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        T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Thursday, October 12, 2017, Vol. 18, No. 203


                            Headlines


C Z E C H   R E P U B L I C

ENERGO-PRO AS: Fitch Assigns 'BB(EXP)' Long-Term IDR
ENERGO-PRO AS: S&P Assigns Preliminary BB- CCR, Outlook Stable


F R A N C E

VALLOUREC: S&P Rates New EUR300MM Unsecured Bond Due 2022 'B'


G E O R G I A

ENERGO-PRO GEORGIA: Fitch Assigns 'BB(EXP)' IDR, Outlook Stable


G E R M A N Y

AIR BERLIN: Nears Agreement with Lufthansa on Asset Sale


I R E L A N D

DECO 2015-HARP: S&P Affirms BB+ (sf) Rating on Class D Notes
ST PAUL'S CLO IV: Moody's Assigns (P)B2 Rating to Cl. E Notes


L U X E M B O U R G

ARENA LUXEMBOURG: Moody's Assigns Ba3 CFR, Outlook Stable
QGOG CONSTELLATION: S&P Cuts CCR to 'B' on Weaker Credit Metrics


N E T H E R L A N D S

DUFRY ONE: Moody's Rates EUR500MM Senior Unsecured Notes Ba2
DUFRY ONE: S&P Assigns 'BB' Rating to New EUR500MM Unsec. Notes
JUBILEE CDO VI: Moody's Hikes Rating on Class E Notes from Ba3
UPC HOLDING: Moody's Revises Outlook to Neg., Affirms B2 Rating


N O R W A Y

NORSKE SKOG: Presents Fourth Debt-Restructuring Proposal
SPAREBANK 1: Fitch Changes Support Rating Floor From BB+
TRIBE INVEST: Pandox Gets Favorable Ruling in Civil Case


R O M A N I A

BANCA TRANSILVANIA: Fitch Affirms BB LT IDR, Outlook Stable


R U S S I A

DEVELOPMENT CAPITAL BANK: S&P Affirms Then Withdraws 'B-/B' CCR


S P A I N

MEIF 5 ARENA: S&P Assigns Prelim 'BB' CCR on Empark Acquisition

* Moody's: Spanish RMBS 90+ Day delinquencies Slightly Improved


T U R K E Y

YASAR HOLDING: Fitch Affirms 'B' Long-Term Issuer Default Rating


U N I T E D   K I N G D O M

CARILLION PLC: Creditors Hire Advisers for Debt Restructuring
ENSCO PLC: S&P Lowers CCR to 'B+' on Weak Credit Ratio Forecast
SANDS HERITAGE: To Exit Administration After Creditors Back CVA

* UK: Brexit Poses Biggest Threat to Businesses in Next Two Years


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C Z E C H   R E P U B L I C
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ENERGO-PRO AS: Fitch Assigns 'BB(EXP)' Long-Term IDR
----------------------------------------------------
Fitch Ratings has assigned hydro power producer and electricity
distributor ENERGO-PRO a.s. an Expected Long-Term Foreign-
Currency Issuer Default Rating (IDR) of 'BB(EXP)' with Stable
Outlook.

Expected ratings are contingent on the receipt of the forthcoming
Eurobond documentation, including details on covenants, and
assume group refinancing as proposed by the management in its
business plan.

ENERGO-PRO's ratings reflect the network regulatory regime and
support mechanism available for part of the generation business,
as well as the company's geographic diversification; they also
consider: its relatively small size compared to other rated
European utilities; cash flow volatility due to supply pass-
through items; regulatory changes; and varying hydrology
conditions affecting generation volumes.

Operating environment and key-person risk stemming from ultimate
ownership by one individual are also limiting factors. The rating
reflects the consolidated group profile, without notching for
subordination based on the proposed group refinancing plan.

Fitch includes guarantees issued by ENERGO-PRO or its
subsidiaries for DK Holding Investments s.r.o. (DK Holding, its
parent) or sister companies within DK Holding group in the
adjusted debt calculations. Fitch views the expected funds from
operations (FFO) net connection-fee and guarantees adjusted
leverage of about 4.3x on average over 2018-2021 as adequate for
the current rating level.

KEY RATING DRIVERS

Diversified Group, Small Size
ENERGO-PRO is an independent hydro power producer and electricity
distributor in the Black Sea region. The company operates a
portfolio of 35 power plants in three countries (Bulgaria (BBB-
/Positive), Georgia (BB-/Stable) and Turkey (BB+/Stable)), with
total installed capacity of 854MW (of which hydro power plants
account for about 87% and the remaining is a gas fired plant)
with up to 3TWh of power generation per annum.

The distribution business includes over two million grid
customers, with about 10TWh of electricity distributed in
Bulgaria and Georgia. EBITDA is geographically balanced, with
similar shares contributed by the Georgian and Bulgarian
businesses (around 41% each) and the remainder generated in
Turkey. Although the company benefits from geographical
diversification it is small compared to most rated European
utilities.

One of the largest Utilities in Georgia and Bulgaria
The local subsidiaries through which the company operates are
important players in the electricity markets of two out of three
markets where it operates. ENERGO-PRO operates one of the three
electric distributors in Bulgaria, covering North-Eastern regions
of Bulgaria (about 26% of the country). In Georgia Energo-Pro
operates one of the largest electricity distribution and supply
companies, covering about 85% of the country's territory.

The company has a 46% market share of Georgia's electricity
consumption, or 65% in consumption that is made through
distribution companies (as not all the electricity consumption
goes through distribution companies). The group also benefits
from access to its customers through the supply business in
Bulgaria and Georgia. In Bulgaria the supply business reports
about 5% EBITDA margin, while in Georgia the supply business is
not legally unbundled at present and is a pass-through item for
the regulated distribution business.

Establishing Distribution Regulation
The majority of EBITDA (about 55%) is derived from regulated
distribution businesses in Bulgaria and Georgia. Fitch views the
regulatory framework in these countries as supportive for the
company's rating, but weaker compared with more established
frameworks in most of the EU.

Although the regulation of electricity distribution in Bulgaria
and Georgia uses the Regulated Asset Base principle, it is based
on historical book values, rather than replacement values of
assets. The framework in Georgia is relatively new, entering its
second period from 2018 and the regulatory periods in Bulgaria
can be relatively short. In addition to historical tariff
changes, the supply cost pass-through element in Georgia leads to
year-on-year cash flow volatility.

Supported Power Generation
Hydro-based power generation represents 36% of the company's
EBITDA, the majority of which comes from plants selling power
under feed-in schemes, thus reducing price risk. Tariff support
will be available for some plants in Bulgaria until 2024-2025 and
in Turkey until 2019-2020. Fitch views the support mechanism in
Bulgaria and Turkey as positive for the rating. This partially
offsets the company's relatively small size of operations and the
regulation in Georgia (which constrains revenues there).

Partial generation deregulation in Georgia is planned for 2018
and Fitch expects this will support an increase in earnings. The
Turkish generation business also benefits from the fact that
tariffs are determined in US dollars (with actual payments in
Turkish lira). However, FX risk remains a constraint for the
company.

EBITDA Volatility
ENERGO-PRO's EBITDA has been volatile over the last four years,
ranging from EUR104 million in 2014 to EUR164 million in 2016 on
the back of variable hydrology conditions and tariff changes.
Fitch anticipates EBITDA to decline in 2017, due to lower hydro
generation in all three countries and temporary volume-related
volatility in the distribution businesses. However, Fitch
anticipates EBITDA to revert to about 2013-2016 average levels in
2018.

FCF Positive, Despite Expected Capex Increase
Fitch expects ENERGO-PRO to continue generating healthy cash flow
from operations of about EUR110 million on average over 2017-
2021. The company expects to increase capex to around EUR58
million on average over 2017-2020, from around EUR33 million on
average over 2013-2016. The investment program is aimed at
network upgrades in Georgia and medium and low voltage grid
upgrades in Bulgaria. Fitch forecast the company to remain
intrinsically (pre-dividend) free cash flow (FCF) positive.

FX Exposure
The group is exposed to FX fluctuations as almost all of its debt
at end-2016 was denominated in currencies other than the
currencies in which the company generates revenue. The majority
of debt was from Czech Export Bank (about 61%), mainly to fund
the investment program. In contrast, all the revenue is
denominated in the local currencies of the countries of
operation, although tariffs in Turkey are determined in US
dollars and the Bulgarian leva is pegged to the euro. The group
does not use any hedging instruments, other than holding some
cash in foreign currencies. Fitch does not expects major changes
to FX exposure with the proposed refinancing.

Part of Larger Privately Owned Group
ENERGO-PRO is a part of larger DK Holding group which is
ultimately owned by one individual; therefore, Fitch assess key-
person risk from a dominant shareholder as higher than for most
rated peers. DK Holding also includes two hydro plants in the
Czech Republic, hydro development and construction projects in
Turkey and hydro equipment production business in Slovenia. The
latter two require capex, which may be funded through dividends
received from ENERGO-PRO, as it is the major cash generating
subsidiary within DK Holding group.

However, the company expects its dividend policy to remain
flexible and subject to business needs. ENERGO-PRO should remain
within its internal leverage target of net debt/EBITDA of 3.5x,
forthcoming Eurobond covenants are yet to be formalized. Fitch
expects liquidity to be supported by cash balances remaining at a
comfortable level of EUR60 million.

Fitch views these financial targets as plausible, but Fitch add
guarantees from ENERGO-PRO group to other DK Holding entities to
its debt and therefore Fitch expects funds from operations (FFO)
connection-fees and guarantees adjusted net leverage to remain
around 4.3x on average over 2018-2021. With expected one-off
shareholder distributions of EUR100 million as part of the
refinancing and other one-off cash outflows in 2017, Fitch
expects dividends may be close to zero in 2018 and around EUR15
million annually thereafter.

DERIVATION SUMMARY

ENERGO-PRO is smaller than other rated European utilities such as
EP Energy, a.s. (BB+/Stable), Energa S.A. (BBB/Stable) or
Bulgarian Energy Holding EAD (BB-/Stable), although it is one of
the largest utilities companies in Georgia (for example compared
with Georgian Water and Power LLC (BB-/Stable)) and Bulgaria. The
company's EBITDA was more volatile over 2013-2016 compared with
many peers, but it benefits from mostly neutral to positive FCF
generation. ENERGO-PRO's leverage is higher compared with EP
Energy and Energa.

KEY ASSUMPTIONS

Fitch's key assumptions within Fitch ratings case for the issuer
include:
- Bulgarian, Georgian and Turkey GDP growth of 2.5%-3%, 3.5%-4%
   and 4%-4.7% over 2017-2020 respectively.
- Bulgarian, Georgian and Turkey CPI of 1.2%-2.5%, 3.8%-4.5% and
   7.4%-10.7% over 2017-2020 respectively.
- Electricity generation to decline by about 19% year-on-year
   (yoy) in 2017 and to increase to an average 2013-2017 level
   (cumulatively over all operated regions) from 2018.
- Capex close to management expectations of about EUR58 million
   on average over 2017-2021.
- Dividends payments so that cash remains at a comfortable level
   of about EUR60 million.
- EUR100 million shareholder distributions and other one-off
   cash outflows in 2017 of around EUR50 million.

RATING SENSITIVITIES

Future developments that may, individually or collectively, lead
to positive rating action:
- Increased scale of operation, less volatile earnings, strong
   track record of supportive regulation and reduction of FX
   exposure.
- Improved FFO net adjusted leverage (excluding connection fees
   and including group guarantees) below 3.5x on a consistent
   basis.

Future developments that may, individually or collectively, lead
to negative rating action:
- A reduction in profitability and cash generation, leading to
   an increase in FFO net adjusted leverage (excluding connection
   fees and including group guarantees) above 4.5x and FFO fixed
   charge coverage below 4x on a consistent basis.

Fitch does not rate any senior unsecured debt of ENERGO-PRO, but
Fitch typically notch it down from the IDR if the amount of
priority debt, ranking ahead of the senior unsecured debt,
increases towards 2x EBITDA. Fitch anticipates that following the
refinancing, ENERGO-PRO will be below this level.

LIQUIDITY

Fitch views ENERGO-PRO's liquidity prior to refinancing as weak,
but manageable. At end-2016, ENERGO-PRO's short-term debt was
EUR141 million against cash and cash equivalents of EUR82
million, along with unused credit facilities of EUR1.8 million.
The company is considering placing Eurobonds at the holding
company level later this year to refinance the majority of its
debt at the operating companies level, except for working capital
loans at EP Georgia and loans from CEB to EP Bulgaria and ENERGO-
PRO's hydro generation business in Turkey. Fitch expects ENERGO-
PRO's FCF to be negative in 2017 and positive over 2018-2020;
with the expected cash balance of around EUR60 million, this will
support its liquidity profile.

FULL LIST OF RATING ACTIONS

Expected Long-Term Local and Foreign Currency Issuer Default
Rating (IDR) assigned at 'BB(EXP)', Stable Outlook
Expected Short-Term Local and Foreign Currency IDR assigned at
'B(EXP)'


ENERGO-PRO AS: S&P Assigns Preliminary BB- CCR, Outlook Stable
--------------------------------------------------------------
S&P Global Ratings said it has assigned its preliminary 'BB-'
long-term corporate credit rating to Czech electricity multi-
utility ENERGO-PRO a.s. The outlook is stable.

S&P said, "The final rating will depend on our receipt and
satisfactory review of all final transaction documentation.
Accordingly, the preliminary rating should not be construed as
evidence of the final rating. If S&P Global Ratings does not
receive final documentation within a reasonable time frame, or if
final documentation departs from materials reviewed, we reserve
the right to withdraw or revise our ratings. Potential changes
include, but are not limited to, utilization of bond proceeds,
maturity, size and conditions of the bond, financial and other
covenants, security, and ranking."

The rating reflects ENERGO-PRO's exposure to operating risks in
emerging markets where regulatory systems are still evolving and
our expectation of heavy capex limiting free operating cash flows
(FOCF). However, these factors are offset by cost-efficient
hydropower assets and manageable leverage levels.

S&P's assessment of parent DKHI's 'bb-' group credit profile
(GCP) indicates our expectation of adjusted funds from operations
(FFO) to debt to average 20%-24% in 2018-2019, offset by weak
FOCF. Although we understand that new capex in Turkey is at the
DKHI level, we base our rating on ENERGO-PRO on the GCP of DKHI.
We consider ENERGO-PRO a core subsidiary of DKHI because the
group's strategy is to operate regulated utility and hydro
generation assets."

