---

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

                           E U R O P E

          Wednesday, April 25, 2018, Vol. 19, No. 081


                            Headlines


B E L A R U S

EXPORT-IMPORT INSURANCE: Fitch Affirms 'B' IFS Rating


F R A N C E

ALTRAN TECHNOLOGIES: S&P Assigns 'BB' ICR, Outlook Stable


G E R M A N Y

ALNO AG: Report on Insolvency Maturity Available


G R E E C E

GREECE: Beats Bailout Targets Again, European Commission Says


I R E L A N D

CVC CORDATUS VI: Fitch Assigns B- Rating to Class F-R Notes
MAN GLG I: Fitch Assigns 'B-sf' Rating to Class F-R Debt


H U N G A R Y

NITROGENMUVEK ZRT: S&P Affirms 'B' ICR, Outlook Stable


I T A L Y

A-BEST 14: Fitch Cuts Rating on Class D Notes to 'BB+sf'


N E T H E R L A N D S

BNPP IP 2015-1: Fitch Affirms 'B-sf' Rating on Class F-R Notes
CONTEGO CLO III: Fitch Assigns 'B-sf' Rating to Class F Notes
GTT COMMUNICATIONS: Fitch Assigns 'B' LT Issuer Default Rating


R U S S I A

AVB BANK: Bank of Russia Okays Amendments to Bankruptcy Measures
UC RUSAL: U.S. Treasury Department Extends Wind-Down Period


S E R B I A

AEC AGRINVESTMENT: S&P Affirms Prelim 'BB-' ICR, Outlook Stable


U K R A I N E

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


U N I T E D   K I N G D O M

AI LADDER: S&P Assigns Prelim 'B' ICR on Leveraged Buyout Offer
COMPASS IV: S&P Assigns Prelim 'B' Long-Term ICR, Outlook Stable
HERCULES ECLIPSE 2006-4: Fitch Lowers Class E Debt Rating to Csf
LDD GROUP: Enters Administration, Buyer Sought for Business


                            *********



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


EXPORT-IMPORT INSURANCE: Fitch Affirms 'B' IFS Rating
-----------------------------------------------------
Fitch Ratings has affirmed Export-Import Insurance Company of the
Republic of Belarus's (Eximgarant) Insurer Financial Strength
(IFS) Rating at 'B'. The Outlook is Stable.

KEY RATING DRIVERS

The rating reflects the insurer's 100% state ownership. On a
stand-alone basis, the presence of guarantees for insurance
liabilities under compulsory lines, adequate capital position,
and robust profit generation are offset by a meaningful exposure
to domestic financial risks and the low quality of the insurer's
investment portfolio.

The Belarusian state has established strong support for
Eximgarant through its legal framework to develop a well-
functioning export insurance system. The framework provides a
government guarantee on export insurance risks. It has led to
significant capital injections in previous years and explicitly
includes Eximgarant's potential capital needs in Belarus's
budgetary system.

Capital is strong relative to the insurer's business volumes,
with a Solvency I-like statutory ratio of 33x at end-2017.
However, the regulator's formula does not consider asset risk,
which is concentrated in local government bonds and directly
linked to the sovereign's credit profile.

Eximgarant's pre-tax income deteriorated slightly to BYN21
million in 2017 from BYN28 million in 2016, as lower investment
returns offset higher underwriting profit. Foreign exchange gains
of BYN5 million also contributed to net income, although they
fell from BYN14 million in 2016 and from BYN25 million in 2015.
The company has remained profitable over each of the last five
years.

Eximgarant's combined ratio improved to 71% in 2017 from 74% in
2016, due to a slightly lower loss ratio, which was 57% in 2017
(2016: 59%). Acquisition costs and administrative expenses
remained stable and have been low since at least 2010. The lower
loss ratio in 2017 was due to a moderate improvement in the loss
ratio for export credit insurance, which benefited from
favourable reserve developments resulting from the full
settlement of claims reserved in the absence of new reported
claims.

Eximgarant's underwriting performance is underpinned by
subrogation recoveries for export and domestic financial risks
insurance. Subrogation income totalled BYN8.5 million in 2017,
equivalent to 14% of the insurer's combined ratio. With low
recovery rates, subrogation income has resulted in significant
distortion and volatility in Eximgarant's overall combined ratio
in recent years.

Insurance of domestic financial risks is one of the key lines in
Eximgarant's portfolio with a 47% weighting in 2017 on a gross
written premium (GWP) basis (excluding export GWP). The absence
of local government guarantees for these risks, the significant
use of Eximgarant's capacity to retain risks, and concentrated
reinsurance protection with the local monopolist reinsurer all
increase the risks associated with domestic financial risk
policies.

In Fitch's view, Eximgarant's investment portfolio is of low
quality. This reflects the credit quality of bank deposits,
constrained by sovereign risks and the presence of significant
concentration by issuer. However, Eximgarant's ability to achieve
greater diversification is limited by the narrow local investment
market and strict regulation of insurers' investment policies.

RATING SENSITIVITIES

A change in Fitch's view of the financial condition of the
Republic of Belarus or significant change in the insurer's
relations with the government would likely have a direct impact
on Eximgarant's ratings.


===========
F R A N C E
===========


ALTRAN TECHNOLOGIES: S&P Assigns 'BB' ICR, Outlook Stable
---------------------------------------------------------
S&P Global Ratings assigned its 'BB' long-term issuer credit
rating to France-based engineering, research, and development
(ER&D) services provider Altran Technologies S.A. The outlook is
stable.

S&P said, "At the same time, we assigned our 'BB' issue rating
and '4' recovery rating to Altran's senior secured EUR1.38
billion and $300 million (EUR1.625 billion equivalent) term loan
facilities maturing in 2025, and on the group's senior secured
EUR250 million revolving credit facility (RCF) maturing in 2023.
The '4' recovery rating on these facilities reflects our
expectation of average recovery prospects (30%-50%; rounded
estimate: 45%) in the event of a payment default.

"The final ratings are in line with the preliminary ratings that
we assigned on Jan. 15, 2018, and extended on April 11, 2018,
following the successful closing of the acquisition, completion
of the EUR750 million capital increase, and the repayment of the
EUR250 million bridge facility loan and EUR500 million under the
term loan B, in line with our assumptions."

Altran, a global leader in the ER&D services market, completed
the acquisition of Aricent Technologies US Inc., a technology
design engineering service provider based in the U.S., on March
20, 2018. Combined, Altran and Aricent generated pro forma sales
of about EUR2.9 billion for the 12 months ended Dec. 31, 2017.

S&P said, "Our ratings reflect our view of the enlarged group's
satisfactory business risk profile. This assessment is backed by
Altran's and Aricent's leading positions in the ER&D services
market, where the group's size, once the entities are merged will
be 1.5x that of the second-largest player, and no competitor will
benefit from a comparable level of end-market diversification.
Altran's dominant positions in key vertical segments, such as
automotive, aerospace, transport, and life sciences, will be
strengthened by Aricent's leadership in semiconductor,
telecommunications, and enterprise software. The group's leading
positions are protected by the complex and stringent referencing
process for ER&D suppliers to become preferred suppliers of large
customers. Altran is referenced as a tier-1 service provider in
various suppliers' panels, and benefits from strong, long-
standing relationships with its key customers. In addition, we
expect the ER&D services market will expand by high single-digit
rates over the next three years. In addition, the combined group
has strong offshore capabilities that we expect will enable it to
address clients' global needs, quickly deploy engineering
resources where needed, and offer a cost advantage with near-term
potential for margin improvement.

"However, Altran is smaller than other companies we rate in the
business services sector in terms of revenues generated. It also
has a limited presence outside Europe, where it derived about 80%
of pro forma revenue in 2017, although Aricent will enhance its
presence in North America, where the combined group derived about
15% of pro forma revenue last year. In addition, the ER&D
outsourced services market is highly fragmented and competitive,
where suppliers have, in our view, limited bargaining power.
Nevertheless, we consider that the risk of lost or reduced
contracts is mitigated by Altran having multiple contracts with
many clients. We consider that Altran's operating efficiency is
somewhat constrained by a significant share of staff costs (about
70% of revenues), which may be difficult to reduce, given the
highly specialized nature of the group's services, in our view.

"We note that Altran's profitability has been fairly stable over
the past three years, with adjusted EBITDA margins at 10%-13%. We
believe Aricent's inclusion could somewhat increase the
volatility of earnings, although improve absolute profitability,
due to Aricent's higher margins.

"We assess Altran's financial risk profile as aggressive, based
on Altran's relatively high post-transaction leverage, with the
S&P Global Ratings-adjusted debt-to-EBITDA ratio of 4.5x
following the repayment of the EUR250 million bridge loan and
prepayment of EUR500 million under the term loan B. We anticipate
that the group's strong cash flow generation capacity, supported
by limited capital expenditure (capex) needs and a relatively
conservative dividend policy, will support gradual deleveraging.

"We project the group's EBITDA margins will strengthen over 2018-
2019, thanks to increased offshoring that will result in lower
staff costs; reduced selling, general, and administrative (SG&A)
expenses; as well as improved invoicing ratios, in line with
Altran's strategic plan. This is also supported, in our opinion,
by Altran's track record of margin improvement over the past
three years. The combined group's operating margins should also
benefit from high margins in Aricent's enterprise software
segment, driven by recent intellectual property contracts with
IBM and the impact of restructuring efforts. We consider
restructuring costs to address operational needs and competitive
challenges in our EBITDA calculation.

"At the end of 2018, we forecast the adjusted debt-to-EBITDA
ratio will be about 4.2x. Our adjusted debt figure includes
EUR1.625 billion outstanding on the new senior secured term loan,
a EUR63 million recourse factoring liability, off-balance-sheet
factoring of about EUR150 million, operating leases of about
EUR237 million, pension obligations of about EUR36 million, and
EUR39 million related to earn-out commitments. We also deduct our
estimate of EUR170 million of surplus cash expected end-2018 from
the overall adjusted debt figure.

