---

        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 26, 2018, Vol. 19, No. 125


                            Headlines


C Y P R U S

ARAGVI HOLDING: S&P Withdraws Prelim 'B-' Issuer Credit Rating
AXION HOLDING: S&P Assigns B Issuer Credit Rating, Outlook Stable


F R A N C E

EUROPCAR GROUPE: S&P Alters Outlook to Pos. & Affirms 'B+' ICR


I R E L A N D

AURIUM CLO II: S&P Assigns Prelim B-(sf) Rating to Cl. F-R Notes
KANTOOR FINANCE 2018: S&P Rates Class E Notes Prelim. BB- Rating
MCALEER & TEAGUE: May Face Liquidation Over Loss-Making Contracts


I T A L Y

GUALA CLOSURES: S&P Places 'B' ICR on CreditWatch Positive


K A Z A K H S T A N

DEVELOPMENT BANK OF KAZAKHSTAN: S&P Affirms 'BB+/B' ICRs
SAMRUK-KAZYNA: S&P Affirms 'BB+/B' Issuer Credit Ratings


L U X E M B O U R G

ZACAPA SARL: S&P Assigns 'B-' Prelim. LT ICR, Outlook Positive


N E T H E R L A N D S

WEENER PLASTICS: S&P Assigns 'B' Long-Term ICR, Outlook Stable


R U S S I A

O1 PROPERTIES: S&P Cuts LT ICR to 'B-', Keeps RWN
BANK SBRD: Liabilities Exceed Assets, Assessment Shows
CB CREDIT: Liabilities Exceed Assets, Assessment Shows
CB EUROSTANDART: Liabilities Exceed Assets, Assessment Shows
CB LIGHTBANK: Liabilities Exceed Assets, Assessment Shows

LENINGRAD OBLAST: S&P Affirms 'BB+' Long-Term ICR, Outlook Stable


S P A I N

HIPOCAT 7: S&P Raises Rating on Class D Notes to B (sf)
TDA IBERCAJA: S&P Affirms D (sf) Rating on Class B Notes


S W E D E N

OVAKO GROUP: S&P Withdraws 'B-' Long-Term Issuer Credit Rating


U N I T E D   K I N G D O M

EUROMASTR 2007-1V: S&P Raises Class D Notes Rating to BB (sf)
HOUSE OF FRASER: Carlisle Store to Close Next Year After CVA OK'd
JEWEL UK: S&P Assigns 'B-' Issuer Credit Rating, Outlook Stable
THPA FINANCE: S&P Affirms B+ (sf) Credit Rating on Class C Notes


U Z B E K I S T A N

ORIENT FINANS: S&P Affirms B-/B ICRs, Outlook Stable


                            *********



===========
C Y P R U S
===========


ARAGVI HOLDING: S&P Withdraws Prelim 'B-' Issuer Credit Rating
--------------------------------------------------------------
S&P Global Ratings said that it had withdrawn its preliminary
'B-' issuer credit ratings on ARAGVI HOLDING INTERNATIONAL LTD
(TransOil) and its senior unsecured debt. S&P is unable to
convert its preliminary ratings into final ratings, due to a lack
of information.


AXION HOLDING: S&P Assigns B Issuer Credit Rating, Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B' long-term issuer credit
rating to Cyprus-registered IT services and solutions provider
Axion Holding Cyprus Ltd. The outlook is stable.

S&P said, "The rating reflects our view that Axion (operating
under the Softline brand) has moderately increased its S&P Global
Ratings-adjusted EBITDA to about $33 million in 2017 (based on
management's accounts) from about $28 million in 2016 (based on
the audited International Financial Reporting Standards [IFRS]
accounts). This improvement stems mostly from organic growth.

"We also consider that the refinancing risk and liquidity risk
related to Axion's debt portfolio (totaling $62 million at the
end of December 2017, represented by about $46 million of Russian
ruble-denominated domestic bonds and about $18 million of bank
debt and finance lease) has substantially decreased. This is
because in December 2017, Axion refinanced a significant part of
its short-term domestic loans with domestic bonds maturing in
July and December 2020.

"Nevertheless, our business risk assessment reflects our view
that Axion remains very small compared with its global peers, and
has a very low market share in a globally fragmented and highly
competitive IT market. We also factor Axion's high reliance on
Microsoft as a key supplier, accounting for about 50% of Axion's
consolidated revenue (2016: $628 million, 2017: $945 million,
according to the management's estimate). In addition, Axion's
EBITDA margin is below average for the sector, at about 3%-4%,
resulting from the low value-added reseller business model, price
pressure on the back of high competition with other IT products
resellers, and exchange rate volatility in Russia.

"Furthermore, we factor in high regulatory risks and exposure to
Russian country risk, since more than half of Axion's EBITDA is
generated in Russia. We are mindful of the heightened
substitution risk due to the imports replacement policy of the
Russian government, in particular, those regarding the software
supplied to Russian government-related entities, which we
understand represents about 10% of Axion's portfolio.
Nevertheless, we believe that the substitution threat is moderate
over the medium term due to lack of suitable local substitutes,
in particular for Microsoft products."

These risks are somewhat mitigated by Axion's long and successful
track record of cooperation with Microsoft (since 1993) and the
solid position it enjoys as one of Microsoft's six globally
managed Licensing Solutions Partners (LSP). The group is the No.
1 LSP in Russia, Central and Eastern Europe, Costa Rica, and
Cambodia. Axion is the No. 2 LSP in Argentina, Georgia, and
Turkmenistan, and the No. 3 LSP in Chile and Peru. In 2017, Axion
renewed all of its LSP authorizations and was additionally
authorized as an LSP in Thailand, the Philippines, Hungary, and
Romania.

S&P said, "We note that in 2017 the group increased its market
share in almost all areas of operation. Axion has a lower degree
of concentration on Microsoft in Russia compared with the total
business, with turnover and EBITDA from Microsoft contracts at
close to 40%. In addition, in 2017-2018 Axion made several small
acquisitions (in particular, a distribution platform and a
cybersecurity company, both operating in Russia), which are
important for its diversification strategy and should positively
affect the EBITDA margin from 2018. Additionally, Axion has a
partnership with over 3,000 international hardware and software
vendors, including major global players Oracle, Hewlett Packard,
Cisco, VMWare.

"Our financial risk profile assessment reflects Axion's
relatively moderate debt level, with S&P Global Ratings-adjusted
debt to EBITDA of 3.8x-4.0x in 2017, including $31.6 million of
preferred stock, which we add to debt because we understand there
is no strong subordination of this instrument to any other debt.
This corresponds to about 2.8x-3.0x, excluding the preferred
stock, as per our estimate. We also make an adjustment to the
debt to account for our estimate of about $25 million of
operating leases, which we will review when the company adopts
IFRS 16.

"We understand that Axion is planning an IPO in 2019-2020, and
may receive investments from funds specializing in emerging
markets. That said, since there is no certainty regarding the IPO
plans, we do not include this assumption into our base case. The
stable outlook reflects our expectation that Axion will maintain
its competitive position in the software licensing segment and
will diversify its activity, in particular through expanding its
cloud business, which should allow it gradually reduce the
concentration on its key supplier, Microsoft. We expect that
Axion's adjusted debt to EBITDA will remain below 4.0x and that
it will be generate positive FOCF of at least $5 million.
Furthermore, we expect that Axion will manage its refinancing
risks in a proactive manner.

"We could take a negative rating action if Axion's leverage
increases to above 4.0x on a prolonged basis, or its FOCF falls
to less than $5 million on the back of operating
underperformance. We would also lower the rating if the degree of
concentration on Microsoft increases or if there is a risk to the
maintenance of this contract. A negative rating action could also
stem from increased liquidity risk due to untimely refinancing.

"We might consider a positive rating action if Axion improves its
degree of diversification, both in terms of the geographic
footprint, reducing the share of revenues generated Russia to
below 50%, and product mix. This should be combined with growth
of EBITDA and gradual improvement of profitability from the
current 3%-4%. For a higher rating, we would need to see adjusted
debt to EBITDA sustainably below 3.0x and positive FOCF
generation capacity, combined with adequate liquidity and the
absence of refinancing and liquidity risks."


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


EUROPCAR GROUPE: S&P Alters Outlook to Pos. & Affirms 'B+' ICR
--------------------------------------------------------------
S&P Global Ratings revised its outlook on France-based car rental
company Europcar Groupe S.A. to positive from stable. S&P
affirmed its 'B+' long-term issuer credit rating.

S&P said, "At the same time, we lowered our issue rating on the
EUR350 million fleet bond to 'BB-' from 'BB' and revised down our
recovery rating to '2' from '1'. The recovery rating indicates
our expectation of substantial recovery (70%-90%, rounded
estimate: 80%) in the event of a payment default.

"In addition, we affirmed our 'BB' issue rating on the EUR500
million senior secured revolving credit facility (RCF) due 2022.
The recovery rating remains unchanged at '1', indicating our
expectation of very high recovery (90%-100%, rounded estimate:
95%) in the event of a payment default.

"We also affirmed our 'B-' issue ratings on the EUR1,200 million
senior secured notes due 2022 and 2024. The recovery rating
remains unchanged at '6', indicating our expectation of
negligible recovery (0%-10%, rounded estimate: 0%) in the event
of a payment default.

"The rating actions reflect our expectation that Europcar's
credit metrics will strengthen in 2018 and 2019, following
significant acquisition activity in 2017, and in spite of the
industry's cyclicality, capital intensity, and exposure to event
risks. We make key assumptions in our analysis that the group's
figures will benefit from full-year operations of the recent
acquisitions and start to realize some synergies. In 2017, the
group completed acquisitions of Goldcar (Dec. 17) and of
Buchbinder (Sept. 20) and its Danish franchise (April 27), which
weakened credit metrics from 2016 levels, mainly due to the
timing of the acquisitions.

"We believe that the group's focus on the fast-growing, low-cost
segment, while continuing to attract business customers that need
longer holding periods, and while refocusing its strategy in the
Vans and Trucks segment, should all help to improve its margins
over the next 12-24 months. We further acknowledge Europcar's
focus on urban mobility solutions, as it seeks to prepare itself
against disruptive changes in the industry. This is mostly driven
by the expectation that people in cities are choosing to swap the
costly responsibility of car ownership in favor of convenient,
on-the-spot mobility solutions, such as chauffeur services, car
sharing, and peer-to-peer car sharing.

"We continue to see Europcar benefitting from a solid market
position and brand recognition in its main markets of operations,
which remain fragmented. We expect Europcar to continue its
leading position in the car mobility and rental business,
supported by its growing operating scale and geographic presence
in more than 10 countries. We see its operational mix as balanced
between business (44% of revenues) and leisure (56% of revenues),
and between airport (57% of revenues) and off-airport (43% of
revenues) locations.

"The off-airport presence is notably higher than that of its U.S.
peers (both Hertz and Avis Budget generate only about 30% of
revenues from off-airport locations), but lower than other peers,
such as Car Inc. with about 80% revenues from off-airport sites
and Localiza with about 70%. We note the off-airport market is
more stable, with relatively consistent demand throughout the
year, and is generally less cyclical with higher profitability.
We also consider that Europcar has solid relationships and good
fleet diversification in terms of vehicle manufacturers
(Volkswagen, 28%; PSA, 21%; Fiat Chrysler, 15%; Renault-Nissan-
Mitsubishi, 12%; and others, 24%) in relation to its significant
buyback agreements (about 90% of fleet). We believe the group
benefits from good operational flexibility and efficiency, with a
solid average fleet utilization rate of 76.4% in 2017.

"Europcar's business risk is constrained by our view of the
price-competitive, cyclical, and capital-intensive nature of the
car rental industry. The group's revenue per day declined by 2.4%
in 2017 and will contract slightly further in 2018 while the
group grows its low-cost segment, principally through Goldcar's
integration, as well as owing to its focus on the Vans and Trucks
segment. It is still early to ascertain the effect of this
strategy, but we believe Europcar is well placed to capitalize on
Goldcar's expertise and track record in the low-cost segment.

"Additionally, we incorporate the car rental industry's
relatively short lease terms (both in absolute terms and as a
percentage of an automobile's economic life) in relation to other
peers in the operating leasing industry. We think Europcar has
limited business and geographic diversity outside of Europe,
which accounts for about 95% of revenues on a pro forma basis. In
addition, we view Europcar as exposed to low-probability, high-
impact events, such as severe weather, air traffic disruptions,
and geopolitical shocks, which can impact all travel-related
industries.