ENERGO-PRO is predominantly a hydro generation and electricity
distribution network operator, with operations in Georgia (41% of
2016 EBITDA), Bulgaria (41%), and Turkey (18%). The company
currently operates 36 hydro power plants (HPPs) and one gas-fired
thermal power plant, which provides ancillary services. In 2016,
it derived about 58% of EBITDA from regulated electricity
distribution and supply, 13% from regulated generation, and most
of the remaining 29% from electricity generation and trading and
supply activities. At year-end 2016, ENERGO-PRO posted EUR164
million of EBITDA and adjusted net debt of EUR510 million
compared with a regulatory asset base (RAB) of EUR370 million.

The main credit factors for the rating are country risk and the
evolving nature of regulations in the key markets where ENERGO-
PRO operates. Even though regulatory frameworks in Georgia and
Bulgaria aim to achieve cost recoverability and create incentives
to invest, they are subject to uncertainties, ongoing reforms --
mainly in Georgia -- and heavy political influence on regulations
in Bulgaria, which remains a material constraint for the
industry. S&P said, "We understand that Georgia is currently
undergoing significant regulatory changes aimed at the
liberalization of certain industry segments to be aligned more
with the EU's third energy package, but we see substantial
uncertainties related to the practical implementation of this
strategy."

S&P said, "Georgia is introducing a new tariff methodology in
2018, and although we view reform as potentially positive for
ENERGO-PRO's cash flow generation, we see substantial
uncertainties related to how the sector reform is implemented. We
understand that Georgia's independent regulator intends to
introduce new parameters in its methodology from 2018, which aim
to increase weighted-average cost of capital (WACC) and gradually
liberalize electricity generation. This should support ENERGO-
PRO's revenues, in our view. The tariffs are set to cover
operating expenditures and capex, while creating efficiency
incentives via "x-factor"(currently 2.0%, with 1.5% forecast in
2018). The WACC is set for 13.5% and is expected to increase to
16.0% from 2018, which we view as relatively high compared to
Eastern and Central European regulated utilities. Still, we take
into account the large historical underinvestment and below-
average operating efficiency of the grid assets, high local
interest rates, historically volatile exchange rate, relatively
low income levels in the country, and significant execution
uncertainties.

"The Bulgarian regulatory framework is relatively politicized, in
our view. The regulatory periods don't have a set length and can
last anywhere from two-to-five years, which provides less
predictability. The current framework is a traditional RAB-based
model with revenue caps and runs until June 2018. The tariff is
approved for the given period, but can be adjusted each pricing
period according to certain factors (i.e., inflation rate,
efficiency ratio). WACC is set at 7.04%, which is in line with
other Eastern European peers and aims to attract investments.
That said, significant past tariff deficits weigh on our
assessment of financial stability, even though the World Bank has
taken measures to reduce these.

"In our view, ENERGO-PRO's unregulated generation and supply
business (about 30% of EBITDA) is relatively volatile due to
inherent exposure to hydrology risks--given the group's focus on
HPPs--as well as to power prices and demand risk. With 854
megawatt (MW) capacity, ENERGO-PRO's production capacity is
relatively limited compared to international peers, and has
essentially no fuel diversification. Still, it benefits from the
low-cost nature of hydropower assets, geographical
diversification in three countries, dominant market position in
Georgia, and a favorable renewable subsidy scheme in Turkey
(YEKDEM), which applies to all five of ENERGO-PRO's HPPs and is
in place for the first 10 years of operation.

"We understand that ENERGO-PRO's share of unregulated activities
will increase in the next three-to-five years (to about 40% of
total EBITDA) as the group intends to strengthen its hydro
position in Turkey by developing three projects, with total
forecast installed capacity of 580MW. We understand that two of
these projects are currently under construction and the third
project should obtain a building permit in 2018. That said, once
the group successfully commissions Turkish hydro assets (between
2019 and 2022), it would also be eligible for the YEKDEM subsidy
scheme, which will significantly boost EBITDA.

"Our assessment of the group's financial risk profile mainly
reflects our expectation of FFO to debt of 14%-18% in 2017,
improving to 20%-24% in 2018-2019; debt to EBITDA of about 4.5x
in 2017, improving to 3.5x-4.0x in 2018-2019; and weak free cash
flow generation, largely on the back of sizable investment
projects in Turkey. We expect the group's cash flows to be
volatile due to inherent hydrology risk, mainly in 2017, when we
expect FFO to debt to hit its lowest point. From 2018, we expect
FFO to debt to bounce back to above 20% on average for the next
two-to-three years, assuming average hydrology in all three
countries of operation. An improvement in EBITDA is also expected
as a result of the increase in WACC in Georgia from 2018, coupled
with the deregulation of five HPPs. At the same time, we project
weak FOCF to debt, mainly due to a ramp-up in capex in the next
two-to-four years related to Turkish hydro projects (EUR50
million-EUR80 million annually on the DKHI level), while
remaining capex (about EUR60 million annually on the ENERGO-PRO
level) will be invested mainly in distribution networks in
Georgia and Bulgaria. We expect FOCF to become positive only
after the group successfully commissions Turkish projects."

S&P's base case assumes:

-- Successful issuance of bonds with at least five years'
    maturity and subsequent partial refinancing of the group's
    outstanding debt. Average GDP growth of 5.0% in Georgia, 2.8%
    in Bulgaria, and 3.1% in Turkey.

-- Stable foreign exchange (FX) rates in Bulgaria (Bulgarian lev
    [BGN] is pegged to the euro [1.96BGN/EUR]) and Georgia (2.71
    Georgian lari/EUR) but we expect the Turkish lira (TRY) to
    weaken.

-- No FX risk between TRY and the U.S. dollar as the feed-in-
    tariff is denominated in U.S. dollars. That said, the group's
    borrowings are in euros, and we expect the euro to weaken
    toward the U.S. dollar (4.00TRY/EUR in 2017).

-- Average hydrology in all three countries of operation in
    2018.

-- Georgian electricity sector reform proceeds to result in WACC
    increasing to 16%, with the new regulatory period commencing
    in January 2018.

-- Partial liberalization of HPPs with production below 40MW
    (five additional HPPs). Decrease in supply volumes as high-
    voltage end-users will be obliged to choose a supplier on the
    free market.

-- Visibility of cash flows until the current regulatory period
    in Bulgaria (June 2018). WACC to remain stable at 7.04%. Grid
    losses to decline to below 9% from 2018.

-- Volatile power prices in Georgia, but to remain at about
    GEL100/MW hours (MWh)--well above regulated prices (average
    GEL28/MWh). All HPPs in Turkey to benefit from feed-in-tariff
    ($73/MWh) until 2021. 20% of total production in Bulgaria
    sold under feed-in-tariff regime until 2024.

-- EBITDA to reach its weakest point in 2017 due to unfavorable
    hydrology, but remain between EUR150 million-EUR170 million
    until 2020.

-- Annual capex of about EUR60 million annually, excluding new
    Turkish hydro projects where we estimate capex of between
    EUR50 million-EUR80 million annually.

-- No dividend distribution from DKHI to the ultimate owner of
    the group, Mr Jaromir Tesar.

-- No large mergers and acquisitions.

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

-- FFO to debt of 20% on average until 2019.
-- Negative FOCF to debt of about 2% in 2018-2019.
-- Debt to EBITDA to remain at about 3.0x-4.0x until 2019.

The stable outlook reflects S&P's expectation of stable
operations in all three key markets, with FFO to debt slightly
above 20%, but with weak FOCF generation on the back of sizable
investments into hydro projects in Turkey and adequate liquidity.

The group's GCP is unlikely to strengthen until the successful
completion of sizable hydro projects in Turkey, which would
result in largely positive FOCF generation. An upgrade would also
depend on the improvement and establishment of a predictable
track record and greater visibility of the Bulgarian and Georgian
regulatory frameworks, without any material negative political
interference or any material deterioration in operating
conditions.

S&P could lower the GCP and subsequently the rating on ENERGO-PRO
if:

-- The group experiences higher volatility on earnings than
    expected, mainly stemming from very poor hydro conditions,
    deteriorating conditions in the key markets (such as
    materially weakening demand or weakening local currency), or
    negative regulatory interventions;

-- The group engages in large-scale, debt-financed acquisition
    which would materially increase its leverage;

-- FFO to debt falls materially below 20% on average, without
    any prospects for near-term recovery; and

-- The group materially overruns on its costs while developing
    three hydro projects in Turkey.


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F R A N C E
===========


VALLOUREC: S&P Rates New EUR300MM Unsecured Bond Due 2022 'B'
-------------------------------------------------------------
S&P Global Ratings said that it assigned its 'B' issue rating to
France-based seamless steel tube producer Vallourec's new EUR300
million unsecured bond due in 2022. At the same time, S&P
affirmed the 'B' issue ratings on Vallourec's existing unsecured
bonds.

S&P said, "The '3' recovery rating reflects our expectation of
about 50% recovery on the proposed issue, as well as the recent
issue of the EUR250 million convertible bonds, in the event of a
payment default.

"We understand that most of the proceeds will be used to repay a
portion of the drawings on the company's sizable revolving credit
facilities (RCFs). We note that the overall size of the RCFs
remains unchanged."

ISSUE RATING: RECOVERY ANALYSIS

Key analytical factors

-- The 'B' issue rating on Vallourec's unsecured notes including
    EUR400 million due 2019, EUR500 million due 2024, and the new
    EUR300 million due in 2022) is in line with the corporate
    credit rating.

-- The '3' recovery rating, underpinned by the company's
    substantial asset base, supports the ratings, but S&P regards
    the notes' unsecured nature as a weakness.

-- Under S&P's hypothetical default scenario, it assumes a
    combination of the loss of key customers and a prolonged
    downturn in the industry, leading to lower pricing and
    operational issues.

-- S&P assumes that, on the path to default, the company would
    refinance its EUR400 million notes due August 2019. Moreover,
    S&P assumes that the company would refinance a material
    portion of its RCFs as they came due.

-- S&P's calculations assume that about 50% of the RCFs will
    remain undrawn at the point of default, given the current
    size of the RCFs and the historic utilization rates.

-- S&P values Vallourec as a going concern, given its market-
    leading position and diversified product offering.

Simulated default assumptions

-- Year of default: 2020
-- Jurisdiction: France

Simplified waterfall

-- Emergence EBITDA: EUR294 million
-- Multiple: 5.0x
-- Gross recovery value: EUR1.469 billion
-- Net recovery value for waterfall after admin. expenses (5%):
    EUR1.396 billion
-- Estimated first-lien debt claim: EUR2.606 billion*
-- Recovery range: 50%-70% (rounded estimate: 50%)
-- Recovery rating: 3

*All debt amounts include six months of prepetition interest.


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G E O R G I A
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ENERGO-PRO GEORGIA: Fitch Assigns 'BB(EXP)' IDR, Outlook Stable
---------------------------------------------------------------
Fitch Ratings has assigned Georgia-based electricity distribution
company JSC ENERGO-PRO Georgia (EPG) an Expected Long-Term
Foreign Currency Issuer Default Rating (IDR) of 'BB(EXP)' with
Stable Outlook.

Expected ratings are contingent on the receipt of the forthcoming
Eurobond documentation to be issued by EPG's parent company
ENERGO-PRO a.s. (ENERGO-PRO), including details on covenants and
assume group refinancing as proposed by the management in its
business plan.

The ratings are aligned with those of its sole shareholder,
ENERGO-PRO, reflecting strong ties between the two, as the parent
provided guarantees for the majority of EPG's loans at end-2016
and will provide direct funding in future. EPG is one of the key
operating subsidiaries within the group, which was responsible
for about 40% of ENERGO-PRO's EBITDA in 2016 (before the spin-off
of generation business).

The rating also reflects the standalone profile of the company,
its natural monopoly position in electricity distribution and
supply, with regulated asset-based tariffs set by the independent
regulator in Georgia, and the relatively short track record of
regulation, its small size compared to rated CIS utilities,
volatile EBITDA and FX exposure.

KEY RATING DRIVERS

Distribution Focus
EPG is a distribution company, formed after the restructuring
performed in December 2016, to reflect the legal need to unbundle
generation and distribution businesses into separate entities.
That resulted in the spin-off of the generation business to a new
legal entity -- JSC ENERGO-PRO Georgia Generation -- and the
transfer of all the hydro generation assets and 100% of shares of
one of its subsidiaries, JSC Zahesi, to the newly created entity.
As a result EPG's rating only reflects the distribution business,
which includes electricity supply as a pass-through item. The
company plans to unbundle the network and supply business, as
will be required by regulations.

Ratings Aligned with Parent
The company is a part of a larger, ultimately privately owned,
utilities group ENERGO-PRO, which also owns electricity companies
in Bulgaria and Turkey. Fitch assess the relationship between EPG
and ENERGO-PRO as strong, as the latter provided guarantees for
the majority of outstanding debt at end-2016, represented by
loans from Czech Export Bank (CEB, about 86%) and EPG was
responsible for about 40% of the groups' EBITDA in 2016 (before
the spin-off of the generation business).

EPG provides loans to its shareholder, interest on which is
capitalised rather than paid and the company considers these
loans as non-repayable (prolonged upon maturity, which was the
case in 2017). ENERGO-PRO also expects to refinance loans from
CEB with proceeds from the forthcoming Eurobonds at ENERGO-PRO
level. There is management commonality and no significant ring-
fence around EPG.

One of the Largest Distribution Companies in Georgia
EPG is one of the largest electricity distribution companies,
with a market share of about 46% of country consumption and 65%
of consumption via distribution companies. The company
distributes electricity to all regions of Georgia except for the
capital city Tbilisi and it covers 85% of the territory of
Georgia. EPG's credit profile is supported by its natural
monopoly position in electricity distribution and supply, with
regulated asset-based tariffs set by the independent regulator in
Georgia.

Supportive Regulation
From 2015 the regulatory framework for the electricity
distribution business in Georgia has been based on the regulated
asset based (RAB) principle, which is a key component for
determining capex, although it is based on assets' book values
rather than replacement values. The second three-year regulatory
period is expected to start in 2018 and envisions the upward
revision of weighted average cost of capital (WACC) to 16.4% from
13.54% to stimulate further investment in the sector.

Volume and price risks are mitigated by the correction mechanism
provided by the regulatory framework. In case of significant
fluctuations in electricity prices, the company applies for a
supply tariff revision within the tariff year. This was the case
in 2015 following local currency devaluation, which had a direct
impact on electricity prices.

