverage in FY17 of 4.0x.
Likewise Fitch only expects coverage ratios to recover on stronger
wholesale pricing from FY21.


Viridian's 'B+' IDR implies a two-notch differential relative to
the closest publicly rated peer Melton Renewable Energy UK PLC
(MRE, BB/Stable), reflecting weaker credit metrics and slightly
higher business risk at Viridian, with around 30% of unregulated
and unsupported EBITDA against zero at MRE. These factors are
partly offset by Viridian's size and business diversification
relative to MRE. This is reflected in Viridian's negative
guideline at 5.0x FFO adjusted net leverage compared with 4.0x for
MRE. A three-notch differential relative to Drax Group Holdings
Limited (BB+/Stable), reflects substantially weaker credit metrics
(with negative leverage guideline of 2.5x for Drax), partly offset
by a weaker EBITDA mix at Drax. Likewise, a two-notch differential
relative to Viesgo Generacion, S.L.U. (BB/Stable), reflects
substantially weaker credit metrics (Viesgo's negative leverage
guideline is 2.5x), partly offset by a much weaker EBITDA mix at


Fitch's key assumptions within the rating case for Viridian

- Power NI no change in regulation after March 2019;
- electricity margin/Huntstown CCGT lower SMP assumptions than
   previous with more conservative view of demand growth from
   data centres;
- capacity payment revenues as per guidance;
- 10% haircut to ancillary services EBITDA;
- renewable PPAs, lower SMP assumptions than previously (please
   see below);
- lower load factors than assumed by company;
- broadly flat EBITDA margins in Irish residential supply;
- dividends from renewables, lower SMP assumptions by an average
   11% than previously;
- company guidance on restricted group capex, but Fitch add to
   this 30% of the owned renewables capex figure outside the
   restricted group as equity finance for renewables capex - this
   is more conservative than management which assumes a 20%
   equity/ 80% debt funding structure.

Key Recovery Rating Assumptions:

A recovery analysis assumes that Viridian would be considered a
going concern in bankruptcy and that the company would be
reorganised rather than liquidated.

- Fitch has assumed an administrative claim of 10%.
- Viridian's going-concern EBITDA is based on LTM March 2017
   EBITDA and includes pro forma adjustments for dividends from
   wind assets from FY19, paid after a one-year time lag on
   assets in operation in FY18. The going-concern EBITDA estimate
   reflects Fitch's view of a sustainable, post-reorganisation
   EBITDA level upon which Fitch base the valuation of the
   company, based on an EBITDA discount of 15%.
- An EV multiple of 6x is used to calculate a post-
   reorganisation valuation and reflects a mid-cycle multiple.
   The estimate reflects a discount of around 20% to the multiple
   paid by I Squared for Viridian in April 2016 and is based on a
   blended multiple, taking other similar transactions into
   account (for example the 5.5x multiple paid by Centrica for
   the supply business of Bord Gais in 2014).
- The waterfall results in a 100% recovery corresponding to RR1
   recovery for the super senior RCF of GBP225 million. The
   waterfall also indicates a 55% recovery corresponding to RR3
   for the EUR600m senior secured notes.


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

- A decrease in FFO adjusted net leverage to below 4x on a
   sustained basis and FFO interest cover trending towards 3x
- A decrease in business risk accompanied by an increase in
   share of EBITDA from regulated and quasi-regulated assets

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

- Sizeable debt-funded expansion or deterioration in operating
   performance, resulting in FFO adjusted net leverage above 5x
   and FFO interest cover below 2x on a sustained basis
- A significant reduction of the proportion of regulated and
   quasi-regulated earnings, in particular due to the change of
   the market design, would be negative for the ratings, leading
   to a reassessment of a maximum debt capacity commensurate with
   the current rating level


Sound Liquidity: Viridian has sound liquidity with GBP107 million
(pre-redemption of 10%) of unrestricted cash and short-term
deposits at FY17, as well as GBP100 million undrawn liquidity
available on the cash portion of the revolving credit facility
which expires in October 2019. The company has no material short-
term debt and the senior secured bond is not due until March 2020.
Wind assets that are financed through the company's project-
finance facilities are excluded from Fitch's total debt
calculation as this debt is held outside of the restricted group
on a non-recourse basis. Fitch expects Viridian's free cash flow
to be neutral to positive over the rating horizon as dividends
received from wind assets increase.


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
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Information contained herein is obtained from sources believed to
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