"The stable outlook reflects our view that Altran will face no
significant operational issues in integrating Aricent, and the
enlarged group's revenues will increase by mid-single digits over
the next 12 months. We also project that the group's adjusted
EBITDA margins will improve to about 16% and cash flow leverage
metrics will remain commensurate with the rating. Specifically,
we forecast adjusted debt to EBITDA of 4.0x-4.5x and adjusted FFO
to debt of 15%-20% over that period.

"We could consider a negative rating action if Altran
consistently showed lower-than-expected revenue growth and
subdued EBITDA margins. Rating pressure could also arise if the
group attempted material debt-funded acquisitions before it fully
integrated Aricent, or undertook exceptional shareholder
distributions beyond our expectations. The rating could also come
under pressure if conditions in the group's main markets became
tougher, for example due to increased competition; integration
costs were higher than expected; or operational restructuring
costs weakened the FFO-to-debt ratio to below 16% for a prolonged
period.

"We could raise the ratings if we believed Altran's EBITDA
margins would be significantly stronger than we currently expect,
alongside material FOCF, with no additional large debt-funded
acquisitions or exceptional shareholder distributions. In
particular, we could consider an upgrade if FFO to debt
increased, staying firmly above 20%, and debt to EBITDA reduced
sustainably below 4.0x."


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


ALNO AG: Report on Insolvency Maturity Available
------------------------------------------------
According to Reuters, a report on the determination of Alno AG's
insolvency maturity is available.

The insolvency administrator says in the proceedings, the
distribution to shareholders of Alno AG i.i. should not be
realized, Reuters relates.

The report says that Alno AG i.i. was already insolvent in 2013,
Reuters notes.

Alno AG is a Germany-based kitchen manufacturer.


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


GREECE: Beats Bailout Targets Again, European Commission Says
-------------------------------------------------------------
Nikos Chrysoloras at Bloomberg News reports that the European
Commission confirmed on April 23 that Greece beat its bailout
targets again last year, strengthening the government's case
against demands to bring forward additional tax measures
originally scheduled to kick in starting 2020.

According to Bloomberg, the European Union's executive arm said
Europe's most indebted state achieved a budget surplus before
interest and other one-time payments equal to 4.2% of its gross
domestic product in 2017, more than twice the target set by its
bailout auditors for a 1.75% of GDP surplus.  Greece achieved a
general government budget surplus for the second year in a row,
Bloomberg relays, citing the bloc's statistical service Eurostat.

"This good news is a welcome shot in the arm for Greece ahead of
the crucial Eurogroup discussions that must prepare a positive
conclusion to the program this summer," Bloomberg quotes European
Commissioner for Economic Affairs Pierre Moscovici as saying in a
statement, referring to scheduled meetings of euro-area finance
ministers.  "The tremendous efforts made by Greece in recent
years to repair its public finances and reform its economy are
now paying off."

With the latest lifeline keeping Greece afloat set to expire in
August, the government of Alexis Tsipras has committed to
additional pension cuts and a lower income tax-free threshold in
2019 and 2020, as creditors seek reassurances that the country
won't go back to its old ways that brought the economy to the
brink of collapse in 2009, Bloomberg discloses.

The stronger performance will also likely feed into the upcoming
talks on Greek debt relief, Bloomberg states.

According to Bloomberg, Greece's Finance Ministry said the
April 23 data show that the target for primary surpluses of 3.5%
of GDP for 2018 and the coming years is "feasible" and that
there's fiscal room for targeted tax relief and social spending
in the post-bailout era.

European creditors want Greece to maintain a stellar fiscal
performance for years to come, thus minimizing the need for a
further restructuring of bailout loans, Bloomberg notes.  While
the IMF doubts such expectations are realistic, budget readings
from the past years may boost the arguments of countries led by
Germany that oppose additional relief, Bloomberg says.


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


CVC CORDATUS VI: Fitch Assigns B- Rating to Class F-R Notes
-----------------------------------------------------------
Fitch Ratings has assigned CVC Cordatus Loan Fund VI Designated
Activity Company refinancing notes final ratings, as follows:

Class X: 'AAAsf'; Outlook Stable
Class A-R: 'AAAsf'; Outlook Stable
Class B-1-R: 'AAsf'; Outlook Stable
Class B-2-R: 'AAsf'; Outlook Stable
Class C-R: 'Asf'; Outlook Stable
Class D-R: 'BBBsf'; Outlook Stable
Class E-R: 'BBsf'; Outlook Stable
Class F-R: 'B-sf'; Outlook Stable

CVC Cordatus Loan Fund VI Designated Activity Company is a cash
flow collateralised loan obligation (CLO). Net proceeds from the
notes have been used to redeem the old notes, with a new
identified portfolio comprising the existing portfolio, as
modified by sales and purchases conducted by the manager. The
portfolio is managed by CVC Credit Partners Group Ltd. The
refinanced CLO envisages a further 4.25-year reinvestment period
and an 8.5-year weighted average life (WAL).

KEY RATING DRIVERS

'B' Portfolio Credit Quality
Fitch places the average credit quality of obligors in the 'B'
category. The Fitch-weighted average rating factor (WARF) of the
current portfolio is 32.96, below the matrix maximum covenanted
WARF of 34

High Recovery Expectations
At least 90% of the portfolio will comprise senior secured
obligations. Fitch views the recovery prospects for these assets
as more favourable than for second-lien, unsecured and mezzanine
assets. The Fitch-weighted average recovery rate (WARR) of the
current portfolio is 64.88%, above the interpolated minimum
covenant of 64.75%

Partial Interest Rate Hedge
Up to 10% of the portfolio can be invested in fixed-rate assets,
while fixed-rate liabilities represent 8.75% of the target par.
Fitch modelled both 0% and 10% fixed-rate buckets and found that
the rated notes can withstand the interest rate mismatch
associated with each scenario. An interest rate cap to hedge the
transaction against rising interest rates is in place. The
notional of the cap is EUR65 million, representing 16.25% of the
target par amount, and the strike rate is fixed at 4%. The cap
will expire three years after the refinancing date.

Unhedged Non-euro Assets
The transaction is allowed to invest in non-euro-denominated
assets, provided these are hedged with perfect asset swaps within
90 days after settlement. Unhedged non-euro assets must not
exceed 2.5% of the portfolio at any time and can only be included
if, as of the trade date, the portfolio balance is above the
target par amount

RATING SENSITIVITIES

Adding to all rating levels the increase generated by applying a
125% default multiplier to the portfolio's mean default rate,
would lead to a downgrade of up to two notches for the rated
notes. A 25% reduction in recovery rates would lead to a
downgrade of up to three notches for the rated notes.


MAN GLG I: Fitch Assigns 'B-sf' Rating to Class F-R Debt
--------------------------------------------------------
Fitch Ratings has assigned Man GLG Euro CLO I DAC final ratings,
as follows:

Class X: 'AAAsf'; Outlook Stable
Class A-1R-R: 'AAAsf'; Outlook Stable
Class A-2R-R: 'AAAsf'; Outlook Stable
Class B-1R-R: 'AAsf'; Outlook Stable
Class B-2R-R: 'AAsf'; Outlook Stable
Class C-R-R: 'Asf'; Outlook Stable
Class D-R-R: 'BBBsf'; Outlook Stable
Class E-R: 'BBsf'; Outlook Stable
Class F-R: 'B-sf'; Outlook Stable
Subordinated notes-R: not rated

Man GLG Euro CLO I DAC, formerly known as GLG Euro CLO I DAC, is
a securitisation of mainly senior secured loans (at least 90%)
with a component of senior unsecured, mezzanine, and second-lien
loans. The transaction is a reissue of GLG Euro CLO I DAC and the
proceeds of this issuance are being used to redeem the existing
notes, with a new identified portfolio comprising the existing
portfolio, as modified by sales and purchases conducted by the
manager. The portfolio is managed by GLG Partners LP. The
refinanced CLO envisages a further four-year reinvestment period
and an 8.5 year weighted average life (WAL).

KEY RATING DRIVERS

'B' Portfolio Credit Quality
Fitch places the average credit quality of obligors in the 'B'
range. The Fitch-weighted average rating factor (WARF) of the
current portfolio is 34.23.

High Recovery Expectations
At least 90% of the portfolio will comprise senior secured
obligations. Fitch views the recovery prospects for these assets
as more favourable than for second-lien, unsecured and mezzanine
assets. The Fitch-weighted average recovery rate of the current
portfolio is 66.03%.

Limited Interest Rate Exposure
Up to 10% of the portfolio can be invested in fixed-rate assets,
while there are 7% fixed-rate liabilities. Fitch modelled both 0%
and 10% fixed-rate buckets and found that the rated notes can
withstand the interest rate mismatch associated with each
scenario.

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

RATING SENSITIVITIES

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


=============
H U N G A R Y
=============


NITROGENMUVEK ZRT: S&P Affirms 'B' ICR, Outlook Stable
------------------------------------------------------
S&P Global Ratings said that it had affirmed its 'B' long-term
issuer credit rating on Nitrogenmuvek Zrt., a Hungary-based
producer of nitrogen fertilizers. The outlook is stable.

At the same time, S&P assigned its 'B' issue rating to the
proposed EUR200 million new euro-denominated fixed-rate notes due
2025 to be issued by Nitrogenmuvek.

The rating primarily reflects Nitrogenmuvek's very high leverage,
at 6.8x S&P Global Ratings-adjusted debt to EBITDA and funds from
operations (FFO) to debt of below 8% on Dec. 31, 2017, partly
offset by a steady deleveraging trend.

