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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 26, 2017, Vol. 18, No. 213


                            Headlines


C R O A T I A

AGROKOR DD: Asks UK Ct. to Recognize Croatian Debt Restructuring


C Y P R U S

BANK OF CYPRUS: S&P Assigns 'B/B' ICR, Outlook Positive


G E R M A N Y

AIR BERLIN: In Asset Sale Talks with Condor, easyJet
CBR FASHION: Moody's Assigns (P)B2 CFR, Outlook Stable
CBR FASHION: S&P Assigns Preliminary 'B' CCR, Outlook Stable


G R E E C E

CAPITAL PRODUCT: Moody's Hikes Corporate Family Rating to B1


I R E L A N D

CORDATUS LOAN I: Moody's Hikes Class E Notes Rating from Ba2


I T A L Y

MONTE DEI PASCHI: Shares Resume Trading After 10-Month Suspension


L I T H U A N I A

SIAULIU BANKAS: Moody's Hikes Deposit Ratings from Ba1


L U X E M B O U R G

AVATION PLC: S&P Rates New Senior Unsecured Notes 'B'
INEOS GROUP: Fitch Assigns BB+ Long-Term IDR, Outlook Stable
INEOS GROUP: S&P Lifts CCR to BB on Strong Operating Performance
INVESTCORP BANK: Moody's Affirms Ba2 CFR, Outlook Stable


N E T H E R L A N D S

SENSATA TECHNOLOGIES: S&P Raises CCR to 'BB+', Outlook Stable


N O R W A Y

NORSKE SKOG: Consent Solicitation Deadline Extended Until Oct. 31


R O M A N I A

OLTCHIM: Creditors Have Until November to Consider Offer Price


U N I T E D   K I N G D O M

KENNEDY WILSON: S&P Lowers CCR to 'BB+' on Takeover by Parent KWH
KEYSTONE JVCO: S&P Lifts CCR to 'B' After Partial Bond Redemption
PREMIER FOOD: Fitch Affirms 'B' Long-Term IDR, Outlook Negative
TOWER BRIDGE NO.1: Moody's Assigns Ba2 Rating to Class E Notes

* UK: Buy-To-Let RMBS 90-Plus Day Delinquencies Slightly Improve


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AGROKOR DD: Asks UK Ct. to Recognize Croatian Debt Restructuring
----------------------------------------------------------------
Luca Casiraghi and Jasmina Kuzmanovic at Bloomberg News report
that U.K. insolvency rules should recognize Croatian legislation
governing Agrokor d.d.'s restructuring process, lawyers for the
troubled conglomerate told a London judge.

Agrokor's insolvency procedure "satisfies the requirements under
the Cross Border Insolvency Regulations for recognition as a
'foreign main proceeding'," Bloomberg relays, citing materials
the company presented to the court at a hearing on Oct. 23.

A ruling in Agrokor's favor would stay arbitration claims over
EUR1.1 billion (US$1.3 billion) of debt by the company's biggest
creditor, Sberbank PJSC, Bloomberg states.  The Russian lender is
disputing recognition of the restructuring process by courts in
the U.K., Croatia, Serbia and Bosnia-Herzegovina, Bloomberg
relays.

The process, known as Lex Agrokor "is not a law relating to
insolvency" as it "does not, in clear distinction with bankruptcy
proceedings under the Croatian 2015 Bankruptcy Law, have the
stated purpose of the protection of the interests of creditors,"
according to Sberbank materials.  Rather, its "expressed purpose
is to protect the Croatian economy from systemic risk," Bloomberg
quotes David Allison, a lawyer representing Sberbank, as saying.

The Croatian government blocked debt payments after taking
control of Zagreb-based Agrokor in April under a special law
designed to deal with the failure of a company that generates
sales equal to about 15% of the nation's gross domestic product,
Bloomberg recounts.  The retailer and foodmaker's total debt is
estimated at least EUR6 billion, Bloomberg discloses.

                        About Agrokor DD

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

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

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

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

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

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



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BANK OF CYPRUS: S&P Assigns 'B/B' ICR, Outlook Positive
-------------------------------------------------------
S&P Global Ratings said it has assigned its 'B/B' long- and
short-term issuer credit ratings to Bank of Cyprus Public Co.
Ltd. (BoC). The outlook is positive.

S&P said, "Our ratings on Bank of Cyprus are supported by its
prominent domestic franchise, with about a 40% market share in
loans, and its satisfactory funding and liquidity position. At
the same time, the ratings are constrained by the challenges the
bank continues to face in reducing the sizable stock of
problematic assets and returning to sustained profitability.

"The starting point for our ratings on BoC is the 'b+' anchor,
which is based on our view of the Cypriot banking system. The
Cypriot banking system remains one of the most fragile in Europe.
Nonperforming exposures (NPEs) still represented over half of the
loan book at June 2017 and cash reserves only covered about 45%
of NPEs. However, the trend in economic risk is positive, in our
view, as we think that asset quality problems have bottomed out.
In 2017, banks are accelerating the pace of NPE reduction to
double digits thanks to ongoing economic recovery and newly
adopted legal reforms that are facilitating banks' loan
restructurings. The decline is also supported by banks' increased
use of debt-to-asset swaps, however, which increases the stock of
foreclosed assets on their balance sheets and does not eliminate
the risk until banks sell the properties. Given the recent
stabilization in real estate prices, we expect banks to sell
assets gradually. Therefore, despite some improvements, we expect
local banks' asset quality to remain weak in the next two-to-
three years. We anticipate that provisions will remain elevated
between 7%-8% of loans between 2017-2019 to adequately cover
current NPEs. Our view of economic risk also reflects banks'
concentration to the real estate and construction sector (over
20% of loan book) and extremely high private sector indebtedness,
which we estimate will stand at about 250% of GDP at end-2017.

"Industry risk is stable. We expect Cypriot banks' operating
profitability to be substantially absorbed by provisioning needs
in the next two years and to start to recover only in 2019.
Operating revenues will likely suffer from further deleveraging
and compressed margins as banks continue to recover deposits, but
we note that the top line of Cypriot banks has fared well during
the crisis. We expect funding to remain unbalanced and the
portion of nonresident deposits to be higher than peers', while
we anticipate limited access to wholesale markets in the next two
years as pricing remains high. Our view of industry risk also
reflects the weak regulatory track record that preceded the
banking crisis in 2013, whereby about 48% of deposits above
EUR100,000 were bailed-in. Nevertheless, we view positively the
substantial banking sector consolidation achieved in the past
four years and the low reliance on European Central Bank funding
compared with other southern European countries."

BoC is the largest bank in Cyprus, with total assets of EUR22.1
billion as of June 2017. It benefits from its leading domestic
position, where about 91% of total lending and 95% of operating
revenues are based. The bank offers a wide range of banking
services across all customer types, focusing particularly on
corporates (47% of loan book) and small and midsize enterprises
(21%).

BoC is currently focused on turning around its financial and
business profiles, after the major crisis experienced in 2012-
2013. S&P said, "We expect management to continue prioritizing
the reduction of the stock of problematic assets, increasing the
coverage and strengthening its profitability. So far, BoC has
achieved several improvements, but the bank's very high level of
uncovered NPEs -- accounting for 3.1x of its total adjusted
capital (TAC) at end-June 2017 -- still represents a tail risk,
in our view. We consider new business generation to be limited,
although gradually progressing over the next two years. New
lending will be primarily focused on recovering sectors in Cyprus
(i.e. tourism, health, energy, trade, transport) and steadily
developing the U.K. franchise. The latter only accounted for
about 7% of the loan book at end-June 2017.

"We see the bank's target to reduce NPEs to below 30% as
ambitious. This is mainly because of the severe correction
experienced by the real estate prices over the crisis -- 30%
reduction from the peak -- recent still untested regulatory
reforms on the foreclosure and insolvency law, and the still-high
leverage of the private sector. However, we consider that the
improving economic environment in Cyprus will support
management's tailored actions to reduce the stock of NPEs,
contributing to a gradual improvement of the bank's
creditworthiness. We anticipate a reduction in NPEs of about 40%
in the next two-and-a-half years, bringing the NPE ratio down to
below 40% at end-2019. We expect this reduction to be driven by a
combination of restructuring, recoveries, sales, structured
trades, write offs, and debt-for-property swaps.

"We expect BoC's capitalization to gradually benefit from an
improvement in asset quality and continuous deleveraging but, in
our view, the bank's still-high loan-loss provisions will reduce
our measure of TAC and thereby reduce BoC's risk-adjusted capital
(RAC) ratio from the calculated 4.5% at end-2016. Specifically,
we estimate that the bank will accumulate an additional 5.5%-
6.0%% of loan loss provisions between the second half of 2017 and
end-2019, including the impact of the new accounting rule IFRS9,
and we do not expect the bank's organic capital generation to be
sufficient to fully absorb such high provisioning needs.

"We expect operating revenues to continue to decline during 2017-
2019 on the back of lower net interest income. This will be
largely driven by the repricing of the loan book at lower rates,
the limited possibility of lower deposits funding, and ongoing
deleverage. We anticipate that operating expenses will moderately
decline as the bank continues to execute targeted staff reduction
and introduces some technology and process improvements.
Provisioning needs will normalize in 2019, when we expect the
bank's TAC to start progressing.

"As such, we expect our RAC ratio to bottom out between 4.0%-4.5%
during the next 12-18 months. We estimate that the bank's RAC
ratio would improve by about 80 basis points if we lowered our
view of domestic economic risk.

"In our opinion, our measure of capital doesn't fully capture the
bank's higher-than-peers concentration. Specifically, we consider
its single-name and sectorial concentration to be material, with
its top 20 clients accounting for 12.9% of the total loan book,
about 1.2x of its TAC at end-2016, and about 30% of the loans
granted to real estate and construction counterparties. In
addition, more than 40% of its top 20 clients are nonperforming.
This is mainly due to BoC's corporate profile; although we
acknowledge that single-name concentration has gradually declined
by 39% over the past two-and-a-half years. We have therefore
adjusted our assessment of the bank's risk position to properly
reflect this weakness."

BoC's liquidity position has improved materially over the past
two years after the full repayment of the emergency liquidity
assistance in early January, achieving a reduction of EUR11.4
billion since its peak in April 2013. BoC shows a satisfactory
buffer of liquid assets, amounting to more than EUR3 billion at
September 2017, mainly in the form of cash and interbank
placements. Liquid assets covered short-term wholesale funding
maturities by 3.4x as of December 2016.

The bank is mostly retail-funded, with customer deposits
accounting for about 90% of total funding as of June 2017.
Following management's efforts to increase the deposit base,
customer deposits rose by about EUR4 billion or by 30% since end-
2014. Most of the recovery was driven by domestic clients. The
ratio of loan to deposits stood at 89.8% as of June 2017, down
from 145.3% at end-2013. S&P said, "We expect this ratio to
continue to improve over the next 12-18 months, as we anticipate
a moderate increase in deposits while the loan book will continue
to decline. At the end of 2016, our measure of the bank's stable
funding ratio stood at about 107%, which compares favorably with
most of its peers. Moreover, BoC was the first Cypriot bank to
regain access to capital markets since the 2013 crisis, with the
issuance of a EUR250 million Tier 2 note in January 2017."

S&P said, "Our ratings on the bank do not include uplift for
additional loss-absorbing capacity (ALAC). This is because we
consider that its ALAC buffer is unlikely to exceed our required
3% threshold for one notch of uplift over a projected two-year
period. In particular, we forecast that BoC's ALAC buffer will
stand at about 2.5% of S&P Global Ratings' risk-weighted assets
at end-2019.

"The positive outlook reflects our view that we could raise the
long-term rating over the next 12 months if the economic
environment in Cyprus becomes more supportive, ultimately
resulting in a strengthening of the banks' overall
creditworthiness and capitalization. This could happen if we
observe that the country is gradually absorbing the credit cost
of the bursting of the credit bubble and subsequent deep economic
recession, and the bank's RAC ratio improves above 5%.

"Our outlook also reflects our expectation that BoC remains
focused on continuing to reduce its large stock of NPEs, while
keeping its coverage ratio similar to current levels.
Specifically we expect a decline in its net NPE ratio to about
2.0x-2.3x and its TAC from the current 3.1x, and that its capital
ratio will gradually strengthen.

"We could revise the outlook back to stable if we anticipate that
the economic environment in Cyprus is not becoming more
supportive for banks, if the bank fails to strengthen its capital
position, or if it doesn't maintain an ample liquidity buffer."


