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

                           E U R O P E

          Wednesday, August 8, 2018, Vol. 19, No. 156


                            Headlines


A R M E N I A

AMERIABANK CJSC: Moody's Assigns B1 Long-Term LC Deposit Ratings


B O S N I A

PROCREDIT BANK: Fitch Hikes LT IDR to 'B+', Outlook Stable


F R A N C E

OPTIMUS BIDCO: Moody's Assigns B2 CFR, Outlook Stable


G R E E C E

ELLAKTOR SA: S&P Raises Issuer Credit Rating to 'B', Outlook Pos.
GREECE: Rescue Fund Provides Final EUR15-Bil. Bailout Loan


I R E L A N D

ARBOUR CLO V: Moody's Assigns B2 Rating to Class F Notes
ARBOUR CLO V: Fitch Assigns 'B-sf' Rating to Class F Notes


L U X E M B O U R G

EURASIAN RESOURCES: Moody's Raises Corporate Family Rating to B2
SAPHILUX SARL: S&P Assigns B- Long-Term Issuer Credit Rating


N O R W A Y

FRED. OLSEN: Mulls Debt, Equity Restructuring Amid Financial Woes


R U S S I A

BANK USSURY: Liabilities Exceed Assets, Assessment Shows
MORDOVIA REPUBLIC: Fitch Affirms 'B' LT IDRs, Outlook Stable
NEW INDUSTRIAL: Put on Provisional Administration
NEW TIME: Bank of Russia Revokes Banking License
NOVOSIBIRSK CITY: Fitch Affirms 'BB' LT IDRs, Outlook Stable

ORENBURG REGION: Fitch Ups Long-Term IDRs to BB+, Outlook Stable
PROMSVYAZBANK: S&P Raises Long-Term Issuer Credit Rating to BB-


S P A I N

CATALONIA: S&P Places B+ Long-Term ICR on CreditWatch Positive


S W E D E N

PROSERV GROUP: S&P Upgrades ICR to 'CCC+', Outlook Positive


U N I T E D   K I N G D O M

ICELAND FOODS: S&P Cuts Issuer Credit Rating to B, Outlook Stable
POLISH CREDIT: Enters Administration, Declared in Default


                            *********



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A R M E N I A
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AMERIABANK CJSC: Moody's Assigns B1 Long-Term LC Deposit Ratings
----------------------------------------------------------------
Moody's Investors Service has assigned the following ratings to
Armenia-based Ameriabank CJSC: B1 long-term and NP short-term
local- currency bank deposit ratings, B2 long-term and NP short-
term foreign currency bank deposit ratings, b1 baseline credit
assessment (BCA) and adjusted BCA, Ba3 long-term and NP short-
term Counterparty Risk Ratings (CRR) and Ba3(cr) long-term and
NP(cr) short-term Counterparty Risk Assessments (CR Assessment).

The long-term local currency deposit rating B1 carries a positive
outlook, driven by the positive outlook on the B1 government debt
rating, while the long-term foreign currency deposit rating B2 is
constrained by Armenia's foreign-currency deposit ceiling and
carries a stable outlook.

RATINGS RATIONALE

The B1 long-term local currency deposit rating assigned to
Ameriabank incorporates its b1 BCA which reflects the bank's: (1)
diversified business profile and strong positions on its domestic
market, (2) Improved asset quality indicators and good loss
absorption capacity -- evidenced by its robust capital buffers,
good profitability and adequate problem loans coverage, (3)
sufficient liquidity and diversified funding base. At the same
time, Ameriabank's BCA is constrained by Armenia's Macro-profile
'Weak', and material exposure to foreign currency loans.

Moody's expects Ameriabank's asset quality to remain generally
stable in the foreseeable future, supported by improving economic
conditions and Moody's expectation that local currency will
remain stable in 2018-2019. Ameriabank's current asset quality
indicators are robust with problem loans (which include impaired
corporate loans, plus retail loans overdue by more than 90 days)
decreased to 3.9% of gross loans as of 31 March 2018 from 4.1% as
of end- 2017. Coverage of problem loans by loan loss reserves
improved to 87% in Q12018 from 57% at YE2017.

In addition, exposure to foreign-currency denominated loans
accounted for high 82% of total loans as of end-2017, a level
that renders asset quality vulnerable to potential FX volatility.
However, a substantial part of the bank's FX borrowers are
naturally hedged exporters that generate foreign-currency
revenues, which partly mitigates FX implied credit risk.

Ameriabank benefits from its diversified shareholder's structure
and access to capital in case of need. Its capital position was
recently strengthened by a Tier 1 capital injection of US$30
million from Asian Development Bank. The bank reported regulatory
total CAR of 14.05% as at end-March 2018 while the ratio under
Basel I stood at higher level of around 19%.

For Q12018, the bank reported net profit of AMD2.56 billion (a
56% increase from AMD1.6 billion reported for Q12017) which
translated to annualized return on average assets of 1.5% and
return on equity of 13.4%. Moody's expects improving
profitability trend to sustain over the next 12-18 months because
the bank's lending strategy will be more focused on gradual
development of higher-yielding retail franchise.

Ameriabank's liquidity and funding profiles will remain stable
over the next 12-18 months and will be supported by good funding
diversification, healthy buffer of liquid assets and access to
alternative liquidity such as funding from IFIs. Customer funds
account for around 64% of the bank's liabilities, half of which
are retail deposits. In addition, the bank maintains sufficient
level of liquidity cushion comprising from cash and government
securities which exceeded 22% of total assets at Q12018.

GOVERNMENT SUPPORT

Ameriabank's long-term global local currency (GLC) deposit rating
of B1 incorporates Moody's assessment of high probability of
government support in the event of need, which is based on the
bank's systemic importance given its large client base, notable
market position, including approximate 17% market share in loans
to customers and 13% in customer deposits. However, this support
currently does not provide any rating uplift to Ameriabank's GLC
rating as Armenia's B1 sovereign rating is at the same level as
the bank's BCA.

POSITIVE OUTLOOK

The outlook on the bank's local currency deposit rating of B1 is
positive, driven by the positive outlook on the B1 government
debt rating.

WHAT COULD MOVE THE RATING UP/DOWN

Positive rating action on the bank's deposit ratings is subject
to a sovereign rating upgrade.
Given the positive outlook on the local currency deposit rating,
negative rating action is not likely over the next 12-18 months.
In the longer term, negative pressure could be exerted on
Ameriabank's ratings in the case of material deterioration in the
operating environment, asset quality impairment beyond Moody's
expectations, capital erosion or liquidity shortage.

FOREIGN CURRENCY DEPOSIT RATING

The bank's B2 foreign-currency deposit rating is constrained by
Armenia's foreign-currency deposit ceiling.

LIST of ASSIGNED RATINGS

Issuer: Ameriabank CJSC

Assignments:

Adjusted Baseline Credit Assessment, Assigned b1

Baseline Credit Assessment, Assigned b1

Long-term Counterparty Risk Assessment, Assigned Ba3(cr)

Short-term Counterparty Risk Assessment, Assigned NP(cr)

Long-term Counterparty Risk Ratings (Local and Foreign Currency),
Assigned Ba3

Short-term Counterparty Risk Ratings (Local and Foreign
Currency), Assigned NP

Long-term Bank Deposit Rating (Foreign Currency), Assigned B2
Stable

Long-term Bank Deposit Rating (Local Currency), Assigned B1
Positive

Short-term Bank Deposit Ratings (Local and Foreign Currency),
Assigned NP

Outlook Actions:

Outlook, Assigned Positive(m)

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


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B O S N I A
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PROCREDIT BANK: Fitch Hikes LT IDR to 'B+', Outlook Stable
----------------------------------------------------------
Fitch Ratings has upgraded ProCredit Bank d.d. Sarajevo's (PCBiH)
Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'B+'
from 'B'. It has also upgraded the Long-Term Local-Currency IDR
to 'BB-' from 'B+'. The Outlooks are Stable. The bank's VR is
unaffected by these rating actions.

The rating actions follow Fitch's reassessment of country risks
in Bosnia and Herzegovina. This in turn is driven by Bosnia
getting back on track with the IMF programme, the improved
macroeconomic outlook and continued fiscal consolidation, leading
to the reduction of gross general government debt.

KEY RATING DRIVERS

IDRS AND SUPPORT RATING

PCBiH's IDRs and Support Rating are underpinned by the likelihood
of support from ProCredit Holding AG&Co. KGaA (PCH, BBB/Stable),
its 100% owner. Support considerations include the strategic
importance of south-east Europe to PCH, the strong integration
within the group and the proven record of providing capital and
liquidity support.

The extent to which support can be factored into PCBiH's ratings
is constrained by Fitch's assessment of country risks in Bosnia
and Herzegovina. Absent of these constraints, Fitch would likely
maintain a one-notch differential between PCBiH's and PCH's
ratings. The Stable Outlook on PCBiH's IDRs reflects the balance
of risks on the Bosnian sovereign credit profile.

RATING SENSITIVITIES

IDRS AND SUPPORT RATING

Changes in Fitch's view of country risks in Bosnia and
Herzegovina could result in a change to the bank's IDRs. IDRs are
also sensitive to Fitch's view of any material weakening of PCH
ability and propensity to support PCBiH.

The rating actions are as follows:

Long-Term Foreign-Currency IDR upgraded to 'B+' from 'B ';
Outlook Stable

Short-Term IDR affirmed at 'B'

Long-term Local-Currency IDR upgraded to 'BB-' from 'B+'; Outlook
Stable

Short-Term Local-Currency IDR affirmed at 'B'

Support Rating affirmed at '4'

Viability Rating of 'b-' unaffected


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F R A N C E
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OPTIMUS BIDCO: Moody's Assigns B2 CFR, Outlook Stable
-----------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating
and a B2-PD probability of default rating to Optimus BidCo SAS,
the parent company of Financiere Efel SAS, and B2 ratings to the
EUR75 million revolving credit facility and the EUR400 million
first-lien term loan (1L TL) as well as a Caa1 rating to the
EUR85 million second-lien term loan (2L TL). The outlook on the
ratings is stable. Moody's withdrew the B2 CFR and the B2-PD PDR
for Financiere Efel SAS and expect to withdraw the B2 instrument
ratings assigned to the EUR295 million term loan B and a EUR6
million RCF, when funds of private equity firm Blackstone close
the transaction, which is expected to occur over the course of Q3
2018.

RATINGS RATIONALE

Moody's has assigned a B2 CFR to Optimus, in line with the
current B2 CFR for FE and despite the higher leverage of 6.6x for
Optimus at closing of the transaction. This compares to 4.7x FE
pro-forma of the Storax acquisition. This reflects (1) the larger
scale of the company following the Storax acquisition (announced
in March 2018 and closed in Q2 2018) that added about EUR76
million of revenues coupled with stronger organic growth than
initially expected; (2) the stronger liquidity backstop in form
of the EUR75 million RCF compared to the EUR6 million RCF FE
currently has in place; and (3) the track record the company has
built up in beating Moody's expectations in terms of key metrics
leverage and free cash flow (FCF) generation.

