/raid1/www/Hosts/bankrupt/TCREUR_Public/180925.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, September 25, 2018, Vol. 19, No. 190


                            Headlines


B E L G I U M

TELENET GROUP: Fitch Affirms BB- LT IDR, Outlook Stable


C Y P R U S

BANK OF CYPRUS: Fitch Affirms B- IDR, Alters Outlook to Positive


F R A N C E

NOVAFIVES SAS: Moody's Affirms B2 CFR, Outlook Stable


G E R M A N Y

ADLER REAL ESTATE: S&P Alters Outlook to Stable & Affirms BB ICR


I R E L A N D

JAMES HARDIE: Moody's Affirms Ba1 CFR, Rates EUR350MM Notes Ba1


K A Z A K H S T A N

TSESNA-GARANT JSC: S&P Alters Outlook to Neg. & Affirms B+ ICR


L U X E M B O U R G

ABLV BANK: Suspension of Payments Extended Until October 10
ANACAP FINANCIAL: S&P Affirms 'BB-' ICR, Outlook Stable


M O N T E N E G R O

MONTENEGRO: Moody's Changes Outlook on B1 Issuer Rating to Pos.


N E T H E R L A N D S

STARFRUIT FINCO: S&P Affirms Prelim. B+ Rating on Sr. Sec. Debt


P O R T U G A L

ONI: Altice Portugal Seeks Insolvency of Business


R U S S I A

GENBANK JSC: Deposit Agency to Participate in Bankruptcy Measures
TOGLIATTI: Bank of Russia Assesses Pension Provision Activity


S P A I N

EL CORTE: Moody's Assigns First-Time Ba1 CFR, Outlook Stable
EL CORTE: Fitch Publishes 'BB' LT IDR, Outlook Pos.


T U R K E Y

ARCELIK AS: S&P Alters Outlook to Negative & Affirms 'BB+' ICR
TURKCELL FINANSMAN: Fitch Affirms BB LT IDR, Outlook Negative
TURKEY: Finance Minister Unveils Sweeping Austerity Program


U K R A I N E

KHARKOV CITY: Fitch Affirms LT IDR 'B-', Outlook Stable
KYIV CITY: Fitch Affirms B- Long-Term IDRs, Outlook Stable


U N I T E D   K I N G D O M

DRYDEN 63 GBP 2018: S&P Assigns B- (sf) Rating to Class F Notes
HOUSE OF FRASER: Mike Ashley Lashes Out at "Greedy Landlords"


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B E L G I U M
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TELENET GROUP: Fitch Affirms BB- LT IDR, Outlook Stable
-------------------------------------------------------
Fitch Ratings has affirmed Belgium-based Telenet Group Holdings
N.V's (Telenet) Long-Term Issuer Default Rating (IDR) at 'BB-'
and Short-Term IDR at 'B'. The Outlook is Stable. The agency has
also affirmed the group's senior secured rating at 'BB+' with a
Recovery Rating of 'RR1'.

Telenet's ratings are underpinned by a strong operating profile
and discretionary capacity in managing its capital structure. The
operating profile is driven by a combination of factors that
include its cable market position in Flanders and Brussels,
integrated fixed and mobile network ownership and a cash-
generative business model. These factors enable Telenet to invest
in its product offering and sustain its competitive position.
Telenet's high leverage compared with peers' constrains the IDR
at 'BB-'.

Potential challenges from competition and regulation are likely
to pressure EBITDA over the next two to three years. These should
be manageable for the company with reductions in capex offsetting
the pressures and enabling free cash flow (FCF) to increase.

KEY RATING DRIVERS

Strong Operating Profile: Telenet has a leading position in the
broadband and TV segments in Belgium, with a market share of
around 50% and 60% respectively across its franchise areas of
Flanders and Brussels. The ownership of Belgium's third national
mobile network operator BASE enables Telenet to effectively
compete with the full benefits of a convergence-based, multi-play
strategy. The benefits extend to both revenue and cost drivers.

Sustaining Competitiveness a Virtuous Circle: Telenet is able to
sustain its leading market position by investing in its network
infrastructure, providing rich, value-for-money content bundles
and improving customer service. This supports the company's FCF
generation, which in turn enables investments in network
infrastructure and content that improve the value of Telenet's
product offering and aid product differentiation.

Potential Challenges: Over the next two to three years, Telenet
is likely to face a number of pressures on revenue and EBITDA,
driven by tougher cable wholesale regulation, increasing
competition and the loss of mobile wholesale revenue. The
combination of potential inflation-linked price adjustments,
ongoing efforts in cost optimisation and efficiencies from
digitalisation are likely to help Telenet offset some of these
pressures on EBITDA.

FCF Growth: Planned reductions in capex from 2019 should enable
Telenet to grow its FCF. Fitch expects Telenet's accrued capex-
to-sales ratio to decline to 20% in 2019 from 26% in 2018. The
reduction in capex follows the near completion of an upgrade
programme for both its cable and mobile networks.

Tougher Cable Wholesale Regulation: Under Belgian telecoms
regulation, Telenet is obliged to provide access to its network
on a wholesale basis. The terms of this access are now changing,
improving the economics and operational execution for alternative
carriers namely Orange Belgium. Under the new regulation that is
yet to be finalised, the pricing mechanism for access will move
from retail-minus to a cost-plus method. An interim price
reduction has already come into effect with wholesale prices for
a 149Mb per second or lower broadband and TV connection
decreasing to EUR20 from EUR24 per month. The final outcome may
be lower than this.

Competition from Wholesale Regulation Manageable: Fitch is
increasing the potential gross EBITDA impact that Telenet may
face from cable wholesale competition to EUR70 million-EUR80
million to reflect lower cable wholesale rates. Fitch had
previously assumed an impact of EUR60 million-EUR70 million. The
impact assumes that among other variables Orange Belgium grows
its market share to 10% by 2021 from an estimated 4% end-2018,
the loss of an average value customer and a final average
wholesale rate per line of EUR16. Telenet has sufficient margin
in its pre-dividend FCF to absorb the impact and to maintain
funds from operations (FFO) adjusted net leverage below its
downgrade trigger of 5.2x if it chooses.

Fourth Operator a Medium-Term Risk: The Belgian government is set
to auction mobile telecom spectrum in 2H19. The auction has
reserved a certain proportion of spectrum for the entry of a
fourth mobile operator with some beneficial rights such as
mandated national roaming once a 20% coverage threshold of
population has been reached.

The business case for a new entrant is challenging due to the
high up-front outlay to deploy a network and uncertainty related
to subscriber growth. However, the availability of frequencies
across spectrum bands accompanied with mandatory national roaming
raises the prospect of a fourth mobile operator making a success
out of 'maverick' approach. The scenario is not currently part of
its base case forecasts but the occurrence of which could add
downside pressure to its FCF estimates.

Commensurate Shareholder Remuneration: Telenet retains
significant discretion in managing its capital structure due to
its strong FCF generation. The company ties shareholder
remuneration to growth, market opportunities and operating risks.
The approach is credit-positive as it provides flexibility for
M&A, investments and the preservation of credit metrics. After a
period of significant organic and inorganic expansion, Fitch
believes Telenet is likely to adopt a more 'steady-state'
dividend policy going into next year. Fitch believes the policy
will continue to take a balanced approach that retains some
discretion in managing its capital structure.

Comfortable Leverage Profile: Telenet's financial policy is to
manage leverage at 3.5x to 4.5x net debt-to-EBITDA based on the
company's definition (1H18: 3.8x). This broadly corresponds to
4.5x-5.5x on a funds from operations (FFO) adjusted net leverage
basis. Its base case forecasts indicate that Telenet is likely to
maintain FFO net leverage broadly flat at 5.0x and comfortably
within its downgrade sensitivity trigger of 5.2x. This assumes a
dividend pay-out ratio of 50% of pre-dividend FCF from 2019.

Notching of Secured Debt: Telenet's secured debt is rated 'BB+',
two notches higher than the IDR. The treatment is line with
Fitch's notching criteria. The Recovery Rating 'RR1' on Telenet's
senior secured debt reflects strong recovery prospects.

DERIVATION SUMMARY

Telenet's ratings are driven by the company's strong operating
profile, which is underpinned by a strong network footprint in
Flanders and Brussels, scaled operations with strong cash
generation and a sustainable competitive position. This enables
Telenet to support a leveraged balance sheet. The company's
leverage target relative to other western European telecoms
operators is high and represents a constraint on the ratings.
Telenet targets 3.5x-4.5x net debt-to-EBITDA (based on its
definition). This is broadly in line with similarly rated cable
peers such as Virgin Media Inc. (BB-/Stable) and UPC Holding BV
(BB-/Stable) but higher than NOS S.G.P.S (BBB/Stable), which has
an equally strong operating profile but manages leverage at lower
levels.

KEY ASSUMPTIONS

Fitch's Key Assumptions within its Rating Case for the Issuer

  - Revenue to decline around 1% p.a. in 2018 and 2019

  - Rebased adjusted EBITDA to rise 7% in 2018 with a broadly
stable profile thereafter;

  - Accrued capex/sales ratio of 26% in 2018 (excluding spectrum
payments) and 20% from 2019

  - Dividend payments of 50% of pre-dividend FCF from 2019

RATING SENSITIVITIES

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

  - A weakening in the operating environment due to increased
competition from either mobile or cable wholesale leading to a
larger than-expected market share loss and decrease in EBITDA.

  - FFO-adjusted net leverage consistently over 5.2x and FFO
fixed charge cover trending below 2.5x (2017: 4.1x).

  - A change in financial or dividend policy leading to new,
higher leverage targets.

Positive rating action is unlikely in the medium-term unless
management pursues a more conservative financial policy.

LIQUIDITY

Strong Liquidity Profile: Telenet has a strong liquidity position
as a result of positive internal cash flow generation and undrawn
credit facilities of EUR420 million as of end-1H18. Telenet has a
long-dated debt maturity profile, with the no significant debt
maturities until 2026.

FULL LIST OF RATING ACTIONS

Telenet Group Holdings N.V.

  - Long-Term IDR affirmed at 'BB-'; Stable Outlook

  - Short-Term IDR affirmed at 'B'

Telenet International Finance S.a.r.L.

  - Senior secured term loan affirmed at 'BB+' / 'RR1'

  - Senior secured bank facility affirmed 'BB+' 'RR1'

Telenet Financing USD LLC.
  - Senior secured term loan affirmed at 'BB+' / 'RR1'

Telenet Finance Luxembourg Notes S.a r.l.

  - Senior secured notes affirmed at 'BB+' / 'RR1'

Telenet Finance VI Luxembourg S.C.A

  - Senior secured notes affirmed at 'BB+' / 'RR1'


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C Y P R U S
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BANK OF CYPRUS: Fitch Affirms B- IDR, Alters Outlook to Positive
----------------------------------------------------------------
Fitch Ratings has revised the Outlook on Bank of Cyprus Public
Company Limited's (BoC) Long-Term Issuer Default Rating (IDR) to
Positive from Stable and has affirmed its Long-Term IDR at 'B-'
and Viability Rating (VR) at 'b-'.

The Outlook revision follows the announcement that BoC is in the
process of securitising a portfolio of EUR2.8 billion of gross
loans (project Helix), including EUR2.7 billion of non-performing
loans, which is equivalent to about a third of the bank's total
non-performing exposures (NPE, as defined by the European Banking
Authority). The securitisation will be positive for BoC's credit
risk profile and will reduce capital encumbrance by unreserved
problem assets (which include NPE and foreclosed assets). The
transaction is subject to regulatory approvals and expected to be
finalised by end-2018 or 1Q19. In its view, the execution risk on
the transaction is small given the strong incentives for all
involved parties to complete the deal.

The Positive Outlook also reflects the progress made by the bank
in organically reducing volumes of problem assets, helped by the
improving operating environment in Cyprus, and its expectation
that this trend will continue in the next 18-24 months.

KEY RATING DRIVERS

IDRS, VR AND SENIOR DEBT

BoC's IDRs reflect its weak asset quality, which results in very
high encumbrance of capital by unreserved problem assets and
constrains profitability. Once completed, the deal will improve
the quality of BoC's loan book, but the ratio of NPE (pro-forma
for project Helix and the sale of BoC's UK subsidiary, announced
in July 2018) is expected to remain high at 38% at end-June 2018
(44% including foreclosed assets; 47% and 51%, respectively at
end-2017).

Fitch expects asset quality to continue to improve, given BoC's
track record in restructuring problem loans, the announced
government scheme to support borrowers whose loans are backed by
primary residences and changes to foreclosure laws that should
speed up collateral repossession.

Its assessment of asset quality also takes into the good quality
of the bank's other earning assets, in particular cash and
balances with central banks (EUR4.2 billion or 18% of total
assets at end-June 2018).

Project Helix will also significantly reduce BoC's exposure to
unreserved problem assets, which is expected to fall to 2.5x of
the bank's IFRS9 fully loaded common equity Tier 1 (CET1). BoC
estimates that the transaction will add about 60bp (in net terms)
to its CET1 capital ratio (a further 85bp will come from the sale
of the UK subsidiary). Despite the improvement, Fitch remains
vigilant to the high vulnerability of the bank's capital to
stress in the Cypriot economy and property market.