"Furthermore, the group is up against a possible threat from
ride-sharing services, which we expect to increase over time,
though we recognize the group's efforts of investing in those
segments through its New Mobility division. We also note that
Europcar is currently facing potential legal claims on inflating
repair bill costs in the U.K., which could cost the group about
EUR45 million.
We note 2017 saw poor performance in the U.K., but we expect some
stabilization in 2018. We will monitor the evolution and possible
consequences of such claims and possible contagious effect within
the industry.

"Europcar's aggressive expansion plan over the last 12 months,
which should persist in its currently stated strategy, has
resulted in additional debt and is a rating constraint. While we
believe there are some risks in successfully integrating recent
acquisitions, we positively acknowledge the complementary nature
of the acquired businesses, as well as important synergies to be
realized, which include, among others, better fleet-purchasing
power (higher discounts and lower interest) and lower overheads.
Nevertheless, in our opinion, Europcar lacks a sufficient track
record in successfully integrating its acquisitions. In addition,
we take into account the group's weak performance in the U.K.
last year, driven by the announced litigation for overcharging
repairs that could cost Europcar up to EUR45 million, as well as
stiff competition that caused operating performance to
significantly decline in this country. These factors challenge
stabilization on the operating performance front. Positively,
Europcar's good cost management and interest-servicing capability
support its financial risk profile although we acknowledge the
relative weakness of its FFO-to-debt ratio compared with rated
peers.

"The positive outlook reflects a one-in-three likelihood of an
upgrade over the next 12 months if Europcar can smoothly and
successfully integrate the recent acquisitions of Buchbinder and
Goldcar with its ongoing operations. We expect Europcar's EBIT
margin to be 13%-14% and its EBIT interest coverage to be 1.5x-
1.6x over the period, despite its evidenced aggressive growth
plans.

"We would raise the rating on Europcar if the group was able to
fully integrate all recent acquisitions of Buchbinder and Goldcar
without significant disruption to its other operations, which
could otherwise create volatility in earnings and credit
measures. We expect the recent acquisitions to create some cost
synergies in the medium term, which would further support an
upgrade. In addition, an upgrade would hinge on FFO to debt
staying near the middle range of 12%-20%, while EBIT interest
coverage remained comfortably above 1.3x.

"We may revise the outlook to stable or downgrade Europcar if a
decline in utilization rates, stiffening price competition, or
integration risks were to weaken the group's margins and cash
flows. A downgrade trigger could be Europcar failing to sustain
its EBIT interest coverage at 1.3x or above or if FFO to debt
fell notably below 12% longer than temporarily."


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


AURIUM CLO II: S&P Assigns Prelim B-(sf) Rating to Cl. F-R Notes
----------------------------------------------------------------
S&P Global Ratings assigned its preliminary credit ratings to the
class A-R, B-R, C-R, D-R, E-R, and F-R notes from Aurium CLO II
DAC, a collateralized loan obligation (CLO) managed by Spire
Partners.

The replacement notes will be issued via a supplemental trust
deed. The replacement notes will be issued at a lower spread over
Euro Interbank Offered Rate (EURIBOR) than the original notes
they replace. The cash flow analysis demonstrates, in S&P's view,
that the replacement notes have adequate credit enhancement
available to support the ratings assigned.

As part of the refinancing, the maximum weighted-average life
test will also be lengthened by 15 months, which S&P has
incorporated in its analysis.

The transaction has experienced overall stable performance since
our previous review. The transaction's reinvestment period ends
in July 2020, and all coverage ratios are well above the minimum
triggers.

Upon refinancing, the proceeds from the issuance of the
replacement notes will be used to redeem the original notes, upon
which S&P will withdraw the ratings on the original notes.

  CAPITAL STRUCTURE

  Current date after refinancing
  Class       Amount      Interest       Ratings
          (mil. EUR)      rate (%)       (prelim)

  A-R         210.00     3ME +0.68        AAA (sf)
  B-R         45.50      3ME +1.35        AA (sf)
  C-R         24.00      3ME +1.80        A (sf)
  D-R         18.00      3ME +2.75        BBB (sf)
  E-R         17.50      3ME +5.10        BB- (sf)
  F-R         10.50      3ME +7.50        B- (sf)

  Current date before refinancing
  Class       Amount      Interest
          (mil. EUR)      rate (%)
  A           205.00     3ME +1.40
  B            49.70     3ME +2.15
  C            23.60     3ME +3.10
  D            18.90     3ME +4.00
  E            17.20     3ME +5.95
  F            10.30     3ME +8.25

  3ME--Three-month EURIBOR.

  RATINGS LIST

  Aurium CLO II DAC
  EUR360.5 Million Secured Floating-Rate Notes

  Preliminary Ratings Assigned

  Replacement    Rating
  class
  A-R            AAA (sf)
  B-R            AA (sf)
  C-R            A (sf)
  D-R            BBB (sf)
  E-R            BB- (sf)
  F-R            B- (sf)


KANTOOR FINANCE 2018: S&P Rates Class E Notes Prelim. BB- Rating
----------------------------------------------------------------
S&P Global Ratings assigned preliminary credit ratings to Kantoor
Finance 2018 DAC's class A to E notes. At closing, Kantoor
Finance 2018 will also issue unrated class X1 and X2
certificates.

The transaction is backed by two Dutch commercial mortgage loans,
which Goldman Sachs Bank USA (Goldman Sachs) originated to
facilitate either the refinancing or acquisition of commercial
real estate between October 2017 and April 2018. The largest
loan, the PPF loan, has a current balance of EUR184.97 million
and equates to 74.6% of the pool by loan balance. The other loan,
the Iron loan, has a current balance of EUR58.37 million and
equates to 25.4% of the pool.

The aggregate market value of the two portfolios is EUR391.4
million, equivalent to a loan-to-value (LTV) ratio of 62.2%
(excluding Iron loan's capital expenditure tranche). Both loans
benefit from scheduled amortization.

As part of EU and U.S. risk retention requirements, the issuer
and the issuer lender (Goldman Sachs), will enter into a EUR12.4
million issuer loan agreement that represents 5% of each class of
notes and ranks pari passu to the notes of each class and the
class X certificates. The issuer lender will advance the issuer
loan to the issuer on the closing date. The issuer will apply the
issuer loan proceeds as partial consideration for the purchase of
the PPF and Iron loans.

CREDIT EVALUATION

PPF Loan

The loan is secured on mortgages over a portfolio of nine
commercial properties located across the Netherlands. The
portfolio comprises seven office buildings, one mixed-use
building (office and hotel), and one retail property. The initial
loan-to-value (LTV) ratio is 61.0%. Scheduled amortization over
the loan's term will result in an LTV ratio at maturity of 58.0%.
The loan's initial debt service coverage ratio (DSCR) is 4.3x.

S&P said, "We consider that the PPF portfolio can sustain a net
cash flow of EUR20.3 million, which would imply a debt yield of
11.0%. Our net recovery value for the portfolio is EUR233.4
million, which represents a 23.0% haircut (discount) to the open
market valuation."

Iron Loan

The loan is secured by a mortgage over a portfolio of nine office
assets located across the Netherlands. The loan's initial LTV
ratio (excluding the capital expenditure tranche) is 66.0%, and
its LTV ratio at maturity is 62.2%, based on the material
scheduled amortization. The initial DSCR is 3.6x.

S&P said, "We consider that the portfolio can sustain a net cash
flow of EUR7.0 million, which would imply a debt yield of 11.1%.
Our net recovery value for the portfolio is EUR68.4 million,
which represents a 22.6% haircut (discount) to the
open market valuation.

"In our analysis, we evaluated the underlying real estate
collateral securing each loan in order to generate an "expected
case" value. Our analysis focused on sustainable property cash
flows and capitalization rates. We assumed that a real estate
workout would be required throughout the five-year tail period
(the period between the maturity date of the loan that matures
last and the transaction's final maturity date) needed to repay
noteholders, if the respective borrowers were to default. We then
determined the recovery proceeds for both loans by applying a
recovery proceeds rate at each rating level. This analysis begins
with the adoption of base market value declines and recovery rate
assumptions for different rating levels. At each rating category,
we adjusted the base recovery rates to reflect specific property,
loan, and transaction characteristics.

"We aggregated the derived recovery proceeds above for each loan
at each rating level, and compared them with the proposed capital
structure. Following our credit analysis, we consider the
available credit enhancement for each class of notes to be
commensurate with our preliminary ratings on the notes."

  RATINGS LIST

  Kantoor Finance 2018 Designated Activity Company
  EUR235.74 mil Commercial mortgage-backed floating-rate notes

                                         Prelim Amount
  Class                 Prelim Rating       (mil, EUR)
  A                     AAA (sf)               137.75
  B                     AA (sf)                 19.95
  C                     A+ (sf)                 28.50
  D                     BBB+ (sf)               34.77
  E                     BB- (sf)                14.47
  X1                    NR                       0.20
  X2                    NR                       0.10

  NR--Not rated


MCALEER & TEAGUE: May Face Liquidation Over Loss-Making Contracts
-----------------------------------------------------------------
Fearghal O'Connor at Independent.ie reports that the latest firm
to run into problems due to loss-making public contracts is
65-year-old Northern Irish firm McAleer & Teague.

According to Independent.ie, documents show the company will only
avoid liquidation by undergoing an examinership process that sees
it withdraw from contracts to build new schools in Ballymun in
Dublin and Dunleer, Co Louth.


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


GUALA CLOSURES: S&P Places 'B' ICR on CreditWatch Positive
----------------------------------------------------------
S&P Global Ratings said that it placed its 'B' long-term issuer
credit ratings on Guala Closures SpA (Guala), a leading bottle
closures manufacturer, and its parent GCL Holdings S.C.A. (GCL)
on CreditWatch with positive implications.

S&P said, "We also put on CreditWatch positive our 'B' issue
rating on the EUR510 million senior secured notes issued by
Guala. The recovery rating is '4', indicating our expectation of
average recovery (rounded estimate: 45%) for debtholders in the
event of a default.

"We expect to withdraw the issue and recovery ratings once the
new capital structure is in place. We will also likely withdraw
our issuer credit rating on GCL because it will no longer be the
controlling entity of Guala."

The CreditWatch placement follows Space4's announcement that it
will be acquiring about 69% of the share capital of Guala
alongside its co-investors, Peninsula Capital (Peninsula) and
Quaestio Italian Growth Fund (Quaestio), which will acquire about
10% and 2% of the existing share capital, respectively, from
Guala's current private equity owners. The latter own Guala
through holding company GCL, with aPriori Capital Partners
(aPriori) as the majority shareholder. Guala will then formally
merge with Space4, a special-purpose acquisition company already
listed on the Italian stock exchange. Following the merger, the
listed entity will adopt the name Guala Closures SpA. The merger
is expected to close in August 2018.

If the listing is finalized as proposed, S&P believes it would
enhance Guala's credit profile through:

-- A change of the ownership structure, implying better
    visibility and understanding of Guala's future strategy and
    financial policy. The financial sponsors will relinquish
    their control of Guala, but remain minority shareholders. S&P
    expects that aPriori and other private-equity owners will
    hold about 3% of the share capital in the new entity post
    merger, with a six-month lock-up period. Peninsula will hold
    about 7% and Quaestio about 3%, both with a nine-month lock-
    up period; management will hold about 14% (and about 24% of
    the voting rights) with an 18-month lock-up period; and the
    rest will be free float.

-- The likelihood of lower debt. S&P said, "We understand that
    Guala's current debt (mainly consisting of the EUR510 million
    senior secured notes due in November 2021 and the EUR65
    million revolving credit facility [RCF] due in August 2021)
    is likely to be refinanced. Space4 will seek an approximately
    EUR600 million bridge loan before the completion of the
    refinancing. As a listed company, we understand that Guala
    plans to adhere to lower leverage of about 3.5x-3.75x net
    debt to EBITDA, and we expect that it will use some of the
    capital from the listing together with cash on hand to reduce
    debt to comply with this target. We calculate that Guala's
    S&P Global Ratings-adjusted funds from operations
    (FFO)-to-debt ratio will improve to above 12% from about 8%
    at year-end2017. We will monitor the new financial policy and
    debt reduction as part of our CreditWatch review."