The B2 CFR takes into account Optimus' market position in
Europe's storage racking market where management sees itself as
the number one provider in France, Belgium and the Netherlands,
which in total account for about 51% of revenues. The company has
relatively high EBITA margins, hovering around 10%. This in
Moody's opinion reflects the made-to-order approach, the
partially automated production facilities, the market position
and the fact that the company distributes around 60% directly.
Future growth is not only tied to cyclical GDP growth, the
replacement of existing racking stock and the growth for
warehouse and logistics centres, but also to structural factors
such as growth for e-commerce (such as built-out of a network for
same-day delivery storage facilities), and automated products.

The B2 rating also factors in the high concentration on racking
solutions accounting for 94% of the company's sales and the
concentration of sales on four European markets with the top 4
markets accounting for about two-thirds of revenues. The starting
leverage at 6.6x is high as a result of the change of ownership.
The Moody's-adjusted amount of debt will increase to about EUR515
million from EUR255 million at FYE17 and EUR320 million pro-forma
the Storax acquisition.

LIQUIDITY

Avery's liquidity will be bolstered by EUR20 million starting
cash on hand at time of closing of the transaction. Annual funds
from operations amount to about EUR40 million. A EUR75 million
revolving credit facility (RCF) with a maturity of 6.5 years
after closing is a significant strengthening of the company's
liquidity compared to the EUR6 million size of its current RCF.
The cash requirements are largely for working cash of around
EUR19 million (or 3% of annual sales), working capital swings to
fund future growth and capital expenditures. Maintenance and
growth-related capex total not more of EUR18 million in a year.
Moody's assumes moderate drawings under the RCF.

STRUCTURAL CONSIDERATIONS

Under the proposed transaction Optimus BidCo SAS will be the
borrower of the EUR75 million RCF (rated B2), the EUR400 million
first-lien term loan (1L TL, B2) and the EUR85 million second-
lien term loan (2L TL, Caa1). The RCF and 1L TL rank pari passu
and ahead of the 2L TL. The instrument ratings assigned reflect
the quantum of subordinated debt and the ranking in the debt
structure. Given the security pledged (shares, intercompany
loans, bank accounts) Moody's views the structure as essentially
unsecured. Guarantors represent a minimum of 80% of the group's
EBITDA.

RATIONALE FOR STABLE OUTLOOK

The stable outlook assumes deleveraging in the next 12-18 months
to below 6.0x debt/EBITDA and EBITA margins above 10.0% and
continued positive FCF generation.

WHAT COULD CHANGE THE RATING UP / DOWN

Ratings could be upgraded if (1) EBITA margins were approaching
12% through the cycle; (2) Debt/EBITDA moving towards 4.5x and;
(3) FCF/Debt in the high single digits (%). Ratings could be
downgraded if (1) EBITA margins were to drop to below 8.0%; (2)
Debt/EBITDA of 6.0x and above; and (3) negative free cash flow
generation.

Optimus BidCo SAS (Optimus), headquartered in Paris/France, is
the parent of companies that trade under the name Averys.
According to management data, Averys is the second largest
manufacturer of storage systems in Europe. The company
manufactures heavy duty shelving (62% of sales), semi-automated
and automated racking (17%), medium to light duty shelving (15%)
and metal furniture (6%), of which it distributes 60% through own
channels, 15% through distributors and 25% through
integrators/OEMs. Pro-forma for the acquisition of Storax,
announced in March 2018, the company reported EUR553.7 million of
revenues and a group adjusted EBITDA of EUR66.3 million (EUR70
million as adjusted by Averys) for 2017. Funds of Blackstone
intend to acquire Optimus from private equity firm Equistone.

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


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G R E E C E
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ELLAKTOR SA: S&P Raises Issuer Credit Rating to 'B', Outlook Pos.
-----------------------------------------------------------------
S&P Global Ratings said that it raised its long-term issuer
credit rating on Greek concessions and construction group
Ellaktor S.A. to 'B' from 'B-'. At the same time, S&P affirmed
its 'B' short-term issuer credit rating on the company. The
outlook is positive.

S&P said, "The upgrade reflects our view that the macroeconomic
and policy environment in Greece has improved due to recent
actions that the government has taken to ease capital controls,
in place since May 2015, ahead of Greece's expected exit from the
European Stability Mechanism program in August 2018. We expect
that this will support further improvement in Ellaktor's
operating performance across its key business unit concessions
(contributing 82% of EBITDA in 2017) and construction (13% of
EBITDA in 2017). At end-2017, adjusted EBITDA had increased to
EUR260 million from EUR200 million in the previous year after the
mature toll road concession Attiki Odos experienced traffic
growth of 3% and the construction EBITDA margin rose to about
3.5% in 2017. As a result, Ellaktor reduced debt to EBITDA to
4.9x from 6.45x in the previous year."

Ellaktor is a publicly listed infrastructure company, generating
80%-90% of its earnings in Greece. In 2017, the group reported
EUR1.865 billion of revenues, mainly from three key business
units: construction (80% of revenues and 13% of EBITDA in 2017),
concessions (12% of revenues and 82% of EBITDA), and the recently
increased exposure to wind farm business (3% of revenues and 17%
of EBITDA).

S&P said, "Our expectation of economic rebound in Greece, though
not as steep as that seen in Spain, Portugal, and Ireland, could
also facilitate a tariff increase in its Attiki Odos concession,
which we only partly reflect in our forecasts. In our base case,
Ellaktor is able to maintain and further strengthen its core
ratios over 2018-2020 on the back of higher cash flow generation
in concessions. We expect the contributions from newly
constructed wind farms will partly offset declining EBITDA in
construction. As a result,we predict S&P Global Ratings-adjusted
debt to EBITDA to remain at 4.0x-5.0x over 2018-2020 from 6.5x at
year-end 2016. While we see these ratios as commensurate with a
higher rating, we are uncertain about the company's strategic
reorganization and financial policies following the recent
investor-induced change in board composition. The new strategy
aims to strengthen corporate governance, reorganize the company,
focus on profitability in construction, and extend the maturity
of concessions, as well as restart dividends once the balance
sheet allows it. We view positively the focus on new business
opportunities in all key areas and on synergies, but we still
lack details regarding the implementation plan."

Ellaktor's high, albeit declining, financial leverage is one of
the key constraints on our rating on the group. While adjusted
EBITDA has increased to EUR260 million at end-2017 from about
EUR200 million a year previously, the group's reported total debt
remains steady and high at about EUR1.4 billion as of Dec. 31,
2017. The group maintains significant cash reserves of EUR510
million (excluding restricted cash and financial assets) at the
concession and corporate level, which we only partly net off debt
since it is subject to restriction by the concession agreements
and held in weak Greek banks. S&P remains unclear on how the
company intends to use this cash, both now and at the end of the
concession agreement.

The still-high country risk continues to constrain the ratings on
Ellaktor, considering the Greek authorities' limited progress in
improving the country's business environment and Greece's
relatively weak banking system, which remains structurally
vulnerable to potential shifts in market confidence. Ellaktor
continues to suffer from the protracted economic recession. While
profitability of construction projects has improved to adjusted
EBITDA margins of about 3%, its construction backlog has declined
steadily since 2013. For instance, Ellaktor covered revenues by
3.3x, but it had managed to secure a backlog of EUR2.0 billion at
Dec. 31, 2017 (1.3x of revenues). More solid construction
businesses have better EBITDA margins; Vinci's construction arm
has a 4% EBITDA margin, while Strabag delivers an EBITDA margin
between 6% and 7%. Furthermore, the group reported a number of
asset impairments due to the declining value of gold mining
assets held as an investment and the below-book-value sale of its
minority stake in Athens Resort Casino. The concession of
Ellaktor's most cash-generative asset, Attiki Odos, expires in
2024, a relatively short remaining lifespan when compared with
peers such as APRR (expiring on 2035) or Vinci, which benefits
from an average life across its portfolio that extends beyond 30
years. The recently constructed toll road, Moreas, requires
government subsidies to cover materially lower traffic numbers
than previously anticipated, which further constrains Ellaktor's
operational risk.

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

-- Real GDP growth in Greece of 2.0% in 2018 and 2.2% in 2019,
    which drives traffic growth in the mature concession, Attiki
    Odos, and provides scope for tariff increases, which S&P only
    partly factor into its forecasts.

-- Improved macroeconomic climate creates opportunities in
    construction. However, construction revenues will decline
    since the current backlog of EUR2.0 billion only covers
    revenues by 1.3x.

-- Capital expenditure (capex) of about EUR80 million-EUR100
    million over 2018 to complete 187MW of wind farms under
    construction, and limited maintenance expenditure in other
    segments.

-- S&P does not expect three of the five toll road concessions
    that Ellaktor concluded in 2016-2017 (Moreas, Aegean
    Motorway, and Olympia) to pay any dividends in the next
    decade.

-- No dividend payments, apart from a small dividend to minority
    shareholders in Attiki Odos.

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

-- Debt to EBITDA declining below 5.0x from 2018 onward.

-- Neutral to positive free cash flow for the business over the
    next year, assuming no further material acquisitions or
    expansions in other areas.

S&P said, "The positive outlook reflects our expectation that
Ellaktor's debt to EBITDA will decline below 5x by 2018 and that
funds from operations to debt will improve to 10%-12% in the next
couple of years. Our base case assumes that the group will
maintain strong traffic growth in concessions, improved margins
in construction, a healthy replenishment of the contract backlog,
and a prudent financial policy.

"We could raise our rating on Ellaktor if its financial leverage,
measured as debt to EBITDA, improved to below 5x and the company
maintained adequate liquidity. We do not consider that the
sovereign rating constrains the rating on Ellaktor, which we
could rate up to two notches above the sovereign as long as it
continues to pass the sovereign stress test. We consider Ellaktor
to have high country risk sensitivity as a predominantly
transportation-based infrastructure group.

"We could revise the outlook to stable if Ellaktor does not
maintain a deleveraging path supported by a prudent financial
policy. Cashflow generation weaker than our expectations after
assessing new management strategy could also lead us to revise
the outlook to stable. For example, this could come as a result
of worse-than-expected macroeconomic conditions or
underperforming construction or concession business, or the
execution of credit-dilutive acquisitions that we have not
factored in our forecasts."


GREECE: Rescue Fund Provides Final EUR15-Bil. Bailout Loan
----------------------------------------------------------
The Associated Press reports that a rescue fund set up to help
euro-using countries paid its final EUR15 billion (US$17.3
billion) bailout loan to Greece on Aug. 6 after objections by
Germany delayed the payment by several weeks.

