TCREUR_Public/170927.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

        Wednesday, September 27, 2017, Vol. 18, No.192


                            Headlines


C R O A T I A

CROATIA: S&P Alters Outlook to Positive, Affirms BB/B SCR


F R A N C E

SMCP GROUP: Moody's Affirms B1 CFR on Proposed IPO


G E O R G I A

GEORGIAN RAILWAY: S&P Alters Outlook to Neg, Affirms B+/B Ratings


G E R M A N Y

AIR BERLIN: Hopes to Conclude Lufthansa, Easyjet Talks by October
THYSSENKRUPP AG: S&P Puts 'BB/B' Ratings on CreditWatch Positive


I R E L A N D

CARLYLE GLOBAL 2015-2: Moody's Affirms B2 Rating on Class E Notes


I T A L Y

ALMAVIVA SPA: S&P Assigns 'B+' Corp Credit Rating, Outlook Stable


N E T H E R L A N D S

DUCHESS VI: Moody's Hikes Rating on Class E Notes from Ba1
NEPTUNO CLO I: Moody's Raises Ratings on Two Note Classes to Ba1
TIKEHAU CLO III: S&P Assigns Prelim B-(sf) Rating to Cl. F Notes
WOOD STREET CLO III: S&P Lowers Class E Notes Rating to B- (sf)


N O R W A Y

NORSKE SKOG: 65% of Bondholders Back Debt Restructuring Plan


R U S S I A

B&N BANK: S&P Places 'B' Long-Term ICR on CreditWatch Developing
RGS BANK: Moody's Lowers Baseline Credit Assessment to caa1
VIM AIRLINES: May Enter Receivership, Seeks State Aid


S P A I N

NEOL BIOSOLUTIONS: To File for Insolvency After Creditor Talks


U N I T E D   K I N G D O M

AFREN PLC: Former Executives Face US$400MM Fraud Charges
BROWN ENGINEERING: Enters Liquidation, 32 Jobs Affected
SANDWELL COMMERCIAL NO.2: S&P Affirms CC Rating on Cl. E Notes
SOUTHERN PACIFIC 06-1: S&P Raises Class FTc Rating to B- (sf)


                            *********



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C R O A T I A
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CROATIA: S&P Alters Outlook to Positive, Affirms BB/B SCR
---------------------------------------------------------
On Sept. 22, 2017, S&P Global Ratings revised to positive from
stable the outlook on the long-term foreign and local currency
sovereign credit ratings on the Republic of Croatia. At the same
time, S&P affirmed its 'BB' long-term and 'B' short-term foreign
and local currency sovereign credit ratings on Croatia.

OUTLOOK

S&P said, "The positive outlook reflects our expectation that
Croatia's economic expansion will continue, helping further
consolidation of public finances, while external ratios will
benefit from continued deleveraging, as well as that the
potential fallout from the situation around Croatia's largest
retail conglomerate, Agrokor, will remain contained.

"We could raise our ratings on Croatia if economic recovery
remains on track while the government continues to show ability
and willingness to implement structural reforms and stick to its
fiscal consolidation agenda, leading to sustainable consolidation
of government finances. Moreover, we could consider an upgrade if
Croatia's external ratios improve faster than in our base-case
scenario as a result of stronger external deleveraging or faster
growth of current account receipts.

"We could revise the outlook to stable if Croatia's contingent
liabilities, such as the lawsuits against the government,
translated into a higher government debt burden, or if structural
reform efforts slowed, leading to lower economic growth and
higher-than-forecast fiscal deficits. Moreover, we are closely
monitoring the restructuring efforts at Agrokor and could
consider
a negative action if a disorderly restructuring undermines
economic performance or leads to significant fiscal costs. This,
however, is not our base-case scenario."

RATIONALE

S&P's ratings on Croatia are supported by the country's declining
general government deficit and its falling external indebtedness,
primarily on the back of continued banking sector deleveraging.
At the same time, the ratings remain constrained by Croatia's
still-high government debt burden, low income levels in a
European comparison, and continued bouts of political volatility.

Institutional and Economic Profile: After coalition reshuffle,
focus is on structural reform agenda to ensure sustainability of
economic upswing

Favorable external and domestic developments bolster growth,
whereas spillovers from Agrokor's ongoing restructuring remain
contained.

However, Agrokor's emerging financial issues have led to a
coalition reshuffle, which may call into question the
government's ability to continue its reform agenda.

Structural challenges to the economy persist in the form of labor
shortages and a high degree of state ownership in the economy,
among others.

S&P said, "A mixture of external and domestic factors continues
to drive the Croatian economy. As a result, we expect real
economic growth of 3% in 2017 supported by strong exports,
particularly in the booming tourism industry. Moreover, domestic
demand contributes positively to growth as investments recover
and private consumption strengthens on the back of improving
labor markets and the tax reform passed in 2016, which increased
disposable incomes. In the medium term, however, we expect
structural factors may weigh on the Croatian economy."

Croatia's business environment, especially as regards starting a
business, remains weaker than regional peers', as indicated by
the World Bank's Ease of Doing Business indicators, while skill
mismatches and labor shortages are reported, despite still-high
unemployment rates.

The effect of the ongoing restructuring of Agrokor appears
contained so far. Besides a small dent in consumer confidence in
the immediate aftermath of the government installing an
extraordinary commissioner at Agrokor, investments and
consumption have held up well over the course of 2017. Downside
risks to the economy could emerge if a disorderly restructuring
of Agrokor negatively affects its suppliers, mostly small and
midsize enterprises and farms, and resulted in their coming under
financial pressure. However, S&P understands Agrokor is currently
servicing all debt obligations, including payments to suppliers,
and has taken steps to mitigate the effect on suppliers.

S&P said, "Therefore, we see downside risks to the Croatian
economy as a result of the Agrokor turmoil as limited (see
"Ratings On Croatia Unchanged By Retail Group Agrokor's Announced
Debt Payment Freeze," published April 7, 2017, on RatingsDirect).
However, we will continue monitoring the situation including the
financial and operational restructuring and its potential impact
on the Croatian economy."

That said, as a result of the Agrokor crisis, the previous ruling
coalition of HDZ (the Croatian Democratic Union) and Most (The
Bridge) split, as some Most party members did not support the
finance minister in a vote of no confidence in parliament. After
the split, HDZ formed a new coalition with HNS (The Liberal
Democrats). This episode underlines the political volatility in
Croatia that has shaped the country for thepast two years and
which could continue constraining the government's ability to
address longstanding structural issues. These include structural
unemployment, a high degree of state ownership in the economy,
and a somewhat weaker business environment than European peers'.
In order to address these and other issues, S&P understands the
government's priority reforms are reform of the public
administration and the pension system, and improvements in the
business climate. A proposed introduction of a property tax has
been postponed to allow further consultation on the final design.

Flexibility and Performance Profile: Public finances improve, due
to strong economy, while external deleveraging continues.

Fiscal balances continue to improve on the back of strong revenue
growth and expenditure containment.

At the same time, the refinancing needs of the government and
government-related entities remain high.

External deleveraging, especially by the financial sector,
continues.

Alongside the strengthening recovery, public finances also
continue to improve. After a better-than-expected general
government deficit at 0.8% of GDP in 2016, we forecast that it
will widen slightly to 1.1% this year. S&P said, "This is still
lower, however, than our forecast of 1.3% at the time of the last
review. Our current base-case scenario does not encompass a
fiscal impact of the Agrokor situation. We understand that
Croatian government-owned development bank Hrvatska banka za
obnovu i razvitak (BB/Stable/B) has some loan exposure to
Agrokor. However, this exposure is secured by collateral.
Moreover, we note that the company is current on its tax
obligations and that the government has not provided direct
financial support to Agrokor. Still, we expect a slightly wider
fiscal deficit over our forecast horizon through 2020 of, on
average, 1.3% of GDP as a pick-up in EU-co-financed investment
projects leads to higher budgetary outlays and the 2016 tax
reform, which encompassed cuts to personal and corporate income
taxes, may hinder revenue growth.

"Substantial refinancing needs of both the government and
government-related entities, the large share of foreign currency-
denominated obligations in public debt, and the Croatian banking
sector's high exposure to the sovereign continue to constrain our
ratings. That said, improved debt management practices and
potential asset-liability management exercises could improve the
general government sector's debt profile. Moreover, we view
positively Croatia's increasing ability to refinance itself on
the domestic market at longer maturities. Faster economic growth
and lower fiscal deficits should translate into a quicker
reduction of Croatia's debt-to-GDP ratio, while in nominal terms,
general government debt continues to increase. We expect
Croatia's debt ratio will decline to about 75% of GDP by 2020,
down from its peak of 86.6% in 2014.

"Croatia's current account remains in surplus, thanks to a large
and increasing service balance surplus driven by a record-
breaking tourism season. Moreover, we expect the current account
surplus will increase to about 3.7% of GDP this year from 2.7% in
2016. Due to the financial situation of Agrokor, the Croatian
National Bank (Hrvatska Narodna Banka; the central bank) asked
banks to provision their Agrokor exposure by at least 50%,
hurting banks' profitability and reducing capital outflows in the
form of profit dividends to their parents in 2017. We forecast
the current account surplus will decline, due to strong import
growth as a result of buoyant domestic demand. Nonetheless,
external debt net of liquid external assets is likely to decrease
further to less than 50% of current account receipts by 2020,
according to our forecast.

"Improvements in Croatia's banking sector indicated by recovering
profitability, increasing lending, and declining nonperforming
loans, could be jeopardized by Agrokor's financial stress. We
understand that independent auditor reports on Agrokor's balance
sheet will be made public and that banks were asked to provision
at least half of their Agrokor exposure. Still, the final haircut
to Agrokor's debt could be somewhat larger than the provisions,
implying additional losses for banks. While larger banks'
capitalization levels should be able to withstand such an impact,
some smaller banks may be forced to raise additional capital.
However, we note that a large part of Agrokor's direct
liabilities are toward foreign banks and should therefore not
affect the stability of the Croatian banking system. Still, we
expect lower profitability for the sector as a whole this year.
The impact could be more pronounced, depending on how Agrokor's
suppliers are impacted by a debt restructuring, although we note
that the company has taken steps to reduce the effect on its
suppliers, notably as 50% of supplier debt has already been
settled."

The Croatian National Bank is committed to the quasi Croatian
kuna-euro peg, which limits monetary policy flexibility, as does
the highly euro-ized economy. As of June 2017, over 50% of loans
and deposits were denominated in or linked to a foreign currency,
usually the euro.