S&P said, "We anticipate a continuous moderate recovery of credit
metrics, stemming from a significant increase in volume following
the commissioning of new and expanded facilities, and no
extensive unplanned plant outages. In addition, we assume a
modest increase in average fertilizer prices from 2018 as demand
rises in Nitrogenmuvek's key markets (Central and Eastern
Europe), although we believe that the overall pricing will remain
below historical levels in the next two years. We also assume
that the company will pass on some of the significant increase in
natural gas prices in 2017 to its customers."

A substantial reduction in capital expenditures (capex), after
the completion in 2017 of the extensive investment program, will
result in moderately positive free operating cash flow (FOCF)
generation under our base-case scenario, which will also
contribute to gradual deleveraging. S&P said, "As a result, we
expect adjusted debt to EBITDA will improve to below 6.0x and FFO
to debt will be around 12% in 2018-2019. We assess the company's
financial risk profile as highly leveraged."

The proceeds from the new bond will be used to redeem the
existing $200 million (about EUR162 million) notes due 2020 and
for general corporate purposes. After the refinancing, gross
financial debt will increase by around Hungarian forint 11
billion (about EUR35.4 million), temporarily increasing leverage
to nearly 6.0x in 2018, at the weaker end of 5.0x-6.0x we view as
commensurate with the rating, and thus with limited headroom for
underperformance.

S&P said, "Our financial risk assessment factors in uncertainty
regarding the pace of the company's deleveraging over the next
two years, given that the supply-demand balance in the global
fertilizer industry is still fragile and notwithstanding the
recent recovery in prices. Scheduled plant outages every three
years for maintenance is an improvement compared over past
outages, but these will still adversely affect Nitrogenmuvek's
production volume in 2019, which will somewhat negate the
positive effects of the expected recovery of fertilizer prices.

"Nitrogenmuvek's business risk profile continues to reflect its
relatively small size compared with peers', highly concentrated
asset base (with a single production site in Hungary), limited
product and geographic diversification, highly volatile earnings
and profitability, and exposure to the cyclical fertilizer
market, for which we expect low-cycle industry conditions and
overall weak pricing to continue through 2018." Partly offsetting
these constraints are the company's dominant market position in
Hungary, with an over 70% market share and a favorable cost
position, especially in the domestic market, thanks to low
transportation costs and its extensive distribution network.

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

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

Upside rating potential could emerge over time if Nitrogenmuvek
were to sustainably deleverage and maintain adjusted FFO to debt
well above 12% and debt to EBITDA below 5.0x through the cycle.
Additionally, the company's financial policy and growth strategy
should support a higher rating.


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


A-BEST 14: Fitch Cuts Rating on Class D Notes to 'BB+sf'
--------------------------------------------------------
Fitch Ratings has assigned Asset-Backed European Securitisation
Transaction Fourteen S.r.l.'s (A-Best 14) class E notes a 'BBsf'
rating and taken rating actions on the existing notes and the
commingling reserve loan (CRL):

EUR1,487.0 million fixed rate class A note, due April 2030:
affirmed at 'AAsf'; Outlook Stable,

EUR50.0 million fixed rate class B note, due April 2030:
affirmed at 'Asf'; Outlook Stable

EUR33.3 million fixed rate class C note, due April 2030:
affirmed at 'BBB+sf'; Outlook Stable

EUR43.0 million fixed rate class D note, due April 2030:
downgraded to 'BB+sf' from 'BBB-sf'; Outlook Stable

EUR18.2 million fixed rate class E note, due April 2030: new
rating of 'BBsf' assigned; Outlook Stable

EUR57.78 million fixed rate CRL, due April 2030: upgraded to
'BBB+sf' from 'BBB-sf'; Outlook Stable

The notes are backed by a pool of Italian auto loan receivables
originated and serviced by FCA Bank S.p.A. (FCAB,
BBB+/Stable/F2).

The transaction, which was first restructured in 2016, has been
further amended, mainly to (a) extend the revolving period
(otherwise due to expire in May 2018); (b) change some purchase
termination events and portfolio covenants applicable during the
replenishment period; (c) upsize the deal with a one-off pool
transfer and shorten the transaction default definition; (d) re-
tranche and downward re-coupon the existing notes; (e) reduce the
interest rate and enhance the seniority of the CRL; and (f) issue
a new class of notes (class E).

The downgrade of the class D notes, and the upgrade of the CRL
mainly reflects that after the restructuring, the CRL ranks
senior to class D in the interest priority of payments.

KEY RATING DRIVERS

Low Default Expectations
Fitch's base case cumulative default rates are set at 1.50%,
3.25% and 2.50% for new car loans, used car loans and loans to
VAT borrowers, respectively, and reflect the recently improved
performance of the originator's loan book. Fitch applied a stress
multiple of 6.0x on defaults at 'AAsf' for new cars, to take into
account the still long-term default definition, the low absolute
level of the base case and the two-year revolving period. The
agency applied a lower multiple of 5.5x for used cars and VAT
borrowers at 'AAsf' to take into account the higher absolute base
case compared with new cars.

Unsecured Recoveries
Due to the unsecured nature of Italian auto financing, recoveries
mainly rely on borrowers' restored performance or settlement of
the loans, or proceeds from the sale of NPL pools, rather than
car sale proceeds. Fitch has determined a weighted average (WA)
expected recovery rate of 15% and applied a WA 'AAsf' haircut of
50%.

Revolving Covenants Limit Portfolio Deterioration
During the revolving period, the pool may migrate to a worse
composition than the initial portfolio. The agency believes that
individually, certain revolving performance triggers are somewhat
looser than other auto loan transactions. However, we deem the
revolving conditions adequate as a whole and this risk is
addressed within stress assumptions and the assumption of a loss
base case reflecting Fitch's stressed portfolio composition.

CRL Rating
The CRL rating addresses the issuer's ability to: (i) pay in a
timely manner the CRL provider interest payment on each monthly
payment date; and (ii) ultimately repay in full the loan by the
final repayment date. After the end of the revolving period, the
CRL will amortise to an amount broadly in line with the next
month's collections.

In Fitch's view, the CRL rating is at any time the lower of: (a)
FCAB's rating; (b) the rating of the account bank, Elavon
Financial Services DAC; and (c) the maximum achievable rating for
the timely payment of interest on the CRL, based on the stressed
portfolio's cash flows. The Stable Outlook mirrors that on FCAB
and the fact that (a) and (c) equally drive the CRL rating.

Sovereign Cap
Italian structured finance transactions are capped at six notches
above the rating of the Republic of Italy (BBB/Stable). The class
A notes are rated at this rating cap.


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


BNPP IP 2015-1: Fitch Affirms 'B-sf' Rating on Class F-R Notes
--------------------------------------------------------------
Fitch Ratings has assigned BNPP IP Euro CLO 2015-1 B.V.
refinancing notes final ratings, as follows:

Class X: 'AAAsf'; Outlook Stable
Class A-R: 'AAAsf'; Outlook Stable
Class B-1R: 'AAsf'; Outlook Stable
Class B-2R: 'AAsf'; Outlook Stable
Class C-R: 'Asf'; Outlook Stable
Class D-R: 'BBB-sf'; Outlook Stable
Class E-R: 'BBsf'; Outlook Stable
Class F-R: 'B-sf'; Outlook Stable

BNPP IP Euro CLO 2015-1 B.V. is a cash flow collateralised loan
obligation (CLO). The proceeds of this issuance are being used to
redeem the existing notes, with a new identified portfolio
comprising the existing portfolio, as modified by sales and
purchases conducted by the manager, BNP Paribas Asset Management
SAS. The refinanced CLO envisages a further 4.25-year
reinvestment period and an 8.5-year weighted average life (WAL).

KEY RATING DRIVERS

'B'/'B-' Portfolio Credit Quality
Fitch expects the average credit quality of obligors to be in the
'B'/'B-' range. The agency rates almost all obligors in the
current portfolio. The weighted average rating factor (WARF) of
the current portfolio was 33.4 as of end-March 2018, below the
maximum indicative covenant of 34 for assigning the final
ratings.

High Recovery Expectations
The portfolio will comprise a minimum of 90% senior secured
loans. Fitch has assigned Recovery Ratings to almost the entire
current portfolio. The weighted average recovery rate (WARR) of
the current portfolio was 64.9% as of end-March 2018, above the
minimum covenant of 62.8% for assigning the final ratings.

Limited Interest Rate Risk
The transaction is only allowed to invest in floating-rate
assets. This aligns the portfolio yield with the cost of the
floating-rate liabilities as fixed-rate liabilities only
represent approximately 4.2% of the target par amount. The
presence of fixed-rate liabilities partially lowers the impact of
rising interest rates on the cost of liabilities.

Limited FX Risk
All non-euro-denominated assets have to be hedged with perfect
asset swaps as of the settlement date, limiting foreign exchange
risk. The transaction is permitted to invest up to 30% of the
portfolio in non-euro-denominated assets.

TRANSACTION SUMMARY

The issuer has amended the capital structure and reset the
maturity of the notes as well as the reinvestment period. The
4.25-year reinvestment period is scheduled to end in 2022.

The issuer has introduced the new class X notes, ranking pari
passu and pro-rata to the class A-R notes. Principal on these
notes is scheduled to amortise in four equal instalments starting
from the first payment date. Class X notional is excluded from
the over-collateralisation tests calculation, but a breach of
this test will divert interest and principal proceeds to the
repayment of the class X notes.

RATING SENSITIVITIES

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


CONTEGO CLO III: Fitch Assigns 'B-sf' Rating to Class F Notes
-------------------------------------------------------------
Fitch Ratings has assigned Contego III CLO B.V. refinancing notes
final ratings, as follows:

Class X: 'AAAsf'; Outlook Stable
Class A-R: 'AAAsf'; Outlook Stable
Class B-1-R: 'AAsf'; Outlook Stable
Class B-2-R: 'AAsf'; Outlook Stable
Class C-R: 'Asf'; Outlook Stable
Class D-R: 'BBBsf'; Outlook Stable
Class E-R: 'BBsf'; Outlook Stable
Class F: 'B-sf'; Outlook Stable

Contego III CLO B.V. is a cash flow collateralised loan
obligation (CLO). Net proceeds from the notes are being used to
redeem the old notes, with a new identified portfolio comprising
the existing portfolio, as modified by sales and purchases
conducted by the manager. The portfolio is managed by Five Arrows
managers LLP The refinanced CLO envisages a further 4.25-year
reinvestment period and an 8.5-year weighted average life (WAL).