According to the AP, the European Stability Mechanism said
EUR9.5 billion (nearly US$11 billion) of the loan would go toward
a cash buffer Greece could use to meet its financial needs for
almost two years.

The other EUR5.5 billion (US$6.4 billion) was earmarked for
paying off some of the country's considerable debt, the AP notes.

Greece has depended on rescue loans from its European partners
and the International Monetary Fund since 2010, the AP relates.
The third, and last, bailout runs out on Aug. 20; after that,
Greece will have to rely on international bond markets for money,
the AP discloses.

The cash buffer means the government won't be in a hurry to do
so, given the country's sub-investment grade credit rating and
the high rates private investors would demand on loans, the AP
states.



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I R E L A N D
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ARBOUR CLO V: Moody's Assigns B2 Rating to Class F Notes
--------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to notes issued by Arbour CLO V
Designated Activity Company:

EUR 1,750,000 Class X Senior Secured Floating Rate Notes due
2031, Definitive Rating Assigned Aaa (sf)

EUR 248,000,000 Class A Senior Secured Floating Rate Notes due
2031, Definitive Rating Assigned Aaa (sf)

EUR 20,000,000 Class B-1 Senior Secured Fixed Rate Notes due
2031, Definitive Rating Assigned Aa2 (sf)

EUR 22,000,000 Class B-2 Senior Secured Floating Rate Notes due
2031, Definitive Rating Assigned Aa2 (sf)

EUR 26,000,000 Class C Senior Secured Deferrable Floating Rate
Notes due 2031, Definitive Rating Assigned A2 (sf)

EUR 21,000,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2031, Definitive Rating Assigned Baa2 (sf)

EUR 23,000,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2031, Definitive Rating Assigned Ba2 (sf)

EUR 12,000,000 Class F Senior Secured Deferrable Floating Rate
Notes due 2031, Definitive Rating Assigned B2 (sf)

RATINGS RATIONALE

Moody's definitive ratings of the rated notes address the
expected loss posed to noteholders by the legal final maturity of
the notes in 2031. The ratings reflect the risks due to defaults
on the underlying portfolio of loans given the characteristics
and eligibility criteria of the constituent assets, the relevant
portfolio tests and covenants as well as the transaction's
capital and legal structure. Furthermore, Moody's is of the
opinion that the collateral manager, Oaktree Capital Management
(UK) LLP ("Oaktree Capital"), has sufficient experience and
operational capacity and is capable of managing this CLO.

Arbour CLO V DAC is a managed cash flow CLO. At least 90% of the
portfolio must consist of senior secured loans and senior secured
bonds and up to 10% of the portfolio may consist of unsecured
obligations, second-lien loans, mezzanine loans and high yield
bonds. The bond bucket gives the flexibility to Arbour CLO V DAC
to hold bonds if Volcker Rule is changed. The portfolio is
expected to be approximately 75% ramped up as of the closing date
and to be comprised predominantly of corporate loans to obligors
domiciled in Western Europe.

Oaktree Capital will manage the CLO. It will direct the
selection, acquisition and disposition of collateral on behalf of
the Issuer and may engage in trading activity, including
discretionary trading, during the transaction's four-year
reinvestment period. Thereafter, purchases are permitted using
principal proceeds from unscheduled principal payments and
proceeds from sales of credit risk and credit improved
obligations, and are subject to certain restrictions.

In addition to the eight classes of notes rated by Moody's, the
Issuer issued EUR 39.1m of subordinated notes, which will not be
rated.

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

Methodology Underlying the Rating Action:

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

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

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

Loss and Cash Flow Analysis:

Moody's modeled the transaction using CDOEdge, a cash flow model
based on the Binomial Expansion Technique, as described in
Section 2.3 of the "Moody's Global Approach to Rating
Collateralized Loan Obligations" rating methodology published in
August 2017. The cash flow model evaluates all default scenarios
that are then weighted considering the probabilities of the
binomial distribution assumed for the portfolio default rate. In
each default scenario, the corresponding loss for each class of
notes is calculated given the incoming cash flows from the assets
and the outgoing payments to third parties and noteholders.
Therefore, the expected loss or EL for each tranche is the sum
product of (i) the probability of occurrence of each default
scenario and (ii) the loss derived from the cash flow model in
each default scenario for each tranche. As such, Moody's
encompasses the assessment of stressed scenarios.

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

Par amount: EUR 400,000,000

Diversity Score: 40

Weighted Average Rating Factor (WARF): 2668

Weighted Average Spread (WAS): 3.40%

Weighted Average Coupon (WAC): 4.60%

Weighted Average Recovery Rate (WARR): 42.0%

Weighted Average Life (WAL): 8.5 years

Stress Scenarios:

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

Percentage Change in WARF: WARF + 15% (to 3068 from 2668)

Ratings Impact in Rating Notches:

Class X Senior Secured Floating Rate Notes: 0

Class A Senior Secured Floating Rate Notes: 0

Class B-1 Senior Secured Fixed Rate Notes: -2

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

Class C Senior Secured Deferrable Floating Rate Notes: -2

Class D Senior Secured Deferrable Floating Rate Notes: -2

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes: 0

Percentage Change in WARF: WARF +30% (to 3468 from 2668)

Ratings Impact in Rating Notches:

Class X Senior Secured Floating Rate Notes: 0

Class A Senior Secured Floating Rate Notes: -1

Class B-1 Senior Secured Fixed Rate Notes: -3

Class B-2 Senior Secured Floating Rate Notes: -3

Class C Senior Secured Deferrable Floating Rate Notes: -4

Class D Senior Secured Deferrable Floating Rate Notes: -3

Class E Senior Secured Deferrable Floating Rate Notes: -2

Class F Senior Secured Deferrable Floating Rate Notes: -2


ARBOUR CLO V: Fitch Assigns 'B-sf' Rating to Class F Notes
----------------------------------------------------------
Fitch Ratings has assigned Arbour V CLO DAC notes final ratings,
as follows:

Class X: 'AAAsf'; Outlook Stable

Class A: 'AAAsf'; Outlook Stable

Class B-1: 'AAsf'; Outlook Stable

Class B-2: 'AAsf'; Outlook Stable

Class C: 'Asf'; Outlook Stable

Class D: 'BBBsf'; Outlook Stable

Class E: 'BBsf'; Outlook Stable

Class F: 'B-sf'; Outlook Stable

Subordinated notes: not rated

Arbour V CLO DAC is a cash flow collateralised loan obligation
(CLO). Net proceeds from the notes are being used used to
purchase a portfolio of EUR400 million of mostly European
leveraged loans and bonds. The portfolio is actively managed by
Oaktree Capital Management UK (LLP). The CLO envisages a 4.5-year
reinvestment period and an 8.5-year weighted average life (WAL)

KEY RATING DRIVERS

'B' Portfolio Credit Quality

Fitch places the average credit quality of obligors in the 'B'
range. The Fitch-weighted average rating factor (WARF) of the
identified portfolio is 31.25.

High Recovery Expectations

At least 90% of the portfolio comprises senior secured
obligations. Fitch views the recovery prospects for these assets
as more favourable than for second-lien, unsecured and mezzanine
assets. The Fitch-weighted average recovery rate (WARR) of the
current portfolio is 66.49.

Diversified Asset Portfolio

The transaction features four different Fitch test matrices with
different allowances for exposure to the 10 largest obligors and
fixed-rate buckets. The manager can interpolate between these
matrices. These covenants ensure that the asset portfolio will
not be exposed to excessive concentration

Adverse Selection and Portfolio Management

The transaction features a 4.5-year reinvestment period and
includes reinvestment criteria similar to other European
transactions'. Fitch's analysis is based on a stressed-case
portfolio with the aim of testing the robustness of the
transaction structure against its covenants and portfolio
guidelines.

Cash Flow Analysis

Fitch used a customised proprietary cash flow model to replicate
the principal and interest waterfalls and the various structural
features of the transaction, and to assess their effectiveness,
including the structural protection provided by excess spread
diverted through the par value and interest coverage tests.

A minimum of 5% and up to 15% of the portfolio can be invested in
fixed-rate assets, while fixed-rate liabilities represent 5% of
the target par. Fitch modelled both 5% and 15% fixed-rate buckets
and found that the rated notes can withstand the interest rate
mismatch associated with each scenario.

Limited FX Risk

The transaction is allowed to invest up to 20% of the portfolio
in non-euro-denominated assets, provided these are hedged with
perfect asset swaps within six months of purchase. Unhedged
obligations are limited at 2.5% and subject to principal
haircuts. Unhedged obligations can only be purchased if the
transaction is above the reinvestment target par.

RATING SENSITIVITIES

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

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO RULE 17G-10

Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.

DATA ADEQUACY

The majority of the underlying assets or risk-presenting entities
have ratings or credit opinions from Fitch and/or other
Nationally Recognised Statistical Rating Organisations and/or
European Securities and Markets Authority-registered rating
agencies. Fitch has relied on the practices of the relevant
groups within Fitch and/or other rating agencies to assess the
asset portfolio information.

Overall, Fitch's assessment of the asset pool information relied
upon for the agency's rating analysis according to its applicable
rating methodologies indicates that it is adequately reliable.

SOURCES OF INFORMATION

The information here was used in the analysis.

  - Offering circular and structure information provided by Bank
of America as at July 31, 2018

  - Loan by loan information provided by Oaktree Capital
Management as at May 25, 2018

REPRESENTATIONS AND WARRANTIES

A description of the transaction's representations, warranties
and enforcement mechanisms (RW&Es) that are disclosed in the
offering document and which relate to the underlying asset pool
was not prepared for this transaction. Offering documents for
EMEA CLO transactions do not typically include RW&Es that are
available to investors and that relate to the asset pool
underlying the security. Therefore, Fitch credit reports for EMEA
CLO transactions will not typically include descriptions of
RW&Es. For further information, please see Fitch's Special Report
titled "Representations, Warranties and Enforcement Mechanisms in
Global Structured Finance Transactions," dated May 31, 2016.


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


EURASIAN RESOURCES: Moody's Raises Corporate Family Rating to B2
----------------------------------------------------------------
Moody's Investors Service has upgraded to B2 from B3 the
corporate family rating and to B2-PD from B3-PD the probability
of default rating of Eurasian Resources Group S.a r.l., and
changed the outlook on these ratings to positive from stable.
Concurrently, Moody's has upgraded ERG's baseline credit
assessment to b3 from caa1.

RATINGS RATIONALE

The upgrade of ERG's ratings results from Moody's decision to
upgrade ERG's BCA, which is a measure of the company's standalone
credit strength under Moody's Government-Related Issuers (GRI)
rating methodology, to b3 from caa1. ERG's BCA has been upgraded
reflecting the company's improved leverage and interest coverage
metrics and continuing adequate liquidity, as well as Moody's
expectation of further improvement in the company's leverage and
interest coverage metrics over the next 12-18 months.