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

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

The committee agreed that the fiscal assessment for flexibility
and performance had improved. All other key rating factors were
unchanged.

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

RATINGS LIST

                                              Rating
                                         To               From
  Croatia (Republic of)
   Sovereign Credit Rating
   Foreign and Local Currency        BB/Positive/B    BB/Stable/B
  Transfer & Convertibility Assessment     BBB            BBB
  Senior Unsecured
  Foreign Currency                         BB             BB
  Short-Term Debt
  Local Currency                           B              B


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F R A N C E
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SMCP GROUP: Moody's Affirms B1 CFR on Proposed IPO
--------------------------------------------------
Moody's Investors Service has affirmed all ratings of French
apparel retailer SMCP Group (SMCP) including the B1 corporate
family rating (CFR) and B1-PD probability of default rating
(PDR). Concurrently, Moody's has affirmed the B1 rating assigned
to the outstanding EUR434 million worth of senior secured Notes
(EUR100 million floating rates notes due 2022 and EUR334 million
outstanding fixed rates notes due 2023). The outlook on all
ratings is stable.

"The decision to affirm the ratings follows SMCP's plans to use
proceeds from a potential initial public offering to reduce its
outstanding external debt" says Guillaume Leglise, a Moody's
Analyst and lead analyst for SMCP. "While the IPO would improve
somewhat the leverage and cash flows of SMCP, its ratings remain
constrained by the weaker credit quality of its Chinese parent
Shandong Ruyi Technology Group Co., Ltd." adds Mr Leglise.

RATINGS RATIONALE

Moody's decision to affirm SMCP's ratings follows the company's
filling of document in preparation for its Initial Public
Offering (IPO) on the regulated market of Euronext Paris. As part
of the proposed IPO, SMCP expects to raise gross proceeds of
approximately EUR120 million. Together with new banking credit
facilities that the company will put in place at the time of the
conclusion of the proposed transaction, the proceeds from the IPO
would be applied towards the early redemption of part of the
existing senior secured notes.

SMCP intends to fully redeem its EUR100 million worth of floating
rate notes due 2022 and partially redeem its EUR334 million worth
of fixed rate notes due 2023. SMCP will also put in place a new
revolving credit facility of up to EUR250 million (upsized from
the EUR70 million it has access to currently) which is expected
to be drawn for up to approximately EUR124 million to finance the
partial bond buy-back following the IPO.

The execution of the IPO as proposed will lead to a reduction in
SMCP's debt and a strengthening of the company's free cash flow
as a result of the reduction in interest expense. SMCP
anticipates its net (reported) leverage will reduce to 2.25x down
from around 2.7x at end-June 2017, should the transaction be
successful. Moody's considers that the proposed IPO and
associated debt repayment is credit positive as it would result
in further de-leveraging pursuing the trend reported in recent
quarters owing to solid earnings growth. Pro-forma of the
proposed IPO, Moody's estimates the company's adjusted (gross)
debt-to-EBITDA ratio (as adjusted by Moody's, mainly for
operating leases) will decrease to below 3.4x from around 3.8x as
of June 30, 2017, which would position SMCP strongly in its B1
rating category.

That being said, SMCP's ratings remain constrained by the weaker
credit quality of its Chinese majority shareholder, textile
manufacturer Shandong Ruyi Technology Group Co., Ltd. ("Ruyi", B2
stable) on a standalone basis. Ruyi's B2 CFR is constrained by
its highly leveraged capital structure and its currently weak
liquidity position. Ruyi reported a gross debt of around RMB14.6
billion (approximately EUR1.8 billion) and its Moody's-adjusted
leverage stood at 8.7x at end-June 2017, a level deemed very high
for the B2 rating category.

Given SMCP's strategic importance to its owner (SMCP represents
around 30% of Ruyi's consolidated EBITDA) and the uncertainty
with regards to SMCP's financial policy and any potential need to
support its parent going forward, Moody's considers SMCP's rating
to be limited at a maximum of one notch above that of Ruyi, which
is currently rated B2 with a stable outlook.

The affirmation is premised on Moody's expectations that Ruyi
will retain a majority ownership into SMCP of about 51% following
the proposed IPO. In addition, Moody's cautions that the ultimate
ownership structure as well as its corporate governance after the
proposed IPO are unclear at this stage.

WHAT COULD CHANGE THE RATING UP/DOWN

An upgrade is unlikely in the near term given the rating assigned
to SMCP's parent Ruyi (B2 stable) which constrains SMCP's rating
at the current level. However, if SMCP's ownership structure
changes, resulting in a reduced linkage with Ruyi, then Moody's
could reconsider SMCP's ratings.

Moody's could consider upgrading SMCP's ratings if the company
continues its trajectory of profitable growth, maintains above
rated peers like-for-like sales growth and generates a positive
free cash flow leading to improved credit metrics such as
Moody's-adjusted (gross) debt/EBITDA ratio sustainably below 3.5x
and Moody's-adjusted EBIT/Interest Expense ratio above 2.5x. An
upgrade would also be dependent upon confirmation of an intention
to pursue a prudent financial policy without material acquisition
or distribution to shareholders.

Conversely, SMCP's ratings could be under downward pressure if
there is evidence of a prolonged weakness in like-for-like sales
growth as a result of, for example, poor execution or
deterioration in either profitability or free cash flow
generation. Quantitatively, a Moody's-adjusted debt/EBITDA ratio
approaching 4.5x and a Moody's-adjusted EBIT/Interest Expense
ratio trending towards 1.5x could trigger a downgrade.

Furthermore, Moody's cautions that a downgrade of Ruyi's CFR
could create some pressure on SMCP's ratings or outlook
especially if there is evidence that Ruyi's weaker credit quality
could cause a change in SMCP's financial policies including
dividend payments.

PRINCIPAL METHODOLOGY

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

Headquartered in Paris, SMCP is an apparel retailer focused on
the accessible luxury segment (average item selling price is
c.EUR205) through three brands: Sandro, Maje, and Claudie
Pierlot. In the fiscal year ended December 31, 2016 SMCP recorded
net sales (before deducting concession fees) of EUR786 million
and reported an EBITDA of EUR130 million. In May 2016, a bond
financing was launched in support of the transaction under which
Chinese textile manufacturer Shandong Ruyi Technology Group Co.,
Ltd. (B2 stable) became the majority owner of SMCP. Former
majority owner, private equity firm KKR, and the company's
management retained minority stakes.


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G E O R G I A
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GEORGIAN RAILWAY: S&P Alters Outlook to Neg, Affirms B+/B Ratings
-----------------------------------------------------------------
S&P Global Ratings revised its outlook Georgia's national railway
operator, JSC Georgian Railway, to negative from stable. At the
same time, S&P affirmed the long- and short-term ratings at
'B+/B'.

S&P said, "We also affirmed our 'B+' issue rating on Georgian
Railway's senior unsecured bonds.

"The outlook revision to negative means that we could downgrade
Georgian Railway if the group's leverage continues to increase
beyond our current forecast, driven by lower freight volumes or
lower tariffs, and results in much weaker cash flow generation
and the coverage of its interest expense by cash flows.
Additionally, high capital expenditures (capex) in the next two
to three years, due to the group's continued expansion project in
central Georgia, could deplete the group's cash reserves, an
important liquidity source. With a lower cash cushion and our
estimate that Georgian Railway might not be able to access
external financing, the group's liquidity could suffer. We
anticipate that the group's leverage might exceed debt to EBITDA
of 3.5x (subject to calculation terms in the bond documentation),
beyond which bondcovenants restrict new borrowings by the
company.

"Although we now think that Georgian Railway has a highly
leveraged financial risk profile, leading us to reassess the
group's stand-alone credit profile (SACP) to 'b' from 'b+', we
continue to take into account our expectation of a very high
likelihood that the Georgian government would provide timely and
sufficient extraordinary support to the Georgian Railway if
needed.

"Our 'b' SACP assessment incorporates our assumption that
Georgian Railway's leverage will increase further in 2017, owing
to depressed freight volumes and the resulting flagging operating
performance, highlighted by the first-half 2017 financial
results, as opposed to our previous expectation that the group's
debt metrics would improve. We currently estimate that Georgian
Railway's S&P Global Ratings-adjusted debt to EBITDA will be in
the 6.5x-7.5x range and its funds from operations (FFO) to debt
will be between 5% and 10% in 2017-2019. This compares with debt
to EBITDA of 5.93x and FFO to debt of 10.49% in 2016, when
declining freight volumes throughout the year and a weaker
Georgian lari at year-end weighed on the company's performance.

"Moreover, we expect that the group's FFO-cash-interest-coverage
ratio will stay around 1.5x-2.0x in 2017-2019, compared with
about 2.5x in 2016. In our calculation of Georgian Railway's
adjusted debt, we do not net cash as we do not expect the group
to need it to repay any near-term debt maturities, but rather to
gradually utilize it for ongoing capex and operating
expenditures.

"We expect low freight volumes to continue to weigh on Georgian
Railway's operating performance over the next few years. Crude
oil transportation faces competition from the region's pipelines,
and its low volumes are only partly compensated by the ship-or-
pay contract to transport Turkmenistan oil. Shortages of natural
gas in Azerbaijan, Georgian Railway's major source of freight,
result in lower output and exports of products, such as methanol.
The shortage of gas also limits exports of fuel oil since
Azerbaijan uses it internally to replace gas in its power
stations. The gas production in Azerbaijan is expected to
increase in 2019, after a second stage of Shah Deniz field begins
operations. We therefore don't expect meaningful recovery of oil
product volumes -- one of Georgian Railway's most profitable
classes of cargo -- at least until 2019. We project that dry
cargo volumes will be volatile in the coming years because of
various factors, such as the state of the region's economic
environment (construction materials) and the harvests (grain),
but still below the historically observed levels. Overall, we
expect a further reduction of freight volumes by up to 5% in
2017, after a cumulative 36% decline in 2013-2016, and a 5%-11%
per year increase in 2018-2019.

"The Baku-Tbilisi-Kars (BTK) railway, a direct rail link that
will connect Turkey to Georgia and Azerbaijan, is expected to
start operations in late 2017. We assume that only a moderate
amount of cargo will go through it in the next few years, with
limited effect on Georgian Railway's overall results. The
Georgian part of the railway was built by the Georgian government
and financed by a loan from the Azerbaijani government. We do not
expect that Georgian Railway will own the infrastructure or have
any link to the loan provided by Azerbaijan. However, the group
will create a joint venture with Azerbaijan Railway to operate
the Georgian part of the link. We don't anticipate that Georgian
Railway will invest into the operating company.