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AIR BERLIN: In Asset Sale Talks with Condor, easyJet
----------------------------------------------------
Klaus Lauer at Reuters reports that Air Berlin is in talks with
Thomas Cook airline Condor, as well as Britain's easyJet over the
sale of some of its remaining assets, as time runs out for a deal
to be done.

Air Berlin had been in exclusive talks with Lufthansa and
easyjet, but while a deal was agreed with Lufthansa for large
parts of its business, talks with easyJet continued over the
weekend, Reuters relates.

"Air Berlin is in talks with two bidders -- easyjet and Condor.
The race is wide open," Reuters quotes a source familiar with the
matter as saying on Oct. 24.

According to Reuters, EasyJet has said it is interested in
operations covering about 25 planes, predominantly at Berlin's
Tegel airport.  EasyJet currently flies only from Berlin
Schoenefeld and analysts say a deal could allow it to build its
share in Berlin and possibly offer domestic routes within
Germany, Reuters notes.

Condor had expressed interest in Air Berlin when the carrier
filed for insolvency back in August, however the creditors chose
to negotiate with Lufthansa and easyJet, Reuters discloses.

                       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.


CBR FASHION: Moody's Assigns (P)B2 CFR, Outlook Stable
------------------------------------------------------
Moody's Investors Service has assigned a provisional (P)B2
corporate family rating (CFR) to the German apparel retailer CBR
Fashion Holding GmbH ("CBR").

At the same time, the agency has assigned a (P)B2 rating to the
proposed EUR450 million senior secured notes to be issued by CBR
Fashion Finance B.V. ("CBR Fashion") and guaranteed by CBR and
certain of its subsidiaries, and a (P)Ba2 to the EUR30 million
super senior Revolving Credit Facility ("RCF").

The outlook is stable. This is the first time that Moody's rates
CBR.

The company will use the proceeds from the bond issuance to
refinance around EUR430 million of existing debt plus pay
transaction related fees and expenses.

"CBR's (P)B2 CFR reflects its modest size and its leveraged
capital structure" says Ernesto Bisagno, a Moody's Vice
President -- Senior Credit Officer and lead analyst for CBR.
"However, the rating also factors in the company's positive free
cash flow generation mitigating the exposure to the competitive
clothing market in Europe and a degree of fashion risk."

RATINGS RATIONALE

The (P)B2 rating of CBR reflects (1) its leveraged financial
structure, with an expected Moody's adjusted debt/EBITDA around
4.9x; (2) its relatively small size and exposure to the
competitive clothing market in Europe; and (3) the pressure on
its earnings due to the weak market conditions in the wholesale
segment. However, the rating also recognizes (1) CBR's positive
free cash flow generation, (2) its good logistic and production
processes; and (3) the limited inventory risk with most of the
wholesale production covered already by CBR clients' orders.

Moody's expects earnings to remain stable over the next 12-18
months as a combination of stronger contribution from the online
and retails segments offsets the weaker wholesale business. The
latter was also negatively impacted over 2015-16 by some
operational issues during the implementation phase of a new
information technology ("IT") platform, as part of CBR's
transformation program which started in 2010. Positively, the
company reported stronger H1 2017 results ahead of last year
which provides some reassurance regarding management's ability to
fix the operational issues. However, Moody's expects the
competitive market conditions in the clothing market to constrain
growth.

Moody's expects free cash flow to remain positive as a
combination of stable earnings, modest working capital needs and
low capex. Based on that, Moodys' expects gross leverage
(adjusted gross debt to EBITDA) to remain below 5x over 2017-18.
However, capability to keep financial leverage under control will
depend on the company's ability to continue to grow its online
and retail business offsetting declining wholesale contribution.
Moody's also assumes that there will be no additional operational
issues. The leverage calculation includes a gross financial debt
of EUR450 million and around EUR60 million for lease adjustments;
but excludes three shareholders loans totaling EUR87 million
which are part of the capital structure and that Moody's
considers as equity. Please refer to Moody's Rating Methodology
"Hybrid Equity Credit" (January 2017) for further details.

Pro-forma for the bond issue Moody's expects CBR to maintain a
good liquidity. At the end of 2017, Moody's expects the company
to have about EUR25 million of cash on balance sheet. The agency
expects the company to maintain positive free cash flow over the
next 12-18 months. CBR will also have access to a EUR30 million
RCF which Moody's expects to remain undrawn. The RCF will be
subject to a senior net leverage covenant set at a 35% headroom,
tested quarterly if more than 35% of the facilities are drawn.

The provisional (P)B2 CFR is subject to the completion of the
refinancing. Upon closing of the transaction and subject to a
review of the final credit documentation, Moody's will assign a
definitive corporate family as well as instrument ratings. The
definitive ratings may differ from the provisional ratings.
Moody's notes that the documentation includes a portability
clause with change of control not occurring if net leverage
remains below 4.25x (down to 3.75x after 24 months).

STRUCTURAL CONSIDERATIONS

All the debt is secured and pari passu with no structural
subordination due to the guarantee and security package. Moody's
understands that the security package covers share pledges
(including over the Company and certain of its subsidiaries);
security assignments over payment claims including trade
receivables, intercompany receivables and claims under profit and
loss pooling agreements with company's subsidiaries; security
over intercompany receivables in respect of the proceeds loans
from the Issuer; security over inventory, current assets and
intellectual property rights and security over certain bank
accounts. Both the notes and the RCF have a first lien but the
RCF is super senior and ranks ahead in the order of application.
The shareholder loans are considered equity and therefore not
included in the Loss Given Default ("LGD") model. Moody's
assigned an instrument rating of (P)B2 to the notes and an
instrument rating of (P)Ba2 to the RCF. Moody's would expect the
probability of default rating to be in line with the CFR.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook reflects Moody's view that CBR will maintain
stable earnings as a combination of stronger contribution from
the own retail business and the online segment as well as some
flattening in the wholesale business.

WHAT COULD CHANGE THE RATING UP/DOWN

Positive pressure on the rating in the short term is unlikely but
could materialize as a combination of (1) positive growth in both
sales and profits; and (2) adjusted gross debt/EBITDA to trend
below 4.5x on a sustainable basis.

Conversely, negative pressure on the rating could materialize if
(1) additional operational issues occur or sales developments do
not stabilize; or (2) free cash flow generation turns negative,
or (3) adjusted gross/EBITDA increases above 5.5x, or (4) Moody's
adjusted EBITA/interest expense fell below 2.5x.

The principal methodology used in these ratings was Global
Apparel Companies published in May 2013.

Headquartered in Kirchhorst, Germany, with revenues of EUR583
million and Moody's adjusted EBITDA of EUR98 million (as of
2016), CBR is one of the top five German womenswear apparel
operators. It operates under its two independent brands Street
One (casual, fashionable clothing) and Cecil (sporty, less figure
accentuating clothing), which account for around 55% and 45% of
revenues (excluding other) respectively, in 2016. As of June 30,
2017, CBR had around 8,000 points of sales, across 19 countries,
with a focus on the German speaking region and the Benelux. CBR's
sales channels are mainly concentrated within its wholesale
business (representing around 81% of sales for 2016) but the
company is also expanding its ecommerce (representing around 11%
of sales for 2016) and retail (representing around 8% of sales
for 2016) businesses. CBR is currently owned by the private
equity firm EQT which bought the company in 2007.


CBR FASHION: S&P Assigns Preliminary 'B' CCR, Outlook Stable
------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'B' long-term
corporate rating to CBR Fashion Holding GmbH, a Germany-based
designer and distributor of womenswear fashion products. The
outlook is stable.

S&P said, "At the same time, we assigned our preliminary 'B'
issue ratings to the proposed EUR450 million fixed-rate senior
secured notes maturing in 2022, with a recovery rating of '4',
indicating our expectations of 30%-50% recovery (rounded
estimate: 45%) in the event of payment default. The notes will be
issued by the financial subsidiary CBR Fashion Finance B.V. and
guaranteed by CBR and certain subsidiaries.

"We also assigned a preliminary 'BB-' issue rating to the EUR30
million super senior revolving credit facility (RCF). The
recovery rating on the super senior debt is '1', indicating our
expectation of very high recovery (90%-100%; rounded estimate:
95%) in the event of payment default. The proposed super senior
RCF will be issued by CBR Fashion GmbH, a wholly owned subsidiary
of CBR.

"The final ratings will be subject to our receipt and
satisfactory review of all the final transaction documentation.
Accordingly, the preliminary ratings should not be construed as
evidence of the final ratings. If the terms and conditions of the
final documentation depart from what we have already reviewed, or
if the financing transaction does not close within what we
consider to be a reasonable time frame, we reserve the right to
withdraw or revise the ratings."

CBR designs and sells womenswear products, enjoying a No. 5
position in the fragmented mainstream segment of the German
womenswear market. In 2016, the group reported EUR583.0 million
of revenues (a 3.9% decrease versus 2015) and EUR87.7 million of
EBITDA, while generating roughly EUR30.0 million of free
operating cash flow (FOCF).

S&P said, "The preliminary rating on CBR reflects our view that
the group maintains a solid position in its core markets where it
competes through two independent brands, Cecil and Street One. We
believe these two brands have a solid customer base in Germany
(approximately 70% of total sales in 2016), but that their
ability to attract new customers is limited.

"This explains part of the decline in sales observed since 2014
and our estimate that the group will report slightly declining-
to-flat revenues of negative 3% to 0% over 2017 to 2019. In
recent years, large retail players such as Hennes & Mauritz AB
(H&M) and Inditex Group have increasingly dominated the market
and have established their presence in all the major European
cities. In contrast, CBR competes mainly through the wholesale
channel (81% of total sales in 2016). This model has the
advantage of low capital intensity, as evident in the group's
consistently solid operating margin (15% reported EBITDA margin
in 2016). However, the wholesale model limits the group's control
over the positioning of its products at the point of sale and its
influence over end customers, which translates into weaker brand
identity and lower pricing power compared with more retail-
oriented companies. For these reasons, we evaluate positively the
increasing exposure to the fast-growing e-commerce channel, where
CBR currently generates 12% of sales, with very healthy growth
rates.

"In our view, the business risk profile is supported by very
quick time to market (two to 14 weeks from the design to the sale
of its collections), allowing the group to design and sell 12
collections per year, generating significant competitive
advantage with the delivery of products ahead of competitors and
rapid implementation of the latest fashion trends. Bestselling
products for each collection are available at the point of sale
within 24 to 48 hours of an order from a wholesale partner. More
importantly, the 12 collections per year allow wholesale partners
to generate high traffic in their stores. CBR maintains core
activities in house (design, marketing, and sales), while it
outsources noncore activities such as production and logistics.
This helps to reduce fixed costs and keeps operations asset-
light. The group has a flexible cost structure, with variable
costs accounting for about 70% of total costs, which largely
explains the reported EBITDA margin of about 15% over 2015 to
2016, which compares well with the sector average. CBR also has
low working capital requirements, thanks to a very limited
inventory position as the majority of total sales are generated
on a preordered basis.

"We note that at the end of 2015 the group experienced a major
information technology (IT) issue that affected key processes
such as delivery and invoice processing. Its effects extended
into 2016, affecting relationships with partners and resulting in
lower orders. We understand that the effects of this issue should
be fully resolved in 2017.

"We expect profitability to slightly decline over 2017 to 2019
because of increasing marketing, staff, and rent expenses driven
by the group's strategy to expand the e-commerce operations and
to selectively enlarge its retail network with new store openings
and new outlet points of sale over 2017 to 2020.

"Our assessment of the company's financial risk profile is
underpinned by our expectation of adjusted debt to EBITDA of 6.0x
to 6.5x over 2017 to 2019, including the subordinated shareholder
loans outstanding (EUR90 million to EUR110 million including the
accrued and unpaid interests).

"We also take into account our expectation of positive annual
FOCF generation (EUR25 million to EUR35 million) over the next
three years. Furthermore, we evaluate positively the forecast
adjusted FFO to cash interest of 3.0x to 4.0x over the same
period.

"Since 2007, the private equity firm EQT has owned roughly 97% of
the total group's equity interest. Our assessment of the group's
financial risk profile is consistent with the company's
financial-sponsor ownership.

"The stable outlook reflects our view that the group will
maintain a solid position in the German mainstream segment of the
womenswear market, leveraging the momentum of e-commerce and
progressive expansion in the retail channel. We expect the
reported EBITDA margin to decline to 14.0% to 14.5% in 2017 from
about 15.0% reported in 2016, reflecting the group's ambition to
selectively expand in the retail channel, which will require
higher marketing costs and increased staff and rent expenses.

