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

                           E U R O P E

          Wednesday, October 3, 2018, Vol. 19, No. 196


                            Headlines


B E L A R U S

BELARUSIAN REPUBLIC UNITARY: Fitch Affirms 'B' IFS Rating


D E N M A R K

PRIMERA AIR: Shuts Operations After Failing to Secure Financing


F I N L A N D

MEHILAINEN: S&P Rates EUR760MMM First Lien Term Loan 'B'


F R A N C E

NOVASEP HOLDING: S&P Cuts ICR to CCC on Rising Refinancing Risks


G E R M A N Y

XELLA GROUP: S&P Alters Outlook to Stable & Affirms 'B+' ICR


G R E E C E

GREECE: Seeks to Drop Commitment on Pension Cuts


I R E L A N D

DUBLIN BAY 2018-1: DBRS Finalizes BB(low) Rating on Cl. E Notes


M O L D O V A

* EBRD and Two PE Firms Buy Stake in Moldova Agroindbank


N E T H E R L A N D S

VAN LANSCHOT: S&P Gives BB Rating to Proposed AT1 Capital Notes


R U S S I A

ROSGOSSTRAKH: S&P Ups Issuer Credit Rating to B+, Outlook Stable


S P A I N

PROMOTORA DE INFORMACIONES: S&P Assigns 'B-' ICR, Outlook Stable


T U R K E Y

AKBANK TAS: Fitch Cuts LT For. Curr. Issuer Default Ratings to B+


U N I T E D   K I N G D O M

FIAT CHRYSLER: DBRS Ups Issuer Rating & Unsec. Debt Rating to BB
HOUSE OF FRASER: Sports Direct Sacks Ex-Directors and Management
LONDON: Key Markets Would Be in The Lurch Under A No-Deal Brexit
MITIE GROUP: To Sell Pest Control Unit as Part of Restructuring
PLAYTECH PLC: Moody's Assigns Ba2 CFR, Outlook Stable

PLAYTECH PLC: S&P Assigns 'BB' Long-Term ICR, Outlook Stable
UNIFIN: Moody's Assigns B2 Corp. Family Rating, Outlook Stable


                            *********



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B E L A R U S
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BELARUSIAN REPUBLIC UNITARY: Fitch Affirms 'B' IFS Rating
---------------------------------------------------------
Fitch Ratings has affirmed Belarusian Republican Unitary
Insurance Company's (Belgosstrakh) Insurer Financial Strength
(IFS) Rating at 'B'. The Outlook is Stable.

KEY RATING DRIVERS

The rating and Outlook mirror Belarus's 'B' Local Currency Long-
Term Issuer Default Rating (IDR), which is on Stable Outlook, and
reflect the insurer's 100% state ownership. The rating also
reflects the presence of guarantees for insurance liabilities
under compulsory lines, the insurer's leading market position in
a number of segments in Belarus, sustainable profitability,
adequate capital position, and the weak quality of the insurer's
investment portfolio.

Belgosstrakh maintains its strong position in the Belarusian
insurance market and remains the exclusive provider of a number
of compulsory lines, including state-guaranteed employers'
liability, homeowners' property, agricultural insurance and other
minor lines. The company has also a life portfolio consisting
predominantly of voluntary pension annuities.

Fitch views Belgosstrakh's investment portfolio as weak. This
reflects the predominance of instruments mainly invested in state
bonds and in deposits of state-owned banks, which are constrained
to the 'B' category, and the presence of significant
concentrations by issuer. Belgosstrakh's ability to achieve
better diversification is limited by the narrowness of the local
investment market and strict regulation of the insurer's
investment policy.

Belgosstrakh's solvency margin coverage, calculated on Solvency-I
like formula, stood at 11x at end-2017, versus 10x at end-2016.
Belgosstrakh's risk-adjusted capital, as measured by Fitch's
Prism Factor-Based Capital Model (Prism FBM), remained weak based
on 2017 IFRS results. This stems from higher charges on invested
assets, which are mainly concentrated in sovereign debt, placing
pressure on available capital.

Belgosstrakh's combined ratio slightly increased to 101% in 2017
from 99% in 2016, due to a worsened loss ratio. The loss ratio
increased to 66% in 2017 from 61% in 2016, due mainly to the
changes in reserving assumptions for the workers' compensation
line. The company maintains tight control over its expenses, with
an administrative expenses ratio of 29% in 2017 and the three-
year average figure equalling to 32%. Fitch views this as rating-
positive especially in the context of Belgosstrakh's significant
presence in retail lines.

In 2017, the company reported slightly worsened net income of
BYN68 million, compared with BYN93 million in 2016, with net
income return on equity (ROE) down at 19% in 2017 from 20% in
2016. The deterioration was due mainly to decreased investment
yield to 7% in 2017 from 11% in 2016, which was in line with the
decline in market yields.

Results for 1H18 suggest that Belgosstrakh will continue to
report a sound, albeit slightly worsening, net result for the
full year based on local GAAP. Net income fell to BYN7 million in
6M18 from BYN16 million in 6M17.

RATING SENSITIVITIES

A change in Belarus's Local-Currency Long-Term IDR is likely to
lead to a corresponding change in Belgosstrakh's IFS Rating.

Significant changes to Belgosstrakh's relationship with the
government would also likely have a direct impact on the
insurer's ratings.



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D E N M A R K
=============


PRIMERA AIR: Shuts Operations After Failing to Secure Financing
---------------------------------------------------------------
Josh Spero at The Financial Times reports that Primera Air, a
low-cost carrier, has ceased operations and announced it will
close as of October 2 after it failed to secure financing.

"On behalf of Primera Air team, we would like to thank you for
your loyalty. On this sad day, we are saying goodbye to all of
you," the Latvian-based airline said in an announcement on its
website, the FT relays.

The FT relates that a statement from the board said the airline
had "no other choice than filing for bankruptcy" when it could
not agree bridge financing with its bank. It said "several
unforeseen events" had cost it significant amounts of money,
including EUR10 million to repair a plane suffering from
corrosion and EUR20 million to lease aeroplanes with crew after
the late delivery of new aircraft, according to the FT.

The board also cited "the difficult environment airlines are
facing now due to low prices and high fuel costs", which other
low-cost carriers including Ryanair and easyJet have recently
cited as weighing on profits, the FT adds.

According to the report, the UK's Civil Aviation Authority said
Primera was not covered by its Atol protection scheme, which
stops passengers losing money or becoming stranded abroad.

Primera Air Scandinavia A/S, trading as Primera Air, was a Danish
leisure airline owned by the Primera Travel Group. It provided
scheduled and charter passenger services from Northern Europe to
more than 40 destinations in the Mediterranean, Middle East and
North America.

Primera was founded as charter airline JetX in 2003, before being
bought by Primera Travel, which runs passenger travel agencies
and tour operators in the Nordic region. Andri Ingolfsson is
chief executive and owner of Primera Travel Group.



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F I N L A N D
=============


MEHILAINEN: S&P Rates EUR760MMM First Lien Term Loan 'B'
--------------------------------------------------------
S&P Global Ratings said that it assigned its 'B' long-term issuer
credit rating to Terveys-ja hoivapalvelut Suomi Yhtyma Oy, the
parent company of Finland-based private health care services
provider and hospital operator Mehilainen. The outlook is stable.

