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

                           E U R O P E

            Tuesday, June 5, 2018, Vol. 19, No. 110


                            Headlines


A R M E N I A

YEREVAN CITY: Fitch Affirms B+ Long-Term IDRs, Outlook Positive


C R O A T I A

AGROKOR: Moody's Withdraws 'Ca' CFR, 'C' Sr. Unsec. Notes Rating


I R E L A N D

HOUSE OF EUROPE V: S&P Hikes Class A2 Notes Rating to BB(sf)


I T A L Y

CREDITO VALTELLINESE: Fitch Affirms Then Withdraws BB-/B IDRs
POSILLIPO FINANCE II: Moody's Reviews Ba1 Class A Notes Rating


K A Z A K H S T A N

EURASIA INSURANCE: S&P Affirms 'BB+' ICR, Outlook Positive


L A T V I A

ABLV BANK: Regulator Has Yet to Decide on Voluntary Liquidation


L U X E M B O U R G

LSF10 XL: Moody's Affirms B2 CFR, Alters Outlook to Negative
LSF10 WOLVERINE: S&P Assigns 'B' Long-Term ICR, Outlook Stable


P O L A N D

EPP NV: S&P Assigns 'BB' Issuer Credit Rating, Outlook Positive


P O R T U G A L

NOVO BANCO: Portugal Government Won't Opt for Liquidation


R O M A N I A

ROTTCO CONSULT: Files for Insolvency Proceedings
* ROMANIA: Corporate Insolvency Sharply Up in First 4Mos. of 2018


R U S S I A

BELGOROD REGION: Fitch Ups IDRs, Sr. Unsec. Debt Ratings to 'BB+'
SME BANK: Moody's Changes Outlook on Ba2 Deposit Rating to Stable
SMOLENSK REGION: Fitch Affirms B+ IDRs, Outlook Stable
SOVCOMFLOT PAO: Fitch Affirms 'BB' Long-Term IDR, Outlook Pos.


S P A I N

HIPOCAT 8: S&P Raises EUR1.5BB Class D Notes Rating to B- (sf)


T U R K E Y

AKBANK TAS: Fitch Puts BB+ Long-Term IDR on Rating Watch Negative
TURKEY: Moody's Puts Ba2 Ratings on Review for Downgrade


U N I T E D   K I N G D O M

ATLANTICA YIELD: S&P Affirms BB Long-Term CCR, Outlook Stable
CRUMMOCK: Goes Into Receivership, 287 Jobs Affected
FAST PENSIONS: High Court Winds Up Pension and Finance Companies
GAMES CENTRE: Enters Liquidation, Halts Trading
KEVIN NEAL: Directors Banned for Taking Assets From Firm

STORE FIRST: Winding Up Petitions Continue
WEATHERLY INTERNATIONAL: Enters Administration, Shares Suspended


                            *********



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A R M E N I A
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YEREVAN CITY: Fitch Affirms B+ Long-Term IDRs, Outlook Positive
---------------------------------------------------------------
Fitch Ratings has affirmed the Armenian City of Yerevan's Long-
Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at
'B+' with Positive Outlooks and Short-Term Foreign-Currency IDR
at 'B'.

The affirmation considers Armenia's weak institutional framework
for local and regional governments (LRGs) amid the city's
satisfactory fiscal performance, supported by steady transfers
from the central government. The ratings also factor in the
city's capital status and zero debt. The Positive Outlook
reflects that on the sovereign ratings.

KEY RATING DRIVERS

Institutional Framework (Weakness)

Yerevan's ratings are constrained by those of Armenia
(B+/Positive), in particular the country's institutional
framework for LRGs, which Fitch assesses as weak. It has a
shorter track record of stable development than many
international peers. Weak institutions lead to lower
predictability of Armenian LRGs' budgetary policies, narrow their
planning horizon and hamper long-term development plans.

Fiscal Performance (Neutral)

Fitch expects the city to continue posting a satisfactory fiscal
performance with a single-digit operating margin in 2018-2020
(2017: 2.9%). Fitch projects improvement of the city's operating
margin on the back of economic growth projected over the medium
term in Armenia. Fitch also expects Yerevan to run a close to
balanced budget in 2018-2020, in line with historical results
(2017: surplus 0.7%).

Yerevan's fiscal performance remains dependent on financial aid
from the central government and Fitch believes the city will
continue receiving financial support from the central government
in line with its track record. Current transfers stood at 72% of
the city's operating revenue in 2017.

The city's capex stood at 7.3% of total spending at end-2017, in
line with the previous year's low point when it dropped to 7.0%
from an average of 19.5% in 2013-2015. Fitch projects a gradual
improvement in capex realisation up to 8%-9% of total expenditure
in 2018-2020. Most of the city's capex is funded by central
government transfers and donor grants, supplemented by asset
sales.

Debt and Other Long-Term Liabilities (Neutral)

As of end-2017, the city remained free from any debt or
guarantees. Yerevan has maintained debt-free status since forming
a community in 2008. Statutory provisions of the national legal
framework guiding debt or guarantees issuance restrict the city
from incurring significant debt. The city's liquidity position
improved, with cash holdings increasing to AMD1.9 billion as of
end-2017 (2016: AMD1.4 billion). The city holds its cash in
treasury accounts as deposits with commercial banks are
prohibited under the national legal framework.

Economy (Weakness)

Yerevan is likely to benefit from the projected economic recovery
in Armenia over the medium term. In its macro forecast, Fitch
expects full-year growth of the national economy of about 4% in
2018-2019. As the country's capital and most populated city,
Yerevan is Armenia's largest market with a developed services
sector. At the same time, Yerevan's wealth metrics remain
relatively modest in the international context, as Fitch
estimates Armenia's 2017 GDP per capita at USD3,928 using market
exchange rates.

Management and Administration (Neutral)

Yerevan's administration demonstrates adherence to a prudent
fiscal policy aimed at balanced budgets, while central government
remains a key funding source for the city. Due to institutional
limitations, the city's planning horizon is rather short - bound
to one fiscal year, which hinders the administration's
forecasting ability and complicates strategic planning and
investments allocation.

RATING SENSITIVITIES

Changes to the sovereign ratings will be mirrored on the city's
ratings, as Yerevan is capped by Armenia's ratings.


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


AGROKOR: Moody's Withdraws 'Ca' CFR, 'C' Sr. Unsec. Notes Rating
----------------------------------------------------------------
Moody's Investors Service has withdrawn Agrokor D.D.'s Ca
corporate family rating (CFR) as well as its D-PD probability of
default rating. Moody's has also withdrawn the C senior unsecured
rating assigned to the notes due in 2019 and 2020. These ratings
had a negative outlook at the time of the withdrawal.

RATINGS RATIONALE

While the company entered its special Extraordinary
Administration process in 2017, it continued to provide
information thereafter. However, the recently published 2017
accounts and additional company publications including the 13th
monthly report since entering administration underline that this
will be a protracted process with an uncertain timetable for
conclusion. The current D-PD, Ca CFR and C level instrument
ratings already adequately reflect Moody's view of the company's
credit quality.

Moody's has decided to withdraw the ratings for reorganization.

COMPANY PROFILE

Based in Zagreb, Croatia, Agrokor is the leading vertically
integrated food manufacturer, distributor, retailer and
wholesaler in Croatia, Serbia, Bosnia & Herzegovina, Slovenia and
Montenegro, with reported revenues of HRK39 billion in 2017
(about EUR5.3 billion). Agrokor has four business segments:
Business Group Retail, Business Group Food, Business Group
Agriculture, Business Group Agrokor Portfolio Holding.


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


HOUSE OF EUROPE V: S&P Hikes Class A2 Notes Rating to BB(sf)
------------------------------------------------------------
S&P Global Ratings raised to 'BB (sf)' from 'B+ (sf)' its credit
rating on House of Europe Funding V PLC's class A2 notes. At the
same time, we have affirmed our 'CC (sf)' ratings on the class
A3a, A3b, B, C, D, E1, and E2 notes.

The rating actions follow our credit and cash flow analysis of
the transaction using data from the May 8, 2018 trustee report,
and the application of our relevant criteria.

S&P said, "We conducted our cash flow analysis to determine the
break-even default rate (BDR) for each rated class of notes. The
BDR represents our estimate of the maximum level of gross
defaults, based on our stress assumptions, that a tranche can
withstand and still fully repay the noteholders. We used the
portfolio balance that we consider to be performing, the reported
weighted-average spread, and the weighted-average recovery rates
that we considered to be appropriate. We incorporated various
cash flow stress scenarios using our shortened and additional
default patterns and levels for each rating category assumed for
each class of notes, combined with different interest stress
scenarios as outlined in our criteria."

The transaction's reinvestment period ended in November 2011.
Since S&P's May 4, 2017 review, the class A1 notes have fully
amortized and class A2 started amortizing.

Of the class A2 notes' original principal balance, 46.9% remains
outstanding. As a result of the class A2 notes' deleveraging, the
available credit enhancement has increased for this class of
notes. However, at the same time, all of the collateral coverage
tests continue to breach their required triggers, similar to what
we observed in our previous review due to a continuing liquidity
issue within the transaction. Currently, principal proceeds are
used to service interest due on nondeferrable notes.

S&P said, "Our credit analysis indicates that our scenario
default rates (SDRs) have increased at all rating levels since
our 2017 review. The SDR is the minimum level of portfolio
defaults we expect each collateralized debt obligation (CDO)
tranche to be able to support at the specific rating level. The
increase results from a higher concentration and a higher
proportion of low rated assets as the portfolio continues to
shrink.

"With further deleveraging resulting in increased credit
enhancement for the class A2 notes, and the notes having
seniority in the capital structure, our credit and cash flow
analysis supports higher ratings than previously assigned.
However, since current interest proceeds are not enough to
service senior fees and interest due on nondeferrable notes, an
event of default has become more likely. Such an event would
allow controlling class noteholders to elect a post enforcement
priority of payment with uncapped senior fees and a potential
liquidation of the portfolio, leading to market value risk.
Therefore, we have raised our rating by two notches only to 'BB
(sf)' from 'B+ (sf)' on the class A2 notes to reflect this risk.

"In our view, and based on the transaction's performance, the
class A3a, A3b, B, C, D, E1, and E2 notes remain highly
vulnerable to nonpayment. We have therefore affirmed our 'CC
(sf)' ratings on these classes of notes."

House of Europe Funding V is a cash flow mezzanine structured
finance CDO transaction that closed in October 2006.

  RATINGS LIST

  Class               Rating
               To                From

  House of Europe Funding V PLC
  EUR1 Billion Fixed- And Floating-Rate Notes And Annuity Notes

  Rating Raised

  A2           BB (sf)            B+ (sf)

  Ratings Affirmed

  A3a          CC (sf)
  A3b          CC (sf)
  B            CC (sf)
  C            CC (sf)
  D            CC (sf)
  E1           CC (sf)
  E2           CC (sf)


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


CREDITO VALTELLINESE: Fitch Affirms Then Withdraws BB-/B IDRs
--------------------------------------------------------------
Fitch Ratings has affirmed Credito Valtellinese's (Creval)
ratings and simultaneously withdrawn them.

Fitch has chosen to withdraw the ratings of Creval for commercial
reasons.

KEY RATING DRIVERS

Creval's ratings factor in the successful completion of the
capital increase and Fitch's expectation that Creval will dispose
of EUR2.1 billion impaired loans during 2018, reducing its
impaired loans ratio to just above 10% from a high 21.1% reported
at end-2017. Despite the capital increase and the planned non-
performing loan (NPL) disposals, capital levels are still not
fully commensurate with risk, in Fitch's opinion, as unreserved
impaired loans will continue to weigh, albeit materially less, on
capital. Fitch expects operating profitability to improve
gradually, mainly as a result of lower loan impairment charges.
Profitability should also benefit from revenue increases and
significant cost reductions envisaged in the strategic plan.

The Positive Outlook reflects Fitch's expectation that the bank's
overall financial profile will benefit from the planned NPL
disposal and a return to moderate profitability.

RATING SENSITIVITIES

Not applicable as the ratings have been withdrawn.

The rating actions are as follows:

Long-Term IDR: affirmed at 'BB-'; Positive Outlook; and withdrawn

Short-Term IDR: affirmed at 'B' and withdrawn

Viability Rating: affirmed at 'bb-' and withdrawn

Support Rating: affirmed at '5' and withdrawn

Support Rating Floor: affirmed at 'No Floor' and withdrawn

EMTN long-term rating: affirmed at 'BB-' and withdrawn

EMTN short-term rating: affirmed at 'B' and withdrawn

Subordinated notes: affirmed at 'B+' and withdrawn


POSILLIPO FINANCE II: Moody's Reviews Ba1 Class A Notes Rating
--------------------------------------------------------------
Moody's Investors Service has placed on review for downgrade 3
tranches in 3 Italian Healthcare ABS deals (POSILLIPO FINANCE II
S.R.L. SERIES 2007-1, POSILLIPO FINANCE S.R.L. and D'Annunzio
S.r.l.) following the recent action taken on transactions'
obligors, the regions of Campania and Abruzzo, respectively. At
the same time, Moody's also placed on review for downgrade the
underlying ratings of the two tranches in POSILLIPO FINANCE II
S.R.L. SERIES 2007-1 and affirmed the rating of the tranche A2
wrapped by Assured Guarantee (Europe) Ltd.

Issuer: D'Annunzio S.r.l.

