/raid1/www/Hosts/bankrupt/TCREUR_Public/180821.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Tuesday, August 21, 2018, Vol. 19, No. 165


                            Headlines


D E N M A R K

FAERCH PLAST: Moody's Cuts Rating on Sr. Sec. Facilities to B3


G E R M A N Y

AIR BERLIN: Can Fully Repay Government Rescue Loan
K+S AG: S&P Alters Outlook to Negative & Affirms 'BB/B' ICRs
SKW STAHL-METALLURGIE: Munich Court Confirms Insolvency Plan


G R E E C E

FOLLI FOLLIE: Set to Discuss Debt Restructuring with Creditors


K A Z A K H S T A N

TENGRI BANK: S&P Cuts Long-Term Issuer Credit Rating to 'B'


N E T H E R L A N D S

NORTH WESTERLY V: Moody's Assigns B2 (sf) Rating to Class F Notes
NORTH WESTERLY V: Fitch Assigns 'B-sf' Rating to Class F Notes


R U S S I A

BANK MOSCOW: Put on Provisional Administration, License Revoked


S L O V E N I A

FAP LIVNICA: Bankruptcy Agency Invites Bids for Assets
NOVA LJUBLJANSKA: Moody's Confirms 'Ba1' LT Deposit Ratings


T U R K E Y

TURKEY: Moody's Cuts LT Issuer Rating to Ba3, Outlook Negative
TURKEY: S&P Cuts Long-Term FC Sovereign Credit Rating to 'B+'
TURKIYE IS BANKASI: S&P Cuts LT Issuer Credit Rating to B+


U N I T E D   K I N G D O M

ADIENT GLOBAL: Moody's Cuts CFR to Ba3 & Sr. Unsec. Rating to B1
HSS HIRE: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable
MICHELLS & BUTLERS: Fitch Affirms 'BB+' Rating on Class D1 Notes
ROAD MANAGEMENT: S&P Raises Senior Secured Debt Rating to 'BB+'


                            *********



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D E N M A R K
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FAERCH PLAST: Moody's Cuts Rating on Sr. Sec. Facilities to B3
--------------------------------------------------------------
Moody's Investors Service has downgraded to B3 from B2 the EUR576
million equivalent upsized term loans and EUR65 million revolving
credit facility borrowed at Faerch Plast Bidco ApS. Concurrently,
Moody's has affirmed the B3 corporate family rating and B3-PD
probability of default rating of parent Faerch Plast Midco ApS.
The outlook on all ratings remains stable.

RATINGS RATIONALE

The downgrade of the instrument ratings is primarily driven by
the company's decision to refinance the EUR100 million second
lien facility with additional GBP145 (EUR162) million of first
lien term loan B. As a result, the now larger first lien term
loans no longer benefit from the subordinated debt cushion that
the second lien provided and, accordingly, the instrument ratings
are aligned with the CFR.

In addition, the affirmation of the CFR and PDR balances the
benefits from the 4PET and CGL Pack acquisitions (earlier this
year) with the company's highly aggressive financial policy. The
remaining funds after the second lien prepayment and fees are
used to fund the 50.1% acquisition of 4PET Group, a Dutch sheet
extrusion and recycling business, as well as to improve liquidity
by partly paying down the revolving credit facility that the
company drew down earlier this year to fund the CGL Pack
acquisition that completed in June 2018.

As a result of the significant increase in debt this year from
the additional first lien term loan B as well as the remaining
revolver drawing used to fund these acquisitions, Moody's
estimates Moody's-adjusted debt to EBITDA at around 8.6x pro
forma for the acquisitions for the last twelve months to June
2018.

Moody's also believes free cash flow after interest pro forma for
the acquisitions (but before acquisition and financing
activities), albeit temporarily, could turn negative in 2018
given the substantial capex investments at 4PET in the first half
of 2018, while interest savings from the lower margins of the
first lien are largely offset by the relative debt increase.
Accordingly, the B3 CFR is weakly positioned and reliant on
visible EBITDA growth over the next 12-18 months. Moody's
anticipates that on the back of 15% EBITDA growth in the first
half of 2018 and ramp up expectations at 4PET, notwithstanding
significant raw material cost headwinds, the company will
deleverage to below 8.0x in the second half of 2018 on a pro
forma and fully consolidated basis. The expectation of
deleveraging from the currently high leverage as well as Moody's
expectation of further improving liquidity in light of the
requirement to acquire the remaining 49.9% stake in 4PET in 2020
are hence underpinned by EBITDA growth expectations. Accordingly,
there is limited room for underperformance or lack of EBITDA
growth at the B3 rating.

Both acquisitions are complementary to the business profile in
Moody's view. 4PET is an integrated PET sheet producer, an
intermediate step to Faerch's products, with capacity to recycle
PET bottles as well as PET trays. As a result, Faerch is now
fully integrated with its own supply of recycled food-grade PET
and benefits from the additional know-how gained (i.e. input mix)
as well as additional extrusion capacity at 4PET. The ability to
recycle PET bottles and trays is particularly important in the
context of the rise in recycled PET prices in 2018 so far on the
back of increasing environmental concerns. In addition, the CGL
Pack acquisitions added a production footprint in France to
support Faerch's existing local customers and complements
Faerch's food-to-go offering.

The rating further reflects the (i) focused nature of the
company's product offering, mainly rigid plastic trays for food
end markets; (ii) degree of customer concentration; (ii) exposure
to volatile and rising raw materials (ie recycled PET); and (iii)
degree of currency exposure given the relative importance of the
UK end market and notwithstanding substantial local production
capacity.

However, the rating also positively reflects (i) that the
company's focus is on higher growth niche food end markets such
as ready meal, food-to-go and fresh meat in the context of a
generally competitive, fragmented but also stable market; (ii) a
high degree of automation in its facilities, as well as
customisation with its customers after significant investments in
the past; and (iii) strong profitability in the context of its
rated peer group as well as a positive track record of passing
through raw material and currency price inflation in the last two
years (although with some lag), supported by a high share of
contractual pass-through arrangements with customers.

Liquidity Profile

Faerch's liquidity profile has improved through the transaction
and is adequate. Pro forma for June 2018, liquidity comprised
EUR7 million (DKK49 million) of cash and EUR36 million (~DKK268
million) of availability under the EUR65 million (~DKK484
million) revolving credit facility (RCF) due 2023. There is a
springing net leverage covenant, tested if the RCF is 40% drawn,
and Moody's expects the company to remain in compliance. Moody's
expects the company to be net cash generative before the
financing- and acquisition-related cash flows in the second half
of 2018 because it is traditionally the more generative season of
the year and as significant investments at 4PET concluded. The
next larger debt maturity after the RCF will be the EUR576
million equivalent term loans due 2024. Moody's notes that the
company also has EUR24 million (DKK183 million) of 4PET rolled
over debt as well as other debt, which Moody's understands
largely represent investment-related medium-term financings,
alongside EUR25 million (DKK185 million) of mortgage debt.
Lastly, Moody's notes that the company has agreed to buy the
remaining 49.9% of 4PET in 2020 which the company currently
expects to fund from internally generated cash flows.

Rating Outlook

The stable outlook and B3 CFR are reliant on continued solid
EBITDA growth. Accordingly, the stable outlook reflects Moody's
expectation that Moody's-adjusted debt/EBITDA will trend below 7x
in 2019 on the back of sustained EBITDA growth as well as
continued raw material price pass-through. Further debt-funded
acquisitions or shareholder-friendly actions such as dividends
would likely weigh negatively on the rating or outlook.

What Could Change The Rating Up/Down

Positive pressure is currently unlikely given the weak
positioning of the ratings. However, positive pressure could come
from continued EBITDA growth so that Moody's adjusted debt/EBITDA
falls below 6.0x, combined with Moody's-adjusted free cash
flow/debt in the mid-single-digits. Conversely, the ratings could
come under immediate negative pressure if EBITDA stagnates or
reduces or if Moody's-adjusted debt/EBITDA does not visibly trend
below 7.0x in 2019. Negative free cash flow or a lack of
continued improvement in the company's liquidity profile could
also result in negative pressure.

LIST OF AFFECTED RATINGS

Issuer: Faerch Plast Midco ApS

Affirmations:

Corporate Family Rating, Affirmed B3

Probability of Default Rating, Affirmed B3-PD

Outlook Actions:

Outlook, Remains Stable

Issuer: Faerch Plast Bidco ApS

Downgrades:

BACKED Senior Secured Bank Credit Facility, Downgraded to B3 from
B2

Outlook Actions:

Outlook, Remains Stable

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Packaging
Manufacturers: Metal, Glass, and Plastic Containers published in
May 2018.

Headquartered in Holstebro, Denmark, Faerch Plast is a rigid
plastic packaging manufacturer supplying plastic trays into the
European food industry and mainly to food producers, with eight
manufacturing facilities across five countries (Denmark, the
United Kingdom, Spain, Czech Republic and France). Pro forma for
the CGL Pack and 4PET acquisitions, Faerch Plast generated DKK2.8
billion (~EUR382 million) of revenue in 2017. The company is
majority owned by private equity firm Advent International
following its acquisition of EQT's 92.7% stake in 2017.


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


AIR BERLIN: Can Fully Repay Government Rescue Loan
--------------------------------------------------
DPA reports that the liquidators dealing with the insolvency of
Air Berlin have said the defunct German airline is able to pay
back all the loans it received from the federal government.

Lucas Floether, the company's liquidator, told DPA it currently
looks highly likely that the EUR150 million (US$170 million) the
company borrowed during its financial difficulties can be
serviced in the coming years, but without interest.

The situation has improved significantly from the earlier this
year when the company said it could only pay back half of the
amount, DPA relates.  Air Berlin has already achieved this
target, DPA notes.  The formerly second largest German airline
declared it was insolvent on August 15, 2017, after major
shareholder Etihad withdrew financial support, DPA recounts.

The federal government stepped in at the time with a loan to keep
the airline flying while it looked for a potential buyer, DPA
discloses.  Mr. Floether continues to work on liquidating the
company which has 1.3 million creditors -- mostly passengers --
looking for their money back, DPA states.


K+S AG: S&P Alters Outlook to Negative & Affirms 'BB/B' ICRs
------------------------------------------------------------
S&P Global Ratings said that it revised its outlook on German
potash and salt producer K+S AG to negative from stable. S&P
affirmed the long- and short-term issuer credit ratings on K+S at
'BB/B'.

S&P said, "At the same time, we affirmed our issue ratings on
K+S' senior unsecured bonds at 'BB'. The recovery ratings on the
bonds are unchanged at '3', reflecting our expectation of
meaningful recovery (50%-70%; rounded estimate: 55%) in the event
of a payment default.

"The outlook revision to negative from stable reflects the
ongoing weak ratios of K+S, with forecast S&P Global Ratings-
adjusted funds from operations (FFO) to debt of about 12%-13% in
2018 (up from 10% in 2017), approaching 15%-16% only in late
2019. Although the forecasted ratios are recovering, they
contrast with our previous expectation of FFO to debt of 14%-15%
in 2017 and 21%-22% in late 2018. We consider that there is a
heightened risk that the company may not achieve our current
base-case forecast.

"We view K+S' adjusted EBITDA of about EUR340 million in the
first half of 2018 as weak due to a range of challenges relating
to K+S' production at the Bethune and German mines, which weighed
on its profitability and cash costs. In Germany, the Werra and
Neuhof sites suffered production issues, including the
availability and motivation of the workforce, downtimes in
production, geological challenges, and a temporary decrease in
the content of potash in the mined rock. At the Bethune mine, the
ramp-up continued on track to achieve 1.4-1.5 million metric tons
(mt) of production in 2018, but not without its own challenges
related to Canadian rail strikes, safety shutdowns, and the
quality of the granular potash.

