TCREUR_Public/170914.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 14, 2017, Vol. 18, No. 183


                            Headlines


F R A N C E

PROMONTORIA MCS: S&P Alters Outlook to Negative on LBO


G E R M A N Y

AIR BERLIN: Flight Operations Expected to Stabilize Today
LSF10 XL: S&P Alters Outlook to Negative on URSA Acquisition
SKW STAHL-METALLURGIE: CEO to Take Steps to Avert Insolvency


G R E E C E

SEANERGY MARITIME: Regains Compliance with Nasdaq Bid Price Rule


I T A L Y

CASSA DI RISPARMIO: Moody's Lowers LT Deposit Rating to Ba2


K A Z A K H S T A N

KAZTRANSGAS JSC: Fitch Raises Long-Term IDR From BB+


L U X E M B O U R G

INTRALOT CAPITAL: S&P Rates New EUR450MM Senior Unsec. Notes 'B'
INTRALOT CAPITAL: Fitch Rates Planned EUR450MM Bond 'BB-(EXP)'


M O L D O V A

* MOLDOVA: Company Liquidations Rise to 4,676 in Jan-Jul 2017


N E T H E R L A N D S

BNPP AM 2017: Moody's Assigns B2(sf) Rating to Class F Notes


R U S S I A

DME LTD: S&P Affirms 'BB+/B' CCR & Retains Negative Outlook
MOBILE TELESYSTEMS: S&P Places 'BB+' CCR on Watch Negative


U N I T E D   K I N G D O M

AMIGO LOANS: S&P Affirms 'B+' LT Issuer Credit Rating
ASTON MARTIN: Moody's Hikes CFR to B2, Outlook Stable
BELL POTTINGER: Enters Administration After PR Campaign Scandal
ERPE MIDCO: Fitch Assigns 'B(EXP)' Long-Term IDR, Outlook Stable
ERPE MIDCO: S&P Assigns Preliminary 'B+' CCR, Outlook Stable

VIRGIN MEDIA: RFNs Tap Issue in Line With Guidance, Fitch Says
VIRIDIAN GROUP: Fitch Rates Senior Secured Notes 'BB-(EXP)'


X X X X X X X X

* EUROPE: Number of Banks in Grave Danger Rises in 2016
* Spec-Grade First-Time Ratings Surge in H1 2017, Moody's Says


                            *********



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F R A N C E
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PROMONTORIA MCS: S&P Alters Outlook to Negative on LBO
------------------------------------------------------
S&P Global Ratings said that it revised its outlook on France-
based debt purchasing company Promontoria MCS to negative from
stable. S&P said, "At the same time, we affirmed our 'BB-' long-
term counterparty credit rating on MCS.  We also assigned a 'BB-'
issue rating to the proposed EUR270 million senior secured notes
to be issued by Louvre Bidco. The recovery rating of '4' indicates
our expectation of average recovery of 30%-50% (rounded estimate:
40%) in the event of a payment default. The rating on the notes is
subject to our review of the notes' final documentation."

The outlook revision follows the LBO of MCS by private equity firm
BC Partners, which was announced in late July. Louvre Bidco, a
newly created intermediate holding controlled by BC Partners, is
acquiring 100% of MCS' shares from Cerberus and MCS' management.
The LBO will be partly funded by the proposed issuance of a EUR270
million senior secured bond with a seven-year tenor, which will
entirely refinance the EUR200 million bond MCS issued in September
2016. The remainder of funding comprises equity invested by BC
Partners. S&P's assessment of the group's credit profile includes
Louvre Bidco, an intermediate non-operating holding company and
issuer of the debt, and the operating activities carried out by
MCS Groupe.

S&P said, "We recognize that the expected pricing and tenor of the
debt will benefit the group's interest costs and debt maturity
profile. However, it has increased MCS' debt to levels that are no
longer commensurate with a significant financial risk profile. We
expect the three-year weighted average debt-to-EBITDA ratio will
be at the lower end of the 4.0x-5.0x range, versus less than 4.0x
under our previous base case. Similarly, we forecast funds from
operations to debt will decline to about 16.5% from about 18%
previously. Combined with the new ownership structure, we now
regard MCS' financial risk profile as aggressive.

"Despite the deterioration in credit metrics after the transaction
close, we believe some deleveraging will occur in 2018 and 2019.
And, at present, we do not anticipate any substantial strategic
change in MCS' operations, business model, geographies, or
management team. Yet, in our view, MCS' prospects for deleveraging
are subject to uncertainty, given its private-equity ownership,
and we have no visibility on the new owner's financial policy or
future tolerance for leverage. For example, BC Partners could set
more aggressive growth targets or enter into material merger and
acquisition activity, as we have observed at other private-equity-
owned debt purchasers. We will monitor BC Partners' medium-term
strategy, especially since it is the majority shareholder and will
have an influence over the group's future strategy.

"The negative outlook on MCS reflects risks relating to the
company's private-equity ownership. More specifically, we see the
risk of the new owner increasing leverage or dictating a more
aggressive financial policy than we assume in our base-case
scenario."

Downside scenario

S&P said, "We could lower the rating if we saw signs of an
aggressive financial policy, increasing leverage, or further
uncertainty with respect to the group's future credit metrics. We
could also lower the rating following a failure in MCS' risk
control framework, adverse changes in the French regulatory
environment, or erosion of the group's cash collections. Upside
scenario

"We could revise the outlook to stable if we believed MCS can
achieve and maintain a three-year weighted average debt-to-EBITDA
ratio below 4.0x, and adjusted EBITDA to interest expenses above
3.0x, as we expected before the LBO. Improving credit metrics, and
evidence that BC Partner's strategy as a financial sponsor will
not hinder MCS' debt-servicing capabilities, would also support a
stable outlook."



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G E R M A N Y
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AIR BERLIN: Flight Operations Expected to Stabilize Today
---------------------------------------------------------
Klaus Lauer at Reuters reports that Air Berlin told staff in an
internal memo on Sept. 13 the company expects its flight
operations to stabilize today, Sept. 14, as pilots return from
sick leave after the insolvent German airline was forced to cancel
more than 130 flights in two days.

"Since [Tuesday] night more than two dozen captains have reported
they are fit to fly," Reuters quotes Air Berlin as saying in the
memo.

It called on its remaining pilots to support the airline as the
sale of its assets nears the home stretch, saying continued
flights were a pre-requisite for jobs at Air Berlin to be saved,
Reuters relays.

It said at least 32 flights would be canceled on Sept. 13, and
that it was unable to operate 35 flights for Lufthansa's budget
airline Eurowings, Reuters recounts.

In a separate report, Reuters' Madeline Chambers and Caroline
Copley relate that Germany's Transport Minister Alexander Dobrindt
appealed to pilots on Sept. 13 to not complicate efforts to rescue
insolvent Air Berlin by calling in sick in high numbers.

"I can only appeal to all to let sanity prevail once again and
allow the flights to take place," Mr. Dobrindt, as cited by
Reuters, said in a statement in Berlin.  "I believe a lengthy
period of non-flying would mean additional difficulties for the
administrators."

Air Berlin, Germany's second-biggest airline, is set to be carved
up, most likely among several buyers, with binding offers due this
Friday, Sept. 15, Reuters discloses.

Meanwhile, Reuters' Holger Hansen reports that German Labour
Minister Andrea Nahles said on Sept. 13 it is "completely
unacceptable" for pilots at Air Berlin to put the airline's fate
at risk by calling in sick in unusually high numbers.

"I think Air Berlin is in a decidedly difficult situation at the
moment and the pilots, with their behavior, are putting at risk a
reasonable handover or sale.  That is unacceptable," Ms. Nahles
told Reuters in a television interview.

"And I say, quite clearly: 8,000 employees depend on this company.
They should not be taken hostage to serve the interests of some
pilots."

                       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.


LSF10 XL: S&P Alters Outlook to Negative on URSA Acquisition
------------------------------------------------------------
S&P Global Ratings revised to negative from stable its outlook on
LSF10 XL Investments S.a.r.l. and LSF10 XL Bidco SCA. S&P also
affirmed its 'B+' long-term corporate credit rating on both
entities.

LSF10 XL Bidco is the issuer of Xella group's first-lien debt,
which includes a term loan B that will be upsized to EUR1.74
billion as part of the URSA transaction and a EUR175 million
revolving credit facility (RCF). S&P affirmed its 'B+' issue
rating on these facilities. The recovery rating on these
instruments is unchanged at '3', reflecting recovery of 50%-70%
(rounded estimate: 50%) in an event of default.

Xella plans to buy URSA, a leading European manufacturer of glass
wool and extruded polystyrene insulation products. S&P expects the
transaction to close in fourth-quarter 2017. The acquisition will
be part-funded by adding EUR285 million to the existing EUR1.45
billion term loan B, on the same terms and conditions. This will
upsize the overall facility to EUR1.74 billion. Xella will also
absorb about EUR46 million of URSA's debt. Xella's majority owner,
Lone Star Funds, will contribute to the transaction via new
preferred equity certificates (which we treat as debt) under the
same terms and conditions as the existing instruments, and some
common equity.

Xella also recently announced that it has agreed to sell its lime-
making business (FELS) to an affiliate of CRH PLC. This
transaction is expected to close later in 2017. Although Xella's
management and majority owner Lone Star Funds have publicly
committed to maintaining net leverage of about 5x, it is unclear
how the net cash proceeds of the FELS disposal will be applied.
Xella could use them to reduce its debt or to pursue further
acquisitions, or could return a portion of the proceeds to the
shareholder via a dividend. S&P therefore excludes any proceeds
from its base case.

The timing of these transaction means that there will be several
months between the closing of the acquisition of URSA and the
disposal of FELS. S&P said, "Until Xella has received the proceeds
of the disposal, we expect its credit metrics to be very
stretched, compared with its rated building materials peers. That
said, Xella's management and majority owner have publicly
committed to maintaining net leverage at about 5x. As such, we
expect them to apply a significant portion of the FELS proceeds to
reducing Xella's leverage to a level more commensurate with the
existing 'B+' rating. Specifically, we expect debt to EBITDA to
trend toward 5x (excluding shareholder loans) by mid-2018.
We also note that Xella is currently exhibiting a strong and
stable operating performance, which adds confidence to our
assumption that this stretch in credit metrics is temporary. We
also consider that the URSA acquisition is credit positive, in
that it complements Xella's existing product offering and
geographic presence.

"Relative to FELS, URSA generates more revenue, but is a lower-
margin business. As such, the overall effect of the two
transactions on Xella will be to boost consolidated group sales,
but dilute overall margins to about 18%. Any future
underperformance or margin pressure could cause us to lower our
assessment of Xella's profitability, which would in turn put
pressure on its current satisfactory business risk profile. If
Xella is to maintain credit metrics commensurate with a 'B+'
rating, it will have to successfully integrate URSA while
preserving its margins above 18%."

In S&P's base case for 2018, it assumes the consolidation of URSA
and the deconsolidation of FELS on a full year basis. This
implies:

-- Revenue growth to more than EUR1.55 billion; Xella's group
    EBITDA margin to soften to about 18%;
-- Capital expenditure (capex) of up to EUR110 million; and
-- No further major acquisitions or divestitures.

Based on these assumptions, and with supportive market conditions,
S&P arrives at the following credit measures:

-- S&P Global Ratings-adjusted debt to EBITDA peaking at about
    6.7x (8.6x including shareholder loans) then reducing toward
    5x (under 7x including shareholder loans) once the proceeds
    of FELS are used to reduce leverage; and
-- Adjusted funds from operations (FFO) cash interest coverage
    of more than 3x over the 12-month rating horizon.