EUR327.4M (Current outstanding amount of EUR65.5M) Class A Notes,
Baa3 (sf) Placed Under Review for Possible Downgrade; previously
on Jul 3, 2015 Upgraded to Baa3 (sf)

Issuer: POSILLIPO FINANCE II S.R.L. SERIES 2007-1

EUR870M (Current outstanding amount of EUR680.4M) Class A1 Notes,
Ba1 (sf) Placed Under Review for Possible Downgrade; previously
on Jun 6, 2013 Downgraded to Ba1 (sf)

Underlying Rating: Ba1 (sf) Placed Under Review for Possible
Downgrade; previously on Jun 6, 2013 Downgraded to Ba1 (sf)

EUR870M (Current outstanding amount of EUR680.4M) Class A2 Notes,
Affirmed A2 (sf); previously on Jun 6, 2013 Affirmed A2 (sf)

Underlying Rating: Ba1 (sf) Placed Under Review for Possible
Downgrade; previously on Jun 6, 2013 Downgraded to Ba1 (sf)

Issuer: POSILLIPO FINANCE S.R.L.

EUR452.7M (Current outstanding amount of EUR348.1M) Series 2007-1
Asset-Backed Floating Rate Notes due 2035, Ba1 (sf) Placed Under
Review for Possible Downgrade; previously on May 24, 2016
Upgraded to Ba1 (sf)

RATINGS RATIONALE

Moody's rating action reflects the weakening credit quality of
the transactions' obligors, the Region of Campania (for POSILLIPO
FINANCE S.R.L. and POSILLIPO FINANCE II S.R.L. SERIES 2007-1) and
Abruzzo (for D'Annunzio S.r.l.), which the rating agency placed
on review for downgrade. The ratings of the notes placed on
review for downgrade are fully linked to the rating of the
Italian regions acting as obligors in each transaction.

Counterparty exposure:

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

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

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

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

The principal methodology used in these ratings was "Moody's
Approach to Rating Repackaged Securities" published in June 2015.
Factors that would lead to an upgrade or downgrade of the
ratings:

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

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


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


EURASIA INSURANCE: S&P Affirms 'BB+' ICR, Outlook Positive
----------------------------------------------------------
S&P Global Ratings said that it has affirmed its 'BB+' long-term
issuer credit and financial strength ratings on Kazakhstan-based
Eurasia Insurance Co. The outlook on the ratings remains
positive.

S&P also affirmed its 'kzAA-' Kazakhstan national scale rating on
Eurasia.

The rating affirmation predominantly reflects our view that
Eurasia continues to have a sound competitive standing in
Kazakhstan and very strong capital and earnings, partly offset by
the marginal quality of its investments.

S&P said, "In our view, Eurasia enjoys a strong operating
performance and it generally outperforms its local peers. For
year-end 2018-2019, we forecast that the company is likely to
post a combined ratio of 90%-93% and a return on equity of 11%-
12%. The ratio was 95% in 2017, although exposure to large
events, including catastrophes, resulted in losses of Kazakhstani
tenge (KZT) 13.8 billion. We note that the global reinsurance
industry incurred roughly $130 billion of insured losses from
catastrophe events in 2017.

"We now regard Eurasia's liquidity as strong rather than
exceptional, owing to the material increase in claims reserves
relating to the above-mentioned losses. However, we still
consider that the company has an ample cushion of liquid assets
to cover potential liquidity needs. Importantly, both assessments
are neutral for our ratings on Eurasia.

"We view Eurasia's rapid expansion in Kazakhstan's obligatory
motor third-party liability (OMTPL) segment since 2017 as
opportunistic. Premiums from this segment increased to more than
10% of total gross premium written in 2017, compared with a share
of about 5% in 2016. We recognize that the OMTPL insurance market
is highly competitive and could potentially weigh on the
company's underwriting performance. That said, the planned
introduction of online OMTPL policies in Kazakhstan in 2019 could
reduce the expense ratio related to this segment.

"The positive outlook indicates the potential for a one-notch
upgrade over the next 12 months if Eurasia maintains its strong
operating performance, in line with our expectations. At the same
time, we expect that Eurasia will maintain its fair business
profile, in particular, supported by its good competitive
position in Kazakhstan.

"We could revise the outlook to stable over the next 12 months if
Eurasia's underwriting performance deteriorated, especially
bearing in mind its increased exposure to OMTPL insurance."


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L A T V I A
===========


ABLV BANK: Regulator Has Yet to Decide on Voluntary Liquidation
---------------------------------------------------------------
LETA reports that the Finance and Capital Market Commission has
not yet made the decision on the application for voluntary
liquidation submitted by ABLV Bank in March.

The financial regulator's spokeswoman, Ieva Upleja, told LETA new
documents were submitted to the Finance and Capital Market
Commission after May 20 and the regulator had to make the
decision within 30 days since receiving the last documents.

Ms. Upleja said she would not make any speculations as to when
the Finance and Capital Market Commission might make its decision
but stressed that it would not be a matter of few days because
the case was complicated, LETA relates.

According to LETA, the head of the Finance and Capital Market
Commission, Peters Putnins, said on the public Latvian Television
that the delay was due to the need to develop control mechanisms
for safe liquidation of the bank.  He said because of the
complicated situation, in case of ABLV Bank it will most probably
be liquidation proper, not voluntary liquidation, LETA notes.

Ms. Upleja explained to LETA that "the whole process" faced by
ABLV Bank should rather be called liquidation but voluntary
liquidation would be one of the phases in this process.

The most important thing for ABLV Bank right now is to pay all
its creditors, and the bank is prepared for tight control
requirements during voluntary liquidation, the bank's spokesman,
Arturs Eglitis, told LETA when asked to comment on the statements
by Putnins.

He said the payments to creditors can be done during voluntary
liquidation and the bank had made thorough plans to this end,
LETA relays.  Moreover, international auditors have confirmed
that those plans are realistic, LETA notes.

The Latvian financial regulator, the Finance and Capital Market
Commission, acting on the instructions from the European Central
Bank (ECB), ordered ABLV Bank to stop all payments as of
February 19, 2018, following a report by the Financial Crimes
Enforcement Network (FinCEN) of the U.S. Department of Treasury
about ABLV Bank's involvement in international money laundering
schemes and corruption, LETA recounts.



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


LSF10 XL: Moody's Affirms B2 CFR, Alters Outlook to Negative
------------------------------------------------------------
Moody's Investors Service has affirmed LSF10 XL Investments
S.a r.l.'s ('Xella') Corporate family and Probability of default
ratings at B2 and B2-PD respectively. Concurrently the agency
also affirmed LSF10 XL Bidco SCA's senior secured bank credit
facility rating at B2 -- the B2 ratings assigned to the EUR1,593
million of senior secured term loan B and to a EUR175 million
senior secured revolving credit facility. The outlook has been
changed to negative from stable.

RATINGS RATIONALE

The revision of the outlook was prompted by Xella's announcement
that it has upstreamed EUR650 million of cash on balance sheet
mainly stemming from the sale proceeds of the disposals of the
group's dry lining and lime businesses to its private equity
owner Lone Star. The distribution compares to a 2017 normalized
like-for-like EBITDA of EUR245 million (as computed by Xella) and
a pro-forma Moody's adjusted debt of EUR1.7 billion (EUR1.6
billion pro-forma of the EUR100 million prepayment of the term
loan B executed in Q1 2018). Pro-forma of the distribution
Moody's estimates that adjusted net debt /EBITDA has deteriorated
to 6.2x from 5.3x based on pro-forma 2017 numbers (excluding lime
and dry lining business and including 12 months of insulation
business). Moody's expects Xella's adjusted gross leverage to
remain above its downgrade trigger of 6.0x for the next 12 to 18
months hence the negative outlook, which flags that negative
rating pressure could develop in case the expected deleveraging
does not materialize over the next 2 years.

The negative outlook also reflects the timing of the releveraging
at a later stage of the economic recovery, when Moody's would
expect credit metrics to rather be at the high end of the
expected range for the current rating to absorb a potential
cyclical weakening in operating performance. Last but not least
the portfolio reshuffle that Xella has implemented over the last
12 months exposes the company more strongly to the cyclicality of
the construction industry with the disposal of the resilient lime
and dry lining operations whilst giving the company more growth
and value creation potential over time.

Xella's B2 continues to reflect the group's (1) strong market
positions in its key geographies, supported by its continuous
focus on product innovation; (2) its diversification in
insulation; (3) some degree of flexibility in its cost structure,
altogether resulting in a fairly resilient performance over the
past few years in comparison with its peers, and (4) the group's
solid profitability despite the dilutive effect of the
consolidation of the insulation business on group margins.

At the same time, Xella is constrained by its (1) high exposure
to the cyclical residential construction sector mainly via its
Building Materials division, representing 65% of 2016 revenue (2)
exposure to raw materials and energy costs fluctuation, and (3)
aggressive financial policies as evidenced by the decision to
upstream EUR650 million of cash to shareholders.

LIQUIDITY

The liquidity profile of Xella will remain strong pro-forma of
the EUR650 million distribution to shareholders with over EUR150
million cash on the balance sheet as well as EUR175 million
availability under the group's RCF Oon April 30, 2018. Xella does
not have debt maturities within the next 12 to 18 months.

WHAT COULD CHANGE THE RATING UP / DOWN

Positive rating pressure is not envisaged in the short term.
Positive pressure would build on the rating if Moody's adjusted
Debt/EBITDA would move towards 5.0x and Moody's adjusted FCF/Debt
towards 5%.

Conversely negative rating pressure would build if Moody's
adjusted Debt/EBITDA would stay sustainably above 6.0x and
negative free cash flow generation would lead to a weakening of
the group's liquidity profile.

Headquartered in Luxembourg, LSF10 XL Investments S.Ö r.l (Xella)
is the holding company of the Xella group. Xella is a leading
European multi-brand manufacturer of modern wall-building
materials and insulation products.

Xella was acquired by certain Lone Star Funds in a secondary
leveraged buyout in April 2017. For the year ended December 31,
2017 the company reported like-for-like revenues of EUR1.4
billion and like-for-like EBITDA of EUR245 million.

The principal methodology used in these ratings was Building
Materials Industry published in January 2017.


LSF10 WOLVERINE: S&P Assigns 'B' Long-Term ICR, Outlook Stable
--------------------------------------------------------------
S&P Global Ratings assigned its 'B' long-term issuer credit
rating to LSF10 Wolverine Investments SCA, which issued the
group's debt. The outlook is stable.

S&P also assigned its 'B' issue rating to the group's debt
facilities, issued by LSF10 Wolverine Investments, including
EUR250 million of senior secured fixed rate notes maturing 2024
and EUR265 million of senior secured floating rate notes maturing
2024. The recovery rating on these instruments is '3' (rounded
estimate 60%).

Private equity firm Lone Star Funds has acquired Stark Group and
refinanced its debt. As part of the refinancing, Stark issued a
new EUR100 million RCF, EUR250 million of senior secured fixed
rate notes maturing 2024 and EUR265 million of senior secured
floating rate notes maturing 2024, and a EUR100 million PIK note.
S&P expects Stark's new owner to display an increased tolerance
for higher leverage and a less conservative financial policy,
increasing the potential for higher shareholder returns in the
future.

Stark is a leading distributor of building materials and products
in the Nordic region, with a focus on heavy-side products. It is
exclusively B2B with significant exposure to residential repair,
remodel and improvement (RMI), and new build construction
activity. For building materials companies like Stark, exposure
to RMI end-markets adds stability to demand and earnings. The
group benefits from a strong network of 179 branches across its
four core markets of Denmark, Finland, Norway, and Sweden.

On the other hand, Stark is exposed to cyclical construction end-
markets. Relative to peers, the company has a high geographic
concentration, generating the majority of sales in only four core
countries. Although careful cost-base management should enable
Stark to protect its margins when markets are choppy, the group's
absolute EBITDA has exhibited volatility in the past and could do
so again. In S&P's view, this higher-than-peers geographic
concentration, together with relatively low and volatile EBITDA,
underpins the group's business risk profile.

Stark has historically exhibited capital expenditure (capex) of
about 2.0% of revenues, which reflects a relatively asset-lite
business versus other rated building materials companies (but not
necessarily versus other distribution businesses). Given its
relatively low margins, Stark's credit metrics will be highly
sensitive to any potential pressure on profitability.

S&P said, "Although we do not rate the proposed EUR100 million
PIK toggle note, we consider it as debt under our non-common
equity criteria because it is held by a third party and has a
collateral charge. For this reason we adjust Stark's debt to
include this instrument. We note that this PIK toggle note sits
outside of the restricted group and has a maturity date beyond
the EUR100 million RCF and EUR515 million senior secured fixed
and floating rate notes. We also adjust Stark's debt for
operating leases and pension liabilities, EUR81.7 million and
EUR38.2 million respectively for fiscal year-end 2017 (FY2017)."

S&P's base-case scenario for FY2018 assumes:

-- Robust fundamentals in most of the group's end-markets, with
    consolidated revenues forecast to grow to about EUR2.24
    billion;

-- S&P Global Ratings-adjusted EBITDA margin gradually rising to
    more than 6%, supported by continued efforts by management to
    reduce the group's cost base;

-- Capex continuing in line with recent historic trend; and

-- No major acquisitions, divestitures, or dividends.

Based on these assumptions, and assuming supportive market
conditions, we arrive at the following credit measures:

-- S&P Global Ratings-adjusted debt to EBITDA of about 5.4x; and

-- Adjusted funds from operations (FFO) to debt of about 12%
    Stark is owned by Lone Star Funds, a financial sponsor, which
    has an increased tolerance for high leverage and potential
    aggressive shareholder returns. These factors are reflected
    in S&P's 'FS-6' financial policy modifier.