Guala reported stable results for 2017, with revenue growth of 7%
and good operating margins of around 20%. Guala is geographically
well diversified, and its revenue base, on balance, should stay
resilient to local trends potentially affecting some markets. S&P
thinks Guala is well placed to benefit from greater penetration
of premium alcohol brands, where spirits manufacturers face high
counterfeiting risk. This, together with Guala's longstanding
relationships with leading spirits manufacturers, should increase
the company's ability to continue to offset unhedged raw material
prices with annually negotiated prices.

Guala's cash flow generation benefitted from lower interest
expenses as a result of a refinancing completed in late 2016.
However, free operating cash flow (FOCF) turned negative for 2017
as payments from some customers were settled with a slight delay,
which meant that higher accounts payable had to be reported as of
year-end 2017. S&P expects future FOCF generation to stabilize,
but this will partly depend on the new capital structure and debt
costs, as well as Guala's capital expenditure (capex) plans.

S&P said, "We note that the bottle closures market remains
fragmented. Guala has actively participated in market
consolidation through targeted small acquisitions of niche,
market-leading, local players, which it has been able to
integrate successfully with limited impact on leverage. We think
that external growth will be part of Guala's future strategy, but
do not incorporate any transformational acquisitions into our
base case at this stage."

S&P's base case assumes:

-- Low-single-digit organic growth in revenues as a result of
    uncertain economic growth prospects in Europe, coupled with
    potentially slow growth conditions in China, Mexico, and
    Argentina;

-- Strong and stable adjusted EBITDA margins at 20%-21%, r
    resulting in adjusted EBITDA of EUR110 million-EUR115
    million, supported by a greater contribution from higher-
    margin safety closures; and

-- Capex of about EUR37 million and ongoing high tax payments,
    contributing to low, albeit positive, FOCF generation.

S&P said, "If the listing, change of ownership, and refinancing
go ahead as planned, we anticipate that Guala's debt-protection
metrics will improve, with adjusted debt falling by about EUR130
million-EUR180 million if the listing proceeds are used to reduce
debt, compared with about EUR600 million at year-end 2017. (The
final amount depends on the results of the rights offering for
the Space4 shares, for which the right to withdrawal has been
exercised.) We believe this would result in stronger debt-metric
forecasts for year-end 2018, with FFO to debt increasing to above
12% from 8% and debt to EBITDA reducing below 4x, compared with
5.7x at year-end 2017. This could lead us to revise our
assessment of Guala's financial risk profile upward to aggressive
from highly leveraged.

"The CreditWatch placement indicates that we could raise the
ratings by at least one notch if the listing and refinancing are
completed in line with our expectations. We aim to resolve the
CreditWatch toward the end of this year, after Guala's completion
of the listing, the implementation of the new capital structure,
and the substantial decrease of the private equity sponsors'
stakes. As part of our CreditWatch resolution, we will assess
Guala's final capital structure and financial policy.

"If the listing does not take place as planned, and Guala's
capital and ownership structure are unchanged, we would likely
remove our 'B' ratings from CreditWatch and affirm them."


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


DEVELOPMENT BANK OF KAZAKHSTAN: S&P Affirms 'BB+/B' ICRs
--------------------------------------------------------
S&P Global Ratings said that it affirmed its long- and short-term
foreign- and local-currency issuer credit ratings on the
Development Bank of Kazakhstan (DBK) at 'BB+/B'. At the same
time, S&P affirmed the Kazakhstan national scale ratings at
'kzAA-' and the 'BB+' issue rating on the bank's senior unsecured
bonds. The outlook is stable.

S&P said, "The affirmation reflects our view that there is an
almost certain likelihood that the government of Kazakhstan would
provide timely and extraordinary support to DBK in a financial
stress scenario. DBK is the largest entity within the government-
owned Baiterek group and we expect it to remain core to the
overall Baiterek group strategy, which is broadly aimed at
supporting Kazakhstan's economic development and
diversification."

The Baiterek group credit profile (GCP) reflects the
creditworthiness of the consolidated operations group, taking
into account extraordinary government support from 'BBB-' rated
Kazakhstan. S&P's assessment of the GCP is one notch lower than
the sovereign rating, at 'bb+', which balances the negative
trends in Kazakhstan's government-related entities (GREs) sector.

S&P said, "We view DBK as playing a core role within Kazakhstan's
National Management Holding Baiterek group, therefore we equalize
our rating on DBK with Baiterek's GCP. DBK accounted for 60% of
the Baiterek group's consolidated assets as of end-2017. DBK's
general mandate to contribute to the development of Kazakhstan's
economy through investments in priority sectors closely aligns
with the overall Baiterek group strategy. We also consider it
highly unlikely that DBK would be sold.

"We also expect DBK to benefit from a considerable degree of
government backing. Specifically, we assess the likelihood of
extraordinary government support as almost certain based on:
DBK's integral link with the government of Kazakhstan, which
fully owns and monitors DBK through National Management Holding
Baiterek. DBK was established in 2001 by a Presidential Decree,
and it has special public status as a national development
institution under the Law On Development Bank of Kazakhstan. For
instance, DBK is not required to have a banking license or to
comply with prudential regulations applicable to commercial
banks. The government has injected additional capital into DBK in
the past, via Baiterek Holding. For instance, the share capital
was increased by Kazakhstani tenge (KZT) 20 billion in 2016 and
by a further KZT25 billion in 2017. DBK's critical role as the
primary institution mandated to develop Kazakhstan's production
infrastructure and the processing industry. It generally provides
long-term funding to large and capital-intensive investment
projects that have strategic significance for the government of
Kazakhstan for economic or social reasons. DBK plays a key role
in implementing several government programs including the five-
year State Program of Industrial and Innovative Development
(SPIID) 2015-2019 and the Nurly-Zhol State Program for
Infrastructure Development.

The amended development strategy of DBK was announced in
September 2017. It includes increasing the share of non-public
sources of borrowing from about 58.9% in 2016 to at least 80%
until 2023, and increasing the share of private business projects
in the bank's loan portfolio from 57.4% in 2016 to at least 70%
until 2023, in line with the President of Kazakhstan's stated
intention to reduce the government's share in the economy. In
S&P's view, this doesn't speak to the diminishing likelihood of
extraordinary government support. S&P's ratings on DBK are four
notches higher than its 'b' stand-alone credit profile (SACP).

S&P said, "We have affirmed the SACP on DBK at 'b'. It reflects
the combination of the 'bb-' anchor for Kazakhstan banks, which
is driven by high economic and industry risks for the system and
the entity's specific factors. In particular, it reflects DBK's
significant size, which is somewhat smaller than the largest two
commercial banks in Kazakhstan.

"We expect DBK's capitalization to remain at adequate levels
although to somewhat reduce in the next 18 months, taking into
account the impact of IFRS9 provisions. The bank's risk position
is comparable to the Kazakh banking system average, reflecting
high individual and by sector lending concentrations but low
reported nonperforming loans (NPLs) following the transfer of
legacy NPLs to the Investment Fund of Kazakhstan a few years
ago."

The bank's liquid assets adequately cover its short-term debt
repayments but the bank is vulnerable to refinancing risk as
concentrated wholesale funding dominates its funding profile. DBK
aims to diversify its lending across a variety of market sources
and to reduce its reliance on government funding.

S&P said, "The stable outlook on DBK mirrors our outlook on the
sovereign ratings on Kazakhstan. Any rating action on the
sovereign would likely result in a similar action on DBK.

"We could lower our ratings on DBK if we saw signs of waning
government support to the Baiterek group or, more broadly, to
other GREs over the next 12 months.

"We could raise the ratings on DBK if Kazakhstan's monitoring of
its GRE debt and the efficiency of administrative mechanisms to
provide extraordinary support to Kazakh GREs significantly
improved."


SAMRUK-KAZYNA: S&P Affirms 'BB+/B' Issuer Credit Ratings
--------------------------------------------------------
S&P Global Ratings affirmed its 'BB+/B' long- and short-term
issuer credit ratings on Kazakh government holding company
Samruk-Kazyna. The outlook is stable.

S&P also affirmed its 'kzAA-' Kazakhstan national scale rating on
Samruk-Kazyna and its 'BB+' issue rating on the company's senior
unsecured debt.

The affirmation reflects that S&P continues to see an almost
certain likelihood of Samruk-Kazyna receiving extraordinary
support from the government of Kazakhstan (BBB-/Stable/A-3), its
sole shareholder, in case of need, owing to its view of Samruk-
Kazyna's:

-- Critical role for the government as the main vehicle for
    implementing its agenda for strategic industrialization and
    long-term economic sustainability and diversification.
    Samruk-Kazyna controls essentially all of Kazakhstan's
    strategic corporate assets, and S&P estimates that the
    consolidated group's assets, including in the oil and gas
    sector, represent about 45% of Kazakhstan's GDP. Furthermore,
    Samruk-Kazyna's strategic role is set out in several key
    government documents and policy statements; and

-- Integral link with the government, which is the company's
    sole shareholder. Samruk-Kazyna enjoys special public status
    as a national management holding company, and S&P does not
    expect the government will reduce its stake in or control of
    the company in the foreseeable future. This is despite
    privatization plans regarding some of the subsidiaries
    Samruk-Kazyna controls, as announced by the government in
    2015. Kazakhstan's prime minister heads Samruk-Kazyna's
    board, and the government is closely involved in determining
    Samruk-Kazyna's strategic decisions.

S&P said, "Although we assess the likelihood of extraordinary
government support for Samruk-Kazyna as almost certain, our long-
term rating on the company continues to be one notch below that
on Kazakhstan because we believe the government's willingness to
support the government-related entity (GRE) sector is gradually
weakening.

"Our view is supported by the authorities' comparatively limited
involvement in ensuring timely payment of the obligations of
railway company Kazakhstan Temir Zholy, a key subsidiariy of
Samruk-Kazyna."

The ratings on Samruk-Kazyna incorporate several notches of
support, resulting in higher ratings than its stand-alone
creditworthiness would warrant. S&P assesses Samruk-Kazyna's
underlying credit quality, absent extraordinary government
support, in the 'b' category.

Samruk-Kazyna has participated in the implemention of some key
national policies since it was established by presidential decree
in 2008. It consolidates almost all of Kazakhstan's state-owned
corporate assets, including those in key sectors such as oil and
gas, power generation, transport, and mining, and manages them on
behalf of the government. Therefore, the company plays a central
role in helping the government meet key economic, political, and
social objectives, in S&P's view.

By law, Samruk-Kazyna's board of directors consists of four
independent members, the Minister of National Economy, Aide to
the President of Kazakhstan, Samruk_Kazyna's chief executive
officer, and Kazakhstan's prime minister, who will act as
chairman until 2020. Through regular board meetings and sole-
shareholder decisions, the government plays a decisive role in
Samruk-Kazyna's development strategy. Samruk-Kazyna must be 100%
owned by the government by law. In 2015, the government announced
plans to privatize some of Samruk-Kazyna's assets, including
those in the energy, mining, and transport sectors, to attract
foreign direct investment and stimulate economic growth. The
privatization list features some 215 entities owned and operated
by Samruk-Kazyna. The largest of its subsidiaries--AirAstana,
Kazatomprom, Kazakhtelecom, KazMunayGas, KTZ, Samruk-Energy, and
Kazpost--are targeted for IPO. According to government plans, a
15%-25% share of those companies is to be floated on the Astana
stock exchange by 2020.

S&P said, "In our view, Samruk-Kazyna still benefits from
adequate, ongoing support from the government through
concessional budget loans and regular capital injections from the
budget.

"The stable outlook on Samruk-Kazyna reflects that on Kazakhstan.
We would likely change our ratings or outlook on Samruk-Kazyna if
we took similar rating actions on the sovereign.

"We could lower the ratings on Samruk-Kazyna if we saw signs of
waning government support to the group or, more broadly, to other
GRE's over the next 12 months.

"We could raise the ratings if both Kazakhstan's monitoring of
its GRE debt, and the efficiency of administrative mechanisms to
provide extraordinary support to Kazakhstani GREs were to improve
significantly."


