/raid1/www/Hosts/bankrupt/TCREUR_Public/180322.mbx         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, March 22, 2018, Vol. 19, No. 058


                            Headlines


A R M E N I A

ARDSHINBANK: Moody's Affirms B1 Local Currency Deposit Rating


C R O A T I A

CROATIA: Credit Profile Balances Fiscal Consolidation
MODESTUS: Sent Into Receivership at NLB's Request


I R E L A N D

BLACKROCK EUROPEAN: Moody's Assigns B1 Rating to Class F-R Notes
HARVEST CLO XV: S&P Puts B- Class F Notes Rating on Watch Neg.


K A Z A K H S T A N

KAZKOMMERTS-POLICY: A.M. Best Keeps C++ FSR Amid Merger
KOMMESK-OMIR: A.M. Best Keeps 'C++' FSR Amid Acquisition
OIL INSURANCE: S&P Places 'B+' ICR on CreditWatch Negative
SALEM INSURANCE: A.M. Best Alters LT Issuer Credit Rating to 'e'


M A C E D O N I A

MACEDONIA: S&P Affirms 'BB-/B' Sovereign Credit Ratings


M O N T E N E G R O

MONTENEGRO: S&P Affirms 'B+/B' SCRs, Outlook Stable


N E T H E R L A N D S

LOPAREX INTERNATIONAL: S&P Assigns 'B' CCR, Outlook Stable


P O L A N D

FIRST CLASS: Warsaw Court Dismisses Bankruptcy Application


R O M A N I A

GLOBALWORTH REAL: S&P Alters Outlook to Pos. & Affirms 'BB+' ICR


R U S S I A

IRKUTSK OBLAST: S&P Affirms Then Withdraws 'BB+' ICR


S E R B I A

AGRI EUROPE: S&P Assigns Preliminary 'BB-' Rating to New LPNs
SERBIA: Credit Profile Benefits From Diversified Economy


U K R A I N E

CHORNOMORNAFTOGAZ: Verkhovna Introduces Bankruptcy Moratorium
UKRAINE: Debt of Commercial Banks for Refinancing Loans Down 4%


U N I T E D   K I N G D O M

CARPETRIGHT PLC: Raises Emergency Cash, Mulls Shop Closures


                            *********



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A R M E N I A
=============


ARDSHINBANK: Moody's Affirms B1 Local Currency Deposit Rating
-------------------------------------------------------------
Moody's Investors Service has affirmed Ardshinbank's local
currency deposit rating of B1, foreign-currency senior unsecured
debt rating of B1, its baseline credit assessments (BCAs) and
adjusted BCA of b1 and changed the outlook to positive from
stable on the local-currency deposit rating of B1 and foreign-
currency senior unsecured debt rating of B1. Ardshinbank's
foreign currency deposit rating of B2 has been affirmed with a
stable outlook as the rating remains constrained by the foreign
currency deposit ceiling.

Concurrently, Moody's has affirmed Ardshinbank's short-term
deposit ratings of Not Prime, its long-term Counterparty Risk
Assessments (CR Assessments) of Ba3(cr) and the short-term CR
Assessment of Not Prime(cr).

The rating action follows Moody's change of outlook on Armenia's
B1 sovereign debt rating to positive from stable on March 9,
2018.

The agency's Macro Profile for Armenia remains "Weak" following
the affirmation of the B1 sovereign rating.

RATINGS RATIONALE

LOCAL CURRENCY BANK DEPOSIT AND FOREIGN CURRENCY DEBT RATINGS

The change in the outlook on Armenia's B1 government bond rating
to positive from stable led to corresponding changes in the
outlooks of Ardshinbank's local currency deposit rating of B1 and
foreign currency senior unsecured debt rating of B1 which benefit
from potential support from the Armenian government.

GOVERNMENT SUPPORT

Ardshinbank's long-term global local currency (GLC) deposit
rating of B1 is based on the bank's BCA of b1 and Moody's
assessment of high probability of government support in the event
of need, given its large market shares. However, this support
currently does not provide any rating uplift to Ardshinbank's
rating as Armenia's B1 sovereign rating is at the same level as
the bank's BCA. Ardshinbank was the third-largest bank in Armenia
with a 14.8% market share in total banking loans and 13.4% in
deposits as of end 2017.

WHAT COULD MOVE RATINGS UP OR DOWN

Given that Ardshinbank's long term ratings are at the Armenia's
sovereign rating level or constrained by the country ceiling, any
positive rating action on Ardshinbank's ratings would be driven
by a higher sovereign rating or/and country ceiling.

The rating outlooks could be changed to stable if the outlook on
Armenia's sovereign debt rating were to be revised to stable or
if Armenian government's capacity or propensity to render support
to Ardshinbank were to diminish (which is not currently
anticipated).

LIST OF AFFECTED RATINGS

Issuer: Ardshinbank CJSC

Affirmations:

-- LT Bank Deposits (Local Currency), Affirmed B1, Outlook
    changed to Positive from Stable

-- LT Bank Deposits (Foreign Currency), Affirmed B2 Stable

-- ST Bank Deposits, Affirmed NP

-- Senior Unsecured Regular Bond/Debenture, Affirmed B1, Outlook
    changed to Positive from Stable

-- Adjusted Baseline Credit Assessment, Affirmed b1

-- Baseline Credit Assessment, Affirmed b1

-- LT Counterparty Risk Assessment, Affirmed Ba3(cr)

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

Outlook Actions:

-- Outlook, Changed To Positive(m) From Stable

PRINCIPAL METHODOLOGY

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


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


CROATIA: Credit Profile Balances Fiscal Consolidation
-----------------------------------------------------
Croatia's (Ba2 stable) credit profile balances its fiscal
consolidation and EU membership supporting the strengthening of
institutions against credit challenges which include the
economy's weak potential growth and the government's slow pace of
structural reform, reflected in weak absorption of European Union
structural funds, Moody's Investors Service said in a report.

The annual update, "Government of Croatia -- Ba2 stable, Annual
credit analysis", is now available on www.moodys.com. Moody's
subscribers can access this report via the link at the end of
this press release. The research is an update to the markets and
does not constitute a rating action.

"Croatia's debt-to-GDP ratio looks likely to have fallen below
80% in 2017, a year earlier than Moody's expected and an
improvement of almost 4 percentage points since 2016," said Evan
Wohlmann, a Moody's Vice President -- Senior Analyst and co-
author of the report. "This prudent budget performance allowed
Croatia to exit the EU's Excessive Deficit Procedure in June last
year and supports Moody's view that the sovereign will be able to
maintain fiscal deficits below 3% going forward."

Moody's expects Croatia's growth to remain robust in 2018,
decelerating slightly to 2.7%, in line with the second half of
2017, moving closer to Moody's medium-term forecasts of 2%-2.5%
GDP growth. Nevertheless, the potential for a disorderly
restructuring of Agrokor D.D. (Ca Negative), Croatia's largest
private company, will continue to pose material downside risks to
the economy, although this is not Moody's baseline.

Domestic demand will remain the key driver of economic growth,
with private consumption supported by further improvements in the
labour market, wage rises and a robust consumer confidence.

Croatia's low fiscal strength reflects the country's elevated
debt-to-GDP ratio, which stems from relatively low nominal
growth, previous high budget deficits and the assumption of
state-owned enterprise (SOE) debt, as well as costs relating to
the restructuring of SOEs.

However, against the backdrop of a better-than-expected public
fiscal performance, Moody's believes that Croatia's debt-to-GDP
ratio has declined to below 80% of GDP at year-end 2017, and
further gradual declines are expected in the coming years.

Croatia's susceptibility to event risk is low, despite some
degree of political uncertainty continuing to weigh on the policy
environment following the formation of a new coalition government
in June 2017. Banking sector risks also remain low, supported by
improving asset quality and increased domestic lending.

Upward pressure on the country's rating could develop if the
coalition were to introduce economic and fiscal reforms that
improved Croatia's long-term economic potential and secured a
downward trajectory in public indebtedness closer to the Ba-rated
median.

Downward pressure might occur if the country is unable to
implement a comprehensive structural reform programme in the
coming years, given that such a failure would likely lead to
weaker growth and increase its public debt in the long term.

A deterioration in Croatia's external vulnerability metrics to
levels significantly below those of Ba2-rated peers would also be
negative.


MODESTUS: Sent Into Receivership at NLB's Request
-------------------------------------------------
STA reports that the Zagreb Commercial Court has sent into
receivership Modestus, a company owned by Kresimir Milanovic, the
brother of former Croatian PM Zoran Milanovic.