As the Kazakhstan government owns a 40% stake in ERG, Moody's
applies its GRI rating methodology. The B2 CFR reflects a
combination of (1) a BCA of b3; (2) the Kazakhstan's Baa3 foreign
currency rating; (3) the high default dependence between ERG and
the government; and (4) the moderate probability of government
support in the event of financial distress.

ERG's leverage declined to 3.7x Moody's-adjusted debt/EBITDA as
of year-end 2017 from 6.1x a year earlier, and EBIT interest
coverage increased to 2.5x from 1.3x. The improvement in metrics
resulted from higher Moody's-adjusted EBITDA, which rose to $2.1
billion in 2017 from $1.2 billion a year earlier. The rise in
EBITDA was driven by an increase in commodity prices,
particularly for ferroalloys and copper, and operational
improvements, which more than compensated the strengthening of
the average exchange rate of tenge to the US dollar to 326 from
342, or 5%.

Moody's expects ERG's Moody's-adjusted EBITDA to slightly decline
to $2.0 billion in 2018, based on the rating agency's assumptions
that growth in volumes of sales of the company's main products,
including ferroalloys that generated 55% of its EBITDA in 2017,
will be balanced by a decline in the average prices of some
commodities and increase in costs. Moody's also expects ERG's
Moody's-adjusted total debt to grow to around $8.1 billion from
$7.8 billion. As a result, leverage will increase to 4.1x and
EBIT interest cover decline to 1.9x as of year-end 2018.

By the end of 2018, ERG intends to start production of cobalt and
copper at its RTR processing plant in the Democratic Republic of
Congo (DRC, B3 negative). Moody's expects that owing to the RTR
project, together with continuing increase in ferroalloys output
volumes, cost control and decreased interest rates on bank loans,
ERG will reduce its leverage below 3.5x and raise EBIT interest
coverage above 3.0x by year-end 2019, provided there is no major
decline in commodity prices.

Moody's estimates that as of June 30, 2018, ERG's liquidity
comprised more than $570 million in unrestricted cash and
equivalents, and more than $1.2 billion in operating cash flow,
which the rating agency expects the company to generate over the
following 12 months. ERG also had access to the project financing
to be used to finance the RTR project. In addition, in July 2018
the company procured a new long-term bank loan of more than $350
million. With this new loan, the company's liquidity is
sufficient to cover its debt maturities, cash sweep obligations,
capital spending and potential dividend payouts over the
following 12 months. ERG can postpone part of its capital
spending if needed to support liquidity.

In addition to the improved financial metrics and adequate
liquidity, ERG's BCA takes into account (1) good access to high-
grade and long-reserve-life mining assets in Kazakhstan; (2)
competitive cost structure, owing to high-quality mines and
efficient processing plants, particularly in the profitable
ferroalloys core business; (3) high degree of vertical
integration in the alumina/aluminium, ferroalloys and iron ore
concentrate/pellets value chains; (4) good operational and
product diversification, with several operating mines and
processing facilities in Kazakhstan and, for copper and cobalt,
in the DRC; (5) solid market position in EMEA for ferrochrome,
iron ore and aluminium; (6) high share of exports in total
revenue (more than 90%); and (7) strong customer base and
moderate customer diversification, with 10 largest customers
representing 49% of sales.

The BCA also factors in (1) ERG's exposure to the volatile prices
of commodities; (2) the company's fairly aggressive financial
policy, anticipating high debt-financed expansionary capital
spending along with dividend payouts, although dividend amounts
are limited under the company's loan documentation with banks;
(3) heightened business and event risks in the DRC; (4) execution
risks related to the company's development projects, which are
common for mining companies; and (5) uncertainty regarding the
outcome of the pending UK Serious Fraud Office (SFO)
investigation on Eurasian Natural Resources Corporation Ltd's
(ERG's subsidiary) past M&A transactions in Africa.

RATIONALE FOR POSITIVE OUTLOOK

The positive outlook reflects the company's strong positioning
within the current rating category and a high likelihood of
further improvements in its credit profile over the next 12-18
months, on the back of commissioning of the RTR project. The
positive outlook does not factor in the potential negative
outcome of the SFO investigation, which Moody's views as an event
risk and would assess separately, if it were to occur.

WHAT COULD CHANGE THE RATINGS UP/DOWN

Moody's could upgrade ERG's ratings if it were to upgrade the
company's BCA, which could be a result of (1) a reduction in the
company's total debt after its expected increase by the end of
2018; (2) a decline in Moody's-adjusted debt/EBITDA below 4.0x on
a sustainable basis; (3) positive post-dividend free cash flow
generation on a sustainable basis; and (4) maintenance of healthy
liquidity and building of a track record of prudent liquidity
management. Although not currently anticipated, Moody's could
also consider an upgrade if it were to reassess the assumptions
related to the degree of support from, and dependence on, the
Kazakhstan government, based on potential new factors indicating
stronger support or lower dependence than currently factored in
the rating. The status of the SFO investigation would also be
assessed and taken into account at the time of an upgrade.

Moody's could downgrade the ratings if it were to downgrade the
company's BCA, which could be a result of the company's (1)
Moody's-adjusted debt/EBITDA increasing above 5.0x on a sustained
basis; (2) EBIT interest coverage declining below 1.5x on a
sustained basis; or (3) liquidity or liquidity management
deteriorating materially. A reassessment of the probability of
government support in the event of financial distress (which
currently provides a one-notch uplift to the rating) to a weaker
level would also exert negative pressure on the rating. A
negative outcome of the SFO investigation, resulting in material
fines and penalties and high reputational damage, could also lead
to a downgrade.

PRINCIPAL METHODOLOGY

The methodologies used in these ratings were Mining Industry
published in April 2018, and Government-Related Issuers published
in June 2018.

ERG is a vertically integrated mining group with main operating
assets in Kazakhstan, the DRC and Zambia, and a number of
development assets in Africa and Brazil. The group is primarily
focused on the mining and processing of ferroalloys, iron ore,
aluminium, copper and cobalt. ERG is one of the world's largest
ferrochrome producers and a major exporter of iron ore in
Kazakhstan. In 2017, ERG generated revenue of $5.0 billion (2016:
$3.8 billion) and Moody's-adjusted EBITDA of $2.1 billion (2016:
$1.2 billion). The Kazakhstan government is ERG's largest single
shareholder with a 40% stake. The company's three founding
shareholders, Mr. Machkevitch, Mr. Ibragimov and Mr. Chodiev, own
in aggregate a 60% stake.


SAPHILUX SARL: S&P Assigns B- Long-Term Issuer Credit Rating
------------------------------------------------------------
S&P Global Ratings assigned its 'B-' long-term issuer credit
rating to Saphilux S.a.r.l., the parent of Luxembourg-based
corporate services provider of SGG Group (SGG). This is lower
than the 'B' preliminary issuer credit rating S&P ssigned on Feb.
22, 2018. The outlook is stable.

S&P said, "We assigned our 'B-' issue ratings and '3' recovery
ratings to the group's EUR487 million first-lien term loan, EUR50
million RCF, and EUR30 million acquisition facility; the issue
ratings are lower than the preliminary 'B' issue ratings. We are
also assigning our 'B-' issue rating and '3' recovery rating to
the proposed EUR90 million equivalent add-on to the first-lien
term loan.

"The recovery ratings of '3' are higher than the preliminary '4'
recovery ratings and indicate our expectation of meaningful
recovery (rounded estimate 50%) in the event of a payment
default.

"The lower issuer and issue ratings (compared to the preliminary
ratings) reflect our view that Saphilux's financial policy is
more aggressive than we previously anticipated, leading to higher
debt leverage and slower deleveraging. The assignment of the
final ratings follows Saphilux's announcement that it acquired
U.K.-based fund services providers Augentius and Lawson Conner.
The group intends to fund the purchase price of EUR167 million
plus related fees by issuing a EUR90 million equivalent add-on to
the existing EUR487 million first-lien term loan and a EUR13
million equivalent add-on to the existing EUR85 million second-
lien term loan, in addition to a EUR30 million drawdown of the
acquisition facility and about EUR50 million of subscriptions
from its shareholders, predominantly in the form of non-common
equity, which we view as debt-like.

"The acquisitions will result in increased leverage and we now
expect pro forma adjusted debt-to-EBITDA in 2018, excluding non-
common equity, of 8.5x-9.0x. This is higher than the 8.0x we
previously expected for Saphilux and direct peer TMF (Sapphire
Midco B.V). Our base case is that Saphilux will show adjusted
debt to EBITDA metrics of more than 8.0x over the coming years,
which is higher than we had initially forecast.

"SGG has just closed the acquisition of Jersey-based competitor
First Names Group (FNG), which we consider transformational given
the size of the acquisition. Both entities generated about EUR125
million of revenues each on a pro forma basis for the 12 months
ending May 2018. We note that the group still needs to integrate
this acquisition and that the combined group has a limited
operating performance track record. While we view the Augentius
and Lawson Conner acquisitions as complementary to the group's
fund administration business in the U.K. and Channel Islands,
particularly in the private equity space, we do not foresee the
expected near-term EBITDA contribution and benefits to the
business risk profile as offsetting the leverage increase.

"We view the group's business risk profile as fair because of the
critical nature of its services where clients are more sensitive
to service quality than price. Providers like SGG that have a
good track record of delivery should benefit from a fairly
stable, recurring revenue base, and relatively strong margins.
Furthermore, SGG's referral-based nature and low capital
intensity results in relatively low reinvestment needs.
Offsetting these strengths are the highly competitive, fragmented
nature of the trust and corporate services market; we see SGG's
service offering as being similar to its direct competitors in
this market. The group's small size and comparatively narrow
service offering are constraints, as are the regulatory and
reputation risks that trust and corporate service providers
generally face. We also see risks associated with integrating the
acquisitions.

"While we expect the group will generate FOCF of over EUR10
million per year after a transformational 2018, we note that
operational underperformance or higher-than-expected exceptional
costs relating to the integration of the businesses and planned
cost saving programs could result in consecutive periods of
negative FOCF. This would threaten the sustainability of the
capital structure given the group's sizable debt burden.

"In 2018, we forecast adjusted debt at about EUR1 billion,
comprising about EUR674 million in first- and second-lien term
loans, the EUR30 million acquisition facility, about EUR250
million of shareholder instruments that we treat as debt, and
about EUR90 million relating to noncancellable operating lease
commitments, post-retirement obligations, and contingent
consideration linked to previous acquisitions.

In S&P's base case for Saphilux in 2018 and 2019, it assumes:

-- Economic conditions will support the group's growth plans,
    with global GDP growth at 3.5%-4.0%.

-- Pro forma revenues of about EUR300 million, about EUR50
    million of which is accounted for by the annualized impact of
    the acquisitions of Augentius and Lawson Conner, with mid-
    single-digit revenue growth forecast for 2019.