"Still, we expect that Georgian Railway will maintain sound
profitability of at least 40% EBITDA margin, supported by its
ability to control costs as well as favorable regulation
providing the group flexibility in setting its tariffs.

"We continue to regard Georgian Railway as a government-related
entity with a very high likelihood of government support, based
on our view of the company's very important role for and very
strong link with the Georgian government.

"The negative outlook reflects the possibility of a negative
rating action if Georgian Railway's operating performance and
liquidity buffers continue to deteriorate and its leverage
increases further.

"We could lower the ratings if the group's operating performance
continues to deteriorate, leading to a further reduction of its
revenues, through decreasing cargo volumes or significantly lower
tariffs, and its EBITDA margin to decrease below 40%. We could
also lower our ratings if its interest coverage measures stagger,
with FFO cash interest coverage falling below 1.5x, as a result
of weaker cash flow generation. A negative rating action could
stem from a pronounced depletion of the group's liquidity
buffers, due to accelerated reduction of its cash reserves
through capex or unexpected cash outflows, such as dividends or
acquisitions.

"We could revise the outlook to stable if Georgian Railway's
financial measures started to improve, on the back of stronger
operating results, while its liquidity remains adequate. In
particular, we could revise the outlook to stable if the group's
FFO cash interest coverage metrics remains above 2x, its EBITDA
margins stay above 40%, and its solid cash buffers continue to
support adequate liquidity."


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G E R M A N Y
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AIR BERLIN: Hopes to Conclude Lufthansa, Easyjet Talks by October
-----------------------------------------------------------------
Victoria Bryan and Klaus Lauer at Reuters report that insolvent
German airline Air Berlin hopes to conclude talks with Lufthansa
and easyJet on a carve-up of its assets by the middle of next
month as it races to secure jobs and keep flying.

According to Reuters, Air Berlin administrator Frank Kebekus said
on Sept. 25 Lufthansa has bid for units including leisure airline
Niki and regional carrier LGW plus around 13 A320 jets, while
easyJet has bid for 27-30 planes.  Talks will run until Oct. 12,
Reuters discloses.

Lufthansa has said it will need 3,000 new employees to grow as a
result of the gap left by the Air Berlin insolvency, Reuters
relates.

Air Berlin CEO Thomas Winkelmann said EasyJet's offer also
involves crews and slots associated with the 27-30 planes,
including a large share of Air Berlin's slots and crews at Berlin
Tegel airport, Reuters notes.

A source has said Lufthansa's bid is for around EUR200 million
(US$237 million), plus a further 100 million to meet operating
costs during a transition phase, Reuters relays.

Air Berlin said the parties had agreed not to disclose financial
details but that the bidders had put forward proposals on
financing the winter flight plan from the end of October, Reuters
discloses.  It hopes the EU will approve the carve-up by the end
of the year, Reuters states.

Administrator Frank Kebekus, as cited by Reuters, said flight
operations had to be kept stable to bring talks to a successful
conclusion, repeating comments made after the airline's
operations were hit by a wave of sickness-related absences among
pilots this month.

                          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.


THYSSENKRUPP AG: S&P Puts 'BB/B' Ratings on CreditWatch Positive
----------------------------------------------------------------
S&P Global Ratings placed on CreditWatch positive its 'BB' long-
term corporate credit and senior unsecured ratings on Germany-
based capital goods and steel group thyssenkrupp AG, as well as
its 'B' short-term rating on the group.

The recovery rating of '4' on the senior unsecured debt is
unchanged and indicates that creditors can expect average (30%-
50%; rounded estimate: 30%) recovery in the event of a payment
default.

The CreditWatch placement follows the announcement that
thyssenkrupp has signed a memorandum of understanding with Tata
Steel Ltd. (BB-/Stable/--) in order to form a joint venture
combining the European steel operations of both groups. The
to-be-formed 50/50 joint venture, thyssenkrupp Tata Steel, would
comprise the European steel operating assets of both companies,
with annual revenues of approximately EUR15 billion -- making it
the second-largest European steel producer after ArcelorMittal
(BB+/Stable/B). According to the announcement, thyssenkrupp plans
to deconsolidate the assets of thyssenkrupp Steel Europe,
together with approximately EUR4 billion of liabilities, most
notably about EUR3.6 billion related to pensions on a nonrecourse
basis.

S&P views the decision to deconsolidate the steel operations and
related liabilities to be positive for thyssenkrupp's credit
quality, as it will allow the group to focus on its more stable
capital goods and technology business areas, as well as
significantly reduce its leverage. The remaining business areas,
most notably elevators, have a more stable demand and performance
pattern across the economic cycle than group's profitable but
highly volatile steel operation. In terms of the group's overall
credit profile, the main positive impact stems from
deconsolidating the steel-related pension liabilities and related
significant cash payments of approximately EUR230 million per
year. In addition, it will enable the group to invest its capital
in segments that have a more attractive market structure and
growth prospects.

In 2016, thyssenkrupp's European steel operations contributed
EUR7.6 billion of the group's total revenues of approximately
EUR39 billion, and EUR700 million of the total EUR2.6 billion of
adjusted EBITDA. After the transaction, we would view
thyssenkrupp as a pure capital goods and technology group, with
its main operations comprising Elevator Technology, Components
Technology, and Industrial Solutions. S&P would further assume
the group's Materials Services business area, which has revenues
of about EUR12 billion and EBITDA contribution of about EUR200
million, to have a reduced strategic value for the group in the
medium term, if the transaction closes as planned.

The business risk profile of the group would be strengthened
because of improved overall operating margins and lower expected
volatility of cash flows, in particular supported by the strong
and stable Elevator Technology segment, contributing a large
share of the group's recurring EBITDA and cash flow. The
announced reduction of pension liabilities by EUR3.6 billion on a
nonrecourse basis would have a significant positive impact on
adjusted leverage and key credit metrics. According to our
estimates, adjusted funds from operations to debt could notably
increase to exceed 20% after the closing of the transaction
pointing toward a stronger financial risk profile, provided that
the benefits of the transaction (including higher operating
margins, lower cost base, and improved balance sheet structure)
will be achieved, and that the group will follow a supportive
financial policy to enable deleveraging.

S&P said, "If the transaction closes as planned, we expect a
positive impact on thyssenkrupp's credit profile in terms of more
stable operating and financial performance over the cycle and
significantly stronger credit ratios. In our view, the current
parameters set out by the group for the transaction -- in
particular deconsolidating the European steel assets and
liabilities in an independent operation on a nonrecourse basis,
without ongoing support by the joint venture partners -- could
support raising of the long-term ratings on thyssenkrupp up to
two notches. This assumes thyssenkrupp's operating performance,
future financial policy, and plans for mergers and acquisitions
all support deleveraging.

"We expect to resolve the CreditWatch as soon as the final
transaction structure and details have been agreed upon by the
partners, the joint venture agreement has been signed, and
sufficient clarity on any potential regulatory hurdles has been
obtained. This could exceed our typical 90-day CreditWatch
horizon, as the signing is currently expected by early 2018.
Should the transaction not materialize, the ratings on
thyssenkrupp would likely remain unchanged, all else remaining
equal."


=============
I R E L A N D
=============


CARLYLE GLOBAL 2015-2: Moody's Affirms B2 Rating on Class E Notes
-----------------------------------------------------------------
Moody's Investors Service has assigned definitive ratings to
seven classes of notes (the "Refinancing Notes") issued by
Carlyle Global Market Strategies Euro CLO 2015-2 Designated
Activity Company (the "Issuer"):

-- EUR238,225,000 Refinancing Class A-1A Senior Secured Floating
    Rate Notes due 2029, Definitive Rating Assigned Aaa (sf)

-- EUR5,275,000 Refinancing Class A-1B Senior Secured Fixed Rate
    Notes due 2029, Definitive Rating Assigned Aaa (sf)

-- EUR30,350,000 Refinancing Class A-2A Senior Secured Floating
    Rate Notes due 2029, Definitive Rating Assigned Aa2 (sf)

-- EUR10,550,000 Refinancing Class A-2B Senior Secured Fixed
    Rate Notes due 2029, Definitive Rating Assigned Aa2 (sf)

-- EUR25,800,000 Refinancing Class B Senior Secured Deferrable
    Floating Rate Notes due 2029, Definitive Rating Assigned A2
    (sf)

-- EUR24,000,000 Refinancing Class C Senior Secured Deferrable
    Floating Rate Notes due 2029, Definitive Rating Assigned Baa3
    (sf)

-- EUR24,900,000 Refinancing Class D Senior Secured Deferrable
    Floating Rate Notes due 2029, Definitive Rating Assigned Ba2
    (sf)

Additionally, Moody's also affirmed the rating on the existing
following notes issued by the Issuer on the original issuance
date (the "Original Closing Date"):

-- EUR12,500,000 Class E Senior Secured Deferrable Floating Rate
    Notes due 2029, Affirmed B2 (sf); previously on Aug 21, 2015
    Assigned B2 (sf)

RATINGS RATIONALE

Moody's definitive ratings of the notes address the expected loss
posed to noteholders. The ratings reflect the risks due to
defaults on the underlying portfolio of assets, the transaction's
legal structure, and the characteristics of the underlying
assets.

The Issuer will issue the Refinancing Class A-1A Notes, the
Refinancing Class A-1B Notes, the Refinancing Class A-2A Notes,
the Refinancing Class A-2B Notes, the Refinancing Class B Notes,
the Refinancing Class C Notes and the Refinancing Class D Notes
(the "Refinancing Notes") in connection with the refinancing of
the Class A-1A Senior Secured Floating Rate Notes due 2029, the
Class A-1B Senior Secured Fixed Rate Notes due 2029, the Class
A-2A Senior Secured Floating Rate Notes due 2029, the Class A-2B
Senior Secured Fixed Rate Notes due 2029, the Class B Senior
Secured Deferrable Floating Rate Notes due 2029, the Class C
Senior Secured Deferrable Floating Rate Notes due 2029 and the
Class D Senior Secured Deferrable Floating Rate Notes due 2029,
("the Original Notes") respectively, previously issued on August
21, 2015 (the "Original Closing Date"). On the Refinancing Date,
the Issuer will use the proceeds from the issuance of the
Refinancing Notes to redeem in full its respective Original Notes
that will be refinanced. On the Original Closing Date, the Issuer
also issued one class of rated notes and one class of
subordinated notes, which will remain outstanding.