S&P said, "We assess the group's management and governance as
fair, reflecting its experienced management team and clear
organic growth plans.

"The stable outlook reflects our expectation that Stark will
exhibit positive revenue growth and gradually improve its S&P
Global Ratings-adjusted EBITDA margin to above 6% following its
recent reorganization activity and management's ongoing efforts
to improve the cost base.

"We could lower the ratings if the group experienced severe
margin pressure, poorer cash flows, or higher leverage --
specifically if Stark's S&P Global Ratings-adjusted EBITDA margin
were to fall to below 5% or leverage rose to more than 6x, with
little evidence of making a swift recovery. A downgrade could
also stem from debt-funded acquisitions or increased shareholder
returns.

"In our view, the probability of an upgrade over our 12-month
rating horizon is limited. This reflects the group's high
leverage and limited prospects for deleveraging over this
timeframe. A new private equity owner has increased uncertainties
regarding the possibility of shareholder returns, and could
trigger changes to the group's capex, acquisition, and disposal
strategy. If Stark were to improve and sustain its S&P Global
Ratings-adjusted EBITDA margins at least in line with our base
case and deleverage to less than 5x, we could consider raising
the rating to 'B+'."


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


EPP NV: S&P Assigns 'BB' Issuer Credit Rating, Outlook Positive
---------------------------------------------------------------
S&P Global Ratings assigned its 'BB' long-term issuer credit
rating to EPP Finance N.V., the fully owned finance vehicle of
Polish retail property owner EPP N.V. (EPP). The outlook is
positive.

S&P said, "At the same time, we assigned our 'BB+' issue rating
to EPP Finance's inaugural senior unsecured notes. The recovery
rating is '2', reflecting our expectation of 85% recovery
prospects in the event of a payment default."

EPP is a Polish real estate company that owns and manages a
EUR2.0 billion portfolio of real estate assets, comprising 18
shopping centers (85.5% of total asset value) and six office
buildings (14.5%) in Poland. The company was created in January
2016 from a carve-out of a portfolio from Echo Investment, a
Warsaw Stock Exchange-listed developer. EPP's strategy is to
become a leader in the retail market of major Polish cities and
gradually divest all of its office portfolio by 2020. Its main
shareholders are: Redefine Properties (36.2%), a South African
property fund with a market capitalization of around EUR4.5
billion that is active in the investment and management of
different real estate segments; and Oaktree and Pimco, which
together directly and indirectly own about 18%.

S&P said, "Our assessment of EPP's business risk profile is
underpinned by the sound quality of the company's shopping
centers. All assets are located in catchment areas where
purchasing power is higher than the Polish average. The
properties are large (about 35,000 square meters on average), and
are new constructions, or have been recently refurbished.
Moreover, based on the company's tested asset-management skills,
EPP has maintained a high occupancy ratio (more than 98% in the
retail segment) and long leases (average of 5.3 years in the
retail portfolio), which is especially positive in the current
context of increasing competition, including from e-commerce. EPP
has a homogeneous portfolio in terms of asset quality: we
consider only 3.3% of the retail portfolio as less core (smaller
assets), and the average occupancy costs ratio is a sound 13%.

"We believe the Polish retail market currently benefits from
positive economic trends that should continue to support EPP's
operations over 2018-2019. This includes sustained GDP growth
(4.5% in 2018 and 3.5% in 2019, compared with 4.6% in 2017),
decreasing unemployment (4.3% in 2018 and 2019, against 4.9% in
2017), improving consumer spending, and resilient retailers'
sales. In addition, the supply of new assets is decreasing and
the density of shopping centers per inhabitant remains moderate.
We believe this should mitigate the risk of market saturation.
We also acknowledge that EPP's portfolio is well spread across
the country, with a presence in 18 regional cities. The company's
portfolio should reach at least EUR2.6 billion by June 2020, as
it has agreed to acquire a portfolio of 12 additional assets in
different tranches (M1 portfolio).

"However, we view the company's portfolio size as modest compared
with higher-rated commercial real estate companies that also
focus on European retail markets, such as CPI Property Group S.A.
(EUR6.7 billion portfolio) or Mercialys (EUR3.7 billion
portfolio). EPP is exposed solely to the Polish economy, where we
believe barriers to entry in the retail property segment are
lower than in some other European countries. In the coming years,
the company will face the impact of the Polish law banning almost
all trade on Sundays, except for food and beverage, and
entertainment/leisure activities.

"Moreover, we view EPP as highly exposed to local Polish
retailers, which represent more than one-half of its total
income. We believe Polish retailers are more vulnerable to the
economy than more internationally diversified retailers. However,
we understand that the Polish fashion retailers are currently
performing relatively well, especially two large tenants LPP and
CCC, representing about 8% and 2%, respectively, of EPP's rental
income. We also expect French retailer Groupe Auchan S.A. to
increase its share to about 15% of EPP's tenant base after the
contemplated acquisition of the M1 portfolio. Auchan would
represent a relatively high share of EPP's tenant base, in our
view, creating further concentration risk in the portfolio.

"Finally, we view the retail property segment as more cyclical
than residential segment, especially as e-commerce accelerates
competition between retail owners and pushes them to adapt their
strategies to the evolving needs of consumers.

"EPP's financial risk profile carries more debt than that of its
peers, although we anticipate that the company will deleverage
significantly in the coming years. The company's financial policy
is centered around a long-term target of maximum reported loan-
to-value (LTV) ratio of 45%, which would translate to S&P Global
Ratings-adjusted debt-to-debt-plus-equity of about 47%-48%. In
the next two years, we expect EPP to dispose of the majority of
its offices portfolio, which represents more than EUR300 million
in total. We also understand that the company could increase
equity, through dividends reinvestments and equity raises. These
additional funds will be used to finance the acquisition of the
remaining tranches of the M1 portfolio and other retail assets
(more than EUR480 million in 2018 and EUR275 million in 2019),
and we assume the remaining funds could be used to reduce
leverage.

"The positive outlook reflects that we could raise the rating if
EPP continues to reduce leverage. We believe that there is a fair
likelihood that the company could strengthen its credit metrics
such that they are commensurate with a higher rating, possibly
within a year, if it is able to raise meaningful equity and
successfully dispose of its offices portfolio. An upgrade would
also depend on EPP's ability to continue generating at least
steady rental income growth on the back of positive consumption
trends in Poland and no deterioration in operating performance.

"We could raise the rating if we see the S&P Global Ratings-
adjusted debt-to-debt-plus-equity decline to the 45%-50% range,
while the company maintains EBITDA interest coverage above 2.8x.
This would happen if the company manages to implement equity
increases and sell its offices portfolio, as per its current
business plan or more rapidly.

"We could revise the outlook to stable if EPP was unable to
meaningfully reduce leverage, with the adjusted debt-to-debt-
plus-equity ratio remaining above 50% (translating into an LTV
ratio of about 47%-48%). This could stem from lower-than-expected
equity injections, slower disposals of its offices portfolio,
pressure on valuations, large debt-funded acquisitions, or
materially higher shareholder remuneration than we currently
expect."

Ratings pressure could also come from deterioration of the
business risk profile, for example, because of an unexpected
pronounced reduction of portfolio size, or flagging conditions in
the Polish retail market.


===============
P O R T U G A L
===============


NOVO BANCO: Portugal Government Won't Opt for Liquidation
---------------------------------------------------------
Anabela Reis at Bloomberg News reports that Secretary of State
for Finance Ricardo Mourinho Felix said in parliament "If all
capital is consumed, if shareholders aren't available to put
money in the bank, if there are no interested parties in the
market to inject capital, then as a last resort the Portuguese
state will never, through the Resolution Fund, allow Novo Banco
to be liquidated."

According to Bloomberg, Mr. Felix said "A liquidation of a bank
with the size of Novo Banco and its reach across the country's
business community would have a direct impact on other banks."

He said this is the worst case scenario and very unlikely,
Bloomberg relates.

Headquartered in Lisbon, Novo Banco, S.A. provides various
financial products and services to private, corporate, and
institutional customers.

                           *     *     *

As reported in the Troubled Company Reporter-Europe on May 28,
2018, Moody's Investors Service confirmed the long-term deposit
ratings of Novo Banco, S.A. (Novo Banco) at Caa1. The rating
action is triggered by the disclosure on April 26, 2018 of Novo
Banco's 2017 audited financial statements and reflects the
agency's assessment of the bank's liability structure at year-end
2017, incorporating the changes to its balance sheet following
the completion of the liability management exercise (LME) on
October 4, 2017. The outlook on the long-term deposit ratings has
been changed to positive from Ratings under Review.



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


ROTTCO CONSULT: Files for Insolvency Proceedings
------------------------------------------------
Govnet reports that Rottco Consult, one of the top 10 players in
the Romanian fuel distribution market, has initiated the
procedures for starting insolvency proceedings.

Govnet relates that the measure was taken as a result of a
complex market situation with a significant negative impact on
ensuring the flow of working capital, such as: non-payment and/or
delays in payment of debts from debtors plus debtors who entered
the procedure insolvency/bankruptcy; delays in prolonging
committed credit lines; early repayment of loans, as requested by
bank creditors; unilaterally reducing payment times from some
suppliers; and suspension after the submission of the bidding
offer of the acquisition of the majority stake of the company by
an investor.

"We have taken this measure as a result of the late payment of
some customers. This, correlated with the other causes, has left
us with no working capital, and the cashflow is heavily
unbalanced, and the company is virtually in a financial
bottleneck and implicitly incapable of honoring turn, payments,"
the report quotes Paul Pop, General Manager Rottco Consult, as
saying.

At this time, the company does not register debts to the tax
office, and most of the debts to suppliers are covered by
warranty letters, the report says. The company has to collect
receivables of over 10 million lei from debtors who are in forced
execution proceedings, claims that cover entirely the current
debts that cannot be honored by ROTTCO, according to Govnet.

At the end of 2016, the company started the SYNERGY by Rottco
project, which proposed to bring independent gas stations into a
network. The Rottco Synergy Card system was functional in over
115 independent gas stations in Romania and was the target of
investors, but the company could not sustain its funding for
further development.

Bucharest, Romania-based Rottco Consult trades wholesale fuel and
other petrol-based products.


* ROMANIA: Corporate Insolvency Sharply Up in First 4Mos. of 2018
-----------------------------------------------------------------
Xinhua News Agency, citing latest data published on the website
of the National Office of Trade Registry (ONRC), reports that
Romania saw a sharp increase in commercial insolvency in the
first four months of this year.

According to the statistics, the number of commercial companies
and authorized natural persons (ANP) in insolvency or suspension
increased year-over-year by 17.38 and 35.58 percent,
respectively, in January-April, 2018, Xinhua relays.

The ONRC data showed 2,965 companies and ANP declared insolvency
in the first four months of 2018, while 6,958 others suspended
their activity, the report says.

Xinhua says the capital Bucharest recorded the most, with
companies and ANP accounting for nearly 20 percent and 13 percent
of the country's total.

The sectors that are most affected by the insolvency phenomenon
are wholesale and retail trade, as well as car repair workshops,
Xinhua notes.

Last year, 9,102 companies and ANP announced insolvency, up 8.73
percent from 2016, while other 16,380 suspended their activity, a
year-over-year increase of 2.9 percent, Xinhua discloses.

Insolvencies in Romania remain at twice the average in the
Central and Eastern Europe (CEE), according to the data presented
in February by Coface officials, quoted by official Agerpres news
agency, Xinhua adds.


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


BELGOROD REGION: Fitch Ups IDRs, Sr. Unsec. Debt Ratings to 'BB+'
-----------------------------------------------------------------
Fitch Ratings has upgraded Russian Belgorod Region's Long-Term
Foreign- and Local-Currency Issuer Default Ratings (IDRs) to
'BB+' from 'BB'. The Outlook is Stable. The Short-Term Foreign-
Currency IDR has been affirmed at 'B'.

The region's senior unsecured debt ratings have been upgraded to
'BB+' from 'BB'.

The upgrade reflects Fitch's expectation that the region's
improved budgetary performance and debt metrics will correspond
to 'BB+' ratings in the medium-term.

KEY RATING DRIVERS

The upgrade reflects the following key rating drivers and their
relative weights:

HIGH

Fiscal Performance Assessed as Neutral

Fitch expects consolidation of the region's operating balance at
15%-17% of operating revenue over the medium term, which is below
the extraordinary strong result in 2017, but higher than the
historical average of 9.5% in 2012-2016.

In 2017, the region's operating margin peaked at 24.5%, supported
by 30.3% yoy growth of taxes. Corporate income tax (CIT) grew
almost 2x in 2017, driven by the high financial results of the
region's metal industry, which benefited from the upward trend on
the international and domestic steel markets.

Fitch assumes some reduction in CIT proceeds is possible over the
medium term, but this will not have a material negative effect on
the region's sound operating performance. Taxes will continue to
support the region's operating revenue benefiting from an economy
that in the national context is developed.

Fitch expects the region will maintain capex at around 17% of
total spending over the medium term. This is higher than for many
domestic peers as the regional government prioritises
infrastructure development in the region. Belgorod's self-
financing capacity of capex will remain high in 2018-2020, with
the current balance and capital revenue covering around 80% of
capex. This will limit the region's recourse to new borrowings.

Fitch expects an only moderate level of capex-driven deficit
before debt in 2018-2020 averaging 3% of total revenue annually,
in line with the historical average in 2014-2016. In 2017,
Belgorod recorded a 2.2% surplus before debt, which led to higher
cash reserves and lower debt.