The procedure was launched upon the request of the Slovenian bank
NLB over EUR4.2 million owed by the company, STA relates.


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


BLACKROCK EUROPEAN: Moody's Assigns B1 Rating to Class F-R Notes
----------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to notes issued by BlackRock
European CLO I Designated Activity Company (the "Issuer" or
"BlackRock European I"):

-- EUR266,000,000 Class A-R Senior Secured Floating Rate Notes
    due 2031, Definitive Rating Assigned Aaa (sf)

-- EUR39,680,000 Class B-1-R Senior Secured Floating Rate Notes
    due 2031, Definitive Rating Assigned Aa2 (sf)

-- EUR26,320,000 Class B-2-R Senior Secured Fixed Rate Notes due
    2031, Definitive Rating Assigned Aa2 (sf)

-- EUR32,000,000 Class C-R Senior Secured Deferrable Floating
    Rate Notes due 2031, Definitive Rating Assigned A2 (sf)

-- EUR24,000,000 Class D-R Senior Secured Deferrable Floating
    Rate Notes due 2031, Definitive Rating Assigned Baa2 (sf)

-- EUR25,500,000 Class E-R Senior Secured Deferrable Floating
    Rate Notes due 2031, Definitive Rating Assigned Ba2 (sf)

-- EUR10,500,000 Class F-R Senior Secured Deferrable Floating
    Rate Notes due 2031, Definitive Rating Assigned B1 (sf)

RATINGS RATIONALE

Moody's definitive ratings of the notes address the expected loss
posed to noteholders. The definitive ratings reflect the risks
due to defaults on the underlying portfolio of assets, the
transaction's legal structure, and the characteristics of the
underlying assets.

The Issuer has issued the Refinancing Notes in connection with
the refinancing of the following classes of notes: Class A-1
Notes, Class A-2 Notes, Class B-1 Notes, Class B-2 Notes, Class C
Notes, Class D Notes, Class E Notes due 2029 (the "Original
Notes"), previously issued on February 25, 2016 (the "Original
Closing Date"). On the refinancing date, the Issuer used the
proceeds from the issuance of the Refinancing Notes to redeem in
full its respective Original Notes. On the Original Closing Date,
the Issuer also issued EUR50 million of Subordinated Notes, which
remain outstanding. However, the terms and conditions of the
Subordinated Notes were amended in accordance with the
Refinancing Notes' conditions.

As part of this reset, the Issuer increased the target par amount
by EUR60 million to EUR460 million, set the reinvestment period
to 4.25 years and the weighted average life to 8.75 years. In
addition, the Issuer amended the base matrix and modifiers that
Moody's took into account for the assignment of the definitive
ratings.

BlackRock European I is a managed cash flow CLO. At least 90% of
the portfolio must consist of secured senior loans or senior
secured bonds and up to 10% of the portfolio may consist of
unsecured senior loans, second-lien loans, high yield bonds and
mezzanine loans. The underlying portfolio is approximately 90%
ramped as of the refinancing date.

BlackRock Investment Management (UK) Limited ("BlackRock IM")
will manage the CLO. It will direct the selection, acquisition
and disposition of collateral on behalf of the Issuer and may
engage in trading activity, including discretionary trading,
during the transaction's 4.25 years reinvestment period.
Thereafter, purchases are permitted using principal proceeds from
unscheduled principal payments and proceeds from sales of credit
risk and credit improved obligations, and are subject to certain
restrictions.

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

Methodology Underlying the Rating Action:

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

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

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

Loss and Cash Flow Analysis:

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

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

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

Par Amount: EUR460,000,000

Diversity Score: 44

Weighted Average Rating Factor (WARF): 2865

Weighted Average Spread (WAS): 3.50%

Weighted Average Coupon (WAC): 5.50%

Weighted Average Recovery Rate (WARR): 42.5%

Weighted Average Life (WAL): 8.75 years

Stress Scenarios:

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

Percentage Change in WARF: WARF + 15% (to 3295 from 2865)

Ratings Impact in Rating Notches:

Class A-R Senior Secured Floating Rate Notes: 0

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

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

Class C-R Senior Secured Deferrable Floating Rate Notes: -2

Class D-R Senior Secured Deferrable Floating Rate Notes: -2

Class E-R Senior Secured Deferrable Floating Rate Notes: -1

Class F-R Senior Secured Deferrable Floating Rate Notes: 0

Percentage Change in WARF: WARF +30% (to 3725 from 2865)

Ratings Impact in Rating Notches:

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

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

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

Class C-R Senior Secured Deferrable Floating Rate Notes: -4

Class D-R Senior Secured Deferrable Floating Rate Notes: -3

Class E-R Senior Secured Deferrable Floating Rate Notes: -1

Class F-R Senior Secured Deferrable Floating Rate Notes: 0


HARVEST CLO XV: S&P Puts B- Class F Notes Rating on Watch Neg.
--------------------------------------------------------------
S&P Global Ratings Services placed on CreditWatch negative its
credit ratings on Harvest CLO XV DAC's class A, B, C, D, E, and F
notes.

The CreditWatch placements follow S&P's assessment of the
transaction's performance using data from the Dec. 29, 2017,
monthly report, the Feb. 22, 2018, payment date report, and the
application of our relevant criteria.

The data from the February 2018 trustee report indicate that the
transaction is failing the S&P CDO Monitor Test by 70 basis
points (bps). The S&P CDO Monitor Test is a collateral quality
test applicable to transactions with reinvestment flexibility. It
dynamically tracks whether the key credit parameters in a
transaction are consistent with the thresholds we assumed when we
initially assigned the ratings. A failure of this test indicates
that the underlying collateral's credit quality has worsened,
recovery prospects are lower, or portfolio yield has decreased
since closing; or a combination of these factors.

The par value and interest coverage tests are currently passing.

Since S&P assigned its initial ratings to the transaction, the
portfolio's credit quality has worsened. As of February 2018,
assets rated 'B' or lower accounted for 89% of the current
portfolio, compared with 80% of the target portfolio at closing.
The erosion of credit quality has been partially offset by par
build-up of about EUR0.36 million. As a result, the transaction
is slightly above the target par balance.

The portfolio's expected recovery rates have also decreased since
closing, with the weighted-average recovery rate (WARR) dropping
to 33.51% at the 'AAA' level from 39.61% under the target
portfolio. The most significant drop in recoveries occurred at
the 'B' rating level, where WARR dropped to 61.03% from 68.61%
over the same period.

At the same time, the weighted-average spread (WAS) earned on the
portfolio, excluding the uptick provided by euro interbank
offered rate (EURIBOR) floors, has dropped to 3.73% from 4.22% at
closing. The fall in WAS is mainly fueled by spread tightening
and repricing activity on the underlying loans, a trend S&P has
observed in other CLO transactions in the same vintage as Harvest
CLO XV. CLO liability spreads have also tightened over this
period. The coupon on the class A notes for this transaction is
150 bps, compared with 73 bps for the manager's latest CLO
transaction, Harvest CLO XVIII DAC. However, CLO issuers can
typically only reprice their liabilities after the expiry of the
two-year noncall period, which for this transaction is in May
this year.

Given the decrease in WAS and WARR levels in the portfolio and
the weakened credit profile, S&P's cash flow analysis indicates
that the rated notes cannot sustain the currently assigned
ratings. This outcome is consistent with the transaction's
failing of the S&P CDO Monitor Test.

S&P said, "However, our ratings indicate a forward-looking
opinion. As such, we recognize the possibility that the notes
could be refinanced once the CLO exits the noncall period. In our
view, if a refinancing is executed, the original notes would be
repaid at par. A refinancing would also improve the CLO's cash
flow generation as the cost of debt for the refinanced
liabilities is likely to be lower. As a result, we have placed on
CreditWatch negative our ratings on the class A, B, C, D, E, and
F notes.

"We expect to resolve the CreditWatch placement when we obtain
more details about the CLO's potential refinancing at the end of
its two-year noncall period. If the refinancing is not executed,
we could lower our ratings on the notes. If the refinancing is
executed, we expect the rated notes to be repaid at par."

Harvest CLO XV is a revolving cash flow CLO transaction that
securitizes loans granted primarily to speculative-grade
corporate firms. The transaction originally closed in May 2016
and its reinvestment period ends in May 2020.

