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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, February 1, 2018, Vol. 19, No. 023


                            Headlines


A Z E R B A I J A N

AZERBAIJAN: S&P Alters Outlook to Stable, Affirms 'BB+/B' SCRs


B E L A R U S

BELARUS: Fitch Raises Long-Term IDR to B, Outlook Stable


C R O A T I A

AGROKOR DD: Zagreb Court Agrees to Divide Creditors Into Groups


F R A N C E

KAPLA HOLDING 2: S&P Assigns Prelim 'B+' CCR, Outlook Stable
TWIST BEAUTY: Moody's Assigns B2 CFR, Outlook Stable


G E R M A N Y

KME AG: Moody's Assigns B3 Corp. Family Rating, Outlook Positive


I R E L A N D

GLG EURO IV: S&P Assigns Prelim B- (sf) Rating to Class F Notes


I T A L Y

CIRENE FINANCE: S&P Lowers Class D Notes Rating to 'D (sf)'


L U X E M B O U R G

MALLINCKRODT INT'L: Moody's Confirms Ba3 Corporate Family Rating


R U S S I A

BASHKORTOSTAN: Moody's Affirms Ba2 LT Issuer Rating, Outlook Pos.
NIZHNIY NOVGOROD: Fitch Affirms BB Long-Term IDR, Outlook Stable
SVYAZINVESTNEFTEKHIM: Moody's Affirms Ba2 CFR and Ba2-PD PDR


S P A I N

UNION FENOSA: Fitch Puts BB+ Sub. LT Notes Rating on Watch Pos.


T U R K E Y

ISTANBUL TAKAS: Fitch Affirms BB+ Long-Term IDR, Outlook Stable
TURKLAND BANK: Fitch Affirms BB- Long-Term Issuer Default Ratings


U N I T E D   K I N G D O M

BYRON: Creditors Back Company Voluntary Arrangement
CARILLION PLC: Northern Ireland Business Enters Liquidation
CARILLION PLC: FRC Calls for More Scrutiny of Accounting Firms
JUICE CORP: Enters Into Administration; 60 Jobs Affected
MATALAN: S&P Raises Holding Co.'s CCR to 'B-'; Outlook Stable


                            *********



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A Z E R B A I J A N
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AZERBAIJAN: S&P Alters Outlook to Stable, Affirms 'BB+/B' SCRs
---------------------------------------------------------------
On Jan. 26, 2018, S&P Global Ratings revised its outlook on the
long-term foreign and local currency sovereign credit ratings on
Azerbaijan to stable from negative. At the same time, S&P
affirmed the ratings at 'BB+/B'.

OUTLOOK

S&P said, "The stable outlook indicates our view of balanced
risks to the ratings over the next 12 months.

"We could lower the ratings if economic prospects materially
weakened compared to our present forecast. This could happen, for
example, as a result of delayed implementation of the Shah Deniz
II gas project leading to reduced investments and ultimately
lower exports. It could also be the case if oil production
declined substantially faster than expected.

"We could also lower the ratings if external vulnerabilities were
to escalate, resulting for instance in a further persistent
decline in central bank reserves, or if domestic political risks
increased in response to a significant decline in real incomes,
possibly restricting the government's ability to control
spending.

"We could raise the ratings if Azerbaijan's growth prospects were
to materially improve while the effectiveness of monetary policy
increased.

"We could also consider an upgrade if there were greater
diversification in the economy, and in particular in Azerbaijan's
export profile over time."

RATIONALE

S&P said, "The outlook revision primarily reflects our view that
Azerbaijan's economic fundamentals should gradually strengthen
over the next four years following a notable deterioration in the
aftermath of the 2014 terms-of-trade shock. Azerbaijan's economy
remains fairly narrowly focused on oil production, which accounts
for about 90% of goods exports. However, while downside risks
remain, we believe the likelihood of them materializing is now
lower. Our GDP, fiscal, and balance of payments projections are
based on assumptions of an average oil price of close to $60 per
barrel in 2018 and $55 thereafter."

S&P's decision to revise the outlook to stable reflects the
following scenario for 2018-2021:

-- Headline growth rates should gradually strengthen, averaging
    3.3%;

-- Current account and general government budget will return to
    mild surpluses; and

-- Banking sector stability should gradually improve, but, even
    after the transfer of the International Bank of Azerbaijan's
    distressed loan book to the resolution vehicle, we estimate
    nonperforming assets at around one-fifth of the remaining
    loan book.

S&P said, "Our ratings on Azerbaijan are still mostly supported
by the sovereign's strong fiscal position, underpinned by the
large stock of foreign assets accumulated in the sovereign wealth
fund, SOFAZ. The ratings are constrained by weak institutional
effectiveness, the narrow and concentrated economic base, limited
monetary policy flexibility, and only partial and less timely
data on Azerbaijan's international investment position."

Institutional and Economic Profile: Moderate recovery in economic
growth rates

-- S&P estimates that Azerbaijan has now passed the bottom of
    the cyclical downturn induced by the 2014 plunge in oil
    prices.

-- Economic growth is projected to recover moderately but will
    remain dependent on oil industry trends and public
    investment.

-- Azerbaijan's institutional arrangements remain weak and we
    expect limited progress on the structural reform front in the
    medium term.

In S&P's view, Azerbaijan has passed the bottom of the cyclical
downturn induced by the 2014 plunge in oil prices. S&P now
estimates that last year's real GDP stagnated, in contrast to its
previous forecast of a 1% contraction in output.

Growth had been held back by the decline in oil production,
cautious public investment, and weak consumption dynamics in the
aftermath of material weakening of the Azerbaijani manat,
adversely impacting confidence and purchasing power.

S&P said, "We expect economic dynamics to gradually shift over
the next few years. In particular, we forecast average growth of
3.3% through 2021. It should be supported by a steady recovery in
consumption and a cautious increase in business confidence. We
also believe that public spending will increase in 2018, given
the upcoming presidential elections in October. Lastly,
completion is approaching for the large Shah Deniz II (SDII)
gasfield project which will see Azeri gas delivered first to
Turkey and then to Europe. Elevated investment ahead of the SDII
launch and a pick up in gas exports after that should benefit
economic performance.

"Longer term, we also see some positive momentum given the recent
amendment of the production-sharing agreement (PSA) for the
biggest oilfield in Azerbaijan--the ACG field. The amended PSA
now extends to 2050 and foreign investors will likely invest
significant resources in the field, which should help sustain
production levels. As a result of the agreement, the authorities
will additionally receive a bonus payment of US$3.6 billion
payable to the country's oil fund SOFAZ in equal instalments over
eight years."

Nevertheless, and importantly, projected growth rates will still
be markedly lower than before 2011. This is primarily due to the
following:

-- Although under the amended PSA more investments will flow
    into the ACG field, production decline is still likely, given
    natural factors, such as the age of the field. This is in
    contrast to pre-2011, when oil production was steadily
    increasing.

-- Gas exports at present constitute about 2% of the republic's
    goods exports. Following the launch of SDII, it is estimated
    that the volume of gas exports will triple in the next few
    years. Even so, given the low starting base, the economic
    impact will be somewhat contained.

-- Even though the non-oil sector should benefit from weaker
exchange rates, we do not forecast substantial growth.
Diversifying a resource-dependent economy tends to be long and
complex and, in S&P's view, Azerbaijan's comparatively poor
business environment will play a negative role. S&P does not
anticipate significant structural reforms over the next few
years.

S&P said, "We view Azerbaijan's institutional arrangements as
weak, characterized by highly centralized decision-making, which
lacks transparency and makes future policy responses difficult to
predict. Political power remains concentrated around the
president and his administration, with limited checks and
balances in place. The referendum in September 2016, followed by
amendments to Azerbaijan's constitution, has further centralized
the president's power, in our view."

Azerbaijan is due to hold presidential elections in October 2018.
S&P does not anticipate any substantial changes in political
arrangements in the aftermath. Given the constitutional changes,
there are no longer term limits and the next president will be
elected for a period of seven years compared to five previously.

The unresolved dispute with Armenia over Nagorno-Karabakh
continues to pose downside risks but S&P does not expect the
conflict to escalate in the medium term. The prospects of its
resolution, however, so far also seem limited.

Flexibility and Performance Profile: A strong public balance
sheet partly offsets the weak banking sector and limited monetary
flexibility

-- The strength of Azerbaijan's public balance sheet is the main
    factor supporting the ratings.

-- S&P expects the steep increase in net general government debt
    throughout 2016-2017 to gradually reverse.

-- Monetary policy effectiveness remains significantly
    constrained by the weak domestic banking system,
    underdeveloped capital markets, high dollarization, and lack
    of operational independence by the Central Bank of Azerbaijan
    (CBA).

Azerbaijan's strong public balance sheet is still the main factor
supporting the sovereign ratings. It is underpinned by the large
foreign assets accumulated in the sovereign wealth fund, SOFAZ.
S&P said, "We have now revised our estimates of SOFAZ's liquid
assets, excluding from our calculations exposures that might be
hard to liquidate in a downside scenario, such as the fund's
domestic investments and foreign equity exposures. Even so, we
forecast SOFAZ's assets will amount to about 60% of GDP at year-
end 2018, and the sovereign will remain in a net asset position
averaging 32% of GDP over the four-year forecast horizon."

S&P said, "We anticipate budgetary performance will gradually
strengthen from the deficits posted over the last three years.
This is primarily due to a recovery in growth rates and higher
oil prices. We estimate last year's general government deficit
amounted to 1.5% of GDP. That said, this outcome includes a one-
off transfer from SOFAZ to the CBA to boost the latter's foreign
exchange reserves. Excluding the transfer, the general government
budget posted a surplus. We forecast an average general
government surplus of about 1% of GDP through 2021. Azerbaijan
will also benefit from annual payments related to the amended ACG
PSA."

Importantly, however, general government debt has expanded at a
considerably faster pace than the headline deficits imply over
the last two years. This is mainly due to the materialization of
contingent liabilities in the banking system: The government has
contributed substantial resources to the majority state-owned
International Bank of Azerbaijan in 2016. In May 2017, the bank
announced its intention to undertake a debt restructuring to
address its weak financial position. Following the successful
exchange, the sovereign explicitly assumed IBA's liabilties of
US$2.3 billion. The authorities currently plan to privatize IBA
but the timeline and details remain unclear.

S&P said, "We believe that most risks for the sovereign from the
weak banking system have already materialized, so we see
additional contingent liabilities as limited. Even though the
financial system remains weak, we forecast it will gradually
strengthen in tandem with improved growth. We also view
positively the recent improvements in supervision. A specialized
banking regulator FIMSA has now been set up, and has received
additional resources to supervise and oversee banking risks.

"Mirroring the developments on the fiscal side, Azerbaijan's
external position remains strong on a stock basis, and we expect
the country's liquid external assets to exceed external debt for
the foreseeable future. We currently project a gradual
improvement in external flows, which should help arrest the
decline in accumulated buffers. Nevertheless, Azerbaijan will
remain vulnerable to potential terms-of-trade volatility. We also
note the only limited available data for Azerbaijan's balance of
payments and international investment position, which possibly
leads to an underestimation of external risks.

"Our ratings on Azerbaijan remain constrained by the limited
effectiveness of its monetary policy. We believe that the
increased flexibility of the manat exchange rate has helped
lessen external pressures and husband foreign exchange reserves.

"At the same time, apart from setting the country's foreign
exchange regime and making interventions, the CBA's ability to
influence economic developments remains considerably constrained.
We estimate that resident deposit dollarization remains at over
60%, which in our view severely limits the CBA's attempts to
influence domestic monetary conditions. In addition, Azerbaijan's
local currency debt capital market remains small and
underdeveloped, while CBA's operational independence remains
limited."

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

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

The committee agreed that the economic assessment improved and
that external assessment deteriorated. All other key rating
factors were unchanged.

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

  RATINGS LIST

                                           Rating
                                        To             From
  Azerbaijan
   Sovereign Credit Rating
    Foreign and Local Currency       BB+/Stable/B  BB+/Negative/B
   Transfer & Convertibility Assessment BB+             BB+


=============
B E L A R U S
=============


BELARUS: Fitch Raises Long-Term IDR to B, Outlook Stable
--------------------------------------------------------
Fitch Ratings has upgraded Belarus's Long-Term Foreign- and
Local-Currency Issuer Default Ratings (IDRs) to 'B' from 'B-'.
The Outlook is Stable.

KEY RATING DRIVERS

The upgrade of Belarus's IDRs reflects the following key rating
drivers and their relative weights:

HIGH

Near-term external financing risks have declined due to the pre-
financing in 2017 of payments due in 2018 through market and
official borrowing, and due to an increase in international
reserves. Gross international reserves rose to USD7.3 billion at
end-2017 from USD4.9 billion at end-2016 boosted by external
disbursements and foreign currency (FC) purchases from residents.
Reserves are likely to decline after the January USD800 million
Eurobond repayment, but could finish the year above USD6.7
billion. The net reserve position improved and remains positive.
However, Fitch estimates that liquid assets as a share of short-
term liabilities (at 53% in 2018) remains the lowest in the 'B'
category.

FC debt service is USD2.6 billion (not including Eurobond
payment) in 2018, which will be covered by a mix of multilateral
financing, local market issuance, use of FC cash buffers and
potentially a new international bond issuance. FC liquidity in
the local market and FC government revenues derived from custom
duties and trade of oil products further mitigate near-term
financing risks.

Belarus's gross external financing requirement (current account
deficit plus medium- and long-term amortisations) has declined to
101% of international reserves, from a previous peak of 223% in
2014. Sustained reduction in refinancing risks will depend on
continued progress on diversifying external financing sources,
refinancing opportunities of Russian bilateral debt and
development of the local market. The next Eurobond amortisation
is not until 2023. Fitch does not factor an IMF programme into
its forecasts.

MEDIUM

Belarus's better coordination between monetary and fiscal policy,
prudent wage policy and greater exchange rate flexibility have
supported a rapid decline in inflation. Inflation dropped to 4.6%
at end-2017 (well below the official inflation ceiling of 9%),
from 10.6% at end-2016, reflecting more gradual regulated price
adjustments, reduced exchange rate volatility and moderate wage
increases.

The authorities have lowered their end-2018 inflation objective
to 'no more than 6%' from 7% previously. Fitch expects inflation
to remain in single digits averaging 6.2% in 2018-2019, thus
reducing the gap against the 5% 'B' median forecast. The success
of the National Bank's strategy to move toward a fully-fledged
inflation targeting regime and reach 5% inflation by 2020 will
likely depend on sustaining policy consistency, and improving
monetary policy transmission channels through continued progress
in the reduction of financial dollarisation (67% of deposits) and
quasi-fiscal programme lending.