The negative outlook reflects a lack of clarity from Xella's
management and majority owner Lone Star Funds on how they plan to
apply the proceeds from the FELS disposal. S&P said, "Although we
expect a significant portion of the proceeds from the FELS
disposal to be used to reduce leverage or strengthen margins
through EBITDA accretive acquisitions, if credit metrics do not
recover to a level commensurate with the current 'B+' rating by
mid-2018, we would downgrade Xella. Specifically, we expect debt
to EBITDA (excluding shareholder loans) to trend toward 5x (less
than 7x including shareholder loans) by mid-2018.

"We could lower the rating to 'B' if Xella's management and
majority owner Lone Star Funds were to prioritize using the
proceeds from FELS to pursue further EBITDA dilutive acquisitions
or shareholder returns, rather than debt reduction. If Xella's
EBITDA margin were to fall below 18% then we could reassess our
view of the group's profitability, which would have a knock-on
effect on the business risk profile and the rating.

"We could consider lowering the ratings if we see any further
deterioration in the group's credit metrics, including FFO cash
interest coverage falling below 2x. This could result from
depressed end markets and competitive pricing. Additionally, we
could consider a downgrade if the group's liquidity deteriorates.

"If Xella applies a significant portion of the proceeds of FELS to
reducing leverage by mid-2018, we could revise the outlook to
stable. Specifically, we would expect to see debt to EBITDA
trending toward 5x (less than 7x, including shareholder loans). We
also expect EBITDA margins to gradually improve to above 18% going
forward."


SKW STAHL-METALLURGIE: CEO to Take Steps to Avert Insolvency
------------------------------------------------------------
SKW Stahl-Metallurgie Holding AG on Sept. 12 disclosed that it has
received motions for additional topics on the agenda for the
scheduled ordinary general assembly on October 10, 2017 as of Sec.
122 Abs. 2 AktG.  Applicant is MCGM GmbH, Munich, together with
other shareholders of the company.  The managing director of MCGM
GmbH, Dr. Olaf Marx, is also member of the Supervisory Board of
SKW Stahl-Metallurgie Holding AG.  CEO and all remaining five
members of the Supervisory Board emphatically reject the motions.
They regard such as an attempt to jeopardize the financial
restructuring of the Company agreed with the finance investor
Speyside.

MCGM GmbH requests among others to resolve on removing three
members of the Supervisory Board plus election of a new member of
the Supervisory Board, a decrease of the size of the Supervisory
Board to four members, several motions to nominate a special
investigator and to withdraw confidence in CEO Dr. Kay Michel.
Moreover the shareholder requests to resolve on an increase of the
share capital of the Company in cash with subscription right of up
to 13.089.860 Euro to up to 19.634.790 Euro by issuing 13.089.860
new shares at a subscription price of at least 1,00 Euro per
share.  Shares not subscribed shall be offered to MCGM [Metal
Funds 1] GmbH, Muenchen.

CEO and all remaining members of the Supervisory Board reject the
intended removal of independent members of the Supervisory Board,
Dr. Ramsauer, Mr. Stegmann and Mr. Weinheimer. Moreover, they
assess the proposed cash capital increase as not appropriate to
reach the urgent needed comprehensive debt relief of SKW Stahl-
Metallurgie Holding AG and SKW group, such being on the agenda of
the ordinary general assembly.  Without such a financial
restructuring agreed with the investor Speyside Equity, the
existence of SKW Stahl-Metallurgie Holding AG is imminently at
risk.

On the other hand, the petitioners hold more than 10% of the
registered share capital of the Company.  Based on the content of
the request for the amendment of the agenda, the CEO is going to
work on the assumption that the petitioners will vote against the
proposals of the management for a Debt-to-Equity-Swap by Speyside
Equity.  Based on presence and registration to former general
assemblies of approximately 35% of the registered share capital,
CEO has come to the conclusion that it is not predominantly likely
that the agenda items of the management regarding the capital
reduction and the capital increase against contribution in kind
(debt-to-equity-swap) will reach the necessary majority of 3/4 of
the votes.

Thereby, the positive continuance prognosis of SKW Stahl-
Metallurgie Holding AG has expired and the insolvency reason of
overindebtedness is applicable to the Company.  During the legally
binding 3-week period the CEO will strive to sustainably eliminate
the insolvency reason of overindebtedness to avoid having to file
for insolvency.

Dr. Kay Michel, Vorstand (CEO) of SKW Stahl-Metallurgie Holding
AG: "These motions of MCGM GmbH and its supporters in our view are
the obvious attempt, with a wave of the hand to gain control on
SKW via a cash capital increase.  At the same time the only
realistic measures aligned with the banks to save our company
shall be jeopardized. Contrary to the investor's offer of Speyside
Equity the cash capital increase as proposed by MCGM GmbH does not
come close the urgent necessary debt relief of our company.  SKW
Metallurgie's would be put imminently at risk, shareholders could
undergo a complete loss. Our Company may not become the plaything
of intransparent interests of single persons in such an
existential phase.  Dr. Marx and his comrades accept the risk of
insolvency and play with 600 jobs in our group."

SKW Stahl Metallurgie Holding AG is a Germany-based steel refining
company.  The Company is engaged in both primary metallurgy, which
refers to processing or ore into liquid iron, and secondary
metallurgy, which includes refining the liquid iron into steel of
different quality levels for use in a multitude of industries,
from steel girders for building to sheets for the automotive
industry.



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SEANERGY MARITIME: Regains Compliance with Nasdaq Bid Price Rule
----------------------------------------------------------------
Seanergy Maritime Holdings Corp. announced that The Nasdaq Stock
Market has confirmed that the Company has regained compliance with
Nasdaq Listing Rule 5550(a)(2) concerning the minimum bid price of
the Company's common stock.  This matter is now considered closed.

               About Seanergy Maritime Holdings

Seanergy Maritime Holdings Corp. --
http://www.seanergymaritime.com/-- is an international shipping
company that provides marine dry bulk transportation services
through the ownership and operation of dry bulk vessels.  The
Company currently owns a modern fleet of eleven dry bulk carriers,
consisting of nine Capesizes and two Supramaxes, with a combined
cargo-carrying capacity of approximately 1,682,582 dwt and an
average fleet age of about 8.4 years.

The Company is incorporated in the Marshall Islands with executive
offices in Athens, Greece and an office in Hong Kong.  The
Company's common shares and class A warrants trade on the Nasdaq
Capital Market under the symbols "SHIP" and "SHIPW", respectively.

Seanergy incurred a net loss of US$24.62 million in 2016 following
a net loss of US$8.95 million in 2015.  For the three months ended
March 31, 2017, Seanergy reported a net loss of US$6.28 million.

As of March 31, 2017, Seanergy had US$250.42 million in total
assets, US$223.71 million in total liabilities and US$26.70
million in stockholders' equity.



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CASSA DI RISPARMIO: Moody's Lowers LT Deposit Rating to Ba2
-----------------------------------------------------------
Moody's Investors Service downgraded the long-term deposit rating
of Cassa di Risparmio di Bolzano S.p.A. by one notch to Ba2 from
Ba1, and downgraded the bank's issuer rating by two notches to B1
from Ba2. The outlook on CariBolzano's ratings remains negative.
At the same time, the rating agency affirmed CariBolzano's b1
standalone baseline credit assessment (BCA), the bank's short-term
deposit rating of Not Prime, and the Counterparty Risk Assessment
(CR Assessment) of Ba1(cr)/Not Prime(cr).

The affirmation of the BCA reflects the persistence of
CariBolzano's structural issues, including a large stock of
problem loans, although materially reduced since its peak in 2015,
and limited franchise strength contributing to weak profitability.
The downgrade of deposit and issuer ratings reflects a significant
reduction in the stock of bail-in-able debt, increasing loss-
given-failure for deposits and senior unsecured instruments.

RATINGS RATIONALE

  -- STOCK OF PROBLEM LOANS REMAINS HIGH

Moody's said it affirmed CariBolzano's b1 standalone BCA, given
the bank's continuing structural issues. In particular, despite a
reduction in the portfolio of problem loans, together with
increased provisioning coverage, the stock of problem loans
remains high in the European context; profitability is still weak,
with an annualised return on assets of 0.2% in H1 2017.
Furthermore, CariBolzano's loan book concentration within the
German-speaking Autonomous Province of Bolzano (rating A3 with
negative outlook, two notches above Italy's Baa2 rating) and
neighbouring regions exposes the bank's capital to further risks
in case of a localised shock.

In 2014, CariBolzano reported a spike in its problem loans, which
rose to 22.2% of gross loans from 13.1% the year prior, and a
sharp increase in provisioning coverage, to 45% from 36%. The
problem loans represent 15.5% of CariBolzano's gross loans, a
significant improvement from the 2015-peak of 23.7%. Provisioning
coverage also improved; the bank's bad loans now being 60% covered
by provisions (versus an Italian average of 62%), and 31% in the
case of its unlikely to pay and past due loans (against an Italian
average of 33%).

CariBolzano's common equity tier 1 (CET1) ratio stood at 12.1% as
of end-June 2017, while Moody's Tangible Common Equity over
adjusted risk-weighted assets ratio was 10.1%. The difference
reflects an adjustment to risk-weighted assets, which reverses
CariBolzano's reported RWA pertaining to investments in Italian
government bonds that receive a zero risk-weight. CariBolzano's
capital ratios are above the bank's prudential requirements
(minimum CET1 is 6.3%), but they would not be sufficient to
withstand losses deriving from large-scale disposals of problem
loans. The bank is not planning any large disposals in its
business plan; in H2 2016 and H1 2017 CariBolzano sold small
portfolios of problem loans and it reduced the stock by EUR246
million (around 2% of gross loans), without incurring in
additional losses.

Nevertheless, Moody's notes that CariBolzano's problem loan ratio
is still about three times the average in the European Union of
around 5%. According to Moody's, unless CariBolzano raises equity
or decides to operate with a significantly lower level of capital,
its level of problem loans will likely remain high in the medium
term. This is in line with CariBolzano's business plan, which
targets a 12% problem loan ratio in 2021 and a CET1 ratio above
12%.

  -- PROFITABILITY REMAINS WEAK

CariBolzano's posted losses in recent years, including in 2016, as
a result of the large costs involved with the cleansing of its
loan portfolio. In H1 2017 CariBolzano recorded a EUR9 million net
profit which is equivalent to an annualised return on assets of
0.2%.

The rating agency expects CariBolzano's profitability to remain
weak, taking into account the bank's limited revenue
diversification, its high cost base and the low interest rate
environment which will continue to put pressure on the bank's net
interest income. CariBolzano's modest pre-provision profitability
offers little protection from potential new spikes in its cost of
risk, should the region's economic prospects deteriorate.

  -- LOWER STOCK OF BAIL-IN-ABLE DEBT AND HIGHER LOSS-GIVEN
FAILURE

Moody's said that the downgrade of CariBolzano's deposit rating to
Ba2 from Ba1, and the downgrade of the bank's issuer rating to B1
from Ba2 was driven by a reduced stock of bail-in-able debt and
results in higher loss-given-failure for the bank's junior
deposits and senior unsecured bonds.

Like other Italian banks, CariBolzano has not rolled-over maturing
bonds sold to retail clients and the redemptions have mostly been
recycled into retail deposits. The impact on CariBolzano's
standalone creditworthiness is neutral as CariBolzano's funding
and liquidity profile remains stable. Nevertheless, a lower stock
of senior debt reduces the cushion available to protect junior
deposits in a resolution scenario, which in turn results in a
higher loss-given-failure for these liabilities. Similarly, a
lower stock of senior unsecured bonds increases their own loss-
given-failure in a resolution scenario. Moody's said that, using
most recent data and the expected repayment of bonds maturing in
2017, its Loss Given Failure (LGF) analysis indicates that
CariBolzano's deposits are likely to face very low loss-given-
failure, from extremely low previously; this provides two notches
of uplift from the b1 standalone BCA, from three previously.
Similarly, Moody's LGF analysis indicates that CariBolzano's
senior unsecured instruments are likely to face moderate loss-
given-failure, from very low previously; this does not lead to any
uplift for the issuer rating against the previous two-notch
uplift.