RATINGS LIST

  Class           Rating
            To                   From

  Harvest CLO XV DAC
  EUR413 Million Senior Secured Floating-Rate Deferrable And
  Subordinated Notes

  Ratings Placed on CreditWatch Negative

  A         AAA (sf)/Watch Neg   AAA (sf)
  B         AA (sf)/Watch Neg    AA (sf)
  C         A (sf)/Watch Neg     A (sf)
  D         BBB (sf)/Watch Neg   BBB (sf)
  E         BB (sf)/Watch Neg    BB (sf)
  F         B- (sf)/Watch Neg    B- (sf)


===================
K A Z A K H S T A N
===================


KAZKOMMERTS-POLICY: A.M. Best Keeps C++ FSR Amid Merger
-------------------------------------------------------
A.M. Best has commented that the Financial Strength Rating of C++
(Marginal) and the Long-Term Issuer Credit Rating of "b+" of JSC
IC Kazkommerts-Policy (Kazkommerts-Policy) (Kazakhstan) remain
unchanged following an announcement on January 25, 2018 by its
sister company, Halyk-Kazakhinstrakh, Insurance Subsidiary
Company of Halyk Bank of Kazakhstan, JSC (Kazakhinstrakh), of the
latter's shareholder agreement to merge Kazkommerts-Policy into
Kazakhinstrakh. The merger decision follows the 2017 acquisition
of JSC Kazkommertsbank, Kazkommerts-Policy's parent, by JSC Halyk
Bank (Halyk Bank), Kazakhinstrakh's parent.

In anticipation of the merger, Kazkommerts-Policy paid a large
one-time dividend of KZT4 billion (approximately USD12 million)
in December 2017, which resulted in deterioration of the
company's risk-adjusted capitalization, as measured by Best's
Capital Adequacy Ratio. In spite of this, the company's rating
fundamentals, including balance sheet strength, remain supportive
of its ratings.

The merger is subject to regulatory approvals and is expected to
complete during 2018. A.M. Best will continue to monitor closely
Kazkommerts-Policy's rating fundamentals ahead of the planned
merger. Further deterioration of risk-adjusted capitalization,
for example due to the additional extraction of capital, could
place negative pressure on the company's ratings.


KOMMESK-OMIR: A.M. Best Keeps 'C++' FSR Amid Acquisition
--------------------------------------------------------
A.M. Best has commented that the Credit Ratings (ratings) of
Kommesk-Omir Insurance Company JSC (Kommesk-Omir) (Kazakhstan)
remain unchanged following the company's announcement on January
15, 2018 of its agreement with another non-life Kazakh insurer,
JSC Salem Insurance Company, to acquire part of the latter's
underwriting portfolio. The business to be transferred mainly
comprises compulsory motor third-party liability, which is
Kommesk-Omir's largest line of business, as measured by gross and
net.

Financial Strength Ratings is C++, given on February 12, 2015 and
affirmed on May 12, 2017. The Outlook is Stable.


OIL INSURANCE: S&P Places 'B+' ICR on CreditWatch Negative
----------------------------------------------------------
S&P Global Ratings said that it has placed its 'B+' long-term
issuer credit ratings and 'kzBBB-' national scale rating on
Kazakhstan-based Oil Insurance Co. JSC (NSK) on CreditWatch with
negative implications.

The CreditWatch placement follows the decision of Kazakhstan's
insurance regulator, the National Bank of Kazakhstan (NBK), to
suspend NSK's license to write obligatory insurance business for
three months. Premiums from obligatory insurance lines accounted
for 48.9% of NSK's gross written premiums (GWP) in 2017 according
to its accounts under local standards. S&P understands, however,
that the company will still be able to continue writing
obligatory insurance of employers' liability, which accounted for
23.5% of its GWP last year, because NSK currently processes this
business through inward reinsurance.

S&P said, "We expect, however, that NSK will be restricted from
writing obligatory motor third-party liability (OMTPL) insurance,
for both new business and amendments to existing contracts. OMPTL
is an important source of the company's revenues, accounting for
23.2% of GWP in 2017. In addition, we expect certain pressure on
other business lines (mostly motor hull) because insurance
companies in Kazakhstan often use OMPTL business for cross-
selling purposes.

"We placed our ratings on CreditWatch because of our concerns
that NSK's competitive position and financial risk profile could
be undermined by the restriction of its license for obligatory
insurance lines. In addition, we see risks that the company's
capitalization and liquidity could weaken, especially if the
restriction is prolonged beyond three months or the regulator
takes a more stringent approach to fixed-asset revaluation, now
included in regulatory capital. The company's reported regulatory
capital adequacy ratio was 1.29x on Feb. 1, 2018, compared with
the minimum requirement of 1x.

"Finally, we are concerned about the effectiveness of the
company's management, governance, and enterprise risk management.
We could revise our assessment of these factors downward if we
concluded that the deficiencies revealed by the regulator in
NSK's internal procedures would persist, preventing the company
from risk-oriented decision-making and leading to significant
volatility in profitability.

"We expect to resolve the CreditWatch within three months, after
obtaining more information about NSK's action plan to mitigate
violations revealed by the NBK. We would also expect to have more
clarity on the dynamics of NSK's competitive position,
profitability, liquidity, and capital after the regulatory
action, which would allow us to revise our forecast of the
company's financial performance indicators for 2018-2019.

"We could lower the ratings by one or more notches if we believed
that the license restriction would continue for longer than three
months and could undermine NSK's competitive position and
financial risk profile. In particular, we could lower the rating
by more than one notch if we saw that liquidity were tightening,
with significant risk to the company's ability to meet its
obligations.

"We could affirm the ratings if the license restriction were
removed in the next three months and we believed that NSK had
taken sufficient measures to overcome the weaknesses the NBK
identified. In addition, the company would need to demonstrate
its ability to sustain its client base following the regulatory
action, while sustaining profitability, capital, and liquidity."


SALEM INSURANCE: A.M. Best Alters LT Issuer Credit Rating to 'e'
-----------------------------------------------------------------
A.M. Best has removed from under review with negative
implications and changed the Financial Strength Rating to a Non-
Rating Designation of E (Under Regulatory Supervision) from C
(Weak) and the Long-Term Issuer Credit Rating to "e" from "ccc+"
of JSC Salem Insurance Company (Salem) (Kazakhstan), following
regulatory actions that prevent the company from writing business
for six months.

These actions follow announcements by the National Bank of
Kazakhstan, on February 9, 2018 and March 3, 2018, suspending
Salem's licenses for compulsory and voluntary classes of business
for six months. The regulator cited non-compliance with
regulatory requirements as the reason for the suspensions.
Salem's regulatory solvency margin deteriorated to 0.58 as at
February 1, 2018, breaching the minimum requirement of 1.00.


=================
M A C E D O N I A
=================


MACEDONIA: S&P Affirms 'BB-/B' Sovereign Credit Ratings
-------------------------------------------------------
On March 16, 2018, S&P Global Ratings affirmed its 'BB-/B' long-
and short-term foreign and local currency sovereign credit
ratings on the Republic of Macedonia. The outlook on the long-
term ratings remains stable.

OUTLOOK

The stable outlook reflects the balance between the risks from
Macedonia's rising public debt and remaining political
uncertainty over the next 12 months, and the country's favorable
economic prospects.

S&P said, "We could raise our ratings on Macedonia if reforms
directed toward higher and broader-based economic growth led to a
faster increase in income levels than in our base-case scenario,
alongside improved effectiveness and accountability of public
institutions and policymaking.

"We could lower the ratings if major political tensions returned,
impairing growth and foreign direct investment (FDI) inflows and
undermining the country's longer-term growth prospects. We could
also lower the ratings if large fiscal slippages or off-budget
activities were to call into question the sustainability of
Macedonia's public debt, raise the sovereign's borrowing costs,
and substantially increase its external obligations, given the
constraints of the exchange-rate regime."

RATIONALE

The ratings on Macedonia reflect S&P's view of the country's
relatively low income levels; comparatively weak checks and
balances between state institutions, coupled with the still-
fragile political environment; and limited monetary policy
flexibility arising from the country's fixed-exchange-rate
regime. The ratings are primarily supported by moderate--albeit
rising--external and public debt levels and favorable growth
potential.

Institutional and Economic Profile: Improved political stability
and progress on the name dispute should support confidence and
accelerate growth

-- In S&P's view, political stability has improved in the
    aftermath of government formation in May 2017, and more
    recently there has been some progress in resolving the name
    dispute with Greece.