S&P said, "At the same time, we assigned our 'B' issue rating to
Mehilainen's EUR760 million senior secured first-lien term loan
due 2025. The recovery rating is '3', indicating our projections
of recovery prospects in the 50%-70% range (rounded estimate:
55%).

"We also assigned our 'CCC+' issue rating to Mehilainen's EUR200
million second-lien term loan. The recovery rating is '6',
indicating our expectations of recovery prospects in the 0%-10%
range (rounded estimate: 0%)."

These ratings are in line with the preliminary ratings S&P
assigned on June 21, 2018.

On May 18, 2018, CVC Partners, alongside a consortium of Finnish
institutions (including LocalTapiola, Varma, and Ilmarinen), and
MehilÑinen's management announced the acquisition of Mehilainen
for about EUR1.8 billion. Established in 1909, Mehilainen is a
leading private health care services provider in Finland. The
group's services comprise outpatient clinics, specialist and
dental care, as well as occupational health care and social care
services including elderly care, mental rehabilitation, disabled
care, and child welfare. In 2017, the group generated revenues of
about EUR755 million and reported EBITDA of EUR85 million.

The 'B' rating on Mehilainen is constrained by the group's highly
leveraged financial risk profile and financial-sponsor ownership.
S&P's view of Mehilainen's business risk profile is driven by the
company's capacity to expand its business in a favorable
environment, supported by a good variety of payment sources and
mix of services. To date, entities within the Mehilainen group
have weathered the volume attrition in the self-pay segment of
private reimbursement and tighter pricing in the employer
insurance coverage segments in the most recent economic downturn.
This was thanks to a diverse mix of locations and services, as
well as flexibility in the cost structure.

The group's revenues have been growing by double digits over the
past three years, significantly outperforming the underlying
market. Revenue increase was driven primarily by a combination of
new contract wins in occupational health care and in public
outsourcing, volume and price increases via higher utilization of
existing facilities, and acquisitions such as the social and
health care provider Mediverkko in 2015 or the social care
provider Maino Vire. S&P said, "We anticipate that the group will
continue to grow strongly, at about 15%-20%, over the next three
years. We expect growth to come from a rising occupational health
care customer base; patient volume growth from Lansi Pohja; and
health care outsourcing contracts with municipalities. The social
care business should benefit from new beds in the elderly care
and added capacity from acquisitions in the mental rehabilitation
and disabled care business unit. Under our base case, we assume
the group will achieve revenues of between EUR900 million and
EUR1.1 billion over 2018-2020."

S&P views rapid expansion as a major risk to Mehilainen's credit
quality. The company will have to smoothly integrate the newly
acquired facilities and increase utilization, while keeping
control over operating costs.

The Finnish private health care market had a compound annual
growth rate of about 2% over 2013-2016, despite the recession.
Growth was helped by a continued shift from public and in-house
providers of occupational health care services to private
providers, but there was limited growth in dental care and
pricing pressure arose during the economic slowdown. During the
same period, private social care expanded by 5.8%, propelled by a
shift toward lighter forms of care due to the dismantling of
public institutional care.

S&P views the Finnish health care services market as conducive to
Mehilainen's operations, as it has a history of a stable and
favorable legislative environment. In particular, the special
situation of free pricing in the Finnish public outsourcing
space, which is not expected to significantly change in the near
term, is supportive of private health care providers. Moreover,
upside potential stems from the proposed health care system
reform (SOTE reform), which could come into effect from 2020-2021
and should give patients freedom to choose their doctor or
facility, and could further increase the role of the private
providers. The latter currently account for about 20% (EUR2.8
billion) of the health care market and about 50% (EUR2.7 billion)
of the social care market.

Private health care providers are partially reimbursed through
the National Health Insurance Fund KELA, covering about 40% of
costs for occupational health care, about 16% of doctor's visits
and diagnostics, and about 15% of private dental care. The
remaining share of the costs is funded through out-of-pocket
customer fees, employers and occupational health care benefit
schemes, and different types of private insurance (which are
becoming more popular, with currently 1.2 million of the total
population subscribing).

It is the responsibility of municipalities to organize social
care. They may do this through their own publicly operated
services or through private operators via outsourcing contracts
and payment vouchers.

S&P said, "We view positively Mehilainen's well-entrenched market
position, with 13% market share of the combined Finnish private
health care and social care markets (worth about EUR5.7 billion),
while we understand that in the occupational health care segment
the company enjoys an even stronger position. The group benefits
from its well-known brand and long history of operation."

The group's revenues are well diversified in terms of payer
profile, with about 44% generated from municipalities and 25%
each from private payers and corporations. This reflects a good
service mix, with revenues split as follows:

-- About 23% from outpatient care (primary care, ambulatory
    treatments, and diagnostics), which is either paid out of
    pocket or by private insurance with partial state
    reimbursement (KELA);

-- Twenty-two percent from occupational health care paid
    directly by employers (contracts);

-- Thirty-four percent from social care paid by municipalities
    with a client contribution; and

-- Approximately 22% from managed contracts run on the behalf of
    municipalities, which are fee-based and capitation-like
    contracts.

Although a high portion of privately derived revenues is a
positive feature in terms of ability to increase prices, these
revenues are subject to underlying economic conditions, such as
employment, especially as the group focuses solely on Finland.
S&P understands that the private pay market has reached
saturation in terms of volume growth and will be mainly driven by
price increases and overspills from the publicly funded sector.
The group is increasing its share of the public market with
several recent outsourcing contract wins.

Further increasing scale will continue to benefit the group's
EBITDA margin. S&P expects that the group's S&P Global Ratings-
adjusted EBITDA margin (before rental payments) will be about
20%-22% over the next 12-24 months -- well in line with peers' --
reflecting purchasing power and the ability to cross-utilize
facilities, while managing the cost base. (Staff represents 48%
of operating costs; and we understand that unlike in other
countries there are no shortages of nurses or doctors.)

Mehilainen operates mostly under a leasehold model, which S&P
views negatively because health care service providers are price-
takers and rent adds to already-high fixed costs. In its opinion,
this could squeeze profitability should revenue growth become
constrained.

S&P said, "We project that Mehilainen will be able to reduce and
maintain cash-interest-paying debt to EBITDA below 7.5x over the
next 12-24 months, from the current 7.8x, supported by positive
free operating cash flow (FOCF) of about EUR30 million-EUR40
million in 2018-2019. Our estimate of adjusted debt in 2018-2019
mainly includes financial debt of about EUR960 million and about
EUR440 million of operating leases. We currently exclude from
debt adjustments about EUR932 million of preference shares.
Should we include these, adjusted leverage would be about 13x.

"We estimate adjusted EBITDAR to be about EUR100 million-EUR130
million in 2018-2019, comfortably covering fixed interest charges
of about EUR40 million-EUR45 million and rents of EUR80 million-
EUR90 million. We expect fixed-charge coverage to remain above
1.6x in 2018-2019 and will likely improve on the back of
increasing EBITDA."

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

-- Revenue growth of 10%-20%, driven by both organic growth and
    acquisitions, in line with the historical trend.

-- Growth within the health care segment to come from the just-
    started primary and secondary health care outsourcing in
    LÑnsi-Pohja hospital district, a rising occupational health
    care customer base; patient volume growth from private
    insurance company LocalTapiola; and other outsourcing
    contracts with municipalities.