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


ZACAPA SARL: S&P Assigns 'B-' Prelim. LT ICR, Outlook Positive
--------------------------------------------------------------
S&P Global Ratings assigned its 'B-' preliminary long-term issuer
credit rating to Luxembourg-based fiber infrastructure services
provider Zacapa S.a.r.l. The outlook is positive.

S&P said, "At the same time we assigned our 'B-' preliminary
issue rating to the proposed $525 million first-lien term loan B
and its $93.5 million committed RCF to be issued by Zacapa
S.a.r.l. and its U.S.-based financing subsidiary Zacapa LLC. The
preliminary recovery rating is '3', indicating our expectations
of 50% recovery (rounded estimate) in the event of a payment
default.

"The preliminary ratings are subject to the completion of the
acquisition of the group by Cinven, successful issue of the
proposed facilities, repayment of existing debt, and our
satisfactory review of the final documentation. Accordingly, the
preliminary ratings should not be construed as evidence of final
ratings. If S&P Global Ratings does not receive the final
documentation within a reasonable time, or if the final
documentation departs from the materials that we have reviewed,
we reserve the right to withdraw or revise our ratings. Potential
changes include, but are not limited to, the use of proceeds,
interest rate, maturity, size, financial and other covenants, and
the security and ranking of the first-lien term loan and
revolving credit facility (RCF)."

Private equity firm Cinven is in the process of acquiring the
Latin-American operations of Ufinet (Ufinet LatAm) through a
leveraged buyout and will control it through Zacapa S.a.r.l.

S&P said, "Our ratings on Zacapa S.a.r.l. reflect our view of
Ufinet LatAm's moderate scale relative to larger carrier
operators, exposure to meaningful country risks, provision of
services with a degree of commoditization, high adjusted
leverage, and private equity ownership. It also reflects the
company's low reported free operating cash flow (FOCF), stemming
from its significant investments to deploy its fiber network and
coverage, combined with high adjusted leverage of about 5.6x at
year-end 2018. However, we expect this will improve as a result
of continued EBITDA growth, driven by supportive economics."

S&P's ratings also incorporate its view of Ufinet LatAm's greater
focus on lit-fiber services (wavelengths, ethernet, and internet
provider transit) than on higher-end dark fiber products, and
some customer concentration. These factors are partly mitigated
by a solid operational track record, longstanding relationships
with key customers, significant data traffic growth, and an
extensive trans-national network in Latin and Central America,
difficult for smaller local players to replicate.

Ufinet LatAm builds and leases both fiber-optic networks in
metropolitan areas, and long-haul networks, and sells
transmission services to companies and telecommunications
carriers in Latin America, provided through its network of about
16,500 kilometers (km) of metro-fiber across 1,840 cities,
including all capitals. Furthermore, its almost 32,700 km of
long-haul fiber provide the only land-based direct connection
between North and Latin America, thus offering the only land-
based alternative to submarine infrastructure.

The group derives approximately 86% of its revenues from high-
margin focus products, including lit fiber (55%) and to a lesser
extent, dark fiber (31%). Entry-level colocation, hosting, and
internet services generate the remaining revenues. Ufinet LatAm
generates revenues across 14 countries including Colombia (34% of
2017 revenues), Panama (25%), Guatemala (12%), and Costa Rica
(10%).

S&P said, "In our view, the industry is characterized by
significant installed fiber capacity globally; numerous
competitors, including many larger, better-capitalized,
multinational, and diversified telecom carriers; and a history of
ongoing price compression on less differentiated services such as
lit fiber, in particular prices per mega-bit (Mb). However, we
expect rising data volumes will continue to outweigh such price
decline per capacity unit in the near term, and will support
average price per circuit growth of about 2%-5% per year.
Therefore, we expect global demand for bandwidth will remain
strong, bolstered by increasing internet traffic data and video
transport. In particular, the roll out of long-term evolution
mobile technology and increasing mobile networks usage should
generate continuous demand for fiber connectivity between
wireless infrastructures.

"Our view of Ufinet LatAm's business is constrained by its
position as a niche player. The company has an estimated market
share of 4.1% within its footprint, competing with larger and
better-capitalized fiber-based telecom operators such as Lilac,
Telefonica and America Movil, with some overlap, mostly in
relation to metro networks. We also see Ufinet LatAm's business
risk profile as significantly weaker than before the spin-off of
its Spanish operations, which previously accounted for about 45%
of 2016 revenues. This is because the new structure will no
longer benefit from the more stable and dominant position in dark
fiber in the Spanish operations. Furthermore, its geographic
concentration and country risk exposure will increase
significantly because of the company's now exclusive Latin-
America based operations. Ufinet LatAm is exposed to various
political, regulatory, and economical risks stemming from the
jurisdictions where it operates. We are also mindful that the
company does not run a fully proprietary network, because it does
not own the physical routes along which it deploys its fiber
network. Moreover, Ufinet LatAm is exposed to ongoing price
pressure per Mb in the lit-fiber segment (55% of revenues), due
to lit-fiber services being relatively commoditized, in our view,
although we expect this will be outweighed by steadily rising
data capacity demand. In addition, contract periods are typically
shorter (one to three years) for lit fiber, and the market has
lower barriers to entry than dark-fiber.

Ufinet LatAm is further constrained by some customer
concentration, with the 10 largest customers representing 64% of
2017 revenue (excluding the recent acquisition of IFX Networks
LLC), although customers subscribe to multiple services across
the regions.

These negative factors are mitigated by:

-- Ufinet LatAm's regional presence across Latin America, with
    connectivity capabilities across regions allowing it to serve
    its customers (91% of which are global or regional
    telecommunications and utilities companies) more successfully
    than local operators, and no meaningful exposure to
    government contracts. S&P believes Ufinet LatAm's extensive
    network of about 49,200 km (of which 2,920 km are leased
    networks) across Central America down to Colombia remain a
    differentiating  factor over smaller, local operators.

-- A business model that provides significant revenue and cash
    flow visibility, with about 98% recurring revenues. Ufinet
    LatAm has multiple-year contracts (one to three years for
    lit-fiber services and 10 to 15 years for dark fiber) and a
    sizable contractual cash revenue backlog of $628 million as
    of December 2017. In addition, the company does not engage in
    speculative developments, since network expansions are driven
    by customer demand, although this requires strict planning
    capacities and accurate cost modelling.

-- A healthy EBITDA margin of about 44%-45% over 2017-2018.

-- Ufinet is the only large dark-fiber provider in its footprint
    (31% of 2017 revenues). Dark-fiber services produce stable
    and high recurring revenues from limited large-scale
    carriers, and make up the bulk of Ufinet LatAm's backlog
   ($307 million, $519 million including rights of way). The
    addressable market is limited at $400 million, of which
    Ufinet LatAm takes a 10% share as of year-end 2017. Its
    ability to provide dark fiber in the region gives it a
    competitive edge given scarcer dark-fiber capacity. The
    commercial and cost advantages of its extensive network help
    differentiate it from its competitors, which mostly focus on
    capacity services.

-- Addressable lit-fiber market of about $2.2 billion, which is
    expanding on the back of increasing demand for data (21%
    compound annual growth rate over 2016-2020) from consumers
    and businesses as well as mobile network operators that
    require fiber backbone for their towers (less than 30% of
    cell sites in Latin America are connected with fiber).

-- Significant barriers to entry due to significant cost and
    time requirements to roll-out fiber networks (Ufinet LatAm's
    network duplication would require capital expenditure
    [capex]of about $850 million) and some revenue visibility,
    although contract durations for lit fiber are shorter than
    for dark fiber.

S&P said, "Our assessment of Ufinet LatAm's financial risk is
primarily constrained by the company's low FOCF profile and high
debt. Network deployment requires large upfront investments,
spurred by increasing capacity demand and recent entrance in new
markets (Peru, Chile, Paraguay, and Ecuador). The company's fixed
customer-driven outlays to build new capacities are partly
prefunded because a portion of new contracts is based on
indefeasible rights of use (IRU), whereby the ultimate customer
pays upfront. That said, a large proportion of outlays are not
prefunded, resulting in only slightly positive FOCF over 2018-
2019. In our base case, we expect only breakeven reported FOCF in
2018, modestly increasing to $8 million in 2019, preventing the
group from reducing debt through voluntary debt amortization in
the medium term.

"Furthermore, we assess Ufinet LatAm's capital structure as
highly leveraged, with adjusted leverage of about 5.6x in 2018.
Although we foresee adjusted leverage potentially stepping down
by about one turn in 2019, our view of the company's financial
risk profile will continue to be constrained by its private-
equity ownership. We think this could translate into debt-
financed recapitalizations, and a likely steady flow of mergers
and acquisitions, with the company likely seizing opportunities
to acquire local players in order to further extend and densify
its fiber network.

"The positive outlook on Zacapa S.a.r.l. reflects our view that
we could upgrade the company in the next 12 months if Ufinet
LatAm sustains its sound operating track record after the
execution of the Spanish segment spinoff, and if we continue to
foresee a steady increase of FOCF, with an adjusted leverage
being maintained at less than 6.0x and continued sound liquidity.

"We could revise the outlook on Zacapa S.a.r.l. to stable if the
company's revenue and EBITDA growth slows down as compared to our
base case, if increased competition results in further pressure
on pricing, not offset by volume growth, if development capex
materially increases, translating into adjusted leverage over 6x,
or if it demonstrates negative FOCF and weakening liquidity.

"We are likely to upgrade Zacapa S.a.r.l. if Ufinet LatAm's
EBITDA growth results in higher absorption of capex, resulting in
stronger credit metrics and a reduction in adjusted leverage.
This would occur if the trend toward positive FOCF is confirmed
in 2018, increasing toward $10 million in 2019, and adjusted
leverage falling under 6x on a sustainable level."


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


WEENER PLASTICS: S&P Assigns 'B' Long-Term ICR, Outlook Stable
--------------------------------------------------------------
On June 13, 2018, S&P Global Ratings assigned its 'B' long-term
issuer credit rating to Netherlands-based Weener Plastics Group
B.V. The outlook is stable.

S&P said, "We also assigned our 'B' issue rating and '3' recovery
rating to the EUR75 million revolving credit facility (RCF) and
EUR335 million term loan B to be borrowed by Weener Plastics
Group. The recovery rating indicates our expectation of
meaningful (50%-70%; rounded estimate: 50%) recovery of principal
in the event of payment default.

"Weener has been owned by 3i since June 2015. Our issuer credit
rating reflects the capital structure after this refinancing and
the acquisition of Proenfar. The Weener group operates in a very
competitive and fragmented industry. Our rating reflects the
group's technical expertise, product innovation, strong EBITDA
margins, adequate geographic diversity, leading niche-market
positions in certain strategic product categories, ability to
provide tailor-made solutions, long-standing customer
relationships, and high customer retention rates."

The group sells to relatively noncyclical end markets, mainly
relating to the personal care, food, beverage, pharma, and home
care segments, with sales split between strategic (72% of sales)
and adjacent products (28% of sales). Its strategic product range
includes deodorant packaging (20% of sales), pharma packaging
(10% of sales), aerosol caps (7% of sales), and nutrition
packaging (6% of sales). Weener has leading niche positions in
certain strategic products, such as deodorant and nutrition
packaging. It ranks among the top four players in dispensing
closures, which account for 26% of sales. The group operates in
very fragmented segments.

Competitors include large global players such as RPC Group
(BB+/Positive/--), Berry Plastics (BB/Positive/--), and
AptarGroup (not rated), as well as regional and smaller players.

Some of Weener's adjacent products include jars and lids on
pouches and PET bottles. Although products under this segment are
less customized than its strategic range, Weener is able to
compete via its technological expertise, for example by providing
relatively lightweight adjacent products.

S&P said, "The stable outlook reflects our expectation that
Weener will continue to capitalize on its solid client
relationships and leading niche position in certain strategic
products. We anticipate annual revenue growth of 3%-5% and modest
positive FOCF. In the next 12 months, we expect that adjusted net
leverage will remain around 4.8x and FFO to debt about 14.8%.

"We could raise the rating if Weener generated FOCF of about
EUR20 million annually. A positive rating action would also hinge
on Weener maintaining its leverage below 5x. An upgrade would
also be contingent on the group's and owner's commitment to
maintaining a conservative financial policy that would support
such credit ratios.