-- Nevertheless, downside risks to policy remain, including from
    the administration's narrow parliamentary majority and a lack
    of clear fiscal consolidation path.

-- S&P expects economic growth to gradually accelerate toward 3%
    in 2019, primarily supported by recovering investments.

In S&P's view, political stability improved in the aftermath of
the formation of the government in May 2017. Previously,
Macedonia endured a long-lasting period of volatility,
culminating in early elections at the end of 2016, and a
subsequent parliamentary gridlock. The new government is centered
around the Social Democratic Union for Macedonia (SDSM) party and
includes the Democratic Union for Integration (DUI)--the Albanian
minority party. The coalition currently relies on 60 out of 120
MPs but is also supported by several other MPs giving it a slim
majority. The central position of SDSM on Macedonia's political
stage has been bolstered by the results of the October 2017 local
elections, which saw a large swing of support toward SDSM and
away from VMRO-DPMNE (Internal Macedonian Revolutionary
Organization - Democratic Party for Macedonian National Unity),
which previously governed Macedonia for over a decade.

In terms of policy direction, the new government has articulated
a few key goals. Expediting the accession process to NATO and EU
remains a priority. Closely related to this is the so called 3-6-
9 plan, which outlines a set of important reforms, including in
the areas of the judiciary and public administration. In
addition, reforms to enhance the transparency of public finances
and procurement procedures are planned.

S&P notes that some progress in the aforementioned areas has
already been achieved. For instance, the government took steps to
improve the transparency of its fiscal accounts. The new
administration also took a more dovish approach toward resolving
the name dispute with Greece, which is central for Macedonia's
NATO and EU accession. The disagreement between the two countries
has lasted for decades and stems from Greece's objection to the
use of the name "Republic of Macedonia" given the existence of a
similarly-named region in Greece.

However, despite the aforementioned improvements, several risks
remain. Specifically:

-- The administration's narrow parliamentary majority could
    constrain reform momentum. Previously, Alliance for Albanians
    (AA) exited the coalition, following some disagreements with
    SDSM. The government is now informally supported by several
    MPs outside the coalition, but the dynamics could change.
    Importantly, a two-thirds majority is required for passing
    several key legislative reforms, such as potential
    constitutional amendments related to resolving the name
    dispute. Given the opposition VMRO-DPNE's regular boycott of
    parliament, that may be difficult to achieve.

-- Although it appears to have reduced, the possibility of
    tensions between ethnic Macedonians and Albanians remains.
    This is particularly so as the government is moving forward
    with the Albanian language law. The law was passed on March
    14, 2018, amid disagreements surfacing in parliament. It
    remains unclear whether the president will sign it.

-- The name dispute could still take time to resolve, despite
    notable recent progress. S&P notes recent protests -- both in
    Macedonia and in Greece -- against the proposed approach,
    which could present an obstacle to a speedy resolution. In
    addition, it is not clear if the final deal will mean that
    Macedonia's constitution has to be amended, and how the
    required parliamentary majority for that will be reached.

-- S&P also believes that, despite the announced commitment to
    fiscal consolidation, precise measures are unclear and
    predominantly rely on improved revenue performance. This
    represents a downside risk to public finances.

Macedonia's recent episodes of political volatility have taken a
toll on the economy. In 2016, growth slowed to 2.9% from 3.9% in
2015 and output stagnated in 2017. S&P said, "We expect growth
will strengthen to 3% by 2019, driven by investments, both in
private and public sector, following improved political
stability. In addition, we expect a more upbeat dynamic of net
exports benefiting from favorable foreign trade conditions and
the gradual diversification of Macedonia's export basket."

S&P said, "Downside risks to our forecasts remain, not least if
the political crisis intensifies again. With GDP per capita
estimated at $5,800 in 2018, Macedonia remains a low-income
economy. In recent years, the government has attempted to attract
FDI to special free economic zones, capitalizing on the country's
comparatively favorable tax regime, low labor costs, and
proximity to European markets. In our view, were major political
tensions to return, this could weigh on growth if a substantial
portion of foreign investments are cancelled or postponed.

"Political risks aside, we believe that the economy's long-term
growth prospects could benefit from the expansion of free
economic zones and their better integration into the local
economy by using local suppliers. We note that, so far, most
inputs for goods assembled by foreign companies have been
imported. Consequently, the free zones' impact on the rest of the
economy has been less than might be expected and largely confined
to employment.

Flexibility and Performance Profile: Although the public debt
burden remains moderate, leverage will continue rising in line
with projected fiscal deficits

-- Macedonia's public debt burden remains moderate in a global
    context.

-- Nevertheless, the projected deficits will add to the
    country's debt stock, and S&P forecasts net general
    government debt (including obligations of the Public
    Enterprise for State Roads [PESR]) will rise to 47% of GDP by
    2021.

-- Although Macedonia's monetary flexibility is higher than that
    of other Balkan states, the denar's peg to the euro
    constrains the policies of the National Bank of the Republic
    of Macedonia (NBRM).

Following the formation of a new government, a supplementary 2017
budget was adopted at the beginning of August, whereby both
revenue and expenditure projections were revised downward. Based
on the preliminary data, the outturn for the year was a 2.8% of
GDP deficit for the general government sector, which is slightly
better than the 2.9% of GDP target. Importantly, the outcome was
bolstered by the underexecution of capital and some current
expenditures, given the previous parliamentary stalemate and the
transfer of power between administrations.

In December 2017, the government adopted a new fiscal strategy
for 2018-2020. The document underscores the focus on fiscal
consolidation, improvement of the public finance management
framework, and the use of EU pre-accession funds. According to
government projections, the deficit for the general government
sector should reduce from the planned 2.9% of GDP in 2017 to 2.3%
of GDP in 2020. The main drivers of the plan include cuts to
unproductive spending and an increase in excise on diesel in
2018.

S&P said, "However, in our view, the plan so far lacks concrete
measures. We believe the official forecasts rely substantially on
the projected improvement in nominal growth, presenting risks if
that does not materialize. The government is considering raising
the progressivity of personal income tax, but that could be
challenging for political reasons. Our base-case forecast thus
foresees wider deficits hovering around 3% of GDP through 2021.

"We believe that while Macedonia's net general government debt
remains comparatively low, it will continue to rise to 47% of GDP
in 2021 from an estimated 40% of GDP at year-end 2017. Our
general government debt calculation includes the increasing debt
of PESR. This is because we believe PESR may need to rely on
government transfers to service its debt in the future. In
particular, a government-guaranteed EUR580 million loan from the
Export-Import Bank of China, contracted in 2013 for the
construction of two highway sections, will continue to contribute
to the increasing debt burden. We also factor in a moderate
amount of arrears clearance, assumed at around 1% of GDP. Arrears
that were not previously disclosed were reported by the new
government after taking office.

In the past, Macedonia has repeatedly been able to tap the
Eurobond market. This has made the government's balance sheet
more vulnerable to potential foreign-exchange movements, because
close to 80% of government debt is denominated in foreign
currency (including part of domestic debt). Last year, the
authorities increased their borrowing in the domestic market, but
they have also recently issued a EUR500 million Eurobond at a
historically low interest rate, benefiting from the European
Central Bank's loose monetary policy. We believe the favorable
terms have also been aided by the improved domestic political
stability. In the future, the government plans to maintain a
regular presence on international financial markets.

With the public sector increasingly borrowing abroad, the
Macedonian economy's external debt has been rising, despite some
deleveraging in the banking sector. In 2017, S&P estimates that
gross external debt, net of liquid financial and public-sector
assets, increased to about 33% of current account receipts.

S&P said, "We forecast that Macedonia's external debt metrics
will remain broadly stable over the next four years. We
anticipate the current account deficit will gradually tighten and
reach 1.7% of GDP in 2021, partly owing to the positive impact of
the expansion of foreign companies in the free economic zones. We
project these deficits will be financed by a combination of
borrowing and net FDI inflows."

The Macedonian denar is pegged to the euro, and we believe the
existing foreign-exchange regime restricts monetary policy
flexibility. However, central bank measures, such as lower
reserve requirements for denar-denominated liabilities, have
lowered overall euroization in Macedonia, with foreign currency-
denominated deposits and loans remaining at around 40% of total
deposits and loans in recent years. S&P notes that this is a
lower proportion than in other Balkan economies and affords the
NBRM additional room for policy response.