Other than the changes to the spreads and coupon of the notes,
the main material change to the terms and conditions will involve
increasing the Weighted Average Life Test by 15 months to a total
of 7 years and one month from the refinancing date. The length of
the reinvestment period will remain unchanged and will expire on
September 21, 2019. Furthermore, the manager is expected to be
able to choose from a new set of collateral quality test
covenants (the "Matrix"). No other material modifications to the
CLO are occurring in connection to the refinancing.

Moody's rating action on the Class E Notes is primarily a result
of the amendments to the transaction documents and the issuance
of the Refinancing Notes.

Carlyle Global Market Strategies Euro CLO 2015-2 Designated
Activity Company is a managed cash flow CLO. The issued notes are
collateralized primarily by broadly syndicated first lien senior
secured corporate loans. At least 90% of the portfolio must
consist of senior secured loans, senior secured bonds and
eligible investments, and up to 10% of the portfolio may consist
of second lien loans, unsecured loans, mezzanine obligations and
high yield bonds.

CELF Advisors LLP (the "Manager") manages the CLO. It directs the
selection, acquisition, and disposition of collateral on behalf
of the Issuer. After the reinvestment period, which ends in
September 2019, the Manager may reinvest unscheduled principal
payments and proceeds from sales of credit risk and credit
improved obligations, subject to certain restrictions.

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

Loss and Cash Flow Analysis:

Moody's modeled the transaction using a cash flow model based on
the Binomial Expansion Technique, as described in Section 2.3.2.1
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. As such, Moody's
encompasses the assessment of stressed scenarios.

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

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

Defaulted par: EUR0

Diversity Score: 38

Weighted Average Rating Factor (WARF): 2900

Weighted Average Spread (WAS): 3.70%

Weighted Average Recovery Rate (WARR): 42%

Weighted Average Life (WAL): 7.08 years

Weighted Average Coupon (WAC): 5.0%

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

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

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

Stress Scenarios:

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

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

Percentage Change in WARF: + 15% (from 2900 to 3335)

Ratings Impact in Rating Notches:

Refinancing Class A-1A Senior Secured Floating Rate Notes: 0

Refinancing Class A-1B Senior Secured Fixed Rate Notes: 0

Refinancing Class A-2A Senior Secured Floating Rate Notes: -2

Refinancing Class A-2B Senior Secured Fixed Rate Notes: -2

Refinancing Class B Senior Secured Deferrable Floating Rate
Notes: -2

Refinancing Class C Senior Secured Deferrable Floating Rate
Notes: -1

Refinancing Class D Senior Secured Deferrable Floating Rate
Notes: -1

Class E Senior Secured Deferrable Floating Rate Notes: -0

Percentage Change in WARF: +30% (from 2900 to 3770)

Ratings Impact in Rating Notches:

Refinancing Class A-1A Senior Secured Floating Rate Notes: -1

Refinancing Class A-1B Senior Secured Fixed Rate Notes: -1

Refinancing Class A-2A Senior Secured Floating Rate Notes: -3

Refinancing Class A-2B Senior Secured Fixed Rate Notes: -3

Refinancing Class B Senior Secured Deferrable Floating Rate
Notes: -4

Refinancing Class C Senior Secured Deferrable Floating Rate
Notes: -2

Refinancing Class D Senior Secured Deferrable Floating Rate
Notes: -2

Class E Senior Secured Deferrable Floating Rate Notes: -3


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


ALMAVIVA SPA: S&P Assigns 'B+' Corp Credit Rating, Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B+' long-term corporate credit
rating to Almaviva S.p.A., an Italian provider of information
technology (IT) services and outsourced customer relationship
management (CRM) for the public and private sectors. The outlook
is stable.

S&P said, "In addition, we assigned our 'B+' issue rating to
Almaviva S.p.A.'s proposed EUR250 million senior secured notes.
The recovery rating is '3', indicating our expectation of
meaningful recovery (rounded estimate: 55%) in the event of a
payment default."

The ratings reflect Almaviva's modest cash flow generation due to
a low-margin business mix, and its large exposure to the more
volatile outsourced CRM business, particularly in Italy, which
has weighed on profitability in the past two years. These
weaknesses are partly offset by the group's leading position as a
mission-critical IT services provider to Italy's domestic
transportation, logistics, and public administration sectors, and
leading positions within Italy's and Brazil's outsourced CRM
markets.

S&P said, "In addition, we believe that Almaviva has now turned
around its domestic CRM operations and that it will gradually
improve credit metrics and leverage. In our base case, we expect
that adjusted gross debt to EBITDA will gradually improve to 4.0x
in 2018, while free operating cash flow (FOCF) to debt will move
above 5%, from more than 5.0x and 4% in 2017, respectively. We
expect this will be supported by improving adjusted EBITDA
margins, reaching about 10% in 2018, from 8% in 2017."

Almaviva, established in 1983 by current chairman and majority
shareholder Alberto Tripi, derives approximately half of its
revenues from IT services in Italy, and half from outsourced CRM
activities, of which about two-thirds from Brazil. Approximately
42% of Almaviva's revenues come from contracts in the public
sector, predominantly from IT services, and thus about 80% of the
IT services revenues are derived from the public sector. Under
these contracts, Almaviva manages national critical assets within
domestic transportation and public administration, and provides
services for critical business processes and IT systems.

S&P's view of Almaviva's business risk is constrained by:

-- the group's overall low margins;

-- Rigid cost structure, with personnel representing about 60%
    of total costs, especially in CRM, where new government
    regulation and restructuring efforts in Italy resulted from
    fierce price competition through offshoring;

-- Relatively small size in its markets, especially in CRM,
    resulting in few opportunities for economies of scale;

-- Revenue seasonality, due to the contractual nature of the
    group's activity;

-- Modest revenue predictability, as most revenues are
    nonrecurring (less than 20% of group revenues are recurring,
    and only about 42% of IT services);

-- Costs capitalized for assets created internally (about EUR11
    million in 2016), which we factor into our adjusted EBITDA
    margin calculation;

-- Substantial concentration of revenues by customer and
    industry. The 10-largest customers accounted for about 63% of
    group revenues, while the largest one accounted for 23% of
    2016 revenues. Also, the CRM business is very dependent on
    the telecom sector (about two-thirds of CRM revenues); and

-- The group is also exposed to potential economic and currency
    swings in Brazil, where it generated about one-third of 2016
    revenues.

These weaknesses are partly offset by Almaviva's established
position within Italy's public sector, its breadth of own
mission-critical proprietary solutions, limited foreign
competition for public IT services due to heavy regulatory
barriers and tender requirements, and its development of
distinctive, proprietary technology, in particular in CRM, with
ability to cross-sell across its two main segments. This is
further supported by solid win rates for tendered contracts
across most business segments, long-lasting contract
relationships with blue chip clients, and consistently strong
contract renewals in IT services, given the high switching costs
of the mission-critical services it provides. Furthermore,
Almaviva's growth prospects are supported by healthy market
fundamentals, in particular in Brazil, and recent tender wins of
two contracts for the Italian public sector's digital agenda,
which are EU sponsored and therefore insulated from government
budget cuts.

S&P said, "Our view of Almaviva's financial risk is primarily
derived from its moderately high leverage, stemming in particular
from its below-average profitability, which is only partly offset
by its prospects for deleveraging and stronger FOCF. Gross debt
pro forma the proposed issuance amounts to EUR250 million,
comprising the EUR250 million senior secured notes and an undrawn
EUR20 million super senior revolving credit facility (RCF). We
add to Almaviva's reported debt about EUR52 million of post-tax
benefit obligations relating to the Employees Termination
Indemnity funds in Italy and about EUR24 million of outstanding
nonrecourse factoring. Given the group's exposure to revenue- and
working-capital seasonality, and high fixed costs, we calculate
its credit metrics on a gross debt basis.

"We understand that the group will pursue a small acquisition of
a strategic supplier, as well as a small dividend in the first
half of next year for a total of EUR16 million in 2018. In our
view, Almaviva is now well positioned across all its segments to
grow and expand its business, given the recent restructuring of
its Italian CRM business and its footprint rebalancing toward
Romania, coupled with a new Italian law forbidding offshoring
outside the EU and regulating nearshoring within the EU.
Therefore, we expect gradually improving adjusted EBITDA margins,
which, combined with its low capital expenditure (capex) needs,
will likely reduce adjusted leverage and support FOCF.

"The stable outlook reflects our view that Almaviva has achieved
a sustainable turnaround of its domestic CRM operations, and that
it will maintain its market positions within the public sector
and CRM business, while maintaining a solid cash position and
gradually improving its metrics. We expect reported EBITDA
margins of above 11%, adjusted debt to EBITDA of about 4.0x, and
an adjusted FOCF-to-debt ratio of about 5% in 2018.

"We could lower the rating if declining revenues and EBITDA
margins or debt-funded acquisitions prevented Almaviva from
gradually improving its credit metrics, such that adjusted debt
to EBITDA increased above 5.0x and FOCF to adjusted debt declined
below 5%. In our view, this could result from operating
underperformance, increasing competition, significant Italian
government budget cuts in IT services, slower recovery than
anticipated within the Italian CRM business, or weaker-than-
expected demand across Almaviva's key markets, which could lead
to contract losses and a weakening of its revenue base.

"Although unlikely in the next 12 months, we could raise the
rating if Almaviva sustainably reduced adjusted debt to EBITDA to
below 4x, and sustainably improved FFO to adjusted debt toward
20% and FOCF to adjusted debt toward 10%."


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


DUCHESS VI: Moody's Hikes Rating on Class E Notes from Ba1
----------------------------------------------------------
Moody's Investors Service has upgraded the ratings of the
following notes issued by Duchess VI CLO B.V.:

-- EUR25M Class C Notes, Upgraded to Aaa (sf); previously on
    Feb. 18, 2016 Upgraded to Aa1 (sf)

-- EUR32.5M Class D Notes, Upgraded to Aa2 (sf); previously on
    Feb. 18, 2016 Upgraded to Baa1 (sf)

-- EUR15M (Current outstanding balance of EUR5,737,060.96) Class
    E Notes, Upgraded to A2 (sf); previously on Feb. 18, 2016
    Upgraded to Ba1 (sf)

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

-- EUR215M (Current outstanding balance of EUR29,235,252.19)
    Class A-1 Notes, Affirmed Aaa (sf); previously on Feb. 18,
    2016 Affirmed Aaa (sf)

-- EUR35M Class B Notes, Affirmed Aaa (sf); previously on
    Feb. 18, 2016 Upgraded to Aaa (sf)

Duchess VI CLO B.V., issued in August 2006, is a collateralised
loan obligation ("CLO") backed by a portfolio of mostly high
yield European loans. The portfolio is managed by Barings (U.K.)
Limited. The transaction's reinvestment period ended in August
2013.

