TCREUR_Public/170907.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

         Thursday, September 7, 2017, Vol. 18, No. 178


                            Headlines


C R O A T I A

AGROKOR DD: Creditors OK Mercator's Re-entry Into Bosnian Market


F R A N C E

ELIS SA: S&P Affirms 'BB' CCR on Berendsen Acquisition Approval


G E R M A N Y

AIR BERLIN: Hans Rudolf Woehrl Expects to Submit Offer
AIR BERLIN: Ryanair No Plan to Bid for Assets


I R E L A N D

HARLEY MECHANICAL: Court Orders Liquidation, 160 Jobs at Risk


L U X E M B O U R G

GARFUNKELUX HOLDCO: S&P Alters Outlook to Stable & Affirms B CCR


N E T H E R L A N D S

ALCOA NEDERLAND: Moody's Hikes CFR to Ba2, Outlook Stable
DOME 2006-I: S&P Affirms B-(sf) Issuer Rating on Class D Notes


P O R T U G A L

COMBOIOS DE PORTUGAL: Moody's Affirms Ba2 CFR, Outlook Positive


R U S S I A

BANK OTKRITIE: Moody's Lowers Sr. Unsec. Debt Ratings to B2
CREDIT SUISSE MOSCOW: S&P Affirms Then Withdraws BB+/B CCRs
POLYUS PJSC: S&P Retains 'BB-' CCR on CreditWatch Positive


S P A I N

AZORES: Moody's Revises Outlook to Pos. & Affirms Ba2 Rating
EDREAMS ODIGEO: Moody's Alters Outlook to Pos. & Affirms B2 CFR
LSFX FLAVUM: Moody's Assigns B1 CFR, Outlook Negative
* Spanish SME Delinquencies Fall Below 1%, Fitch Says


U K R A I N E

EASTERN INDUSTRIAL: Deposit Guarantee Fund Extends Liquidation
UKRKOMMUNBANK: Deposit Guarantee Fund Extends Liquidation


U N I T E D   K I N G D O M

CO-OPERATIVE BANK: Fitch Affirms B- Long-Term IDR, Outlook Stable
DECO 8 - UK: Moody's Lowers Rating on Fairhold Loan Notes to Caa1
ICELAND TOPCO: S&P Affirms 'B+' CCR on Planned Refinancing


                            *********



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C R O A T I A
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AGROKOR DD: Creditors OK Mercator's Re-entry Into Bosnian Market
----------------------------------------------------------------
SeeNews reports that Slovenian retailer Mercator said on Aug. 31
the formal basis for its re-entry into the Bosnian market has
been approved by the board of creditors of its parent company,
Croatia's ailing food and retail concern Agrokor.

According to SeeNews, Mercator said in a Ljubljana bourse filing
the transfer of possession and establishment of retail operations
in 83 stores in Bosnia and Herzegovina, currently run by
Mercator's peer Konzum, will take place gradually.

At the same time, the retailer noted, the board of creditors
adopted commitments to Konzum's restructuring in Bosnia, where it
will manage 156 of its stores in the future, SeeNews relates.
The restructuring foresees a capital increase of the Bosnian-
based unit of Konzum, SeeNews discloses.

The Slovenian company said the restructuring of Konzum BH,
however, does not include any transfer of liabilities to
Mercator, SeeNews notes.

"Mercator will acquire the equipment and inventory in Konzum's
stores, based on arm's length principle, i.e. at market price,
and thus mostly resolve its challenges regarding the existing
receivables from its peer," SeeNews quotes the company as saying.

The Slovenian company noted it has been working intensively on
its re-entry into the Bosnian market, as it is faced with
settling its relations with suppliers and employees, among other
things, SeeNews relays.

In 2014, following the takeover of Mercator by Agrokor, Konzum
was put in charge of retail operations in Croatia and in Bosnia,
SeeNews recounts.  Mercator's fast-moving consumer goods stores
in Croatia and Bosnia were leased out at arm's length principle
to Konzum, SeeNews states.

                         About Agrokor DD

Founded in 1976 and based in Zagreb, Crotia, Agrokor DD is the
biggest food producer and retailer in the Balkans, employing
almost 60,000 people across the region with annual revenue of
some HRK50 billion (US$7 billion).

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

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

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

On June 2, 2017, Moody's Investors Service downgraded Agrokor
D.D.'s corporate family rating (CFR) to Ca from Caa2 and the
probability of default rating (PDR) to D-PD from Ca-PD. The
outlook on the company's ratings remains negative.  Moody's also
downgraded the senior unsecured rating assigned to the notes
issued by Agrokor due in 2019 and 2020 to C from Caa2.  The
rating actions reflect Agrokor's decision not to pay the coupon
scheduled on May 1, 2017 on its EUR300 million notes due May 2019
at the end of the 30-day grace period. It also factors in Moody's
understanding that the company is not paying interest on any of
the debt in place prior to Agrokor's decision in April 2017 to
file for restructuring under Croatia's law for the Extraordinary
Administration for Companies with Systemic Importance.

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



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F R A N C E
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ELIS SA: S&P Affirms 'BB' CCR on Berendsen Acquisition Approval
---------------------------------------------------------------
S&P Global Ratings affirmed its 'BB' long-term corporate credit
rating on France-based textile and appliances rental company Elis
S.A. The outlook remains positive.

S&P said, "At the same time, we affirmed the 'BB' issue rating on
Elis' EUR800 million senior unsecured notes. The recovery rating
on the notes is '3', indicating our estimate of meaningful
recovery (50%-70%, rounded estimate 65%) in the event of a
payment default."

On Aug. 31, Elis obtained the necessary approval from its
shareholders of the final terms of the acquisition of U.K.-based
textile and facility services company Berendsen PLC. Regulatory
approval had been granted earlier in 2017 and S&P expects the
transaction to close on Sept. 12, 2017.

The Berendsen transaction includes a cash offer (43% of the
transaction) with the remaining portion funded by new Elis
shares. It values Berendsen at close to GBP2.2 billion. Elis will
fund the cash contribution of the transaction and the refinancing
of assumed debt with a committed bridge facility of EUR1.9
billion to be drawn by about EUR1.4 billion. The facility will
have an initial tenor of 12 months, but carries a one-year
extension option at the company's discretion. In addition, Elis
has arranged a EUR200 million capital increase subscribed by one
of its largest shareholders, the Canada Pension Plan Investment
Board. After the acquisition, Berendsen's shareholders will own a
32% stake in the combined group.

S&P said, "We view the acquisition as somewhat positive from a
business risk perspective. By combining both entities, we expect
Elis to reach a revenue base of close to EUR3.2 billion in 2017,
which is double Elis' revenue generation in 2016. The combined
company will also significantly increase Elis' geographic
diversification and expand its presence to 28 countries, from 14.
After the acquisition, Elis will receive only about one-third of
its revenues from France, a market that has shown relatively
sluggish growth in recent years, compared with about two-thirds
in 2016.

"We anticipate that the combination of Elis and Berendsen will
also lead to moderate purchasing synergies and potential for
streamlining overhead costs, which should allow Elis to return to
adjusted EBITDA margins of above 30%. However, given that the
geographic split of the two companies is largely complementary,
with Berendsen holding leading positions in the U.K. and Northern
Europe and Elis in Southern Europe, the additional synergies
expected from travel time reductions and route plan optimizations
are limited. In our view, the greatest potential for margin
improvement will come from the German market, where Berendsen's
operations will more than double Elis' revenue generation.

"We still consider Elis' financial risk profile as aggressive,
although the company is moving toward a stronger financial risk
profile with debt to EBITDA reducing to below 4x and funds from
operations (FFO) to debt of more than 20% in 2017. However, given
Berendsen's sizable investment plan and expected integration
costs, we believe that Elis' free operating cash flow (FOCF) will
be depressed over the following 12-24 months with FOCF to debt
moving to more than 5% only in 2018. We also see some integration
risks related to the combination with Berendsen, given the
significant size and Berendsen's underperformance in its domestic
U.K. market, which if continued, could further derail the
company's efforts to reduce leverage and improve FOCF generation.

"We view 2017 as a transitional year because Elis will need to
focus on the integration of Berendsen and the already acquired
Spanish competitor Indusal and Brazil-based Lavebras, with the
related extraordinary costs. The successful integration and
continued solid operating performance of the combined group, and
the generation of significant cost and capital expenditure
(capex) synergies could lead us to raise the rating, provided the
group continues to stick to its financial policy of carefully
funding potential additional acquisitions. However, this would
likely require Elis to refrain from undertaking additional
sizable acquisitions with material integration efforts or
undertaking higher-than-expected shareholder distributions in the
coming years.

"The outlook remains positive, reflecting our view that Elis
could reduce its debt to EBITDA to well below 4x one year after
acquiring Berendsen, with FOCF to debt exceeding 5% in 2018. We
see upside potential for the rating if Elis manages a successful
integration of Berendsen, which could allow it to generate higher
cost and capex synergies than expected and allowing it to quickly
improve its FOCF generation after the transition year of 2017.

"We could consider a positive rating action if Elis integrated
Berendsen in a more efficient manner than expected, as would be
seen in reduced exceptional costs and lower capex. We would need
to see ratios of debt to EBITDA well below 4x, FFO to debt well
above 20%, and FOCF to debt of more than 5% on a sustained basis.

"We could revise our outlook to stable if Elis' credit metrics
deteriorated to such an extent we thought it unlikely that the
company could sustainably maintain debt to EBITDA well below 4x
and FOCF to debt of more than 5%. This could, for example, occur
if the integration of Berendsen severely weakened Elis'
operational performance, resulting in subdued EBITDA margins,
higher-than-expected capex, or higher-than-expected integration
costs."