-- Within the social care segment, growth mainly driven by
    increased capacity via organic greenfield development and
    small add-ons, with improving utilization rates in all three
    segments.

-- The adjusted EBITDA margin after rental payments will
    gradually increase to about 12% in 2018 from about 11% in
    2017, and rise to about 13% over the next three years. The
    growth will mainly come from cost efficiency and operational
    improvements. S&P said, "We add about EUR15 million of
    acquisition/restructuring costs to EBITDA in 2018 and between
    EUR11 million and EUR26 million from 2019. We estimate rent
    to sales at about 9%, remaining stable going forward,
    providing an EBITDAR margin of about 22%."

-- Flat working capital changes from 2018, benefiting from
    increasing revenues from care services offset by potential
    acquisitions.

-- Replacement, expansion, and other capital expenditures
    (capex) to represent 3.6% of sales in 2018, and about 2%-3%
    from 2019. This includes expansion related expenditures
    (greenfield) and maintenance capex (renovation).

-- Spending on acquisitions of EUR59 million in 2018 and EUR45
    million-EUR30 million from 2019.

-- S&P also takes into account EUR1.8 billion in 2018 for the
    acquisition of Mehilainen by CVC.

Based on these assumptions, S&P arrives at the following S&P
Global Ratings-adjusted credit measures for 2018-2019:

-- EBITDAR margin of 20%.

-- Debt to EBITDA at about 12x-13x including preference shares,
    7.8x-6.8x excluding them.

-- Fixed-charge coverage of about 1.6x-1.7x.

S&P said, "The stable outlook reflects our view that Mehilainen
will continue to grow both organically and through bolt-on
acquisitions, while strengthening its operating margins,
leveraging its track record of integrating acquired facilities,
and rolling out new services. In addition, we believe that
legislation for private health care providers will become more
supportive or at least remain stable.

"We assume that Mehilainen will be able to improve its adjusted
EBITDAR margin to and maintain it at about 20%, benefiting from
growing scale and increasing resources utilization. We believe
that the group will manage its working capital and capex to be
able to generate positive FOCF, leading to gradual deleveraging,
with adjusted debt to EBITDA remaining below 7.5x, enabling the
company to maintain adequate liquidity and comfortably service
its fixed charges, such as interest payments and rents.

"We could take a negative rating action if the operating and
competitive environment deteriorated, triggering a negative
reassessment of the group's business risk profile, primarily due
to deteriorating operating margins. We could also consider a
downgrade if Mehilainen was unable to generate positive FOCF,
resulting in liquidity issues and underlying structural
operational issues. These could include higher-than-expected
integration costs or operational expenses, or a decline in volume
growth, given Mehilainen's high fixed-cost base. As such, we
could lower the rating if the company's ability to comfortably
service its fixed costs deteriorates, signaled by a deterioration
of the adjusted fixed-charge coverage ratio to below 1.5x.

"We would consider an upgrade if Mehilainen reduced its adjusted
debt to EBITDA to below 5.0x on a sustainable basis. An upgrade
would also hinge on a sustained track record of growing revenue
to improve both its overall size and its cash flow generation.
This would most likely occur if the group significantly
outperformed our forecasts through organic growth and accretive
acquisitions, while managing its cost base."



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F R A N C E
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NOVASEP HOLDING: S&P Cuts ICR to CCC on Rising Refinancing Risks
----------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
Novasep Holding SAS to 'CCC' from 'B-'. The outlook is stable.

S&P said, "At the same time, we lowered our issue rating on the
group's senior notes to 'CCC' from 'B-'. The recovery rating
remains at '4' reflecting our expectation of recovery prospects
in the 30%-50% range (rounded estimate, 40%) in the event of a
default.

"The downgrade reflects the approaching refinancing deadline and
our view that any delays or complications could prevent
management from implementing the second phase of its strategic
growth initiatives. However, a significant overlap between
shareholders and bondholders should aid the credit negotiation
process."

The company's growth cycle focuses on pharmaceuticals and
especially targeted therapies. This should bolster the group's
manufacturing services in the biopharma segment, thanks to the
launch of four projects in strategic areas, while increasing
margins due to a new product mix. Since 2017, the group has
launched three new projects that fit into its Rise 2 strategy,
which aims to capture the strong growth prospects in several
therapeutic areas, such as antibody drug conjugates, viral vector
production, and monoclonal antibody (mAb).

Novasep anticipates that the new capacities will be commissioned
from midyear 2019, with the full impact in 2020. Through these
investments, Novasep demonstrates its strong know-how in process
development to create good manufacturing practices, in line with
the U.S. Food and Drug Administration's highest requirements and
approvals. It also showcases Novasep's technologies (low and
high-pressure chromatography) and strong expertise in analytical
transfer, development, and qualification. The last investment,
launched in May 2018, will offer Novasep's customers a
fill/finish product range via SeneFill, a new facility for
commercial aseptic fill and finish operations. In S&P's view,
this constitutes another example of Novasep's strong
understanding of market needs by adding state-of-the-art filling
equipment and isolators that should enhance the group's product
mix and fuel margins in 2020 once this manufacturing site begins
operating.

In S&P's view, the company's growth prospects and viability do
not depend directly on successful refinancing because the funds
from upcoming refinancing will not be used to implement its Rise
2 strategy. All major investment programs are funded via long-
term leases, alongside financing agreement with customers. The
large capital expenditure (capex) program launched this year is
almost covered by Novasep's current order backlog in the
biological equipments segment. In addition, Novasep is
implementing various clauses, such as take or pay, in its
contracts to avoid any upcoming liquidity crisis stemming from
unused manufacturing facility and low utilization rates.
Therefore, S&P anticipates that the group should return to
positive free cash flow generation by 2020 once all its
additional manufacturing capabilities are up and running.

S&P said, "As of June 30, 2018, our adjusted leverage ratio for
Novasep was very high, at almost 10x. For the 12 months ended
Dec. 31, 2017, the company reported EUR29.2 million of negative
free operating cash flow, which contributed to its weaker
liquidity position. Under our base-case forecast, we expect
leverage to remain elevated and cash flow deficits to persist in
the next 12 to 24 months. The stable outlook reflects our view
that the group has a reasonable chance of completing its
refinancing via a managed process, given that the majority
shareholders hold more than 50% of the debt.

"We could lower our rating on Novasep to 'CC' if the company
announces that it intends to restructure its debt."

A positive rating action on Novasep would be contingent on
successful refinancing without engaging in any restructuring,
removing the potential refinancing risks on the upcoming bonds
maturing on May 31, 2019.



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G E R M A N Y
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XELLA GROUP: S&P Alters Outlook to Stable & Affirms 'B+' ICR
------------------------------------------------------------
S&P Global Ratings revised its outlook on Germany-based Xella
group to stable from negative, and affirmed its 'B+' long-term
issuer credit ratings on LSF10 XL Investments S.a.r.l. and LSF10
XL Bidco SCA.

LSF10 XL Bidco is the issuer of Xella group's first-lien debt,
which includes a EUR1.74 billion term loan B (current balance
EUR1.574 billion) and a EUR175 million revolving credit facility
(RCF). S&P is affirming its 'B+' issue rating on these
facilities. The recovery rating on these instruments is unchanged
at '3', reflecting recovery of 50%-70% (rounded estimate: 55%) in
an event of default.