Current account deficits will remain contained. Fitch estimates a
deficit of 2.7% of GDP in 2017, down from 3.5% in 2016. The
deficit will widen moderately to 3.5% in 2018-2019 as domestic
demand and large infrastructure projects (Nuclear Power Plant)
gain pace, but this compares favourably with the five-year
average of 8.2% in 2010-2014. Export performance remains
dependent on oil prices and trade partners' growth prospects,
especially Russia. Fitch expect net external debt (49% of GDP)
and external debt service (16% of CXR) to stabilise over the
forecast period, although they will remain above their respective
'B' medians.

The ratings also reflect the following key rating drivers:

A favourable external backdrop in terms of export demand, easing
of financing constrains and improved macroeconomic stability
lifted Belarus's growth to 2.4% in 2017, and should contribute to
modest acceleration of 2.6% in 2018 and 2.5% in 2019.
Nevertheless, growth prospects are currently weaker than 'B'
rated peers. Higher growth could result from progress in the
reform agenda by addressing productivity challenges, most notably
in the large public sector.

Fitch's measure of general government balance (consolidated
government including Social Protection Fund and off balance sheet
expenditure related to guarantees and financial sector transfers)
is estimated to have recorded a near-balanced position at -0.1%
of GDP in 2017. This estimate incorporates a consolidated
government surplus of 2.4% of GDP reflecting a combination of
revenue growth derived from higher oil prices and a more dynamic
economy and continued expenditure restraint. Fitch expects the
general government to record low deficits of 0.8% and 1.2% of GDP
in 2018 and 2019, respectively, reflecting lower surpluses at the
consolidated level plus potential cost related to the
materialisation of guarantees, banking sector capitalisation and
the asset clean-up process. Fitch forecast the "augmented
deficit", which includes off-budget programme lending -- adding
to government debt -- to be a little higher at 1.8% of GDP in
2018.

Fitch estimates that government debt (including guarantees) rose
to 55.7% of GDP at end-2017, still below the 'B' median.
Belarus's debt is highly exposed to currency volatility (90% is
FC-denominated), and interest rate risk (50% floating rate).
Fitch includes government guarantees, estimated at 10.1% of GDP,
in its total debt calculations, due to the high likelihood that
the government will need to meet state-owned enterprises'
repayment obligations.

The financial sector remains a contingency liability to the
government and a potential risk for macroeconomic stability,
despite some improvements. Regulatory NPLs (the three riskiest
categories) have stabilised, reaching 12.8% of gross credit
exposure in 3Q17 due to the improved macroeconomic backdrop
leading to lower interest rates and lower exchange rate
volatility. Capitalisation levels have improved somewhat, but
remain modest given high credit risks. The large presence of the
public sector (65% of assets) creates fiscal risks for the
sovereign due to the potential need of further capital
injections, execution of guarantees and issuance of securities in
exchange of loan transfers.

Belarus has a clean debt repayment record and strong structural
indicators, notably, GDP per capita and human development.
Nevertheless, Belarus scores lower than the 'B' median in the
World Bank Governance Indicators. Political power is concentrated
in the hands of President Lukashenko who has been in power since
1994. The opposition is weak, and Fitch assumes that Lukashenko
will remain in power over the medium term. In the aftermath of
the resolution of the gas price dispute, bilateral relations with
Russia are currently stable. Russia is a key partner for Belarus
from a trade, financing and political perspective.

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

Fitch's proprietary SRM assigns Belarus a score equivalent to a
rating of 'BB-' on the Long-Term Foreign Currency (LTFC) IDR
scale. Fitch's sovereign rating committee adjusted the output
from the SRM to arrive at the final LTFC IDR by applying its QO,
relative to rated peers, as follows: .

- Macro: -1 notch, to reflect weaker medium-term growth
   prospects relative to rating peers.

- External finances: -1 notch, to reflect a high gross external
   financing requirement, low net international reserves, and
   reliance on often ad hoc external financial support from
   Russia to meet external obligations, which is vulnerable to
   changes in bilateral relations. Belarus's net external
   debt/GDP is high.

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 LTFC 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 could, individually or collectively, lead
to positive rating action are:
- Sustained increase in international reserves supported by
   further progress in diversification in external financing
   sources.
- Fiscal consolidation at the broader government level leading
   to a reduction in public debt/GDP and/or contingent
   liabilities.
- Sustained improvement in Belarus's medium-term growth
   performance in the context of macroeconomic stability, for
   example stemming from implementation of structural reform
   agenda.

The main factors that could, individually or collectively, lead
to negative rating action are:
- Re-emergence of external financing pressures and erosion of
   international reserves.
- Increased macroeconomic instability, for example due to
   weakening in the coherence or credibility of economic policy.
- Deterioration in public finances resulting in a significant
   rise in government debt or contingent liabilities.

KEY ASSUMPTIONS

Fitch's assumes that Belarus will receive ad-hoc financial
support from Russia.

The full list of rating actions is as follows:

Long-Term Foreign-Currency IDR upgraded to 'B' from 'B-'; Stable
Outlook
Long-Term Local-Currency IDR upgraded to 'B' from 'B-'; Stable
Outlook
Short-Term Foreign-Currency IDR affirmed at 'B'
Short-Term Local-Currency IDR affirmed at 'B'
Country Ceiling revised to 'B' from 'B-'
Issue ratings on long-term senior unsecured foreign-currency
bonds upgraded to 'B' from 'B-'


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C R O A T I A
=============


AGROKOR DD: Zagreb Court Agrees to Divide Creditors Into Groups
---------------------------------------------------------------
SeeNews reports that Agrokor said the commercial court in Zagreb
has upheld a proposal of the extraordinary administration of
Croatia's ailing concern Agrokor to divide creditors into groups
ahead of a vote on a debt settlement plan.

"The sorting of creditors and defining of groups is based on the
records of claims filed and the differences in the legal position
of each of the groups," SeeNews quotes Agrokor as saying in a
statement on its website.

The creditors' council will have five members, and will be made
up of creditors of the food-to-retail concern with verified
claims, SeeNews discloses.

"The difference between the new creditors' council compared to
the previous interim creditors' council is that the majority of
supplier claims are now within one group, while the unsecured,
mostly financial creditors are divided into two groups based on
the different economic interests of their claims," Agrokor, as
cited by SeeNews, said.

The extraordinary commissioner of Agrokor has proposed to assign
the creditors to five groups: A, B, C, D and E depending on the
various legal and economic positions of each of the groups,
SeeNews discloses.

In December, Agrokor's extraordinary management unveiled a
settlement plan under which the creditors and suppliers of the
troubled concern will take full control of a new holding company
and its units, to which the assets of the sound segments of the
Agrokor group will be transferred, SeeNews recounts.

The settlement proposal must be submitted to the Commercial Court
in Zagreb by April 10, 2018 at the latest, SeeNews notes.  The
settlement plan is first voted on by the creditors, while the
final confirmation rests with the Commercial Court in Zagreb,
SeeNews states.


                         About Agrokor DD

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

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

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

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

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

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



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F R A N C E
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KAPLA HOLDING 2: S&P Assigns Prelim 'B+' CCR, Outlook Stable
------------------------------------------------------------
S&P Global Ratings said that it assigned its preliminary 'B+'
long-term corporate credit rating to Kapla Holding 2 (Kiloutou).
The outlook is stable.

S&P said, "At the same time, we assigned our 'B+' issue rating to
its proposed EUR670 million senior secured term loan B. The
recovery rating on this term loan is '4', indicating our
expectation of average (30%-50%; rounded estimate: 40%) recovery
in the event of payment default."

Kiloutou is a France-based equipment rental company specializing
in earthmoving and access equipment, as well tools and light
equipment. S&P said, "In 2017, we forecast that the company would
generate EUR620 million sales and EUR196 million in EBITDA. Our
'B+' rating on Kiloutou reflects our view of the group's
aggressive financial risk profile and weak business risk profile,
at the higher end of the range."

S&P said, "We think that Kiloutou's business risk profile is
constrained by its small size of operations and limited scale. We
also note that most of the company's earnings -- about 90% of
revenues -- stem from France, which increases concentration
risks. Although Kiloutou's geographic footprint is relatively
narrow and focused on France, we take a positive view of its
sizable domestic market share of about 14% and its No. 2 position
in France, which we think it will be able to sustain, thanks to
its longstanding relationships with the clients and its dense
branch network. At the same time, Kiloutou has a wide product
range and aims to improve its diversity by further expanding into
value added services such as insurance, logistics, and client
training.

"The company is exposed to cyclical construction and industrial
end markets. However, we believe that Kiloutou will be able to
demonstrate its flexibility by reducing fleet investment
significantly when earnings growth subsides through active fleet
management measures. Kiloutou has a well-maintained fleet with an
average age of 5.2 years. 40% of Kiloutou's revenues stem from
its light equipment, which requires lower capital expenditure
(capex) investment than peers and offers higher return on
capital.

"We anticipate that Kiloutou will benefit from the pick-up in the
French construction market and maintain reported EBITDA margins
of about 31%-33% in the next two years, which we see as an
average range versus other equipment rental companies. We believe
that Kiloutou's profitability will also be supported by its
optimization measures, including branch consolidation and prudent
cost control.

"We view Kiloutou's financial risk profile as aggressive. Our
assessment is constrained by high capital investments typical for
the equipment rental industry. We anticipate that the company
will post negative free operating cash flow (FOCF) in 2018 on the
back of higher capex of about EUR195 million and return to
positive FOCF starting from 2019. We anticipate that Kiloutou's
S&P Global Ratings-adjusted debt-to-EBITDA ratio will be below 5x
and its cash coverage ratio, measured by funds from operations
(FFO) to debt, to be above 12%. The increased capex reflects that
the company is seeking to expand its fleet and take advantage of
growth opportunities in its respective markets. Nevertheless, we
note that Kiloutou's business model allows flexibility to
significantly reduce capex in a downturn and preserve its free
cash flow generation.

"Kiloutou has a track record of expanding through acquisitions.
Although we do not incorporate any sizable acquisitions in our
forecast, we believe that larger-than-expected debt-financed
acquisitions would constrain Kiloutou's credit metrics.

"The stable outlook on Kiloutou reflects our expectation that its
credit metrics will continue to be commensurate with an
aggressive financial risk profile. More specifically, its
adjusted FFO to debt is forecast to stay in the 12%-20% range and
debt to EBITDA below 5.0x. We expect the company to benefit from
healthy growth in the French construction market in 2018.
However, we also expect Kiloutou to increase growth capex to
expand its fleet and capture market growth. We therefore
anticipate that the company will generate negative FOCF.

"We might consider lowering the ratings if the unfavorable market
conditions significantly constrained Kiloutou's credit ratios,
such as FFO to debt of less than 12% and debt to EBITDA above 5x,
without near-term prospects for improvement. We could also lower
the rating if Kiloutou made unexpected, large, debt-funded
acquisitions.

"We might raise the ratings if Kiloutou achieved and sustained
stronger credit metrics, with FFO to debt above 20% and debt to
EBITDA below 4.0x. Stronger credit metrics could result from
substantially reduced debt in absolute amounts, combined with
better-than-anticipated operating performance. The rating upside
could also arise from Kiloutou increasing its size of operations
and improving diversification coupled with stability of margins."


TWIST BEAUTY: Moody's Assigns B2 CFR, Outlook Stable
----------------------------------------------------
Moody's Investors Service has assigned B2 Corporate Family Rating
(CFR) and B2-PD Probability of Default Rating (PDR) to Twist
Beauty International Holdings S.A., parent of the beauty and
personal care packaging company Albea Beauty Holdings S.A (Albea)
and the entity at the top of the restricted banking group. The B2
CFR and the B2-PD PDR of Albea Beauty Holdings S.A. have also
been withdrawn.

Concurrently, Moody's has affirmed the B2 rating to the EUR385
million and USD408 million senior secured term loans B due April
2024 and to the USD105 million senior secured revolving credit
facility (RCF) due April 2023, both borrowed or to be borrowed by
Albea Beauty Holdings S.A. The outlook on all ratings is stable.

The rating action was prompted by the proposed issuance of USD175
million PIYC notes due June 2024 by Hercule Debtco S.ar.l. in
conjunction with the acquisition of Albea by the private equity
firm PAI Partners from Sun Capital. The proceeds from the PIYC
notes, together with USD480 million of equity injected by PAI,
mainly in the form of PECs, will be used to acquire Albea, to
prefund the first year of interests on the PIYC notes and to pay
the transaction fees. These new unrated instruments will be
issued outside the restricted banking group and therefore they
will not impact the Moody's-adjusted debt/EBITDA and
EBITDA/Interest metrics. However, free cash flow and liquidity
will deteriorate because the notes interest payments will be
serviced via distributions made under existing terms of the
senior secured facilities.

RATINGS RATIONALE

The action reflects Moody's expectation that Albea will continue
its positive trading performance achieved YTD September 2017 and
gradually reduce the elevated leverage of 5.9x for the last
twelve months to September 30, 2017, supported by positive
industry trends in the near term, the planned acquisition of
Covit to complete in March 2018 and ongoing optimization of the
cost structure. However, the issuance of the USD175 PIYC notes,
despite not affecting the leverage and interest cover metrics,
will reduce the already weak cash flow from 2019, partly
mitigated by expectation for lower corporate costs.

Albea's B2 corporate family rating continues to be constrained by
the fact the company operates in a highly competitive environment
with significant level of customer concentration (top largest
customers represented approximately 50% or revenues in 2016)
resulting in pricing pressure particularly from larger accounts,
albeit this is partly mitigated by long-standing relationships
with its blue-chip customers, as well as a global manufacturing
base aligned to the customers' plants and its innovative
capacity. Albea remains also exposed to the volatility of input
costs, which started to rise during 2017, with only 60% of
contracts including pass-through clauses, and to currency
movements.

More positively, the rating is supported by Albea's leading
positions in the global beauty personal care packaging segment
particularly in laminated tubes, mascara and lipsticks, with
operations in 15 countries. Although the beauty and personal care
industry is viewed as cyclical, Moody's notes that the
fundamentals are positive in the near term driven by stable of
improving economies and ageing population. The rating also
incorporates the fact that Albea has largely completed its
operational restructuring integrating six businesses, most
notably Rexam Personal Care in 2012.

LIQUIDITY

Moody's expects Albea's liquidity profile to be good for its near
term requirements as cash and external sources will compensate
for weak free cash flow due to ongoing restructuring costs,
working capital outflows, maintenance and project capex albeit
lower than historical levels, dividend distribution for the notes
cash interests and 0.25% quarterly debt amortization of the term
loan B USD tranche. The liquidity is supported by (1)
approximately USD108 million cash on balance sheet pro forma for
this transaction including pre-funded interest payments for 2018;
(2) USD105 million undrawn RCF credit facility due April 2023;
(3) USD60 million committed North American ABL facility, fully
available, and due October 2019; (4) EUR115 million committed
European receivables facility (factoring), only EUR10 million
drawn and maturing October 2019; (5) local facilities for $176
million, $48 million of which are drawn; and (6) the presence of
non-recourse factoring arrangements which are expected to be
renewed on an ongoing basis.

