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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

          Wednesday, December 6, 2017, Vol. 18, No. 242


                            Headlines


A Z E R B A I J A N

AZINSURANCE OJSC: Fitch Alters Outlook to Neg & Affirms 'B' IFSR


F R A N C E

FINANCIERE HOLDING: Moody's Assigns B1 CFR, Outlook Negative
FINANCIERE HOLDING: S&P Assigns 'B' LT Corporate Credit Rating
PHOTONIS TECHNOLOGIES: Moody's Cuts CFR to Caa1, Outlook Negative


H U N G A R Y

NITROGENMUVEK ZRT: S&P Cuts CCR to 'B' on Weak Operating Results


I R E L A N D

PURPLE FINANCE 1: S&P Assigns Prelim B-(sf) Rating to Cl. F Notes
WILLOW PARK: Fitch Assigns B Rating to EUR13.0MM Class E Notes


I T A L Y

INTESA SANPAOLO: Fitch Affirms BB+ Perpetual Sub. Debt Rating
LAZIO: Moody's Rates Proposed EUR455MM LT Sr. Unsec. Bonds Ba2
PRO-GEST SPA: Moody's Assigns B1 CFR, Outlook Stable
PRO-GEST SPA: S&P Assigns Preliminary 'BB-' CRR, Outlook Stable


N E T H E R L A N D S

NORTH WESTERLY III: Moody's Hikes Class E Notes Rating to B1


R U S S I A

IRKUTSK OBLAST: S&P Raises Issuer Credit Rating to 'BB+'
RUSAL BRATSK: Fitch Affirms Then Withdraws BB- IDR


S P A I N

BANKINTER 2: Moody's Affirms C(sf) Rating on Class E Notes
OBRASCON HUARTE: Moody's Hikes Corporate Family Rating to B3
TDA SABADELL 4: Moody's Assigns B3 Rating to Class B Notes


S W E D E N

PERSTORP HOLDING: S&P Rates New EUR250MM Sr. Secured Notes 'B-'


T A J I K I S T A N

BANK ESKHATA: Moody's Affirms Caa1 Deposit Rating, Outlook Stable


U N I T E D   K I N G D O M

FOUR SEASONS: Owner Urged H/2 Capital to Back Restructuring Offer
HASTINGS PIER: Lack of Funding Prompts Administration
MONARCH AIRLINES: Sale of Airport Slots May Hamper Competition
PALMER & HARVEY: Nisa Retail to Provide Contract to McColl's


X X X X X X X X

* EC in Dispute with States on Oversight of EUR500BB Bailout Fund


                            *********



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A Z E R B A I J A N
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AZINSURANCE OJSC: Fitch Alters Outlook to Neg & Affirms 'B' IFSR
----------------------------------------------------------------
Fitch Ratings has revised AzInsurance OJSC's Outlook to Negative
from Stable. At the same time, Fitch has affirmed AzInsurance's
Insurer Financial Strength (IFS) Rating at 'B'.

KEY RATING DRIVERS

The revision of the Outlook reflects AzInsurance's weak business
profile and low resilience to a difficult operating environment in
Azerbaijan, deteriorated financial performance in 9M17 and the
lack of distinctive competitive advantages. The affirmation of the
rating reflects AzInsurance's strong regulatory capital position.

The operating environment is challenging in Azerbaijan with
continued risks and uncertainty around the macroeconomic and
financial sector adjustment currently underway. Policy credibility
continues to be tested by the fallout from low oil prices. The
impact of a mishandled devaluation is still reverberating across
the economy.

AzInsurance is a medium-sized insurer and is ranked sixth on the
Azerbaijani non-life and life insurance markets, with gross
written premiums of AZN17 million in 9M17, after adjusting for
inwards reinsurance and early policy terminations. Fitch believes
that the company has no distinctive competitive advantages that
could support an improvement of its financial performance or boost
business volumes.

In 3Q17, in response to the weaker economic environment,
AzInsurance decided to launch a new business plan. The company
intends now to optimise its business processes through
digitalisation, reduce its cost base and diversify its insurance
product mix through product innovation. However, Fitch views this
business strategy as challenging to implement successfully. In
Fitch's view, AzInsurance faces challenges in finding a stable
market position and implementing the strategic steps that could
make the company more resilient to the operating environment.

AzInsurance is in compliance with regulatory solvency
requirements. The regulatory solvency margin, calculated according
to the Solvency-I like formula, was a strong 281% at end-9M17
compared with 341% at end-2016.

Historically, AzInsurance's shareholder repatriated nearly 100% of
its net profits in the form of dividends. However, in 2016-9M17,
AzInsurance paid out 22% and 48% of prior year net profit. Fitch
understands from management that AzInsurance's shareholder has
decided to reduce the sum of expected dividends to maintain the
company's sound capitalisation. This decision should support the
company throughout the restructuring of its business.

In 9M17 AzInsurance reported a net loss of AZN4.8 million, which
was adversely impacted by a worsened underwriting result and, to a
lesser extent, by FX losses on investments. The underwriting loss
of AZN4 million was driven by increased administrative expenses
stemming from the restructuring.

In 2016 AzInsurance reported a net profit of AZN2.3 million
compared with a net profit of AZN18.5 million in 2015. As in 2015,
the 2016 net result was mainly driven by FX gains on investments
of AZN4.9 million (2015: AZN10.4 million). Adversely the net
result was impacted by negative underwriting profitability.
AzInsurance reported an underwriting loss of AZN3.8 million in
2016.

AzInsurance's portfolio contains significant concentrations in
single counterparties. Cash and bank deposits with sister AFB Bank
ASC accounted for 47% of the insurer's investments at end-9M17
(end-2016: 28%).

RATING SENSITIVITIES

Capital depletion due to investment or operating losses could lead
to a downgrade of AzInsurance's rating.

Successful implementation of the new business plan, resulting in
improved financial performance, could lead to a revision of the
Outlook to Stable.



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F R A N C E
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FINANCIERE HOLDING: Moody's Assigns B1 CFR, Outlook Negative
------------------------------------------------------------
Moody's Investors Service has assigned a B1 Corporate Family
Rating ("CFR") to Financiere Holding CEP (France) ("CEP") and a
Probability of Default Rating (PDR) of B1-PD. The outlook is
negative. Moody's has also assigned a (P)B1 rating to the proposed
EUR590 million senior secured first lien term loan issued by CEP
and Financiere CEP (France), a (P)B3 rating to the proposed EUR120
million senior secured second lien term loan issued by CEP, and a
(P)B1 rating to the proposed EUR40 million revolving credit
facility to be issued by Financiere CEP (France).

Financiere Holding CEP (France) will use the proceeds from the
debt issuance to repay existing debt obligation and partially
repay an existing shareholder loan.

Moody's issues provisional ratings in advance of the final sale of
securities and these reflect Moody's credit opinion regarding the
planned issuance only. Upon a conclusive review of the final
documentation and terms and conditions of the issuances, Moody's
will endeavour to assign definitive ratings. A definitive rating
may differ from a provisional rating.

RATINGS RATIONALE

Corporate Family Rating

The B1 CFR on CEP reflects the group's high leverage, partly
mitigated by a leading position in the French loan insurance
market and growing position in the credit brokerage market, very
high profitability levels, a strong resilience of revenue streams
and cash flows and a growing, although still limited,
diversification.

Moody's views CEP's high leverage to be the one of the key
constraints of the ratings. Following the proposed debt issuance,
CEP's debt amount will significantly increase to EUR710 million at
year-end 2017 from EUR444 million (excluding shareholders loans)
at year-end 2016. This results in an expected Debt-over-EBITDA
(leverage) ratio of around 6x at year-end 2017, although Moody's
expects this leverage ratio to reduce over the next 24 months.
According to Moody's, reduction in leverage will come mostly from
expected growth in EBITDA as the group continues to grow in the
loan insurance segment (both in France and internationally) and in
the credit brokerage segment, and, to a lesser extent, from the
cash sweep mechanism to be embedded in the senior secured loan.

Commenting on the business profile, Moody's says that CEP has a
leading position in brokerage services for credit protection
insurance in France, with a 25% market share. Moody's believes
that the strong know-how and good reputation of the group protects
CEP's position in this market despite of the incoming regulatory
changes and the development of individual credit protection
insurance (CPI). CEP has an historical leading position in the
group insurance segment but the group has gained a strong market
share also in the individual insurance market, which is quickly
growing in France. Moreover, the group developed a good position
in the French credit brokerage segment, with a 9% market share
before ACE Credit acquisition, mainly through acquisitions.
Nevertheless, Moody's believes that CEP's business profile is
still constrained by its relative small size as an insurance
brokerage firm and the still limited business and geographical
diversification.

As regards to profitability, Moody's says that CEP's EBITDA margin
is very strong (57% in 2016 on a 3-year average and on a Moody's
adjusted basis). Moody's expects the EBITDA margin to remain above
50% in the next 12-18 months despite the development in lines of
businesses with lower margins such as credit brokerage.
Furthermore, Moody's sees CEP's strong resilience of revenue
streams and cash flows as one of its key strengths. This is due to
the long-term nature and periodic payments of loan insurance
policies, which provide CEP with a long-term stream of revenues,
as well as the multi-year agreements (from 2 to 7 years) signed
with the group's largest counterparties, ensuring CEP to
intermediate all the business underwritten by these counterparties
for several years.

Outlook

The negative outlook reflects the increase in leverage after the
planned issuances and the risks that CEP may not be able to reduce
its leverage ratio below 5.5x as quickly as expected. Moody's
mentions that reduction in leverage will be predominantly
dependent on planned growth in EBITDA in the next 12-24 months.
According to Moody's, CEP's revenues and profits may be
pressurised by headwinds from recent changes in legislation such
as the Bourquin amendment to the Sapin II law, which will allow
individuals to churn their loan insurance policy at any time. In
addition, growth in credit brokerage has relied on external growth
which carries some execution risk. CEP acquired recently Empruntis
(in 2015), Immopret, Ceprima, Alto Informatique (in 2016) and
expects to close the acquisition of ACE Credit (by end 2017). All
expected synergies and productivity gains from these acquisitions
have not yet emerged.

Probability of Default and Debt ratings

The (P)B1 rating on the proposed EUR590 million senior secured
first lien term loan, (P)B3 rating on the proposed EUR120 million
senior secured second lien term loan, and (P)B1 rating on the
proposed EUR40 million revolving credit facility reflect Moody's
view of the probability of default of the CEP Group, along with
Moody's loss given default (LGD) assessment of the debt
obligations and the absence of strong covenants. The difference in
ratings between the senior secured first lien term loan and the
senior secured second lien term loan reflects the subordination of
the second lien debt over the first lien debt.

Moody's expects to convert the provisional ratings of the proposed
debts and revolving credit facility upon the launch of the
transaction, contingent upon the receipt and review of the final
documentation. Moody's treats the shareholder loan as equity in
its analysis.

--- RATING DRIVERS ---

Factors that could lead to a stabilisation of the outlook include:
(i) leverage reducing to or below 5.5x EBITDA, or (ii) material
increase in CEP's diversification, geographically or by business
line, without a material reduction of the EBITDA margin.

The factors that could lead to a downgrade of CEP's corporate
family rating include: (i) leverage remaining sustainably above
5.5x, or (ii) significant reduction in EBITDA margin.

RATINGS LIST

Issuer: Financiere CEP (France)

Assignment:

-- Backed Senior Secured EUR40M Revolving Credit Facility,
    assigned (P)B1

-- Backed Senior Secured EUR 496.61M First Lien Credit Facility,
    assigned (P)B1

Outlook assigned: Negative

Issuer: Financiere Holding CEP (France)

-- Corporate Family Rating, assigned B1

-- Probability of Default Rating, assigned B1-PD

-- Backed Senior Secured EUR120M Second Lien Credit Facility,
    assigned (P)B3

-- Backed Senior Secured EUR120.39 First Lien Credit Facility,
    assigned (P)B1

Outlook assigned: Negative

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Insurance
Brokers and Service Companies published in September 2017.


FINANCIERE HOLDING: S&P Assigns 'B' LT Corporate Credit Rating
--------------------------------------------------------------
S&P Global Ratings said that it had assigned its 'B' long-term
corporate credit rating to France-based Financiere Holding CEP
(FHCEP) and to its subsidiary Financiere CEP. The outlook is
stable.

S&P said, "At the same time, we assigned our 'B' issue rating to
FHCEP's existing EUR424 million senior secured debt due 2020, and
to the proposed EUR590 million first-lien term loan due 2024 and
EUR40 million revolving credit facility due 2023. The recovery
rating on these facilities is '3', indicating our expectation of
meaningful recovery (50%-70%; rounded estimate 50%) in the event
of a payment default. We expect to withdraw the issue and recovery
ratings on the existing EUR424 million debt once the refinancing
is completed.

"At the same time, we assigned our 'CCC+' issue rating to the
proposed EUR120 million second-lien loan facility due 2025. The
recovery rating is '6', indicating our expectation of negligible
recovery (0%) in the event of a payment default."