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G E R M A N Y
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AIR BERLIN: Hans Rudolf Woehrl Expects to Submit Offer
------------------------------------------------------
Myria Mildenberger at Reuters reports that German aviation
investor Hans Rudolf Woehrl expects to submit an offer for
insolvent Air Berlin early next week, jointly with several
partners.

According to Reuters, Mr. Woehrl told TV station ARD on Sept. 6,
"It will be a programme that goes into several hundred million
(euros), to be paid in instalments.  But even the first
instalment that we're willing to pay is very, very high."

Mr. Woehrl -- who made his name when he bought German airline
Deutsche BA from British Airways for a nominal EUR1 in 2003 --
has proposed keeping Air Berlin intact as a charter airline
rather than carving it up, Reuters relates.

Last week, he stepped back from the process to search for
partners, Reuters relays.

Leading German airline Lufthansa, Britain's easyJet and Thomas
Cook's Condor are also expected to submit offers for parts of Air
Berlin, Reuters discloses.

Bidders for the assets must submit offers by a Sept. 15 deadline
and a decision could come on Sept. 21, Reuters notes.

                        About Air Berlin

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

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

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

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

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


AIR BERLIN: Ryanair No Plan to Bid for Assets
---------------------------------------------
DPA reports that Ryanair chief executive Michael O'Leary said on
Aug. 30 the budget airline does not plan to bid for any assets
belonging to the insolvent German carrier Air Berlin.

"We will not get involved in this process: it's a stitch-up,"
DPA quotes Mr. O' Leary as saying in reference to the charge that
the insolvency process is designed to help strengthen German
airline Lufthansa.

                        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.



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I R E L A N D
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HARLEY MECHANICAL: Court Orders Liquidation, 160 Jobs at Risk
-------------------------------------------------------------
RTE News reports that the High Court has been told Harley
Mechanical Services Limited, a Co Cork mechanical services
company with debts of almost EUR2 million and 160 workers, is
beyond saving.

Ms. Justice Marie Baker ordered the winding up of the company,
which provided various mechanical services for building
contractors, RTE News relates.

Harley Mechanical, of Gortanacra, Ballymakeera, Co Cork had been
in examinership since late June after the court had heard that if
certain steps were taken the firm had a prospect of survival as a
going concern, RTE News recounts.

It had been hoped the company, established in 2011, could have
been saved through the appointment of an examiner but on Sept. 5,
Judge Baker was told that the examiner process had failed and
there was no option but to have the company wound up, RTE News
states.

When the company sought the appointment of an examiner, the High
Court was told it had more than EUR1.8 million in trade debts and
had got into difficulties after the commencement dates of several
contracts had been delayed, RTE News discloses.

Lawyers for the examiner, insolvency practitioner Aengus Burns of
Grant Thornton, said he was not in a position to put together a
scheme of arrangement with the firm's creditors, RTE News relays.

The judge, as cited by RTE News, said such a scheme, if approved
by the High Court, would have allowed the firm survive as a going
concern but despite the examiners best efforts it was in the
interest of both the creditors and the public that the firm be
wound up.


Under the current circumstances, the judge said she was
appointing Mr. Burns as the company's liquidator, RTE News notes.



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L U X E M B O U R G
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GARFUNKELUX HOLDCO: S&P Alters Outlook to Stable & Affirms B CCR
----------------------------------------------------------------
S&P Global Ratings revised to stable from negative its outlook on
Luxembourg-based debt collection company Garfunkelux Holdco 2
S.A. (Garfunkelux 2), which consolidates the activities of
Lowell's U.K., German, and Austrian operations. S&P also affirmed
its 'B+' long-term and 'B' short-term counterparty credit ratings
on Garfunkelux 2.

S&P said, "At the same time, we assigned a 'B+' issue rating and
a '3' recovery rating to the proposed senior secured floating-
rate notes to be issued by Garfunkelux Holdco 3 S.A. (Garfunkelux
3). The rating on the proposed notes is subject to our review of
the notes' final documentation."

S&P also affirmed:

-- The 'B+' issue rating on the EUR365 million and GBP565
     million senior secured notes issued by Garfunkelux 3, with
     an unchanged recovery rating of '3';

-- The 'BB' issue rating on the EUR200 million revolving credit
    facility (RCF) co-issued by Garfunkel Holding GmbH and Simon
    Bidco Ltd., with an unchanged recovery rating of '1'; and

-- The 'B-' issue rating on the GBP230 million senior unsecured
    notes issued by Garfunkelux 2, with an unchanged recovery
    rating of '6'.

S&P said, "The outlook revision reflects our expectation that the
group will maintain the improvement it has shown in its leverage
profile over the past 12 months. In addition, we consider that
operational integration risks from its recent merger and
acquisition activity are diminishing. The group's credit metrics,
as of June 30, 2017, had improved from the levels reported after
the acquisition of Tesch Inkasso Group in September 2016.

In S&P's view, management's medium-term target of net debt/EBITDA
of 4.0x-4.5x indicates that the group's S&P Global Ratings-
adjusted credit metrics will remain in the following ranges over
the next 12-18 months:

-- Gross debt to adjusted EBITDA between 4x-5x;
-- Funds from operations to gross debt between 12%-20%; and
-- Adjusted EBITDA to interest expense between 3x-6x.

Adjusted EBITDA is gross of portfolio amortization.

In September 2016, the group raised EUR230 million in floating-
rate notes to fund the acquisition of German-based Tesch Inkasso
Group. S&P said, "At this time, we revised our outlook to
negative, reflecting a weakening in the group's credit metrics
and our view of increased operational risks. However, we consider
that the continued integration of Lowell and GFKL since the
merger in 2015, plus the full-year earnings of Tesch, will lead
to credit metrics more consistent with our current assessment by
year-end 2017. Our base-case scenario incorporates continued
growth in gross collections and the group's backbook of debt
portfolios, which supports the ability to service its debt. We
also recognize a larger proportion of third-party servicing
income within total income, supporting the group's revenue
stability.

"Our 'b+' group credit profile (GCP) for the combined entity
continues to incorporate a downward adjustment of one notch based
on our view that, among other things, Garfunkelux 2's credit
metrics are at the weaker end of its peer group, and there is
some uncertainty with regards to the group's future financial
policy under its current ownership structure.

"The group received full authorization from the U.K. conduct
regulator, the Financial Conduct Authority, in June 2017.
However, our business risk profile assessment remains constrained
by the regulatory and operational risks faced by credit
management services companies. In addition, given the group's
recent formation, its track record of executing its strategy is
relatively short. That said, the group remains one of the largest
credit management businesses operating across two large European
markets. We consider that the group benefits from its scale and
diversification, particularly its presence across a number of
asset classes, and its growing proportion of revenue from third-
party servicing income.

"The stable outlook reflects our expectation that Garfunkelux 2
will maintain credit metrics in line with our current assessment.
We based our view on our expectation that the group will maintain
sufficient levels of cash collections, sustain its competitive
position in the U.K. and Germany, and will not materially
increase its debt levels.

"We could lower the ratings if we no longer expect the group to
improve its credit metrics over the next 12 months, or if we
anticipate that a decline in the group's cash collections will
affect its debt-servicing capacity. We could revise our forward-
looking financial risk profile assessment downward if we expect:

-- Gross debt to adjusted EBITDA above 5x;
-- Funds from operations to gross debt below 12%; or
-- Adjusted EBITDA to interest expense below 3x.

"Such a scenario could unfold if the group's earnings capacity is
lowered or it sees a material, and unanticipated, rise in costs.
It could also occur if we saw further signs of an aggressive
financial policy, for example, the group raising additional debt
to fund brisk growth or another material acquisition.

"Given Garfunkelux 2's current ownership structure and credit
metrics, we consider an upgrade unlikely over the next 12 months.
We could raise the ratings if we saw evidence of leverage
improving beyond our current expectations, combined with further
clarity on the group's long-term financial policy. A positive
rating action would also be supported by evidence that Permira's
strategy as a financial sponsor will not hinder GH2's debt-
servicing capabilities."



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ALCOA NEDERLAND: Moody's Hikes CFR to Ba2, Outlook Stable
---------------------------------------------------------
Moody's Investors Service upgraded Alcoa Nederland Holding B.V.'s
Corporate Family Rating (CFR) and Probability of Default Rating
to Ba2 and Ba2-PD respectively from Ba3 and Ba3-PD respectively.
The senior unsecured notes, guaranteed by Alcoa Corporation
(Alcoa) and restricted subsidiaries were upgraded to Ba2 from Ba3
and the Speculative Grade Liquidity rating was upgraded to SGL-1
from SGL-2. The outlook is stable.

The upgrade acknowledges the strengthened operating profile of
Alcoa, improvement in debt protection metrics, moderate leverage
(roughly 1.8x), and excellent liquidity position. Alcoa's
improved earnings and cash flow profile is driven by the
strengthened fundamentals in the aluminum markets and consequent
pricing improvement for both alumina (+ roughly 34% in the first
half of 2017 versus the comparable 2016 period) and aluminum (+
roughly 15% in the first half of 2017 versus the comparable 2016
period), as well as continued focus on costs although cost creep
is evidenced and the company anticipates a net impact of negative
$50 million in 2017. As both realized alumina and aluminum prices
are on a lag basis to price changes, Moody's expects that Alcoa's
performance will remain strong through the balance of the year
and contribute to good cash flow generation. While alumina and
aluminum prices are expected to remain volatile, better
underlying fundamentals exist on stronger demand levels, reduced
LME inventories and the expectation on the closure of illegal and
polluting capacity in China as well as the curbing of output
during the heating season.