Over the past 12 months, Xella has completed several M&As
including the acquisitions of Cellumat, URSA, and Macon and the
disposal of its lime (FELS) and dry lining businesses Fermacell.
Xella also paid a one-off EUR650 million distribution to its
owner Lone Star Funds and repaid EUR161 million of its term loan
B (including the repayment at the closing of the FELS disposal).

The group operating performance is robust. It also shows strong
cash flow generation. Management remains focused on integration
and realizing synergies and is continuing its successful cost-
cutting program to drive profitability. As a result, pro forma
the various transactions, the group's profitability is forecast
to improve to more than 18% and its credit metrics continue to
strengthen to a level more comfortably commensurate with a 'B+'
rating. S&P views the low volatility in the company's core
operating profitability over the past seven years as a key rating
factor.

Xella group is Europe's leading autoclaved aerated concrete
producer by capacity and the largest producer of calcium silicate
units by production facility. The group has also recently
diversified (via acquisitions) to become a producer of insulation
products. The company's diversification across a variety of
product lines and, to a lesser extent, end markets, is a key
factor supporting its credit quality.

That said, the group operates in a highly cyclical industry owing
to its high exposure to new construction markets that can exhibit
volatile demand. The Xella group has sizable exposure to energy
prices and commodity price fluctuations, which weigh on the
company's profitability. However, the group's branding and
technology, which distinguish its products from those of its more
commoditized peers, give it a relatively strong degree of pricing
power.

In S&P's view, Xella group's relatively weak geographic diversity
compared with some of its larger peers constrains the rating. The
group has significant concentration in Central Europe, with very
limited revenues derived outside European markets.

Financial sponsor Lone Star Funds is Xella's 100% owner. As such,
Xella has recently followed a strategy of acquisitions,
disposals, refinancings, and high shareholder returns. Although
S&P considers this activity to be largely completed, Lone Star
Funds could continue to pursue further such transactions, leading
to a reversal of recovery in credit metrics and positive pressure
on the ratings.

S&P said, "We note that Xella's capital structure includes about
EUR480 million of preferred equity certificates that accrue
payment-in-kind interest. We consider these instruments to be
debt under our non-common equity criteria."

In its base case for 2019, S&P assumes:

-- Revenues of about EUR1.5 billion;
-- S&P Global Ratings-adjusted EBITDA margin of more than 18%;
-- Capital expenditure (capex) of up to EUR100 million; and
-- No further major acquisitions or divestitures.

Based on these assumptions, and with supportive market
conditions, S&P arrives at the following credit measures:

-- S&P Global Ratings-adjusted debt to EBITDA of about 6.0x
    excluding PECS that we treat as debt;

-- Weak free operating cash flow to debt of less than 5%,
    reflecting the capital intensive nature of the business
    (typical for building materials companies); and

-- Adjusted funds from operations (FFO) cash interest coverage
    of more than 3x over the 12-month rating horizon.

S&P said, "The stable outlook reflects our expectation that Xella
will continue to enjoy good demand for its products and positive
revenue growth. Ongoing integration of the recent acquisitions
and cost base improvement should result in S&P Global Ratings-
adjusted EBITDA margins improving to more than 18% for fiscal
2019, with credit metrics rebounding to being commensurate with a
'B+' rating.

"We currently forecast that Xella's EBITDA margins will swiftly
return to above 18% by the end of fiscal 2019. If profitability
weakens and the company does not meet our expectation in this
regard, we would reassess the group's business risk profile and
likely lower the rating by one notch. We could also lower the
rating if Xella's management and owner Lone Star Funds were to
pursue further EBITDA margin-dilutive acquisitions or further
shareholder returns, rather than debt reduction.

"Xella's credit metrics are forecast to improve over the rating
horizon. If this trend were to reverse, we could consider
lowering the ratings. Specifically, we could downgrade Xella if
FFO cash interest coverage falls below 2x. Additionally, we could
consider a downgrade if the group's liquidity deteriorates.

"In our view, the probability of an upgrade over our 12-month
rating horizon is limited. This reflects the group's high
leverage and private equity ownership that increases
uncertainties regarding the possibility of shareholder returns,
and could trigger changes to the group's capex, acquisition, and
disposal strategy."



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G R E E C E
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GREECE: Seeks to Drop Commitment on Pension Cuts
------------------------------------------------
Associated Press reports that the Greek government is urging
bailout inspectors to drop their insistence that it cuts pension
further next year, arguing the country is on target to beat
budget targets without doing so.

In its draft 2019 budget, tabled to parliament, the government
said Greece's economy will grow 2.5 percent next year, with debt
and unemployment steadily falling too, Associated Press relays.

In the 44-page document, it said the issue of pension cuts would
be decided later this year, the report cites.

Greece's partners in the 19-country eurozone who lent Greece
billions to stay afloat in the eight years from 2010 have
insisted on the reforms, the report points out.

The report relays that Greece officially exited its bailout era
in August in that it's not borrowing any more, but it remains
under supervision.

Prime Minister Alexis Tsipras must call an election within a
year, the report adds.



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I R E L A N D
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DUBLIN BAY 2018-1: DBRS Finalizes BB(low) Rating on Cl. E Notes
---------------------------------------------------------------
DBRS Ratings Limited finalized its provisional ratings of the
notes issued by Dublin Bay Securities 2018-1 DAC as follows:

-- Class A notes rated AAA (sf)
-- Class B notes rated AA (sf)
-- Class C notes rated A (high) (sf)
-- Class D Notes rated BBB (high) (sf)
-- Class E Notes rated BB (low) (sf)

The Class Z and R notes are not rated.

DBS 2018-1 is a bankruptcy-remote special-purpose vehicle (SPV)
incorporated in Ireland. The issued notes were used to fund the
purchase of Irish residential mortgage loans originated by Bank
of Scotland plc. and secured over properties located in Ireland.
Bank of Scotland sold the portfolio in May 2018 to Erimon Home
Loans Ireland limited, a bankruptcy-remote SPV wholly owned by
Barclays Bank plc.

As at July 30, 2018, the final mortgage portfolio consisted of
1,423 loans with a total portfolio balance of approximately EUR
260.0 million. The weighted-average (WA) loan-to-indexed value,
as calculated by DBRS giving a limited credit-to-house price
increase, is 68.7% with a WA seasoning of 11.6 years. Almost all
the loans included in the portfolio (99.98%), are floating-rate
loans linked either to the European Central Bank (ECB) rate or a
variable rate linked to ECB rate. The notes pay a floating rate
of interest linked to three-month Euribor. DBRS has accounted for
this interest rate mismatch in its cash flow analysis.
Approximately 20.8% of the portfolio is collateralized by buy-to-
let properties. No loans in the portfolio are in arrears.

Credit enhancement for the Class A notes is calculated at 19.9%
and is provided by the subordination of the Class B notes to the
Class Z notes and the general reserve fund. Credit enhancement
for the Class B notes is calculated at 14.9% and is provided by
the subordination of the Class C notes to the Class Z notes and
the general reserve fund. Credit enhancement for the Class C
notes is calculated at 12.1% and is provided by the subordination
of the Class D notes to the Class Z notes and the general reserve
fund. Credit enhancement for the Class D notes is calculated at
9.6% and is provided by the subordination of the Class E notes,
Class Z notes and the general reserve fund. Credit enhancement
for the Class E notes is calculated at 6.0% and is provided by
the subordination of the Class Z notes and the general reserve
fund.