The RCF has one springing financial covenant (net senior secured
leverage ratio), set with large headroom at 7.97x, to be tested
on quarterly basis when the RCF is drawn by more than 40%.

STRUCTURAL CONSIDERATIONS

Albea's B2-PD PDR is aligned with the CFR, reflecting an assumed
recovery rate of 50%, customary for capital structure comprising
of bank debt but lacking a maintenance financial covenants. The
term loan B and the RCF, issued by Albea Beauty Holdings S.A.,
both rated B2, are secured on a first-priority basis by shares
and certain assets, and on a second-priority basis by the asset
securing the US ABL facility and local facilities, and they are
guaranteed by the material subsidiaries which represent at least
80% of the consolidated EBITDA and 80% of consolidated assets.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook reflects Moody's view that Albea will continue
its positive trading, slowly deleveraging over the next 12 to 18
months. The stable outlook also assumes that the company will not
lose any material customer and it will not engage in material
debt-funded acquisitions or shareholder distributions.

WHAT COULD CHANGE THE RATING UP/DOWN

For upgrade pressure, Moody's would expect the company to
continue to improve EBITDA margins resulting in a deleveraging
measured by debt/EBITDA (as adjusted by Moody's) below 5x.
Moody's would also expect the company to sustain its positive
free cash flow.

Downward pressure could occur if improvements in operating
performance from growth opportunities and cost efficiencies fail
to materialize, debt/EBITDA (as adjusted by Moody's) increases
above 6.0x or if there is a sustained negative free cash flow or
material deterioration in liquidity.

The principal methodology used in these ratings was Packaging
Manufacturers: Metal, Glass, and Plastic Containers published in
September 2015.

Headquartered in France, Albea is a leading producer of plastic
packaging for the beauty and personal care market. The company
benefits from a manufacturing footprint of 38 plants in 15
countries across Europe, the Americas and Asia, serving both
large, developed markets such as Europe and North America and
faster-growing, developing markets such as Brazil, Mexico, China,
Indonesia, Russia and India. For the last twelve months to 30
September 2017, Albea generated $1.4 billion of revenues and
reported $186 million of EBITDA., employing approximately 15,000
people.

LIST OF AFFECTED RATINGS:

Assignments:

Issuer: Twist Beauty International Holdings S.A.

-- Corporate Family Rating, Assigned B2

-- Probability of Default Rating, Assigned B2-PD

Affirmations:

Issuer: Albea Beauty Holdings S.A

-- Senior Secured Bank Credit Facility, Affirmed B2

Withdrawn:

Issuer: Albea Beauty Holdings S.A.

-- Corporate Family Rating, Withdrawn

-- Probability of Default Rating, Withdrawn

Outlook Actions:

Issuer: Albea Beauty Holdings S.A

-- Outlook, Remains Stable

Issuer: Twist Beauty International Holdings S.A.

-- Outlook, Assigned Stable


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


KME AG: Moody's Assigns B3 Corp. Family Rating, Outlook Positive
----------------------------------------------------------------
Moody's Investors Service has assigned a first-time long-term B3
corporate family rating (CFR) to KME AG ("KME") a B3 rating to
the proposed backed EUR300 million senior secured notes due 2023
with a loss-given default of LGD3 and a probability of default
rating of B3-PD. The outlook on all ratings is positive.

"The assigned B3 CFR with a positive outlook balances the
company's very high initial leverage, relatively small scale
operations with limited geographic diversification, and limited
track record of structurally improved operating profitability.
This is following its recently finalized reorganization which,
nevertheless, should support continued improvements in operating
profitability in addition to positive exposure to supportive end-
user industry trends", says Dirk Steinicke, Moody's lead analyst
for KME.

RATINGS RATIONALE

KME's B3 corporate family rating (CFR) reflects its (i) leading
market positions in niche markets of the copper products
industry; (ii) good customer diversification; (iii) ability to
pass through raw material prices; (iv) expectation of sustainable
positive free cash flow generation in the following years; (v)
positive exposure to supportive end user industry trends
including increasing electrification of the automotive industry,
continued demand for steel and stable but modestly growing
construction industry with a good share of the renovation
business; (vi) recently finalized and meaningful reorganization
that should support KME's envisaged operating profitability.

Concurrently KME's B3 CFR is primarily constrained by (i) very
high adjusted starting leverage on a pro forma basis with
approximately 6.1x -- 6.3x debt/EBITDA as of 2017; (ii) limited
track record of structurally improved operating profitability
following its reorganization; (iii) relatively small scale
operations with limited geographic diversification; (iv)
materially volatile IFRS profitability due to accounting rules
but without free cash flow generation impact; (v) meaningful off-
balance sheet factoring program.

LIQUIDITY

Moody's considers KME's liquidity as adequate based on reported
EUR18 million of cash and cash equivalents as per end of
September 2017, further underpinned by a new EUR350 million
borrowing base revolving credit facility, EUR30 million
shareholder working capital facility and envisaged EUR33 million
cash over-funding following the issuance of the notes. The
facility contains only one maintenance covenant regarding
interest coverage defined to maintain a minimum EBITDA to total
financial interest expense as well as one springing covenant
requiring KME to maintain a certain ratio of net financial
indebtedness to consolidated tangible net worth. These liquidity
sources together with cash generated from operations should be
sufficient to fund working capital swings, Moody's assumed
working cash requirements, acquisitions, capital expenditures,
transaction fees as well as short-term debt repayments over the
next 18 months amounting to approximately EUR120 million.

STRUCTURAL CONSIDERATIONS

In the loss-given-default assessment, the group's proposed new
backed EUR300 million senior secured notes rank effectively
subordinated to local financial debt that is secured by property
and assets that do not secure the notes which Moody's assume to
amount to approximately EUR30 million at the date of the
transaction. Non-UK Pension liabilities, which Moody's assume are
unsecured, are ranking behind the notes and the borrowing base
facility. The senior secured notes are rated at B3 which is in
line with the CFR since any other sizeable debt ranks pari passu
to the notes. The fixed assets that are pledged in favor of the
note holders are accounting for at least 80% of the group's
EBITDA and meaningful operating assets as per LTM period ending
September 2017. The borrowing base facility of EUR350 million and
EUR30 million shareholder working capital facility are also
assumed to rank pari passu with the notes, as its security
package consists of the liquid short term assets that are part of
the company's working capital, and cover 100% of the drawings.
Given the collateral value of the security in a potential default
scenario, the new debt instruments are modeled as secured in the
LGD analysis. Accordingly, these facilities second together with
trade payables and the UK Pension liabilities.

RATING OUTLOOK

The positive outlook reflects Moody's expectation that KME will
build a track record of profitable operations following its
meaningful reorganization in 2015-16. It also takes into
consideration that an upgrade is likely when KME is able to
improve its Brass segment profitability over the next 12-18
months. In addition, Moody's expect a continued gradually
improving operating performance of its Copper and Special
segments on the back of increased Net Added Value (NAV) revenues
resulting in Moody's adjusted EBITA margin moving into the high
single to low double digit percentage range of NAV revenues or
EBITA margins approaching the mid-single digit % range of IFRS
revenues. Furthermore, Moody's expect that leverage moves
meaningfully below 6x adjusted debt/EBITDA on a sustainable basis
excluding sizeable effects from raw material revaluation under
IFRS. Moody's also expects consistent positive free cash flow
generation at around mid-single digit percentage range of
adjusted gross debt and maintenance of at least adequate
liquidity.

WHAT COULD CHANGE THE RATINGS UP/DOWN

The ratings could be upgraded, if (i) KME's Moody's-adjusted
leverage would move to below 5.5x debt/EBITDA, (ii) EBITA margin
improves to above 10 % of net added value sales, and (iii) free
cash flow to debt generation is in the mid-single digit % range
on a sustainable basis.

Moody's might consider a downgrade, if (i) KME is unable to
maintain a Moody's adjusted leverage of sustainably below 6.5x
debt/EBITDA, (ii) EBITA margin falls below 8% of net added value
sales on a sustainable basis, and (iii) free cash flow generation
is negative resulting in a deteriorating liquidity position.

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

Headquartered in Osnabrueck, Germany, KME AG (KME) is a leading
producer of copper and copper alloy products which are largely
based on copper scrap. During the LTM period ended September 2017
the company generated EUR1.6 billion revenues and about EUR503
million Net Added Value revenues (NAV). The company operates 10
production sites of which 8 are based in Europe, 1 in the US, and
1 in China as well as 2 joint ventures (1 in Europe and 1 in
China) and employs approximately 3,900 people. KME is a fully
owned subsidiary of Italian industrial investment company Intek
Group S.p.A..


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I R E L A N D
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GLG EURO IV: S&P Assigns Prelim B- (sf) Rating to Class F Notes
---------------------------------------------------------------
S&P Global Ratings assigned preliminary credit ratings to GLG
Euro CLO IV DAC's class A-1, A-2, B-1, B-2, C, D, E, and F notes.
At closing, the issuer will issue unrated subordinated notes.

GLG Euro CLO IV is a cash flow collateralized loan obligation
(CLO) transaction securitizing a portfolio of primarily senior
secured loans granted to speculative-grade corporates. GLG
Partners LP manages the transaction.

Under the transaction documents, the rated notes will pay
quarterly interest unless a frequency switch event occurs.
Following this, the notes will permanently switch to semiannual
interest payments.

The portfolio's reinvestment period will end approximately four
years after closing, and the portfolio's maximum average maturity
date will be approximately 8.5 years after closing. During the
reinvestment period, the manager can reinvest principal proceeds
as long as certain tests are met, mainly coverage, collateral
quality (including S&P CDO Monitor), and portfolio profile tests.

S&P said, "On the effective date, we understand that the
portfolio will represent a well-diversified pool of corporate
credits, with a fairly uniform exposure to all of the credits.
Therefore, we have conducted our credit and cash flow analysis by
applying our criteria for corporate cash flow collateralized debt
obligations.

"In our cash flow analysis, we have used the portfolio target par
amount of EUR350 million, the covenanted weighted-average spread
of 3.50%, and the expected weighted-average recovery rates at
each rating level."

The U.K. branch of Elavon Financial Services Ltd. (AA-/Stable/A-
1+) is the bank account provider and custodian. The participants'
downgrade remedies are in line with our current counterparty
criteria.

The issuer is bankruptcy remote, in line with our legal criteria.

Following S&P's analysis of the credit, cash flow, counterparty,
operational, and legal risks, S&P believes its preliminary
ratings are commensurate with the available credit enhancement
for each class of notes.

RATINGS LIST

  GLG Euro CLO IV DAC
  EUR361.25 mil senior secured floating- and fixed-rate notes and
  deferrable floating-rate notes

                                         Prelim Amount
  Class                 Prelim Rating       (mil, EUR)
  A-1                   AAA (sf)               173.00
  A-2                   AAA (sf)                30.00
  B-1                   AA (sf)                 29.00
  B-2                   AA (sf)                 20.00
  C                     A (sf)                  23.50
  D                     BBB (sf)                20.00
  E                     BB- (sf)                19.00
  F                     B- (sf)                 9.50
  Sub                   NR                      37.25

  NR--Not rated


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


CIRENE FINANCE: S&P Lowers Class D Notes Rating to 'D (sf)'
-----------------------------------------------------------
S&P Global Ratings lowered to 'D (sf)' from 'CCC- (sf)' its
credit rating on Cirene Finance S.r.l.'s class D notes. S&P said,
"At the same time, we have affirmed our 'D (sf)' rating on the
class E notes. We have subsequently withdrawn our ratings on
these two classes of notes, effective in 30 days' time."

The rating actions reflect the issuer's failure to repay the
remaining note principal balance on Dec. 15, 2017, the legal
final maturity date.

Cirene Finance is a 2006 CMBS transaction, backed by a pool of
secured and unsecured nonperforming loans, originated in Italy.

Our ratings on Cirene Finance address timely payment of interest
and repayment of principal no later than the legal final maturity
date on Dec. 15, 2017.

The issuer failed to repay the notes on the legal final maturity
date.

S&P said, "We have therefore lowered to 'D (sf)' from 'CCC- (sf)'
our rating on the class D notes in line with our criteria.

"At the same time, we have affirmed our 'D (sf)' rating on the
class E notes. These classes of notes failed to pay interest on a
timely basis and were also not repaid on the legal final maturity
date."

The ratings will remain at 'D (sf)' for a period of 30 days
before the withdrawals become effective.

  RATINGS LIST

  Class                  Rating
              To                      From
  Cirene Finance S.r.l.
  EUR101.45 Million Mortgage-Backed Floating-Rate Notes And
  Deferrable-Interest Notes

  Rating Lowered And Withdrawn (Effective 30 Days)

  D           D (sf)                  CCC- (sf)
              NR                      D (sf)

  Ratings Affirmed And Withdrawn (Effective 30 Days)

  E           D (sf)
              NR                      D (sf)

  NR--Not rated.


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


MALLINCKRODT INT'L: Moody's Confirms Ba3 Corporate Family Rating
----------------------------------------------------------------
Moody's Investors Service confirmed Mallinckrodt International
Finance SA's Corporate Family Rating ("CFR") at Ba3 and
Probability of Default Rating ("PDR") at Ba3-PD. Moody's
confirmed the existing senior secured revolver and term loan at
Ba1, the guaranteed senior unsecured notes at B1, and the
unguaranteed senior unsecured notes at B2. The Speculative Grade
Liquidity Rating was lowered to SGL-3 from SGL-2. The rating
outlook was changed to negative from under review. This action
concludes the rating review initiated on December 26, 2017,
following the announcement that Mallinckrodt will acquire Sucampo
Pharmaceuticals for $1.2 billion. In conjunction with the
acquisition, Moody's also assigned a Ba1 rating to the new $500
million senior secured term loan B.

The confirmation of Mallinckrodt's Ba3 Corporate Family Rating
reflects Moody's expectation that leverage will be elevated but
that the company will use a majority of its free cash flow to
reduce gross debt/EBITDA to under 4 times within 18 months of the
deal close. At the same time, Moody's has growing concerns
regarding Acthar's revenue declines, as well as its opioid-
related exposure.

