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

                           E U R O P E

          Thursday, January 25, 2018, Vol. 19, No. 018


                            Headlines


B E L A R U S

BELAGROPROMBANK JSC: S&P Affirms 'B-/B' Issuer Credit Ratings


F R A N C E

COMETE HOLDING: S&P Assigns 'B' CCR, Outlook Stable
COMEXPOSIUM HOLDING: Moody's Assigns B2 CFR, Outlook Stable


G E R M A N Y

NORDEX SE: Moody's Assigns B3 Corp. Family Rating, Outlook Stable


G R E E C E

ALPHA BANK: Fitch Rates EUR500MM Mortgage Covered Bonds 'B(EXP)'


I R E L A N D

IRISH BANK: Indian Company Behind Cash Extraction Linked to Quinn
OAK HILL VI: Moody's Assigns B2 Rating to Class F Sr. Sec. Notes


I T A L Y

SIENA LEASE 2016-2: Fitch Ups Rating on Cl. C Notes From 'BB+sf'


L U X E M B O U R G

STI INFRASTRUCTURE: S&P Affirms 'CCC+' CCR, Outlook Negative


M O L D O V A

MOLDOVA: Credit Profile Reflects Weak Institutions, Moody's Says


N E T H E R L A N D S

BARINGS EURO 2018-1: Moody's Assigns (P)B2 Rating to Cl. F Notes


R U S S I A

B&N BANK: Bank of Russia Guarantees Operations
BANK OTKRITIE: Bank of Russia Guarantees Operations
MOBILE TELESYSTEMS: Fitch Affirms BB+ Long-Term IDR, Outlook Neg.
PROMSVYAZBANK PJSC: Bank of Russia Guarantees Operations
RENAISSANCE FINANCIAL: Fitch Affirms B- Long-Term IDR

SISTEMA PUBLIC: Fitch Affirms BB- Long-Term IDR, Outlook Negative


T U R K E Y

TURKEY: Fitch Affirms BB+ Long-Term IDR, Outlook Stable
TURKIYE HALK: Fitch Places BB+ IDR on Rating Watch Negative


U N I T E D   K I N G D O M

CARILLION PLC: PwC's Role in Liquidation Process Faces Scrutiny


                            *********



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B E L A R U S
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BELAGROPROMBANK JSC: S&P Affirms 'B-/B' Issuer Credit Ratings
-------------------------------------------------------------
S&P Global Ratings affirmed its 'B-/B' long- and short-term
issuer credit ratings on Belarus-based JSC Belagroprombank. The
outlook is stable.

Belagroprombank's asset quality metrics have improved following a
balance-sheet cleanup the government undertook in 2016 and
continued in 2017. The initiative  brought the share of
nonperforming loans (NPLs) down to about 1.45% of the loan book
as of Sept. 30, 2017, from more than 6% a year ago. In 2016-2017,
the bank transferred to a specially created government Agency of
Asset Management about Belarusian rubles (BYN) 545 million
(around EUR237 million) of problem loans to the highly sensitive
agriculture industry (or about 9% of its average loan book).
Additionally, about BYN190 million (around EUR80 million) and
EUR280 million of problem loans have been exchanged for
securities issued by central and local government authorities
with average maturities of five-to-seven years. This has led to
remarkable changes in the bank's asset structure and an increase
in the share of securities on the balance sheet, to 34.6% of
total assets as of Sept. 30, 2017 from 22.9% a year ago and 14.7%
as of Dec. 31, 2015. At the same time, S&P notes that the share
of restructured loans accounts for an additional 12.6% of the
loan book as of Sept. 30, 2017. After the cleanup, the bank's
total amount of problem loans (including loans overdue 90 days
and restructured loans) stands generally in line with the average
in Belarus' banking sector.

The Belarusian government has provided support to
Belagroprombank's capital position by injecting BYN309.1 million
in capital and by buying out of BYN102.4 million of the bank's
treasury shares in the first half of 2017. S&P said, "We project
the bank's risk-adjusted capital (RAC) ratio will be in the 5%-7%
range in the next 12-18 months, which is neutral for our rating
on the bank. We exclude from our RAC ratio calculation a
subordinated loan issued by the bank because we assess it as
having only minimal equity content. However, we take the loan
into account as a source of long-term funding for the bank."

S&P said, "We understand that Belagroprombank targets resuming
its loan portfolio growth and gradually changing the current
asset structure to increase the share of loans and to decrease
the share of securities. We expect annual loan book growth of 5%-
7% in 2018-2019. Under the bank's new strategy adopted at the end
of 2017, it plans to increase its presence in the small and
midsize enterprise and retail segments in different regions of
Belarus and to improve its operating efficiency, risk management,
and industry diversification. At the same time, we understand
that the bank still works in a highly risky operating
environment, which could potentially complicate its execution of
the strategy.

"We continue to classify Belagroprombank as a GRE but we do not
factor into the ratings any uplift for extraordinary government
support. In our opinion, there is a moderately high likelihood of
the Belarusian government providing Belagroprombank with timely
and sufficient extraordinary support in the event of financial
distress." S&P bases this on its view of Belagroprombank's:

-- Very important role in the local economy as the largest
    lender to the strategic agribusiness sector, which employs
    about one-third of Belarus' working population, and its high
    systemic importance.

-- Limited link with the government, given that large contingent
    liabilities in Belarus affect the government's capacity to
    provide extraordinary support to GREs.

The stable outlook on Belagroprombank reflects S&P's view the
bank's creditworthiness will likely remain unchanged over the
next 12-18 months.

Any positive rating action on Belagroprombank would depend on an
improvement in the bank's own creditworthiness, such as a sizable
and persistent increase in capital or sustainable improvement in
the bank's business diversification. An upgrade would be also
possible S&P adopted a more positive view on the risks it sees in
Belarus' banking sector.

S&P is unlikely to lower the ratings on the next 12-18 months,
but it could do so if Belagroprombank's creditworthiness
deteriorated significantly.


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F R A N C E
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COMETE HOLDING: S&P Assigns 'B' CCR, Outlook Stable
---------------------------------------------------
S&P Global Ratings assigned its 'B' long-term corporate credit
rating to France-based trade show organizer Comete Holding SAS
(Comexposium). The outlook is stable.

S&P said, "We also assigned our 'B' issue rating to the group's
proposed EUR355 million term loan B and to the proposed EUR90
million revolving credit facility (RCF). The recovery rating on
this debt is '3', indicating our expectation of average recovery
prospects (50%-70%; rounded estimate: 50%) in the event of
payment default."

The rating on Comexposium primarily incorporates its relatively
small scale compared with rated peers, RELX Group and UBM PLC, in
the highly fragmented global exhibition market, as well as its
high leverage and financial sponsor ownership.

With more than EUR280 million of reported revenue expected in
2017, Comexposium is a business-to-business and business-to-
customer trade show organizer, with a No. 2 market position in
France and No. 4 globally in term of revenue. Its
responsibilities range from managing suppliers in charge of the
exhibition space to selling space to exhibitors, as well as
ticketing, marketing, and promotion. The group's top shows
include Sial (food industry), SIMA (agribusiness), GIIAS
(automotive), and Foire de Paris (leisure and home improvement).

S&P said, "Comexposium's small scale of operations in the highly
competitive and fragmented global exhibition industry constrains
our assessment of the group's business risk. Peers include RELX
Group's exhibitions business, which had revenues over EUR1.0
billion in 2016 and UBM (more than EUR1.0 billion). We also
factor in Comexposium's limited, though improving, geographic
diversification, with about 72% of its revenues coming from
France in 2017 (compared with more than 80% in 2015). In France,
it relies heavily on business in the Paris region, which in our
view leaves the group vulnerable to unexpected risks, such as
terrorist attacks, that could affect visitor and exhibitors
numbers. We also note that Comexposium is exposed to variations
in industry cycles where the group operates. Since Comexposium
still generated about 40% of revenues through its top-10 trade
shows in 2017, we also see revenue concentration as a rating
constraint, though we acknowledge that it has reduced from 57% in
2014."

These weaknesses are somewhat tempered by Comexposium's leading
and established market position in France, underpinned by well-
recognized brands and popular shows, providing stability and
predictability to revenues and margins. For instance, as of Dec.
31, 2017, more than 80% of the total budgeted spaces for shows
occurring in the next 12 months had been already contracted. S&P
said, "On the same date, Comexposium owned more than five shows
that have generated annual revenue in excess of EUR10 million for
the past three years, which we believe evidences the "must-
attend" nature of the shows. Our assessment is also supported by
the group's diversified trade show portfolio in terms of its
industry and exhibitor base, which somewhat mitigates the lack of
geographic diversity. In addition, Comexposium benefits from a
variable cost structure, with flexibility to adjust costs or
cancel services if needed, as well as economies of scale
typically resulting from the group's strategy of replicating
existing shows abroad, when it comes to international
development, attracting local exhibitors."

S&P said, "We project that adjusted debt to EBITDA will remain
elevated at 7.0x-7.5x on average in 2018-2019. Our adjusted debt
figure for 2017 includes about EUR37 million of operating leases,
approximately EUR28 million in put option liabilities, and about
EUR184 million in non-common-equity instruments provided by
noncontrolling shareholder Chambre de Commerce et d'Industrie
Paris Ile de France, comprising payment-in-kind interest, EUR112
million of shareholder loans, and EUR73 million of preferred
shares paying dividends. Excluding these two instruments from our
calculation, we expect adjusted debt to EBITDA to be between 4.5x
and 5.5x on average in 2018-2019 in the absence of releveraging.

"We also view positively the funds from operations (FFO) cash
interest coverage ratio of above 2.0x, as well as positive free
operating cash flow (FOCF) of between EUR15 million and EUR20
million in 2017, and above EUR50 million in 2018, due to a peak
number of shows.

"The stable outlook reflects our view that Comexposium will
continue to post revenue growth on an annualized basis, on the
back of its moderate organic growth and continued expansion plan
internationally, while generating positive FOCF. This should
enable the group to maintain, for the next 12 months, FFO to cash
interest of more than 2.0x, while we anticipate adjusted debt to
EBITDA will remain above 5.0x.

"Because the global exhibition market is fragmented and we
understand that Comexposium will participate in sector
consolidation, we think potential rating downside would most
likely stem from further material or transformative debt-financed
acquisitions that push up the group's leverage. We could lower
the rating if the group's deleveraging--on a weighted average
basis to incorporate the seasonality between even and odd years--
was delayed by material debt-funded acquisitions or shareholder
returns. We could also lower our rating if Comexposium's
operating performance deteriorated, leading to negative reported
FOCF and weakened liquidity over a protracted period.