The transaction benefits from a cash reserve that is available to
support the Class A to Class E notes. The cash reserve will be
fully funded at close at 1.5% of the initial balance of the rated
notes less the liquidity reserve fund. The liquidity reserve fund
is sized at 1.5% of the Class A balance and provides liquidity
support to cover revenue shortfalls on senior fees, Class X1
payment and interest on the Class A notes. The notes will
additionally be provided with liquidity support from principal
receipts, which can be used to cover interest shortfalls on the
most senior class of notes, provided a debit is applied to the
principal deficiency ledgers in reverse sequential order.

A key structural feature is the provisioning mechanism in the
transaction, which is linked to the arrears status of a loan
besides the usual provisioning based on losses. The degree of
provisioning increases with the increase in number of months in
arrears status of a loan. This is positive for the transaction as
provisioning based on the arrears status will trap any excess
spread much earlier for a loan, which may ultimately end up in
foreclosure.

The Issuer Account Bank, Paying Agent and Cash Manager is
Citibank, N.A., London Branch. The DBRS private rating of the
Issuer Account Bank is consistent with the threshold for the
Account Bank outlined in DBRS's "Legal Criteria for European
Structured Finance Transactions" methodology, given the ratings
assigned to the notes.

The rating assigned to the Class A notes addresses the timely
payment of interest and ultimate payment of principal on or
before the final maturity date. The ratings assigned to the Class
B to Class E notes address the ultimate payment of interest and
principal. DBRS based its ratings primarily on the following:

-- The transaction capital structure, form and sufficiency of
    available credit enhancement and liquidity provisions.

-- The credit quality of the mortgage loan portfolio and the
ability
    of the servicer to perform collection activities. DBRS
calculated
    the probability of default (PD), loss given default (LGD) and
    expected loss (EL) outputs on the mortgage loan portfolio.

-- The ability of the transaction to withstand stressed cash
flow
    assumptions and repays the rated notes according to the terms
of
    the transaction documents. The transaction cash flows were
    analyzed using PD and LGD outputs provided by the "Master
    European Residential Mortgage-Backed Securities Rating
    Methodology and Jurisdictional Addenda" methodology.
Transaction
    cash flows were analyzed using INTEX DealMaker.

-- The structural mitigants in place to avoid potential payment
    disruptions caused by operational risk, such as downgrade and
    replacement language in the transaction documents.

-- The transaction's ability to withstand stressed cash flow
    assumptions and repay investors in accordance with the Terms
and
    Conditions of the notes.

-- The legal structure and presence of legal opinions addressing
the
    assignment of the assets to the Issuer and consistency with
    DBRS's "Legal Criteria for European Structured Finance
    Transactions" methodology.



=============
M O L D O V A
=============


* EBRD and Two PE Firms Buy Stake in Moldova Agroindbank
--------------------------------------------------------
Henry Foy at The Financial Times reports that the European Bank
for Reconstruction and Development has bought a stake in
Moldova's largest commercial bank, as part of a drive by the
country's government to clean up a sector beset by corruption and
fraud.

Moldova, a former Soviet republic on the edge of Europe, was
pitched into political and economic crisis in 2014 after $1
billion was stolen from three of its largest banks in a fraud
equivalent to around one-seventh of the country's GDP, according
to the FT. At the same time, its banking sector was used in the
so-called Russian Laundromat money-laundering scheme.

According to the FT, the EBRD and two private equity firms on
Oct. 2 bought a 41.09 per cent stake in Moldova Agroindbank
(MAIB), in a EUR23 million deal that the development-focused
lender hopes will restore trust in the sector and encourage other
investors.

"The government showed strong political will and resolve to clean
up the banking sector," the FT quotes Francis Malige, EBRD's
managing director for financial institutions, as saying. "It took
a brave decision to support the sale process of MAIB, which - no
doubt - will contribute to better banking services and stronger
investments to the Moldovan economy as a whole."

The FT relates that while the consortium will not hold a
controlling stake, the London-based development bank plans to
work with MAIB's minority shareholders to steer its strategic
direction.

Tucked between Ukraine and Romania, the country of 3 million has
found itself in a geopolitical tussle between Europe and Russia,
the FT discloses.

The FT says the $1 billion fraud resulted in the collapse of the
country's government and the arrest of its prime minister,
derailing efforts by the country's pro-EU politicians to meet
economic reform and anti-corruption demands made by Brussels in
exchange for financial assistance.

As part of the renewed effort to clean up the country's banking
sector, the Moldovan government took control of the stake in
MAIB, which has assets of around EUR1.1 billion, after it found
the previous shareholders had broken governance rules by acting
in concert, according to the FT.

According to the report, the EBRD and private equity firms AB
Invalda and Horizon Capital will own the stake through a UK-based
entity. The EBRD and Invalda will each hold 37.5 per cent of that
holding company and Horizon will hold 25 per cent.

The FT notes that the purchase comes after the EBRD helped broker
a deal for Romania's Banca Transilvania to acquire a controlling
stake in Victoriabank, Moldova's third-largest lender, earlier
this year.

The consortium will "bring the highest standards of corporate
governance, new technologies and effective structures to
strengthen the performance of Moldova's leading bank, improve
lending services for small businesses and support the economy
more broadly," the EBRD said in a statement, the FT relays.

The development bank is the largest institutional investor in
Moldova and has invested over EUR1.2 billion in the country
through over 120 projects, the FT discloses.



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


VAN LANSCHOT: S&P Gives BB Rating to Proposed AT1 Capital Notes
---------------------------------------------------------------
S&P Global Ratings has assigned its 'BB' long-term issue rating
to the proposed additional Tier 1 (AT1) perpetual capital notes
to be issued by Netherlands-based Van Lanschot N.V. The rating is
subject to S&P's review of the notes' final documentation.

In accordance with S&P's criteria for hybrid capital instruments,
the 'BB' issue rating reflects its analysis of the proposed
instrument and the 'BBB+' long-term issuer credit rating (ICR) on
Van Lanschot.

S&P said, "This proposed issuance is neutral for our issuer
credit ratings on Van Lanschot N.V. because we see no material
impact on our view of the bank's capitalization. We note that our
ICR on Van Lanschot's is the same as our stand-alone credit
profile (SACP) assessment."

The issue rating stands four notches below the ICR on Van
Lanschot due to the following deductions:

-- One notch because the notes are contractually subordinated;

-- Two notches reflecting the notes' discretionary coupon
    payments and expected regulatory Tier 1 capital status; and

-- One notch because the notes contain a contractual write-down
    clause.

The instrument contains a regulatory capital-based trigger,
linked to a regulatory common equity Tier 1 (CET1) ratio of
5.125% of the consolidated operating bank Van Lanschot N.V.
and/or the consolidated non-operating holding company Van
Lanschot Kempen N.V. (not rated). S&P said, "We treat this
mandatory trigger as a 'non-viability' trigger and don't apply
additional notching to this instrument. The reason for this is
that Basel III requirements and market expectations will likely
require banks to operate with significantly higher capital than a
CET1 ratio of 5.125% implies. We expect the CET1 ratios will
remain consistently at more than 700 basis points above the
5.125% trigger. As of June 30, 2018, Van Lanschot N.V. and Van
Lanschot Kempen reported a fully-loaded CET1 ratio of 21.4%."