"We do not anticipate significant pressures on FOCF, which we
expect to range from EUR25 million to EUR35 million over the next
three years. Our stable outlook also reflects our view that the
company will maintain adjusted debt to EBITDA of 6.0x to 6.5x and
FFO to cash interest of 2x to 4x.

"We could lower the ratings if FOCF weakens and approaches zero
or FFO cash interests falls to 2x or less. This could happen if,
for example, there is clear evidence that earnings from the
wholesale segment are shrinking, and CBR fails to efficiently
expand its retail and e-commerce channels, resulting in weaker
profitability. In particular, the ratings could come under
pressure if the EBITDA margin contracts by more than 200 basis
points in the next 12 months, coupled with higher-than-expected
working capital absorption.

"In our view, the potential for a positive rating action is
remote. We could upgrade the group if our assessment of its
credit metrics improves and adjusted debt to EBITDA is maintained
consistently below 5x. An upgrade would also hinge on a clear
commitment from the owner to deleverage and to a long-term
investment strategy so that the risk of releveraging beyond 5x is
low."


===========
G R E E C E
===========


CAPITAL PRODUCT: Moody's Hikes Corporate Family Rating to B1
------------------------------------------------------------
Moody's Investors Service upgraded the corporate family rating of
Capital Product Partners L.P. (CPLP) to B1 from B2 and the
probability of default rating to B1-PD from B2-PD. The rating
outlook is stable.

"Moody's decision to upgrade CPLP's rating follows an
approximately $116 million debt repayment combined with a
successful refinancing of its maturities with the new $460
million credit facility due 2023 thus extending its debt maturity
profile," says Maria Maslovsky, a Moody's Vice President --
Senior Analyst and the lead analyst for CPLP.

RATINGS RATIONALE

The rating action reflects the recent prepayment of approximately
$116 million of CPLP's debt with cash on hand, as well as the
refinancing of the material portion of remaining debt to extend
its maturity profile. Moody's also considered CPLP's maintenance
of moderate leverage and strong coverage for some time despite
deteriorating market conditions and expectations of continued
stable performance with leverage measured as debt/EBITDA below
4.0x despite weakness in the tanker market.

In September 2017, CPLP entered into a new $460 million secured
term loan due 2023 priced at L+325. Together with approximately
$116 million of balance sheet cash, the new facility refinanced
all of CPLP's outstanding debt except a $16 million ING facility
due 2022. The new facility is secured on 35 out of CPLP's 36
vessels in two tranches; the amortization of the credit facility
will further reduce the LTV to enhance future refinancing
prospects. As a result of the debt paydown and refinancing,
Moody's expects the company's leverage measured as debt/EBITDA to
decline closer to 3.3x from approximately 4.0x at June 30, 2017.

Tanker segment has been deteriorating in 2017 owing to
significant new supply coming in and putting pressure on charter
rates, particularly on the crude side. In addition to the excess
supply currently pressuring the tanker market, high oil and oil
product inventories reduce the demand for tonne-miles. This is a
risk because CPLP will need to re-charter its vessels coming up
for charter renewal in this weakened market environment.

CPLP's B1 corporate family rating continues to reflect the
group's (1) small scale and high reliance on Capital Maritime &
Trading Corp. (CMTC, unrated), which is its sponsor, as well as
one of its main customers and manager of its fleet through its
subsidiary Capital Ship Management (CSM, unrated); (2) meaningful
exposure to re-pricing risk; and (3) weakened tanker market
fundamentals. The B1 rating also takes into account the group's
(4) superior revenue and cash flow visibility, as CPLP mainly
operates under medium- to long-term charters; (5) good fleet
diversity, comprising crude oil and product tankers, container
vessels and one dry bulk vessel; (6) strong asset coverage; and
(7) sufficient liquidity.

CPLP's liquidity is adequate based on expected positive free cash
flow, minimal capex and moderate amortization. The company
extended its maturity profile with the recent refinancing;
however, it has no external liquidity sources, such as revolving
credit facilities, and all of its assets are encumbered.

WHAT COULD CHANGE THE RATING UP/DOWN

Upward pressure on CPLPs rating would most likely be driven by an
improvement in charter rates combined with higher charter
coverage by longer-term contracts. Further deleveraging such that
debt/EBITDA ratio consistently moves toward 2.5x and stable asset
coverage measured as LTV, as well as good liquidity, would also
be needed for an upgrade.

Downward pressure on the rating could develop if charter rates
continue to deteriorate leading to reduction in charter coverage
and an increase in leverage measured as debt/EBITDA to over 4x.
Any weakening in the liquidity profile would also be a concern.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Global
Shipping Industry published in February 2014.

Headquartered in Piraeus, Greece, Capital Product Partners L.P.
(CPLP) is an international shipping company engaged in the
transportation of crude oil, refined oil products, as well as dry
cargo and containerized goods. For the twelve months ended June
30, 2017, CPLP reported $245 million in revenues.


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


CORDATUS LOAN I: Moody's Hikes Class E Notes Rating from Ba2
------------------------------------------------------------
Moody's Investors Service announced that it has taken rating
actions on the following classes of notes issued by Cordatus Loan
Fund I P.L.C.:

-- EUR24.3M (current balance EUR5.8M) Class C Deferrable Secured
    Floating Rate Notes due 2024, Upgraded to Aaa (sf);
    previously on Dec 16, 2016 Upgraded to Aa1 (sf)

-- EUR31.5M Class D Deferrable Secured Floating Rate Notes due
    2024, Upgraded to Aaa (sf); previously on Dec 16, 2016
    Upgraded to A3 (sf)

-- EUR18M Class E Deferrable Secured Floating Rate Notes due
    2024, Upgraded to Aa2 (sf); previously on Dec 16, 2016
    Affirmed Ba2 (sf)

Cordatus Loan Fund I PLC, issued in January 2007, is a
collateralised loan obligation (CLO) backed by a portfolio of
mostly high-yield senior secured European loans managed by CVC
Cordatus Credit Partners Group Limited. The transaction's
reinvestment period ended in January 2014. GBP liabilities in the
transaction have repaid in full; as per the latest trustee
report, GBP assets remaining total GBP 7.25 million.

RATINGS RATIONALE

According to Moody's, the rating actions taken on the notes are a
result of significant deleveraging of the Variable Funding Notes
(VFN), Class A2 and Class B notes following amortisation of the
portfolio and the improvement in the credit quality of the
underlying collateral pool since the last rating action in
December 2016. In addition, principal proceeds of EUR10.58
million and GBP 1.35 million are reported in the September 2017
trustee data.

VFN, Class A2, Class B and Class C notes paid down by GBP 14.24
million, GBP 7.67 million, EUR39.6 million and EUR18.48 million
respectively on the July 2017 payment date. As a result of the
deleveraging, over-collateralisation (OC) ratios have increased
across the capital structure. According to the trustee report
dated September 2017, Class C, Class D and Class E OC ratios are
reported at 1538.62%, 239.89% and 161.83% respectively, compared
to the October 2016 OC levels of 152.40%, 126.23%, and 114.95%
respectively.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analysed the underlying collateral pool as having a
performing par and principal proceeds of EUR89.07 million, zero
defaults, a weighted average default probability of 11.37%
(consistent with a WARF of 2242 over a weighted average life of
2.89 years), a weighted average recovery rate upon default of
40.19% for a Aaa liability target rating, a diversity score of 9
and a weighted average spread of 3.63%.

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. Moody's generally applies recovery rates
for CLO securities as published in "Moody's Approach to Rating SF
CDOs". In some cases, alternative recovery assumptions may be
considered based on the specifics of the analysis of the CLO
transaction. In each case, historical and market performance and
a collateral manager's latitude to trade collateral are also
relevant factors. Moody's incorporates these default and recovery
characteristics of the collateral pool into its cash flow model
analysis, subjecting them to stresses as a function of the target
rating of each CLO liability it is analyzing.

Methodology Underlying the Rating Action

The principal methodology used in this rating 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 rating:

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 Classes C and D, and within one notch of
the base-case results for Class 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) Foreign currency exposure: The deal has some exposure to non-
EUR denominated assets. Volatility in foreign exchange rates will
have a direct impact on interest and principal proceeds available
to the transaction, which can affect the expected loss of rated
tranches.

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


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


MONTE DEI PASCHI: Shares Resume Trading After 10-Month Suspension
-----------------------------------------------------------------
Rachel Sanderson at The Financial Times reports that shares in
Italy's rescued Banca Monte dei Paschi di Siena opened two-thirds
weaker on Oct. 25 following a 10-month suspension, a day after
the lender warned that mooted tough new European rules on bad
loans will risk it missing its restructuring targets.

Monte Paschi shares were valued at EUR4.9 at noon on the first
day of trading on Oct. 25 since the shares were suspended in
December, the FT relates.

Italy's government paid EUR6.49 to bail out the lender in July
and a value of EUR8.65 was attributed to each one held by
investors under the burden-sharing imposed by European
authorities under the terms of the rescue, the FT recounts.
Under those terms, Italy's Treasury owns about 70% of the bank,
the FT notes.

Monte Paschi, which received EUR5.4 billion in aid from the
Italian government as part of a EUR8.3 billion precautionary
recapitalization, is slashing a fifth of its workforce,
shuttering branches and selling EUR28.6 billion of bad loans by
2021 under terms agreed with the EU for its rescue, the FT
relays.

According to the FT, Manuela Meroni, an analyst at Banca Imi in
Milan, said she expected "volatility on the market in the short
term" for Monte Paschi, although she did not rule out it
attracting new equity investors in the longer term.

Banca Monte dei Paschi di Siena SpA -- http://www.mps.it/-- is
an Italy-based company engaged in the banking sector.  It
provides traditional banking services, asset management and
private banking, including life insurance, pension funds and
investment trusts.  In addition, it offers investment banking,
including project finance, merchant banking and financial
advisory services.  The Company comprises more than 3,000
branches, and a structure of channels of distribution.  Banca
Monte dei Paschi di Siena Group has subsidiaries located
throughout Italy, Europe, America, Asia and North Africa.  It has
numerous subsidiaries, including Mps Sim SpA, MPS Capital
Services Banca per le Imprese SpA, MPS Banca Personale SpA, Banca
Toscana SpA, Monte Paschi Ireland Ltd. and Banca MP Belgio SpA.



=================
L I T H U A N I A
=================


SIAULIU BANKAS: Moody's Hikes Deposit Ratings from Ba1
------------------------------------------------------
Moody's Investors Service has upgraded the long- and short-term
deposit ratings of Siauliu Bankas, AB (Siauliu Bankas) in
Lithuania to Baa3/P-3 from Ba1/NP. The baseline credit assessment
(BCA) was upgraded to ba2 from ba3. Furthermore, the long- and
short-term counterparty risk (CR) assessments were upgraded to
Baa2(cr)/P-2(cr) from Baa3(cr)/P-3(cr). The outlook on the long-
term deposit ratings was changed to positive from Rating under
Review.

This action concludes the review initiated on July 13, 2017 to
assess the bank's ability to sustain its positive trajectory
through a full economic cycle, focusing on the bank's improving
fundamentals beyond the current favourable operating conditions
and the risks associated with the partial acquisition of the
failed Lithuanian bank, AB Ukio Bankas.

The key drivers for the upgrade are: (1) the improved operating
environment in Lithuania; (2) the stronger fundamentals of the
bank, with increased capitalization and sustainable profitability
(3) the reduced risks associated with the acquisition of the AB
Ukio Bankas portfolio in 2013. This is balanced against the
bank's high loan growth and sector concentration toward SME's and
consumer finance in Lithuania. Meanwhile the assumptions
regarding loss absorption given failure remain unchanged, with
the volumes of subordinated obligations and junior deposits
indicating a very low loss given failure for junior deposits and
extremely low loss given failure in Moody's counterparty risk
assessment.

The positive outlook reflects Moody's expectations of continued
favourable operating conditions supporting the improvements in
the bank's fundamentals regarding both risk management and
capital management.

RATINGS RATIONALE

BASELINE CREDIT ASSESSMENT

The primary driver for the upgrade of Siauliu Bankas' BCA is the
context of a benign operating environment in Lithuania. The
rating agency expects Lithuania's real GDP to expand by 3.5% and
3.4% in 2017 and 2018 on the back of robust private consumption
and increasing levels of exports. Of significance for Siauliu
Bankas' growth and asset quality, nominal wages are increasing,
unemployment is declining, and demand for credit is picking up
while debt affordability continues to be high due to an
accommodative monetary policy. In this context, Siauliu Bankas is
in a position to maintain solid profitability and strengthen
capital buffers.