BoC's funding profile has continued to benefit from the growth of
the deposit base (+3% since-2017). With the loan book shrinking,
the gross loans/deposits ratio improved from 105% at end-2017, to
about 83% at end-June 2018, pro-forma for project Helix and the
sale of BoC's UK subsidiary. The bank's liquidity buffer should
be boosted by the proceeds from the transaction. As a result,
Fitch expects that about 22% of assets will be in the form of
cash and central bank placements.

The bank's senior unsecured debt long-term and short-term ratings
of 'B-'/'RR4' and 'B', respectively, are in line with the bank's
IDRs. The 'RR4' Recovery Rating reflects average recovery
prospects.

SUPPORT RATING AND SUPPORT RATING FLOOR

BoC's Support Rating of '5' and Support Rating Floor of 'No
Floor' reflect Fitch's view that senior creditors cannot rely on
receiving full extraordinary support from the sovereign if BoC
becomes non-viable. The EU's Bank Recovery and Resolution
Directive and the Single Resolution Mechanism for eurozone banks
provide a framework for resolving banks that is likely to require
senior creditors participating in losses, if necessary, instead
of or ahead of a bank receiving sovereign support.

Its view on support takes into account the authorities' record of
imposing losses on senior creditors of BoC and Cyprus Popular
Bank (Laiki Bank) in March 2013. It also considers the
potentially constrained ability to provide support in light of
the large size of the banking sector relative to the Cypriot
economy, and the banks' high stock of NPE.

SUBORDINATED DEBT

The 'CCC'/'RR6' long-term rating on BoC's subordinated Tier 2
notes is notched twice off the bank's VR. The 'RR6' Recovery
Rating reflects poor recovery prospects. Fitch applies zero
notches for additional non-performance risk relative to the VR as
the notes' loss-absorption is triggered only at the point of non-
viability, and two notches for loss severity. The latter reflects
its view that the layer of subordinated debt, including the
anticipated issue of additional Tier 1 debt, is very thin
relative to the size of the bank's potential problem (reflected
in the high volume of unreserved NPE).

RATING SENSITIVITIES

IDRS, VR AND SENIOR DEBT

Fitch expects to upgrade BoC's ratings if the bank's core capital
metrics materially improve, including its capital encumbered by
unreserved problem assets. The latter should also inevitably be
achieved through a continued material decline in the stock of
problem assets. Improved earnings would also be rating positive,
although for the rating to be upgraded it would have to be
accompanied by improved asset quality metrics and capitalisation.

A negative asset quality shock, lack of further credible
reduction of problem assets or a material weakening of
profitability and capital would be rating negative.

SUPPORT RATING AND SUPPORT RATING FLOOR

Fitch believes there is little upside for the bank's Support
Rating and Support Rating Floor. This is due to the presence of a
resolution scheme with bail-in tools that have already been
implemented, the authorities' limited capacity to provide future
support, but also in light of a clear intention to reduce
implicit state support for financial institutions in the EU.

SUBORDINATED DEBT

BoC's subordinated debt ratings are sensitive to changes in the
bank's VR. They could also be upgraded if unreserved NPE become
less significant relative to the layer of subordinated debt,
either through an increase in the amount of junior debt or
through a significant reduction of unreserved NPE.

The rating actions are as follows:

BoC

Long-Term IDR: affirmed at 'B-'; Outlook revised to Positive from
Stable

Short-Term IDR: affirmed at 'B'

Viability Rating: affirmed at 'b-'

Support Rating: affirmed at '5'

Support Rating Floor: affirmed at 'No Floor'

Senior debt long-term rating: affirmed at 'B-'/'RR4'

Senior debt short-term rating: affirmed at 'B'

Subordinated debt long-term rating: affirmed at 'CCC'/'RR6'


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F R A N C E
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NOVAFIVES SAS: Moody's Affirms B2 CFR, Outlook Stable
-----------------------------------------------------
Moody's Investors Service has affirmed the B2 corporate family
rating and B2-PD Probability of Default Rating of Novafives
S.A.S. Concurrently, the rating agency affirmed the B3 instrument
ratings of EUR325 million fixed rate Senior Secured Notes and
EUR275 million floating rate Senior Secured Notes both maturing
2025. The outlook on the ratings remain stable.

RATINGS RATIONALE

Although Novafives' ratings have been affirmed, the company is
now very weakly positioned in the rating category driven by
increased costs in H1 2018 that led to a level of profitability
that is below the levels compared to its expectations at the
beginning of the year. Novafives experienced a number of project
execution issues which resulted in a disappointing operating
profitability during H1 2018. Novafives reported an H1 2018
EBITDA of EUR23 million compared with EUR30 million the same
period in 2017. Moreover, during the first six months the company
experienced US trade related sanctions which forced Novafives to
stop delivery to all projects in Iran and with Rusal and lead to
a lower FY 2018 EBITDA guidance. Furthermore, the company
anticipates that its latest operational issues would further
decrease its FY 2018 EBITDA guidance by around EUR15 million.
Driven by the new FY 2018 guidance Moody's expects leverage to
increase to 6.3x to 6.6x debt/EBITDA as Moody's adjusted up from
its previous guidance of 4.8x to 5.5x. This level leaves little
room for further unexpected underperformance in H2 2018.
Nevertheless, the affirmation of Novafives' ratings also takes
into account positive revenue and order intake developments in
its main business segments, as well as the solid liquidity
situation, despite the drop in EBITDA that led to a lower cash
flow generation as well.

"The rating action takes into account a weaker than expected
operating performance leading to leverage moving into the upper
range that Moody's expects for the B2 rating assigned while
maintaining a solid liquidity profile", commented Dirk Steinicke,
Moody's lead analyst for Novafives.

The company meaningfully increased its sales during the first six
months 2018 with 8% growth supported by fast growing logistics
business. Furthermore, Novafives' level of order backlog provides
a good basis for continued sales growth during the second half of
2018 and into 2019.

The stable outlook reflects its expectation that Novafives'
credit metrics will remain within its guidance for the assigned
B2 rating despite recent operational issues. Moody's notes,
however, that there is very limited headroom for further
unexpected underperformance in H2 2018. In addition, Moody's
cautions that there is execution risk to the proposed
restructuring actions and their expected operating profitability
improvements. Nevertheless, the currently weak positioned rating
is supported by solid liquidity.

Moody's views Novafives' liquidity profile as solid. This is
supported by the company's cash balance of EUR121 million as at
June 2018 and access to undrawn EUR85 million of its EUR115
million RCF with EUR50 million free utilization threshold and a
net leverage covenant of 6.0x thereafter. These sources, combined
with projected FFO generation, are sufficient to accommodate
working capital swings and cover forecasted capital expenditures
as well as upcoming debt maturities in the next 12-18 months. The
upcoming debt maturities primarily comprise small local loans
held by operating subsidiaries. No significant debt repayments
are due until 2025 when the company's Notes issued in April 2018
mature.

Moody's would consider a positive rating action should Novafives
improve its gross adjusted debt/EBITDA towards 5.0x (excluding
unrealized gains and losses from FX) on a sustainable basis,
generate meaningful positive FCF and maintain an adequate
liquidity profile with sufficient covenant headroom at all times.

Moody's would consider downgrading Novafives' rating when the
company is unable to improve its adjusted EBITA margins towards
5% (2.7% per LTM 06/2018) indicating a continued price pressure
or poor contract execution, should indications arise that
Novafives' leverage will remain above 6.5x (excluding unrealized
gains and losses from FX) for a prolonged period of time as well
as generation of negative FCF for a prolonged period of time
leading to reduced covenant headroom or a meaningful reduction in
liquidity, reflecting both a reduction in cash including the
inability to fully draw down on its EUR115 million RCF.

PRINCIPAL METHODOLOGY

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


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G E R M A N Y
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ADLER REAL ESTATE: S&P Alters Outlook to Stable & Affirms BB ICR
----------------------------------------------------------------
S&P Global Ratings revised its outlook to stable from positive on
German residential property company Adler Real Estate AG. S&P
affirmed its 'BB' long-term issuer credit rating on Adler.

S&P said, "We also affirmed our 'BB+' long-term issue rating on
the company's senior unsecured debt. The '2' recovery rating
remains unchanged, reflecting our expectation of 70%-90% recovery
(rounded estimate: 80%) in the event of a payment default."

The outlook revision follows the release of Adler's first-half
2018 results, showing the debt-to-debt-plus-equity ratio well
above 65%: 70.9% at the end of the first quarter and 73.5% as of
June 30, 2018 (excluding receivables from the ACCENTRO sale). The
S&P Global Ratings-adjusted EBITDA interest coverage ratio for
the rolling 12 months to June 30, 2018, was also weak at only
1.3x. S&P said, "We believe that Adler intends to execute on its
publicly announced financial policy targeting a loan-to-value
ratio of 55%, which translates into an S&P Global Ratings-
adjusted debt-to-debt-plus-equity ratio of 59%-60%. We expect
that Adler's leverage will improve within the 60%-65% in the next
six to 12 months. Our base-case estimates over the coming 12
months are weaker than our previous forecasts, but remain within
the thresholds for the current 'BB' rating."

In the second quarter of 2018, Adler closed its acquisition of
70% plus one share of Netherlands-based real estate company Brack
Capital Properties N.V. (BCP). Adler issued EUR800 million of
senior unsecured notes in April to finance the acquisition, and
has fully consolidated BCP into its financial statements since
then.

S&P said, "We understand that Adler intends to use the proceeds
of its sale of ACCENTRO Real Estate AG (approximately EUR137
million still to be received) and the sale of its noncore assets
to repay debt. In addition, we understand that Adler will
undertake a strategic review of BCP's retail business, since it
does not see it as core to its strategy and this portfolio could
therefore be sold. However, we believe it is unlikely that Adler
will close all asset sales this year and expect the repayment of
debt will be postponed to 2019. We also understand that the
company is executing its deleveraging plans, thereby positioning
the company more comfortably within the credit ratio range (60%
to 65%) consistent with our 'BB' rating.

"In our view, Adler has a sound portfolio of residential
properties in the north and west of Germany, mainly in smaller
cities. Adler is one of the largest property companies in
Germany, managing a portfolio of about 62,000 units valued at
about EUR4.8 billion as of June 30, 2018. Adler enjoys a high
degree of tenant and asset diversity, which we believe compares
favorably with that of most peers we rate and in the same
business risk category. The average stay per tenant is long, at
10 years, with a low percentage of tenants leaving each year.

"Our assessment of Adler's business risk reflects our view that
German residential properties benefit from lower volatility in
rents and asset values than in other countries and the commercial
real estate sector as a whole. We think that demand from German
households for midsize apartments with midmarket rents will
remain stable in the portfolio's main geographic locations. We
believe that rents will continue to increase steadily in the next
two to three years, due to low levels of new construction and
Germany's strong macroeconomic fundamentals. We note that there
is limited development risk in the portfolio because development
is confined to the renovation of existing properties."

The main constraints to Adler's business risk profile are the
smaller portfolio than that of other rated German peers, a
relatively high vacancy rate (10%), exposure to small cities, and
lower rent levels than the regional market average. While Adler
focuses on small cities and secondary locations, its strategy is
to choose apartment portfolios in cities with low unemployment
and established employers in the region or close to large
metropolitan areas. S&P understands that Adler's portfolio has
some potential for rent adjustment upon renewal and re-letting,
since Adler's rent levels (averaging EUR5.40 per square meter)
are below the market average in the respective regions.

S&P said, "The stable outlook reflects our expectation of
continued favorable demand for residential real estate in
Germany, translating into stable cash flow generation and
positive revaluation of Adler's properties. We also consider that
the company is contemplating various measures to restore its
credit profile, including sizable asset disposals over 2018 and
2019. Over the next year, we anticipate Adler's S&P Global
Ratings-adjusted ratio of debt to debt plus equity will be
between 60% and 65% and its interest coverage ratio will improve
to 1.7x-1.8x.

"We could consider lowering the rating if, in particular, Adler's
debt to debt plus equity stayed above 65% and its EBITDA interest
coverage ratio below 1.3x, as a result of a delay in reducing
leverage, including through disposals and other corporate
measures, or lower-than-expected revaluation gains. A negative
rating action might also follow if the company's operating
performance were weaker than we anticipated. The company's
ability to improve its vacancy rate will be a key area to
monitor.

"We would also take a negative action if the company were facing
difficulty in refinancing its upcoming short-term debt maturities
or complying with covenants, resulting in cash restrictions or a
revision of our liquidity assessment."

An upgrade will hinge on Adler's willingness and ability to
reduce the S&P Global Ratings-adjusted ratio of debt to debt plus
equity to well below 60% and achieve an EBITDA interest coverage
ratio materially higher than 1.8x. This might be supported by the
sale of the noncore and retail portfolios in the short term,
combined with significant refinancing, resulting in strong debt
reduction.


