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

                           E U R O P E

          Friday, September 28, 2018, Vol. 19, No. 193


                            Headlines


B E L G I U M

NYRSTAR N.V.: S&P Cuts Issuer Credit Rating to CCC+, Outlook Neg.


C R O A T I A

HRVATSKA ELEKTROPRIVREDA: S&P Affirms 'BB' Ratings, Outlook Pos.


I T A L Y

ALITALIA SPA: Returns to Profitability in Third Quarter 2018


M A L T A

PILATUS BANK: EBA Backs MFSA Recommendation to Withdraw License


N E T H E R L A N D S

NEP/NCP HOLDCO: Moody's Affirms B2 CFR, Alters Outlook to Stable


R U S S I A

SUEK JSC: Fitch Affirms BB Long-Term IDR, Outlook Stable


S P A I N

TDA 24: Fitch Raises Rating on Class A1 Notes to 'BB+sf'


T U R K E Y

AKBANK TAS: Moody's Lowers Long-Term Deposit Rating to B2
EMINIS AMBALAJ: Applies for Arrangement of Bankruptcy
VB DPR: S&P Withdraws B+ Rating on 2011-A Floating-Rate Notes


U N I T E D   K I N G D O M

BRACKEN MIDCO1: Fitch Rates GBP350MM Sr. PIK Toggle Notes B
CARLUCCIO'S: Norwich Branch to Close on Dec. 23 as Part of CVA
FORCE INDIA: Uralkali Launches Legal Action v. Administrators
GKN HOLDINGS: Moody's Confirms Ba1 CFR, Outlook Stable
HIBU MIDCO: S&P Lifts Issuer Credit Rating to 'B', Outlook Stable


X X X X X X X X

* BOOK REVIEW: Competitive Strategy for Healthcare


                            *********



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B E L G I U M
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NYRSTAR N.V.: S&P Cuts Issuer Credit Rating to CCC+, Outlook Neg.
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S&P Global Ratings lowered to 'CCC+' from 'B-' its long-term
issuer credit rating on Belgian zinc producer Nyrstar, N.V. The
outlook is negative.

S&P said, "At the same time, we lowered to 'CCC' from 'B-' our
issue rating on the group's EUR500 million senior unsecured notes
due 2024 and EUR350 million senior unsecured notes due 2019. The
recovery rating is '5', indicating our expectation of modest
recovery (10%-30%; rounded estimate: 25%) in the event of a
payment default.

"The negative rating action reflects our view of Nyrstar's weak
performance year-to-date and deterioration of the company's
liquidity. In our view, the negative sentiment could result in a
material headwind for the company's ability to refinance its
EUR500 million maturities in the coming 12 months, including the
EUR350 million notes due in September 2019 and about EUR150
million of prepayments.

"We are now expecting an adjusted EBITDA of EUR200 million-EUR220
million in 2018 and negative free operating cash flow (FOCF) of
EUR120 million-EUR140 million. Coupled with the company's
sizeable debt (as of June 30, 2018 the reported gross debt level
was EUR1.3 billion and adjusted debt EUR1.9 billion), this would
result in an adjusted debt to EBITDA of more than 8.0x. As a
result of the expected improvement in the company's results in
2019, we currently do not see the company's capital structure as
unsustainable."

Nyrstar recently released a profit warning for the third quarter
of the year, indicating that it is likely to record an underlying
EBITDA result for the second half of 2018 materially below the
EUR120 million achieved in the first half. S&P understands this
is due to the significant fall in zinc prices (a drop of 25% from
the average price in the first half of the year). Prior to the
recent announcement, S&P expected the company would show a
recovery in the EBITDA in the second half of the year, taking
into account some contribution from the higher mining volumes,
more favorable exchange rates, some contribution from the Port
Pirie (South Australia) project, and benefits from the company's
hedge position.

The company reiterated its full-year guidance for production and
capital expenditure (capex) and positive FOCF generation. S&P
notes that the latter is the result of an expected working
capital inflow of about EUR100 million.

Trading was soft in the first two quarters of the year, on the
back of low zinc treatment charges (TCs), reduced production at
Port Pirie due to a planned maintenance shut down, and the
weakening of the U.S. dollar against the euro.

S&P said, "Our assessment of Nyrstar's business risk profile as
weak predominantly reflects the nature of its metal processing
activities (80% of 2017 EBITDA). The zinc-refining industry is
fragmented and volatile, and is currently subject to overcapacity
leading to reduced refining margins. Despite being one of the
largest zinc producers globally, Nyrstar has limited ability to
differentiate itself from peers given the commodity nature of the
product. Our assessment is constrained by the company's
relatively small scale in the context of the global metals and
mining industry, as well as by its very low and volatile
profitability. Positively, however, it has high operating
diversity as there is no revenue concentration relating to any
one asset. We believe that the company's competitive position
will strengthen somewhat after the redevelopment of Port Pirie
because it will be transformed from a primary lead smelter into
an advanced polymetallic processing and recovery center capable
of processing a wider range of high margin metal bearing feed
materials. Once reaching full capacity in 2019, the facility will
allow Nyrstar to extract value from high-margin metal-bearing
feed materials, including lead and silver.

"The negative outlook reflects the possibility that we could
further downgrade Nyrstar in the next six-12 months if it fails
to address its weak liquidity, namely the EUR350 million notes
due September 2019.

"In our view, the volatility of zinc prices and low earning
visibility in the coming quarters may pose some challenges to
capital market access.

"Under our base-case scenario, as a result of the expected
improvement in the company's results in 2019, we currently do not
see the company's capital structure as unsustainable. We forecast
Nyrstar's adjusted debt to EBITDA at 8.5x-9.0x at year-end 2018,
improving to about 6.0x at year-end 2019."

S&P could consider a further negative rating action if:

-- S&P saw no progress in the refinancing of the upcoming
    different maturities, including prepayments and notes, and if
    the company failed to extend the maturity of its Trafigura
    line.

-- Nyrstar made a distress exchange offer (either a voluntary
    agreement with the noteholders to extend the maturity of the
    note or purchasing the notes below par).

-- S&P saw a material negating FOCF, stemming from further
    deterioration in the macroenvironment or from operational
    setbacks. Alternatively, negative FOCF could result from
    recovering zinc prices to $3,000/ton or more, which would
    require a significant working capital outflow.

S&P could consider revising the outlook to stable in the coming
six months if the company addressed its upcoming maturities.

Over time, an upgrade would be subject to Nyrstar's ability to
deliver robust operating performances, with adjusted debt to
EBITDA trending toward 5x, together with positive FOCF.


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C R O A T I A
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HRVATSKA ELEKTROPRIVREDA: S&P Affirms 'BB' Ratings, Outlook Pos.
----------------------------------------------------------------
S&P Global Ratings revised its outlook on Croatian vertically
integrated multi-utility Hrvatska Elektroprivreda (HEP) to
positive from stable.

S&P said, "At the same time, we affirmed our 'BB' long-term
issuer credit rating on HEP and our 'BB' issue rating on its
senior unsecured debt.

"The outlook revision mirrors that on the sovereign rating.
Because of our analysis of HEP being very important to Croatia
and having a strong link with the government, we believe that the
Croatian government is highly likely to provide extraordinary
support to HEP in the event of financial distress. HEP is
currently 100% owned by the Croatian government and we do not
expect it to be privatized in the medium term."

HEP is a Croatian state-owned utility and operates under the form
of a holding company with several wholly and mixed owned
subsidiaries.

HEP has been a vertically integrated and unrivalled utility in
the Croatian electricity market for more than a century. At year-
end 2017, the group's S&P Global Ratings-adjusted EBITDA and net
debt amounted to about Croatian kuna (HRK)4.2 billion and HRK3.2
billion, respectively. The group benefits from the monopoly
ownership and operation of the transmission and distribution
networks, from which it derives around half of its EBITDA.