The following summarizes rating action:

Upgrades:

Issuer: Alcoa Nederland Holding B.V.

-- Probability of Default Rating, Upgraded to Ba2-PD from Ba3-PD

-- Speculative Grade Liquidity Rating, Upgraded to SGL-1 from
    SGL-2

-- Corporate Family Rating, Upgraded to Ba2 from Ba3

-- Backed Senior Unsecured Regular Bond/Debenture, Upgraded to
    Ba2 (LGD4) from Ba3 (LGD4)

Outlook Actions:

Issuer: Alcoa Nederland Holding B.V.

-- Outlook, Remains Stable

RATINGS RATIONALE

The Ba2 CFR at Alcoa Nederland Holding B.V. (Nederland) considers
its parent's (Alcoa) position as a leading producer of bauxite,
alumina and aluminum, geographical and aluminum product
diversity, and operational quality. From a business profile
perspective, Alcoa Corp. is well positioned within its products
and markets served. Additionally, the company has a solid cost
production profile, driven by continued refocusing of its
refining and smelting system and idling/closure of higher cost
facilities. Moody's expects the company to generate EBITDA of at
least $2 billion in 2017.

However, the CFR considers the company's exposure to essentially
a single metal commodity, as the demand for bauxite and alumina
is directly correlated to the demand for aluminum, the volatility
in the alumina and aluminum markets driven by weak global growth
expectations and industrial production levels, overcapacity,
particularly given the increase in Chinese smelting capacity,
which mitigates the positive impact of supply curtailments and
closures by other producers, supply/demand imbalances, and market
sentiment.

The stable outlook incorporates the expectation that aluminum
prices will remain comfortably above 2016 levels and that the
improvement in alumina prices will hold. Additionally, the
outlook contemplates that Alcoa will remain free cash flow
generative and continue to strengthen its balance sheet.

The ratings could be upgraded should Alcoa be able to sustain
EBIT margins of at least 8%, EBIT/interest of at least 4x and
(cash flow from operations less dividends)/debt of at least 20%.
The maintenance of a conservative financial policy to absorb
volatiliy in the industry and excellent liquidity positions as
well as an understanding as to the company's growth strategy
would be further considerations in any upgrade. Ratings could be
downgraded should the liquidity position erode, EBIT/interest is
2.5x or less and (cash flow from operations less dividends)/debt
is 15% or less.

The SGL-1 speculative grade liquidity rating acknowledges the
company's excellent liquidity as evidenced by its cash position
of $954 million at June 30, 2017 and unused (except for some
letter of credit issuance) $1.5 billion secured revolving credit
facility (RCF -unrated) at Alcoa Nederland, guaranteed by Alcoa
and maturing in November 2021. The RCF is secured by
substantially all assets. The RCF contains two financial
covenants; Consolidated EBITDA/interest of no less than 5x and
consolidated debt/EBITDA of no more than 2.25x (Moody's leverage
ratios include Moody's standard adjustments for pensions and
operating leases. Additionally, the company has no material debt
maturities until September 2024.

The Ba2 senior unsecured debt rating, at the same level as the
CFR, reflects the preponderance of unsecured debt in the capital
structure, given the level of unsecured notes being issued and
unfunded pension obligations relative to the $1.5 billion secured
revolving credit facility.

Alcoa Nederland is a wholly owned subsidiary of Alcoa. Alcoa Corp
holds the bauxite, alumina, aluminum, cast products and energy
business as well as the rolling operations in Warrick, Indiana
and Alcoa Inc's 25.1% interest in the Ma'aden Rolling Company.
Revenues for the twelve months ended June 30, 2017 were $10.4
billion.

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


DOME 2006-I: S&P Affirms B-(sf) Issuer Rating on Class D Notes
--------------------------------------------------------------
S&P Global Ratings raised its credit ratings on Dome 2006-I
B.V.'s class B and C notes. At the same time, S&P has affirmed
its ratings on the class A and D notes.

S&P said, "The rating actions follow our credit and cash flow
analysis of the transaction and the application of our European
residential loans criteria.

"In our opinion, the current outlook for the Dutch residential
mortgage and real estate market is benign (see "Outlook
Assumptions For The Dutch Residential Mortgage Market," published
on Nov. 23, 2016). The generally favorable economic conditions
support our view that the performance of Dutch residential
mortgage-backed securities (RMBS) collateral pools will remain
stable in 2017. Given our outlook on the Dutch economy, we
consider the base-case expected losses of 0.5% at the 'B' rating
level for an archetypical pool of Dutch mortgage loans, and the
other assumptions in our European residential loans criteria, to
be appropriate."

The collateral performance has improved since S&P's previous
review, with arrears of more than 90 days, as of June 2017,
falling to 0.7% from 1.3%.

After applying its European residential loans criteria to this
transaction, S&P's credit analysis results show a decrease in the
weighted-average foreclosure frequency (WAFF) for all rating
levels apart from 'AAA', and a decrease in the weighted-average
loss severity (WALS) for each rating level, compared with those
at its previous review.

  Rating level   WAFF (%)   WALS (%)
  AAA            28.4        48.4
  AA             19.4        45.0
  A              14.7        38.4
  BBB             9.9        35.8
  BB              5.3        32.1
  B               3.9        29.6

The decrease in the WAFF in rating scenarios below 'AAA' is
primarily due to the increased seasoning and lower level of
arrears in the transaction. The WAFF increase in the 'AAA'
scenario is due to the increased seasoning not offsetting the
increase in the original loan-to-value (LTV) ratio since our
previous review. The decrease in the WALS is mainly due to the
decrease in the weighted-average current LTV ratio since our
previous review and our lower market value decline assumptions.

The amortizing reserve fund has remained fully funded since the
duty-of-care setoff compensation claims from borrowers were
successfully paid back to the issuer by the originator's (DSB
Bank N.V.) bankruptcy estate, on the basis of, among other
factors, a breach of the representations and warranties that DSB
Bank provided to the issuer at closing. Consequently, given the
strong asset pay-down observed in this transaction since our
previous review, the available credit enhancement for the class
A, B, and C notes has increased.

S&P said, "As we do not consider the swap agreements to be in
line with our current counterparty criteria, the maximum
potential rating for the notes is constrained at one notch above
the issuer credit rating on the swap guarantor, Cooperatieve
Rabobank U.A. (Rabobank Nederland; A+/Stable/A-1) (see
"Counterparty Risk Framework Methodology And Assumptions,"
published on June 25, 2013).

"The increased available credit enhancement for the class A, B,
and C notes is commensurate with higher ratings than those
currently assigned. Consequently, we have raised our ratings on
the class B and C notes. At the same time, due to the
abovementioned counterparty cap, we have affirmed our 'AA- (sf)'
rating on the class A notes.

"Despite the positive asset performance and the lower credit
coverage required, the class D notes are unable to withstand the
stresses we apply at the 'B' rating level. In our view, these
notes are not reliant upon favorable business conditions to
redeem and there is a less than one-in-two chance of a default.
Consequently, we have affirmed our 'B- (sf)' rating on the class
D notes in line with our criteria for assigning 'CCC' category
ratings."

The assets backing the transaction are residential mortgage
loans, granted to individuals in the Netherlands. DSB Bank (now
insolvent) originated the loans.

RATINGS LIST

  Class   Rating      Rating
          To          From

  Dome 2006-I B.V.
  EUR512.4 Million Secured Mortgage-Backed Floating-Rate Notes

  Ratings Raised

  B     AA- (sf)       A (sf)
  C     BBB+ (sf)       BBB (sf)

  Ratings Affirmed

  A     AA- (sf)
  D     B- (sf)



===============
P O R T U G A L
===============


COMBOIOS DE PORTUGAL: Moody's Affirms Ba2 CFR, Outlook Positive
---------------------------------------------------------------
Moody's Investors Service has changed to positive from stable the
outlook on the ratings of Portuguese state-owned rail operator
Comboios de Portugal (CP). Concurrently, Moody's has affirmed
CP's Ba2 corporate family rating (CFR) and Ba2-PD probability of
default rating (PDR). The baseline credit assessment (BCA) of CP
remained unchanged at caa1.

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 takes into account the strong
linkages between Combios de Portugal and the sovereign, from
which it receives considerable financial support," says Lorenzo
Re, a Vice President -- Senior Analyst at Moody's and lead
analyst for CP.

RATINGS RATIONALE

The change in CP's outlook to positive reflects the 1 September
change in the outlook to positive of the Government of Portugal's
Ba1 sovereign rating.

In accordance with Moody's GRI rating methodology, CP's Ba2
rating reflects the combination of the following inputs: (1) a
BCA, which is a measure of the company's standalone financial
strength without the assumed benefit of government support, of
caa1; (2) the Ba1 with positive outlook local currency rating of
Portugal; (3) a very high probability of government support; and
(4) very high default dependence.

The Ba2 CFR assumes that in the future the Portuguese government
will continue to provide CP with funds, either in the form of
loans or capital increases, enabling it to meet its debt
obligations on a timely basis.

In 2016, the Portuguese government provided CP with EUR655
million of new equity (either in cash or by conversion of a State
loan) and Moody's expects that the government will fund (either
by injecting new capital or providing additional lending) CP's
2017 financial requirements, including around EUR85 million of
interest costs and EUR27 million of maintenance capital spending,
and around EUR399 million of debt maturities in the second half
of 2017 and EUR409 million in 2018.

This significant financial support is reflected in Moody's
assessment of a very high probability of support, that is also
based on (1) CP being a 100% state-owned company, and (2) its
special Entidade Publica Empresarial (EPE) legal status.