NEGATIVE OUTLOOKS REFLECT REDUCING STOCK OF DEBT

The outlooks on CariBolzano's long-term issuer and deposit ratings
remain negative, reflecting the continuously reducing stock of
bail-in-able debt, which reduces the protection to creditors in a
resolution scenario.

FACTORS THAT COULD LEAD TO AN UPGRADE

CariBolzano's BCA could be upgraded following further material
reduction of the stock of problem loans, improvements in capital,
and improvements in pre-provision profitability, which Moody's
does not anticipate.

The deposit rating and issuer ratings could be upgraded following
an upgrade in the BCA, provided that the bank maintains its
current stock of bail-in-able debt.

FACTORS THAT COULD LEAD TO A DOWNGRADE

The ratings could be downgraded because of a lower volume of
senior debt, as indicated by the negative outlook.

The standalone BCA could be downgraded if problem loans increase
once more, provisioning needs rise, or if the bank's profitability
were to deteriorate further from its current low level. A
downgrade of the BCA would likely result in the downgrade of the
issuer and deposit ratings.

PRINCIPAL METHODOLOGY

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

LIST OF AFFECTED RATINGS

Downgrades:

-- LT Bank Deposits, Downgraded to Ba2 Negative from Ba1 Negative

-- LT Issuer Rating, Downgraded to B1 Negative from Ba2 Negative

Affirmations:

-- ST Bank Deposits, Affirmed NP

-- Adjusted Baseline Credit Assessment, Affirmed b1

-- Baseline Credit Assessment, Affirmed b1

-- Counterparty Risk Assessment, Affirmed Ba1(cr)

-- Counterparty Risk Assessment, Affirmed NP(cr)

Outlook Actions:

-- Outlook, Remains Negative



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K A Z A K H S T A N
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KAZTRANSGAS JSC: Fitch Raises Long-Term IDR From BB+
----------------------------------------------------
Fitch Ratings has upgraded KazTransGas JSC's (KTG) and its fully
owned subsidiaries, Intergas Central Asia JSC's (ICA) and
KazTransGas Aimak JSC's (KTGA), Long-Term Foreign- and Local-
Currency Issuer Default Ratings (IDRs) to 'BBB-' from 'BB+'. The
Outlook is Stable. Fitch has also assigned an expected senior
unsecured 'BBB-(EXP)' rating to KTG's proposed bond issue.

The upgrade of KTG and its subsidiaries follows alignment of its
ratings with those of its parent, JSC National Company KazMunayGas
(NC KMG, BBB-/Stable), based on the evidence of strong support for
KTG in the form of regulated tariff increases, KTG's greater share
in NC KMG's actual and projected funds from operations (FFO), and
financial assistance from the parent. KTG's ties with NC KMG are
underpinned by the former's dominant position in national gas
transportation and distribution and cross-default provisions, as
in NC KMG's Eurobonds. KTG's IDR is currently one notch below that
of Kazakhstan (BBB/Stable).

KTG's proposed bond will be guaranteed by ICA. ICA generated
KZT100 billion of Fitch-calculated EBITDA in 2016, while the
group's total EBITDA was KZT162 billion. Proceeds from the notes
will be used by KTG for debt reduction and general corporate
purposes.

KEY RATING DRIVERS

Ratings Aligned with NC KMG's: Fitch aligns ratings of KTG and its
subsidiaries ICA and KTGA with those of NC KMG, its sole parent.
KTG and its subsidiaries serve an important social function in
Kazakhstan by supplying natural gas to millions of households and
tens of thousands of industrial customers.

The rating alignment reflects an increase in regulated gas
transportation tariffs and regulated gas sales prices in 2017,
which support KTG's earnings following the drop in ICA's gas
transit volumes. Fitch expects that the state and NC KMG will
continue regulating KTG's financial profile such as to allow KTG
to generate significant operating cash flow and maintain moderate
leverage. KTG, ICA and KTGA are ultimately fully state-owned
through NC KMG.

NC KMG's Material Subsidiaries: KTG and ICA qualify as material
subsidiaries in NC KMG's Eurobonds and are subject to the bonds'
cross-default provisions. Strong parent-subsidiary links between
KTG and NC KMG are also supported by KTG's "national operator"'
status, the transfer of trunk gas pipelines from the state to ICA,
NC KMG's flexible approach to KTG's dividends, large low-interest
loans from NC KMG to KTG, and the transfer of NC KMG's 50% stake
in KazRosGas LLP for trust management.

NC KMG guarantees 50% of the third-party debt of Beineu-Shymkent
Gas Pipeline LLP (BShP), KTG's 50% owned JV, but it does not
guarantee debt of KTG or its subsidiaries. NC KMG also
participates in negotiations between PJSC Gazprom (BBB-/Stable)
and KTG on the gas transit contracts.

Gas Transmission, Distribution Monopoly: KTG's ratings reflect the
company's near-monopoly position in the Kazakh natural gas
transmission and distribution market. Two other gas transportation
operators in Kazakhstan are Asian Gas Pipeline LLP (AGP) and BShP,
both of which are KTG's 50% owned JVs with China National
Petroleum Corporation (CNPC, A+/Stable). Fitch views their
business as augmenting KTG's own operations. KTG's status as the
national operator in the field of gas supply gives it a pre-
emptive right to purchase natural gas produced from domestic
upstream companies and resell domestically and for export.

Subsidiaries Equalised With KTG: Fitch views legal, operational
and strategic intra-group links between KTG, ICA and KTGA as
strong and hence align the ratings of the two subsidiaries with
KTG's 'BBB-'. The evidence of strong linkage includes KTG's
financial guarantees for all of ICA's end-1H17 debt and for two-
thirds of KTGA's end-1H17 debt, operational interdependence and a
common planning and budgeting process between the companies. ICA,
the operator of trunk gas pipelines, generated 62% of the group's
consolidated EBITDA in 2016, while KTGA, the domestic gas
distributor, generated 15%.

Customer/Profitability Concentration Decreases: Historically,
Gazprom has been KTG's principal customer. ICA's tariff of
USD2/mcm per 100 km for Gazprom is fixed until 2020, while transit
volumes are set annually. In 2016 and 1H17, Gazprom accounted for
71% and 68%, respectively, of KTG's pipeline transit revenue and
about 59% and 56%, of ICA's gas transportation revenue. The drop
in 1H17 was due to the end of Gazprom orders for Turkmen gas and a
decrease in transportation volumes of Uzbek gas.

KTG has been downsizing its operations following the drop of
Gazprom's central Asian transit volumes, eg mothballing unused
pipeline facilities, staff optimisation and seeking other income
sources. For example, KTG's total headcount decreased by 20%
between end-2014 and June 30, 2017, with 2,700 workers made
redundant. These measures have helped KTG maintain its
profitability at above 30% in 2016.

Regulated Domestic Tariffs: The Kazakhstan Natural Monopolies
Committee (NMC) sets domestic tariffs and gas prices separately
for ICA and KTGA for a number of years, subject to annual
adjustments. Tariffs should cover transportation costs and provide
a certain fixed profit. ICA's regulated domestic gas transmission
tariff was increased 60% yoy in 2017.

On Jan. 1, 2017, ICA's average export tariff increased by 56%, to
USD5, for transportation of 1,000 cubic metres of natural gas for
a distance of 100 km. Export transportation tariffs and gas sale
prices are not regulated by the state and are set between KTG and
its customers, sometimes with the involvement of NC KMG.

Stable Capex Expected: Fitch projects KTG to broadly maintain the
annual level of capex at KZT100bn over the medium term, investing
in the expansion of the gas pipeline network and the upgrade of
old pipelines. Fitch does not foresee a significant impact on
KTG's creditworthiness from debt repayment by the BShP or AGP,
whose debt is guaranteed by CNPC and NC KMG with no recourse to
KTG. KTG provided loans to its JV constructing the Beineu-Bozoy-
Shymkent pipeline, as NC KMG in turn provided loans to KTG. Over
2014-2017, BShP received loans from KTG amounting to KZT75
billion. BShP increased its FFO to KZT36 billion in 1H17 from a
negative figure in 1H16 as it ramped up gas delivery volumes.

DERIVATION SUMMARY

KTG is the monopoly in domestic gas transmission and distribution
in Kazakhstan. It is also the dominant player in export gas
transportation and sales. Its business profile is similar to that
of JSC KazTransOil (KTO, BBB-/Stable), although KTO, the Kazakh
state-owned oil pipeline operator, has a smaller market share in
the Kazakh oil transportation market. KTG's operating profile is
also comparable to Kazakhstan Electricity Grid Operating Company
(KEGOC, BBB-/Stable), the Kazakh electricity transmission
monopoly.

KTG's revenue and EBITDA are greater than those of KEGOC and KTO.
On the other hand, KTO has very low leverage while KEGOC's
leverage is comparable to KTG's. KEGOC is rated one notch below
the sovereign, and KTG's ratings are aligned with NC KMG and are
currently one notch below the sovereign as well.

KTG's tariffs and gas sale prices are exposed to the evolving
regulatory environment in Kazakhstan, making its revenues less
predictable than those of its peers in Europe, such as eustream
a.s. (A-/Stable) and NET4GAS, s.r.o. (BBB/Stable) that operate
under the ship-or-pay contracts or Enagas S.A. (A-/Stable) and REN
- Redes Energeticas Nacionais, SGPS, S.A. (BBB/Stable) that are
subject to regulated asset base (RAB) tariffs. Although these
European companies have comparable or higher leverage, their
operating environment is different from KTG's. Fitch assess KTG's
standalone rating to be in the high 'BB' category.

The ratings of KTG, ICA and KTGA are aligned with NC KMG's ratings
due to the overall strong links between them. No country-ceiling
or operating environment aspects impact the rating.

KEY ASSUMPTIONS

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

- average exchange rate of KZT315 for 1 US dollar in 2017-2021;
- 4bcm of central Asian gas transit to Russia annually shipped
   by ICA from 2017 onwards;
- average tariffs for domestic gas transportation at 2016 level
   in 2017-2021;
- average domestic gas prices and domestic sales volumes
   increasing in the low single digits annually between 2017 and
   2021;
- export gas prices at roughly USD120/mcm in 2017-2021;
- KZT10 billion of dividends to NC KMG starting from 2018;
- annual capex of KZT100bn in 2017-2021.

RATING SENSITIVITIES

KTG

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

- positive rating action on NC KMG.

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

- negative rating action on NC KMG;
- evidence of weaker ties between NC KMG and KTG, eg, sustained
   deterioration of KTG's credit profile with FFO adjusted gross
   leverage consistently above 4x.

LIQUIDITY

Sufficient Liquidity, Manageable Maturities: At June 30, 2017, KTG
reported consolidated cash of KZT59 billion plus KZT23 billion in
short-term bank deposits. This cash plus Fitch-calculated FCF of
KZT10 billion over the following 12 months is sufficient to cover
short-term debt of KZT41 billion. Even though KTG has no undrawn
committed facilities, it has good access to Kazakh banks. The
proposed Eurobond from KTG should significantly improve its
liquidity and average debt tenor.

Significant Natural FX Hedge: Fitch estimates that possible tenge
appreciation to have a largely neutral impact on KTG's leverage as
lower tenge-denominated FX debt will be largely offset by lower
EBITDA as most of ICA's and KTG's revenues are US dollar-linked
while most costs are tenge-linked. Around 85% of the group's end-
2016 debt and around half of 2016 revenues were effectively US
dollar-denominated, while KTG's operating costs and capex are
denominated in tenge, except for a large share of natural gas
purchases.