The other half of HEP's EBITDA stems from its dominant position
in electricity generation supply and retail markets, with a
market share of more than 80%. HEP has a dominant retail market
share (about 85%). Since market opening in 2014, only about 15%
of the retail market has moved to competitors. HEP has limited
geographic diversification as the group's activities are largely
focused on Croatia, a relatively small market with uncertain
long-term growth prospects. Although the transparency and clarity
of the Croatian regulatory framework are improving, S&P continues
to view the regulatory support as weaker than in many other
Western European jurisdictions.

HEP maintained solid metrics, with funds from operations (FFO) to
debt of 95% in 2015, and 115%-116% in 2016-2017. Despite
relatively stable cash flows over the last three years, HEP's
credit metrics are exposed to volatility because of its hydro
electric activity. The group's credit metrics are vulnerable to
drought episodes, as observed in 2011 and 2012 when HEP's EBITDA
declined by more than 50%. S&P said, "This potential volatility
weighs on our assessment of the company's financial risk profile.
Indeed, despite recently improving metrics, we still see a risk
that HEP's cash flows could be volatile and credit metrics remain
exposed to adverse hydrological conditions. We understand that
recent regulatory changes could increase stability and
predictability of cash flows and reduce historical volatility. If
we observe such a change over a sustained period, we would likely
revise upward our stand-alone credit profile (SACP) on HEP."

S&P said, "Another risk factor in our assessment of HEP's
financial risk profile is the company's negative discretionary
cash flow (DCF)-to-debt ratio, which reflects the risk of large
investments committed by the group, dividend payments to the
state, and potential acquisitions. That said, we understand that
HEP has some financial flexibility, as it can defer and cancel
investments. In addition, the state has rescheduled dividends in
the past.

"The positive outlook on HEP reflects that on the sovereign
rating on Croatia and the possibility that if we were to upgrade
Croatia it could lead us to raise the rating on HEP. It also
reflects our opinion that the company's SACP will remain at least
at 'bb-' (currently 'bb'). This assumes in particular no material
changes to the group's structure and that HEP will continue to
proactively manage its liquidity position to avoid any liquidity
pressures. We would likely raise our ratings on HEP if we raised
our ratings on Croatia.

"Upside could also stem from improvements in the SACP. Our 'bb'
assessment of HEP's SACP is based on our base-case forecasts,
which demonstrate S&P Global Ratings-adjusted FFO to debt above
60%. We may revise upward our assessment of the company's SACP to
'bb+' if we see a track record of less volatile cash flows and
more predictable liquidity and leverage. That said, given HEP's
100% state-ownership and the risk of potential negative
extraordinary government intervention, our rating on HEP is
unlikely to exceed that on the sovereign.

"We would revise the outlook to stable if we revised the outlook
on Croatia to stable. Assuming no change to our expectation of a
high likelihood of extraordinary state support, a downgrade of
HEP by one notch would require the SACP to move down by two
notches to 'bb-', which is unlikely in our current base case."


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I T A L Y
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ALITALIA SPA: Returns to Profitability in Third Quarter 2018
------------------------------------------------------------
Alberto Sisto at Reuters reports that Alitalia returned to a net
profit of EUR2 million (US$2.35 million) in the third quarter,
Stefano Paleari, one of the commissioners managing the airline,
said on Sept. 26 in a sign that the fortunes of the airline were
slowly improving.

Once a symbol of Italy's post-war economic boom but recently in
trouble due to low-cost carriers and high speed trains, Alitalia
was put under special administration last year after workers
rejected its latest rescue plan, Reuters relates.

In the first nine months of the year, revenues at the airline
rose 4.6% to EUR2.35 billion, while its EBITDA loss, excluding
non-recurring items, was reduced to a loss of EUR59 million from
a loss of EUR246 million in the same period last year, Reuters
discloses.

Mr. Paleari said for the full year, Alitalia is expected to post
revenues of above EUR3 billion, Reuters notes.


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M A L T A
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PILATUS BANK: EBA Backs MFSA Recommendation to Withdraw License
---------------------------------------------------------------
Francesco Guarascio at Reuters reports that Europe's banking
watchdog has backed a recommendation by the Maltese financial
regulator to withdraw Pilatus Bank's banking license following
the indictment of its chairman for money laundering.

According to Reuters, EBA's move puts pressure on the European
Central Bank which is expected to make a decision on whether to
withdraw Pilatus's license as early as this week.

In a letter dated Sept. 24 and sent to European Union lawmakers,
European Banking Authority chairman Andrea Enria said the move by
the Maltese Financial Services Authority (MFSA) was justified by
"the current circumstances of the bank's ultimate beneficial
owner," Ali Sadr Hashemi Nejad, Reuters relates.  He was indicted
in the United States in March for bank fraud, money laundering
and the evasion of U.S. sanctions against Iran, Reuters recounts.

Malta's regulator had recommended the withdrawal of Pilatus'
license in June after Ali Sadr's arrest in the United States,
Reuters discloses.

The MFSA was investigated by EBA for its decision to grant a
banking license to Pilatus in 2014 and for its supervision of the
bank, Reuters relays.

That investigation has now been closed, Enria, as cited by
Reuters, said in the letter, because EU rules are too vague and
"make it difficult to conclude that there have been breaches of
clear and unconditional obligations."

The Maltese regulator said earlier on Sept. 25 the EBA had
dropped its investigations against the agency, according to
Reuters.


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N E T H E R L A N D S
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NEP/NCP HOLDCO: Moody's Affirms B2 CFR, Alters Outlook to Stable
----------------------------------------------------------------
Moody's Investors Service affirmed the B2 Corporate Family Rating
and the B2-PD Probability of Default Rating of NEP/NCP Holdco,
Inc. (NEP), and revised its outlook to stable from negative.
Moody's assigned a B1 rating to new $1.29 billion senior secured
1st lien USD credit facilities and a Caa1 rating to new $330
million senior secured 2nd lien term loan, issued by NEP. In
addition, Moody's assigned a B1 rating to a EUR397 million Euro
denominated 1st lien term loan issued by NEP Europe Finco B.V.
The refinancing is launched upon Carlyle Global Partners'
purchase of Crestview's share in the company. The credit
agreement is expected to contain a collateral allocation
mechanism that will equalize the recovery of first lien revolver
and term loan lenders to NEP and NEP Europe Finco B.V. by re-
allocating exposures to individual tranches based on lenders'
pro-rata share of total first lien debt in the event of default.
As a result, Moody's ranks the first lien debt of NEP and NEP
Europe Finco B.V. the same in the loss given default framework
and rates the facilities the same at B1. Moody's will withdraw
the secured ratings on existing bank credit facilities upon
closing of the refinancing transaction.

NEP/NCP Holdco, Inc.

Corporate Family Rating, affirmed at B2

Probability of Default Rating, affirmed at B2-PD

Gtd Senior Secured First Lien Multi Currency Revolving Credit
Facility due 2023, assigned B1 (LGD3)

Gtd Senior Secured First Lien Term Loan due 2025, assigned B1
(LGD3)

Gtd Senior Secured Second Lien Term Loan due 2026, assigned Caa1
(LGD5)

Outlook, revised to Stable from Negative

NEP Europe Finco B.V.

Gtd Senior Secured First Lien Term Loan due 2025, assigned B1
(LGD3)

Outlook, revised to Stable from Negative

Ratings to be withdrawn

NEP/NCP Holdco, Inc.

Senior Secured First Lien Revolving Credit Facility due 2022, B2
(LGD3)

Senior Secured First Lien Term Loan due 2022, B2 (LGD3)

Senior Secured Second Lien Term Loan due 2023, Caa1 (LGD6)

NEP Europe Finco B.V.

Senior Secured First Lien Term Loan due 2024, B2 (LGD3)

RATINGS RATIONALE

NEP's B2 CFR reflects the company's acquisitive debt-funded
growth strategy, its high leverage and continued need for capital
spending to maintain and win new contracts for its outsourced
media services business. It also incorporates the company's
demonstrated ability to expand its portfolio of services and its
broader customer universe, its dominant position within the
outsourced media sector and its ability to successfully integrate
acquisitions while continuing to win new contracts organically as
well.