The NBRM's gross foreign exchange reserves have been on an upward
trajectory in recent months. Nevertheless, S&P believes there are
vulnerabilities that could put some pressure on the existing peg
in the unlikely event of confidence in the banking system taking
a turn for the worse and prompting conversion of local currency
deposits into euro. This is particularly so as Macedonia runs a
pegged exchange rate arrangement while being in a net external
debtor position vis-Ö-vis the rest of the world, at 60% of GDP.

Macedonia's banking system, which is predominantly foreign owned,
has seen several bouts of volatility in recent years. For
example, political developments caused deposit outflows from
Macedonia's banking sector in April 2016, although the majority
of funds have since flowed back into the system. In general, the
banking system appears well capitalized and profitable, and it is
largely funded by domestic deposits. Macedonia's regulatory and
supervisory framework under the NBRM has proven resilient to past
episodes of volatility; the NBRM reacted swiftly to the
volatility in April 2016 by raising interest rates and
intervening in the foreign exchange market to support the
currency peg, as well as deploying several other measures. In
addition, the NBRM has moved ahead with the implementation of
Basel III principles. At present, S&P estimates that
nonperforming loans in the system amount to about 6% of the
total, which compares favorably with other countries in the
region.

Rather exceptionally for the region, bank lending in Macedonia
has continued to increase in recent years. That said, the trends
are uneven: while lending to households has been robust, the
stock of credit to corporates has remained flat. S&P expects the
stock of domestic credit to grow by an annual average of 6% over
the next four years.

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 all 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

  Ratings Affirmed

  Macedonia
   Sovereign Credit Rating
    Foreign and Local Currency                BB-/Stable/B
   Transfer & Convertibility Assessment       BB
   Senior Unsecured
    Foreign and Local Currency                BB-


===================
M O N T E N E G R O
===================


MONTENEGRO: S&P Affirms 'B+/B' SCRs, Outlook Stable
---------------------------------------------------
On March 16, 2018, S&P Global Ratings affirmed its 'B+/B' long-
and short-term foreign and local currency sovereign credit
ratings on Montenegro. The outlook on the long-term ratings
remains stable.

OUTLOOK

The stable outlook reflects the balance between the
implementation risks of Montenegro's fiscal adjustment program
over the next 12 months and upside potential if economic growth
is stronger than our base case.

S&P said, "We could lower the ratings if Montenegro's fiscal
performance turned out materially weaker than we currently
forecast. This could be the case, for example, if new revenue
measures adopted under the 2017-2020 fiscal strategy fell short
of target. It could also be the case if the government found it
difficult to keep spending pressures under control, particularly
given the general election in 2020. Additionally, ratings
pressure could emerge if the flow of inbound foreign direct
investment dried up or Montenegro faced unforeseen pressures from
the gradual tightening of global monetary policy.

"We could raise the ratings on Montenegro if multiple projects
currently ongoing in the infrastructure, energy, and tourism
sectors yielded better-than-expected results, improving
Montenegro's growth outlook and reducing balance-of-payments
risks."

RATIONALE

The ratings on Montenegro remain constrained by the country's
high net general government debt burden, which S&P expects will
peak at 65% of GDP in 2019. This is accentuated by Montenegro's
unilateral adoption of the euro, which leaves almost no room for
monetary policy flexibility. The country also remains vulnerable
to balance-of-payments risks, given the large net external
liability position and persistent historic current account
deficits.

The ratings remain supported by the country's favorable growth
potential, given the possibilities for further development of
tourism and the energy sector. The ratings are also supported by
the country's comparatively strong institutional settings in a
regional context and upside potential from structural reforms
that will have to be implemented for Montenegro to become an EU
member.

Institutional and Economic Profile: growth set to moderately
weaken as fiscal adjustment advances

-- S&P expects growth rates to moderately weaken from an
    estimated 4.5% in 2017 as large infrastructure projects are
    completed and fiscal adjustment takes hold.

-- Nevertheless, S&P believes the country's long-term growth
    potential remains favorable, stemming from unexplored
    opportunities in the tourism and energy sectors.

-- Although there is upside potential from reforms implemented
    as part of Montenegro's EU accession process, progress will
    be only gradual.

Montenegro's economy remains small and open. With nominal GDP
estimated at EUR4.3 billion in 2017, it is, in fact, by far the
smallest economy within the Balkan region. It is primarily driven
by tourism and related activities, given the attractiveness of
the country's coastline. S&P estimates that last year's GDP
growth was 4.5%, partly boosted by higher numbers of tourists.

S&P believes last year's strong outturn was also a result of the
ongoing public-financed highway construction project, with
investments expanding by 8% year on year in real terms. The
government plans that, upon completion, the new highway will link
the coastal port of Bar with the Serbian border, connecting
remote regions and improving road safety. Only the first section,
a 41-km segment north of the capital Podgorica, is under
construction so far. Because of difficult terrain, the cost of
the first section is high-estimated at close to 20% of 2018 GDP
and largely financed by a U.S. dollar-denominated loan from
China.

To halt a rapid increase in debt from the highway construction,
the government has embarked on fiscal consolidation to increase
revenues and contain non-highway spending. This should improve
fiscal sustainability, but it will simultaneously act as a drag
on growth. S&P estimates that growth will slow to 3% in 2018-2019
as budgetary consolidation gets under way, before decelerating
further to 2.6% in 2020, following the completion of the highway
and a resulting decline in investments.

Political considerations aside, the highway project's net
economic benefit remains uncertain. Although there will be some
positive spillover effects, it appears that the cost of the first
section far outweighs the direct economic gains. It is also
unclear whether full benefits could be reaped from completing
just one part. The government contemplates further phases of the
project, but Montenegro's fiscal flexibility is constrained and
S&P believes additional construction may not be feasible over the
medium term.

S&P continues to view Montenegro's long-term economic prospects
as favorable. This primarily stems from the multiple
opportunities that exist in the tourism sector. A number of
hospitality projects are currently being implemented, including
several high-end resorts on the coast. S&P also understands that
there is untapped potential in winter ski tourism as well as
energy generation.

In S&P's view, unlocking this long-term development potential
will to a significant degree hinge on the ability of the
government to deliver structural reforms, such as increasing the
flexibility of the labor market, combating the shadow economy,
and improving the judiciary system. Despite some progress, a
number of constraints remain, including perceived corruption and
bureaucracy -- typical problems often reported by companies
operating in former Yugoslav Republics.

Montenegro is currently governed by a coalition, which is
centered around the long-ruling Democratic Party of Socialists.
It also includes several smaller ethnic minority parties, giving
the administration only a very small majority in Parliament. The
government continues to prioritize EU accession negotiations as
one of its main goals. S&P said, "Early implementation of reforms
that will bring Montenegro in line with the EU acquis represents
upside, but we believe this process will be only gradual. Despite
renewed momentum about the integration of the Balkans, in our
view, the 2025 EU accession date could be optimistic. We note
that further progress by Montenegro could face headwinds from
both domestic developments and rising euroscepticism among the
existing member states, which--under EU rules--will have to
ultimately unanimously approve Montenegro's membership bid."

Although Montenegro's institutional settings compare favorably in
a regional context, several domestic political and policy risks
remain. The country is due to hold presidential elections in
April. Even though only a month is left until the ballot, it
remains unclear whether Montenegro's long-time political
strongman Milo Djukanovic will run for the post. In the past,
elections have sometimes been characterized by instability, such
as in 2016, when an alleged coup took place. Subsequently,
multiple opposition members faced allegations, with several
parties boycotting Parliament in the election aftermath.

S&P said, "We also note that Montenegro became a member of NATO
in mid-2017. While there appears to be a general consensus on the
desirability of joining the EU among the local population, NATO
membership is more controversial. Consequently, some tensions
remain, although these will likely recede over time.

"Finally, we see risks regarding the government's adopted fiscal
strategy. Although our base-case forecast assumes broad
commitment to budgetary tightening, this could be difficult to
achieve in the context of the upcoming 2020 general election."

Flexibility and Performance Profile: Public sector leverage will
gradually decline after completion of the highway project in 2019

-- S&P expects net general government debt to start declining
    from a peak of 65% of GDP in 2019, as the highway
    construction project is completed.

-- Balance-of-payments vulnerabilities remain elevated, given
    the recurrent historical current account deficits and the
    resulting large net external liability position, which S&P
    estimates at 250% of GDP.

-- Montenegro has no monetary policy flexibility because it has
    unilaterally adopted the euro while not being part of the
    eurozone.