Debt and Other Long-Term Liabilities Assessed as Neutral
Fitch expects the region's direct risk will remain moderate over
the medium term, in the range of 40%-45% of current revenue. This
is lower than historical results as starting from 2013 direct
risk had never fallen below 45%. In 2017, direct risk declined to
RUB33.5 billion from RUB34.8 billion one year earlier, or to 45%
from 56% relative to current revenue.

Fitch also notes the improvement in the debt payback ratio
(direct risk-to-current balance), albeit driven mostly by the
significant current balance increase in 2017. Debt payback
improved to 2.1 years from 7.0 years in 2014-2016, and the agency
expects this ratio to be around 3.0 years in 2018-2020, which is
close to the weighted average life of debt estimated by Fitch at
3.7 years as of 1 April 2018.

The region's debt portfolio is dominated by issued debt, which
constitutes 50% of the total, followed by medium-term bank loans
that compose another 16%. The rest is budget loans, the majority
of which were restructured according to the programme initiated
by the federal government in the end-2017. According to the
programme the maturity of RUB8.2 billion budget loans received by
the region in 2015-2017 will be prolonged until 2024, with most
of the payments closer to the end of maturity.

In February 2018, Belgorod repaid in advance the residual RUB3.8
billion of debt of regional public company Obldorsnab (road
construction company). Formally, the region guaranteed the debt
of Obldorsnab, but according to the formal agreement the region
paid both principal and interest on the company's debt, which
allowed Fitch to reclassify this guarantee from contingent
liabilities to direct risk. Thus, repayment of the company's debt
has contributed to the decline of the region's direct risk.

MEDIUM

Management and Administration Assessed as Neutral

The administration leads a responsible and coherent budgetary
policy, which is demonstrated by the track record of a sound
operating performance and moderate debt. The region is quite
conservative in its budgetary forecast and usually records a
lower level of deficit than expected. Management is focused on
regional development and investment in infrastructure to make the
region more attractive to the residents and businesses.

Management used to provide guarantees to support the regionally
important enterprises. However, for the last five years the
amount of guarantees has been gradually declining and reached
RUB6.2 billion in 2017 compared with RUB14.9 billion in 2013.
Currently, management's policy is to limit the issuance of new
guarantees, and during 2015-2017 it provided only RUB0.45 billion
of new guarantees to the regional company for the purpose of SMEs
support. As this cautious approach is planned for future periods,
Fitch projects a further decline of the region's contingent
liabilities.

LOW

Economy Assessed as Neutral

Belgorod has a developed economy in the national context with GRP
per capita at 135% of the national median in 2015 (the latest
available official data). Among the most important sectors for
the regional economy are agriculture, mining (mostly iron ore)
and processing industry (metal and food production are among the
largest subsectors). According to the administration, the
regional economy continued to outperform the national one in
2017, with GRP up 3.6% while Russia's GDP grew 1.5%.

Institutional Framework Assessed as Weak

The region's credit profile remains constrained by a weak
institutional framework for Russian local and regional
governments (LRGs), which has a shorter record of stable
development than many of their international peers. Weak
institutions lead to lower predictability of Russian LRGs'
budgetary policies, which are subject to the federal government's
constant reallocation of revenue and expenditure responsibilities
within government tiers.

RATING SENSITIVITIES

Consolidation of the region's strong budgetary performance with a
sustained operating margin of above 15% accompanied by the
decline of overall risk below 40% of current revenue would lead
to an upgrade.

Growth of direct risk, accompanied by deterioration in the
operating performance leading to deterioration of debt payback
towards 10 years, would lead to a downgrade.


SME BANK: Moody's Changes Outlook on Ba2 Deposit Rating to Stable
-----------------------------------------------------------------
Moody's Investors Service has changed to stable from negative the
outlook on Ba2 long-term local- and foreign currency deposit
ratings of SME Bank (Russia). The outlook on the bank's Ba2
local-currency senior unsecured debt rating was also changed to
stable from negative. Concurrently, the rating agency affirmed
SME Bank's Baseline Credit Assessment (BCA) and adjusted BCA of
b2, the bank's Not Prime short-term foreign-currency deposit
rating, as well as its long-term and short-term Counterparty Risk
Assessments (CR Assessments) of Ba1(cr) / Not-Prime(cr).

RATINGS RATIONALE

The change of SME Bank's ratings outlook to stable from negative
reflects Moody's expectation that the bank's asset quality and
profitability metrics will stabilize during 2018, with any
further negative pressure, should it occur, being limited and
offset by the bank's ample capital adequacy buffer.

In 2017, problem loans in SME Bank's portfolio, including loans
to financial institutions and direct loans to small and medium-
sized enterprises (SMEs), decreased by approximately 20% in
nominal terms, although in percentage terms the problem loan
ratio increased to 20.6% of total gross loans from 16.8%, owing
to the overall shrinkage of the loan book. During 2017, SME Bank
was actively reducing its exposures to financial institutions,
because the increased number of Russian banks' failures (whereby
the regulator had revoked more than 300 bank licenses over 2014-
17) put pressure on SME Bank's solvency metrics. Instead,
following its recently revised strategy, SME Bank started to
substitute the concentrated portfolio of loans to financial
institutions by granular loans to SMEs. Moody's expects that SME
Bank's reduced single-name credit concentration will render
performance of the bank's loan book more predictable going
forward. As of December 31, 2017, SME Bank's total aggregate
exposure to 10 largest financial institutions stood at just above
100% of its Tier 1 capital, much lower than the 164% reported as
of the start of 2017.

According to the rating agency, SME Bank's intensified direct
lending to SMEs still forms a source of incremental asset risk
for the bank as the rapidly augmented new SME loan vintages start
to season. However, a mitigating factor is that lending to this
class of borrowers is not a new area for SME Bank, because, due
to its mandate, the bank has historically been involved in
different types of standard-setting activities for credit
underwriting in this product niche. The portfolio of SME Bank's
direct loans to SMEs increased more than 1.5x in 2017 (although
from a low base), and Moody's expects it to further nearly double
in 2018.

Moody's expects that SME Bank's capital buffer will be able to
absorb any elevated credit losses stemming from the new lending
activities, should these losses exceed the rating agency's
central scenario. Currently, the bank's coverage of problem loans
by loan-loss reserves is sufficient, standing at 101% as of
December 31, 2017. SME Bank's capital adequacy also stands at
solid levels. As of May 1, 2018, the bank's regulatory Common
Equity Tier 1 and total capital adequacy ratios stood at 19.0%
and 24.9%, respectively, providing ample buffers over the
regulatory minima of 4.5% and 8%, as well as over the regulatory
Basel III fully loaded ratios of 7% and 10.5% applicable starting
1 January 2019.

SME Bank's liquidity and funding profiles are stable. The long-
term and cheap funds from the state-related sources dominate the
bank's liabilities and help it preserve loan origination
activities even at times of financial turbulence, thus
facilitating the Russian government's countercyclical economic
policies.

Moody's incorporates very high government support assumptions in
SME Bank's Ba2 debt and deposit ratings, which lead to a three-
notch uplift of these ratings from the bank's BCA of b2. The
rating agency believes that the support from the Russian
government will be rendered to SME Bank, given that (1) the bank
is fully owned and controlled by Russian authorities through the
state joint-stock company Russian Small and Medium Business
Corporation (JSC RSMB Corporation); (2) it is the core
operational unit of JSC RSMB Corporation, which, in turn, acts as
the government conduit for supporting local SMEs; (3) the
development of the SME sector is the Russian government's
strategic priority; and (4) there is a track record of government
support to the bank through capital injections and subsidized
long-term funding.

WHAT COULD MOVE THE RATINGS UP / DOWN

Moody's may upgrade SME Bank's deposit and debt ratings if it
observes a sustainable good quality of the newly issued SME loan
vintages coupled with the diversification of the bank's funding
sources.

SME Bank's ratings might be downgraded, or the rating outlook
might be revised to negative from stable, in case of a material
deterioration of the bank's asset quality and profitability, or
if the bank is unable to refinance its maturing wholesale funding
at a reasonable price.

LIST OF AFFECTED RATINGS

Issuer: SME Bank

Affirmations:

LT Bank Deposits, Affirmed Ba2, Outlook changed To Stable From
Negative

ST Bank Deposit, Affirmed NP

Senior Unsecured Regular Bond/Debenture, Affirmed Ba2, Outlook
changed To Stable From Negative

Adjusted Baseline Credit Assessment, Affirmed b2

Baseline Credit Assessment, Affirmed b2

LT Counterparty Risk Assessment, Affirmed Ba1(cr)

ST Counterparty Risk Assessment, Affirmed NP(cr)

Outlook Actions:

Outlook, Changed To Stable From Negative

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Banks
published in April 2018.

Headquartered in Moscow, Russia, SME Bank reported -- at year-end
2017 -- total assets of RUB89.7 billion and total shareholder
equity of RUB24.3 billion, according to its audited financial
statements prepared under International Financial Reporting
Standards (IFRS). The bank's IFRS loss for 2017 was RUB887
million.


SMOLENSK REGION: Fitch Affirms B+ IDRs, Outlook Stable
------------------------------------------------------
Fitch Ratings has affirmed Russian Smolensk Region's Long-Term
Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'B+'
with Stable Outlook and Short-Term Foreign-Currency IDR at 'B'.
The region's outstanding senior unsecured domestic debt has been
affirmed at 'B+'.

The affirmation reflects Smolensk's high debt burden due to a
long track record of high budget deficits amid some improvement
of budgetary performance in 2017. The ratings also take into
account the modest profile of the region's economy translating
into a lower fiscal capacity and a weak institutional framework
for Russian subnationals.

KEY RATING DRIVERS

Fiscal Performance Assessed as Weakness

Fitch expects the region's operating margin to be 5%-6% over the
medium term, supported by a moderate tax increase and ongoing
flow of transfers from the federal budget. The latter continue to
account for around 20% of the region's operating revenue. In
2017, the operating margin further improved to 9.8% from 5.5% one
year earlier and negative values in 2014-2015. This was mostly
due to the increase of current transfers from the federal budget
and strict cost control, while taxes demonstrated a modest
positive dynamic of 1.2% yoy in 2017.

The region recorded positive budget balance before debt at 3.8%
of total revenue in 2017 after a period of high budget deficits,
which averaged 15% in 2013-2016. The surplus was supported by a
further cut in the region's already low capex to 8.2% of total
spending in 2017 (2016: 11.3%). Fitch projects the region's
budget will be in deficit in 2018-2020 as Smolensk's financial
flexibility is low, in its view. However, the scale of the
deficit will be moderate at around 2%, according to Fitch's
projections, as Smolensk needs to meet the requirements of debt
decline set by the federal government.

Debt and Other Long-Term Liabilities Assessed as Weakness

Fitch expects the region's direct risk will remain high in 2018-
2020, but stabilise at around 80% of current revenue. According
to Fitch's rating case, in absolute term direct risk will
continue to grow moderately in order to finance the region's
expected deficit over the medium term. In 2017, direct risk
declined to 80.5% of current revenue from 94.2% in 2016 as the
region did not incur new borrowings and met all the payments due
in 2017 using surplus accumulated during the year.

The region's debt structure is dominated by budget loans, which
composed 67% of the direct risk as of 1 April 2018. Thus, the
budget loan restructuring programme, initiated by the federal
government in the end-2017, allows Smolensk to significantly
benefit in terms of saving on interest and maturity prolongation
of a significant part of its direct risk. According to the
programme, the maturity of RUB15.8 billion budget loans received
by Smolensk in 2015-2017 has been prolonged until 2024 with most
of the payments due closer to the end of maturity.

Management Assessed as Neutral

The administration follows a socially-oriented fiscal policy
within an annually adopted three-year budget, which includes the
budget for the current financial year and forecasts for two years
ahead. The budgeted figures are usually amended within each
financial year and annually. Like most Russian LRGs, regional
budgetary policy is strongly dependent on the decisions of the
federal authorities. The administration receives stable support
from the federal government in the form of transfers and - in
previous periods - budget loans.

Economy Assessed as Weakness

The region's economy is diversified across sectors, but modest in
scale. The region's GRP per capita was 83% of the national median
in 2015 and the average salary was 10% below the national median
as of December 2016. According to preliminary data, the regional
economy demonstrated low 0.7% growth in 2017 (national economy:
1.5% growth) after two years of contraction in 2015-2016. The
administration forecasts low growth of the region's economy at
0.8% in 2018 and then 2.2%-2.6% growth in 2018-2019. This is
generally in line with Fitch's forecast for growth of the
national economy of 2% in 2018-2019.

Institutional Framework Assessed as Weakness

Fitch views Russia's weak institutional framework for local and
regional governments (LRGs) as a constraining factor on the
region's ratings. Weak institutions have a short track record of
stable development compared with many of its international peers.
Unstable intergovernmental set-up leads to lower predictability
of LRGs' budgetary policies and negatively affects the region's
forecasting ability, and debt and investment management.

RATING SENSITIVITIES

Resumed deterioration of the budgetary performance leading to a
negative current balance and inability to curb the growth of
direct risk accompanied by persistent refinancing pressure could
lead to a downgrade.

Consolidation of the fiscal performance, with an operating
balance sufficient for interest payments on a sustained basis and
stabilisation of direct risk could lead to an upgrade.


SOVCOMFLOT PAO: Fitch Affirms 'BB' Long-Term IDR, Outlook Pos.
--------------------------------------------------------------
Fitch Ratings has affirmed Russia-based PAO Sovcomflot's (SCF)
Long-Term Issuer Default Rating (IDR) at 'BB' and maintained its
Positive Outlook. Fitch has also affirmed SCF Capital Designated
Activity Company's senior unsecured notes, which are guaranteed
by Sovcomflot, at 'BB'.