The ratings reflect FHCEP's high debt leverage and high
concentration of revenues on the French credit protection
insurance market, as well as significant customer concentration.
These weaknesses are offset by the group's top position in its
niche market, the long-term nature of its contracts, high customer
retention rates, and its high S&P Global Ratings-adjusted EBITDA
margins of more than 50% translating into resilient cash flow
generation.

S&P said, "We view FHCEP's business risk profile at the high end
of our fair category, supported by its strong EBITDA margins,
which are significantly above average compared with any other peer
in the insurance brokerage business, as well as with our broader
portfolio of professional services providers. Not only the
absolute level of profitability is high, but the group has also
demonstrated stability and resilience in profitability, supported
by the long-term nature of the contracts and high customer
retention rates.

"However, in our view, the company's limited scale and scope makes
it vulnerable to external changes. The high concentration of
revenues on France (about 90% of revenues) is another constraint,
making the company subject to macroeconomic and regulatory
developments in this country. The increasing contribution from
international business will only marginally lower this risk, in
our view. Moreover, the group also has significant customer
concentration, since we estimate that its top client generates
nearly 50% of consolidated revenue. This is tempered by the fact
that customer stickiness is high, as it would be complex and
costly for a bank to internalize FHCEP's services. Finally, yet
importantly, in case of nonrenewal of a contract with one of its
customers, the group would continue to receive commissions on the
existing stock of loans until credit termination. This provides
very good revenue and earnings visibility."

The group is following an external growth strategy in order to
diversify its activities in the credit brokerage business, with
the acquisitions of Empruntis in late 2015, and Immopràt, Ceprima,
and Alto Informatique in 2016. In addition, FHCEP is about to
complete the acquisition of another credit brokerage business, ACE
Credit, which will strengthen its service offering by adding
additional market shares to the mortgage brokerage activity in
France. S&P said, "Although we view this diversification as
positive, as it provides new sources of growth, we nevertheless
understand that EBITDA margins in this segment are lower,
resulting in some dilution in profitability for the whole group,
as seen over recent years."

FHCEP is refinancing its existing senior secured debt with a new
EUR590 million first-lien facility and a new EUR120 million
second-lien facility. The proceeds from the new facilities will
also be used to partially prepay about EUR235 million of
shareholder loans, thus increasing the amount of cash-paid debt
versus debt paid in kind.

S&P said, "Our view of FHCEP's financial risk profile primarily
reflects the high total adjusted leverage of about 9.0x-9.5x
expected by year-end 2017 (about 6.0x and 6.5x excluding the non-
cash-paid debt, i.e., the shareholder loan and the preferred
shares, which we treat as debt under our criteria). Our adjusted
debt amount of about EUR1.1 billion includes the proposed EUR590
million first-lien loan and the EUR120 million second-lien loan,
the EUR202 million shareholder loan (including capitalized
interest) that will remain outstanding post transaction, EUR152
million in preferred shares, EUR21 million of operating lease
liabilities, and EUR3 million in pension liabilities.

"Despite the increase in cash interest expenses as a result of the
refinancing, we expect the group's cash flow coverage metrics will
remain in line with our benchmarks for the rating, with adjusted
funds from operations (FFO) cash interest coverage well above 2.5x
and on an improving trend. In addition, the group's sound free
operating cash flow (FOCF) generation, supported by its low
capital requirements, will enable the group to gradually
deleverage. We project, however, that adjusted debt to EBITDA will
remain deeply within our highly leveraged category throughout
2017-2018.

"Our assessment of FHCEP's financial policy as aggressive reflects
its private-equity ownership, as demonstrated by the high debt
leverage and shareholder-friendly action, such as the prepayment
of part of the shareholder loan.

"The stable outlook reflects our view that FHCEP will benefit from
the ongoing revenue stream of its existing portfolio of managed
credit protection insurance contracts and from additional revenues
from its recently created credit brokerage business unit
portfolio. We expect that FHCEP will generate resilient cash
inflows, owing to its long-term contracts. We expect the company's
adjusted debt leverage will remain at about 9.0x-10.0x in the next
12 months, with FOCF in excess of EUR20 million and FFO cash
interest coverage of more than 2.5x.

"We could consider a negative rating action if FFO cash interest
coverage declined below 2.0x or if reported FOCF turned negative.
This could happen due to a combination of a continued decline in
mortgage production in France, resulting in a weaker stream of new
commissions, and underperforming European activities and credit
brokerage activities. We could also take a negative rating action
if we saw a significant decline in operating margins and a higher
volatility in profitability due to an unfavorable business mix and
increased competition. We could also lower the rating if the group
undertook shareholder-friendly actions, such as material dividend
distributions or large debt-financed acquisitions.

"Due to the group's high debt leverage and aggressive financial
policy, we are unlikely to raise the ratings in the near future.
However, we could consider an upgrade if FHCEP demonstrated a
track record of improved credit metrics--such that adjusted debt
to EBITDA were sustained below 5.0x--and the group maintained a
financial policy consistent with a higher rating. An improvement
in credit metrics could result from better operating conditions
than we currently forecast, leading to accelerated growth in
adjusted EBITDA."


PHOTONIS TECHNOLOGIES: Moody's Cuts CFR to Caa1, Outlook Negative
-----------------------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating (CFR) of Photonis Technologies SAS (Photonis) to Caa1 from
B3 and the probability of default rating (PDR) to Caa1-PD from B3-
PD. Concurrently, Moody's has downgraded the instrument rating on
the senior secured term loans to Caa1 from B3 and the instrument
rating on the super senior revolving credit facility (RCF) to B1
from Ba3. The outlook on all ratings remains negative.

RATINGS RATIONALE

"The rating action reflects (1) the weaker-than-expected trading
performance of Photonis over the first nine months of fiscal year
(FY) 2017 leading to a further deterioration of the company's
leverage to around 9x as of the end of the period (based on
unaudited management accounts) from around 8x as of the end of FY
ending 31 December 2016 (based on unaudited accounts or 8.9x as
calculated by Moody's including the negative impact of non-
recurring items and write-off of inventories, among others, as
disclosed in the 2016 audited annual accounts) and (2) the lack of
clear de-leveraging trend over the coming quarters while the
maturity of the senior secured term loans is looming raising the
risk of default driven by a potential debt write-off or distressed
exchange", says Sebastien Cieniewski, Moody's lead analyst for
Photonis.

These weaknesses are partly mitigated by the company's adequate
liquidity position supported by the EUR16 million cash balance as
of the end of September 2017 which Moody's expects to increase
towards EUR25 million by the end of FY 2017 as Q4 is typically
generating a significant portion of group annual EBITDA and cash
flow. Moody's expects that the internal sources of funding should
cover the company's needs over the next 12 months mitigating the
lack of external sources of liquidity when the RCF expires in
September 2018.

Photonis has experienced a prolonged period of weakening revenues
over the last three years. Most recently, the company's sales
declined by 6% in FY 2016 and a further 13% in the first nine
months of FY 2017 compared to the same periods in prior year. This
decline was mainly driven by lower demand for the company's core
night vision products and unfavorable product mix towards lower
value components.

The decline in sales had a disproportionately negative impact on
group profitability. EBITDA (as reported by the company) decreased
by 21% to EUR38 million in FY 2016 and by 51% in the first nine
months of FY 2017 compared to the same period in prior year. The
drop in EBITDA in Q1-Q3 2017, which was driven by the pressure on
sales, was only partly mitigated by a cost cutting plan put in
place by the company which generated savings of EUR2 million in
manufacturing overheads and EUR1 million in general and
administrative expenses during the period.

The drop in EBITDA resulted in a further deterioration of
Photonis' adjusted gross leverage towards 9x as of the last twelve
months (LTM) to 30 September 2017 (based on unaudited management
accounts and an LTM EBITDA of EUR30 million as reported by the
company) from below 8x as of the end of FY 2016 (or 8.9x as
calculated by Moody's including the negative impact of non-
recurring items and write-off of inventories, among others, as
disclosed in the 2016 audited annual accounts). While Moody's
positively notes the sale of a technology transfer contract with
India should bring a boost to the company's sales and EBITDA of
c.EUR10 million and EUR8 million, respectively, a portion of which
will be invoiced in FY 2017 with the remainder to be invoiced in
H1 2018, this represents a one-off project that the rating agency
does not anticipate at this stage to be replicated beyond 2018 in
other countries.

Moody's thus assumes that Photonis will maintain an elevated level
of leverage over the next 12-18 months at between 7.5x to 9.0x --
the large range is partly explained by the one-off impact from the
Indian contract. The very high leverage raises concerns over the
capacity of the company to refinance the senior secured term loans
before their maturity in September 2019. The Caa1 CFR thus
reflects the higher risk of default that could be triggered by,
among others, a debt write-off in order to provide the group with
a more sustainable capital structure or a distressed exchange.

Moody's views Photonis' liquidity as currently adequate. As of
September 2017, the company had EUR16 million in cash on the
balance sheet and the rating agency projects that amount to
increase by the end of FY 2017 as the fourth quarter tends to
generate substantial cash flow. Despite the significant drop in
EBITDA in FY 2017 and assuming no further deterioration over the
coming quarters, the rating agency believes that Photonis should
generate flat or slightly positive free cash flow (FCF) going
forward. Moody's thus considers that Photonis will be able to
cover its needs with internal sources of funding with no shortage
of liquidity over the short-term following the expiry of the
undrawn EUR30 million RCF in September 2018. The RCF carries one
financial maintenance covenant, a net first lien leverage ratio,
with no covenant headroom as of September 2017. The covenant will
only be triggered if at least 25% of the revolver is drawn, which
Moody's considers unlikely over the coming quarters.

The Caa1 rating on the senior secured term loans, in line with the
CFR, reflects the essentially first lien only capital structure
with the exception of the EUR30 million equivalent super senior
RCF that carries a B1 rating due to its priority ranking. The
Caa1-PD probability of default rating (PDR) reflects Moody's
standard assumption of a 50% recovery rate for covenant-lite first
lien senior secured debt structures.

The negative outlook reflects the deterioration of the group's
performance and uncertainty as to the outlook for the next 24
months. It also reflects the very high leverage, which positions
the company weakly in the Caa1 rating category in the context of
looming debt maturities.

Factors that Could Lead to an Upgrade/Downgrade

Upward rating pressure is unlikely over the short-term. However
the outlook could be stabilized if (1) Photonis delivers a
significant increase in sales over the coming quarters while
improving its orders backlog, (2) debt-to-EBITDA decreases to
below 7x on a sustainable basis, while (3) the liquidity position
remains adequate. On the other hand, negative rating pressure
could arise if (1) the company does not return to visible revenue
growth over the coming quarters, (2) maintains its adjusted gross
debt/EBITDA at above 7x further increasing the risk of a debt
restructuring or distressed exchange at or before the maturity of
the senior secured term loans, or (3) the liquidity position
weakens driven by a negative FCF.

The principal methodology used in these ratings was Global
Aerospace and Defense Industry published in April 2014.

France-based Photonis Technologies SAS is a manufacturer of
electro-optic components used in military night vision and
industry & science applications. The company's products are key
components of military night vision equipment based on image
intensification technology and its Night vision segment's revenues
represented 71% of total revenues in the first nine months of
2017. The Scientific detectors (23%) and Power Tubes (5%) segments
leverage Photonis' know-how in terms of alternative civil and
military uses for the technology, including for nuclear sensors or
mass spectrometry. As of the last twelve months to 30 September
2017, the company generated EUR131 million in revenues and EUR30
million in company-adjusted EBITDA. Photonis was acquired by
ARDIAN (former Axa Private Equity) in 2011.



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H U N G A R Y
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NITROGENMUVEK ZRT: S&P Cuts CCR to 'B' on Weak Operating Results
----------------------------------------------------------------
S&P Global Ratings said that it has lowered its long-term
corporate credit rating on Hungary-based fertilizer producer
Nitrogenmuvek Zrt. to 'B' from 'B+'. The outlook is stable.
In addition, S&P lowered its issue rating on the company's $200
million bond to 'B' from 'B+'.

S&P said, "The downgrade stems from Nitrogenmuvek's weaker
performance and slower deleveraging than we previously expected.
Continued weakness of fertilizer prices and a surge in natural gas
prices have resulted in very high leverage, with adjusted debt to
EBITDA above 8.0x since the second half of 2016. At the same time,
Nitrogenmuvek's adjusted funds from operations (FFO) to debt
further declined to 6.2% for the 12 months ended June 30, 2017,
from an already subdued 7.0% in 2016. Given the ongoing oversupply
in the global fertilizer industry, we expect the
low-cycle industry conditions and overall weak pricing to continue
through 2018. Under our base-case scenario, this will
significantly delay deleveraging at Nitrogenmuvek, keeping
adjusted FFO to debt below 12% (at 8%-9%) in 2017 and at about 12%
in 2018, compared with our previous forecast of 12%-15% in 2017-
2018. We forecast adjusted debt to EBITDA will remain above 6.5x
in 2017 and at about 5.5x in 2018. As a result, we now assess the
company's financial risk profile as highly leveraged rather than
aggressive.