KEY RATING DRIVERS

'B' Portfolio Credit Quality
Fitch places the average credit quality of obligors in the 'B'
category. The Fitch-weighted average rating factor (WARF) of the
current portfolio is 31.96, below the pricing maximum covenanted
WARF of 33.75

High Recovery Expectations
At least 90% of the portfolio will comprise senior secured
obligations. Fitch views the recovery prospects for these assets
as more favourable than for second-lien, unsecured and mezzanine
assets. The Fitch-weighted average recovery rate (WARR) of the
current portfolio is 66.32%, above the minimum covenant of 62.2%
corresponding to the matrix WARF of 33.75 and WAS of 3.6%

Limited Interest Rate Exposure
Up to 7.5% of the portfolio can be invested in fixed-rate assets,
while fixed-rate liabilities represent 2.3% of the target par.
Fitch modelled both 0% and 7.5% fixed-rate buckets and found that
the rated notes can withstand the interest rate mismatch
associated with each scenario.

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

Unhedged Non-euro Assets
The transaction is allowed to invest in non-euro-denominated
assets, provided these are hedged with perfect asset swaps within
30 days after settlement. Unhedged non-euro assets must not
exceed 3% of the portfolio at any time and can only be included
if, as of the trade date, the portfolio balance is above the
target par amount

RATING SENSITIVITIES

Adding to all rating levels the increase generated by applying a
125% default multiplier to the portfolio's mean default rate
would lead to a downgrade of up to three notches for the rated
notes. A 25% reduction in recovery rates would lead to a
downgrade of up to three notches for the rated notes.


GTT COMMUNICATIONS: Fitch Assigns 'B' LT Issuer Default Rating
--------------------------------------------------------------
Fitch Ratings has assigned a first-time 'B' Long-term Issuer
Default Rating (IDR) to GTT Communications, Inc. and GTT
Communications BV. The Rating Outlook for both entities is
Stable. Fitch has also assigned a first-time 'BB'/'RR1' rating to
GTT's $200 million senior secured revolving credit facility and
$2.1 billion Term Loan B. In addition, Fitch has assigned a
first-time 'CCC+'/'RR6' ratings to GTT's senior unsecured notes.

The proceeds, along with a $425 million equity contribution, will
be used to refinance GTT's existing Term Loan B and fund the $2.4
billion acquisition of Interoute, which the company announced in
late February.

Fitch's rating actions affect $3.5 billion of debt, including the
$200 million revolving credit facility.

KEY RATING DRIVERS

Debt Funded M&A: Fitch expects GTT Communications, Inc. to
maintain pro forma gross leverage between 4.5x and 5.5x over the
rating horizon as the company continues to pursue and execute on
multiple acquisitions annually. These transactions are expected
to be primarily debt funded in order to minimize equity dilution.
Fitch recognizes that acquisitions can provide increased scale in
a capital-intensive industry; however, Fitch is also aware of the
risk of delays in the integration process, and shortfalls in
expected synergies.

Elevated Leverage: Fitch believes management's historical track
record of maintaining net leverage near the upper end of its
target range is a constraint to the rating. Pro forma for the
Interoute and Accelerated Connections transactions (the
Transactions), the company will maintain gross leverage near 7.4x
at the end of fiscal 2017, or 5.5x when inclusive of expected
synergies. Fitch expects the company will be below its negative
gross leverage sensitivity of 5.5x within 12 months of the
transaction's close as a result of synergies and continued EBITDA
growth. Fitch would only expect GTT's leverage to decline towards
the lower end of management's target range in a less intensive
M&A environment.

Recurring Revenue & Contract Matching: Fitch expects the
recurring nature of GTT's revenue to provide a significant amount
of stability and visibility into future cash generation. Pro
forma for the Transactions, over 90% of the company's revenue
will be contractually recurring with contracts generally ranging
between one to three years. GTT will typically match the contract
length of its last mile leases with the customer's contract
length in order to insulate itself from price fluctuations. Over
80% of the company's network costs are related to these last mile
leases, providing the company with a significant amount of
capacity to downsize if customers choose not to renew.

Strong Secular Trends: GTT's credit profile benefits from the
ongoing secular trends its industry is experiencing. Enterprises
are continuing to increase their demand for networking bandwidth
due to the rapid adoption of cloud-based applications and an
increasing amount of data usage across locations as a result of
increasing files sizes, voice, video conferencing and real-time
collaboration tools. Cisco estimates that IP-based and cloud
traffic will grow at a 24% and 30% CAGR over the next several
years.

Competitive Position & Limited Scale: Fitch believes GTT's modest
scale provides the company with limited room for operational
headwinds or unexpected industry shifts. Many of the company's
competitors are significantly larger, better capitalized, and
have a stronger market presence. The company's capex-lite
business model places it in an inherently inferior competitive
position due to its dependency on third party providers for fiber
connectivity. This dependency is most visible in the last mile
connection, where there are significantly less providers of
connectivity.

Customer Diversification, Supplier Concentration: Fitch expects
the company's credit profile to continue to benefit from broad
customer diversification. Pro forma for the Transactions, GTT's
largest customer accounted for 2% of monthly recurring revenue
(MRR) during December 2017, while its top 20 customers made up
19% of MRR. These customers are multi-national corporations with
significant access to capital and liquidity. Approximately 59% of
GTT's monthly recurring costs (MRC) were tied to its top 20
suppliers during December 2017, with the largest supplier making
up 11% of total MRC during that same period. GTT's diverse base
of over 2,000 suppliers partially mitigates risks stemming from
the potential for increased margin pressure related to supplier
pricing.

DERIVATION SUMMARY

The ratings reflect the company's highly recurring and
diversified revenue profile, the strong secular trends driving
industry demand, and its profitability on an EBITDA less capex
basis. Fitch expects these factors to provide a significant
amount of visibility for and stability to the company's cash
flows over the rating horizon. The ratings also incorporate
Fitch's expectation for an elevated level of M&A activity over
the rating horizon. Forecasted transactions are expected to be
heavily debt-funded in order to minimize equity dilution and
drive equity returns. This acquisitive posture introduces
integration risks to the company's credit profile and drives
Fitch's expectation for leverage to remain at an elevated level
over the rating horizon. Fitch believes these factors position
the company well in the 'B' rating category relative to similarly
rated peers.

KEY ASSUMPTIONS

-- Organic revenue growth in the high single digits at GTT, and
low single digit revenue growth at Interoute;

-- Acquisition-related spend of approximately $775 million per
year, with $125 million being spent on smaller deals and $650
million on larger deals. Small acquisitions are expected to be
completed at 1.3x revenue and 5.0x EBTIDA (pro forma for cost
synergies), while larger deals are expected to be completed at
2.0x revenue and 6.5x EBITDA (pro forma for cost synergies).
These acquisitions are expected to grow in the low single digits
through the remainder of the forecast and are expected to be 90%
debt funded;

-- EBITDA margin expansion towards 31% due to increased scale
and approximately $105 million of cost synergies related to
Interoute and Accelerated Connections. EBITDA margin expansion is
expected to be hampered by smaller acquisitions that are expected
to be lower margin than the overall company;

--Acquisition related charges between $25 million and $65
million per year;

-- Capital intensity expanding towards 8% due to larger
acquisitions that are expected to be more asset heavy, similar to
Interoute and Hibernia.

GTT's Recovery Ratings reflect Fitch's expectation that the
enterprise value (EV) for the company, and, hence, the Recovery
Rating for its creditors will be maximized as a going concern
rather than in liquidation. Fitch estimates a distressed
enterprise valuation of $2.6 billion, using a 5.5x multiple and a
$479 million going concern EBITDA. GTT's $479 million going
concern EBITDA is primarily driven by margin pressure from last
mile providers, resulting in a 20% decline from LTM pro forma
EBITDA. The 5.5x multiple is reflective of the company's asset-
lite business model, partially offset by the acquisition of
Hibernia and Interoute. The multiple is also in line with the
median for telecom companies published in Fitch's Telecom, Media
and Technology Bankruptcy Enterprise Values and Creditor
Recoveries report. The senior secured euro tranche term loan is
considered pari passu with the debt located at GTT due to the
collateral allocation mechanism that would come into effect
during a bankruptcy.

RATING SENSITIVITIES

Developments That May, Individually or Collectively, Lead to
Positive Rating Action

-- Gross leverage sustained at or below 4.5x;
-- FCF to total adjusted debt sustained in the mid-single digit
range.

Developments That May, Individually or Collectively, Lead to
Negative Rating Action

-- Gross leverage sustained at or above 5.5x;
-- FCF to total adjusted debt approaching zero;
-- Delays in the integration process, or shortfalls in the
expected synergies of current or future acquisitions.

LIQUIDITY

Liquidity: Fitch expects GTT's liquidity to remain solid over the
rating horizon. Pro forma for the Transaction, liquidity was
supported by $91 million of cash on hand, $200 million available
under its new revolver, and Fitch's expectation for the company
to generate $42 million of FCF in 2018. The company's financial
flexibility is also enhanced by the lenient one percent
amortization schedule under its new term loan.

FULL LIST OF RATING ACTIONS

GTT Communications, Inc.

-- Long-term IDR 'B'; Stable Outlook;
-- Senior Secured Revolving Credit Facility 'BB'/'RR1';
-- Senior Secured USD Term Loan at 'BB'/'RR1';
-- 7.875% Senior unsecured notes at 'CCC+'/'RR6'.