High FX Risks
EPG is exposed to FX fluctuation risks as almost all of its debt
at end-2016 (about 96%) was denominated in foreign currencies,
mainly EUR and USD. The majority of debt is represented by debt
from CEB, mainly for the investment program funding (about 86%).
In contrast, all the revenue is denominated in local currency.

Significant Capex
Fitch expects EPG to continue generating healthy cash flow from
operations of about GEL70 million on average over 2017-2020. Free
cash flow (FCF) may turn negative in 2017 on the back of weaker
2017 financial results and extensive capex, but should be
positive in 2018.

DERIVATION SUMMARY

The company benefits from a more robust regulatory regime
compared to rated CIS peers, yet it is smaller compared to some
peers, such as PJSC Moscow United Electric Grid Company (MOESK,
BB+/Stable). EPG is bigger compared with Mangistau Electricity
Distribution Network Company (MEDNC, BB/Negative, the rating is
notched down from Kazakhstan's sovereign) or Georgian Water and
Power LLC (GWP, BB-/Stable). The company has higher FFO net
adjusted leverage compared to GWP, but operates under a more
robust regulatory regime.

KEY ASSUMPTIONS

Fitch's key assumptions within Fitch ratings case for the issuer
include:
- Georgian GDP growth of 3.5%-4.1% over 2017-2020.
- Georgian CPI of 3%-5.5% over 2017-2020.
- Electricity consumption to grow slightly below GDP growth in
   2017-2020.
- Capex close to management expectations of about GEL66 million
   on average over 2017-2021.
- Debt refinancing with an external bond at ENERGO-PRO in 2017.

RATING SENSITIVITIES

Future developments that may, individually or collectively, lead
to positive rating action:
- Fitch rate EPG at the level of the country ceiling and
   therefore Fitch does not expects a positive rating action in
   the near future, unless Georgian's country ceiling is
   upgraded. However, factors that Fitch considers relevant for
   potential future positive action include the stronger
   financial profile of EPG's parent.

Future developments that may, individually or collectively, lead
to negative rating action:
- Negative rating action on the parent, ENERGO-PRO, assuming the
   links remain strong.


For the rating of ENERGO-PRO, EPG's ultimate parent, Fitch
outlined the following sensitivities in its rating action
commentary of 9 October 2017:

Future developments that may, individually or collectively, lead
to positive rating action:
- Increased scale of operation, less volatile earnings, strong
   track record of supportive regulation and reduction of FX
   exposure.
- Improved FFO net adjusted leverage (excluding connection fees
   and including group guarantees) below 3.5x on a consistent
   basis.

Future developments that may, individually or collectively, lead
to negative rating action:
- A reduction in profitability and cash generation leading to an
   increase in FFO net adjusted leverage (excluding connection
   fees and including group guarantees) above 4.5x and FFO fixed
   charge coverage below 4x on a consistent basis.

LIQUIDITY

Fitch views EPG's liquidity as weak, but manageable. At end-2016
short-term debt of EPG (distribution business only) amounted to
GEL115 million against cash and cash equivalents of GEL32
million, along with unused credit facilities of GEL11 million
(EUR denominated). The company expects to roll-over short-term
loans for working capital funding purposes at the end of the year
which is a common practice in Georgia. The remaining loans from
CEB are to be refinanced from the proceeds of the forthcoming
Eurobonds issued by the parent (ENERGO-PRO). Fitch expects that
FCF may turn negative in 2017 which will add to funding
requirements.

FULL LIST OF RATING ACTIONS

Expected Long-Term Local and Foreign Currency Issuer Default
Rating (IDR) assigned at 'BB(EXP)', Stable Outlook
Expected Short-Term Local and Foreign Currency IDR assigned at
'B(EXP)'


=============
G E R M A N Y
=============


AIR BERLIN: Nears Agreement with Lufthansa on Asset Sale
--------------------------------------------------------
Maria Sheahan at Reuters reports that Lufthansa is poised to
agree to a deal to buy assets of Air Berlin, a person familiar
with the matter told Reuters ahead of an Oct. 12 deadline for
talks to carve up the insolvent German airline.

"The deal with Lufthansa is done, there is agreement," Reuters
quotes the person as saying on Oct. 11, adding that talks with
easyJet were not yet completed.

The person familiar with the matter said Lufthansa was set to buy
Air Berlin's Niki leisure unit, its LG Walter regional airline
and some additional aircraft, Reuters relates.

Lufthansa declined to comment on the matter but said it was
confident it would meet the deadline for negotiations, Reuters
notes.

                        About Air Berlin

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

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

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

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

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


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


DECO 2015-HARP: S&P Affirms BB+ (sf) Rating on Class D Notes
------------------------------------------------------------
S&P Global Ratings affirmed its credit ratings on DECO 2015-HARP
Ltd.'s class B, C, and D 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).

DECO 2015-HARP is a true sale commercial mortgage-backed
securities (CMBS) transaction that closed in 2015, with notes
totaling EUR175.1 million. The original three loans were secured
on 18 properties in Ireland. One loan remains, with a current
securitized loan balance of EUR38.9 million.

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
eachrating 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 long-term
sovereign rating on the relevant jurisdiction (see "Ratings Above
The Sovereign - Structured Finance: Methodology And Assumptions,"
published on Aug. 8, 2016)."

The Boland Loan [100% OF THE POOL]

The securitized loan is secured against the Treasury Building in
Dublin, a single-office property located on the outskirts of the
central business district in Dublin 2 (Ireland). The property is
multi let, primarily to National Treasury Management Agency Ltd.
(NTMA; 40.6% by income), National Asset Management Agency
(40.2%), and Elan Management Ltd. (18.6%) with an occupancy rate
of 82.2% and a weighted-average unexpired lease term of 6.10
years. The weighted-average unexpired lease term compares with a
loan remaining term of 4.75 years. In April 2017, the vacancy
level increased to 17.8% (from less than 1.0% historically)
following NTMA's departure of the 4th floor. We understand that
the borrower is about to re-let most of the vacated spaces to
another existing tenant. The property market value increased by
29.0% to EUR74.8 million (valuation dated of May 2017) from
EUR58.0 million (valuation dated of January 2015).

The loan matures in April 2022. The loan is performing in
accordance with its covenants.

LOAN AND COLLATERAL SUMMARY (AS OF JULY 2017)

-- Securitized loan balance: EUR38.9 million
-- LTV ratio: 52.1%
-- Net operating income: EUR2.7 million
-- Market value: EUR74.8 million (dated as of May 2017)
-- Calculated net yield: 3.6%

S&P'S KEY ASSUMPTIONS

-- S&P NCF: EUR3.0 million
-- S&P Value: EUR44.2 million
-- Net yield: 6.8%
-- Haircut-to-market value: 40.9%
-- S&P LTV ratio (before recovery rate adjustments): 88.1%

OPERATIONAL RISKS

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.

"Situs Asset Management Ltd. acts as servicer and special
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 RISKS

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.

"Our assessment of the counterparty risk associated with the
transaction parties does not constrain our ratings 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 of April 2027, after taking into account
available credit enhancement and allowing for transaction
expenses and external liquidity support."

Prior to expected maturity, the issuer uses 50% of principal
receipts to redeem the notes pro rata (based on their respective
outstanding amounts at closing) and uses the other 50% to redeem
the notes sequentially. If the loan fails to repay at its
maturity date or enters in special servicing, or if a note
acceleration notice is delivered, the issuer will use principal
receipts to repay the notes sequentially.

The risk of interest shortfalls is mitigated by a EUR3.8 million
facility that provides liquidity support to service the interest
on the notes, if needed. Interest shortfalls resulting from loan
repayments are mitigated by an available funds cap on the class C
and D notes that limits the interest due to the available funds.

S&P's assessment of the payment structure and cash flow mechanics
for this transaction does not constrain its ratings in this
transaction.

RATING ACTIONS

S&P said, "We consider the available credit enhancement for the
class B, C, and D 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
'AA- (sf)', 'A- (sf)', and 'BB+ (sf)' ratings on these classes of
notes, respectively."

RATINGS LIST

  DECO 2015-HARP Ltd.
  EUR175.081 mil commercial-mortgage backed floating-rate notes
                                         Rating
  Class        Identifier             To                  From
  B            23318LAC6              AA- (sf)           AA- (sf)
  C            23318LAD4              A- (sf)             A- (sf)
  D            23318LAE2              BB+ (sf)           BB+ (sf)


ST PAUL'S CLO IV: Moody's Assigns (P)B2 Rating to Cl. E Notes
-------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following provisional ratings to eight classes of notes issued by
St. Paul's CLO IV Designated Activity Company (the "Issuer" or
"St. Paul's CLO IV"):

-- EUR3,500,000 Class X Senior Secured Floating Rate Notes due
    2030, Assigned (P)Aaa (sf)

-- EUR289,500,000 Class A-1 Senior Secured Floating Rate Notes
    due 2030, Assigned (P)Aaa (sf)

-- EUR31,500,000 Class A-2A Senior Secured Floating Rate Notes
    due 2030, Assigned (P)Aa2 (sf)

-- EUR22,500,000 Class A-2B Senior Secured Fixed Rate Notes due
    2030, Assigned (P)Aa2 (sf)

-- EUR29,000,000 Class B Senior Secured Deferrable Floating Rate
    Notes due 2030, Assigned (P)A2 (sf)

-- EUR24,600,000 Class C Senior Secured Deferrable Floating Rate
    Notes due 2030, Assigned (P)Baa2 (sf)

-- EUR30,250,000 Class D Senior Secured Deferrable Floating Rate
    Notes due 2030, Assigned (P)Ba2 (sf)

-- EUR14,300,000 Class E Senior Secured Deferrable Floating Rate
    Notes due 2030, Assigned (P)B2 (sf)

Moody's issues provisional ratings in advance of the final sale
of financial instruments, but these ratings only represent
Moody's preliminary credit opinions. Upon a conclusive review of
a transaction and associated documentation, Moody's will endeavor
to assign definitive ratings. A definitive rating (if any) may
differ from a provisional rating.

RATINGS RATIONALE

Moody's provisional ratings of the rated notes address the
expected loss posed to noteholders by the legal final maturity of
the notes in 2030. The provisional ratings reflect the risks due
to defaults on the underlying portfolio of loans given the
characteristics and eligibility criteria of the constituent
assets, the relevant portfolio tests and covenants as well as the
transaction's capital and legal structure. Furthermore, Moody's
is of the opinion that the Collateral Manager, Intermediate
Capital Managers Limited ("ICM"), has sufficient experience and
operational capacity and is capable of managing this CLO.

St. Paul's CLO IV 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 secured senior loans or senior secured bonds and
up to 10% of the portfolio may consist of unsecured senior loans,
second lien loans, high yield bonds and mezzanine loans.

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

In addition to the eight classes of notes rated by Moody's, the
Issuer issued EUR43,410,000 of subordinated notes. Moody's will
not assign rating to this class of notes.

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

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

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

Loss and Cash Flow Analysis:

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

Therefore, the expected loss or EL for each tranche is the sum
product of (i) the probability of occurrence of each default
scenario and (ii) the loss derived from the cash flow model in
each default scenario for each tranche.

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

Par Amount: EUR475,000,000

Diversity Score: 38

Weighted Average Rating Factor (WARF): 2775

Weighted Average Spread (WAS): 3.50%

Weighted Average Coupon (WAC): 5.0%

Weighted Average Recovery Rate (WARR): 43.0%

Weighted Average Life (WAL): 8.5 years

As part of the base case, Moody's has addressed the potential
exposure to obligors domiciled in countries with local currency
country risk ceiling (LCC) of A1 or below. As per the portfolio
constraints, eligible countries do not have an LCC below A3 and
exposures to countries with LCC of between A1 to A3 cannot exceed
10%. Following the effective date, and given these portfolio
constraints and the current sovereign ratings of eligible
countries, the total exposure to countries with a LCC of A1 or
below may not exceed 10% of the total portfolio. The remainder of
the pool will be domiciled in countries which currently have a
LCC of Aa3 and above. Given this portfolio composition, the model
was run without the need to apply portfolio haircuts as further
described in the methodology.

Stress Scenarios:

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

Percentage Change in WARF: WARF + 15% (to 3191 from 2775)

Ratings Impact in Rating Notches:

Class X Senior Secured Floating Rate Notes: 0

Class A-1 Senior Secured Floating Rate Notes: 0

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

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

Class B Senior Secured Deferrable Floating Rate Notes: -2

Class C Senior Secured Deferrable Floating Rate Notes: -2

Class D Senior Secured Deferrable Floating Rate Notes: -1

Class E Senior Secured Deferrable Floating Rate Notes: 0

Percentage Change in WARF: WARF +30% (to 3608 from 2775)

Ratings Impact in Rating Notches:

Class X Senior Secured Floating Rate Notes: 0

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

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

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

Class B Senior Secured Deferrable Floating Rate Notes: -4

Class C Senior Secured Deferrable Floating Rate Notes: -2

Class D Senior Secured Deferrable Floating Rate Notes: -1

Class E Senior Secured Deferrable Floating Rate Notes: -2

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.


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


ARENA LUXEMBOURG: Moody's Assigns Ba3 CFR, Outlook Stable
---------------------------------------------------------
Moody's Investors Service has assigned a Ba3 corporate family
rating (CFR) and a Ba3-PD probability of default rating to Arena
Luxembourg Investments S.a r.l. (Arena), an acquisition vehicle
indirectly owned by Macquarie European Infrastructure Fund 5
(MEIF5), which is managed by Macquarie Infrastructure and Real
Assets. Concurrently, Moody's has assigned a Ba3 rating to the
proposed senior secured notes (the Notes) to be issued by Arena
Luxembourg Finance S.a r.l., a financing conduit of Arena. The
Notes have a loss given default assessment of LGD4. The outlook
on the ratings is stable.

The Notes, which will be split into fixed rate notes and floating
rate notes, are expected to have a cumulative amount of
approximately EUR475 million. Net proceeds from the issuance,
along with an indirect cash contribution by MEIF5, will be used
to finance the acquisition of 100% of Empark Aparcamientos y
Servicios S.A. (Empark, Ba3 stable) and repay existing
outstanding debt of Empark, including the redemption in full of
the EUR235 million senior secured fixed rate notes due 2019 and
the EUR150 million senior secured floating rate notes due 2019,
both currently rated Ba3. Following the completion of the
proposed transaction, Arena will be the new parent company of
Empark. Therefore, the CFR assigned to Arena consolidates the
legal and financial obligations of the Empark group, and reflects
the overall debt features of the newly created Arena group. The
assigned ratings assume successful completion of the planned
transaction.