RATINGS RATIONALE

The upgrades of the ratings of the notes are primarily a result
of the partial redemption of Class A-1 and full redemption of the
Revolving Credit Facility notes. The Class A-1 Notes have paid
down by EUR185.8M or 86% of the original balance including
EUR14.4M at the recent August 2017 payment date leading to an
increase of the overcollateralization ratios of the remaining
tranches. According to the July 2017 trustee report, the Classes
A-1, B, C, D and E ratios are 608.78%, 277.07%, 199.45%, 146.20%
and 139.62% respectively compared to levels just prior to the
payment date in June 2017 of 437.80%, 242.98%, 184.38%, 140.37%
and 134.44%.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analysed the underlying collateral pool as having a
combined GBP and EUR performing par and principal proceeds
balance of EUR171.19M, a weighted average default probability of
19.46% (consistent with WARF of 2925 and a weighted average life
of 3.95 years), a weighted average recovery rate upon default of
45.60% for a Aaa liability target rating, a diversity score of
27.

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

Methodology Underlying the Rating Action:

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

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

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it lowered the weighted average recovery rate by 5
percentage points; the model generated outputs that were in line
with the base-case results for Classes A-1, B, C and within a
notch for Classes D and E.

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

Additional uncertainty about performance is due to the following:

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

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

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

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

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


NEPTUNO CLO I: Moody's Raises Ratings on Two Note Classes to Ba1
----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings on the
following notes issued by Neptuno CLO I B.V.:

-- EUR28M Class D Senior Secured Deferrable Floating Rate Notes
    due 2023, Upgraded to Aaa (sf); previously on Mar 30, 2017
    Upgraded to A1 (sf)

-- EUR24M Class E-1 Senior Secured Deferrable Floating Rate
    Notes due 2023, Upgraded to Ba1 (sf); previously on Mar 30,
    2017 Affirmed Ba3 (sf)

-- EUR2M Class E-2 Senior Secured Deferrable Fixed Rate Notes
    due 2023, Upgraded to Ba1 (sf); previously on Mar 30, 2017
    Affirmed Ba3 (sf)

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

-- EUR44M (Current outstanding balance of EUR35.6M) Class B-1
    Senior Secured Floating Rate Notes due 2023, Affirmed Aaa
    (sf); previously on Mar 30, 2017 Affirmed Aaa (sf)

-- EUR4M (Current outstanding balance of EUR3.2M) Class B-2
    Senior Secured Fixed Rate Notes due 2023, Affirmed Aaa (sf);
    previously on Mar 30, 2017 Affirmed Aaa (sf)

-- EUR25M Class C Senior Secured Deferrable Floating Rate Notes
    due 2023, Affirmed Aaa (sf); previously on Mar 30, 2017
    Upgraded to Aaa (sf)

Neptuno CLO I B.V., issued in May 2007, is a collateralised loan
obligation (CLO) backed by a portfolio of mostly high-yield
European loans. The portfolio is managed by BNP Paribas Asset
Management S.A.S.. The transaction's reinvestment period ended in
November 2014.

RATINGS RATIONALE

The rating actions on the notes are primarily a result of the
full repayment of the classes A-R, A-T and the partial repayment
of classes B-1 and B-2 following amortisation of the underlying
portfolio since the last rating action in March 2017.

The classes A-R, A-T, B-1 and B-2 notes have paid down by
approximately EUR65.3 million (13.05% of closing balance) since
the last rating action in March 2017 and EUR332.2 million (66.4%
of closing balance). As a result of the deleveraging, over-
collateralisation (OC) has increased. According to the trustee
report dated July 2017 the Class A/B, Class C, Class D and Class
E OC ratios are reported at 338.73%, 205.98%, 143.15% and 111.55%
compared to February 2017 of 189.00%, 152.53%, 125.43% and
107.66%, respectively.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analysed the underlying collateral pool as having a
performing par and principal proceeds balance of EUR76.6 million
and GBP 4.3 million, defaulted par of EUR0.01 million, a weighted
average default probability of 17.19% (consistent with a WARF of
2760 and a WAL of 3.52 years), a weighted average recovery rate
upon default of 45.76% for a Aaa liability target rating, a
diversity score of 13 and a weighted average spread of 3.32%.

Moody's notes that the August 2017 trustee report was published
at the time it was completing its analysis of the July 2017 data.
Key portfolio metrics such as WARF, diversity scores and OC
ratios have not materially changed between these dates.

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

Methodology Underlying the Rating Action:

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

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

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it assumed lower weighted average recovery rate for the
portfolio. Moody's ran a model in which it reduced the weighted
average recovery rate by 5%; the model generated outputs that
were within one notch of the base-case results.

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

Additional uncertainty about performance is due to the following:

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

* Around 8.39% of the collateral pool consists of debt
obligations whose credit quality Moody's has assessed by using
credit estimates. As part of its base case, Moody's has stressed
large concentrations of single obligors bearing a credit estimate
as described in "Updated Approach to the Usage of Credit
Estimates in Rated Transactions," published in October 2009 and
available at
http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_120461.

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

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

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


TIKEHAU CLO III: S&P Assigns Prelim B-(sf) Rating to Cl. F Notes
----------------------------------------------------------------
S&P Global Ratings assigned its preliminary credit ratings to
Tikehau CLO III B.V.'s class A, B, C, D, E, and F notes. At
closing, Tikehau CLO III will also issue an unrated subordinated
class of notes.

The preliminary ratings assigned to Tikehau CLO III's notes
reflect S&P's assessment of:

-- The diversified collateral pool, which consists primarily of
    broadly syndicated speculative-grade senior secured term
    loans and bonds that are governed by collateral quality
    tests.

-- The credit enhancement provided through the subordination of
    cash flows, excess spread, and overcollateralization.

-- The collateral manager's experienced team, which can affect
    the performance of the rated notes through collateral
    selection, ongoing portfolio management, and trading.

-- The transaction's legal structure, which we expect to be
    bankruptcy remote.

Under the transaction documents, the rated notes will pay
quarterly interest unless there is a frequency switch event.
Following this, the notes will permanently switch to semiannual
payment. The portfolio's reinvestment period will end
approximately four years after closing.

S&P said, "Our preliminary ratings reflect our assessment of the
preliminary collateral portfolio's credit quality, which has a
weighted-average 'B' rating. We consider that the portfolio at
closing will be well-diversified, primarily comprising broadly
syndicated speculative-grade senior secured term loans and senior
secured bonds. Therefore, we have conducted our credit and cash
flow analysis by applying our criteria for corporate cash flow
collateralized debt obligations (see "Global Methodologies And
Assumptions For Corporate Cash Flow And Synthetic CDOs,"
published on Aug. 8, 2016).

"In our cash flow analysis, we used the EUR420 million target par
amount, the covenanted weighted-average spread (3.60%), the
covenanted weighted-average coupon (4.75%) (where applicable),
and the target minimum weighted-average recovery rates at each
rating level as indicated by the manager.

"We applied various cash flow stress scenarios, using four
different default patterns, in conjunction with different
interest rate stress scenarios for each liability rating
category. Elavon Financial Services DAC is the bank account
provider and custodian. At closing, we anticipate that the
documented downgrade remedies will be in line with our current
counterparty criteria (see "Counterparty Risk Framework
Methodology And Assumptions," published on June 25, 2013).

"At closing, we consider that the issuer will be bankruptcy
remote, in accordance with our legal criteria (see "Structured
Finance: Asset Isolation And Special-Purpose Entity Methodology,"
published on March 29, 2017).

"Following our analysis of the credit, cash flow, counterparty,
operational, and legal risks, we believe our preliminary ratings
are commensurate with the available credit enhancement for each
class of notes."

RATINGS LIST


  Tikehau CLO III B.V.
  EUR435.15 mil floating-rate notes (including EUR45.6 mil
  subordinated notes)

                                              Prelim Amount

  Class                 Prelim Rating         (mil, EUR)
  A                     AAA (sf)               244.70
  B                     AA (sf)               57.70
  C                     A (sf)                28.60
  D                     BBB (sf)              19.70
  E                     BB (sf)               26.25
  F                     B- (sf)               12.60
  Sub                   NR                    45.60

NR--Not rated


WOOD STREET CLO III: S&P Lowers Class E Notes Rating to B- (sf)
---------------------------------------------------------------
S&P Global Ratings lowered its credit ratings on Wood Street CLO
III B.V.'s class D and E notes. At the same time, S&P has
affirmed its rating on the class C notes.

The rating actions follow S&P's assessment of the transaction's
performance using data from the Aug. 16, 2017 trustee report and
the application of its relevant criteria (see "Related
Criteria").

S&P said, "We subjected the capital structure to a cash flow
analysis to determine the break-even default rate (BDR) for each
rated class at each rating level. The BDR represents our estimate
of the maximum level of gross defaults, based on our stress
assumptions, that a tranche can withstand and still fully repay
the noteholders. In our analysis, we used the portfolio balance
that we consider to be performing (EUR77,372,496), the current
weighted-average spread (3.52%), and the weighted-average
recovery rates calculated in line with our corporate
collateralized debt obligation (CDO) criteria (see "Global
Methodologies And Assumptions For Corporate Cash Flow And
Synthetic CDOs," published on Aug. 8, 2016). We applied various
cash flow stresses, using our standard default patterns, in
conjunction with different interest rate stress scenarios.

"Since our March 23, 2016 review, the aggregate collateral
balance we consider to be performing has decreased by 65.89% to
EUR77.38 million from EUR226.81 million (see "Ratings Raised In
European Cash Flow CLO Transaction Wood Street CLO III Following
Performance Review"). Over the same period, the rated liabilities
have amortized by EUR130.13 million and the class A-1, A-2A, A-
2B, and B notes have been fully repaid. The reduction in
collateral being larger than the reduction in rated liabilities
implies a par loss of EUR19.30 million.