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I R E L A N D
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JAMES HARDIE: Moody's Affirms Ba1 CFR, Rates EUR350MM Notes Ba1
---------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to James Hardie
International Finance Designated Activity Company's proposed
EUR350 million of senior unsecured notes due 2026. At the same
time, Moody's affirmed the company's Ba1 Corporate Family Rating,
Ba1-PD Probability of Default Rating, SGL-2 Speculative Grade
Liquidity Rating, and Ba1 ratings on its existing $400 million
senior unsecured notes due 2025 and $400 million senior unsecured
notes due 2028. The rating outlook is stable.

The proceeds from the proposed EUR350 million ($408 million)
senior unsecured notes due 2026 will be used to repay
approximately $402 million of outstanding borrowings under the
company's 364-day credit facility expiring in April 2019, which
were utilized to fund the Fermacell acquisition in April 2018.
Approximately $64 million will remaining outstanding under the
facility.

The transaction extends the company's debt maturity profile and
is effectively leverage-neutral when compared to the LTM results
as of fiscal Q1 2019 (ending June 30, 2018), which included the
bridge financing associated with the Fermacell acquisition. James
Hardie's pro forma debt to EBITDA, inclusive of Moody's
adjustments and considering earnings of Fermacell, is estimated
at approximately 2.3x (while adjusting EBITDA for asbestos
contribution, leverage is at approximately 2.8x). Moody's
anticipates that through fiscal 2019 and 2020, James Hardie will
increasingly utilize its $500 million revolving credit facility
expiring in 2022 to fund elevated capital expenditures associated
with planned capacity expansions, which will result in further
increase in leverage towards 3.0x. However, Moody's believes that
leverage increase will be temporary, and the company will de-
lever towards mid 2.0x by fiscal 2020 ending March 31, 2020,
while EBITA to interest coverage will range between 6.0x and 7.0x
over this period. The company is likely to experience some margin
weakening over the next 12 to 18 months due to lower
profitability of the acquisition and input cost pressures,
however, margins are expected to remain solid.

The following rating actions were taken:

Issuer: James Hardie Intl Fin Designated Activity Co.:

Proposed EUR350 million of senior unsecured notes due 2026,
assigned Ba1 (LGD4)

Corporate Family Rating, affirmed at Ba1

Probability of Default Rating, affirmed at Ba1-PD

Speculative Grade Liquidity Rating, affirmed at SGL-2

$400 million senior unsecured notes due 2025, affirmed at Ba1
(LGD4)

$400 million senior unsecured notes due 2028, affirmed at Ba1
(LGD4)

Rating outlook, remains stable

RATINGS RATIONALE

The Ba1 Corporate Family Rating is supported by: 1) James
Hardie's established industry expertise combined with solid
operating strategy and world-wide reputation as one of the
largest manufacturers of fiber cement; 2) the company's scale
with $2.4 billion in pro forma revenue and global presence across
four continents; 3) it's historically conservative balance sheet
management, and its expectation that following the integration of
the Fermacell acquisition and the completion of capacity
expansion, the company will de-lever towards mid 2.0x debt to
EBITDA by FY 2020, and further thereafter, consistent with its
financial policy to maintain 1.0x-2.0x net leverage; 4) good
operating margins with EBITA margin in the high teens and its
expectation for solid EBITA to interest coverage to be
maintained; 5) the company's ability to produce solid cash flow
from operations on an ongoing basis (before asbestos related
payments); and 6) supportive end market conditions in residential
and repair & remodeling activity across the majority of
geographies served.

However, the company's rating is constrained by: 1) its exposure
to an asbestos liability, which as of June 30, 2018, was
approximately $690 million on a net unfunded basis, and the
annual obligation to utilize up to 35% of operating cash flow to
fund the liability, which limits the cash flow available for the
company's core business; 2) high level of capital expenditures as
the company is expanding its manufacturing capacity through
construction and extension of multiple facilities, which also
places a burden on cash flow, and along with a high level of
ordinary dividends, is expected to cause free cash flow to be
negative over the next two years; 3) concentration in one niche
product category, fiber cement; 4) operations in cyclical end
markets, and the vulnerability to significant declines in demand
for products during downturns; and 5) exposure to volatility of
input costs.

The stable rating outlook reflects its view that the company will
benefit from good organic growth in its North American end
markets and grow through expanded capacity in Europe and Asia
Pacific markets. Its expectations also reflect deleveraging, and
maintenance of solid margins and a good liquidity profile over
the next 12 to 18 months.

James Hardie's SGL-2 Speculative Grade Liquidity Rating indicates
its expectation that the company will maintain a good liquidity
profile over the next 12 to 15 months. While cash flow from
operations is expected to be strong, the asbestos payments, high
capital expenditures and dividends will cause free cash flow to
be negative. Moody's expects that the company will maintain a
cash balance of above $100 million at any point in time. James
Hardie's liquidity profile is supported by its $500 million
unsecured revolving credit facility expiring in 2022, the
availability under which is expected to average around 40% of
capacity during the next 12 to 15 months, as the company utilizes
the facility for seasonal needs and to fund elevated capital
spending. Liquidity is also supported by the availability for
alternative liquidity sources given that all of its debt is
unsecured, and its expectation that the company will maintain
comfortable cushion under its net debt leverage and interest
coverage financial maintenance covenants.

The ratings could be upgraded if James Hardie substantially
reduces its asbestos liability. The ratings upgrade will also
consider the company's business profile (narrow product offering,
exposure to cyclical end markets) and minimal free cash flow
generation both of which are limited when compared to many
investment-grade issuers at the lower end of the Baa ratings
range.

The ratings could be downgraded if the company changes its
financial policy to be more shareholder friendly or adopt a
higher leverage permanently, namely if debt to EBITDA is
sustained above 3.0x. Further, any negative change in the
asbestos liability or protracted negative free cash flow
generation could result in a downgrade. Also, EBIT/interest
expense of less than 5x on a sustained basis would be considered
a trigger for downgrade.

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

James Hardie International Finance Designated Activity Company, a
wholly-owned subsidiary of James Hardie Industries plc, domiciled
in Ireland, is a global manufacturer of fiber-cement products and
systems for internal and external building construction
applications primarily sold in the United States, Australia, New
Zealand, the Philippines, and Europe. In the last twelve months
ending June 30, 2018, the company generated approximately $2.2
billion in revenue, and $2.4 billion pro forma for Fermacell.


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


TSESNA-GARANT JSC: S&P Alters Outlook to Neg. & Affirms B+ ICR
--------------------------------------------------------------
S&P Global Ratings revised its outlook to negative from stable on
Kazakhstan-based Insurance Company Tsesna-Garant JSC. S&P
affirmed the issuer credit and financial strength ratings at
'B+'. At the same time, S&P lowered the Kazakhstan national scale
rating on the insurance company to 'kzBBB' from 'kzBBB+'.

The outlook revision and rating action on Tsesna-Garant follows
our recent downgrade of the insurance company's 100% owner,
Tsesnabank. Tsesnabank is currently facing liquidity pressures,
driven by the outflow of clients' funds at the end of August,
that it compensated with Kazakhstani tenge (KZT) 150 billion
(about $400 million) from an emergency funding from National Bank
of Kazakhstan (NBK). Although the bank has announced that the
loan was partially repaid ahead of the schedule and will be fully
repaid in the near future, S&P believes that the bank's liquidity
position has structurally deteriorated and is now weaker than
peer banks' in Kazakhstan.

S&P said, "We consider that Tsesna-Garant has a stronger stand-
alone credit profile (SACP), which we assess at 'b+', than our
group credit profile on Tsesnabank. Although Tsesna-Garant is
strategically important for its parent, we don't anticipate
detrimental effects on the insurer's stand-alone credit
characteristics. In our view, the insurance company's capital is
sufficient to support further planned growth. Nevertheless, we
note that the bank's liquidity situation may lead to strategic
shifts at the insurance company, in particular with regards to
dividends from retained earnings for previous years.

"We consider the insurance company to be insulated from the bank
and rate it one notch higher than its parent. This is because the
regulatory framework provides some protection for the insurer in
the event of adverse intervention from Tsesnabank. The regulatory
framework also includes constant oversight from the NBK.

"The negative outlook mirrors that on Tsesnabank because we
consider that the bank's weaker financial profile could have an
adverse impact on the insurance company in the next 12 months,
notably with regards to capital management."

A negative rating action in the next 12 months on Tsesnabank will
drive a similar rating action on Tsesna-Garant. At the same time,
deterioration in the Tsesna-Garant's stand-alone characteristics
can have rating repercussions if:

-- S&P saw evidence that Tsesna-Garant's competitive position
     had weakened, for example, if it experienced a material loss
    of premium income; or

-- Tsesna-Garant's average asset quality declined to 'B'; or

-- Tsesna-Garant's dividend payments markedly eroded its
    financial flexibility and capital adequacy.

If S&P revised the outlook on Tsesnabank to stable, it would
likely revise the outlook on Tsesna-Garant, all other rating
factors unchanged.


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


ABLV BANK: Suspension of Payments Extended Until October 10
-----------------------------------------------------------
Eric Collard and Alain Rukavina, the court-appointed
administrators of ABLV BANK LUXEMBOURG SA, disclosed that by
order dated September 7, 2018, the District Court of Luxembourg,
hearing commercial cases:

   -- ordered the extension of the suspension of payments
procedure [as provided in Part II, title II of the law dated
December 18, 2015, on the reorganization measures and winding-up
proceedings, as amended ("the law")] of the public limited
company ABLV BANK LUXEMBOURG SA, having its registered office at
26 A, boulevard Royal, L-2449 Luxembourg and entered in the
Commercial and Companies Register in Luxembourg under Section B,
number 162 048, until midnight of October 10, 2018;

   -- the same order has imposed the costs of the publication of
the judgment on ABLV BANK LUXEMBOURG SA;

   -- the order shall be provisionally enforceable.

In accordance with article 122 (12) of the law "the CSSF and the
bank are entitled to file appeal within 15 days from the
notification of the decision (. . .) by way of declaration to the
secretary of the District of Luxembourg (. . .)".


ANACAP FINANCIAL: S&P Affirms 'BB-' ICR, Outlook Stable
-------------------------------------------------------
S&P Global Ratings said that it affirmed its 'BB-' long-term
issuer credit rating on debt purchaser AnaCap Financial Europe
S.A. (AFE, or the company). The outlook is stable.

S&P said, "At the same time, we affirmed our 'BB-' issue rating
and recovery rating of '3' on the senior secured notes issued by
AFE, indicating our expectation of meaningful recovery (50%-70%;
rounded estimate: 60%) in the event of a payment default.

"The affirmation reflects our view of AFE's lack of operational
track record, its limited scale relative to rated debt purchasing
peers, and its narrow business profile." These weaknesses are
mitigated by evidence of AFE's controlled growth, good
understanding of its primary markets through its ability to
leverage the financial services expertise of the wider group,
AnaCap Financial Partners (the group), and AFE's relatively low
leverage and good debt servicing.

Since its creation in June 2017, AFE has maintained its narrow
debt purchasing focus within the financial services industry. Its
primary focus is on purchasing a range of nonperforming debt
across Europe, with a recent bias toward secured debt portfolios
in Italy, Portugal, and Spain. S&P does not expect AFE's strategy
to change materially, although it notes the potential for the
company to enter new European jurisdictions where it believes it
understands the market characteristics and can maintain
supportive servicing relationships.

AFE primarily operates through a fully outsourced master-
servicing model, rather than retaining in-house collections. AFE
therefore has a more concentrated revenue profile than debt
purchasing peers that also service third-party assets, or that
provide other credit management services. In our view, this
constrains potential upside to the ratings. However, we believe
that AFE's selective investment strategy and controlled growth
will continue to support its creditworthiness at the current
rating.

AFE's relatively high-margin debt purchasing activities,
including a 10% increase in core collections to EUR55 million,
make up its reported EUR39 million adjusted EBITDA in the six
months to June 30, 2018. AFE invested EUR110 million of capital
during this period, including EUR56 million in a secured consumer
debt portfolio in Portugal, EUR37 million in secured small-to-
midsize enterprise (SME) loans in Spain, and EUR17 million on
corporate and SME debt in Romania. As a result, AFE's asset mix
has continued the trend of shifting toward secured assets, which
now make up roughly 60% of its estimated remaining collections
over the next seven years.

S&P said, "We calculate that AFE's pro forma gross debt to S&P
Global Ratings-adjusted EBITDA stood at 3.7x at year-end 2017. We
have updated our approach toward surplus cash and now focus on
gross debt rather than net debt in our adjusted metrics for AFE.
This reflects the risk of the group changing its long-term
investment philosophy toward AFE, deciding to act more as a
financial sponsor and potentially dictating an increase in risk
appetite or a leverage-driven growth strategy. We anticipate a
moderate weakening of AFE's credit metrics in the financial year
ending 2018, reflecting its higher investments due to the
availability of better market opportunities than in the prior
year." However, S&P believes that cash collections from AFE's
existing portfolios and its constrained organic growth ambitions
will allow the company to maintain credit metrics at the weaker
end of the following ranges over the next 12 months:

-- Debt to adjusted EBITDA of 3x-4x;
-- Funds from operations (FFO) to debt of 20%-30%; and
-- Adjusted EBITDA to interest of 4x-5x.