RATINGS RATIONALE

The assignment of a Ba3 CFR to Arena primarily reflects the
underlying credit quality of the Empark group, which is the
largest car parking operator in the Iberian Peninsula. The CFR of
Arena is in line with the current Ba3 CFR of Empark reflecting
(1) Empark's long track record of operations and well-established
position as a leading car park operator in Spain and Portugal;
(2) the strategic location of Empark's assets, which somewhat
mitigates competitive threats and demand risk; (3) a significant
number of long-term off-street concessions, which currently
account for around 85% of group consolidated EBITDA and provide a
degree of medium-term visibility of Empark's future cash flow
generation; (4) a track record of strict cost controls, which
have enabled the company to maintain a relatively stable
recurring EBITDA despite the significant contraction in volumes
during the recent economic crisis; and (5) the continued recovery
of volume in the off-street car parks on the back of improvements
in the macroeconomic environment in Iberia, largely driven by
increasing domestic demand and private consumption.

The CFR is, however, constrained by (1) the high financial
leverage of the consolidated Arena group, with a pro-forma
Moody's-adjusted debt/EBITDA expected to be around 7.9x; (2) the
renewal risk associated with Empark's maturing concessions and
contracts; (3) the competitive and fragmented nature of the car
parking sector in Iberia; and (4) Empark's relatively small size
and limited geographic diversification.

The Ba3 CFR also reflects Moody's expectation that Arena will
prudently manage contract renewals and acquisitions so that the
group maintains or grows operating cash flow contributions
without significantly increasing its financial leverage. Empark's
portfolio is diversified with a mixture of long-term concessions
and short to medium term contracts to operate parking facilities.
Whilst the company's off-street division benefits from
concessions with a relatively long remaining life, some 15% of
the company's EBITDA is represented by concessions and contracts
that on average are up for renewal by 2022. The need to replace
the maturing concessions and contracts will drive investment
given the upfront payments typically associated with
acquisitions. In this regard, the Ba3 rating assumes that the
Arena group will continue to manage its spending so that its
consolidated funds from operations (FFO)/debt ratio will remain
above 6%.

A CFR is an opinion on the expected loss associated with the debt
obligations of a group of companies assuming that it had one
single class of debt and was a single legal entity. The Ba3/LGD4
rating of the Notes is in line with Arena's CFR, because of the
guarantees on a senior secured basis from Arena, Empark and a
number of subsidiaries that account for around 80% of group
consolidated adjusted EBITDA and 80% of assets, and the
relatively small super senior bank revolving credit facility
(RCF) that ranks ahead of the Notes. Furthermore, the shareholder
loans provided to Arena meet the conditions to be treated as 100%
equity as set out in the cross-sector rating methodology Hybrid
Equity Credit, published in January 2017.

Moody's considers the liquidity of the Arena consolidated group
to be adequate. The company's liquidity is supported by around
EUR4 million cash on balance sheet and the RCF in an amount of
EUR75 million.

The RCF will be guaranteed by the same subsidiaries and share the
same collateral package as the Notes but will rank ahead in an
enforcement scenario. The Notes will be secured on shares and
intercompany loans of the guarantors, but there is no security
over the fixed assets.

RATIONALE FOR STABLE OUTLOOK

The stable outlook reflects Moody's expectation that the
financial leverage of the Arena group will remain high, with a
consolidated FFO/debt ratio approaching 7%, which is within the
ratio guidance for a Ba3 rating.

WHAT COULD CHANGE THE RATING UP/DOWN

Upward rating pressure could develop if the Arena group
deleverages so that its FFO/debt ratio were to exceed 8% on a
sustainable basis. Deleveraging would need to be coupled with a
strong liquidity position, in the context of successful renewal
rates and steady demand for parking services.

Conversely, downward rating pressure could develop, if (1) Arena
group's FFO/debt were to decline below 6%; or (2) liquidity
concerns were to arise.

The methodologies used in these ratings were Privately Managed
Toll Roads published in May 2014, and Global Surface
Transportation and Logistics Companies published in May 2017.

Arena Luxembourg Investments S.a r.l. will be the parent company
of Empark Aparcamientos y Servicios S.A., which is the largest
car parking operator in the Iberian Peninsula with a consolidated
portfolio of more than 430 contracts in almost 190
municipalities. The group's major geographic focus is Spain and
Portugal, where it generates some 70% and 30% of EBITDA
respectively. In the last twelve months ended June 30, 2017,
Empark generated around EUR206 million of recurring revenue and
EUR76 million of recurring EBITDA.


QGOG CONSTELLATION: S&P Cuts CCR to 'B' on Weaker Credit Metrics
----------------------------------------------------------------
S&P Global Ratings lowered its corporate credit and 2019 notes
ratings on QGOG Constellation S.A. (QGOG) to 'B' from 'B+'. The
outlook on its corporate credit remains negative and the recovery
rating in the 2019 notes is affirmed at 3 (65%), capped by the
Brazilian jurisdiction.

S&P said, "At the same time, we're assigning a 'B+' issue rating
to the 2024 notes following the conclusion of the exchange offer.
The one-notch uplift derives from the strength its collateral
would provide to the creditor's recovery in an event of default.
Our recovery rating for the 2024 notes is 2 (85%), also capped by
the Brazilian jurisdiction."

The downgrade reflects the company's increasing exposure to the
adverse global offshore drilling market conditions (refer to "Is
There Hope For U.S. Offshore Drillers?", published June 28, 2017
on Global Credit Portal) as seven of the eight offshore vessels
owned by QGOG (which are responsible for 90% of the consolidated
revenue) will have their contracts maturing by the end of 2018.

S&P said, "We expect that in this context, QGOG's main credit
metrics may significantly deteriorate. Moreover, we believe that
the new contractual environment has increased the risk of
dividends interruption to the holding company, in addition to the
high operational risk nature of the industry due to outages
(downtime) and planned dockage periods. As a result, we're
reassessing the quality of the expected distributions from its
subsidiaries, because we believe the level of certainty over
those flows has decreased. More importantly, we expect more cash
flow volatility since the day rates for the vessels'
recontracting would be determined by referring to an oversupplied
market-based price and the length of these new contracts could be
shorter than the current ones."


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


DUFRY ONE: Moody's Rates EUR500MM Senior Unsecured Notes Ba2
------------------------------------------------------------
Moody's Investors Service has assigned a Ba2 instrument rating
with a loss given default assessment of 4 (LGD 4) to Dufry One
B.V.'s EUR500 million senior unsecured notes ("Dufry One"). The
bond is unconditionally and irrevocably guaranteed by the parent
Dufry AG ("Dufry").

RATINGS RATIONALE

Dufry's Ba2 CFR reflects Dufry's (1) leading market position with
more than 20% market share of the airport travel retail spending
according to the company (2) strong geographical footprint; (3)
track record and know-how in operating a travel retail business;
(4) expectation of long term positive organic sales growth in
line with growth of passenger air traffic.

The rating is however constrained by the (1) high leverage
reflecting past Dufry's aggressive acquisition strategy combined
with the adjustments for concessions; (2) the cyclical nature of
the company's travel retail business, which is tied to
international passenger traffic, with an exposure to certain
discretionary items (e.g., perfumes and cosmetics, confectionary
and luxury goods); (4) risks associated with the renewal of
concession contracts as well as to certain event risks that would
have implications on global travel behaviour.

PRINCIPAL METHODOLOGY

The principal methodology used in this rating was Retail Industry
published in October 2015.


DUFRY ONE: S&P Assigns 'BB' Rating to New EUR500MM Unsec. Notes
---------------------------------------------------------------
S&P Global Ratings said that it has assigned its 'BB' issue
rating to the proposed EUR500 million unsecured notes due 2024 to
be issued by Dufry One B.V. and guaranteed by Dufry AG and some
of its subsidiaries.

S&P said, "The recovery rating on the proposed senior notes is
'3', indicating our expectation of average (50%-70%; rounded
estimate: 50%) recovery in the event of a payment default. The
recovery rating reflects our understanding that Dufry will use
the proceeds of the proposed notes to repay in full its existing
EUR500 million unsecured notes due 2022."

RECOVERY ANALYSIS

S&P said, "The proposed EUR500 million unsecured notes are rated
'BB' with a recovery rating of '3'. We understand that Dufry will
use the proceeds of the proposed notes to repay in full its
existing EUR500 million unsecured notes due 2022. The group also
seeks to refinance its term loan facilities that currently mature
in July 2019. The recovery rating is supported by the low amount
of prior-ranking liabilities, but constrained by the significant
amount of unsecured debt. Our recovery expectations are at about
50%.

"To determine recoveries, we simulate a hypothetical default
scenario. This assumes a set of negative regulatory changes and
reduced airport travel following a natural disaster or a
terrorist event, combined with an economic recession in Europe.

"We value Dufry as a going concern to reflect its leading market
position in duty free shops."

SIMULATED DEFAULT ASSUMPTIONS

-- Year of default: 2022
-- Jurisdiction: Switzerland

SIMPLIFIED WATERFALL

-- EBITDA at emergence: Swiss franc (CHF) 459 million

-- Minimum capital expenditure (capex) at 2.5% of historical
    three-year annual average revenues, based on the company's
    average minimum capex requirement trend.

-- Standard cyclicality adjustment of +5% for the retail and
    restaurants industry.

-- Implied enterprise value multiple: 6.0x; an EBITDA multiple
    of 6.0x (versus an anchor multiple of 5x for the retail and
    restaurant industry) reflects Dufry's global leadership
    position in the travel retail market, significant geographic
    and portfolio diversity, and its increased exposure to the
    high growth emerging market after the acquisition.

-- Gross enterprise value at default: CHF2,753 million.

-- Net enterprise value after administrative costs (5%):
    CHF2,615 million.

-- Priority claims: CHF75 million.

-- Estimated senior unsecured debt claims: CHF4,808 million (1)

-- Value available for senior secured claims: CHF2,540 million

-- Recovery expectations: 50%-70% (rounded estimate: 50%)

(1) All debt amounts include six months' prepetition interest.
Includes CHF1482 million revolving credit facility assumed 85%
drawn.


JUBILEE CDO VI: Moody's Hikes Rating on Class E Notes from Ba3
--------------------------------------------------------------
Moody's Investors Service announced that it has taken rating
actions on the following classes of notes issued by Jubilee CDO
VI B.V.:

-- EUR27M (Current outstanding balance EUR25.62M) Class C Senior
    Secured Deferrable Floating Rate Notes due 2022, Affirmed Aaa
    (sf); previously on Mar 24, 2017 Upgraded to Aaa (sf)

-- EUR21M Class D Senior Secured Deferrable Floating Rate Notes
    due 2022, Upgraded to Aaa (sf); previously on Mar 24, 2017
    Upgraded to A2 (sf)

-- EUR17M Class E Senior Secured Deferrable Floating Rate Notes
    due 2022, Upgraded to Baa3 (sf); previously on Mar 24, 2017
    Affirmed Ba3 (sf)

-- EUR3.15M (Current rated balance EUR0.035M) Class Q
    Combination Notes due 2022, Upgraded to Aaa (sf); previously
    on Mar 24, 2017 Upgraded to Aa1 (sf)

Jubilee CDO VI B.V., issued in August 2006, is a collateralised
loan obligation (CLO) backed by a portfolio of mostly high-yield
senior secured European loans managed by Alcentra Limited. The
transaction's reinvestment period ended in September 2012.

RATINGS RATIONALE

The rating actions on the notes are primarily a result of the
significant deleveraging of the transaction following
amortisation of the underlying portfolio and the improvement in
the credit quality of the underlying collateral pool since the
last rating action in March 2017.

Class B notes paid down in full by a total of approximately
EUR25.54 million (79.78% of closing balance) on the September
2017 payment date, whilst Class C paid down by EUR1.37 million
(5.1% of closing balance) on the March 2017 payment date. As a
result of these pay-downs, over-collateralisation (OC) ratios of
all classes of rated notes have increased. As per the trustee
report dated September 2017, Class C, Class D and Class E OC
ratios are reported at 216.33%, 154.55% and 125.53% compared to
March 2017 levels of 174.07%, 139.27%, and 119.88% respectively.
These OC ratios do not incorporate the pay-downs in the rated
notes on the September 2017 payment dates.

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
performing par and principal proceeds of EUR73.80 million,
defaulted par of EUR14.28 million, a weighted average default
probability of 16.83% (consistent with a WARF of 2665 over a
weighted average life of 3.67 years), a weighted average recovery
rate upon default of 48.13% for a Aaa liability target rating, a
diversity score of 9 and a weighted average spread of 3.40%.

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

The rating of the combination notes addresses the repayment of
the rated balance on or before the legal final maturity. For the
Class Q notes, the 'rated balance' at any time is equal to the
principal amount of the combination note on the issue date minus
the sum of all payments made from the issue date to such date, of
either interest or principal. The rated balance will not
necessarily correspond to the outstanding notional amount
reported by the trustee.

Methodology Underlying the Rating Action:

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

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

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

1) 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.

2) Recoveries on 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.

3) 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.

4) Lack of portfolio granularity: The performance of the
portfolio depends to a large extent on the credit conditions of a
few large obligors' ratings, especially when they default.
Because of the deal's low diversity score and lack of
granularity, Moody's supplemented its typical Binomial Expansion
Technique analysis with a simulated default distribution using
Moody's CDROMTM software.

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.


UPC HOLDING: Moody's Revises Outlook to Neg., Affirms B2 Rating
---------------------------------------------------------------
Moody's Investors Service has changed the outlook on UPC Holding
B.V. as well as its rated subsidiaries to negative from stable.
At the same time, the agency has affirmed the company's Ba3
Corporate Family Rating (CFR) and Ba3-PD Probability of Default
Rating (PDR). Moody's has also affirmed the company's B2 senior
unsecured debt ratings as well as the Ba3 ratings on the senior
secured debt issued by UPC's finance subsidiaries.

"The change in outlook on UPC's ratings to negative is driven by
the weaker operating momentum of the business in Switzerland
which has constrained the company's consolidated revenue and
EBITDA growth in 2017. UPC is also expanding its network to
improve growth prospects, although at this time, its elevated
capex is constraining free cash flow generation. Consequently,
Moody's adjusted credit metrics for the company are weaker than
the parameters set for the Ba3 rating even after assuming the
cash-funded acquisition of Multimedia Polska (MMP)," says Gunjan
Dixit, a Moody's Vice President -- Senior Credit Officer, and
lead analyst for UPC.