The par losses experienced since our previous review resulted
from both defaults and discounted sales of credit-impaired
assets. Two of the assets we considered performing at our
previous review, we now consider to be defaulted (a EUR7.7
million loss). Discounted sales on three other assets, at prices
ranging from 45.4% to 96.5%, resulted in losses of EUR3.9
million.

"Additionally, while we considered another asset as performing at
our previous review, due to a potential mandatory conversion to
equity, we no longer give credit to this asset as performing in
our analysis. This is in line with the proposed treatment of
equity securities (a EUR8.2 million loss) under our CDO criteria.

"In our view, due to the amortization of the rated liabilities,
the available credit enhancement for all of the rated classes of
notes has increased. We have also observed that the
overcollateralization tests have improved and the concentration
of assets we consider to be in the 'CCC' category (rated 'CCC+',
'CCC', and 'CCC-') has decreased significantly since our previous
review, to EUR4.0 million from EUR39.5 million.

"As a consequence of the collateral amortization and the losses
experienced, the collateral portfolio has become increasingly
concentrated, with the number of distinct obligors falling to 15
from 33 in March 2016. Due to the increased concentration, our
out-of-the-model obligor supplemental test (as described in our
CDO criteria) has become the main factor we consider when
determining our ratings in this transaction.

"Taking into account the results of our credit and cash flow
analysis and the application of our out-of-the-model obligor
supplemental test, we consider that the available credit
enhancement for the class C notes is commensurate with the
currently assigned rating. We have therefore affirmed our 'A+
(sf)' rating on the class C notes.

"Despite the increased available credit enhancement for the class
D and E notes, the results of our out-of-the-model obligor
supplemental tests are not commensurate with the ratings
currently assigned. We have therefore lowered to 'BB- (sf)' from
'BB+ (sf)' our rating on the class D notes and to 'B- (sf)' from
'BB (sf)' our rating on the class E notes. The results of the
supplemental tests are due to the increased concentration within
the portfolio, which has resulted from the losses experienced.

"We note that the 'BB- (sf)' rating assigned to the class D notes
exceeds the supplemental test implied rating, but we have made a
qualitative adjustment after considering the available credit
enhancement for this class of notes and the improved quality of
the remaining portfolio following the significant reduction in
the notional value of assets in the 'CCC' category."

Wood Street CLO III is a cash flow CLO transaction that
securitizes loans to primarily speculative-grade corporate firms.
The transaction closed in June 2006, with a reinvestment period
that ended in August 2012, and is managed by Alcentra Ltd.

RATINGS LIST

  Class             Rating
              To                 From

  Wood Street CLO III B.V.
  EUR576.5 Million Senior Secured And Deferrable Floating-Rate
  Notes

  Ratings Lowered

  D           BB- (sf)           BB+ (sf)
  E           B- (sf)            BB (sf)

  Rating Affirmed

  C           A+ (sf)


===========
N O R W A Y
===========


NORSKE SKOG: 65% of Bondholders Back Debt Restructuring Plan
------------------------------------------------------------
Luca Casiraghi at Bloomberg News reports that Norske
Skogindustrier ASA is close to winning enough support from
secured bondholders to push through its latest debt-restructuring
plan, weeks after the noteholders moved toward seizing the debt-
laden company's paper mills.

The Norwegian papermaker said in a statement on Sept. 26 it has
support from holders of 65% of its EUR290 million (US$343
million) of December 2019 secured notes, Bloomberg relates.  The
company needs 75% support from the bondholders, and the same
level of backing from unsecured noteholders, Bloomberg states.

Christen Sveaas, Norske Skog's new chairman, unveiled the
restructuring proposal last week, the latest step in the
papermaker's struggle under a $1 billion debt pile and falling
demand, Bloomberg relays.  The secured bondholders demanded
immediate repayment earlier this month, including a threat to
take over assets, Bloomberg recounts.

"The board's proposal is the best solution given the
circumstances," Bloomberg quotes Mr. Sveaas as saying in the
statement.  "The alternative will trigger a complex insolvency
process, which will result in Norske Skog being 100 percent owned
by the secured bondholders."

Under the board's plan, Norske Skog's secured bondholders and
securitized lenders will own at least 77% of the restructured
company, Bloomberg discloses.  Unsecured bondholders and existing
shareholders will own as much as 23% of the company, if they
participate in a NOK400 million (US$51 million) equity injection,
according to Bloomberg.

Creditors have until Sept. 29 to approve the proposal, Bloomberg
notes.  It also requires support from two-thirds of shareholders,
Bloomberg says.

                       About Norske Skog

Norske Skogindustrier ASA or Norske Skog, which translates as
Norwegian Forest Industries, is a Norwegian pulp and paper
company based in Oslo, Norway and established in 1962.

                           *   *   *

As reported by the Troubled Company Reporter-Europe on
August 7, 2017, S&P Global Ratings lowered to 'D' (default) from
'C' its issue rating on the unsecured notes due in 2026 issued by
Norwegian paper producer Norske Skogindustrier ASA (Norske Skog).
At the same time, S&P removed the rating from CreditWatch with
negative implications, where the rating placed it on June 6,
2017. S&P said, "We also affirmed the long- and short-term
corporate credit ratings on Norske Skog at 'SD' (selective
default) and affirmed our 'D' issue rating on the senior secured
notes maturing in 2019."  The 'C' ratings on the remaining
unsecured debt remain on CreditWatch negative. The recovery
rating on these notes is unchanged at '6', reflecting our
expectation of negligible (0%-10%) recovery in the event of a
conventional default.  The downgrade follows the nonpayment of
the cash coupon due on Norske Skog's 2026 unsecured notes before
the contractual grace period expired on July 30, 2017.

The TCR-Europe reported on July 24, 2017 that Moody's Investors
Service downgraded the probability of default rating (PDR) of
Norske Skogindustrier ASA (Norske Skog) to Ca-PD/LD from Caa3-PD.
Concurrently, Moody's has affirmed Norske Skog's corporate family
rating (CFR) of Caa3.  In addition, Moody's also affirmed the C
rating of Norske Skog's global notes due 2026 and 2033 and its
perpetual notes due 2115, the Caa2 rating of the senior secured
notes issued by Norske Skog AS and downgraded the rating of the
global notes due 2021 and 2023 issued by Norske Skog Holdings AS
to Ca from Caa3.  The outlook on the ratings remains stable.  The
downgrade of the PDR to Ca-PD/LD from Caa3-PD reflects the fact
that Norske Skog did not pay the interest payment on its senior
secured notes issued by Norske Skog AS, even after the 30 day
grace period had elapsed on July 15.  This constitutes an event
of default based on Moody's definition, in spite of the existence
of a standstill agreement with the debt holders securing that an
enforcement will not be made under the secured notes due to non-
payment of interest.  In addition, the likelihood of further
events of defaults in the next 12-18 months remains fairly high,
as the company is also amidst discussions around an exchange
offer that would most likely involve equitisation of debt, which
the rating agency would most likely view as a distressed
exchange.



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


B&N BANK: S&P Places 'B' Long-Term ICR on CreditWatch Developing
----------------------------------------------------------------
S&P Global Ratings said it placed its 'B' long-term issuer and
issue credit ratings on B&N Bank on CreditWatch with developing
implications. At the same time, S&P affirmed the short-term
rating at 'B'.

S&P said, "B&N Bank experienced outflows of customer funds over
the last few weeks. By our estimate, these outflows accounted for
no more than 5% of funding, and a decrease in interbank loans
accounted for another 3%. However, given the structure of the
bank's balance sheet -- in which about 50% of assets are placed
with Rost Bank, which is under financial rehabilitation -- even
such relatively modest outflows put serious pressure on the
bank's liquidity.

"To support the bank, the Central Bank of Russia (CBR) on
Sept. 20, 2017, provided a liquidity line to the bank, and on
Sept. 21, 2017, CBR announced measures to improve B&N Bank's (and
Rost Bank's) financial stability. These include its temporary
administration of B&N Bank, under which it will effectively take
control of the bank. The central bank announced that it will
provide financial support to the bank and has ensured the market
on the continuity of its operations. We understand from the
central bank's announcement that it is not going to introduce a
moratorium on payments under creditors' claims or apply a bail-in
option.

"We expect that the liquidity line and other measures by the CBR
will prevent the exhaustion of the bank's liquidity buffers and
help stabilize customer confidence. Therefore we maintain our
view of the bank's liquidity as adequate, and keep our assessment
of B&N Bank's stand-alone credit profile (SACP) at 'b-'.

"We expect to resolve the CreditWatch listing within the next 90
days.

"We could lower our ratings on B&N Bank if we saw a higher risk
that the bank's creditors would suffer losses, in contrast to the
statements the CBR made when it announced its temporary
administration of the bank.

"We could upgrade B&N Bank if we saw marked improvement in the
bank's stand-alone credit quality, owing to the CBR's measures.
This could happen due to improvement of the bank's capitalization
and risk position that might be driven by substantial reduction
in B&N Bank's exposure to Rost Bank (currently being under
temporary administration of Central Bank of Russia).

"We could affirm the ratings if we saw that the CBR's measures
did not materially change B&N Bank's creditworthiness and we
considered that the risk that creditors would suffer losses was
not greater than what we currently incorporate in our ratings on
B&N Bank."


RGS BANK: Moody's Lowers Baseline Credit Assessment to caa1
-----------------------------------------------------------
Moody's Investors Service has changed the outlook on RGS Bank's
long-term foreign and local-currency deposit ratings to
developing from stable, in line with that of the parent, Bank
Otkritie Financial Corporation PJSC (BOFC; LT Bank Deposits B2
developing, BCA ca). The rating agency affirmed RGS Bank's long-
term local- and foreign-currency deposit rating at B2, but
downgraded its baseline credit assessment (BCA) to caa1 from b2,
given exposure to troubled BOFC. Moody's has incorporated very
high probability of affiliate support from the final B2 ratings
of BOFC, which benefit from the government support given the
recent take-over by Central Bank of Russia (CBR).

RATINGS RATIONALE

The rating action on RGS Bank with the downgrade of its BCA and
revision of the outlook to developing from stable follows the
rating action on the parent BOFC, which acquired a 60.5% stake in
the bank on August 25, 2017. The downgrade of RGS-bank's BCA
reflects its current exposure to the troubled BOFC and potential
contagion risks. RGS is a potential source of liquidity and
capital for BOFC, whose standalone credit profile is very weak
with a BCA at ca. This exposes RGS's creditworthiness to an
impairment risk.