CP's caa1 BCA reflects the company's weak standalone financial
profile. Despite some improvements in the financial performance
and the reduction in the total amount of debt from EUR4.2 billion
in 2014 to EUR3.0 billion in 2016, owing to new equity provided
by the state, CP's financial structure remains unsustainable.
Moody's expects the company's operating cash flows (before
interests) to remain neutral or only modestly positive in 2017-
18, thus being largely insufficient to cover CP's financial needs
(debt service and capex).

WHAT COULD CHANGE THE RATINGS UP/DOWN

An upgrade of the Portuguese sovereign rating would likely result
in an upgrade of CP's ratings, with the one-notch differential in
respect of the company's CFR expected to be maintained. An
upgrade in the BCA is unlikely given CP's current financial
structure.

Downward pressure on the rating could result from a deterioration
in sovereign creditworthiness. Furthermore, any evidence that the
provision of financial support from Portugal would not be
forthcoming if required would result in a downgrade of CP's
rating.

PRINCIPAL METHODOLOGIES

The methodologies used in these ratings were Global Passenger
Railway Companies published in June 2017, and Government-Related
Issuers published in August 2017.

CP is the main railway operator in Portugal, controlling 90% of
the passenger market. The company is 100% owned by the Portuguese
government though the Ministry of Finance and the Ministry of
Economy. In 2016, it transported almost 115 million of passengers
and reported revenues of EUR266 million.



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


BANK OTKRITIE: Moody's Lowers Sr. Unsec. Debt Ratings to B2
-----------------------------------------------------------
Moody's Investors Service downgraded to B2 from Ba3 the long-term
foreign and local-currency senior unsecured debt and deposit
ratings of Bank Otkritie Financial Corporation PJSC (BOFC or Bank
Otkritie), one of Russia's largest private listed banks. The
action reflects the bank's failure due to significant outflow of
clients funds and request for a bail-out from its shareholders
followed by subsequent take-over by the Central Bank of Russia.

Concurrently, Moody's downgraded the bank's foreign-currency
subordinated debt ratings to C from B2 and C(hyb) from Caa1(hyb)
(assumed by Bank Otkritie), its baseline credit assessment (BCA)
to ca from b1, its adjusted BCA to ca from b1 and its long-term
counterparty risk assessment (CRA) to B1(Cr) from Ba3(cr).

In addition, Moody's has affirmed BOFC's short-term deposit
rating of Not Prime and the short-term CRA rating of Not
Prime(cr).

All long-term senior unsecured debt and deposit ratings carry a
developing outlook. A full list of affected ratings can be found
at the end of this press release.

RATINGS RATIONALE

The rating action follows the Central Bank of Russia's (CBR)
announcement on August 29, 2017 that it will act as a key
investor in BOFC via the country's Banking Sector Consolidation
Fund (BSCF). The CBR has said that it will not apply a payment
moratorium on creditors' claims, nor it will implement a bail-in.
The CBR and BSCF have appointed a provisional administration to
provide them with operational control over Otkritie and conduct
their due diligence of the bank over the coming months.

The CBR's actions indicate that the support it will provide is
necessary to enable the bank to remain a going concern and avoid
default. This is consistent with a BCA of ca, indicating the
bank's failure to continue its operations on a standalone basis.

The CBR now has a number of policy tools at its disposal, which
range from the full support it has indicated, to a liquidation of
the bank. Moody's believes that a liquidation is very unlikely in
view of the bank's size: indeed the CBR states that Otkritie is a
systemically important credit institution ranked 8th by assets in
Russia. As such, the rating agency has revised the probability of
government support for Otkritie's senior creditors to very high
from moderate, and now includes five notches of uplift within the
long-term senior unsecured and deposit ratings of B2, partly
offsetting the reduction in the bank's BCA. The long-term CRA of
B1(cr) also reflects this very high likelihood of support, taking
into account the CBR's statement that Otkritite's principal
operating subsidiaries will continue their normal operation and
provide services to their clients.

Nevertheless, Moody's believes that Otkritie's failure and the
central bank's due diligence will likely lead to significant
losses and consequent reduction in capital, given the bank's
large related-party lending, participation in the financing of
certain projects of its parent Otkritie Holding (unrated), and
its now heavy reliance on more expensive CBR funding. This is
likely to lead to the write-off or conversion of subordinated
debt and hybrid subordinated debt into equity, resulting in
limited recovery for these bondholders, reflected in the
downgrade of the ratings to C and C(hyb), respectively.

RATIONALE FOR DEVELOPING OUTLOOK

The developing outlook reflects the both upward and downward
ratings pressures as the CBR and BCSF conduct their due diligence
and likely restructuring of Otkritie. To the extent this leads to
a recapitalisation and reduction in central bank funding, this
may be positive for senior creditors. Yet if the CBR were to
reconsider its supportive stance, this would be negative.

WHAT COULD MOVE THE RATINGS DOWN/UP

The bank's long-term senior debt and deposit ratings could be
upgraded if the bank's capital and liquidity were to return to
adequate and sustainable levels without any moratorium or bail-in
of these instruments.

The bank's ratings could be downgraded, however, if the
likelihood of a moratorium, bail-in, distressed exchange or
liquidation were to increase.

LIST OF AFFECTED RATINGS

Issuer: Bank Otkritie Financial Corporation PJSC

Downgrades:

-- LT Bank Deposits, Downgraded to B2 from Ba3, Outlook Changed
    To Developing From Rating Under Review

-- Senior Unsecured Regular Bond/Debenture, Downgraded to B2
    from Ba3, Outlook Changed To Developing From Rating Under
    Review

-- Subordinate, Downgraded to C from B2

-- Subordinate, Downgraded to C (hyb) from Caa1 (hyb) (Assumed
    by Bank Otkritie Financial Corporation PJSC)

-- Adjusted Baseline Credit Assessment, Downgraded to ca from b1

-- Baseline Credit Assessment, Downgraded to ca from b1

-- LT Counterparty Risk Assessment, Downgraded to B1(cr) from
    Ba3(cr)

Affirmations:

-- ST Bank Deposits, Affirmed NP

-- ST Counterparty Risk Assessment, Affirmed NP(cr)

Outlook Actions:

-- Outlook, Changed To Developing From Rating Under Review

PRINCIPAL METHODOLOGY

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


CREDIT SUISSE MOSCOW: S&P Affirms Then Withdraws BB+/B CCRs
-----------------------------------------------------------
S&P Global Ratings affirmed its 'BB+/B' long- and short-term
counterparty credit ratings on Russia-based Credit Suisse
Securities (Moscow) Ltd. (CSSM).

S&P subsequently withdrew its ratings on CSSM at CSSM's request.
At the time of withdrawal, the outlook was positive.

S&P said, "The affirmation reflects our view of CSSM as a highly
strategic subsidiary of its parent bank, Credit Suisse AG. There
are close operational and financial ties between the two
entities. Also, because the group plans to further develop its
business in Russia, CSSM has an important role in Credit Suisse's
strategy. Furthermore, we think there is a very high likelihood
that CSSM would receive capital support if needed.

"At the time of the withdrawal, we capped the ratings on CSSM at
the level of our foreign currency long-term sovereign rating on
Russia (BB+/Positive/B). The broker is exposed mainly to business
risks in Russia, and we think this exposure will remain
substantial in the next 12-18 months."


POLYUS PJSC: S&P Retains 'BB-' CCR on CreditWatch Positive
----------------------------------------------------------
S&P Global Ratings maintained its 'BB-' long-term corporate
credit rating on Russia-based miner Polyus PJSC, and its 'BB-'
issue rating on the group's senior unsecured debt issued by the
finance SPV Polyus Finance PLC on CreditWatch, where it
originally placed them with positive implications on June 8,
2017.

S&P said, "We also withdrew the 'BB-' long-term corporate credit
rating on Polyus' parent company Polyus Gold International Ltd.,
at the issuer's request.

On June 30, 2017, Polyus completed a secondary public offering of
9.7% of its shares (on a fully diluted basis, including the over-
allotment option), raising $858 million. S&P assumes Polyus and
its major shareholders will use the funds for deleveraging.

Additionally, the company has negotiated a sale of up to a 15%
stake (including the option for up to 5% of Polyus' shares,
exercisable by the end of May 2018) to a consortium of Chinese
investors led by Fosun International for a total consideration of
about $1.4 billion. The deal has yet to be approved by the
Chinese regulators, but we understand this could be finalized by
the end of this year.

S&P said, "We still consider that the two transactions signal the
company's commitment to more conservative financial policies and
suggest that the risk that it will make aggressive shareholder
distributions has fallen. That said, we do not expect these
financial policy risks to disappear completely in the medium
term, because we have not been able to obtain a clear view of the
debt amount and capital structure at the shareholder level, and
because we expect the current shareholder will retain control. As
such, although we may reduce our current two-notch downward
adjustment for the financial policy to one notch, we do not
expect Polyus' financial policy to become a neutral factor for
the rating in the medium term.

S&P plans to resolve the CreditWatch upon the finalization of the
transaction with Fosun, most likely within the next three months.
For an upgrade, S&P would also need to observe a combination of:

-- The company refraining from extra shareholder distributions
    on top of the approved dividend payout ratio.

-- Moderate leverage, with funds from operations to debt
    comfortably in the 30%-45% range through the cycle.

-- Consistent positive free operating cash flow that enables
    gradual deleveraging at the company and shareholder level.

S&P said, "If the company for any reason withdraws from the deal
with Fosun or its financial and operational performance weakens
below our expectations, we would consider an upgrade to be less
likely in the short term. We will continue to monitor Polyus'
track record and the developments in its financial policies."