Pro-forma for the revised capital structure, NEP's leverage
remains high at 5.7x (incorporating Moody's standard adjustments
and giving full year credit for recent acquisitions and new
contract wins) and Moody's expects it to remain in the mid to low
5x range over the next 12-18 months as the company tends to raise
incremental debt as it de-levers to fund capital needs for new
and prospective contracts. Moody's believes that ongoing heavy
investments to service existing and new contracts and pursue
acquisitions is an ongoing credit concern because it constrains
the company's ability to delever. The investments also result in
continued negative free cash flow, tight interest coverage, and
ongoing liquidity needs. The strategy results in ongoing reliance
on the revolver and requires good operating execution. NEP's
sponsor ownership further constrains the rating via increased
likelihood of leveraging events, such as acquisitions and
dividends.

NEP's long standing leading position within its niche business
facilitates good client relationships as well as access to
potential acquisitions, and its contractual relationships with
key broadcast networks and cable channels provide some measure of
revenue stability. NEP faces competition from smaller providers,
but its growing scale and geographic and product diversity leave
it less vulnerable to competition for any particular event or
within a given region.

Moody's affirmation of the B2 CFR is supported by the company's
ability to generate good revenue growth at a solid EBITDA margin.
NEP's 2018 performance has exceeded budget and Moody's expects
the company to maintain strong organic and acquisitive growth
over the next 12-18 months. Moody's also believes that while free
cash flow prior to more discretionary spending tied to contract
wins has trailed expectations, it remains positive. The stable
outlook reflects Moody's expectations that NEP will continue to
grow its revenue and EBITDA in the outsourced media sector while
continuing to address its growing capital expenditure needs
through incremental debt raises, which would prevent its debt-to-
EBITDA leverage from declining materially and free cash flow from
turning positive. Moody's believes that the company's dominant
position in the media outsourced services sector and its unique
and comprehensive product offering together with contractual
revenue base serves to mitigate operating risk in an event of an
economic downturn. Moody's also expects that the company will be
able to reduce some of its capital expenditure needs in an event
that its revenue declines. Moody's expects debt-to-EBITDA
leverage to remain above 5x, with some margin improvement as
NEP's scale provides it with stronger operating efficiencies.

A downgrade could occur if EBITDA growth does not keep pace with
incremental debt raises, with sustained leverage above 6x
(incorporating Moody's standard adjustments) and the ongoing
acquisitive growth strategy continues to drive negative free cash
flow and weak EBITDA less capital expenditures-to-interest
coverage of less than 1x EBITDA. Any shortfall in operating
performance, deterioration of liquidity or expectations for
sustained leverage of 6x debt-to-EBITDA or higher would also
likely lead to a downgrade.

Given the current trajectory of the business, Moody's does not
anticipate an upgrade in the foreseeable future. An upgrade would
require profitable growth leading to debt-to-EBITDA around 4x or
lower, free cash flow-to-debt of at least 5%, and good liquidity.

The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.

NEP/NCP Holdco, Inc. (NEP) provides outsourced media services
necessary for the delivery of live broadcast of sports and
entertainment events to television and cable networks, television
content providers, and sports and entertainment producers. Its
major customers include television networks such as ESPN, and key
events it supports include the Super Bowl, the Olympics and
sporting events such as Major League Baseball and Sky and
Scottish Premier League football, as well as entertainment shows
such as American Idol and The Voice. The company is owned
primarily by the Carlyle Group.


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R U S S I A
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SUEK JSC: Fitch Affirms BB Long-Term IDR, Outlook Stable
--------------------------------------------------------
Fitch Ratings has affirmed JSC SUEK's Foreign Currency Long-term
Issuer Default Rating at 'BB' with Stable Outlook following the
acquisition of Siberian Generation Company LLC (SGK), a Russian
electricity and heat producer and a related party, announced in
August 2018.

Fitch views the acquisition as credit-neutral for SUEK as Fitch
expects its funds from operations (FFO) adjusted gross leverage,
post-acquisition, to remain within its 3.5x negative sensitivity
over the medium-term. The benefits of the acquisition for SUEK
include vertical integration into SGK's electricity and heat
generation assets, better visibility on revenue and earnings, and
potential cost synergies due to a larger scale. On the other
hand, the deal would delay SUEK's deleveraging and increase
exposure to Russian regulatory environment in the power utilities
sector.

KEY RATING DRIVERS
Forecast Leverage within Guidance: In Fitch's estimate, SUEK's
acquisition of SGK will result in higher than previously
anticipated consolidated leverage in 2018-2019. However, Fitch
expects SGK to add scale, earnings predictability and neutral-to-
positive free cash flow (FCF) to SUEK's business. Fitch projects
that the 2018 benign coal market and the contribution of SGK's
earnings will compensate for higher debt due to the acquisition-
related liability and SGK's debt appearing on SUEK's balance
sheet, which will lift FFO adjusted gross leverage to around 3.5x
at end-2018, from 3.1x at end-2017.

Starting from 2019 Fitch expects a moderation in coal prices that
should be mitigated by SGK's positive FCF. Following the full-
year consolidation of SGK's results in 2019, SUEK's leverage
should stabilise at just above 3x, below its 3.5x negative rating
sensitivity.

Mid-Sized Russian Utility Company: SGK is a mid-sized Russian
electricity and heat generation company that operates in Siberia
with a 25%-30% regional market share. Its installed capacity is
10.9GWt. It provides electricity, capacity and heat to customers
in the relatively affluent regions of Kemerovo, Krasnoyarsk and
Novosibirsk, as well as Altai, Tuva and Khakasia. SGC had been
owned by Andrey Melnichenko, the beneficial owner of SUEK. SGK is
also a major buyer of SUEK's brown coal, which accounts for most
of SGK's fuel purchases and for almost half of SUEK's domestic
coal sales. The high level of operating integration between SUEK
and SGK, in its view, is beneficial and would contribute to
improved profitability of the combined group over time.

Post-Deal Uncertainties Mitigated: Fitch estimates that following
the completion of the acquisition, SUEK will remain a
predominantly coal producer with a smaller utilities segment.
Fitch forecasts that from 2019 its coal revenue will account for
two-thirds and electricity, heat and capacity revenue for the
remainder of consolidated revenue. Potential post-acquisition
uncertainties include SGK's capex associated with the new
mechanism incentivising the modernisation of thermal power plant
capacity. This is largely mitigated by SGK's successful
participation in a similar lucrative capacity supply agreement
(CSA) scheme, which allowed it to modernise 27% of its capacities
during 2009-2014, and boost its revenue and earnings.

Large Thermal Coal Producer: SUEK is a top seaborne thermal coal
exporter globally and is the largest supplier of brown coal in
Russia. In 2017 the company exported half of its 108mt thermal
coal production to the Asia-Pacific (APAC) and Atlantic markets.
SUEK exports high-quality hard coal processed through washing;
export sales generate over 75% of its gross revenue. The company
projects that its coal output will exceed 110mt over the next
three years as new open-pit and underground mines in Kuzbass,
Urgal and Primorye are developed. SUEK's hard coal reserve life
is comfortable at more than 30 years.

Domestic Coal Sales Remain Low-Margin: SUEK's domestic revenue
contributes around 20% of total revenue and mainly comprises
sales of brown coal, which is lower-priced than hard coal due to
its lower calorific value. Domestic sales are stable, since
volumes are mainly secured by long-term supply contracts with
electric power plants and utility companies, including SGK.
Changes in domestic coal prices are linked to rouble inflation,
and so are independent of export market volatility, resulting in
lower but more stable profitability for domestic sales. Following
the completion of the SGK deal, Fitch does not expect
significantly higher profitability of domestic coal sales, as
sales are currently carried at arm's length.