"We understand that K+S' management, with the help of external
consultants, is working on several countermeasures to stabilize
and improve the operations and maintain cost discipline. While we
recognize this, as well as the complexity of K+S' mining
operations, we consider that the operational risks materially
affecting the company's earnings warrant a downward revision of
our management and governance score to fair from satisfactory. We
also believe that the above challenges may at least partly spill
into the second half of 2018 and hence we view a recovery of
EBITDA to the upper range of K+S' guidance of EUR660 million-
EUR740 million, up from EUR577 million in 2017, as unlikely.

"Looking into 2019, we believe the ramp-up of the low-cost
Bethune mine, improving potash prices, and the eventual
normalization of operations in Germany could translate into
stronger adjusted EBITDA of about EUR850 million-EUR900 million.
Assuming capital expenditure (capex) of about EUR550 million-
EUR600 million and working capital outflows of about EUR100
million, this could allow K+S to return to moderately positive
free operating cash flow. We believe this potential upside in
earnings, and recovery of credit ratios, primarily requires at
least partly resolved issues at the German mines, and smooth and
fully ramped-up production at Bethune."

In S&P's base-case for 2018-2019, it assumes:

-- Overall steady underlying demand for potash of about 2%-3% in
     2018-2019, which should support the recovery in potash
     prices, in combination with a delay in certain capacity
     additions coming on stream and production curtailments of
     high cost capacities.

-- In K+S' German mines, about 6.4-6.5 mt of production volumes
    in 2018 and about 6.0 mt in 2019, factoring in the closure of
    the high-cost 0.6 mt Sigmundshall mine. S&P views the
    additional upside of 0.3 mt as highly dependent on the
    resolution of the challenges related to the availability of
    the workforce, and efficient tackling of other operational
    issues.

-- Continued ramp-up of the Bethune mine, with about 1.4-1.5 mt
    of production in 2018 and 1.7-1.9 mt in 2019 (of which low-
    cost secondary mining would account for 0.1-0.2 mt).

-- Broadly stable performance of the salt business.

-- Capex of about EUR550 million in 2018 and about EUR550
    million-EUR600 million in 2019, which S&P considers a
    normalized level.

-- Working capital outflows of about EUR100 million in both
    years.

-- An unchanged dividend payout ratio of 40%-50% of the previous
    year's adjusted net income.

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

-- Adjusted EBITDA of EUR680 million-EUR700 million in 2018 and
    about EUR850 million-EUR900 million in 2019.

-- Adjusted FFO to debt of 12%-13% in 2018, approaching 15%-16%
    in late 2019.

-- Adjusted debt to EBITDA of 6.1x-6.3x in 2018 and below 5x in
    2019.

-- Negative free cash flow in 2018 and moderately positive free
    cash flow in 2019.

S&P assesses K+S' liquidity as strong, reflecting its forecast
that its liquidity sources will exceed uses by more than 1.8x in
the 12 months from June 30, 2018, and 1.6x in the following 12
months. S&P also factors in the company's solid access to bank
financing and prudent liquidity management.

S&P estimates that K+S' liquidity sources over the next 12 months
will comprise:

-- Cash and cash equivalents of EUR265 million as of June 30,
    2018;

-- Full availability under a committed EUR1 billion revolving
    credit facility (RCF) due July 2020; and

-- Cash FFO of about EUR600 million over the next 12 months.

S&P estimates that K+S' liquidity uses over the next 12 months
will comprise:

-- Capex of about EUR550 million;
-- A dividend payout of 40%-50% of the previous year's adjusted
net income;

-- Working capital outflow of about EUR100 million; and

-- About EUR410 million of short-term debt. K+S will cover a
     debt maturity of EUR500 million with already secured proceeds
     of a EUR600 million senior unsecured bond issue completed in
     July 2018.

S&P said, "The negative outlook reflects the risk that we could
lower the rating on K+S if we do not see a meaningful and
sustainable improvement in its EBITDA and free operating cash
flow generation in the next 12-18 months.

"We could lower the rating if K+S' adjusted FFO-to-debt ratio
remains below 12% in the next 12-18 months, for example because
of ongoing production issues in Germany, or a slower-than-
anticipated ramp-up of production volumes at Bethune.

"We could revise the outlook to stable if we observed a sustained
improvement in K+S' adjusted EBITDA to at least EUR700 million-
EUR730 million, translating into K+S comfortably achieving an
adjusted FFO-to-debt ratio of 12%-20%, which we view as
commensurate with the rating."


SKW STAHL-METALLURGIE: Munich Court Confirms Insolvency Plan
------------------------------------------------------------
By resolution dated August 14, 2018, the local court in Munich
(Insolvency Court) has confirmed the insolvency plan for SKW
Stahl-Metallurgie Holding AG.  This was preceded by the approval
of all groups of creditors during the creditors' meeting on
July 23, 2018.  The denial of the insolvency plan by the
shareholders (who form a separate group) during the creditors'
meeting, was substituted by the court by referring to the
prohibition to obstruct (Sec. 245 Insolvency Code).

The resolution of the court is appealable within 14 days.  As
soon as the insolvency plan becomes legally binding, its
execution can be initiated.

During the on-going insolvency proceeding under self-
administration, the insolvency plan determines all measures for
the financial restructuring of the Company.  To this end, a
considerable part of the credit claims held by the US based
investor Speyside Equity against SKW Holding, will be swapped
into equity, associated with the current shareholders exiting the
Company.  For all none-subordinated insolvency creditors, the
insolvency plan provides for economic full satisfaction of their
claims in the amount of 100%.

The SKW Metallurgie Group -- http://www.skw-steel.com-- is a
is a provider of chemical additives for hot metal
desulphurization and for cored wire and other products for
secondary metallurgy.


===========
G R E E C E
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FOLLI FOLLIE: Set to Discuss Debt Restructuring with Creditors
--------------------------------------------------------------
Antonio Vanuzzo at Bloomberg News reports that a statement said
Folli Follie is meeting creditors to discuss a possible
standstill and future debt restructuring.

According to Bloomberg, the sole holder of EUR20 million
Schuldschein served a termination notice on Aug. 9.

The company's liabilities as of Aug. 13 include:

   -- EUR51 million Schuldschein
   -- EU249.5 million convertible notes
   -- CHF150 million bonds
   -- EU18 million financial leasing liabilities
   -- EU47 million and GBP10 million bank loans

Folli Follie is a Greek-based international company which
designs, manufactures and distributes luxury jewellery, watches
and fashion accessories.



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


TENGRI BANK: S&P Cuts Long-Term Issuer Credit Rating to 'B'
-----------------------------------------------------------
S&P Global Ratings said that it had lowered its long-term issuer
credit rating on Tengri Bank to 'B' from 'B+' and also lowered
its Kazakhstan national scale rating to 'kzBB+' from 'kzBBB'. S&P
placed these ratings on CreditWatch with negative implications.

At the same time, S&P affirmed the 'B' short-term issuer credit
rating.

S&P said, "The downgrade reflects our view that the ability of
Punjab National Bank (PNB), which holds a 49% stake in Tengri
Bank, to provide extraordinary support to its subsidiary has
substantially weakened. In our opinion, PNB's asset quality and
capital and earnings are currently pressured by the fraud case
related to the issuance of unauthorized bank guarantees.
Consequently, we no longer incorporate a notch of support from
PNB to Tengri Bank.

"The CreditWatch placement reflects our concerns about Tengri
Bank's ability to improve its capital position over the next 90
days, with our risk-adjusted capital (RAC) ratio sustainably
above 10%. The bank's capital position has deteriorated in 2018,
with the RAC ratio falling to 7.6% as of June 30, 2018, mostly
because Tengri Bank's business expansion was not timely supported
by capital injections from PNB.

"The bank's ability to recover its capital ratios currently
depends on new capital injections, which we understand might come
from the new investors. In particular, we expect Kazakhstani
tenge 7.2 billion (about US$20 million) new capital to be
injected in the next 90 days, which should improve Tengri Bank's
RAC ratio to around 10%-10.5%. However, if the capital injections
are not executed in a timely manner, or if we believe that the
bank will not be able to maintain its strong capitalization even
after these injections are made, we may lower our rating on
Tengri Bank.

"At the same time, we note that Tengri Bank has managed to
improve its funding profile over the last several years,
diversifying its liabilities and, in particular, increasing the
share of retail deposits to around 30%. We now believe that these
improvements are sustainable, and we have therefore revised the
bank's stand-alone credit profile to 'b' from 'b-'.

"We aim to resolve the CreditWatch in the next 90 days, as we get
a clearer understanding on the bank's future capital position.
We could lower the rating by one notch if the planned capital
injections are not forthcoming, and Tengri Bank is not able to
sustainably recover its capitalization to strong levels in the
next 90 days.

"We will consider lifting the CreditWatch and affirming the
rating if Tengri Bank receives the planned capital injections and
we believe that the improvements in capitalization are
sustainable, evidenced by the RAC ratio being consistently above
10%."



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


NORTH WESTERLY V: Moody's Assigns B2 (sf) Rating to Class F Notes
-----------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to notes issued by North Westerly V
B.V.:

EUR248,000,000 Class A Senior Secured Floating Rate Notes due
2031, Definitive Rating Assigned Aaa (sf)

EUR21,000,000 Class B-1 Senior Secured Floating Rate Notes due
2031, Definitive Rating Assigned Aa2 (sf)

EUR15,000,000 Class B-2 Senior Secured Fixed Rate Notes due 2031,
Definitive Rating Assigned Aa2 (sf)

EUR29,500,000 Class C Senior Secured Deferrable Floating Rate
Notes due 2031, Definitive Rating Assigned A2 (sf)

EUR20,500,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2031, Definitive Rating Assigned Baa2 (sf)

EUR26,000,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2031, Definitive Rating Assigned Ba2 (sf)

EUR11,600,000 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 definitive 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, NIBC Bank N.V. has
sufficient experience and operational capacity and is capable of
managing this CLO. The collateral manager CLO investment strategy
has evolved from its pre-crisis focus on mid-market loans to
nearly exclusively large-liquid senior secured European leveraged
loans.

North Westerly V B.V. 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
senior secured bonds, unsecured senior loans, second-lien loans,
mezzanine obligations and high yield bonds. The portfolio is
expected to be at least 65% ramped up as of the closing date and
to be comprised predominantly of corporate loans to obligors
domiciled in Western Europe.

NIBC Bank N.V. 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 are subject to certain restrictions.

In addition to the seven classes of notes rated by Moody's, the
Issuer issued EUR 40.5M 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. NIBC Bank N.V.'s investment
decisions and management of the transaction will also affect the
notes' performance.

Moody's modelled the transaction using CDOEdge, a cash flow model
based on the Binomial Expansion Technique, as described in
Section 2.3 of the "Moody's Global Approach to Rating
Collateralized Loan Obligations" rating methodology published in
August 2017.

Par amount: EUR 400,000,000

Diversity Score: 40

Weighted Average Rating Factor (WARF): 2677

Weighted Average Spread (WAS): 3.4%

Weighted Average Coupon (WAC): 4.5%

Weighted Average Recovery Rate (WARR): 43.0%

Weighted Average Life (WAL): 8.5 years

As part of the base case, Moody's has addressed the potential
exposure to obligors domiciled in countries with local currency
country risk ceiling (LCC) of A1 or below. As per the portfolio
constraints, exposures to countries with local currency country
risk ceiling ratings of A1 or below cannot exceed 10%, with
exposures to countries local currency country risk ceiling
ratings of Baa1 to Baa3 further limited to 2.5%. As a worst case
scenario, a maximum 7.5% of the pool would be domiciled in
countries with LCC of A3 and 2.5% in countries with LCC of Baa3.
The remainder of the pool will be domiciled in countries which
currently have a LCC of Aa3 and above. Given this portfolio
composition, the model was run with different target par amounts
depending on the target rating of each class of notes as further
described in the methodology. The portfolio haircuts are a
function of the exposure size to peripheral countries and the
target ratings of the rated notes and amount to 0.375% for the
Class A Notes, 0.25% for the Class B-1 and B-2 Notes, 0.1875% for
the Class C Notes and 0% for Classes D, E and F Notes.