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


AZORES: Moody's Revises Outlook to Pos. & Affirms Ba2 Rating
------------------------------------------------------------
Moody's Investors Service has changed the outlook on the ratings
of the autonomous regions of Azores and Madeira to positive from
stable. At the same time, Moody's affirmed the long-term issuer
ratings of these two Portuguese sub-sovereigns.

The outlook changes reflect the expectation of reduced systemic
risk as captured by the outlook change on the Ba1 Portuguese
sovereign rating to positive from stable on September 1, 2017.
The improving resilience of Portugal's economic growth and
ongoing fiscal improvement will also help strengthen the credit
profile of both autonomous regions given the strong correlation
between the Portuguese sovereign and sub-sovereign credit risk.

RATINGS RATIONALE

RATIONALE FOR THE OUTLOOK CHANGES

The outlook change to positive from stable for the autonomous
regions of Azores and Madeira reflect the decrease in systemic
pressure following the outlook change to positive from stable for
Portugal.

The revenue base for both autonomous regions will increase as the
country's improving medium-term economic prospects will gradually
result in higher shared tax revenue and growing state transfers
for these two Portuguese regional governments. These elements
will help the regions' efforts to rebalance their budgets in the
future and therefore reduce their need for further debt
financing.

Furthermore, despite their autonomous status, the ratings for
both regions benefit from Moody's assumption of a high likelihood
of support from the central government should it be required.

RATIONALE FOR THE RATING AFFIRMATIONS

-- AUTONOMOUS REGION OF AZORES

Moody's affirmation of the Ba2 long-term issuer rating of the
autonomous region of Azores reflects the region's high net direct
and indirect debt levels of 255% of operating revenue in 2016,
although Moody's expects a slight improvement to be recorded in
the current fiscal year.

Azores also faces ongoing budgetary challenges to address ongoing
deficits.

The gross operating balance, although positive, fell in 2016 as
operating expenditures increased 4.7%, reflected primarily in
higher healthcare spending and rising goods and services costs.
Controlling expenditure increases will be crucial for the region
in its efforts to return to balanced budgets.

-- AUTONOMOUS REGION OF MADEIRA

The affirmation of the B1 long-term issuer rating of the
autonomous region of Madeira reflects the region's weak fiscal
performance, sizeable commercial debt and very high debt metrics
(390% of operating revenues in 2016). To prevent default on its
debt obligations, the region has benefited from central
government liquidity support since 2012 through several loans and
guarantees. Furthermore, the Portuguese treasury (IGCP) assumed
Madeira's debt management between 2012 and 2015. The region
continues to work with the central government on a long-term plan
to reduce its debt levels and commercial debt stock.

Moody's believes that this region will continue to receive
liquidity support from the central government through additional
loans or guaranteed debt for as long as financial pressures
persist.

Madeira also faces ongoing sizeable deficits and high financing
requirements which continue to weaken its fiscal health. Moody's
notes that the region has made significant fiscal consolidation
efforts and that its tax revenue collection has increased
significantly in recent years due to tax rate hikes. Madeira's
tax revenues increased by 41% between 2012 and 2016, helping the
region to reduce its deficit to operating revenue ratio to 10% in
2016 from 77% in 2013.

WHAT COULD CHANGE THE RATINGS UP/DOWN

The strengthening of Portugal's credit profile, as reflected by
an upgrade of the sovereign rating, would result in further
decreases in the systemic risk for the Portuguese sub-sovereigns,
resulting in upward pressure on their ratings in general. In
addition, upward pressure would develop on Azores and Madeira, if
their fiscal and financial performance were to improve.

A downgrade of Portugal's sovereign rating, leading to
indications of weakening government support for the regions, or a
deterioration in their fiscal performance, would likely lead to a
downgrade of sub-sovereign entities.

The sovereign action required the publication of these credit
rating actions on a date that deviates from the previously
scheduled release date in the sovereign release calendar.
The specific economic indicators, as required by EU regulation,
are not available for Azores, Autonomous Region of and Madeira,
Autonomous Region of. The following national economic indicators
are relevant to the sovereign rating, which was used as an input
to this credit rating action.

Sovereign Issuer: Portugal, Government of

GDP per capita (PPP basis, US$): 28,053 (2015 Actual) (also known
as Per Capita Income)

Real GDP growth (% change): 1.6% (2015 Actual) (also known as GDP
Growth)

Inflation Rate (CPI, % change Dec/Dec): 0.4% (2015 Actual)

Gen. Gov. Financial Balance/GDP: -4.4% (2015 Actual) (also known
as Fiscal Balance)

Current Account Balance/GDP: 0.1% (2015 Actual) (also known as
External Balance)

External debt/GDP: [not available]

Level of economic development: Very High level of economic
resilience

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

On August 31, 2017, a rating committee was called to discuss the
rating of the Azores, Autonomous Region of; Madeira, Autonomous
Region of. The main points raised during the discussion were: The
systemic risk in which the issuers operates has materially
decreased.

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


EDREAMS ODIGEO: Moody's Alters Outlook to Pos. & Affirms B2 CFR
---------------------------------------------------------------
Moody's Investors Service has changed the outlook on the ratings
of eDreams ODIGEO S.A. to positive from stable. Concurrently
Moody's has affirmed the company's B2 corporate family rating
(CFR), B2-PD probability of default rating (PDR) and the B3
rating on the company's EUR435 million backed senior secured
notes due 2021.

The change in outlook reflects:

- Strong trading, cash generation and deleveraging in the fiscal
   year ended March 31, 2017

- Further deleveraging to below 4.0x Moody's-adjusted debt /
   EBITDA expected through voluntary prepayments of the senior
   secured bonds and earnings growth

- eDreams leading position in the European online travel agency
   (OTA) flights segment

- Risks of disruption from price transparency strategy, although
   the effects are expected to be limited

RATINGS RATIONALE

In fiscal 2017, eDreams grew its bookings by 9%, revenue margin
by 5% and EBITDA by 12%, as the OTA segment continues to grow at
a faster pace than the wider travel industry. As a result,
Moody's-adjusted leverage reduced to 4.3x, compared to 4.7x at
June 2016 (pro forma for the refinancing carried out in October
2016).

The company has signaled its intention to make a voluntary
prepayment of up to 10% of the senior secured notes by October
2017, utilising efficient call protection terms within the bond
documentation. Whilst a final decision on prepayment has not been
made, eDreams retains a conservative financial policy focused on
deleveraging which may lead to further debt prepayments in the
future. As a result and due to further anticipated earnings
growth, Moody's-adjusted leverage is expected to reduce to below
4x over the next 12-18 months.

eDreams is currently implementing a strategy to present a more
transparent display of prices on its websites, intended to
improve customer loyalty and reduce customer acquisition costs.
In the near term this is affecting results through reduced
booking growth and lower revenue margin per booking, and the
strategy is currently being rolled out across the business.
Moody's expects the company to continue growing its revenue
margin and EBITDA in fiscal 2018, but considers that potential
execution risks remain whilst the transparency strategy is fully
implemented.

The B2 CFR reflects (1) relatively high leverage; (2) a
geographic concentration in Southern Europe and France; and (3)
industry risks, including value chain disintermediation from
airlines or other intermediaries, exposure to paid search costs
and risks of exogenous shocks.

More positively, the ratings are supported by: (1) eDream's
strong competitive positioning within the OTA industry in Europe,
particularly within the flight segment and in its key markets of
France, Spain, UK, Italy, Germany, and Scandinavia; (2) Moody's
expectation that the online travel market will continue to
benefit from migration from high-street travel agencies, although
at a slower rate than in the past; (3) Moody's expectation of
general growth in the airline passenger market; and (4)
conservative financial policies expected to drive further
deleveraging.

LIQUIDITY

eDreams' liquidity is adequate. As at June 30, 2017, the company
had a cash balance of EUR97 million, which may be reduced by up
to EUR45 million from the proposed debt prepayment in October
2017. Further cushion is provided by the EUR127 million super-
senior revolving credit facility (RCF) available until 2021,
subject to a leverage test financial covenant against which there
is significant headroom.

STRUCTURAL CONSIDERATIONS

The company's capital structure consists of (1) a super-senior
revolving credit facility of EUR127 million maturing in 2021; (2)
a super-senior guarantee facility of EUR30 million maturing in
2021; and (3) EUR435 million of senior secured notes maturing in
2021. The senior secured notes are rated B3, which reflects their
ranking behind the super-senior facilities and their limited
security package.

RATING OUTLOOK

The positive outlook reflects Moody's expectation that the
company will make a substantial debt repayment in October 2017,
with conservative financial policies and earnings growth
supporting further deleveraging thereafter. It assumes that the
company will continue to generate solid single digit growth in
revenue margin, with a stable cost environment, and that there
will no material debt funded acquisitions or dividends in the
near to medium term, with liquidity remaining satisfactory.

WHAT COULD CHANGE THE RATING - UP

Upward pressure on the rating could occur if Moody's-adjusted
debt/EBITDA were to trend substantially below 4.0x on a
sustainable basis, with Moody's-adjusted free cash flow (FCF) to
debt above 10%. Moody's would in such a scenario also expect
eDreams to display solid growth in revenue margin and stable
EBITDA margins, with liquidity remaining satisfactory.

WHAT COULD CHANGE THE RATING - DOWN

Negative rating pressure could develop if Moody's-adjusted
debt/EBITDA were to exceed 5.0x, if Moody's-adjusted FCF to debt
were to trend towards zero, or if the company's liquidity profile
were to weaken. Negative pressure could also develop if there is
significant disruption to the market or distribution chain
resulting in reducing revenue margin or profitability.