RATINGS RATIONALE

The company's performance in Switzerland has been considerably
weaker than Moody's expectations driven by heightened
competition. After growing by 1.6% in FY 2016, UPC's rebased
revenue in Switzerland/ Austria declined by 1.4% year-on-year (y-
o-y) in H1 2017. The reported Operating Cash Flow (OCF) for
Switzerland/ Austria grew by only 1.0% y-o-y in H1 2017 compared
to 4.8% in FY2016. For FY2017, Moody's expects revenue growth in
Switzerland to remain subdued and OCF to decline marginally due
to higher content costs. The company has been taking measures to
address some of the operating challenges including the refresh of
the Swiss "Connect & Play Portfolio" in May as well as the launch
the MySports channels in September 2017. These measures should
lead to some improvement in operating performance in 2018,
however, Moody's remains cautious of the intense competition in
the market.

In Central and Eastern Europe (CEE), UPC has performed well. The
revenues and OCF in CEE have grown by 5.8% and 5.5% in H1 2017
compared to 3.9% and 1.5% respectively in FY2016. This
improvement in CEE's performance has helped overall results for
UPC but given that Switzerland/ Austria account for around 61%
and 69% of UPC's overall revenues and OCF respectively, the
slowdown in Switzerland has more than offset the growth in CEE.

As of June 2017, UPC reported just under EUR6.4 billion of third-
party debt, which translated into a Moody's adjusted Gross
Debt/EBITDA ratio of around 5.7x (on a last twelve months basis),
above Moody's leverage threshold for UPC's Ba3 rating. Pro-forma
for the cash-funded acquisition of MMP, the adjusted Gross Debt/
EBITDA ratio for UPC reduces to 5.4x, still above the 5.25x
threshold for downward pressure on the rating. UPC's Moody's
adjusted cash flow from operations ("CFO")/ Debt ratio was 12.6%
as of June 2017. This ratio is also towards the weaker end of the
Ba3 rating category. The company's free cash flow generation
(after capex including vendor financing repayments) will also
likely remain negative due to elevated capex.

Given UPC's high leverage prior to MMP's acquisition, UPC's
ratings could come under pressure if the acquisition does not go
through or if the company incurs additional debt and fails to
reduce leverage in line with Moody's expectations.

UPC's reported leverage ratio of Total Debt to Annualized EBITDA
(last two quarters annualized), as calculated in accordance with
the definition in the UPC Broadband Holding Bank Facility, stood
at 4.27x at the end of Q2 2017 and was therefore within the 4.0x
to 5.0x Debt/EBITDA (UPC indenture definition) corridor within
which Liberty Global generally manages leverage for its group
companies. Helped by the EBITDA contribution from MMP's
acquisition, UPC's leverage will be at the lower end of this
range.

Given the expectation of continued constrained free cash flow
generation (as calculated by Moody's), Moody's would expect the
company not to incur any material incremental debt in the near
term and focus on keeping its leverage towards the low-end of its
corridor. Moody's recognizes that UPC's ratio is flattered by the
exclusion of vendor loans and by the add-back to EBITDA of
certain related party fees and allocations, the majority of which
Moody's views as ongoing operating costs for UPC and does not add
back to EBITDA.

UPC remains on track to connect its network or upgrade to two-way
service in approximately 50,000 homes in Switzerland/Austria and
400,000 homes in the CEE region in 2017. Moody's expects total
capex (including non-cash P&E additions) to sales levels to
remain elevated to around the mid-twenties in 2017/18 as the
company considers new build projects particularly in CEE. In this
regard, Moody's notes the execution risks associated with the
timely and effective delivery of the company's network expansion
plans.

Moody's regards UPC's liquidity provision as adequate for its
near-term requirements. As of June 30, 2017, UPC reported EUR19.2
million of cash on hand, almost exclusively at subsidiary and
intermediate holdco levels. This is complemented by EUR990
million of unused borrowing capacity under the company's credit
facility, of which EUR934 million were available for borrowing.

UPC's near term repayment obligations were limited to EUR827
million of vendor financing (as of June 30, 2017) that falls due
within one year. Following several refinancing transactions
during 2016/17 at improved conditions, the next maturity of long-
term third party debt does not occur before 2023. Moody's expects
the company to upstream cash to its parent company through
shareholder loan repayments or loan advances from time to time,
while maintaining sufficient flexibility for its operational
needs over the next 12 to 18 months.

RATIONALE FOR NEGATIVE OUTLOOK

The negative outlook on the ratings reflects the weakness in
UPC's operating performance in Switzerland, combined with high
leverage and weak cash flow based metrics.

Stabilization of the outlook will be dependent upon (1) a
successful completion of the acquisition of MMP (via funding it
through cash from its parent -- Liberty Global) and integration
of the asset achieving the expected synergies; (2) the
improvement in overall revenue and EBITDA growth rates
particularly in Switzerland, with good execution on its new build
initiatives; and (3) the reduction in its Moody's adjusted Gross
Debt/ EBITDA leverage ratio below 5.25x.

WHAT COULD CHANGE THE RATING UP / DOWN

Downward ratings pressure could develop if (1) UPC fails to
maintain its Moody's adjusted Gross Debt/ EBITDA ratio at below
or around 5.25x on a sustained basis; and/ or (2) cash flow
generation does not improve such that its Moody's adjusted CFO/
Debt ratio remains materially below 12% and its free cash flow
(after capex including vendor financing repayments) remains
negative on a sustained basis.

Positive pressure on the rating could develop over time if (1)
UPC's operating performance improves materially and its rebased
revenue growth trends to (at least) around 5% on a sustained
basis; (2) its adjusted Gross Debt/ EBITDA ratio (as calculated
by Moody's) falls below 4.25x on a sustained basis; and (3) its
cash flow generation improves such that it achieves a Moody's
adjusted CFO/ Debt ratio above 17%.

LIST OF AFFECTED RATINGS

Affirmations:

Issuer: UPC Financing Partnership

-- Senior Secured Bank Credit Facility, Affirmed Ba3

Issuer: UPC Holding B.V.

-- Probability of Default Rating, Affirmed Ba3-PD

-- Corporate Family Rating (Foreign Currency), Affirmed Ba3

-- Senior Unsecured Regular Bond/Debenture, Affirmed B2

Issuer: UPCB Finance IV Limited

-- Senior Secured Regular Bond/Debenture, Affirmed Ba3

Issuer: UPCB Finance VII Limited

-- Senior Secured Regular Bond/Debenture, Affirmed Ba3

Outlook Actions:

Issuer: UPC Financing Partnership

-- Outlook, Changed To Negative From Stable

Issuer: UPC Holding B.V.

-- Outlook, Changed To Negative From Stable

Issuer: UPCB Finance IV Limited

-- Outlook, Changed To Negative From Stable

Issuer: UPCB Finance VII Limited

-- Outlook, Changed To Negative From Stable

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Global Pay
Television - Cable and Direct-to-Home Satellite Operators
published in January 2017.

UPC is an indirect subsidiary of Liberty Global plc (Ba3 stable),
is a European cable company that operates in Switzerland and
Austria and in a number of Central and Eastern European countries
(Poland, Hungary, Czech Republic, Romania and Slovakia). For the
last twelve months ended June 30, 2017, the company generated
EUR2.6 billion in revenues and EUR1.4 billion in reported OCF.


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


NORSKE SKOG: Presents Fourth Debt-Restructuring Proposal
--------------------------------------------------------
Luca Casiraghi at Bloomberg News reports that Norske
Skogindustrier ASA presented its fourth debt-restructuring
proposal this year, as the Norwegian papermaker struggles to find
agreement among its different creditor groups.

According to Bloomberg, the company said in a statement on
Oct. 11 that under the latest plan, unsecured creditors and
shareholders will get 28% of a restructured Norske Skog, and
warrants for a further 10%, if they agree to inject NOK500
million (US$63 million) of new money.  Secured bondholders will
own the rest, Bloomberg notes.

Norske Skog has made concessions to its unsecured creditors, who
rebuffed the previous restructuring proposal, as it seeks to
avoid collapsing under a US$1 billion debt pile, Bloomberg
discloses.  The company's secured bondholders last month demanded
immediate repayment and threatened to seize assets, escalating a
debt saga that has dragged on for years, Bloomberg recounts.

The statement said more than 65% of the company's secured
bondholders and major shareholders have agreed to support the new
proposal, Bloomberg relays.

Bondholders have until Oct. 19 to approve the plan, which will
completely wipe out unsecured debt and EUR140 million (US$166
million) of secured debt, Bloomberg states.

                      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.


SPAREBANK 1: Fitch Changes Support Rating Floor From BB+
--------------------------------------------------------
Fitch Ratings has affirmed SpareBank 1 Nord-Norge's (SNN) Long-
Term Issuer Default Rating (IDR) at 'A', SpareBank 1 SMN's (SMN)
and SpareBank 1 SR-Bank's (SR) Long-Term IDRs at 'A-', and
Sandnes Sparebank's Long-Term IDR at 'BBB'. The Outlooks on all
Long-Term IDRs are Stable.

The rating actions were part of Fitch's periodic review of
Norwegian savings banks.

KEY RATING DRIVERS
IDRS, VRS AND SENIOR DEBT

The affirmations of the ratings of SNN, SMN and SR (collectively
Sparebanken) are based on their strong regional franchises,
healthy profitability, resilient asset quality and sound capital
ratios. The ratings also factor in risks arising from lower oil
prices and significant rises in property prices in recent years,
geographically concentrated lending and liquidity management in
the context of the banks' wholesale funding reliance.

SNN's ratings are one notch higher than those of its Sparebanken
peers, reflecting better asset-quality metrics, limited oil
exposure and a more retail-orientated business model.

Sandnes's ratings reflect good pre-impairment profitability,
adequate asset quality and sound capital ratios, and its
entrenched regional presence in south-west Norway. Its ratings
are constrained by the bank's smaller franchise relative to
domestic peers, and by still significant geographical and obligor
loan concentration.

Fitch expects the Sparebanken's asset quality to remain strong,
despite a recent oil-related increase in impaired loans for some
banks, driven by a relatively stable operating environment and
conservative underwriting standards. Concentration risk relating
to large exposures is reducing and Fitch expects the banks to
continue to implement solid strategies based on low-risk business
models focused on retail and SME customers. Impaired and non-
performing loans for the Sparebanken represented between 0.7% and
1.4% of gross loans at end-June 2017.

The sharp fall in oil prices and the consequent slowdown of
economic growth in the country have translated into asset-quality
pressure in certain portfolios, particularly in lending to the
offshore service vessels (OSV) segment. Fitch does not expects
this to spread more widely and forecast mainland GDP (excluding
oil and gas extraction and shipping) to grow by 1.9% in 2017 and
to about 2% annually in 2018 and 2019.

SR and SMN have the highest exposures to oil and gas lending
among the Sparebanken, representing 7% and just over 4% of gross
on-balance-sheet lending, respectively, at end-June 2017. OSV
companies are particularly under pressure due to a combination of
high fixed costs and reduced demand for vessels. Both banks have
been restructuring a material part of these portfolios in recent
years. SMN's oil and gas lending is made up almost entirely of
OSVs, compared with about 60% for SR. Fitch expects loan
impairment charges (LICs) to be largely contained to the OSV
segment, but the risk is heightened in SR's entire oil and gas
exposure. SR and Sandnes's lending books are concentrated in
south-west Norway, the primary base for the oil industry, and the
banks are therefore also sensitive to more widespread contagion
effects from lower oil activity.

A significant property price correction is a key sensitivity for
the banks. Fitch does not expect such a scenario to lead to a
significant deterioration of the quality of the banks' retail
lending, although reduced consumption would be likely to
negatively affect their SME portfolios. SNN is less exposed to
this risk, due to the lower house prices in north Norway than
elsewhere in the country and the large public-sector presence.

Sandnes's impaired and non-performing loans accounted for 3.7% of
gross loans at end-June 2017. A significant share of the impaired
loans relate to legacy commercial real estate (CRE) loans, which
in Fitch assessment includes building and construction and
property management lending. Although management has made
progress in reducing concentration in this segment since its peak
in 2008, it remains a significant risk. The bank's efforts to
shorten maturities and reduce high loan-to-value CRE lending are
positive for the rating. Net lending to the oil and gas sector is
minimal.

Sparebanken and Sandnes have good pre-impairment profitability
and the regional franchises support stable revenue generation.
Net interest income is the main source of revenue, but the banks
are also gradually strengthening fee income from ancillary
products such as insurance, wealth management and real-estate
brokerage. Cost-efficiency is acceptable, with cost-to-income
ratios between 43% and 55% in 1H17.

LICs for the Sparebanken have averaged below 20% of pre-
impairment profitability in recent years. Fitch expects SR and
SMN to continue to report higher than average LICs in 2017,
although they should be lower than in 2016 and easily absorbable.
Sandnes reported a net loss in 2015 due to some specific large
LICs relating to certain large exposures, which Fitch does not
expects to be repeated. However, this highlights the continued
risk the bank faces from its sizeable obligor concentration.

The Sparebanken's capital adequacy ratios compare well with those
of international peers. Their Fitch Core Capital ratios were
between 15% and 17% at end-June 2017, despite Norwegian floors on
the computation of risk weights. Leverage is low in a European
context, with tangible equity/tangible asset ratios of around 9%
and 11%.

Sandnes's capital ratios have improved in recent years, most
notably through a rights issue in 2016. The end-June 2017 Fitch
Core Capital ratio was 17.0%, despite the use of the standardised
approach to calculate its capital requirements for both retail
and corporate exposures. Leverage is low in a European context,
in line with its Sparebanken peers. Nonetheless, Fitch assessment
of capital is constrained by continued high obligor
concentration, and the small absolute size of the bank's equity,
which makes the bank vulnerable to shocks.

Like most of their Nordic peers, the Sparebanken and Sandnes rely
on wholesale funding to varying degrees. The Sparebanken have
maintained access to domestic and international funding markets,
particularly for covered bonds through SpareBank 1 Boligkreditt
(S1B), a joint covered bonds funding vehicle for member banks of
the Alliance group. SR also set up its own covered bond vehicle
in 2015 and this is now its main source of covered bond funding.
Fitch believes the banks will retain large liquidity portfolios
to mitigate refinancing risk.

The 'F2' Short-Term IDRs of SR and SMN, and the 'F3' Short-Term
IDR for Sandnes, map to the lower of the two options for the 'A-
'/'BBB' Long-Term IDRs. Fitch believes the banks have good
funding and liquidity, but their liquidity is not notably better
than their rating levels would suggest.