S&P said, "We understand that the group targets a CET1 ratio in
the 15%-17% range as part of its 2020 medium term plan. It
recently announced its intention to return over EUR60 million to
shareholders. We estimate that this contemplated capital return
would represent pro forma a reduction of 1.2% of the bank's fully
loaded CET1 as of June 30, 2018, to 20.2%.

"We could lower the rating on the AT1 instrument if we project
that either of these regulatory ratios will fall within 700 basis
points of the trigger within our two-year rating horizon, or if
we were to lower the SACP of Van Lanschot N.V.

"Once the securities have been issued and confirmed as part of
the issuer's Tier 1 capital base, we expect to assign them
intermediate equity content. We would therefore include them in
our calculation of Van Lanschot's total adjusted capital, the
numerator of our capital adequacy ratio. This reflects our
understanding that the notes are perpetual, regulatory Tier 1
capital instruments that have no step-up." The payment of coupons
is fully discretionary and the notes can additionally absorb
losses on a going-concern basis through the write-down feature.



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


ROSGOSSTRAKH: S&P Ups Issuer Credit Rating to B+, Outlook Stable
----------------------------------------------------------------
S&P Global Ratings raised its insurer financial strength and
issuer credit ratings on Russia-based insurer Rosgosstrakh to
'B+' from 'B'. The outlook is stable.

S&P said, "Our view of Rosgosstrakh's capital and liquidity
positions has improved and it has implemented more-stringent
underwriting standards, thereby reducing the risk of further
significant negative capital fluctuations. At the same time,
Rosgosstrakh's lack of a track record in sustainably improving
and stabilizing its premium volumes, technical result, and
capital adequacy caused us to choose the lower of two possible
anchors, at 'b+'. In addition, Rosgosstrakh's investment
portfolio displays high concentration on BOFC group assets,
however, we view as positive that by the end of the year
Rosgosstrakh aims to diversify its investment allocation,
substantially decreasing the share of related parties.

"We see Rosgosstrakh has restored its regulatory solvency ratio
more than twice the regulatory minimum of 100%, and has reported
an excess of capital at the 'BBB' confidence level according to
our capital model. Capital adequacy as of June 30, 2018, has
improved and benefited from Russian ruble (RUB) 106.2 billion
(about $1.8 billion) capital injections during 2017, combined
with lower capital risk charges (in our capital model) due to
decline in net premiums, write-off of goodwill from the balance
sheet, substantially lower investments in equities, and improved
underwriting performance in 2017 and the first six months of
2018. These factors have partially offset Rosgosstrakh's reported
net losses at year-end 2017 of RUB56 billion. The losses stemmed
from poor technical performance in the obligatory motor third-
party liability (OMTPL) line, plus a one-off loss from asset
impairment. The insurer reported a net combined ratio above 130%
in 2016 and 2017. (Lower combined ratios indicate better
profitability. A combined ratio of greater than 100% signifies an
underwriting loss.) Since its arrival in mid-2017, Rosgosstrakh's
new management has focused on pruning the OMTPL insurance
portfolio and implementing more-stringent underwriting standards.
We estimate the combined ratio will gradually improve over 2018-
2019, but will remain above 100% at close to 110% in 2018 and
103% in 2019. This indicates a weaker technical performance than
other large players in the Russian insurance market"

Because it pruned its portfolio in 2017, Rosgosstrakh's gross
premium written contracted by 34% in 2017 and 33% in the first
half of 2018. It also lost its position as the leader of the
domestic insurance market. S&P estimates that Rosgosstrakh will
see positive, albeit modest, premium growth in 2019. If the
deregulation of insurance tariffs in the OMTPL segment is
effectively implemented in 2018-2019, it would further support
both premium growth and improved technical performance going
forward.

S&P said, "In our opinion, Rosgosstrakh's liquidity benefited
from the capital injections during 2017 and a decrease in
equities in the investment portfolio. The company's portfolio of
deposits and bonds is liquid and could be quickly converted into
cash. However, the investment portfolio remains concentrated on
particular names and in the financial sector, which weighs on the
average credit quality of the insurer's invested assets.

"In our view, Rosgosstrakh will still benefit because it is owned
by Bank Otkritie Financial Corp. (BOFC) group, and ultimately, by
the Central Bank of Russia (CBR). Due to the ownership structure,
we regard Rosgosstrakh as a government-related entity, even
though we do not, as a result, factor in additional notches of
support to the rating. Although we do not forecast that
Rosgosstrakh will require additional financial support in 2018-
2019, we expect BOFC and CBR to support Rosgosstrakh in case of
need.

"The stable outlook indicates that we do not expect to change our
ratings on Rosgosstrakh during the next six to 12 months. We
expect that Rosgosstrakh will continue to show an excess of
capital at the 'BBB' confidence level, and that its combined
ratio will improve as a result of the more-stringent underwriting
practices, while still remaining above 100%. We also expect
business growth to be limited in 2018, and that the insurer's
asset allocation will remain mostly unchanged over the same
period."

An upgrade would depend on positive credit developments at the
BOFC group level and reduced concentration in Rosgosstrakh's
investment portfolio, combined with improved premium volumes,
underwriting performance, and capital adequacy. The
creditworthiness of the wider group may strengthen because the
group's systemic importance, and therefore the likelihood that it
would receive extraordinary government support, might increase
after its merger with B&N Bank. The group's credit profile may
also strengthen in the next 12 months--its risk profile is
expected to improve following the planned transfer of some
problem assets from BOFC's balance sheet to a specially created
problem assets bank.

A downgrade would depend on significantly weaker-than-expected
underwriting performance or an unexpected deterioration in
capital adequacy, resulting from the materialization of older
claims. We could also lower the rating if significant premium
contraction were to mar the company's competitive position,
rather than supporting it, or the BOFC group's credit quality
were to deteriorate.



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


PROMOTORA DE INFORMACIONES: S&P Assigns 'B-' ICR, Outlook Stable
----------------------------------------------------------------
S&P Global Ratings said that it had assigned its 'B-' long-term
issuer credit rating to Spain-headquartered education and media
group Promotora de Informaciones S.A. (Prisa). The outlook is
stable.

The rating reflects S&P's view of Prisa's highly leveraged
capital structure and the potential for deterioration in its low
free cash flows due to macroeconomic factors or operational
underperformance. These factors offset the group's solid market
positions in its media operations and in the Latin American
(Latam) and Spanish educational publishing industries.

Prisa's highly leveraged capital structure includes about EUR1.25
billion of reported debt or more than EUR1.70 billion of adjusted
debt as at June 2018 (including preference shares treated as
debt). S&P views the group's level of cash flow generation as low
relative to its debt, and forecast S&P Global Ratings-adjusted
free operating cash flow (FOCF) to debt of 1.6%-2.1% in 2018 and
3.5%-4.0% in 2019.

In 2018, Prisa undertook a capital restructuring that saw it
raise equity and reduce debt, refinance its existing facilities,
and extend its debt maturities, actions that are positive for the
rating. Additionally, the group has refreshed its management team
and board, including the appointment of a new chief executive
officer and chief financial officer in 2017. While S&P views the
capital restructuring positively, it believes there remains risk
to the sustainability of Prisa's free cash flows from foreign-
exchange swings at its Latam operations, higher restructuring
charges than it forecast, or operational underperformance due to
factors such as adverse trends in advertising markets or working
capital swings.