"Our rating action also factors in uncertainty regarding the pace
of the company's deleveraging over the next two years, which will
depend on the development of supply and demand in the global
fertilizer industry. Scheduled plant-maintenance outages every
three years is an improvement compared with the past, but will
also adversely affect Nitrogenmuvek's production volume in 2019,
somewhat dampening the effect of an expected recovery of
fertilizer prices.

"We anticipate a moderate recovery of credit metrics, but much
slower than we previously expected. The improvement will be
supported by a significant increase in volume following the
commissioning of new and expanded facilities in 2017, and no
extensive unplanned plant outages. In addition, we assume a very
modest increase in average fertilizer prices from 2018 as demand
rises in Nitrogenmuvek's key markets (Central and Eastern Europe),
although overall pricing will remain weak and below historical
levels in the next two years. We also assume that the company will
pass on some of the significant increase in natural gas prices in
2017 to its customers. The substantial reduction in capital
expenditure (capex), after the extensive investment program is
completed in 2017, will also contribute to moderately positive
free cash flow generation under our base-case scenario, and
gradual deleveraging in the next two years."

Nitrogenmuvek's business risk profile continues to reflect its
relatively small size compared with peers', highly concentrated
asset base (with a single production site in Hungary), limited
product and geographic diversification, highly volatile earnings
and profitability, and exposure to the cyclical fertilizer market,
which is experiencing an unusually extended and severe downturn.
Partly offsetting these constraints are the company's dominant
market position in Hungary, with over 70% market share and a
favorable cost position, especially in the domestic market, thanks
to low transportation costs and its extensive distribution
network.

S&P said, "In addition, we note a mismatch in the company's
capital structure between its debt (currently mostly denominated
in U.S. dollars) and its revenues (nearly 50% of sales are
denominated in euros in 2017 with the remainder in forint). The
company intended to issue a EUR200 million bond in July this year
to refinance the outstanding $200 million bond due 2020, which
would have significantly addressed the mismatch. However, the
refinancing has been postponed without a concrete timeline at this
stage. As a result, we assess the capital structure as negative.
At the same time, our positive view of the company under our
comparable rating analysis reflects our expectation that credit
metrics will improve from the current trough. This is due to the
recovery of Nitrogenmuvek's EBITDA in 2018 to Hungarian forint
(HUF) 15 billion (about $57 million) to HUF16 billion, and
stronger free operating cash flow (FOCF) after capex reduces to
HUF3 billion in 2018 from HUF13 billion in 2017.

"The stable outlook reflects our expectation of a steady recovery
of Nitrogenmuvek's credit metrics, on the back of a significant
increase in volume in 2017 and only a very modest increase in
average fertilizer prices from 2018 as demand rises. The
substantial reduction in capex after the extensive investment
program is completed in 2017 will also contribute to improvement
of FOCF generation and gradual deleveraging over the next two
years. We would view adjusted debt to EBITDA of 5.0x-6.0x and
adjusted FFO to debt of about 9%-12% as commensurate with the
rating.

"We could lower the rating if anticipated deleveraging were
delayed, leading to adjusted FFO to debt remaining at the current
low level and debt to EBITDA above 6.0x in the next 12 months.
This could happen due, for example, to lower-than-anticipated
fertilizer prices, a significant fall in production (except for
planned maintenance outages), or a material depreciation of the
forint against the euro, the U.S. dollar, or both. We could also
consider lowering the rating if we saw a weakening in liquidity or
if Nitrogenmuvek were to adopt financial policies that we consider
less prudent, which we don't anticipate."

Upside rating potential could emerge if Nitrogenmuvek were able to
sustainably deleverage and maintain adjusted FFO to debt well
above 12% and debt to EBITDA below 5.0x through the cycle.
Additionally, the company's financial policy and growth strategy
would be important factors when considering a higher rating.



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


PURPLE FINANCE 1: S&P Assigns Prelim B-(sf) Rating to Cl. F Notes
-----------------------------------------------------------------
S&P Global Ratings assigned preliminary credit ratings to Purple
Finance CLO 1 DAC's floating-rate class A, B, C, D, E, and F
notes. At closing, Purple Finance CLO 1 will also issue an unrated
subordinated class of notes.

Purple Finance CLO 1 is a European cash flow collateralized loan
obligation (CLO), securitizing a portfolio of primarily senior
secured euro-denominated leveraged loans and bonds issued by
European borrowers. Natixis Asset Management is the collateral
manager.

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

S&P said, "Our preliminary ratings reflect our assessment of the
preliminary collateral portfolio's credit quality, which has a
weighted-average 'B' rating. We consider that the portfolio at
closing will be well-diversified, primarily comprising broadly
syndicated speculative-grade senior secured term loans and senior
secured bonds. Therefore, we have conducted our credit and cash
flow analysis by applying our criteria for corporate cash flow
collateralized debt obligations.

"In our cash flow analysis, we used the EUR300 million target par
amount, the covenanted weighted-average spread (3.50%), the
covenanted weighted-average coupon (5.00%), and the target minimum
weighted-average recovery rates at each rating level as indicated
by the manager. We applied various cash flow stress scenarios,
using four different default patterns, in conjunction with
different interest rate stress scenarios for each liability rating
category."

Elavon Financial Services DAC is the bank account provider and
custodian. At closing, S&P anticipates that the documented
downgrade remedies will be in line with its current counterparty
criteria.

S&P said, "Following the application of our structured finance
ratings above the sovereign criteria, we consider that the
transaction's exposure to country risk is sufficiently mitigated
at the assigned preliminary rating levels.

"At closing, we consider that the issuer will be bankruptcy
remote, in accordance with our legal criteria.

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

  RATINGS LIST

  Preliminary Ratings Assigned

  Purple Finance CLO 1 DAC
  EUR308.4 Million Senior Secured Floating-Rate Notes And
  Subordinated Notes

  Class                 Prelim.         Prelim.
                        rating           amount
                                       (mil. EUR)

  A                     AAA (sf)          173.7
  B                     AA (sf)            45.7
  C                     A (sf)             20.4
  D                     BBB (sf)           15.0
  E                     BB (sf)            13.8
  F                     B- (sf)             9.5
  Sub                   NR                 30.3

  Sub--Subordinated loan.
  NR--Not rated.


WILLOW PARK: Fitch Assigns B Rating to EUR13.0MM Class E Notes
--------------------------------------------------------------
Fitch Ratings has assigned Willow Park CLO DAC final ratings, as
follows:

EUR239.0 million class A-1: 'AAAsf'; Outlook Stable
EUR40.75 million class A-2A: 'AAsf'; Outlook Stable
EUR12.0 million class A-2B: 'AAsf'; Outlook Stable
EUR22.75 million class B: 'Asf'; Outlook Stable
EUR21.25 million class C: 'BBBsf'; Outlook Stable
EUR25.25 million class D: 'BBsf'; Outlook Stable
EUR13.0 million class E: 'Bsf'; Outlook Stable
EUR38.38 million subordinated notes: not rated

Willow Park CLO DAC is a cash flow collateralised loan obligation
(CLO). Net proceeds from the issuance of the notes are being used
to purchase a portfolio of EUR400 million of mostly European
leveraged loans and bonds. The portfolio is actively managed by
Blackstone / GSO Debt Funds Management Europe Limited (DFME). The
CLO envisages a 4.5-year reinvestment period and an 8.5-year
weighted average life (WAL).

KEY RATING DRIVERS

B' Portfolio Credit Quality
Fitch considers the average credit quality of obligors to be in
the 'B' range. The Fitch-weighted average rating factor of the
current portfolio is 31.6, below the indicative maximum covenant
of 33 for assigning final ratings.

High Recovery Expectations
At least 90% of the portfolio will comprise senior secured
obligations. Fitch views the recovery prospects for these assets
as more favourable than for second-lien, unsecured and mezzanine
assets. The Fitch-weighted average recovery rate of the current
portfolio is 67.8%, above the minimum covenant of 61.7% for
assigning final ratings.

Limited Interest Rate Exposure
Fixed-rate liabilities represent 3% of the target par, while
fixed-rate assets can represent up to 7.5% of the portfolio
depending on the Fitch test matrix point selected by the manager.

Diversified Asset Portfolio
The covenanted maximum exposure to the top 10 obligors for
assigning the ratings is 20% of the portfolio balance. This
covenant ensures that the asset portfolio will not be exposed to
excessive obligor concentration.

Exposure to Country Ceiling Below 'AAA'
The transaction has the ability to invest up to 15% in assets that
are domiciled in countries with a Country Ceiling below 'AAA'
depending on the Fitch test matrix selected by the manager. This
bucket allows the manager to invest in countries for which the
Country Ceiling assigned by Fitch is lower than the ratings on the
senior notes.

VARIATIONS FROM CRITERIA

The "Fitch Rating" definition was amended so that assets that are
not expected to be rated by Fitch, but are rated privately by the
other rating agency rating the liabilities, can be assumed to be
of 'B-' credit quality for up to 10% of the aggregate collateral
balance. This is a variation from Fitch's criteria, which requires
all assets unrated by Fitch and without public ratings to be
treated as 'CCC'. The change was motivated by Fitch's policy
change of no longer providing credit opinions for EMEA companies
over a certain size. Instead Fitch expects to provide private
ratings that would remove the need for the manager to treat assets
under this leg of the "Fitch Rating" definition.

The amendment has only a small impact on the ratings. Fitch has
modelled the transaction at the pricing point with 10% of the 'B-'
assets with a 'CCC' rating instead, which resulted in a two-notch
downgrade at the 'A' rating level and a one-notch downgrade at
other rating levels.

RATING SENSITIVITIES

A 125% default multiplier applied to the portfolio's mean default
rate, and with this increase added to all rating default levels,
would lead to a downgrade of up to two notches for the rated
notes. A 25% reduction in recovery rates would lead to a downgrade
of up to two notches for the rated notes.



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


INTESA SANPAOLO: Fitch Affirms BB+ Perpetual Sub. Debt Rating
--------------------------------------------------------------
Fitch Ratings has affirmed Italian insurer Intesa Sanpaolo Vita
S.p.A.'s (ISV) Insurer Financial Strength (IFS) rating at 'BBB'
(Good) and Long-Term Issuer Default Rating (IDR) at 'BBB'. The
Outlooks are Stable. Fitch has also affirmed ISV's dated
subordinated notes and perpetual subordinated debt at 'BBB-' and
'BB+', respectively.

KEY RATING DRIVERS

The ratings reflect the strong business profile of ISV in Italy,
where it is the largest life insurance group by premiums, with
EUR24 billion of gross premiums underwritten in 2016, and its
strong financial performance. However, the ratings are constrained
by ISV's parent company's rating, Intesa Sanpaolo (ISP; IDR:
BBB/Stable) and by Italy's sovereign rating (BBB/Stable).

Fitch assesses the standalone credit profile of ISV at 'A-' and
its unconstrained IDR at 'BBB+'. These are notched down once
reflecting ISV's ownership by ISP and Fitch's view that in the
event of ISP's financial distress, it may seek to extract capital
from the higher-rated group member. ISV's IFS rating is then
constrained by Italy's sovereign rating due to the insurer's large
exposure to Italian sovereign debt. To match domestic insurance
liabilities, ISV held around EUR50 billion of Italian sovereign
bonds or around 9x consolidated shareholder's funds at end-June
2017.

Intesa Sanpaolo (ISP; BBB/Stable), is the second-largest Italian
bank by total assets. ISV is highly integrated within ISP. The
bank manages capital and risks at group level, including for ISV.
Subsidiaries' capital adequacy is based on a prudential buffer and
is set consistently with the group's strategy. As part of ISP's
wealth management operations, ISV distributes its insurance
products through ISP branches. Fitch views ISV as an important
contributor to ISP's financial performance.

ISV's Prism FBM score increased to 'Strong' in 2016 from
'Adequate' in 2015 based on last year financials, mainly driven by
lower risk capital for asset risk and strong growth in the unit-
linked business, which carries lower capital charges. ISV's
consolidated Solvency II ratio, calculated using the standard
formula, was 210% at end-3Q17 (end-2016: 183%). However, given the
large exposure to Italian sovereign debt, ISV could face a
significant increase in regulatory capital charges if European
authorities remove the zero risk-weighting for European
sovereigns. Prism FBM already includes a capital charge for
sovereign assets.

ISV's Fitch-calculated financial leverage ratio (FLR) improved to
23% in 2016 (2015: 24%), However, ISV received an infra-group
subordinated loan for EUR600 million in 3Q17. This loan will
support ISV's growth over the new strategic plan time horizon and
will increase leverage. Fitch estimate ISV's pro-forma FLR would
weaken to around 29%, a level that is nonetheless commensurate
with the ratings.

ISV's life premium income decreased by 6.6% to EUR16.8 billion at
end-3Q17, in line with the market. Net income also decreased to
EUR529 million at end-3Q17 (end-3Q16: EUR578 million). However,
ISV's five-year average return on equity (ROE) was 11%, which
Fitch views as strong and supportive of the company's ratings.
ISV's ROE has increased consistently over the last four years and
Fitch expect it will stabilise in 2017.