"We view an upgrade of Comexposium as unlikely over the next 12
months. We could raise our rating on Comexposium if adjusted debt
to EBITDA decreased sustainably to below 5x, together with
sizable FOCF. Any rating upside would hinge on the group
committing to a more conservative financial policy than in the
past."


COMEXPOSIUM HOLDING: Moody's Assigns B2 CFR, Outlook Stable
-----------------------------------------------------------
Moody's Investors Service has assigned a first-time B2 corporate
family rating (CFR) and B2-PD probability of default rating (PDR)
to Comete Holding, the 100% ultimate owner of Comexposium
Holding, a France-based trade fair and exhibitions organizer.
Concurrently, Moody's has assigned a B2 ratings to the company's
new EUR355 million Term Loan B and EUR90 million revolving credit
facility (RCF) to be raised at Comete Holding.

Proceeds of the new Term Loan B will be used to repay existing
debt of EUR294 million under the existing Term Loan B as well as
EUR54.7 million drawn under the company's acquisition facility,
with the bulk of the remainder used to fund transaction fees. The
transaction will be leverage neutral at closing although Moody's
expects the company to draw on the new multipurpose RCF in the
future.

"The B2 rating reflects Comexposium's good track record in
growing both revenue and EBITDA in recent years through
successful geo-cloning and well integrated acquisitions." says
Christian Azzi, Assistant Vice President at Moody's and lead
analyst on Comexposium."While the high concentration of events in
France is a credit negative, the current refinancing will provide
the company with funds to pursue its strategy of growing
international operations further".

RATINGS RATIONALE

Comexposium's B2 CFR reflects (1) its high leverage, which
Moody's expects around 5.6x at year end 2017 (annualized for
biennial events) pro-forma for the proposed refinancing; (2) the
inherent cyclicality in some of the company's targeted verticals,
in particular the leisure and fashion sectors; (3) the lower
EBITDA margins of the company compared to other events and
exhibitions organisers; (4) its small scale relative other peers
in the business services industry and the concentration of
revenue around its top ten events (40% in 2017); and (5) Moody's
expectation that the company will continue to pursue an active
M&A strategy which will hinder any meaningful deleveraging
prospects in the coming two years.

The B2 CFR also reflects (1) the company's strong position in
France, evidenced by a long and successful track-record, and the
must-attend nature of its top ten events; (2) its revenue and
EBITDA growth potential given the highly fragmented nature of the
exhibitions industry and Moody's understanding that acquisitions
will be structured with minimal earn-outs going forward; (3) its
good cash-flow generation supported by advance payments from
event exhibitors and low capital expenditure requirements; and
(4) the company's adequate liquidity profile.

Comexposium is a leading organiser of trade fairs & trade shows,
with #2 market position in France and #4 market position globally
in terms of revenue.

Since 2015, when private equity sponsor acquired a 50.1% stake in
the company, the company has demonstrated strong growth, in
particular through bolt-on acquisitions of smaller events and the
replication of existing formats internationally known as "geo-
adaptation". Since then, Comexposium has completed 12
acquisitions and geo-adapted 7 of its events internationally
leading the company to expect annualized revenue of EUR335
million and annualized EBITDA of EUR72 million in 2017 (pro-forma
for the 2017 acquisitions and annualized for biennial and
triennial shows), up from revenue of EUR258 million and EBITDA of
EUR56 million in 2015.

The company has been focused on diversifying its revenue to be
less reliant on the French exhibition market. As of around 72% of
revenues are generated by events held in France (vs. 86% in 2015)
and a large part of these are generated from international
exhibitors.

Comexposium enjoys good cash-flow generation, as is typical for
leading exhibition organisers as bookings are typically received
and paid for 6 to 18 months in advance of the events taking
place. This provides the company with some visibility over future
earnings, albeit only on a recurring short-term. Moody's expects
the company to generate positive free cash flow of around EUR35
million on average per year over the next two years as advance
payments lead to negative working capital and, as is customary
for exhibition organisers, Comexposium's capital expenditure
requirements are low at around 1% of revenue.

Despite its recent growth (from 100 events in 2015 to 177 in
2017), Comexposium's revenues and EBITDA remain concentrated on
the company's top ten events which, in 2017, are expected to
generate 40% of the annualized revenue. However, key-event risk
is mitigated by the very strong brand names and long standing
tenure of these events.

Comexposium expects to continue to drive growth through expanding
its portfolio of existing events, exhibitions and congresses
internationally by "geo-adapting" these in local markets where it
believes demand for similar events exists. Those events
capitalise on the success and brand of the original one but
remain only marginally profitable in their first years.

In addition to "geo-adapting", Moody's expects the company to
pursue further bolt-on acquisitions and the current rating
assumes that the company will make use of its new EUR90 million
RCF to at least part-finance these.

Comexposium has an adequate liquidity profile, supported by a
fully undrawn EUR90 million revolving credit facility (RCF) and a
EUR62 million cash balance. The current refinancing will also
extend maturities further with the new Term Loan B expected to
mature in 2026 and there is no mandatory scheduled amortization.

The B2 ratings on the Term Loan B and the RCF, in line with the
CFR, reflect the pari passu nature of the Term Loan and the RCF
and the fact these effectively constitute the majority of the
company's liabilities. The B2-PD PDR, in line with the CFR,
reflects Moody's assumption of a 50% recovery rate as is
customary for all-bank-debt capital structures with only one
maintenance covenant set at ample headroom. In the case of the
new facilities, Comexposium will have to comply with a net debt
covenant starting at 7.5x.

RATIONALE FOR STABLE OUTLOOK

The stable outlook reflects the company's high quality portfolio
of "must-attend" events, high proportion of recurring revenues as
well as Moody's expectations that Comexposium will continue to
maintain a prudent financial policy with regards to acquisitions
and shareholder remuneration, and to maintain an adequate
liquidity profile.

WHAT COULD CHANGE THE RATINGS UP/DOWN

Positive ratings pressure could develop should Comexposium's
leverage (Moody's adjusted gross debt / average EBITDA)
sustainably decrease to below 4.75x. An upgrade would also
require the company to successfully achieve organic mid-single
digit revenue growth on an annualized basis.

Negative ratings pressure could develop should Comexposium's
leverage (Moody's adjusted gross debt / average EBITDA) increase
towards 6.0x as a result of softening in demand for the company's
events or debt funded acquisitions. Downward pressure would also
ensue should the company's liquidity profile deteriorate
including a reduction in covenant headroom.

LIST OF RATINGS

Issuer: Comete Holding

Assignments:

-- LT Corporate Family Rating, Assigned B2

-- Probability of Default Rating, Assigned B2-PD

-- BACKED Senior Secured Bank Credit Facility, Assigned B2
(LGD4)

Outlook Action:

-- Outlook, Assigned Stable

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.

Headquartered in Paris, France, Comexposium is the number four
commercial exhibitions organizer by size globally. Comexposium
organizes 177 events and exhibitions (annual, biennial and
triennial) with a focus on the food and agriculture, leisure,
cyber security and digital verticals among others.

The company was formed in 2008 through a 50/50 joint venture that
saw Chambre de Commerce et d'Industrie de region Paris Ile-de-
France ("CCIR") merge its Comexpo business with and Unibail-
Rodamco's Exposium's exhibitions subsidiary. In July 2015,
Charterhouse acquired a majority (50.1%) stake in Comexposium
with CCIR rolling-over its 49.9% stake.

In 2016, the company generated revenues and EBITDA of EUR227
million and EUR57 million respectively.


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G E R M A N Y
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NORDEX SE: Moody's Assigns B3 Corp. Family Rating, Outlook Stable
-----------------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating
(CFR) and B3-PD Probability Default Rating to Nordex SE.
Concurrently, Moody's assigned a B3 (LGD3) rating to the
company's proposed EUR275 million senior unsecured notes maturing
in 2023. The outlook on the ratings is stable.

This is the first time that Moody's has rated Nordex.

RATINGS RATIONALE

The B3 CFR is primarily supported by (1) the company's improved
scale, geographic footprint and product portfolio enhanced since
the merger with Acciona Wind Power in 2016 which moved the group
into a global top-5 position in the wind turbine manufacturing
industry (excluding Chinese players), but in a consolidating and
intensively competitive environment; (2) a strong cash position
on the balance sheet of more than EUR600 million as of year-end
2017; (3) its service business representing around 10% of total
revenues and increasing with the installed base providing good
visibility, more stability and typically higher margins; and (4)
medium-term positive prospects for the wind industry.

At the same time, the CFR is constrained by (1) the limited
product diversification and some geographical concentration in
the volatile wind industry; (2) the weak operating performance
and negative free cash flow expected for the next 12-18 months as
a result of the freezing of installations in the key German
market and general fierce price pressure in the industry; (3)
some degree of uncertainty regarding market developments in the
next 12-18 months both in terms of new capacity and pricing as
the wind industry is adapting to the new system of auctions to
allocate new developments; and (4) low pricing power as products
are mainly undifferentiated which allowed Nordex to generate only
modest profitability historically compared to other manufacturing
peers.


The B3 CFR assumes a successful placement of EUR275 million
notes. Proceeds from the bond would largely be earmarked to repay
part of Nordex' outstanding private placements maturing in 2019
and 2021.

STRUCTURAL CONSIDERATIONS

The B3 rating assigned to the company's proposed EUR275 million
senior unsecured notes is at the same level as the CFR, which
reflects the fact that they will account for the large majority
of group borrowings. Nordex SE other borrowings include private
placement notes (Schuldscheindarlehen) of which about EUR288
million will remain outstanding after repayment with proceeds
from the notes. Beyond that, Nordex Energy GmbH has borrowed
EUR78 million under a loan from the European Investment Bank
(EIB) and Nordex has borrowed EUR42 million via foreign operating
subsidiaries under ancillary facilities to the EUR1.21 billion
facility agreement.

LIQUIDITY

With the successful placement of the proposed EUR275 million
bond, Moody's would consider the company's liquidity to be
adequate over at least 12-18 months in spite of Moody's
expectation of a significant drop in earnings in 2018 and
negative free cash flows, which might however be mitigated by
potential efficiency gains in working capital management.
Liquidity also benefits from more than EUR600 million of cash and
cash equivalents on balance as of December 2017. Nevertheless,
Moody's acknowledge the fact that there is an element of
unpredictability and volatility in cash flows, considering the
large size and long lead times of projects.