GTT Communications BV

-- Long-term IDR 'B'; Stable Outlook;
-- Senior Secured EUR Term Loan 'BB'/'RR1'.


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


AVB BANK: Bank of Russia Okays Amendments to Bankruptcy Measures
----------------------------------------------------------------
The Bank of Russia approved amendments to the plan of its
participation in bankruptcy prevention measures for the joint-
stock company AVTOVAZBANK (Reg. No. 23), hereinafter referred to
as JSC AVB Bank.  These measures provide for the Bank of Russia
to allocate RUR350 million for recapitalisation purposes; the
funds will be used to purchase the JSC AVB Bank's follow-on
offering.

The current development of the bank's status has been detailed in
a press statement released by the Bank of Russia.


UC RUSAL: U.S. Treasury Department Extends Wind-Down Period
-----------------------------------------------------------
The U.S. Department of the Treasury's Office of Foreign Assets
Control (OFAC) on April 23 issued General License 14 in the
Ukraine-/Russia-related sanctions program.

General License 14 authorizes U.S. persons to engage in specified
transactions related to winding down or maintaining business with
United Company RUSAL PLC (RUSAL) and its subsidiaries until
October 23, 2018.  In accordance with preexisting OFAC guidance,
OFAC will not impose secondary sanctions on non-U.S. persons for
engaging in the same activity involving RUSAL or its subsidiaries
that General License 14 authorizes U.S. persons to engage in.

"RUSAL has felt the impact of U.S. sanctions because of its
entanglement with Oleg Deripaska, but the U.S. government is not
targeting the hardworking people who depend on RUSAL and its
subsidiaries," said Treasury Secretary Steven T. Mnuchin. "RUSAL
has approached us to petition for delisting.  Given the impact on
our partners and allies, we are issuing a general license
extending the maintenance and wind-down period while we consider
RUSAL's petition."

In addition to General License 14, OFAC on April 23 also
published several FAQs regarding to the general license's
authorizations and limitations, and issued an amended General
License 12A.

On April 6, 2018, OFAC designated RUSAL for being owned or
controlled by, directly or indirectly, EN+ Group.  In that same
action, OFAC designated EN+ Group for being owned or controlled
by, directly or indirectly, Oleg Deripaska and other entities he
owns or controls.  RUSAL is based in the Bailiwick of Jersey and
is one of the world's largest aluminum producers.


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


AEC AGRINVESTMENT: S&P Affirms Prelim 'BB-' ICR, Outlook Stable
---------------------------------------------------------------
S&P Global Ratings affirmed its preliminary 'BB-' long-term
issuer credit ratings on Serbia-based agribusiness group AEC
Agrinvestment Limited (Agri Europe). The outlook is stable.

S&P said, "At the same time, we affirmed our preliminary 'BB-'
issue rating on the proposed loan participation notes to be
issued by financing vehicle North Fund Becede B.V.

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

"The rating affirmation reflects our view that Agri Europe's
credit quality of remains in line with our recently published
analysis. We understand there is no change in the contemplated
debt structure for the transaction. Agri Europe intends to raise
new debt in 2018, the proceeds of which will be used to acquire
agribusiness companies in the South Central and Eastern Europe
region and refinance secured bank lines.

"We forecast Agri Europe will have revenues of about EUR940
million in 2018. Of the EBITDA, 60% is generated from sugar
production and about 25% from crop production (corn, wheat,
sunflower, soybeans, and sugarbeet). The group also operates silo
storage services and distributes fertilizers, seeds, and
equipment. It also does meat processing. Its main geographical
markets are its domestic market of Serbia, and neighboring
countries in the South Balkan region, including Romania."

Agri Europe is part of a wider diversified group that operates in
banking (AIK Banka in Serbia) and owns a small portfolio of
hotels in the region. S&P's preliminary issuer credit rating is
based on its assessment of the credit quality of the agribusiness
activities as well as of the wider group, including banking and
hotels.


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


UKRAINE: S&P Affirms 'B-/B' Sovereign Credit Ratings
----------------------------------------------------
On April 20, 2018, S&P Global Ratings affirmed its 'B-/B' long-
and short-term foreign and local currency sovereign credit
ratings on Ukraine. The outlook is stable.

At the same time, S&P affirmed its 'uaBBB-' Ukraine national
scale rating on Ukraine.

OUTLOOK

S&P said, "The stable outlook reflects our expectation that the
Ukrainian government will pass reforms necessary to draw a fifth
tranche under its Extended Fund Facility (EFF) with the
International Monetary Fund (IMF). Those funds, combined with
additional disbursements from international donors, would help
Ukraine to meet its external repayments coming due over the next
12 months.

"We could consider a positive rating action if economic growth
significantly outperforms our expectations, alongside
improvements in fiscal and external imbalances that would allow
the National Bank of Ukraine (NBU) to continue easing its capital
account restrictions. We could also raise our ratings on Ukraine
if we conclude that the security situation in the nongovernment-
controlled areas in Ukraine's east has stabilized and a further
escalation is unlikely."

Pressure on the ratings could build if a lack of funding from
external donors calls into question Ukraine's ability to meet
large external repayments. S&P said, "Additionally, we consider
that an adverse ruling in Ukraine's legal battle with Russia over
a eurobond issued in December 2013 and held by Russia could have
fiscal implications, and in a worst-case scenario might create
technical constraints on Ukraine's ability to repay its
commercial debt, which would exert pressure on the ratings.
Irrespective of the ruling at the London court, we expect the
case to be appealed to the Supreme Court prolonging the overall
proceedings further. We note that the government believes there
is no potential for technical constraints on debt service, even
in the case of an adverse ruling."

RATIONALE

S&P said, "Our long-term ratings on Ukraine reflect the country's
weak economy in terms of per capita income and its challenging
institutional and political environment that remains heavily
exposed to corruption at various levels of government. Moreover,
our ratings remain constrained by Ukraine's large external
refinancing risks, which necessitate continued compliance with
Ukraine's IMF program. Fiscal deficits are declining, although
the stock of debt remains large due to the costs associated with
the cleanup of Ukraine's banking sector and only gradual progress
in reducing the large pension fund deficit. We positively note,
however, Ukraine's successful liability-management exercise in
2017, which reduced refinancing needs for 2019, in particular, as
well as for 2020. Additionally, our ratings remain constrained by
high consumer price inflation that continues to be well outside
the NBU's target and by a transmission mechanism of monetary
policy that remains weak due to the very high share of
nonperforming loans (NPLs) in Ukraine's banking sector."

Institutional and Economic Profile: Strengthening economic
recovery, but only gradual reform progress

Economic recovery continues to be driven by strengthening
domestic demand, high commodity prices, and the economy's ability
to quickly adapt to the Donbas trade blockade.

The introduction of an anti-corruption court and adjustment of
gas tariffs are the key reforms to unlock a fifth tranche under
the IMF EFF program, which would boost foreign exchange reserves
and unlock additional donor funds.

Upcoming presidential and parliamentary elections in 2019 limit
the window of opportunity to pass important reforms before pre-
election posturing begins.

In 2017, Ukraine's economic recovery firmed. Real GDP increased
by 2.5%, primarily supported by domestic demand thanks to pent-up
investment demand and robust consumption growth. Household
consumption benefited from a doubling of the minimum wage at the
beginning of 2017, falling unemployment rates, and significant
remittance inflows from abroad. Investments saw double-digit
increases for a second consecutive year in 2017. Over 2013-2015,
investments contracted cumulatively by over 41%, but the improved
macroeconomic environment and high global commodity prices
spurred a rebound in investments.

On the flipside, this recovery in gross fixed capital formation
led to a surge in imports so that net exports remained negative
in 2017. Higher imports were also a result of the Donbas trade
blockade that emerged in first-quarter 2017.

Ukraine's industrial producers, particularly in steel and
aluminum, had to revert to coal imports, especially from the U.S.
and South Africa, due to the suspension of trade with the
nongovernment-controlled areas in eastern Ukraine.
Notwithstanding macroeconomic improvements, Ukrainian per capita
wealth levels remain low. Despite two consecutive years of
growth, per capita GDP ($2,600 in 2017) is still only at 67% of
its pre-crisis wealth levels in 2013 and the second-lowest in
Europe and the Commonwealth of Independent States after
Tajikistan (for more see www.spratings.com/sri). Low income
levels also explain high levels of net emigration. Over one
million Ukrainians worked in Poland last year, with several
hundreds of thousands in other neighboring countries. There are
reports that this has caused shortages of qualified labor in
western Ukraine, for instance, where a successful automotive
industry cluster has been established over the past few years.

Despite these structural challenges, growth in Ukraine is set to
accelerate further to 3.1% in 2018, according to our forecast.
Growth drivers in the Ukrainian economy will remain broadly
unchanged, with domestic demand as the main contributor.
Household consumption will benefit from another planned increase
of the minimum wage, while public-sector wage and pension
increases will also support disposable incomes. Positive base
effects due to a disappointing agricultural season in 2017, where
output dropped by 2.7%, could also bolster the agricultural
sector's contribution to economic growth in 2018. At the same
time, Ukraine's economy continues to benefit from the Deep and
Comprehensive Free Trade Agreement with the EU, although
Ukrainian exporters frequently hit export quotas early in the
year. Moreover, meat exports, especially poultry, to the EU have
an inflationary impact complicating the NBU's task of reducing
price inflation within its target band. Through to 2021, S&P
expects average real GDP growth of about 2.9%. More concerted
structural reform efforts could stimulate stronger economic
growth. For instance, land reform, namely the lifting of the
moratorium on agricultural land sales, could boost annual GDP by
about 1.5 percentage points
according to the World Bank.