FULL LIST OF RATING ACTIONS

KazTransGas JSC

Long-Term Foreign-Currency IDR: upgraded to 'BBB-' from 'BB+',
Outlook Stable

Long-Term Local-Currency IDR: upgraded to 'BBB-' from 'BB+',
Outlook Stable

Short-Term IDR: upgraded to 'F3' from 'B'

National Long-Term rating: upgraded to 'AA+(kaz)' from
'AA(kaz)', Outlook Stable

Senior unsecured long-term rating: upgraded to 'BBB-' from 'BB+'

Senior unsecured National long-term rating: upgraded to
'AA+(kaz)' from 'AA(kaz)'

Senior unsecured bond guaranteed by ICA: 'BBB-(EXP)'

Intergas Central Asia JSC

Long-Term Foreign-Currency IDR: upgraded to 'BBB-' from 'BB+',
Outlook Stable

Long-Term Local-Currency IDR: upgraded to 'BBB-' from 'BB+',
Outlook Stable

Short-Term IDR: upgraded to 'F3' from 'B'

National Long-Term rating: upgraded to 'AA+(kaz)' from
'AA(kaz)', Outlook Stable

Senior unsecured long-term rating: upgraded to 'BBB-' from 'BB+'

Senior unsecured National long-term rating: upgraded to
'AA+(kaz)' from 'AA(kaz)'

KazTransGas Aimak JSC

Long-Term Foreign-Currency IDR: upgraded to 'BBB-' from 'BB+',
Outlook Stable

Long-Term Local-Currency IDR: upgraded to 'BBB-' from 'BB+',
Outlook Stable

Short-Term IDR: upgraded to 'F3' from 'B'

National Long-Term rating: upgraded to 'AA+(kaz)' from 'AA(kaz)',
Outlook Stable

Senior unsecured long-term rating: upgraded to 'BBB-' from 'BB+'

Senior unsecured National long-term rating: upgraded to
'AA+(kaz)' from 'AA(kaz)'



===================
L U X E M B O U R G
===================


INTRALOT CAPITAL: S&P Rates New EUR450MM Senior Unsec. Notes 'B'
----------------------------------------------------------------
S&P Global Ratings assigned a 'B' issue rating and '4' recovery
rating to the proposed EUR450 million senior unsecured notes
maturing in 2024 to be issued by Intralot Capital Luxembourg S.A.,
subsidiary of Greece-based gaming company Intralot S.A.
(B/Stable).

S&P said, "Our 'B' issue rating on the existing EUR250 million
senior unsecured notes due in September 2021 and EUR250 million
senior unsecured notes due in May 2021 remains unchanged, but we
have now assigned them a '4' recovery rating. This reflects
Intralot S.A. and its subsidiaries falling within the scope of our
recovery criteria after the new jurisdiction ranking assessment on
Greece was published on Sept. 7, 2017.

"The '4' recovery rating indicates our expectation of recovery
prospects in the range of 30%-50% (rounded estimate: 45%) in the
event of a default."

The recovery rating is constrained by the high amount of senior
unsecured debt ranking pari passu and relatively weak guarantor
coverage.

S&P understands that Intralot will use the EUR450 million proceeds
coming from the issuance of the proposed notes to repay its
existing EUR250 million senior unsecured notes due in May 2021
with a 6.0% coupon, repay EUR165 million of currently drawn bank
debt, and cover about EUR15 million of transaction fees.

The draft documentation of the proposed senior unsecured notes
mirrors the terms of the existing EUR250 million senior unsecured
notes, with extended maturity from 2021 to 2024 and an expected
lower coupon.

S&P said, "Our hypothetical default scenario assumes unfavorable
changes in regulation as well as challenging economic conditions
leading to a significant decline in discretionary consumer
spending.

"We value the business as a going concern, given Intralot's
leading position in gaming technology and sports betting
industries globally.

"Our 'B' corporate credit rating on Intralot S.A. is based on our
assessment of the company's weak business risk profile and highly
leverage financial risk profile. The outlook is stable."

SIMULATED DEFAULT ASSUMPTIONS

-- Year of default: 2020
-- Jurisdiction: Greece

SIMPLIFIED WATERFALL

-- EBITDA at emergence: EUR78.2 million (capital expenditures
    representing 1.5% of three-year average of sales, in line
    with the company's expectation. 10% cyclicality adjustment in
    line with industry segment. No operational adjustment).
-- Implied enterprise value multiple: 5.5x
-- Gross recovery value: EUR430 million
-- Net enterprise value after administrative expenses (5%):
    EUR408 million
-- Remaining value for unsecured creditors: EUR408 million
-- Estimated senior unsecured debt: EUR831 million*
-- Recovery range: 30%-50% (rounded estimate 45%)
-- Recovery rating: 4

*All debt amounts include six months of pre-petition interests.


INTRALOT CAPITAL: Fitch Rates Planned EUR450MM Bond 'BB-(EXP)'
--------------------------------------------------------------
Fitch Ratings has assigned Intralot Capital Luxembourg S.A's
planned EUR450 million bond an expected senior unsecured rating of
'BB-(EXP)' with a Recovery Rating of 'RR3'. The bond is rated one
notch above Intralot's Long-Term Issuer Default Rating of
'B+'/Stable.

Proceeds from the notes, which mature in September 2024, will be
used for early redemption of the company's EUR250 million 6% notes
due in 2021 as well as other outstanding credit facilities. The
planned notes are guaranteed by Intralot SA and some material
subsidiaries, and will rank pari passu with all existing and
future unsecured indebtedness of the issuer that is not
subordinated to the notes, including senior credit facilities that
are not secured. The final rating of the notes is contingent upon
receipt of final documents conforming to the information already
received by Fitch and confirmation of the final amount and tenor
of the notes.

The planned bond issue will marginally enhance Intralot's
financial flexibility by extending the average debt maturity
profile and reducing interest costs. Despite improved performance
continuing into the first half of 2017, Intralot's high leverage
remains not fully aligned with a 'B+' rating but Fitch expects
Intralot will deleverage from 2018. The rating profile remains
well anchored around a business profile that is commensurate with
a 'BB' rating category for the sector. Any evidence of
deteriorating operating environment, contracts not being renewed
or renewed on worse terms, or unexpected cash leakages, could
however be negative for the rating.

KEY RATING DRIVERS

Recurring Contracted Revenue Base: Intralot's credit profile
benefits from more than 85% of revenues recurring and contracted
up until 2021, with only three contracts up for renewal in 2018.
The group has recently secured long-term contract renewals in the
U.S. market, resulting in the securing of EUR35 million of EBITDA
until 2025 in that market. This number should increase to about
EUR50 million per annum if the new Illinois contract is secured.
Due to high switching costs, Fitch expects many of the contracts
will be renewed in the future, although Fitch continues to believe
these could be on lower margins and may require a higher renewal
fee.

Margin Impacted by Business Mix: The strong growth of Licenced
Operations (+21.9% in H117) is having a negative impact on group
EBITDA margins, which were 12.6% in the first half of 2017
compared to 14% last year. Licenced Operations represented 78% of
total group sales in H117 versus 73% in H116. This is a
significantly less profitable division than Technology and
Management Contract Businesses, which has not performed as
anticipated this year mainly due to weaker performance in Turkey
and some one-off effects in the US.

The top-line growth is leading to a higher actual level of EBITDA.
While margins are lower than Fitch previous expectations, absolute
EBITDA is in line with Fitch forecasts. Fitch expects that
operating performance in the management contract and technology
contract businesses will normalise from the second half of 2017,
and forecast an overall EBITDA margin of 12.4% for the year,
improving slightly thereafter. EBIT margins remain above the
minimum threshold of 7% supporting the 'B+' rating.

Weak Free Cash Flows: Fitch expects free cash flow (FCF) to be
negative in 2017 and 2018, mainly due to one-off investments
related to the new Illinois contract and some contract renewal
fees and to then turn positive. FCF can be volatile as a result of
upfront investments related to new contracts of contract renewals.
However, this does contribute to steady operating cash-flow
generation due to its recurring profit stream and is a key credit
support. After 2018 the group does not have any major contract
renewals until 2021 and therefore capex should remain at lower
levels.

Capex Driving Higher Leverage: Fitch expects funds from operations
(FFO) adjusted gross leverage to increase to 6.5x in 2018 (FFO
adjusted net leverage will reach about at 5.0x) due to higher
capex than was previously expected. This level of leverage is not
commensurate with a 'B+' rating which indicates low financial
headroom. However, Fitch anticipates continued deleveraging from
2018 through improvements in the group's underlying operating
performance following this expenditure.

In addition, Fitch base-case projections do not factor in any
proceeds from the expected sale of the group's stake in Gamenet
during the IPO process, or the disposal of other assets. These
options provide additional flexibility for Intralot and if
executed successfully could result in significant net debt
reduction, bringing net leverage back within out sensitivity
guidance for the current rating level.

Reputable Gaming Operator, Technology Supplier: Intralot has
established itself in the international gaming sector as a
reputable provider of, among other products, systems to manage
lotteries through software platforms and hardware terminals, and
in betting, a large algorithm-based sportsbook. This has enabled
it to win important contracts for the supply of technology and the
management of lotteries in the US and Greece and for sports
betting in Turkey and Germany.

Scope for Growth: The gradual liberalisation of gaming markets,
governments' keenness on finding ways to raise tax proceeds and
the increasing supply of new games, should all provide increasing
opportunities for Intralot. The company should be able to leverage
on its experience and reputation and also benefit from the limited
number of reputable suppliers in the industry, allowing the group
to expand into new geographies. Intralot is also well positioned
to benefit from opportunities in the US.

Limited Linkage with Greece: Intralot generates less than 10% of
its EBITDA in Greece (rated 'B-'). Fitch views Greece's low
sovereign rating as neutral for Intralot's ratings given its
contractual requirement to maintain large portions of its cash
outside Greek banks. Currently, less than 10% of cash is held in
Greece, and following the new transaction, the group will have
less reliance on funding from Greek banks due to a higher capital
markets allocation. Intralot's wide geographic diversification of
its business and lack of meaningful reliance on Greek banks for
funding mitigates its exposure to Greece and other countries with
a 'b' economic environment.

DERIVATION SUMMARY

Intralot is positioned well in the 'B' rating category compared to
its peers. The main differentiating factor being its visibility of
revenue from recurring contracted EBITDA. Intralot has smaller
revenue and EBITDA than Ladbrokes Coral (BB/Stable), William Hill,
IGT, and Scientific Games. However, it does have good geographic
diversification and benefits from the more profitable emerging
markets. It also has an established position in the US, and is
well placed for potential future growth opportunities. Compared to
peers at the 'B' rating level, Intralot has certain
differentiating characteristics, such as the above-mentioned
contracted EBITDA and specialist supplier technology expertise.

KEY ASSUMPTIONS

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

- revenue growth of about 12% in 2017 as a result of strong
   growth in licenced betting operations, falling back to mid-
   single digits thereafter driven by a combination of new
   contracts and some organic growth;

- EBITDA margin falling to 12.4% in 2017 and remaining between
   12.7%-12.8% thereafter;

- rental expenses lower as a result of leases associated with
   expiring contracts;

- minority profits fully paid out fully as dividends, EUR39
   million in 2017, EUR44 million in 2018;

- capex higher in 2017 and 2018 due to contract renewals and
   investments in new contracts which Fitch assume will be
   partially funded by debt drawdowns;

- capex falling back to about EUR45m per annum from 2019;

- no common dividends.