Montenegro has historically been running recurrent fiscal
deficits. These have been a result of high social spending and
transfers, as well as the substantial shadow economy, which
escapes taxation. More recently, the deficits have widened as a
result of the implementation of the highway project.

To control the upward public debt trajectory, the government has
embarked on a fiscal consolidation strategy announced in mid-
2017. The strategy includes a number of revenue and expenditure
items, such as raising the VAT rates and excise taxes, as well as
controlling public employment levels and spending efficiency.
Most of the measures have received parliamentary approval as
planned within the confines of the 2018 budget.

S&P forecasts that the headline deficit levels will remain
elevated in 2018-2019, but this mostly reflects the ongoing
highway project and masks the improvement in the non-highway
deficit. The first highway section is set to be completed in 2019
and consequently S&P forecasts the headline budget deficit will
reduce to 2% of GDP in 2020 and 1% of GDP in 2021. Under these
assumptions, net general government debt will peak at 65% of GDP
in 2019 before starting to decline.

The official government projections are considerably more
optimistic and envision a headline fiscal surplus of close to 5%
of GDP in 2020. In S&P's view, this is unlikely to be achieved.
S&P sees a number of downside fiscal risks and its base-case
scenario is accordingly more conservative. Specifically:

-- The government might face difficulties in controlling public
    employment levels, wages, and social transfers, given that
    general elections are due to take place in 2020. S&P notes
    past pre-election expenditure hikes.

-- Although higher excise taxes should increase the revenue
    envelope, there remains a resulting risk of an increase in
    tax avoidance.
-- Cost overruns at local government level or crystallization of
    guarantees (estimated at close to 7.5% of GDP in total)
    remain a possibility, since these issues have been a frequent
    occurrence in the past.

-- Cost overruns could occur on the first phase of the highway
    project, owing to its complexity. In addition, the government
    also faces foreign-exchange risk since the bilateral loan
    from China is denominated in U.S. dollars. S&P understands
    that the authorities are currently exploring ways to hedge
    this risk.

-- More generally, the fiscal consolidation path depends on the
    rates of nominal growth. Therefore, were real GDP or
   inflation dynamic to underperform, this will have a
   detrimental impact on the fiscal adjustment effort.

S&P said, "In addition, we believe there are risks for Montenegro
from the gradual tightening of monetary policy by major central
banks, particularly the European Central Bank (ECB) from 2019. We
note that close to 80% of government commercial borrowing is from
non-residents." In recent years Montenegro has benefitted
substantially from the ECB's quantitative easing program.
Although debt levels have been on the rise, interest spending has
remained rather muted hovering around 5% of general government
revenues. Montenegro faces substantial eurobond redemptions in
2019-2021, totaling EUR1.1 billion (25% of 2017 GDP). The
government is at an advanced stage of securing a World Bank
guarantee-supported EUR250 million syndicated loan, which the
authorities intend to partially deploy to meet the upcoming debt
repayments. S&P believes the authorities will also roll over a
large portion of debt falling due.

Montenegro's weak balance-of-payments position remains a key
ratings constraint. The country has been running persistent
double-digit current account deficits and S&P estimates the net
external liability position totaled close to 250% of GDP at the
end of 2017. Positively, substantial amounts of inbound foreign
direct investment have entered Montenegro, averaging over 10% of
GDP over the past five years. These investments are concentrated
in the real estate as well as tourism and energy sector projects
and tend to be import-intensive. As such, the investments
actually cause the current account to be in a recurrent deficit,
rather than the other way round. Risks remain as growth will
likely dive if foreign direct investment unexpectedly dries up.

Moreover, Montenegro's external accounts show large, persistent,
and positive errors and omissions, which -- following recent data
revisions -- average 5% of GDP over the past five years. These
discrepancies may reflect unrecorded tourism export revenues and
the underestimation of remittances from the large Montenegrin
diaspora, among other factors. This could mean that the current
account deficit may be lower than the reported data indicate.
Also, S&P has limited information on Montenegro's external
assets. As such, external ratios are likely to indicate higher
net leverage than is actually the case. S&P views positively the
authorities' intention to start producing international
investment position data later in 2018.

Montenegro's unilateral adoption of the euro prevents the Central
Bank of Montenegro from setting interest rates and controlling
the money supply, and restricts its ability to act as a lender of
last resort. While the central bank has some options to provide
liquidity support to banks, its inability to create the currency
needed in a stress scenario effectively prevents it from
fulfilling a lender of last-resort function, in S&P's view.
Unilateral euro adoption also makes the country's economy highly
sensitive to cross-border capital movements.

Montenegro's banking system appears broadly stable and liquid.
Nonperforming loans have declined to around 7% of the total,
according to the regulator. S&P said, "Nevertheless, although the
larger institutions are in a better position, we understand a
number of smaller banks could be vulnerable. We still view the
government's contingent liabilities from the banking system as
limited, since we believe that only minimal support to cover the
insured deposits would be provided in the event of a bank
default."

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 fiscal flexibility and performance had
improved. All other key rating factors were unchanged.

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

RATINGS LIST

Ratings Affirmed

  Montenegro
  Sovereign Credit Rating
    Foreign and Local Currency                  B+/Stable/B
   Transfer & Convertibility Assessment         AAA

   Montenegro
   Senior Unsecured
     Local Currency                             B+


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


LOPAREX INTERNATIONAL: S&P Assigns 'B' CCR, Outlook Stable
----------------------------------------------------------
S&P Global Ratings assigned its 'B' corporate credit rating to
Loparex International B.V. and Loparex Holding B.V. Netherlands.
The outlook is stable.

S&P said, "We also assigned a 'B' issue-level rating, in line
with the corporate credit rating, to the company's $320 million
term loan due in 2025. The '3' recovery rating on the term loan
indicates our expectation for meaningful (50%-70%; rounded
estimate: 60%) recovery to lenders in the event of a default.

"Our 'B' rating on Loparex reflects our view of the company's
small size relative to rated forest and paper product sector
peers and limited product breadth in a segmented and competitive
market. Our rating also incorporates the company's pro forma debt
to EBITDA of 5x, and controlling ownership by equity sponsor
European-based Intermediate Capital Group PLC (ICG), as well as
intrinsic characteristics of financial sponsor's ownership and
strategies, i.e. short- to intermediate-term holding periods and
the use of debt to maximize shareholder returns.

"The stable outlook reflects our expectation that the company
will achieve modest but steady sales growth of 4%-6% over the
next 12 months because of product innovation and opportunities in
emerging markets. In addition, we expect EBITDA margins of about
13% to 14% due to assumed cost-saving initiatives offsetting
modest input cost inflation. Consequently, we expect adjusted
debt to EBITDA will remain between 4.5x and 5x.

"We view a downgrade as unlikely given our expectations for the
continuation of 3%-4% annual growth in global release liner
markets. However, we could downgrade the company within the next
year if adverse market or macroeconomic events cause gross
margins to decline at least 200 basis points from our forecast
such that Loparex' EBITDA fell by 15% or more, bringing leverage
above 6x and EBITDA interest coverage below 2x. We could also
lower the rating if the owners undertook aggressive debt-financed
acquisitions or dividends that drove metrics to these levels.

"Given the company's small size and limited product focus, we
view an upgrade as equally unlikely in the next year unless the
company grew significantly and diversified its products, while
reducing and sustaining leverage below 4x. Incorporated into the
potential for an upgrade would be our assumption that financial
sponsor ownership would be committed to maintaining leverage at
less than 4x with a low risk of releveraging."


===========
P O L A N D
===========


FIRST CLASS: Warsaw Court Dismisses Bankruptcy Application
----------------------------------------------------------
Reuters reports that the court in Warsaw dismissed the
application for declaration of bankruptcy of First Class SA,
Artificial Intelligence SA's subsidiary.

According to Reuters, the application of First Class has been
dismissed due to lack of funds to satisfy the costs of the
proceedings.

The decision of the court is not legally binding, Reuters notes.


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


GLOBALWORTH REAL: S&P Alters Outlook to Pos. & Affirms 'BB+' ICR
----------------------------------------------------------------
S&P Global Ratings revised its outlook on Romania-based
Globalworth Real Estate Investments Ltd. to positive from stable.
The 'BB+' long-term issuer credit rating on the company was
affirmed.