"We view downside as unlikely over the next 12 months. We could
lower the rating if Weener experienced unexpected customer losses
or margin deterioration resulting in negative operating cash flow
or FFO to cash interest coverage below 2x, on a sustained basis.

"We could lower the rating if the group's financial policy became
more aggressive, especially with regard to shareholder
remuneration, preventing any material deleveraging."


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


O1 PROPERTIES: S&P Cuts LT ICR to 'B-', Keeps RWN
-------------------------------------------------
S&P Global Ratings said that it had lowered its long-term issuer
credit rating on Russian real estate investment company O1
Properties Ltd. to 'B-' from 'B' and kept the rating on
CreditWatch with negative implications.

S&P said, "We also lowered our issue ratings on the notes issued
by O1 Properties Finance plc and O1 Properties Finance JSC to
'CCC+' from 'B-' and kept them on CreditWatch negative.

"The downgrade reflects our view that the likelihood of a change
of control in O1 Properties is increasing and, could, at the
request of its creditors, lead to most of the company's debt
becoming due for repayment. There is a change-of-control clause
in O1 Properties' $350 million Eurobond maturing in 2021, as well
as in most of the company's secured loan covenants."

It is currently unclear if the previous possible takeover by
Laysa Group will occur, as there are other entities interested in
taking over control over O1 Properties.

O1 Group has already stopped servicing part of its debt. The
controlling stake in O1 Properties currently owned by O1 Group is
pledged under the Russian ruble 25 billion ($430 million) loan
originally borrowed from Credit Bank of Moscow. S&P said, "We
believe that it is becoming more difficult for O1 Group to
continue servicing its debt obligations, including this loan. We
understand Moscow Credit Bank conceded the right of claim under
that loan, but it is unclear which entity currently has the right
of claim under it. We understand that O1 Properties' management
plans to take over the $175 million loan from O1 Group, which was
guaranteed by O1 Properties."

The legal dispute between O1 Group and Bank Otkritie Financial
Co. is ongoing, and one of O1 Properties' smaller assets remains
under arrest because of the bank's claim. S&P notes the recent
exit of Goldman Sachs International from O1 Properties' share
capital as it exercised its put option, which it views as a
negative sign for O1 Properties' corporate governance.

S&P said, "We view O1 Properties' liquidity position as less than
adequate, due to the additional shareholder distributions that
might be upstreamed to O1 Group or to a new controlling
shareholder, as well as the company's weak credit standing in the
public debt markets.

"We rate O1 Properties senior unsecured bonds one notch below the
issuer credit rating, as they rank behind a significant amount of
secured debt in the capital structure. O1 Properties' capital
structure consisted of $2,133 million of secured debt and $930
million of unsecured debt as of Dec. 31, 2017.

"We continue to see heightened risks to O1 Properties' debt
leverage and increased uncertainty over the company's future
strategy and financial policy. If O1 Properties is burdened with
additional debt from O1 Group on top of the $175 million loan, it
might put additional pressure on O1 Properties' already weak
credit metrics, as its debt-to-debt plus equity ratio is more
than 75% and its EBITDA interest coverage is about 1x.

"We expect to resolve the CreditWatch when the situation at the
O1 Group level ceases to put pressure on O1 Properties' credit
quality and after we have more clarity on O1 Properties' future
ownership structure and strategy.

"We could downgrade O1 Properties by one notch or more if a
change of control at the O1 Properties level occurs and if debt
holders chose to exercise their right for immediate debt
repayment. We could also lower the rating on O1 properties if we
believe the company had become integral to the identity of an
entity with a weaker group credit profile or a more aggressive
financial policy.

"We would likely affirm our 'B-' rating on O1 Properties if the
change in ownership does not trigger debt repayment and if we
believe the new shareholding does not pose a threat to O1
Properties' credit metrics or overall credit profile. An
affirmation would also be conditional upon the final resolution
of the ongoing legal disputes between O1 Group and Bank Otkritie
Financial Co. without additional negative implications for O1
Properties' credit quality."


BANK SBRD: Liabilities Exceed Assets, Assessment Shows
------------------------------------------------------
The provisional administration to manage the credit institution
Bank SBRD (LLC), hereinafter, the Bank, appointed by Bank of
Russia Order No. OD-281, dated June 2, 2018, following banking
license revocation, conducted an investigation of the bank's
financial standing and identified operations aimed at withdrawal
of its assets, by replacing liquid assets with less liquid ones,
which resulted in over RUR750 million of financial damage.

The provisional administration estimates the value of the Bank
assets to be not more than RUR1,355 million, vs RUR3,320 million
of its liabilities to creditors.

On March 15, 2018, the Arbitration Court of the Tyumen Region
recognized the bank as insolvent (bankrupt).  The State
Corporation Deposit Insurance Agency was appointed as a receiver.

The information on the financial transactions bearing the
evidence of criminal offence, conducted by the Bank's executives,
was sent to law enforcement authorities for consideration and
procedural decision making.

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


CB CREDIT: Liabilities Exceed Assets, Assessment Shows
------------------------------------------------------
The provisional administration to manage the credit institution
CB Credit Express LLC (hereinafter, the Bank) appointed by Bank
of Russia Order No. OD-630, dated March 15, 2018, following the
revocation of its banking license, in the course of examination
of the bank's financial standing has revealed actions performed
by its former management and owners bearing the evidence of theft
of property and that of intentions to conceal previous asset
withdrawal transactions.

The provisional administration estimates the value of the Bank
assets to be not more than RUR993 million, vs RUR1,910 million of
its liabilities to creditors.

On April 12, 2018, the Arbitration Court of the Rostov Region
recognized the bank as insolvent (bankrupt).  The hearing was
scheduled for June 18, 2018.

The Bank of Russia submitted the information on the financial
transactions bearing the evidence of criminal offence conducted
by the Bank's executives to the Prosecutor General's Office of
the Russian Federation, the Ministry of Internal Affairs of the
Russian Federation and the Investigative Committee of the Russian
Federation for consideration and procedural decision making.

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


CB EUROSTANDART: Liabilities Exceed Assets, Assessment Shows
------------------------------------------------------------
The provisional administration to manage the credit institution
Commercial Bank EUROSTANDART LLC, further referred to as the
Bank, appointed by Bank of Russia Order No. OD-3387, dated
December 4, 2017, following banking license revocation, in the
course of its inspection of banknotes, coins and other valuables,
revealed a shortage of over RUR160 million in cash desks of the
credit institution's internal structural divisions.

Also, in the course of its examination of the bank's financial
standing, the provisional administration revealed the theft of $5
million, committed by unidentified persons from the Bank's vault.

The provisional administration-conducted probe into the bank's
financial standing further established the Bank's assets total
under RUR1,200 million, vs over RUR1,440 million of its
liabilities to creditors.

Given these circumstances, on May 5, 2018, the Arbitration Court
of the City of Moscow recognized Commercial Bank EUROSTANDART LLC
as bankrupt.  The State Corporation Deposit Insurance Agency was
appointed as a receiver.

The information on financial transactions bearing the evidence of
the criminal offence conducted by the former management and
officers of Commercial Bank EUROSTANDART LLC was submitted to the
Prosecutor General's Office of the Russian Federation, the
Ministry of Internal Affairs of the Russian Federation and the
Investigative Committee of the Russian Federation in December
2017 and May 2018 for consideration and procedural decision
making.

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


CB LIGHTBANK: Liabilities Exceed Assets, Assessment Shows
---------------------------------------------------------
The provisional administration of CB LIGHTBANK LLC (hereinafter,
the Bank) appointed by Bank of Russia Order No. OD-776, dated
March 29, 2018, due to the revocation of its banking license,
encountered obstruction of its activity from the first day of its
operations.

In contempt of the legislation of the Russian Federation, the
Bank's management failed to submit to the provisional
administration original copies of loan documentation to a total
of ca. RUR15 million.

In the course of examination of the bank's financial standing,
the provisional administration revealed actions, performed by its
former management and owners, bearing the evidence of theft of
the Bank's property and that of intentions to conceal previous
asset withdrawal transactions.  Also, in the course of its
operations the provisional administration revealed a cash
shortage to a total of over RUR144 million.

The provisional administration estimates the Bank's assets to
total not more than RUR403 million vs RUR810 million of its
liabilities to creditors.

The Bank of Russia submitted the information on the financial
transactions bearing the evidence of criminal offence conducted
by the Bank's executives to the Prosecutor General's Office of
the Russian Federation, the Ministry of Internal Affairs of the
Russian Federation and the Investigative Committee of the Russian
Federation for consideration and procedural decision making.

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


LENINGRAD OBLAST: S&P Affirms 'BB+' Long-Term ICR, Outlook Stable
-----------------------------------------------------------------
On June 22, 2018, S&P Global Ratings affirmed its 'BB+' long-term
issuer credit rating on the Russian region Leningrad Oblast. The
outlook is stable.

OUTLOOK

The stable outlook reflects S&P's expectation that, over the next
12 months, the region will maintain its strong liquidity position
and limit its recourse to debt, thanks to high operating balances
and using cash to cover deficits.

Downside scenario

S&P could lower the rating on Leningrad Oblast in the next 12
months if the oblast's budgetary performance and liquidity
weakened as a result of a pronounced reduction in tax revenues or
a looser spending policy at the oblast level.

Upside scenario
S&P could raise the rating on Leningrad Oblast in the next 12
months if stronger revenue and expenditure management enabled the
oblast to structurally post strong budgetary performance while
keeping its favorable liquidity position.

RATIONALE

S&P said, "We continue to assume that, in the coming three years,
Leningrad Oblast will post high operating balances that will help
contain its deficits. Furthermore, we believe the oblast will
rely on cash to help narrow its deficits, thereby maintaining a
very limited debt burden. Despite the use of cash reserves,
however, we expect the oblast will continue to post strong
liquidity."

Centralized institutional framework limits management's ability
to counterbalance revenue volatility

Like other Russian regions, Leningrad Oblast has very limited
control over its revenues and expenditures within the centralized
institutional framework, which remains unpredictable and where
frequent changes to taxing mechanisms affect regions. The federal
government regulates the rates and distribution shares for most
taxes and transfers, leaving only about 5% of operating revenues
that the region can manage. The new presidential decrees of May
2018 will likely result in higher capital expenditures by most
Russian local and regional governments (LRGs) through 2024. These
will focus mainly on healthcare, education, and infrastructure.

The application of the consolidated taxpayer group, the tax-
payment scheme used by corporate taxpayers since 2012, continues
to undermine the predictability of corporate profit tax (CPT)
revenues. In addition, the federal budget law for 2018-2020
contains no provisions for new budget loans. However, S&P
understands that Leningrad Oblast is participating in the
restructuring of its outstanding budget loans, initiated by the
Federal Ministry of Finance, which will support its liquidity.

Leningrad Oblast's economy benefits from its favorable location
surrounding the City of St. Petersburg and on the transit routes
to the EU, as well as from a continuing inflow of investments
into transport and energy infrastructure and the manufacturing
sector. The region now ranks among Russia's top 10 LRGs in terms
of year-on-year increase in investment inflows. Supported by
several new projects in the region, including Gazprom's Nord
Stream 2 pipeline, the region demonstrated a 12% year-on-year
increase in investment inflows in 2016 and 26% in 2017. However,
S&P believes that gross regional product per capita will remain
below US$16,000 over the next three years.

S&P said, "We believe capital expenditures will contribute over
15% of total spending in the coming three years. At the same
time, our assessment also captures new expenditures related to
the May 2018 presidential decrees, which will likely limit the
oblast's ability to cut spending in the medium term. The oblast's
leeway also remains limited by the large share of inflexible
social spending. Similar to most Russian LRGs, Leningrad Oblast's
modifiable revenues (mainly transport tax and nontax revenues)
are low and don't provide much flexibility. We forecast they will
account for less than 10% of the oblast's operating revenues on
average over the next three years.

"We believe that the region enjoys higher political and
managerial strength, as well as more prudent and sophisticated
debt and liquidity management, than most of its Russian peers. At
the same time, similar to most Russian LRGs, Leningrad Oblast
lacks reliable long-term financial planning and, in our view, its
management of government-related entities (GREs) remains weak
compared with international peers'."