SUPPORT RATING AND SUPPORT RATING FLOOR

In June 2017 the Norwegian Ministry of Finance proposed
legislation to fully implement the EU Bank Recovery and
Resolution Directive. Fitch expects this legislation to come into
force in due course. In line with Fitch approach for EU banks and
Fitch views that senior creditors will no longer be able to rely
on receiving full extraordinary support from the sovereign in the
event that any of these banks becomes non-viable, Fitch has
downgraded the Support Ratings of SR, SMN and SNN to '5' from '3'
and revised down the Support Rating Floors to 'No Floor' from
'BB+'.

Sandnes's Support Rating and Support Rating Floor have been
affirmed at '5'/'No Floor', also reflecting the bank's small size
and lack of systemic importance.

For SMN, SR and SNN, there is also a possibility of institutional
support for members of the Alliance from its other members.
However, Fitch understands that no obligation to support member
banks arises from membership of the Alliance and therefore does
not factor this into the ratings.

SUBORDINATED DEBT

SNN, SMN and SR's subordinated debt instruments are notched down
once from the banks' Viability Ratings (VRs) to reflect higher
expected loss severity relative to senior unsecured creditors.

SUBSIDIARY AND AFFILIATED COMPANY

S1B's IDRs are aligned with those of the largest Alliance
members, SR and SMN, as together with SNN (rated one notch
higher), these are the most likely source of support. At end-June
2017, the combined ownership of SR, SMN and SNN in S1B was 47.6%.
The ownership reflects the amount of loans sold to S1B and is
updated at least annually. S1B's IDRs reflect its key role as a
covered bond funding vehicle for its shareholder banks by
securing competitively priced funding and access to a diversified
investor base.

The Alliance banks are contractually obliged to buy covered bonds
from S1B if an expected shortfall is identified 60 days before
the maturity of the bond. The obligation from the shareholder
banks is pro rata to the ownership, and if one or more banks are
unable to fulfil their requirements, the other banks must meet
the shortfall up to 2x their original shares. These bonds are
eligible as collateral for repo with the Norwegian central bank.

The Alliance banks are also contractually required to maintain a
minimum Tier 1 capital ratio of 9% at S1B. The obligation is also
pro rata based on each bank's shareholding and is capped at 2x
the original allocation. As the combined ownership is nearly 50%,
the three Fitch-rated Alliance banks' combined obligation would
cover the vast majority of any required liquidity or capital
shortfall. Fitch believes the Fitch-rated Alliance banks have the
financial resources and the propensity to jointly support S1B, if
necessary.

No VR is assigned because of S1B's close integration in the
Alliance, including operational support and servicing of the
mortgage assets.

RATING SENSITIVITIES
IDRS, VRS AND SENIOR DEBT

The Sparebanken's ratings are primarily sensitive to
deteriorating asset quality, particularly if prolonged lower oil
prices led to higher unemployment, a deterioration in CRE
exposure or a significant house price correction, and if the
banks are unable to absorb losses via earnings. This scenario
would probably be followed by difficulties in obtaining
competitively priced funding.

The Stable Outlooks on the Sparebanken's ratings reflect Fitch's
expectation that the operating environment in Norway will remain
strong, with LICs contained largely to the OSV segment. Fitch
expects the banks to further reduce their single-name
concentration, and that they will continue to strengthen capital
ratios and maintain healthy liquidity buffers.

For SMN and SR, positive rating pressure could in the medium term
result from sustained asset-quality improvements, most likely
through the successful restructuring of the OSV portfolios,
combined with continued capital strengthening. For SNN, an
upgrade is unlikely due to its already high ratings in the
context of its company profile and geographical and lending
concentration. The Sparebanken's structural reliance on wholesale
funding means any unmitigated weakening of access to capital
markets would also be negative for their ratings.

Sandnes's Stable Outlook also reflects Fitch's expectation that
the bank will continue to work out its impaired legacy CRE
exposures and maintain access to competitively priced market
funding. An upgrade is currently unlikely, but in the medium term
a material reduction in legacy CRE exposure and obligor
concentration could be ratings positive. Sandnes's ratings are
sensitive to reduced activity in the region should it lead to a
significant house price correction or increased losses in the
corporate sector.

SUPPORT RATING AND SUPPORT RATING FLOOR

An upgrade of the Sparebanken's Support Ratings or upward
revision of their Support Rating Floors would be contingent on a
positive change in Norway's propensity to support its banks. This
is highly unlikely, in Fitch's view. An upward revision of
Sandnes's Support Rating Floor would be also contingent on a
positive change in Fitch's view of the systemic importance of the
bank, which is also unlikely.

SUBORDINATED DEBT
Subordinated debt issued by the Sparebanken is notched down from
the banks' VRs, and are therefore sensitive to any change in the
VRs. The securities' ratings are also sensitive to changes in
Fitch's assessment of loss severity or non-performance risk
relative to that captured in the banks' VRs, although these are
unlikely.

SUBSIDIARY AND AFFILIATED COMPANIES

S1B's ratings are sensitive to the same factors that might drive
a change in the parent banks' ratings. The Stable Outlook is in
line with those on the Long-Term IDRs of S1B's rated parents. As
S1B's ratings are driven by expected support, downside risk to
the ratings could arise if one or more of the largest owners were
downgraded, or if Fitch believed their willingness or ability to
support had diminished. S1B's IDRs could also be downgraded if
SR, SMN and SNN's combined ownership in S1B reduced materially.

These rating actions have no impact on the ratings of the covered
bonds issued by S1B.


The rating actions are:

SpareBank 1 Nord-Norge:
Long-Term IDR affirmed at 'A'; Outlook Stable
Short-Term IDR affirmed at 'F1'
Viability Rating affirmed at 'a'
Support Rating downgraded to '5'from '3'
Support Rating Floor revised to 'No Floor' from 'BB+'
Senior unsecured debt affirmed at 'A'/'F1'
Subordinated debt affirmed at 'A-'

SpareBank 1 SMN:
Long-Term IDR affirmed at 'A-'; Outlook Stable
Short-Term IDR affirmed at 'F2'
Viability Rating affirmed at 'a-'
Support Rating downgraded to '5' from '3'
Support Rating Floor revised to 'No Floor' from 'BB+'
Senior unsecured debt affirmed at 'A-'/'F2'
Subordinated debt affirmed at 'BBB+'

SpareBank 1 SR-Bank:
Long-Term IDR affirmed at 'A-'; Outlook Stable
Short-Term IDR affirmed at 'F2'
Viability Rating affirmed at 'a-'
Support Rating downgraded to '5' from '3'
Support Rating Floor revised to 'No Floor' from 'BB+'
Senior unsecured debt affirmed at 'A-'/'F2'
Subordinated debt affirmed at 'BBB+'

SpareBank 1 Boligkreditt:
Long-Term IDR affirmed at 'A-'; Outlook Stable
Short-Term IDR affirmed at 'F2'
Support Rating affirmed at '1'

Sandnes Sparebank:
Long-Term IDR affirmed at 'BBB'; Outlook Stable
Short-Term IDR affirmed at 'F3'
Viability Rating affirmed at 'bbb'
Support Rating affirmed at '5'
Support Rating affirmed at 'No Floor'


TRIBE INVEST: Pandox Gets Favorable Ruling in Civil Case
--------------------------------------------------------
Pandox AB (publ) ("Pandox") has received a positive verdict from
the Oslo City Court (Oslo byfogdembete) in the case against the
Norwegian company Tribe Invest AS (under bankruptcy) related to a
long-term lease agreement where the lessee was declared bankrupt
in 2013.

The verdict refers to claims in the bankruptcy estate associated
with future rent under a long-term lease agreement in Copenhagen,
where the lessee was declared bankrupt in 2013.

Tribe Invest AS (under bankruptcy), the lessee, asserted that
Pandox suffered no loss as a consequence of the bankruptcy and
therefore had no right to receive any claim in the bankruptcy
estate.

Tribe Invest AS (under bankruptcy) was unsuccessful in its
assertion and it was established by the court that Pandox has the
right to claim compensation through the bankruptcy proceedings.
Pandox will evaluate how they will proceed with further claims.
During 2015, Pandox received SEK60 million as compensation from
former board of directors/owners of Tribe Invest as described in
a press release on July 3, 2015.


=============
R O M A N I A
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BANCA TRANSILVANIA: Fitch Affirms BB LT IDR, Outlook Stable
-----------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Ratings
(IDRs) of Banca Comerciala Romana S.A. (BCR) and BRD-Groupe
Societe Generale S.A. (BRD) at 'BBB+', UniCredit Bank S.A.
(UCBRO) at 'BBB-' and Banca Transilvania S.A. (BT) at 'BB'. The
Outlooks are Stable.

Fitch has also upgraded BCR's Viability Rating (VR) to 'bb+' from
'bb' and affirmed the VRs of BT at 'bb' and UCBRO at 'bb-'.

KEY RATING DRIVERS
IDRS, SUPPORT RATINGS

BCR, BRD and UCBRO's Long- and Short-Term IDRs and Support
Ratings are based on potential support available from their
respective parents - Erste Group Bank AG (Erste, A-/Stable),
Societe Generale (SG; A/Stable) and Unicredit SpA (UCB;
BBB/Stable).

In Fitch's view, Erste, SG and UCB will continue to have a high
propensity to support their Romanian subsidiaries because Romania
and the wider central and eastern European region remain
strategically important for each of them. This view also
considers these banks' majority ownership, the high level of
operational and management integration between the banks and
their parents, the track record of support to date and the
limited size of the subsidiaries relative to their parent groups'
assets, making any support manageable.

BCR and UCBRO are notched once from their respective parents. The
Stable Outlook on BCR's Long-Term Foreign-Currency IDR, which is
at the same level as Romania's Country Ceiling (BBB+), reflects
the Stable Outlooks on Romania and on Erste. The Stable Outlook
on UCBRO is in line with that on its parent.

BRD could be rated within one notch of its parent, although its
Long-Term Foreign-Currency IDR is currently constrained by
Romania's Country Ceiling. The Stable Outlook on BRD reflects
that on the Romanian sovereign.

BT's IDRs are driven by its standalone creditworthiness, as
expressed by its VR. The Support Rating of '5' and Support Rating
Floor of 'No Floor' reflect Fitch's view that sovereign support,
while possible, can no longer be relied upon for BT, as for most
other commercial banks in the European Union.

VRs
The three banks' VRs reflect their generally stable credit
profiles and reasonable financial performance, driven by the
continued balance-sheet cleaning and moderate lending growth. The
VRs also consider the banks' solid capital buffers (weaker at
UCBRO, as captured by its 'bb-'VR) providing resilience in case
of potential recurring pressures on asset quality and reasonable
reserve coverages of existing problem loans (stronger at BCR).
Funding profiles are stable at all three banks and liquidity is
comfortable. In the case of UCBRO liquidity is complemented by
ordinary support from the parent bank.

The banks' stocks of legacy impaired loans remain sizeable after
a recent clean-up. Fitch expects the banks to continue bad debts
off-loading in 2017-2018, being encouraged by the regulatory
focus on reduction of the problem assets in the banking sector.
Non-performing exposures (NPE) ratio of the sector decreased to
8.3% at end-1H17 from 11.3% at end-1H16 (EBA definition, National
Bank of Romania's disclosure) following recent NPL sales and
work-outs.

Fitch expects the macro trends to remain supportive for the
banks' asset quality and performance in 2017-2018 with moderate
credit expansion driven by households, which benefit from
loosening of government's fiscal policy and higher salaries.
Demand for new corporate credit is yet to recover. Inflows of new
impaired loans are expected to stay moderate, helped by generally
conservative risk appetites (albeit higher growth targets at BT)
and stricter regulatory guidance for retail lending standards,
although increasing market interest rates may pressure borrower
debt servicing capacity.

Legislative risks (those linked to Swiss franc loan conversion
initiative and the debt discharge law) have now abated for
Romanian banks, positively contributing into their developing
strategies and financial planning.

BCR
The upgrade of BCR's VR reflects a further loan book clean up and
increased reserve coverage of the NPL book as well as extended
record of good profitability. The risk from the bank's stock of
legacy impaired loans has decreased as the bank has increased
reserve coverage to a high 91% of NPLs, which compares well with
peers, and means the impact of further portfolio clean-up actions
on earnings and capital should be easily manageable. BCR's VR
also reflects the bank's purely domestic, retail-oriented
universal banking business model and its leading market shares
(14% of gross loans,) despite a decrease over the last few years.

Loan quality metrics have improved significantly at end- 2016 and
in 1H17 as a result of the NPL resolution strategy, which
involved large portfolio sales in 2015 and 2016. Fitch expects
further reduction, albeit slower, in the stock of legacy problem
loans, which should bring BCR's NPLs ratio (in Fitch's
classification these include IFRS impaired loans and loans past
due more than 90 days but not impaired) down to mid-high single
digits from 11% as of end-1H17. Further improvements should be
driven by continued work-out efforts, a stabilisation in gross
loans contraction and moderate inflows of new impaired loans, as
the bank's risk appetite remains conservative compared with
historical levels.

Operating profits have been supported by low and reversing loan
impairment charges (LICs) as the bank adjusted to better
recoveries than expected when it booked its large LICs in 2014.
Overall, Fitch considers that earnings volatility and the risk
stemming from asset quality charges has decreased. Pre-impairment
profitability is under some pressure from lower interest income
on a shrinking loan portfolio, lower margins following voluntary
repricing of customer loans and from its large liquidity
holdings, so Fitch expects the bank to look for modest growth to
stabilise its revenue base.

Similar to peers, Fitch expects operating expenses to come under
pressure from investments and higher wages. In the longer term
the bank is looking to offset these through increased reliance on
automated and digital distribution channels.

Fitch views the bank's capitalisation as strong, with a Fitch
Core Capital (FCC) ratio of 20% at end-1H17, particularly in view
of reduced levels of unreserved impaired loans/FCC (5% at end-
1H17). Fitch expects the upcoming application of an internal
ratings-based approach to calculation of credit risk risk-
weighted assets (RWAs) to be manageable, although it will likely
lead to an increase in RWAs and a decrease in regulatory capital
ratios.

The bank has a sound funding profile, where customer deposits
represent a high 83% of total funding excluding derivatives, and
parent funding has decreased. Liquidity is comfortable, given
large holdings of cash and unencumbered Romanian government
securities, net of mandatory reserves and potential cash uses,
equivalent to a high 52% of customer deposits at end-1H17.

BT
BT's VR factors in the bank's through-the-cycle profitability
being more resilient than peers. Strong internal capital
generation has underpinned BT's ability to grow at times when
peers were deleveraging. The acquisition of Volksbank Romania's
in 2015 supported revenue growth and franchise (gain in market
share to 13.6% of sector assets at end-1H17, up from 9% at end-
2014) with no pressure on BT's asset quality or capitalisation.