Nordex does not have any committed credit facility but retains a
syndicated committed guarantee facility of EUR1.2billion, of
which EUR200 million can be drawn as cash via ancillary
facilities. The facility is subject to three covenants (leverage,
interest coverage and equity ratio). On the back of the weak
operating performance expected for the next two years, the
covenants were reset in December 2017, providing the group with
solid headroom even under the expected adverse development.

OUTLOOK

The stable outlook assumes a successful refinancing of the
upcoming 2019 maturities of the company's private placement
notes. It further factors in Moody's expectation that operating
performance will deteriorate over the next 12-18 months as long
as the installations in Germany remain delayed, but that it will
gradually improve thereafter to levels more sustainable with the
current business model.

WHAT COULD CHANGE THE RATING UP/DOWN

The ratings could be downgraded if (1) the company fails to grow
its order book in 2018 which would not allow the topline to grow
and the operating performance to improve in 2019/20 as expected
or (2) if the liquidity profile does not remain sufficient over
at least a 12-18 month horizon.

Upward potential would develop if (1) Moody's adjusted EBITA
margin were to remain sustainably positive, (2) free cash flow
turns positive and (3) Moody's adjusted gross leverage will
remain sustainably below 5.0x.

The principal methodology used in these ratings was Global
Manufacturing Companies published in June 2017.

PROFILE

Headquartered in Hamburg, Germany, Nordex is a one of the leading
manufacturer of onshore wind turbine generators, holding a top-5
position globally (excluding Chinese players). Nordex operates
production sites in Germany, Spain, Brazil, India and the U.S.
The group generated revenues of EUR3.2 billion during the twelve
months to November 2017 with a cumulated installed base of around
22.4 GW. Most of Nordex revenues (around 90%) come from the sale
of onshore turbine while the remaining part comes from its
service business which provides maintenance and repair services
to its installed base. Moody's note that Nordex is occasionally
also active in the area of project development. Nordex' stock has
been listed on the Frankfurt stock exchange since 2001 and is
listed in the TecDax index. In 2016, the company merged with
Acciona Wind Power. The parent company of Acciona Wind Power,
Acciona S.A., is now the main shareholder of Nordex with 29.9%.
Acciona is an infrastructure and energy company with sales
mounting to EUR6.0 billion in 2016. Acciona also belongs to
Nordex' top 10 customers.


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ALPHA BANK: Fitch Rates EUR500MM Mortgage Covered Bonds 'B(EXP)'
----------------------------------------------------------------
Fitch Ratings has assigned Alpha Bank AE's (Alpha, RD/RD/ccc/RWE)
upcoming issuance of EUR500 million mortgage covered bonds an
expected rating of 'B(EXP)' with a Positive Outlook. The upcoming
issuance (Series 7) will pay a fixed interest rate with a tenor
of five years and includes a 12-months maturity extension to be
triggered upon failure to pay principal at the scheduled maturity
date.

With the upcoming Series 7, Alpha is introducing amendments to
the terms and conditions of its covered bond programme
established in 2010 (Programme I) such as the soft bullet
redemption instead of conditional pass-through, and the increase
of liquidity reserves to 12 months from three months.

The assignment of the final rating is contingent upon receipt of
final documents and legal opinions conforming to the information
already received.

KEY RATING DRIVERS

Country Ceiling
The 'B(EXP)' covered bonds rating is constrained by Greece's 'B'
Country Ceiling, and it is based on Alpha's Viability Rating (VR)
of 'ccc', an Issuer Default Rating (IDR) uplift of two notches
and a recovery uplift of one notch (of the three assigned to the
programme). In a scenario where the covered bonds are assumed to
default, Fitch would expect at least good recovery prospects as
the cover pool comprises Greek residential mortgage loans.

The Positive Outlook reflects that on Greece's sovereign IDR and
the strong protection offered via the 25% minimum contractual
over-collateralisation (OC), which the agency views as sufficient
to sustain stresses above the 'B' rating and which provides more
protection than the 5.3% 'B(EXP)' breakeven OC.

IDR Uplift
The two-notch IDR uplift assigned to the covered bonds reflects
the covered bonds' exemption from bail-in, Fitch's view that the
issuer's resolution scenario would not result in a direct
enforcement of the recourse against the cover pool and the low
risk of under-collateralisation at the point of resolution, in
view of the applicable regulatory safeguards. This is based on
Fitch's assessment on the Greek legal framework, the presence of
an asset monitor, asset eligibility criteria and minimum
contractual level of OC. It also reflects that Alpha's Long-Term
IDR is not support-driven (institutional or by the sovereign).

Recovery Uplift
The covered bonds are eligible for a recovery uplift of three
notches as they will be secured by a pool of prime residential
mortgages. The 25% relied-upon OC provides more protection than
the 7.4% 'B(EXP)' stressed credit loss estimated for the cover
pool, which is one of the lowest among Greek covered bond
programmes rated by Fitch.

The EUR717 million cover pool comprises borrower and loan
characteristics with a low risk profile. The weighted average
(WA) seasoning is about nine years, almost all the loans were
granted to purchase or construct a house, and 76.7% is linked to
permanent employees, pensioners or civil servants. Restructured
and subsidised loans are no longer admitted in the cover pool as
per the revised eligibility criteria, but 6.7% of the loans are
in early stage arrears by less than 30 days past due.

Payment Continuity Uplift
Fitch has assigned a payment continuity uplift (PCU) of six
notches to the programme, although this is not currently a driver
of the rating. The covered bonds will have a soft bullet
redemption profile with a 12-month principal maturity extension,
and a liquidity reserve is in place providing coverage for 12-
month interest payments and senior expenses and will be rolled
over on each payment date. The agency considers asset segregation
and alternative management features of the covered bonds
compatible with the six-notch PCU uplift.

RATING SENSITIVITIES

Changes in Greece's Country Ceiling could affect the rating of
Alpha Bank AE's covered bond programme. All else being equal, an
upgrade of the Country Ceiling will lead to an upgrade of the
covered bonds programme as long as the relied-upon
overcollateralisation (OC) of the programme is sufficient to
compensate for the stresses commensurate with the Country
Ceiling.

A downgrade or upgrade of the bank's 'ccc' Viability Rating by
one notch would leave the 'B' covered bonds rating unaffected
because of the cushion provided by notches of recoveries not
factored in the current rating (downside scenario) and because of
the Greece's 'B' Country Ceiling cap (upside scenario).

An increase of the cover pool credit loss estimate above the 25%
OC relied upon by Fitch would lead to a revision of the Outlook
to Stable, all else being equal.


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I R E L A N D
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IRISH BANK: Indian Company Behind Cash Extraction Linked to Quinn
-----------------------------------------------------------------
Mary Carolan at The Irish Times reports that a company connected
to an advisory firm to the family of businessman Sean Quinn is
allegedly behind the "cash extraction" of some US$15 million
(EUR12.26 million) from an Indian company in a number of bogus
transactions, it has been claimed at the Commercial Court.

The alleged extraction is part of a scheme designed to put US$455
million in Quinn group assets beyond the reach of Irish Bank
Resolution Corporation (IBRC), it is claimed, The Irish Times
discloses.

According to The Irish Times, on Jan. 22, Mr. Justice Brian
McGovern granted IBRC liquidator Kieran Wallace interim orders
appointing a receiver over shares in the Indian company, Macksoft
Tech Pty, which was recently the subject of insolvency
proceedings in India taken by a Quinn firm there.

Mr. Wallace claims Macksoft's shares are held by a Dubai-
registered company, Mecon FZE, whose controlling shareholder,
Willem Smit, is the principal of Senat Legal Consultancy which,
Mr. Wallace alleges, has been an adviser to members of the Quinn
family, The Irish Times relates.

In 2012, the High Court granted orders prohibiting members of the
Quinn family and a number of companies, including Mecon,
dissipating assets within the Quinn international property group
(IPG), The Irish Times recounts.

                  About Irish Bank Resolution

Irish Bank Resolution Corp., the liquidation vehicle for what was
once one of Ireland's largest banks, filed a Chapter 15 petition
(Bankr. D. Del. Case No. 13-12159) on Aug. 26, 2013, to protect
U.S. assets of the former Anglo Irish Bank Corp. from being
seized by creditors.  Irish Bank Resolution sought assistance
from the U.S. court in liquidating Anglo Irish Bank Corp. and
Irish Nationwide Building Society.  The two banks failed and were
merged into IBRC in July 2011.  IBRC is tasked with winding them
down and liquidating their assets.  In February, when Irish
lawmakers adopted the Irish Bank Resolution Corp., IBRC was
placed into a special liquidation in the Irish High Court to
complete liquidation and distribution of the two banks' assets.

IBRC's principal asset as of June 2012 was a loan portfolio
valued at some EUR25 billion (US$33.5 billion).  About 70 percent
of the loans were to Irish borrowers. Some 5 percent of the
portfolio was under U.S. law, according to a court filing.  Total
liabilities in June 2012 were about EUR50 billion, according
to a court filing.

Most assets in the U.S. have been sold already.  IBRC is involved
in lawsuits in the U.S.

IBRC was granted protection under Chapter 15 of the U.S.
Bankruptcy Code in December 2013.

Kieran Wallace and Eamonn Richardson of KPMG have been named the
special liquidators.


OAK HILL VI: Moody's Assigns B2 Rating to Class F Sr. Sec. Notes
----------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to notes issued by Oak Hill European
Credit Partners VI Designated Activity Company:

-- EUR259M Class A-1 Senior Secured Floating Rate Notes due
    2032, Definitive Rating Assigned Aaa (sf)

-- EUR20M Class A-2 Senior Secured Fixed Rate Notes due 2032,
    Definitive Rating Assigned Aaa (sf)

-- EUR35.55M Class B-1 Senior Secured Floating Rate Notes due
    2032, Definitive Rating Assigned Aa2 (sf)

-- EUR10.55M Class B-2 Senior Secured Fixed Rate Notes due 2032,
    Definitive Rating Assigned Aa2 (sf)

-- EUR26.5M Class C Senior Secured Deferrable Floating Rate
    Notes due 2032, Definitive Rating Assigned A2 (sf)

-- EUR23M Class D Senior Secured Deferrable Floating Rate Notes
    due 2032, Definitive Rating Assigned Baa2 (sf)

-- EUR30.6M Class E Senior Secured Deferrable Floating Rate
    Notes due 2032, Definitive Rating Assigned Ba2 (sf)

-- EUR13.5M Class F Senior Secured Deferrable Floating Rate
    Notes due 2032, Definitive Rating Assigned B2 (sf)

RATINGS RATIONALE

Moody's definitive ratings of the rated notes address the
expected loss posed to noteholders by the legal final maturity of
the notes in 2032. The definitive ratings reflect the risks due
to defaults on the underlying portfolio of loans given the
characteristics and eligibility criteria of the constituent
assets, the relevant portfolio tests and covenants as well as the
transaction's capital and legal structure. Furthermore, Moody's
is of the opinion that the collateral manager, Oak Hill Advisors
(Europe), LLP ("Oak Hill"), has sufficient experience and
operational capacity and is capable of managing this CLO.