In 2017, Prisa reported more than EUR1.3 billion in revenues and
EUR230 million in S&P Global Ratings-adjusted EBITDA (including
the consolidation of the Portuguese operations, Media Capital).
Prisa has operations in Spain, Portugal, and Latam. Its key
operations can be classified as educational publishing, radio,
press, and audiovisual. The audiovisual operations are owned by
the group's majority-owned and controlled subsidiary Media
Capital, which operates in the Portuguese market. In 2017, S&P
estimates the respective divisions' contribution to EBITDA after
the allocation of corporate overheads as approximately 67% for
educational publishing, 16% for radio, 15% for Media Capital, and
2% for press.

The educational publishing division, Santillana, focuses on the
sale of textbooks and the provision of complementary digital
learning systems to the K-12 learning market. Santillana is the
group's most stable business in terms of its market position and
recurrent earnings, but it is highly exposed to volatility in
Latam. The geographic spread of the Prisa group's EBITDA earnings
in 2017 was approximately 25% from Brazil; 19% from Spain; 15%
from Portugal; 7% from Colombia; 6% from Mexico; and 28% from
other Latam countries, including Chile, Argentina, Ecuador, and
Peru. In any given year, we forecast that earnings from Latam
will contribute more than 65% of adjusted EBITDA. Prisa's
exposure to country risk, and particularly foreign-exchange
volatility, in Latam countries is a key constraint on the rating,
with the group reporting in euros and all of its debt denominated
in euros.

S&P said, "We view Prisa's portfolio as providing a degree of
business diversification to educational publishing, and note that
two divisions -- radio and Media Capital -- each contributed more
than EUR40 million in EBITDA in 2017. However, educational
publishing remains the dominant contributor to the group's
earnings, and press and radio are subsegments of the media
industry that we view as susceptible to declining structural
trends. Prisa is undertaking a restructuring program, through
which it aims to achieve a run rate of EUR40 million in savings.
However, Prisa will also incur restructuring and severance costs
in the near term to achieve this target, and we estimate about
EUR30 million in restructuring costs in 2018.

"We estimate adjusted EBITDA margins of around 18% in 2018 and
20% in 2019, which reflect improving operating margins and are
partly due to improved seasonal performance at Santillana. We
anticipate that 2019 will see improved performance on average in
education compared with 2018, given that 2018 was an education
low cycle in Brazil and Spain."

Prisa holds No.1 or No.2 market share positions across almost all
its media operations, in its chosen markets. S&P said, "We think
that in educational publishing in particular, the group enjoys
some barriers to entry protection, from existing high market
shares and entrenched market positions in the mandatory K-12
sector, international operating scale, and in-force local sales
and content staff. At present, around 20% of Santillana's
revenues come from digital solutions, with the group offering
physical and digital products in all the countries in which it
operates. We understand that, due the location of the key
operations in Latam, the digital penetration of products remains
low relative to peers operating in more developed markets, but is
growing strongly. At present, we see the digital offerings as
complementary to Santillana's physical educational publishing
business, and note Santillana's leading digital position in
Latam. However, we believe that in the future, there is a risk
that growing digital penetration could lower the barriers to
entry in this business."

Prisa is seeking to dispose of assets to raise further capital
and improve its operational focus, with likely disposals in S&P's
view being Media Capital (mainly TV) and certain noncore or
nonprofitable radio operations. Such disposals would likely
reduce the group's business scale and diversification, but would
likely improve its financial position. S&P forecasts about EUR60
million-equivalent of noncore disposals in the next 12 months
from small Latam radio operations and some non-core properties.
The group had previously contracted to sell Media Capital to
Altice N.V. in early 2018 for more than EUR300 million in net
proceeds. However, the transaction was terminated due to the
Portuguese competition regulator not approving the transaction.
The group has not committed to any further asset sales, however
S&P understands that management will likely continue to consider
the monetization of noncore assets over the next 12-24 months.

S&P said, "Our view of Prisa's highly leveraged capital structure
remains a key constraint on the rating. We forecast adjusted debt
to EBITDA of around 7.3x-7.8x in 2018, 6.0x-6.5x in 2019, and
5.0x-5.5x in 2020. When calculating our adjusted debt, we do not
net cash on the balance sheet. Additionally, we include in our
adjusted debt figure EUR279 million of preference shares at
Santillana's operating subsidiary. These shares relate to the
preference shares held by minority owner Victoria Capital
Partners (VCP), which owns a 25% stake in Santillana. We view
this preference share interest as structurally senior to the debt
facilities at the intermediate holding company entities and the
parent holding company Prisa."

The VCP preference shares carry a minimum contractual preference
dividend payable by Santillana to VCP of US$25.8 million
annually. S&P said, "We treat this dividend as interest in our
adjustments and therefore it lowers our operating cash flow
metrics. Our forecasts also include disposal proceeds, which we
estimate at around EUR60 million spread across 2018 and 2019, and
deferred consideration earn-out payments to private equity firm
3i for shares in Prisa Radio, which we estimate at EUR36.5
million in our forecasts in 2018. We include scheduled
amortization payments of EUR25 million in 2018, EUR40 million in
2019, and EUR27 million in 2020."

S&P said, "The stable outlook reflects our view that Prisa will
continue to generate consistent EBITDA from its portfolio of
media operations, with modest, albeit positive, free cash flow
generation supporting capital investments and debt reduction in
the next 12 months. Our base case does not include any material
disposals, such as the sale of Media Capital. We also project
that the group will maintain adequate liquidity at all times,
including covenant headroom comfortably above 15%.

"We could lower the rating if we viewed Prisa's capital structure
as no longer sustainable. This may occur in the event of material
operating underperformance such that the group's EBITDA and
margins declined materially lower than our base-case forecast.
Additionally, we could lower the rating if FOCF was to
deteriorate sustainably on an adjusted basis, such that
discretionary cash flow (DCF) after the payment of dividends to
VCP and minorities turned sustainably negative. We could also
consider lowering the rating if the group was to make any
material debt-funded acquisitions, or if we observed a material
deterioration in covenant or liquidity headroom.

"We could raise the rating if Prisa were to generate sustainable
meaningful DCF (after the payment of dividends to VCP and
minorities), while maintaining or improving its operating
performance and margins. Prisa could demonstrate this by
reporting consistent growth in organic revenues, maintaining its
leading market positions, and by continuing to expand the
educational publishing segment's digital offerings. Absent any
material shareholder returns or acquisitions, we believe that
this would most likely result in a combination of deleveraging,
improving DCF to adjusted debt, and growing sustainable FOCF
generation. That said, any upgrade would also hinge on the group
having built sufficient headroom to absorb potential significant
foreign-exchange volatility."



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


AKBANK TAS: Fitch Cuts LT For. Curr. Issuer Default Ratings to B+
-----------------------------------------------------------------
Fitch Ratings has downgraded the Long-Term Foreign-Currency
Issuer Default Ratings (LTFC IDRs) of 20 Turkish banks and their
subsidiaries. The agency has also downgraded the Viability
Ratings (VRs) of 12 banks.