-- Adjusted EBITDA margins of 28%-30%, supported by
    contributions from recently completed acquisitions by SGG and
    FNG, as well as ongoing cost management. S&P also factors in
    margin improvements from cross-selling and cost synergies of
    the combined group.

-- Capital expenditure (capex) totaling 3.5%-4.5% of total
    revenues.

-- About EUR30 million of cash outflows relating to earn-outs
    from previous acquisitions.

-- Minor cash outflows related to working capital of EUR3.0
    million-EUR4.5 million.

-- No dividend distributions to shareholders.

Based on these assumptions, S&P arrives at the following credit
metrics for 2018-2019:

-- Adjusted debt to EBITDA of 11.0x-12.0x (8.5x-9.0x excluding
    the shareholder instruments).

-- Adjusted FFO to debt of 2%-4% (6%-8% excluding shareholder
    instruments).

-- FFO cash interest coverage of 2.5x-3.0x.

-- FOCF greater than EUR10 million annually following a
    transformational year in 2018.

S&P said, "The stable outlook reflects our view that Saphilux
will report stable operating performance, with adjusted EBITDA
margins at about 30%, while generating positive FOCF of more than
EUR10 million per year.

"We could take a negative rating action if Saphilux
underperformed our forecasts, resulting in weaker cash generation
or heightened liquidity pressure. Specifically, we could consider
lowering the rating if the group's operating performance were to
be significantly weaker, for example due to contract losses and
higher-than-expected integration and cost restructuring expenses,
such that it was unable to generate positive FOCF with no sign of
recovery.

"We could take a positive rating action if Saphilux were to
demonstrate sound operating performance with adjusted EBITDA
margins of greater than 30%, such that forecasted debt to EBITDA
excl. shareholder instruments fell below 8.0x, with a clear
expectation of material further deleveraging, accompanied by
continued positive FOCF."


===========
N O R W A Y
===========


FRED. OLSEN: Mulls Debt, Equity Restructuring Amid Financial Woes
-----------------------------------------------------------------
Ole Petter Skonnord at Reuters reports that Norwegian drillship
and rig operator Fred. Olsen Energy, owner of the yard that built
the RMS Titanic, said it is considering a debt and equity
restructuring that would almost wipe out the value of its current
shares.

With debt and liabilities of more than US$840 million at the end
of June, Fred. Olsen last month stopped paying its creditors to
preserve liquidity, making it the latest victim of a slow
recovery in the oil and gas exploration sector, Reuters relates.

According to Reuters, the company said in a statement it has now
received indicative, non-binding proposals from equity investors
valuing its current shares and bonds at just US$10 million.

The company's largest owner, Bonheur, which holds a 51.9% stake,
separately said it had not decided whether to take part in the
proposed refinancing, Reuters notes.

The company has a NOK1.025 billion (US$124.63 million) bond
maturing in February 2019, while bank debt of US$611 million
falls due the following year, Reuters discloses.

Any deal would require approval from holders of the company's
bonds, Reuters states.


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


BANK USSURY: Liabilities Exceed Assets, Assessment Shows
--------------------------------------------------------
The provisional administration to manage Bank Ussury JSC
(hereinafter, the Bank) appointed by virtue of Bank of Russia
Order No. OD-1327, dated May 25, 2018, due to the revocation of
its banking license, in the course of examination of the Bank's
financial standing has revealed operations aimed at siphoning off
the Bank's assets through assignment of credit claims to a legal
entity with dubious creditworthiness and issuing loans to the
counterparty to settle liabilities as well as through the
disposal of real estate property with deferred payment.

The provisional administration estimates the value of the Bank's
assets to be no more than RUR5 billion, whereas its liabilities
exceed RUR5.3 billion.

On June 19, 2018, the Bank of Russia submitted a claim to the
Court of Arbitration of the Khabarovsk Territory to declare the
bank bankrupt.  The hearing is scheduled for August 16, 2018.

The Bank of Russia submitted the information on the financial
transactions bearing the evidence of criminal offence conducted
by the former management and owners of the Bank 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.


MORDOVIA REPUBLIC: Fitch Affirms 'B' LT IDRs, Outlook Stable
------------------------------------------------------------
Fitch Ratings has affirmed the Russian Mordovia Republic's
Long-Term Foreign- and Local-Currency Issuer Default Ratings
(IDRs) and Short-Term Foreign-Currency IDR at 'B'. The Outlooks
on the Long-Term IDRs are Stable. The republic's senior unsecured
debt ratings have been also affirmed at 'B'.

The affirmation reflects Fitch's unchanged scenario regarding
Mordovia's high debt burden and weak fiscal performance with a
fragile operating balance and continuing, albeit smaller, budget
deficit over the medium term. The region's rating 'B' also
considers Mordovia's economic indicators that are below the
national medium, which has resulted in material reliance on
support from the federal government.

KEY RATING DRIVERS

Fiscal Performance (Weakness/Stable)

Fitch projects the republic's fiscal performance will remain weak
in 2018-2020 despite an expected annual 5% restoration of tax
revenue and higher transfers from the federal government. Under
its rating case scenario, the operating margin will recover to
2%-3% after a negative value of -0.6% recorded in 2017, but it
will remain insufficient to cover interest payments and so the
current balance will be negative.

Fitch expects that Mordovia will continue to record a deficit
over the medium term, reflecting the structural imbalance of its
revenues and expenditure. However, Fitch projects the deficit
will narrow towards 13% of total revenue 2018 and 7% in 2019-2020
from the extreme 27% recorded in 2017, following completion of
intensive investment projects related to FIFA 2018 championship.
Risk remains on the operating expenditure side as the scheduled
increase in salaries for public employees and maintenance of the
constructed sports facilities could fuel budget expenditure over
the medium term.

Debt and Other Long-Term Liabilities (Weakness/Stable)

Fitch projects that Mordovia's direct risk will remain high at
160%-170% of current revenue, moderately up from 158% in 2017 due
to the expected deficit. In 6M18, the region's direct risk
further increased to RUB52.5 billion from RUB48.2 billion at end-
2017 as Mordovia contracted a RUB2.3 billion treasury line and
RUB3.2 billion bank loans to fund intra-year deficit and
refinance maturing budget loans.

Mordovia is among the most indebted of the Russian regions rated
by Fitch. Its direct risk more than doubled in 2013-2017, when
the region undertook huge capital expenditure. In mitigation, a
substantial amount of construction was funded by budget loans
that the federal government provided to the republic at a
preferential 0.1% interest rate. At July 1, 2018, 60% of the
direct risk was represented by budget loans; more than half of
them are long-term and mature in 2023-2034. This result in
Mordovia's maturity profile being long compared with national
peers, with a weighted average life of debt of about 4.8 years
(Fitch's estimate).

Nevertheless, Mordovia's annual refinancing needs is high
relative to the size of its budget. The 2018 maturities are
RUB3.8 billion, which corresponds to 7% of total direct risk or
12% of expected current revenue for this year. The concentration
remains in 2020-2021 when RUB23.7 billion or 45% of direct risk
matures. Fitch notes that Mordovia is highly dependent on access
to debt market to refinance maturing debt and fund expected
deficit as the extension of loans granting to the region from the
federal budget is uncertain. Consequently, the region may have to
refinance most of the maturing budget loans with market debt,
which would expose the republic to high refinancing risk and the
volatility of market interest rates.

Management and Administration (Weakness/Stable)

The republic's government has made large investments in
infrastructure, including the construction of sport facilities
for the national event in 2012 and FIFA championship in 2018.
Huge capex amid the republic's weak self-financing capacity have
led to a high debt burden, which now demands careful debt
servicing management. Fitch notes that the reliability of the
region's forecasts has deteriorated. This is evident from its
2017 financial performance, which was much weaker than the budget
presented to us by management in 2H17. The intra-year 6M18
deficit of RUB4.9 billion, which exceeds the budget deficit of
RUB2.6 billion, also raise concerns over the region's forecast
credibility.

Economy (Weakness/Stable)

According to the region's preliminary data, Mordovia's GRP grew
4.6% in 2017 (2016: 4.4%), which outpaced the national trend. The
growth was supported by developing processing industries,
agricultural sector and FIFA championship-related construction.
Nevertheless, Fitch expects that the republic's wealth metrics
will remain low, with GRP per capita being 70%-75% of the
national median (2015: 71%). This is the reason for the region's
modest tax capacity and its high reliance on regular current
transfers from the federal budget, which contributes about 30% of
Mordovia's operating revenue.

Institutional Framework (Weakness/Stable)

Russia's institutional framework for sub-nationals is a
constraining factor on the region's ratings. Frequent changes in
the allocation of revenue sources and in the assignment of
expenditure responsibilities between the tiers of government
hampers the forecasting ability of local and regional governments
in Russia. The republic's budgetary performance in particular is
reliant on support provided by the state.

KEY ASSUMPTIONS

The republic will continue to have reasonable access to domestic
financial markets to enable it to refinance maturing debt.

Mordovia will continue to receive support from the federal
government over the medium term.

RATING SENSITIVITIES

Continuous material growth of direct risk and inability to
restore operating balance to sustainably positive values, would
lead to a downgrade.

Reduction of direct risk to 120% of current revenue along with a
sustainably positive current balance, could lead to an upgrade.


NEW INDUSTRIAL: Put on Provisional Administration
-------------------------------------------------
The Bank of Russia, by virtue of its Order No. OD-2023, dated
August 3, 2018, revoked the banking license of Moscow-based
credit institution Joint-stock Company New Industrial Bank or JSC
New Industrial Bank from August 3, 2018. According to its
financial statements, as of July 1, 2018, the credit institution
ranked 441st by assets in the Russian banking system.  The bank
is not a member of the deposit insurance system.

Problems in the credit institution's operations owe its origin to
the use of an excessively risky business model, which resulted in
multiple low-quality assets building up on its balance sheet.  At
the same time, the bank conducted "scheme" transactions with its
owners aimed at concealing its real financial standing while
formally complying with the prudential regulations of the Bank of
Russia.  Also, the credit institution's operations were found
non-compliant with the requirements of Bank of Russia regulations
on countering the legalization (laundering) of criminally
obtained incomes and the financing of terrorism.  Moreover, the
credit institution was involved in dubious transit operations.

The Bank of Russia had repeatedly (3 times over the last 12
months) applied supervisory measures against JSC New Industrial
Bank.

However, the management and owners of the credit institution
failed to take effective measures to cease dubious and 'scheme'
transactions and normalize the bank's activities. Under these
circumstances, the Bank of Russia took the decision to revoke JSC
New Industrial Bank's banking license.