Fitch considers ISV's exposure to interest rate risk as low. This
reflects strong asset and liability matching and relatively low
minimum guarantees. The shift in business mix in favour of single
premium unit-linked and hybrid products is reducing the proportion
of in-force life reserves that carry financial guarantees.
Moreover, most guarantees on ISV's in-force business apply only at
maturity, rather than accruing year by year, allowing ISV greater
flexibility in dealing with low investment returns in any
particular year.

RATING SENSITIVITIES

ISV's ratings would likely be downgraded if Italy's or ISP's
ratings are downgraded. Conversely, ISV's ratings would likely be
upgraded if Italy's and ISP's ratings are upgraded.


LAZIO: Moody's Rates Proposed EUR455MM LT Sr. Unsec. Bonds Ba2
--------------------------------------------------------------
Moody's Public Sector Europe ("MPSE") has assigned a Ba2 debt
rating to the proposed issuance of up to EUR455 million long-term
senior unsecured bonds. Moody's expects these to be issued within
the next week.

RATINGS RATIONALE

The debt rating mirrors Region of Lazio's (the Issuer) Ba2 long
term issuer rating with stable outlook. Proceeds of the bond
issuance will allow the region to partly refinance the
securitisation indebtedness of its vehicle San.Im S.p.A (San.Im)
by paying part of the purchase price to be paid to the
securitisation noteholders which have validity tendered their
notes pursuant to the tender offer.

The refinancing is expected to have no impact on the issuer's debt
stock.

The proposed bond issuance is anticipated to repurchase up to
EUR455 million notes related to the second and third tranches
issued by Cartesio S.r.l. (fully owned by San.Im) in 2003 and due
in 2028 and 2033 respectively. The bonds are expected to have long
term maturities up to 25 years with semi-annual fixed coupon. The
issuance will reflect the market conditions of Italian Treasury
Bonds with the same duration, increased by 75-85 bps.

The deal will terminate part of the sale and lease back
transaction through the repurchase of San.Im's assets from the
issuer. This would free up regional real estate assets, originally
segregated for the transaction, such as the unused Hospital San
Giacomo, which could be disposed of. In addition, the debt service
costs would reduce annually by around EUR20 million, due to the
lower rates and extended maturity.

The rating assigned to the proposed EUR455 million bonds is based
on documentation received by Moody's as of the rating assignment
date. In the event that the structures change from the
documentation submitted to us, Moody's will assess the impact that
these differences may have on the ratings.

FACTORS THAT COULD LEAD TO AN UPGRADE

Continuous improvement in the liquidity position over the next
year, as well as a structural reduction of debt levels, could
exert upward pressure on the rating. An upgrade of Italy's
sovereign rating would likely lead to an upgrade of Lazio's
rating.

FACTORS THAT COULD LEAD TO A DOWNGRADE

A higher than expected increase in debt levels and heightened
liquidity pressure may lead to a downgrade.

The assignment of the debt rating to Lazio, Region of required the
publication of this credit rating action on a date that deviates
from the previously scheduled release date in the sovereign
release calendar, published on www.moodys.com.

This credit rating and any associated review or outlook has been
assigned on an anticipated/subsequent basis.

The principal methodology used in this rating was Regional and
Local Governments published in June 2017.


PRO-GEST SPA: Moody's Assigns B1 CFR, Outlook Stable
----------------------------------------------------
Moody's Investors Service has assigned a B1 corporate family
rating (CFR) and a B1-PD probability of default rating (PDR) to
the Italian paper packaging producer Pro-Gest S.p.A. ("Pro-Gest"
or the "company"). Concurrently, Moody's has assigned a (P)B2
rating to the EUR250 million senior unsecured notes due 2024 to be
issued by Pro-Gest.

The outlook on all ratings is stable.

The proceeds from the notes will be used to refinance part of the
existing indebtedness, to pre-fund capital expenditures, and to
pay transaction fees. The capital structure also includes a
secured export credit facility of EUR50 million, medium and long
term facilities of EUR49 million, Italian mini-bonds of EUR90
million, and finance leases of EUR16 million. At close, Moody's
expects Pro-Gest to have EUR175 million of cash in the balance
sheet, and approximately EUR70 million of it will be contributed
to Cartiere Villa Lagarina as equity to fund capital expenditures
in connection with the refurbishment and development of the
Mantova Mill.

This is the first time that Moody's has assigned a rating to Pro-
Gest. Moody's issues provisional ratings in advance of the final
sale of securities and these ratings reflect Moody's preliminary
credit opinion regarding the transaction only. Upon a conclusive
review of the final documentation, including any possible changes
during the syndication process, Moody's will endeavor to assign a
definitive rating to the facilities. A definitive rating may
differ from a provisional rating.

RATINGS RATIONALE

Moody's considers that Pro-Gest is solidly positioned in the B1
category.

The assignment of the B1 CFR to Pro-Gest reflects (1) its limited
scale and geographic diversity compared to other rated peers such
as Smurfit Kappa (Ba1 stable); (2) the risk of price pressure
and/or volatility owing to the highly competitive and fragmented
paper packaging industry, particularly for more standardised
containerboard products, demand-supply dynamics and growth in
industrial production; (3) exposure to fluctuations in input
costs, namely recycling paper and energy, and the ability to pass
through increases to customers; and (4) negative free cash flow
generation in 2017-2018 due to the planned but pre-funded
investments in the Mantova mill, but expected to reverse
thereafter.

Pro forma Moody's-adjusted leverage at close is expected to be
high at around 4.8x but there is potential for rapid de-gearing
below 4.0x in the next 12 to 18 months from a combination of
organic EBITDA growth and mandatory debt repayments under the
existing Italian mini bonds and bank debt facilities. However, one
of the main drivers of organic growth is the ramp-up of the paper
mill in Mantova from mid-2018, a project which presents a degree
of execution risk and could suffer from delays, and operational
and administrative challenges.

Conversely, the B1 rating is positively supported by (1) the
company's defensive leading position as one of the largest and
vertically integrated producer of containerboard and corrugated
boards in Italy; (2) the well-diversified customer base with 10
largest customers accounting for 17% of FY2016 revenues and not a
single customer accounting more than 2.8%; (3) the attractive
features of the Italian paper packaging industry, being Italy a
net importer and expected to continue to remain so at least until
2020; and (4) its LTM Sep 2017 Moody's-adjusted EBITDA margin of
c.21%, which is higher than most global competitors and could
further improve from 2019 with the ramp-up of the Mantova mill.

LIQUIDITY

Moody's considers Pro-Gest liquidity position to be good for its
near term requirements, including working capital needs and
mandatory debt repayments. The company does not have a revolving
credit facility, but the balance sheet cash will increase to
EUR175 million with this transaction. However, approximately EUR70
million will be used to fund planned investment at the Mantova
paper mill. Excluding these pre-funded expenditures, Moody's
expect the company to generate positive free cash flow and not
distribute any dividends.

The majority of the credit agreements related to the existing
debt, which will remain in place post-refinancing, include
financial covenants, consisting in a maximum net leverage ratio of
4.0x-4.25x and a net debt to equity ratio of 2.5x. The non-
compliance with these covenants or other obligations could trigger
cross default clauses.

Moody's also notes that, Cartiere Villa Lagarina, is prohibited
from paying any dividends until 6 September 2019 and it can only
make dividend payments not exceeding 50% of its net income after
that date. Cartiere Villa Lagarina, is a non-guaranteeing
subsidiary representing a substantial part of the group EBITDA
(31% of LTM Sep 2017 aggregated EBITDA), and its contribution to
the EBITDA is expected to increase further with the ramp-up of the
Mantova mill. Considering that the interests of the new notes will
be in the region of EUR7 million and total interest expenses for
the group will be equal to EUR17 million, Moody's expects Pro-
Gest, excluding Lagarina, will be comfortably able to service its
debt.

STRUCTURAL CONSIDERATIONS

Using Moody's Loss Given Default (LGD) methodology, the B1-PDR is
aligned to the B1 CFR. This is based on a 50% recovery rate, as is
typical for transactions with both bonds and bank debt. The (P)B2
rating on the senior unsecured notes due 2024 is one notch below
the CFR, reflecting the large amount of debt in the operating
subsidiaries that are not guaranteeing the notes and considered
senior to the notes.

The 2024 senior unsecured notes, issued by Pro-Gest S.p.A., will
be unsecured and guaranteed by the issuer and certain subsidiaries
which accounted for 57.2% of total assets on an aggregated basis,
82.6% of consolidated total revenues and 64.6% of EBITDA on an
aggregated basis (gross of intragroup transactions) as of
September 2017.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook reflects Moody's view that Pro-Gest will be
able to withstand competitive pressure even at times of declining
testliner prices, due to its vertical integration, and maintain
its EBITDA margin around 20%. The stable outlook also assumes that
the company it will not engage in material debt-funded
acquisitions or shareholder distributions.

WHAT COULD CHANGE THE RATING UP/DOWN

Positive rating pressure on Pro-Gest's ratings could develop if
(1) the company successfully ramp-ups the production at its
Mantova mill from mid-2018; (2) it maintains its high Moody's-
adjusted EBITDA margin around 20%; (3) the debt/EBITDA trends
below 4.0x; and (4) RCF/debt remains above 15%, while maintaining
a good liquidity profile.

Negative pressure on the ratings could arise if (1) the company's
operating performance is under pressure as a result of increased
competition including prolonged periods of supply-demand
imbalances reflective in its EBITDA margin declining towards the
mid-teens; (2) debt/EBITDA rises above 5.0x for an extended period
of time; and (3) the liquidity materially deteriorates.

The principal methodology used in these ratings was Global Paper
and Forest Products Industry published in October 2013.

Headquartered in Treviso (Italy), Pro-Gest S.p.A. is an Italian
vertically integrated producer of recycled paper, containerboard,
corrugated cardboard and packaging solutions. The company operates
2 recycling plants, 5 paper mills, 4 corrugators and 8 packaging
plants, for overall 19 production facilities, all located in
Italy, and it employs approximately 1,000 people.

For the last twelve months (LTM) to 30 September 2017, the company
reported revenues of EUR467 million and EBITDA of EUR96.7 million.
The company is family owned and Mr. Bruno Zago, who founded Pro-
Gest in 1973, is also its CEO.

RATINGS:

Assignments:

Issuer: Pro-Gest S.p.A.

-- Corporate Family Rating, Assigned B1

-- Probability of Default Rating, Assigned B1-PD

-- BACKED Senior Unsecured Regular Bond/Debenture, Assigned
   (P)B2

Outlook Actions:

Issuer: Pro.Gest S.p.A.

-- Outlook, Assigned Stable


PRO-GEST SPA: S&P Assigns Preliminary 'BB-' CRR, Outlook Stable
--------------------------------------------------------------
S&P Global Ratings said that it assigned its preliminary 'BB-'
long-term corporate credit rating to Italy-based Pro-Gest SpA. The
outlook is stable.

S&P said, "We also assigned our preliminary 'BB-' issue rating and
'4' recovery rating to the proposed EUR250 million senior
unsecured fixed-rate notes due 2024. The recovery rating indicates
our expectation of average (30%-50%; rounded estimate: 40%)
recovery of principal in the event of payment default.

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

"Our preliminary ratings on Pro-Gest SpA reflect its leading
position in Italy as a provider of containerboards, corrugated
boards, and packaging solutions."

The rating is based on the proposed capital structure, which
assumes a note issuance and the partial refinancing of existing
debt facilities.

Pro-Gest SpA's business risk profile is underpinned by its leading
niche position, technological know-how, cost leadership, strong
EBITDA margins, manufacturing footprint, and long-standing
customer relations.

In Italy, the company is the market leader in recycled
containerboards (23% market share) and the third largest provider
of corrugated cardboards and packaging (14% market share). Key
competitors include Smurfit Kappa and DS Smith, as well as
smaller, local players. The company relies heavily on the Italian
market where it generates around 90% of sales and where its 19
manufacturing plants are based.

Pro-Gest SpA has strong and long-standing customer relations and a
diversified customer base; the top 10 customers account for 17% of
sales. Despite the standardized nature of containerboards, the
market favors local players as the bulky nature of the items leads
to high transportation costs. Compared with other European
markets, the Italian market is undersupplied.

Pro-Gest SpA is therefore expanding its containerboard capacity by
450 kilotonnes (kt) by converting a former newspaper plant to a
highly efficient containerboard mill in Mantova. There, production
of lightweight (70-160 grams per square meter) containerboards is
expected to start in mid-2018. S&P also expects the new plant to
deliver significant cost savings. The company has so far only
received the permit to produce 200kt. Authorization for a further
200kt  has been delayed by two years and is still pending
following protests by local residents. Although delays or failure
to receive the pending authorization would result in lower
operating efficiencies and a longer investment payback period, it
would not affect S&P's forecasts, which only assume the approved
200kt capacity increase.

Overall, 40% of Pro-Gest SpA's containerboards and 70% of its
corrugated cardboards are sold to third parties, mostly other
corrugated cardboard and packaging producers. The packaging
segment is exposed to relatively stable end-markets with around
60% of packaging sales relating to the food and beverage sector.