Competitive Coal Cost Position: SUEK has low cash production
costs, underpinned by a high share of open pit-mined coal, both
brown and hard, a weak rouble, and efficiency improvement
measures implemented over the last few years. The company
benefits from vertical integration in the processing, washing and
logistics infrastructure. SUEK owns major export ports Murmansk,
Vanino and the dedicated Maly port, and controls more than 70% of
the open-top railcars needed for its operations. SUEK's mining
assets are remote from export sea ports compared with global
mining peers', but the company is positioned on the first to
second quartile of the global cost curve by total cash costs,
which stood at around USD50/t in 2017, according to CRU.

Railcar Leases Increase Leverage: SUEK has significant rail
transportation requirements. Availability of railcars is crucial
for its operations, especially for export destinations. To
address this issue and achieve greater control over railcar
rates, SUEK is planning to increase both owned fleet and railcars
under operating leases over the coming years. Fitch capitalises
operating leases using the 6x multiple applicable for Russian
issuers. SUEK's higher operating lease charge of USD180 million-
USD190 million expected from 2018 adds around USD1.1 billion, or
25%-27%, to its Fitch-calculated adjusted gross debt, compared
with below 20% in 2015-2017.

Flexible Capex and Dividends: SUEK's leverage decreased to 3.1x
at end-2017 from peaks of 4.0x in 2014-2016 due to a coal price
rebound, growth in higher-margin export sales and a continuing
increase in the average grades of export coal due to washing.
However, SUEK's EBITDA remains sensitive to export coal price
volatility. The company can adjust to market downturns by cutting
capex from its projected USD600 million per year (excluding SGK's
capex) to the maintenance level of USD200 million-USD250 million
per year.

Although SUEK paid no dividends in 2014-2017 due to high
leverage, Fitch expects the company to commence dividend payments
when its net debt/EBITDA leverage declines to 2.5x or below.
Fitch does not expect dividends earlier than 2020 when SUEK's net
debt/EBITDA should reutrns comfortably to 2x-2.5x, which broadly
corresponds to 3x-3.5x FFO adjusted gross leverage.

Solid Coal Fundamentals: Thermal coal remains a key energy source
with above a 35% share in global power generation. Fitch and CRU
expect demand for thermal coal will be stable over the next 10
years. A projected decline in coal use in developed countries
will be compensated by rising consumption in emerging markets, eg
India and other APAC countries where large baseload coal-fired
power capacities are being added. At the same time, increased
penetration of competitive renewable sources and concerns over
environmental issues put pressure on further coal consumption
growth.

On the supply side, social and environmental opposition to new
mines result in fewer projects currently in the development
phase, leading to a potential underinvestment in the industry,
which should support prices in the medium term. Nevertheless,
Fitch conservatively assume that Australia Newcastle (6,000
kcal/kg) will decline from an average of USD88/t for the rest of
2018 year towards USD75/t in 2021.

DERIVATION SUMMARY

SUEK is Russia's top thermal coal producer operating 26 mines in
several regions, and one of the largest exporters of seaborne
thermal coal globally. SUEK is comparable with AO Holding Company
Metalloinvest (BB/Positive) and PJSC ALROSA (BB+/Positive) in
scale, diversification and better-than-average mining cost
position. However, SUEK lacks ALROSA's global market leadership
in raw diamonds. In comparison with Russian gold producer PJSC
Polyus (BB-/Positive), SUEK is larger in scale but its global
cost curve position trails that of Polyus. SUEK's leverage
profile is comparable with that of Polyus, but trails ALROSA's
and Metalloinvest's.

KEY ASSUMPTIONS

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

  - Thermal coal Newcastle 6000k in line with Fitch mid-cycle
commodity price assumptions declining towards USD75/t in 2021

  - Domestic coal price growth at slightly below rouble inflation
rate

  - Growth in coal production volumes to 110mt by 2020

  - Consolidated capex of around USD850 million in 2018 and
USD800 million in 2019-2021 per year

  - Dividend payments commence from 2020 as net debt / EBITDA
returns to 2.0x-2.5x

  - USD/RUB exchange rate of 61 in 2018; 62.5 in 2019 and 62
thereafter

RATING SENSITIVITIES

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

  - FFO adjusted gross leverage sustainably below 2.5x combined
with an extended and smoother debt maturity profile

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

  - Subdued coal  markets,  aggressive  dividends  or  M&A
driving  FFO  adjusted  gross  leverage  sustainably  above 3.5x

  - Negative FCF on a sustained basis

  - EBITDAR margin sustainably below 20%

  - Deteriorating liquidity position

LIQUIDITY AND DEBT STRUCTURE

Sufficient Consolidated Liquidity: Fitch estimates that at June
30, 2018 SUEK had cash balances of USD529 million and unutilised
credit facilities of USD1.64 billion that were sufficient to
cover the consolidated SUEK's and SGK's short-term indebtedness.
Fitch expects that the acquisition will not weaken the combined
group's liquidity due to SUEK's proven access to bank financing
and the domestic bond market, plus SUEK's FCF generation is
expected by Fitch to reach USD700 million-USD800 million this
year and next.

SUMMARY OF FINANCIAL STATEMENT ADJUSTMENTS

  - Operating lease expense of USD140 million in 2017 was
capitalised using a 6x multiple, in line with the Fitch's
approach to Russian issuers

  - USD29 million cross-currency derivative at end-2017 was added
to debt

  - Dividends to non-controlling interest of USD16 million paid
in 2017 were deducted from EBITDA


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


TDA 24: Fitch Raises Rating on Class A1 Notes to 'BB+sf'
--------------------------------------------------------
Fitch Ratings has upgraded three tranches and affirmed eight
tranches of four Spanish RMBS transactions. One tranche has been
removed from Rating Watch Positive (RWP).

The transactions comprise Spanish residential mortgages
originated and serviced by Abanca (BB+/Positive/B) for HT Abanca
RMBS II, Caixabank, S.A. (BBB/Positive/F2) and Caja Castilla La
Mancha (unrated) for TDA 24, Banco de Sabadell S.A. (unrated) and
Banca March (unrated) for TDA 29, and Banca March for TDA 30.

KEY RATING DRIVERS

Asset Performance

HT Abanca RMBS II, TDA 29 and TDA 30 continue to show sound asset
performance with three-month plus arrears (excluding defaults) as
a percentage of current pool balance lower than 0.4% as of the
latest reporting date. Fitch expects performance to remain stable
due to the seasoning of the mortgage portfolios, the prevailing
low interest rate environment and the Spanish macroeconomic
outlook. The stable asset outlook is reflected in the upgrade of
TDA 29 and TDA 30's senior notes and the revision of the Outlook
on HT Abanca RMBS II to Positive.

TDA 24 continues to show weak performance with cumulative
defaults as a percentage of original pool balance at 8.9% as of
the latest reporting date. Loans originated by Credifimo
contribute to the majority of loan defaults as well as to the
weak recoveries realised to date. The upgrade of the class A1
notes reflects the prevailing sequential amortisation of
liabilities and the probability of full repayment in the short to
medium term. The principal deficiency ledgers continue increasing
to EUR25.2 million as of May 2018 versus EUR23.7 million last
year. This principal deficiency is reflected in the class B to D
notes' sub-investment grade ratings of 'CCsf' and 'Csf'.

TDA 30 Swap Ignored

Fitch has not given credit to the swap arrangement in TDA 30, as
the current hedging provider Banco Santander SA (A-/F2) is not in
line with the contractually defined applicable minimum
eligibility triggers of 'A' and 'F1', and transaction parties
have confirmed no restructuring or remedial actions will be
implemented.

Payment Interruption Risk Caps TDA 29

Fitch views TDA 29 as exposed to payment interruption risk as the
available structural mitigant of a reserve fund (reduced by the
expected loss) remains insufficient to fully cover stressed
senior fees, net swap payments and stressed note interests in the
event of a servicer disruption event. As a result, Fitch has
capped the notes at 'A+sf' unless payment interruption risk is
sufficiently mitigated.