Rating assigned:

Mallinckrodt International Finance SA:

New senior secured term loan B at Ba1 (LGD2)

Ratings confirmed:

Ba3 Corporate Family Rating

Ba3-PD Probability of Default Rating

B2 (LGD6) Senior unsecured notes

B1 (LGD 5) guaranteed unsecured notes

Mallinckrodt International Finance SA and co-borrower
Mallinckrodt CB LLC:

Ba1 (LGD 2) senior secured term loan B due 2024

Ba1 (LGD 2) senior secured revolver expiring 2022

Rating lowered:

Speculative Grade Liquidity Rating to SGL-3 from SGL-2

Outlook Actions:

Outlook, Changed To Negative from Rating Under Review

RATINGS RATIONALE

Mallinckrodt's Ba3 CFR reflects its elevated financial leverage
and high earnings concentration in one drug, Acthar. Acthar is
not protected by any patents, however, companies would face
significant hurdles to get a generic version approved. Acthar
revenue will decline at least through mid-2018 and failure to
return to growth could pressure the ratings. At the same time,
specialty generics earnings will continue to decline.
Mallinckrodt's Ba3 CFR is supported by the company's moderate
scale in specialty branded pharmaceuticals, its growing hospital-
based business, healthy late-stage pipeline, and good free cash
flow.

Sucampo brings Mallinckrodt a marketed product, Amitiza, which
treats chronic constipation. Despite the competitive market for
prescription constipation drugs, Moody's expects Amitiza will
modestly grow until generic competition enters in 2021. Sucampo
also brings two late-stage pipeline assets in rare orphan
diseases that support prospects for growth over the long term.
Nevertheless, the deal will be fully debt funded, and, combined
with organic earnings declines, Mallinckrodt's financial
flexibility will be constrained as it delevers.

The lowering of the Speculative Grade Liquidity Rating to SGL-3
reflects weakening liquidity as Mallinckrodt's $900 million
revolver is fully drawn and its financial covenants will be in
effect in 2018. Moody's expects good cash generation in excess of
$500 million in 2018 and that the company will use cash flow
(including divestiture proceeds) to reduce its revolver balance
and repay an upcoming $300 million notes maturity in April 2018.
Mallinckrodt has $50 million of availability under its $250
million accounts receivable facility. The revolver has a
springing net leverage covenant if more than 25% of the facility
is drawn (the covenant test steps down to 5.0x in the first
quarter of 2018 from 5.25x). Moody's believes the covenant will
be tested throughout 2018 and that the company's cushion will be
weakest in the first quarter, improving thereafter.

The negative outlook reflects Mallinckrodt's high financial
leverage following the acquisition of Sucampo. In Moody's view,
gross Debt/EBITDA will remain elevated above 4.0 times over the
next 12-18 months, allowing minimal cushion for incremental
business headwinds.

Moody's could downgrade Mallinckrodt's ratings if it believes
that debt/EBITDA will be sustained above 4.0 times. Failure to
reverse revenue declines in Acthar could also result in a
downgrade. Moody's could upgrade the ratings if the company can
meaningfully improve its earnings diversity while maintaining
debt/EBITDA below 3.0.

The principal methodology used in these ratings was
Pharmaceutical Industry published in June 2017.

Luxembourg-based Mallinckrodt International Finance SA is a
subsidiary of Staines-upon-Thames, UK-based Mallinckrodt plc
(collectively "Mallinckrodt"). Mallinckrodt is a specialty
biopharmaceutical company with annual revenues of approximately
$3.3 billion.


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


BASHKORTOSTAN: Moody's Affirms Ba2 LT Issuer Rating, Outlook Pos.
-----------------------------------------------------------------
Moody's Investors Service has changed to positive from stable the
outlooks on the ratings of 11 regional and local governments
(RLGs) in Russia and two government-related issuers (GRIs),
reflecting reduced systemic risk stemming from the sovereign's
credit profile. At the same time, Moody's affirmed the ratings of
these 13 issuers. Concurrently, Moody's has changed outlooks to
stable from negative for four RLGs and affirmed their ratings. In
addition, it affirmed the ratings of one RLG and maintained the
stable outlook.

These rating actions follow the improvement of Russia's credit
profile as captured by Moody's change of outlook to positive from
stable on Russia's government rating (Ba1) on January 25, 2018.

Specifically, Moody's has changed the outlook to positive from
stable and affirmed the ratings of the following 11 RLGs: Moscow,
City of (Ba1), St. Petersburg, City of (Ba1), Bashkortostan,
Republic of (Ba2), Tatarstan, Republic of (Ba2), Autonomous-Okrug
(region) of Khanty-Mansiysk (Ba2), Moscow, Oblast of (Ba2),
Samara, Oblast of (Ba3), Chuvashia, Republic of (Ba3), Krasnodar,
Krai of (B1), Krasnoyarsk, Krai of (B1) and Nizhniy Novgorod,
Oblast of (B1).

Additionally, the ratings were affirmed and the outlooks were
changed to positive from stable of the following two GRIs: SUE
Vodokanal of St. Petersburg (Ba2) and OJSC Western High-Speed
Diameter (Ba3).

Conversely, Moody's changed the outlook to stable from negative
and affirmed the ratings of the following four RLGs: Omsk, Oblast
of (Ba3), Komi, Republic of (B1), Krasnodar, City of (B1) and
Omsk, City of (B1). In addition, the ratings of Volgograd, City
of (B2) were affirmed and stable outlook maintained.

RATINGS RATIONALE

   -- RATIONALE FOR OUTLOOK CHANGE TO POSITIVE FROM STABLE AND
AFFIRMATION OF 11 RLGs' AND 2 GRIs' RATINGS

The outlook change to positive from stable of Moscow, City of,
St. Petersburg, City of, Bashkortostan, Republic of, Tatarstan,
Republic of, Autonomous-Okrug (region) of Khanty-Mansiysk,
Moscow, Oblast of, Samara, Oblast of, Chuvashia, Republic of,
Krasnoyarsk, Krai of, Krasnodar, Krai of and Nizhniy Novgorod,
Oblast of reflects the decrease in systemic pressure following
the change to positive outlook for Russia.

The revenue base of Russian RLGs will likely grow in 2018 given
the recovery of economic performance, which will help sustain
RLGs' budgets. Real GDP growth is estimated to have been 1.7% in
2017 and is forecasted at 1.6% for 2018 compared to -0.2% in
2016. Stronger tax collection and a number of tax initiatives
positively influencing RLGs' revenues also added to higher
revenue bases. Stronger revenues and tighter cost controls will
result in the improvement of these issuers' performances as
reflected in their current budgets which are more conservative
compared to previous years. Federal government's stricter control
and measures to foster improvement of the RLGs' performance
already constrained sector-wide debt burden which Moody's expects
to decrease in 2018.

Furthermore, debt affordability has improved and is supported by
ongoing lending from state-owned banks. The abundant liquidity of
the banking sector (the main donor of fiscal resources for
Russian RLGs) has reduced borrowing rates for RLGs while loan
supply has increased.

Higher ability of the sovereign government to provide system-wide
on-going support also exerts positive pressure on the issuers'
credit standing. The large federal government programme for
refinancing market debt with cheap budget loans has significantly
eased the refinancing pressure of the regions. As a result, the
share of budget loans in the debt structure of the sector has
materially increased since 2014. In 2017, the federal government
announced a restructuring programme of the budget loans that
extended their maturities to seven to twelve years from one to
five years originally.

The affirmation of the issuer ratings with positive outlooks of
SUE Vodokanal of St. Petersburg and the backed senior unsecured
rating of OJSC Western High-Speed Diameter reflects their status
as GRIs fully owned by the St. Petersburg government and their
strong credit linkages with the City of St. Petersburg. OJSC
Western High-Speed Diameter also benefits from a guarantee on its
principal payments from the Russian government.

   -- RATIONALE FOR AFFIRMATION OF RATINGS AND OUTLOOK CHANGE TO
STABLE FROM NEGATIVE FOR 4 RLGs

The affirmation of the ratings of Omsk, Oblast of reflects
stabilisation of its financial performance and debt metrics. The
deficit is estimated at below 2% of total revenues in 2017
compared to 7% in 2016 while the debt burden has decreased to
around 77% of own source revenues in 2017 from 80% in 2016. The
stable outlook reflects that the positive pressure arising from
the reduced systemic risk is offset by the significant debt
burden and continuing weak operating balances.

The affirmation of the rating with stable outlook on Omsk, City
of reflects the linkages of the city with Omsk, Oblast of. The
city's revenue base depends to a large extent on transfers from
Oblast, which totalled around 50% of city revenues for the last
three years. The stabilisation in fiscal conditions of the Oblast
is expected to maintain the level of transfers to the city at
adequate levels. Moody's forecasts that the stable operating
environment will support the city's own-source revenues and debt
affordability, maintaining credit pressures at current levels.

The affirmation of the ratings of Komi, Republic of reflects the
continued relatively high debt burden despite declining recently.
Moody's forecasts that the republic ended a trend seen over the
past six years of significant budgetary deficits. Revenues
benefited from higher taxes from the key taxpayers while expense
consolidation efforts also contributed to such improvement. The
debt burden has declined to an estimated 60% of own-source
revenues in 2017 compared to 78% a year earlier. However,
although the republic adopted conservative budgets, revenues
remain volatile given their dependence on receipts from key
taxpayers which could prevent the republic from achieving
budgetary targets. These weaknesses offset the positive pressure
from the decreasing systemic risk underpinning the stable outlook
on the ratings.

The affirmation of the rating of Krasnodar, City of reflects
repayments of sizeable overdue payables in 2017. The city
benefited from a significant increase in transfers from
Krasnodar, Krai of, despite the latter's own consolidation
measures. Such support, together with stronger own-source
revenues, enabled the city to maintain performance at around
historic levels (with estimated deficit at below 4% of total
revenues in 2017), and avoided growth in its debt burden and
pressure on liquidity. The stable outlook reflects the fact that
the anticipated decrease in systemic risk will be offset by
continued modest fiscal performance.

   -- RATIONALE FOR AFFIRMATION OF RATINGS WITH STABLE OUTLOOK
FOR VOLGOGRAD, CITY OF

The affirmation of the rating and stable outlook of Volgograd,
City of reflects the very high debt burden with significant near-
term refinancing pressure. Moody's notes that while the city's
fiscal performance will improve going forward as it adopts
conservative budgets it will not enable Volgograd to
significantly reduce its debt burden over the course of the next
12-18 months. The net direct and indirect debt to own-source
revenue is estimated at around 1.5x in 2017 (1.5x in 2016). These
credit pressures are likely to remain despite the decreasing
systemic pressure.

   -- WHAT COULD CHANGE THE RATINGS UP/DOWN

Moscow, City of, St. Petersburg, City of, Bashkortostan, Republic
of, Tatarstan, Republic of, Autonomous-Okrug (region) of Khanty-
Mansiysk, Moscow, Oblast of and the two GRIs could experience
upward rating pressure in case of upward changes in the sovereign
rating, provided their budget performances do not deteriorate
considerably. For other entities with positive outlooks, upward
pressure could arise from both upward changes in the sovereign
rating as well as their ability to sustain improved financial
performances and debt metrics.

For Komi, Republic of the positive pressure could stem from its
proven ability to sustain the track record of improved
performance. For other entities with a stable outlook a rating
upgrade would require an improvement in their financial
performance.

Given positive and stable outlooks for the RLGs and GRIs the
negative pressure is not expected. At the same time, any
unexpected deterioration in the credit metrics of sub-sovereigns,
could exert downward pressure on ratings or outlooks.

   -- RATINGS AFFECTED

  -- THE RATINGS OF THE FOLLOWING 13 ISSUERS WERE AFFIRMED WITH
POSITIVE OUTLOOK

Affirmations:

Issuer: Bashkortostan, Republic of

-- LT Issuer Rating, Affirmed Ba2

Issuer: Chuvashia, Republic of

-- LT Issuer Rating, Affirmed Ba3

-- Senior Unsecured Regular Bond/Debenture, Affirmed Ba3

Issuer: Khanty-Mansiysk AO

-- LT Issuer Rating, Affirmed Ba2

Issuer: Krasnodar, Krai of

-- LT Issuer Rating, Affirmed B1

Issuer: Krasnoyarsk, Krai of

-- LT Issuer Rating, Affirmed B1

Issuer: Moscow, City of

-- LT Issuer Rating, Affirmed Ba1

Issuer: Moscow, Oblast of

-- LT Issuer Rating, Affirmed Ba2

Issuer: Nizhniy Novgorod, Oblast

-- LT Issuer Rating, Affirmed B1

Issuer: OJSC Western High-Speed Diameter

-- Backed Senior Unsecured Regular Bond/Debenture, Affirmed Ba3

Issuer: Samara, Oblast of

-- LT Issuer Rating, Affirmed Ba3

-- Senior Unsecured Regular Bond/Debenture, Affirmed Ba3

Issuer: St. Petersburg, City of

-- LT Issuer Rating, Affirmed Ba1

Issuer: SUE Vodokanal of St. Petersburg

-- LT Issuer Rating, Affirmed Ba2

Issuer: Tatarstan, Republic of

-- LT Issuer Rating, Affirmed Ba2

Outlook Actions:

Issuer: Bashkortostan, Republic of

-- Outlook, Changed To Positive From Stable

Issuer: Chuvashia, Republic of

-- Outlook, Changed To Positive From Stable

Issuer: Khanty-Mansiysk AO

-- Outlook, Changed To Positive From Stable

Issuer: Krasnodar, Krai of

-- Outlook, Changed To Positive From Stable

Issuer: Krasnoyarsk, Krai of

-- Outlook, Changed To Positive From Stable

Issuer: Moscow, City of

-- Outlook, Changed To Positive From Stable

Issuer: Moscow, Oblast of

-- Outlook, Changed To Positive From Stable

Issuer: Nizhniy Novgorod, Oblast

-- Outlook, Changed To Positive From Stable

Issuer: OJSC Western High-Speed Diameter

-- Outlook, Changed To Positive From Stable

Issuer: Samara, Oblast of

-- Outlook, Changed To Positive From Stable

Issuer: St. Petersburg, City of

-- Outlook, Changed To Positive From Stable

Issuer: SUE Vodokanal of St. Petersburg

-- Outlook, Changed To Positive From Stable

Issuer: Tatarstan, Republic of

-- Outlook, Changed To Positive From Stable

-- THE RATINGS OF THE FOLLOWING 5 ISSUERS WERE AFFIRMED WITH
    STABLE OUTLOOK

Affirmations:

Issuer: Komi, Republic of

-- LT Issuer Rating, Affirmed B1

Issuer: Krasnodar, City of

-- LT Issuer Rating , Affirmed B1

Issuer: Omsk, City of

-- LT Issuer Rating, Affirmed B1

Issuer: Omsk, Oblast of

-- LT Issuer Rating, Affirmed Ba3

Issuer: Volgograd, City of

-- LT Issuer Rating, Affirmed B2

Outlook Actions:

Issuer: Komi, Republic of

-- Outlook, Changed To Stable From Negative

Issuer: Krasnodar, City of

-- Outlook, Changed To Stable From Negative

Issuer: Omsk, City of

-- Outlook, Changed To Stable From Negative

Issuer: Omsk, Oblast of

-- Outlook, Changed To Stable From Negative

Issuer: Volgograd, City of

-- Outlook, Remains Stable

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

The specific economic indicators, as required by EU regulation,
are not available for these entities. The following national
economic indicators are relevant to the sovereign rating, which
was used as an input to this credit rating action.