S&P said, "Our assessment also reflects Pro-Gest SpA's small size,
high operational gearing, and exposure to volatile raw material
and energy prices, which the company has historically only partly
been able to pass on to customers, often with a two-to-three-month
time lag.

"We assess Pro-Gest SpA's financial risk profile as aggressive,
reflecting our expectation that S&P Global Ratings-adjusted
leverage will drop from 4.2x at year-end (YE) 2017 to around 3.7x
by YE2018. Our assessment also reflects negative free cash flows
over 2017 and 2018, due to high expansion capex at Mantova and
other plants. Interest coverage will remain strong and above 5.5x
over the medium term."

S&P's base case assumes:

-- Ongoing economic recovery in Italy with real GDP growth of
    1.2% in 2017, and 1.0%-1.2% over 2018-2020. S&P said, "We
    expect this growth to be supported by stabilizing domestic
    demand, a gradual improvement in the labor market, and
    favorable financial conditions. Nevertheless, we expect GDP
    growth to lag the eurozone average given the uncertainties on
    Italy's economic and political future."

-- Annual revenue growth of about 6% over the 2017-2019 period.
    2017 growth will primarily reflect the full contribution of
    all paper mills, after one of them faced technical issues in
    2016.

-- Revenue growth in 2018 and 2019 primarily reflects the ramp-
    up (to the approved capacity of 200kt) of production at the
    Mantova plant. Adjusted EBITDA margins of around 20.5%, in
    line with 2016. We view this level as sustainable, given the
    expected operational efficiencies at the Mantova plant.

-- Adjusted EBITDA margins include maintenance costs (3%-4% of
    sales), which the company expenses (instead of capitalizing
    them).

-- S&P Global Ratings-adjusted EBITDA of EUR95.3 million for the
    financial year ending Dec. 31, 2017 (FY2017) reflects
    reported EBITDA of EUR92.9 million adjusted for operating
    leases (+EUR2.4 million).

-- Capex of approximately EUR117 million at end-FY2017 and EUR99
    million in 2018. These capex mainly relate to the ramp-up of
    the Mantova mill, the development of a new Cartonstrong
    facility in Grezzago as well as capacity expansions at the
    Modugno, Pontirolo, and Carnate plants.

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

-- Forecast adjusted funds from operations (FFO) to debt of
    around 16.7% in 2017 and 17.9% in 2018.

-- Adjusted debt to EBITDA of 4.2x at end-FY2017 and 3.7x at
    end-FY2018.

-- Negative free operating cash flows (FOCF) in FY2017 and
    FY2018

S&P said, "The stable outlook reflects our expectation that Pro-
Gest SpA will continue to capitalize on its solid client
relationships and leading niche position in Italy. From mid-2018,
we expect revenue and EBITDA margin improvements from the new
containerboard capacity at the Mantova paper mill. That said,
Mantova's high capex requirements will lead to negative FOCF in
2017 and 2018. We expect FFO to debt of around 16.7% (FY2017) and
17.9% (FY2018).

"We could raise the rating upon the successful completion of the
Mantova plant and the realization of the expected margin
improvements and if the company generated sustainably positive
FOCF with FFO to debt comfortably above 20% and debt to EBITDA
sustainably below 3x. We would also expect a financial policy that
would support such ratios. The company would also need to show a
track record of steady earnings growth and the ability to
consistently meet its budget, including top-line growth and profit
margins.

"We could lower the rating if Pro-Gest SpA experienced a
significant decline in profitability, with EBITDA margins dropping
to sustainably below 19%. This could come from delays in the ramp-
up of the Mantova plant, unexpected customer losses, raw material
price increases that they are not able to pass through to
customers or significant legal claims. A more aggressive financial
policy (that is, if the company made a large payment to
shareholders or a large debt funded acquisition, thus preventing
any material deleveraging) could also trigger a downgrade. We
would also view a decline in FFO to debt below 15%, rise in
adjusted debt to EBITDA above 4.5x, with persistent negative FOCF
after 2019, as leading to a downgrade."



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


NORTH WESTERLY III: Moody's Hikes Class E Notes Rating to B1
------------------------------------------------------------
Moody's Investors Service announced that it has upgraded the
following classes of notes issued by North Westerly CLO III B.V.:

-- EUR15.5M (current outstanding balance of EUR13.5M) Class D
    Deferrable Interest Floating Rate Notes due 2022, Upgraded to
    Aaa (sf); previously on Mar 2, 2017 Upgraded to Baa1 (sf)

-- EUR14.5M (current outstanding balance of EUR7.9M) Class E
    Deferrable Interest Floating Rate Notes due 2022, Upgraded to
    B1 (sf); previously on Mar 2, 2017 Affirmed B3 (sf)

North Westerly CLO III B.V., issued in August 2006, is a
collateralised loan obligation (CLO) backed by a portfolio of
mostly high-yield senior secured European loans, managed by NIBC
Bank N.V. The transaction's reinvestment period ended in October
2012.

RATINGS RATIONALE

The rating actions taken on the notes are primarily a result of
the deleveraging of Classes B, C and D notes following
amortisation of the underlying portfolio since the last rating
action in March 2017.

The Class B and Class C notes have been fully redeemed and Class D
has paid down by approximately EUR 2.0 million and, as a result,
the over-collateralisation (OC) ratios have increased. As per the
trustee report dated October 2017, Class D and Class E OC ratios
are reported at 181.23% and 114.22%, compared to December 2016
levels of 123.87% and 106.06% 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 EUR 25.32 million,
defaulted par of EUR3.12 million, a weighted average default
probability of 28.98% (consistent with a WARF of 4542 over a
weighted average life of 3.45 years), a weighted average recovery
rate upon default of 43.42% for a Aaa liability target rating, a
diversity score of 4 and a weighted average spread of 4.00%.

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

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

Methodology Underlying the Rating Action

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

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

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
notes, 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
starting with the notes having the highest prepayment priority.

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

3) Around 29% of the collateral pool consists of debt obligations
whose credit quality Moody's has assessed by using credit
estimates. As part of its base case, Moody's has stressed large
concentrations of single obligors bearing a credit estimate as
described in "Updated Approach to the Usage of Credit Estimates in
Rated Transactions," published in October 2009 and available at
the Moody's website.

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

5) Lack of portfolio granularity: The performance of the portfolio
depends to a large extent on the credit conditions of a few large
obligors with Caa1 or lower/non-investment-grade ratings,
especially when they default. Because of the deal's low diversity
score and lack of granularity, Moody's supplemented its typical
Binomial Expansion Technique analysis with a simulated default
distribution using Moody's CDOROM(TM) software.

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



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


IRKUTSK OBLAST: S&P Raises Issuer Credit Rating to 'BB+'
--------------------------------------------------------
S&P Global Ratings raised its foreign and local currency long-term
issuer credit rating on the Russian region Irkutsk Oblast to 'BB+'
from 'BB'. The outlook is stable.

At the same time, S&P raised the issue rating on the oblast's
senior unsecured bonds to 'BB+' from 'BB'.

OUTLOOK

S&P said, "The stable outlook reflects our expectation that strong
economic growth will continue to underpin tax revenue growth and
the oblast will contain the deficit after capital accounts at less
than 5% of total revenues, while its liquidity position remains
solid."

Downside Scenario

S&P could lower the rating if the pace of operating spending
growth offsets revenue growth, translating into negative operating
balances, and if the oblast constantly relied on short-term
borrowing.

Upside Scenario

S&P said, "We could raise the rating on Irkutsk Oblast if the
oblast further strengthened its management policies and if its
budgetary flexibility became less constrained, for example, as a
result of higher capital spending. An upgrade would also be
contingent on our taking a similar rating action on our foreign
currency sovereign rating on Russia, which is currently 'BB+'. We
believe that none of the Russian local and regional governments
(LRGs) can be rated higher than the sovereign because of the LRGs'
restricted revenue autonomy and inability to withstand possible
negative intervention by the federal government."

RATIONALE

S&P said, "The upgrade reflects primarily the reduced refinancing
risks and higher tax revenue growth than we previously expected.
In October, the federal government took the decision to r
estructure some of the Russian regions' budget loans for seven or
12 years, depending on a particular region's revenue growth. This
measure has helped reduce Irkutsk Oblast's refinancing needs for
2018-2019. We also note that the region outperformed our previous
base case and demonstrated stronger revenues thanks to higher tax
receipts." Together with some cost-containment measures, the
oblast has reported very solid financial results in the first nine
months of 2017, and an improved average cash position.

Economic growth and cost containment underpin budgetary
performance, but the institutional framework remains subject to
frequent changes

S&P said, "We believe that Russia's highly unpredictable and
centralized institutional framework continues to be the main
rating constraint. Tax, fiscal, and administrative legislation
affecting Russian regional governments is subject to frequent
changes. The system is dominated by what we view as the federal
government's unilateral, hasty decisions.

"Russia's highly centralized institutional framework translates
into very weak budgetary flexibility for the oblast. Moreover, we
believe that Irkutsk Oblast's spending flexibility is further
restricted by its high share of social spending and relatively
high infrastructure needs.

"We project that Irkutsk Oblast's economic growth will likely
surpass that of the national economy, translating into further tax
revenue growth. Nevertheless, wealth will remain low in an
international context. We estimate that gross regional product per
capita will average about US$8,500 in 2017-2019. The mining sector
dominates the oblast's economy, and its importance is growing,
representing 26% of gross regional product in 2016. In our view,
the dependence on this sector exposes Irkutsk Oblast's budget
revenues to the volatility of world commodity prices and to
changes to the national tax regime.

"We view positively the region's cost-containment measures in 2015
and 2016. We also note that debt and liquidity management
continues to improve; the oblast relies on medium-term borrowing
(budget loans and bonds) and maintains sufficient credit
facilities throughout the year. Still, Irkutsk Oblast lacks a
reliable long-term financial plan, which constrains our assessment
of its financial management. This lack of planning is typical of
Russia's regional governments."

Modest deficit after capital accounts, low debt, and strong
liquidity coverage support the ratings

Economic growth, coupled with management's cost-containment
measures, translated into very solid budgetary performance in 2016
and the first nine months of 2017, surpassing our expectations.
The hike in corporate profit tax revenues is explained by the
increased contribution of the largest taxpayers, which operate in
the oil, energy, and financial sectors. S&P said, "Under our
revised base-case scenario, we assume that the operating balance
will likely average 4.3% of operating revenues in 2017-2019,
compared with the negative operating balances demonstrated in 2014
and 2015. On the spending side, we assume that Irkutsk Oblast's
operating performance will be supported by its management's
prudent spending policies." The moderate operating margins will
help narrow the deficit after capital accounts to about 2.3% of
total revenues on average in 2017-2019 compared with almost 6% on
average in 2014-2016.

S&P said, "Owing to modest deficits after capital accounts, we
expect that tax-supported debt will remain very low and won't
exceed 21% of consolidated operating revenues in the period to
year-end 2019. After a Russian ruble (RUB) 5.5 billion (EUR79.4
million at the exchange rate on Nov. 28, 2017) prepayment of bank
loans in the beginning of 2017 and a RUB5 billion bond placement
at the end of 2016, Irkutsk Oblast's direct debt now consists of
budget loans (64% of the stock) and bonds (36%). We also include
minor debt of the oblast-owned government-related entities (GREs)
in our assessment of tax-supported debt.

"We note Irkutsk Oblast's debt service coverage ratio improvement.
We project free cash now will cover about 4.8x debt service
falling due within the next 12 months. At the same time, we view
Irkutsk Oblast's access to external liquidity as limited, owing to
the weaknesses of the Russian capital market and its banking
sector."

In October, the federal government restructured some of the
regions' budget loans for seven or 12 years, depending on a
region's revenue growth. This measure has helped reduce Irkutsk
Oblast's refinancing needs and its debt service might be as low as
4% of operating revenues in 2018-2019, thanks to this
restructuring.

The debt maturity profile is very smooth. S&P said, "Under our
base case, we believe that Irkutsk Oblast's cash will continue to
exceed annual debt service by at least 100%.

"We assess Irkutsk Oblast's outstanding contingent liabilities as
low. We estimate the GREs' payables at about 4.5% of the oblast's
operating revenues. At the same time, we believe that Irkutsk
Oblast is more likely than Russian peers to have to provide
extraordinary financial support to its GREs or municipalities.
This reflects our view of Irkutsk Oblast's extensive
infrastructure development needs."

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

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

The committee agreed that liquidity had improved. All other key
rating factors were unchanged.

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

RATINGS LIST

                                      Rating
                               To               From
  Irkutsk Oblast
   Issuer Credit Rating
  Foreign and Local Currency   BB+/Stable/--    BB/Stable/--
  Senior Unsecured
  Local Currency               BB+              BB


RUSAL BRATSK: Fitch Affirms Then Withdraws BB- IDR
--------------------------------------------------
Fitch Ratings has affirmed Russia-based PJSC Rusal Bratsk's
(Bratsk) Long-Term Issuer Default Rating at 'BB-' with Stable
Outlook and simultaneously withdrawn the rating for commercial
reasons. Bratsk's senior unsecured rating has also been affirmed
at 'BB-'/'RR4' and withdrawn.