RECOVERY ASSUMPTIONS:

In Fitch bespoke going-concern recovery analysis, Fitch look at
Intralot's 2016 EBITDA of EUR106 million (after deducting
attributable EBITDA to minority interests) and this is further
discounted to arrive at an estimated post-restructuring EBITDA
available to creditors of around EUR84.8 million. Fitch apply a
conservative distressed EV/EBITDA multiple of 4.5x to Intralot's
wholly owned operations.

Fitch also estimates EUR100 million of additional value stemming
from minority interests, mainly from emerging markets, resulting
from attributable FY16 EBITDA from minorities of EUR68 million
discounted by 50% and applying a conservative EV/EBITDA valuation
of 3.0x.

In terms of distribution of value, all unsecured debt including
the planned new bond would recover 58% in the event of default
(assuming that the EUR125 million unsecured RCF will be fully
drawn). This is consistent with an 'RR3' and an instrument rating
of 'BB-', one notch above the IDR.

RATING SENSITIVITIES

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

- Revenue growth and steady profitability supported by a
   stronger return on capital on existing and future contracts
   with limited capex outlays

- FFO adjusted net leverage reducing sustainably below 3.0x (or
   FFO gross lease adjusted leverage below 4.0x), with cash
   deposited predominantly at investment grade-rated
   counterparties

- FFO fixed charge cover above 3.0x, unaided by favourable
   interest carry

- Evidence of sustained positive FCF generation in the low to
   mid-single digits of sales.

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

- Evidence that new contracts or renewals are occurring at
   materially less favourable conditions for Intralot, resulting
   in continuing weak EBIT margins of under 7%, large upfront
   concession fees or capex outlays (2016: 8.2%)

- FFO adjusted net leverage sustainably above 4.5x (or FFO
   adjusted gross leverage above 5.5x) (FY16: 4.3x and 5.6x
   respectively)

- FFO fixed charge cover below 2.0x (2016: 1.8x)

- Material reduction in liquidity without a commensurate
   reduction in gross debt levels

LIQUIDITY

Comfortable Liquidity Following Refinancing: Fitch expects the
group's liquidity profile will improve following the completion of
the planned refinancing transaction. EUR500 million of bonds
maturing in 2021 will leave only one older EUR250 million bond
outstanding due 2021, while the new notes will not be repayable
until September 2024. The plan to repay the outstanding credit
facilities is also beneficial, effectively pushing the 2019
maturity to 2024.

Fitch expects the group will have cash on balance sheet of about
EUR175 million at end-2017 and this will be complemented by
approximately EUR125 million in committed unsecured credit
facilities.



=============
M O L D O V A
=============


* MOLDOVA: Company Liquidations Rise to 4,676 in Jan-Jul 2017
-------------------------------------------------------------
InfoMarket reports that 4,676 enterprises have been liquidated in
Moldova in January-July 2017, which is 1.8 times more than in the
same period of the last year (2,533).

In January, 221 enterprises have been liquidated, in February -
683, in March - 1088, in April - 624, in May - 604, in June - 946,
in July - 510, InfoMarket relays, citing the State Registration
Chamber of Moldova.

Approximately 69% of the liquidated enterprises worked in the
country's districts, InfoMarket notes.

As it was informed earlier, in 2016, 4055 enterprises have been
liquidated in Moldova, in 2015 - 3905, in 2014 - 2770, InfoMarket
discloses.  For comparison, in 2007, 1915 enterprises have been
liquidated, InfoMarket states.



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


BNPP AM 2017: Moody's Assigns B2(sf) Rating to Class F Notes
------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to notes issued by BNPP AM Euro CLO
2017 B.V.:

-- EUR215,250,000 Class A Senior Secured Floating Rate Notes due
    2031, Definitive Rating Assigned Aaa (sf)

-- EUR38,500,000 Class B Senior Secured Floating Rate Notes due
    2031, Definitive Rating Assigned Aa2 (sf)

-- EUR20,500,000 Class C Senior Secured Deferrable Floating Rate
    Notes due 2031, Definitive Rating Assigned A2 (sf)

-- EUR17,500,000 Class D Senior Secured Deferrable Floating Rate
    Notes due 2031, Definitive Rating Assigned Baa2 (sf)

-- EUR22,850,000 Class E Senior Secured Deferrable Floating Rate
    Notes due 2031, Definitive Rating Assigned Ba2 (sf)

-- EUR9,450,000 Class F Senior Secured Deferrable Floating Rate
    Notes due 2031, Definitive Rating Assigned B2 (sf)

RATINGS RATIONALE

Moody's definitive ratings of the rated notes address the expected
loss posed to noteholders by legal final maturity of the notes in
2031. The definitive ratings reflect the risks due to defaults on
the underlying portfolio of loans given the characteristics and
eligibility criteria of the constituent assets, the relevant
portfolio tests and covenants as well as the transaction's capital
and legal structure. Furthermore, Moody's is of the opinion that
the collateral manager BNP PARIBAS ASSET MANAGEMENT France SAS,
("BNPP Asset Management"), has sufficient experience and
operational capacity and is capable of managing this CLO.

BNPP EURO CLO is a managed cash flow CLO. At least 95% of the
portfolio must consist of secured senior loans and up to 5% of the
portfolio may consist of senior unsecured loans, second-lien
loans, and mezzanine loans. The portfolio is expected to be
approximately 57% ramped up as of the closing date and to be
comprised predominantly of corporate loans to obligors domiciled
in Western Europe. The remainder of the portfolio will be acquired
during the six month ramp-up period in compliance with the
portfolio guidelines.

BNPP Asset Management, will manage the CLO. It will direct the
selection, acquisition and disposition of collateral on behalf of
the Issuer and may engage in trading activity, including
discretionary trading, during the transaction's four-year
reinvestment period. Thereafter, purchases are permitted using
principal proceeds from unscheduled principal payments and
proceeds from sales of credit improved and credit impaired
obligations, and are subject to certain restrictions.

In addition to the six classes of notes rated by Moody's, the
Issuer has issued EUR37,600,000 of subordinated notes. Moody's
will not assign rating to this class of notes.

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

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

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

Loss and Cash Flow Analysis:

Moody's modeled the transaction using CDOEdge, a cash flow model
based on the Binomial Expansion Technique, as described in Section
2.3 of the "Moody's Global Approach to Rating Collateralized Loan
Obligations" rating methodology published in August 2017. The cash
flow model evaluates all default scenarios that are then weighted
considering the probabilities of the binomial distribution assumed
for the portfolio default rate. In each default scenario, the
corresponding loss for each class of notes is calculated given the
incoming cash flows from the assets and the outgoing payments to
third parties and noteholders. Therefore, the expected loss or EL
for each tranche is the sum product of (i) the probability of
occurrence of each default scenario and (ii) the loss derived from
the cash flow model in each default scenario for each tranche.

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

Par Amount: EUR350,000,000

Diversity Score: 37

Weighted Average Rating Factor (WARF): 2825

Weighted Average Spread (WAS): 3.60%

Weighted Average Coupon (WAC): n/a

Weighted Average Recovery Rate (WARR): 43.5%

Weighted Average Life (WAL): 8 years

As part of the base case, Moody's has addressed the potential
exposure to obligors domiciled in countries with local currency
country risk ceiling (LCC) of A1 or below. As per the portfolio
constraints, exposures to countries with a LCC between A1 and A3
cannot exceed 10%. In addition, the obligation is not an
obligation of an obligor or obligors domiciled in a country with a
LLC of Baa1 or below. Given the portfolio concentration limit and
eligibility criteria, it is not possible to have exposures to
countries with a LCC below A3.

Stress Scenarios:

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

Percentage Change in WARF: WARF + 15% (to 3249 from 2825)

Ratings Impact in Rating Notches:

Class A Senior Secured Floating Rate Notes: 0

Class B Senior Secured Floating Rate Notes: -2

Class C Senior Secured Deferrable Floating Rate Notes: -2

Class D Senior Secured Deferrable Floating Rate Notes: -2

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes: 0

Percentage Change in WARF: WARF +30% (to 3673 from 2825)

Ratings Impact in Rating Notches:

Class A Senior Secured Floating Rate Notes: -1

Class B Senior Secured Floating Rate Notes: -3

Class C Senior Secured Deferrable Floating Rate Notes: -4

Class D Senior Secured Deferrable Floating Rate Notes: -2

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes: -1

Methodology Underlying the Rating Action:

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



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


DME LTD: S&P Affirms 'BB+/B' CCR & Retains Negative Outlook
-----------------------------------------------------------
S&P Global Ratings affirmed its 'BB+/B' long- and short-term
corporate credit ratings on Russia-based DME Ltd., the operator of
Moscow's Domodedovo airport. The outlook remains negative.

S&P said, "We have also affirmed our 'BB+/B' long- and short-term
corporate credit ratings on DME's fully owned subsidiaries
Domodedovo International Airport LLC and Hacienda Investments Ltd.
The outlooks are negative.

"At the same time, we have affirmed our 'BB+' rating on the loan
participation notes (LPNs) due 2018 and 2021, issued by special-
purpose vehicle (SPV) DME Airport Designated Activity Co.

"The ratings affirmation reflects our view that the airport's
weaker-than-expected financial performance in 2016 and our
expectation of generally stable financial metrics in 2017 are
balanced by a supportive operational perspective. Over the next
two years, we expect recovering passenger traffic and expansion of
the airport's capacity, including the addition of a significant
amount of commercial space, which the airport currently lacks.

"DME's credit metrics were below our base-case scenario in 2016,
primarily because of heavier investments and a larger dividend
payout than we expected. S&P Global Ratings-adjusted funds from
operations (FFO) to debt was just 33.5%, against our expectation
of about 58%, while FFO cash interest coverage was 5.3x, against
our expectation of 6.8x. We believe DME's financial performance in
2017-2018 will continue to be affected by its sizable investment
program. Under our base-case scenario, we expect DME's 2017
adjusted FFO to debt to be 34%-36%, and its FFO cash interest
coverage 5.5x-6.5x. Gradual improvement of these
metrics will begin in 2018, we think, when the new terminal starts
operating. At that point, we expect DME's FFO to debt to reach
39%-41% and FFO cash interest coverage 7x-8x. We have therefore
revised our assessment of DME's financial risk profile to
intermediate from modest previously.

"The group is due to open its new terminal -- which will expand
the airport's capacity by some 20 million people to a total of 52
million per year -- in the second quarter of 2018, before the
start of the 2018 football World Cup to be held in Russia. By
then, we expect the airport's existing capacity will be fully
utilized. Expansion also includes a new 1,600-car multi-story
parking lot, expansion of airport roads, and modernization of the
railway station. DME spent Russian ruble (RUB) 12.7 billion (about
$209 million) expanding the airport in 2017, up from RUB7.4
billion in 2015, and we estimate that it will spend up to RUB15
billion per year over the next two years."

By mid-2018, DME should also start operating a new runway, built
and paid by the government, which will replace an existing one,
due to be converted into a taxiway. With two modern runways,
capable of delivering 45 air transport movements per hour each
under current rules, DME's runway capacity will be around 60
million passengers, solid headroom over the terminals' total
handling capacity of 52 million. DME will lease the new runway
from the state under as yet undefined terms.

S&P said, "We believe that DME's expansion, alongside recovering
passenger traffic, should strengthen the group's operating
performance in the coming years. Apart from increased passenger
capacity, the new terminal will allow DME to significantly
increase its commercial space, which the airport was historically
short of, by the end of 2018. This will allow DME to significantly
increase its rental income beginning in the second half of 2018.
The full financial effect, therefore, will be seen in the group's
results for 2019.