The affirmation reflects Fitch expectations that excessive FFO
adjusted net leverage at end-2017 is temporary and that the
company will maintain a robust financial profile over 2018-2021.
Fitch forecasts FFO adjusted net leverage to be average 5x over
2018-2021. The rating also incorporates the company's strong
business profile with large scale, healthy share of long-term
contracts, fairly young and specialised fleet and diversified
customer base.

The Positive Outlook reflects the improved quality of SCF's long-
term contracts driven by expansion in its industrial business,
including gas transportation and offshore services. Fitch may
upgrade the ratings if the company demonstrates its ability to
sustain healthy cash flow from conventional segments in crude oil
and oil product segments or moderate capex spending in a
downturn.

KEY RATING DRIVERS

Improved Cash Flow Visibility: Fitch expects improvements in
SCF's business mix and cash flow visibility in the medium term
due to the fleet expansion in the industrial segments, which are
generally more profitable and are under longer-term, fixed-rate
contracts, unlike the conventional business. Industrial segments
contributed over half of time charter equivalent (TCE) revenue in
2017 (34% in 2016). Fitch forecasts that SCF's industrial
business will continue to contribute over half of TCE revenue in
2018-2021 on the back of full-year revenue impact from newly
delivered vessels and weaker performance from conventional
business.

Tanker Rates under Pressure: Fitch expects SCF's conventional
business (crude oil and oil product transportation) to remain
under pressure on the back of weak market conditions and global
supply and demand imbalance in the tanker vessels. The company's
conventional business is exposed to market risk as more than two-
thirds of the business is operating on spot trading with the rest
on fixed-term contracts of no more than five years. This remains
as an important part of SCF's overall business contributing just
under a half of its time charter equivalent (TCE) revenue,
mitigated by growing share of more stable industrial business.

Leverage to Fall: Fitch views SCF's excessive FFO adjusted net
leverage at end-2017 of 7.4x as temporary and is due to the large
number of debt-funded vessel deliveries, exacerbated by
underperformance from crude oil and oil product transportation
business during the year. While Fitch expects pressured tanker
rates to persist, FFO net leverage is set to improve to an
average of 5x during 2018-2021 driven by lower capex than its
historical average and stable cash flow from industrial segments.

No Impact from GRE Criteria Introduction: There is no rating
impact from Fitch's new Government-Related Entities Rating
Criteria (GRE Criteria), which replaces Parent and Subsidiary
Rating Linkage, and Sovcomflot's IDR still benefits from the one-
notch uplift from its standalone credit profile of 'BB-'. Under
the new GRE criteria, Fitch views SCF's government ownership as
strong, support/funding track record, socio-political
implications of GRE's default and financial implication of GRE's
default as moderate.

Solid Business Profile: Sovcomflot's business profile is
underpinned by a fairly high share of long-term contracts with
about USD8.2 billion of contracted revenue (including joint
ventures), USD3.5 billion of which is scheduled during 2018-2022.
Strong operations are also supported by the company's leading
global position as tanker owner and in certain niche markets, a
fairly young fleet and diversified customer base.

Diversified Customer Base: SCF has a diversified customer base
consisting of large international and Russian oil and gas
players, whose unconstrained credit profiles are generally
stronger than that of SCF. Top 10 customers account for 72% of
TCE revenue as of 9M17 (67% in 9M16), with no single counterparty
contributing more than a fifth of TCE revenue.

Senior Unsecured in Line with IDR: Fitch continues to align the
senior unsecured rating with the company's Long-Term IDR. Fitch
views the weak unencumbered assets-to-unsecured debt ratio of
1.8x at end-2017 as temporary given sufficient value of the
secured vessels to be unencumbered upon the associated secured
loan maturities within the next 12 months. Fitch would consider
decoupling the ratings if the amount of unencumbered assets
remains below 2x of unsecured debt on a sustained basis and that
Fitch believes would indicate a structural subordination that is
detrimental to the unsecured debt.

DERIVATION SUMMARY

Despite higher leverage than PT Soechi Lines Tbk (B+/Negative),
Sovcomflot's standalone rating of 'BB-' is higher than Soechi's
and is underpinned by its significantly stronger business profile
supported by large scale of its business, healthy share of long-
term contracts, fairly young and specialised fleet and
diversified customer base. While Soechi's historical average FFO
adjusted net leverage is below 4x, SCF's EBITDA is about 10x
larger than Soechi's. The company benefits from the one-notch
uplift due to strong support from the Russian government. No
country-ceiling and operating environment aspects impacts the
rating.

KEY ASSUMPTIONS

Fitch's Key Assumptions Within Its Rating Case for the Issuer
  - 10-year average freight rates for spot operations from 2019 -
contractual rates for time charters;
  - Capex of under USD450 million in 2018 and about USD500
million a year thereafter;
  - Dividends of USD31 million in 2018 and dividend pay-out of
50% of net income in 2019-2021.

RATING SENSITIVITIES

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

  - The Positive Outlook indicates that Fitch may upgrade the
rating reflecting the expected moderation of leverage from end-
2017, improved cash flow visibility and if it sees sustained
healthy cash flow from conventional segment in crude oil and oil
product segments or lower capex spending.

  - Stronger links with the government.

  - FFO adjusted net leverage well below 4.5x and FFO fixed-
charge cover above 3.5x on a sustained basis.

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

  - Structural decline of tanker rates or more sizeable capex
resulting in deterioration of the company's credit metrics (eg
FFO adjusted net leverage above 5.5x and FFO fixed-charge
coverage below 2.5x on a sustained basis)

  - Weaker links with the government.

  - Unencumbered assets falling below 2x of unsecured debt on a
sustained basis, would lead to a downgrade of the senior
unsecured rating.

LIQUIDITY

Strong Liquidity: Sovcomflot's had an unrestricted cash position
of USD321 million at end-2017 as well as its undrawn portion of
committed credit lines of USD167 million (79% of which is due in
or after 2022), which are mainly related to capex. This compares
comfortably with debt maturities of USD342 million and negative
post-dividend free cash flow of about USD5 million that we
estimate for the subsequent 12 months.

FULL LIST OF RATING ACTIONS

PAO Sovcomflot

  - Long-Term IDR affirmed at 'BB'; Outlook Positive
SCF Capital Designated Activity Company

  - Long-term senior unsecured rating affirmed at 'BB'


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


HIPOCAT 8: S&P Raises EUR1.5BB Class D Notes Rating to B- (sf)
--------------------------------------------------------------
S&P Global Ratings raised and removed from CreditWatch positive
its credit ratings on Hipocat 8, Fondo de Titulizacion de
Activos' class A2, B, and C notes. At the same time, S&P raised
its rating on the class D notes.

S&P said, "The rating actions follow the application of our
relevant criteria and our full analysis of the most recent
transaction information that we have received, and reflect the
transaction's current structural features. We have also
considered our updated outlook assumptions for the Spanish
residential mortgage market.

"Our structured finance ratings above the sovereign (RAS)
criteria classify the sensitivity of this transaction as
moderate. Therefore, after our March 23, 2018 upgrade of Spain to
'A-' from 'BBB+', the highest rating that we can assign to the
senior-most tranche in this transaction is six notches above the
Spanish sovereign rating, or 'AAA (sf)', if certain conditions
are met. For all the other tranches, the highest rating that we
can assign is four notches above the sovereign rating.

"Our European residential loans criteria, as applicable to
Spanish residential loans, establish how our loan-level analysis
incorporates our current opinion of the local market outlook. Our
current outlook for the Spanish housing and mortgage markets, as
well as for the overall economy in Spain, is benign. Therefore,
we revised our expected level of losses for an archetypal Spanish
residential pool at the 'B' rating level to 0.9% from 1.6%, in
line with table 87 of our European residential loans criteria, by
lowering our foreclosure frequency assumption to 2.00% from 3.33%
for the archetypal pool at the 'B' rating level.

"After applying our European residential loans criteria to this
transaction, the overall effect in our credit analysis results is
a decrease in the required credit coverage for each rating level
compared with our previous review, mainly driven by our revised
foreclosure frequency assumptions."

  Rating level     WAFF (%)    WALS (%)
  AAA                 21.58       24.66
  AA                  15.01       20.24
  A                   11.37       13.60
  BBB                  8.51       10.25
  BB                   5.73        8.01
  B                    3.55        6.06

WAFF--Weighted average foreclosure frequency. WALS--Weighted
average loss severity.

Credit enhancement available in Hipocat 8 has increased since the
previous review as the amortization deficit, i.e., the difference
between accrued and paid principal has decreased. As of March
2017, the amortization deficit was EUR16.89 million. That
decreased during 2017 to EUR2.40 million in March 2018. The
reserve fund has been fully depleted since December 2013 as it
was used to provision for loans in foreclosure and in arrears
over 18 months. In November, the servicer, Banco Bilbao Vizcaya
Argentaria (BBVA) acquired around EUR5 million of repossessed
properties from the fund. Cash flows from the sale of these
properties contributed to the decrease in the amortization
deficit. In addition, according to the trustee, during 2017,
recoveries from defaulted assets contributed to narrowing the gap
between assets and liabilities in this transaction.

S&P said, "Following the application of our criteria, we have
determined that our assigned ratings on the classes of notes in
this transaction should be the lower of (i) the rating as capped
by our RAS criteria, (ii) the rating as capped by our
counterparty criteria, or (iii) the rating that the class of
notes can attain under our European residential loans criteria.

"The application of our RAS criteria caps our rating on the class
A2 and B notes at six and four notches above our unsolicited 'A-'
long-term sovereign rating on Spain, respectively. We have
therefore raised to 'AAA (sf)' from 'AA+ (sf)' our rating on the
class A2 notes and to 'AA (sf)' from 'A (sf)' our rating on the
class B notes. We have removed our ratings on these classes of
notes from CreditWatch positive.

"Our ratings on the class C and D notes are not capped by our RAS
analysis as the application of our European residential loans
criteria, including our updated credit figures, determine our
rating on the class C notes at 'BB- (sf)'. We have therefore
raised to 'BB- (sf)' from 'B- (sf)' and removed from CreditWatch
positive our rating on the class C notes. In reviewing our rating
on the class C notes, in addition to applying our credit and cash
flow analysis which considered various recovery assumptions for
the defaulted assets, we have considered its position in the
capital structure and sensitivty to the various recovery
assumptions.

"The class D notes are not able to pass our cash flow stresses at
the 'B' rating level. Our cash flow analysis for the class D
notes shows that we do not expect a default to occur in the next
12 months. In line with paragraphs 92 and 93 of our European
residential loans criteria, and our criteria for assigning 'CCC'
category ratings, we have raised to 'B- (sf)' from 'CCC- (sf)'
our rating on the class D notes."

Hipocat 8 is a Spanish RMBS transaction, which closed in May 2005
and securitizes first-ranking mortgage loans. Catalunya Banc
(formerly named Catalunya Caixa) originated the pool, which
comprises loans secured over owner-occupied properties, mainly
located in Catalonia.

  RATINGS LIST
  Class             Rating
              To               From

  Hipocat 8, Fondo de Titulizacion de Activos EUR1.5 Billion
  Mortgage-Backed Notes

  Ratings Raised And Removed From CreditWatch Positive

  A2          AAA (sf)         AA+ (sf)
  B           AA (sf)          A (sf)
  C           BB- (sf)         B- (sf)

  Rating Raised

  D           B- (sf)          CCC- (sf)


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


AKBANK TAS: Fitch Puts BB+ Long-Term IDR on Rating Watch Negative
-----------------------------------------------------------------
Fitch Ratings has placed 25 Turkish banks' Long-Term Foreign-
Currency (FC) Issuer Default Ratings (IDRs) and 25 banks'
Viability Ratings (VRs) on Rating Watch Negative (RWN).

The RWNs placed on all Turkish banks' VRs reflect risks to their
performance, asset quality, capitalisation and, in most cases,
liquidity and funding profiles following a recent period of
increased market volatility. This has seen the Turkish lira
depreciate against the US dollar-euro basket by about 20% this
year with the authorities responding by raising the key policy
rate by 300bp to 16.5%.

The RWNs on the IDRs of state-owned commercial banks and two
development banks additionally consider the greater potential for
stress in Turkey's external finances, which could hinder the
authorities' ability to provide support in FC.

The RWNs on foreign-owned banks' 'BBB-' IDRs reflect Fitch's
intention to reassess whether it remains appropriate to rate
these institutions above the sovereign (BB+/Stable), given
potential intervention in the banking system if there is marked
deterioration in Turkey's external finances.

Fitch will resolve the RWNs based on both an analysis of the
impact on banks' credit profiles of the deterioration in the
operating environment that has already been observed and the
extent to which the operating environment deteriorates further or
stabilises in the near term. Unless there is further marked
worsening of economic and financial market conditions, any
downgrades are likely to be limited to one notch, in most cases.
Fitch expects to resolve the RWNs in the next six months.

KEY RATING DRIVERS

VRs OF ALL BANKS

Turkish banks' VRs, which range from 'bb+' to 'b', reflect their
exposure to the relatively high-risk Turkish operating
environment, but also their largely satisfactory financial
metrics, reflected in moderate non-performing loans (NPLs), solid
profitability, reasonable capitalisation and acceptable liquidity
buffers. Banks rated 'bb+' or 'bb' have stronger franchises and
in most cases longer records of stable and sound performance.
Banks rated 'bb-', 'b+' or 'b' have narrower franchises and, to
varying degrees, have exhibited greater volatility in their
results.