According to Fitch's Counterparty Criteria for Structure Finance
and Covered Bonds, the maximum achievable rating for transactions
exposed to payment interruption risk is five notches above the
rating of the collection account bank, so long as the bank is a
regulated institution in a developed market. Even though the
collection account banks in TDA 29 are not rated by Fitch, the
maximum achievable rating for this transaction of 'A+sf' is
substantiated by the established retail franchise of both
collection account banks (Banco de Sabadell S.A. and Banca
March), the availability of bank ratings by other internationally
recognised agencies, and the robust banking sector supervision in
Spain.

VARIATIONS FROM CRITERIA

Increasing Instalment Loans

In its analysis of HT Abanca RMBS II, Fitch has increased by 5%
the foreclosure frequency (FF) expectation for instalment build-
up loans that come from previous securitisations (AyT Colaterales
Global Hipotecario, FTA Series Caixa Galicia I and II,
representing 54.6% of the portfolio), due to the stable credit
performance since these transactions were originated in 2008.
This constitutes a variation from the agency's European RMBS
Rating Criteria, which makes a 50% FF adjustment for instalment
build-up loans.

RATING SENSITIVITIES

A worsening of the Spanish macroeconomic environment especially
employment conditions, or an abrupt shift of interest rates could
jeopardise the underlying borrowers' affordability. This could
have negative rating implications, especially for junior tranches
that are less protected by structural credit enhancement.

With regards to TDA 29, so long as payment interruption risk is
not fully mitigated, the maximum achievable rating of the notes
will remain capped at 'A+sf'.

DATA ADEQUACY

Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset
pools and the transactions.

For HT Abanca RMBS II, the latest loan-by-loan portfolio data
with respect to borrower employment status sourced from the
European Data Warehouse did not reconcile with the past
information received from Haya Titulizacion SGFT (Haya). Fitch
has taken the most recent reporting data from the European Data
Warehouse as input for the agency analysis. For TDA 24, because
the latest loan-by-loan portfolio data sourced from the European
Data Warehouse did not include information about property ID
values, Fitch has derived property ID values based on valuation
amount, valuation date and borrower ID values, in line with prior
years' analysis. For TDA 29 and TDA 30, there were no findings
that affected the rating analysis.

For TDA 24, TDA 29 and TDA 30 Fitch has not reviewed the results
of any third party assessment of the asset portfolio information
or conducted a review of origination files as part of its ongoing
monitoring. Fitch did not undertake a review of the information
provided about the underlying asset pool ahead of the
transactions' initial closing. The subsequent performance of the
transaction over the years is consistent with the agency's
expectations given the operating environment and Fitch is
therefore satisfied that the asset pool information relied upon
for its initial rating analysis was adequately reliable.

For HT Abanca RMBS II, prior to the transaction closing, Fitch
reviewed the results of a third party assessment conducted on the
asset portfolio information and concluded that there were no
findings that affected the rating analysis.

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

SOURCES OF INFORMATION

The information here was used in the analysis:

HT Abanca RMBS II

Issuer and servicer reports dated July 2018 provided by Haya.

Loan level data as of July 2018 sourced from the European Data
Warehouse.

TDA 24

Issuer and servicer reports dated June 2018 provided by
Titulizacion de Activos SGFT (TdA).

Loan level data as of August 2018 provided by TdA.

TDA 29

Issuer and servicer reports dated May 2018 provided by TdA.

Loan level data as of April 2018 sourced from the European Data
Warehouse.

TDA 30

Issuer and servicer reports dated June 2018 provided by TdA.

Loan level data as of May 2018 sourced from the European Data
Warehouse

MODELS

ResiGlobal.

EMEA Cash Flow Model.

The rating actions are as follows:

HT Abanca RMBS II, FTA:

Class A notes (ISIN ES0305306005): affirmed at 'AAsf'; Outlook
revised to Positive from Stable

TDA 24, FTA:

Class A1 notes (ISIN ES0377952009 ): upgraded to 'BB+sf' from
'BBsf'; Outlook Stable

Class A2 notes (ISIN ES0377952017): affirmed at 'BBsf'; Outlook
Stable

Class B notes (ISIN ES0377952025: affirmed at 'CCsf'; Recovery
Estimate (RE) 0%

Class C notes (ISIN ES0377952033): affirmed at 'CCsf'; RE 0%

Class D notes (ISIN ES0377952041): affirmed at 'Csf'; RE 0%

TDA 29, FTA:

Class A2 notes (ISIN ES0377931011): upgraded to 'A+sf' from
'Asf'; Outlook Stable

Class B notes (ISIN ES0377931029): affirmed at 'BBBsf'; Outlook
Stable

Class C notes (ISIN ES0377931037): affirmed at 'Bsf'; Outlook
Stable

Class D notes (ISIN ES0377931045): affirmed at 'CCsf'; RE revised
to 95% from 30%

TDA 30, FTA:

Class A notes (ISIN ES0377844008): upgraded to 'AAsf' from 'AA-
sf'; off RWP; Outlook Stable


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


AKBANK TAS: Moody's Lowers Long-Term Deposit Rating to B2
---------------------------------------------------------
Moody's Investors Service has downgraded to B2 from B1 the long-
term foreign currency deposit ratings of Akbank TAS,
Alternatifbank A.S., ING Bank A.S. (Turkey), QNB Finansbank AS,
T.C. Ziraat Bankasi, Turk Ekonomi Bankasi A.S., Turkiye Garanti
Bankasi A.S., Turkiye Vakiflar Bankasi TAO and Yapi ve Kredi
Bankasi A.S.

The downgrades are driven by the lowering of Turkey's foreign
currency deposit ceiling to B2 from B1 on September 24, 2018:
Moody's lowers Turkey's country ceiling on foreign currency bank
deposits to B2.

The outlook on the ratings remains negative.

RATINGS RATIONALE

FOREIGN CURRENCY DEPOSIT RATINGS ARE IN SOME CASES CONSTRAINED BY
THE FOREIGN CURRENCY DEPOSIT CEILING

The downgrades are driven solely by the lowering of Turkey's
foreign currency deposit ceiling and do not reflect bank-specific
credit considerations. The lowering of the ceiling reflects
Moody's view that the risk of the government intervening to
prevent the withdrawal of foreign currency-denominated deposits
in order to conserve Turkey's foreign currency reserves has
risen.

As a consequence, the long-term foreign currency deposit ratings
of 9 banks are now constrained at B2.

FACTORS THAT COULD LEAD TO AN UPGRADE/DOWNGRADE

An upgrade is unlikely, given the current negative outlooks on
the banks. However, the outlooks could stabilise should the
Turkish lira become more stable, if there were a structural
reduction of the reliance of Turkish banks on foreign currency
funding, the banks' stock of problem loans stabilize, and returns
on tangible assets stabilize in line with recent years.

A downgrade could be driven by a persistently high market
volatility, a spike in corporate defaults, lower capital ratios,
or a material reduction in banks' profitability beyond Moody's
expectations.

LIST OF AFFECTED RATINGS

Issuer: Akbank TAS

Downgrade:

Senior Unsecured Deposit Rating (Foreign Currency), downgraded to
B2 Negative from B1 Negative

Issuer: Alternatifbank A.S.

Downgrade:

Senior Unsecured Deposit Rating (Foreign Currency), downgraded to
B2 Negative from B1 Negative

Issuer: ING Bank A.S. (Turkey)

Downgrade:

Senior Unsecured Deposit Rating (Foreign Currency), downgraded to
B2 Negative from B1 Negative

Issuer: QNB Finansbank AS

Downgrade:

Senior Unsecured Deposit Rating (Foreign Currency), downgraded to
B2 Negative from B1 Negative

Issuer: T.C. Ziraat Bankasi

Downgrade:

Senior Unsecured Deposit Rating (Foreign Currency), downgraded to
B2 Negative from B1 Negative

Issuer: Turk Ekonomi Bankasi A.S.

Downgrade:

Senior Unsecured Deposit Rating (Foreign Currency), downgraded to
B2 Negative from B1 Negative

Issuer: Turkiye Garanti Bankasi A.S.