S&P said, "When calculating our weighted-average ratios for AFE,
we apply a 50% weight to both year-end 2018 and year-end 2019
projections.

"Given AFE's asset class focus and smaller scale, we believe that
its back book of debt portfolios is less granular relative to
peers. We therefore believe that AFE's cash collections are
likely to be more volatile than the average of its peer group.
For example, during the second quarter of 2018, AFE's actual
collections were 80% of its December 2017 forecast, and followed
the first quarter's material over-performance of 150%. We also
believe that AFE is more exposed to the potential
underperformance of single debt portfolio investments than its
peers. We have therefore revised our view of AFE's business risk
profile to capture its smaller scale, lack of operational track
record, and potentially volatile cash collections compared with
rated peers.

"At the same time, our affirmation of the 'BB-' rating follows
our removal of the negative notch of adjustment that we
previously incorporated into the rating. This reflects our view
that AFE's overall creditworthiness remains unchanged. It also
reflects our view that AFE has grown in a controlled way,
demonstrating relatively stable credit metrics that have remained
within management's guided ranges.

"Based on likely sources and uses of cash over the next 12
months, we assess AFE's liquidity as adequate. We expect
liquidity to be supported by the upsizing of the super senior
revolving credit facility (SSRCF) to EUR90 million in February
2018. In our base-case scenario, we anticipate that sources of
liquidity will exceed uses by at least 1.3x for the next 12
months."

Aside from retained earnings, AFE intends on funding itself
through two primary sources. These include the SSRCF of EUR90
million and a proposed senior secured bond issuance of EUR315
million.

Principal Liquidity Sources

-- Cash FFO of about EUR70 million;
-- About EUR50 million of cash and liquid investments; and
-- The EUR90 million SSRCF.

Principal Liquidity Uses

-- Portfolio acquisitions, which are the main cash outflow.
-- Debt Maturities 2024: EUR325 million.

S&P said, "The stable outlook on AFE reflects our view that the
company's leverage and debt-service metrics will remain within
the current financial risk profile category over the outlook
horizon of one year. This scenario is predicated on our view that
the company will maintain controlled organic growth in total
collections, supported by selective investing.

"We could lower the ratings if we saw an increase in leverage
tolerance, a failure in AFE's control framework, or adverse
changes in the Italian regulatory environment for debt purchasers
or in any other jurisdiction where the company has material
exposures. We could also lower the ratings if we see evidence
that the group has a long-term investment philosophy toward AFE,
acting more as a financial sponsor, and dictating an increase in
risk appetite or higher leverage.

"We consider an upgrade unlikely within the next year. Over time,
we could raise our ratings on AFE if the company appears set to
lower its debt metrics sustainably. Although less likely at this
stage, we could also raise the ratings if we saw greater
diversification in the franchise supporting the future stability
of cash flows, for instance with a material increase in fee
income generated in collection services for third parties."


===================
M O N T E N E G R O
===================


MONTENEGRO: Moody's Changes Outlook on B1 Issuer Rating to Pos.
---------------------------------------------------------------
Moody's Investors Service has changed the outlook on the
Government of Montenegro's B1 long-term issuer and senior
unsecured debt ratings to positive from stable. Concurrently,
Moody's has affirmed the B1 long-term ratings as well as
Montenegro's Not Prime short-term issuer rating.

The key drivers for the change in the rating outlook to positive
from stable are:

(1) Montenegro's favourable medium-term growth outlook, supported
by structural reforms, progress with respect to the country's EU
accession negotiations and significant investment projects in
transportation, tourism and energy sectors.

(2) The government's consolidation measures that improve
Montenegro's fiscal position.

(3) Moreover, the government took effective actions to
significantly lower Montenegro's medium-term refinancing risks.

The affirmation of Montenegro's B1 sovereign ratings balances its
relatively high wealth compared to similarly rated peers with the
economy's very small size and low diversity. The rating reflects
also the country's moderate institutional strength supported by
EU accession prospects and its moderate event risk, driven by
banking sector risk and to a lesser extent by external
vulnerability risk.

Montenegro's long-term foreign currency bond and deposit ceilings
remain at Ba1 and B2, respectively. The short-term foreign
currency bond and deposit ceilings remain Not Prime.

RATINGS RATIONALE

RATIONALE FOR POSITIVE OUTLOOK

FIRST DRIVER: MONTENEGRO'S FAVOURABLE MEDIUM-TERM GROWTH OUTLOOK,
SUPPORTED BY STRUCTURAL REFORMS, EU ACCESSION PROSPECTS AND
SIGNIFICANT INVESTMENT PROJECTS

The first driver for changing Montenegro's rating outlook to
positive relates to Montenegro's medium-term growth outlook,
supported by structural reforms, the country's EU accession
prospects and significant investment projects. With respect to
structural reforms, the new labour and pension laws are expected
to address mismatches in the labour market and improve the
sustainability of the pension system which has a relatively large
funding gap. Overall, Moody's expects potential growth to rise to
about 3.5%, an acceleration from the average growth rate of 2.0%
between 2008 and 2017.

Montenegro's growth prospects are also supported by further
progress made on strengthening institutions in the EU accession
process. While Moody's does not expect Montenegro to join the EU
in the foreseeable future, the ongoing success achieved in
bringing the legal and operational framework into line with EU
norms enhances local operating conditions and the country's
attractiveness to foreign direct investment (FDI). Montenegro is
the front-runner in EU accession negotiations compared to peers
such as Serbia (Ba3 stable) and Albania (B1 stable).

In addition, Montenegro benefits from EU assistance amounting to
around 1% of GDP per year under the Second Instrument for Pre-
Accession (IPA2) for the period 2014-2020, which aims to support
the implementation of key reforms. Moreover, following the
European Commission's publication of its strategy towards the
Western Balkans in May 2018 which reaffirmed the enlargement
perspective, the Western Balkan Summit in London in July 2018 saw
the commitment to a new guarantee instrument with an initial EU
commitment of up to EUR150 million in 2019-2020 that could be
leveraged to up to EUR1 billion in investments in sustainable
socio-economic development and regional integration.

Significant investment projects in the tourism, construction and
energy sectors currently underway are also supporting
Montenegro's growth perspectives. The expansion of capacity in
the tourism sector continues with new flight routes being opened
to additional Western European locations. The Bar-Boljare highway
project will further improve Montenegro's economic prospects by
facilitating access to main coastal hubs and diversifying the
tourist sector by opening up links to the mountainous north of
the country. While Moody's expects more substantial gains once
the entire highway and corresponding links from other countries
are complete, the priority section of the Bar-Boljare highway
being in full operation probably in the second half of 2019 will
already have some positive spill-over effects on the economy.

Moreover, large energy projects will support investment and
Montenegro's export potential. The most important of these is an
undersea power cable connecting Montenegro and Italy -- a link of
the 400 kV Trans-Balkan Electricity Corridor connecting Serbia,
Bosnia and Herzegovina, Romania and Montenegro to the EU grid --
that is expected to be in full operation in 2019. The entire
corridor linking all four countries to the EU grid is expected to
come on stream in 2022. This project is expected to make
Montenegro an important energy hub in the region, increasing the
country's competitiveness and encouraging investments in new
energy sources, particularly renewables.

SECOND DRIVER: CONSOLIDATION MEASURES IMPROVE FISCAL POSITION

The second driver for changing the outlook to positive from
stable relates to Moody's assessment that the authorities' fiscal
consolidation measures will improve the government's debt metrics
starting in 2018. The authorities made progress on the
implementation of significant fiscal consolidation measures
comprising higher revenue generation and expenditure cuts as well
as measures taken to tackle pension and public-sector wages since
end-2016.

On the revenue side, the main measures have been an increase in
the standard VAT rate to 21% from 19% at the beginning of 2018
and higher excises on, for example, sugary drinks (January 2018)
and coal (planned for January 2019). Spending measures include
reduction in social welfare benefits, cuts in capital expenditure
outside of the Bar-Bolijare highway, reduction in payments to
redundant workers. Those fiscal adjustments translate into a
counter-cyclical fiscal policy which is in contrast to the pro-
cyclical fiscal policy that had eroded the government's fiscal
space in the past.

In combination with solid average economic growth of 3.2% over
2018/20, Moody's expect the fiscal balance to turn into a surplus
of 2% of GDP by 2020 from an average deficit of -2.4% of GDP in
2018/19. After peaking at 69% in 2018, the debt-to-GDP ratio is
expected to decline to below 50% by 2022. In Moody's view,
regaining fiscal space is especially important in Montenegro's
case due to the full euro-ization of the economy, which leaves
fiscal policy as its main macro tool. Moody's expects the fiscal
policy actions and the commitment of the government to reduce
government debt as well as contingent liabilities. The
accumulated fiscal consolidation measures taken together will
amount to almost 3% of GDP between 2017 and 2020, with the
largest effect in 2018.

Unexpected budget overruns related to judicial claims, SOEs or
ad-hoc decisions of the government to increase spending could
lead to a weaker than expected fiscal consolidation. Moody's
expects an average fiscal balance of -1% of GDP over 2018-2020
compared to the government's forecast of a balanced budget and a
fiscal surplus of 4.4% by 2020.

The main risk to the fiscal outlook relates to the costs of the
Bar-Boljare highway. The completion of the priority section is
expected for the second half of 2019. The overall costs of that
section are estimated at EUR929 million (based on the EUR/USD
exchange rate as of September 19, 2018), equivalent to 20.7 % of
GDP. The risks include possible delays with cost overruns as well
as foreign currency risks associated with the dollar-denominated
loan taken from the Export-Import Bank of China (A1 stable) in
2014. Additionally, while the authorities hope to attract private
investors to build the three remaining sections of the highway
project, Moody's believes that risks persist that the government
would eventually be exposed to some form of risk sharing to
complete the project. The overall costs for those sections are
roughly estimated at around EUR1.2 billion or 25% of GDP.

THIRD DRIVER: THE GOVERNMENT'S EFFECTIVE MEASURES TO LOWER
MONTENEGRO'S REFINANCING RISKS

The third rating driver is based on a significant mitigation of
Montenegro's refinancing risks over coming years. While the
government faced refinancing risks amounting to almost EUR1.1
billion or 22% of GDP against the backdrop of three maturing
Eurobonds over 2019-2021 (notably EUR280 million in 2019, EUR500
million in 2020 and EUR300 million in 2021), the authorities have
taken effective actions to improve the debt maturity profile and
to lower large refinancing risks.

Firstly, with the support of a World Bank Policy-Based Guarantee
amounting to EUR80 million, a consortium of international banks
provided a EUR250 million loan to Montenegro in May 2018 with a
maturity of 12 years and a 4-year grace period on principal and
an amortizing payment structure. This loan will help to amortize
the Eurobond maturing in 2019.

Secondly, the government issued a EUR500 million Eurobond with a
7-year maturity period in April 2018 and implemented a liability
management operation including the exchange of EUR362.35 million
of Eurobonds coming to maturity over 2019-2021. Overall these
measures improved the debt maturity profile and significantly
reduced the medium-term refinancing risks. The government's cash
balance stood at EUR345 million at the end of 2018 Q2 up from
EUR72 million at the end of 2018 Q1. Leveraging a second World
Bank Policy-Based Guarantee and issuing a Eurobond smaller than
the 2018 Eurobond would likely fully take away refinancing needs
for 2019-2021.

RATIONALE FOR AFFIRMATION OF THE B1 RATING

The factors supporting the rating affirmation include
Montenegro's elevated wealth and strong institutions compared to
similarly rated peers. Montenegro's position in the Worldwide
Governance Indicators compares favorably to regional peers:
Montenegro fares better compared to Serbia, Albania, Bosnia and
Herzegovina (B3 stable) and Moldova (B3 stable) in the key
categories, including rule of law, government effectiveness and
control of corruption. Balanced against these strengths are
Montenegro's small scale and limited economic diversification,
the government's relatively high debt-to-GDP levels and the
economy's heavy reliance on foreign funding.

WHAT COULD CHANGE THE RATING UP/DOWN

The rating would likely be upgraded if there would be full or
close to full implementation of the government's consolidations
measures showing up in improving government's debt metrics
placing the government's debt trajectory on a sustainable
downward path in combination with Moody's heightened confidence
that the highway-related fiscal risks are contained.

Also credit positive would be the completion of a majority of the
EU's acquis communautaire, which would support progress towards
EU accession. Equally, a reduction in contingent liabilities,
stemming from a combination of materially lower government
guarantees and lower risks posed by banks and SOEs, would also be
credit positive.

Finally, further improvements in external competitiveness gained
from the implementation of FDI-funded projects in the tourism and
renewable energy sectors, as well as a material reduction in
external vulnerability, would support Montenegro's sovereign
credit profile.

The positive outlook signals that a downgrade is currently very
unlikely. However, downward pressure on Montenegro's credit
profile would develop should the government's debt metrics and
contingent liabilities would deteriorate substantially. Other
negative factors include a weakening of Montenegro's external
position, likely reflecting the failure of efforts to gain
competitiveness in the areas of tourism and other export-oriented
industries.