"Our assessment of DME's business risk reflects our opinion of
elevated regulatory and legal risks in light of state
interventions, such as previous government bodies' attempts to
challenge the legitimacy of certain transactions at the airport,
and recent litigation against the airport's owner. We believe that
the long-term legal risk to DME persists, remaining a constraint
to the company's business risk profile.

"The negative outlook reflects the possibility of us lowering the
ratings if DME's financial or operating results are significantly
below our expectations or if its liquidity deteriorates.

"We could lower the ratings on DME if its leverage continues to
increase further, with FFO to debt falling below 30%. This could
happen, for example, if the group's operating performance suffers
as a result of economic or political events significantly
affecting air travel. A delay to the opening of the new terminal
or significant capex overruns could also result in a negative
rating action. We could also lower our ratings if the group pays
an unexpected dividend or extracts cash through other measures,
such as a related party loan. A weakening of DME's liquidity, for
example if the group does not proactively secure refinancing for
the LPNs maturing in November 2018, could also result in a
downgrade.

"We could revise our outlook on DME to stable if the company
stabilizes and starts to improve its financial performance, with
FFO to debt moving toward 40%. We would also expect DME to
continue growing its passenger numbers and open the new terminal
by the end of second-quarter 2018. Maintaining adequate liquidity,
including proactively securing refinancing of LPNs maturing in
2018, would also be required for a revision of the outlook to
stable."


MOBILE TELESYSTEMS: S&P Places 'BB+' CCR on Watch Negative
----------------------------------------------------------
S&P Global Ratings said that it has placed its 'BB+' long-term
corporate credit rating on Russian mobile telecommunications
operator Mobile TeleSystems PJSC (MTS) on CreditWatch with
negative implications. At the same time, S&P placed its 'BB+'
issue rating on MTS' senior unsecured debt on CreditWatch
negative.

The CreditWatch placement follows the downgrade of Sistema, which
owns 50% of MTS, to 'BB-' from 'BB'. The rating on Sistema remains
on CreditWatch negative due to uncertainties stemming from the
potential impact of Rosneft's $2.3 billion claim (see "Russian
Holding Company Sistema Downgraded To 'BB-' From 'BB'; CreditWatch
Negative Maintained On Liquidity Concerns," published Sept. 8,
2017, on RatingsDirect). S&P said, "We foresee increasing pressure
on our ratings on MTS if we downgrade Sistema further, or if MTS'
shareholder distributions exceed our base-case projection.
However, if the outcome of the claim has no material adverse
impact on Sistema, or if MTS' links with Sistema weaken
sufficiently for us to rate MTS more than two notches above
Sistema, we could affirm our ratings on MTS.

"In our view, given the current relationship between Sistema and
MTS, our rating on MTS cannot exceed the rating on Sistema by more
than two notches. This two-notch difference takes into account,
among other factors, the independence of MTS' operating and
financial performance from Sistema and the presence of four
independent directors on MTS' nine-member board; Sistema is
represented by three directors. Even in a hypothetical scenario in
which Sistema defaults, there would be no cross-default with MTS.

"Nevertheless, if Sistema's control over MTS were to weaken, we
could reassess the link between the rating on MTS and that on
Sistema, allowing a gap of more than two notches, which could have
a positive impact on our rating on MTS. This is not our base case,
however, because we understand that Sistema does not plan to sell
any of its shares in MTS.

"We intend to resolve the CreditWatch on MTS once we resolve the
CreditWatch on Sistema, depending on the outcome of Sistema's
litigation with Rosneft and its impact on MTS.

"We would likely lower the rating on MTS if we downgrade Sistema
further. Although unlikely, rating downside could also stem from
MTS' shareholder distributions exceeding our base-case
assumptions, resulting in pressure on MTS' credit metrics.

"Alternatively, we could affirm the rating on MTS if we affirm the
rating on Sistema, or if MTS' links with Sistema weaken, allowing
us to rate MTS more than two notches higher than Sistema."



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


AMIGO LOANS: S&P Affirms 'B+' LT Issuer Credit Rating
-----------------------------------------------------
S&P Global Ratings said that it affirmed its 'B+' long-term issuer
credit rating on U.K.-based guarantor lender Amigo Loans Ltd. The
outlook is stable.

S&P said, "At the same time, we affirmed our 'B+' issue rating and
'4' recovery rating on the senior secured notes issued by wholly
owned subsidiary Amigo Luxembourg S.A. This indicates our
expectation of average recovery (30%-50%; rounded estimate: 40%)
in the event of payment default.

"Amigo's proposed GBP75 million tap of its existing GBP325 million
senior secured notes does not affect our ratings or our view of
the company's highly leveraged financial risk profile. This
reflects our expectation that the group's earnings capacity will
continue to steadily increase, combined with a deceleration in the
growth of its loan book, leading to improving credit metrics over
our 12-month outlook horizon. We expect its gross debt to EBITDA
and funds from operations (FFO) to gross debt, by our measures, to
trend toward the middle of the 5.0x-6.0x range and up toward 12%,
respectively. These metrics were 5.7x and 10.1% at financial year-
end March 31, 2017, respectively.

"Our gross debt measure includes Amigo's senior secured notes, any
draw-down on its revolving credit facility (RCF), and the group's
shareholder loans. Our forward-looking weighted-average financial
risk profile applies a 20% weight to year-end March 2017 results
and a 40% weight to year-end projections for both 2018 and 2019."

In the 12 months to June 30, 2017, Amigo's reported net loan book
rose by 62% to GBP467 million. This very high rate of growth was
partly driven by an increase in Amigo's maximum loan value to
GBP10,000 from GBP7,500, an increase in repeat business from its
existing customers, the introduction of new credit trials that
have widened its potential customer base, and improvements in its
operational efficiency. S&P said, "We don't believe that Amigo has
materially relaxed its lending standards, and recognize that it is
a growth business, but note that very high loan growth rates can
be a precursor to asset quality or operational pressures, over
time. We also consider that much of this loan growth has been
funded by incremental debt issuance. For example, Amigo's GBP50
million tap in May 2017 and the current GBP75 million proposed tap
will take its balance of senior secured debt to GBP400 million, up
from its inaugural debt issuance of GBP275 million in January
2017."

S&P said, "The very fast pace of loan growth and additional debt
has meant that Amigo's credit metrics have not improved in line
with our prior expectations (for example, we had assumed lending
growth of about 30%-35%). However, the increase in debt is
partially offset by a 39% increase in revenue to GBP146 million,
and a 44% increase in adjusted EBITDA to GBP91 million during the
12 months to June 30, 2017. Our base-case scenario therefore
assumes that Amigo's pace of loan growth will slow, and that its
earnings will increasingly benefit from its new originations,
leading to an improvement in the company's credit metrics over the
next 12 months.

"Our business risk profile assessment continues to be constrained
by Amigo's narrow focus on a niche part of the U.K. nonstandard
lending market. We consider its monoline business model and lack
of diversification results in heightened regulatory and
operational risks, as well as exposure to potential adverse
changes in its operating environment. This is partially offset by
our view of Amigo's above-average profitability, good market
position in its chosen segment, and consistent strategy, which are
factored into our overall 'B+' rating.

"The stable outlook reflects our expectation that the company will
increase its earnings capacity, reduce the pace of loan growth,
and improve its credit metrics over the 12-month outlook horizon.
Prior loan growth and credit metrics have not been in line with
our past expectations; however, we expect an improving trend over
the next 12 months."

S&P could lower the rating if the group's credit metrics did not
trend toward the following:

-- Gross debt/adjusted EBITDA in the middle of the 5.0x-6.0x
    range; and
-- FFO to gross debt to 12%.

S&P said, "We could also lower the rating if Amigo saw very high
loan growth and persisted in raising related debt, or if we saw a
weakening in the group's asset quality or a rise in regulatory or
operational risks, which affected Amigo's debt-servicing
capability or current business model.

"Given Amigo's current credit metrics and narrow business focus,
we consider an upgrade unlikely over the next 12 months. We could
raise the ratings if there were a marked improvement in its credit
metrics, substantially beyond our current base-case assumptions,
and a more sustainable level of business growth."


ASTON MARTIN: Moody's Hikes CFR to B2, Outlook Stable
-----------------------------------------------------
Moody's Investors Service has upgraded the corporate family rating
(CFR) to B2 from B3, the probability of default rating of Aston
Martin Holdings (UK) Limited (Aston Martin) to B2-PD from B3-PD,
the senior secured notes to B2 from B3 issued by Aston Martin
Capital Holdings Limited and changed the outlook to stable from
positive.

"Aston Martin's upgrade reflects the company's better than
expected operating performance since Q4 2016 and, moreover,
Moody's view of a continued substantial improvement over the
period 2017-2019 driven by the successful renewal of Aston
Martin's sports car range, following strong demand for its new
DB11 model with V12 and V8 engine variants launched in Q4 2016 and
June 2017 respectively," says Falk Frey, a Moody's Senior Vice
President and lead analyst for Aston Martin.

DETAILED RATINGS RATIONALE

On the basis of continued strong demand for its new DB11 model
with V12 and V8 engine variants launched in Q4 2016 and June 2017
respectively, Aston Martin's reported EBITDA during the first six
months 2017 reached GBP93 million, bringing the last twelve months
(LTM) ended June 2017 reported EBITDA to GBP175 million. On a
Moody's adjusted basis, EBITDA improved to GBP111 million from a
negative GBP14 million in 2016 and negative free cash flow was
reduced to GBP21 million from a negative GBP57 million. For the
current year, Moody's anticipates a significant improvement in
Aston Martin's financial metrics based on the strong order book
for DB11 models and its announced launch of the new Vantage during
Q4 2017. Moody's anticipates Aston Martin to achieve its full-year
2017 guidance generating a reported EBITDA of at least GBP175
million which would translate into a gross leverage (debt/EBITDA)
in the range of 7-8x on a Moody's adjusted basis. Nevertheless,
Moody's anticipates still negative free cash flow generation given
the anticipated high level of investments for the renewal of the
remaining sports car models, the announced SUV model and
investments into the development of the announced electric car as
well as into new technologies reducing emissions. In addition,
Aston Martin is highly dependent on only a few models which makes
the company very vulnerable.

Aston Martin's liquidity profile further strengthened following
its debt refinancing in April 2017 and the increased size of the
revolving credit facility to GBP80 million (up from GBP40
million). Together with a cash position of GBP123 million as of 30
June 2017 these sources should be able to cover Aston Martin's
anticipated cash needs for more than the next 18 months.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook is based on Moody's expectation of a continued
strong demand for Aston Martin's DB11 models and a successful
renewal of the other sports car models (Vantage and Vanquish) that
will lead to a material improvement in operating performance over
the next 2 years, e.g. a materially positive EBITA result in 2017
and a positive free cash flow by 2018 (as defined by Moody's).

WHAT COULD CHANGE THE RATINGS DOWN/UP

An upgrade of the ratings is unlikely in the near term considering
the execution of the second century plan together with the
requirement to meet reduced emission targets and invest in
alternative fuel technologies requiring significant capex over the
next couple of years limiting its ability to generate more
meaningful free cash flows.

However, the ratings could be upgraded if (1) Aston Martin is able
to improve its leverage to below 5.0x on a sustained basis; (2)
EBITA margin is turning positive into the high single-digit %
range on a sustainable basis despite new model launches and (3)
free cash flow to debt to reach a high single-digit % going
forward.

The ratings could come under pressure in case of (1) failure to
improve leverage to below 6.0x and profitability of above 7% EBITA
margin by FY 2018; (2) inability to generate positive free cash
flow from FY 2018 onwards; (3) evidence of execution issues
associated with the launch of the next generation core models and
material weakening of DB11 unit sales volumes and (4) a
significant deterioration in Aston Martin's liquidity profile
shown in very little to no headroom to cover cash needs over a
period of at least 12 months.