Downgrade:

Senior Unsecured Deposit Rating (Foreign Currency), downgraded to
B2 Negative from B1 Negative

Issuer: Turkiye Vakiflar Bankasi TAO

Downgrade:

Senior Unsecured Deposit Rating (Foreign Currency), downgraded to
B2 Negative from B1 Negative

Issuer: Yapi ve Kredi Bankasi A.S.

Downgrade:

Senior Unsecured Deposit Rating (Foreign Currency), downgraded to
B2 Negative from B1 Negative

PRINCIPAL METHODOLOGY

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


EMINIS AMBALAJ: Applies for Arrangement of Bankruptcy
-----------------------------------------------------
Reuters reports that Eminis Ambalaj on Sept. 25 said it applied
to the court for arrangement of bankruptcy.

The court decided to implement injunction to halt follow-up
procedures of the company temporarily for three months, Reuters
relates.

According to Reuters, the company said business operations
continue.  It said it expects to discharge debts with debt
restructuring, Reuters notes.

Aminis Ambalaj Sanayi ve Ticaret AS is a Turkey-based metal and
plastic packaging company.  The Company manufactures metal and
plastic containers for the paint, chemical and food industries.
It offers product within two categories: Plastic packaging and
Metal packaging.


VB DPR: S&P Withdraws B+ Rating on 2011-A Floating-Rate Notes
-------------------------------------------------------------
S&P Global Ratings withdrew it 'B+' credit rating on VB DPR
Finance Co.'s series 2011-A floating-rate notes at the issuer's
request.

The transaction is backed by current and future diversified
payment rights (DPRs). DPRs take the form of U.S. dollar-, euro-,
and pound sterling-denominated payment orders, including Society
for Worldwide Interbank Financial Telecommunication (SWIFT) MT100
series payment order messages. These payment order messages are a
product of the international financial operations of VakifBank,
one of Turkey's leading banks. Payment orders are created as a
result of VakifBank's role as a financial intermediary between
foreign payers who send funds to Turkey and resident Turkish
entities that receive these funds.


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


BRACKEN MIDCO1: Fitch Rates GBP350MM Sr. PIK Toggle Notes B
-----------------------------------------------------------
Fitch Ratings has assigned Bracken Midco1 plc's (Midco1; BB-
/Stable) GBP350 million 8.875%/10.375% senior PIK toggle notes
due 2023 a final rating of 'B'.

Midco1 is an indirect parent company of Together Financial
Services Ltd (Together; BB/Stable). Together is a UK specialist
mortgage provider, offering both retail and commercial purpose
loans to market segments under-served by mainstream lenders.

The final rating assigned to the senior PIK toggle notes is in
line with the expected rating assigned on September 14, 2018. For
details of the expected rating, and of the key rating drivers and
sensitivities for the Long-term Issuer Default Ratings (IDRs) of
both Together and Midco1.

KEY RATING DRIVERS

The senior PIK toggle notes are notched down twice from Midco1's
IDR, reflecting Fitch's view of the likely recoveries in the
event of Midco1 defaulting. While sensitive to a number of
assumptions, this scenario would only be likely to occur in a
situation where Together is also in a much weakened financial
condition, as otherwise its upstreaming of dividends for Midco1
debt service would have been maintained. The structurally
subordinated rank of the senior PIK toggle notes would then place
their holders in a weaker position than Together's senior secured
creditors for available recoveries from the group's assets.

RATING SENSITIVITIES

The rating of the senior PIK toggle notes is sensitive primarily
to changes in Midco1's IDR, as well as to Fitch's assumptions
regarding recoveries in a default scenario. Lower encumbrance of
Together's assets by senior secured creditors could lead to
higher recovery assumptions and therefore narrower notching from
Midco1's IDR.


CARLUCCIO'S: Norwich Branch to Close on Dec. 23 as Part of CVA
--------------------------------------------------------------
Lauren Cope at Norwich Evening News reports that the Norwich
branch of Carluccio's is due to close to December 23.

It was announced earlier this year that the Norwich branch of
Carluccio's could be closed as part of a restructuring of the
company, Norwich Evening News recounts.

It was one of roughly 30 which was at risk, with some 500 jobs at
the Italian chain in doubt, Norwich Evening News notes.

Closure of the Chapelfield branch was later confirmed, Norwich
Evening News relates.

"Following the announcement that Carluccio's has entered a
Company Voluntary Arrangement, it is confirmed that the Norwich
restaurant will close.  This is rationalization of the business
for commercial reasons and in no way reflects the passion and
commitment displayed by our team.  We thank them for their hard
work and we aim to place staff at alternative Carluccio's sites
where possible after we cease trading," Norwich Evening News
quotes a spokesperson as saying.


FORCE INDIA: Uralkali Launches Legal Action v. Administrators
-------------------------------------------------------------
Alan Baldwin at Reuters reports that Russian potash producer
Uralkali announced legal action against the administrators of the
Force India Formula One team after losing out in what it called a
"flawed sale process".

According to Reuters, the company said in a statement it had
started proceedings in the London High Court and was seeking
substantial damages for "prejudicial and unequal treatment".

Joint administrators Geoff Rowley and Jason Baker, for FRP
Advisory LLP, said, however, that they were unaware of any such
action against them, Reuters relates.

"No such claim has been received by us or, as far as we are
aware, by the Court," Reuters quotes the joint administrators as
saying.

"We have fulfilled our statutory duties as administrators
throughout this process and ultimately achieved a very successful
outcome for all stakeholders.

"Any legal action brought against us will be defended vigorously,
and we are confident it would be dismissed."

British-based Force India went into administration at the end of
July before a rescue deal led by Canadian billionaire Lawrence
Stroll, the father of 19-year-old Williams F1 driver Lance, was
announced on Aug. 7, Reuters recounts.

Uralkali co-owner Dmitry Mazepin is the father of 19-year-old
Nikita, who is a development driver for Force India, Reuters
states.


GKN HOLDINGS: Moody's Confirms Ba1 CFR, Outlook Stable
------------------------------------------------------
Moody's Investors Service has downgraded to Ba2/(P)Ba2 from
Ba1/(P)Ba1 the senior unsecured debt and programme ratings of GKN
Holdings Ltd, the finance, investment and holding company of the
British multinational automotive and aerospace components
manufacturer, which is owned by Melrose Industries plc (Melrose,
unrated). Concurrently, Moody's has confirmed GKN's corporate
family rating of Ba1 and the probability of default rating of
Ba1-PD. The outlook on the ratings is stable.

"The downgrade of GKN's instrument ratings reflects the
structural subordination to pension provisions and other
liabilities owed by GKN's operating companies as well as
guarantees provided by some of GKN's operating subsidiaries for
debt sitting at Melrose group level", says Matthias Heck, a Vice
President -- Senior Credit Officer and Moody's Lead Analyst for
GKN. "The confirmation of the CFR concludes our review process
and reflects the inherent credit quality of GKN while balancing
the negative impact of financial guarantees GKN has provided to
Melrose's lenders with the expectation that Melrose will be a
supportive shareholder of GKN." added Mr. Heck.

RATINGS RATIONALE

The ratings downgrade concludes the review for downgrade process,
which was initiated on May 29, 2018. The review was focused on
the impact Melrose, the new shareholder, will have on GKN's
financial policy, funding structure, and its business profile.

The confirmation of GKN's CFR reflects the company's standalone
credit profile, and takes its expectation into consideration that
Melrose will be a supportive shareholder of GKN. This expectation
is illustrated by Melrose's commitments to (i) make contributions
to GKN's sizeable pension deficit, as well as (ii) include GKN as
a borrower to its debt facilities, which will support GKN's
liquidity. The shareholder support is balanced against negative
factors, such as financial guarantees, which GKN and certain of
its operating companies have given the lenders of Melrose's new
GBP4.5 billion debt facilities.