GDP per capita (PPP basis, US$): 17,996 (2017 Actual) (also known
as Per Capita Income)

Real GDP growth (% change): 4.3% (2017 Actual) (also known as GDP
Growth)

Inflation Rate (CPI, % change Dec/Dec): 1.9% (2017 Actual)

Gen. Gov. Financial Balance/GDP: -5.4% (2017 Actual) (also known
as Fiscal Balance)

Current Account Balance/GDP: -16.3% (2017 Actual) (also known as
External Balance)

External debt/GDP: 159.7% (2017 Actual) (also known as Foreign
Debt)

Level of economic development: Moderate level of economic
resilience

Default history: No default events (on bonds or loans) have been
recorded since 1983.

On September 19, 2018, a rating committee was called to discuss
the rating of the Government of Montenegro. The main points
raised during the discussion were: The issuer's economic strength
have increased. The issuer's institutional strength/framework
have improved being supported by the EU accession process.
Montenegro's refinancing risks were lowered by the government's
effective measures. The issuer's fiscal or financial strength
including its debt profile will probably improve starting in
2018, but risks related to the Bar-Bolijare highway remain.

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


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


STARFRUIT FINCO: S&P Affirms Prelim. B+ Rating on Sr. Sec. Debt
---------------------------------------------------------------
S&P Global Ratings said that it affirmed its preliminary 'B+' and
'B-' issue ratings on the proposed senior secured and senior
unsecured debt, respectively, to be issued by co-borrowers
Starfruit Finco B.V., Starfruit US Holdco LLC, and Starfruit
Swedish Finco (to be incorporated). The recovery ratings are
unchanged.

The affirmation follows a EUR385 million increase in Starfruit's
proposed U.S.-dollar senior secured term loan facility, and a
simultaneous, identical decrease in the proposed U.S.-dollar
senior unsecured bond, with the overall debt amount unchanged.
S&P also factors in the latest price talk for the proposed
facilities (not the final terms), which is higher than it
initially assumed.

S&P said, "We have therefore affirmed the preliminary 'B+' issue
rating on the proposed EUR1.79 billion and the EUR3.71 billion
U.S. dollar-equivalent senior secured term loan B facilities due
in 2025 (upsized from EUR3.325 billion), and the EUR750 million
senior secured revolving credit facility (RCF) due in 2024. The
preliminary recovery rating is unchanged at '3', based on our
expectation of meaningful recovery (50%-70%; rounded estimate:
60%) prospects in the event of default.

"We have affirmed the preliminary 'B-' issue rating on the
proposed EUR485 million senior unsecured notes due 2026 and the
EUR515 million U.S. dollar-equivalent senior unsecured notes due
2026 (downsized from EUR900 million). The preliminary issue
rating is two notches below the preliminary 'B+' issuer credit
rating, with a recovery rating of '6', based on our expectation
of negligible (0%) recovery prospects."

Private equity firm Carlyle is in process of acquiring Akzo
Nobel's specialty chemicals business through holding company,
Starfruit Topco Cooperatief U.A.

S&P said, "The final ratings will depend on our receipt and
satisfactory review of all final documentation and final terms of
the transaction. The preliminary ratings should therefore not be
construed as evidence of the final ratings. If we do not receive
the final documentation within a reasonable time, or if the final
documentation and final terms of the transaction depart from the
materials and terms reviewed, we reserve the right to withdraw or
revise the ratings. Potential changes include, but are not
limited to, utilization of the proceeds, maturity, size and
conditions of the facilities, financial and other covenants,
security, and ranking. The proposed structure does not, at this
stage, include any shareholder loans, preferred equity
certificates, or preference stock through the entire corporate
group structure (all the way to the shareholders, sponsor, and
fund). Were any such instruments be in the final structure and we
included them in our financial analysis, including in our
leverage and coverage calculations, we could revise the ratings."

KEY ANALYTICAL FACTORS

The proposed EUR1.79 billion and EUR3.71 billion U.S. dollar-
equivalent senior secured term loan facility B due in 2025, and
EUR750 million senior secured RCF due in 2024 have been assigned
a preliminary recovery rating of '3' and a preliminary issue
rating of 'B+' based on S&P's expectation of meaningful recovery
prospects (rounded estimate: 60%). The recovery rating of '6' on
the proposed EUR485 million senior unsecured debt due 2026 and
EUR515 million U.S. dollar-equivalent senior unsecured debt due
2026 is based on S&P's view of negligible (0%) indicative
recovery prospects. The preliminary ratings are supported by
S&P's view of a fairly comprehensive security package with
tangible and intangible personal property of the loan parties,
including a pledge of 100% of the stock of each borrower and each
directly and wholly owned restricted subsidiary of the loan
parties; subject to customary exceptions and, in the case of non-
U.S. guarantors, customary agreed security principles.

The guarantors include the holding company and all wholly owned
restricted subsidiaries of the borrowers that are organized under
the laws of the U.S., Brazil, Canada, Denmark, Germany,
Netherlands, and Sweden. S&P said, "We note that the
enforceability of the guarantees may be subject to limits set by
the local laws in several jurisdictions such as Sweden, Germany,
and the Netherlands, which may alter the priorities and
realizable amounts assumed in our recovery analysis. Our
hypothetical default scenario assumes intensified competition and
slowing demand for Starfruit's products in key end markets, in
combination with margin pressure due to inability to pass higher
feedstock costs to customers. We value the business as a going
concern due to its leading market positions within several
sectors of the specialty chemicals industry, and our assumption
that it would be restructured in the event of default."

SIMULATED DEFAULT ASSUMPTIONS

-- Year of default: 2022
-- Jurisdiction: Netherlands

SIMPLIFIED WATERFALL

-- Emergence EBITDA: EUR593 million
-- Cyclical adjustment: 5% (standard for specialty chemicals)
-- EBITDA multiple: 6x Maintenance
-- capex: About EUR200 million, in line with company guidance of
     maintenance capex at 50%-60% of the planned annual
     expenditure of EUR400 million in 2019-2021
-- Gross recovery value: EUR3.6 billion
-- Net recovery value for waterfall after administrative
    expenses (5%): EUR3.4 billion
-- Estimated senior secured debt claims: EUR5.7 billion*
-- Senior secured debt recovery: 60%
-- Total collateral value available to unsecured claims: Nil
-- Total unsecured claims: EUR3.4 billion
    --Recovery rating (unsecured debt): '6' (0% recovery)
*All debt amounts include six months' prepetition interest; RCF
assumed 35% drawn at default. Capex--Capital expenditure.


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


ONI: Altice Portugal Seeks Insolvency of Business
-------------------------------------------------
Telecompaper reports that Altice Portugal has requested the
insolvency of Oni, a wholesaler controlled by Nowo, the operator
that has an agreement with Eleven Sports for the distribution of
football rights such as the Champions League and the Spanish
league.

The insolvency request has formally been submitted in Lisbon and
concerns debt exceeding EUR6 million, Telecompaper relays, citing
Economia Online.

The reasons for the request are Oni's inability to pay off its
debts and unbalanced books, Telecompaper discloses.

Nowo and Oni are two companies with separate legal statuses but
are managed as a single company, one for Oni and another for
Nowo, Telecompaper notes.


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


GENBANK JSC: Deposit Agency to Participate in Bankruptcy Measures
-----------------------------------------------------------------
The Bank of Russia has approved amendments to the plan for the
State Corporation Deposit Insurance Agency (hereinafter, the
Agency) to participate in bankruptcy prevention measures for JSC
GENBANK (hereinafter, the Bank), including the plan for the
Bank's financial resolution.

The Bank and JSC Sobinbank (Investor) planned balanced growth in
small and medium-sized business lending and retail lending in the
main region of the Bank's operation, formation of a portfolio of
securities to be used to settle liabilities to the Agency and
form the Bank's equity capital.

According to the financial model stipulated in the financial
resolution plan, the value of the Bank's equity capital will have
become positive by late 2029.  As the period of bankruptcy
prevention measures draws to a close, the Bank will become
compliant with the required ratios established by the Bank of
Russia.

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


TOGLIATTI: Bank of Russia Assesses Pension Provision Activity
-------------------------------------------------------------
While implementing its functions, the provisional administration
to manage the Togliatti Non-governmental Pension Fund Municipal
(hereinafter, the Fund) appointed by Bank of Russia Order No.
OD-1114, dated April 27, 2018, due to cancellation of the Fund's
license to perform the activity related to pension provision and
pension insurance, revealed the circumstances which are
indicative of the actions aimed at withdrawal of the Fund's
assets.

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

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


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


EL CORTE: Moody's Assigns First-Time Ba1 CFR, Outlook Stable
------------------------------------------------------------
Moody's Investors Service has assigned a first-time Ba1 corporate
family rating and Ba1-PD probability of default rating (PDR) to
Spanish retailer El Corte Ingles, S.A. Concurrently, Moody's has
assigned a Ba1 senior unsecured rating to ECI's proposed senior
unsecured bonds of up to EUR600 million. The outlook on the
ratings is stable.

"The Ba1 rating reflects ECI's well-established market position
and strong brand awareness in Spain as demonstrated by the
company's leadership in most of the business segments in which it
operates. The rating also reflects the commitment of the new
senior management team towards a more conservative financial
policy than in the past," says Victor Garcia Capdevila, Moody's
lead analyst for ECI.

RATINGS RATIONALE

ECI's Ba1 CFR is underpinned by (1) the company's leading market
positions in most of the business segments in which it operates,
(2) strong brand awareness and high interest from third-party
brands to operate in ECI's stores, (3) a large and unencumbered
real estate portfolio with a proven track record of successful
asset monetization, (4) supportive macroeconomic conditions in
Spain, (5) and good deleveraging prospects and the firm
commitment of the new senior management team to adopt a more
conservative financial policy than in the past.

The rating also reflects (1) the company's high geographic
concentration in its home market, (2) the cyclical, seasonal and
discretionary nature of its business model, (3) lower
profitability margins than rated peers and high earnings
dependency on its top ten best-performing stores, (4) weak
historic corporate governance and a lack of track record under
new management, (5) and the risks and challenges posed by
increasing online penetration rates and competition from pure e-
commerce specialists.

Moody's anticipates annual sales growth of 1.0%-1-5% driven by
the retail business and, in particular, the fashion segment.
Moody's adjusted EBITDA margins are expected to remain stable in
a range of 7.0%-7.5% in the next 12-18 months, supporting steady
operating cash flow generation. The rating agency estimates ECI
will generate free cash flow in a range of EUR220 million --
EUR280 million in the next 12-18 months.

Moody's adjusted gross leverage stood at 4.1x at the end of the
fiscal year 2018, which ended on February 28, 2018, and it is
expected to decrease towards 3.0x in the next 12-24 months.

LIQUIDITY ANALYSIS

Moody's views the company's liquidity profile as adequate. As of
February 28, 2018, ECI had a cash balance of EUR222 million and
full access to a EUR1,150 million committed revolving credit
facility which, coupled with Moody's expectations of positive
free cash flow generation, will allow the company to meet its
cash requirements comfortably over the next 12-24 months.

ECI's working capital requirements are seasonal, with an increase
in stock for the autumn/winter and spring/summer seasons from
July to November and from January to May respectively. Moody's
estimates that the peak-to-trough variance in working capital
during the year is around EUR700 million.

The availability of the company under its commercial paper
program is EUR500 million and the future amount of outstanding
employee's promissory notes is not expected to exceed EUR325
million. Moody's notes that a sudden termination of these
programs would require a heavy use of the revolving credit
facility. Although this is unlikely, it would put pressure on
ECI's liquidity profile. Assuming rollover of commercial paper
programs, El Corte Ingles has no near debt maturities.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook reflects Moody's expectation that sales will
grow by 1.0%-1.5% in the next 12-18 months and that Moody's
adjusted EBITA margin will improve towards 5.0% in the medium
term.

WHAT COULD CHANGE THE RATING UP/DOWN

Positive rating pressure could develop if Moody's adjusted gross
leverage decreased sustainably below 3.5x while maintaining or
improving current profitability and free cash flow generation
levels.

Conversely, downward pressure on the ratings could arise as a
result of a prolonged period of negative like-for-like sales,
weaker profitability and depressed free cash flow generation. On
a quantitative basis, the ratings could be downgraded if Moody's
adjusted gross leverage increased above 4.0x or the company's
liquidity profile deteriorated.

The principal methodology used in these ratings was Retail
Industry published in May 2018.

Assignments:

Issuer: El Corte Ingles

Corporate Family Rating, Assigned Ba1

Probability of Default Rating, Assigned Ba1-PD

Backed Senior Unsecured Regular Bond/Debenture, Assigned Ba1

Outlook Actions:

Issuer: El Corte Ingles

Outlook, Assigned Stable


EL CORTE: Fitch Publishes 'BB' LT IDR, Outlook Pos.
---------------------------------------------------
Fitch Ratings has published Spanish-based department store
operator El Corte Ingles S.A.'s Long-Term Issuer Default Rating
at 'BB' with Positive Outlook. Fitch has also published ECI's
expected senior unsecured rating of 'BB+(EXP)'/'RR2' for the
retailer's planned EUR600 million notes.