Sovereign Issuer: Russia, Government of

GDP per capita (PPP basis, US$): 26,926 (2016 Actual) (also known
as Per Capita Income)

Real GDP growth (% change): -0.2% (2016 Actual) (also known as
GDP Growth)

Inflation Rate (CPI, % change Dec/Dec): 5.4% (2016 Actual)

Gen. Gov. Financial Balance/GDP: -3.7% (2016 Actual) (also known
as Fiscal Balance)

Current Account Balance/GDP: 2% (2016 Actual) (also known as
External Balance)

External debt/GDP: 40.1% (2016 Actual)

Level of economic development: Moderate level of economic
resilience

Default history: At least one default event (on bonds and/or
loans) has been recorded since 1983.

On January 25, 2018, a rating committee was called to discuss the
ratings of the Russian sub-sovereign entities. The main points
raised during the discussion were: The systemic risk in which the
issuers operate has materially decreased. Pressure from
idiosyncratic factors for some entities still remains.

The principal methodology used in rating Moscow, City of, St.
Petersburg, City of, Bashkortostan, Republic of, Tatarstan,
Republic of, Autonomous-Okrug (region) of Khanty-Mansiysk,
Moscow, Oblast of, Samara, Oblast of, Chuvashia, Republic of,
Krasnodar, City of, Krasnodar, Krai of, Nizhniy Novgorod, Oblast
of, Omsk, Oblast of, Komi, Republic of, Volgograd, City of,
Krasnoyarsk, Krai of and Omsk, City of was Regional and Local
Governments published in January 2018.

The principal methodology used in rating SUE Vodokanal of St.
Petersburg and OJSC Western High-Speed Diameter was Government-
Related Issuers published in August 2017.

The weighting of all rating factors is described in the
methodology used in this credit rating action, if applicable.


NIZHNIY NOVGOROD: Fitch Affirms BB Long-Term IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed the Russian Nizhniy Novgorod Region's
Long-Term Foreign- and Local-Currency Issuer Default Ratings
(IDR) at 'BB' with Stable Outlooks and Short-Term Foreign-
Currency IDR at 'B'. The region's senior unsecured debt ratings
have been affirmed at 'BB'.

The affirmation reflects Fitch's unchanged base case scenario
regarding the region's sound operating performance in the medium
term, moderate direct risk and diversified economy, which is
prone to cyclicality. The ratings further take into account the
concentrated maturity profile of the region's debt.

KEY RATING DRIVERS
Fitch projects the region's budgetary performance will remain
sound with an operating margin of 12%-14% over the medium term.
The agency expects a current balance of around 10% in 2018-2020,
weighed down by interest payments. According to preliminary data,
Nizhniy Novgorod's operating balance improved to a sound 14% in
2017, from 11.7% a year earlier and 6.1% in 2015.

In 2017 Nizhniy Novgorod recorded a RUB1.2 billion surplus (2016:
deficit of RUB5 billion), due mainly to increases in personal
income tax proceeds of 7.5% yoy and corporate income tax proceeds
of 5.4% yoy. Tax revenue grew on the back of a national economic
rebound and broad growth of wages across all sectors. This was
accompanied by strict control over operating expenditure and some
decrease in capital expenditure as preparations for 2018 Football
World Cup approach their final phase.

Fitch projects the region's direct risk will stabilise at around
50% of current revenue (2017: 56.3%) over the medium term amid a
balanced budget. In 2017 the region's direct risk decreased to
RUB75.8 billion from RUB78 billion a year ago as the
administration used its budget surplus and part of its cash
reserves to repay bank loans. Debt profile also improved in 2017
as the region contracted RUB6.4 billion budget loans at 0.1%
interest rate and placed a five-year RUB12 billion domestic bond
at 8.1%. The region's debt portfolio is weighted towards market
debt with 51% domestic bonds, 28% budget loans and 22% bank
loans.

As with most regions in Russia, Nizhniy Novgorod is exposed to
refinancing pressure in 2018-2020 when 73% of its direct risk
matures. As of end-2017 the region's refinancing needs for 2018
were RUB31.9 billion (42% of outstanding debt), composed of bank
loans (RUB16.5 billion), budget loans (RUB9.8 billion) and bonds
(RUB5.6 billion). Fitch expects the region will refinance debt
via a combination of domestic bonds (RUB10 billion placement
later this year) and bank loans. Budget loans will be
restructured for longer maturities and gradual amortisation
within a state-wide programme for regions.

The region's liquidity position remained strong with cash
totaling RUB3.6 billion at end-2017 (RUB4.6 billion at end-2016).
The decline in cash was due to the administration using part of
its cash reserves to repay bank loans. Additionally, the region
has access to RUB7.5 billion of undrawn committed bank lines and
RUB10 billion of short-term standby credit lines (0.1% annual
interest rate) from the Treasury of Russia.

Nizhniy Novgorod has a diversified economy with a fairly well-
developed industrialised sector, which helps support wealth
metrics near the national median. In 2016 the 10-largest
taxpayers contributed 17% of all tax revenue, underlining a broad
tax base. The region is among the top 15 Russian regions in gross
regional product (GRP) volume and has a population of 3.3 million
people (2.2% of Russia's).

Nizhniy Novgorod's economy is driven by domestic demand and
therefore prone to cyclicality and correlated with the national
economy. According to preliminary data, in 2017 GRP grew 1.7%,
which is in line with the wider Russian economy (1.8% growth).
According to the administration's forecast, the region's GRP
growth will accelerate to 2% in 2018-2020, following the national
trend. Fitch forecasts national GDP to grow 2% in 2018.

The region's credit profile is constrained by the weak Russian
institutional framework for sub-nationals, which has a shorter
record of stable development than many of Nizhniy Novgorod's
international peers. The predictability of Russian local and
regional governments' budgetary policy is hampered by the
frequent reallocation of revenue and expenditure responsibilities
within government tiers.

RATING SENSITIVITIES

Sound operating performance with an operating margin above 10% on
a sustained basis, accompanied by a decrease in direct risk to
below 40% of current revenue and lower reliance on short-term
bank financing, could lead to an upgrade.

An increase in direct risk to above 70% of current revenue,
accompanied by ongoing refinancing pressure or an inability to
maintain a sustainable positive current balance, could lead to a
downgrade.


SVYAZINVESTNEFTEKHIM: Moody's Affirms Ba2 CFR and Ba2-PD PDR
------------------------------------------------------------
Moody's Investors Service has assigned Baa3 long-term issuer
ratings to 13 Russian non-financial corporates and their family
entities, while concurrently withdrawing their Ba1 corporate
family ratings (CFRs) and Ba1-PD probability of default ratings
(PDRs). The outlooks for these entities have been changed to
positive from stable. Baseline credit assessments (BCA) for all
of the government-related issuers (GRIs) in this cohort were
upgraded to baa3 from ba1, while support and dependence
assumptions remain unchanged.

Moody's has also assigned Baa3 long-term issuer ratings with a
stable outlook to six Russian non-financial corporates and their
family entities, concurrently withdrawing their Ba1 CFRs and Ba1-
PD PDRs. BCAs for all of the GRIs in this cohort were upgraded to
baa3 from ba1, while support and dependence assumptions remain
unchanged.

Moody's has affirmed the Ba1 CFRs and the Ba1-PD PDRs of six
Russian non-financial corporates and their family entities and
changed the outlook to positive from stable on these ratings. For
all the affected GRIs in this cohort, their respective BCAs,
support and dependence assumptions remain unchanged except for
Atomenergoprom, JSC, for which the BCA was upgraded to ba1 from
ba2.

Finally, Moody's has affirmed the Ba2 CFR and the Ba2-PD PDR of
Svyazinvestneftekhim JSC and changed the outlook to positive from
stable on its ratings. Svyazinvestneftekhim JSC's BCA, support
and dependence assumptions remain unchanged.

The actions follow a sovereign rating action on the government of
Russia which took place on January 25, 2018, during which Moody's
changed the outlook on Russia's Ba1 long-term issuer and senior
unsecured debt ratings to positive from stable. Concurrently,
Moody's affirmed Russia's long-term ratings at Ba1 and its short-
term rating at Not Prime (NP). The change in the outlook on
Russia's Ba1 ratings was driven by the following rating factors:

* Growing evidence of institutional strength. Russia's
macroeconomic framework coped well with the oil price shock and
with the impact of sanctions imposed to date, and enhancements
have been made to the government's rule-based fiscal framework;
and

* Relatedly, increased evidence of economic and fiscal resiliency
that has reduced Russia's vulnerability to further external
shocks arising from geopolitical tensions or from renewed
declines in oil prices.

In a related decision, Moody's has raised Russia's country
ceilings for foreign currency debt to Baa3/P-3 from Ba1/NP to
reflect diminished concerns that the government might impose
capital controls or otherwise ration foreign exchange reserves.

Moody's also raised the country risk ceilings for local currency-
denominated debt and deposits to Baa2 from Baa3. A country
ceiling generally indicates the highest rating level that any
issuer domiciled in that country can attain for instruments of
that type and currency denomination.

RATINGS RATIONALE

"The raising of Russia's country ceilings for foreign currency
debt to Baa3/P-3 from Ba1/NP has resulted in a decoupling of the
ratings of some of the strongest Russian corporates from Russia's
long-term issuer rating, which remains at Ba1, and led to the
assignment of the Baa3 long-term issuer ratings to 19 Russian
companies in the oil and gas, steel, mining, infrastructure,
utilities and chemical sectors," says Victoria Maisuradze,
Moody's Associate Managing Director. "These companies possess a
number of characteristics, which give them a degree of resilience
against sovereign or macroeconomic stress."

Out of these corporates, 15 companies in the oil and gas, steel,
mining and chemical sectors (for which Ba1 CFRs were withdrawn
and the long-term issuer rating of Baa3 with varying outlooks was
assigned) exhibit particularly strong credit metrics with a
substantial share of foreign currency revenue and strong
liquidity profiles, which gives them a degree of resilience at
times of sovereign stress. All of these entities have robust
business models, are cost leaders in their sectors and visible
players both in the domestic market and abroad, factors that
merited a modest rating differentiation relative to Russia's Ba1
long-term issuer and senior unsecured debt rating and factoring
in the sovereign ceiling for foreign currency debt being raised
to Baa3/P3 from Ba1/NP. Foreign currency revenue stream, combined
with costs bases and capital spending that are largely in
roubles, provides the strongest Russian companies in these
sectors with a degree of insulation from local market stress and
helps cushion the effects of foreign-currency debt revaluations
on their leverage metrics.

The credit profiles of Russian power and utilities,
telecommunications and infrastructure companies are more
sensitive to the domestic macroeconomic environment. These
companies operate in the same economic and financial environment
as exporters. However, they lack revenue diversification and are
therefore more vulnerable to macroeconomic stresses. That
explains why the majority of the companies in this cohort
continue to be rated at Ba1 with varying outlooks, reflecting the
degree of interlinkage with the sovereign and their differing
credit profiles, which remain fairly strong. Lack of clarity on
the magnitude of potential capital spending related to the
regulatory requirements on data storage served as a constraining
factor for Ba1 rated Russia's strongest telecommunication
providers.

Nevertheless, some of these companies may demonstrate a degree of
resilience to the domestic macroeconomic and financial disruption
in the event of sovereign distress due to their fundamentally
strong credit profiles. Russian Railways Joint Stock Company
(Baa3 positive) and its subsidiary Federal Passenger Company OJSC
(Baa3 positive), Transneft, PJSC (Baa3 positive) and Inter RAO,
PJSC (Baa3 stable) have fundamentally strong credit quality due
to their resilient business models and market positioning
(including monopoly status for some of them), diversified
customer bases (albeit predominantly domestic), as well as modest
levels of debt and strong liquidity profiles - factors that
merited modest rating differentiation relative to Russia's
sovereign rating factoring in the sovereign ceiling for foreign
currency debt being raised to Baa3/P3 from Ba1/NP. As a result,
Ba1 CFRs were withdrawn for these companies and the long-term
issuer rating of Baa3 with positive or stable outlooks was
assigned.

For some GRIs where ratings are now higher than the sovereign
rating, Moody's ratings assume a continuation of their strong
stand alone credit profiles, and a continuation of their
operations without negative government interference that could
otherwise be a constraining factor to their ratings.

Some of the companies on which the rating action was taken are
subject to US/EU sanctions. They have less diversified sources of
funding and greater reliance on state controlled banks and local
capital markets. However, they also demonstrated their ability to
adapt to these new conditions since the sanctions were imposed in
2014 with these companies' vulnerability to such events somewhat
receding.

RATIONALE FOR RATINGS OUTLOOK

Differing (positive or stable) outlooks assigned to 26 Russian
non-financial corporates reflect the differentiation of their
credit profiles and Moody's view on their potential further
rating migration if Russia's long-term rating is upgraded or
Russia's country ceilings for foreign currency debt are raised,
provided that this is merited by their stand alone credit
profiles at the time.

These multiple outlooks assigned to the affected non-financial
corporates also reflect Moody's expectation that each company's
specific credit factors, including their operating and financial
performance, market position, financial leverage and liquidity
will remain commensurate with their ratings on a sustainable
basis. In some cases the ratings remain constrained by the
sovereign ceiling, while in other cases the ratings and outlooks
reflect the underlying credit strength of the companies and are
no longer constrained by the sovereign ceiling.

The positive outlook on the Ba2 rating of Svyazinvestneftekhim
JSC is in line with the outlook on the rating of the Republic of
Tatarstan (Ba2 positive) and reflects the company's strong
linkages with the government of the Republic of Tatarstan as a
100% government-owned entity and manager of the Republic of
Tatarstan's key assets, as well as the improved credit profile of
the company via its growing dividend stream from one of its key
portfolio companies -- Tatneft PJSC.

PRINCIPAL METHODOLOGIES

The principal methodology used in rating PJSC PhosAgro, PhosAgro
Bond Funding DAC, Sibur Holding, PJSC and Sibur Securities DAC
was Chemical Industry published in January 2018.

The principal methodology used in rating Gazprom Neft PJSC, GPN
Capital S.A., Lukoil, PJSC and LUKOIL International Finance B.V.
was Global Integrated Oil & Gas Industry published in October
2016.

The principal methodology used in rating MMC Norilsk Nickel, PJSC
and MMC Finance DAC was Global Mining Industry published in
August 2014.