GKN's Ba1 CFR is supported by (1) the company's end market
diversification, predominantly into automotive (51% of 2017
sales) and aerospace (35%), which largely follow different
industry cycles, (2) a positive exposure to the growing adoption
of alternative fuel vehicles through GKN's investments in eDrive
technologies, and (3) its strong position in selected niche
markets such as ice protection and fuel systems.

The rating is constrained by (1) GKN's exposure to the
cyclicality of production rates in the automotive and aerospace
industry as well as strong competition in both markets, (2)
ongoing pricing pressure by the original equipment manufacturers
(OEMs) on their suppliers, (3) the company's financial leverage
(2.9x at December 2017, Moody's adjusted, which includes GKN's
sizable pension deficit).

GKN's operating performance was in line with Melrose's
expectation in the first half of 2018. The divisional reporting
of Melrose included 1% revenue growth and a slightly improved
adjusted operating margin of 6.8% for the aerospace division, 8%
revenue growth but a slightly lower operating profit margin of
7.2% for the automotive division, as well as 7% higher revenues
at an slightly lower operating margin of 10.9% at Powder
Metallurgy. On a Moody's adjusted basis, Moody's estimates a debt
/ EBITDA of 3.2x at GKN for the last twelve months to June 2018,
based on adjusted EBITDA of approximately GBP960 million and
gross debt of GBP3.0 billion at June 2018 comprising
approximately GBP1.4 billion of bonds and bank debt, pension
provisions of GBP1.2 billion, and operating leases of GBP0.4
billion.

The downgrade of the instrument ratings to Ba2/(P)Ba2 reflects
the structural subordination of GKN's bonds versus other debt and
non-debt liabilities within GKN, comprising of pension
provisions, trade liabilities and other operating debt owed by
GKN's subsidiaries. Financial guarantees provided by GKN and
certain of its operating companies also result in a structural
subordination of GKN's senior unsecured bonds to Melrose's debt.
At the same time, the rating of the instruments reflects the
credit quality of Melrose, which has substantially gained in
terms of size, scale and diversification due to the recent
acquisition of GKN, which included a substantial portion of
equity.

With the publication of 1H2018 results, Melrose has started
providing an operational update of GKN's activities but
discontinued publishing separate accounts for GKN plc. Moody's
previously used these accounts to monitor the quarterly financial
performance GKN Holdings, the only and fully owned subsidiary of
GKN plc. To maintain the ratings of GKN, Moody's will require
adequate information to be made available. Moody's will assess
the adequacy of such information to be provided by Melrose over
the coming months but caution that the lack of sufficient
information would result in a withdrawal of GKN's ratings.

The stable outlook reflects the expectation that Melrose will
maintain its announced financial target of net leverage not
exceeding 2.5x at the group level, and that this policy will be
reflected in GKN's metrics as well. Moody's expects that GKN will
at least maintain or even reduce its leverage, due to a
combination of earnings improvements following restructuring
measures implemented by Melrose, and debt reduction. The latter
will be driven by GKN's free cash flows and assumes that
shareholder distributions to Melrose will remain moderate.
Moody's also notes Melrose's intention to dispose of certain
assets. While there is an agreement with the GKN's UK pension
trustee to use certain parts of such proceeds to partially fund
the pension deficit, this will further help to reduce leverage at
the level of GKN if targeted disposals are successfully executed.
The outlook also assumes that potential asset disposals will
result in a de-leveraging of GKN, at least due to the agreed
funding of pension provisions.

WHAT COULD DRIVE THE RATINGS UP/DOWN

An upgrade of the CFR to Baa3 would require an established track
record of Melrose being a supportive shareholder of GKN, also
with regards to maintaining a strong liquidity profile, and clear
visibility that GKN can further improve its credit strength by
maintaining its leverage at a level of below 2.5x debt/EBITDA
through the cycle (2.9x at December 2017), EBITA margins
consistently exceeding 8.0% (6.4% in 2017), both on a sustainable
basis. An upgrade would also require independent funding at the
level of GKN and the implementation of a financial policy, which
supports an investment-grade rating.

Downward rating pressure would arise upon a sustainable
deterioration of earnings and cash flow. Such a development would
be exemplified by negative free cash flow, an increase in
leverage to more than 3.5x debt/EBITDA, EBITA margin falling
below 6.0%. Likewise, larger than expected shareholder
distributions under the new owner and/or a significant weakening
of the business profile, could trigger a negative rating action.
Additional downward pressure on the instrument ratings could
result from the structural subordination due to newly imposed
guarantees and the seniority of other non-debt liabilities.
Finally, a rating downgrade could be triggered by a re-leveraging
at the level of Melrose, or an increase of Melrose's financial
leverage strategy to above 2.5x.

Headquartered in Redditch, UK, GKN is a global tier one supplier
to the automotive and aerospace industry with operations in more
than 30 countries and 58,200 employees. The group operates
through three main divisions: Driveline (51% of 2017 revenues),
Aerospace (35%), and Powder Metallurgy (11%). The Driveline and
Powder Metallurgy activities primarily address the automotive
industry. Aerospace supplies both the commercial and military
aircraft market. In 2017, GKN recorded revenues of GBP9.7
billion. Including GKN's pro-rata share in joint ventures, the
group's revenues amounted to GBP10.4 billion in the same period.
GKN is a fully owned subsidiary of Melrose Industries plc.

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


HIBU MIDCO: S&P Lifts Issuer Credit Rating to 'B', Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings said that it had raised to 'B' from 'B-' its
issuer credit rating on directory publisher and digital services
provider Hibu Midco Ltd. (Hibu Group), a subsidiary of Hibu Group
Ltd. The outlook is stable.

S&P said, "At the same time, we raised to 'B' from 'B-' our issue
rating on Hibu Group's GBP225 million senior secured term notes
due 2023 issued by Yell Bondco plc. We also revised the recovery
rating on these notes to '3', from '4' reflecting our expectation
of meaningful recovery (50%-70%; rounded estimate: 55%) in the
event of a payment default.

S&P also raised to 'BB-' from 'B+' its issue rating on the
group's GBP25 million super senior secured revolving credit
facility. The recovery rating on this facility is '1', reflecting
its expectations of very high recovery (90%-100%: rounded
estimate: 95%).

The upgrade primarily reflects Hibu Group's continuous credit
metrics improvement since May 2018, when it refinanced its
capital structure by issuing new GBP225 million senior secured
notes, mostly to repay its existing cash debt and part of the
payment-in-kind (PIK) loan, the remainder of which was converted
into equity. Hibu Group's S&P Global Ratings-adjusted leverage
fell to 2.3x in fiscal year 2018 (ended March 31, 2018) from 2.6x
in fiscal 2017 and 6.5x in fiscal 2016. After the refinancing,
S&P expects adjusted leverage to remain about 2.0x in fiscal 2019
and fiscal 2020, versus 2.5x-3.0x in our previous forecasts.

The upgrade also takes into account the group's successful
business transition from print directories to digital solutions
in the U.K., where S&P expects organic growth of about 2% in 2019
and 2020, together with an S&P Global Ratings-adjusted EBITDA
margin of at least 30% with no contribution from print sales.
Finally, S&P believes the group's new strategy to phase out the
U.S. print directory business by 2020 will strengthen its
operating model overall.

Hibu Group is a provider of digital directories in the U.K. (Yell
Ltd.) and of print and digital directories in the U.S. (Hibu
Inc.). The group also offers digital marketing services to small
and midsize enterprises. S&P said, "Our rating on Hibu Midco
reflects our analysis of the entire group, including its
operations in the U.K. and the U.S. We view the group as a whole,
despite the new restricted group defined by the documentation of
the new notes, which excludes Hibu Inc. The digital and print
directories segments in the U.S. have been in structural decline
for several years. Hibu Group fully controls both entities, and
we understand that the group does not plan to divest the U.S.
operations in the coming 12-24 months."