ECI intends to use the proceeds to refinance its bridge-to-bond
loan, as well as part of its 'existing employees' promissory
notes' as and when maturities come due.

The assignment of the final rating to the bond is contingent on
the receipt of final documents conforming to information already
received.

The IDR of 'BB' reflects ECI's strong market position and large
scale in the Spanish department store segment with a wide product
and service offering, which is balanced by the company's lower,
albeit improving, profitability compared withrated peers. The
rating and the Positive Outlook are underpinned by its
expectation of further progress by ECI in achieving its
profitability targets, on the back of its Retail Strategic Plan,
and deleveraging.

Fitch expects to rate the planned notes at 'BB+', one notch above
ECI's IDR,  reflecting its estimation of superior recovery
prospects for unsecured creditors, due to the sizeable intrinsic
value of ECI's property assets (even on a highly discounted
basis) and lack of meaningful prior-ranking debt.

KEY RATING DRIVERS

Largest Department Store Operator in Europe: ECI derives 95% of
its revenue in Spain, where it operates the only large department
store chain in the country. It enjoys a privileged position in
Spain, due to its unique shopping proposition, wide product and
service offering, long established brand, consumer loyalty and
the prime location of several of its stores. Its large scale
allows ECI to profitably commercialise financial products to its
clients, including insurance policies and consumer loans, through
Financiera El Corte Ingles (FECI), a 49% JV with Banco Santander.

Business Transformation Key: Fitch believes that ECI can increase
its profit margins further due to ongoing efficiency efforts
aimed at optimising its personnel expenses and restructuring its
hypermarket division. ECI's unrivalled business model and
leadership market share also contribute to fending off
competition from established competitors such as Zara (in
fashion), Mercadona (food retail), or even Amazon. ECI is
focusing its investments on the digital transformation and omni-
channel capabilities and Fitch believes these are critical in
positioning the business for the future.

Low Profitability Expected to Improve: ECI has shown structurally
low margins - EBITDAR margin as of financial year to February
2018 (FY17) at 7.8% - relative to rated peers from other regions.
This is partly due to its business mix with 34% of revenue
derived from low-margin food retail and travel agency activities,
as well as to structurally high personnel expenses (16.8% of
sales vs. Marks & Spencer Group plc's 14%). However, margins have
shown lower volatility than peers and a steady improvement on the
back of cost containment and better use of retail space, and
Fitch expects this trend to continue against a broadly benign
economic backdrop and manageable competitive conditions.
Moreover, ECI pays a lower proportion of rents than rated peers
given its high asset ownership, which results in greater
operational flexibility.

Cyclical Recovery; Less Disruptive Trends: Fitch expects ECI's
financial performance to stay closely correlated with that of the
Spanish economy. The rating takes into account that ECI's sales
and profits are inherently exposed to economic swings and scope
for volatility in the credit profile through the cycle. These
dynamics are in line with other rated department stores in the
U.S./UK and for ECI reflect its reliance on consumer sentiment
and inbound tourism within Spain.

However, ECI benefits from a more concentrated department store
sector in Spain and lower penetration of e-commerce. This has
allowed the company to develop its own strategy to fend off
competition, unlike in other developed markets such as the UK,
USA or Germany where highly disruptive trends are affecting
department stores.

High but Declining Leverage: Fitch expects ECI's funds from
operations (FFO) adjusted gross leverage to fall to 3.7x by FY19
from 5.0x at FY17, consistent with the upper-end of the 'BB'
category. Deleveraging will be driven by ECI's improved
operational profile and by committed debt repayments on
syndicated loan amortisation. ECI's target of net debt/EBITDA of
2.0x in the medium term - which is consistent with FFO adjusted
net leverage trending to 3.0x - if achieved, could be consistent
with an investment grade rating.

Adequate Financial Flexibility: Fitch expects ECI's financial
profile to remain conservative with a focus on profitability and
free cash flow (FCF) driven by improving FFO, with moderate capex
and dividends.

ECI has sound financial flexibility, due to comfortable
liquidity, a well-spread maturity schedule and access to a
EUR1.15 billion revolving credit facility (RCF), and FFO fixed
charge coverage trending to 4.0x by FY20 (FY17: 3.1x). These
factors, and the possibility of selective asset sales, point to
strong financial flexibility for the rating. ECI's access to
diversified funding tools, and a fully unencumbered asset base
(following its refinancing on an unsecured basis in January 2018)
further enhances the company's chances of successful refinancing
even in less benign conditions.

Commitment to Improve Governance: Despite the recent change in
ECI's CEO and Chairman, the company's Board and the new
leadership continue to support a strategy focusing on improving
profitability and deleveraging. ECI's governance practices are
not fully aligned with the market's best practices relative to
rated peers', with limited oversight by independent directors on
the board and below-standard information disclosures. However,
changes in the company structure and financial transparency are
being carried out, such as the appointment of a new independent
Director, and improved information disclosures as a result of the
planned bond placement.

Superior Recovery Expectations for Unsecured Creditors: Following
the refinancing completed in January 2018, ECI's debt structure
is virtually all unsecured. The planned notes, its existing
syndicated loan and EIB loan represent in excess of 85% of total
debt and will share the same guarantee structure with ECI, Viajes
El Corte Ingles, S.A. and Supercor, S.A.. Together they accounted
for 87.8%, 83.7% and 87.6% of ECI's consolidated sales, EBITDA
and total assets, respectively as of the 12 months ended May 31,
2018. Non-guarantors had a small amount of EUR51 million of debt
outstanding.

Given ECI's significant property portfolio spread throughout
Spain, and in many cases in prime locations, Fitch estimates
superior recovery prospects for unsecured creditors, in the 71%-
90% range, based on its Corporates Notching and Recovery Ratings
Criteria. This leads to a 'RR2' (capped for unsecured debt) on
the planned bond, and thus a notch uplift to 'BB+'.
DERIVATION SUMMARY
ECI's 'BB' IDR compares well from a business risk profile
standpoint with US players, such as Nordstrom, Inc.
(BBB+/Stable), Macy's, Inc. (BBB/Negative), Dillard's, Inc. (BBB-
/Stable) or JC Penney, Inc. (B/Stable) as well as UK-based Marks
and Spencer Group plc (BBB-/Stable). All of them operate a
similar format (large department stores) and with comparable
scale with the exception of Dillard's and JC Penney.

The US and British markets have suffered from the disruptive
incursion of pure online operators, especially Amazon, with the
result of declining revenue in the last few years, which was most
pronounced for mid-tier apparel and accessories retailers.
However, most of these players still benefit from lower leverage
than ECl, as well as sustainably positive FCF, which allows them
to invest significantly in business turnaround, critically in
omni-channel.

Unlike Nordstrom, Macy's and Dillard's, which have shown
decreasing revenue for the past three years, ECI benefits from
positive revenue evolution, and lower profit volatility as market
leader in Spain. However, these companies maintain significantly
better profitability, with an average EBITDAR margin close to 13%
vs. ECI's 7.8%, lower leverage and higher cash flow generation.
Pre-dividend FCF margin at M&S, which as a listed entity also
owns some freehold assets, averages around 4.5% relative to ECI's
1.8% (but trending to 2.8% under its rating case forecasts by
FY20).

Overall, all these players maintain better corporate governance
practices, although Fitch expects ECI to improve on these aspects
over the medium term. On the other hand, compared with these
peers ECI has strong resilience on the back of the ownership of
near 100% of its assets (similar to Dillard's), with a market
value representing a loan-to-value of around 23%. This provides
strong operational flexibility and underpins ECI's solvency
through the cycle.

KEY ASSUMPTIONS

  - LfL sales growing slightly above inflation and about half of
nominal GDP growth, 1.9% revenue CAGR over 2017-2021 vs 2.4% over
2015-2017

  - EBITDA margin trending progressively to 7.4%

  - Capex at around 2.4% of revenue primarily related to IT and
store refurbishment

  - EUR60 million in dividends over FY18-FY19, EUR100 million
over FY20-FY21, albeit dependent on future leverage

  - Average annual cash outflows of EUR48 million, mainly from
inventory build-up on the back of expected growth in e-commerce
platforms and/or tighter supplier payment days

  - No large divestments or bolt-on acquisitions apart from those
already signed such as EUR212 million in FY18 from assets
disposals

RATING SENSITIVITIES

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

  - FFO adjusted gross leverage below 4x on a sustained basis

  - FFO margin above 6% showing progress on further business and
cost rationalisation, accompanied by steady organic sales growth
and/or market share gains in Spain

  - Evidence of gross debt repayment, greater headroom under debt
service cover ratio as reflected in FCF margin above 2.5% (FY17:
1.5%)

  - FFO fixed charge cover above 4x

  - Strengthening corporate governance including greater
oversight by independent directors, maintenance of solid strategy
execution along with a conservative financial structure, and
enhanced information disclosures

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

  - FFO adjusted gross leverage staying above 4.5x

  - Delayed benefits from business repositioning efforts due to
increased competition or other operational challenges translating
into weakening market share and FFO margin staying structurally
below 5%

  - Volatile FCF margin not compensated by asset divestments or
other forms of external support, leading to delays in
deleveraging

  - FFO fixed charge cover below 3.5x

Developments That May, Individually or Collectively, Lead to a
revision in Outlook to Stable

  - FFO adjusted gross leverage staying within 4x- 4.5x

  - FFO fixed charge cover below 4x

LIQUIDITY AND DEBT STRUCTURE

Adequate Liquidity: As at FYE18, ECI had adequate liquidity as
Fitch-adjusted unrestricted cash balance (EUR171 million), an
undrawn committed RCF (EUR1 billion), an undrawn to bridge to
bond loan (EUR1.2 billion) and expected positive FCF were
sufficient to cover short-term debt (EUR1.76 billion).

During FY18, ECI reduced the bridge-to-bond loan  to EUR1 billion
from EUR1.2 billion and at the same time increased the RCF to
EUR1.15 billion from EUR1 billion, leaving the liquidity position
little changed. Its forecasts assume the rollover of all
outstanding short-term debt instruments, including ECI's MARF
promissory notes (CP) and EUR300 million outstanding employees'
commercial paper. The RCF also serves as back-up facility for the
CP programme.

SUMMARY OF FINANCIAL STATEMENT ADJUSTMENTS

  -- Fitch has applied 8x multiple to capitalise operating leases
(of EUR151 million as of FY17) as the company is based in Spain.
ECI is the owner of all department stores although there are
other assets (premises, offices, warehouses) leased under long-
term agreements.

  -- According to Fitch's hybrid methodology, the EUR1,000
million convertible loan as of FY17 qualified for 100% equity
credit as it was fully covered by the company's treasury shares
(i.e. no board approval required) and the loan could only convert
into shares with no events of default. The convertible loan was
recently converted into shares in July 2018.

  -- Fitch has restricted EUR50 million from reported cash as
this is the amount held in tills in the department stores, and
hence required to be kept aside for operational reasons.

  -- Fitch made a fair value adjustment of EUR21 million to debt
as the difference between face value and book value of ECI's
debt.


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


ARCELIK AS: S&P Alters Outlook to Negative & Affirms 'BB+' ICR
--------------------------------------------------------------
S&P Global Ratings revised its outlook on Turkey-based home
appliances manufacturer Arcelik A.S. to negative from stable. At
the same time, S&P affirmed its 'BB+' long-term issuer credit
rating on Arcelik.

S&P said, "We also affirmed our 'BB+' issue ratings on Arcelik's
$500 million senior unsecured notes due 2023 and EUR350 million
senior unsecured notes due 2021. The recovery rating is '3',
indicating meaningful recovery prospects (50%-70%; rounded
estimate 50%) in the event of a payment default.

"The outlook revision stems from our view that the macroeconomic
environment in Turkey has deteriorated substantially in recent
months and has the potential to weaken Arcelik's credit profile.
In particular, we consider that the following factors, by order
of importance, are weighing on the group's credit profile:

-- The marked deterioration of interest coverage ratios as
    domestic interest rates surged while the interest on hard-
    currency bonds suffered from the steep decline of the Turkish
    lira.

-- The weakening of cash flow generation, which we now believe
    will turn more negative than expected in 2018, amid higher
    capital expenditure (capex) and working capital needs, adding
    to the mounting interest burden.

-- Higher leverage, due to the conversion effect on the hard
    currency bonds, although EBITDA is boosted by international
    revenues as the lira depreciates.

The lira lost about 46% and 44% of its value against the U.S.
dollar and euro, respectively, year on year as of Sept. 12, 2018.
Given Arcelik's large share of debt in these currencies (about
54% of total gross debt as of half-year 2018), this has pushed up
the group's financial expenses considerably due to the negative
translation impact, since almost all of the debt is at fixed
interest rates. On the domestic side, Turkish authorities' recent
decision to raise interest rates to contain the fall of the lira,
and the increased cost of funding from Turkish banks, are also
weighing heavily on the group's cash flow generation. In
addition, Arcelik's domestic borrowing costs have increased
somewhat, with average interest rates rising to about 17% so far
this year, from 13% on average in 2017. S&P expects domestic
interest rates to hit the group even harder next year as Arcelik
progressively rolls over its short-term facilities.