The outlook revision stems from Globalworth's progress in
increasing the scale and diversification of its prime office and
real estate portfolio beyond S&P's expectations. This was
achieved through a number of asset acquisitions in Poland and
Romania, including that of a 71.7% stake in Polish property
company Griffin Premium RE. N.V. As a result, Globalworth
currently owns and manages 39 assets in Central and Eastern
Europe (CEE), valued at EUR1.8 billion as of Dec. 31, 2017 (or
EUR2 billion including targeted assets with right-of-first-
refusal agreements) compared with EUR1 billion a year ago.

Globalworth's geographic diversification has also increased, with
assets in Bucharest now representing about 57% of the portfolio
compared with 92% at year-end 2016. The remaining 43% of assets
are in large Polish cities, such as Warsaw (9%), Wroclaw (10%),
and Katowice (7%), among others. Office properties accounted for
75% of the portfolio's value, mixed-use office and retail assets
16%, and logistics and light industrial assets 7%.

S&P said, "We understand Globalworth's accelerated expansion will
continue and management has already identified a large pipeline
of assets for possible acquisitions. In our base-case scenario
for the next 24 months, we forecast like-for-like rental income
growth of 2%-3%, since most leases are indexed to inflation, and
a stable occupancy rate of about 95%. We also assume that the
company's portfolio value will approach EUR2.5 billion by midyear
2018 and exceed EUR3 billion by midyear 2019. Similarly, we
expect EBITDA will total EUR120 million in 2018 and EUR150
million in 2019, after EUR37 million in 2017, thanks to the
contribution from previous and new acquisitions, completed
development projects, and margins improvements. We forecast
Globalworth's adjusted EBITDA margin at 64%-67% over 2018-2019 as
company contains administrative costs while expanding its asset
base. We assume the effective interest rate on Globalworth's debt
will remain lower than 3%, since the company continues to have a
good standing in the debt capital markets. We expect it will
issue new debt with coupons comparable or lower than that for its
debut EUR550 million bond issuance in 2017."

Globalworth's business risk profile is underpinned by the prime
quality of its modern offices assets and its large share of
international tenants (more than 80%), which make it less
dependent on economic conditions in Romania and Poland. S&P said,
"Also, we believe these countries should remain resilient markets
for office landlords like Globalworth because both countries are
major outsourcing hubs for multinationals and financial
institutions, due to the low labor costs and qualified work
force. In addition, we view as positive Globalworth's long-term
leases, which provide sound revenue predictability and support
Globalworth's high occupancy ratio (95% as of year-end 2017). We
note that there is limited development risk in the portfolio
because the share of assets under development will remain less
than 10% of the current portfolio value and subject to a
preletting hurdle of 50% before construction can start."

S&P said, "Still, we believe the portfolio remains smaller than
that of higher-rated peers, creating risks of revenue volatility
in the event of asset rotation. We generally view the office
segment as more cyclical and vulnerable to economic changes than
residential property segment for example. We also see relatively
high tenant concentration, since the company's top 15 tenants in
Romania account for a large 60% of its total rents, and the five
largest office tenants in Poland account for 36% of total office
rents there. We believe this could create rental income
volatility if a tenant were to exit. Although the company
exhibits healthy occupancy levels, we are mindful of the risk
attached to reletting, due to the high vacancy rate (15%) in the
Polish office market.

"Our assessment of Globalworth's financial risk profile remains
unchanged, as supported by the company's plans to balance equity
with debt funding to finance its acquisition pipeline."
Globalworth has announced its plan to issue more than EUR400
million of equity at the Globalworth Poland level in the coming
months to fund further acquisitions totaling about EUR300
million. The company benefits from the strong support of its main
shareholders, including Growthpoint, which has a market
capitalization of about EUR5.9 billion and owns a 29% stake in
Globalworth as well as approximately EUR9 billion of group
property assets.

The company's prudent financial policy centers on a loan-to-value
ratio of less than 35%, which is low for the industry. S&P said,
"We forecast debt to debt plus equity of 30%-35% in 2018-2019,
considering further yield compression and continued equity
increases. We also anticipate that the EBITDA interest coverage
ratio will exceed 4x in 2018 as a result of improving EBITDA
margins, lower cost of debt, and contributions from acquired
assets."

Still, Globalworth's current credit ratios (debt to debt plus
equity and, especially, EBITDA interest coverage) are weaker than
those of peers S&P assesses in the same financial risk category,
such as NEPI Rockcastle. Therefore, S&P continues to apply a
negative notch from its comparable ratings analysis.

The positive outlook indicates the possibility of an upgrade over
the next 12 months if Globalworth's portfolio of prime office
assets increases substantially further, leading to greater asset
diversification. Strong demand from corporations interested in
expanding in Romania and Poland supports S&P's view of
Globalworth's prospects.

Rating upside is also contingent on the company's ability to
maintain a disciplined approach to funding its investments, such
that its debt-to-debt-plus-equity ratio remains below 35% and
EBITDA interest coverage reaches 4x in 2018.

Upside scenario

S&P could raise the ratings if Globalworth's business risk
profile strengthens materially on the back of an increase in
scale and diversification of assets and tenants. An upgrade would
require continued strong operating performance, with high
occupancy levels and positive like-for-like rental income growth.
It is also dependent on debt to debt plus equity remaining below
35% and EBITDA interest coverage ratio approaching 4x.

Downside scenario

S&P could consider revising outlook to stable if the company's
diversification and scale improves only marginally, or if
Globalworth's EBITDA interest coverage ratio does not reach 4x by
2018. This could occur if the company's investment plans are not
fully realized over the next 12 months, or if new equity issuance
to support these investments is delayed or smaller than expected.


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


IRKUTSK OBLAST: S&P Affirms Then Withdraws 'BB+' ICR
-----------------------------------------------------
On March 16, 2018, S&P Global Ratings affirmed its 'BB+' long-
term foreign and local currency issuer credit ratings on Russia's
Irkutsk Oblast. The ratings were subsequently withdrawn,
alongside S&P's 'BB+' issue ratings on the region's senior
unsecured debt, at the oblast's request.

The outlook on the issuer credit rating was stable at the time of
the withdrawal.

OUTLOOK

At the time of withdrawal, the stable outlook reflected S&P's
expectation that Irkutsk Oblast's tax revenues would continue to
increase and its belief that the oblast's deficits after capital
accounts would stay below 5% of total revenues, while its
liquidity position remained robust.

RATIONALE

The rating reflected S&P's expectation that Irkutsk Oblast could
deliver stable budgetary performance, while the restructuring of
federal government budget loans from 2018 would help the region
maintain a very solid debt-service coverage ratio.

Economic growth and cost containment underpin budgetary
performance under a highly centralized institutional framework.

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

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

"We project that Irkutsk Oblast's economic growth will likely
surpass that of the national economy, translating into further
tax revenue growth. Nevertheless, wealth will remain low in an
international context. We estimate that the gross regional
product per capita will average about $9,200 in 2018-2020. The
mining sector dominates the oblast's economy, and its importance
is growing, representing over 20% of the gross regional product.
In our view, the dependence on this sector exposes Irkutsk
Oblast's budget revenues to the volatility of world commodity
prices and to changes in the national tax regime.

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

Modest deficits after capital accounts, low debt, and strong
liquidity coverage

Economic growth, coupled with management's cost-containment
measures, translated into very solid budgetary performance for
Irkutsk Oblast over the past two years. S&P said, "Under our
base-case scenario, we assume that the deficit after capital
accounts will remain below 5% of total revenues on average in
2018-2020. We believe that the tax revenue growth will continue
supporting economic growth in the region."

S&P said, "Owing to modest deficits after capital accounts, we
expect that Irkutsk Oblast's tax-supported debt won't exceed a
very limited 30% of consolidated operating revenues in the period
to year-end 2020. The oblast's direct debt consists of budget
loans (41% of total debt), bonds (27%), and bank debt (32%). We
also include minor debt of government-related entities (GREs)
Irkutsk Oblast owns in our assessment of tax-supported debt.

"We project the oblast's free cash will cover more than 100% of
its debt service falling due within the next 12 months. At the
same time, we view Irkutsk Oblast's access to external liquidity
as limited, owing to the weaknesses of the Russian capital market
and banking sector."

The oblast's debt maturity profile is also very smooth. In
October 2017, the federal government decided to restructure some
of the budget loans it granted to Russian regions for seven or 12
years, contingent on each region's tax potential growth. This
measure has helped reduce Irkutsk Oblast's refinancing needs and
S&P forecasts that its debt service is unlikely to exceed 3.5% of
operating revenues in 2018-2020.