Oak Hill VI is a managed cash flow CLO. At least 90% of the
portfolio must consist of secured senior loans or senior secured
bonds and up to 10% of the portfolio may consist of unsecured
senior loans, second-lien loans, high yield bonds and mezzanine
loans. The portfolio is expected to be approximately 50% ramped
up as of the closing date and to be comprised predominantly of
corporate loans to obligors domiciled in Western Europe. The
remainder of the portfolio will be acquired during the ramp-up
period in compliance with the portfolio guidelines.

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

In addition to the eight classes of notes rated by Moody's, the
Issuer will issue EUR45.2M of subordinated notes which will not
be rated.

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

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:

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

Loss and Cash Flow Analysis:

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

Therefore, the expected loss or EL for each tranche is the sum
product of (i) the probability of occurrence of each default
scenario and (ii) the loss derived from the cash flow model in
each default scenario for each tranche. As such, Moody's
encompasses the assessment of stressed scenarios.

Par amount: EUR450,000,000

Diversity Score: 38

Weighted Average Rating Factor (WARF): 2825

Weighted Average Spread (WAS): 3.5%

Weighted Average Coupon (WAC): 5.0%

Weighted Average Recovery Rate (WARR): 43.0%

Weighted Average Life (WAL): 8.5 years

Stress Scenarios:

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

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

Ratings Impact in Rating Notches:

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

Class A-2 Senior Secured Fixed Rate Notes: -1

Class B-1 Senior Secured Floating Rate Notes: -2

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

Class C Senior Secured Deferrable Floating Rate Notes: -2

Class D Senior Secured Deferrable Floating Rate Notes: -2

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes: 0

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

Ratings Impact in Rating Notches:

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

Class A-2 Senior Secured Fixed Rate Notes: -1

Class B-1 Senior Secured Floating Rate Notes: -3

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

Class C Senior Secured Deferrable Floating Rate Notes: -4

Class D Senior Secured Deferrable Floating Rate Notes: -2

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes: -2


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


SIENA LEASE 2016-2: Fitch Ups Rating on Cl. C Notes From 'BB+sf'
----------------------------------------------------------------
Fitch Ratings has upgraded Siena Lease 2016-2 S.r.l.'s class B
and C notes as follows:

EUR188.6 million Class A notes: affirmed at 'AAsf', Outlook
Stable
EUR202.5 million Class B notes: upgraded to 'AAsf' from 'A+sf';
Outlook Stable
EUR202.5 million Class C notes: upgraded to 'A-sf' from 'BB+sf';
Outlook Stable

The transaction is a granular cash flow securitisation of a
static pool of euro-denominated receivables derived from lease
agreements entered into among Italian small and medium- sized
enterprises, entrepreneurs, artisans and self-employed
individuals, and Monte dei Paschi di Siena Leasing and Factoring
Banca per i servizi finanziari alle imprese (MPS L&F), a fully
owned subsidiary of Monte dei Paschi di Siena S.p.A.

KEY RATING DRIVERS

The upgrade reflects increase in credit enhancement (CE),
together with the stable performance of the underlying asset pool
and improved performance of the bank's lease book shown in
updated data received from the originator.

Rapid Deleveraging
The transaction has deleveraged by 17% over the last 12 months.
CE of the class B notes totalled 61.9%, which is significantly
greater than the original CE of the class A notes. Likewise, CE
of the class C notes totalled 42.1%, which is greater than the
original CE of the class B notes. As of end-August 2017, the
securitised portfolio remained fairly diversified, with the
largest Fitch industry and the top 10 lessees accounting for 29%
and 7% of the portfolio, respectively.

Improved Lease Book Performance
Updated data received by the originator shows continued
improvement in the bank's lease book performance. This led Fitch
to revise its bank benchmark to 5.5% from 6.5%, compared with a
country benchmark of 4.75%. The benchmark revision led to
slightly lower probability of default (PD) assumptions for the
loan-by-loan analysis Fitch performed using the internal ratings
assigned by the originator.

Class B Deferability Unlikely
The presence of cumulative default triggers - if breached - would
cause class B interest and/or class C interest to be deferred.
Fitch sees this deferability feature as a structural weakness in
a severe stress scenario. However, due to the level of
deleveraging in the structure over the past one year, the
cumulative default trigger of 35% is unlikely to be breached
before the class A notes are repaid in full.

Sovereign Cap
The class A notes are capped at 'AAsf', driven by sovereign
dependency on Italy, in accordance with Fitch's Criteria for
Sovereign Risk in Developed Markets for Structured Finance and
Covered Bonds.

RATING SENSITIVITIES

An increase in default probability by 25% will not affect the
ratings on the class A and B notes due to the considerable buffer
offered by the available CE over their current capped ratings.
The same increase of default probability for the class C notes
would, however, cause a downgrade by two notches.

Reducing Fitch recovery assumption by 25% would not affect the
ratings on any of the class A, B and C notes.


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


STI INFRASTRUCTURE: S&P Affirms 'CCC+' CCR, Outlook Negative
------------------------------------------------------------
S&P Global Ratings affirmed its 'CCC+' corporate credit rating on
STI Infrastructure Sarl, the Luxembourg-based holding company of
Baltimore-based Synagro, an organic biosolids management company.

S&P said, "At the same time, we affirmed our 'CCC+' issue-level
and '3' recovery ratings on the company's term loan. The '3'
recovery rating reflects our expectation of meaningful (50%-70%;
rounded estimate: 60%) recovery for lenders in the event of a
payment default.

"The affirmation reflects our belief that, despite the company's
recent amendment to its revolving credit facility -- which
revises covenant levels, extends the revolver maturity to 2020
from 2018, and includes a $15 million equity infusion from equity
sponsor EQT Partners -- the amendment provides a short-term
liquidity fix rather than a long-term solution to STI's liquidity
needs.

"We expect the company will be able to comply with a revised
total leverage covenant during the first three quarters of 2018
as the $15 million sponsor equity infusion benefits covenant
EBITDA. However, we forecast cushion under the leverage covenant
to decline to the 5%-10% range in the fourth quarter of fiscal
year 2018, as the benefit from the equity support rolls off, even
factoring in some improvements in the company's operating
performance. Given the company's relatively small EBITDA base,
minor changes in profitability in the next 12 months could
significantly reduce covenant headroom and increase risk that the
company may not be able to comply with the leverage covenant. We
will continue to monitor the company's operating performance this
year and assess its ability to maintain compliance with the
leverage covenant.

"The negative outlook on STI reflects our view that the company
will have less than 10% cushion under its leverage covenant over
the next 12 months, which we believe elevates the risk of a
potential covenant violation in the event of continued operating
underperformance. We believe it may be challenging for the
company to remain compliant with the covenant in the next 12
months, particularly in the fourth quarter of 2018, as STI loses
the benefit of EQT's equity infusion, which will support covenant
EBITDA for the first three quarters of 2018.

"We could lower our ratings on STI if the company's headroom
under its leverage ratio covenant continues to decline.
Specifically, we could lower our rating if the company's headroom
declines to less than 5% or we believe that a breach of the
company's leverage covenant is likely.

"We could consider revising the outlook to stable if the company
increases its covenant headroom to more than 10% on a sustained
basis. We believe this could occur by improving its profitability
and paying down its debt or further covenant amendments to
provide for additional headroom.

"We affirmed our 'CCC+' issue-level rating on STI's senior
secured term loan. The '3' recovery rating is unchanged,
indicating our expectation for meaningful recovery (50%-70%;
rounded estimate: 60%) in the event of a payment default. Our
simulated default scenario contemplates a default occurring in
2019 arising from a combination of declining demand for the
company's services, pricing pressures from strained municipal
budgets, and a shift in its customers' preferences toward cheaper
disposal alternatives such as nearby landfills. We also
incorporated the loss of a major client and increased collection
risk into our scenario, specifically in a weak economic
environment. At this point, the company's cash flow would be
insufficient to cover its interest expense and nondiscretionary
maintenance capex.

"We use a 5x EBITDA multiple, reflecting the company's operations
in the niche biosolids management industry and STI's below-
average profitability in the environmental services industry."

-- Revolver will be 85% drawn at default.
-- LIBOR at 2.5% in our assumed default year.
-- All debt obligations include six months of outstanding
    interest.
-- Emergence EBITDA: $23 million
-- Multiple: 5x
-- Gross recovery value: $114 million
-- Net recovery value for waterfall after admin expenses (5%):
    $108 million
-- Obligor/nonobligor valuation split: 55%/45%
-- Estimated first-lien claim: $175 million
-- Value available for first-lien claim (including value from
    deficiency claims): $108 million
    --Recovery range: 50%-70% (rounded estimate: 60%)


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


MOLDOVA: Credit Profile Reflects Weak Institutions, Moody's Says
----------------------------------------------------------------
Moldova's (B3 stable) credit profile reflects its low economic
strength, weak institutions and its vulnerability to external
shocks, Moody's Investors Service said in a new annual report.

The report, "Government of Moldova - B3 stable, Annual credit
analysis", is now available on www.moodys.com. Moody's
subscribers can access this report via the link at the end of
this press release. The research is an update to the markets and
does not constitute a rating action.

"Moldova's moderate and volatile growth prospects are linked to
the agricultural sector's vulnerability to weather-related
shocks, the associated high concentration of exports and the
economy's heavy reliance on foreign remittances," said Daniela Re
Fraschini, a Moody's Assistant Vice President -- Analyst and the
report's author.

"A key challenge facing Moldova is to shift the economy away from
its reliance on remittances to support domestic consumption,
which fuelled much of the domestic demand-driven growth pre-2009,
and towards a growth model based on investment and the
development of goods- and services-exporting industries."