The principal methodology used in rating Federal Passenger
Company OJSC was Global Passenger Railway Companies published in
June 2017.

The principal methodology used in rating PAO Novatek and Novatek
Finance Limited was Independent Exploration and Production
Industry published in May 2017.

The principal methodology used in rating Magnitogorsk Iron &
Steel Works, NLMK, Steel Funding D.A.C., PAO Severstal and Steel
Capital S.A. was Steel Industry published in September 2017.

The principal methodology used in rating MegaFon PJSC, Mobile
TeleSystems PJSC and MTS International Funding Limited was
Telecommunications Service Providers published in January 2017.

The methodologies used in rating Bashneft PJSOC, Gazprom, PJSC,
Gaz Capital S.A., Gazprom ECP S.A., OOO Gazprom Capital, PJSC Oil
Company Rosneft, Rosneft International Finance Limited, Rosneft
International Holdings Limited, Rosneft Finance S.A. and Tatneft
PJSC were Global Integrated Oil & Gas Industry published in
October 2016, and Government-Related Issuers published in August
2017.

The methodologies used in rating ALROSA PJSC and Alrosa Finance
S.A. were Global Mining Industry published in August 2014, and
Government-Related Issuers published in August 2017.

The methodologies used in rating Russian Railways Joint Stock
Company and RZD Capital PLC were Global Surface Transportation
and Logistics Companies published in May 2017, and Government-
Related Issuers published in August 2017.

The methodologies used in rating Svyazinvestneftekhim JSC were
Investment Holding Companies and Conglomerates published in
December 2015, and Government-Related Issuers published in August
2017.

The methodologies used in rating FGC UES, PJSC, Federal Grid
Finance Limited, ROSSETI, PJSC, Transneft, PJSC and
TransCapitalInvest DAC were Regulated Electric and Gas Networks
published in March 2017, and Government-Related Issuers published
in August 2017.

The methodologies used in rating Atomenergoprom, JSC, Inter RAO,
PJSC, RusHydro, PJSC and RusHydro Capital Markets DAC were
Unregulated Utilities and Unregulated Power Companies published
in May 2017, and Government-Related Issuers published in August
2017.


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


UNION FENOSA: Fitch Puts BB+ Sub. LT Notes Rating on Watch Pos.
---------------------------------------------------------------
Fitch Ratings has upgraded the senior unsecured ratings of two
Spanish utilities, Iberdrola S.A. (Iberdrola, Long-Term Issuer
Default Rating (IDR) BBB+/Stable) and Endesa S.A. (Endesa,
BBB+/Stable) to 'A-' from 'BBB+'. The subordinated debt of
Iberdrola has also been upgraded to 'BBB' from 'BBB-'. At the
same time Fitch has placed the senior unsecured and subordinated
debt ratings of Gas Natural SDG S.A. (Gas Natural,
BBB+/Negative), another Spanish utility, on Rating Watch Positive
(RWP).

The rating actions follow the upgrade of Spain's Long-Term
Foreign-Currency Issuer Default Rating (IDR) to 'A-' from 'BBB+'.

Under Fitch's methodology, Fitch apply a one-notch uplift to
senior unsecured debt rating from the Long-Term IDR when there is
a large share of regulated network earnings (more than 50%),
which is the case for Iberdrola, Endesa and Gas Natural. This
uplift is no longer constrained following the upgrade of Spain to
'A-' and can be applied to the three groups, resulting in rating
actions. Similarly, the subordinated debt rating also benefits
from higher recovery assumptions.

For Gas Natural, however, Fitch have chosen to place the senior
unsecured rating on RWP, rather than an immediate upgrade, due to
the Negative Outlook on the IDR. Fitch expect to resolve the RWP
once Fitch have analysed the business plan update to be disclosed
by end-February and reviewed all ratings of Gas Natural.

KEY RATING DRIVERS

See the relevant rating action commentary (RAC) referenced for
each issuer at www.fitchratings.com.

Fitch Affirms Enel S.p.A. and Endesa, S.A. at 'BBB+'; Outlook
Stable, dated 16 May 2017
Fitch Affirms Iberdrola S.A. at 'BBB+'; Outlook Stable, dated 25
July 2017
Fitch Affirms Gas Natural at 'BBB+'; Negative Outlook, dated 31
October 2017

DERIVATION SUMMARY

Under Fitch's methodology, Fitch apply a one-notch uplift for
Iberdrola's and Endesa's senior unsecured ratings due to Fitch
expectations of stronger-than-average recoveries. This results in
a higher senior unsecured rating for Endesa compared with the one
for its parent Enel S.p.A., whose senior unsecured 'BBB+' rating
is capped at its IDR level due to the Italian sovereign being at
'BBB'. This is similar to Scottish Power UK plc, the UK
subsidiary of Iberdrola, whose senior unsecured rating was until
now higher than the one for Iberdrola, but following rating
action is aligned at 'A-'.

See the relevant RAC referenced for each issuer at
www.fitchratings.com for more details.

KEY ASSUMPTIONS

See the relevant RAC referenced for each issuer at
www.fitchratings.com for more details.

RATING SENSITIVITIES

Iberdrola

Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- Outperformance of Fitch expectations with capital structure
   targets supporting funds from operations (FFO) adjusted net
   leverage substantially below 3.7x and FFO interest coverage
   above 5.0x on a sustained basis.
- Improvement of the business mix, consistently with the
   company's target for regulated and quasi-regulated activities,
   together with a strengthening of the weighted average of the
   economic environments Iberdrola is present in could lead to a
   positive revision of the guidelines for an upgrade.

Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- Underperformance of Fitch expectations with an increase of FFO
   adjusted net leverage up to and above 4.5x and FFO interest
   coverage below 4.0x on a sustained basis.
- Deterioration of the operating environment due to unexpected
   adverse regulatory or policy changes, including in the UK or
   the US or higher-than-expected exposure to low-rated countries
   or weak regulatory frameworks.
- Increased organic growth or M&A appetite, if largely debt-
   funded.

Gas Natural
The Outlook is Negative and Fitch therefore do not expect an
upgrade. Future developments that may nevertheless lead to
positive rating action (revision of Outlook to Stable) include:
- Expected FFO adjusted net leverage approaching 4.0x, coupled
with FFO fixed charge cover above 4.5x and projected free cash
flow (FCF) returning structurally to positive territory.

Fitch would upgrade the debt ratings of Gas Natural if the
Outlook on its IDR is revised to Stable from Negative.

Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- FFO adjusted net leverage above 4.0x and FFO fixed charge
   coverage below 4.5x on sustained basis and failure to generate
   positive FCF within this business plan.
- Substantial deterioration of the operating environment or
   further government measures substantially reducing cash flows.
- Substantial decrease in the share of regulated and quasi-
   regulated EBITDA leading to lower cash flow visibility.

Fitch would affirm the debt ratings of Gas Natural if its IDR is
downgraded by one notch.

Endesa
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- An upgrade of Enel's ratings.

Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- A downgrade of Enel's ratings.

LIQUIDITY

See the relevant RAC referenced for each issuer at
www.fitchratings.com for more details.

FULL LIST OF RATING ACTIONS

Iberdrola
Iberdrola S.A.
- Senior unsecured rating upgraded to 'A-' from 'BBB+'

Iberdrola International BV:
- Senior unsecured rating upgraded to 'A-' from 'BBB+'
- Subordinated long-term notes' rating upgraded to 'BBB' from
   'BBB-'

Iberdrola Finanzas, S.A.U.
- Senior unsecured rating upgraded to 'A-' from 'BBB+'

Iberdrola Finance Ireland Limited
- Senior unsecured rating upgraded to 'A-' from 'BBB+'

Gas Natural

Gas Natural Fenosa Finance BV
- Senior unsecured rating of 'BBB+' placed on RWP
- Subordinated long-term notes' rating of 'BBB-' placed on RWP

Gas Natural Capital Markets, S.A.
- Senior unsecured rating of 'BBB+' placed on RWP

Union Fenosa Preferentes, S.A.
- Subordinated long-term notes' rating of 'BB+' placed on RWP

Endesa

Endesa, S.A.
Senior unsecured rating upgraded to 'A-' from 'BBB+'


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


ISTANBUL TAKAS: Fitch Affirms BB+ Long-Term IDR, Outlook Stable
---------------------------------------------------------------
Fitch Ratings has affirmed Istanbul Takas ve Saklama Bankasi
A.S.'s (Takasbank) Long- and Short-Term Foreign Currency (FC)
Issuer Default Ratings (IDRs) at 'BB+' and 'B' respectively. The
Outlook on the Long-Term FC IDR is Stable. At the same time,
Fitch has affirmed Takasbank's Viability Rating (VR) at 'bb+'.

KEY RATING DRIVERS
IDRS, NATIONAL RATING AND SENIOR DEBT

Takasbank's Long-Term IDRs are driven by Fitch's view of a high
probability of support from the Turkish authorities in case of
need. Takasbank's Long-Term FC IDR is also underpinned the bank's
individual credit profile, as expressed in its VR.

The VR takes into account Takasbank's franchise as the country's
only clearing house as well as its sound counterparty risk
management and its adequate capitalisation, funding and liquidity
profile. The VR also reflects considerable concentration risk in
its central clearing counterparty (CCP) activities and
incremental credit risk appetite in its non-CCP activities,
notably its extensive treasury activities with Turkish
counterparties, which has led to a reduction in Takasbank's risk-
weighted capital ratios. Treasury-related and other non-CCP-
related bank liabilities typically account for around two-thirds
of Takasbank's total bank liabilities.

Takasbank has dominant domestic franchises in clearing, custody
and CCP collateral management services. Given Turkey's fairly
narrow capital markets, Takasbank's strategy is primarily to roll
out its clearing and collateral management services to other
product areas as well as strengthening ancillary services,
including collateral management.

As of end-2017, Takasbank provided clearing services for four
asset classes: Borsa Istanbul's futures and options market (by
far Takasbank's largest clearing business), securities lending,
Borsa Istanbul's money market (since late 2016) and Borsa
Istanbul's cash equities market (since June 2017). Management is
considering offering clearing services for commercial cheques,
the natural gas market and carbon emission trading certificates
in the short- to medium-term.

Takasbank is primarily exposed to money-market and counterparty
credit risk in its CCP activities. Although the credit quality of
money-market placements is generally acceptable (typically with
institutions rated BB+), these are highly concentrated, with the
top three counterparties (all domestic banks) accounting for 92%
of the total at end-2017. While Takasbank often places funds with
Turkiye Halk Bankasi's (Halk; see 'Fitch Places Halk on Rating
Watch Negative', published 19 January 2018), its exposure is
short-term in nature and subject to regularly reviewed limits.

Within Takasbank's CCP activities, counterparty risk is mitigated
by sound margin (initial and variation margining) and default
management procedures, which are in line with international best
practice.

Profitability is solid (operating return on average equity (ROAE)
of 30.8% in 9M17), although a fairly high dividend pay-out ratio
weighs on internal capital generation. Takasbank's revenue
structure is adequate with net fee income more than covering the
cost base, which is typical for a CCP (net fees/operating
expenses of 152% in 9M17). Net interest income, both from placing
free cash and Takasbank's growing treasury activities, has
increased markedly in recent years, supporting Takasbank's
overall profitability. The bank's good cost-efficiency is
reflected in a low cost/income ratio (21% in 9M17).

Takasbank is adequately capitalised (Fitch Core Capital ratio of
15.2% at end-1H17) although risk-based capital ratios decreased
in recent years in line with volume growth in its treasury
business. Defaults in Takasbank's concentrated treasury portfolio
could therefore have a more adverse impact on the bank's
capitalisation.

Takasbank's funding and Liquidity profile is sound and the stock
of liquid assets (predominately bank placements) at end-1H17 was
sufficient to repay all of Takasbank's non-equity liabilities.
Most liabilities are either interbank funding relating to its
treasury activities (with proceeds invested in the interbank
market with matching tenors) or collateral accounts (proceeds
invested in liquid assets or the interbank market). The bank's
investment policy is quite stringent and allows only for short-
term interbank placements and a small portfolio of government
securities.

The Stable Outlook on Takasbank's Long-Term FC IDR reflects both
the Stable Outlook on Turkey's sovereign rating and Fitch
expectation that Takasbank's performance should remain sound
without compromising the bank's currently adequate risk profile.
The National Long-Term 'AAA(tur)' Rating of Takasbank reflects
Fitch's view that the bank remains among the strongest credits in
Turkey, and that its creditworthiness relative to other Turkish
issuers remains unchanged.

SUPPORT RATING AND SUPPORT RATING FLOOR

Takasbank's Support Rating of '3' and Support Rating Floor (SRF)
of 'BB+' reflect Fitch view of a moderate probability of support
from the Turkish sovereign in case of need. The SRF, which
underpins Takasbank's Long-Term FC IDR, is aligned with the
sovereign's Long-Term FC IDR. The bank's Long-Term Local Currency
IDR of 'BBB-' is also aligned with that of the sovereign,
reflecting Fitch high support expectations and Turkey's ability
to provide support in local currency.

Takasbank has, in Fitch opinion, exceptionally high systemic
importance for the Turkish financial sector and contagion risk
from its default would be considerable given its
interconnectedness. The state's ability to provide extraordinary
FC support to the banking sector, if required, may be constrained
by limited central bank reserves (net of placements from banks)
and the sector's sizable external debt. However, in Fitch view,
the FC pport needs of Takasbank in even quite extreme scenarios
should be manageable for the sovereign given Takasbank's adequate
liquidity position.

RATING SENSITIVITIES
IDRS, NATIONAL RATING AND SENIOR DEBT

A material operational loss, or a materially increased risk
appetite, for example, by growing rapidly in untested asset
classes, could be negative for Takasbank's VR. Increasing risk
appetite in the bank's treasury activities could also be rating-
negative.

Upside for Takasbank's VR is limited given the bank's
concentrated credit exposure and undiversified business model due
to an almost exclusive focus on the fairly narrow Turkish capital
markets. However, an upgrade of Turkey's sovereign rating and/or
an upgrade of Turkey's largest banks would likely lead to an
upgrade of Takasbank's VR and FC IDRs.
A weakening of Takasbank's credit profile relative to other
domestic issuers could lead to a downgrade of Takasbank's
National Long-Term Rating.

SUPPORT RATING AND SUPPORT RATING FLOOR

Rating actions on Turkey are likely to be mirrored in Takasbank's
ratings given the strong correlation of the bank's credit profile
with sovereign, country and banking sector risks.