Tighter balances, but still low debt, thanks to significant cash
cushion

S&P said, "We believe that the oblast's operating margins will
tighten in the coming three years as the rate of revenue growth
normalizes compared with 2015 and expenditures remain relatively
high, which will result in a modest deficit after capital
accounts of below 5% of total revenues on a five-year average in
2016-2020. We anticipate that, in the near term, Leningrad
Oblast's key revenue source, CPT, will continue to account for
about 50% of operating revenues and will remain volatile because
of its strong link with the cyclical oil industry.

"We anticipate that, in 2018-2020, the oblast will use its
accumulated cash to finance deficits. Tax-supported debt will
therefore not exceed 10% of consolidated operating revenues
through 2020. Apart from direct debt, we include in our
calculation of the oblast's tax-supported debt the guarantees
that it provides to its GREs. The oblast's largest outstanding
guarantee of about Russian ruble 390 million maturing in 2019 was
granted to the hotel it owns in Sochi, Zvyozdny.

"We view the oblast's contingent liabilities as very low, thanks
to the oblast's low involvement in the local economy. We estimate
support to GREs will not exceed 2% of the oblast's total
revenues, and we believe that its municipal sector is relatively
healthy financially. We therefore don't expect any significant
extraordinary support to be required from the budget in the
coming years.

"We assume that in the next 12 months, the oblast's average free
cash, net of the deficit after capital accounts will exceed its
very low debt service over the next 12 months, by a comfortable
margin. Similar to its Russian LRG peers, we view the oblast's
access to external liquidity as limited, given the weaknesses of
the domestic capital market and the banking system."

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

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

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

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

  RATINGS LIST
  Ratings Affirmed

  Leningrad Oblast
   Issuer Credit Rating        BB+/Stable/--


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


HIPOCAT 7: S&P Raises Rating on Class D Notes to B (sf)
-------------------------------------------------------
S&P Global Ratings raised and removed from CreditWatch positive
its credit ratings on Hipocat 7, Fondo de Titulizacion de
Activos' class A2, B, C, and 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 the 'A' to 'B'
rating levels compared with our previous review, mainly driven by
our revised foreclosure frequency assumptions. The credit
coverage for 'AAA' and 'AA' rating levels have increased in
comparison with the previous review due to the increase in 'AAA'
repossession market value decline."

  Rating level     WAFF (%)    WALS (%)
  AAA                 27.94       25.67
  AA                  19.19       20.00
  A                   14.55       11.04
  BBB                 10.83        6.45
  BB                   7.16        3.71
  B                    4.32        2.00

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

Credit enhancement available in Hipocat 7 has increased since the
previous review due the reserve fund being partially replenished.
The reserve fund increased to EUR14.87 million in April 2018 from
EUR4.38 million in April 2017. The reserve fund was partially
depleted in the past as it was used to provision for loans in
foreclosure and in arrears over 18 months. In November, the
servicer, Banco Bilbao Vizcaya Argentaria S.A. (BBVA), acquired
about EUR1.74 million of repossessed properties from the fund.
Cash flows from the sale of these properties contributed to the
partial replenishment of the reserve fund. In addition, according
to the trustee, during 2017, recoveries from defaulted assets
also contributed to replenishing the reserve fund.

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 also removed our ratings on these classes
of notes from CreditWatch positive.

"Our rating on the class C notes is not capped by our RAS
analysis as the application of our European residential loans
criteria, including our updated credit figures, caps our rating
on the class C notes at 'BBB+ (sf)'. We have therefore raised to
'BBB+ (sf)' from 'BB+ (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 their position in the
capital structure and sensitivity to the various recovery
assumptions, and the scope of the improvement in credit
enhancement since the last review.

"The class D notes are not capped by our RAS analysis. At the
same time their credit enhancement has improved to -6.32% from -
8.06%, calculated excluding loans in arrears for more than 180
days, since our previous review. As a consequence we have raised
to 'B (sf)' from 'B- (sf)' and removed from CreditWatch positive
our rating on the class D notes. In our analysis of this class of
notes we have considered the magnitude of the negative credit
enhancement, their position in the capital structure, the
sensitivity to the various recovery assumptions, and the scope of
the improvement in credit enhancement since our previous review."

Hipocat 7 is a Spanish residential mortgage-backed securities
(RMBS) transaction that closed in June 2004 and securitizes
first-ranking mortgage credits. Catalunya Banc, which was
formerly named Caixa Catalunya and is now part of BBVA,
originated the pool. The pool comprises credits secured over
owner-occupied properties, mainly in Catalonia.

  RATINGS LIST
  Class             Rating
              To               From

  Hipocat 7, Fondo de Titulizacion de Activos EUR1.4 Billion
  Mortgage-Backed Floating-Rate Notes

  Ratings Raised And Removed From CreditWatch Positive

  A2          AAA (sf)         AA+ (sf)/Watch Pos
  B           AA (sf)          A (sf)/Watch Pos
  C           BBB+ (sf)        BB+ (sf)/Watch Pos
  D           B (sf)           B- (sf)/Watch Pos


TDA IBERCAJA: S&P Affirms D (sf) Rating on Class B Notes
--------------------------------------------------------
S&P Global Ratings raised and removed from CreditWatch positive
its credit ratings on TDA IBERCAJA ICO-FTVPO, Fondo de
Titulizacion Hipotecaria's class A(G) notes. At the same time,
S&P affirmed its 'D (sf)' rating on the class B 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.

"Following the sovereign upgrade, on April 6, 2018, we raised to
'A' from 'A-' our long-term issuer credit rating (ICR) on Banco
Santander S.A., , which is the swap provider in this transaction.

"The counterparty risks in this transaction are related to
Societe Generale (Madrid branch) as the transaction accounts
provider and Banco Santander as the swap provider. Under our
counterparty criteria, our rating on the class A(G) notes is
capped by the remedy period defined in the downgrade language in
the bank account contracts, which, limits the maximum potential
rating in this transaction at the 'AA+' rating level.

"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. As the pool's attributes
indicate better credit quality than the archetype, we increased
the projected loss that we modeled to meet the minimum floor
under our European residential loans criteria."

  Rating level     WAFF (%)    WALS (%)

  AAA                12.23       25.04
  AA                  8.28       23.64
  A                   6.22       17.72
  BBB                 4.56       14.99
  BB                  2.99        8.27
  B                   1.76        7.14

S&P said, "The class A(G) notes' credit enhancement has increased
to 18.3% from 16.7% since our previous review due to the
amortization of the notes.

"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 European residential loans criteria and
our RAS criteria allows our rating on the class A(G) notes to be
at six notches above our unsolicited 'A-' long-term sovereign
rating on Spain. However our rating is capped under our current
counterparty criteria by the guaranteed investment contract
downgrade language at the 'AA+' rating level. We have therefore
raised to 'AA+ (sf)' from 'AA- (sf)' and removed from CreditWatch
positive our rating on the class A(G) notes."

The class B notes were issued at closing to fund the reserve fund
and interest and principal payments will be made on this class
after the reserve fund has replenished. This tranche has been
paying timely interest due as a consequence of the negative
interest rates and interest not being accrued on senior tranches.
Once interest rates start increasing again, there will be no
excess spread to cover for the interest on this tranche given its
subordinated position in the priority of payments. S&P said,
"Following the application of our criteria for the use of 'D'
category ratings, even if amounts due on this class of notes have
resumed and interest is currently being paid, given its
subordination to the reserve fund in the priority of payments, we
believe a further default is virtually certain. We have therefore
affirmed our 'D (sf)' rating on this class of notes."

TDA IBERCAJA ICO-FTVPO is a Spanish residential mortgage-backed
securities (RMBS) transaction, which securitizes a portfolio of
first-ranking mortgage loans granted to Spanish residents. The
transaction closed in July 2009.

  RATINGS LIST

  Class             Rating
              To               From

  TDA IBERCAJA ICO-FTVPO, Fondo de Titulizacion Hipotecaria
  EUR447.2 Million Floating-Rate Notes

  Rating Raised And Removed From CreditWatch Positive

  A(G)          AA+ (sf)         AA- (sf)

  Rating Affirmed

  B              D (sf)


===========
S W E D E N
===========


OVAKO GROUP: S&P Withdraws 'B-' Long-Term Issuer Credit Rating
--------------------------------------------------------------
S&P Global Ratings said that it had withdrawn its 'B-' long-term
issuer credit rating on Sweden-based engineering steel producer
Ovako Group AB at the company's request.

S&P also withdrew its 'B-' issue ratings on Ovako's EUR310
million senior secured notes issued by Ovako's wholly owned
subsidiary, Ovako AB, which have now been redeemed as part of the
acquisition.

The ratings were on CreditWatch with positive implications at the
time of the withdrawal, following the announced acquisition by
Nippon Steel & Sumitomo Metal Corp. in March 2018, which was
completed recently.


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


EUROMASTR 2007-1V: S&P Raises Class D Notes Rating to BB (sf)
-------------------------------------------------------------
S&P Global Ratings raised its credit ratings on EuroMASTR PLC's
series 2007-1V's class C and D notes. At the same time, S&P has
affirmed its ratings on the class A2, B, and E notes.

S&P said, "The rating actions follow our credit and cash flow
analysis of the transaction using information from the March 2018
investor report. Our analysis reflects the application of our
European residential loans criteria.

"The pool's performance has been consistent since our previous
review of the transaction in May 2016. Total delinquencies have
increased to 18.5% from 15.3%, while 90 days past due arrears
have declined to 8.3% from 11.0%. The level of arrears in this
transaction remains higher than for our U.K. non-conforming
index, which stood at 13.0% for total arrears, and 6.8% for 90
days past due arrears as of Q1 2018.

"Since our previous review, our weighted-average foreclosure
frequency (WAFF) assumptions have decreased due to the higher
portion of loans with seasoning of more than ten years. Our
weighted-average loss severity (WALS) assumptions have decreased
at all rating levels due to a decline in weighted-average current
loan-to-value (CLTV)."

  WAFF AND WALS ASSUMPTIONS

  Rating                   WAFF                  WALS
                            (%)                   (%)
  AAA                      50.7                  46.9
  AA                       45.1                  37.6
  A                        41.8                  22.3
  BBB                      38.5                  13.6
  BB                       35.1                   8.0
  B                        34.0                   4.6

The transaction is currently paying pro-rata, as all pro-rata
conditions are met, including zero principal deficiency ledger
(PDL) balance. The credit enhancement available to all rated
classes of notes has nevertheless slightly increased since our
previous review due to a non-amortizing cash reserve. The cash
reserve cannot amortize over the remaining life of the
transaction due to a breach in the cumulative loss trigger. The
transaction also benefits from a liquidity facility, which cannot
amortize for the same reason.

"Our view on counterparty, legal, and operational risks remains
unchanged since our previous review. The maximum potential rating
on the notes is capped at issuer credit rating (ICR) on Danske
Bank A/S acting as the transaction's liquidity facility and
guaranteed investment contract (GIC) account provider. The
current level of this cap is 'A', in accordance with our
counterparty criteria.

"As a result of the application of our counterparty criteria,
although our credit and cash flow analysis shows that the credit
enhancement available to the class A2 and B notes would otherwise
be commensurate with higher ratings, we have affirmed our 'A
(sf)' ratings on the class A2 and B notes.

"Taking into account the transaction's performance and the slow
build-up of available credit enhancement, we have raised to 'A
(sf)' from 'BBB+ (sf)' our rating on the class C notes and to 'BB
(sf)' from 'B+ (sf)' that on the class D notes. We have also
affirmed our rating on the class E notes at 'B- (sf)', as we
believe that payment of principal and interest on the class E
notes is not dependent upon favorable business, financial, or
economic conditions in accordance with our criteria. Our view is
based on the stable transaction and collateral performance, and
the benign outlook for the U.K. residential mortgage market."

EuroMASTR's series 2007-1V is a securitization of a pool of
nonconforming U.K. residential mortgages secured over freehold
and leasehold properties in England and Wales.

  RATINGS LIST

  Class            Rating
             To            From

  EuroMASTR PLC
  GBP200.75 Million Mortgage-Backed Floating-Rate Notes Series
  2007-1V

  Ratings Raised

  C          A (sf)       BBB+ (sf)
  D          BB (sf)       B+ (sf)

  Ratings Affirmed

  A2         A (sf)
  B          A (sf)
  E          B- (sf)


HOUSE OF FRASER: Carlisle Store to Close Next Year After CVA OK'd
-----------------------------------------------------------------
News & Star reports that Carlisle's House of Fraser shop will
close after creditors granted approval for the department store
to shut 31 stores.