NORTH WESTERLY V: Fitch Assigns 'B-sf' Rating to Class F Notes
--------------------------------------------------------------
Fitch Ratings has assigned North Westerly V B.V. notes final
ratings, as follows:

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

North Westerly V B.V. is a cash flow collateralised loan
obligation (CLO). Net proceeds from the notes will be used to
purchase a portfolio of EUR400 million of mostly European
leveraged loans and bonds. The portfolio is actively managed by
NIBC Bank N.V. The CLO envisages a four-year reinvestment period
and an 8.5 year weighted average life (WAL)

KEY RATING DRIVERS

'B+'/'B' Portfolio Credit Quality

Fitch places the average credit quality of obligors in the
'B+'/'B' range. The Fitch-weighted average rating factor (WARF)
of the identified portfolio is 31.12.

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 66.14.

Diversified Asset Portfolio

The covenanted maximum exposure to the top 10 obligors for
assigning the ratings is 20% of the portfolio balance. The
transaction also includes limits on maximum industry exposure
based on Fitch industry definitions. The maximum exposure to the
three largest (Fitch-defined) industries in the portfolio is
covenanted at 40%. These covenants ensure that the asset
portfolio will not be exposed to excessive concentration.

Reinvestment Criteria Similar to Peers

The transaction features a four-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.

Ratings Resilient to Rate Mismatch

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 maximum of 10% of the portfolio can be invested in fixed-rate
assets, while fixed-rate liabilities represent 3.75% of the
target par. Fitch modelled both 0% and 10% fixed-rate buckets and
found that the rated notes can withstand the interest rate
mismatch associated with each scenario.

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 five 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.


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


BANK MOSCOW: Put on Provisional Administration, License Revoked
---------------------------------------------------------------
The Bank of Russia, by its Order No. OD-2149, dated August 17,
2018, revoked the banking license Moscow-based credit institution
Joint-stock Bank Moscow Bill Bank (Registration No. 2697),
further referred to as the credit institution.  According to its
financial statements, as of August 1, 2018 the credit institution
ranked 419th by assets in the Russian banking system.

The credit institution's consistently conducted transactions
towards concealing its real financial standing and avoiding the
supervisor's requirements to adequately assess the risks assumed
resulted in the emergence on its balance sheet of a considerable
amount of assets of questionable quality.  The due diligence
check of the value of the specified assets, conducted at the
regulator's request, revealed a significant deterioration in the
bank's indicators, suggesting the need for action to prevent its
insolvency (bankruptcy) and, consequently, a real threat to its
creditors' and depositors' interests.

The Bank of Russia had repeatedly (four times over the last 12
months) applied supervisory measures against the credit
institution including restrictions on household deposit taking.

However, the bank's management and owners failed to take
effective measures to normalize its activities.  Under these
circumstances, the Bank of Russia took the decision to revoke
Joint-stock Bank Moscow Bill Bank's banking license.

The Bank of Russia takes this extreme measure -- the revocation
of a banking license -- because of the credit institution's
failure to comply with federal banking laws and Bank of Russia
regulations, due to repeated application within a year of
measures envisaged by the Federal Law "On the Central Bank of the
Russian Federation (Bank of Russia)", and considering a real
threat to the creditors' and depositors' interests.

The Bank of Russia, by its Order No. OD-2150, dated August 17,
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.

Joint-stock Bank Moscow Bill Bank is a member of the deposit
insurance system.  The revocation of a 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.



===============
S L O V E N I A
===============


FAP LIVNICA: Bankruptcy Agency Invites Bids for Assets
------------------------------------------------------
SeeNews reports that Serbia's Bankruptcy Supervision Agency said
it is inviting bids for the purchase of assets of insolvent iron
casting company FAP Livnica.

According to SeeNews, the Bankruptcy Supervision Agency said in a
notice the estimated value of the assets of FAP Livnica for sale
stands RSD461.1 million (US$4.5 million/EUR3.9 million).

The deadline for the submission of bids is Sept. 20, SeeNews
discloses.

A deposit of RSD92.2 million is required to participate in the
tender, SeeNews notes.


NOVA LJUBLJANSKA: Moody's Confirms 'Ba1' LT Deposit Ratings
-----------------------------------------------------------
Moody's Investors Service has confirmed Nova Ljubljanska banka
d.d.'s Ba1 long-term local and foreign-currency deposit ratings,
its Baa3/Prime-3 long- and short-term local and foreign-currency
Counterparty Risk (CR) Ratings and its Baa3(cr)/Prime-3(cr) CR
Assessment. The rating agency also confirmed the bank's b1
baseline credit assessment (BCA) and adjusted BCA. The short-term
local and foreign currency deposit ratings were affirmed at Not
Prime. The outlook on NLB's long-term bank deposits has been
changed to positive from Ratings under Review.

The rating action reflects Moody's assessment that the European
Commission's (EC) approval of the revised deadline for the bank's
restructuring and privatisation lifts material uncertainty about
the bank's viability which will have a positive impact on NLB's
overall credit strength.

This rating action concludes a review that was initiated on
April 17, 2018 following a decision by the EC that Government of
Slovenia's failure to meet the conditions of the 2011-13 state
aid provided to NLB was unlawful.

RATINGS RATIONALE

The confirmation of NLB's BCA takes into account the EC's
approval on August 13, 2018 of Slovenia's (Baa1, stable) revised
timeline for the privatisation of NLB. The revision will see 50%
plus one share privatised by end 2018 and the reduction of
Slovenia's remaining shareholding in NLB to 25% plus one share in
2019, a year later than the original deadline set by the EC.

Without satisfactory commitments from Slovenia regarding the
bank's restructuring, including its privatisation, the EC could
have initiated disciplinary actions against the bank, including
potentially requiring repayment of the EUR2.32 billion of state
aid the bank received. This amount is equal to 1.4x NLB's equity
as of year-end 2017. Returning the state aid would have
undermined NLB's solvency and liquidity, two factors that
underpinned Moody's placing NLB on review for downgrade on April
17, 2018.

The confirmation of NLB's BCA also reflects the parliamentary
approval of a new law on July 19 to compensate NLB, via the
Succession Fund of the Republic of Slovenia, for the potential
costs of a reimbursement of foreign currency deposits ordered by
a Croatian court. The reimbursement relates to savings deposits
dating back to the former Yugoslavia era that were held at Zagreb
(Croatia) branch of Ljubljanska banka d.d., Ljubljana. Moody's
estimates that, in a worst-case scenario and if paid up front,
the costs would equate to more than NLB's annual profits.

NLB's BCA is underpinned by the bank's comfortable liquidity,
with gross loans equal to 77% of deposits and sound solvency,
with leverage measured in terms of Tier 1 capital over total
assets at 11.3%, and Tier 1 capital at 15.9% of risk-weighted
assets. Asset quality is improving but still weak, with problem
loans at 10.9% of gross loans as of year-end 2017. Nonetheless,
the BCA remains constrained by Moody's assessment of remaining
uncertainties and risks to the bank stemming from the EC's
requirement for swift execution of the privatization plan and
other restructuring measures by the Slovenian government.

  - RATIONALE FOR CONFIRMING THE DEPOSIT RATINGS

The confirmation of the long-term deposit ratings reflects the
confirmation of NLB's b1 BCA and adjusted BCA and incorporates
two notches of rating uplift from the results from Moody's
Advanced Loss Given Failure (LGF) analysis, which takes into
account the severity of loss faced by different liability classes
in the event of bank resolution. There is also an additional one
notch of rating uplift from Moody's assumption that, as the
country's largest bank, there is a moderate likelihood of support
from the Slovenian government in the event of failure.

  - RATIONALE FOR THE POSITIVE OUTLOOK ON THE LOCAL-CURRENCY AND
FOREIGN-CURRENCY DEPOSIT RATINGS

The positive outlook on NLB's long-term deposit ratings reflects
the bank's strong solvency and liquidity indicators and Moody's
expectation that the bank will gradually resume lending after
nine years of deleveraging. Moody's further expects that the bank
will continue to clean up its loan book, benefitting from a
supportive operating environment with real GDP growth in Slovenia
at 4.3% in 2018 and 3.5% in 2019, according to Moody's forecasts.

The positive outlook also takes into account Moody's expectation
of a smooth privatisation of NLB within the EC's revised time
frame. This will reduce the uncertainties regarding strategic
direction and potential disciplinary action against the bank that
currently weigh on its risk profile.

  -- WHAT COULD MOVE THE RATINGS UP/DOWN

Orderly, swift execution of the latest privatisation plan and a
continued improvement in loan quality and profitability, while
maintaining a sound capital base and healthy liquidity profile
would likely result in an upgrade of NLB's BCA and ratings.

Failure to adhere to the agreement reached with the EC may result
in material financial costs for the bank, resulting in a
deterioration in its credit profile and likely triggering a
ratings downgrade.

In addition, changes in NLB's liability structure, resulting in
lower loss-given-failure in resolution and, therefore, more
notches in rating uplift derived from Moody's Advanced LGF
analysis, could positively affect the bank's deposit ratings.
Conversely, downward ratings pressure could result from changes
in the liability structure, leading to higher loss-given-failure
in resolution and consequently fewer notches of rating uplift.

LIST OF AFFECTED RATINGS

Issuer: Nova Ljubljanska banka d.d.

Confirmations:

Adjusted Baseline Credit Assessment, confirmed at b1

Baseline Credit Assessment, confirmed at b1

Long-term Counterparty Risk Assessment, confirmed at Baa3(cr)

Short-term Counterparty Risk Assessment, confirmed at P-3(cr)

Long-term Counterparty Risk Ratings, confirmed at Baa3

Short-term Counterparty Risk Ratings, confirmed at P-3

Long-term Bank Deposits, confirmed at Ba1, outlook changed to
Positive from Rating under Review

Affirmations:

Short-term Bank Deposits, affirmed NP

Outlook Action:

Outlook changed to Positive from Rating under Review

PRINCIPAL METHODOLOGY

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



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


TURKEY: Moody's Cuts LT Issuer Rating to Ba3, Outlook Negative
--------------------------------------------------------------
Moody's Investors Service has downgraded the Government of
Turkey's long-term issuer ratings to Ba3 from Ba2 and changed its
rating outlook to negative, concluding the review for downgrade
that was initiated on June 1, 2018. The senior unsecured bond
ratings and senior unsecured shelf ratings have also been
downgraded to Ba3 and (P)Ba3 respectively.

Concurrently, Moody's has downgraded to Ba3 from Ba2 the senior
unsecured bond rating of Hazine Mustesarligi Varlik Kiralama
A.S., a special purpose vehicle wholly owned by the Republic of
Turkey from which the Turkish Treasury issues sukuk lease
certificates, and changed its rating outlook to negative.

The key driver for the downgrade is the continuing weakening of
Turkey's public institutions and the related reduction in the
predictability of Turkish policy making. That weakening is
exemplified by heightened concerns over the independence of the
central bank, and by the lack of a clear and credible plan to
address the underlying causes of the recent financial distress,
notwithstanding recent statements by the government. The tighter
financial conditions and weaker exchange rate, associated with
high and rising external financing risks, are likely to fuel
inflation further and undermine growth, and the risk of a balance
of payments crisis continues to rise.

In a related decision, Moody's lowered Turkey's long-term country
ceilings: the foreign currency bond ceiling to Ba2 from Baa3; its
foreign currency deposit ceiling to B1 from Ba3; and its local
currency bond and deposit ceilings to Ba1 from Baa2. The short-
term foreign currency bond ceiling was also lowered to Not Prime
(NP) from Prime-3 (P-3) and the short-term foreign currency
deposit ceiling remains unchanged at Not Prime (NP). Ceilings
generally act as the maximum ratings that can be assigned to a
domestic issuer in Turkey, including structured finance
securities backed by Turkish receivables. The decision to narrow
the gap between the ceilings and the government bond rating is
informed by Moody's view of weakening institutional strength.