In this favorable context, Moody's expects problem loans to
continue declining to 6% from 7.2% at year-end 2016, contributing
to reduce costs and sustain profits. Due to improved internal
capital generation, capitalisation will remain solid after
improving significantly in recent years, with tangible common
equity over risk weighted assets increasing to 15.85% at year-end
2016 from 12.59% in 2015 and 9.64% in 2014. In addition, the bank
has a large headroom above minimum requirements of 8.9% as of 31
December 2016. The bank's recurring profitability will normalise
after higher than usual earnings in 2016, with net income over
tangible assets increasing to 1.77% at year-end 2016 from 1.17%
in 2015 and 0.33% in 2014. Although results in 2016 were boosted
by revenues that will subside over time, the bank has succeeded
in attaining an economy of scale that will support solid
recurring earnings.

Another driver for the BCA upgrade is the largely dissipated
risks associated with the acquisition of the AB Ukio Bankas
portfolio in 2013. Since the acquisition, the bank has
methodically reviewed the portfolio, written down any loans that
were deemed sub-par and aligned internal ratings to their
underwriting standards. The rating agency considers that the
risks associated with the acquired portfolio to be significantly
reduced and that asset risk of the acquired portfolio is aligned
with the rest of the portfolio. However, this positive driver is
balanced against sector concentration risks, with a high
concentration toward SME's and consumer finance in Lithuania, and
risks related to high loan growth, with an annual pace of between
10%-15%. Moody's views these risks in the context of how the
asset risk will evolve when the economy enters a less favourable
point in the cycle.

- RATIONALE FOR THE UPGRADE OF THE LONG-TERM DEPOSIT RATING

The long-term deposit ratings were upgraded due to a one notch
BCA upgrade, while Moody's Advanced Loss Given Failure approach
and government support assumptions remain unchanged.

The upgrade of Siauliu Bankas long-term deposit rating to Baa3
from Ba1 therefore reflects: (1) the upgrade of the bank's BCA
and adjusted BCA to ba2; (2) the large amounts of junior deposits
and subordinated debt indicating a very low loss given failure
according to Moody's Advance Loss-Given Failure (LGF) analysis,
reflected by two notches of uplift for the deposit ratings above
the adjusted BCA; and (3) Moody's assessment of a low probability
of government support for Siauliu Bankas, which results in no
uplift for the deposit ratings.

- RATIONALE FOR THE POSITIVE OUTLOOK

The positive outlook on Siauliu Bankas' long-term deposit ratings
reflects Moody's expectation that the bank will continue to
effectively wind down its stock of problem loans while
maintaining a solid capitalization with large headroom above
requirements. The rating agency further expects profitability to
remain high while acknowledging there are certain revenue sources
with definitive time limits.

- RATIONALE FOR UPGRADING THE COUNTERPARTY RISK ASSESSMENT

As part of rating action, Moody's upgraded Siauliu Bankas' long-
term CR Assessment to Baa2(cr) from Baa3(cr), three notches above
the BCA of ba2, whereas the short-term CR Assessment was upgraded
to P-2(cr) from P-3(cr). The CR Assessment is driven by the
bank's adjusted BCA, a low likelihood of systemic support and by
the cushion against default provided by senior obligations
represented by subordinated instruments and junior deposits.

FACTORS THAT COULD LEAD TO AN UPGRADE

Siauliu Bankas' ratings could be upgraded, if the bank increases
its capitalization while unwinding its portfolio of problem
loans, while also maintaining a stable recurring profitability.

- FACTORS THAT COULD LEAD TO A DOWNGRADE

Downward pressure on Siauliu Bankas could develop if the
operating environment deteriorated significantly, or if the
bank's fundamentals deteriorated considerably from current
levels.

LIST OF AFFECTED RATINGS

Issuer: Siauliu Bankas, AB

Upgrades:

-- LT Bank Deposits, Upgraded to Baa3 from Ba1, Outlook Changed
    To Positive From Rating Under Review

-- ST Bank Deposits, Upgraded to P-3 from NP

-- Adjusted Baseline Credit Assessment, Upgraded to ba2 from ba3

-- Baseline Credit Assessment, Upgraded to ba2 from ba3

-- LT Counterparty Risk Assessment, Upgraded to Baa2(cr) from
    Baa3(cr)

-- ST Counterparty Risk Assessment, Upgraded to P-2(cr) from
    P-3(cr)

Outlook Actions:

-- Outlook, Changed To Positive From Rating Under Review

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Banks
published in September 2017.



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


AVATION PLC: S&P Rates New Senior Unsecured Notes 'B'
-----------------------------------------------------
S&P Global Ratings assigned its 'B' long-term issue rating to
proposed senior unsecured notes by Avation Capital SA under the
company's medium-term notes program. Avation PLC (B+/Stable/--)
fully guarantees the notes. Avation PLC announced that it would
issue senior unsecured notes to fund the acquisition of two wide-
body aircraft--one Airbus A330 and one Boeing B777.

Although Avation's ability to manage wide-body aircraft is
untested, the added diversification to the company's fleet is
positive. S&P said, "We understand the company has already found
clients for the two aircraft. Accordingly, we have revised upward
our assumption for capital spending in fiscal 2018. In addition,
we now expect higher revenue of US$100 million-US$110 million in
2018 and US$115 million-US$125 million in 2019, with EBITDA
margin remaining at 88%-91%.

"The stable outlook on Avation reflects our expectation that the
company will maintain its profitability and leverage over the
next 12-24 months, while expanding its fleet. Based on a US$200
million issuance of senior unsecured notes, we forecast that
Avation's EBIT interest coverage will remain above 1.5x and the
ratio of funds from operation (FFO) to debt will stay in the 6%-
9% range over the period.

"The 'B' issue rating and '5' recovery rating on the senior
unsecured notes that Avation PLC guarantees reflect our
expectation of modest (10%-30%) recovery prospects for lenders in
the event of a payment default. We use discreet asset values of
the company's aircraft in our recovery analysis, which is
consistent with the approach for other aircraft leasing
companies."


INEOS GROUP: Fitch Assigns BB+ Long-Term IDR, Outlook Stable
------------------------------------------------------------
Fitch Ratings has assigned Ineos Group Holdings SA (Ineos) a
Long-Term Foreign-Currency Issuer Default Rating (IDR) of 'BB+'
with a Stable Outlook. Fitch has also assigned a rating of 'BBB-'
to the EUR770 million senior secured notes due 2023 issued by
Ineos Finance plc and a rating of 'BB' to the USD500 million and
EUR650 million subordinated notes due 2024 issued by Ineos.

At the same time, Fitch has assigned Ineos Finance plc's proposed
euro term loan due 2024 and Ineos US Finance LLC's proposed US
dollar term loan B due 2024 an expected senior secured rating of
'BBB-(EXP)'. The assignment of a final rating to the term loans
is contingent on the receipt of final documents conforming to the
information already received.

The 'BB+' rating reflects Ineos's solid business profile as one
of the world's largest commodity chemical producers, benefiting
from leading market positions in the US and Europe, large-scale
efficient integrated production facilities, low (shale gas in the
US) to average (naphtha in Europe) feedstock costs, feedstock
flexibility in US and European crackers with secured supply of
low-cost US shale gas, deep integration with suppliers and
customers, and economies of scale.

The rating is constrained by the company's exposure to cyclical
and commoditised chemicals and the resulting inherent earnings
volatility and a financial profile commensurate with a 'BB'
category rating, with its lease-adjusted funds from operations
(FFO) net leverage expected to remain around 3.0x-3.5x over the
next two to three years under Fitch base case. Ineos also has
corporate governance deficiencies compared with other privately
owned Fitch-rated issuers with similarly concentrated ownership.
Specifically, this includes limited transparency around dividends
and related-party funding decisions, absence of independent
directors on the board, and key person risk.

The Stable Outlook reflects Fitch's view that the fundamental
sustainable operational changes and deleveraging achieved by
Ineos over the past few years will allow the group to maintain a
credit profile commensurate with a 'BB+' rated entity despite
higher capex and weakening US margins.

KEY RATING DRIVERS

Large Scale, Commodity Chemicals Manufacturer: Ineos is an
intermediate holding company within the wider Ineos group, which
operates within the commoditised petrochemical segments of
olefins and polymers (O&P). The group is one of the world's
largest commodity chemical manufacturers, with sales of EUR12.6
billion in 2016 and 31 manufacturing sites in six countries in
North America and Europe. The company's products are the key
building blocks to create a variety of olefin derivatives and
serve a broad and diverse range of end markets, including
packaging, construction, automotive, white goods and durables,
agrochemicals and pharmaceuticals.

Cyclical Credit Profile: The inherently cyclical nature of the
commodity chemicals sector means Ineos is subject to feedstock
and end-product price volatility, driven by prevailing market
conditions, demand/supply drivers -- especially with new lower-
quartile capacity coming online globally -- and customer
stocking/de-stocking patterns. Ineos manages volatility by
capitalising on its critical mass as a leading integrated
petrochemical producer, with strong links to a large customer and
supplier base, and by leveraging on its flexibility over
feedstock in its production sites. Earnings volatility is also
mitigated by the company's geographical and product
diversification.

Step Change in Performance: The company's EBITDA margin doubled
to 18% in 2016 from 2013 owing to a combination of supportive
market fundamentals, sustainable underlying operational
improvements and changes in the consolidation perimeter. The
group has also benefited from top-of-the-cycle margins in its
shale-based US operations and has shored-up its European
operations by cutting fixed costs, investing in the capacity to
switch feedstock at its crackers and in shipping and storage
facilities for low-cost US shale-based ethane to be used by its
cracker in Norway.

Margins also improved following the removal of the
underperforming Grangemouth and Lavera operations from the
consolidation perimeter of Ineos; while these businesses are not
in the restricted group rated by Fitch, the agency understands
that they have also benefited from efficiency and cost-cutting
measures over the past three years.

Supply-driven Margin Pressure: Fitch expects the EBITDA margin to
fall to 13% by 2020 after planned capacity additions in the US
normalise top-of-the-cycle margins, however, a low Fitch-
projected oil price should uphold European performance. The cost
advantage for US ethylene production based on natural gas liquids
feedstock has spurred capacity expansion activity, with around 10
million tonnes of ethylene capacity likely to come online by
2019. Fitch forecasts EBITDA at around EUR2.5 billion in 2017
(2016: EUR2.3 billion), boosted by better earnings across all
businesses, solid European polymer and chemical Intermediate
demand and improved butadiene pricing.

Capex and Acquisitions Constrain Cash Flow: Fitch forecasts free
cash flow (FCF) margins of 3%-4% in 2018, down from the 9% 2015-
2016 average, due to supply-driven margin pressure, higher
dividends in line with large payment in 2016 and elevated capex.
This includes capex for the USD2 billion European petrochemicals
expansion to produce propylene within Europe. Recent
acquisitions, aimed at building up the group's exploration and
production business, have largely been outside Ineos, but have
been funded partially through arm-length related-party loans from
Ineos. Fitch base case does not include any acquisitions, but
businesses that sit outside the group may become dependent on
Ineos to support their own acquisitions and financing, which
could lead to a negative rating action.

Corporate Governance Deficiencies: The company's corporate
governance deficiencies are incorporated into its 'BB+' rating
and centre around its board structure, which does not have
independent directors, its three-person private shareholding and
key person risk. The structure of the wider Ineos group is also
complex, with restricted group perimeters around certain
businesses, and limited transparency on Ineos' strategy around
related-party transactions and dividends. These factors are
mitigated by the strong systemic governance in the countries
where the group operates and its record of no governance
failures, reasonable dividend distributions, related-party
transactions on an arm's length basis, and solid financial
reporting.

Leveraged Financial Profile: Fitch expects FFO adjusted net
leverage to remain within Fitch rating guidelines at around 3.0x-
3.5x over the next two to three years. Over the past four years,
IGH's net leverage has gradually reduced on the back of strong
earnings and Fitch forecasts FFO adjusted net leverage at 2.9x at
end-2017 compared with 3.3x at end-2016. Refinancing exercises
have simplified the company's capital structure and Ineos intends
to use the proceeds from the repayment of its USD250 million loan
Styrolution to repay part of its outstanding senior secured
loans.