According to News & Star, 6,000 jobs will be lost nationally,
including about 150 in Carlisle.

The store, on English Street, is likely to shut next year, News &
Star states.

The chain announced plans to close the 31 branches next year, in
a radical restructuring by the company's Chinese owners, News &
Star relates. The flagship Oxford Street store is among those to
close.

The report says the June 24 vote was a make-or-break moment for
the 169-year-old business.  If the rescue plan had failed,
administration was likely.

House of Fraser used what is called a company voluntary
arrangement (CVA), a form of insolvency proceedings, to overhaul
its business, News & Star discloses.

It is hoped that some of the concessions within House of Fraser
will stay in the city and open shops of their own, News & Star
states.


JEWEL UK: S&P Assigns 'B-' Issuer Credit Rating, Outlook Stable
---------------------------------------------------------------
S&P Global Ratings said that it assigned its 'B-' long-term
issuer credit rating to Jewel UK Midco Ltd., the parent of U.K.-
based watch and jewelry retailer Aurum. The outlook is stable.

S&P said, "At the same time, we assigned our 'B-' issue rating to
the group's five-year GBP265 million senior secured notes, issued
by Jewel UK Bondco PLC. The recovery rating on these notes is
'3', indicating our expectations of meaningful recovery (50%-70%;
rounded estimate: 55%) in the event of default.

"The ratings reflect Aurum's position as a leading U.K. luxury
watch retailer, where it operates under several well-recognized
brands, including Mappin & Webb, Goldsmiths, and Watches of
Switzerland. The ratings are also supported by its longstanding
relationships with several luxury watch manufacturers, its strong
earnings growth in recent years, and relatively moderate adjusted
leverage following completion of the refinancing. At the same
time, the ratings are constrained by our anticipation that
reported free operating cash flow (FOCF) generation will
deteriorate as the group funds its expansion in the U.S., leading
to negative reported FOCF of up to GBP25 million in fiscal 2019
(year ending April 2019). The ratings are also constrained by
what we view as elevated execution risk relating to Aurum's
ambitious growth plans, as well as the highly discretionary and
seasonal nature of demand for the group's products. Both of these
factors reduce visibility of future earnings and cash flows."

Aurum commands a robust share -- about 36% -- of the luxury watch
segment in the U.K., supported by its long-standing relationships
with some of the industry's flagship brands, including Rolex, Tag
Heuer, and Patek Philippe. The consistency in these brands'
customer appeal -- many iconic models last for years or even
decades -- typically means their luxury watches are not as
vulnerable to fast-changing trends as the group's lower-priced
fashion watches, ensuring a high proportion of sales are at full
price.

S&P said, "Equally, we believe the oversupply experienced in the
global luxury watch market in recent years has had only a limited
impact on Aurum's sales, primarily thanks to its focus on Rolex
and Patek Philippe watches, whose supply is carefully managed by
their manufacturers and remains scarce relative to demand.
Furthermore, we believe Aurum represents a strategically valuable
distribution channel for these brands, and Rolex in particular,
for whom Aurum represented nearly 50% of U.K. sales in fiscal
2017.

"We consider that the high inherent value of the group's
inventories, along with the breadth and availability of its
offering, gives it a competitive advantage. We believe the long-
standing appeal of luxury watches will ensure the value of
Aurum's stock remains robust over time. We further believe that
the ongoing popularity of smart or electronic watches will not
meaningfully dent the market for, or value of, luxury watches.
That said, these inventories also require material investment in
working capital, which, when combined with the significant
investments the group intends to make in the U.S., will weigh on
the group's ability to generate positive FOCF in fiscal 2019.

"We believe the sale of luxury watches and jewelry remains
closely linked to tourism and the income of those with high
personal wealth, which can generate volatility in demand. In
particular, we believe a significant portion of Aurum's customers
could be sensitive to Brexit-related risks, or come from
overseas -- and China in particular -- where customers are
younger and may exhibit less long-standing brand loyalty.

"Additionally, we note that the volume of excess inventory
available through the "gray" and second-hand markets also poses
the risk that pressures on prices could further intensify. That
said, recent actions by several manufacturers -- including most
notably Richemont -- to reduce excess inventory volumes should
somewhat temper this risk.

Aurum's acquisition of U.S. jeweler Mayor's in October 2017, and
its recently signed agreements to open new stores in Wynn's Las
Vegas resorts, New York, and New Jersey bring additional
geographic diversity, somewhat offsetting the group's reliance on
nine key stores -- located in London's golden triangle and
Heathrow Airport -- which generated over 30% of revenues in
fiscal 2017. S&P said, "While this expansion will bring Aurum
into markets in which it is less established, they are also
underpenetrated, and subject to more favorable near-term
macroeconomic conditions than the U.K., in our view. At the same
time, we consider that this U.S. expansion poses material
execution risks, particularly given the ambitious growth
expectations and the near-term cash investment needed for new
stores and inventories. That said, our view of this execution
risk is somewhat tempered by the group's successful integration
of Mayor's and the existing Wynn's stores to date."

Unlike some luxury brand manufacturers who have their own retail
operations, Aurum's lack of vertical integration into watch
manufacturing means that -- while generally stable over time --
the group's operating margins are somewhat modest when compared
with other specialty retailers. This is because manufacturers
generally capture a larger proportion of industry profits in the
luxury watch segment.

This is partly compensated by the group's moderate financial debt
following the refinancing, with S&P Global Ratings-adjusted debt
to EBITDA of about 5.9x and earnings before interest, taxes,
depreciation, amortization, and rent (EBITDAR) to cash interest
plus rent coverage of about 1.4x by fiscal year-end 2019. While
operating leases contribute significantly to our adjusted debt,
S&P also acknowledges the fairly accommodative nature and
flexibility of some of Aurum's variable lease contracts (34.9% of
lease payments were turnover-based in fiscal 2017), which
provides some degree of cost variability.

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

-- Moderate U.K. real GDP growth of 1.3% in 2018 -- down from
    1.7% in 2017--along with consumer price inflation of 2.3% in
    2018. S&P also expects a significant decline in real private
    consumption growth to 1.1% in 2018, from 1.8% in 2017;

-- U.S. real GDP growth of 2.9% in 2018, up from an expected
    2.3% in 2017, which S&P believes will be accompanied by
    average annual consumer price inflation of 2.5% in 2018 from
    2.1% in 2017.

-- Revenue growth of about 30% in fiscal 2018 to nearly GBP750
    million, reflecting the recent acquisition of Mayor's, the
    agreement signed with Wynn, and further like-for-like (LFL)
    growth in U.K. luxury watch sales of about 5% to 10%. S&P
    said, "We expect sales of fashion watches and jewelry will
    decline year-on-year (YoY), since we perceive these lower-
    ticket items to be more sensitive to the aforementioned
    slowdown in U.K. consumption. We expect further growth of
    about 10% in fiscals 2019 and 2020, as these acquisitions
    annualize and new stores open in New York and Las Vegas."

-- S&P said, "We expect fiscal 2018 reported EBITDA margins will
    remain broadly unchanged YoY. S&P said, "We expect a shift in
    sales mix toward lower net margin (defined as sales minus
    associated inventory costs) luxury watches -- and Rolex in
    particular -- along with some discounting on the group's
    fashion watches and jewelry items, will offset operating
    efficiency measures. Our reported EBITDA margin also
    incorporates some cash restructuring and integration costs
    related to the U.S. acquisition. We expect reported EBITDA
    margins will improve moderately in fiscal 2019 and 2020 as
    these restructuring costs roll off."

-- Working capital cash requirements of up to GBP15 million in
    fiscal 2018 and GBP25 million fiscal 2019, driven by
    expansionary investment in U.S. inventories.

-- Capital expenditure (capex) of about GBP15 million in fiscal
    2018, stepping up to about GBP35 million in fiscal 2019 to
    support the group's U.S. expansion plans.

-- No further shareholder returns beyond the GBP75 million paid
    as part of the refinancing transaction.

-- S&P treats approximately GBP30 million of remaining preferred
    equity certificates as debt. We do not deduct any cash from
    debt.

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

-- Adjusted pro forma EBITDA of GBP90 million-GBP100 million in
    fiscal 2018 -- compared with the GBP80 million generated in
    fiscal 2017. We expect GBP95 million-GBP105 million in fiscal
    2019 and GBP105 million-GBP115 million in fiscal 2020.

-- Adjusted debt to EBITDA of 5.5x-5.9x in fiscal 2018,
    remaining broadly stable in fiscal 2019 and declining toward
    5.0x in fiscal 2020.

-- Adjusted funds from operations (FFO) to debt of 8%-10% in
    fiscal 2018, rising to 9%-11% in fiscal 2019 and 10%-12% in
    fiscal 2020.

-- EBITDAR cash interest coverage of about 1.4x in fiscals 2018
    and 2019, before climbing to about 1.5x in fiscal 2020.

-- Close to neutral reported FOCF in fiscal 2018. Under S&P's
    forecast, it expects negative reported FOCF of up to GBP25
    million in fiscal 2019, reflecting the material capex and
    working capital investment required to support Aurum's U.S.
    expansion.

S&P said, "The stable outlook reflects our expectation that
Aurum's international expansion plans, combined with mid-single-
digit LFL growth in the U.K., will lead to earnings growth over
the next 12 months, such that debt to EBITDA reaches 5.9x by the
end of fiscal 2019. However, execution risk relating to the
group's ambitious growth plan remains somewhat elevated, in our
view, and we expect these expansion plans will consume a material
amount of cash over the next 12-18 months through a combination
of working capital and capex investment.

"We could take a positive rating action if Aurum were to increase
its earnings and deleverage faster than we currently expect, on
the back of robust performance in the U.K. -- its core domestic
market -- and the successful integration and growth of its U.S.
businesses. In such a scenario, we would expect to see a
reduction in S&P Global Ratings-adjusted debt to EBITDA to below
5.5x, along with an improvement in EBITDAR coverage to
sustainably above 1.5x. Most importantly in such a scenario, we
would expect reported FOCF generation to turn neutral as growth
in the group's U.S. earnings begins to offset investments in
working capital and capex."

Any positive rating action would also be contingent on a
commitment from the company to maintain a financial policy
supportive of these improved credit metrics, along with adequate
liquidity.

S&P said, "We could take a negative rating action if Aurum
experienced unexpected operating setbacks -- including in
earnings growth expectations or integration costs for its U.S.
businesses -- a significant loss of market share, or a
considerable decline in its U.K. earnings. This could lead to
negative cash flows and credit metrics that are both weaker than
we currently anticipate and potentially render the capital
structure unsustainable in the long term.

"If we believed Aurum had adopted a more aggressive financial
policy focused on debt-financed shareholder remuneration, this
could also lead to a prolonged weakening of Aurum's credit
metrics and a negative rating action."


THPA FINANCE: S&P Affirms B+ (sf) Credit Rating on Class C Notes
----------------------------------------------------------------
S&P Global Ratings has affirmed its credit ratings on the class
A2, B, and C notes issued by THPA Finance Ltd.

The transaction is a corporate securitization of the operating
business of port facilities provider PD Portco Ltd., the
borrower. It closed in April 2001. The cash flows that support
the rated notes issued by THPA Finance are derived from the
operations of a borrowing group that sits within the
securitization group, which comprises PD Teesport Ltd., PD Port
Services Ltd., and Tees and Hartlepool Pilotage Company Ltd.

S&P's ratings address the timely payment of interest and
principal due on the notes, and are based primarily on S&P's
ongoing assessment of the borrowers' underlying business risk
profile, the integrity of the transaction's legal and tax
structure, and the robustness of operating cash flows supported
by structural enhancements.

BUSINESS RISK PROFILE

S&P said, "We have applied our corporate securitization criteria
as part of our rating analysis on the notes in this transaction.
As part of our analysis, we assess whether the operating cash
flows generated by the borrower are sufficient to make the
payments required under the notes' loan agreements by using a
debt service coverage ratio (DSCR) analysis under a base case and
a downside scenario. Our view of the borrowing group's potential
to generate cash flows is informed by our base-case operating
cash flow projection and our assessment of its business risk
profile, which we derive using our corporate methodology.