Bratsk is United Company RUSAL's (Rusal) 100%-owned subsidiary.
Rusal is one of the world's largest aluminium producers, with over
3,700kt of aluminium output in 2016. Bratsk's 'BB-' IDR is
supported by Rusal's creditworthiness, as well as strong legal,
operational and strategic ties between the two entities. Bratsk's
aluminium smelter represents approximately 30% of Rusal's
aluminium output and is the group's rouble bond-issuing entity.
Rouble bonds issued by Bratsk benefit from a guarantee provided by
Rusal, alumina refinery Rusal Achinsk and Krasnoyarsk aluminium
smelter.

KEY RATING DRIVERS

Competitive Cost Position: In 2016 Rusal's smelters were strongly
positioned in the first quartile of the global aluminium cost
curve. In the past couple of years the group has benefitted from
highly favourable FX dynamics following the rouble devaluation,
which positively affected the company's cash costs (around 50% +/-
5% of Rusal's cash costs are rouble denominated). The company also
still benefits from the results of its own cost-saving measures
(including idling of 647,000t of its least efficient assets in
2013-2014). Rusal's cash costs therefore decreased to USD1,334/t
in FY16 (-8% yoy).

Energy Charges Increase Costs: Higher energy costs due to a new
electricity agreement, increase in raw material costs and FX
effects pushed Rusal's average costs to USD1,520/t in 3Q17 (up 12%
on FYE16), still within the first quartile of the cost curve.
However, most of Rusal's smelters, including Bratsk, are located
in Siberia and source 90% of their electricity needs from the
region's hydro power generation assets, benefiting from lower
electricity prices. Fitch forecast gradual rouble strengthening to
56RUB/USD by 2020 will have the biggest negative impact on the
company's cost structure in the next three to four years, leading
to gradual EBITDA margin erosion from 20% in 2017 to 15% by 2020.

Positive Aluminium Market Dynamics: Fitch has recently updated its
commodity price assumptions and Fitch now assume aluminium prices
at USD1,900/t over the next four years, compared with USD1,800/t
long-term price used previously. The change in assumed prices
primarily reflects a downward revision of Fitch assumptions for
net Chinese smelter capacity growth due to supply-side reform
closures. Fitch now expect Chinese output to grow by only about 4%
year-on-year in 2018 due to a combination of state-directed and
winter closures. Aluminium prices are also being supported by a
cost push from increasing alumina prices.

Ongoing Deleveraging
Rusal has had a high debt burden and leverage since the purchase
of its 25% stake in Norilsk Nickel (NN; BBB-/Stable) in 2008.
However, the group has benefited from strong support from its bank
group and has consistently deleveraged, albeit at a slower pace
than Fitch initially expected, to an estimated USD8.8 billion at
end-2017 (Fitch-adjusted) from USD9.1 billion in 2016. In Fitch's
view, further debt reduction remains a key priority for Rusal but
the pace will depend on aluminium prices and the level of
dividends paid by NN. At end-December 2016, funds from operations
gross leverage temporarily increased to above 5x from 3.6x at end-
2015.

Fitch now expects this ratio to decrease to 3.3x by end-2017 and
to remain below 3.5x in 2018-2020. This is mainly due to improved
prices, as also reflected in the expected 30% rise in Fitch-
adjusted EBITDA by end-2017. Absent an absolute debt reduction,
Rusal will remain exposed to external factors, such as market
price volatility, rouble strengthening and energy costs inflation,
which add volatility to leverage metrics (as in 2016). Fitch
expects future positive free cash flow will be partly directed to
deleveraging, resulting in total debt of less than USD8 billion at
end-2018, USD7 billion at end-2019 and around USD6.5 billion in
2020.

Stake in NN: Rusal effectively owns 27.82% of the world's second-
largest nickel producer, NN. The market value of the stake was
USD8.1 billion at 23 November 2017, representing nearly 90% of
Rusal's total indebtedness, and therefore providing significant
collateral coverage. NN has historically paid out significant
dividends to its shareholder. From 2017 a new dividend policy
applies, with a variable payout ratio of 30%-60% of EBITDA,
depending on NN's net leverage metrics. The total dividend
declared by NN in 2017 is around USD3.0 billion (Rusal received
USD642 million in 9M17) and the total minimum payment will be USD1
billion from 2018 (USD278 million Rusal pre-tax share). Fitch
expects dividends attributable to Rusal to exceed USD650
million/year on average in 2017-2020, contributing materially to
Rusal's debt service.

Vertically Integrated Business Model: Rusal operates throughout
the aluminium value chain with bauxite mining, alumina refining
and aluminium smelting production. The Dian Dian project in Guinea
(first delivery planned in 3Q18) will make Rusal almost 100% self-
sufficient in bauxite. This provides the group with significant
control over its raw material costs, and limits its exposure to
input cost fluctuations.

DERIVATION SUMMARY
Bratsk is a 100%-owned subsidiary of Rusal. Comparable Fitch-rated
peers for Rusal include Alcoa Corporation (BB+/Stable), Aluminum
Corporation of China (Chalco; BBB+/Stable) and China Hongqiao
Group (B+/Stable). Rusal's standalone rating of 'BB+' ('BB-' after
notching down for the weak legal and governance environment and
structures present in Russia) reflects a comparable operating
profile in most respects (eg market position, vertical
integration, cost competitiveness), but typically higher leverage
metrics.

Chalco is rated three notches below China's rating based on
Fitch's top-down approach in line with its parent and subsidiary
linkage rating criteria. Fitch downgraded Hongqiao Group, the
biggest aluminium producer in the world, in April 2017 due to weak
internal controls and uncertainties regarding the impact of its
capacity closures in 2H17. Hongqiao has higher leverage compared
to Alcoa Corporation and Rusal.

KEY ASSUMPTIONS

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

- Fitch aluminium LME base prices: USD1,906/t in 2017 and
   USD1,900 in 2018-2020;
- aluminium premiums earned by Rusal to average USD160/t in
   2017, USD170/t in 2018 and USD180/t thereafter (across all
   products produced by the group);
- RUB/USD exchange rates: 59 in 2017, 58 in 2018, and 56 in 2019
- 3% increase in production volumes in 2017 and 6% increase in
   2018, flat thereafter;
- EBITDA margin to average 19% in 2017-2018 and 16% in
   2019-2020;
- USD400 million dividend payment in 2017 and to average USD350
   million thereafter;
- sustained dividend from NN under new dividend policy.

RATING SENSITIVITIES

Not applicable.

LIQUIDITY

Adequate Liquidity: At end-June 2017, Rusal had nearly USD9
billion of Fitch-adjusted debt, including USD0.6 billion
maturities to be repaid before December 2018 (after refinancing of
a USD1.1 billion maturity with proceeds from its January and May
Eurobonds) compared with USD0.6 billion of non-restricted cash.
Near-term liquidity is also supported by free cash flow
generation, which Fitch forecasts to be over USD1 billion over the
next 18 months, including dividends from NN.

Rusal also proactively manages its debt maturity profile after
2018, refinancing USD1.4 billion and USD2.9 billion of 2019 and
2020 maturities, and reducing them to USD0.7 billion and USD0.7
billion, respectively.



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


BANKINTER 2: Moody's Affirms C(sf) Rating on Class E Notes
----------------------------------------------------------
Moody's Investors Service has upgraded the ratings of seven
tranches and affirmed seven tranches in three Spanish ABS-SME
deals.

Issuer: BANKINTER 2 PYME, FTA

-- EUR682M Class A2 Notes, Affirmed Aa2 (sf); previously on Jan.
    23, 2015 Upgraded to Aa2 (sf)

-- EUR16.2M Class B Notes, Affirmed Aa2 (sf); previously on Jan.
    23, 2015 Upgraded to Aa2 (sf)

-- EUR27.5M Class C Notes, Upgraded to Aa2 (sf); previously on
    Mar 10, 2017 Upgraded to A1 (sf)

-- EUR10.7M Class D Notes, Upgraded to Baa1 (sf); previously on
    Mar 10, 2017 Upgraded to Ba1 (sf)

-- EUR14.6M Class E Notes, Affirmed C (sf); previously on June
    27, 2006 Definitive Rating Assigned C (sf)

Issuer: BANKINTER 3 FTPYME, FTA

-- EUR288.9M Class A2 Notes, Affirmed Aa2 (sf); previously on
   June 13, 2016 Upgraded to Aa2 (sf)

-- EUR91.2M Class A3 (G) Notes, Affirmed Aa2 (sf); previously on
    June 13, 2016 Upgraded to Aa2 (sf)

-- EUR23.1M Class B Notes, Upgraded to Aa2 (sf); previously on
    March 10, 2017 Upgraded to A1 (sf)

-- EUR6M Class C Notes, Upgraded to Baa3 (sf); previously on
    March 10, 2017 Upgraded to Ba2 (sf)

-- EUR10.8M Class D Notes, Upgraded to B2 (sf); previously on
    March 10, 2017 Upgraded to B3 (sf)

-- EUR17.4M Class E Notes, Affirmed C (sf); previously on
    Nov. 13, 2007 Definitive Rating Assigned C (sf)

Issuer: GC FTGENCAT CAIXA TARRAGONA 1, FTA

-- EUR25.7M Class B Notes, Upgraded to Aa2 (sf); previously on
    March 10, 2017 Upgraded to A1 (sf)

-- EUR16.8M Class C Notes, Upgraded to Ba2 (sf); previously on
    Jan.  23, 2015 Affirmed Caa3 (sf)

-- EUR13.8M Class D Notes, Affirmed C (sf); previously on
    July 1, 2008 Definitive Rating Assigned C (sf)

The three transactions are ABS backed by small to medium-sized
enterprise (ABS SME) loans located in Spain and originated by
Bankinter, S.A. ("Bankinter") (Baa1/P-2) in BANKINTER 2 PYME, FTA
and BANKINTER 3 FTPYME, FTA and originated by Caixa Catalunya,
Tarragona i Manresa which was merged in 2010 with Catalunya Banc
SA, now part of Banco Bilbao Vizcaya Argentaria, S.A. (A3/P-2) in
GC FTGENCAT CAIXA TARRAGONA 1, FTA.

RATINGS RATIONALE

The ratings are prompted by the increase in the credit enhancement
available for the affected tranches due to portfolio amortization.

Credit Enhancement levels for Class C and Class D notes in
BANKINTER 2 PYME, FTA have increased to 39.7% and 21.5% from 28.9%
and 14.5% respectively since last rating action.

In the cases of Class B notes and Class C notes in BANKINTER 3
FTPYME, FTA Credit Enhancement levels have increased to 36.2% and
29.4%, this compares with the observed Credit Enhancement levels
at latest rating actions taken on this deal which were at 26.3%
and 20.5% respectively.

In the case of GC FTGENCAT CAIXA TARRAGONA 1, FTA, Credit
Enhancement levels for Class B have increased to 64.8% from 38.4%
since last rating action while in the case of Class C notes it has
increased up to 18.9% from 0%. The sudden increase in Credit
Enhancement is explained by a significant increase in recoveries
over the last months that has been capable to increase Reserve
Fund size which was fully depleted at last rating action last
March 2017.

Revision of key collateral assumptions

As part of the review, Moody's reassessed its default
probabilities (DP) as well as recovery rate (RR) assumptions based
on updated loan by loan data on the underlying pools and
delinquency, default and recovery ratio update.

Moody's maintained its DP on current balance and Recovery rate
assumptions as well as portfolio credit enhancement (PCE) due to
observed pool performance in line with expectations on BANKINTER 2
PYME, FTA and BANKINTER 3 FTPYME, FTA. In the case of GC FTGENCAT
CAIXA TARRAGONA 1, FTA, Moody's has maintained its DP on current
balance as well as portfolio credit enhancement but Moody's have
increased recovery rate assumption to 60% from 35% to reflect
significantly improved Recoveries performance.

Exposure to counterparties

The rating action took into consideration the notes' exposure to
relevant counterparties, such as servicer, account banks or swap
providers.

Moody's considered how the liquidity available in the transactions
and other mitigants support continuity of notes payments, in case
of servicer default, using the CR Assessment as a reference point
for servicers.

Moody's also matches banks' exposure in structured finance
transactions to the CR Assessment for commingling risk, with a
recovery rate assumption of 45%.

Moody's also assessed the default probability of the account bank
providers by referencing the bank's deposit rating.

Moody's assessed the exposure to the swap counterparties. Moody's
considered the risks of additional losses on the notes if they
were to become unhedged following a swap counterparty default by
using CR Assessment as reference point for swap counterparties.

Principal Methodology:

The principal methodology used in these ratings was "Moody's
Global Approach to Rating SME Balance Sheet Securitizations"
published in August 2017.

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

Factors or circumstances that could lead to an upgrade of the
ratings include: (1) performance of the underlying collateral that
is better than Moody's expected, (2) deleveraging of the capital
structure, (3) improvements in the credit quality of the
transaction counterparties, and (4) reduction in sovereign risk.