RATINGS RATIONALE

RATIONALE FOR THE DOWNGRADE TO Ba3

The key driver for the rating downgrade is the further weakening
of Turkey's public institutions and the related reduction in the
predictability of Turkish policy making. When Moody's placed
Turkey's Ba2 rating on review for downgrade on June 1, the rating
agency stated that the outcome of the review would mainly rest on
the coherence and predictability of the policies pursued by the
government and the extent to which the policy framework would
restore adequate financing of Turkey's large external borrowing
requirements.

Since then, financial stress has increased further, most visibly
in the sharp depreciation of the Turkish Lira, which has now lost
close to 40% of its value against the US dollar since the start
of the year. Consumer price inflation has reached 15.85% in July,
up by more than five percentage points since the start of the
year and the highest inflation rate since December 2003. Domestic
funding conditions have deteriorated with bond yields on the
government's domestic securities reaching above 20% in mid-
August. While Turkish banks have so far managed to maintain
access to the international inter-bank markets for funding, the
tightening financing conditions and the weakening Lira will
further increase pressure on domestic borrowers with foreign-
currency debt.

Moody's view of a further decline in the predictability and
effectiveness of economic policy making is exemplified by
concerns over the central bank's independence. This particularly
follows the centralization of powers at the presidency level
following the elections in June with the president now having the
sole responsibility for appointing the central bank governor,
deputy governor and other members of the country's Monetary
Policy Committee. Since the elections, the central bank has
refrained from raising policy rates despite significantly
increasing its inflation forecasts for this year and next. The
discrepancy between the central bank's inflation forecasts and
targets and its unwillingness to pursue an appropriate policy to
achieve those targets further undermines the central bank's
credibility. While it has provided some breathing space to the
domestic banks by lowering their reserve requirements, in Moody's
view this is a short-term measure that does not address the
underlying pressures the banking sector faces, nor does it
address the mounting inflationary pressures.

Similarly, Moody's considers that the lack of or delays in
formulating a comprehensive and effective economic plan to
address the underlying causes of the recent financial stress is a
clear indication for declining policy predictability and
effectiveness. The government has outlined the broad objectives
of its medium-term economic plan, including its intention to
gradually slow down the over-heating economy by tightening fiscal
policy, and bringing inflation back to single-digit rates.
However, so far these objectives have not been underpinned by
detailed measures with clear timelines of implementation.
Turkey's external funding needs remain significant, and the risk
of a balance of payments crisis continues to rise.

RATIONALE FOR ASSIGNING NEGATIVE OUTLOOK

In Moody's view, the probability that the Turkish authorities
will manage to engineer a "soft landing" of the economy is
declining in the context of weakened institutions and increasing
tensions with the US. Therefore, the risk of continued financial
stress is significant, with potentially further negative
implications for Turkish banks and corporates that have large
external funding needs. Such a negative scenario would further
increase the risk of a prolonged period of accute economic and
financial volatility, which ultimately would weigh further on the
credit risk profile of the government.

Against these significant credit risks, Moody's will continue to
balance the inherent credit strengths of the country, including a
large and diversified economy and a still relatively strong
fiscal position. The government's debt burden remains moderate by
global standards. Moody's also notes that Turkey has successfully
managed previous serious economic and financial shocks.

WHAT COULD CHANGE THE RATING DOWN/UP

Moody's would likely downgrade Turkey's rating if the currency
crisis deepened further and the country proved unable to pursue a
combination of fiscal and monetary policies that would be
effective in easing external funding pressures and in engineering
a rebalancing of the economy that would ease inflationary
pressures and position the country on a sustainable growth path.

Given the negative outlook, a positive rating action is currently
highly unlikely. The rating could be stabilized if the Turkish
authorities presented a coherent and effective economic plan in
the near term that involves a material fiscal and monetary policy
tightening to induce an orderly slowdown of the economy, leading
in turn to lower inflation and inflation expectations as well as
a reduction in the size of the current account deficit.
Significant external financial support would likely act as a
supportive factor to the rating.

The conditions which led to the actions also weigh on the
country's structured finance transactions, financial and non-
financial corporates and sub-sovereign entities. The reviews on
impacted domestic issuers, which started in June 2018, are still
ongoing. In addition to assessing the impact of the sovereign
action and ceiling changes on these issuers, as part of these
reviews, Moody's is analyzing their exposure to the prevalent
refinancing environment, as well as to its expectation of
challenging economic conditions in the country, and potential
further volatility in the financial markets. The rating
conclusions of those reviews will be communicated to the market
separately once these various credit aspects have been fully
analyzed.

NATIONAL SCALE RATINGS

Moody's Investors Service has the also published an update to the
National Scale Ratings (NSR) map for Turkey in conjunction with
the downgrade of the government's long-term issuer rating.
Moody's NSRs are ordinal rankings of creditworthiness relative to
other credits within a given country, which offer enhanced credit
differentiation among local credits. NSRs are generated from
Global Scale Ratings (GSRs) through correspondences, or maps,
specific to each country. However, unlike GSRs, Moody's NSRs are
not intended to rank credits across multiple countries. Instead,
they provide a measure of relative creditworthiness within a
single country. The full maps can be found in "National Scale
Rating Maps by Country", published on August 17, 2018.

GDP per capita (PPP basis, US$): 26,893 (2017 Actual) (also known
as Per Capita Income)

Real GDP growth (% change): 7.4% (2017 Actual) (also known as GDP
Growth)

Inflation Rate (CPI, % change Dec/Dec): 11.9% (2017 Actual)
Gen. Gov. Financial Balance/GDP: -2.6% (2017 Actual) (also known
as Fiscal Balance)

Current Account Balance/GDP: -5.6% (2017 Actual) (also known as
External Balance)

External debt/GDP: [not available]

Level of economic development: Moderate level of economic
resilience

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

On August 15, 2018, a rating committee was called to discuss the
rating of the Government of Turkey. The main points raised during
the discussion were: The issuer's economic fundamentals,
including its economic strength, have not materially changed. The
issuer's institutional strength/framework, have materially
decreased. The issuer's fiscal or financial strength, including
its debt profile, has not materially changed. The issuer has
become increasingly susceptible to event risks.

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

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


TURKEY: S&P Cuts Long-Term FC Sovereign Credit Rating to 'B+'
-------------------------------------------------------------
On Aug. 17, 2018, S&P Global Ratings lowered its unsolicited
long-term foreign currency sovereign credit rating on Turkey to
'B+' from 'BB-' and its unsolicited long-term local currency
sovereign credit rating to 'BB-' from 'BB'. The outlook is
stable.

S&p said, "We affirmed the short-term foreign and local currency
sovereign credit ratings at 'B'.

"At the same time, we lowered our unsolicited long-term Turkey
national scale rating to 'trAA+' from 'trAAA' and affirmed the
'trA-1+' short-term national scale rating. We revised down the
transfer & convertibility assessment to 'BB-' from 'BB+'.

"The downgrade reflects our expectation that the extreme
volatility of the Turkish lira and the resulting projected sharp
balance of payments adjustment will undermine Turkey's economy.
We forecast a recession next year. Inflation will peak at 22%
over the next four months, before subsiding to below 20% by mid-
2019. We anticipate that 2019 will be the first year since 2009
in which nominal credit growth will be less than inflation,
implying a major shift in real domestic financing conditions.

"The weakening of the lira is putting pressure on the indebted
corporate sector and has considerably increased the funding risk
for Turkey's banks. We expect these economic and financial shifts
will have implications for public finances, resulting in a rise
in the government's still-moderate debt ratio, and increasing the
risk of contingent liabilities rising in the banking sector.
Despite heightened economic risks, we believe the policy response
from Turkey's monetary and fiscal authorities has so far been
limited."

OUTLOOK

S&P said, "The stable outlook reflects balanced risks to our
ratings on Turkey over the next 12 months.

"We could lower our ratings on Turkey if we see an increasing
likelihood of a systemic banking crisis with the potential to
undermine the country's fiscal position. Key indicators of this
could include a rise in corporate loan book default rates,
difficulties rolling over banks' foreign funding, or domestic
deposit withdrawals. We could also lower the ratings if Turkey's
economic growth turned out to be materially weaker than we
currently project, with a deeper recession taking place over the
four-year forecast horizon.

"We could consider an upgrade if the government successfully
devises and implements a credible economic adjustment program
that bolsters confidence, stabilizes balance-of-payments flows,
and brings inflation under control."

RATIONALE

S&P's ratings on Turkey remain constrained by its challenging
institutional environment. Following the June 2018 elections,
power remains firmly concentrated in the hands of the executive
branch, with future policy responses difficult to predict. In
addition, over the last three years, Turkey has been in a
constant electoral cycle and remains so given the upcoming March
2019 local elections. In S&P's view, this further complicates
policymaking in an already difficult economic setting.

The ratings on Turkey also remain constrained by its vulnerable
balance of payments and the sizable stock of accumulated private
sector external debt of close to 50% of 2018 GDP, of which close
to half needs to be rolled over in the next 12 months.

The ratings remain supported by Turkey's currently moderate
public debt burden, which stems from past economic policies. S&P
thinks the government still has some fiscal flexibility that
should help partially absorb the consequences of an economic
adjustment. Nevertheless, a combination of support for public-
private partnerships, weaker economic growth, and possible
external deleveraging in the private sector could rapidly erode
what appears to be a relatively clean public balance sheet.

Institutional and Economic Profile: The economy is set to
contract in the aftermath of the recent extreme lira volatility

-- Turkey has experienced extreme currency volatility with
    limited policy response so far.

-- S&P said, "We now expect the economy will contract by 0.5% in
    real terms in 2019, underpinned by declining consumption and
    falling investment. Our forecast assumes, however, that banks
     are still able to successfully refinance existing foreign
     debt stock over the next three years."

-- Turkey's institutional environment remains weak, with limited
    checks and balances in place. Decision-making is centered
    around President Erdogan following the transition to an
    executive presidential system in June 2018.

Over the last two weeks, Turkey has experienced substantial
local-currency volatility, following a long period of
accumulating macroeconomic imbalances and overheating. Since the
beginning of the year, the lira has dropped 38% against the U.S.
dollar, of which almost half has taken place in the last two
weeks. Meanwhile, inflation reached nearly 16% year-on-year in
July.

S&P said, "We forecast an economic recession as a result of
exchange rate depreciation and volatility, as well as a likely
reduction in foreign financing inflows in the months ahead.
According to official estimates, Turkey's economy grew by 7.4%
year-on-year in the first quarter of 2018. However, in recent
months signs of a slowdown in domestic demand have become
increasingly evident. Combined with the expected sharp balance-
of-payments adjustment, we foresee a hard landing for the Turkish
economy."

Elevated inflation brought about by the pass-through from
exchange-rate depreciation will erode real incomes, depressing
private consumption. S&P expects consumption growth will
decelerate to 3.4% this year before posting a 1.7% decline in
2019. This compares to an average annual growth rate of over 5%
over the last five years.

More significantly, S&P expects investments -- a traditional
driver of the Turkish economy -- will shrink by 6% in real terms
in 2019. Although the potential for fiscal policy to support
public investments remains unclear, several factors combine to
foretell a particularly weak outlook for Turkey's private
investments.
Specifically:

-- S&P expects foreign currency debt service to become
     increasingly burdensome for some companies, limiting scope
     for other activities. The corporate sector remains in a short
     FX position that the central bank estimates at about 25% of
     GDP as of year-end 2017. A substantial weakening of the lira
     could have lasting implications for the quality of corporate
     balance sheets.