Despite the completion of the digital transformation of Yell, S&P
continues to consider Hibu Group's operations to be exposed to
the declining printing and digital directories businesses in the
U.S., weighing on S&P's view of the group's operations. The
emergence of many online players is also driving a pronounced
evolution of how users search for people and gather information
online. All this has resulted in a pronounced decline of printed
yellow pages and digital directory advertisements (which are
largely sold now as a bundled offers) of about 50% between first-
quarter (Q1) 2016 and Q1 2019.

In fiscal 2019, the company launched its new "Print to Digital"
program aiming to accelerate the existing customers' transition
from print to digital solution sales. Hibu Group's last yellow
pages book in the U.S. is expected to be published in fiscal
2020. S&P said, "We assume that printing and digital directories
operations in the U.S. will cause a 40%-45% contraction of the
U.S. division's top line in fiscal 2019, while we assume a 5%
growth in the digital marketing segment. Due to intense online
competition and pricing pressure, our adjusted EBITDA margin for
Hibu Group should decrease to 20%-21% in fiscal 2019 and fiscal
2020, versus 27% in fiscal 2018, despite the group's efforts to
reduce its cost base."

S&P said, "In the U.K., we note positively that digital revenues
grew by 3.4% and digital EBITDA reached GBP62 million in fiscal
2018, in line with our previous positive outlook, thanks to the
successful management plan to transform Yell into a digital
marketing services company." Although the subsidiary has faced
digital customer decline and traffic decline at its Yell.com
directory website for the last three years, Yell managed to
increase its average revenue per customer by 48% between Q1 2016
and Q1 2019.

However, the digital market remains subject to high online
competition, in particular from dominating players Google and
Facebook, and faces very limited barriers to entry. S&P believes
that Yell should be able to generate organic growth of about 2%
in digital in fiscal 2019 and fiscal 2020, mainly coming from new
product offerings and strategic partnership with large online
players.

Print revenues should fall to GBP9 million in 2019 and GBP0 in
2020, from GBP27 million in 2018, following the expected
termination of the Yellow Pages book in January 2019.

At the group level, despite several cost-reduction initiatives
for the four years since the group emerged from default in 2014,
the S&P Global Ratings-adjusted EBITDA margin decreased to 27.1%
in 2018 from 28.5% in 2017. S&P said, "We believe that margins
will remain under pressure in 2019 and will not recover to
historical levels, given Hibu Group's transition to the highly
fragmented, intensely competitive, and rapidly evolving online
market. We also believe that the group's pricing power will be
significantly lower than it was in its former leading or
incumbent positions in the traditional print classified
directories business."

In 2018, the group continued to repay its debt using excess cash
as per the previous debt documentation's cash sweep mechanism,
ending with an S&P Global Ratings-adjusted leverage of about
2.3x, despite the decline in the group's EBITDA to GBP163 million
in fiscal 2018 from about GBP193 million in fiscal 2017.
Following the refinancing and the partial conversion of the PIK
loan into equity, S&P forecasts its adjusted debt to EBITDA will
likely remain at about 2x over the next two fiscal years and
positive reported free operating cash flow (FOCF) generation will
be in excess of GBP60 million.

Finally, despite a lower S&P Global Ratings-adjusted debt-to-
EBITDA ratio than similarly rated peers in other industries, the
rating on Hibu Group is constrained by its operations in a market
dominated by a limited number of large players, which checks the
pricing power of smaller players like Hibu Group. S&P therefore
incorporates in its analysis our view that the group's earnings
and credit metrics could deteriorate rather quickly.

S&P said, "The stable outlook reflects our view that Hibu Group's
S&P Global Ratings-adjusted leverage (debt to EBITDA) will remain
close to 2x in fiscal 2019 and fiscal 2020. It also captures our
view of Yell's top-line stabilization, after the directories
print division is closed in fiscal 2019. Finally, we believe that
the group should be able to manage Hibu Inc.'s gradual shift to
digital from print in the U.S. and totally exit the print
directories business by fiscal year-end 2020 without major
setbacks.

"We could lower the rating if Hibu Group inadequately manages the
transition of its business model in the U.S. or if Yell's
operations underperform our organic growth expectations. This
could lead to a more pronounced decline in Hibu Group's
consolidated EBITDA than anticipated, resulting in our adjusted
debt to EBITDA approaching 3x and lower reported FOCF.

"We view an upgrade as unlikely over the next 12 months. It would
hinge on the improvement of the group's operating model shifting
100% to digital solutions, together with a growing EBITDA base
coming from organic growth at the group level, and maintaining
very low leverage."


===============
X X X X X X X X
===============


* BOOK REVIEW: Competitive Strategy for Healthcare
--------------------------------------------------
Authors: Alan Sheldon and Susan Windham
Publisher: Beard Books
Softcover: 190 pages
List Price: $34.95

Review by Francoise C. Arsenault
Order your personal copy today at http://bit.ly/1nqvQ7V

Competitive Strategy for Health Care Organizations: Techniques
for Strategic Action is an informative book that provides
practical guidance for senior health care managers and other
health care professionals on the organizational and competitive
strategic action needed to survive and to be successful in
today's increasingly competitive health care marketplace. An
important premise of the book is that the development and
implementation of good competitive strategy involves a profound
understanding of change. As the authors state at the outset:
"What may need to be done in today's environment may involve
great departure from the past, including major changes in the
skills and attitudes of staff, and great tact and patience in
bringing about the necessary strategic training."

Although understanding change is certainly important in most
fields, the authors demonstrate the particular importance of
change to the health care field in the first and second chapters.
In Chapter 1, the authors review the three eras of medical care
(individual medicine, organizational medicine, and network
medicine) and lay the groundwork for their model for competitive
strategy development. Chapter 2 describes the factors that must
be taken into account for successful strategic decision-making.
These factors include the analysis of the environmental trends
and competitive forces affecting the health care field, past,
current, and future; the analysis of the competitive position of
the organization; the setting of goals, objectives, and a
strategy; the analysis of competitive performance; and the
readaptation of the business, if necessary, through positioning
activities, redirection of strategy, and organizational change.

Chapters 3 through 7 discuss in detail the five positioning
activities that are part of the model and therefore critical to
the development and implementation of a successful strategy:
scanning; product market analysis; collaboration; restructuring;
and managing the physician. The chapter on managing the physician
(Chapter 7) is the only section in the book that appears dated
(the book was first published in 1984). In this day of physician-
owned hospitals and physician-backed joint ventures, it is
difficult to envision the physician in the passive role of "being
managed." However, even the changing role of physicians since the
book's first publication correlates with the authors' premise
that their model for competitive strategic planning is based
exactly on understanding and anticipating change, which is no
better illustrated than in health care where change is measured
not in years but in months. These middle chapters and the other
chapters use a mixture of didactic presentation, graphs and
charts, quotations from famous individuals, and anecdotes to
render what can frequently be dry information in an entertaining
and readable format.

The final chapter of the book presents a case example (using the
"South Clinic") as a summary of many of the issues and strategic
alternatives discussed in the previous chapters. The final
chapter also discusses the competitive issues specific to various
types of health care delivery organizations, including teaching
hospitals, community hospitals, group practices, independent
practice associations, hospital groups, super groups and
alliances, nursing homes, home health agencies, and for-profits.
An interesting quote on for-profits indicates how time and change
are indeed important factors in strategic planning in the health
care field: "Behind many of the competitive concerns lies the
specter of the for-profits. Their competitive edge has lain until
now in the excellence of their management. But developments in
the past half-decade have shown that the voluntary sector can
match the for-profits in management excellence. Despite
reservations that may not always be untrue, the for-profit sector
has demonstrated that good management can pay off in health care.
But will the voluntary institutions end up making the same
mistakes and having the same accusations leveled at them as the
for-profits have? It is disturbing to talk to the head of a
voluntary hospital group and hear him describe physicians as his
potential competitors."



                            *********

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
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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
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balance sheet for liabilities that may never materialize.  The
prices at which equity securities trade in public market are
determined by more than a balance sheet solvency test.

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


                            *********


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

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

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

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

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

The TCR Europe subscription rate is US$775 per half-year,
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members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
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                 * * * End of Transmission * * *