BT's pre-impairment profitability remained solid in 2016-1H17,
underpinned by lower funding costs and strong fee generation.
Good operational efficiency and lower impairment charges (at 9%
of pre-impairment profit in 1H17; 2016: 38%) supported the bottom
line results (ROAA and ROAE of 2% and 16%, respectively, in
1H17). Fitch expects the bank's pre-impairment results to stay
strong, driven by growth, while performance metrics will be
sensitive to asset quality trends.

Individually impaired loans (IFRS) decreased to 10.6% of BT's
loans at end-1H17 from 14.9% at end-1H16, driven by write-offs
and in-house recoveries, rather than NPL sales as pursued by
peers. Concentration risks are limited given the bank's profile
of SME and retail lender, while FX-lending levels at 24% of total
loans are below the sector average (43% at end-2016). At end-
1H17, reserve coverage of individually impaired loans was
reasonable at 64%. Unreserved impaired loans were moderate at
around 19% of FCC.

The FCC ratio was solid of 19.6% at end-1H17 and regulatory
common equity Tier 1 and Total capital ratios were 17.6% and
18.6%, respectively. The bank's capitalisation should be viewed
in the context of its ambitious growth targets involving
potential new acquisition of the smaller retail lender in the
local market in the near term. BT intends to manage its capital
ratios with comfortable buffers above the regulatory capital
requirements, including the impact of potential acquisitions as
well as the implementation of IFRS 9.

BT's funding profile remains stable and deposit franchise is
strong (customer deposits accounted about 96% of total funding at
end-1H17). BT's liquidity cushion is large, to a significant
extent formed by Romanian government bonds (27% of assets at end-
1H17), eligible for the refinancing with the National Bank of
Romania. Net of potential cash uses and mandatory reserves, the
liquidity buffer was equal to a solid 36% of customer accounts at
end-1H17.

UCBRO
The affirmation of UCBRO's VR reflects Fitch views that although
asset quality has improved, UCBRO's capitalisation, with FCC of
14% and a CET 1 ratio of 12.6% at end-1H17 remains weaker than
peers. This constrains the VR given a higher level of unreserved
impaired loans (22% of FCC), and higher loan book concentrations,
in line with UCBRO's higher share of corporate lending in its
business model. However, Fitch expects ordinary support from the
main shareholder to be available to offset any minor capital
shortfall relative to regulatory requirements, if needed.

UCBRO's impaired loans ratio improved to 9.7% at end-1H17 from
13.5% at end-2016, driven by the migration of a large exposure to
the performing book and NPL sales. Coverage with IFRS reserves
has also improved but remains moderate at 70%, reflecting a less
aggressive approach to cleaning up the loan book.

UCBRO's profitability is supported by single-digit growth in
gross loans, in particular in the retail segment including
unsecured retail lending through a specialised subsidiary. Gross
loans have grown organically and continuously despite the impact
of NPL sales recognised in 2016. Loan impairment charges
decreased to 33% of pre-impairment operating profit in 1H17 from
53% in 2016, but UCBRO is not benefitting from reserve releases
to the same extent as its peers.

UCBRO's gross loans are increasingly funded by customer deposits,
as evidenced by a decreasing customer loans to deposits ratio to
118% at end-1H17 from 134% at end-2015, which remains higher than
at rated peers. At the same time, corporate deposits are more
prevalent in its funding structure, although the bank's
commercial efforts are directed at increasing its retail customer
base, which should help it attract a higher share of more
granular deposits over time.

Available liquidity consisting of cash, net of mandatory reserves
and unencumbered liquid assets, net of potential short-term uses
covered 24% of customer deposits at end-1H17. The bank has
subsequently cancelled the emergency liquidity line it had in
place from the group, but Fitch expects ordinary liquidity
support from the parent, to continue to be available, if needed.

RATING SENSITIVITIES
IDRS AND SUPPORT RATINGS

BCR's Long-Term IDRs would likely be downgraded if either Romania
or Erste is downgraded, but would only be upgraded if both
Romania and Erste were upgraded.

BRD's Long-Term IDRs could be upgraded in case of an upgrade of
the Romanian sovereign rating. A downgrade of the Romanian
sovereign rating would likely cause a downgrade of BRD's IDRs.

UCBRO's IDRs are sensitive to changes in UCB's ratings and to
Fitch's assessment of the ability and propensity of UCB to
provide extraordinary support.

BT's IDRs are sensitive to the same factors as those driving its
VR.

VRs
Upside potential for BCR is limited given Fitch's assessment that
the operating environment in Romania remains fairly volatile and
vulnerable to external shocks, despite a cyclical upswing
currently supporting the banks' financials.

Upside for BT could arise from the continued reduction of problem
assets along with the maintained solid solvency and profitability
metrics and the evidence of robust risk controls executed in the
period of aggressive growth.

An upgrade of UCBRO's VR would require a strengthening of the
bank's capitalisation and further reduction in problem assets
while maintaining reasonable coverage of these by IFRS
provisions.

The VRs of all three banks could be downgraded if the weaker
operating environment or a material increase in risk appetite
translate into marked deterioration in the banks' asset quality
and capital metrics.

The rating actions are as follows:

Banca Comerciala Romana S.A.
Long-Term Foreign-Currency IDR: affirmed at 'BBB+', Outlook
Stable
Short-Term Foreign-Currency IDR: affirmed at 'F2'
Long-Term Local-Currency IDR: affirmed at 'BBB+', Outlook Stable
Support Rating: affirmed at '2'
Viability Rating: upgraded to 'bb+' from 'bb'

Banca Transilvania S.A.
Long-Term Foreign-Currency IDR: affirmed at 'BB', Outlook Stable
Short-Term Foreign-Currency IDR: affirmed at 'B'
Viability Rating: affirmed at 'bb'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'

UniCredit Bank S.A.
Long-Term Foreign-Currency IDR: affirmed at 'BBB-', Outlook
Stable
Short-Term Foreign-Currency IDR: affirmed at 'F3'
Support Rating: affirmed at '2'
Viability Rating: affirmed at 'bb-'

BRD-Groupe Societe Generale S.A.
Long-Term Foreign-Currency IDR: affirmed at 'BBB+', Outlook
Stable
Short-Term Foreign-Currency IDR: affirmed at 'F2'
Support Rating: affirmed at '2'


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


DEVELOPMENT CAPITAL BANK: S&P Affirms Then Withdraws 'B-/B' CCR
---------------------------------------------------------------
S&P Global Ratings affirmed its 'B-/B' long- and short-term
counterparty credit ratings on Russia-based Development Capital
Bank OJSC (DCB).

S&P said, "We subsequently withdrew our ratings on DCB at the
bank's request. At the time of withdrawal the outlook was
negative.

"The affirmation reflected our view of DCB's highly concentrated
business -- which was the main rating constraint, in our
opinion -- and its limited market position. However, we thought
that the risks were slightly mitigated by the bank's knowledge of
the niches in which it operates and solid customer relationships.
In addition, DCB demonstrated its commitment to operating with
very strong capital and sufficient liquidity buffers, and we
don't anticipate this will change in the next 12 months, thanks
to the bank's low appetite for growth.

"At the time of withdrawal, the outlook was negative, reflecting
our view that the bank's high business concentrations could
result in higher credit losses and weaker-than-anticipated
profitability in the next 12 months. In particular, we noted that
the amount of provisions under the International Financial
Reporting Standards (IFRS) is significantly lower than under the
Russian generally accepted accounting principles. As such, we did
not exclude potential for significant credit costs according to
IFRS in the next 18 months."


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


MEIF 5 ARENA: S&P Assigns Prelim 'BB' CCR on Empark Acquisition
---------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'BB' long-term
corporate credit rating to MEIF 5 Arena Holdings, which has
committed to acquire Spanish-based car park operator Empark
Aparcamientos y Servicios (Empark). The outlook is stable.

S&P said, "At the same time, we assigned our preliminary 'BB'
issue rating to the proposed EUR475 million senior secured notes
due 2023, with a recovery rating of '4', indicating our
expectation of average (30%-50%; rounded estimate: 30%) recovery
prospects for bondholders in the event of payment default.

"The preliminary rating reflects our view of the strengths of the
predominantly concession-based car park business that MEIF 5
Arena Holdings will acquire when it buys Empark, combined with
the relatively high amount of proposed debt needed to refinance
Empark's existing notes and co-finance the transaction.

"It also assumes the successful execution of the acquisition and
of the placement on the market of the proposed EUR475 senior
secured notes and ú75 million revolving credit facility (RCF) at
the maturity and interest rate conditions indicated to us.

"We do not expect the new corporate structure to interfere with
Empark's ability to maintain its market leadership in the Iberian
Peninsula as we anticipate key operational and management staff
will remain in place. However, we view new shareholders' ability
to establish and maintain successful relationships with local
municipalities as key in order to ensure concession renewals and
portfolio growth. We have not therefore revised our latest
operational forecasts on Empark, which we consider as a core
subsidiary of MEIF 5 Arena Holdings, and we expect the company to
continue delivering business growth supported by favorable
macroeconomic conditions in the Iberian Peninsula and limited
concessions maturities.

"MEIF 5 Arena Holdings is proposing to issue EUR475 million new
senior secured notes to refinance Empark's existing EUR385
million senior secured notes due in 2019 and to repay other debt
(about EUR30 million-EUR40 million). Overall, the total amount of
additional gross debt compared with Empark's existing financial
debt is relatively small (about EUR55 million-EUR65 million) and
we expect the company's funds from operations (FFO) to debt to
remain comfortably above 8% over the next two years, given the
current relatively favorable interest rates. However, we expect
the adjusted debt to EBITDA ratio to increase to close to 7.5x as
a combination of the additional debt and dividend distributions.
This limits the group's ability to deleverage, but we understand
that the dividend distributions are flexible and dependent on
business conditions -- in particular the acquisition of new
business to replace expiring contracts -- and that shareholders
are committed to maintaining the leverage at or below 7.5x.

"We view the EUR393 million shareholder loan injected in the
proposed new capital structure as equity. The equity treatment
reflects our view of Macquarie Infrastructure and Real Estate
Assets as an infrastructure fund with relatively long investment
horizon as well as the features of the loan: it matures one year
later than the proposed senior secured notes; it is contractually
subordinated against any senior debt; and is not transferrable
unless the company's shares are sold. We also note that there are
no events of default or acceleration of repayment, which supports
the equity treatment. Finally, we anticipate that the company
will not prepay the shareholder loan unless the majority of
creditors approve it."

Assumptions

-- Annual revenue growth of about 3.0%-3.5% in 2017 and 2.0%-
    2.5% in 2018, driven by Spanish and Portuguese GDP and
    consumer price index increases, as well as limited concession
    maturities;

-- Stable adjusted EBITDA margin at about 35%-36%;

-- Capital expenditures (capex) of about EUR28 million and EUR25
    million in 2017 and 2018, respectively;

-- Refinancing of the existing EUR235 million 6.75% senior
    secured notes and the EUR150 million senior secured floating-
    rate notes with the issuance of EUR475 million 3.5% new
    senior secured notes; and

-- EUR30 million-EUR40 million dividend distributions per year.

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

-- FFO to debt of 8.0%-8.5% in 2017-2018 (excluding the effect
    of one-off transaction costs in 2017);

-- Debt to EBITDA of 7.5x over 2017 and 2018; and

-- FFO cash interest coverage of 3.0x-3.5x in 2017 and 2018.

S&P said, "The stable outlook reflects our base-case expectations
that MEIF 5 Arena Holdings will be able to maintain adjusted FFO
to debt above 8% and its adjusted debt to EBITDA will increase to
close to, but not exceeding 7.5x, over the next 12 months. The
rating headroom is therefore limited, but we expect the owners to
calibrate dividend distributions to maintain these metrics and to
deliver business growth supported by favorable macroeconomic
conditions in the Iberian Peninsula.

"We could take a negative rating action on MEIF 5 Arena Holdings
if its debt to EBITDA increased above 7.5x. We expect this could
materialize if the shareholder's financial policy increased
dividend distributions by more than we anticipated. We could also
take a negative rating action if the company's FFO to debt
declined, trending toward 7%. We expect this would likely result
from a decline in the company's EBITDA as a result of
deteriorating macroeconomic conditions in the Iberian Peninsula
or the new shareholders' inability to renew concessions and
expand the portfolio.

"We consider an upgrade as unlikely given the limited rating
headroom in respect to leverage, and the uncertainty of the
dividend policy in the case of unforeseen growth in the car park
business. We could take a positive rating action if the company
were able to increase its FFO to debt above 9%, while maintaining
its debt to EBITDA below 6.0x."


* Moody's: Spanish RMBS 90+ Day delinquencies Slightly Improved
---------------------------------------------------------------
The 90+ day delinquencies decreased to 0.81% of the current pool
balance in July 2017 from 0.87% in April 2017 in the Spanish
residential mortgage-backed securities (RMBS) market, according
to the latest indices published by Moody's Investors Service
("Moody's"). During the same period, the 60+ day delinquencies
decreased to 1.23% of the current pool balance in July 2017 from
1.30% in April 2017.

The cumulative defaults remained stable to 4.15% of the original
balance in July 2017, from 4.16% in April 2017.

The annualised constant prepayment rate decreased to 3.18% in
July 2017 from 3.69% in July 2016.

As of July 2017, the reserve funds of 41 transactions were
partially below their target levels and 20 were fully drawn,
compared with 47 partially drawn and 22 fully drawn transactions
in April 2017.

As of July 2017, Moody's rated 165 transactions in the Spanish
RMBS market, with a total outstanding pool balance of EUR93.85
billion, a 3.26% decrease from EUR97.19 billion in April 2017.


===========
T U R K E Y
===========


YASAR HOLDING: Fitch Affirms 'B' Long-Term Issuer Default Rating
----------------------------------------------------------------
Fitch Ratings has affirmed Turkish food group Yasar Holding
A.S.'s (Yasar) Long-Term Foreign- and Local-Currency Issuer
Default Ratings (IDR) at 'B' and affirmed its National Long-Term
rating at 'BBB(tur)'. The Outlooks are Stable.

Fitch has also affirmed the USD250 million senior unsecured notes
due 2020 at 'B' with Recovery Rating 'RR4'.