Based in Gaydon, UK, Aston Martin is a car manufacturer focused on
the high luxury sports car segment. Aston Martin's current core
products include five core models (DB11, V8 Vantage S, V12 Vantage
S, Vanquish S and Rapide S) and generated sales of GBP792 million
in the LTM period ended June 2017 and an adjusted EBITDA (as
defined by Moody's) of approximately GBP111 million from the sale
of total 4,663 cars, of which more than 2,500 were made from its
new DB11 (market launch during Q4 2016).

The principal methodology used in these ratings was Automobile
Manufacturer Industry published in June 2017.


BELL POTTINGER: Enters Administration After PR Campaign Scandal
---------------------------------------------------------------
BBC News reports that Bell Pottinger has collapsed into
administration in the UK after running a racially charged PR
campaign in South Africa.

The troubled public relations firm put itself up for sale last
week, but could not find a buyer, BBC relays.

According to BBC, the administrators BDO said the firm had been
"heavily financially impacted" by the scandal.

BDO said the level of its losses and the inability to win new
clients left the firm with no other option, BBC notes.

Bell Pottinger was ejected from the UK's industry body last week
for a PR campaign that emphasized the power of white-owned
businesses in South Africa, BBC relates.

A string of clients, including HSBC, Investec and luxury goods
company Richemont, cut ties with the firm over its work on the
campaign, BBC states.

Bell Pottinger filed plans to appoint three BDO administrators on
Sept. 8, and the appointment became effective on Sept. 12, BBC
recounts.

A BDO spokesman, as cited by BBC, said: "Following an immediate
assessment of the financial position, the administrators have made
a number of redundancies.

"The administrators are now working with the remaining partners
and employees to seek an orderly transfer of Bell Pottinger's
clients to other firms in order to protect and realise value for
creditors."


ERPE MIDCO: Fitch Assigns 'B(EXP)' Long-Term IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has assigned Erpe Midco Limited (Praesidiad) an
expected Long-Term Issuer Default Rating (IDR) of 'B(EXP)' with
Stable Outlook. Fitch has also assigned an instrument rating of
'B+(EXP)'/''RR3' to the company's proposed new senior secured
loans.

Praesidiad's 'B' rating reflects a niche specialist business
profile that benefits from rising demand for high-security
solutions for strategic assets. Following the acquisition of
HESCO, the group has improved its portfolio of high-security
products that are used in a wide range of end-markets. However,
the addition of HESCO has added volatility to the group's business
model as HESCO sales partly depend on contracts from the US army
and armed conflict. Large exposure to the oil & gas sector also
led to below-budget operating performance in 2016.

KEY RATING DRIVERS

Niche High-Security Specialist: Following its acquisition by
Carlyle for EUR660 million (10x enterprise value-EBITDA multiple),
Fitch expects Praesidiad to focus its strategy on growing its
high-security business. Fitch continues to view the combined group
as a niche specialist in a narrowly defined, but growing, segment
of the perimeter protection (PP) market that benefits from high
barriers to entry, stable customer relationships and diversified
end-markets. However, the rating is constrained by Praesidiad's
small operating size and niche focus.

Supportive Operating Environment: Growth in the PP market is
driven by an increased demand of security and rise of natural
disasters and geopolitical events. Fitch does not expects to see
any sharp reversal of this secular trend over the rating horizon.
The current pipeline of projects has provided some support for
revenue visibility and further contract win opportunities within
the same sector in the coming years. However, large exposure to
oil & gas has delayed some project starts, affecting their recent
operating performance.

HESCO Volatility Exceeds Betafence: Praesidiad continues to face
execution risks in balancing its product portfolio between the
volatile but profitable high-security segment (HESCO) and the
commoditised but stable baseline segment under Betafence. While
Praesidiad's strategic aim is to increase the weight of higher-
margin and value-added services, HESCO remains a separate brand
and operating unit in the combined group.

Volatile Operating Performance: The increased contribution from
the high-security segment has increased Praesidiad's business
risk. The delayed start of key projects in the US utility sector,
deferred investment decisions in the oil & gas sector as well as
lower-than-expected sales at HESCO has led to a lower forecasted
revenue growth over the period of 2017-2020. Fitch expects
Praesidiad to stabilise its profitability with EBITDA margins
reaching 15% by 2020, reflecting its flexible cost base, which
should help absorb some of these exogenous shocks.

B-category Credit Metrics: Fitch estimates FFO adjusted gross
leverage (including factoring and operating leases adjustments) to
reach around 6.5x in 2017 pro forma to Carlyle's acquisition of
the company. The leverage profile remains high but sustainable and
in line with the single-B rating category. Management highlighted
working capital requirements could be optimised where inventory
levels are high at HESCO level for rapid product delivery.
Profitability in the baseline segment can be improved with cost
restructuring programmes.

DERIVATION SUMMARY

Praesidiad has evolved from a general fence manufacturer to a
total solution project (TSP) provider offering a full suite of
security services to a wide range of end-markets. Given its niche
strategic focus in high-security PP and perimeter control,
Praesidiad's building products peers such as Compagnie de Saint-
Gobain (BBB/Stable), CRH plc (BBB/Stable), L'isolante K-Flex
S.p.A. (B+/Stable) and Ideal Standard International S.A. (CC) can
only be used as a guide under Fitch peer comparison. Nonetheless,
Fitch believes Praesidiad's ratings remain constrained by its
group's small size and niche focus. Relative to certain other
security peers, Praesidiad's business model is more volatile with
earnings depending on large projects and unplanned events.
Although Praesidiad's profitability is weaker than peers', key
credit metrics such as free cash flow (FCF), leverage and coverage
are consistent with the current rating.

KEY ASSUMPTIONS

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

- Total revenue CAGR of 3.2% driven by a steady baseline segment
   and modest growth in the high-security segment over 2016-2020;

- EBITDA margin to reach 15% by 2020, supported by an increasing
   share of the higher-margin high-security segment as well as
   some cost saving initiatives;

- Capex at 2.5%-3% of total revenue;

- No extraordinary dividend payments or acquisitions.

KEY RECOVERY ASSUMPTIONS

- The recovery analysis assumes that Praesidiad would remain a
   going concern in bankruptcy and that the group would be
   reorganised rather than liquidated. Fitch has assumed a 10%
   administrative claim in the recovery analysis.

- The recovery analysis assumes a 20% discount to Praesidiad's
   LTM EBITDA for 2016, resulting in a post-reorganisation EBITDA
   around EUR50 million. At this level of EBITDA which assumes
   corrective measures have been taken, Fitch would expects
   Praesidiad to generate marginally positive FCF.

- Fitch also assumes a distressed multiple of 5.5x and a fully
   drawn EUR80 million revolving credit facility (RCF).

- These assumptions result in a recovery rate for the senior
   secured debt within the 'RR3' range to allow a single-notch
   uplift to the debt rating from the IDR.

RATING SENSITIVITIES

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

- Successful transition to the high-security-focused business,
   which will represent the majority of revenue.

- Stable EBITDA margin in the high-teens and consistently
   positive FCF.

- Funds from operations (FFO) adjusted gross leverage (including
   factoring and operating leases adjustments) below 4.5x.

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

- Failure to maintain its niche position in the high-security
   segment, leading to loss of key customers.

- EBITDA margin erosion trending towards 10% and volatile FCF
   with margin below 1%.

- FFO adjusted gross leverage (including factoring and operating
   leases adjustments) above 7.0x for a sustained period.

LIQUIDITY

Satisfactory Liquidity: Fitch views Praesidiad's liquidity
position as satisfactory following the transaction and the
proposed new capital structure. Fitch expects Praesidiad to have
access to cash of around EUR17 million on balance sheet and an
undrawn multi-currency revolving credit facility of EUR80 million.
In addition, Praesidiad utilises its factoring facility to fund
part of its working capital cycle. Fitch forecasts sufficient
internal cash flow to accommodate any capital expenditure
requirements.


ERPE MIDCO: S&P Assigns Preliminary 'B+' CCR, Outlook Stable
------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'B' long-term
corporate credit rating to Erpe Midco Ltd., parent company of
Praesidiad. The outlook is stable.

S&P said, "At the same time, we assigned a preliminary 'B' issue
rating to the group's proposed EUR320 million term loan B, which
will be issued by the core subsidiary Erpe Bidco Ltd. The
preliminary recovery rating is '4', indicating our expectation of
average recovery (30%-50%; rounded estimate: 40%) in the event of
a payment default.

"All the ratings depend on our review of the final transaction
documentation. If we do not receive the final documentation within
a reasonable time frame, or if the final documentation departs
from materials we have reviewed, we reserve the right to withdraw
or revise our ratings. Potential changes include, but are not
limited to, the interest rate, maturity, size, and financial and
other covenants."

Private equity group Carlyle has entered into an agreement to
acquire 100% of the shares in Belgian-based perimeter protection
provider Praesidiad from CVC Capital Partners for an enterprise
value of EUR660 million. S&P said, "Our preliminary ratings on the
Praesidiad group incorporate our assumptions that the group will
issue a seven-year EUR320 million term loan B to finance the
acquisition and transaction-related costs, and to repay all of its
outstanding debt. The group will also issue a EUR80 million
revolving credit facility (RCF). We assume that, after the
acquisition, the RCF will be undrawn and the group's cash balance
will amount to about EUR17 million. The preliminary ratings
assessment further takes into account our expectations that the
shareholder loan provided by Carlyle will meet our requirements
for equity treatment."

Praesidiad has a leading position in its niche within the global
perimeter protection market, providing perimeter security
solutions and safety barriers for military and industry, and
manufacturing metal fences for general purposes. S&P views the
group's business risk as weak and its financial risk profile as
highly leveraged after the acquisition by Carlyle and the related
refinancing.

Praesidiad remains smaller than global capital goods peers that
operate across many markets and sectors. S&P said, "We forecast
revenue of about EUR450 million and EBITDA of EUR70 million in
2017. The group has two main business lines, baseline and high
security. We see the baseline general purpose fencing as having
limited product differentiation, relatively low profitability, and
limited growth in end markets. This weakness is to an extent
offset by the recent restructuring of the baseline manufacturing
activities, which has significantly reduced the cost base related
to the group's manufacturing footprint.

"We view the group's transformation over the past 18 months as
positive for the group's credit profile, with the acquisition of
HESCO, an increasing shift to high security, and continued
business repositioning. The group has also diversified its end
markets for its high security segment--previously military and oil
and gas--and is growing in the energy sector and in new end
markets like data centers. HESCO, which has a dominant position in
military perimeter security, contributes in terms of
diversification, complementary product offering, strong brand
recognition among the targeted client base, and superior margins.
We further view positively the group's strategic focus in
developing the business toward providing full perimeter security
solutions for military and industrial clients, with significantly
higher value-added for the end customer, as well as higher
profitability and growth potential.

"Praesidiad is increasingly shifting its business focus to the
high security segment, which represented about 60% of group EBITDA
in 2016. The group enjoys a stronger market position and higher
margins in this segment, and we expect the shift will continue to
improve the group's profitability over the coming years. Demand
for high security solutions is growing, strongly driven by
international or national events requiring solutions to protect
individuals and objects. Although this segment is to some extent
event-driven, it adds stability to the group as it is less
dependent on economic cycles than the baseline products.

"The major constraints to Praesidiad's financial risk profile are
the group's aggressive financial policy, owing to its private
equity ownership and its highly leveraged capital structure. We
forecast adjusted debt to EBITDA of about 5x in 2018-2019. We add
about EUR70 million of debt adjustments related to factoring and
operating-lease obligations. The group's financial risks are
mitigated by its strong cash conversion profile, benefitting from
the low capital intensity of the business, with replacement
capital expenditures estimated at only about 2%-3% of sales, and
moderate working capital needs. We therefore expect the group to
generate positive free operating cash flows (FOCF) of above EUR20
million per year. We also note the group's relatively strong funds
from operations (FFO) cash interest coverage for the rating, which
we forecast will remain above 4x over 2018-2019.