The RWNs on all 25 Turkish banks' VRs reflect increased risks to
their asset quality, profitability and capitalisation given
heightened operating environment pressures resulting from
currency and interest-rate volatility. It also considers risks to
most banks' funding and liquidity profiles given the reliance, to
varying degrees, on external FC wholesale funding and pressure on
lira funding costs.

Fitch believes that immediate risks to Turkey's macroeconomic and
financial stability have reduced following the increase in the
policy rate, the announced simplification of the monetary policy
framework and the resulting moderate recent recovery of the
exchange rate. However, the still significant fall in the
exchange rate, the rise in the interest rate (and the stated
readiness of the Turkish authorities to raise this further if
needed) and the negative impact of both of these on economic
growth are likely to result in deterioration in banks' financial
metrics. Risks to financial stability also remain significant,
given the possibility that policy predictability will come under
pressure after June's presidential elections, and in view of
Turkey's need to meet a large external financing requirement in
tougher global financial conditions.

Asset-quality risks for banks have increased due to generally
high FC lending (equal to about 37% of sector loans) and the
potential impact of local-currency depreciation on often weakly
hedged borrowers' ability to service their debt. Higher interest
rates (which could affect lira borrowers' debt service capacity)
and weaker economic growth could also weigh on loan performance.
Fitch had expected GDP growth of 4.1% in 2018 and 4.7% in 2019,
but anticipates revising downwards these forecasts following the
recent volatility. Exposures to the construction and energy
sectors and high borrower concentrations are also significant
sources of risks at many banks.

NPL ratios have in most cases remained broadly stable in recent
quarters, but the emergence of some big-ticket problematic
exposures (notably on the books of the largest banks in the
sector) and growth in group 2 watch list loans (partly explained
by banks' transition to IFRS 9 in 1Q18) suggest the potential for
future increases in NPLs. The sector NPL ratio (loans overdue by
more than 90 days) was 2.9% at end-1Q18, with reserve coverage of
119%.

Fitch expects sector profitability to moderately weaken in 2018
due to higher funding costs (following the policy rate rise),
slower credit growth (reflecting the reduction in Credit
Guarantee Fund (CGF) stimulus, the snap elections and lower GDP
growth) and higher impairment charges. Performance could
deteriorate more significantly in case of a marked weakening of
asset quality. The sector return on average equity was a solid
14.7% in 2017 and 15.9% in 1Q18, supported by CGF-driven loan
growth (21% for the sector in 2017) solid margins and manageable
impairment charges.

Capital ratios are under pressure from lira depreciation (which
inflates FC risk-weighted assets) and higher interest rates
(which will result in negative revaluations of government bond
portfolios). Potential asset-quality deterioration also
represents a risk to banks' capital positions, but strong pre-
impairment profit provides most banks with a considerable buffer
to absorb credit losses through income statements.

The sector average total capital ratio was 16.1% at end-1Q18.
Capital ratios increased in 2017 on the back of solid internal
capital generation, capital relief from regulatory measures
(including lower risk weightings on CGF loans and FC reserve
requirements) and due to Tier 2 capital notes issuance at some
banks. Capital comprises predominantly common equity Tier 1 at
most banks, although increased issuance of FC Tier 2 instruments
provides a partial hedge against Turkish lira depreciation in
respect to total capital ratios.

Turkish banks' refinancing risks have increased as a result of
recent market volatility and tightening global financing
conditions driven mainly by an increase in US dollar interest
rates. However, the banks have a proven record of accessing
external funding even in adverse market conditions, and typically
have access to sufficient FC liquidity to cover their FC
wholesale funding liabilities maturing within a year. Risks are
less pronounced at most foreign-owned banks, which can rely on FC
liquidity support from shareholders, and some smaller lenders
which have limited FC wholesale funding.

The sector loans/deposits ratio was a high 127% at end-1Q18, and
banks' external debt stood at USD186 billion, of which USD103
billion matured within 12 months. However, as some of the latter
represents more stable funding (for example, from parent banks,
subsidiary banks or offshore Turkish corporate entities), Fitch
estimates banks' external debt servicing requirement over one
year, in case of a complete market shutdown, at about USD55
billion - USD60 billion. Available liquidity of about USD90
billion (comprising mainly FC placed with the central bank under
the reserve option mechanism (ROM) and short-term currency swaps
with foreign counterparties) provides solid coverage. However, a
scenario in which Turkish borrowers had to pay down foreign debt
would result in a reduction in central bank FC reserves and add
to pressures on the exchange rate, interest rates and economic
growth.

IDRS, SENIOR DEBT RATINGS AND NATIONAL RATINGS DRIVEN BY VRS

Akbank T.A.S. (Long-Term FC IDR BB+/RWN; VR bb+/RWN)

Turkiye Is Bankasi A.S. (Isbank; BB+/RWN, bb+/RWN)

Anadolubank A.S. (BB-/RWN, bb-/RWN)

Fibabanka Anonim Sirketi (BB-/RWN, bb-/RWN)

Odea Bank A.S. (BB-/RWN, bb-/RWN)

Arap Turk Bankasi A.S. (ATB, BB-/RWN, bb-/RWN)

Sekerbank T.A.S. (B+/RWN, b+/RWN)

The RWNs on the Long-Term IDRs, senior debt ratings and National
Ratings of these banks reflect the RWNs on their VRs.

The Support Rating Floors (SRFs) of Akbank and Isbank have been
affirmed at 'B+', and their Support Ratings at '4', reflecting
Fitch's view that there is a limited probability of support for
these banks. This takes into account the banks' systemic
importance and solid market shares, but also the sovereign's
modest ability to provide support in FC considering its only
moderate level of FC reserves.

The 'No Floor' SRFs and '5' Support Ratings of the other five
banks listed above reflect Fitch's view that support cannot be
relied upon given their limited market shares and systemic
importance.

IDRs, SUPPORT RATINGS, SENIOR DEBT RATINGS AND NATIONAL RATINGS
OF STATE-OWNED COMMERCIAL BANKS AND DEVELOPMENT BANKS

T.C. Ziraat Bankasi A.S. (Ziraat; LT FC IDR BB+/RWN; VR bb+/RWN)

Turkiye Halk Bankasi A.S. (Halk; BB+/RWN, bb+/RWN)

Turkiye Vakiflar Bankasi T.A.O. (Vakifbank; BB+/RWN, bb+/RWN)

Vakif Katilim Bankasi AS (BB+/RWN, b+/RWN)

Turkiye Sinai Kalkinma Bankasi A.S. (TSKB; BB+/RWN, bb/RWN)

Turkiye Ihracat Kredi Bankasi A.S. (Turk Eximbank; BB+/RWN)

Turkiye Kalkinma Bankasi A.S. (TKB; BB+/Stable)

The IDRs, Support Ratings, SRFs, FC senior debt ratings and
National Ratings of state-owned commercial banks (Ziraat, Halk,
Vakifbank and Vakif Katilim) and development banks (TKB, Turk
Eximbank, TSKB) are aligned with those of the Turkish sovereign.
This reflects Fitch's view of the government's likely high
propensity to support the banks, in case of need, based on their
majority state ownership (except for TSKB), systemic importance
and significant state-related funding (state-owned commercial
banks) and policy roles (Ziraat, Halk and the development banks).

The RWNs on the Long-Term FC IDRs and FC senior debt ratings of
these banks (with the exception of TKB) reflect increased risks
to the authorities' ability to provide support in FC given the
greater potential for stress in Turkey's external finances. At
end-April 2018, the central bank's FC reserves were a moderate
USD112 billion, while net reserves (adjusted for USD63billion of
banks' placements with the central bank, including under the ROM)
were lower.

The ratings of TKB have been affirmed, rather than placed on RWN,
due to its small size and the fact that nearly all of its funding
is guaranteed by the Turkish treasury.

The RWN on the ratings of Halk also continue to reflect
uncertainty surrounding the sufficiency and timeliness of state
support in case a material fine or other punitive measures being
imposed on the bank as a result of the U.S. investigation which
resulted in the conviction of its deputy general manager for
violating U.S. sanctions.

The affirmation of the Local-Currency IDRs and National Ratings
of the state-owned commercial banks and the development banks
reflects Fitch's view that there is unlikely to be any material
weakening in the ability or propensity of the authorities to
support these entities in local currency.

IDRs, SUPPORT RATINGS, SENIOR DEBT RATINGS AND NATIONAL RATINGS
OF FOREIGN-OWNED BANKS

Turkiye Garanti Bankasi A.S. (Garanti; LT FC IDR BBB-/RWN; VR
bb+/RWN)

Yapi ve Kredi Bankasi A.S. (YKB; BBB-/RWN; bb+/RWN)

Turk Ekonomi Bankasi A.S. (TEB; BBB-/RWN, bb+/RWN)

QNB Finansbank A.S. (BBB-/RWN, bb/RWN)

ING Bank A.S. (BBB-/RWN, bb/RWN)

Kuveyt Turk Katilim Bankasi A.S. (Kuveyt Turk; BBB-/RWN, bb-/RWN)

Turkiye Finans Katilim Bankasi A.S. (TFKB; BBB-/RWN, bb-/RWN)

Alternatifbank A.S. (ABank; BBB-/RWN, b+/RWN)

Burgan Bank A.S. (BBB-/RWN, b+/RWN)

ICBC Turkey Bank A.S. (BBB-/RWN, b+/RWN)

BankPozitif Kredi ve Kalkinma Bankasi A.S. (BBB-/RWN, b+/RWN)

Turkland Bank A.S. (B+/Stable, b/RWN)

The IDRs, Support Ratings, FC senior debt ratings and National
Ratings of these banks are driven by potential support from their
shareholders. This reflects Fitch's view that the banks
constitute strategically important subsidiaries, to varying
degrees, for their parents. It also considers ownership stakes,
integration, the subsidiaries' roles within their respective
groups and, for some, common branding.

The Long-Term FC IDRs and FC senior debt ratings of these banks
(with the exception of Turkland) are one notch above the Turkish
sovereign. The RWNs on these ratings and on the banks' Support
Ratings reflects Fitch's intention to reassess whether it remains
appropriate to rate these institutions above the sovereign, given
potential intervention in the banking system in case of a marked
deterioration in Turkey's external finances.

In Fitch's view, the risk of capital controls being imposed in
Turkey remains remote given Turkey's high dependence on foreign
capital and strong incentive to retain market access, the
eventually orthodox policy response to recent market pressures,
statements by senior Turkish officials (including Deputy Prime
Minister Mehmet Simsek) that such controls would not be
introduced and reduced immediate risks to macroeconomic and
financial stability.

However, in case of a marked deterioration in Turkey's external
finances, some form of intervention in the banking system that
may impede banks' ability to service their FC obligations cannot
be ruled out, in Fitch's view. While such intervention is a
remote risk, the agency will reconsider whether it is
sufficiently remote to be regarded as less likely than a
sovereign default, as is implied by its ratings.

The affirmation of the Local-Currency IDRs and National Ratings
of the foreign-owned banks reflects Fitch's view that there is
less likely to be any form of government intervention that would
impede their ability to service obligations in local currency.
The banks' 'BBB-' Long-Term Local-Currency IDRs are at the same
level as, rather than above, the sovereign Local-Currency IDR.

Turkland's support-driven Long-Term IDRs (BB-/Stable) have been
affirmed as these are below the sovereign ratings.

SUBORDINATED DEBT RATINGS

The subordinated notes ratings of YKB, Garanti, ABank and Kuveyt
Turk are notched down once from their support-driven IDRs, as
Fitch believes support from foreign shareholders would likely be
available to support these obligations. The subordinated notes
ratings of Isbank, Akbank, Vakifbank, Sekerbank, Odea, Fiba, and
TSKB are notched down once from their VRs.

The notching in each case includes one notch for loss severity
and zero notches for non-performance risk (relative to the anchor
ratings). The RWNs on these ratings reflect the RWNs on the
anchor ratings.

GUARANTEED DEBT RATING

Alternatifbank's guaranteed debt rating of 'A' is equalised with
the rating of the guarantor, The Commercial Bank (P.Q.S.C.)
(A/Negative).

SUBSIDIARY RATINGS

Akbank AG (Long-Term FC IDR BB+/RWN)

Ak Yatirim Menkul Degerler AS (BB+/RWN)

Ak Finansal Kiralama A.S. (BB+/RWN)

Akbank AG (BB+/RWN)

Alternatif Finansal Kiralama AS (BBB-/RWN)

Garanti Faktoring A.S. (BBB-/RWN)

Garanti Finansal Kiralama A.S. (BBB-/RWN)

Is Faktoring A.S. (BB+/RWN)

Is Finansal Kiralama A.S. (BB+/RWN)

Is Yatirim Menkul Degerler A.S. (AA+(tur)/RWN)

QNB Finans Finansal Kiralama A.S. (BBB-/RWN)

Yapi Kredi Finansal Kiralama A.O. (BBB-/RWN)

Yapi Kredi Faktoring A.S. (BBB-/RWN)

Yapi Kredi Yatirim Menkul Degerler A.S. (BBB-/RWN)

Ziraat Katilim Bankasi A.S. (BB+/RWN)

The ratings of the subsidiaries of Akbank, Garanti, Isbank, YKB,
Ziraat, Alternatifbank, and QNB Finansbank are equalised with
those of their respective parents, reflecting their strategic
importance to, and integration with, their respective groups.
Consequently, the RWNs on their ratings mirror those on their
parents and indicate a possible weakening of their parents'
ability to provide support, in case of need.

Akbank AG's Deposit Ratings are aligned with the bank's IDRs. In
Fitch's opinion, debt buffers do not afford any obvious
incremental probability of default benefit over and above the
support benefit factored into the bank's IDRs.