Implementing reforms under the IMF EFF could further improve
Ukraine's growth potential and usher in stronger foreign direct
investment (FDI) inflows. As part of the EFF, the IMF demands
that Ukraine establish an independent anti-corruption court (ACC)
that would process cases brought forward by the National Anti-
Corruption Bureau of Ukraine (NABU). The importance of and need
for an independent ACC is underpinned by Ukraine's position in
Transparency International's Corruption Perception Index, where
Ukraine ranks 130th of 180 countries. In addition, of the more
than 100 cases sent to court by NABU, only 19 have led to
convictions as of year-end 2017. S&P said, "We understand that a
draft bill on the ACC has passed in a first reading in Ukraine's
parliament. However, this draft is not yet in line with the IMF's
demands and the recommendations by the Venice Commission. Despite
strong opposition by some parliamentarians and parties with
vested interest, our base case is that the ACC will be
established in line with the IMF EFF program requirements for two
reasons." First, the fight against corruption has broad support
from the general public and failure to implement legislation on
the ACC could have direct consequences in the presidential and
parliamentary elections, which are scheduled for spring and fall
2019, respectively. Second, Ukraine still faces up to $24 billion
in public and quasi-public external debt repayments over 2018-
2021. Without official creditor support, these external debt
repayments would be extremely challenging to meet. Establishing
an independent ACC would remove one of the main impediments for
FDI.

Ukrainian authorities also need to hike energy tariffs in order
to conclude the fourth IMF review and receive the fifth tranche
under the EFF program. The hike should have been implemented
automatically in the summer of 2017, as a result of a formula
that was designed as a prior action to conclude the third review.
The authorities did not carry out the hike in line with the
formula, because they want to change the formula to better
reflect import prices -- which they claim are lower than those in
the formula -- while also phasing in the hikes gradually.
Concluding energy reform and establishing the ACC would
complement last year's pension reform and recent privatization
legislation. Together these measures should be sufficient to
conclude the fourth review. This would unlock the fifth tranche
of $1.9 billion in IMF financing plus additional donor financing,
namely about EUR1.0 billion under the EU macrofinancial
assistance and around $800 million in World Bank loans.

S&P said, "With the IMF EFF program set to expire in March 2019,
we do not envisage any further disbursements under the program
beyond those under the fourth review. Considering the electoral
calendar, we also do not expect a follow-up arrangement to the
EFF to be in place before 2020. While current opinion polls for
the two elections next year show former prime minister Yulia
Tymoshenko and her Fatherland party in the lead, we note that
roughly one-half of Ukraine's population is still undecided. Post
election, we expect the process of building a coalition will
likely be complicated, which would also delay discussions around
a successor arrangement with the IMF. Furthermore, prolonged
political uncertainty in 2019 may delay any progress in
implementing measures agreed under the Minsk II protocol or
finding a sustainable solution to the conflict in Ukraine's
nongovernment-controlled area in the Donbas. That said, in our
base case, we assume no further escalation of this conflict,
despite the U.S.'s approval of the sale of Javelin anti-tank
missiles to Ukraine, and frequent ceasefire violations and daily
casualties. We note, however, the ongoing external security risk
this conflict generates for our sovereign ratings on Ukraine."

Flexibility and Performance Profile: Lower deficits, but still-
high refinancing needs

-- Revised balance-of-payments data shows much stronger
    remittance inflows and a lower current account deficit.

-- S&P expects that Ukraine's fiscal deficit will start widening
    again, not least due to upcoming elections.

-- A high level of NPLs continues to hamper Ukraine's banking
    sector and inhibit credit growth.

Higher-than-previously reported remittance inflows provide a
stable source of funding for a smaller current account deficit.
The NBU has revised its balance-of-payments data to better
reflect remittance inflows from Ukrainians working abroad. The
revised data shows remittance inflows averaging 7% of 2017 GDP
over 2015-2017. As a result, the current account deficit in 2017
only amounted to 1.9% of GDP and was overfunded by financial
account inflows of 3.8%of GDP, thanks to net FDI inflows and debt
portfolio inflows, in part due to the government's September
Eurobond transaction. Over its 2018-2021 forecast horizon, S&P
still expects slightly higher current account deficits averaging
2.7% of GDP. Strong import demand--due to the domestically driven
economy, volatile commodity prices, and risks to external trade
from rising protectionism--could underpin these higher deficits.

The historical revision of current account receipts (CARs)
through the restatement of remittances has improved our external
debt metrics that use CARs as a denominator. External debt net of
liquid financial sector assets now amounts to 121% of CARs, as of
end-2017, and could decline further to about 100% by 2021. At the
same time, gross external financing needs remain large averaging
130% of CARs and usable reserves over our forecast horizon.
Critically, our external forecast assumes the successful
disbursement of the fifth IMF tranche this year, which would
bolster reserve levels at the NBU. S&P said, "Absent the IMF
funding and additional donor funds tied to the IMF program, we
continue to see a risk of marked deterioration in external
financing for Ukraine, given the large refinancing needs. We note
positively that Ukrainian authorities used the eurobond issuance
in September 2017 to buy back 64% of the notes maturing in 2019
and 23% of the notes maturing in 2020. This transaction eases
financing needs in those years."

S&P said, "Ukraine's 2017 fiscal outcome was better than we
expected. Revenues overperformed, in part due to higher inflation
that boosted the nominal GDP growth rate to 25%, but also thanks
to strengthening domestic demand, which is typically tax rich. In
addition, public investment spending remained below target,
leading to an overall deficit of around 1.6% of GDP in 2017. We
forecast wider deficits, especially in 2018 and 2019, as the pre-
election period will lead to higher social spending pressures,
especially on pensions and wages where the government is
entertaining a further hike in the minimum wage. In addition,
infrastructure needs remain large. Overall, we believe that
through 2021 the government will maintain its general government
deficit at or below the IMF program's target of 2.5% of GDP. Over
our forecast horizon, we also expect a mildly positive impact on
Ukraine's public financesfrom the 2017 pension reform, which
gradually increases the years of service required to retire
without a penalty to 35 years in coming years. As the reform
falls short of an outright increase in the statutory retirement
age and some provisions may reduce incentives to work until 65,
we believe further adjustments need to be considered to allow
Ukraine's large pension-fund deficit to sustainably decline."

Another factor helping Ukraine's fiscal position has been the
financial performance of state-owned oil and gas company
Naftogaz. Thanks to gas tariff hikes implemented under the IMF
program in previous years, Naftogaz has reported surpluses and
been paying dividends into the state budget recently. Still,
further hikes to tariffs as agreed under the IMF program could
more sustainably improve Naftogaz' financial position. Moreover,
the Stockholm Court of Arbitration recently ruled in favor of
Naftogaz in a lawsuit over undersupplied gas under the Naftogaz-
Gazprom gas transit contract. Once the financial damages awarded
to Naftogaz ($4.6 billion; 4% of 2018 GDP) in this case are
netted against claims that Gazprom has against Naftogaz from
another ruling of the Stockholm court in the so-called 'take or
pay' case, Gazprom will still owe Naftogaz about $2.6 billion (2%
of 2018 GDP). S&P said, "Due to the favorable ruling of the
Stockholm court, we no longer believe that contingent liabilities
are a significant risk to Ukraine's debt profile. We note,
however, that the gas transit contract with Gazprom expires at
the end of 2019. With plans at the European level to pursue the
North Stream 2 pipeline project, which would allow Gazprom to
boost its direct gas exports to Europe, we think Naftogaz and
therefore the sovereign could lose an important source of foreign
currency revenues as well as budgetary support from the gas
transit contract."

S&P said, "The general government debt-to-GDP ratio is on a
downward path thanks to Ukraine's lower fiscal deficit and strong
nominal growth. Despite another recapitalization of nationalized
PrivatBank in 2017, we estimate Ukraine's debt ratio in 2017 fell
to around 72% from 81% in the prior year. In line with our
macroeconomic and fiscal baseline projection, we forecast that
this ratio could decline further to about 57% of GDP by 2021.
That forecast remains highly sensitive to future exchange rate
developments, since around 70% of Ukrainian government debt is
denominated in foreign currency. Besides the successful eurobond
transaction in 2017, we note positively Ukraine's ability to fund
itself on the domestic market, also in foreign currency." This
ability could strengthen should the authorities pursue a
potential link of the domestic bond market to the global clearing
system, which would facilitate nonresidents' access to the
market.

There is a residual risk for Ukraine's government balance sheet
from the $3 billion eurobond bought by Russia in 2013 that was
not restructured and on which legal proceedings are ongoing in
London. S&P said, "While the current appeal case may be settled
shortly, we understand that any ruling would likely be appealed
with the Supreme Court, and therefore a conclusion of the case
may still be years out. There remains concern whether an adverse
ruling and Ukraine's subsequent refusal to pay in full could
eventually lead to technical constraints on Ukraine's ability to
repay its commercial debt, although we note that in the
government's view this does not present a risk."

Ukrainian banks continue to grapple with very high NPLs. At year-
end 2017, Ukraine's four state-owned banks had average NPLs of
about 59%. S&P said, "We note this figure is dragged down by
PrivatBank, which has NPLs amounting to about 87% of its loan
portfolio, due to its corporate loan book being almost entirely
composed of related-party lending. This compares with NPLs of
around 31% for Ukrainian private banks. To that end, the
government has recently agreed on a strategy for state-owned
banks, which includes a gradual cleanup and eventual
privatization of at least two of the four banks, namely
Oschadbank and PrivatBank. With the restructuring of all four
state-owned banks progressing, we do not expect any additional
recapitalization needs from the central government in 2018-2019.
A high share of NPLs points to weak credit standing of Ukrainian
companies and households and the limited number of clients with
adequate creditworthiness. As a result, lending growth to the
corporate sector remains timid at around 2% in 2017. In our view,
this still limits the transmission mechanism of monetary policy.
Overall, we classify Ukraine's banking sector in group '10' ('1'
being the lowest risk, and '10' the highest) under our Banking
Industry Country Risk Assessment methodology."