RGS Bank's exposure to BOFC surged to RUB49 billion (34% of
assets or 3x shareholders' equity) as of September 1, 2017 from
almost zero as of August 1, 2017, following the change in
ownership and BOFC's financial difficulties. This increase was
partly financed by interbank funding under securities repo
transactions and drained RGS Bank's available liquidity
(excluding pledged securities and BOFC exposure) to 24% of assets
from former 58%.

According to the CBR, BOFC and RGS-Bank currently operate
normally and continue to service their obligations.

AFFILIATE SUPPORT

Moody's incorporates a very high probability of affiliate support
to RGS Bank from BOFC's B2 final ratings, which include
assessment of government support. Being a subsidiary of BOFC,
which is currently under the CBR's administration, RGS Bank is
also de facto under control of the CBR and, as such, can benefit
from government support if needed. This results in a two-notch
uplift above the bank's BCA.

OUTLOOK

The developing outlook on RGS Bank mirrors the outlook of its
parent BOFC, which reflects both upward and downward ratings
pressures as the CBR conducts its due diligence of the group.

WHAT COULD MOVE THE RATINGS UP/DOWN

Moody's would consider stabilizing the outlook, or a ratings
upgrade following positive rating action on the parent BOFC, as a
result of its strengthened credit profile, including a capital
and liquidity position, and resulting easing pressure on RGS
bank's creditworthiness.

Conversely, RGS Bank's ratings could be downgraded, in case of a
further significant deterioration of the bank's credit profile as
a result of capital and liquidity dilution, and/or downgrade of
the parent BOFC's ratings if the likelihood of a moratorium,
bail-in, distressed exchange or liquidation were to increase .

LIST OF AFFECTED RATINGS

Issuer: RGS Bank

Downgrades:

-- Baseline Credit Assessment, Downgraded to caa1 from b2

Affirmations:

-- LT Bank Deposits, Affirmed B2, Outlook Changed To Developing
    From Stable

-- ST Bank Deposits, Affirmed NP

-- Adjusted Baseline Credit Assessment, Affirmed b2

-- LT Counterparty Risk Assessment, Affirmed B1(cr)

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

Outlook Actions:

-- Outlook, Changed To Developing From Stable

PRINCIPAL METHDOLOGY

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


VIM AIRLINES: May Enter Receivership, Seeks State Aid
-----------------------------------------------------
Vladimir Soldatkin at Reuters reports that Russian private air
carrier VIM Airline has faced a severe economic adversary and has
asked the state for financial aid with a possibility of going
into a receivership.

The company, top 10 among the Russian airlines, also known as
VIM-AVIA, has cancelled or delayed dozens of flights for the past
few days, Reuters relates.

"Unfortunately, we have to state that the VIM-AVIA airline has
been faced with a hard economic situation.  The working capital
has run out, financing has been frozen, while servicing at the
airport has been suspended," Reuters quotes the company as
saying.  "The air company is counting on support of the state
bodies as well as partners in the tourism industry.  And as the
airline is not ably to carry out flights without additional
funds, we plan to enter into an anti-crisis receivership."

According to the company's latest available information, in 2015,
it carried about 1.6 million passengers.


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


NEOL BIOSOLUTIONS: To File for Insolvency After Creditor Talks
--------------------------------------------------------------
Reuters reports that Neol Biosolutions SA intends to file for
insolvency proceedings after negotiations with creditors and
possible investors and no agreement reached to refinance the
company.

Headquartered in Granada, Spain, Neol Biosolutions, S.A. develops
microbial processes and technologies for industrial applications
worldwide.


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


AFREN PLC: Former Executives Face US$400MM Fraud Charges
--------------------------------------------------------
Christopher Williams at The Telegraph reports that the former
leadership of Afren have been charged with a US$400 million
(GBP300 million) fraud that allegedly led to the collapse of the
former FTSE 250 oil explorer.

Osman Shahenshah, Afren's former chief executive, and
Shahid Ullah, who served as chief financial officer, are due to
appear at Westminster Magistrates Court today, on Sept. 27, to
face claims they abused their positions and laundered money, The
Telegraph relates.

The charges come after a two-year investigation by the Serious
Fraud Office (SFO), The Telegraph notes.

The Telegraph revealed in April that Mr. Shahenshah was among the
targets of a criminal probe of an offshore vehicle that it is
claimed distributed large bonus payments from Oriental Resources,
an Afren partner in Nigeria.

According to The Telegraph, sources with knowledge of the
investigation said the allegedly fraudulent system was set up to
enrich Afren's leaders after the company suffered a series of
shareholder revolts over executive pay.

"Osman Shahenshah and Shahid Ullah stand accused over payments
they received via secret companies they controlled relating to
over US$400 million of Nigeria business deals," The Telegraph
quotes the SFO as saying on Sept. 26.

Both men face four charges, The Telegraph discloses.  Two relate
to fraud by abuse of position and two to money laundering, The
Telegraph states.

As well as criminal charges, the pair and a Nigerian contact face
a civil damages claim in excess of $500m from Afren's
administrators, The Telegraph relays.  Insolvency experts allege
their wrongdoing led to the collapse of the company in July 2015
and are seeking to recover money for creditors left out of
pocket, according to The Telegraph.

Messrs. Shahenshah and Ullah, who referred to themselves as "the
A-team" were sacked by Afren in 2014 for gross misconduct, The
Telegraph recounts.  An investigation by KPMG and law firm Wilkie
Farr & Gallagher uncovered allegations that payments had been
funnelled to them without the knowledge of the the rest of the
board, The Telegraph relates.

It was alleged that a US$45 million cut of Afren's deals in
Nigeria was paid into an offshore vehicle for distribution to
senior executives, The Telegraph states.

                      About Afren plc

Afren plc, a London-based company specializing in oil and gas
exploration and production, filed a Chapter 15 bankruptcy
petition (Bankr. D. Del. Case No. 15-11452) on July 2, 2015, in
the United States, to seek recognition of its restructuring
proceedings in England.  Judge Kevin Gross presides over the U.S.
case.  L. John Bird, Esq., and Jeffrey M. Schlerf, Esq., at Fox
Rothschild LLP, serve as counsel to the Debtor in the U.S. case.


BROWN ENGINEERING: Enters Liquidation, 32 Jobs Affected
-------------------------------------------------------
BBC News reports that Brown Engineering, a Moray engineering
company, has gone into liquidation with the loss of more than 30
jobs.

Liquidators KPMG said 32 of the company's 33 employees had been
made redundant with immediate effect, BBC relates.

According to BBC, Brown Engineering was said to have been
suffering from increased competition in the distilling and
malting industry and a fall in demand for its services in the oil
and gas sector.

Established in the 1970s Brown Engineering specialized in the
manufacture, installation and maintenance of plant and machinery
and pipework for the distilling and malting and oil and gas
industries.


SANDWELL COMMERCIAL NO.2: S&P Affirms CC Rating on Cl. E Notes
--------------------------------------------------------------
S&P Global Ratings affirmed its credit ratings on Sandwell
Commercial Finance No. 2 PLC's class A, B, C, D, and E notes.

The affirmations follow S&P's review of the transaction's five
key rating factors (credit quality of the securitized assets,
legal and regulatory risks, operational and administrative risks,
counterparty risks, and payment structure and cash flow
mechanisms)."

Sandwell Commercial Finance No. 2 is a true sale European
commercial mortgage-backed securities (CMBS) transaction that
closed in 2005, with notes totaling GBP350.0 million. The
original 187 loans were secured on 225 properties in England and
Wales. Currently, 34 loans remain secured on 34 properties, with
a current securitized loan balance of GBP49.3 million.

Upon publishing our updated S&P Cap Rates for various
jurisdictions and property types, S&P placed those ratings that
could potentially be affected "under criteria observation" (see
"Application Of Property Evaluation Methodology In European CMBS
Transactions," published on April 28, 2017). Following S&P's
review of this transaction, its ratings that could potentially be
affected are no longer under criteria observation.

CREDIT QUALITY OF THE SECURITIZED ASSETS

S&P said, "Our analysis considers the revenue and expense drivers
affecting the portfolio of properties in forecasting property
cash flow, in order to make appropriate adjustments. These
adjustments are intended to minimize the effects of near-term
volatility and ensure that the net cash flow (NCF) figure derived
from the analysis represents our view of a long-term sustainable
NCF (S&P NCF) for the portfolio of properties. This S&P NCF is
then converted into an expected-case value (S&P Value) using a
direct capitalization approach and capitalization rates
calibrated to our expected-case approach, which is akin to a 'B'
stress level. We derive our view of the loan-to-value ratio (S&P
LTV ratio) by applying our CMBS global property evaluation
methodology. We consider the S&P LTV ratio in our transaction-
level analysis, in conjunction with stressed recovery parameters
and pool diversity metrics, to determine credit risk and
ultimately credit enhancement for a CMBS transaction at each
rating category in accordance with our European CMBS criteria
(see "CMBS Global Property Evaluation Methodology, " published on
Sept. 5, 2012, and "European CMBS Methodology And Assumptions,"
published on Nov. 7, 2012).

"Our credit analysis also takes into account our foreign currency
long-term sovereign rating on the relevant jurisdiction (see
"Ratings Above The Sovereign - Structured Finance: Methodology
And Assumptions," published on Aug. 8, 2016)."

LOAN POOL AND COLLATERAL SUMMARY (AS OF THE June 2017 INVESTOR
REPORT)

The securitized loan pool is secured against 34 properties
(retail [60.1%], office [12.6%], light industrial [16.8%], other
[6.7%], and residential [3.9%]), located throughout England and
Wales. On June 30, 2017, the securitized property portfolio was
83% let (by net lettable area).

As of the June 2017 investor report, out of the 34 loans backing
the transaction, six loans have failed to repay at maturity.

S&P also understands that some previous loans (no longer in the
pool) had previously repaid at a loss. In this transaction,
principal losses are not directly applied reverse sequentially
toward the notes' redemption, but instead accrue on a principal
deficiency ledger (PDL). To date, the PDL associated with the
class E notes is GBP8.83 million. This represents about 94.4% of
the class E notes' balance.