"We continue to view the business risk profile of PD Portco as
fair. For a full discussion of the strengths and weaknesses,
which are broadly unchanged, see our previous full review of the
transaction."

RECENT PERFORMANCE

In 2017, PD Portco's financial performance improved, with EBITDA
almost returning to pre-2015 levels. It increased to GBP38.4
million from the GBP36.0 million reported in 2016, a 6.8%
improvement (14.7% after excluding 2016's non-trading items
related to property and asset management). Quarterly EBITDA has
become much more stable throughout the year, with all quarters in
2017 delivering a similar level of EBITDA, reflecting the new and
more diversified revenue base. The growth in EBITDA was mostly
driven by the conservancy segment's improved results, which
increased to GBP34.6 million from GBP28.1 million in 2016, a
22.9% improvement. Additional drivers include:

-- MGT Power and Trafigura projects, which are proceeding as
    planned and whose associated revenues are in-line with
    expectations. The MGT Power project, which is scheduled to be
    completed in 2020, contributed GBP2.7 million in 2017,
    largely from rent, with additional fees from the handling of
    major components over the Tees Dock;

-- Conservancy volumes remaining broadly stable in 2017, with
    slight EBITDA growth being driven by rentals related to a
    liquefied natural gas (LNG) project, which are essentially
    100% margin rental income and have contributed GBP3.3 million
    since commencing in mid-2017;

-- Port operations benefitting from increased bulks volumes
    related to a new contract signed with Glencore in 2016;

-- Completion of the third and final phase of No. 1 Quay; and

-- Portcentric logistics, which are benefiting from the new
    Hitachi rail contracts.

In the quarter ended March 2018, conservancy and property EBITDA
increased by 5.1%, offset by a 5.4% decrease in port operations,
leaving the borrower's EBITDA flat at GBP9.2 million, compared
with the same quarter a year ago. S&P attributes much of the
improvement in conservancy and property to increased volumes from
key customers, notably Redcar Bulk Terminal, and revenues related
to an offshore wind project.

PD Portco's EBITDA margin for the financial year (FY) ending 2017
decreased to 32.8% from 33.7%, with the decline reflecting the
lack of one-off credits that reduced 2016's operating costs. The
rolling off of credits, alongside investment in commercial and
IT, contributed to an increase in overheads.

The improvement in EBITDA has lifted the DSCR to 1:48:1 from a
low of 1.26:1 in June 2016.

The net cash flow DSCR (NCDSCR), which reflects maintenance
capital expenditure remains below 1.0:1 (0.75:1) due to costs
associated with the Quay No. 1 project. PD Portco received
additional funding from the repayment of a subordinated
intercompany loan, cash on balance sheet, grants, and positive
working capital that reflected payments from MGT Teesside. The
restricted payment conditions, the 1.50:1 EBITDA DSCR, and the
1.35:1 NCDSCR, have not been satisfied.

The LNG project will start delivering conservancy volumes from
mid-2018, and has minimum volume guarantee over the life of the
contract. Trafigura is undertaking all capital works required to
recommission the LNG berth. In addition, to prepare for potential
Brexit effects, PD Portco is contemplating alternative
approaches, including customs-related services. The company is
working on getting the Authorized Economic Operator status or a
Freeport status, which could mitigate Brexit's negative effect on
volumes. That said, these developments remain largely uncertain
at this stage.

RATING RATIONALE

THPA Finance's primary sources of funds for principal and
interest payments on the outstanding class A2, B, and C notes are
the loan interest and principal payments from the borrower.
Additionally, amounts from a liquidity facility are available for
the benefit of the class A2 noteholders.

CLASS A2 NOTES

S&P said, "Our cash flow analysis serves to both assess whether
cash flows will be sufficient to service debt through the
transaction's life and to project minimum DSCRs in base-case and
downside-case scenarios. We base our base-case EBIDTA and
operating cash flow projections for the securitized assets and
the company's fair business risk profile on our corporate
methodology.
Under our "Global Methodology And Assumptions For Corporate
Securitizations," we determine base-case and downside EBITDA
projections, from which we then apply assumptions for capital
expenditures (capex), pension liabilities, and taxes to arrive at
our projections for the cash flow available for debt service. For
PD Portco, S&P's assumptions were:

-- Maintenance capex: GBP9.5 million for FY2018. Thereafter, the
    minimum requirement of GBP3.75 million is considered as per
    the transaction documents.

-- Working capital: positive GBP0.5 million for FY2018 and
    thereafter.

-- Other support: GBP19.1 million in FY2018, and nil thereafter.

-- Development capex: GBP18.1 million in FY2018, and zero
    thereafter.

Base-Case Projections

S&P said, "Our base-case scenario treats the contractual MGT
Teesside project and non-MGT Teesside-based EBITDA separately and
then aggregates their individual projections to arrive at our
base-case EBITDA projection. For the non-MGT Teesside-based
EBITDA projections, we gave credit to growth through the end of
FY2018. No credit is given to the growth after FY2018. We also
assume that the revenue, and therefore EBIDTA, from MGT
Teesside's power station project results in some level of growth
over the life of the contract in both the construction and
operations phase."

S&P established an anchor of 'bbb-' for the class A2 notes based
on:

-- S&P's assessment of PD Portco's fair business risk profile,
    which it associates with a business volatility score of 4;
    and

-- The minimum DSCR achieved in our base-case analysis, which
    considers only operating-level cash flows and does not give
    credit to issuer-level structural features (such as the
    liquidity facility).

Downside Scenario

S&P said, "Our downside DSCR analysis tests whether the issuer-
level structural enhancements improve the resilience of the
transaction under a stress scenario. Given that THPA Finance
falls within the transport infrastructure industry, we applied a
25% decline in non-MGT Teesside-based EBITDA from our base case.
The 25% decline also appropriately addresses the borrower's key
client risk, which is deemed relevant for PD Portco. Our downside
DSCR analysis resulted in a strong resilience score for the class
A2 notes. The combination of a strong resilience score and the
'bbb-' anchor derived in the base-case results in a resilience-
adjusted anchor of 'bbb+' for the class A2 notes.

"Lastly, the GBP40 million liquidity facility balance represents
a significant level of liquidity support, measured as a
percentage of the current outstanding balance of the notes it
supports, which is limited to the class A2 notes. Given that the
full two notches above the anchor have been achieved in the
resilience-adjusted anchor, we consider a one-notch upward
adjustment warranted as part of our downside analysis."

Modifiers Analysis

As highlighted by the liquidation of SSI UK, which led to an
erosion of about 25% of EBITDA, PD Portco has exposure to key
customers. S&P said, "Although our DSCR analysis suggests an 'a-'
resiliency-adjusted anchor, we have not seen a track record of
improvement that would reduce the key client exposure in a
relatively short period of time and lead us to form the view that
the rating on the class A2 notes will be stable at this level."
Therefore, a one-notch reduction in the resilience-adjusted
anchor has been applied in our modifiers analysis.

CLASS B AND C NOTES

S&P said, "In corporate securitization transactions, one of our
primary assumptions is that the issuer can survive the borrower's
insolvency without defaulting. To make such an assumption, we
typically expect an appropriately sized liquidity facility
available to the issuer." This will enable the issuer to make
timely payments to the noteholders and will account for any other
obligations that rank senior in the waterfall to the notes during
any workout period following the borrower's insolvency and the
appointment of an administrative receiver.

The class B and C notes do not have the benefit of a liquidity
facility.

Given that the class B and C notes do not benefit from the
structural enhancements that S&P typically look for as mitigating
factors to the borrower's operational risks, the potential rating
uplift for the class B and C notes above the creditworthiness of
the borrowing group (PD Portco Ltd.) is constrained.

OUTLOOK

S&P said, "A change in our assessment of the company's business
risk profile would likely lead to a rating action on the class A2
notes. We would require higher/lower DSCRs for a weaker/stronger
business risk profile to achieve the same anchor."

UPSIDE SCENARIO

S&P said, "We could consider raising the business risk profile if
PD Portco's operating performance is better than currently
expected and supports an increase in funds from operations to
debt to above 12%, while allowing the borrower to cover its capex
needs without parental support. We may also consider raising the
business risk profile if PD Portco diversified its customer base
by gaining new clients outside the commodity sector, leading to
an improvement in the annual EBITDA to above GBP45 million."

DOWNSIDE SCENARIO

S&P said, "We could also lower our ratings on the class A2 notes
if our minimum projected DSCR, as it relates to the class A2
notes, falls below 1.30:1 in our base-case scenario, or if we
were to lower the business risk profile to weak from fair. This
could occur if the group faces significant customer losses or
lower revenue per customer, resulting in adjusted EBITDA margins
falling below 30%. We may also lower our ratings if the group
experiences a material gap between its sources and uses of
liquidity over the next year that is not remediated with a
commitment of parental support."

  RATINGS LIST

  THPA Finance Ltd.
  GBP305 Million Fixed- And Floating-Rate Asset-Backed Notes

  Ratings Affirmed

  A2             BBB+ (sf)
  B              B+ (sf)
  C              B+ (sf)


===================
U Z B E K I S T A N
===================


ORIENT FINANS: S&P Affirms B-/B ICRs, Outlook Stable
----------------------------------------------------
S&P Global Ratings said that it had affirmed its 'B-' long-term
and 'B' short-term issuer credit ratings on Uzbekistan-based
Orient Finans Bank. The outlook is stable.

S&P said, "The affirmation reflects our view that the risk of a
negative regulatory intervention has somewhat reduced, since
Orient Finans Bank improved its regulatory capital adequacy ratio
and stabilized its open currency position in line with regulatory
requirements. The improvement owes to the bank being able to
include the full amount of its income earned during 2017 in its
regulatory capital (local regulation holds that until an auditor
confirms the current year's earnings, only 50% of earned income
can be included in regulatory capital). In addition, the local
currency has gradually strengthened since February 2018, which
partially mitigates currency mismatches caused by the sharp 48%
local currency depreciation on Sept. 5, 2017, when Uzbekistan
liberalized its exchange rate regime.

"Since Orient Finans Bank is no longer at risk of violation of
regulatory capital ratio requirements, we have revised our
assessment of the bank's capital and earnings to moderate from
weak. This still has no affect on the rating. Our projected risk-
adjusted capital (RAC) ratio is likely to be 6%-7% over the next
12-18 months, diminishing from the 8.2% as of Dec. 31, 2017,
reflecting anticipated business expansion in 2019. At the same
time, we expect relatively modest assets and loan book growth in
2018 because the bank will need to adapt to the new exchange rate
environment. We also expect that Orient Finans Bank's growth will
likely be supported by solid earnings capacity with annual return
on average equity staying close to 30%-35% in 2018-2019.

"At the same time, we note historical volatility of the bank's
capital buffer, as Orient Finans Bank from time to time is
required to be involved in projects run by the Cabinet of
Ministers. These projects, due to their large size, lead to
material increases in risk-weighted assets, as a result of
directed lending or off-balance-sheet exposures. However, these
deals are generally backed by guarantees, which in our opinion
partially offset credit risk and pressure on the bank's capital
buffer.

"Although we assume Orient Finans Bank's total client funds to be
relatively stable, we are closely monitoring the bank's liquidity
position. Customer funds decreased by about 15% over the first
four months of 2018, largely because of maturities of cash-
covered letters of credit.

"The stable outlook reflects our expectation that, despite its
limited franchise, volatile funding, and challenging operating
environment, Orient Finans Bank will maintain its core customer
base and solid profitability over the next 12 months.

"We could take a negative rating action if we see that the
challenging competitive environment impairs customer relations
and causes significant client fund outflow, along with weakening
business prospects and squeezed profitability. Signs of
deteriorated asset quality far beyond market average levels,
which would place the bank's business stability and compliance
with capital adequacy or other prudential ratios under pressure,
could also lead to a negative rating action.

"We could consider a positive rating action on Orient Finans Bank
if it is able to maintain its RAC ratio sustainably above 7%,
with a remote risk of regulatory capital adequacy breaches.
Stable business development and funding base, as well as absence
of substantial asset quality deterioration, would be required to
support a positive rating action."



                            *********

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

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

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


                            *********


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

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

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

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

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

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


                 * * * End of Transmission * * *