S&P said, "We view the appointment of Yakiv Smolii as the
governor of the NBU as an important sign for the independence of
the central bank and its ability to continue with the cleanup of
the financial sector and preserving financial stability. The NBU
continues to fight inflation, with four successive key policy
rate hikes to 17% over the past six months. Given our forecast of
continued deprecation pressures on the Ukrainian hryvnia, which
pushes up import prices and inflationary pressures, especially
from food prices, we forecast that inflationary pressures will
persist over the medium term, though inflation will move closer
to the NBU's target of 6% plus/minus 2% in 2018." Broader
macroeconomic stability, a more stable exchange rate, and
replenished foreign exchange reserves should also enable the NBU
to continue gradually easing its capital account restrictions.

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's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.

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
  Ukraine
   Sovereign Credit Rating
   Foreign and Local Currency          B-/Stable/B   B-/Stable/B
  Ukraine National Scale               uaBBB-/--/--  uaBBB-/--/--
  Transfer & Convertibility Assessment     B-            B-
  Senior Unsecured
  Foreign Currency[1]                      B-            B-
  Foreign Currency                         D             D
  Foreign Currency                         B-            B-
  [1] Dependent Participant(s): Ukraine


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


AI LADDER: S&P Assigns Prelim 'B' ICR on Leveraged Buyout Offer
---------------------------------------------------------------
S&P Global Ratings said that it assigned its preliminary 'B'
long-term issuer credit rating to U.K.-based electronic and
technology company, AI Ladder (Luxembourg) Subco S.a.r.l. The
outlook is stable.

S&P said, "At the same time, we assigned our 'B' issue rating to
both the first-lien term loan and revolving credit facility
(RCF), which will be borrowed by AI Ladder (Luxembourg) Subco
S.a.r.l. The preliminary recovery rating on the first-lien term
loan and the RCF is '3', indicating our expectations of
meaningful recovery (50%-70%; rounded estimate: 65%) in the event
of a payment default.  The preliminary ratings are subject to the
completion of the acquisition of Laird by Advent International as
presented to us, the successful issue of the proposed facilities,
the repayment of existing debt, and our satisfactory review of
the final documentation. Accordingly, the preliminary ratings
should not be construed as evidence of final ratings.

"If S&P Global Ratings does not receive the final documentation
within a reasonable timeframe, or if the final documentation
departs from the materials we have already reviewed, we reserve
the right to withdraw or revise our ratings. Potential changes
include, but are not limited to, the use of proceeds, interest
rate, maturity, size, financial and other covenants, and the
security and ranking of the senior secured term loan and RCF.

"Our rating on Laird primarily reflects the company's highly
leveraged capital structure, its limited scale compared with
larger key customers, its presence in fragmented markets,
exposure to cyclical end-markets and modest profitability. At the
same time, our rating considers the company's leading position in
a number of specialized products, its attractive growth
fundamentals, and long-lasting relationships with key clients."

A British-based global technology business generating roughly
$1.2 billion in sales, Laird is split into three divisions:

-- Performance Materials (48% of FY2017 sales), which
    specializes in customized components protecting smart devices
    from electromagnetic interference and heat.

-- Connected Vehicle Solutions (34% of FY2017 sales), which
    sales smart cars antennas, car connectivity systems to large
    auto OEMs such as Ford and General Motors. S&P is aware that
    the new owner Advent may potentially sell this division but
    we have not factored a divestment in our base case.

-- Wireless and Thermal Systems (18% of FY2017 sales), which
    provides systems, components and solutions enabling
    connectivity in mission critical wireless applications.

S&P's assessment of Laird's business risk profile is constrained
by its relatively limited scale compared to larger key customers,
its presence in fragmented markets with many players, its
exposure to cyclical end-markets, relatively low revenue
visibility, moderate client concentration, and modest
profitability.

Laird competes in a variety of relatively small markets, for
instance antennas (market size of $1.1 billion) and precision
metals ($1.4 billion-$2.8 billion). Many of Laird's clients,
which include auto and smartphones OEMs, are very large, limiting
Laird's bargaining power. Furthermore, the segments in which
Laird operates are generally quite fragmented with Laird
typically holding a market share below 20% per product.

S&P believes that Laird's operational performance is sensitive to
the business cycle due to the company's high exposure to cyclical
end-markets, with the auto and smartphone industries accounting
for roughly 55% of the company's total sales in 2017. This is
heightened, in S&P's view, by the fact that revenue visibility is
relatively limited due to the short product life cycle and short
lead-time on customer orders in the Performance Material
division. This is somewhat balanced by better revenue visibility
in the company's Connected Vehicle Solutions division due to the
longer life cycle of products sold to large auto OEMs, which
usually last four-to-five years.

Laird is exposed to some customer concentration; its largest
client accounts for roughly 14% of total sales. This is partly
mitigated by the fact that Laird is actively pursuing means to
diversify its customer base.

S&P said, "We think Laird's profitability is modest. The company
has an S&P Global Ratings-adjusted EBITDA margin of below 12% in
2017 and 2018, and would have little flexibility during a
downturn due to its relatively fixed cost structure. Of total
operating costs, 50% are considered fixed. This is despite the
company's recent efforts to simplify its operations by closing
eight manufacturing sites since Q3 2015. We expect that
profitability will increase in the coming years on the back of
operating leverage and a reduction in the company's fixed cost
base.

"These weaknesses are partly offset, in our opinion, by Laird's
no. 1 position in a number of high value added products,
attractive growth fundamentals across most of its end-markets,
its established relationships with key clients, and some degree
of diversification. Laird is the market leader in several
products, including precision metals, vehicle antennas, and
mobile radios for public safety, which account for over half of
the company's total sales. We believe that some of these products
are high value added, such as smart antennas in the company's
Connected Vehicle Solutions division and wireless automation and
control systems in its Wireless & Thermal Systems Division. Over
the medium term, we expect that the company's divisions will
benefit from trends such as the miniaturisation of devices, the
increased electrification and communication of vehicles, and the
development of Internet of Things applications, which affect a
number of industries Laird, operates in such as consumer
electronics, auto, medical, and safety."

The company also benefits from proven co-development abilities as
well as long and established relationships with a number of large
smartphone and auto OEM clients. S&P said, "We view Laird as
being well-diversified by end-markets (which could somewhat
offset the impact on revenue during a business downturn) as well
as geographically, with revenues generated across a broad range
of industries in North America, Europe and Asia.  In our
assessment of Laird's financial risk profile, we factor in the
group's ownership and control by financial sponsor Advent
International and its highly leveraged capital structure
following the proposed transaction and positive but relatively
modest FOCF. However, this is offset by our expectation of
gradually stronger ratios and growing FOCF in coming years and
EBITDA interest coverage at about 2.5x."

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

-- GDP growth of 2.8% and 2.6% in North America, 2.4% and 2.1%
    in Europe and 5.6% and 5.6% in Asia for 2018 and 2019
    respectively. S&P said, "Our outlook for the automotive
    industry is broadly stable, reflecting steady sales globally
    for auto OEMS. Our outlook for global technology companies is
    also stable and we expect mid-single digit revenue growth for
    hardware companies partly driven by improving smartphones
    sales."

-- Revenue decline of 1.1% in 2018 followed by growth of 6%-7%
    2019 compared to growth of 16.8% in 2017. S&P said, "For
    2018, we expect some sales headwinds due to some pricing
    pressure in the Performance Material division coming from a
    large customer and from the divestment of Model Solutions,
    which generated sales of $45 million in 2017. From 2019, we
    expect that the Performance Material division will return to
    growth at a mid-single digit rate due to high single-digit
    growth in Electro-Magnetic Interference and Thermal Interface
    materials products, supporting the division's sales growth.
    For the Connected Vehicle Solutions (CVS) we expect high
    single digit growth for 2018 and 2019 driven by 10%-12%
    growth in vehicle antennas and an order book of roughly 2x
    2017 sales. We also expect high single digit growth in the
    Wireless and Thermal Systems division driven by at least 6%
    growth across the majority of the division's products."

-- S&P Global Ratings-adjusted EBITDA margins of 10% in 2018 and
    11.4% in 2019, from 11.8% in 2017. The decline in margins in
    2018 is driven by one-off operational costs and higher
    capitalized development costs. S&P said, "We expect some
    improvements driven by strong sales growth, reduced central
    costs, and an improvement in the company's manufacturing
    footprint as the sponsor implements its value creation plan.
    We expect this will deliver roughly $50 million of cost
    savings from 2017 to 2022."

-- Improved working capital outflows of $10 million per year,
    versus outflows of roughly $45 million in 2017, on the back
    of improved inventory management.

-- Yearly capital expenditure (capex; excluding capitalized
    development costs) of 3%-4% of sales.

-- No dividends and no acquisitions.

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

-- Adjusted debt to EBITDA of about 7.7x in 2018 decreasing to
    about 6.4x in 2019.

-- Funds from operations (FFO) to debt, of about 5.5% 2018 with
    pro forma interest annualized for the transaction and 8% in
    2019.

-- EBITDA interest coverage of 2.1x in 2018 with pro-forma
    interest annualized for the transaction and 2.5x in 2019.

-- Free operating cash flow (FOCF) close to break even on a pro-
    forma basis for 2018 followed by 4% in 2019.

S&P said, "We assess Laird's liquidity as adequate. We estimate
that the group's liquidity sources over the next 12 months will
cover uses by more than 1.2x, and by at least 1.0x even if EBITDA
declined by 15%. We view Laird's relationships with banks as
sound and believe that management exhibits generally prudent risk
management. Our liquidity analysis starts in Q3 2018 and does not
include proceeds from the potential sale of the Model Solution
division, which Laird currently classifies as an asset held for
sale."

Principal liquidity sources for the next 12 months are:

-- $71 million reported cash balance as of December 2017;
-- $133 million of undrawn bank line available under the new
    RCF; and
-- Cash FFO of about $100 million.