Strong Recoveries for Secured Debt: Up to 82% of the company's
total debt consists of senior debt secured by first-ranking share
pledges and is rated one notch above the IDR to reflect
exceptional recoveries. The notching differential between the IDR
and subordinated debt ratings reflects the structural and
contractual subordination of these obligations, which is likely
to result in poor recovery rates.

DERIVATION SUMMARY

Ineos's credit profile reflects its large operating scale, with
manufacturing sites across North America and Europe, as well as
its focus on the production of volatile and commoditised olefins
and derivatives, making it consistent with sector peers, such as
Westlake Chemical Corporation (BBB/Stable), Saudi Basic
Industries Corporation (SABIC) (A+/Stable), NOVA Chemicals
Corporation (BBB-/Negative) and PAO SIBUR Holding (BB+/Negative).

Ineos has stronger market-leading positions, is of larger scale
and diversification, has production flexibility and a stronger
ability to transport products compared with Westlake, SIBUR and
NOVA, which are more regional petrochemical companies. Fitch
therefore considers Ineos to have a stronger business profile
than these peers. Ineos has an overall weaker feedstock position
due to its lower-margin European O&P and intermediates business,
but this has not affected its free cash flow margin, which
remains strong against those of peers, and which Fitch forecasts
to remain positive over the next two to three years.

Ineos also differs from peers due to its three-person private
shareholding and related-party transactions to other businesses
in a much larger overall group. The Ineos group also contains
chlorovinyls, styrene, refining joint ventures, other
petrochemical assets and an upstream business. Fitch incorporates
the company's corporate governance deficiencies within its
rating, but does not specifically notch down as a result of it
due to the strong systemic governance of the countries in which
Ineos operates, its history of paying reasonable dividends and no
corporate governance failures, related-party loans being made and
repaid on an arm's length basis, and an adequate record of
financial reporting.

KEY ASSUMPTIONS

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

- An overall projected reduction in utilisation rates within
   the US and Europe to more normalised rates in 2018 as a
   result of new capacity additions.
- A lower EBITDA margin within O&P in the US from 33% to mid to
   low 20%, from 33% in 2017, over the next two to three years
   due to US capacity additions
- 15% tax rate
- EUR200 million of restricted cash mainly in relation to
   collateral posted
- Annual capex averaging at over EUR1 billion over the next two
   to three years
- Dividends in line with the 2016 level of around 18% of net
   income, including management fees to Ineos AG
- EUR40 million of pension contributions each year
- No related-party outflows, apart from around USD376 million
   to be made to the upstream business for DONG Energy A/S's
   (BBB+/Stable) assets in 2017, minus a EUR127 million repayment
   from the Grangemouth loan in 2017 and a forecast EUR250
   million repayment from the Styrolution loan.

RATING SENSITIVITIES

Developments that May, Individually or Collectively, Lead to
Positive Rating Action
- FFO adjusted net leverage maintained at or under 2x through
   the cycle and through the peak of capacity additions.
- A significant improvement in corporate governance; in
   particular, better transparency on decisions regarding
   dividends and related-party loans, a more varied shareholding
   structure mitigating key person risk and independent directors
   on the board.

Developments that May, Individually or Collectively, Lead to
Negative Rating Action
- Through the cycle market pressure, excessive capex and/or
   related party loans pushing the EBITDA margin below 10%, the
   FCF margin below 1.5% and/or FFO adjusted net leverage over
   3.5x.
- A significant deterioration in the business profile that may
   come from deterioration in cost advantage, scale,
   diversification and product leadership.
- An incidence of corporate governance failing, including, but
   not limited to, transparency of reporting, beneficial
   shareholder actions or related-party loans on favourable
   terms.

LIQUIDITY

Ineos had access to readily available cash of EUR1.2 billion and
a securitisation facility of EUR 800 million as of end-June 2017,
of which EUR289 million had been drawn. However, as this is a
receivables securitisation facility, Fitch does not consider it
as a liquidity source. Liquidity is comfortable and in excess of
minimum operational cash requirements.

FULL LIST OF RATING ACTIONS

Ineos Group Holdings S.A
-- Long-Term Foreign-Currency Issuer Default Rating assigned
    at 'BB+'; Stable Outlook
-- Subordinated long-term rating on USD500 million and EUR650
    million bonds due 2024 assigned at 'BB'

Ineos US Finance LLC
-- Long-term senior secured expected rating on proposed 2024
    US-dollar term loan B assigned at 'BBB-(EXP)'

Ineos Finance plc
-- Long-term senior secured rating on EUR770 million 2023 bond
    assigned at 'BBB-'
-- Long-term senior secured expected rating on proposed 2024
    euro term loan B assigned at 'BBB-(EXP)'


INEOS GROUP: S&P Lifts CCR to BB on Strong Operating Performance
----------------------------------------------------------------
S&P Global Ratings said that it raised its long-term corporate
credit ratings on Ineos Group Holdings S.A. (Ineos) and Ineos
Holdings Ltd. to 'BB' from 'BB-'. The outlook is stable.

S&P said, "At the same time, we raised our issue ratings on
Ineos' loan B tranches due in 2022 (EUR3.0 billion) and 2024
(EUR1.4 billion) to 'BB+' from 'BB'. The recovery rating remains
'2', indicating our expectation of the 85% in the event of a
default."

Ineos has announced it will reduce these tranches by EUR250
million and refinance the remaining term loans due 2022 and 2024
with new tranches of euro- and dollar-denominated term loans due
2024 in about the same amount, but with narrower interest-rate
margins than the existing tranches.

S&P said, "We raised the issue rating on the EUR770 million
senior secured notes due 2023 to 'BB+' from 'BB'. The recovery
rating remains '2', indicating our expectation of 85% recovery in
the event of a default.

"We also raised our issue rating on the group's 2024 senior
unsecured notes (EUR650 million and US$500 million) to 'B+' from
'B'. The recovery rating on this debt remains '6', indicating our
expectation of negligible recovery (0%) in a default scenario."

The upgrades reflect Ineos' robust operating performance and
strong cash flow generation in 2017; the EUR250 million reduction
in gross debt as part of the proposed transaction; and
management's commitment to achieving a higher rating.

S&P said, "We anticipate Ineos will report adjusted EBITDA of
about EUR2.5 billion-EUR2.7 billion this year. This is materially
higher than we previously forecast and up from EUR1.8 billion in
2014. We forecast the group's adjusted debt to EBITDA in 2017 and
2018 at 2.4x-2.6x, despite the less-supportive industry
conditions we anticipate from 2018 compared to the previous three
years. We forecast that Ineos' adjusted debt will decrease to
EUR6.2 billion at year-end 2018 from EUR8.2 billion at year-end
2016. We expect that it will further decline thereafter due to
the accumulation of cash in light of the group's strong FOCF
generation of EUR0.7 billion-EUR0.9 billion per year.

"We expect annual interest payments to be EUR28 million lower as
a result of the transaction, improving Ineos' funds from
operations (FFO) to cash interest coverage to about 8x-10x in
2017 and 2018 from 5.7x in 2016.

"We look favorably on management's commitment to a higher rating
and view its further repayment of debt following the transaction
in February -- which lowered gross debt by over EUR1 billion --
as demonstrating this. We expect that Ineos will balance capital
expenditure (capex) and M&A to preserve credit metrics in line
with the 'BB' rating.

"We have revised up our assessment of Ineos' business risk
profile to satisfactory from fair. In this, we recognize the
company's access to advantaged feedstock for its U.S. operations
and its European operations' improved supply in the form of
competitively priced shale-based feedstock imported from the U.S.
We estimate that over 50% of the group's feedstock needs are
satisfied with cost-advantaged feedstock, and management plans to
further improve this ratio. We take into account the group's
cost-competitive, large-scale integrated petrochemical sites in
the U.S. and Europe, access to low-priced ethane for its U.S.
cracker and polyolefin plants, and sizable and diversified
chemical intermediate segment (phenols, nitriles, oxides, and
oligomers). For instance, Ineos holds leading global positions in
acrylonitrile, phenol, acetone, and poly-alpha olefins. It is
also Europe's fourth-largest producer of ethylene (even following
the transfer of Grangemouth assets outside of the group) and
second-largest producer of propylene."

Ineos' improved profitability over the cycle further supports our
business profile assessment. In the U.S., its profitability is
enhanced by the U.S. Chocolate Bayou cracker's access to
competitively priced U.S. ethane (the cracker can run on 95% of
natural gas liquids), while in Europe the company remains a net
buyer of ethylene, which -- coupled with the carve-out of
Grangemouth assets -- has facilitated higher capacity utilization
rates. S&P also anticipates profitability of European olefin and
polyolefin activities have structurally strengthened on the basis
of Ineos' U.S. ethane imports to operate its Rafnes cracker as
well as on the weaker euro.

S&P said, "Ineos' key business weaknesses include the substantial
cyclicality of its petrochemical profits, its exposure to the
slow recovery of European economies, and what we see as the
continued challenging supply/demand outlook for base
petrochemicals in the region. These weaknesses would prevail even
if profits soared during 2016 and 2017 on the back of tight
supplies caused by plant outages in first-half 2016, rising
demand, and still relatively low oil prices. Also, European
petrochemical assets that do not benefit from feedstock imports
tend to be weaker than U.S. or Middle Eastern producers, which
benefit from cheaper feedstock.

"Also, we view Ineos Group Holdings as a core subsidiary of Ineos
Ltd. (not rated) and a sister company of Inovyn Ltd. (B+/Stable)
and Ineos Styrolution (BB-/Stable). Ineos Group Holdings
represents 65%-75% of the wider group's sales, EBITDA, and
adjusted debt. However, our assessment of the wider group's
credit quality (group credit profile 'bb') factors in the limited
visibility on the wider group's financial policy, M&A, and
planned capex. We refer to the latter especially in light of the
wider group's announcement to potentially engage in sizable
projects such as shale gas fracking in the U.K., grow its oil &
gas activities, and develope and produce an off-road vehicle to
succeed the Landrover Defender.

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

-- S&P Global Ratings' economic assumptions, including world GDP
    growth of 3.6% in 2017, 3.7% in 2018, and 3.8% in 2019, and a
    euro-to-U.S. dollar exchange rate averaging US$0.89 in 2017,
    US$0.87 in 2018, US$0.87 in 2019.

-- An oil price for WTI and Brent of US$50/barrel for 2017,
    US$50/barrel in 2018, and US$55/barrel in 2019.

-- Following record margins in 2015-2017, industry conditions
    possibly deteriorating from 2018.

-- Gradually rising feedstock costs in Europe steepening the
    global cost curve and widening the competitive gap between
    European petrochemical producers and their peers in
    feedstock-advantaged regions such as North America and the
    Middle East.

-- Ineos' LNG imports to Europe having a positive impact on its
    average feedstock costs.

-- A deterioration in the global supply/demand balance and lower
    utilization rates in the U.S. and Europe in 2018 due to
    significant capacity additions in North America in late 2018
    and beyond.

-- Capex of EUR0.7 billion per year.

-- Dividends below EUR100 million per year.

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

-- Adjusted EBITDA of EUR2.5 billion-EUR2.7 billion in 2017 and
    EUR2.0 billion-EUR2.5 billion in 2018 and 2019.

-- Adjusted debt to EBITDA of about 2.6x in 2017 and 2.1x-2.5x
    in 2017 and 2018.

-- FFO cash interest coverage of about 8x-10x in 2017 and 2018,
    up from 5.7x in 2016.

S&P said, "The stable outlook reflects our view that Ineos'
EBITDA in 2017 and 2018 should remain resilient at about EUR2.3
billion-EUR2.7 billion. This is despite our view that industry
conditions could deteriorate from 2018; our base case is for
gradually increasing oil prices to steepen the global cost curve
and for significant capacity additions in North America to come
on stream from 2018.

"We forecast Ineos to generate material positive FOCF of EUR700
million-EUR900 million even under mid-cycle conditions in 2017
and 2018, and we take comfort from management's commitment to
balance capex and M&A to preserve a ratio of adjusted debt to
EBITDA below 3x over the industry cycle, which we view as
commensurate with the 'BB' rating."

Rating pressure could arise if Ineos' ratio of adjusted debt to
EBITDA materially exceeded 3.0x in mid-cycle conditions. This
would, for instance, correspond to EBITDA declining to below
EUR2.0 billion or could result from a material change in the
group's financial policy -- say if Ineos were to engage in large-
scale, debt-financed M&A or make significant dividend payouts.