-- The availability of foreign financing for the Turkish nonbank
    private sector will reduce in the aftermath of the currency
    crisis. S&P said, "We note that its external debt was a
    sizable US$165 billion at end-2017 (20% of GDP). While we
    anticipate that the existing stock of debt will be rolled
    over, attracting net new financing will be challenging."

-- Refinancing the existing stock of Turkish lira-denominated
    loans is also becoming increasingly burdensome. The average
    interest rate for lending in Turkish lira currently exceeds
    20%, likely rendering many investment projects unprofitable.

-- Lastly, S&P believes that the generally heightened political
    uncertainty will also likely put a brake on private
    investment.

S&P said, "Overall, we expect the Turkish economy will experience
a hard landing with real GDP contracting by 0.5% in 2019 before
rebounding gradually. This is a milder adjustment compared to
past financial crises in Turkey--output contracted by 6.0% in
2001 and 4.7% in 2009. Although our forecast remains uncertain,
we believe that in contrast to 2009 external demand will hold up
relatively well for Turkey's newly competitive merchandise and
services exports, which should provide support."

During the first five months of 2018, goods exports rose by over
10% in U.S. dollar terms. Services have fared even better, with
tourism being a key contributor: travel receipts grew by over 30%
over the same period. Tourism growth has been fairly broad-based
with the number of European tourists increasing by 30% and
visitors from Russia up by 50%. S&P believes that the relatively
strong economic outlook for Turkey's trade partners should
support continued export expansion over the next three years.
Broader export performance should also benefit from the weaker
exchange rate, although the high import content in Turkey's
export production will moderate the positive impact as input
costs rise.

S&P said, "Importantly, our baseline economic forecast assumes
that Turkey's indebted banks and corporates will be able to roll
over their existing stock of foreign debt even if net new
financing is not forthcoming. Should rollover rates decline below
100%, Turkey would face a much more pronounced economic
adjustment and output volatility than we currently project. This,
in turn, could also have fiscal implications if, for instance,
the authorities are forced to support pockets of the domestic
banking system.

"Turkey's economic risks are, in our view, aggravated by an
absence of a rapid and effective policy response. The authorities
have taken only modest steps to stabilize the financial market
volatility of recent weeks. The central bank has refrained from
hiking its key policy rate, and we view the new economic model
recently announced by the government as lacking specific policy
proposals. At the same time, President Erdogan has criticized
higher interest rates, ruling out an increase as a way to deal
with current balance-of-payments stress. We understand that he
also opposes a potential funding arrangement with the IMF.
Finally, the March 2019 local elections could also be keeping the
government from a more forceful, but potentially unpopular,
response. We consider that the margin for policy error has
already substantially narrowed and, absent quick and decisive
actions, the economic, financial, and fiscal costs could
escalate.

"In this overall context, we continue to see Turkey's broader
institutional settings as weak. The president and the AKP-led
coalition secured a victory in this year's June presidential and
parliamentary elections, concluding Turkey's transition to an
executive presidential system. We expect the executive branch
will dominate all future decision-making, with few checks and
balances in place.

There are also substantial risks stemming from Turkey's
international relations. Turkey's relations with the U.S. have
continued to deteriorate throughout 2018, culminating in the
introduction of sanctions against two Turkish government
ministers at the beginning of August. S&P understands that risks
of further sanctions remain: points of contention include
Turkey's continued detention of a U.S. citizen; its alleged role
in allowing Iranian counterparties to evade American sanctions;
and its purchase of S-400 surface-to-air missiles from Russia. In
early August, U.S. President Donald Trump announced tariffs on
aluminium and steel exports from Turkey to the U.S., while Turkey
retaliated by hiking tariffs on a range of American consumer
goods.

Regional security also remains precarious. Apart from
geopolitical repercussions, any deterioration could substantially
impact tourism flows. This could be the case, for example, if
tensions in Syria escalated or there was an increased domestic
terrorist threat.

Beyond the current balance of payments stress and heightened
economic uncertainty, S&P believes Turkey's growth prospects
could improve--assuming a credible government policy response.
S&P notes that Turkey's economy is large on a global scale and is
characterized by a diversified SME sector, a strategic geographic
location, and a young and growing population.

Flexibility and Performance Profile: A forced balance of payments
adjustment will lead to a notable contraction in the current
account deficit

-- A substantially weaker lira coupled with tighter financing
    conditions will lead to a sharp narrowing of the current
    account deficit toward 2.6% of GDP in 2019, from 5.6% last
    year.

-- Elevated refinancing risks characterize Turkey's large
    accumulated stock of corporate and banking sector external
    debt.

-- Positively, S&P believes the authorities still command some
    fiscal space to cushion the impact of an economic adjustment.
    S&P forecasts net general government debt will amount to 31%
     of GDP at end-2018, which is favorable in a global
     comparison.

-- However, contingent liability risks from Turkey's banks are
    on the rise.

Turkey's balance of payments vulnerabilities remain a key rating
constraint. Historically, Turkey has posted large recurrent
current account deficits, averaging close to 5% of GDP over the
last five years. Throughout 2018 the current account has been
steadily widening, with the 12-month cumulative deficit peaking
at US$58 billion (8% of 2018 GDP) in May. Debt instruments -- as
opposed to portfolio equity and foreign direct investment -- have
increasingly emerged as the main component funding the deficit.
Moreover, since February 2018 net errors and omissions and
reserve drawdowns made up over half of net external financing
sources. Given the low level of net reserves, this is an
unwelcome signal.

S&P said, "In our view, Turkey's current account deficit has
peaked and will decline in the coming months. We forecast it will
amount to 5.6% of GDP this year before narrowing to 2.6% in 2019.
Rather than reflecting a gradual rebalancing, this substantial
contraction represents an abrupt forced external adjustment where
imports will shrink owing to a much weaker lira exchange rate.
Meanwhile, exports should pick up following competitiveness
gains.

"Our projections for the deficit rely as much on our assumptions
of available external financing as they do on our net exports
forecast. To that end, we assume the public sector will remain
the only net borrower from the rest of the world in line with
anticipated budgetary deficits. Meanwhile, the private sector
will roll over existing foreign debt with no net new borrowing
taking place, reflecting tighter financing conditions."

The narrowing of the current account deficit does not imply an
immediate reduction in Turkey's balance of payments
vulnerabilities. Recurrent historic deficits have underpinned a
substantial rise in private sector foreign leverage, which still
needs to be refinanced even if no net borrowing is taking place.
S&P said, "We note that the combined banking and corporate sector
external leverage has risen from close to US$200 billion in 2011
(25% of GDP at the time) to US$350 billion at the end of last
year (50% of 2018 GDP). We estimate that close to a third of this
debt stock is short term. Adding maturing long-term debt, we
project that Turkey needs to roll over approximately US$180
billion (26% of 2018 GDP) in maturing private-sector external
debt over the next 12 months. Of this, more than 60% pertains to
the country's banking system.

"So far, bank debt rollover ratios have generally remained above
100%. However, given a combination of Turkey's accumulated
imbalances, domestic policy and geopolitical risks, and
tightening global liquidity, we see a risk that financing
availability could reduce (albeit our base case still assumes
that the existing debt stock will be successfully rolled over).
Should financial flows suddenly cease, the economic adjustment
will likely be more pronounced than the 0.5% output contraction
we are projecting for 2019. In this scenario, the exchange rate
would likely further correct while consumption and investment
sharply decline."

On top of significant accumulated external leverage, banks' off-
balance-sheet hedging of currency risks -- predominantly in the
swap market -- create an additional vulnerability. The total off-
balance-sheet FX position amounts to an estimated US$50 billion
(7% of 2018 GDP). Should the counterparties (mostly foreign
banks) prove unwilling to extend these contracts, they may also
exit their corresponding long Turkish lira positions when the
contracts terminate. This, in turn, could create a destabilizing
one-time foreign currency outflow.

S&P said, "We view the central bank's buffers to counter the
impact of the two potential aforementioned scenarios as limited.
Although headline FX reserves are nearly US$100 billion (14.5% of
2018 GDP), a large proportion pertains to the central bank's
liabilities in foreign currency to the domestic banking system.
This reflects the required reserves on banks' FX deposits as well
as liabilities under the reserve option mechanism. The latter
allows commercial banks to maintain some of their required
reserves related to Turkish lira deposits in foreign currency.
Excluding these, we estimate the central bank's net reserves are
a much smaller US$28 billion (4% of GDP).

"We expect Turkey's fiscal position to weaken but remain
supportive of the sovereign ratings. Historically, the government
ran recurrent fiscal deficits, but these have been contained,
averaging only slightly higher than 1% of GDP over the last five
years. Although we expect the deficits to widen over the forecast
horizon, partly because of weaker economic growth, they will
still average less than 3% of GDP. We also see upside potential
from some of the authorities' revenue measures, including the tax
amnesty that should front-load the collection of past-due tax
payments. The government plans to announce more details on fiscal
policy in September.

"Lira depreciation has inflated the government debt stock (40% of
which was FX denominated at end-2017). We expect that on a net
basis, general government debt will remain a manageable 31% of
GDP at end-2018, up from 25% in 2016. This still leaves the
government with some policy space to leverage the public balance
sheet in case of need, in our view."

Such a need could arise, for example, if the government were
called to support parts of the banking system through
recapitalizing individual institutions or undertaking a broader
sector clean up by moving nonperforming assets to a "bad bank."
S&P said, "We have revised our assessment of contingent
liabilities for the government stemming from the domestic banking
system to moderate, from limited previously. This is mainly
driven by our assessment that risks to the stability of Turkey's
financial system have increased."

The continued weakening of the lira poses a major risk to banks'
capital levels and asset quality. The latter has remained
relatively resilient so far, with NPLs totaling just 3% in June.
However, this ratio does not reveal the full problem-loan picture
in Turkey. S&P said, "We note that closely monitored loans had
previously hovered around 3%-4% since 2014 but rose to 7.5% at
the end of first-quarter 2018. There is also evidence of rising
distress in pockets of the corporate loan book, seen in
restructured debt at several highly leveraged holding companies
recently. We forecast that problem loans will follow an upward
trend, potentially rising to double-digit levels."

S&P said, "In our view, Turkey's monetary policy has been
historically ineffective in managing inflation. The central bank
has never met the 5% medium-term target that was introduced in
2012, while the real effective exchange rate has exhibited
substantial swings. The central bank has faced increasing
political pressure in recent years, which in our view is
impairing its effectiveness, often by delaying timely responses
to rising inflation. Inflation has soared this year with headline
CPI reaching almost 16% year-on-year in July. We expect it to
continue rising throughout the rest of the year, to above 20%."
Consequently, the annual average CPI will increase by almost 16%
in 2018, the highest in 15 years.

Although the central bank has tightened interest rates on several
occasions in 2018, it has been reluctant to hike the key repo
rate in response to the currency crisis of the past few weeks.
Instead, it has opted to address FX market volatility, primarily
via lowering mandatory reserve requirements for commercial banks,
while the banks' regulator (BRSA) has de facto introduced
restrictions on short selling of the lira. S&P said, "We
understand that the central bank also recently implemented what
could be considered "backdoor tightening" by providing liquidity
to banks only through the overnight lending window, which has a
higher 19.25% interest rate compared to the key 17.75% repo rate.
We view this as a partial reversal of the monetary framework
simplification unveiled at the end of May, potentially deployed
to avoid the explicit interest rates hikes to which President
Erdogan publicly objects. Given the scale of Turkey's balance of
payments stress, we believe that without a more far-reaching
policy response the relief provided by these measures could prove
temporary."

S&P said, "Although still not our base case, we consider that the
likelihood of the introduction of capital controls in Turkey has
increased. Consequently, we have revised our transfer &
convertibility assessment - -which measures the likelihood of a
sovereign introducing restrictions on FX access for nonsovereign
issuers' debt service -- downward to 'BB-' from 'BB+'. That said,
the Minister of Finance has so far publicly ruled out this
option.