The rating affirmation incorporates Fitch's expectations that
over 2018-2020 continuing growth funds from operations (FFO),
stabilisation of working-capital outflows and lower capex needs
will bring Yasar's leverage down to levels more commensurate with
its current rating. The improving performance of the Turkish
economy and the recent stabilisation of the currency should
sustain internal demand and benefit Yasar's profits from the
second half of 2017. Yasar remains vulnerable to material falls
in the Turkish lira but has demonstrated its ability to cope
effectively with Turkey's volatile economy, drawing on its
strength as an established player in the growing Turkish food and
beverages and coatings markets.

KEY RATING DRIVERS

Trading Improving in 2H17: Yasar's revenues and profit margin
suffered from an increase in the prices of raw materials over
2H16 and 1H17, during a difficult consumer environment linked to
political instability and a weakening of the Turkish Lira. Yasar
did not manage to pass through the impact of increased costs to
customers. This resulted in particular in considerably lower
profitability in the coatings business. However, Q317 results are
encouraging and point to a recovery of Yasar's operating
performance.

Limited Free Cash Flow: Fitch projects that Yasar will continue
to generate negative or modest FCF over 2017-2020. In 2017 Fitch
expects some improvement in free cash flow (FCF) to minus TRY65
million from minus TRY229 million in 2016, mostly thanks to the
normalisation of its working-capital movements, while capex
should stay at the high level of TRY180 million. The significant
FCF outflow in 2016 was mostly related to increased demands in
working capital as the company stopped using factoring for its
receivables.

Yasar has conducted major investments in 2016 and management
intends now to prioritise deleveraging. Therefore, Fitch expects
reduced capex from 2018 and forecast FCF to turn positive from
2019, although at a level of less than 1% of revenue.

Gradual Recovery From Leverage Peak: Fitch projects net FFO
adjusted leverage will stay at a high level of 5.8x at end-2017
(2016: 5.7x), despite the recent stabilisation of the dollar/lira
rate and Fitch expectations of its moderate adverse impact on
debt in 2017. Fitch then projects FFO adjusted net leverage will
fall below 5.5x from 2018 thanks to FCF generation.

High Foreign-Currency Risk: Yasar is vulnerable to the movements
of the Turkish Lira against the US Dollar as a result of its high
proportion of hard currency debt (around 60% at end-June 2017).
In the short term Fitch takes comfort from the stabilisation of
the exchange rate over 2017 and from the company's proven ability
to pass through commodity price increases to its end-customers,
although with some time lags of up to six to 12 months. For the
longer term, Fitch estimates that Fitch's expectation of further
lira depreciation of around 5% annually over 2018-19 should not
result in a material increase in leverageover Fitch four-year
rating-case horizon.

Healthy Food and Beverage Prospects: Yasar's leading market
position in several food categories in a fragmented and stable
market continues to underpin its ratings. Fitch expects Yasar's
revenue in its food and beverage division to grow at around 10%
annually over 2017-20 driven both by price/mix and volumes
growth. Yasar's position in the industry as one of few producers
able to offer products with strong hygiene standards, its brand
recognition and good innovation efforts should continue to
benefit its performance. Ongoing market trends of urbanisation,
consumers moving to modern trade and a shift towards packaged
products are also beneficial in the long term for the company.

Resilience Thanks to Diversification: Yasar's diversified
operations in food and beverages and coatings provide some
protection from volatility in raw material prices from one
division to the other. Historically, meat, dairy, animal feed,
fish, coatings, and tissues have not followed the same price and
demand cycles. Fitch believes that Yasar tends normally to absorb
cost increases in the short term. However, given its important
market shares and established relations with its distributors, as
well as the good recognition of its brands, Fitch believes it is
able to pass them on fully, although with some time lags.

DERIVATION SUMMARY

Similar to its closest peers in the food and beverage sector,
Premier Foods (B/Negative), Labeyrie Fine Foods SAS (B-/Withdrawn
in August 2017) and PSJC Beluga (B+/Stable), Yasar enjoys solid
market shares and holds a portfolio of leading and recognised
brands in its market. Yasar benefits from higher product
diversification compared to these peers. This is contrasted by a
large portion of hard currency debt (around 60% of debt at end-
June 2017), which also makes the company more vulnerable to any
macroeconomic instability in its home country. Another point of
weakness for Yasar is its historically negative FCF, while
Premier Foods and Labeyrie have both generated positive FCF over
recent years. The IDRs of all these companies also reflects
broadly high and at times volatile leverage, with FFO adjusted
net leverage on average in the 4.5x-6x range. The only exception
is Beluga, which has much lower leverage at around 3x.

KEY ASSUMPTIONS

Fitch's key assumptions within Fitch ratings case for the issuer
include:
- revenue growth remaining in high single digits over 2017-2020;
- group EBITDA margin of around 10% over 2017-2020;
- capex of 4.6% of revenue in 2017, 3.8% in 2018, 3% afterwards;
- negative FCF over 2017-18, turning to around 1.0% FCF margin
   afterwards;
- USD/TRY at 3.5x, 3.65x and 3.85 at year ends of 2017, 2018 and
   2019 respectively in line with Fitch's house view.
- liquidity to remain adequate.

RATING SENSITIVITIES

Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action
- FFO adjusted net leverage consistently below 4.5x
- FFO fixed charge above 2.5x
- EBITDA margin remaining at or above 11% with improved pricing
   power
- Neutral to positive FCF together with maintenance of longer-
   dated debt maturity profile mitigating refinancing risks

Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action
- Operating shortfall, such as contracting revenue, further
   constraining cash flow and/or liquidity
- FFO adjusted net leverage above 5.5x (2016:5.7x) on a
   sustained basis
- FFO fixed charge coverage below 2.0x (2016: 2.3x) on a
   sustained basis
- EBITDA margin falling below 9.5% (2016: 10.8%) for more than
   two financial years
- Sharp currency depreciation or economic downturn in Turkey
   affecting Yasar's operations

LIQUIDITY

Sufficient Liquidity: Liquidity was supported by unrestricted
cash (as defined by Fitch) of TRY5 million at end-2016,
approximately USD350 million in undrawn uncommitted (as typical
in Turkey) bank lines, as well as strong relationships with both
local and international banks. This is sufficient to cover
Yasar's near term debt maturities of TRY343 million in 2017.

KEY RECOVERY RATING ASSUMPTIONS

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

Going-Concern Approach: Yasar's going concern EBITDA is based on
December 2016 LTM EBITDA. The going-concern EBITDA estimate
reflects Fitch's view of a sustainable, post-reorganisation
EBITDA level upon which Fitch base the valuation of the company.
The going-concern EBITDA is 20% below December 2016 LTM EBITDA to
reflect the company's historical swings in operating margins and
exposure to volatility in the lira. The EV/EBITDA multiple
applied is 4.8x, reflecting the strong (although not dominant)
market shares within specific product categories and the long-
term growth potential of Turkey. The applied distressed multiple
reflects an average (weighted by each segment's profits) between
the food business (5x), coatings (4x), and tissues and others
(3x).

Fitch applies a waterfall analysis to the post-default enterprise
value (EV) based on the relative claims of the debt in the
capital structure. Fitch debt waterfall assumptions take into
account debt at 31 December 2016. All of Yasar's debt is
unsecured. The waterfall results in a 'RR2' Recovery Rating for
senior unsecured debt. However, the recovery rating is capped at
'RR4' due to the Turkish jurisdiction. Therefore, the dollar
senior unsecured notes due 2020 are rated 'B'/'RR4'/50%.


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


CARILLION PLC: Creditors Hire Advisers for Debt Restructuring
-------------------------------------------------------------
Dinesh Nair, Manuel Baigorri, Ruth David and Luca Casiraghi at
Bloomberg News report that Carillion Plc creditors are rushing to
hire financial advisers and lawyers in anticipation of the U.K.
builder seeking to restructure its GBP961 million (US$1.3
billion) debt.

According to Bloomberg, people familiar with the matter said
holders of GBP350 million of the company's private notes have
appointed Houlihan Lokey Inc. as advisers alongside law firm Akin
Gump Strauss Hauer & Feld LLP.

The people said holders of GBP170 million in convertible notes
have hired Willkie Farr & Gallagher LLP as lawyers and are
choosing a financial adviser, Bloomberg relates.

The people, as cited by Bloomberg, said creditors are
preparing as Carillion may need to repair its balance sheet
through a debt-for-equity swap.

The Wolverhampton, England-based builder has already
announced plans for asset disposals and a possible share sale
after reporting a GBP1.15 billion-first-half loss partly due to
additional costs on major projects, Bloomberg notes.

The people said banks that participated in an GBP835 million-
pound credit line are working with FTI Consulting
Inc. and Clifford Chance LLP, Bloomberg relays.

In July the builder said it is working with HSBC Holdings Plc,
Morgan Stanley, Lazard and Stifel to draw up a rescue plan,
Bloomberg recounts.

Carillion plc is a construction and support services firm.


ENSCO PLC: S&P Lowers CCR to 'B+' on Weak Credit Ratio Forecast
---------------------------------------------------------------
S&P Global Ratings removed its ratings on Ensco PLC from
CreditWatch with negative implications, where it placed them on
May 31, 2017, following Ensco's announcement of its intention to
acquire Atwood. The outlook is negative.

S&P said, "We lowered our corporate credit rating on Ensco to
'B+' from 'BB'. At the same time, we lowered our issue-level
rating on the company's senior unsecured debt to 'BB-' from 'BB'.
We revised our recovery rating on this debt to '2' from '3',
reflecting our expectation of substantial (70%-90%; rounded
estimate: 85%) recovery to creditors in the event of a payment
default.

"The downgrade reflects our expectation that Ensco's credit
ratios will weaken significantly in 2018 and 2019. Although the
Atwood acquisition enhances the size and quality of Ensco's
fleet, we expect industry conditions to remain depressed until
late 2019 because of the sharp reduction in capital spending by
customers in the offshore oil and gas sector. We do not expect
the combined company to realize significant revenue growth from
the transaction until the industry recovers. As a result, while
Ensco will consolidate Atwood's net debt of about $850 million,
we forecast that Atwood's net contribution to cash flow will be
minimal over the next couple of years due to its weak contract
backlog and acquisition costs to be incurred in 2018 and 2019.

"We assess Ensco's business risk profile as satisfactory. We base
our assessment of Ensco's business risk on its large and
geographically diversified fleet of high quality, relatively new
offshore rigs, and track record of strong operational
performance. Following the Atwood acquisition, the fleet has 62
rigs, including 12 ultra-deepwater drillships, 10 dynamically
positioned (unmoored) semisubmersible rigs, four moored
semisubmersible rigs, and 36 premium jack-up rigs. The rigs
listed include three ultra-deepwater drillships and one premium
jack-up under construction. The fleet also includes two jack-ups
and one semisubmersible that are held for sale or expected to be
retired. The company has upgraded its fleet quality over the past
several years through newbuilds and rig retirements. Our view is
that stacked rigs that are idle or coming off contract over the
next few months will not return to work for an extended period.
We expect that stacked rigs will not be contracted until a
recovery is well under way and may ultimately be retired."

Deepwater units typically receive premium rates during industry
upcycles and operate under long-term contracts, providing a
cushion of future cash flows during downturns. However, deepwater
projects require relatively higher oil prices to generate
acceptable returns, and demand for offshore drilling has fallen
sharply. Ensco has one of the largest high quality jack-up fleets
in the industry, which operates in shallow water, and is somewhat
less sensitive to the effect of low oil prices. Nevertheless, it
also faces difficult market conditions and typically enters into
work under shorter-term agreements (typically a few weeks or a
few months). Barring a significant improvement in oil prices and
industrywide reduction in rig supply through retirement of older
and less competitive equipment, S&P expects utilization and day
rates will be depressed through the first half of 2019, with
utilization rates starting to recover in late 2019 and day rates
following in 2020.

S&P said, "The negative outlook reflects our expectation that
market conditions in the offshore drilling sector will remain
very challenging over the next 24 months. We expect Ensco's
credit ratios will be very weak in 2018 and 2019, with FFO to
debt around 8% and debt to EBITDA of 9x on average. We could
lower the ratings if liquidity weakens, which would most likely
result from a more prolonged industry downturn than currently
expected and higher-than-expected reactivation expenses or
capital spending.

"We could consider a stable outlook if offshore contract drilling
market conditions improve or the company adds backlog such that
we expect debt to EBITDA to improve closer to 6x."


SANDS HERITAGE: To Exit Administration After Creditors Back CVA
---------------------------------------------------------------
BBC News reports that a Kent theme park plagued by financial
problems is to come out of administration at the end of the
month.

Sands Heritage Ltd., which operates Dreamland in Margate, called
in administrators last year, BBC recounts.

According to BBC, the company announced creditors had unanimously
voted in a "Company Voluntary Arrangement" to emerge from
administration and continue trading.

It follows a GBP25 million revamp and agreement not to repay in
full businesses which had invested in the park, BBC discloses.


* UK: Brexit Poses Biggest Threat to Businesses in Next Two Years
-----------------------------------------------------------------
Praseeda Nair at growthbusiness.co.uk reports that the next two
years will bring significant challenges to UK businesses, many of
which may succumb to insolvency as a result.

ICAEW conducted a survey of those working with the insolvency and
business restructuring sectors and asked what they felt would be
the three greatest threats to British businesses over the next
two years, growthbusiness.co.uk discloses.  According to
growthbusiness.co.uk, overwhelmingly, the responses ranked the
impact of Brexit as number one (73%), followed by rise in
interest rates (56%), and attitudes of HMRC and banks as
creditors (43%).

"We are in no doubt that businesses in the UK face difficult
times ahead.  A sharp and unexpected rise in the cost of doing
business can make managing liquidity tough.  We believe that a
change in attitudes is critical in order to successfully avoid
substantially increased corporate insolvencies -- confronting
business issues, rather than being ashamed of them,"
growthbusiness.co.uk quotes Bob Pinder, ICAEW regional director,
as saying.

"Seeking the early help of restructuring and insolvency
practitioners enables restructuring of finances, business
processes or management to salvage many businesses and bring them
back into profit.  There is no shame in admitting you are
struggling -- getting help is the bold and right decision."

Certain industries are expected to be hit the hardest,
growthbusiness.co.uk notes.  When asked what sectors were most
likely to face increased financial difficulty it was widely
agreed by over three quarters of respondents that the retail
sector would be significantly challenged, with potential interest
rate rises and the unknown consequences of Brexit looming,
growthbusiness.co.uk relays.  Over two thirds of respondents felt
care homes would be challenged, with similar consequences for the
healthcare sector, which 44% felt would suffer,
growthbusiness.co.uk states.



                            *********

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

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

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


                            *********


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

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

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

This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed to
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                 * * * End of Transmission * * *