PRINCIPAL METHODOLOGY

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

COMPANY PROFILE

eDreams is the largest OTA in Europe in the flights segment. It
was formed in 2011 when Axa (now Ardian) and Permira acquired
Opodo and merged it with their existing portfolio travel
companies to create a European rival to Expedia. It is listed in
Spain with an equity market value of approximately EUR300 million
in August 2017.

The company is present in 44 countries, with a particularly
strong penetration in France, Spain, Italy, Germany, the UK and
Scandinavia. The company's brands include Opodo, eDreams, Go
Voyages, Travellink and Liligo.


LSFX FLAVUM: Moody's Assigns B1 CFR, Outlook Negative
-----------------------------------------------------
Moody's Investors Service has assigned a B1 corporate family
rating (CFR) and a B1-PD probability of default rating (PDR) to
LSFX Flavum Holdco, S.L., an intermediate holding company of
Spain-based Esmalglass-Itaca group ("E-I"). Moody's has also
assigned provisional (P)B1 instrument ratings to the proposed
EUR375 million senior secured term loan B (TLB, maturing 2024)
and EUR60 million senior secured revolving credit facility (RCF,
maturing 2024), to be raised by LSFX Flavum Bidco, S.L., a direct
subsidiary of LSFX Flavum Holdco, S.L. The outlook on all
aforementioned ratings is negative.

Proceeds from the new TLB will be used to finance the group's
acquisition by funds controlled by private equity firm Lone Star
Funds, to refinance existing debt and pay transaction fees and
expenses. Moody's anticipates that the indirect cash contribution
from the new shareholder will be in the form of common equity.

Concurrently, Moody's has withdrawn the B1 CFR and the B2-PD PDR
assigned to Pigments II B.V.

The existing instrument ratings on the EUR250 million senior
secured term loan (maturing 2022), the EUR40 million senior
secured RCF and the EUR15 million senior secured acquisition
facilities (both maturing 2021), raised by Pigments II B.V.,
remain unchanged. Moody's expects the outstanding loans to be
repaid upon closing of the acquisition and to withdraw the
instrument ratings upon repayment.

Moody's issues provisional ratings in advance of the final sale
of securities and these ratings reflect the rating agency's
preliminary assessment of the transaction. Upon a conclusive
review of the final documentation, Moody's will endeavor to
assign definitive ratings to the proposed senior secured notes
and RCF. Definitive ratings may differ from provisional ratings.

RATINGS RATIONALE

The assigned B1 CFR with a negative outlook reflects the increase
in E-I's indebtedness following the proposed refinancing, which
results in an expected leverage of around 5x Moody's-adjusted
debt/EBITDA at year-end 2017. While leverage is initially
elevated, also considering an estimated ratio of around 3.2x
before the acquisition, Moody's expects E-I to be able to
progressively restore its leverage to levels below 4.5x over the
next 12 to 18 months. Any evidence of the inability of the group
to reach this level, however, driven either by operational
underperformance or as a result of more aggressive financial
policy, would lead to downward pressure on the ratings, as
reflected in the negative outlook.

Moreover, the assigned B1 CFR is constrained by (1) the group's
small scale with total sales of around EUR410 million and EBITDA
(company-adjusted) of about EUR79 million for the 12 months ended
(LTM) 30 June 2017, (2) its narrow product diversification with a
focus on intermediate products for ceramic tiles, (3) exposure to
the cyclical construction industry, albeit tempered by more
stable demand for renovation works, (4) a competitive business
environment, especially in the segment of inkjet inks, where
Moody's expects intense price pressure to persist at least in the
medium term, (5) foreign currency risk related to a substantial
exposure to Brazil and China, where sales and purchases are
partly denominated in different currencies, and (6) heightened
risk of debt-funded acquisitions given a growth-focused strategy
of the group's new shareholder.

More positively, the rating remains supported by (1) E-I's
leading global market positions in all of its product groups, but
particularly in the consolidated body stains and inkjet inks
segments, (2) favorable medium- to long-term growth drivers
including the substitution of alternative flooring and wall-
covering products by ceramic tiles and urbanization trends in
emerging markets, (3) high profitability, exemplified by Moody's-
adjusted EBITDA margins of around 19% over the last 5 years, (4)
healthy cash flow generation with expected positive free cash
flows in the range of EUR20-30 million over the next three years,
despite increasing capital expenditures related to facility
expansions in Vietnam and Brazil and a higher interest burden
following the refinancing, (5) a track record of constant product
innovation and a best in class quality and service offering, (6)
good prospects for recovering economic and construction activity
in some of E-I's core markets in Western Europe (e.g. Spain,
Portugal) and the Americas (Brazil), and (7) a seasoned and
highly experienced management team.

Moody's takes comfort from the latest recovery in key end-markets
of the group such as Spain and Brazil, which, besides good
momentum in Far East, have resulted in E-I's sales and EBITDA
(company-adjusted) increasing by 10.6% and 2.3% in the first half
of 2017, respectively. The agency further projects around mid-
single-digit (organic) volume and topline growth in 2017 and next
year, whilst assuming no material effects from rising raw
material costs and/or increasing price pressure. This should
enable E-I to increase profits and de-lever to below 4.5x
Moody's-adjusted debt/EBITDA during 2018 absent any external
growth initiatives. Together with consistent positive free cash
flow generation, Moody's thereby expects the group's positioning
in the B1 category to gradually solidify over the next 12 to 18
months.

LIQUIDITY

E-I's liquidity is good. An expected cash position of around
EUR15 million at closing of the acquisition, combined with annual
funds from operations of around EUR60 million, are sufficient to
cover the group's short-term cash requirements. Projected cash
uses mainly comprise capital expenditures of around EUR25 million
in 2017 (including for capacity expansions) and EUR20 million in
2018, working capital spending of EUR5-10 million per annum and a
standard working cash assumptions of 3% of group sales.

The liquidity assessment also takes into account the proposed
EUR60 million RCF, which Moody's understands will remain largely
undrawn at closing of the transaction and one springing covenant
(Senior Secured Net Leverage Ratio; to be tested when more than
40% of the RCF is utilized), set with ample initial headroom.

STRUCTURAL CONSIDERATIONS

In the loss-given-default (LGD) assessment of E-I, Moody's ranks
pari passu the proposed new senior secured EUR375 million TLB and
EUR60 million RCF, which share the same security and are
guaranteed by certain subsidiaries of the group accounting for at
least 80% of consolidated EBITDA and aggregate gross assets.

Given the weak collateral package (customary security collateral
for leveraged transactions consisting mainly of share pledges,
intercompany receivables and bank accounts) in a theoretical
default scenario, the new bank loans are modeled as unsecured in
the LGD analysis and therefore rank equal with other obligations
of the group such as trade payables, pensions and lease
commitments. As a result, the proposed instruments are rated
(P)B1 (LGD4) in line with the CFR.

While E-I's new capital structure consists only of bank loans,
the assigned LGD rate of 50% reflects the lack of an all asset
pledge as well as the absence of affirmative financial covenants.

The group's capital structure further includes a shareholder loan
(maturing 2047), which qualifies for 100% equity treatment by
Moody's and is therefore not included in the LGD assessment and
debt calculations for the group.

OUTLOOK

The negative outlook reflects the likelihood of a downgrade to B2
in case of E-I being unable to reduce its leverage to below 4.5x
Moody's-adjusted debt/EBITDA over the next 12-18 months, driven
either by a weaker than expected operating performance and/or
loosening financial policy.

WHAT COULD CHANGE THE RATING UP/DOWN

To consider an upgrade, Moody's would require the group's (1)
leverage to decline below 2.5x Moody's-adjusted debt/EBITDA, (2)
EBITDA-margins remaining around current levels (high teens), (3)
positive free cash flow generation being applied for debt
reduction, helping to sustain a balanced financial policy, and
(4) business profile to strengthen through organic growth and/or
bolt-on acquisitions, as well as further geographic and product
diversification.

Downward pressure on the ratings would build, if (1) the group
was unable to reduce leverage below 4.5x debt/EBITDA (Moody's-
adjusted); (2) profitability weakened with EBITDA margin
(Moody's-adjusted) falling towards 15%, and (3) FCF turned
negative.

PRINCIPAL METHODOLOGY

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

Headquartered Villarreal, Spain, the Esmalglass-Itaca Group is a
world leading manufacturer of intermediate products for the
global ceramic tile industry. The group's offering comprises a
full range of products, which determine the key properties of
floor and wall tiles including surface colors, glazing products
and body coloring materials. In the 12 months ended 30 June 2017,
the group reported sales of around EUR410 million and EBITDA of
about EUR79 million.


* Spanish SME Delinquencies Fall Below 1%, Fitch Says
-----------------------------------------------------
Fitch Ratings says in its latest SME Compare that Spanish SME 90+
day arrears have continued to decrease and are currently at
0.95%, the lowest level observed by Fitch since June 2008.
Recovery proceeds are in steady receipt and more than two thirds
of Fitch-rated Spanish SME CLOs have a recovery rate above 50%.
These transactions are deleveraging and the current portfolio
represents now less than 10% of the original total.

The Fitch SME Compare tracks the performance of all SME CLO
transactions monitored by Fitch based on their investor reports.
The report is updated monthly.

On September 1, 2017, Fitch placed Sinepia DAC notes on Rating
Watch Positive (RWP) following the upgrade of Greece's Long-Term
Issuer Default Rating (IDR) to 'B-'/Positive from 'CCC' and the
revision of the sovereign Country Ceiling to 'B' from 'B-' (see
"Fitch Upgrades Greece to 'B-' from 'CCC'; Outlook Positive"
dated August 18, 2017 at www.fitchratings.com). Fitch may upgrade
the tranches placed on RWP after a detailed analysis of the
current portfolio.