The long-term local currency rating on Turkey is one notch higher
than the long-term foreign currency rating. In our view, the
floating exchange rate regime, comparatively developed local
currency capital markets, and the fact that about 60% of
government debt is denominated in local currency and mostly held
domestically imply a lower default risk on Turkey's lira-
denominated sovereign commercial debt in comparison with its FX-
denominated debt."

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

  Downgraded; Ratings Affirmed
                               To                 From
  Turkey
   Sovereign Credit Rating
    Foreign Currency |U~       B+/Stable/B        BB-/Stable/B
    Local Currency |U~         BB-/Stable/B       BB/Stable/B
   Turkey National Scale |U~   trAA+/--/trA-1+    trAAA/--/trA-1+

  Transfer & Convertibility Assessment |U  BB-   BB+

|U  Unsolicited ratings with no issuer participation and/or no
access to internal documents.


TURKIYE IS BANKASI: S&P Cuts LT Issuer Credit Rating to B+
----------------------------------------------------------
S&P Global Ratings took the following rating actions on four
Turkish financial institutions:

-- S&P said, "We lowered to 'B+' from 'BB-' our long-term issuer
    credit ratings on Turkiye Is Bankasi A.S. (Isbank), Turkiye
     Garanti Bankasi A.S. (Garanti), Garanti Finansal Kiralama
     A.S. (Garanti Leasing), Yapi ve Kredi Bankasi A.S.
     (YapiKredi), and Turkiye Vakiflar Bankasi T.A.O. (VakifBank).
     At the same time, we affirmed the 'B' short-term ratings on
     Isbank, Garanti Leasing, YapiKredi, and VakifBank. The
     outlook on Isbank and VakifBank is negative, whereas the one
     on Garanti, Garanti Leasing, and YapiKredi is stable."

-- S&P also lowered its Turkey national scale ratings on Isbank,
    YapiKredi, and VakifBank to 'trA+/trA-1' from 'trAA/trA-1+'.

-- S&P said, "We lowered to 'B' from 'B+' our long-term issuer
    credit rating on Albaraka Turk Katilim Bankasi A.S. (Albaraka
    Turk). At the same, we affirmed our 'B' short-term issuer
     credit rating on this entity." The outlook on Albaraka Turk
    is stable.
-- S&P lowered its Turkey national scale ratings on Albaraka
    Turk to 'trBBB+/trA-2' from 'trA+/trA-1'.

-- S&P lowered its ratings on Albaraka Turk's senior and
    subordinated sukuk trust certificates issued through the
    following special-purposes vehicles: Bereket Valik Kiralama
    A.S. (to 'B' from 'B+') and Albaraka Sukuk Ltd. (to 'CCC-'
    from 'CCC').

RATIONALE

S&P said, "The rating actions reflect our belief that the ongoing
sharp depreciation of the Turkish lira is increasingly hampering
Turkish private sector borrowers' ability to repay their debt, a
large portion of which is in foreign currency and due to Turkish
banks. During the first half of 2018, a few large conglomerates
had to restructure their loans, and several other entities are
negotiating with local banks the terms of the potential
rescheduling of their borrowings. As a result, the share of
"Stage 2" loans (impaired but not classified as nonperforming) in
total loans doubled to a decade-high level of around 7%,
according to latest figures.

"So far this year, the lira has depreciated by over 40% against
the U.S. dollar (as of Aug. 13, 2018), while inflation has risen
to 16% year-on-year in July 2018. We expect these factors to
restrain economic growth in Turkey in 2018 and 2019 and to weigh
negatively on banks' asset quality indicators. Overall, we expect
the percentage of problem loans to exceed double digits in the
next 24 months, barring any additional shock or greater
depreciation of the lira than we currently expect.

"In addition, the credit guarantee fund program--which resulted
in strong growth for Turkish banks in 2017--has tapered off and
increased banks' funding costs. We expect these costs, coupled
with higher credit losses, to weigh materially on Turkish banks'
profitability. Our view of the economic risks that Turkish banks
face has worsened (to '8' from '7', on a scale of 1-10, with '1'
being the lowest risk), and we think that risks could increase
further in the absence of a decisive policy response. We have
therefore assigned a negative trend to our economic risk
assessment in Turkey.

"The rating actions also mirror our view that the institutional
framework has weakened more in Turkey over the past few quarters
than in its more advanced peer countries, and our observation of
a lack of transparency in the banking system when it comes to
banks reporting the full extent of their asset quality
deterioration. The latter is exacerbated, in our view, by some
regulatory forbearance in recognizing and reporting problem
loans. This is evident from the recent measures that the Banking
Regulation & Supervision Agency has introduced and that include a
weakening of the classification standards for restructured loans.
We consider that the absence, or at least the insufficiency, of
policy responses to the currency crisis, coupled with what we
perceive as a gradual loss of central bank independence from the
President, as factors contributing to the turmoil that is
currently affecting the banking sector. The sector heavily relies
on the confidence of investors (in particular external
investors).

"At the same time, we think that the currency crisis could lead
to a significant decline in banks' profitability, due to rising
funding and credit costs, but also to likely weaker new business
volumes, and imply gradual changes in the competitive environment
in Turkey. We have therefore revised downward our industry risk
score to '9' from '7' and maintained the stable trend.
We also consider that refinancing risk remains extremely high for
Turkish banks, which rely heavily on short-term external debt.
This is because their access to global capital markets is
constrained by investor sentiment, global liquidity tightening,
and U.S. sanctions, as well as a U.S. investigation into a large
Turkish state-owned bank.

"Overall, we now assess Turkey's Banking Industry Country Risk
Assessment (BICRA) as being in Group '9'. As a result, we have
revised downward our bank anchor to 'b+' from 'bb'. This led us
to revise downward the stand-alone credit profiles of Isbank,
YapiKredi, Garanti, and VakifBank to 'b+' from 'bb' and that of
Albaraka Turk to 'b-' from 'b'. The lowering of our issuer credit
ratings on Garanti and Yapi follows our decision to lower our
long-term sovereign rating on Turkey to 'B+' from 'BB-'. The
downgrade of Garanti Leasing is driven by the downgrade of its
parent company, Garanti."

PROBLEMATIC CREDIT IS INCREASING

S&P said, "We expect the asset quality of Turkish banks to
deteriorate further in 2018 under our base-case scenario, with
the percentage of problematic loans in the sector likely
exceeding double digits in the next 24 months, despite reported
nonperforming loans of only around 3% as of the first quarter of
2018. In addition to ongoing lira depreciation, we believe that a
slowdown of economic growth could impair banks' asset quality.
This is also due to some specific features of the Turkish banking
system, including the recent loosening of underwriting standards
and the denomination of almost 40% of loans in foreign currency.
In this respect, we have observed that in the past few months,
several high-profile conglomerates and corporate borrowers have
restructured their loans due to high leverage and/or currency
depreciation. The main cause of the restructuring in these
entities is mismanagement of cash flows following
overinvestment."

REFINANCING RISKS STILL POSE A MAJOR THREAT TO TURKISH BANKS

S&P said, "We also consider that refinancing risk has increased
for Turkish banks, which rely heavily on short-term external debt
as their access to global capital markets is constrained by
investor perceptions of high financial deterioration in Turkey.
This is also the result of quantitative tightening and rising
rates in the U.S. Increased political risk in Turkey is another
factor deterring foreign investors, as well as the deterioration
in Turkey's relations with its Western allies (particularly the
latest trade and diplomatic dispute with the U.S.) and the U.S.
investigation into the large state-owned bank, Halkbank. This
heavy reliance on external funding sources could strain funding
and liquidity with shifts in global liquidity and yields and
changing investor perceptions of risk in Turkey. We already
incorporate the increased risk into our assessment of the Turkish
banking system's industry risk. External funding reliance remains
the weakest point in our BICRA assessment of Turkey."

Eurobond pricing has increased materially in recent months. This,
coupled with the increasing cost of deposits following the
cumulative 5% rate hike by the central bank to 17.75% on its main
funding vehicle for banks, will lead to some tightening of
margins.

OUTLOOKS

S&P said, "The negative outlooks on Isbank and VakifBank reflect
the possibility that we could lower the ratings over the next 12
months if we see significant deterioration of these banks'
liquidity, and, specifically, if the market turbulence further
exacerbates the banks' already elevated refinancing risks. We
could also lower the ratings if we see more intense pressure on
the banks' asset quality and solvency than we currently expect,
pushing our risk-adjusted capital ratios below 3%.

"We could revise the outlooks to stable if we anticipate that
pressure on the banks' financial profiles is abating, and if we
consider that their funding and liquidity positions are still
adequately balanced.

"The stable outlook on Garanti and YapiKredi balances the
downside risks we see on the banks' financial profiles, including
pressure on their liquidity and asset quality, with benefit from
their respective parent companies' (BBVA in the case of Garanti,
and Unicredit in the case of YapiKredi) potential support. A
negative rating action could be possible if we were to see a much
sharper deterioration in the banks' operating environment than
what we currently anticipate, leading to a material weakening of
their liquidity, asset quality, and ultimately solvency. We could
also lower the ratings if we were to take a similar action on our
sovereign rating on Turkey or if we consider that the strategic
importance to the parent banks declined. A positive rating
action, though unlikely at present, could be possible if we were
to take a similar action on the sovereign and at the same time
the banks were able to significantly enhance their operating
performance and their capitalization. The stable outlook on
Garanti Leasing mirrors that on Garanti.

"The stable outlook on Albaraka Turk reflects our belief that a
default remains unlikely over the next 12 months. While we
acknowledge that the bank's financial profile, including its
capital and liquidity, might see a negative effect from the
ongoing economic and financial turmoil, we believe that the
current rating already captures these risks. We also consider
that the granular nature of Albaraka Turk's deposit base could
reduce the risk of a potential erosion of its funding profile.

"We could lower the rating on Albaraka Turk if we see evidence of
accelerated deterioration in its liquidity or solvency, mainly
due to a sharp rise of credit costs and pressure on margins. A
positive rating action, though unlikely at this stage, could be
possible if we consider that, despite the weakening operating
environment, Albaraka Turk has significantly improved its asset
quality, or that its strategic importance to the parent company
has increased, while at the same time risks in the Turkish
operating environment have stabilized."

BICRA SCORE SNAPSHOT*

Turkey                   To                   From

BICRA Group              9                    7

  Economic risk           8                    7
    Economic resilience   High risk            High risk
    Economic imbalances   Very High risk       Very High risk
    Credit risk in the
       economy            Very High risk       High risk
   Trend                  Negative             Stable

  Industry risk           9                    7
  Institutional
       framework          Very high risk       Intermediate risk
    Competitive dynamics  High risk            Intermediate risk
    Systemwide funding    Extremely high risk Extremely high risk
   Trend                  Stable               Stable

*Banking Industry Country Risk Assessment (BICRA) economic risk
and industry risk scores are on a scale from 1 (lowest risk) to
10 (highest risk).

RATINGS LIST

Albaraka Turk Katilim Bankasi AS

Downgraded; Ratings Affirmed
                                         To              From
Albaraka Turk Katilim Bankasi AS
  Issuer Credit Rating             B/Stable/B        B+/Stable/B

Downgraded
                                         To              From
Albaraka Turk Katilim Bankasi AS
  Turkey National Scale            trBBB+/--/trA-2  trA+/--/trA-1

Albaraka Sukuk Ltd.
  Subordinated                           CCC-            CCC

Bereket Varlik Kiralama A.S.
  Senior Unsecured                       B               B+

Downgraded; CreditWatch/Outlook Action
                                         To              From
Turkiye Garanti Bankasi A.S.
  Issuer Credit Rating             B+/Stable/--     BB-/Stable/--

Downgraded; CreditWatch/Outlook Action; Ratings Affirmed
                                         To              From
Garanti Finansal Kiralama A.S.
  Issuer Credit Rating             B+/Stable/B      BB-/Stable/B

Turkiye Is Bankasi AS

Downgraded; CreditWatch/Outlook Action; Ratings Affirmed
                                         To              From
Turkiye Is Bankasi AS
  Issuer Credit Rating             B+/Negative/B    BB-/Stable/B

Downgraded
                                         To              From
Turkiye Is Bankasi AS
  Turkey National Scale            trA+/--/trA-1   trAA/--/trA-1+

Turkiye Vakiflar Bankasi TAO
Downgraded; CreditWatch/Outlook Action; Ratings Affirmed
                                         To              From
Turkiye Vakiflar Bankasi TAO
  Issuer Credit Rating             B+/Negative/B    BB-/Stable/B

Downgraded
                                         To              From
Turkiye Vakiflar Bankasi TAO
  Turkey National Scale            trA+/--/trA-1   trAA/--/trA-1+

Yapi ve Kredi Bankasi A.S.