Rating upside would depend on preserving adjusted debt-to-EBITDA
ratios of below 2.0x over the cycle and sufficient visibility on
financial policy, capex, and M&A plans of the wider Ineos Group.


INVESTCORP BANK: Moody's Affirms Ba2 CFR, Outlook Stable
--------------------------------------------------------
Moody's Investors Service has affirmed the Ba2 corporate family
rating of Investcorp Bank B.S.C. (Investcorp) as well as the Ba2-
PD probability of default rating. Moody's has also affirmed the
Ba2 ratings of the backed senior unsecured debt of Investcorp
S.A. and Investcorp Capital Limited. The outlook on all long-term
ratings has been changed to stable from negative.

RATINGS RATIONALE

Moody's affirmed the Ba2 ratings, reflecting Investcorp's strong
franchise in the Gulf Cooperation Council (GCC) region as a
leading alternative investment provider to Gulf investors, as
well as investors in the US and Europe. Investcorp has a strong
reputation and recognizable brand name in the GCC due to its
thirty-year-plus track record. The ratings also reflect the
company's high financial leverage and balance sheet risk related
to its co-investment activities.

Moody's changed Investcorp's outlook to stable, reflecting the
company's strong ability to raise and reinvest investors' money
in the GCC. Despite a weakening operating environment, Investcorp
investment solutions continue to appeal to very high net worth
individuals looking for diversification outside of the GCC
region. Investcorp's placement and fund raising activities
reached $4.1 billion in FY 2017, a 68% increase compared to the
year before. The change of outlook to stable also reflects the
company's strong profitability as well as the ongoing improvement
in earnings quality due to the growth of more stable and
predictable asset management fees. Moody's notes that the pre-tax
income margin grew to 30% in FY 2017 from 25% a year ago.
Investcorp's asset management fee income increased 39% to $136
million thanks to asset growth in corporate investments and real
estate divisions as well as fees from the alternative investments
and credit management businesses. In FY 2017, Investcorp had a
strong year in term of investments, realizations and fund
raising. Also, with the addition of the credit management
business (acquired from 3i Group plc ) opportunities for cross-
selling are rising, which Moody's expects will support revenue
growth in the next couple of years.

WHAT COULD MOVE THE RATINGS UP/DOWN

Upward rating pressure may result from: (i) reduced debt levels;
(ii) further reduction in the company's investment portfolio;
(iii) growth of Investcorp's clients' AUM, contributing to growth
in management fees and EBITDA; and (iv) further expansion and
diversification of revenue streams.

Downward rating pressure could result from a weaker financial
position driven by: (i) a reversal in the trend of declining debt
and on-balance sheet investment levels; (ii) a deterioration of
the liquidity position, (iii) an erosion in the company's
improving capital position, (iv) a deterioration in the company's
ability to raise new client capital or reinvest client capital
that would substantially affect revenue generation capacity; (v)
lower private equity origination and placement activities that
would constrain the company's profitability; and (vi) material
on-balance sheet investment losses.

LIST OF AFFECTED RATINGS

Issuer: Investcorp Bank B.S.C.

-- Affirmations:

-- Long-term Corporate Family Rating, affirmed Ba2, outlook
    changed to Stable from Negative

-- Probability of Default Rating, affirmed Ba2-PD

-- Outlook Action:

-- Outlook changed to Stable from Negative

Issuer: Investcorp Capital Limited

-- Affirmations:

-- Backed Senior Unsecured Regular Bond/Debenture , affirmed
    Ba2, outlook changed to Stable from Negative

-- Outlook Action:

-- Outlook changed to Stable from Negative

Issuer: Investcorp S.A.

-- Affirmations:

-- Backed Senior Unsecured Regular Bond/Debenture , affirmed
    Ba2, outlook changed to Stable from Negative

-- Outlook Action:

-- Outlook changed to Stable from Negative

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Asset
Managers: Traditional and Alternative published in December 2015.


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


SENSATA TECHNOLOGIES: S&P Raises CCR to 'BB+', Outlook Stable
-------------------------------------------------------------
S&P Global Ratings raised its corporate credit rating on Sensata
Technologies B.V. to 'BB+' from 'BB'. The outlook is stable.

S&P said, "At the same time, we affirmed our 'BBB-' issue-level
rating on the company's senior secured debt. The '1' recovery
rating is unchanged, reflecting our expectation for very high
recovery (90%-100%; rounded estimate: 95%) in the event of a
payment default.

"We also raised our issue-level rating on the company's senior
unsecured notes to 'BB+' from 'BB'. The '4' recovery rating is
unchanged, reflecting our expectation of average recovery (30%-
50%; rounded estimate: 35%) in the event of a default.

"The upgrade reflects our view that Sensata is making good
progress on integrating large acquisitions from 2014-2015 and is
focused on increasing margins and reducing leverage. While
Sensata's acquisitions of CST and Schrader made sense
strategically, the acquisitions significantly increased leverage.
The company is fulfilling its commitment to reduce leverage
closer to 3x by the end of 2017. In addition, we expect that the
company's free operating cash flow (FOCF)-to-debt ratio will rise
to over 15% in the next year.

"Our stable outlook reflects our view that the company's leverage
will continue to improve over the next year. We expect the
company to continue to grow slowly and maintain EBITDA margins in
the mid- to high-20% range. While FOCF to debt is slightly below
15% now, we expect it to move above this over the next 12 months.

"We could lower our rating if Sensata's leverage moves back above
4.0x or free operating cash flow to debt moves below 15%. This
could be because the company decides to pursue large debt-based
acquisitions or as a result of operational inefficiencies.

"While unlikely, we could raise the rating if debt to EBITDA were
to fall below 2x and free operating cash flow to debt were to
stay well above 25% on a sustained basis. Furthermore, we would
have to believe that the company will continue to strengthen its
competitive position in the sensor business, and would
demonstrate less volatility during a downturn compared to that of
higher-rated auto suppliers."


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


NORSKE SKOG: Consent Solicitation Deadline Extended Until Oct. 31
-----------------------------------------------------------------
The board of directors and the management of Norske
Skogindustrier ASA have received strong support from both secured
and unsecured bondholders and shareholders for the proposed
recapitalization solution.  In direct dialogue with these
holders, the vast majority are supportive of the proposal.  The
consent solicitation deadline is extended until Tuesday,
October 31 at 17:00 CET to allow sufficient time for holders to
provide formal consent through their respective bond custodians
and submit lock-up agreements to Lucid Issuer Services Limited as
information and tabulation agent.

In relation to the secured and unsecured tranches and following
direct dialogue with holders, the indications of support suggest
that the thresholds required to implement the transaction
by way of Schemes of Arrangement will be reached.

A consensual recapitalization proposal is also contingent upon
support from the holders of the EUR100 million Norwegian
Securitization Facility due 2020 (NSF) and a majority of the 2115
Perpetual Notes.  The extension period will allow holders to
provide formal consent and submit lock-up agreements.  The
extension period will also be used to continue discussions with
the holders of the NSF and holders of the 2115 Perpetual Notes to
try to achieve support also from these two remaining creditor
groups.

"We are pleased that practically all stakeholders targeted in the
consent solicitation process are supporting for a consensual
recapitalization of the current Norske Skog group.  We will
now spend time to ensure the registration and documentation of
formal support for the recapitalization occurs.  Equally
important, we will do our outmost to obtain the support to the
recapitalization from the holders of the NSF and the 2115
Perpetual Notes holders," said Mr.Christen Sveaas, Chairman of
Norske Skogindustrier ASA.

Regardless of the outcome of the recapitalization process, the
business operations at our seven paper mills will continue as
normal.

If the requisite consent levels are not reached, the listed
parent company Norske Skogindustrier ASA will likely file for
debt negotiations or bankruptcy in the Norwegian courts.
The secured creditors of Norske Skog AS will then likely enforce
upon their security resulting in the operating business being
transferred into new ownership.

Simultaneously with the efforts to gather the required consent
for the recapitalization proposal, the board of directors and the
management of Norske Skog are preparing a contingency plan if
adequate consent for the recapitalization solution is not
reached.  As part of this plan, Norske Skog has involved
financial advisors pursuant to the terms of the indenture for the
2019 Senior Secured Notes to perform a valuation of the group.

All holders of relevant Norske Skog bonds must provide their
consents through their respective bond custodians, and are
encouraged to contact the following persons on all matters
related to the consent solicitation:

                       About Norske Skog

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

                           *   *   *

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

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


=============
R O M A N I A
=============


OLTCHIM: Creditors Have Until November to Consider Offer Price
--------------------------------------------------------------
Plastics News Europe reports that Romania's troubled state run
PVC and chemicals company Oltchim took a hesitant step forward
last week as administrators of the insolvent firm named three
serious bidders for its assets.

According to Plastics News Europe, the bidders, two Romanian
industrial companies and an international investment firm, were
selected from nine potential buyers who made offers for packages
of Oltchim assets in a revived sale process.

Leading the list is local chemicals producer Chimcomplex
Borzesti, a previous failed auction bidder for all of the Oltchim
business four years ago, Plastics News Europe discloses.

Owned by Romanian entrepreneur Stefan Vuza, it wants to acquire
five asset packages including the chlor-alkali, oxo-alcohols and
propylene oxide polyols operations, along with part of Oltchim's
vinyl chloride monomer and PVC capacity, Plastics News Europe
states.

Also in the running is local PVC profiles and accessories
distributor Dynamic Selling Group SRL, Plastics News Europe
notes.

Dynamic Selling Group is understood to want to acquire the PVC
profile processing operations of Ramplast still controlled by the
insolvent chemicals group, according to Plastics News Europe.

The third bidder is the investment firm White Tiger Wealth
Management Ltd. of London, with offices in New York, Hong Kong
and San Marino. Plastics News Europe says.  It also has its eye
on acquiring Oltchim's chlor-alkali manufacturing business,
Plastics News Europe discloses.

Conditional sale contracts are still subject to the approval of
Oltchim's creditors with a view to completing the asset disposal
in the first half of 2018, Plastics News Europe states.
Creditors have until late November to consider the offer price
and contracts, Plastics News Europe relays, citing the Oltchim
administrators.  Meanwhile, discussions are understood to be
continuing with other bidders, Plastics News Europe notes.

                          About Oltchim

Oltchim SA is a Romanian chemical producer.  Romania owns 54.8%
of the company.

Oltchim entered insolvency on January 30, 2013. The company had
EUR790 million worth of debt. The state and state-owned companies
had to recover some EUR470 million, while two banks, BCR and
Banca Transilvania, had EUR26 million worth of outstanding loans
to Oltchim, Romania-Insider.com disclosed.

In August 2016, the creditors of Oltchim agreed to extend the
company's reorganisation period by one year, according to
SeeNews. At the time, the company also launched the sale through
auctions of all or part of its assets grouped into nine bundles.
It hoped to find investors by the end of 2016 but the sale
process stalled due to lack of interest, SeeNews notes.

However, in April 2017, Romania's economy ministry and creditors
decided once again to offer the company's assets for sale bundled
in nine packages with a total market value of EUR294 million,
with the starting price set at EUR307 million, according to
SeeNews.



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


KENNEDY WILSON: S&P Lowers CCR to 'BB+' on Takeover by Parent KWH
-----------------------------------------------------------------
S&P Global Ratings lowered its long-term corporate credit rating
on U.K.-based Kennedy Wilson Europe Real Estate PLC (KWE) to
'BB+' from 'BBB' and removed it from CreditWatch with negative
implications. The outlook is stable.

S&P said, "At the same time, we lowered our issue-level rating on
KWE's unsecured bonds to 'BBB-' from 'BBB' and removed it from
CreditWatch negative. The recovery rating is '2' (70%-90%;
rounded estimate: 70%).

The downgrade follows the closing of the acquisition of KWE by
KWH, which will increase its participation in its subsidiary from
23.7% to 100%. KWE will no longer be listed in the U.K.

S&P said, "We understand that the transaction rationale is to
create a global-leading real estate investment and asset
management platform with significant presence in both the U.S.
and Europe. While local management will still run activities in
Europe, we believe that KWE's overall strategy will be closely
linked to KWH's, with its board composed of only executive
members and no independent directors."

KWE will represent around 50% of the total assets and EBITDA
generated, constituting a significant proportion of the
consolidated group. We therefore see KWE playing an integral role
in KWH's identity and strategy. The two entities also share a
name and brand, and the group's reputation and risk management
activities are closely linked.

S&P also also notes that one of the key benefits from the
transaction for KWH will be the flexibility to allocate capital
across asset classes and markets to offer the best risk-adjusted
returns.