S&P said, "As a result of these factors, we now project our
adjusted EBITDA interest coverage ratio will fall markedly below
3.0x in 2018 and likely stay below that level in 2019, compared
with 3.3x in 2017, which is contrary to our previous base case of
4.0x-4.5x for 2018-2019. This is despite our forecasts of a
positive impact from the weaker lira on EBITDA margins, supported
by the group's sizeable exports (about 50% of production) from
its Turkish operations and improved cost control.

"We expect elevated borrowing costs and sizeable working capital
needs related to the group's expansion efforts in international
markets to hamper free cash flow generation. In particular,
contrary to our previous base case, we now expect free operating
cash flow (FOCF) to remain deep in negative territory in 2018 and
2019. After a strong 2016, the group's FOCF turned negative in
2017 (about -TRY950 million) due to large working capital
requirements caused by an increase in domestic inventory to meet
higher demand. We expect FOCF generation to be constrained in
2018 by the spill-over effect of investment capex in Romania and
the Voltbek joint venture in India. Even though we note that
there is no plan to increase investment capex in 2019, due to
sufficient capacity to serve current market needs, the group's
structural net working capital outflow position will remain a
drag on free cash flow generation, despite ongoing cost control
and improving profitability.

"When we lowered our ratings on Turkey on Aug. 17, 2018, we also
revised our transfer and convertibility assessment on Turkey down
to 'BB-' from 'BB+' to reflect our view of the likelihood that
Turkey would restrict access to foreign exchange liquidity for
Turkish companies. Nevertheless, we continue to rate Arcelik at
'BB+', which is three notches higher than the foreign currency
credit rating on Turkey. This is because Arcelik passes our
hypothetical sovereign default stress test, which, among other
factors, assumes a 50% devaluation of the lira against hard
currencies and a 15%-20% decline in Arcelik's organic EBITDA.
Because of this, we currently assess that our rating on Arcelik
can exceed the sovereign rating by up to four notches.

"We believe the company can withstand a hypothetical sovereign
default because of the large share of earnings in hard currency.
Therefore, in the hypothetical case of further depreciation of
the lira, we think the appreciation of deposits abroad would
offset the increase in Arcelik's short-term foreign currency
debt-service burden and capex related to the ongoing expansion
efforts outside Turkey.

"Failure to pass this test would lead us to equalize our rating
on Arcelik with the foreign currency sovereign ratings on Turkey
(unsolicited; B+/Stable/B), which would imply a three-notch
downgrade.

"We continue to assess Arcelik's business risk profile as
satisfactory, reflecting its leading market position in the
Turkish home appliances market and increasing international
presence in Europe and Asia. It also reflects its above-average
profitability supported by production located entirely in low-
cost jurisdictions. Arcelik has enjoyed a robust track record of
volume growth through local brands and its global brand, Beko,
with good international recognition over the past several years.
These strengths are counterbalanced by what we view as a still-
fragmented and competitive market environment in the group's key
markets, the cyclical nature of demand (partly discretionary),
and volatility in profitability metrics, since approximately 65%-
70% of Arcelik's operating costs are raw materials, mostly
plastics and metals.

"We also continue to de-link our ratings on Arcelik from those on
Arcelik's majority shareholder Koc Holding A.S. (BB-/Stable/B).
This is because there is a track record of good corporate
governance, independent and consistent strategy, policy-setting,
and execution at Arcelik, as well as lower dividends in periods
of lower cash-flow generation. Any evidence to the contrary would
cause us to reevaluate this assessment."

The negative outlook reflects the substantial increase of the
group's interest burden, as domestic interest rates have surged
while the lira's steep depreciation has strongly inflated the
interest payable on Arcelik's euro and dollar bonds.

Additionally, the persistence of substantial working capital
needs makes free cash flows structurally negative, which further
increases debt and interest expenses.

S&P said, "We could lower our rating on Arcelik over the next 12
months if we see that the group is unable to restore positive
FOCF generation and achieve an adjusted EBITDA interest coverage
ratio of at least 3.0x. We could also lower the ratings should
debt to EBITDA increase to more than 4x, but we foresee this as a
more remote scenario because we anticipate an increase in EBITDA.
The company's large share of earnings in hard currencies
mitigates the unfavorable currency movements that affect its debt
and the cost of raw materials.

"We could revise the outlook to stable if we saw a marked
improvement of refinancing conditions in Turkey and robust EBITDA
growth at Arcelik, spurred by an increase in volumes in Western
European markets, which provide hard-currency inflows."

The group's ability to restore positive free cash flows in the
medium term is a key factor in our consideration of a positive
rating action, as is EBITDA interest coverage close to 3.0x.


TURKCELL FINANSMAN: Fitch Affirms BB LT IDR, Outlook Negative
-------------------------------------------------------------
Fitch Ratings has affirmed Turkcell Finansman A.S.'s (TFS) 'BB'
Foreign and Local Currency Long-Term Issuer Default Ratings
(IDRs) and 'AA-(tur)' National Long-Term Rating. The Outlooks are
Negative on the IDRs and Stable on the National Rating.

KEY RATING DRIVERS

IDRS AND NATIONAL RATINGS

TFS's ratings are based on potential support from the parent -
Turkcell Iletisim Hizmetleri A.S (Turkcell, BB+/Negative). Fitch
believes Turkcell would have a strong propensity to support TFS
given (i) its 100% stake and full operational control; (ii) the
close integration of the subsidiary with its parent; and (iii)
TFS's role in customer base acquisition for Turkcell.

The one-notch difference between the ratings of Turkcell and TFS
mainly reflects the subsidiary's focus on a different segment
(finance rather than telecom services) but also its short
operating history and different branding. These factors in
Fitch's view moderately reduce the potential reputational risk
for the parent or potential negative impact on other parts of the
Turkcell group in case of TFS's default.

TFS accounted for a material 14% of Turkcell's assets as of end-
1H18 (but a smaller 6% of equity and 12% of pre-tax profit) and
TFS is forecasted to stabilise at around 15% of group assets.

TFS provides Turkcell retail customers with loans on mobile
devices. The core product is small ticket unsecured loans and the
tenor was recently restricted to six months by the local
regulator. This limits TFS's short to medium-term growth
potential. TFS sells its products directly via Turkcell's network
across Turkey with 3,300 sales-points. The business model relying
heavily on digital integration with shops allows TFS to limit
fixed costs.

TFS's internal debt/equity limit is 10x (significantly more
conservative than the domestic regulator's 33x). Leverage at end-
1H18 was 5.0x.

TFS plans to keep bank loans a core funding source for the near
term. TFS's asset duration is around nine months and therefore
may be comfortably matched by bank funding. Additionally TFS
placed three domestic securitised bonds in 2017-1H18 totalling
TRY300 million. These securitisations were structured as 'true
sale' and are therefore off balance sheet together with their
respective assets. TFS does not plan to attract any parental
funding due to tax implications.

RATING SENSITIVITIES

IDRS AND NATIONAL RATINGS

As TFS's IDR is bound to Turkcell's, changes to the latter will
be reflected on the subsidiary. The IDR of Turkcell is currently
one notch above the Turkish sovereign's rating (BB/Negative) and
may move in line with it.

An equalisation of TFS's ratings with those of Turkcell is
unlikely because TFS's business segment (finance) is less
important to Turkcell than its core telecom business.

A weakening of TFS's strategic importance or Turkcell's
propensity or ability to support TFS may result in a widening of
the notching from the parent.

TFS's National Long Term Rating is sensitive to changes in
Turkcell's ability or propensity to provide support.

The rating actions are as follows:

Long Term Local and Foreign Currency IDRs: affirmed at 'BB',
Outlook Negative

Short Term Local and Foreign Currency IDRs: affirmed at 'B'

National Long Term Rating: affirmed at 'AA-(tur)', Outlook Stable

Support Rating: affirmed at '3'


TURKEY: Finance Minister Unveils Sweeping Austerity Program
-----------------------------------------------------------
Laura Pitel in Istanbul and Jonathan Wheatley at The Financial
Times report that Turkey's finance minister tried to rebuild
shattered market confidence in his government's ability to manage
the economy by promising to cut public spending by nearly US$10
billion in a sweeping austerity program that would put the brakes
on growth.

The announcement by Berat Albayrak, who was put in charge of the
economy two months ago by his father-in-law, President Recep
Tayyip Erdogan, comes just a week after a surprise decision by
the central bank to sharply raise interest rates in the face of a
mounting currency crisis, the FT notes.

According to the FT, under Mr. Albayrak's forecasts, Turkey,
which has suffered from a sharp increase in inflation, would see
growth slow to 3.8% in 2018 and 2.3% in 2019.  The previous
target was 5.5% for both years, the FT states.

Analysts said that both the spending and growth targets were a
welcome sign that Ankara was willing to take tough measures to
tame runaway inflation and shore up the lira, which has lost 40%
of its value against the US dollar since the start of the year,
the FT relates.

However, sentiment remained mixed over whether Mr. Albayrak's
plan would keep the deficit close to 2% through next year, as he
promised, the FT states.

The sliding lira has piled pressure on Turkish corporates
burdened with foreign currency debt and the banks that lent them
money, the FT discloses.  It has also sent jitters through other
emerging markets amid fears of broader contagion, the FT notes.

According to the FT, although many economists now forecast a
recession for next year, the reduced growth targets announced on
Sept. 20 by Mr. Albayrak were seen as an important step in
building on the central bank's 6.25 percentage point rate rise to
24%.


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


KHARKOV CITY: Fitch Affirms LT IDR 'B-', Outlook Stable
-------------------------------------------------------
Fitch Ratings has affirmed the Ukrainian City of Kharkov's
Long-Term Foreign- and Local-Currency Issuer Default Ratings
(IDRs) at 'B-' with Stable Outlooks and Short-Term Foreign-
Currency IDR at 'B'. The city's National Long-Term Rating has
been affirmed at 'AA-(ukr)' with Stable Outlook.

Fitch continues to view the city's ratings as constrained by
Ukraine's sovereign ratings (B-/Stable/B) and the weak
institutional framework governing Ukrainian local and regional
governments.

The affirmation reflects the city's sound operating metrics and
debt-free status, although exposure to debt of companies in the
broader public sector is increasing.

KEY RATING DRIVERS

Institutional Framework Assessed as Weakness

Ukraine's institutional framework lacks clarity and
sophistication, hindering long-term development and budget
planning of Ukrainian subnationals. The national government is
pressurised by the challenging reform agenda implied by the IMF
to secure external funding for the repayments on external debt,
which will resume in 2019 after the break following the 2015
restructuring. Institutional constraints, geopolitical and
political risks arising from unresolved conflict in eastern
Ukraine will remain a risk for overall macroeconomic performance
and stability. High inflation and interest rates make debt and
investment policy challenging.

Fiscal Performance Assessed as Neutral

Fitch expects Kharkov's financial performance will remain sound,
albeit fragile over the medium term due to the continued reform
of financial decentralisation resulting in numerous legal
amendments. Fitch projects the operating margin will be around
20% in 2018 (2015-2017 average: 23%) supported by growth of taxes
following the economic recovery and steady inflow of current
transfers from the central government.

During 7M18 Kharkov collected 56% of revenue budgeted for a full
year and incurred 54% of expenditure, which resulted in an intra-
year budget surplus of UAH35 million. Fitch expects close-to-
balance budget for the full year 2018 due to acceleration of
spending, particularly capital ones, in 4Q18. During 7M18 the
city incurred only 31% of capital spending budgeted for a full
year.

Debt and Other Long-Term Liabilities Assessed as Neutral

Fitch expects that the city will retain its debt-free position at
least in 2018 amid the high interest rate environment - the
National Bank of Ukraine increased its policy rate to 18% on
September 7, 2018).

Kharkov remains exposed to material contingent risk. The net
financial result of the municipal companies remains negative,
forcing the city to provide support through operating subsidies
or capital injections. The scale of support is increasing year to
year and reached UAH2.3 billion in 2017 (17% of total revenue),
which is 1.7x higher than UAH1.3 billion in 2016 (13% of total
revenue). Most of the funding goes to utility and transport
companies due to historically low tariffs that do not cover the
prime cost of services provided.

The debt of municipal companies is also gradually increasing and
amounted to UAH0.8 billion in 2017, or 6% of current revenue. The
majority of debt came from three public companies: Kharkov's
Water Utility company, Heating company and Central park of
Culture.

The city has guaranteed the debt of the Water Utility company for
modernisation of the city's water utility system. The debt has an
amortising structure and is US dollar-denominated. As of January
1, 2018, the outstanding guaranteed amount was equivalent to
UAH101.3 million. The company has never claimed the guarantee to
date, although the city makes adequate provision in its budget
annually in case the company fails to meet its obligation.

Economy Assessed as Weakness

Kharkov is the capital of the country's fourth-largest region,
which contributed 6.5% to Ukraine's GDP in 2016 and 6.4% of the
total population in 2017. Kharkov's economy is well-positioned
among its domestic peers, but significantly lags its
international peers. Its GRP per capita is much below the EU
average, which justifies its assessment of the economy as a
weakness.