Moody's expects Moldova's economy to grow by around 3.5% in 2018,
similar to the previous year. In 2017, domestic demand was
supported by the pick-up in remittances on the back of a stronger
recovery in Russia and Europe. This also led to higher imports
and an overall negative contribution to growth from net exports.
Over the medium-term, Moody's forecasts a growth rate of around
4%.

Moldova scores poorly on the Worldwide Governance Indicators, the
quantitative indicators Moody's uses in its assessment of
institutional strength. The country scores particularly badly on
control of corruption and is positioned in the 9th percentile in
Moody's rated universe, down from the already low 13th percentile
one year ago.

The country's credit strengths include the relatively low,
although increasing, debt burden and low debt-servicing costs due
to a reliance on predominantly concessional international
financing. Moldova is also only moderately susceptible to event
risk in each category of political, banking, external and
government liquidity risk.

Moody's estimates that the budget deficit will widen to close to
3% of GDP in 2017 from 2.1% in 2016, broadly in line with revised
budget that was approved in October 2017. However, based on
budget execution for the first 11 months of the year, the deficit
might be lower than projected. The general government deficit is
projected to stand at 2.9% of GDP in 2018.

Upward pressure on Moldova's sovereign rating could arise if the
contingent liability risks posed by the country's weak banking
system were to diminish meaningfully or the new resolution
framework proves to be sufficiently robust to avoid additional
liabilities on the government's balance sheet.

Conversely, Moldova's government rating could be downgraded if
the authorities do not continue the reforms associated with the
IMF program. It would also be negative if the medium-term fiscal
consolidation effort fails.


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


BARINGS EURO 2018-1: Moody's Assigns (P)B2 Rating to Cl. F Notes
----------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following provisional ratings to notes to be issued by Barings
Euro CLO 2018-1 B.V.:

-- EUR263,250,000 Class A-1 Senior Secured Floating Rate Notes
    due 2031, Assigned (P)Aaa (sf)

-- EUR32,100,000 Class B-1 Senior Secured Floating Rate Notes
    due 2031, Assigned (P)Aa2 (sf)

-- EUR30,000,000 Class B-2 Senior Secured Fixed Rate Notes due
    2031, Assigned (P)Aa2 (sf)

-- EUR30,150,000 Class C Senior Secured Deferrable Floating Rate
    Notes due 2031, Assigned (P)A2 (sf)

-- EUR22,500,000 Class D Senior Secured Deferrable Floating Rate
    Notes due 2031, Assigned (P)Baa2 (sf)

-- EUR24,750,000 Class E Senior Secured Deferrable Floating Rate
    Notes due 2031, Assigned (P)Ba2 (sf)

-- EUR13,500,000 Class F Senior Secured Deferrable Floating Rate
    Notes due 2031, Assigned (P)B2 (sf)

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

RATINGS RATIONALE

Moody's provisional ratings of the rated notes address the
expected loss posed to noteholders by the legal final maturity of
the notes in 2031. The provisional ratings reflect the risks due
to defaults on the underlying portfolio of loans given the
characteristics and eligibility criteria of the constituent
assets, the relevant portfolio tests and covenants as well as the
transaction's capital and legal structure. Furthermore, Moody's
is of the opinion that the collateral manager, Barings (U.K.)
Limited has sufficient experience and operational capacity and is
capable of managing this CLO.

Barings Euro CLO 2018-1 B.V. is a managed cash flow CLO. At least
96% of the portfolio must consist of senior secured loans and
senior secured bonds and up to 4% of the portfolio may consist of
unsecured senior loans, second-lien loans, mezzanine obligations
and high yield bonds. The portfolio is expected to be at least
71% ramped up as of the closing date and to be comprised
predominantly of corporate loans to obligors domiciled in Western
Europe.

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

In addition to the seven classes of notes rated by Moody's, the
Issuer will issue EUR42.05M of subordinated notes which will not
be rated.

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

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

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

Loss and Cash Flow Analysis:

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

Therefore, the expected loss or EL for each tranche is the sum
product of (i) the probability of occurrence of each default
scenario and (ii) the loss derived from the cash flow model in
each default scenario for each tranche. As such, Moody's
encompasses the assessment of stressed scenarios.

Par amount: EUR450,000,000

Diversity Score: 45

Weighted Average Rating Factor (WARF): 2870

Weighted Average Spread (WAS): 3.50%

Weighted Average Coupon (WAC): 4.90%

Weighted Average Recovery Rate (WARR): 42.0%

Weighted Average Life (WAL): 8 years

Stress Scenarios:

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

Percentage Change in WARF: WARF + 15% (to 3301 from 2870)

Ratings Impact in Rating Notches:

Class A-1 Senior Secured Floating Rate Notes: 0

Class B-1 Senior Secured Floating Rate Notes: -2

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

Class C Senior Secured Deferrable Floating Rate Notes: -2

Class D Senior Secured Deferrable Floating Rate Notes: -1

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes: 0

Percentage Change in WARF: WARF +30% (to 3730 from 2870)

Ratings Impact in Rating Notches:

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

Class B-1 Senior Secured Floating Rate Notes: -3

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

Class C Senior Secured Deferrable Floating Rate Notes: -4

Class D Senior Secured Deferrable Floating Rate Notes: -3

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes: -1

Methodology Underlying the Rating Action:

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


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


B&N BANK: Bank of Russia Guarantees Operations
----------------------------------------------
The Bank of Russia Board of Directors has decided to guarantee
the continuity of the activity of the Public Joint-stock Company
B&N Bank in the course of implementation of the plan for the Bank
of Russia's involvement in bankruptcy prevention measures
underway at the Bank, according to the press service of the
Central Bank of Russia.


BANK OTKRITIE: Bank of Russia Guarantees Operations
---------------------------------------------------
The Bank of Russia Board of Directors has decided to guarantee
the continuity of the activity of the Public Joint-stock Company
Bank Otkritie Financial Corporation in the course of
implementation of the plan for the Bank of Russia's involvement
in bankruptcy prevention measures underway at the Bank, according
to the press service of the Central Bank of Russia.


MOBILE TELESYSTEMS: Fitch Affirms BB+ Long-Term IDR, Outlook Neg.
-----------------------------------------------------------------
Fitch Ratings has affirmed PJSC Mobile TeleSystems' (MTS) Long-
Term Issuer Default Rating (IDR) at 'BB+' and removed all ratings
from Rating Watch Negative (RWN). The Outlook on the IDR is
Negative.

The RWN has been removed following the settlement agreement by
its parent Sistema Public Joint Stock Financial Corporation's
(Sistema; BB-/Negative) with Rosneft, Bashneft and the Republic
of Bashkortostan on litigation against Sistema. Sistema has to
pay RUB100 billion compensation to Bashneft by end-1Q18,
according to the agreement.

Fitch had placed MTS's ratings on RWN on 28 June 2017 following
the Russian court injunction to freeze significant Sistema's
assets, including its 31.76% stake in MTS, in relation to the
claims filed by Rosneft against Sistema.

KEY RATING DRIVERS

Sistema's Settlement Payment: Of the total settlement of RUB100
billion to Bashneft, RUB20 billion was already paid in December
2017. Sistema should pay a further RUB40bn each by end-February
and end-March 2018, and has organised borrowings for these
amounts. Following the payment of the settlement all parties
should withdraw their remaining claims to each other from courts.

Fundamentals Weighed Down by Shareholding: MTS has a strong
credit profile supported by its leading market positions on the
Russian mobile market, low leverage and robust free cash flow
(FCF) generation. Its ratings are notched down for the risk of
negative influence of Sistema. Under Fitch's Parent and
Subsidiary Rating Linkage Criteria (PSL), a subsidiary can
generally be rated a maximum of two notches above the
consolidated profile of its weaker parent in the presence of weak
parent/subsidiary links. The Negative Outlook on MTS's IDR
reflects that of Sistema's rating.

Strong 9M17 Performance: MTS's operating and financial profile
remained strong in 2017. Revenue in 9M17 grew by 0.6% yoy,
supported by higher mobile data usage and increased international
roaming activity. EBITDA margin improved to 41% in 9M17 from 39%
in 9M16. MTS has slightly upgraded its guidance on revenue growth
and on EBITDA for 2017 on the back of stronger growth and cost
optimisation measures in Russia. Capex guidance remains unchanged
at RUB75 billion in 2017.

Robust Pre-Dividend FCF Generation: Fitch project that MTS's pre-
dividend FCF margin will be maintained in the low double-digit
territory, supported by strong EBITDA generation and stable capex
at below 20% of revenue over the next four years. EBITDA margin
is likely to have been around 40% in 2017 and is forecast by
Fitch to slightly decline in 2018-2020, mostly on the back of
inflationary pressures and keen competition on the Russian mobile
market.

FCF to Fund Shareholder Distribution: Fitch expects that MTS will
continue to spend its FCF on shareholders remuneration in the
form of dividends and share buybacks. The company announced a new
round of share buybacks in September 2017 targeting RUB20 billion
worth of own shares for repurchase by April 2019, after having
spent RUB10 billion for that purpose in 4Q16-1Q17. On Fitch
estimates, the company spent more than RUB11 billion for the new
round of buybacks in September-December 2017. The repurchase plan
implies a mechanism of proportionate buybacks of shares from
Sistema and other shareholders so that the share of Sistema
remains unchanged on the completion of the buyback.

Low Leverage Stable: Fitch expects MTS's funds from operations
(FFO) adjusted net leverage to remain stable and low at around
2.0x in 2018-2020, leaving comfortable headroom below the
downgrade threshold of 3.0x. MTS retains substantial financial
flexibility within its rating category and has capacity for a
more generous shareholder remuneration policy, in Fitch's view.
MTS's current dividend policy is valid until 2018 after which it
is likely to be reviewed. Fitch does not incorporate any changes
in the policy and Fitch projections on dividend payments remain
at RUB52 billion per year in 2018-2020.

DERIVATION SUMMARY

MTS is well-positioned in its rating category as the leading
mobile operator in Russia both by revenue and subscriber. The
operator's ratings are supported by low leverage, stable market
positions and operating performance and strong pre-dividend FCF
generation. MTS's credit profile is close to leading western
European operators with a strong focus on their domestic markets,
such as Telefonica Deutschland Holding AG (BBB/Positive) and
Royal KPN N.V. (BBB/Stable). MTS's ratings take into
consideration higher-than-average systemic risk associated with
the Russian business and jurisdictional environment. In line with
Fitch PSL criteria, the company's ratings would be negatively
impacted if the rating of its weaker parent Sistema is
downgraded. MTS is rated at the same level as its Russian peers
with comparable market positions and level of leverage, PJSC
MegaFon and VEON Ltd (both BB+/Stable).