The Bank of Russia took this measure following the credit
institution's failure to comply with federal banking laws and
Bank of Russia regulations, repeated violations, within a year,
of Bank of Russia regulations issued in accordance with the
Federal Law "On Countering the Legalisation (Laundering) of
Criminally Obtained Incomes and the Financing of Terrorism", and
multiple applications within one year of measures stipulated by
the Federal Law "On the Central Bank of the Russian Federation
(Bank of Russia)".

The Bank of Russia, by virtue of its Order No. OD-2024, dated
August 3, 2018, appointed a provisional administration to the
credit institution for the period until the appointment of a
receiver pursuant to the Federal Law "On the Insolvency
(Bankruptcy)" or a liquidator under Article 23.1 of the Federal
Law "On Banks and Banking Activities".  In accordance with
federal laws, the powers of the credit institution's executive
bodies were suspended.

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


NEW TIME: Bank of Russia Revokes Banking License
------------------------------------------------
The Bank of Russia, by virtue of its Order No. OD-2026, dated
August 3, 2018, cancelled the banking license of Moscow-based
credit institution Commercial Bank NEW TIME Limited Liability
Company (CB NEW TIME LLC) from August 3, 2018. According to the
financial statements, as of July 1, 2018, the credit institution
ranked 429th by assets in the Russian banking system.

The Bank of Russia cancelled the credit institution's banking
license based on Article 23 of the Federal Law "On Banks and
Banking Activities" following the decision of the credit
institution's authorized body to terminate its activity through
liquidation according to Article 61 of the Civil Code of the
Russian Federation and the submission of the respective
application to the Bank of Russia.

Based on the data provided to the Bank of Russia, the credit
institution has enough assets to satisfy creditors' claims.

In compliance with Article 62 of the Civil Code of the Russian
Federation and Article 57 of the Federal Law "On Limited
Liability Companies", a liquidation commission will be appointed
to CB NEW TIME (LLC).

CB NEW TIME (LLC) is a member of the deposit insurance system.
The cancellation of the banking license is an insured event as
stipulated by Federal Law No. 177-FZ "On the Insurance of
Household Deposits with Russian Banks" in respect of the bank's
retail deposit obligations, as defined by law. The said Federal
Law provides for the payment of indemnities to the bank's
depositors, including individual entrepreneurs, in the amount of
100% of the balance of funds but no more than a total of RUR1.4
million per depositor.

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


NOVOSIBIRSK CITY: Fitch Affirms 'BB' LT IDRs, Outlook Stable
------------------------------------------------------------
Fitch Ratings has affirmed the Russian City of Novosibirsk's
Long-Term Foreign- and Local-Currency Issuer Default Ratings
(IDRs) at 'BB' with Stable Outlooks and Short-Term Foreign-
Currency IDR at 'B'. Novosibirsk's senior debt has been affirmed
at long-term 'BB'.

The affirmation reflects Fitch's expectation that the city will
continue to record a low positive current balance and will keep
its fiscal deficit under control over the medium term. The
ratings also reflect Novosibirsk's moderate direct risk with a
smooth maturity profile, and the city's diversified economy. The
ratings also factor in Russia's weak institutional framework and
a sluggish national economic environment.

KEY RATING DRIVERS

Fiscal Performance (Neutral/Stable)

According to Fitch's base case scenario the city will continue to
record a stable fiscal performance, with an operating margin
between 5% and 7% in 2018-2020 (2017: 6.3%), which will be
sufficient to cover annual interest payment and is close to the
2015-2017 average of 6.4%. Budgetary performance is backed by
steady growth of personal income tax, which accounts for about
one-third of the city's total revenue. Another important revenue
source is transfers from Novosibirsk Region (BBB-/Stable), which
averaged 40% over the last three years.

For 6M18 the city collected 46% of its budgeted revenue for the
full year and incurred 45.5% of budgeted expenditure, leading to
a minor interim RUB451 million deficit. Fitch expects capital
expenditure acceleration by end-2018 to take the full-year
deficit to around RUB2 billion, or 5% of total revenue, which is
in line with the 2015-2017 average. Fitch expects the deficit
will gradually narrow to 3%-4% in 2019-2020 following the
intention of the city's management to curb debt increase.

Debt and Other Long-Term Liabilities (Neutral/Stable)

During 6M18 the city's direct risk remained unchanged from end-
2017 at RUB19.2 billion. Fitch projects the city's direct risk to
total around RUB21 billion by end-2018, driven by a fiscal
deficit, which Fitch expects to total about 5% of total revenue
(2017: 7%). Market debt growth could drive interest expenses and
add pressure to the current margin, which Fitch forecasts to
remain in low single digits. Its rating case scenario forecasts
direct risk growth to about 60% of current revenue by end-2020
(2017: 56.6%), remaining within the 'BB' rating range.

The city's primary source of borrowing is amortising domestic
bond issues (59% of direct risk as of July 1, 2018) with up to
10-year maturity followed by revolving lines of credit from local
banks with maturity of up to six years (19% of total direct
risk). The remaining is low-cost borrowing from the Federal
Treasury and Novosibirsk region budget.

Management and Administration (Neutral/Stable)

Like most Russian local and regional governments (LRGs),
Novosibirsk's budgetary policy is strongly dependent on the
decisions of the federal and regional authorities. The city's
fiscal flexibility is limited due to very low proportion of
modifiable taxes and rigid expenditure structure. The
administration has a socially-oriented fiscal policy and aims to
fulfil all social obligations, which is controlled by the upper
government level.

Novosibirsk demonstrates sophisticated debt management, and
unlike most of its Russian peers, the city mostly relies on long-
term market funding to smooth the city's annual refinancing
needs. The administration focused its budgetary policy on gradual
deficit narrowing leading to stabilisation of debt level in
relative terms.

Economy (Neutral/Stable)

The city is the capital of Novosibirsk Region and with a
population of about 1.6 million inhabitants is the third-largest
metropolitan city in Russian Federation. Novosibirsk's economy is
diversified, with a well-developed processing industry and
service sector. The sound economic performance of local companies
supports Novosibirsk's fiscal capacity, with tax revenue
accounting for 48.4% of operating revenue in 2017. Fitch
forecasts national GDP will continue to see moderate growth in
2018, which should support Novosibirsk's economic and budgetary
performance.

Institutional Framework (Weakness/Stable)

The city's credit profile remains constrained by the weak
institutional framework for LRGs in Russia. Russia's
institutional framework for LRGs has a shorter record of stable
development than many international peers. The predictability of
Russian LRGs' budgetary policy is hampered by the frequent
reallocation of revenue and expenditure responsibilities among
government tiers.

RATING SENSITIVITIES

Restoring the operating margin to above 10% on a sustained basis
and maintaining direct risk below 60% of current revenue with a
debt maturity profile corresponding to the direct risk payback
ratio could lead to an upgrade.

Deterioration of the budgetary performance, leading to an
inability to cover interest expenditure with the city's operating
balance, and direct risk increasing to above 70% of current
revenue would lead to a downgrade.


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

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

The upgrade reflects the consolidation of the region's sound
budgetary performance, supported by a broad tax base and
effective cost control management, as well as healthy debt
metrics, which will correspond to a 'BB+' rating over the medium
term according to Fitch's expectations.

KEY RATING DRIVERS

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

High

Fiscal Performance (Neutral/Stable)

Fitch expects maintenance of the region's sound budgetary
performance with operating margin above 10% and a close-to-
balance budget over the medium-term. This will be supported by
the region's strong tax base, dominated by taxpayers from oil and
gas sector, and the regional government's effective cost
management. The region has sound fiscal capacity, with taxes
contributing about 80% of operating revenue. At the same time,
tax revenue is concentrated in corporate income tax (CIT), which
is exposed to volatility. CIT contributes more than 40% of
Orenburg's total tax revenue.

In 2014-2017, the region's operating balance averaged 12.3% of
operating revenue while the average deficit before debt variation
was a modest 2.2%. During 1H18 Orenburg collected 51% of revenue
budgeted for the full year and incurred 51% of budgeted
expenditure for 2018, which is an indicator of good budgetary
discipline within the financial year. This resulted in a balanced
mid-year budget, indicating the feasibility of the region's
fiscal authorities aim to maintain a balanced budget over the
medium term.

Orenburg has no urgent infrastructure needs, and Fitch projects
capex at 12%-13% of total spending over the medium term, having
been slightly below 15% in 2014-2017. Fitch expects the region
will finance its capex mostly by current balance and capital
revenue, limiting recourse to new borrowings.

Debt and Other Long-Term Liabilities (Neutral/Stable)

Fitch expects the region's direct risk will remain below 40% of
current revenue over the medium term with a trend to decline at
least in relative terms (2017: 37.7% or RUB27 billion). Fitch
projects the direct risk-to-current balance ratio will remain
about four years (2017: 3.6 years) - below the weighted average
life of debt, which is estimated by Fitch at 6.6 years as of
January 1, 2018, and is credit positive.

The region's refinancing risk is moderate, as half of the debt is
composed of long-term budget loans, while the remainder is
amortising domestic bonds with a smooth repayment schedule. Fitch
expects that the region will refinance its maturing debt with new
bonds and bank loans as the contraction of new budget loans is
unlikely while Orenburg's liquidity cushion is low (end-2017:
RUB168 million).

Medium

Economy (Neutral/Stable)

Orenburg's economy is strong in the national context. Rich
deposits of oil and gas as well as metal production contributes
to GRP per capita at 118% of the national median in 2015 (the
latest available data). However, it lags the EU average, which
leads us to assess Economy as Neutral. Concentration in oil and
gas sector exposes the region to potential changes in the fiscal
regime, business cycles or price fluctuations.

In 2017, the regional economy declined by 0.8% compared with the
modest recovery of national economy at 1.5%. The decline of
Orenburg's GRP was mostly attributed to narrowed oil extraction,
following Russia's commitment to cooperate with OPEC and cut oil
production in 2017. According to the regional government, no
further cuts of oil production are expected for 2018, which
should support GRP growth at 1.0%-1.5% in 2018. Fitch expects
Russia's economy to grow 1.8% in 2018.

Low

Management (Neutral/Stable)

The region's management follows a prudent and coherent budgetary
policy. It strictly monitors the dynamics of operating
expenditure. This is evident from the sound fiscal performance
amid some tax revenue volatility. The region's debt policy is
reasonable, which has resulted in a moderate volume of debt,
smooth maturity profile and limited refinancing pressure.

Institutional Framework (Weakness/Stable)

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

RATING SENSITIVITIES

An operating margin sustainably above 15%, accompanied by the
maintenance of sound debt metrics with a direct risk-to-current
balance (2017: 3.6 years) below weighted average life of debt
(2017: 6.6 years), would lead to an upgrade.

Growth of direct risk, accompanied by deterioration in the
operating performance leading to a direct risk-to-current balance
rising towards 10 years on a sustained basis, would lead to a
downgrade.