Takasbank is Turkey's only CCP and is majority-owned by Borsa
Istanbul, Turkey's main stock exchange. Borsa Istanbul in turn is
majority-owned by the Turkish government (via the Turkish Wealth
Fund). Takasbank is operating under a limited banking licence,
and is regulated by three Turkish regulatory bodies, namely the
Central Bank of Turkey, the Banking Regulation and Supervision
Agency and the Capital Markets Board

The rating actions are as follows:

Long-Term Foreign Currency IDR: affirmed at 'BB+'; Outlook Stable
Short-Term Foreign Currency IDR: affirmed at 'B'
Long-Term Local Currency IDR: affirmed at 'BBB-'; Outlook Stable
Short-Term Local Currency IDR: affirmed at 'F3'
Viability Rating: affirmed at 'bb+'
Support Rating: affirmed at '3'
Support Rating Floor: affirmed at 'BB+'
National Long-Term Rating: affirmed at 'AAA(tur)'; Outlook Stable


Union Fenosa Preferentes, S.A.
-Subordinated long-term notes' rating of 'BB+' placed on RWP


TURKLAND BANK: Fitch Affirms BB- Long-Term Issuer Default Ratings
-----------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term IDRs of six foreign-
owned small Turkish banks: Alternatifbank A.S. (ABank),
BankPozitif Kredi ve Kalkinma Bankasi A.S. (BankPozitif), ICBC
Turkey Bank A.S. (ICBC Turkey), Turkland Bank A.S (T-Bank),
Burgan Bank A.S. (Burgan), and Odea Bank (Odea). The Outlooks on
the banks' Long-Term ratings are Stable, except for T-Bank which
is Negative.

At the same time, Fitch has downgraded Turkland's Viability
Rating (VR) to 'b' from 'b+'. All other banks' VRs have been
affirmed.

KEY RATING DRIVERS
IDRS AND SUPPORT RATINGS

Institutional support drives the IDRs, National Ratings and
Support Ratings of ABank (100% owned by The Commercial Bank
(Q.S.C.) (CBQ, A/Negative) and its leasing subsidiary Alternatif
Finansal Kiralama (ALease; 100% owned by ABank), BankPozitif
(69.8% owned by Bank Hapoalim, A/Stable), T-Bank (50% owned by
Arab Bank Group, BB+/Negative), ICBC Turkey (92.8% owned by
Industrial and Commercial Bank of China, ICBC, A/Stable) and
Burgan Bank A.S. (99% owned by Burgan Bank Kuwait, A+/Stable).

Fitch considers ABank, Burgan and ICBC Turkey as strategically
important subsidiaries for their respective parents and believes
there is a high probability that support would be forthcoming to
these banks, in case of need. As a result, the banks' Support
Ratings have been affirmed at '2'. The Support Ratings also
considers their majority ownership, integration, roles within
their respective groups, and common branding (Burgan and ICBC
Turkey). Nevertheless, the banks' Long-Term Foreign-Currency (FC)
IDRs are constrained by Turkey's 'BBB-' Country Ceiling.

BankPozitif's IDRs are also constrained by the Country Ceiling.
However, unlike ABank, Burgan and ICBC Turkey, Fitch views
BankPozitif to be of limited importance to its parent considering
its narrow franchise and lack of strategic fit. Nevertheless, a
high level of integration and the bank's small size compared with
the parent contribute positively to Fitch assessment of support
and Fitch have affirmed the bank's Support Rating at '2'.

T-Bank's 'BB-' support-driven IDRs are notched twice from its
parent Arab Bank Plc (BB+/Negative) and its Support Rating has
been affirmed at '3'. The Negative Outlook on the bank's IDRs
mirrors that on its parent. Fitch's view of support is based on
Arab Bank Group's only 50% ownership, which may complicate the
prompt provision of solvency support, if required. It also
reflects T-Bank's weak performance in recent years and non-core
jurisdiction relative to Arab Bank's other strategically
important subsidiaries. Nevertheless, the bank's Support Rating
also takes into account T-Bank's small size relative to its
parent and the record of timely and sufficient provision of
capital and liquidity support from both Arab Bank Plc and its
other 50% shareholder, Lebanon's BankMed Sal.

Odea's IDRs and National Rating are driven by the bank's
standalone creditworthiness, as reflected by its VR. Odea's
Support Rating of '5' and Support Rating Floor of 'No Floor'
reflect Fitch's view that support from the Turkish state cannot
be relied upon. This reflects the bank's lack of systemic
importance in Turkey. Support from the bank's shareholder cannot
be relied upon given the weak ability of Bank Audi S.A.L. (76.4%
stake) to provide support based on its current rating (B-
/Stable).

Odea is rated three notches above Bank Audi S.A.L., whose ratings
are capped by the Lebanese sovereign rating. Fitch sees limited
contagion risk for Odea from its parent, based on i) limited
group funding; ii) the fact that Odea has not paid any dividends
to date, while Bank Audi has contributed about USD1.2 billion in
equity; and (iii) the relatively strong Turkish regulator, which
Fitch believes would seek to limit transfers of capital and
liquidity to the parent in case of stress at the latter. However,
Odea's investments in Lebanese sovereign debt (equal to 34% of
Fitch Core Capital (FCC) at end-9M17) weigh on Fitch assessment
of the bank's asset quality.

VRs
The banks' VRs of reflect their small absolute size (combined
assets amounted to about 3% of sector assets at end-3Q17) and
ensuing limited franchises and lack of competitive advantages.
Most banks primarily offer commercial banking services with a
historical focus on small and medium-sized companies (SMEs) and
have limited retail loan books. However, banks are generally
shifting their focus to larger commercial customers as SMEs have
proven among the most sensitive to swings in the economy. Only
some of the banks (including ABank and Burgan) have made material
use of the Credit Guarantee Fund (CGF) stimulus, which boosted
lending by the sector to SME customers in 9M17.

The banks typically report below-sector-average performance
metrics, reflecting a lack of economies of scale, limited pricing
power, and, in some cases, high loan impairment charges relative
to pre-impairment operating profit. Margins came under pressure
in 3Q17 from higher funding costs, due to tighter sector lira
liquidity, and further increases could weigh on banks' earnings.
However, the availability of relatively cost effective parent
funding, typically in FC, could reduce the extent of margin
erosion.

Average loan growth for the peer group (16% in 9M17; including
domestically owned small Turkish banks) was broadly in line with
the sector average (15%). However, growth varies significantly
across the banks depending on strategic objectives (BankPoz),
asset quality concerns (T-Bank, Odea) and available related-party
funding (ICBC Turkey).

The banks' asset quality metrics have generally held up, except
for T-Bank and Odea, despite the challenging operating
environment and significant lira depreciation. The average NPL
ratio for the peer group increased slightly to 4.0% at end-3Q17
(end-2016: 3.7%) reflecting loan seasoning and, for some banks,
loan book clean ups. Nevertheless, immediate risks to asset
quality for most banks have moderated, in Fitch's view, given the
supportive economic backdrop (FY17 GDP growth forecast: 5.5%).
However, regulatory group 2 watch-list loans remain high at most
banks and could contribute to NPL growth in the medium term.
These ranged from 0.7% of loans at BankPozitif to a higher 21% at
Turkland end-3Q17, a high proportion of which is generally
restructured.

In addition, FC lending (including FC-indexed loans) at the
banks, ranging from 31% (T-Bank) to 80% (BankPozitif) of total
loans at end-3Q17, remains significant and heightens credit risk.
Fitch believes FC loans could bring loan losses, particularly
considering the depreciation of the Turkish lira in recent years
and the fact that borrowers are typically smaller companies,
which are likely to be more weakly hedged. Nevertheless, FC loans
are typically long-term (albeit amortising) meaning any asset-
quality problems should feed through gradually.

Fitch considers the peer groups' average FCC/risk-weighted assets
ratio (end-3Q17: 15.8%) only adequate for their risk profiles
considering modest internal capital generation, high loan book
concentrations, and generally modest NPL reserve coverage. ABank,
Burgan and Odea have FC subordinated debt (qualifying as Tier 2
capital), providing a partial hedge against FC risk-weighted
assets.

The banks' funding and liquidity profiles are generally fairly
reasonable. Banks have limited deposit franchises but benefit
from varying degrees of access to funding from their respective
parents. ABank, ICBC Turkey, and Burgan all have high loan-to-
deposit ratios (above 150% at end-3Q17) given high usage of
parent funding. BankPozitif does not have a deposit license and
is therefore solely reliant on wholesale funding.

The downgrade of T-Bank's VR to 'b' from 'b+' reflects Fitch's
view that the bank's weak asset quality is continuing to
constrain performance, with loan impairment charges absorbing a
high 97% of pre-impairment profits in 9M17, and putting pressure
on capital ratios. Its NPL ratio increased to a high 7.3% at end-
3Q17 (end-2016: 6.5%) as loans season following rapid loan growth
between 2011 and 2015. More significantly, watch list loans
amounted to a further 21% of loans at end-3Q17, the weakest ratio
among peers, which could lead to further NPL growth. The bank is
in the process of changing its target customer segment to larger
commercials from SMEs, although it will take time for metrics to
improve, in Fitch view.

Fitch consider T-Bank's FCC ratio of 15.0% at end-3Q17 modest in
light of high net NPLs to FCC (20%), weak internal capital
generation and planned growth. The VR is underpinned by T-Bank's
reasonable funding and liquidity profile given a loan-to-deposit
ratio of 102% at end-3Q17 (end-2016: 92%) which compares well
with peers and the sector average.

Odea's VR reflects its limited franchise, deteriorating asset
quality metrics and exposure to some high-risk sectors such as
construction. However, the VR also factors in the bank's more
conservative stance in growth, reasonable funding profile in
light of the predominance of customer deposits in the bank's
funding base and limited wholesale funding reliance. Odea's
headline NPL ratio has increased since 2016 and was 4.3% at end-
9M17. Watch-list loans (end-9M17: 7.7% of performing loans) have
increased, as have watch-list restructured loans; at least some
of which are likely to migrate to the NPL category as loans
season, in Fitch's view. Odea's level of specific reserves
coverage of NPLs is also fairly weak, albeit a more reasonable
70% after adjusting for available free provisions.

ABank's 'b+' VR reflects the bank's weak core capitalisation,
reasonable performance metrics and narrow franchise. ABank's FCC
ratio increased to 8.3% FCC ratio at end-3Q17 but is considered
low in light of large unreserved NPLs (end-3Q17: equal to 13% of
FCC), weak internal capital generation and high FC lending.
However, the bank's capital ratios were supported by additional
Tier 1 capital by its parent and subordinated debt issues. The
bank's total regulatory CAR stood at 18% at end-9M17. The bank
plans a USD100 million equity increase from its shareholder in
2018. The bank's profitability improved in 9M17 following lower
loan impairment charges and volume growth. ABank's funding costs
are also at the lower end compared with peers thanks to access to
group funding, which is supporting margins.

ICBC Turkey's 'b+' VR reflects the bank's improved ability to
execute its newly deployed strategy, reasonable, albeit
improving, financial metrics and growing franchise. ICBC Turkey
has grown rapidly since acquisition in 2015 thanks to the
availability of cheap, long-term funding from its parent (about
TRY4 billion at end-3Q17) and a TRY440 million capital injection
in 2Q17. Nevertheless, the VR also captures the bank's appetite
for rapid growth and the risks this could bring to asset quality
and capitalisation. ICBC Turkey's NPL ratio fell to 1.4% at end-
3Q17, although watch list loans have risen, as for the sector.

Burgan's 'b+' VR considers its reasonable asset quality metrics,
high risk appetite and weak core capital ratios. The bank's 2.3%
NPL ratio was broadly stable at end-3Q17, and compares well with
peers, but recent rapid loan growth could increase NPLs as loans
season. Credit risk is heightened by high concentrations,
sizeable project finance exposures and elevated level of
regulatory group 2 watch-list loans (6.2% of loans at end-3Q17).
The bank also has the second highest share of FC loans (62% at
end-3Q17) among the banks. Fitch considers Burgan's FCC ratio
(7.8% at end-3Q17) weak for its risk profile, but it is set to
moderately improve following a TRY285 million capital injection
from its parent in December 2017. Parent funding, including
subordinated debt, provides uplift to the total capital ratio
(15.5%) and underpins the bank's relatively low cost of funding
(on a swap adjusted basis).

BankPozitif's 'b+' VR reflects its small absolute size, narrow
franchise and sole reliance on wholesale funding resulting from
the absence of a deposit license. The bank is deleveraging, in
line with the parent's strategy, and therefore the loan book
shrunk by 24% in 9M17. The NPL ratio remained broadly flat at 6%,
reflecting the lumpy loan book. The FCC ratio was above peers at
26.4%, but should be viewed in light of high concentrations,
small absolute size and low provision coverage (40%). Refinancing
risk is mitigated by access to parental funding and committed
lines and by the bank's deleveraging plans.

NATIONAL RATINGS
The affirmation of the banks' National Ratings reflects Fitch's
view that their creditworthiness relative to one another and to
other Turkish issuers is unchanged.

BANK SUBSIDIARY - ALTERNATIF FINANSAL KIRALAMA

ALease's ratings are equalised with those of ABank, reflecting
Fitch's view that it is a highly integrated, core subsidiary of
the parent. ALease is 100% owned by ABank and offers core
products and services (leasing) in the parent's core market
(Turkey) which reflects the key role in the group. ALease is
small relative to its parent (9% of ABank's total assets at end-
3Q17). Fitch believes that support for ALease, if needed, would
ultimately also come from CBQ via ABank

RATING SENSITIVITIES
IDRS, NATIONAL RATINGS, SENIOR DEBT RATINGS AND VRs

The IDRs, National Ratings, Support Ratings and debt ratings of
ABank, Burgan, ICBC Turkey, BankPozitif, T-Bank and Alternatif
Finansal Kiralama could be downgraded in case of a marked
weakening of the ability or propensity of parent institutions to
provide support. With the exception of T-Bank, the banks' ratings
are also sensitive to changes in the Country Ceiling.

The Negative Outlook on T-Bank's ratings reflects that on Arab
Bank, and a downgrade of the parent would likely result in a
downgrade of the subsidiary. Any other material change in Fitch's
view of support available to the bank from its parents would also
result in rating action.

All banks' VRs are sensitive to a material weakening in the
operating environment or in asset quality, profitability and the
sufficiency of their capital and liquidity buffers. T-Bank and
Odea's VRs (and the latter's IDRs) could be downgraded if asset
quality materially weakened further, putting pressure on
profitability and capital buffers. ICBC Turkey's VR could be
downgraded if there was a sharp increase in risk appetite and
this was not offset by material capital support from the
shareholder.

Upside potential for the banks' VRs is limited in the near term,
given current operating environment pressures. However, a
significant improvement in Burgan's and ICBC Turkey's franchises,
without a corresponding sharp increase in their risk appetite or
a weakening of their underwriting standards, could result in
upside potential for their VRs in the medium term. A track record
of successful implementation of the new strategy at ABank,
together with a strengthening of its core capital ratios, could
lead to an upgrade of its VR.