Factors or circumstances that could lead to a downgrade of the
ratings include: (1) performance of the underlying collateral that
is worse than Moody's expected, (2) deterioration in the notes'
available credit enhancement, (3) deterioration in the credit
quality of the transaction counterparties, and (4) an increase in
sovereign risk.


OBRASCON HUARTE: Moody's Hikes Corporate Family Rating to B3
------------------------------------------------------------
Moody's Investors Service has upgraded to B3 from Caa1 the
corporate family rating (CFR) of Spanish construction group
Obrascon Huarte Lain S.A. ("OHL"). Concurrently, Moody's has
upgraded to B3-PD from Caa1-PD the probability of default rating
(PDR) and to B3 from Caa1 the ratings on the senior unsecured
instruments. The ratings remain on review for further upgrade.

The rating action follows the announcement by OHL on December 1 of
a finalized Share Purchase Agreement (SPA) with IFM Global
Infrastructure Fund (IFM) to acquire 100% of its stake in OHL
Concesiones, S.A.U. ("OHL Concesiones"). This follows the group's
announcement on 16 October of a binding offer received by IFM for
the acquisition of OHL Concesiones for an enterprise value of
EUR2.775 billion, subject to certain customary closing
adjustments.

RATINGS RATIONALE

The upgrade to B3 is based on Moody's view that OHL's liquidity
will substantially strengthen to at least adequate levels upon
closing of the sale of OHL Concesiones, when proceeds of around
EUR2.2 billion will be received. In addition, the group's
structure will be simplified to a pure construction company by
removing significant complexity and non-recourse debt associated
with the concessions business. With the finalized SPA between OHL
and IFM, announced on 1 December, Moody's considers execution
risks related to the successful closing of the transaction within
the next two to three months are now very small and only relate to
shareholder and customary antitrust approvals.

Besides the anticipated liquidity improvement, Moody's also
expects OHL's gross indebtedness and leverage to reduce
materially. While the rating agency recognizes the group's
intention to use a major portion of the sale proceeds to reduce
its net debt to zero or even to a net cash position, however, some
uncertainty as to future debt levels and the magnitude of de-
leveraging remains. Assuming a zero net debt position, this may
translate into a Moody's-adjusted leverage ratio of less than 6x
gross debt/EBITDA, including debt adjustments for factoring,
reverse factoring and operating leases. The final metric will
depend on the size of debt repayments from the sale proceeds,
OHL's expected future profitability, but also the amount of
adjustments under the group's future business model, excluding
concessions.

The current review of OHL's ratings will therefore focus on i) the
final proceeds from the disposal as well as the use of proceeds,
including the impact on leverage and liquidity; ii) future
profitability of OHL's remaining core construction business; and
iii) the level of Moody's adjustments that will be relevant for
OHL's future business and capital structure.

Besides the pending closing of the transaction and uncertain final
cash proceeds, the review will further focus on OHL's operating
performance in2017, after posting rather weak results for the
first nine months of 2017 with a 12.1% drop in group turnover and
3.3% EBITDA margin in its construction business, albeit improved
from 2.6% in H1-17. Moody's also notes the recently revised
guidance of OHL's forecasts of construction EBITDA of around
EUR110 million in 2017, compared with previously around EUR165
million. The review will also assess the progress in terms of
other planned asset disposals.

Moreover, the review will incorporate the impact of the
transaction on OHL's business of the remaining core construction
activities and its prospects without ownership of the concession
business, which currently contributes around 20% of the order book
and has above-average profitability. An evaluation of OHL's
ability to generate positive earnings and free cash flows at its
current recourse level (i.e. construction, services and
development divisions), which have still been negative in the 12
months ended 30 September 2017, thus represents another important
element of the review process.

WHAT COULD CHANGE THE RATING UP/ DOWN

The ratings could be further upgraded to B2, if Moody's determines
during the review period that OHL's credit metrics will improve,
including (1) Moody's-adjusted gross debt/EBITDA of well below 6x,
(2) EBITA/interest expense exceeding 1.5x, and (3) maintenance of
adequate liquidity and expected positive free cash flow generation
of the future OHL group post the sale of OHL Concesiones.

Downward pressure on the ratings would build, if (1) Moody's-
adjusted gross debt/EBITDA increased to 7x or higher, (2) Moody's-
adjusted EBITA/interest expense was to fall below 1.0x, (3) FCF
failed to improve as expected to at least break-even levels.
Negative rating pressure would further evolve, if the group's
short-term liquidity deteriorated unexpectedly.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Construction
Industry published in March 2017.

Headquartered in Madrid, OHL is one of Spain's leading
construction/concessions groups. The group owns a 56.85% equity
stake in OHL Mexico SAB de CV., a large concessions operator in
Mexico. In the last 12 months ended June 2017, OHL reported sales
of EUR3.1 billion. The group is organised into three divisions:
Engineering & Construction, Concessions and Developments. The
Villar Mir family, via its investment vehicles Inmobiliaria
Espacio and Grupo Villar Mir (GVM), currently holds a 54.5% equity
stake in OHL.


TDA SABADELL 4: Moody's Assigns B3 Rating to Class B Notes
----------------------------------------------------------
Moody's Investors Service has assigned definitive rating to two
classes of notes issued by TDA SABADELL RMBS 4, FONDO DE
TITULIZACION:

-- EUR 5,430M Class A Notes due November 2063, Definitive Rating
    Assigned Aa2 (sf)

-- EUR 570M Class B Notes due November 2063, Definitive Rating
    Assigned B3 (sf)

TDA SABADELL FONDO DE TITULIZACION is a securitisation of first-
ranking mortgage loans that Banco Sabadell, S.A. ("Banco
Sabadell") (Baa3/P-2/Baa2(cr)/P-2(cr)), granted to individuals
backed by properties located in Spain. Banco Sabadell will be
acting as the servicer of the loans, while Titulizacion de
Activos, S.G.F.T., S.A. will be acting as the management company.

RATINGS RATIONALE

The definitive ratings take into account the credit quality of the
underlying mortgage loan pool, from which Moody's determined the
Moody's Individual Loan Analysis Credit Enhancement ("MILAN CE")
assumption and the portfolio's expected loss.

Following the assignment of the provisional ratings, Moody's has
received new information on the originator of the loans in the
pool and has increased the portfolio's expected loss to 3.85% from
3.5%. The key drivers for the portfolio's expected loss of 3.85%
are (i) high exposure to loans originated by Banco CAM, (ii)
performance of the originators' preceding transactions, (ii)
benchmarking with comparable transactions in the Spanish RMBS
market, (iii) analysis of the static information on delinquencies
and recoveries received from Banco Sabadell; and (iv) current
economic environment in Spain.

The key drivers for the 14.0% MILAN CE number, which is above the
average for Spanish RMBS, are (i) the current weighted-average
loan-to-value ("LTV") ratio of 73.4% calculated taking into
account the original full property valuations for the majority of
the loans (around 5% of the pool has updated valuations); (ii)
high seasoning of around 7.9 years and high concentration to 2006,
2007 and 2008 vintages ; (iii) the fact that 3.85% of the
borrowers in the pool are not Spanish nationals; (vi) 3.94% of the
loans in the pool are currently in arrears less than 30 days,
0.68% less than 60 days in arrears, 82.7% have never been in
arrears more than 30 days; and (viii) 2.64% of restructured, or
renegotiated loans in the pool.

Moody's considers that the deal has the following credit
strengths: (i) the full subordination of the Class B, equivalent
to 9.5% of the original balance of the notes; (ii) a reserve fund,
which will be funded at closing and will be equal to 4.9% of the
original balance of the notes; the reserve fund covers potential
shortfalls in the Class A's interest and principal during the life
of the transaction (and subsequently, once the Class A has fully
amortised, covers the principal and interest of the Class B); and
(iii) the transaction also benefits from an excess margin of 50
bps provided through an interest rate swap agreement.

The portfolio mainly contains floating-rate loans linked to 12-
month EURIBOR, 19.63% fixed rate loans and Indices de Referencia
de Prestamos Hipotecarios, conjunto entidades de credito (IRPH);
whereas the notes are linked to three-month EURIBOR and reset
quarterly. The transaction is protected by an interest rate swap
provided by Banco Sabadell. The SPV will pay the interest actually
received from the loans while Banco Sabadell will pay the weighted
average coupon on the notes plus 50 bppa, over a notional equal to
the outstanding amount of performing loans.

Banco Sabadell will continue servicing the securitised loans. Even
if there is no back-up servicer in the transaction, the management
company acts as back-up servicer facilitator and independent cash
manager.

The reserve fund provides liquidity support and is sufficient to
cover almost 10 quarters of interest payments and senior expenses.

FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS:

Factors that may lead to an upgrade of the ratings include a
significantly better-than-expected performance of the pool
combined with an increase of the Spanish Local Currency Country
Risk Ceiling.

Factors that may cause a downgrade of the ratings include
significantly different realised losses compared with Moody's
expectations at closing due to either (i) a change in economic
conditions from Moody's central forecast scenario; or (ii)
idiosyncratic performance factors that would lead to rating
actions.

Finally, a change in Spain's sovereign risk may also result in
subsequent rating actions on the notes.

Stress Scenarios:

At the time the definitive ratings were assigned, the model output
indicated that the notes would have achieved an Aa3 (sf) if the
expected loss was as high as 5.3% and the MILAN CE remained at
14%, and all other factors were constant.

Moody's Parameter Sensitivities provide a quantitative/model-
indicated calculation of the number of rating notches that a
Moody's structured finance security may vary if certain input
parameters used in the initial rating process differed.

The analysis assumes that the deal has not aged and is not
intended to measure how the rating of the security might migrate
over time, but rather how the initial rating of the security might
have differed if key rating input parameters were varied.
Parameter Sensitivities for typical EMEA RMBS transaction are
calculated by stressing key variable inputs in Moody's primary
rating model.

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.

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



===========
S W E D E N
===========


PERSTORP HOLDING: S&P Rates New EUR250MM Sr. Secured Notes 'B-'
---------------------------------------------------------------
S&P Global Ratings assigned its 'B-' issue rating and '2' recovery
rating to the proposed EUR250 million senior secured floating-rate
notes due 2022, to be issued by Perstorp Holding AB
(CCC+/Positive/--).

S&P said, "At the same time, we raised our issue and recovery
ratings to 'B-' and '2' from 'CCC+' and '3' on the existing senior
secured facilities, including the $275 million 8.5% senior secured
notes and EUR285 million 7.625% notes, all due in 2021. The
recovery rating on the proposed and existing senior secured debt
reflects substantial (rounded estimate: 80%) recovery prospects in
the event of a payment default. The proceeds of the proposed
senior secured floating rate note will be used to fully redeem the
existing senior secured floating-rate notes, and partially redeem
the senior secured fixed-rate notes.

"We have also affirmed our 'CCC-' issue and '6' recovery ratings
on the $420 million second-lien secured notes due in September
2021, reflecting the contractual subordination of the notes and
our expectation of negligible (rounded estimate: 0%) recovery in
the event of a payment default.

"The ratings on the senior secured debt are supported by a fairly
comprehensive security package but constrained by the material
amount of prior-ranking debt, which includes receivables, a
factoring facility, and a super senior revolving credit facility
(RCF)."

Perstorp Holding's debt structure is multi-layered. The super
senior RCF, the senior secured notes, and the second-lien bank
loan are all issued by Perstorp Holding and share the same
security package. This consists of share pledges in the Perstorp
group, bank accounts, and some of the guarantors' fixed assets,
but an inter-creditor agreement establishes their relative
ranking.

S&P said, "Further, we have assigned our 'CCC-' issue rating and
'6' recovery rating to the proposed EUR235 million subordinated
notes due December 2022, issued by the private limited liability
company Prague CE S.a.r.l, reflecting our expectation of
negligible (rounded estimate: 0%) recovery in the event of a
payment default. We understand that the proposed notes will be
cash-pay throughout their term."

While the proposed subordinated notes are rated in line with the
second-lien notes at 'CCC-', and both facilities would be forecast
to receive negligible recovery in the event of a mandatory
payment, the subordinated notes are structurally and contractually
subordinated to the second-lien notes. In the event of a mandatory
prepayment, the subordinated noteholders would not receive any
collateral proceeds until the second-lien note holders receive
full repayment. The subordinated noteholders' right to collateral
stems through the Prague CE ownership of the legacy mezzanine
facility, which itself is contractually subordinated to the
second-lien bank loan.

S&P said, "The issue and recovery ratings on the proposed notes
are based on preliminary information and are subject to their
successful issuance and our satisfactory review of the final
documentation. If we do not receive the final documentation within
a reasonable timeframe, or if the final documentation departs from
materials we have reviewed, we reserve the right to withdraw or
revise our ratings.

"Our hypothetical default scenario assumes intensified competition
and slowing demand from European markets; combined with margin
constraints, due to increased volatility in raw material costs; or
substantial volatility in foreign exchange rates.

"We value the business as a going concern given its leading market
position in several sectors of the specialty chemicals market."