On August 4, 2017, Fitch revised the Outlook on 2 tranches of
Spanish SME transactions following the revision of the Outlook on
Spain to Positive from Stable and affirmation of the sovereign
Issuer Default Rating (IDR) at 'BBB+'. Fitch maintains a six-
notch differential between the sovereign IDR and the highest
achievable SF ratings. Therefore, the sovereign Outlook revision
to Positive implies a maximum achievable rating for SME
transactions in Spain of 'AA+sf'/Positive. This rating cap
reflects the risk that sovereign weaknesses increase the
likelihood of extreme macro-economic events that could undermine
the performance of the securitisations.

In surveillance, Fitch has reviewed Caixa Penedes PYMES 1 TDA and
has affirmed the class A notes and upgraded the class B and C
notes. The upgrades were driven by increased credit enhancement,
rising recoveries, stable delinquencies and low obligator
concentration.

Locat SV 8 was also reviewed resulting in a "Review - No Action".
The rated notes of this transaction benefit from credit
enhancement of 90.8% and are currently rated at the highest
achievable SF ratings possible for Italy.

In addition, the class B and C of Empresas Hipotecario TDA CAM 3,
FTA and the class 2SA and 3SA of FTPYME TDA CAM 2, FTA were paid
in full.



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


EASTERN INDUSTRIAL: Deposit Guarantee Fund Extends Liquidation
--------------------------------------------------------------
Ukrainian News Agency reports that the Deposit Guarantee Fund
extended the liquidation of Eastern Industrial Bank.

According to Ukrainian News Agency, the liquidation of Eastern
Industrial Bank will last until September 10, 2018.

The liquidator of the banks is Andrii Matviyenko, Ukrainian News
Agency discloses.

On September 9, 2015, the National Bank of Ukraine made decisions
to revoke banking license and liquidate Eastern Industrial
Commercial Bank, Ukrainian News Agency recounts.


UKRKOMMUNBANK: Deposit Guarantee Fund Extends Liquidation
---------------------------------------------------------
Ukrainian News Agency reports that the Deposit Guarantee Fund
extended the liquidation of Ukrkommunbank.

According to Ukrainian News Agency, the liquidation of
Ukrkommunbank will last until September 13, 2018.

The liquidator of the banks is Andrii Matviyenko, Ukrainian News
Agency discloses.

On September 14, 2015, the National Bank of Ukraine made
decisions to revoke banking licenses and liquidate the Ukrainian
Communal Bank, Ukrainian News Agency recounts.



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


CO-OPERATIVE BANK: Fitch Affirms B- Long-Term IDR, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed The Co-operative Bank plc's (Co-op
Bank) Long-Term Issuer Default Rating (IDR) and senior debt
ratings at 'B-' and removed them from Rating Watch Evolving
(RWE). The Outlook on the Long-Term IDR is Stable.

The rating action follows the recapitalisation of the bank
through a combination of fresh capital and the conversion of Tier
2 debt into equity, altogether raising around GBP700 million
before expenses.

Fitch has also downgraded Co-op Bank's Viability Rating (VR) to
'f' before upgrading it to 'b-'. The downgrade reflects the
bank's failure according to Fitch definitions, as subordinated
debt holders were subject to burden-sharing through the mandatory
conversion of their notes into equity (or in the case of retail
investors, into cash). This conversion qualifies as a distressed
debt exchange (DDE) under Fitch criterias since it represents a
material reduction in terms (equity conversion or, for some
retail investors cash consideration for less than principal).

The subsequent upgrade of the VR reflects Fitch's view of the
bank's restored viability following the recapitalisation. However
at 'b-' the VR also reflects the vulnerability of the bank to a
turnaround of the business to ensure that it becomes structurally
profitable and that capital erosion will remain within the
estimates under its recovery plans.

KEY RATING DRIVERS

IDRS, VR AND SENIOR DEBT

Following the downgrade of the VR to 'f' and subsequent upgrade
to b-', Co-op Bank's IDR is now aligned with its VR and the
ratings are driven by the bank's standalone creditworthiness.

The VR primarily reflects Fitch views that after being
recapitalised, the bank's viability has been restored but remains
under pressure from still negative pre-impairment profitability.
This is driven by tight margins and high costs related to the
need to invest further in systems to improve efficiency and risk
controls. Furthermore, the bank needs to generate higher-yielding
loans without increasing risk unduly. .

The bank's CET1 ratio is expected to improve to 22%-23%,
following the recapitalisation, from 9.8% at end-1H17. Its
leverage position, which had deteriorated significantly as a
result of its losses, is expected to improve materially (leverage
ratio likely to have risen to around 5% from 2.4% at end-1H17).
Nonetheless, the bank will remain in regulatory forbearance, as
it will still not meet its individual capital guidance unless and
until it issues GBP250 million Tier 2 debt instruments, which
management expects by 4Q18

Part of the broader proposed capital-raising scheme agreed with
stakeholders is a clear allocation of the assets and liabilities
of the pension scheme, which is currently held jointly with Co-
operative Group. A clear allocation of which pension scheme
assets and liabilities are allocated to the bank and the removal
of the bank's obligation to support the pension liabilities of
the rest of the group should result in a lower Pillar 2A
requirement, which is now particularly high (15.1% at the last
disclosure). This in turn could create some capital flexibility
and allow the bank to expand its lending operations and help
alleviate profitability pressure.

Losses are also likely to be generated from continued
deleveraging from some legacy loans (the so-called Optimum
portfolio, made up of non-conforming loans originated by the
Britannia Building Society before it was acquired). Impaired
loans have reduced materially since the bank's first
recapitalisation, but the Optimum loan portfolio and other legacy
loans are very low yielding and could generate losses on
sale/deconsolidation.

Furthermore, reserve coverage of impaired loans is low and
renders the bank's capital somewhat vulnerable to falling real
estate prices.

The bank has an overall moderate franchise in the UK and limited
pricing power. Its asset quality has improved and is in line with
a declining risk appetite, improved underwriting standards, a
benign operating environment, and legacy asset deleveraging. The
bank's customer deposits and loan/deposit ratios were broadly
stable in 2016/1H17 but continue to be prone to sudden changes in
sentiment.

Co-op Bank's senior debt is rated in line with the IDR,
reflecting Fitch's expectations of average recovery prospects for
senior debt holders in the event of default or resolution
(Recovery Rating of 'RR4').

SR AND SUPPORT RATING FLOOR (SRF)

Co-op Bank's SR and SRF reflect Fitch's view that senior
creditors cannot rely on extraordinary support from the UK
authorities in the event it is declared non-viable given
resolution legislation in place as well as the bank's low
systemic importance.

RATING SENSITIVITIES

IDRS, VR AND SENIOR DEBT

The VR, IDRs and senior debt ratings are sensitive to Co-op
Bank's ability to implement successfully the bank's revised
recovery plan. A failure to improve structural profitability or
to stem losses as outlined in its medium-term plan will likely
result in a downgrade of the bank's VR and IDRs. In such
circumstances, it would be unlikely that the bank could meet its
regulatory capital requirements in the medium-term.

Ratings could be upgraded if the bank successfully reduces legacy
loans, invests in systems and is able to achieve a turnaround in
structural profitability before significant renewed erosion of
capital.

SR AND SRF

A positive change in the UK sovereign's propensity to support
senior bondholders that would be necessary for an upgrade of the
SR and an upward revision of the SRF is, in Fitch's view, highly
unlikely.

The rating actions are:

The Co-operative Bank plc

Long-Term IDR affirmed at 'B-'; off RWE; Outlook Stable
Short-Term IDR affirmed at 'B', off Rating Watch Negative (RWN)
Viability Rating downgraded to 'f' from 'c' and subsequently
  upgraded to 'b-'
Support Rating affirmed at '5'
Support Rating Floor affirmed at 'No Floor'
Senior unsecured notes' long-term rating affirmed at 'B-'/'RR4',
  removed from RWE
Senior unsecured notes' short-term rating affirmed at 'B',
  removed from RWN


DECO 8 - UK: Moody's Lowers Rating on Fairhold Loan Notes to Caa1
-----------------------------------------------------------------
Moody's Investors Service has downgraded the Counterparty
Instrument Rating and affirmed the ratings of three classes of
Notes issued by Deco 8 - UK Conduit 2 plc.

Moody's rating action is:

-- GBP64.92815 million Swap Reference 1475920L - Fairhold Loan
    Notes, Downgraded to Caa1 (sf); previously on Jan 25, 2017
    Downgraded to B3 (sf)

-- GBP256.6 million Class A2 Notes, Affirmed Caa1 (sf);
    previously on Jan 25, 2017 Downgraded to Caa1 (sf)

-- GBP32.4 million Class B Notes, Affirmed C (sf); previously on
    Jan 25, 2017 Affirmed C (sf)

-- GBP34 million Class C Notes, Affirmed C (sf); previously on
    Jan 25, 2017 Affirmed C (sf)

Moody's does not rate the Class F, Class G and the Class X Notes.

RATINGS RATIONALE

The affirmation action reflects Moody's continued high loss
expectations for the rated Notes.

The downgrade of the counterparty instrument rating (CIR)
relating to the interest rate swap on the Fairhold Loan to Caa1
(sf) from B3 (sf) follows the Swap Event of Default due to a
failure to pay and the note event of default due to non-payment
of interest on the most senior class of Notes. Payments under the
swap agreement rank pari passu with the Class A2 Notes and
therefore the CIR of the swap is at the same level as the rating
of the Class A2 Notes.