Upside potential for Bank Pozitif's VR is limited given its
narrow franchise and small size.

SUBORDINATED DEBT AND OTHER HYBRID SECURITIES

The 'B+' rating of Odeabank's subordinated notes is notched down
once from the bank's 'bb-' VR. ABank's 'BB+' subordinated debt
rating is notched down once from the bank's 'BBB-' IDR. The
notching includes one notch for loss severity and zero notches
for non-performance risk in the case of both banks.

The rating actions are as follows:

Alternatifbank A.S.
Long-Term FC IDR affirmed at 'BBB-'; Stable Outlook
Long-Term LC IDR affirmed at 'BBB-'; Stable Outlook
Short-Term FC IDR affirmed at 'F3'
Short-Term LC IDR affirmed at 'F3'
Viability Rating affirmed at 'b+'
Support Rating affirmed at '2'
National Long-Term Rating affirmed at 'AAA(tur)' Stable Outlook
USD250 million senior notes guaranteed by Commercial Bank of
Qatar affirmed at 'A'
Subordinated debt rating affirmed at 'BB+'

Alternatif Finansal Kiralama A.S.
Long-Term FC IDR affirmed at 'BBB-'; Stable Outlook
Long-Term LC IDR affirmed at 'BBB-'; Stable Outlook
Short-Term FC IDR affirmed at 'F3'
Short-Term LC IDR affirmed at 'F3'
Support Rating affirmed at '2'
National Long-Term Rating affirmed at 'AAA(tur)' Stable Outlook

BankPozitif Kredi ve Kalkinma Bankasi A.S.
Long-Term FC and LC IDRs: affirmed at 'BBB-'; Stable Outlook
Short-Term FC and LC IDRs affirmed at 'F3'
Viability Rating affirmed at 'b+'
Support Rating affirmed at '2'
National Long-Term Rating affirmed at 'AA+(tur)' ; Stable Outlook
Senior unsecured debt: affirmed at 'BBB-

ICBC Turkey A.S.
Long-Term FC IDR affirmed at 'BBB-'; Stable Outlook
Long-Term LC IDR affirmed at 'BBB-'; Stable Outlook
Short-Term FC and LC IDRs affirmed at 'F3'
Viability Rating affirmed at 'b+'
Support Rating affirmed at '2'
National Long-Term Rating affirmed at 'AAA(tur)' Stable Outlook

Turkland Bank A.S.
Long-Term FC and LC IDRs affirmed at 'BB-'; Negative Outlook
Short-Term FC and LC IDRs affirmed at 'B'
Viability Rating downgraded to 'b' from 'b+'
Support Rating affirmed at '3'
National Long-Term Rating affirmed at 'A+(tur)'; Negative Outlook

Burgan Bank A.S.
Long-Term FC IDR affirmed at 'BBB-'; Stable Outlook
Long-Term LC IDR affirmed at 'BBB-'; Stable Outlook
Short-Term FC IDR affirmed at 'F3'
Short-Term LC IDR affirmed at 'F3'
Viability Rating affirmed at 'b+'
Support Rating affirmed at '2'
National Long-Term Rating affirmed at 'AAA(tur)' Stable Outlook

Odeabank A.S.
Long-Term Foreign and Local Currency IDRs affirmed at 'BB-';
Outlook Stable
Short-Term Foreign and Local Currency IDRs affirmed at 'B'
Viability Rating affirmed at 'bb-'
Support Rating affirmed at '5'
Support Rating Floor affirmed at 'No Floor'
National Long-Term Rating affirmed at 'A+(tur)'; Outlook Stable
Subordinated debt rating affirmed at 'B+'


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


BYRON: Creditors Back Company Voluntary Arrangement
---------------------------------------------------
Ben Woods at Press Association reports that embattled burger
chain Byron has won the backing of creditors and landlords over
its restructuring plan which is set to spark store closures and
hundreds of job losses.

Byron has tabled a company voluntary arrangement (CVA) in an
attempt to shore up its financial position by allowing it to shut
loss-making restaurants and secure deep discounts on rental
costs, Press Association relates.

The overhaul received 99% backing during a meeting on Jan. 31,
paving the way for the potential closure of 20 restaurants across
the country, Press Association discloses.

According to Press Association, Will Wright --
will.wright@kpmg.co.uk -- KPMG restructuring partner and joint
CVA supervisor, said: "[Wednes]day's creditor vote in favor of
the CVA proposal will allow Byron to conclude its previously
negotiated financial restructuring and is a key step in the
directors' turnaround plan."


CARILLION PLC: Northern Ireland Business Enters Liquidation
-----------------------------------------------------------
John Mulgrew at Belfast Telegraph reports that Carillion's
Northern Ireland business has entered liquidation more than a
week after the collapse of the infrastructure giant.

The listed firm was granted a temporary lifeline in Northern
Ireland, as it's understood the firm has been given a line of
credit to continue some of its key operations in the area,
Belfast Telegraph relates.

But subcontractors still face an uncertain future, with potential
losses of up to GBP150,000 in the case of one firm, Belfast
Telegraph notes.

Carillion has three major maintenance contracts with the Northern
Ireland Housing Executive (NIHE) worth around GBPS35 million a
year, Belfast Telegraph discloses.  It also has contracts with
the Ministry of Defence and Power NI, Belfast Telegraph states.

According to Belfast Telegraph, it's understood the firm has been
granted a lifeline in the form of a line of credit with another
Northern Ireland company, which will see it continue key
contracts, such as the ones with the NIHE.

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.


CARILLION PLC: FRC Calls for More Scrutiny of Accounting Firms
--------------------------------------------------------------
Julia Kollewe at The Guardian reports that Britain's four biggest
accountancy companies are facing fresh scrutiny, with the head of
the industry watchdog calling for the competition regulator to
investigate their auditing activities following the collapse of
Carillion.

Stephen Haddrill, the chief executive of the Financial Reporting
Council (FRC), told MPs at a joint select committee hearing on
Jan. 30 that "there should be more competition in the major
accounting and audit area," The Guardian relates.

According to The Guardian, Mr. Haddrill said he would ask the
Competition and Markets Authority to look at the sector again.

He was responding to Frank Field, the Labour MP and chair of the
work and pensions select committee, who asked whether KPMG,
Deloitte, EY and PricewaterhouseCoopers should be broken up, The
Guardian notes.  It is conducting a joint enquiry with the
business committee into Carillion's collapse, The Guardian
discloses.

Mr. Field noted that two of the construction company's recent
finance directors had previously worked for KPMG and it had
audited Carillion's accounts for the past 19 years, The Guardian
relays.

Mr. Haddrill rejected MPs' suggestions that the accounting
watchdog was "toothless" but agreed that it needed more
enforcement powers, according to The Guardian.

It also emerged that Carillion is unlikely to have "enough assets
to meet even the cost of winding up the company", The Guardian
relays, citing Sarah Albon, the chief executive of the Insolvency
Service.  The group collapsed with GBP29 million in the bank, a
GBP1.3 billion debt pile and a pension deficit of close to GBP1
billion, The Guardian discloses.

Ms. Albon told MPs that Carillion was made up of 326 companies,
199 of them in the UK, with 169 directors, The Guardian recounts.
She said the Insolvency Service's investigations normally took 21
months and it was putting "considerable resource" into the
Carillion inquiry, The Guardian notes.

"One significant constraint is the incredibly poor standard of
the company's own record-keeping.  It took some hours to identify
how many directors we could potentially be targeting," The
Guardian quotes Ms. Albon as saying.

MPs heard Carillion borrowed to continue to pay dividends, but
cited cashflow problems when pension scheme trustees pushed it
for higher contributions, The Guardian discloses.

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.


JUICE CORP: Enters Into Administration; 60 Jobs Affected
--------------------------------------------------------
Ravender Sembhy at Press Association reports that Juice
Corporation, the firm behind fashion brand Joe Bloggs and the
retailer that designed the wedding dress for Diana, Princess of
Wales, has collapsed into administration, resulting in 60 job
losses.

The Manchester-based company appointed insolvency practitioner CG
& Co as administrator, and it is understood that all staff have
now been axed, Press Association relates.

Joe Bloggs, which was founded in 1985 by market trader Shami
Ahmed, rose to prominence in the 1990s when it produced ranges
for celebrities including "Prince" Naseem Hamed, Brian Lara and
Uri Geller, Press Association recounts.  It faded from the
fashion scene and Mr. Ahmed later ran into financial
difficulties, Press Association relays.

The group turned over GBP13 million last year, according to
Robson Kay, the agent tasked with carving up and selling off its
GBP7.5 million worth of assets, Press Association discloses.

According to Press Association, these include intellectual
property rights, a warehouse, offices and showrooms.

David Kay -- david@robsonkay.co.uk -- a director at Robson Kay,
as cited by Press Association, said: "We are looking to sell
these as a package and have received a number of inquiries from
potential buyers.  We hope to achieve a sale in the near future."

"These will be put up for sale in due course, with priority given
to the buyer of the stock and intellectual property rights."


MATALAN: S&P Raises Holding Co.'s CCR to 'B-'; Outlook Stable
-------------------------------------------------------------
S&P Global Ratings raised its long-term corporate credit rating
on Missouri Topco Ltd., the holding company of U.K.-based value
apparel retailer Matalan, to 'B-' from 'CCC+'. The outlook is
stable.

S&P said, "At the same time, we affirmed the 'B-' issue rating on
the GBP350 million first-lien senior secured notes issued by
Matalan Finance Plc. The recovery rating is '3', indicating our
expectation for meaningful recovery (50%-70%; rounded estimate:
60%) of principal in the event of a payment default.

"We also affirmed our 'CCC' issue rating on the GBP130 million
second-lien senior secured notes issued by Matalan Finance Plc.
The recovery rating on these notes is '6', indicating our
expectation of negligible (0%-10%; rounded estimate: 0%) recovery
prospects in the event of a default.

"Following their repayment, we have withdrawn the issue ratings
on the GBP330 million first-lien senior secured instruments and
GBP150 million second-lien senior secured notes issued by Matalan
Finance Plc.

"We removed the corporate credit rating on Missouri Topco from
CreditWatch, where we placed it with positive implications on
Jan. 15, 2018."

The upgrade follows Matalan's successful refinancing of its
senior secured debt. S&P considers that this refinancing has
stabilized the group's capital structure and liquidity position,
and comfortably extended its debt maturities.

This refinancing transaction follows a significant improvement in
the group's operating performance over the past seven months. For
the 12 months to Nov. 25, 2017, Matalan reported EBITDA of GBP100
million, compared with GBP77 million generated in fiscal 2017
(ended Feb. 28, 2017), outperforming all EBITDA numbers posted in
the past five fiscal years. This improvement reflected the
benefits from the measures Matalan implemented over the past two
years, with the aim of raising the efficiency of its operations,
honing its merchandising strategy, and rolling out its store-
refurbishment program. As a result, Matalan has significantly
improved its underlying free operating cash flow (FOCF)
generation. For example, also over the 12 months ended Nov. 25,
2017, the group reported FOCF of GBP16.5 million, accounting for
the GBP33 million acquisition of the company's head office (about
GBP49 million excluding this exceptional spending). This compares
with GBP16 million reported in fiscal 2017.

S&P said, "We believe this solid performance, alongside Matalan's
market share gains in U.K. apparel in recent periods, including
trading in the run-up to Christmas, demonstrates the group's
greater resilience to tough market conditions than we had
previously anticipated, and has prompted us to revise upward our
business risk profile assessment to weak from vulnerable. At the
same time, we forecast broadly stable credit metrics because the
refinancing is not accompanied by any meaningful deleveraging.

"Our rating on Matalan is constrained by the group's exposure to
the price-competitive value retail clothing market, exacerbated
by concentration in the U.K., where demand for discretionary
goods will continue to face challenges. It also reflects
Matalan's relatively high financial leverage, with S&P Global
Ratings-adjusted debt to EBITDA of 5.5x-6.0x over our forecast
period through the end of fiscal 2020. This includes the
capitalization of Matalan's operating leases, which are high
compared with those of peers. This reduces the flexibility of the
group's cost base and increases its adjusted leverage. As such,
we forecast that rent-adjusted cash interest cover (EBITDAR to
cash interest plus rents) will remain relatively low, at 1.4x-
1.5x over our forecast period through the end of fiscal 2020.
Matalan's financial flexibility is also limited by near-term
pressure on cash generation, owing to exceptional items, namely
the GBP33 million acquisition of the group's headquarters and
onetime refinancing costs in fiscal 2018."

On the upside, fashion trends are less important in the value
segment than in the higher-price segments of the apparel
industry, which supports Matalan's operating efficiency. Matalan
benefits from a wide store network across the U.K.,
diversification into menswear, kids wear, and homeware, and from
the broad reach of its customer loyalty program, allowing direct
contact with its customers. Compared with other value retailers,
Matalan benefits from its well-established and expanding online
presence, enabling it to boost sales growth via cross-selling
across channels.

S&P said, "The stable outlook reflects our expectation that like-
for-like sales will continue to improve moderately. It also
reflects our view that the company will gradually improve its
footprint in its core U.K. market through greater online
penetration and ability to capture a greater share of wallet of
its existing customers. Over the next 12 months, we expect
Matalan will continue to make moderate improvements to earnings
and cash flows, resulting in a modest deleveraging to adjusted
debt to EBITDA of about 6.0x in fiscal years 2018 and 2019 from
of 6.8x in fiscal 2017; a moderate improvement in EBITDAR
coverage to about 1.4x-1.5x; and moderately negative to neutral
FOCF at the end of fiscal 2019.

"We view the potential for a positive rating action as remote in
the near term, because we believe weak demand and inflationary
pressures on cost as well as management's plan to increase capex
will weigh on credit metrics and FOCF generation. However, we
could raise the ratings if the group expands its earnings
materially beyond our base-case expectations, and significantly
improves its reported FOCF generation, resulting in adjusted debt
to EBITDA falling toward 5.0x and an EBITDAR cover ratio
comfortably exceeding 1.5x. An upgrade would also be contingent
on our assessment of the group's financial policy remaining
supportive.

"Although unlikely in the next 12 months, we could consider a
negative rating action if Matalan's operating turnaround stalls
and its profitability weakens due to, for example, to an
inability to manage labor and input-cost in a more challenging
market environment. This could lead to reported FOCF remaining
materially negative for a prolonged period, weakening liquidity,
and credit metrics materially deviating from our current base
case, raising concerns over the sustainability of the group's
capital structure in the long term. For example, EBITDAR cover
ratio of less than 1.4x could be indicative of such concerns."



                            *********

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
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Information contained herein is obtained from sources believed to
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members of the same firm for the term of the initial subscription
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