KEY ASSUMPTIONS

Fitch's Key Assumptions within Fitch Rating Case for the Issuer
- Low single-digit revenue growth per year in Russia in 2017-
   2020.
- A sharp decline in revenue in CIS markets in 2017 before
   gradually stabilising in 2018-2020.
- EBITDA margin under modest pressure in 2017-2020 at around
   40%.
- Capital intensity at 18% of revenue in 2017-2020.
- RUB52 billion of dividend payments per year.
- Around RUB8 billion spending on share buybacks in 2018-2019.

RATING SENSITIVITIES

Developments that May, Individually or Collectively, Lead to
Positive Rating Action
- MTS's rating could benefit from an upgrade of Sistema's rating
   provided that MTS continues to adhere to high corporate
   governance standards.

Developments that May, Individually or Collectively, Lead to
Negative Rating Action
- Weaker corporate governance but also excessive shareholder
   remuneration and other developments that lead to a sustained
   rise in funds from operations adjusted net leverage to above
   3.0x
- Competitive weaknesses and market share erosion, leading to
   significant deterioration in pre-dividend FCF generation.
- A downgrade of Sistema if it remains the dominant shareholder.

LIQUIDITY

Strong Liquidity: The company's debt maturity profile is evenly
spread, with annual principal payments of below RUB75 billion per
year. Cash, liquid investments and bank deposits as of end-3Q17
covered upcoming debt maturities until end-2018. In addition, the
company had RUB38 billion of unused credit facilities from
various banks at end-1H17. Its strong liquidity profile is
supported by expected robust cash flow generation in 2018-2020.

FULL LIST OF RATING ACTIONS

PJSC Mobile TeleSystems (MTS)
Long-Term Foreign and Local Currency IDRs: affirmed at 'BB+'; off
RWN; Outlook Negative
Short-Term Foreign and Local Currency IDRs: affirmed at 'B'; off
RWN
Senior unsecured debt: affirmed at 'BB+'; off RWN

MTS International Funding Ltd
Loan participation notes guaranteed by MTS: affirmed at 'BB+';
off RWN


PROMSVYAZBANK PJSC: Bank of Russia Guarantees Operations
--------------------------------------------------------
The Bank of Russia Board of Directors has decided to guarantee
the continuity of the activity of the Public Joint-stock Company
Promsvyazbank in the course of implementation of the plan for the
Bank of Russia's involvement in bankruptcy prevention measures
underway at the Bank, according to the press service of the
Central Bank of Russia.


RENAISSANCE FINANCIAL: Fitch Affirms B- Long-Term IDR
-----------------------------------------------------
Fitch Ratings has affirmed Renaissance Financial Holding
Limited's (RFHL) Long-Term Issuer Default Rating (IDR) at 'B-'.
The Outlook is Stable.

RFHL is the holding company of an investment banking group
Renaissance Capital (RenCap) operating in Russia as well as other
emerging markets. Fitch classifies the company as a securities
firm with high usage of the balance sheet in accordance with the
agency's 'Global Non-Bank Financial Institutions Rating Criteria'
(published 10 March 2017).

KEY RATING DRIVERS - IDRS AND SENIOR DEBT

The ratings affirmation reflects limited changes to the group's
credit profile over the last 12 months. The 'B-' Long-Term IDR
reflects RenCap's weak asset quality and poor solvency due to a
large USD1.3 billion high-risk unsecured related-party exposure
at end-1H17. The related party exposure was moderately reduced
and mainly comprised amounts due from various companies of the
broader Onexim Group (OG), the ultimate shareholder. RenCap also
sold out USD102 million agricultural non-core assets in 1H17.

Although there has been some shareholder support from OG via
funding and equity injections, assistance with business
origination, and a gradual repayment of related-party financing
(USD0.3 billion, including accrued interest, in 2017), the
absence of guarantees on RenCap's related-party exposures and
OG's patchy support record with respect to subsidiaries make
RenCap's broader clean-up prospects uncertain, in Fitch's view.

Funding and liquidity remain vulnerable in light of RenCap's
moderate liquidity cushion and over-reliance on unsecured
borrowings of securities (USD0.7 billion or 23% of total
liabilities at end-1H17) from the institution's broker clients
(some of them could be OG's core clients and partners, in Fitch's
view) to subsequently repo these securities. Nevertheless
potential repayment of outstanding senior unsecured Eurobonds in
April 2018 (under a put option), at 2% of total liabilities,
should be manageable given RenCap's unencumbered liquid assets
equalling 18% of total liabilities.

Core performance is weak. Reported annualised return on average
equity was only 2% in 1H17, and adjusting for accrued interest
income on related-party exposures it would have been negative.
Improving performance would be challenging without the unwinding
of the related-party exposure and scaling up the non-captive
parts of the business, which is unlikely to happen in the medium-
term.

Reported capitalisation metrics are high with Fitch Core Capital
(FCC) at 16% of tangible asset net of reverse repos at end-1H17.
However, capitalisation is deeply undermined as the aggregate
amount of related-party and non-core exposures equalled 2.8x FCC
at end-1H17, albeit down moderately from 3.3x FCC at end-2016. At
the same time, RenCap's use of lighter regulated jurisdictions
for securities firms enables the company to manage capital across
its international subsidiaries to support continued operations.

RATING SENSITIVITIES

The Long-Term IDRs and, consequently, senior bond rating could be
downgraded if (i) RenCap fails to refinance its obligations,
including securities borrowings from broker clients or otherwise
loses access to short-term funding; (ii) the company's
performance materially deteriorates; or (iii) related-party
exposure increases significantly without appropriate risk
mitigation.

An upgrade requires (i) considerable strengthening of solvency
through the unwinding of at least part of the related-party
exposure or recapitalisation via external support and (ii)
reduced reliance on securities borrowings to support liquidity.

The rating actions are as follows:

Long-Term IDR: affirmed at 'B-'; Outlook is Stable
Short-Term IDR: affirmed at 'B'
Senior unsecured debt rating: affirmed at 'B-'; Recovery Rating
at 'RR4'


SISTEMA PUBLIC: Fitch Affirms BB- Long-Term IDR, Outlook Negative
-----------------------------------------------------------------
Fitch Ratings has affirmed Sistema Public Joint Stock Financial
Corp.'s (Sistema) Long-Term Issuer Default Rating (IDR) at 'BB-'
and removed all ratings from Rating Watch Negative (RWN)
following a settlement agreement with Rosneft, Bashneft and the
Republic of Bashkortostan on litigation against Sistema. The
Outlook on the IDR is Negative.

Sistema has to pay RUB100 billion compensation to Bashneft by the
end-1Q18, according to the agreement. Fitch does not see any
liquidity challenges as the company has already paid RUB20
billion and has organised borrowings for the remainder. The
payment will increase Sistema's leverage at holco level above
Fitch threshold of 4.5x net debt (including off-balance-sheet
liabilities)-to-normalised dividends and shareholder loan returns
in 2018. In Fitch's view, the company has financial flexibility
to deleverage with a combination of asset sales and an increase
in regular cash inflows from operating subsidiaries. The pace of
deleveraging within the next 18-24 months will be key to
maintaining the rating at 'BB-'. The Negative Outlook captures
the execution risks in the company's debt reduction.

Fitch had placed Sistema's ratings on RWN on 28 June 2017
following the Russian court injunction to freeze significant
Sistema's assets, including a 31.76% stake in PJSC Mobile
Telesystems (MTS) (BB+/Negative), in relation to the claims filed
by Rosneft against Sistema.

KEY RATING DRIVERS

Leverage Spike: Sistema's Fitch-defined leverage is expected to
spike to above Fitch threshold of 4.5x net debt (including off-
balance-sheet liabilities)-to-normalised dividends and
shareholder loan returns in 2018. The company's total debt should
increase by RUB80 billion in 1Q18 following the payment of the
settlement. In Fitch's view, the company is able to reduce its
leverage by selling a portion of its assets and increasing
regular cash inflows from its investment portfolio. The price of
the assets for potential disposal as well as the quality of the
remaining assets may have a notable impact on the ratings.

Financial Flexibility: Following the payment of the settlement
and the lifting of asset freeze Sistema should have substantial
financial flexibility at holdco level, due to its ability to
upstream cash from its operating subsidiaries and to divest its
assets. On Fitch's estimates, regular cash inflows from assets in
the form of dividends and shareholder loan returns should
sufficiently cover holdco's costs, including taxes, general and
administrative costs (G&A) and interest expense while assets
divestments can be used for deleveraging. A reduction of
dividends to shareholders can also be supportive of the credit
profile.

Regular Cash Inflows: MTS is likely to remain the key source of
regular cash streams for Sistema with a Fitch- estimated share in
excess of 60% in 2018-2020 (65% in 2016). Fitch does not
incorporate any additional cash inflows from MTS to Sistema apart
from the payments within the established shareholder remuneration
policy. However, Fitch believe that the mobile operator has
capacity to upstream more cash or further increase the amount of
its current buyback programme with only limited impact on its own
ratings.

The amount of regular contributions from other assets will depend
on Sistema's actions on leverage reduction, including a potential
divestment of some of its assets, and the resulting structure of
the company's investment portfolio. On Fitch estimates, the
company was able to notably increase the share of regular cash
inflows from assets other than MTS in 2016-2017 to around RUB12
billion per year from RUB5 billion in both 2014 and 2015.

Settlement Payment: Following the RUB20 billion payment made in
December 2017 Sistema has a further RUB40 billion each to pay by
end-February and end-March 2018. According to the settlement
agreement, Sistema will take a secured loan for the second
tranche from Russian Direct Investments Fund (RDIF) with its 52%
stake in Detsky mir and 91% in BESK provided as collateral.
Funding for the third tranche will be provided by Sberbank as a
loan secured with MTS's shares. Following the payment of the
settlement all parties should withdraw their remaining claims to
each other from courts.