Counterparty Instrument Ratings measure the risk posed to a
counterparty on an expected loss basis arising from a special
purpose vehicle's (SPV) inability to honour its obligations under
the referenced financial contract by the maturity date of that
contract. The ratings do not address potential losses in relation
to any market risk associated with the transaction. Any
subordinated payments other than "core" obligations are not
addressed by CIRs. For this purpose, core obligations include
scheduled and termination payments under swaps.

Moody's affirmation reflects a base expected loss in the range of
20% - 30% of the outstanding balance, in the same range as at the
last review. Moody's derives this loss expectation from the
analysis of the default probability of the securitised loans
(both during the term and at maturity) and its recovery
expectation for the collateral.

Realised losses have increased to 22.09% from 22.01% of the
original securitised balance compared to the last review.

Moody's estimate of the base expected loss is now in the range of
30% - 40% of the original pool balance, in the same range as at
the last review.

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was Moody's
Approach to Rating EMEA CMBS Transactions published in November
2016.

Other factors used in these ratings are described in CMBS -
Europe - European CMBS: 2016-18 Central Scenarios published in
April 2016.

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

Main factors or circumstances that could lead to an upgrade of
the CIR or note ratings are (i) higher than expected recoveries
from the disposal of the underlying Mapeley II and Fairhold
properties.

Main factors or circumstances that could lead to a downgrade of
the CIR or note ratings are (i) a decline in the property values
backing the underlying loans, specifically for either the Mapeley
II or Fairhold loans.

MOODY'S PORTFOLIO ANALYSIS

As of the July 2017 IPD, the transaction balance has declined by
57% to GPB 268 million from GPB 630 million at closing in April
2006 due to the pay off of 16 loans originally in the pool and
some amortisation from the Fairhold loan. The notes are currently
secured by five first-ranking legal mortgages over 23 commercial
properties and a portfolio of ground rents ranging in size from
1.4% to 70% of the current pool balance. The pool has an above
average concentration in terms of geographic location (100% UK
based on UW market value) and property type (67% office). Moody's
uses a variation of the Herfindahl Index, in which a higher
number represents greater diversity, to measure the diversity of
loan size. Large multi-borrower transactions typically have a
Herf of less than 10 with an average of around 5. This pool has a
Herf of 2, the same as at Moody's prior review.

All loans are currently in special servicing either due to
trigger breaches or failure to refinance.

SUMMARY OF MOODY'S LOAN ASSUMPTIONS

Below are Moody's key assumptions for the Top 5 loans.

Mapeley II (70.5% of pool) - LTV: 111.5% (Whole)/ 111.5% (A-
Loan); Total Default Probability: N/A - Defaulted; Expected Loss:
20% - 30%

Fairhold Portfolio (20.7% of pool) - LTV: 111.8% (Whole)/ 72.6%
(A-Loan); Total Default Probability: N/A - Defaulted; Expected
Loss: 10% - 20%

Rowan UK Commercial Property (5.6% of pool) - LTV: 315.8%
(Whole)/ 315.8% (A-Loan); Total Default Probability: N/A -
Defaulted; Expected Loss: 70% - 80%

Elbank Limited (1.7% of pool) - LTV: 232.7% (Whole)/ 232.7% (A-
Loan); Total Default Probability: N/A - Defaulted; Expected Loss:
60% - 70%

MPH (UK) (1.4% of pool) - LTV: 221.5% (Whole)/ 221.5% (A-Loan);
Total Default Probability: N/A - Defaulted; Expected Loss: 50% -
60%


ICELAND TOPCO: S&P Affirms 'B+' CCR on Planned Refinancing
----------------------------------------------------------
S&P Global Ratings affirmed its 'B+' long-term corporate credit
rating on U.K. discount food retailer Iceland Topco Ltd. (Iceland
Foods). The outlook is stable.

S&P said, "At the same time, we assigned our 'B+' issue rating to
Iceland Foods' proposed GBP430 million senior secured notes due
2025 and GBP200 million senior secured notes due 2027. We also
affirmed the 'B+' issue rating on the existing GBP200 million
senior secured notes due 2024 (GBP170 million outstanding), which
will remain in the capital structure post refinancing and rank
pari passu to the proposed notes. The recovery rating on these
debt instruments is '3', indicating our expectations of
meaningful recovery (50%-70%; rounded estimate 55%) in the event
of a payment default.

"In addition, we affirmed our 'BB+' issue rating on the company's
GBP30 million super senior revolving credit facility (RCF), which
will remain in the capital structure post refinancing. The
recovery rating remains at '1+', reflecting our expectation of
full recovery in the event of default.

"Lastly, we affirmed our 'B+' issue rating and left the '3'
recovery rating unchanged on the existing GBP350 million senior
secured floating rate notes due 2020 (GBP271 million
outstanding), and the existing GBP400 million senior secured
fixed rate notes due 2021 (GBP357 million outstanding), which we
expected will be fully redeemed as part of the refinancing. The
recovery rating on these debt instruments is '3', indicating our
expectations of meaningful recovery (50%-70%; rounded estimate
55%, revised from 50%) in the event of a payment default. We will
withdraw the issue and recovery ratings on these debt instruments
once the refinancing transaction is completed.

"The ratings on the proposed refinancing are subject to the
successful completion of the transaction, and to 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 materially departs from the information we
have already reviewed, we reserve the right to revise or withdraw
our ratings.

"Our affirmation follows Iceland Foods' announcement that it
plans to refinance its GBP350 million senior secured floating
rate notes due 2020 (GBP271 million outstanding) and GBP400
million senior secured fixed rate notes due 2021 (GBP357 million
outstanding), replacing them with the proposed GBP430 million
senior secured notes due 2025 and GBP200 million senior secured
notes due 2027. We understand that the refinancing will be
leverage neutral and involves no shareholder return. We
anticipate that the company will benefit from cash interest
savings of GBP6 million per year and an extended debt maturity
profile.

"Post refinancing, we continue to forecast our adjusted debt to
EBITDA at 4.8x in financial year (FY) 2018 (ending March 31).
This is slightly improved from 4.9x in FY2017, reflecting Iceland
Foods' proactively reduced debt through a GBP50 million partial
redemption of the 2020 floating rate notes in June 2017.

"We also recognize Iceland Foods' strengthening operating
performance, with like-for-like sales growth returning to
positive territory in the past four quarters on the back of
several trading initiatives. We anticipate that the company will
take advantage of its improving earnings and increasingly
reinvest more of its operating cash flow for further expansion,
resulting in our adjusted debt to EBITDA remaining below 5.0x on
a sustainable basis. Based on Iceland Foods' track record of
proactive deleveraging, we also see potential for further debt
reduction."

Iceland Foods is maintaining its niche position as the U.K.'s
second-largest frozen food retailer behind Tesco PLC
(BB+/Stable/B). The company offers compelling value propositions
for those who prefer branded grocery products at discounted
prices, with prices typically between those of the big four
supermarkets -- Tesco, Sainsbury's, Asda, and Morrisons -- and
German discounters, Aldi and Lidl, operating in the U.K.

Despite intensified competition among U.K. grocers, Iceland Foods
maintained an S&P Global Ratings-adjusted EBITDA margin of 9.6%
in FY2017 (or about 5.7% on a reported basis excluding S&P's
operating lease and surplus cash adjustment). Nevertheless, S&P
expects that the impact of rising labor and food costs in the
U.K. will be to some extent absorbed by the company's
profitability, resulting in S&P's forecast of a slightly
contracting adjusted EBITDA margin to 9.3% in FY2018 and FY2019
(or around 5.5% on a reported basis excluding S&P's operating
lease and surplus cash adjustment).

S&P said, "At the same time, our ratings are constrained by the
group's smaller scale relative to larger supermarket chains. It
is the ninth-largest grocer in the U.K. with overseas
diversification limited to about 2% of total revenues. Owing to
high rent costs, we also forecast our reported EBITDAR cash
interest coverage (defined as reported EBITDA before deducting
rent over cash interest plus rent) will remain below 2x. These
factors are reflected in our comparable ratings assessment, which
incorporates a one-notch downward adjustment to arrive at our
current rating on Iceland Foods.

"The stable outlook reflects our view that Iceland Foods'
proactive debt reduction and improving operating performance
continues to strengthen its deleveraging prospects. Post
refinancing, we continue to forecast adjusted debt to EBITDA will
remain below 5x, with reported EBITDAR cash interest coverage of
around 1.8x over the next 12 months.

"We could raise our ratings if Iceland Foods further reduces its
debt on the back of strengthening operating performance,
resulting in its S&P Global Ratings-adjusted debt to EBITDA
improving close to 4x and reported EBITDAR cash interest coverage
improving toward 2.2x, while it maintains strong reported free
operating cash flow (FOCF). Any ratings upside would also be
contingent on our view of the company's conservative financial
policy regarding leverage and shareholder returns.

"We view ratings downside as less likely than previously, in
light of Iceland Foods' refinancing and strengthening operating
performance. Nevertheless, we could consider a negative rating
action if Iceland Foods' growth and deleveraging prospects
weakened. This could arise if, for example, the company
experienced a slowdown in EBITDA growth or a contraction in
EBITDA margins due to higher labor and food costs, resulting in
our adjusted debt to EBITDA increasing beyond 5x, reported
EBITDAR cash interest coverage falling toward 1.5x, or weakened
FOCF generation. We could also lower the ratings if we perceived
a more aggressive financial policy regarding capital investment
or shareholder returns."



                            *********

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
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prices at which equity securities trade in public market are
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Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
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                            *********


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

Troubled Company Reporter-Europe is a daily newsletter co-
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Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante,
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Copyright 2017.  All rights reserved.  ISSN 1529-2754.

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