Downgraded; CreditWatch/Outlook Action; Ratings Affirmed
                                         To              From
Yapi ve Kredi Bankasi A.S.
  Issuer Credit Rating             B+/Stable/B      BB-/Stable/B

Downgraded
                                         To              From
Yapi ve Kredi Bankasi A.S.
  Turkey National Scale            trA+/--/trA-1   trAA/--/trA-1+


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


ADIENT GLOBAL: Moody's Cuts CFR to Ba3 & Sr. Unsec. Rating to B1
----------------------------------------------------------------
Moody's Investors Service downgraded Adient Global Holdings Ltd's
Corporate Family and Probability of Default Ratings to Ba3, and
Ba3- PD from Ba2, and Ba2-PD, respectively, and downgraded the
senior unsecured rating to B1 from Ba3. Moody's affirmed the
senior secured debt rating at Baa3, and the Speculative Grade
Liquidity Rating at SGL-3. The rating outlook was revised to
stable from negative.


Adient Global Holdings Ltd:

The following ratings were downgraded:

Corporate Family Rating, to Ba3 from Ba2;

Probability of Default, to Ba3-PD from Ba2-PD;

Euro dollar guaranteed senior unsecured notes due 2024, to B1
(LGD4) from Ba3 (LGD5);

U.S. dollar guaranteed senior unsecured notes due 2026, to B1
(LGD4) from Ba3 (LGD5);

The following ratings were affirmed:

$1.5 billion senior secured revolving credit facility due 2021,
at Baa3 (LGD2);

$1.2 billion (remaining amount) senior secured term loan facility
due 2021, at Baa3 (LGD2);

Speculative Grade Liquidity Rating: at SGL-3,


Rating Outlook: Stable, from Negative


RATINGS RATIONALE

The downgrade of Adient's ratings incorporates Moody's view that
inefficiencies in the consolidated operations of both the seating
structures and mechanisms (SSM), and the core seating business,
along with raw material cost pressures, will drive EBITA margins
below 5% well into the 2019 fiscal year. This is even after
consideration of equity income from the company's unconsolidated
affiliates. Moody's believes the recovery of performance measures
is unlikely before the end of 2019 given the operational
challenges and ongoing high pace of new launches in Adient's
fiscal 2019 and 2020 years. In addition, the underperformance
within Adient's consolidated operations has also resulted in
reliance on the joint venture income at a level higher than
expected to support the metrics. While the equity income from
Adient's unconsolidated affiliates has been guided lower for
fiscal 2018 by management, the rate of conversion into dividends
has improved.

Adient has recently put in place new operational leadership to
address these challenges along with announcing a leadership
transition plan following the retirement of its former CEO. While
Moody's anticipates that the company's year over year performance
will continue to soften in the fourth quarter, sequential
quarterly improvement in operational performance in the SSM
segment appears to be taking hold. Moody's believes Adient will
continue to maintain a strong competitive position as a leading
global supplier of automotive seating supported by a strong book
of business and backlog which supported management increasing its
revenues guidance for fiscal 2018 to $17.5 billion from $17.0 -
$17.2 billion. Adient continues to maintain strong regional and
customer diversification, and longstanding customer
relationships. The senior secured rating is affirmed Baa3, based
on the large portion of secured debt relative to total
obligations and the expectation that recoveries, while weaker
under the current rating, will continue to support the instrument
rating.

The stable rating outlook incorporates expectations that Adient's
gradual operational recovery progress to date will continue,
along with the company's strong competitive position. Yet,
Moody's believes that ongoing challenges with new platform
launches along with additional costs to ensure customer
deliveries will be headwinds to the ability to drive EBITA
margins above 5% (as adjusted by Moody's) well into fiscal 2019.

Adient's SGL-3 Speculative Grade Liquidity Rating continues to
reflect the company's revised guidance of negative free cash flow
generation, which may spill further into fiscal 2019, and the
risk that weakening profitability over the coming quarters will
lessen the cushion under the financial maintenance covenant. As
of June 30, 2018 cash on hand was $378 million and the $1.5
billion revolving credit facility was unfunded. Adient maintained
good cushion under its net leverage ratio financial maintenance
covenant test for the senior secured facilities as of June 30,
2018. However, this cushion is anticipated to weaken over the
coming quarters given weakening operating performance. Adient
recently entered into a EUR200 million accounts receivable
transfer and servicing arrangement. As of June 30, 2018, $94
million was funded under the program. While not expected, if the
company is unable to maintain and extend these receivable
programs, additional borrowings under the revolving credit
facility would be required to meet liquidity needs.

The ratings could be downgraded with the expectation of material
deterioration of automotive demand, the loss of a major customer,
the expectation of continued weak operating performance into
fiscal 2019 resulting, in Moody's view the inability to return to
higher EBITA margins over the near-term, or Debt/EBITDA above
5.0x, or a further deterioration in liquidity. Debt funded
acquisitions or large shareholder return actions could also
result in a lower outlook or rating.

The ratings could be upgraded if Moody's expects Adient to
sustain EBITA margins above 5%, inclusive of restructuring
charges, with Debt/EBITDA below 3.5x, supported by positive free
cash flow generation solidly in the high-teens as percentage of
debt annually and balanced financial policies, while maintaining
a adequate liquidity profile.

The principal methodology used in these ratings was Global
Automotive Supplier Industry published in June 2016.

Adient plc is one of the world's largest automotive seating
suppliers with a leading market position in the Americas, Europe
and China, and has longstanding relationships with the largest
global original equipment manufacturers (OEMs) in the automotive
space. Adient's automotive seating solutions includes complete
seating systems, frames, mechanisms, foam, head restraints,
armrests, trim covers and fabrics. Adient also participates in
the automotive seating and interiors market through its joint
ventures in China. Revenues for the LTM period June 30, 2018 were
approximately $17.3 billion.


HSS HIRE: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable
--------------------------------------------------------------
S&P Global Ratings affirmed its 'B' long-term issuer credit
rating on HSS Hire Group PLC (HSS Hire). S&P removed the rating
from CreditWatch where S&P placed it with negative implication on
April 25, 2018. The outlook is stable.

S&P said, "At the same time, we withdrew our 'B' long-term issuer
credit ratings on HSS Hire's 100% owned finance subsidiary HSS
Financing PLC, as well as our issue and recovery ratings on the
group's remaining GBP136 million senior secured fixed-rate notes,
which are now fully repaid."

The rating actions reflect that HSS Hire has successfully
completed a refinancing, improved its liquidity, and continues to
perform in line with our expectations. As part of its
refinancing, HSS Hire agreed to a new GBP25 million revolving
credit facility (RCF) and GBP220 million term loan. The proceeds
of the new term loan were used to completely repay the group's
remaining GBP136 million senior secured notes, issued by HSS
Financing PLC, and drawings under its previous GBP80 million RCF.
Because of this refinancing, HSS Hire's liquidity has improved to
an adequate level, and we estimate that sources will cover uses
by more than 1.2x for the next 12 months. S&P also believes that
HSS Hire will exhibit adequate headroom under its new net debt
leverage covenant. Finally, S&P notes that HSS Hire continues to
exhibit good operating performance, in line with our
expectations.

S&P said, "We also note that HSS Hire has agreed to dispose of
its U.K. platforms business, and expects to generate net proceeds
of GBP47.5 million. Management intends to apply about 80% of the
proceeds to reduce leverage, with the balance held for potential
investment in its core tool rental fleet.

"Our ratings on HSS Hire continue to be constrained by the risk
of tougher-than-expected market conditions, aggressive
competition, volatility in expected seasonality of demand, and
any unexpected delays in management's continued efforts to
optimize HSS Hire's logistics network or streamline the group's
cost base. Given the group's geographic concentration in the
U.K., it could also face market headwinds arising from the U.K.
leaving the EU."

The stable outlook reflects that management has successfully
overhauled the group's logistics network and continues to reduce
costs, and that HSS Hire's core operating profitability is
gradually improving. S&P expects this trend to continue through
2018 into 2019, with HSS Hire's S&P Global Ratings-adjusted
margins rising to more than 22% and debt to EBITDA of just more
than 4x. S&P also expects liquidity to remain adequate.

S&P said, "We could lower the rating if HSS Hire experienced
margin pressure, or diminished profitability or cash flows,
leading to weaker credit metrics or liquidity. Specifically, if
debt to EBITDA were to trend toward or over 5x or liquidity
sources over uses were to fall below 1.2x, we could lower the
rating."

There is limited upside to the rating at this stage, since HSS
Hire remains at risk from tougher-than-expected market
conditions, and aggressive competition. Additionally, given the
group's geographic concentration on the U.K., HSS Hire could also
face market headwinds arising from the U.K. leaving the EU.


MICHELLS & BUTLERS: Fitch Affirms 'BB+' Rating on Class D1 Notes
----------------------------------------------------------------
Fitch Ratings has affirmed Mitchells & Butlers (M&B) Finance's
notes and interest rate (IRS) and cross currency swaps (FX
swaps). The Outlooks are Stable.

KEY RATING DRIVERS

The ratings reflect the group's exposure to discretionary
spending and prevailing cost pressures. The managed business
model helps adaptation to the dynamic and increasingly
competitive eating and drinking out market in the UK. Fitch's
projected free cash flow (FCF) debt service coverage ratios
(DSCR) are well aligned with criteria and peers for the ratings.

The ratings of the class A notes and the swaps reflect the strong
FCF ratios with sufficient cushion to absorb material EBITDA
deterioration in a downside scenario. The ratings are constrained
at 'A+' by Fitch's overall midrange industry profile assessment
for the pub sector.

The rating of the class AB notes reflects the projected DSCR,
which positions the rating at the upper end of the 'A' category,
but with limited cushion. The ratings of the junior notes (class
B, C and D) reflect the projected DSCR metrics in line with the
indicated coverage thresholds at the last rating review.

Mature Sector Facing Headwinds - Industry Profile: Midrange
The pub sector in the UK has a long history, but trading
performance for some assets has shown significant weakness in the
past. The sector has been in a structural decline for the past
three decades due to demographic shifts, greater health awareness
and more competing offerings. Exposure to discretionary spending
is high and revenues are therefore inherently linked to the
broader economic cycle. Fitch views competition as high,
including off-trade alternatives, and barriers to entry are low,
despite increasingly demanding regulations. Fitch views the pub
sector as sustainable in the long term, despite the on-going
contraction, supported by the strong UK pub culture.

Sub-Key Rating Drivers: Operating Environment: Weaker; Barriers
to Entry: Midrange; Sustainability: Midrange.

Managed Estate, Continuous Investment - Company Profile: Stronger
M&B is a large operator of restaurants, pubs and bars in the UK,
including a range of strong brands aimed at both the more
expensive and value-end of the market. The company's trading
history (10-year revenue CAGR of 2.3%) has shown resilience to
declining UK pub industry fundamentals. However, growth has
slowed in recent years. After weak performance in 2016 with a
like-for-like contraction in sales (-0.8%), sales returned to
growth with 1.8% in the financial year to September 2017. In 1H18
(weeks 1-28) like-for-like (LFL) sales continued moderate growth
of around 1.6%. Continuing efforts to reposition underperforming
sites and focused capital investments should help maintain market
share. The fairly large pension deficit (GBP451 million as of the
last valuation in 2016) is credit negative.