PROMSVYAZBANK: S&P Raises Long-Term Issuer Credit Rating to BB-
---------------------------------------------------------------
S&P Global Ratings said that it raised its long-term issuer
credit rating on Promsvyazbank to 'BB-' from 'B+' and removed it
from CreditWatch positive, where it was placed on Jan. 29, 2018.
The outlook is stable.

S&P affirmed its 'B' short-term rating on Promsvyazbank.

S&P said, "The upgrade mainly reflects our view of the bank's
stronger link with the government after its ownership transfer to
the Federal Agency for State Property Management (Rosimuschestvo)
and the formation of a new management team consisting of high-
profile executives with extensive backgrounds in working at
government-related entities. It also reflects that the bank
received around Russian ruble (RUB) 243 billion of fresh capital
from the state as part of its financial rehabilitation and
transferred a significant part of its problem assets to the
state's Banking Sector Consolidation Fund. As a result, we
consider that the likelihood that Promsvyazbank will receive
extraordinary government support in case of need has increased to
moderately high from moderate.

"We estimate that the capital support and transfer of about RUB
250 billion of toxic assets have improved the bank's risk-
adjusted capital (RAC) ratio to 7.4% as of July 1, 2018, from
3.5% at year-end 2016. As a result, we have revised our
assessment of the bank's capital and earnings upward to moderate
from weak. We forecast, however, that the RAC ratio will decline
to around 5%-7% through to 2020 as lending growth outpaces
earnings retention. We revised our assessment of the bank's risk
position downward to moderate from adequate because of our
expectation of more-intense lending concentration in the defence
sector and high single-name exposures.

"We consider Promsvyazbank's funding to be average, reflecting
the ongoing support from the regulator that has allowed it to
withstand material outflows of corporate deposits. We also note
that the bank has been actively replacing funds from the
regulator over the last several months. Currently, these funds
net of deposits placed with the regulator account for only RUB38
billion (around 4% of total liabilities). We view the bank's
liquidity as adequate because liquid assets currently amply cover
short-term wholesale funding and short-term customer deposits.

The bank benefits from its considerable size in the fragmented
Russian banking sector (as of July 1, 2018, it ranked No. 10 by
assets among more than 520 Russian banks) and ongoing government
support that has allowed it to clean its balance sheet and start
focusing on the defence sector, which is important for the state.
S&P said, "On the other hand, we note the bank's limited track
record of operations with the new business focus under the new
management team. We therefore continue to assess its business
position as moderate."

S&P said, "The stable outlook on the ratings on Promsvyazbank
reflects our expectation that its creditworthiness will remain
balanced over the next 12 months, with the bank continuing to
benefit from ongoing and potential extraordinary government
support.

"We could lower the rating on Promsvyazbank in the next 12 months
if we considered that its link with the government had weakened.
This could happen, for example, if the government demonstrated
lower involvement in the bank's decision-making process or
unwillingness to provide sufficient support to offset the risks
the bank is taking under the new business model.

"We could also take a negative rating action if the bank's stand-
alone credit profile deteriorated. This could be the case if the
bank's risk appetite increased materially under the new strategy
or if its capital adequacy significantly weakened after it
resumed active lending operations. In addition, although we do
not currently anticipate this, we could take a negative rating
action if we believed that there were a greater risk that the
bank's senior creditors could potentially suffer losses, for
example as a result of any restrictions on making payments to
clients in the originally contracted order.

"Prospects of an upgrade appear remote at this stage. We could
consider raising the rating if the public policy role of the bank
were to strengthen or if the bank improves its risk position and
capitalization materially and builds a sufficient track record of
managing risks prudently following the strategy of the new
management team."


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


CATALONIA: S&P Places B+ Long-Term ICR on CreditWatch Positive
--------------------------------------------------------------
On Aug. 1, 2018, S&P Global Ratings placed its 'B+' long-term
issuer credit rating on the Autonomous Community of Catalonia on
CreditWatch with positive implications. At the same time, S&P
affirmed the 'B' short-term rating.

As a "sovereign rating" (as defined in EU CRA Regulation
1060/2009 "EU CRA Regulation"), the ratings on the Autonomous
Community of Catalonia are subject to certain publication
restrictions set out in Art 8a of the EU CRA Regulation,
including publication in accordance with a pre-established
calendar. Under the EU CRA Regulation, deviations from the
announced calendar are allowed only in limited circumstances and
must be accompanied by a detailed explanation of the reasons for
the deviation. In this case, the reason for the deviation is the
decision of the Spanish central government to allow refinancing
of regional structural short-term debt into long-term debt. The
next scheduled rating publication on the Autonomous Community of
Catalonia will be on Nov. 23, 2018.

CREDITWATCH

S&P said, "We could raise our rating on Catalonia if the region
refinanced the majority of its short-term debt with a longer-term
maturity horizon, and we viewed this as reducing the likelihood
that ongoing political tension between Catalonia's government and
Spain's central government could hinder Catalonia's ability to
fully and timely service its debt.

"Conversely, we could assign a stable outlook if the refinancing
of Catalonia's short-term debt did not go through. We could also
assign a stable outlook if we did not consider the refinancing
sufficient to insulate the region's debt service from the ongoing
political conflict, while the two administrations maintained open
communication.

"We aim to resolve the CreditWatch during the next 90 days. The
resolution may take longer, however, depending on the timeline of
the finalized refinancing agreement, given the regions have until
Oct. 31, 2018, to submit their refinancing requests."

RATIONALE

On July 26, 2018, the Spanish central government announced that
it would allow Spanish regions to refinance their structural
short-term debt with long-term maturities. The central government
defined structural short-term debt as loans not used to cover
temporary intrayear liquidity mismatches, but rather are
refinanced recurrently.

Spanish regions interested in this refinancing option will have
to justify the structural nature of their short-term debt to the
Spanish Ministry of Finance or the Secretary General of the
Treasury before Oct. 31, 2018. S&P expects Catalonia will do so,
since the region had repeatedly requested the central
government's authorization for such a refinancing in recent
years.

S&P said, "We currently do not have additional details on how
this refinancing will proceed. In particular, we do not know the
amount Catalonia would refinance, because this depends on what
portion of the region's short-term debt will be deemed as
structural, as per the central government's definition.
Furthermore, we do not know whether the central government will
refinance the short-term debt directly through its liquidity
facilities, or authorize regions to refinance it with banks. In
the latter case, we understand the new debt would subsequently
fall under the scope of the central government's liquidity
facilities, which cover long-term debt maturities (but not short-
term debt). We also do not know what maturity the new loans will
have, or if they will be bullet or amortizing. As of July 27,
2018, Catalonia had about EUR4.8 billion in short-term debt, of
which about EUR3.8 billion are short-term loans and about EUR1
billion are credit lines.

"We expect to gain greater visibility about all the details of
the refinancing program over the coming 90 days.

"Since our last review of Catalonia on May 25, 2018, there have
been political developments that are likely to affect the
discussions between Catalonia and the central government going
forward. On June 2, the Catalan regional government, led by pro-
independence Mr. Joaquim Torra, was established, ending the
central government's direct rule in Catalonia following the
application of article 155 of the Spanish constitution. On the
same date, socialist party leader Mr. Pedro S†nchez took office
as Spain's president following Mr. Mariano Rajoy's defeat in a
no-confidence vote in parliament the day before.

"Although these developments have yet to shed light on a possible
resolution of the political tensions between Catalonia and the
central government, we think that the new political environment
may prompt more dialogue between the two parties. Mr. S†nchez and
Mr. Torra met on July 9, 2018, in Madrid, and have expressed
their willingness to engage in further dialogue.

"In our view, the maintenance of open channels of direct
communication between the two governments would likely indicate a
diminishing likelihood of a lack of coordination that could
jeopardize Catalonia's timely debt service."

KEY SOVEREIGN STATISTICS

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
  CreditWatch Action; Ratings Affirmed
                                          To             From
  Catalonia (Autonomous Community of)
   Issuer Credit Rating            B+/Watch Pos/B   B+/Negative/B
   Ratings Affirmed

  Senior Unsecured
   Foreign and Local Currency       B+/Watch Pos     B+
   Foreign and Local Currency       B
  Commercial Paper
   Local Currency                   B


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


PROSERV GROUP: S&P Upgrades ICR to 'CCC+', Outlook Positive
-----------------------------------------------------------
S&P Global Ratings said that it raised its issuer credit rating
on Proserv Group Inc. (Proserv, or the company) to 'CCC+' from
'SD' (selective default). The outlook is positive.

The upgrade of Proserv, a provider of engineered products and
services to the offshore industry, follows the company's
successful capital restructuring with very low debt outstanding,
amid gradually improving market conditions (albeit from a very
low cyclical starting point). S&P said, "Despite low gross debt,
we currently believe the company remains dependent upon business
conditions to sustain sufficient liquidity. As such, and until we
have more visibility and track record that the company can
generate meaningful positive EBITDA, we are raising the rating to
'CCC+'." The positive outlook points to a stronger recovery in a
likely alternative scenario, in which oil prices and subsequent
demand from oil companies would support higher activity and
improving profitability. Proserv provides services and products
that span over the life of the field, until decommissioning,
notably to maximize oil and gas recovery. Key services include
automation and control systems, as well as the manufacture of
components for equipment used to extract oil and gas. As such,
Proserv is exposed to the full cycle, and the absence of long-
term contracts leaves it sensitive to oil prices and market
dynamics, with an almost immediate impact on the company's
activity levels.

Following the continued decline in oil prices and an uncertain
period of recovery in the industry, Proserv's trading declined
significantly, ultimately resulting in the need to restructure
due to a heavy debt burden. Following restructuring, Proserv's
majority shareholder Riverstone reached an agreement with the
holders of first- and second-lien debt in the company to exchange
all of the equity in Proserv for all of the first- and second-
lien debt, leaving the company largely debt free, with Oaktree
Capital Management and Kohlberg Kravis Roberts (KKR) taking
majority control. This is a major change and although market
conditions remain difficult, they are improving. S&P said, "With
many restructurings and a steep reduction in fixed costs in the
past three years, we believe the company can now build on this
platform to grow revenues (notably through its business in the
Middle East) and start generating cash. Since the company will
pay no interest and very limited taxes (due to major losses
brought forward), we expect it to be able to self-finance capital
expenditures (capex)."

S&P said, "We still believe that the capital structure is
unsustainable, not because the debt burden is an issue (only one
debt instrument remains, about $10 million due to Riverstone),
but because the company's cash flow generating capabilities are
still uncertain. This leaves the company vulnerable to certain
scenarios, such as a steep decline in oil prices and demand. We
therefore believe building a track record is important, and as
such, the positive outlook reflects the potential for a higher
rating in the next six to 12 months if the company builds a track
record of successful operations and liquidity management."