RATING SENSITIVITIES

VRs OF ALL BANKS, AND IDRS, SENIOR DEBT RATINGS AND NATIONAL
RATINGS DRIVEN BY VRS

Fitch will resolve the RWNs on all banks' VRs, and on the IDRs,
senior debt ratings and National Ratings of Akbank, Isbank,
Anadolubank, ATB, Fibabanka, Odea and Sekerbank, based on an
analysis of the impact of the deterioration in the operating
environment on individual banks' performance, asset quality,
capitalisation and liquidity and funding profiles and the extent
to which the operating environment deteriorates further or
stabilises in the near term, as reflected in particular in the
lira exchange rate, domestic interest rates, economic growth
prospects and external funding market access.

Ratings are more likely to be downgraded at banks that have
experienced significant increases in NPLs or in problematic loans
not categorised as NPLs, have higher proportions of FC loans and
FC wholesale market funding, or have suffered a more critical
reduction in their capital ratios without this being offset by
shareholder support. Already-observed deterioration of asset-
quality ratios at Turkland and Odea Bank, and of capital ratios
at Fibabanka and Alternatifbank, increases risks for these banks'
VRs.

Ratings could stabilise at their current levels where Fitch views
asset quality, capital ratios and foreign currency liquidity as
less exposed to the deterioration in the operating environment,
in particular if economic conditions stabilise in the near term.

IDRs, SUPPORT RATINGS, SUPPORT RATING FLOOR, SENIOR DEBT RATINGS
AND NATIONAL RATINGS OF STATE-OWNED COMMERCIAL BANKS AND
DEVELOPMENT BANKS

The Long-Term FC IDRs, FC senior debt ratings and SRFs of Ziraat,
Halk, Vakifbank, Vakif Katilim, TSKB and Turk Eximbank could be
downgraded if Fitch concludes that the greater potential for
stress in Turkey's external finances is sufficient to materially
reduce the reliability of support for these banks in FC from the
Turkish authorities.

The ratings of these banks, and of TKB, could also be downgraded
if the Turkish sovereign is downgraded or if Fitch believes the
sovereign's propensity to support the banks has reduced. The
introduction of bank resolution legislation in Turkey aimed at
limiting sovereign support for failed banks could also negatively
affect Fitch's view of support, but Fitch does not expect this in
the short term.

Halk's support-driven ratings could also be downgraded if the
bank does not receive sufficient and timely support to offset the
impact of any fine or other punitive measures imposed as a result
of the case in the US.

IDRs, SUPPORT RATINGS, SENIOR DEBT RATINGS AND NATIONAL RATINGS
OF FOREIGN-OWNED BANKS

The FC IDRs, FC senior debt ratings and Support Ratings of
foreign-owned banks rated 'BBB-' could be downgraded if Fitch
concludes that it is no longer appropriate to rate these
institutions above the sovereign, given potential intervention in
the banking system in case of a marked deterioration in Turkey's
external finances. These ratings are also sensitive to a
downgrade of Turkey's Country Ceiling.

A sharp reduction in a parent bank's ability or propensity to
support its Turkish subsidiary could also result in a downgrade.

SUBORDINATED DEBT RATINGS

Subordinated debt ratings are primarily sensitive to changes in
anchor ratings, namely the VRs of Isbank, Akbank, Vakifbank,
Sekerbank, Odea, Fiba, and TSKB, and the Long-Term IDRs of YKB,
Garanti, Kuveyt Turk and ABank.

The ratings are also sensitive to a change in notching from the
anchor ratings due to a revision in Fitch's assessment of the
probability of the notes' non-performance risk or of loss
severity in case of non-performance.

GUARANTEED DEBT RATING

Alternatifbank's guaranteed debt rating of 'A' is sensitive to a
change in The Commercial Bank's (P.Q.S.C.) Long-Term IDR
(A/Negative).

SUBSIDIARY RATINGS

The ratings of these entities are sensitive to changes in the
Long-Term IDRs of their parents.


TURKEY: Moody's Puts Ba2 Ratings on Review for Downgrade
--------------------------------------------------------
Moody's Investors Service (MIS) has placed the government of
Turkey's Ba2 long-term issuer ratings, the Ba2 senior unsecured
bond ratings and (P)Ba2 senior unsecured shelf ratings on review
for downgrade. Concurrently, Moody's has placed on review for
downgrade the Ba2 senior unsecured bond rating of Hazine
Mustesarligi Varlik Kiralama A.S., a special purpose vehicle
wholly owned by the Republic of Turkey from which the Turkish
Treasury issues sukuk lease certificates.

Moody's decision to place the current rating under review
reflects mounting uncertainty regarding the future direction of
macroeconomic policy, in the context of the country's already
vulnerable external position, that will, if sustained, raise the
risk of severe pressures on Turkey's balance of payments to a
level that is no longer consistent with the current rating.

Turkey's long-term country ceilings are not affected by Moody's
announcement. The foreign currency bond ceiling remains at Baa3;
its foreign currency bank deposit ceiling remains at Ba3 and its
local currency country ceilings for bonds and bank deposits
remain at Baa2. The short-term country ceilings also remain
unchanged at Prime-3 (P-3) for foreign currency bonds and Not
Prime (NP) for foreign currency bank deposits.

RATINGS RATIONALE

DRIVER FOR THE DECISION TO PLACE TURKEY'S Ba2 RATING ON REVIEW
FOR DOWNGRADE

On March 7, 2018, Moody's downgraded Turkey's ratings by one
notch to Ba2 from Ba1. At that time, the rating agency stated
that Turkey's sovereign rating would likely be downgraded further
if there was a material increase in the probability and proximity
of severe pressures on the country's balance of payments,
relative to what is implied by the Ba2 rating.

Moody's decision to place Turkey's Ba2 rating on review for
downgrade is driven by Moody's expectation that the recent
erosion in investor confidence in Turkey will continue if not
addressed through credible policy actions following the June
elections, leading to a sustained increase in the probability and
proximity of severe balance of payments constraints. The erosion
of confidence was triggered in part by the advancement of
presidential and parliamentary elections to 24 June, 17 months
ahead of schedule. That decision exacerbated existing investor
concerns regarding the negative credit impact of the economic,
fiscal and monetary policy settings, and heightened concerns that
the next administration would move further down the path of
policy options detrimental to economic and financial stability.

The increase in the country's external vulnerability resulting
from that confidence shock can be seen in a number of indicators.
Most visibly, the Turkish lira has depreciated by roughly 20% in
the past three months. The current account deficit has widened to
an estimated 6.5% of GDP on a twelve-month rolling basis as of
the end of the first quarter and reserves have dropped further
since their recent peak in October 2017 due to seasonally high
debt repayments in recent months. In March alone, the $4.7
billion outflow of central bank foreign exchange reserves roughly
matched the $4.8 billion current account deficit. In the same
month, the roll-over ratio for banks' long-term external funding
fell to only 64%, compared to 88% for the whole quarter. Also
since then, the cost of bank funding has risen sharply.

The negative shift in investor sentiment is a significant
challenge for a country that is deeply dependent on net capital
inflows to finance annual gross external borrowing requirements
in excess of $200 billion, reflecting the large current account
deficit and sizeable short-term debt and maturing long-term debt
maturities. The country's reserves are already low -- the central
bank's foreign exchange reserves (including gold) cover less than
half that amount. Even if the current account deficit narrows in
the second half of the year due to the impact of the weaker lira
and a slowdown in domestic demand, the deficit will remain large
in absolute and relative terms.

The authorities have made limited progress in addressing Turkey's
structural economic problems, most notably its structural
external deficits, in recent years. The period since the failed
coup in 2016 has seen increasingly expansionary fiscal policy
that has stimulated growth to unsustainable levels. Longer term
economic reforms intended to raise potential growth and to reduce
external vulnerabilities to a large extent have been sidelined,
given the political focus on the several election cycles the
country experienced in recent years.

Most recently, although not for the first time, the focus has
been on monetary policy. For a number of years, the credibility
of Turkey's policy institutions has been undermined by the
ineffectiveness of monetary policy, in part reflecting political
interference in the policy-making process. The 5% (Ò2%) inflation
target is regularly exceeded -- inflation is currently in double
digits and will probably rise given the falling exchange rate.
The President's recent suggestion that monetary policy would be
loosened rather than tightened if he is re-elected further
aggravated the lira's weakness, which did not subside despite an
emergency 300 bps hike in the Late Liquidity Window (LLW)
interest rate by the central bank on 23 May.

The central bank had to take additional steps in the subsequent
days to take the pressure off the lira, which culminated in the
credit-positive simplification of the monetary policy regime to
take effect on June 1, a reform that had been pledged in the past
but never implemented. The latter move involved more than
doubling the various policy rates that had gone unused for more
than a year and also included another hike in the LLW rate to
19.5%. The bank will now return to using the one-week repo rate,
which it hiked from 8% to 16.5%, as its main policy rate, around
which it established a Ò150 bps corridor. The currency firmed
marginally on the news, with market attention still focused on
the next MPC meeting on June 7.

Turkey has seen, and has managed, serious economic and financial
shocks before. These circumstances partly reflect fundamental
credit strengths derived from a large and diversified economy and
a still relatively strong fiscal position. At present, the fact
that economic and financial vulnerabilities are rising in
parallel with an increasingly unpredictable political situation
and rising global interest rates heightens the threat. The
outcome will mainly rest on the coherence and predictability of
the policies that are pursued after the upcoming elections and
beyond and the extent to which an improved policy framework will
restore adequate financing and refinancing of Turkey's large
external borrowing requirements.

Moody's will therefore use the review period to gain a better
understanding of the likely policy direction post-election, and
the extent to which it is likely to weaken or support domestic
economic and financial stability. Moody's will also use the
review period to monitor indicators of stress and assess their
implications for Turkey's resilience to shocks and the country's
balance of payments position. Finally, the agency will seek to
understand the policy-formulation process, given that after the
elections the person elected president will have significant
authority over the legislative and judicial branches of
government, and could potentially also exert greater influence
over the legally independent central bank.

WHAT COULD CHANGE THE RATING DOWN/UP

Moody's would likely downgrade Turkey's ratings if it concludes
that policymaking is unlikely to be able to prevent further
deterioration in Turkey's external position, leading to a
sustained rise in the risk of a balance of payments crisis.
Moody's might reach that conclusion either because it determined
that monetary, financial or economic policies are likely to
undermine financial stability and sustainable growth; or because
it concluded that, in the absence of clarity as to future
policies, the risk of a further rise in refinancing risk and
damaging capital flight remains high.

Given the review for downgrade, an upgrade is highly unlikely in
the near future. Moody's would consider confirming the current
Ba2 rating if it were to conclude that the country would likely
be able to strengthen its ability to meet its large external
funding requirements by pursuing credible macroeconomic policies
supportive of financial stability and sustainable growth within
an adequately transparent and predictable policy-making
environment.

GDP per capita (PPP basis, US$): 24,986 (2016 Actual) (also known
as Per Capita Income)

Real GDP growth (% change): 3.2% (2016 Actual) (also known as GDP
Growth)

Inflation Rate (CPI, % change Dec/Dec): 8.5% (2016 Actual)

Gen. Gov. Financial Balance/GDP: -1.7% (2016 Actual) (also known
as Fiscal Balance)

Current Account Balance/GDP: -3.8% (2016 Actual) (also known as
External Balance)

External debt/GDP: 47.3% (2016 Actual)

Level of economic development: Moderate level of economic
resilience

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

On May 30, 2018, a rating committee was called to discuss the
rating of the Turkey, Government of. The main points raised
during the discussion were: The issuer's economic fundamentals,
including its economic strength, have not materially changed. The
issuer's fiscal or financial strength, including its debt
profile, has not materially changed. The issuer has become
increasingly susceptible to event risks, in particular external
vulnerability risks.

The principal methodology used in these ratings was Sovereign
Bond Ratings published in December 2016.

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


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


ATLANTICA YIELD: S&P Affirms BB Long-Term CCR, Outlook Stable
-------------------------------------------------------------
S&P Global Ratings affirmed its 'BB' long-term corporate credit
rating on Atlantica Yield PLC. The outlook is stable. Yield PLC.
The outlook is stable.

At the same time, S&P Global Ratings affirmed its 'BBB-' rating
on the company's senior secured debt; the recovery rating on this
debt is unchanged at '1', indicating S&P's expectation of very
high (90%-100%; rounded estimate: 95%)recovery for investors in a
default scenario.

In addition, S&P Global Ratings affirmed its 'BB' rating on the
company' senior unsecured debt. The recovery rating on this debt
is unchanged at '3', indicating S&P's expectation of meaningful
(50%-70% range; rounded estimate 55%) recovery in a default
scenario.

The affirmation follows the close of Algonquin Power & Utilities
Corp.'s (BBB/Stable-) acquisition of a 25% equity stake in
Atlantica, making it the largest shareholder in the company.
Algonquin has also exercised the option to acquire an additional
16.5% stake from Abengoa S.A. that S&P expects to happen later
this year (subject to the approval of the U.S. Department of
Energy and other closing conditions), bringing Algonquin's
interest in Atlantica to 41.5%. The company also signed an
agreement with Abengoa-Algonquin Global Energy Solutions -- a
joint venture between Algonquin and Abengoa) providing Atlantica
access to a pipeline of new growth projects via dropdowns right
of first offer. S&P said, "We believe the sale of Abengoa's
interest removes the last formal link between Atlantica and its
previous sponsor, which we believed hindered its ability to
access the capital market. As a result, we are revising our
funding and capital structure assessment to neutral from
negative."