Principal liquidity uses over the same period are:

-- Mandatory yearly amortization of $7.35 million as per the
    first-lien loan documentation.
-- Intra-year working capital outflows of $50 million; and
-- S&P estimates of roughly $75 million of capex, including
    capitalized development costs.


S&P said, "Our view of the company's liquidity is reinforced by
assumption that Laird will dispose of the Model Solution division
in the timeframe disclosed by Laird in its financial statements
and will keep sales proceeds on its balance sheet.

"The stable outlook reflects our expectation of continued revenue
and EBITDA growth, resulting in S&P Global Ratings-adjusted debt
to EBITDA at below 6.5x in 2019, and growing albeit modest FOCF
and EBITDA interest coverage of 2.5x.

"We could lower the rating if S&P Global Ratings-adjusted debt to
EBITDA remained above 7x and S&P Global Ratings-adjusted EBITDA
interest coverage declined below 2x as well as FOCF approaching
zero. This could materialize if Laird's revenues and EBITDA were
affected by a downturn affecting one of the main division, price
pressure from key customers, or intensified competition.

"We view an upgrade as remote in the next 12 months. We could
consider raising the rating if adjusted debt to EBITDA approached
5x and FOCF to debt was well above 5%. This could be achieved
through the combination of meaningful growth and improvement in
the company's EBITDA margin."


COMPASS IV: S&P Assigns Prelim 'B' Long-Term ICR, Outlook Stable
----------------------------------------------------------------
S&P Global Ratings said that it has assigned its preliminary 'B'
long-term issuer credit rating to U.K.-based Compass IV Ltd.
(WVREU). The outlook is stable.

S&P said, "At the same time, we assigned our preliminary 'B+'
issue rating with a recovery rating of '2' to the proposed EUR105
million RCF and EUR585 million first-lien TLB. The recovery
rating reflects our expectation of substantial recovery (rounded
estimate 75%) in a default scenario.

"In addition, we assigned to the proposed EUR167 million second-
lien loan our preliminary 'CCC+' issue rating, with a recovery
rating of '6' reflecting our expectation of zero recovery in a
default.

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

"Our preliminary rating on Compass IV Ltd. (WVREU) reflects our
opinion of the group's long-established and leading positions in
the rapidly expanding private accommodation sector in Europe. We
primarily value WVREU's record of recurrent earnings and cash
flow generation, which is a function of its good product
positioning, stable operating margins, and asset-light business
model in this developing subsegment of the lodging industry. Its
diversified portfolio of market-leading brands across Europe
further support our view of the business."

WVREU is the largest manager of holiday rentals in Europe, with
approximately 114,000 units in nearly 600 destinations. It
operates through three main business units: Landal GreenParks,
Novasol, and Wyndham Vacation Rentals U.K.

S&P said, "We view as positive WVREU's leading positions in the
holiday-park and private accommodation sectors, which enjoy
strong growth fundamentals. The group is 1.7x larger than any
other direct competitor in this market, and it encompasses
leading regional brands with a long history and high brand
awareness, since about 80% of bookings are through proprietary
channels. Moreover, we believe the group's leadership position
will be protected by certain barriers to entry, given its well-
established portfolio and differentiated value proposition in
being able to meet the needs of both travelers and homeowners.
WVREU's presence across Europe and the U.K., and business line
diversification also support our assessment."

However, with reported revenues of around $750 million and
reported EBITDA of $130 million in 2017, WVREU is smaller than
similar companies we rate in the lodging industry. This
constrains the rating, as does the seasonal nature of the
business, with about 55% of EBITDA generated in the third
quarter. Furthermore, the private accommodation market is highly
competitive and fragmented. Typically, suppliers have limited
bargaining power since clients decide where to list a property,
customers decide where to stay, and it is easy to switch
suppliers. Nevertheless, S&P notes note that this risk is
somewhat mitigated by WVREU having multiple contracts with many
clients.

S&P said, "We consider that higher-than-average fixed costs for
this type of asset-light business may constrain WVREU's operating
efficiency and margins. Still, we note that, with stable
commission rates, property retention rates are relatively high.

"WVREU's profitability has been fairly stable recently, but we
are wary about future margins. In particular, this is due to the
implementation of the carve-out (including significant one-time
costs related to the cost-optimization program in 2018), recent
acquisitions, and several strategic investments in property
recruitment, marketing, and distribution, which could weigh more
on margins than we currently expect. Nonetheless, we view
profitability as average for the sector, which supports our
assessment of WVREU's competitive position."

On Feb. 15, 2018, Platinum reached an agreement to acquire WVREU
from Wyndham Worldwide Corp. (BBB-/Watch Neg/A-3) for a total
consideration of about $1.3 billion (about EUR1.1 billion). The
transaction-financing package will include the EUR105 million
RCF, EUR585 first-lien TLB, and EUR167 million second-lien notes
to be issued by the operating entity. S&P understands that the
equity contribution will mostly comprise preference shares owned
by Platinum.

S&P said, "We view WVREU's proposed capital structure as highly
leveraged and expect the S&P Global Ratings-adjusted debt-to-
EBITDA ratios will exceed 8.0x in 2018, which we view as a
transition year because WVREU will start operating on a stand-
alone basis under the new ownership structure. We believe the
carve-out process will incur substantial costs this year that
will weigh materially on the group's credit metrics.

"Nonetheless, we see some opportunities for business optimization
and believe that carve-out costs will decline after 2018. In
addition, we view the business' relatively limited capital
expenditure needs and favorable working capital dynamics (with
noteworthy prepayments of holidays) as supporting the group's
cash flow generation profile. In this context, absent any
releveraging or debt-funded acquisitions, we expect to see
material growth of absolute EBITDA and profitability, translating
into deleveraging, with debt to EBITDA approaching 6.5x in 2019.

"The stable outlook reflects our view that WVREU will face no
significant operational issues when its carve-out is completed,
and revenues will increase by at least healthy mid-single digits
over the next 12 months. It also incorporates our view that cost-
rationalization initiatives will weigh heavily on EBITDA margins
during 2018. However, we expect margins will improve gradually
from 2019 on the back of synergies from business optimization
under the new ownership structure. Specifically, we forecast that
adjusted debt to EBITDA will move toward 6.5x in 2019 from 8.3x
in 2018. At the same time, we expect the new entity will continue
to generate positive free operating cash flow (FOCF), with FOCF
to debt at about 5% over the next two years.

"We could take a negative rating action if WVREU showed declining
revenues and subdued EBITDA margins for a prolonged period that
delayed deleveraging. The rating could also come under pressure
if we saw challenging conditions in WVREU's main markets, such as
increased competition, stricter regulations, higher-than-expected
costs relating to the carve-out, and delays in achieving
synergies from cost-optimization efforts.

"Rating pressure would also arise if the company's financial
policy became more aggressive, resulting in credit metrics
weakening materially. Specifically, we could lower the rating if
adjusted EBITDA interest coverage fell below 2.0x. We could also
consider a negative rating action if liquidity weakened
substantially or WVREU was unable to generate sustainably
positive FOCF.

"We see rating upside as being currently constrained by the
group's financial sponsor ownership. We could take a positive
rating action if leverage approached 5.0x on a sustainable basis,
supported by a conservative financial policy. Ratings upside
would also depend on WVREU generating sustainably robust FOCF,
with FOCF to debt exceeding 5%, no material debt-funded
acquisitions, or exceptional shareholder distributions."


HERCULES ECLIPSE 2006-4: Fitch Lowers Class E Debt Rating to Csf
----------------------------------------------------------------
Fitch Rating has downgraded Hercules (Eclipse 2006-4) plc, as
follows:

GBP13.7 million class C (XS0276412375) downgraded to 'CCCsf' from
'B+sf '; Recovery Estimate (RE) 100%

GBP50.9 million class D (XS0276413183) downgraded to 'CCsf' from
'CCCsf'; RE 80%

GBP28.9 million class E (XS0276413340) downgraded to 'Csf' from
'CCsf'; RE 0%

KEY RATING DRIVERS

The downgrade reflects the increasing likelihood of default as
the transaction nears its legal maturity on October 28, 2018.
Fitch expects recoveries of the GBP21.9 million Welbeck loan to
fully repay the outstanding class C note balance and reduce the
class D note balance to GBP42.7 million. However, with only six
months until legal maturity, it is increasingly unlikely that a
sufficient number of properties can be liquidated to repay the
class C bonds ahead of this date.

The RE for the class D notes reflects the lack of progress for
the GBP72 million Ashbourne loan, with continued uncertainty
surrounding the sale of the care homes securing the loan.

The majority of the portfolio is not currently being marketed;
however, the special servicer and asset manager are exploring
possible options, including a future sale of the entire portfolio
or clusters thereof. As a result, Fitch expects the recovery
process not to be completed by the notes' legal final maturity.

Asset sales for the Welbeck loan completed in the last 12 months
have generally achieved greater sale prices than their 2016
market values and as a result, it is expected that the remaining
34 properties, with a 2016 market value of GBP17 million, will
fully repay the Welbeck loan only post legal maturity.

RATING SENSITIVITIES
None


LDD GROUP: Enters Administration, Buyer Sought for Business
-----------------------------------------------------------
Rachel Constantine at Business Sale reports that LDD Group, an
GBP8 million tech and IT firm, based in Yorkshire has entered
administration and is actively searching for a buyer.

The company announced on April 19 that it had appointed
insolvency practitioners Walsh Taylors as administrators and is
seeing a buyer to ensure the firm's future, Business Sale
relates.

However, the ill health of one of the company's directors has had
a large impact on the success of the firm, according to Walsh
Taylor director Mary Taylor -- mary.taylor@walshtaylor.co.uk --
resulting in demise of the firm's current management, Business
Sale notes.

According to Business Sale, the administrators said LDD Group is
set to continue to trade while they search for a buyer for the
firm, with priority placed on selling as soon as possible to
ensure it remains a viable business to safeguard the future of
the brand and its employees.



                            *********

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.


                 * * * End of Transmission * * *