The securitised portfolio includes 1,358 outlets as of April
2018. As the estate is fully managed, there is visibility over
underlying profitability. The pubs are well-maintained and
feature a high minimum maintenance covenant. Furthermore, M&B has
historically spent maintenance capex in excess of the required
level. Maintenance spend over FY17 was GBP117 million compared
with a minimum requirement of GBP94.4 million. Assets are almost
all freehold.

Sub-KRDs: Financial Performance: Midrange; Company Operations:
Stronger; Transparency: Stronger; Dependence on Operator:
Midrange; Asset Quality: Stronger

Fully Amortising, Moderate Leverage - Debt Structure: Class A,
Swaps - Stronger, Class AB, B, C and D - Midrange
The debt is fully amortising but there is some concurrent
amortisation with junior tranches. The notes are a combination of
fixed-rate and fully hedged floating-rate debt. A currency swap
removes FX risk on the US dollar-denominated class A3N notes.

The security package is strong, with comprehensive first-ranking
fixed and floating charges over borrower assets. Class A is the
senior ranking controlling creditor, with the junior notes
ranking lower, resulting in a 'Midrange' assessment. The
securitised estate also benefits from a liquidity facility
covering 18 months debt service, tranched at the class C and D
levels. Other structural features include debt service covenants
and restricted payment conditions, which are tested quarterly.

Fitch views the creditworthiness of the issuer's obligations
under the interest rate and cross currency swaps as consistent
with the long-term ratings of the most senior class of notes, as
the swaps are expected to default with the notes under certain
scenarios.

Sub-KRDs: Debt Profile: 'Stronger' for the class A notes and
swaps and 'Midrange' for the class AB, B, C and D notes, Security
Package: 'Stronger' for the class A notes and swaps and
'Midrange' for the class AB, B, C and D notes. Structural
Features: 'Stronger' for all notes and swaps.

Financial Profile

The updated Fitch rating case (FRC) projected metrics are largely
in line with last year, in terms of minimum of average and median
FCF DSCR for class A (2.8x), class AB (2.2x), class B (1.5x),
class C (1.3x) and class D (1.3x) with a slightly improved
minimum DSCR for class A (2.7x), class AB (2.1x), class B (1.4x),
class C (1.3x) and class D (1.3x). Leverage metrics of 1.8x for
the class A notes, 2.7x for the class AB, 3.8x for class B, 4.5x
for class C and 4.9x for class D are supportive of the ratings.

PEER GROUP

M&B's class A and AB notes are rated at the pub sector rating cap
and higher than any other senior debt tranches in Fitch's pub
portfolio, due to the strong financial metrics. The junior notes
are well-aligned with its pub peers, Green King and Marston's.
M&B's junior notes' coverage levels and ratings equate to the
senior tranche of Marston, which benefits from a first-ranking
security over assets in contrast to their junior claim.
Positively M&B's EBITDA leverage metrics are lower than their
peers with the same ratings. A further strength is M&B's more
reactive and transparent business model as a result of being the
only fully managed estate among Fitch-rated peers.

RATING SENSITIVITIES

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

  - Any decline in Fitch's rating case FCF DSCRs (1.45x, 1.35x
and 1.25x for class B, C and D, respectively) due to persistent
underperformance against expectations could lead to downgrades of
the class B, C and D notes.

  - The class A and AB notes could be downgraded if they were to
deteriorate below 2.15x.

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

  - Class A and AB notes' ratings are constrained by the industry
cap applicable to WBS pub transactions.

  - For class B, C and D notes, an improvement in Fitch's base
case FCF DSCRs to above 1.7x, 1.6x and 1.5x could lead to
positive rating action, when combined with further deleveraging
expected over the next few years.

CREDIT UPDATE

Performance Update

Total revenues grew by 1.8% in FY17 to GBP2,180 million due to
the improving sales performance in particular in the drink-led
segment. Continuing cost headwinds drove an increase in operating
costs and compressing the operating margin to 14.4% for FY 2017.
This resulted in trailing 12 month EBITDA to September 2017 of
GBP429 million - essentially flat from FY16. Performance
continued to follow this trend in 2018 with 1H18 showing a 1.6%
LFL sales growth. Operating costs increases continues to put
pressure on margins (12.5% operating margin in 1H18).

Investment continued during the year with M&B spending around
GBP117 million on the securitised estate, well above the
covenanted capex requirement. This should support long-term
growth and help M&B to maintain its market share.

Fitch Cases

The Fitch rating case incorporates a 4% cost stress on fixed
costs until 2020 reflective of cost headwinds to which the pub
industry is currently exposed as well as the limited growth
potential due to changing consumer habits and a competitive
market. Fitch assumes an annual growth rate of 1.8% until 2024
reducing to 1.5% long term. M&B's capex has historically exceeded
covenanted levels and Fitch projects capex above covenanted
levels at 6.5% of sales.

Asset Description

M&B is a whole business securitisation of a portfolio of 1,358
managed pubs and pub restaurants in Britain owned and operated by
Mitchells & Butlers Plc (representing 80% of M&B plc's pubs).

The rating actions are as follows:

GBP200 million class A1N floating-rate notes (GBP136.9 million
outstanding as of April 2018) due 2030: affirmed at 'A+'; Outlook
Stable

GBP482 million class A2 fixed-rate notes (GBP249.1 million) due
2030: affirmed at 'A+'; Outlook Stable

USD418.8 million class A3N floating-rate notes (USD286.6 million)
due 2030: affirmed at 'A+'; Outlook Stable

GBP170 million class A4 floating-rate notes (GBP154.4 million)
due 2030: affirmed at 'A+'; Outlook Stable

GBP325 million class AB floating-rate notes (GBP325m) due 2033:
affirmed at 'A+'; Outlook Stable

GBP350 million class B1 fixed-rate notes (GBP110.4 million) due
2025: affirmed at 'BBB'; Outlook Stable

GBP350 million class B2 fixed-rate notes (GBP319.5 million) due
2030: affirmed at 'BBB'; Outlook Stable

GBP200 million class C1 fixed-rate notes (GBP200 million) due
2032: affirmed at 'BBB-'; Outlook Stable

GBP50 million class C2 floating-rate notes (GBP50 million) due
2034: affirmed at 'BBB-'; Outlook Stable

GBP110 million class D1 floating-rate notes (GBP110 million) due
2036: affirmed at 'BB+'; Outlook Stable

Mitchells & Butlers Finance Plc interest rate swap affirmed at
'A+'; Outlook Stable

Mitchells & Butlers Finance Plc cross currency swap affirmed at
'A+'; Outlook Stable

The swap ratings address the issuer's ability to make payments
under the swap agreements as per the transaction documentation,
excluding swap termination payments due to default or non-
performance of the counterparty. The ratings also do not address
events related to a change in law or taxation.


ROAD MANAGEMENT: S&P Raises Senior Secured Debt Rating to 'BB+'
---------------------------------------------------------------
S&P Global Ratings said that it raised its issue rating on the
senior secured debt issued by U.K.-based limited purpose entity
Road Management Consolidated PLC (RMC) to 'BB+' from 'BB-'. S&P
said, "We removed the rating from CreditWatch with positive
implications where it was placed on Dec. 20, 2017. The outlook is
positive. The recovery rating is unchanged at '1+', reflecting
our expectation of full recovery of outstanding principal in case
of default."

The debt comprises GBP165 million fixed-rate senior secured bonds
due 2021. RMC issued the debt to finance construction of two
cross-collateralized shadow toll road projects: the A1(M) between
Alconbury and Peterborough; and the A419/A417 between Swindon and
Gloucester. Construction of both roads was completed in 1998. RMC
operates under a 30-year project agreement with Highways England,
which expires in June 2026, receiving a shadow-toll revenue
payment based on traffic volumes and road availability. The scope
of required services is relatively simple and is provided by
Ringway Group Ltd.

S&P said, "The upgrade reflects our view of the increased
likelihood that senior debt will be repaid in full, in light of
increasing liquidity available to senior lenders in the form of
contractual reserves and locked-up cash. The total amount of cash
and cash equivalents increased to about 93% of the GBP73.6
million of senior debt outstanding at June 30, 2018, despite the
declining traffic volumes, up from 81% of total outstanding debt
on Nov. 30, 2017. We expect liquidity as a share of debt to
continue increasing, even if traffic volumes decline." The
project is generally able to meet senior debt service from its
operating cash flows with coverage ratios of just over 1.0x. Any
excess cash generated is retained within the project because the
project has not exceeded its required distribution ADSCR
covenant. As a result, available liquidity as a percentage of
outstanding debt has increased and is expected to increase
further.

Traffic volumes on RMC's two U.K. roads, the A1(M) and the
A419/A417, declined in 2017 and in the first half of 2018 by
about 1% for Peterborough and 2% for Gloucester for light
vehicles. Despite the recent decline in traffic volumes, S&P
expects the project to be able to fully repay its debt absent
other adverse operational developments. Such adverse developments
could include higher-than-budgeted lifecycle expenditures.

S&P said, "Under our downside case, which assumes a further drop
in traffic volumes, we forecast that the project will generate
operating cash flows (before interest payment) of about GBP21
million, on average, over the next three years. This compares
with average annual debt service of about GBP28.4 million until
final repayment. This implies that our projected annual debt
service coverage ratios (ADSCRs) under our downside case will
remain below 1.0x. However, we expect any cash shortfall and the
final repayment to be supported by the available liquidity
balances in the project."

S&P GLOBAL RATINGS' OPERATIONS PHASE DOWNSIDE CASE ASSUMPTIONS

S&P said, "We base our assessment on our downside analysis as a
starting point because it provides unique insight into this
project's default risk. Specifically, the project's robust
liquidity is such that we would expect the project to persevere
through our downside scenario, regardless of our base-case
ADSCRs, in view of only three years remaining until final
repayment.

"Under our downside scenario, the minimum ADSCR falls to 0.51x
and the average to 0.68x. However, the project is able to service
its debt under this scenario without depleting its liquidity
reserves. Under our downside scenario we expect that the project
would fall short of senior debt service by about GBP21 million
until final repayment. This compares with about GBP68.6 million
of liquidity available to it as of June 30, 2018."

Downside Case Assumptions

-- Traffic growth assumptions: Decrease in traffic of 2% in both
    2018 and 2019, followed by 0.5% decrease in both 2020 and
    2021.

-- Operating costs: As contracted under the operation and
    maintenance agreement and as budgeted by the ProjectCo for
    overheads, all increased by 10%.

-- Major maintenance (lifecycle): Management's forecast (as
    reviewed by the LTA) +10% stress throughout.

-- Major maintenance timing: Bring forward the lifecycle profile
    by 12 months.

-- Retail price index (RPI): 2019: 2.1%; 2020: 2.0%; 2021: 2.9%

-- Interest income: None.

Downside Case Key Metrics

-- S&P said, "Our downside case assessment determines the
     adjusted operations phase SACP. We assess this at 'bbb-' as
     we expect the liquidity reserves to be called upon to support
    debt service payment until final maturity."

OUTLOOK

S&P said, "The positive outlook reflects our expectation that the
likelihood of full senior debt repayment will continue to
increase as the project approaches final repayment in June 2021.
Absent any material adverse operational developments, we expect
the total sources of liquidity to support such repayment in the
event that operating cash flows fall short of senior debt
service.

"We could raise the rating by one or more notches if the project
is able to meet debt service out of operating cash flows without
tapping into its reserves, as demonstrated by increasing
liquidity.

"We could revise the outlook to stable or lower the rating if
traffic volumes drop materially over the next year or if
lifecycle expenditure exceeds current forecasts thereby eroding
the project's liquidity position."



                            *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
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                            *********


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

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