-- Securitized loan balance: GBP49.25 million
-- Weighted-average interest coverage ratio: 3.76x
-- Weighted-average debt service coverage ratio: 2.59x
-- Weighted-average LTV ratio: 80.72%
-- Market value: GBP69.1 million

S&P'S KEY ASSUMPTIONS

-- S&P NCF: GBP4.02 million
-- S&P Value: GBP31.6 million
-- Net yield: 12.7%
-- Haircut-to-market value: 54%
-- S&P LTV ratio (before recovery rate adjustments): 156%

OPERATIONAL RISK

S&P said, "We apply our operational risk criteria to assess the
operational risk associated with transaction parties that provide
an essential service to a structured finance issuer (see "Global
Framework For Assessing Operational Risk In Structured Finance
Transactions," published on Oct. 9, 2014). Where we believe that
operational risk could lead to credit instability and have an
effect on our ratings, these criteria call for rating caps that
limit the securitization's maximum potential rating.

"West Bromwich Commercial Ltd. is the servicer. Our assessment of
the operational risk associated with the transaction parties does
not constrain our ratings in this transaction."

LEGAL AND REGULATORY RISKS

S&P said, "Under our legal criteria, we assess the extent to
which a securitization structure isolates securitized assets from
bankruptcy or insolvency risk of the entities participating in
the transaction, as well as the special-purpose entities'
bankruptcy remoteness (see "Structured Finance: Asset Isolation
And Special-Purpose Entity Methodology," published on March 29,
2017).

"Our assessment of the legal and regulatory risk is commensurate
with the rating assigned."

COUNTERPARTY RISK

S&P said, "Our current counterparty criteria allow us to rate the
notes in structured finance transactions above our ratings on
related counterparties if a replacement framework exists and
other conditions are met (see "Counterparty Risk Framework
Methodology And Assumptions," published on June 25, 2013). The
maximum ratings uplift depends on the type of counterparty
obligation.

"The maximum rating achievable for this transaction under our
current counterparty criteria is constrained by the issuer credit
rating (ICR) on the account bank and guaranteed investment
contract (GIC) account provider, Barclays Bank PLC (A-
/Negative/A-2). In accordance with our current counterparty
criteria, this counterparty can support a maximum potential
rating of A-' (the long-term ICR) in this transaction."

PAYMENT STRUCTURE AND CASH FLOW MECHANICS

S&P said, "Our ratings analysis includes an analysis of the
transaction's payment structure and cash flow mechanics. We
assess whether the cash flow from the securitized assets would be
sufficient, at the applicable rating levels, to make timely
payments of interest and ultimate repayment of principal by the
legal maturity date in September 2037, after taking into account
available credit enhancement and allowing for transaction
expenses and external liquidity support.

"The risk of interest shortfalls is mitigated by a GBP2.8 million
facility that provides liquidity support to service the interest
on the notes (with the exception of any shortfalls on the class E
notes, which have a PDL amount of more than 95% of the class E
notes' total balance), if needed. Our assessment of the payment
structure and cash flow mechanics for this transaction does not
constrain our ratings in this transaction."

RATING ACTIONS

S&P said, "We consider the available credit enhancement for the
class A notes to adequately mitigate the risk of losses from the
underlying loans in higher stress scenarios. That said, our
rating on the class A notes is constrained at 'A- (sf)' due to
counterparty reasons. We have therefore affirmed our 'A- (sf)'
rating on the class A notes.

"We consider the available credit enhancement for the class B
notes to be sufficient to absorb the amount of losses that the
underlying properties would suffer at the currently assigned
rating level. We have therefore affirmed our 'BB+ (sf)' rating on
the class B notes.

"Our analysis indicates that the available credit enhancement for
the class C notes is not sufficient to mitigate the risk of
principal losses from the underlying loans in a 'B' stress
scenario. In our opinion, this class of notes' repayment is not
dependent upon favorable business, financial, and economic
conditions notes (see "Criteria For Assigning 'CCC+', 'CCC',
'CCC-', And 'CC' Ratings," published on Oct. 1, 2012). We have
therefore affirmed our 'B- (sf)' rating on the class C notes.

"Our analysis indicates that the class D notes are currently
vulnerable to nonpayment. This class of notes is dependent upon
favorable business, financial, and economic conditions to meet
its payment obligations, and in our view faces at least a one-in-
two likelihood of default. We have therefore affirmed our 'CCC-
(sf)' rating on the class D notes.

"A PDL of approximately GBP8.8 million has been allocated to the
class E notes, which has a current balance of GBP9.3 million. We
believe the likelihood of default to be virtually certain and we
have therefore affirmed our 'CC (sf)' rating on this class of
notes."

RATINGS LIST

  Sandwell Commercial Finance No. 2 PLC
  GBP350 Million Commercial Mortgage-Backed Floating-Rate Notes

  Class        Rating

  Ratings Affirmed

  A            A- (sf)
  B            BB+ (sf)
  C            B- (sf)
  D            CCC- (sf)
  E            CC (sf)


SOUTHERN PACIFIC 06-1: S&P Raises Class FTc Rating to B- (sf)
-------------------------------------------------------------
S&P Global Ratings raised its credit ratings on Southern Pacific
Securities 06-1 PLC's class D1a, D1c, and FTC notes. At the same
time, S&P has affirmed its ratings on the class B1c, C1a, C1c,
and E1c notes.

S&P said, "The rating actions follow our credit and cash flow
analysis of the transaction, as part of our periodic review of
its performance as of the June 2017 payment date.

"Since our previous review on Sept. 16, 2016, the transaction's
performance has been stable in terms of arrears and net losses
(see "Various Rating Actions Taken In U.K. RMBS Transaction
Southern Pacific Securities 06-1 Following Review")."

In the December 2012 investor report, the servicer (Acenden Ltd.)
updated how it reports arrears to include amounts outstanding,
delinquencies, and other amounts owed. The servicer's definition
of other amounts owed include (among other items), arrears of
fees, charges, costs, ground rent, and insurance. Delinquencies
include principal and interest arrears on the mortgages, based on
the borrowers' monthly installments. Amounts outstanding are
principal and interest arrears, after payments from borrowers are
first allocated to other amounts owed.

In this transaction, the servicer allocates any arrears payments
first to other amounts owed, then to interest amounts, and
subsequently to principal. From a borrowers' perspective, the
servicer first allocates any arrears payments to interest and
principal amounts, and secondly to other amounts owed. This
difference in the servicer's allocation of payments for the
transaction and the borrower results in amounts outstanding being
greater than delinquencies.

S&P has refined its analysis of these other amounts owed by using
the available reported loan-level data. The new approach results
in a minor increase in the weighted-average foreclosure frequency
(WAFF) and a decrease in the weighted-average loss severity
(WALS).

Acenden references the level of amounts outstanding to arrive at
the 90+ day arrears. The transaction pays principal sequentially
because the 90+ day arrears trigger of 22.5% remains breached.

S&P's credit analysis shows a decrease in our current WAFF and
WALS assumptions since its previous review. The WAFF shows the
weighted-average probability of default of loans in the
collateral pool, and the WALS shows the weighted-average loss
likely to be experienced on defaulted loans in the collateral
pool, as a proportion of the loan amount. The main reason for the
decrease in our WAFF assumptions is the greater seasoning and
lower arrears.


  Rating     WAFF    WALS
  level       (%)     (%)
  AAA       52.31   34.95
  AA        46.70   27.67
  A         39.78   17.42
  BBB       34.62   12.27
  BB        27.95    9.39
  B         24.34    7.24

The notes are currently amortizing sequentially, as 90+ days
amounts outstanding comprise 51.6% of the pool. As this ratio is
well above the transaction's 22.5% pro rata amortization trigger,
S&P considers that the transaction will likely continue to pay
principal sequentially. S&P has incorporated this assumption in
its cash flow analysis by modeling a sequential repayment of the
notes.

The liquidity facility was restructured at the end of 2014. The
triggers have been removed, and it is now GBP6.1 million,
compared with GBP6.9 million at our previous review.

The notes benefit from a nonamortizing reserve fund that is at
its target level and represents 3.6% of the notes' current
balance.

S&P said, "Although our cash flow modeling shows that the class B
to C notes pay timely interest and repay principal at rating
levels above 'A-', our current counterparty criteria limit the
notes' maximum achievable ratings at our long-term 'A-' issuer
credit rating on Barclays Bank PLC (see "Counterparty Risk
Framework Methodology And Assumptions," published on June 25,
2013).

"The combination of lower credit coverage and transaction
deleveraging, has resulted in improved cash flow results.
Consequently, we have raised to 'BB+ (sf)' from 'B- (sf)' our
ratings on the class D1a and D1c notes.

"Taking into account the results of our credit and cash flow
analysis, we consider the available credit enhancement for the
class B1c, C1a, and C1c notes to be commensurate with our
currently assigned ratings. We have therefore affirmed our
ratings on these classes of notes.

"In our analysis, the class E1c notes are unable to withstand the
stresses that we apply at the 'B' rating level. Our outlook for
the U.K. residential mortgage market remains benign, with
historically low unemployment (currently 4.3%), low mortgage
interest rates, and falling or stable delinquencies across the
sector. Taking these factors into account, along with stable
collateral performance and increasing credit enhancement,
currently 3.56%, we have affirmed our 'B- (sf)' ratings on the
class E1c notes. We do not believe these notes are reliant upon
favorable business, financial, or economic conditions to redeem.

"The class FTc notes repay principal and interest using excess
spread and are deferrable-interest notes. Their outstanding
balance has decreased by about GBP1 million since June 2016 and
principal repayments have been occurring for the past three years
with robust levels of excess spread since 2010. We have therefore
raised to 'B- (sf)' from 'CCC (sf)' our rating on the class FTc
notes.

"Our credit stability analysis indicates that the maximum
projected deterioration that we would expect at each rating level
for time horizons of one year and three years under moderate
stress conditions, are in line with our credit stability criteria
(see "Methodology: Credit Stability Criteria," published on May
3, 2010)."

Southern Pacific Securities 06-1 securitizes a pool of
nonconforming U.K. residential mortgage loans, which Southern
Pacific Mortgage Ltd. and Southern Pacific Personal Loans Ltd.
originated.

  RATINGS LIST

  Class             Rating
              To               From

  Southern Pacific Securities 06-1 PLC
  EUR157.85 Million, GBP157.01 Million, US$199.15 Million
  Mortgage-Backed Floating-Rate Notes, Plus An Overissuance Of
  Deferrable  Interest Notes

  Ratings Raised
  D1a         BB+ (sf)          B- (sf)
  D1c         BB+ (sf)          B- (sf)
  FTc         B- (sf)           CCC (sf)

  Ratings Affirmed

  B1c         A- (sf)
  C1a         A- (sf)
  C1c         A- (sf)
  E1c         B- (sf)



                            *********

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
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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.

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