S&P's base case assumes:

-- Oil prices of $65 per barrel (/bbl) for the rest of 2018,
    $60/bbl in 2019, and $55/bbl in 2020 and beyond, according to
    S&P's latest price deck;

-- Oil prices stabilizing above $50/bbl should gradually improve
    demand, and we think Proserv's entry into the Middle East
    provides growth opportunities, whereas growth remains more
    difficult in offshore drilling. Increasing capex and
    maintenance from oil companies should allow for revenue
    growth as per our base case;

-- Revenues of about $150 million-$200 million in 2018, growing
    to about $250 million in 2019;

-- Positive EBITDA of up to $10 million in 2018 and $15-million-
    $20 million in 2019;

-- No material cash tax payments or interests in the next two
    years; and

-- Capex will remain limited, with about $5 million spent in
    each of 2018-2019.

S&P said, "The positive outlook reflects our view that Proserv
could generate positive EBITDA in 2018 as well as growing the
backlog and revenues, which could lead to higher cash flow
generation than we currently assume. We expect the company will
generate at least neutral cash from operations.

"We could raise the rating on Proserv if the company successfully
took advantage of the gradual recovery for oilfield service
demand and generated positive cash from operations and free
operating cash flows, increasing the cash balance and building
sufficient headroom under the company's liquidity position.
Revenues trending toward $300 million and EBITDA in excess of $20
million, in conjunction with adequate liquidity, could support an
upgrade.

"We could lower the rating on Proserv if market conditions
deteriorated again, with oil and gas prices falling steeply in
the next six to 12 months. In such a scenario, demand for
Proserv's products and services would fall again, which could
render the order stream and revenues insufficient to cover costs.
We could also lower the rating if the company experienced
liquidity issues, for example, if accounts receivables grew
significantly as the result of late payments from customers."


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


ICELAND FOODS: S&P Cuts Issuer Credit Rating to B, Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings said that it lowered its long-term issuer
credit rating on Iceland Topco Ltd. (Iceland Foods) to 'B' from
'B+'. The outlook is stable.

SP said, "At the same time, we lowered our issue rating on the
group's senior secured notes to 'B' from 'B+'. The senior secured
notes are issued by financing subsidiary Iceland Bondco Plc,
comprising GBP350 million LIBOR + 4.25% senior secured floating-
rate notes due 2020 (GBP54.5 million outstanding), GBP200 million
6.75% senior secured notes due 2024 (GBP170.2 million
outstanding), and GBP550 million 4.625% senior secured notes due
2025. The recovery rating on the notes is unchanged at '3',
indicating our expectation of meaningful (50%-70%; rounded
estimate 55%) recovery prospects in the event of default.

"We also lowered our issue rating on the group's GBP30 million
super senior revolving credit facility (RCF) arranged by
financing subsidiary Iceland VLNco Limited to 'BB' from 'BB+'.
The recovery rating on the RCF remains unchanged at '1+',
indicating our expectation of full recovery prospects in the
event of default.

The downgrade of Iceland Foods is underpinned by two factors: the
challenging price competition among U.K. grocers, which will
likely intensify over the next few years; and unexpected supply
chain infrastructure of the past that led to insufficient stock
availability during Christmas weeks, resulting in significantly
weaker performance in December 2017. Overall, although Iceland
Foods achieved a record level of GBP3 billion revenue in the
financial year ending March 31, 2018 (FY2018), S&P's reported
EBITDA (after deducting cash based exceptional costs) declined by
6% to GBP150 million. Instead of Iceland Foods reducing leverage,
S&P Global Ratings-adjusted debt to EBITDA exceeded 5.0x in
FY2018.

Over the past several years, the U.K. has seen discount grocers,
namely Aldi and Lidl, rapidly increasing their market share with
aggressive price points. Since 2015, Aldi has grown its U.K.
market share to 7.5% from 4.8%, while Lidl has improved to 5.4%
from 3.5%, according to Kantar Worldpanel. Major grocers, after
an extended period of competition, are now fighting back with
market consolidation. For example, Tesco Plc recently acquired
wholesaler Booker Ltd., Co-operative Group has taken over Nisa
Retail Ltd., and the proposed merger of J Sainsbury Plc and Asda
Stores Ltd. In light of market consolidation, a new market trend
could emerge, driving down food prices further via stronger
purchasing power positions.

Looking ahead, U.K. grocers are likely to face further pressure
on margins as consumers remain price sensitive. At the same time,
the National Living Wage and utilities costs are rising in an
environment where real wage growth is very weak in the U.K.,
making inflationary cost more difficult to pass on to consumers.
While Iceland Foods, as a value grocer, should benefit from price
cautious consumers behavior in the U.K., pricing power would
likely be constrained by competitors over the next few years.

To remain competitive, Iceland Foods will continue to invest in
new store openings and store refit programs. In addition, the
investments in phased depot development would likely bring
capital expenditure (capex) to a record high level of GBP90
million-GBP95 million in FY2019. While these investments could
help support revenue growth of around 5.5%-6.0% per year, price
competition would likely further dilute profitability, and
considering the timing of investments, EBITDA may not
significantly improve from the current level until FY2020. S&P
forecasts that its reported EBITDA margin (after deducting cash
based exceptional costs) could further decline toward around
4.4%-4.7% in FY2019, trending from 5.0% in FY2018 and 5.7% in
FY2017.

S&P said, "Subsequently, in FY2019, our adjusted debt to EBITDA
would likely remain slightly above 5.0x, while our reported
EBITDAR cash interest coverage (defined as reported EBITDA plus
rent over cash interest and rent) would stay at around 1.6x.
Management expects that the group will begin to recover its
performance in the third quarter (October to December 2018) as
the first half of FY2019 is likely to absorb the effects of wage
growth, rising oil prices, and reflect the timing of marketing
investment."

Iceland Foods is a U.K.-based grocery retailer with over 900
stores operating under its own brand. It is the second-largest
frozen food retailer in the U.K., second only to Tesco Plc.
Almost 40% of Iceland Foods' product lines comprise frozen
products, the remainder consists of groceries, and chilled food
and drinks. Iceland Foods adopts a top-up grocery shopping
concept, with price points situated between those of the Big 4
supermarkets and the discount grocers Aldi and Lidl. In the
context of the overall U.K. grocery market, however, Iceland
Foods ranks ninth with about a 2.1% market share, according to
Kantar Worldpanel. Although Brait S.E. represents a major
shareholder of Iceland Foods, management retains majority control
over the group's operations and cash flows. As a result, S&P
considers Iceland Foods independently from Brait S.E.

S&P's base case assumes:

-- S&P's forecast U.K. real GDP growth of 1.2% in 2018 and 1.4%
    in 2019, reducing from 1.8% in 2017. Consumer price index
    inflation would reduce to 2.5% in 2018 and 1.9% in 2019, from
    2.7% in 2017. However, grocery prices would remain highly
    competitive as major supermarkets in the U.K. -- namely
    Tesco, Sainsbury's, Asda, and Morrisons -- would likely focus
    on discounting food products in an attempt to regain market
    share against discounters Aldi and Lidl. In this environment,
    S&P expects Iceland Foods would focus on increasing volume to
    drive revenue growth of around 5.5%-6.0% in FY2019 and
    FY2020, mainly supported by about 30-35 net new store
    openings per year among conventional and warehouse store
    formats, and ongoing store refitting that would attract
    footfalls.

-- However, rising National Living Wage and utilities costs
    would drive cost inflation further. At the same time,
    intensifying price competition makes it difficult to pass on
    higher costs to customers, resulting in further pressure on
    reported EBITDA margin (after deducting cash based
    exceptional costs), which S&P expects to decline toward
    4.4%-4.7%in FY2019 and FY2020 from 5.0% in FY2018. Taking
    into account S&P's operating lease adjustment and surplus
    cash adjustment, it arrives at its adjusted EBITDA margin of
    around 8.1%-8.4% in FY2019 and FY2020, reduced from 8.7% in
    FY2018.

-- Additionally, the group plans to invest in phased depot
    developments, as well as ongoing store refits and new store
    openings. Capex would reach a record level of GBP90 million-
    GBP95 million in FY2019, before moderating toward GBP75
    million-GBP80 million in FY2020. This is higher than GBP67
    million in FY2017 and GBP86 million in FY2018.

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

-- Adjusted debt to EBITDA of 5.0x-5.2x in FY2019 and 4.8x-5.1x
    in FY2020, versus 5.1x in FY2018. This is because earnings
    growth will likely remain subdued in 2019.

-- Reported EBITDAR cash interest coverage of about 1.6x in
    FY2019 and 1.7x in FY2020, versus 1.6x in FY2018. This is
    mainly due to Iceland Foods exhibiting higher rent costs than
    peers.

-- Reported free operating cash flow would remain low at around
    GBP10 million-GBP15 million in FY2019 due to elevated capex
    on additional depot developments, before improving to GBP20
    million-GBP30 million in FY2020 when capex could moderate
    from the peak level.

S&P said, "Our stable outlook reflects our expectation that a new
market trend could emerge, driving down food prices further while
cost inflation persists. Further margin pressure would likely
offset the benefit of sales growth, constraining Iceland Foods'
earnings growth prospects in 2019. We forecast our adjusted debt
to EBITDA to be 5.0x-5.2x and reported EBITDAR cash interest
coverage to be around 1.6x over the next 12 months.

"We could consider a negative rating action if Iceland Foods'
growth and deleveraging prospects further weakened. This could
arise if, for example, the group experienced a decline in EBITDA
due to further price competition and inflationary cost pressure,
resulting in reported EBITDAR cash interest coverage falling
toward 1.2x, or very weak free operating cash flow (FOCF)
generation due to elevated capex.

"We could also lower the ratings if we perceive a more aggressive
financial policy regarding capital investment or shareholder
returns.

"We could raise the ratings if Iceland Foods materially improves
its operating performance through consistently strong like-for-
like sales growth and higher margins, resulting in its S&P Global
Ratings-adjusted debt to EBITDA improving to below 5x on a
sustainable basis and reported EBITDAR cash interest coverage
improving toward 2x, while maintaining strong reported FOCF. Any
ratings upside would also be contingent on our view of
conservative financial policy regarding leverage and shareholder
returns."


POLISH CREDIT: Enters Administration, Declared in Default
---------------------------------------------------------
Business Sale reports that Polish Credit Union UK Limited, which
launched in 2013 and has 500 members under its name, has been
placed in administration.

Preston-based insolvency practitioners and specialists in credit
unions, Begbies Traynor has been called in, and partner
Dean Watson -- dean.watson@begbies-traynor.com -- has been
appointed as the official administrator, Business Sale relates.

Opened in 2013 to provide the London-based Polish community with
savings accounts and loans, the single-branched credit union
located in West Ealing, London has since gained a customer-base
of more than 500 members, Business Sale notes.

According to Business Sale, the union has been declared in
default by the Financial Services Compensation Scheme (FSCS),
which will ensure that all members will have their deposits
returned to them.



                            *********

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.

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members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
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