SIMULATED DEFAULT ASSUMPTIONS

-- Year of default: 2019
-- Jurisdiction: Sweden

SIMPLIFIED WATERFALL

-- Emergence EBITDA: SEK1.56 billion
-- Cyclical adjustment of 5%
-- No operational adjustment
-- Multiple: 5.0x
-- Gross recovery value: SEK7.8 billion
-- Maintenance capex: SEK223.6 million
-- Net recovery value for waterfall after administrative
    expenses (5%): SEK7.4 billion
-- Estimated priority claims: SEK1.2 billion
-- Remaining recovery value: SEK6.2 billion
-- Estimated super senior debt claims: SEK870 million
-- Remaining recovery value: SEK5.3 million
-- Estimated senior secured debt claims: SEK6.6 billion
-- Recovery range: 70%-90% (rounded estimate: 80%)
-- Estimated Second lien debt claims: SEK3.6 billion
-- Recovery range: 0%-10% (rounded estimate: 0%)
-- Estimated senior subordinated debt claims, issued by Prague
    CE S.a.r.l: SEK2.7 billion
-- Recovery range: 0-10% (rounded estimate: 0%)

SEK--Swedish krona.



===================
T A J I K I S T A N
===================


BANK ESKHATA: Moody's Affirms Caa1 Deposit Rating, Outlook Stable
-----------------------------------------------------------------
Moody's Investors Service has changed the outlook to stable from
negative on Tajikistan-based OJSC Bank Eskhata's B3 long-term
local-currency deposit rating and Caa1 long-term foreign-currency
deposit rating and affirmed these ratings. At the same time,
Moody's affirmed the bank's baseline credit assessment (BCA) and
adjusted BCA of b3, and the Not-Prime short-term local- and
foreign-currency deposit ratings. The overall entity outlook has
changed to stable from negative.

Concurrently, Moody's upgraded the bank's long-term Counterparty
Risk Assessment (CR Assessment) to B2(cr) from B3(cr) and affirmed
the bank's short-term CR Assessment of Not-Prime(cr).

RATINGS RATIONALE

The outlook change to stable from negative reflects: 1) the
expected improvement in asset quality as the negative impact from
the Tajik somoni depreciation and lower workers' remittances from
Russia have already materialized in Eskhata's financial metrics,
2) the anticipated improvement in profitability, given the lower
cost of risk and higher remittances going forward.

Moody's expects asset quality to improve in 2017 and it will not
deteriorate in the next 12-18 months. According to local GAAP the
non-performing loans (over 90 days overdue) and restructured loans
reduced to 12% of the gross loan book at end-Q3 2017 from 17% at
end-2016, and the rating agency expects this trend will continue.

In 2017, asset quality benefited from more stable FX rate and
higher volume of remittances from Russia. During January-October
2017, TJS depreciated by only 10% (vs. 16% in 2016) and the
depreciation has been more gradual compared to the previous year
and did not significantly affect the borrowers' debt-service
capacity. That said, high share of foreign currency loans in the
bank's balance sheet (these loans accounted for over 50% of the
bank's loan book at the end-Q3 2017) is a rating-constraining
factor as these loans are susceptible to foreign currency rate
fluctuation, as the majority of these borrowers do not have
foreign-currency revenues.

The remittances from Russia demonstrated upward trend for first
two quarters in 2017 compared to the corresponding periods in
2016: 34% higher in the Q1 2017 and 16% in Q2 2017. Remittances
from Russia affect local consumers' incomes and performance of the
bank's loans to individuals and to small and medium-sized
enterprises (SMEs).

Moody's expects the bank's profitability to improve given lower
cost of risk and higher income related to remittances (fees and
commissions and FX conversion gains). The profitability suffered
from the higher cost of risk which increased to 6.6% in 2016 and
6.5% in 2015 from 2.7% in 2014 and decline in remittances which
reduced fees and commission and FX conversion income. As a result,
Return on Average Assets declined to 0.4% in 2016 and 2.3% in 2015
from 6.2% in 2014. Offsetting these developments, the
capitalization remained adequate with total regulatory capital
ratio standing at 17% (500bp higher than regulatory minimum) at
end-2016 albeit down from 21% a year earlier.

WHAT COULD MOVE THE RATINGS UP/DOWN

An upgrade of Eskhata's ratings may be driven by significant
improvement in operating environment which would translate into an
improvement in the asset quality and profitability metrics. The
ratings could be downgraded if the bank's loss-absorption capacity
and financial fundamentals erode beyond Moody's current
expectations, as a result of worsened operating conditions.

LIST OF AFFECTED RATINGS

Issuer: OJSC Bank Eskhata

Upgrades:

-- LT Counterparty Risk Assessment, Upgraded to B2(cr) from
    B3(cr)

Affirmations:

-- LT Bank Deposits (Local Currency), Affirmed B3, Outlook
    Changed To Stable From Negative

-- LT Bank Deposits (Foreign Currency), Affirmed Caa1, Outlook
    Changed To Stable From Negative

-- ST Bank Deposits, Affirmed NP

-- Adjusted Baseline Credit Assessment, Affirmed b3

-- Baseline Credit Assessment, Affirmed b3

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

Outlook Actions:

-- Outlook, Changed To Stable From Negative

PRINCIPAL METHODOLOGY

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



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


FOUR SEASONS: Owner Urged H/2 Capital to Back Restructuring Offer
-----------------------------------------------------------------
Javier Espinoza at The Financial Times reports that the private
equity owner of Four Seasons Health Care has urged the care home
operator's largest creditor to accept a debt restructuring offer
it made nearly a month ago as a looming interest payment threatens
to push the business into administration.

Terra Firma, led by City financier Guy Hands, called on H/2
Capital Partners to accept its offer to hand over to the lender
and the other bondholders, the 343 care homes owned by the Four
Seasons group "for a nominal sum, with immediate effect", as it
did at the start of November, the FT relates.

According to the FT, Terra Firma, which has incurred GBP450
million in losses, said it believed "this outcome will deliver
much needed certainty for patients and employees of the Four
Seasons group and most importantly achieve the consensual outcome
that Terra Firma and H/2 Capital Partners have both set out as
their core objective".

The statement comes days after H/2 offered to let the care home
operator miss its upcoming debt repayment, which is due next week,
to help talks move forward, the FT notes.

Under the new proposals, H/2, which owns the majority of the bonds
in Four Seasons since acquiring them at a discount price in 2015,
also said it will let the courts decide who has ownership over
certain homes, the FT states.


HASTINGS PIER: Lack of Funding Prompts Administration
-----------------------------------------------------
John Plummer at Third Sector reports that The Hastings Pier
Charity, which employs 44 people, has gone into administration.

The pier, which first opened in 1872, fell into disrepair during
the 1990s because of storm damage and neglect, and was finally
closed to the public in 2008, Third Sector discloses.

The structure was badly damaged by fire in 2010, but a group set
up to save the pier persuaded the local council to allow it to
take over the structure through a charity established in 2011,
Third Sector recounts.

In 2012, it secured a grant of GBP11.4 million from the Heritage
Lottery Fund towards the cost of restoring the pier, which
reopened last year, Third Sector relays.

In a statement made on Nov. 24, the charity, as cited by Third
Sector, said it had agreed a three-year business plan with the
Heritage Lottery Fund, Hastings Borough Council and East Sussex
County Council to reach self-funding status in three years.

But the statement said the plan required a further GBP800,000 and
the charity thought it would be wrong to ask community
shareholders for more money to fund the ongoing operating costs of
Hastings pier, Third Sector notes.  It said the major stakeholders
did not feel able to support the new three-year plan, according to
Third Sector.

"Sadly, therefore, the Hastings Pier Charity has been placed into
administration," Third Sector quotes the charity as saying.  "The
board will do everything to assist the administrator and step down
at the end of the year."

According to Third Sector, the charity said no staff would be made
redundant and "the pier will remain open to the public whilst the
administration takes place, and the pier will be fully operational
and staffed for 2018".

Finbarr O'Connell -- finbarr.oconnell@smithandwilliamson.com --
and Adam Stephens -- Adam.Stephens@smithandwilliamson.com -- of
the consultancy Smith & Williamson have been appointed joint
administrators of the charity, Third Sector discloses.

Mr. O'Connell, joint administrator and restructuring and recovery
partner, as cited by Third Sector, said he anticipated "extensive
talks with local stakeholders" to find a "long-term sustainable
solution".

He added: "We are already talking to one party that is seriously
interested in the pier."


MONARCH AIRLINES: Sale of Airport Slots May Hamper Competition
--------------------------------------------------------------
Bradley Gerrard at The Telegraph reports that the decision by the
Court of Appeal to allow defunct airline Monarch to sell its take-
off and landing slots could hamper competition in the airline
industry, critics have claimed.

The collapsed carrier filed for administration last month and its
air operator certificate -- the license needed to act as an
airline -- was provisionally suspended by the Civil Aviation
Authority, The Telegraph recounts.  The High Court ruled that
without an active license or any pilots, the administrators for
the airline, KPMG, could not claim ownership of the slots and
subsequently sell them, The Telegraph discloses.

Being able to sell the slots at airports including Gatwick and
Luton is essential to KPMG realising any cash for the folded
carrier's creditors, including former owners Greybull Capital, The
Telegraph notes.

The Court of Appeal overturned the High Court's decision, paving
the way for a bidding war by rivals to augment their positions at
the two airports, The Telegraph recounts.  Airport Coordination
Limited, which is responsible for the allocation of airport berths
to airlines, had fought the lawyers acting for Monarch in the High
Court, The Telegraph relays.  It wanted to be able to put
Monarch's slots in the industry pool, which reserves half of newly
available slots for new entrants at an airport, The Telegraph
states.

"The concern is the ability of rich airlines to frustrate new
competition by being able to buy slots from a defunct airline,"
The Telegraph quotes ACL as saying.  "One of the issues
highlighted in this case is when exactly an entity stops being an
airline is not defined in law."  The High Court deemed this to be
when an airline had disposed of all its aircraft and made all its
staff redundant, like Monarch.

But the appeal court, as cited by The Telegraph, said it remained
an airline until its operating license was removed completely by
the CAA.

According to The Telegraph, Henry Kikoyo --
hkikoyo@brownrudnick.com -- partner at law firm Brown Rudnick,
says he agrees with the Court of Appeal ruling in relation to
insolvency law because it fits with the anti-deprivation
principle.  This is designed to prevent the removal of assets from
an insolvent entity, The Telegraph says.

Monarch Airlines, also known as and trading as Monarch, was a
British airline based at Luton Airport, operating scheduled
flights to destinations in the Mediterranean, Canary Islands,
Cyprus, Egypt, Greece and Turkey.


PALMER & HARVEY: Nisa Retail to Provide Contract to McColl's
------------------------------------------------------------
Noor Zainab Hussain at Reuters reports that British wholesaler and
convenience retailer Nisa Retail said on Dec. 4 it would provide a
new short-term contract to its member McColl's Retail Group to
help it ensure continuity of supplies after the collapse of Palmer
& Harvey (P&H).

P&H, the UK's largest tobacco distributor which also delivers food
and drink to supermarkets, went into administration after running
out of cash, raising the possibility of tobacco shortages across
the country, Reuters recounts.

According to Reuters, analysts said McColl's was relatively well-
placed to deal with the situation but could face additional costs.

The new contract was set to starts on Dec. 4 and covers McColl
stores previously supplied by P&H, Nisa Retail, as cited by
Reuters, said in a statement, adding that the stock would be
delivered through existing Nisa-supplied McColl stores.

Earlier McColl's said it had "a contingency plan already in place
to ensure continuity of supply to the around 700 newsagents and
smaller convenience stores, previously supplied by P&H, within our
estate of 1,611 stores", Reuters relates.



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


* EC in Dispute with States on Oversight of EUR500BB Bailout Fund
-----------------------------------------------------------------
Jim Brunsden and Mehreen Khan at The Financial Times report that
the European Commission is on a collision course with Berlin and
other major European governments over its plans to increase its
oversight of the eurozone's EUR500 billion sovereign bailout fund,
angering member states who fear a power grab.

According to the FT, Brussels is expected to propose today,
Dec. 6, that the European Stability Mechanism -- set up in 2012 at
the height of the debt crisis -- is converted into a "European
Monetary Fund" with broad new powers.  The move is part of a wider
package of euro area reforms, the FT says.

While EU member states broadly support the EMF idea, senior
policymakers have warned that Brussels risks damaging the
independence of the mechanism by changing its legal standing, the
FT notes.  They say the changes would reduce the control that
eurozone governments have over the powerful institution, which
raises money on international financial markets for bailouts, the
FT discloses.

The commission is planning to use a little-known article of the
EU's treaties to propose the creation of an EMF, the FT says.
This would mark a big legal change for the ESM, which at the
moment is controlled by the 19 governments of the eurozone through
an international agreement and does not come under the scope of EU
law, according to the FT.

Brussels has argued that the legal shift would improve the
democratic accountability of the fund, which has played a vital
role in bailouts of Greece, Ireland, Cyprus and Portugal, the FT
notes.

But the move will touch a raw nerve for governments, which provide
some EUR80 billion in paid-in capital that allows the ESM to lend
to member states who need financial rescues, according to the FT.



                            *********

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

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

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


                            *********


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

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

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

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

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

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


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