S&P said, "The stable outlook reflects our view that Atlantica's
contracted assets will continue to operate under long-term
contracts with investment-grade counterparties and generate
fairly predictable cash flows to support its holding-company debt
obligations. In our base-case scenario, we expect FFO-to-debt of
23%-27% and debt-to-EBITDA of 3.0x-3.5x over our 12-month outlook
period.

"We would consider upgrading Atlantica if debt-to-EBITDA stays
below 3x and FFO-to-debt stays above 30%. This could result from
increased cash flows from new projects or acquisitions, or
deleveraging. In addition, we would consider raising the ratings
if the company increases its scale and diversity relative to
similar rated peers such as NRG Yield, NextEra Energy Partners,
and AES."

A downgrade could occur if debt-to-EBITDA stays above 4x and FFO-
to-debt consistently falls below 20% over our 12-month outlook
period. This could result from significantly reduced cash flows
from the company's projects following a decline in operating
performance and asset reliability, higher-than-expected operating
costs, unfavorable weather, or increased leverage at the
corporate level.


CRUMMOCK: Goes Into Receivership, 287 Jobs Affected
---------------------------------------------------
Alan Simpson at Herald Scotland reports that civil engineering
firm Crummock on May 31 told its employees the company has gone
into receivership with the loss of 287 jobs.

Employees at the company, based near Bonnyrigg in Midlothian,
were informed that severe cash flow problems had led to claims
from creditors, Herald Scotland relates.

According to Herald Scotland, accountancy firm Johnston
Carmichael has been appointed as receivers and the company has
ceased trading.

The company said last year that a lack of orders from the
Scottish Government and a reduction in local authority budgets
posed the biggest risk to the business, although it expected to
turn over GBP34 million this year, Herald Scotland recounts.

Midlothian Council, as cited by Herald Scotland, said the
collapse will be "a real blow to the local economy and to the
council."

"Crummock is a long-established construction business which, like
many in the industry, has suffered from reduced margins in recent
times," Herald Scotland quotes Matt Henderson --
matt.henderson@jcca.co.uk -- restructuring partner at Johnston
Carmichael, as saying.

"In recent months it has also encountered cashflow difficulties
due to high retention levels, the tight margins within the sector
and business specific issues.

"Unfortunately, the business was unable to raise the capital to
enable it to overcome the current financial challenges it faces
and we are now dealing with creditors' claims."

Crummock offered a wide range of civil engineering and surfacing
construction expertise including groundworks, infrastructure
works, roadworks and road surfacing.


FAST PENSIONS: High Court Winds Up Pension and Finance Companies
----------------------------------------------------------------
Fast Pensions Ltd and five other related firms have been wound up
in the public interest at the High Court on 30 May 2018. The
Official Receiver in the Public Interest Unit (North) is now the
liquidator of all six companies.

Between 2012 and 2013, 520 people were encouraged to transfer
their pension savings from existing providers into one of 15
schemes, with Fast Pensions acting as the sponsoring employer.

FP Scheme Trustees Ltd (FPST) was the trustee of all 15 pension
schemes and a proportion of the funds were invested in the
remaining four related finance companies.

The Insolvency Service was made aware of complaints about the
management and operation of the companies and following an
investigation, the High Court ordered that Fast Pensions and the
five related companies be put into provisional liquidation in
March 2018 following a petition presented by the Secretary of
State.

Investigations found that a total of at least GBP21 million was
invested into the 15 schemes and people were persuaded to
transfer their savings through various methods. Some received
cold calls questioning the performance of their pension funds or
offering free pension reviews.

Others who were originally looking for credit were advised by the
connected finance companies that they could get a loan if they
transferred their pension savings to one of Fast Pensions'
schemes.

Advice provided was inadequate as the companies misrepresented
the schemes on offer. Advisors also failed to disclose
information around returns and the high risk and illiquid nature
of the investments made by the schemes, as well as the benefits
members would be entitled to.

Scheme members were also informed that the investments would
consist of a wide ranging portfolio but investigators found that
funds were misused. At least GBP4 million was used to pay
commissions and the remaining funds were largely used to make
loans to companies and other entities which appear to be
connected with Fast Pensions and FPST.

The six companies failed to preserve, maintain or produce
adequate accounting records and failed to cooperate fully with
the investigation. This made it impossible for investigators to
determine the full extent of the companies' activities, the
nature and value of the investments made or the value of the
members' pension funds.

David Hope, Chief Investigator for the Insolvency Service said:

People work long and hard to put money away for their retirements
but the six companies that have been shut down paid scant regard
to their members. They used unsavory tactics to attract members
and failed to paint the full picture as to what would really
happen with their savings.

By shutting the companies down, the courts have put a stop to
their unscrupulous activities and we hope this sends a strong
message that we will robustly investigate and take action where
people's funds and savings are at risk.

The Official Receiver has made an application to The Pensions
Regulator for the appointment of an independent Trustee to take
over the running of the pension schemes and it is anticipated
that the application will take 4 to 6 weeks to complete. Further
updates will be publicised in due course.

Until the application is completed the Official Receiver will
continue to act as the trustee to the pension schemes and, in
doing so:

   * will take steps to protect the investments and assets in
     the pension schemes

   * will not make investment decisions during the period of
     appointment

   * is unable to provide updates regarding an individual's
     pension, or to authorise transfers out of the schemes,
     or to make any payments out of the schemes, including
     death benefits

   * is unable to provide advice to pension members regarding
     their pensions

Members of the pension schemes who require advice should consider
contacting a solicitor, a regulated financial advisor or the
Pensions Advisory Service (TPAS) on: 0800 011 3797; email:
virtual.appointments@pensionsadvisoryservice.org.uk.

All public enquiries concerning the affairs of the companies
should be made to:

          The Official Receiver
          Public Interest Unit (North)
          PO Box 16663, Birmingham, B2 2JP
          Email: piu.north@insolvency.gsi.gov.uk.

The six companies that are subject to compulsory liquidation are:

   - Fast Pensions Ltd
   - FP Scheme Trustees Ltd
   - Blu Debt Management Ltd
   - Blu Financial Services Ltd
   - Blu Personal Finance Ltd,
   - Umbrella Loans Ltd

The 15 pension schemes involved:

   - Broughton Retirement Plan
   - DM1 Retirement Plan
   - Elphinstone Retirement Plan
   - EP1 Retirement Plan
   - Fleming Retirement Plan
   - FP1 Retirement Plan
   - FP2 Retirement Plan
   - FP3 Retirement Plan
   - Galileo Retirement Plan
   - Golden Arrow Retirement Plan
   - Leafield Retirement Plan
   - Springdale Retirement Plan
   - Talisman Retirement Plan
   - Templar Retirement Plan
   - VRSEB Retirement Plan


GAMES CENTRE: Enters Liquidation, Halts Trading
-----------------------------------------------
Ross Dunn at Daily Record reports that an Ayrshire retailer Games
Centre has gone into liquidation after 25 years of trading.

The company, who operated eight stores across Scotland and an
online outlet, ceased trading on May 29, Daily Record relates.

The independent games chain operated three stores in Ayrshire --
Irvine, Kilmarnock and Ayr, Daily Record discloses.

Games Centre's Irvine branch has been based at Irvine's
Bridgegate for 20 years and the chain was Scotland's largest
independent games retailer, according to Daily Record.


KEVIN NEAL: Directors Banned for Taking Assets From Firm
--------------------------------------------------------
A married couple who were directors of an independent financial
advice company have been disqualified for taking assets from an
insolvent company.

Kevin Gerald Neal, and his wife, Cheryl Neal, have been banned
from acting as company directors for 6 and 4 years respectively,
due to their misconduct in Kevin Neal Associates Wealth
Management LLP (KNAWM).

The finance company had been incorporated to take over the wealth
management business of a previous company, Kevin Neal Associates
Limited, which went into compulsory liquidation on July 1, 2013.

By a deed poll and declaration, signed by both Kevin and Cheryl
Neal on April 8, 2011, KNAWM became liable, amongst other
liabilities, for any award of the Financial Ombudsman Service
against Kevin Neal Associates Limited.

By May 2014, at least six decisions by the Financial Ombudsman
Service, totalling at least GBP573,274, had gone against Kevin
Neal Associates Limited and KNAWM.

The company's previous insurer refused to settle the claims and
the Financial Conduct Authority (FCA) had altered KNAWM's
permissions to ensure that it did not transfer away assets
without its permission.

Despite this, between May and June 2014, KNAWM transferred
GBP55,000 and two cars worth GBP22,120 to associated parties.

However, these transactions were to the unreasonable risk and
ultimate detriment of other creditors who either submitted claims
in the liquidation of Kevin Neal Associates Limited or were
included within the Statement of Affairs.

The Secretary of State accepted disqualification undertakings
from Kevin Gerald Neal and Cheryl Neal on May 10, 2018 for
periods of 6 and 4 years respectively and they are effective from
May 31, 2018.

The disqualifications prevent Mr and Mrs Neal from directly or
indirectly becoming involved, without the permission of the
court, in the promotion, formation or management of a company or
limited liability partnership for the duration of their bans.

Mark Bruce, Chief Investigator for the Insolvency Service, said:

"This is a particularly blatant example of common misconduct seen
by the Insolvency Service.

"Mr. and Mrs. Neal plainly acted to improve their position, once
the partnership was insolvent, while failing to honor either the
prior decisions of the Financial Ombudsman or the protections put
in by the FCA, specifically to stop such actions.

"Such conduct will invariably lead to disqualification."

Kevin Neal Associates Wealth Management LLP was incorporated on
September 2, 2010 and traded in Wealth Management from Repton
Manor, Repton Avenue, Ashford, Kent, TN23 3GP and The Maltings,
Bridge Street, Hitchin, Hertfordshire, SG5 2DE.

The allegation not disputed in the undertakings was:

Mr. Neal caused, and Mrs. Neal caused or allowed, Kevin Neal
Associates Wealth Management LLP ("KNAWM"), on May 19 and June 3,
2014, to make payments totalling GBP55,000 to an associated
company, and on May 27 and May 30, 2014 to transfer vehicles with
estimated equity of GBP11,363 and GBP10,757 to an associated
company and/ or themselves when they knew, or ought to have
known, that KNAWM was insolvent and due to enter into
liquidation. These transactions were to the unreasonable risk and
ultimate detriment of other creditors who submitted claims in the
liquidation, or were included within the Statement of Affairs
sworn by Mr. Neal, in respect of liabilities totalling
GBP9,443,648.

A disqualification order has the effect that without specific
permission of a court, a person with a disqualification cannot:

   - act as a director of a company
   - take part, directly or indirectly, in the promotion,
     formation or management of a company or limited liability
     partnership
   - be a receiver of a company's property

Persons subject to a disqualification order are bound by a range
of other restrictions.

Disqualification undertakings are the administrative equivalent
of a disqualification order but do not involve court proceedings.

The Insolvency Service administers the insolvency regime,
investigating all compulsory liquidations and individual
insolvencies (bankruptcies) through the Official Receiver to
establish why they became insolvent. It may also use powers under
the Companies Act 1985 to conduct confidential fact-finding
investigations into the activities of live limited companies in
the UK. In addition, the agency authorises and regulates the
insolvency profession, deals with disqualification of directors
in corporate failures, assesses and pays statutory entitlement to
redundancy payments when an employer cannot or will not pay
employees, provides banking and investment services for
bankruptcy and liquidation estate funds and advises ministers and
other government departments on insolvency law and practice.


STORE FIRST: Winding Up Petitions Continue
------------------------------------------
A voluntary questionnaire has been sent to investors of Store
First Limited to help assist the court in considering the
petitions.

In July 2017, the Business Secretary applied to the court to have
Store First Limited, a self storage company, and four other
related companies wound-up in the public interest.

To help progress the ongoing proceedings, the Insolvency Service
has sent a voluntary questionnaire to a selection of investors of
Store First Ltd and related companies to assist the court in
considering the petitions.

The investors contacted will have until June 4, 2018 to complete
the questionnaire and other investors are also welcome to
contribute.

If you have information you would like to submit to the
Insolvency Service in relation to your investment experience with
Store First and related companies, please send your comments to
storefirstpetition@dwf.law.

The companies involved in the action are:

   - Store First Limited,
   - Store First Blackburn Limited,
   - Store First St Helens Limited,
   - Store First Midlands Limited, and
   - SFM Services Limited.

A further date for the court to consider the petitions has not
been fixed, although there is an expectation that a trial will
take place before the end of the year.

"Until such time as the petitions have been heard and determined
by the court we are not able to provide any further information,"
the Insolvency Service said.


WEATHERLY INTERNATIONAL: Enters Administration, Shares Suspended
----------------------------------------------------------------
Weatherly International PLC on June 1 disclosed that the
Company's ordinary shares have been suspended from trading on
AIM, pending clarification of its financial and operational
position.

As a result of the material uncertainty regarding the Company's
operational and financial position, the Directors have now
appointed Simon Kirkhope -- simon.kirkhope@fticonsulting.com --
and Andrew Johnson -- andrew.j.johnson@fticonsulting.com -- of
FTI Consulting LLP ("FTI") as administrators to the Company.  Any
enquiries regarding the Company or its administration should be
directed to William Marsden on +44 (0)20 3727 1342.

It has also been agreed with the Panel on Takeovers and Mergers
that the formal sales process, announced on April 26, 2018, is
terminated, and the Company is no longer considered to be in an
"offer period", as defined in the City Code on Takeovers and
Mergers.  Parties with a continuing interest in making a proposal
should contact FTI as administrators to the Company.

Further announcements will be made as required.


                            *********

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

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

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


                            *********


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

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

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

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

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

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


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