Release of Assets: According to the terms of the settlement
agreement, Sistema's frozen assets will be released gradually
with the payment of the settlement tranches. The restrictions on
dividends receipt from MTS and BESK were lifted in December 2017
and the released funds were used for the payment of the first
tranche. The freeze on Detsky mir and BESK shares will be removed
for the payment of the second tranche while the freeze on 31.76%
share in MTS will be lifted for the payment of the final tranche.
The completion of the payments will release all the remaining
assets. The majority of Sistema's assets were frozen during the
lawsuit hearings as collateral for alleged damages.

Shyam Deal Closed: Sistema completed the merger of SSTL (Shyam),
Sistema's Indian mobile subsidiary, into Reliance Communications
(RCom) in 4Q17. Historically due to negative EBITDA Shyam
required substantial contributions from the parent to finance its
capex and operating activities. The put option of the Russian
government on a stake in Shyam remains outstanding with an
estimated remaining balance value of RUB21 billion, which should
be paid by Sistema over the next three years in equal
instalments.

DERIVATION SUMMARY

The credit profile of Sistema is primarily driven by its ability
to control cash flows, upstream dividends from MTS and other
public companies and to monetise its investments in non-public
assets. This is overlaid by a significant debt burden at the
holdco level and the substantial associated interest expense,
which consumes a material part of cash inflows to Sistema from
its subsidiaries. Sistema's ratings are supported by the robust
financial profile of MTS, in which the company holds a 50% share.

KEY ASSUMPTIONS

Fitch's key assumptions within Fitch rating case for the issuer:
- Sistema to receive dividends of RUB26 billion per year before
   tax from MTS in 2018-2020,
- Sistema to receive RUB9 billion-RUB10 billion of dividends and
   shareholder loan returns per year from other subsidiaries in
   2018-2020;
- G&A expenses, interest and taxes at the holdco level on
   average at around RUB27 billion-RUB28 billion per year in
   2018-2020;
- Successful payment of the settlement to Bashneft by end-1Q18
   and withdrawal of all the remaining legal claims; and
- No major acquisitions in 2018-2020.

RATING SENSITIVITIES

Developments That May, Individually or Collectively, Lead to the
Outlook being revised to Stable
-Sustained deleveraging at the holdco level to below 4.5x net
debt (including off-balance-sheet liabilities)-to- normalised
dividends and shareholder loan returns received from Sistema's
operating subsidiaries.
- Maintaining sufficient liquidity combined with dividend
coverage ratio at holdco level sustainably above 2.0x (defined as
normalised recurring cash inflows from subsidiaries divided by
interest expense).

Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- Failure to decrease holdco leverage to below 4.5x net debt
   (including off-balance-sheet liabilities)-to-normalised
   dividends and shareholder loan returns with the next 18 to 24
   months, which may lead to a downgrade.
- Dividend coverage ratio at holdco level sustainably below
   2.0x.
- A portfolio reshuffle increasing the share of subsidiaries
   with low credit profiles could also be rating-negative.

LIQUIDITY

Comfortable Liquidity: Sistema holdco had RUB20.4 billion of cash
at end-3Q17, which - combined with available long-term credit
lines - covered scheduled 4Q17-2018 debt maturities. Sistema
faces moderate debt repayments in 2018 of RUB21.9 billion.
Following the resolution of the litigation Sistema should regain
full access to capital markets, enabling the company to refinance
debt on standard market terms. The payment of the first tranche
of the settlement in 4Q17 was covered by RUB16.5 billion of
dividends released from freeze and the company's own funds.
Funding for the remaining RUB80 billion has largely been arranged
and hence the final payment of the settlement should not have an
impact on liquidity at holdco level.

FULL LIST OF RATING ACTIONS

Sistema Joint Stock Financial Corp
Long-Term Foreign and Local Currency IDRs: affirmed at 'BB-'; off
RWN; Outlook Negative
Senior unsecured debt: 'BB-'; off RWN
Sistema International Funding S.A.
Loan participation notes guaranteed by Sistema: affirmed at
'BB-'; off RWN


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


TURKEY: Fitch Affirms BB+ Long-Term IDR, Outlook Stable
-------------------------------------------------------
Fitch Ratings has affirmed Turkey's Long-Term Foreign-Currency
Issuer Default Rating (IDR) at 'BB+' with a Stable Outlook.

KEY RATING DRIVERS

Turkey's IDRs reflect the following key rating drivers:

Turkey's ratings balance high external financing vulnerabilities,
pronounced political and geopolitical risks and high levels of
inflation and macroeconomic volatility against low public debt
ratios backed by a long commitment to fiscal stability and strong
growth performance. Structural indicators are generally better
than peers.

Fiscal performance deteriorated in 2017 due to various counter-
cyclical measures (worth an estimated 0.34% of GDP on the central
government budget), with the central government deficit
officially projected at 2% of GDP, up from 1.6% in 2016, and in
line with the peer median. Policy tightening is planned for 2018,
with taxes being raised and stimulus scaled back. However, Fitch
expects this to be reversed in 2019 as policy is loosened ahead
of elections.

Government debt levels remain well below peers despite the
widening of the deficit. Debt/GDP is estimated at 28.4% of GDP at
end-2017, compared with a peer median of 47.8%. Turkey's large
and diversified revenue base means that debt/revenue is less than
half the 'BB' and 'BBB' medians. Debt/GDP is expected to rise
over the forecast period, but should stay below 30%. Contingent
liabilities are rising, but from a low base and are unlikely to
have a material impact on government finances over the forecast
period.

Political and geopolitical risks weigh on Turkey's ratings and
World Bank governance indicators have fallen below the 'BB'
median. The domestic political scene remains focused on
presidential and legislative elections, the first under the
constitution that was approved in the April 2017 referendum.
Fitch assumes the polls will be held in November 2019, the
deadline under the new constitution. Tolerance of dissenting
political views is reducing in the opinion of independent
observers. A state of emergency was extended for another three
months in January and a purge of followers of the group that the
government considers responsible for the coup attempt in July
2016 continues. Security incidents in 2017 were confined to the
unresolved conflict in the south east.

Bouts of tense rhetoric with key bilateral partners are becoming
regular events, potentially souring relations with the EU and US
and bringing economic risks. The conviction of an employee of a
state-owned bank for evading Iranian sanctions in January 2018
brings the risk of fines for the institutions implicated, which
could have broader implications for the external financing of the
financial sector.

The current account deficit is large and persistent, and has
resumed widening. Fitch estimates a deficit of 5.3% of GDP in
2017, pushed up by higher commodity imports, from 3.8% in 2016.
The deficit will remain on an upward trend, despite a recovery in
tourism, reflecting rising import growth. With FDI likely to
remain at around 1% of GDP, the deficit will remain largely debt
financed. Net external debt is forecast to rise to 34% of GDP by
2019, compared with a peer median of 14.1%.

External financing requirements are large, both in absolute and
relative terms, and are a major weakness in the sovereign credit
profile. The external financing requirement (including short-term
debt) is projected to rise to USD214 billion in 2018, 226% of
projected end-2017 reserves. Turkey's strained international
liquidity ratio (81.6% at end-2017) makes it vulnerable to shifts
in investor sentiment. However, the private sector has a track
record of meeting its FX obligations and banks diversified the
nature and tenor of their external market funding sources in
2017. The combination of likely tighter global financial
conditions over 2018 and particularly 2019 and a potentially more
heated pre-election political environment could again test this
resilience.

Monetary policy has persistently proven unable to bring inflation
near to target and a complex policy framework undermines
transmission mechanisms, in Fitch's opinion. Inflation averaged
11.1% in 2017 making Turkey one of only two Fitch-rated
sovereigns that are rated above the 'B' category to record double
digit inflation last year. Inflation expectations have risen and
Fitch expects inflation to stay in double digits for the bulk of
2018.

Economic growth was very strong in 2017, at an estimated 6.8%,
and five-year average growth, at 5.6% is well in excess of the
peer median of 3.5%. Growth was boosted by stimulus measures in
2017, supported by solid growth in major trading partners and a
gradual recovery in tourism. A slowdown in growth to 4.1% is
expected in 2018 due to tighter fiscal and monetary policy and
reduced availability of credit. Growth should rebound in 2019 to
4.7%, reflecting Fitch's expectation of renewed stimulus ahead of
the elections.

Fitch has a stable outlook for the banking sector reflecting
resilience in banks' credit profiles and financial metrics
despite a challenging operating environment and macro volatility.
Headline non-performing loans are low and stable at around 3% of
total loans. However, the volume of at-risk restructured and
watch-list loans has increased. Sector capitalisation (capital
adequacy ratio 17.2% at end-September) is underpinned by solid
internal capital generation, low unreserved NPLs and regulatory
forbearance. Turkey scores a '3' on Fitch's macro-prudential risk
indicator, based on past rises in house prices and real credit
growth. These increases are now moderating, but rapid credit
growth and its financing are a potential source of vulnerability
to the banking sector. Credit growth picked up in 2017 reflecting
government initiatives to stimulate the economy, but has slowed,
and in the absence of further stimulus will be constrained by a
loan-to-deposit ratio of 126% (148% for TRY) and rising financing
costs.

Turkey is a large and diversified economy with a vibrant private
sector. Human Development and Doing Business indicators, as
measured by the World Bank, are in excess of the 'BB' median. GDP
per capita is double the peer median, although the volatility of
economic growth is well in excess of peers reflecting a
vulnerability to regular domestic and external shocks.

SOVEREIGN RATING MODEL (SRM) and QUALITATIVE OVERLAY (QO)

Fitch's proprietary SRM assigns Turkey a score equivalent to a
rating of 'BBB' on the Long-Term Foreign-Currency (LT FC) IDR
scale.

Fitch's sovereign rating committee adjusted the output from the
SRM to arrive at the final LT FC IDR by applying its QO, relative
to rated peers, as follows:
- External finances: -1 notch, to reflect a very high gross
   external financing requirement and low international liquidity
   ratio.
- Structural features: -1 notch, to reflect a political
   environment that may continue to adversely affect economic
   policymaking and performance, and the risk of serious
   terrorist attacks.

Fitch's SRM is the agency's proprietary multiple regression
rating model that employs 18 variables based on three-year
centred averages, including one year of forecasts, to produce a
score equivalent to a LT FC IDR. Fitch's QO is a forward-looking
qualitative framework designed to allow for adjustment to the SRM
output to assign the final rating, reflecting factors within
Fitch criteria that are not fully quantifiable and/or not fully
reflected in the SRM.