"The stable outlook reflects our view that Praesidiad will benefit
from its recent cost optimization and be able to continue the
shift toward high security, thereby further improving
profitability. We anticipate that the group will gradually
deleverage and continue to generate positive FOCF. We expect
adjusted FFO cash interest coverage to remain above 2.5x.

"We could lower the rating if the group failed to sustain its
improved operating performance, for example if it was not able to
achieve higher margins and cash flow generation, or if it
continued to incur material restructuring costs. Downward pressure
could also arise through higher volatility of cash flows than
expected, or debt-financed acquisitions that led to higher
leverage and weaker coverage ratios, in particular FFO cash
interest coverage below 2.5x.

"We view rating upside as remote over the next 12 months, but we
could consider raising the rating if Praesidiad demonstrated solid
growth in revenue and margins through successfully growing within
the high security segment. An upgrade would also require credit
metrics in line with an aggressive financial risk profile
category, with debt to EBITDA comfortably and sustainably below
5x. An upgrade would also be contingent on our view that any
improvement would be supported by a conservative financial
policy."


VIRGIN MEDIA: RFNs Tap Issue in Line With Guidance, Fitch Says
--------------------------------------------------------------
Fitch Ratings says that Virgin Media Receivables Financing I DAC's
receivables financing notes (RFNs) tap issuance (rated
'B+(EXP)'/'RR5(EXP)') is in line with Fitch's previous guidance.
The RFNs' ratings are one notch lower than Virgin Media Inc.'s
(VMED) Long-Term Issuer Default Rating (IDR) of 'BB-' and a notch
higher than the group's senior unsecured debt. The RFNs' original
ratings reflected Fitch's assessment of the security and
transaction structure, which places the RFNs structurally senior
to VMED group's senior unsecured debt.

The new issuance is a tap of the GBP350 million notes due
September 2024 and issued in September 2016. As such the terms,
conditions and structure of the notes are identical to the 2016
issuance. With issuance at this tier of the capital structure
expected to remain within the parameters guided by Fitch at the
time of the original issue, the tap has the same instrument and
recovery ratings.

The RFNs (and associated VM facilities) benefit from guarantees
from Virgin Media Senior Investments Limited (VMSI) as well as a
number of opco obligors, creating structural seniority relative to
the group's senior unsecured debt given that the latter is not
guaranteed by VMSI. From an organisational perspective, VMSI sits
closer to the operating assets of the group. The unsecured debt
does not benefit from guarantees from any of the operating
companies (for a comprehensive overview of the rating rationale
see https://www.fitchratings.com/site/pr/1012183).

As identified in Fitch original instrument rating rationale, the
RFNs rank equally with other vendor finance (VF) obligations of
the VMED group. In total these liabilities stood at around GBP801
million at June 2017; a value that Fitch expects to increase as
the group's Project Lightning build continues to ramp. Fitch has
guided an overall limit of around GBP1.5 billion (looking through
year-end seasonal peaks and in the context of the group's existing
cash flow scale) to be a tolerance for this kind of funding before
the notching uplift of the notes relative to unsecured debt is
likely to fall away.

At the time of the original RFN issuance, secured debt ranking
ahead of the RFN/VF debt was around 4.3x 2016 Fitch forecast
EBITDA; with a GBP1.5 billion VF threshold equivalent to a further
0.7x of EBITDA leverage. Based on Fitch current forecast 2017
EBITDA, the cap structure at June 2017 and a GBP1.5 billion VF
threshold, these ratios have not materially changed. With VMED's
'BB-' IDR, Fitch does not apply bespoke recoveries to its capital
structure. It is important nonetheless that these parameters
remain broadly in place; with undue increases in secured leverage
or the weighting of VF liabilities within the structure likely to
erode the notching assigned to the RFNs.


VIRIDIAN GROUP: Fitch Rates Senior Secured Notes 'BB-(EXP)'
-----------------------------------------------------------
Fitch Ratings has assigned Viridian Group FinanceCo PLC's and
Viridian Power and Energy Holdings DAC's proposed senior secured
sterling and euro notes an expected rating of 'BB-(EXP)'.

The final rating is contingent upon the receipt of final
documentation conforming materially to information already
received and details regarding the amount and tenor.

The expected senior secured rating of 'BB-(EXP)' reflects Viridian
Group Investments Limited's Long-Term Issuer Default Rating (IDR)
of 'B+' and the recovery prospects for the notes with the Recovery
Rating of RR3.

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

KEY RATING DRIVERS

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

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

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

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

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

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

DERIVATION SUMMARY

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

KEY ASSUMPTIONS

Fitch's key assumptions within the rating case for Viridian
include:

- Power NI no change in regulation after March 2019;
- electricity margin/Huntstown CCGT lower SMP assumptions than
   previous with more conservative view of demand growth from
   data centres;
- capacity payment revenues as per guidance;
- 10% haircut to ancillary services EBITDA;
- renewable PPAs, lower SMP assumptions than previously (please
   see below);
- lower load factors than assumed by company;
- broadly flat EBITDA margins in Irish residential supply;
- dividends from renewables, lower SMP assumptions by an average
   11% than previously;
- company guidance on restricted group capex, but Fitch add to
   this 30% of the owned renewables capex figure outside the
   restricted group as equity finance for renewables capex - this
   is more conservative than management which assumes a 20%
   equity/ 80% debt funding structure
- company will pay GBP60 million in dividends as part of the
   refinancing, Fitch assume dividends at 50% of net income from
   FY19.

Key Recovery Rating Assumptions:

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

- Fitch have assumed an administrative claim of 10%.
- Viridian's going-concern EBITDA is based on LTM March 2017
   EBITDA and includes pro forma adjustments for dividends from
   wind assets from FY19, paid after a one-year time lag on
   assets in operation in FY18. The going-concern EBITDA estimate
   reflects Fitch's view of a sustainable, post-reorganisation
   EBITDA level upon which Fitch base the valuation of the
   company, based on an EBITDA discount of 15%.
- An EV multiple of 6x is used to calculate a post-
   reorganisation valuation and reflects a mid-cycle multiple.
   The estimate reflects a discount of around 20% to the multiple
   paid by I Squared for Viridian in April 2016 and is based on a
   blended multiple, taking other similar transactions into
   account (for example the 5.5x multiple paid by Centrica for
   the supply business of Bord Gais in 2014).
- The waterfall results in a 100% recovery corresponding to RR1
   recovery for the super senior RCF of GBP225 million. The
   waterfall also indicates a 53% recovery corresponding to RR3
   for the proposed notes.

RATING SENSITIVITIES

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

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

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

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

LIQUIDITY

Sound Liquidity: Viridian has sound liquidity with GBP107 million
(pre-redemption of 10%) of unrestricted cash and short-term
deposits at FY17, as well as GBP100 million undrawn liquidity
available on the cash portion of the revolving credit facility
which expires in October 2019. The company has no material short-
term debt and Fitch expects liquidity to remain sound after the
refinancing. Wind assets that are financed through the company's
project-finance facilities are excluded from Fitch's total debt
calculation as this debt is held outside of the restricted group
on a non-recourse basis. Fitch expects Viridian's free cash flow
to be neutral to positive over the rating horizon as dividends
received from wind assets increase.



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


* EUROPE: Number of Banks in Grave Danger Rises in 2016
-------------------------------------------------------
Laura Noonan at The Financial Times reports that analysis by
consultancy Bain shows the number of European banks in grave
danger rose sharply last year and is now close to its 2013 level,
despite extensive efforts by lenders to bolster balance sheets and
profits.

The annual Bain review, which is being made public for the first
time, examines about 110 European banks and scores them on
profitability and balance sheet strength, the FT discloses.  The
weakest face severe challenges on both fronts, the FT notes.


According to the FT, at the end of 2016, 31 were in the "weakest"
category, a jump from 23 a year earlier and close to the 35 in the
worst category in 2013.

Bain, as cited by the FT, said that every European lender that
failed in the past decade was in the weakest category before its
failure, as were many of those that had to recapitalize during and
after the eurozone financial crisis.

Already, four of the 31 weakest banks at the end of last year have
ceased operating as standalone entities, the most high-profile
being Spain's Banco Popular, which was rescued by Santander in
June, the FT states.

"The fragile banks that have not acted effectively or that delayed
taking action find themselves in a very difficult position," the
FT quotes Joao Soares, author of the report, as saying.

He said he believes the number of banks in jeopardy has increased
partly because the lenders that originally showed only problems in
profitability developed issues with their balance sheets as losses
mounted, the FT relays.

Banks were forced to reassess the value of their assets after
regulators, led by the European Central Bank, increased scrutiny
over how they were dealing with problem loans, the FT says.

The weakest set includes 11 Italian banks, six Spanish, five
German and two Greek, according to the FT.  The strongest includes
five each from Germany, France and the Netherlands and four from
Sweden, the FT discloses. Four UK banks were included in the
survey, with one in the best category and none in the worst, the
FT notes.


* Spec-Grade First-Time Ratings Surge in H1 2017, Moody's Says
--------------------------------------------------------------
Low interest rates and high investor demand have triggered a surge
in the number of spec-grade companies looking for a first-time
rating. This reverses a three-year declining trend and heralds the
return of more aggressive transactions that increase risk to
investors, says Moody's Investors Service in a report published.

"Active high-yield bond and leveraged loan markets, as well as
issuer friendly conditions, have paved the way over the past 12
months for the current uptick in first-time spec-grade ratings.
Moody's expects this pace to continue as long as the overall
market maintains its momentum. However, transactions are becoming
more aggressive with higher initial leverage and weaker cash flow
increasing risk to investors," says Tobias Wagner, Vice President
at Moody's.

Moody's rated 52 new speculative-grade companies in the first half
of 2017, or 88% of last year's full year total, indicating that
the total for the current year will outpace 2016, reversing a
trend since 2013.

Moody's report is, "Speculative-grade non-financial corporates --
EMEA: The number of companies seeking first-time ratings is
rising, but so is risk for investors."

Transactions are becoming more aggressive in 2017, with higher
initial debt/EBITDA (Moody's-adjusted) and weaker cash flow
generation, but improved macroeconomic conditions are keeping the
average rating at B2. Some newly rated companies have a limited or
weak operating track record, and some are highly exposed to
business cycles, while others use optimistic adjustments to arrive
at their EBITDA.

Companies first rated in H1 2017 at B1 and lower have the highest
starting leverage since 2011. This trend could continue into H2,
leading to riskier transactions seeking to access the high-yield
bond or leveraged loan market. However, 21% of companies first
rated in 2017 have ratings in the Ba range, which is the highest
level since 2011. On average, though, these companies have higher
leverage.

Spec-grade firms first rated in H1 2017 had the weakest average
cash flow generation in the past five years. Their free cash flow
to debt (Moody's-adjusted), which measures cash flow after
investments, interest and dividends, is at less than 4%. Since
lower cash flow is not the result of higher investment, companies
first rated in 2017 expect generally weaker free cash flow than in
previous years.

Companies first rated in 2017 will rely more on EBITDA growth to
reduce leverage. On average, newly rated companies expect 6%
revenue growth in the first year after rating assignment, which is
in line with previous years' cohorts. While deleveraging
expectations remain in line with previous years, those first rated
in 2017 will rely more on EBITDA growth and managements' ability
to achieve expectations, given lower cash flow.



                            *********

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

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

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


                            *********


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

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

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

This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

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

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


                 * * * End of Transmission * * *