S&P said, "Irkutsk Oblast has limited contingent liabilities, in
our view. We estimate that the GRE's payables represent about
3.5% of the oblast's consolidated operating revenues. At the same
time, we believe that Irkutsk Oblast is more likely than its
Russian peers to have to provide extraordinary financial support
to its GREs or municipalities. This reflects our view of Irkutsk
Oblast's extensive infrastructure development needs."

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable.

At the onset of the committee, the chair confirmed that the
information provided to the Rating Committee by the primary
analyst had been distributed in a timely manner and was
sufficient for Committee members to make an informed decision.

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

The committee agreed that all rating factors remained unchanged
and that the rating was to be withdrawn at the issuer's request.

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

Ratings Affirmed; Ratings Withdrawn   To            From

  Irkutsk Oblast
   Issuer Credit Rating               NR            BB+/Stable/--
    Senior Unsecured                  NR            BB+
   NR--Not rated.


===========
S E R B I A
===========


AGRI EUROPE: S&P Assigns Preliminary 'BB-' Rating to New LPNs
-------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'BB-' issue rating to
the proposed senior loan participation notes (LPNs) to be issued
by North Fund Becede B.V., a financing vehicle of Serbia-based
sugar and crop producer AEC Agrinvestment Ltd. (Agri Europe).

S&P understands that Agri Europe will use the cash proceeds of
the issuance mainly for acquisitions and the refinancing of
existing bank debt.

The 'BB-' issue rating on the proposed LPNs mirrors the 'BB-'
issuer credit rating on Agri Europe. S&P sees limited structural
subordination in the group's new capital structure, with the
secured debt and the debt at the operating companies amounting to
less than 50% of the total debt.

S&P said, "We understand that the LPNs are backed by senior
unsecured obligations of Agri Europe and its main operating
companies, with equivalent payment terms. We note that North Fund
Becede is a new financing vehicle set up solely to raise debt on
behalf of Agri Europe. We believe that Agri Europe is willing and
able to support North Fund Becede to ensure full and timely
payment of interest and principal of the LPNs when due, including
any expenses incurred by the financing entity."


SERBIA: Credit Profile Benefits From Diversified Economy
--------------------------------------------------------
Serbia's (Ba3 stable) credit profile benefits from its
diversified economy, institutional reforms and stronger fiscal
metrics, Moody's Investors Service said in a new annual report.

However, the country still faces a number of credit constraints,
including its significant contingent liabilities, obstacles to
further structural reform and the large share of general
government debt denominated in foreign currency.

The annual update, "Government of Serbia -- Ba3 Stable, Annual
credit analysis", is now available on www.moodys.com. Moody's
subscribers can access this report via the link at the end of
this press release. The research is an update to the markets and
does not constitute a rating action.

"The Serbian government's significant fiscal efforts, with IMF
support, have led to a turnaround in the general government
fiscal balance," said Evan Wohlmann, a Moody's Vice President --
Senior Analyst and co-author of the report. "Moody's expect the
implementation of further structural reforms and the improved
fiscal outlook will lead to a gradual downward trend in the debt
burden to levels closer in line with its rating peers."

Moody's expects growth to accelerate to 3.0% in 2018 and 3.5% in
2019, supported by private consumption as private sector
employment expands. Importantly, the Serbian economy's growth
structure is now more balanced than before the financial crisis,
having seen a strong shift towards export-driven growth in recent
years.

Serbia's moderate institutional strength reflects its improving
scores on the Worldwide Governance Indicators. While the EU
accession process will drive further institutional improvements
over the coming years, weaknesses remain, particularly in areas
such as transparency and the rule of law.

The country's low fiscal strength captures a general government
debt level -- at an estimated 62.4% of GDP as of 2017 -- that
remains higher than the median of Ba-rated peers. However,
Moody's expects that Serbia's improved fiscal out-turns and
healthy economic growth will help to gradually narrow the
difference in the coming years, although debt will continue to
exceed the Ba-rated median.

Ongoing reforms to the large state-owned enterprise (SOE) sector
will help to reduce fiscal risks in the future. Nevertheless,
significant contingent liabilities, particularly from the SOE
sector, remain a constraint on the sovereign credit profile.
Moreover, the government's debt-servicing costs are vulnerable to
exchange-rate fluctuations, as a significant portion of total
government debt is denominated in foreign currencies.

Progress on structural reforms that leads to a notable
improvement in the country's economic and fiscal metrics,
resulting in a faster than expected reduction in the public debt
burden closer to the median of similarly rated peers, would
generate upward pressure on Serbia's sovereign rating.

Downward pressure on Serbia's issuer rating could arise if a
reduced commitment by policymakers to the reform agenda,
particularly in relation to addressing budget risks from the SOE
sector, leads to a markedly weaker growth outlook and a
deterioration in fiscal metrics.


=============
U K R A I N E
=============


CHORNOMORNAFTOGAZ: Verkhovna Introduces Bankruptcy Moratorium
-------------------------------------------------------------
Ukrainian News Agency reports that the Verkhovna Rada of Ukraine
has introduced a moratorium on bankruptcy of the
Chornomornaftogaz State Joint-Stock Company (100% of the company
belongs to the Naftogaz of Ukraine national joint stock company)
until January 1, 2019.

With 226 votes required, 230 lawmakers voted for bill No.5370
with suggestions of President of Ukraine Petro Poroshenko,
Ukrainian News Agency discloses.

In May 2017, the Verkhovna Rada supported bill No.5370 On
Moratorium on Bankruptcy of Chornomornaftogaz State Joint-Stock
Company by 233 votes, Ukrainian News Agency relates.

In June President of Ukraine Petro Poroshenko vetoed the bill,
Ukrainian News Agency relays.

The authorities in the Russia-annexed Crimean nationalized
Chornomornaftogaz's assets on the peninsula and within the limits
of its continental shelf on March 17, 2014, Ukrainian News Agency
recounts.

The company has retained its legal status on the territory
controlled by Ukraine and it worked during the period of 2014-
2015 to restore its documents on ownership of the assets it lost
as a result of the annexation of Crimea, Ukrainian News Agency
states.

In 2016, Naftogaz and its six affiliated companies --
Chornomornaftogaz, Ukrtransgaz, Likvo, UkrGasVydobuvannya,
Ukrtransnafta and Gas of Ukraine -- brought an arbitrary
proceeding against Russia claiming to reimburse losses caused by
its illegal seizure of the company's assets in Crimea, estimated
by Naftogaz at USD2.6 billion, according to Ukrainian News
Agency.


UKRAINE: Debt of Commercial Banks for Refinancing Loans Down 4%
---------------------------------------------------------------
Ukrainian News Agency reports that in February, the debt of
commercial banks for refinancing loans provided by the National
Bank of Ukraine (NBU) decreased by 4% or UAH2.7 billion to
UAH 64.944 billion as at March 1, 2018.

Since the beginning of the year, the debt for refinancing
decreased by 5.4% from UAH74.8 billion, Ukrainian News Agency
discloses.

According to Ukrainian News Agency, the debt of UAH64.9 billion
for refinancing loans includes approximately UAH54 billion owed
by insolvent banks.

On January 10, the NBU provided UAH2.3 billion of refinancing for
PrivatBank, Ukrainian News Agency recounts.

In 2017, the debt for refinancing decreased by 8.2% from UAH74.8
billion, Ukrainian News Agency notes.



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


CARPETRIGHT PLC: Raises Emergency Cash, Mulls Shop Closures
-----------------------------------------------------------
Jack Torrance at The Telegraph reports that Carpetright is
scrambling to raise emergency cash as it mulls a rescue plan to
restructure its debts and close dozens of loss-making stores.

Britain's biggest flooring retailer on March 21 said it was
looking at launching a company voluntary arrangement, an
insolvency deal that would allow it to continue trading while
negotiating with landlords to reduce rents, The Telegraph
relates.

According to The Telegraph, it also plans to tap shareholders for
GBP40 million-GBP60 million in an equity fundraise and has
secured a GBP12.5 million from one of its backers, asset manager
Meditor, to fund its short-term working capital.

According to The Telegraph, Wilf Walsh, chief executive, said:
"The aggressive store opening strategy pursued by the company's
previous leadership has left Carpetright burdened with an
oversized property estate consisting of too many poorly located
stores on rents which are simply unsustainable."

Carpetright is the UK's largest retailer of carpets, flooring and
beds.


                            *********

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

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

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


                            *********


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

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

Copyright 2018.  All rights reserved.  ISSN 1529-2754.

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

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

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


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