The bonds documentation does not include material restrictions
apart from certain covenants--interest coverage ratio of 1.5x or
more, total unencumbered assets of 125% or more, net indebtedness
below 60%, and secured debt to total asset value below 50%--
implying that the group's operations in Europe will not suffer
from substantial limitations. The bond documentation also
specifically carves out its holding company from its change-of-
control clause, so the transaction has no impact.

S&P said, "There are no cross-default provisions between the two
entities, but we believe that the absence of minority
shareholders at KWE could potentially affect the company in a
bankruptcy process at the KWH level. On the other hand, KWH is
likely to support KWE under any foreseeable circumstance, as the
subsidiary is fundamental to its strategy and performance.

"We see the absorption to be an overall credit negative for KWE
given that KWH's leverage is higher and that we view KWH's
business model as riskier and more volatile. The lower rating on
KWH (see our research update on KWH published separately today on
RatingsDirect) reflects this.

"We therefore lowered the rating on KWE to 'BB+', in line with
our rating on KWH, as we assess KWE as a core subsidiary for KWH.

"The stable outlook reflects our view of KWH and our expectation
that KWE should remain core for KWH. We believe that a rating
action on KWE would most likely follow a rating action on its
parent. We expect that KWE's rental income will be underpinned by
its diverse real estate portfolio and relatively supportive
macroeconomic prospects in its core markets.

"Our downside and upside scenarios will also depend on a negative
or positive rating action on KWH.

"Our recovery analysis on KWE was prepared on a consolidated
level at KWH. Our recovery rating of '2' (70%-90%; rounded
estimate: 70%) on KWE's unsecured bonds is supported by the
structurally senior position of the bondholders vis a vis lenders
at KWH and the company's robust asset base in Europe."

The issue-level rating on KWE's unsecured bonds is 'BBB-', one
notch higher than the corporate credit rating of KWE.

See S&P's research update on KWH for more detail on its recovery
analysis.


KEYSTONE JVCO: S&P Lifts CCR to 'B' After Partial Bond Redemption
-----------------------------------------------------------------
S&P Global Ratings said it has raised its long-term corporate
credit rating on U.K.-based housing developer Keystone JVco Ltd.
(Keepmoat) to 'B' from 'B-'. The outlook is stable.

S&P sid, "At the same time, we raised our issue rating on
Keepmoat's GBP75 million super senior revolving credit facility
(RCF) due 2019 to 'BB-' from 'B+'. The recovery rating is
unchanged at '1', indicating our expectation of very high
recovery (rounded estimate: 95%) in the event of a default.

"We have also raised our issue rating on the group's remaining
GBP100 million senior secured notes due 2019 to 'B+' from 'B-'.
We have also revised the recovery rating on the notes to '2' from
'3', indicating our expectation of meaningful recovery in the
event of a default.

"The upgrade reflects our view that Keepmoat's credit metrics
should improve further, following the sale of its regeneration
business in April and its partial redemption of the senior
secured notes in June. Funding plans for the growth strategy of
its homes business had to be clarified a few months ago. We now
think that the company's current capital structure will remain
broadly in place, with some modest usage under its GBP75 million
RCF as the company does not expect any additional debt issuances.

"We anticipate that credit metrics will improve further with a
growing EBITDA base, stemming from the homes business, and that
the S&P Global Ratings-adjusted ratio of debt to EBITDA will
remain below 4x. We expect EBITDA interest coverage to improve to
close to 3x or above in the next 12-24 months.

"Therefore, we have adjusted our financial policy modifier to FS-
5 from FS-6, reflecting the company's unchanged private equity
ownership but factoring in lower leverage plans.

"Our long-term rating on Keepmoat also incorporates our view that
the company will continue to focus on the highly cyclical and
fragmented homebuilder sector. Despite political uncertainties in
the U.K. following the Brexit vote in June 2016, we think that
demand should remain robust for affordable housing, especially in
Keepmoat's regions outside London, and that the government will
continue to support the U.K. housing market with several
initiatives and schemes, such as help-to-buy. We note that
Keepmoat's gross margin -- estimated at 15% for its home
business -- is lower than rated peers in its industry, such as
Taylor Wimpey PLC (BBB-/Stable/--) or Miller Homes Group Holdings
PLC (B+/Stable/--). This is mainly the result of Keepmoat's focus
on the affordable housing market, where average selling prices
and margins over construction spending are lower than mid-end
housing projects.

"We also note that Keepmoat has some exposure to building
materials and other associated cost increases because its
contracts are mostly at fixed prices. However, we understand
these risks are partly offset by back-to-back contracts with
suppliers and subcontractors.

"In our base case, we forecast strong growth in the company's
revenues generated from homes, and therefore significant working
capital needs for the next 12-24 months, in line with the
company's strategy."

Keepmoat's new capital structure, as of September 2017, includes
a senior secured bond of about GBP100 million and the GBP75
million RCF.

S&P said, "In our base case, assuming sustained growth in its
affordable housing business line, we expect Keepmoat's S&P Global
Ratings-adjusted debt-to-EBITDA ratio to decrease toward 2.5x-
3.0x over the next 12-24 months, including some modest
adjustments for operating leases and assuming a partial drawdown
of the RCF for working capital funding. We do not include
performance bonds issued by insurance companies to Keepmoat's
clients in our debt calculation."

The rating incorporates a one-notch downward adjustment for our
comparable ratings analysis. This reflects some volatility in
Keepmoat's cash flow base, linked to often unpredictable quarter-
on-quarter fluctuations in demand in its main markets.

S&P said, "We also view the company's absolute cash flow base as
relatively small, and we expect it will decline over the next 12-
24 months, owing to higher working capital as the company
increases its focus on the homes segment.

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

-- GDP growth slowing to about 1.8% in 2017 and 1.4% in 2018,
    and an unemployment rate close to 5% for the next 12-24
    months on the back of the U.K.'s weakening economic
    environment following the Brexit referendum and the recent
    general elections;

-- U.K. house price growth of 2.5% for 2017 and some decline in
    house prices expected in 2018 of about 1%, with house prices
    already stagnating in the early part of this year;

-- Increase in overall revenues by about 40%-50% for the
    company's fiscal year ending March 2018, based solely on the
    growth of its homes business, in line with the company's
    current strategy;

-- Significant increase in working capital needs in 2017 and
    2018, in line with management's intent and focus on growing
    its home development business; and

-- Strong reduction in overall adjusted debt due to the partial
    redemption of the GBP163 million senior secured bond, the
    preference shares, and the repayment of the GBP30 million
    shareholder loan.

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

-- A gross margin of 15%-16%, reflecting Keepmoat's focus on the
    affordable housing sector;

-- Adjusted debt to EBITDA of about 2.5x-3.0x for the next 12-24
    months; and

-- Funds from operations (FFO) cash interest coverage of close
    to 3x in 2017 and above 4x for 2018.

S&P said, "The stable outlook on Keepmoat reflects our
expectation that the company will generate sufficient revenues
from its growing home business segment in the next 12 months,
with adjusted gross margins reaching about 15%-16%.

"We also assume that Keepmoat will keep sufficient headroom under
its covenants and undrawn RCFs to fund its working capital needs
and support its growth in the home segment. Over the next 12-24
months, we anticipate that Keepmoat's FFO cash interest coverage
will stay well above 2x.

"We could lower the ratings if Keepmoat's liquidity position
deteriorated significantly. A possible trigger could be a
substantial decrease in EBITDA compared with our current base
case or a change in business strategy that would require new
funding.

"We would also consider lowering the ratings if Keepmoat changed
its current financial strategy and issued additional debt to
finance its growth in the home business, leading to weaker credit
metrics than we currently anticipate. This would include the
ratio of debt to EBITDA increasing well above 4x or EBITDA
interest coverage remaining well below 3x for the next 12-24
months.

"The likelihood of an upgrade is currently remote. However, we
could consider raising the ratings if we saw a solid improvement
in the stability and amount of free operating cash flow (FOCF).
In our view, this would most likely occur if Keepmoat's EBITDA
base increased materially, enabling the company to control
working capital growth and increasing its FOCF base."


PREMIER FOOD: Fitch Affirms 'B' Long-Term IDR, Outlook Negative
---------------------------------------------------------------
Fitch Ratings has affirmed Premier Food Finance plc's Long-Term
Issuer Default Rating (IDR) at 'B' with a Negative Outlook.
Premier Food's GBP325 million and GBP210 million senior secured
fixed-rate notes have been affirmed at 'B' with a Recovery Rating
of 'RR4'.

The Negative Outlook continues to reflect the challenges that
Premier is facing from product competition, downward price
pressure from UK retailers and shifting consumer spending
patterns while it needs to reduce its leverage. Leverage is
currently not compatible with a "B" IDR and despite Fitch
expectation of positive annual free cash flow (FCF) generation
between the financial year ending in April 2018 (FY18) and FY21,
Fitch project that it will remain high. On the positive side,
trading performance in the first part of FY18 is demonstrating
some recovery as Premier is seeing benefits from its cost-saving
initiatives and is starting to pass through to consumers the
impact of higher raw-material prices.

KEY RATING DRIVERS

High Leverage: Premier's FFO-adjusted net leverage was very high
at 8.4x at FYE17 and is not commensurate with a 'B' rating. Fitch
expect Premier to deleverage to around 6.0x-6.2x by FY19, which
would be just outside Fitch negative sensitivity. Offsetting this
weakness, Fitch believe that the business profile demonstrates
characteristics in line with a mid- to low 'BB' rating category.
Premier has some well-known brands, long-term relationships with
its customers and good opportunities for international growth,
which should support its revenue.

Exposure to Challenging UK Market: Fitch estimates an important
proportion of Premier's revenue (close to 60%) is generated from
the four largest retailers in the UK: Tesco (BB+/Stable), Asda, J
Sainsbury's, and Morrisons. These major retailers have pursued a
strategy of protecting the spending power of consumers by
pressuring their suppliers to absorb higher input costs following
the sharp depreciation of sterling in 2016, affecting Premier's
FY17 margin. In addition, an ongoing shift in consumer shopping
behaviour towards healthier and more authentic products as well
as from traditional big retailers to hard discounters, online and
convenience stores is challenging Premier's performance.

Disappointing FY17 Trading: Premier's operating profit suffered
in FY17 from the combination of continuing high investments in
advertising and promotions, aimed at supporting the launch of new
variants of its products, and from higher input costs. It is
rejuvenating its product portfolio with new packaging and
offering consumers new ways of consuming its long-established
products. It managed to slightly improve its share of the
stagnating UK ambient grocery market.

Overall revenue growth despite these initiatives is however
modest at 2.4% for the year. In FY17 Premier's raw-material cost
base grew as a result of the weakening of sterling, but the
company managed to only partially pass these increases on during
the year, suffering a 9% contraction in EBITDA.

Partial Recovery: Similarly to other fast-moving consumer-goods
companies (FMCG) in the UK, Premier started in 2017 to pass on
some of its higher costs to consumers and this should enable it
to partially bring back its EBITDA to FY16 levels. In addition,
in order to protect its profit margin, the company aims to
deliver GBP20 million in cost savings by FY19. However, in Fitch
rating case, Fitch assume Premier's EBIT margin will only
marginally recover after its fall to 9.8% in FY17 from FY16's
high of 11.8%. At the same time, as the process towards Brexit
progresses and the UK leaves the European Union, risks from
further downward pressure on consumer spending or a weakening
pound remain.

Positive Free Cash Flow: mitigating these concerns is Premier's
track record of maintaining positive annual free cash flow (FCF)
generation. Over FY17-FY21 pension contributions will absorb an
important portion of cash generation (approximately GBP50 million
pa) but Fitch project they should still leave GBP15-GBP25 million
for debt paydown. Supporting FCF generation is the fact that
capex is being kept under tight control (at 3% to 4% of revenues)
and that its lending documentation prevents it from distributing
dividends so long as net debt/EBITDA remains above 3.0x.

Leading UK Ambient Food Producer: Premier enjoys a strong
position as one of the UK's largest ambient food producers, with
an almost 5% share in the fragmented and competitive GBP28.7
billion UK market. It enjoys benefits in manufacturing, logistics
and procurement in the UK from its wide range of branded and non-
branded food products, but mainly competes in mature segments
such as desserts and cakes. This product portfolio, which the
company currently has limited financial resources to complement
with the entry into higher-growth categories, limits its growth
prospects. As a result, Premier relies on continuing its
marketing and innovation efforts to protect its market share.