Kharkov is a large scientific, industrial and cultural centre.
Its economy is diversified across manufacturing and services, and
supported by a large number of companies. In 2017 Ukraine's
economy continued its mild restoration with GDP growth of 2.5%.
Fitch expects Ukraine's GDP to grow 3.2%-3.5% in 2018-2019, which
should positively impact the city's economic prospects.

Management and Administration Assessed as Neutral

The city's management follows a prudent approach in its budgetary
policy. It usually draws a social-oriented budget and supports
close-to-balance budgetary performance. The city's budget
planning horizon is limited to one year, which hinders
management's forecasting ability and makes strategic planning
more difficult. Overall, management operates under the frequently
changing legal framework, which requires quick and adequate
response on the potential developments.

One of management's priorities is development of the city's
infrastructure, i.e. expansion of the metro lines, renewal of the
stock of the city's transport and roads construction. The
administration closely works in cooperation with international
financial institutions to attract investments and implement
infrastructure projects.

RATING SENSITIVITIES

Kharkov's ratings are constrained by the sovereign IDRs and could
be positively affected by a sovereign upgrade, providing the city
maintains its current sound fiscal performance.

Negative rating action on Ukraine would be mirrored on the city's
ratings.


KYIV CITY: Fitch Affirms B- Long-Term IDRs, Outlook Stable
----------------------------------------------------------
Fitch Ratings has affirmed the Ukrainian City of Kyiv's Long-Term
Foreign- and Local-Currency Issuer Default Ratings (IDRs) at
'B-'. Simultaneously Fitch has upgraded Kyiv's National Long-Term
Rating to 'A(ukr)' from 'A-(ukr)'. The Outlooks are Stable.

Fitch has also assigned PBR Kyiv Finance PLC's USD115.072 million
loan participation notes (LPN) due December 2022 a 'B-' rating.
The issuer is the city's financial SPV, and the LPN were issued
on a limited recourse basis for the sole purpose of financing a
loan made to the city. Thus they represent direct, unconditional,
unsecured and unsubordinated obligations of Kyiv and at all times
rank pari passu with all its unsecured and unsubordinated
obligations.

The upgrade of the National Rating reflects the improvement in
Kyiv's credit strength following the exchange of USD101.15
million of the non-restructured part of USD250 million LPN due in
2015 for new LPN due in 2022.

KEY RATING DRIVERS

Institutional Framework Assessed as Weakness

Ukraine's institutional framework lacks clarity and
sophistication, hindering long-term development and budget
planning of subnationals. The national government is under
pressure from a challenging reform agenda imposed by the IMF to
secure external funding. Political risks, which stem from
powerful vested interests and fragmented political parties, are
growing ahead of presidential and parliamentary elections in
2019.

Fiscal Performance Assessed as Neutral

Fitch expects Kyiv's financial performance will remain
satisfactory over the medium term. The city will continue to have
a close-to-balance budget and an operating balance at 22%-24% of
operating revenue. Performance will be supported by tax revenue
growth on the back of the continuation of the economic recovery
and a steady inflow of current transfers from the central
government. However, it remains fragile due to the overall
weakness of sovereign public finances and unpredictable fiscal
changes amid continued uncertainty over the pace of macroeconomic
stabilisation.

During 1H18 Kyiv collected 57% of revenue budgeted for full-year
and incurred only 44% of full-year expenditure, which led to a
mid-year surplus of UAH5.6 billion, close to 1H17 results. The
surplus was driven by faster tax revenue growth and much slower
expenditure dynamic due to capex concentration in 2H18. Fitch
expects expenditure acceleration by year-end and forecast a close
to balance full year fiscal results.

Debt and Other Long-Term Liabilities Assessed as Neutral
Following material fiscal surpluses over the last three years,
Kyiv's direct risk has been declining to a moderate 26.1% of
current revenue at end-2017 from a peak of 67% in 2014. However,
the debt is fully US dollar-denominated, exposing the city to FX
risk.

As of end September 2018, the city's outstanding direct debt was
represented by USD115.072 million LPN, issued on September 4,
2018 in exchange for USD101.15 million of the non-restructured
part of Kyiv's USD250 million Eurobond due in 2015. The new LPN
bear a 7.5% semi-annual coupon and will be redeemed in four equal
semi-annual instalments in 2021 and 2022.

Kyiv's direct risk also includes USD351.1 million obligations to
Ukraine's Ministry of Finance (MoF). The latter arose as a result
of the exchange of Kyiv's Eurobonds into Ukraine sovereign debt
in December 2015. According to the terms of debt exchange, Kyiv
makes semi-annual payments to compensate for the coupon payment
related to this debt servicing and should repay the principal in
two equal instalments in 2019 and 2020.

This exposes the city to two peaks of annual refinancing each
about UAH5 billion in 2019 and 2020. However, following
negotiations with the Ukrainian government the principal amount
at the due date will be reduced by UAH1.9 billion (equivalent to
Kyiv's repayment of domestic bonds series G in November 2016),
and by the amount of Kyiv's capex on bridge and metropolitan
construction (about UAH1.1 billion in 2017 and up to UAH3.9
billion in 2018). Fitch expects the city will continue
negotiations with the central government in offsetting the
remaining liabilities.

Kyiv's other obligations are UAH3.7 billion of interest-free
treasury loans contracted prior to 2014. As these loans were
granted to the city to finance mandates delegated by the central
government and will be written off by the state in the near
future. Fitch does not include this treasury loan in its
calculation of direct risk.

Kyiv remains exposed to contingent risk stemming from public
sector companies. The city had several outstanding guarantees
totalling EUR46.2 million as of mid-2018 to support projects in
public transportation, infrastructure and energy-saving. The
guaranteed loans are euro-denominated and relate mostly to two
city-owned companies, Kyivpastrans and Kyivmetropoliten. The
guarantees expire in 2021.

Economy Assessed as Weakness

Kyiv benefits from its status as Ukraine's capital and remains
the largest and wealthiest city in the country, with gross city
product accounting for about 23% of the country's GDP (2016). Its
economy is diversified across manufacturing and services, and
supported by a large number of major national and international
companies. However, Kyiv's economy still significantly lags
international peers, which justifies its assessment of the
economy as weakness.

In 2017 the Ukrainian economy continued its mild recovery with an
estimated GDP growth of 2.5%. Fitch expects Ukraine's GDP to grow
3.2%-3.5% in 2018-2019, which should positively impact Kyiv's
economic prospects.

Management and Administration Assessed as Neutral (revised from
Weakness)

Kyiv finally has completed the exchange of all outstanding
overdue liabilities of non-restructuring 2015 LPN and
successfully negotiated with MoF on reduction of outstanding
USD351.1 million obligations, which lead to its reassessment of
the Management Administration factor to Neutral.

However Ukraine's long-term financial planning is still in early
development, and the city administration's planning horizon is
limited to one year, which hinders the forecasting ability of
administration and makes the strategic planning difficult. High,
albeit declining, inflation and interest rates also make debt and
investment policies challenging.

RATING SENSITIVITIES

Kyiv's ratings are constrained by the sovereign IDRs and could be
positively affected by a sovereign upgrade, providing the city
maintains its current sound fiscal performance.

Negative rating action on Ukraine would be mirrored on the city's
ratings. A material increase of the city's indebtedness, combined
with deterioration of its financial flexibility, would lead to a
downgrade.


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


DRYDEN 63 GBP 2018: S&P Assigns B- (sf) Rating to Class F Notes
---------------------------------------------------------------
S&P Global Ratings assigned its credit ratings to Dryden 63 GBP
CLO 2018 B.V.'s class A-1, A-2, B-1, B-2, C-1, C-2, D, E, and F
notes. At the same time, Dryden 63 GBP CLO 2018 issued unrated
subordinated notes.

The ratings assigned to Dryden 63 GBP CLO 2018's notes reflect
S&P's assessment of:

-- The diversified collateral pool, which consists primarily of
     broadly syndicated speculative-grade senior secured term
     loans and bonds that are governed by collateral quality
     tests.

-- The credit enhancement provided through the subordination of
    cash flows, excess spread, and overcollateralization.

-- The collateral manager's experienced team, which can affect
    the performance of the rated notes through collateral
    selection, ongoing portfolio management, and trading.

-- The transaction's legal structure, which is bankruptcy
    remote.

-- The counterparty risks, which is mitigated and in line with
    S&P's criteria.

Under the transaction documents, the rated notes pay quarterly
interest unless a frequency switch event occurs. Following this,
the notes permanently switch to semiannual payments.

The portfolio's reinvestment period ends approximately four years
after closing, and the portfolio's maximum average maturity date
is 8.5 years after closing.

S&P said, "We understand that the portfolio is well-diversified,
primarily comprising broadly syndicated speculative-grade senior
secured term loans and senior secured bonds. Therefore, we have
conducted our credit and cash flow analysis by applying our
criteria for corporate cash flow collateralized debt obligations.

"Following the application of our structured finance ratings
above the sovereign criteria, we consider the transaction's
exposure to country risk to be limited at the assigned rating
levels, as the exposure to individual sovereigns does not exceed
the diversification thresholds outlined in our criteria.

"In our cash flow analysis, we used the GBP325 million target par
amount, the covenanted weighted-average spread (4.24%), the
reference weighted-average coupon (5.11%), and the target minimum
weighted-average recovery rate as indicated by the collateral
manager. The transaction also benefits from a GBP32.5 million
interest cap with a strike rate of 4%, reducing interest rate
mismatch between assets and liabilities in a scenario where
interest rates would exceed 4%. We applied various cash flow
stress scenarios, using four different default patterns, in
conjunction with different interest rate stress scenarios for
each liability rating category.

"We consider that the transaction's documented counterparty
replacement and remedy mechanisms adequately mitigate its
exposure to counterparty risk under our current counterparty
criteria."

Until the end of the reinvestment period on Oct. 15, 2022, the
collateral manager is allowed to substitute assets in the
portfolio for so long as our CDO Monitor test is maintained or
improved in relation to the initial ratings on the notes. This
test looks at the total amount of losses that the transaction can
sustain as established by the initial cash flows for each rating,
and compares that with the default potential of the current
portfolio plus par losses to date. As a result, until the end of
the reinvestment period, the collateral manager can, through
trading, deteriorate the transaction's current risk profile, as
long as the initial ratings are maintained.

At closing, S&P considers that the transaction's legal structure
is bankruptcy remote, in line with our legal criteria.

S&P said, "Following our analysis of the credit, cash flow,
counterparty, operational, and legal risks, we believe that our
ratings are commensurate with the available credit enhancement
for each class of notes from class A-1 to E notes."

Based on the actual characteristics of the portfolio and the
class F notes' credit enhancement (9.74%), this class is able to
sustain a steady-state scenario, where the current market level
of stress and collateral performance remains steady.
Consequently, S&P has assigned its 'B- (sf)' rating to the class
F notes, in line with our criteria.

Dryden 63 GBP CLO 2018 is a European cash flow corporate loan
collateralized loan obligation (CLO) GBP-denominated
securitization of a revolving pool, comprising mostly GBP-
denominated and euro-denominated senior secured loans and bonds
issued mainly by U.K. and European borrowers. PGIM Ltd. is the
collateral manager.

  Ratings Assigned

  Dryden 63 GBP CLO 2018 B.V.
  Class                   Rating        Amount
                                      (mil. GBP)

  A-1                     AAA (sf)      171.000
  A-2                     AAA (sf)      9.000
  B-1                     AA (sf)       29.100
  B-2                     AA (sf)       14.400
  C-1                     A (sf)        17.300
  C-2                     A (sf)        0.911
  D                       BBB (sf)      16.450
  E                       BB- (sf)      23.800
  F                       B- (sf)       11.400
  Sub. notes              NR            42.500

  NR--Not rated. Sub.--Subordinated.


HOUSE OF FRASER: Mike Ashley Lashes Out at "Greedy Landlords"
-------------------------------------------------------------
Oliver Gill at The Telegraph reports that Sports Direct boss Mike
Ashley has launched a fresh attack on "greedy landlords" who
refuse to accept his demands on renegotiated House of Fraser
leases.

According to The Telegraph, announcing the closure of stores in
Edinburgh, Hull and Swindon, Mr. Ashley warned of further
closures if landlords refused to agree new terms.

The retail tycoon bought House of Fraser for GBP90 million in
August after it went into administration, The Telegraph recounts.
Mr. Ashley previously vowed to keep most of the department
store's 59 sites open, The Telegraph notes.

A total of 20 stores have now been "saved", Mr. Ashley, as cited
by The Telegraph, said in a statement.  Some 15 stores that had
previously been earmarked for closure under a company voluntary
arrangement (CVA) earlier this year will now remain open, The
Telegraph discloses.

"We continue to hope to save at least 80 per cent of stores.
We've shown what we can achieve on the British high street when
we work together with landlords.  I would like to thank those
landlords who have helped us to rescue approximately 3,500 jobs
at the stores we have saved to date," The Telegraph quotes Mr.
Ashley as saying.  "However, I am disappointed that in my opinion
a small number of greedy landlords still refuse to be
reasonable."


                            *********

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

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

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


                            *********


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

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

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

This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed to
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The TCR Europe subscription rate is US$775 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
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                 * * * End of Transmission * * *