RATING SENSITIVITIES
The main factors that, individually, or collectively, could lead
to negative rating action are:
- Heightened stresses stemming from external financing
   vulnerabilities, potentially reflecting deteriorating
   bilateral political relations.
- Weaker public finances reflected by a deterioration in the
   government debt/GDP ratio to a level closer to the peer
   median.
- A serious deterioration in the political or security
situation.

The main factors that, individually, or collectively, could lead
to positive rating action are:
- Implementation of reforms that address structural deficiencies
   and reduce external vulnerabilities.
- A political and security environment that supports a
   pronounced improvement in key macroeconomic data.

KEY ASSUMPTIONS

- Fitch forecasts Brent Crude to average USD52.5/b in 2018 and
   USD55/b in 2019.

The full list of rating actions is as follows:

Long-Term Foreign-Currency IDR affirmed at 'BB+'; Outlook Stable
Long-Term Local-Currency IDR affirmed at 'BBB-'; Outlook Stable
Short-Term Foreign-Currency IDR affirmed at 'B'
Short-Term Local-Currency IDR affirmed at 'F3'
Country Ceiling affirmed at 'BBB-'
Issue ratings on long-term senior unsecured foreign-currency
bonds affirmed at 'BB+'
Issue ratings on long-term senior unsecured local-currency bonds
affirmed at 'BBB-'
Issue ratings on short-term senior unsecured local-currency bonds
affirmed at 'F3'
Issue ratings on Hazine Mustesarligi Varlik Kiralama Anonim
Sirketi's foreign-currency global certificates (sukuk) affirmed
at 'BB+'
Issue ratings on Hazine Mustesarligi Varlik Kiralama Anonim
Sirketi's local-currency global certificates (sukuk) affirmed at
'BBB-'


TURKIYE HALK: Fitch Places BB+ IDR on Rating Watch Negative
-----------------------------------------------------------
Fitch Ratings has placed Turkiye Halk Bankasi's (Halk) Long-Term
Foreign Currency Issuer Default Rating (IDR) of 'BB+', senior
debt rating of 'BB+' and Viability Rating (VR) of 'bb+' on Rating
Watch Negative (RWN).

The rating actions follow the conviction in the US of the bank's
Deputy General Manager for violation of U.S. sanctions. The RWN
on the VR reflects Fitch's view of the material risk of Halk
becoming subject to a fine or other punitive measures as a result
of the U.S. investigation, which could put downward pressure on
its standalone credit profile. The RWN on the Long-Term IDRs and
senior debt rating reflect the risk that in such a scenario
government support for the bank may not be sufficiently
substantial and timely to warrant the continued equalisation of
the bank's ratings with those of the Turkish sovereign
(BB+/Stable).

KEY RATING DRIVERS
IDRs, SRF, SR, SENIOR DEBT, NATIONAL RATING

Halk's IDRs, senior debt rating and other support-driven ratings
continue to be aligned with those of the Turkish sovereign. This
reflects Fitch's view of the government's likely high propensity
to support the bank, in case of need, based on its majority state
ownership, SME policy role, systemic importance (9%-11% market
shares in sector assets and deposits) and significant state-
related funding.

The RWN on the Long-Term IDRs, senior debt rating and other
support-driven ratings, however, reflects the uncertainty
surrounding the sufficiency and timeliness of such support in
case a material fine or other punitive measures are imposed on
Halk. Uncertainty about support in such a scenario results from
(i) uncertainty about the nature and severity of measures, if
any, taken against the bank; (ii) recent statements by Turkey's
Deputy Prime Minister that the bank, rather than the Treasury,
would pay any fine; and (iii) significant (49%) non-state
ownership of the bank, which may complicate the prompt provision
of solvency support, if required.

Halk's Support Rating of '3' and Short-Term Foreign Currency IDR
of 'B' have not been placed on RWN, as the bank's Long-Term IDRs
are unlikely to be downgraded below the 'BB' category. This
reflects Fitch's view that even in case of quite punitive
measures taken against Halk, the bank would likely receive
sufficient liquidity support and/or regulatory forbearance from
the Turkish authorities to be able to continue to service its
obligations.

VR
Halk's VR is supported by the bank's strong and long-standing
domestic franchise and policy role, and generally sound financial
metrics. However, the VR also factor in risks to asset quality,
profitability and capitalisation given the concentration of the
bank's operations in a challenging Turkish operating environment,
more moderate capital ratios than at some peers', reduced, albeit
still reasonable, access to external funding and Fitch's view of
weaknesses in governance and risk controls.

The RWN on the VR reflects Fitch's view of a material risk of
Halk becoming subject to a fine or other punitive measures as a
result of the U.S. investigation. Such measures could materially
weaken solvency, increase refinancing risks or negatively impact
other aspects of the bank's standalone credit profile.

Halk has consistently reported reasonable financial metrics,
which improved in 2016-9M17, in line with broader trends in the
sector, despite a challenging Turkish operating environment.
However, margins have come under pressure from higher funding
costs in 3Q17 and further increases could weigh on Halk's
earnings given the bank's strategy to fund loan growth primarily
with Turkish lira liabilities. Profitability could also be
impacted if the bank's ability to access cheaper foreign currency
funding remains constrained for a prolonged period.

Halk's capital ratios are only adequate (Fitch core capital
(FCC)/risk-weighted assets ratio: 12% at end-9M17) and typically
below those of peers. Capital ratios could come under pressure if
Halk is subject to a large fine or from further rapid loan
growth, material lira depreciation or large non-performing loans
(NPLs). However, Fitch's assessment of capitalisation is
supported by Halk's low net NPLs relative to FCC and still
satisfactory internal capital generation.

Halk's reported headline asset quality ratios were reasonable at
end-9M17 with NPLs (loans overdue by 90+ days) at a low 3% of the
portfolio, supported by rapid loan growth (22% in 9M17) driven by
the Credit Guarantee Fund stimulus. Regulatory group 2 watch-list
loans remain at a moderate level (2.4% at end-9M17), comparing
reasonably with peers, but these could contribute to NPL growth
in the future. In addition, asset quality, as for other Turkish
banks, is subject to significant seasoning risks after recent
rapid growth.

The bank's foreign currency liquidity is adequate and short-term
foreign currency liquid assets were broadly sufficient to cover
foreign currency wholesale funding due within a year at end-9M17.
Nevertheless, foreign currency liquidity could come under
significant pressure from a prolonged loss of access to external
funding markets due to a downturn in investor sentiment, for
example, or from any escalation of the case in the U.S..
Mitigating factors include the reasonable diversification of
maturities and of the funding markets on which Halk borrows,
adequate foreign currency liquidity and significant foreign
currency liquidity lines available from the Turkish Central Bank.

RATING SENSITIVITIES
[IDRs, SRF, SR, SENIOR DEBT, NATIONAL RATING

Halk's support-driven ratings could be downgraded if the bank
does not receive sufficient and timely support to offset the
impact of any fine or other punitive measures imposed as a result
of the case in the U.S.. However, Fitch expects the ratings to
remain in the 'BB' category as even in case of quite punitive
measures the bank would likely receive sufficient liquidity
support and/or regulatory forbearance from the Turkish
authorities to be able to continue to service its obligations.

In common with other state-owned banks, the ratings could also be
downgraded if the sovereign is downgraded, or if Fitch otherwise
believes that (i) the ability of the sovereign to provide
support, in case of need, has markedly weakened or (ii) the
sovereign's propensity to provide support, in case of need, has
reduced.

A reduction in state ownership at Halk, or the introduction of
bank resolution legislation in Turkey aimed at limiting sovereign
support for failed banks, could also negatively impact Fitch's
view of the likelihood of support, although such developments are
not expected in the near term.

VR
The VR could be downgraded if a fine or other punitive measures
resulting from the U.S. investigation materially weaken solvency,
increase refinancing risks or negatively impact other aspects of
the bank's standalone credit profile.

A gradual weakening of Halk's funding profile or profitability
relative to peers could also result in downward pressure on the
VR. In common with other Turkish banks, the VR is also sensitive
to a weakening of asset quality as the loan book seasons or a
marked deterioration of the operating environment.]

The rating actions are as follows:

Turkiye Halk Bankasi
Long-Term Foreign-Currency IDR: 'BB+'; placed on RWN
Long-Term Local-Currency IDR: 'BBB-'; placed on RWN
Short-Term Foreign-Currency IDR: affirmed at 'B'
Short-Term Local-Currency IDR: 'F3'; placed on RWN
Viability Rating: 'bb+'; placed on RWN
Support Rating: affirmed at '3'
Support Rating Floor: 'BB+'; placed on RWN
Long-term senior unsecured rating: 'BB+'; placed on RWN
National Long-Term Rating: 'AAA(tur)'; placed on RWN

In accordance with Fitch's policies the issuer appealed and
provided additional information to Fitch that resulted in a
rating action which is different than the original rating
committee outcome.


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


CARILLION PLC: PwC's Role in Liquidation Process Faces Scrutiny
--------------------------------------------------------------
Madison Marriage and Barney Thompson at The Financial Times
report that PwC's role in the liquidation process of the
collapsed contractor Carillion has come under scrutiny after it
emerged that the auditor already has two separate, and apparently
conflicting roles, including one advising the defunct company's
pension trustees.

Six PwC executives were appointed by the High Court on Jan. 15 as
"special managers" in the liquidation process to help wind down
Carillion, which became insolvent after building up GBP1.3
billion in debts and a GBP587 million pension deficit, the FT
relates.

Deloitte and KPMG, rival Big Four firms, had been ruled out of
the liquidation role because they were already Carillion's
internal and external auditors, respectively, the FT notes.

This left the government with the choice of PwC; EY, which
advised Carillion on restructuring options before its collapse;
or one of the smaller accounting firms -- highlighting
longstanding issues around the Big Four oligopoly and potential
conflicts of interest this generates, the FT states.

As special managers, PwC will work with the liquidator -- also
known as the official receiver -- whose role is to secure the
best possible outcome for all of Carillion's creditors while
ensuring that public services continue, the FT says.  However,
questions have been raised about the appropriateness of PwC's
appointment in light of its recent work on two separate contracts
involving Carillion, according to the FT.

Carillion's pension trustees engaged PwC last year to advise on
how to protect members' interests amid mounting financial
difficulties for the company, the FT recounts.  This contract,
which is ongoing, has brought into question PwC's ability to act
with impartiality towards other creditors, the FT relays.

Carillion plc employs about 43,000 people worldwide and provides
services to half the UK's prisons, as well as hundreds of
hospitals and schools.



                            *********

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 2018.  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.


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