DERIVATION SUMMARY

Premier Foods is one of the largest UK food producers, selling
and distributing a wide range of branded products. Similarly to
Labeyrie (NR, withdrawn at 'B-'in August 2017 ), it is exposed to
customer concentration, with an important portion of revenues
being generated from the "big-four retailers" in the UK. Its
operating profit margins are higher than other FMCG peers in the
'B' category, such as Yasar (B/Stable), United Confectioners
(B/Stable) and Beluga (B+/Stable). However, Premier's cash-flow
generation is more volatile and its leverage is also higher.

KEY ASSUMPTIONS
Fitch's key assumptions within Fitch rating case for the issuer
include:
- top-line growth of 1.6% in FY18-19, slightly increasing to
   1.8% from FY20 onwards;
- fairly stable EBITDA margin, only mildly improving compared
   to FY17, assuming that the company is able to partly pass
   the increase of input costs on to its customers;
- FFO affected from FY17 onwards, by a step-up in pension
   contributions to over GBP40 million pa following the
   agreements with its pension trustees (reduced compared to
   previous forecasts);
- low capex, stable at GBP25-27 million (approximately 3% of
   sales.)

RATING SENSITIVITIES

Future Developments That May, Individually or Collectively, Lead
to Move the Outlook to Stable
- Trading performance recovering (consistently positive organic
   revenue growth) and the ability to maintain EBIT margin above
   10% after having sufficiently invested in advertising and
   promotions to protect its market position and drive growth
- Visibility that FFO adjusted net leverage is trending towards
   6.0x (pension deficit contributions are deducted from FFO)

Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action
- Evidence of weaker pricing power in the UK market
- Failure to stabilise performance with continued revenue
   declines and margin deterioration with EBIT falling below 10%
- Neutral to negative FCF on a sustained basis due to
   profitability erosion, higher or unexpected capex and
   increases in pension contribution or funding costs
- Expectation that FFO adjusted net leverage will remain well
   above 6.0x in FY19 (pension deficit contributions are deducted
   from FFO)
- FFO fixed charge coverage below 1.8x on a sustained basis

LIQUIDITY
Adequate Liquidity: Premier Foods' liquidity is supported by its
GBP 217 million RCF prolonged to December 2020 and positive
projected FCF of GBP26 million in 2018. Fitch expects liquidity
to remain adequate after FY17 despite the reduction of the RCF to
GBP183 million in FY19, thanks to the positive FCF generation
over the forecast horizon. Furthermore, the group is facing only
minor scheduled debt repayments before 2021, when the GBP325
million secured fixed notes become due. Thus, Fitch assess
refinancing risk as manageable.

KEY RECOVERY RATING ASSUMPTIONS

The 'B'/'RR4' senior secured rating reflects average recoveries
(31%-50%), although at the low end (34%), for senior secured
noteholders in the event of default. Fitch assumes that the
enterprise value (EV) of the company and the resulting recovery
of its creditors (including the pension trustees) would be
maximised in a restructuring scenario under Fitch going-concern
approach rather than in a liquidation scenario due to the asset-
light nature of the business as well as the strength of its
brands. Furthermore, a default would probably be triggered by
unsustainable financial leverage, possibly as a result of weak
consumer spending affecting sales and profits and combined with
ongoing punitive pension deficit contributions.

Fitch has applied a 25% discount to EBITDA and a distressed
EV/EBITDA multiple of 5.0x, reflecting challenging market
conditions in the UK and the reliance on a single country, which
are partially offset by a portfolio of well-known product brands.
Based on the company's agreement with its pension trustees, the
notes rank equally with the pension schemes for up to GBP450
million. Fitch has therefore included a GBP450m pension trust
claim as a senior obligation in the debt waterfall within Fitch
recovery calculation

FULL LIST OF RATING ACTIONS

Premier Foods plc
-- Long-Term IDR affirmed at 'B', Negative Outlook

Premier Foods Finance plc
-- Senior secured long-term rating affirmed at 'B'/RR4


TOWER BRIDGE NO.1: Moody's Assigns Ba2 Rating to Class E Notes
--------------------------------------------------------------
Moody's Investors Service has assigned definitive long-term
credit ratings to the following classes of notes issued by Tower
Bridge Funding No.1 plc:

-- GBP 189.2 million Class A Mortgage Backed Floating Rate Notes
   due March 2056, Definitive Rating Assigned Aaa (sf)

-- GBP 12.6 million Class B Mortgage Backed Floating Rate Notes
    due March 2056, Definitive Rating Assigned Aa2 (sf)

-- GBP 10.3 million Class C Mortgage Backed Floating Rate Notes
    due March 2056, Definitive Rating Assigned A1 (sf)

-- GBP 8.0 million Class D Mortgage Backed Floating Rate Notes
    due March 2056, Definitive Rating Assigned Baa2 (sf)

-- GBP 4.6 million Class E Mortgage Backed Floating Rate Notes
    due March 2056, Definitive Rating Assigned Ba2 (sf)

Moody's assigned provisional ratings to these notes on October 3,
2017.

Moody's has not assigned ratings to the GBP 6.9 million Class X
Mortgage Backed Floating Rate Notes due March 2056, nor to the
GBP 6.1 million Class Z1 Fixed Rate Notes due March 2056 or the
GBP 5.8 million Class Z2 Fixed Rate Notes due March 2056.

This transaction represents the first securitisation transaction
backed by buy-to-let mortgage loans and non-conforming loans
originated by Belmont Green Finance Limited ("Belmont Green", not
rated). The provisional completion portfolio consisted of 996
loans, secured by first ranking mortgages on properties located
in the UK, of which 66.9% are buy-to-let and 33.1% are owner-
occupied. The provisional completion portfolio balance was
approximately GBP 201.5 million as of the end August 2017 cut-off
date.

The final completion portfolio as of the issue date differs
slightly to the provisional completion portfolio owing to
redemptions between August 31, 2017 and end September 2017.

RATINGS RATIONALE

The ratings take into account the credit quality of the
underlying mortgage loan pool, from which Moody's determined the
MILAN credit enhancement and the portfolio expected loss, as well
as the transaction structure and legal considerations. The
expected portfolio loss of 5.0% and the MILAN required credit
enhancement of 20.0% serve as input parameters for Moody's cash
flow model and tranching model.

The expected loss is 5.0%, which is higher than the expected loss
for other UK RMBS transactions owing to: (i) the newness of the
originator and lack of historical performance data; (ii) the
weighted average (WA) LTV of around 69.5%; (iii) benchmarking
against comparable transactions, (iv) the current macroeconomic
environment in the UK, and (v) the performance of comparable
transactions in this sector.

The MILAN CE for this pool is 20.0%, which is higher than the
MILAN CE for other UK RMBS transactions, owing to: (i) the lack
of historical data and newness of the originator; (ii) a number
of borrowers with bad credit history in the pool (14.0% have had
a CCJ, 0.85% are in arrears although none are more than two
months in arrears); (iii) weighted average current LTV for the
pool of [69.5]%, which is in line with comparable transactions,
(iv) the percentage of self-employed borrowers in the pool of
circa 41.4%, which is in line with the average of the sector, (v)
the lack of historical information and (vi) benchmarking with
similar UK RMBS transactions.

The structure allows for additional loans to be added to the pool
between the closing date and before the first interest payment
date on 20 March 2018. Prefunding in the deal may equal up to
13.0% of the principal-backed notes issued. The prefunded loans
will be funded by the excess of the notes issuance over the
completion portfolio purchase price, which is initially deposited
into a prefunding principal reserve. The purchase by Tower Bridge
Funding No.1 plc of prefunded loans is conditional upon Moody's
providing a rating agency confirmation. Should the prefunding not
take place in full, remaining unused funds in the prefunding
principal reserve will be released to the principal redemption
waterfall.

The risk of pool deterioration through addition of prefunded
loans is mitigated by concentration limits in relation to the
added loans; including a 70.5% average original LTV limit, a
25.0% limit on loans with CCJs; as well as other concentration
limits for example relating to geographical areas. The structure
also benefits from a prefunding revenue reserve, which mitigates
potential negative carry up until the end of the prefunding
period.

At closing the non-amortising general reserve fund is 2.5% of the
closing principal balance of the principal backed notes i.e.
GBP5.769million. The general reserve fund will be replenished
after the PDL cure of the Class E notes and can be used to pay
senior fees and costs, interest and PDLs on the Class A - E
notes. The liquidity reserve fund target is 1.5% of the
outstanding Class A and B notes and is funded by the diversion of
principal receipts until the target is met. The liquidity reserve
fund is available to cover senior fees, costs and Class A and B
interest only. Amounts released from the liquidity reserve will
flow down the principal priority of payments. Classes A and B, or
if neither are outstanding, the most senior note outstanding at
that time further benefit from a principal to pay interest
mechanism.

Operational Risk Analysis: Although Belmont Green is the servicer
in the transaction it delegates all the servicing to Homeloan
Management Limited, "HML" (not rated), who also acts as the
standby servicer. Elavon Financial Services DAC (Aa2), acting
through its UK Branch will be the cash manager. In order to
mitigate the operational risk, Intertrust Management Limited (not
rated) acts as back-up servicer facilitator. To ensure payment
continuity over the transaction's lifetime the transaction
documents incorporate estimation language whereby the cash
manager can use the three most recent monthly servicer reports to
determine the cash allocation in case no servicer report is
available. The transaction also benefits from the equivalent of
at least 5 months liquidity through the general and liquidity
reserves.

Interest Rate Risk Analysis: 90.1% of the loans in the pool are
fixed rate loans reverting explicitly or indirectly to three
months Libor. To mitigate the fixed floating mismatch there is a
fixed floating swap provided by The Royal Bank of Scotland plc
(A3/P-1/A2(cr)/P-1(cr)).

The principal methodology used in these ratings was "Moody's
Approach to Rating RMBS Using the MILAN Framework" published in
September 2017.

The analysis undertaken by Moody's at the initial assignment of
ratings for RMBS securities may focus on aspects that become less
relevant or typically remain unchanged during the surveillance
stage.

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

Significantly different loss assumptions compared with
expectations at close due to either a change in economic
conditions from the central scenario forecast or idiosyncratic
performance factors would lead to rating actions. For instance,
should economic conditions be worse than forecast, the higher
defaults and loss severities resulting from greater unemployment,
worsening household affordability and a weaker housing market
could result in a downgrade of the ratings. Deleveraging of the
capital structure or conversely a deterioration in the notes
available credit enhancement could result in an upgrade or a
downgrade of the rating, respectively.

Stress Scenarios:

Moody's Parameter Sensitivities: If the portfolio expected loss
was increased from 5.0% to 8.75% and the MILAN CE was increased
from 20% to 32%, the model output indicates that the Class A
notes would achieve Aa2(sf) assuming that all other factors
remained equal. Moody's Parameter Sensitivities quantify the
potential rating impact on a structured finance security from
changing certain input parameters used in the initial rating. The
analysis assumes that the deal has not aged and is not intended
to measure how the rating of the security might change over time,
but instead what the initial rating of the security might have
been under different key rating inputs.

The definitive ratings address the expected loss posed to
investors by the legal final maturity of the Notes. In Moody's
opinion, the structure allows for timely payment of interest and
ultimate payment of principal with respect to the Class A, Class
B, Class C, Class D and Class E Notes by the legal final
maturity. Moody's ratings only address the credit risk associated
with the transaction. Other non-credit risks have not been
addressed, but may have a significant effect on yield to
investors.


* UK: Buy-To-Let RMBS 90-Plus Day Delinquencies Slightly Improve
----------------------------------------------------------------
The 90-plus day delinquencies of UK buy-to-let residential
mortgage-backed securities (RMBS) slightly decreased to 0.3% of
current balance in the three-month period ended June 2017 from
0.4% in the three month period ended March 2017, according to the
latest performance update published by Moody's Investors Service
("Moody's").

Cumulative losses remained stable at 0.3% of original pool
balance between March 2017 and June 2017. The total redemption
rate increased to 20.3% from 18.4% in the same period.

As of June 2017, the total outstanding pool balance of the 43 UK
BTL RMBS transactions rated by Moody's was GBP26.0 billion,
compared with GBP21.9 billion in March 2017. One new transaction
has been added to the performance update: Oat Hill No.1 plc.



                            *********

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
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is compiled on the Friday prior to publication.  Prices reported
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Each Tuesday edition of the TCR contains a list of companies with
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                            *********


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

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Editors.

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

This material is copyrighted and any commercial use, resale or
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                 * * * End of Transmission * * *