The downgrades of the banks' VRs reflect increased risks to their
stand-alone credit profiles over the rating horizon since the
last review of these institutions on July 20, 2018. In Fitch's
view, the banks' performance, asset quality, capitalisation and
liquidity and funding profiles are now more likely to come under
pressure as a result of the further depreciation of the Turkish
lira (by about 20% against the US dollar since the last rating
review), the spike in interest rates (driven by the increase in
the policy rate to 24% from 17.75% on September 13) and the
weaker growth outlook (Fitch has revised downwards its forecasts
for GDP growth to 3.8% in 2018 and 1.2% in 2019).

At the same time, Fitch believes that near-term pressure on the
banks' ratings has moderated as a result of the eventually
orthodox monetary policy response, the stabilisation of the lira
exchange rate, recent evidence of external market access - albeit
at a higher cost - and the absence of significant deposit
outflows since mid-August.

The downgrades of foreign-owned banks' LTFC IDRs to 'BB-' from
'BB', one notch below the sovereign rating, reflect its revised
assessment of the risk of a marked deterioration in Turkey's
external finances, and therefore of the risk of government
intervention in the banking sector. Fitch now views the risk of
restrictions that would prevent banks from servicing their
obligations to be slightly higher than that of a sovereign
default.

The downgrades and revisions of the LTFC IDRs and Support Rating
Floors (SRFs) of state-owned commercial banks, state-owned Vakif
Katilim Bankasi AS and the private development bank Turkiye Sinai
Kalkinma Bankasi A.S. (TSKB) to 'B+' from 'BB-' reflect Fitch's
view of greater risks to the ability of the Turkish authorities
to provide support in FC given the increased potential for stress
in the country's external finances.

The affirmation of the LTFC IDRs and SRFs of two state-owned
development banks, Turkiye Ihracat Kredi Bankasi A.S. (Turk
Eximbank) and Turkiye Kalkinma Bankasi A.S. (TKB), at 'BB-' and
'BB', respectively, reflect the banks' ownership, policy roles
and, in the case of TKB, almost entirely treasury-guaranteed
funding base.

Fitch plans to resolve the outstanding Rating Watch Negatives
(RWNs) on the VRs of smaller foreign-owned and participation
banks at a further review in the coming weeks.

KEY RATING DRIVERS

VRs OF ALL BANKS

The 'b+' VRs of T.C. Ziraat Bankasi A.S. (Ziraat), Turkiye Halk
Bankasi A.S. (Halk), Turkiye Vakiflar Bankasi T.A.O. (Vakifbank),
TSKB, Akbank T.A.S., Turkiye Garanti Bankasi A.S. (Garanti), Yapi
ve Kredi Bankasi A.S. (YKB), Turkiye Is Bankasi A.S. (Isbank),
Turk Ekonomi Bankasi A.S. (TEB), ING Bank A.S., QNB Finansbank
A.S. and Denizbank A.S. reflect their exposure to the high-risk
Turkish operating environment. They also reflect, to varying
degrees, the banks' solid franchises, and in most cases records
of stable and sound performance and moderate non-performing loans
(NPLs).

However, the banks' risk profiles have deteriorated significantly
as a result of local-currency depreciation and higher interest
rates, which have, and will continue to, put pressure on asset
quality, margins and capitalisation. In addition, there is a
material risk of a reduction in access to foreign funding
markets, and of volatility in deposit levels, resulting in
heightened refinancing and liquidity pressures. Risks to
financial stability remain significant, given potential
unpredictability in the policy framework and Turkey's large
external financing requirements.

Asset-quality risks for banks have increased given the weaker
growth outlook, generally high FC lending (equal to about 45% of
sector loans as of mid-September 2018, up from 39% at end-1H18
due to the impact of local-currency depreciation) and the
potential impact of depreciation on often weakly hedged
borrowers' ability to service their debt. Significantly higher
interest rates following the increase in the policy rate are
likely to negatively affect lira borrowers' debt service
capacity, and also weigh on loan performance. Exposures to the
construction and energy sectors and high borrower concentrations
are also significant sources of risks at many banks.

The banks' reported NPL ratios have remained broadly stable in
recent quarters and at manageable levels. The sector NPL ratio
(loans overdue by 90+ days; unconsolidated basis) was a still
moderate 3% as of mid-September 2018. However, NPLs have grown in
absolute terms and the emergence of some big-ticket problematic
exposures, growth in Stage 2 loans (partly explained by banks'
transition to IFRS 9 in 1Q18) and the loan restructuring
framework agreement being implemented in Turkey suggest the
potential for NPL increases. Reserves coverage of NPLs is
reasonable, but taking into account Stage 2 loans - which
averaged 8% at the larger banks in the sector at end-1H18 - is
significantly weaker.

Fitch expects sector profitability to weaken in 2019 due to
higher funding costs following the increase in the policy rate,
slower credit growth and higher impairment charges. Performance
could deteriorate significantly in case of a marked weakening of
asset quality. FY18 performance should remain reasonable,
notwithstanding slower growth in 2H18, supported by a strong
performance in 7M18 (return on average equity of 15.6%), loan
repricing, expected gains on CPI-linked securities at some banks
and some flexibility in impairment recognition and provisioning.

Capital ratios have come under pressure from lira depreciation
(which inflates FC risk-weighted assets) and higher interest
rates (which result in negative revaluations of government bond
portfolios). Potential asset-quality deterioration also
represents a risk to capital positions. Pre-impairment profit
(7M18 annualised: equal to about 5% of average sector loans)
provides a moderate buffer to absorb losses through income
statements, although this is likely to fall as a result of
tighter margins. A number of banks also hold small amounts of
free provisions.

The sector's average total capital ratio (on a solo basis) was
16.1% at end-July 2018, comfortably above the 12% recommended
regulatory minimum. This is down only moderately from 16.9% at
end-2017 as solid internal capital generation and the hedge
offered by FC Tier 2 instruments have partially offset the impact
of a weaker lira and higher rates. However, further sharp lira
depreciation, and the interest-rate hike in August 2018, will
have eroded banks' capital positions further. Nonetheless,
forbearance measures introduced by the Banking Regulation and
Supervision Authority to alleviate the impact on reported
regulatory capital metrics reduce the risk of regulatory capital
breaches, in its view.

Refinancing risks for the banks remain high given the sector's
significant short-term maturing FC wholesale funding liabilities,
and in light of the recent heightened market volatility and
tightening global financing conditions (driven mainly by an
increase in dollar interest rates). Banks typically have access
to sufficient FC liquidity (comprising mainly cash and interbank
placements, FC reserves held under the reserve option mechanism
(ROM) and FC swaps) to cover their FC wholesale funding
liabilities maturing with a year, mitigating the refinancing
risk. Refinancing risks are less pronounced at most foreign-owned
banks, given potential FC liquidity support from shareholders.

Fitch considers recent monetary policy action, along with
Akbank's latest USD980 million syndicated loan rollover (albeit
at a significantly higher cost), to be mildly positive for
investor sentiment. Nevertheless, FC wholesale funding rollover
rates could decline given the weaker growth outlook, subdued
investor sentiment and the rise in funding costs.

The sector loans/deposit ratio was a high 132% as of mid-
September, and banks' external debt was USD183 billion at end-
1H18, of which USD102 billion matured within 12 months. However,
as some of the latter represents more stable funding (for
example, from parent banks, subsidiary banks or offshore Turkish
corporate entities), Fitch estimates banks' external debt
servicing requirement over one year, in case of a complete market
shutdown, at about USD50 billion-USD55 billion.

Available FC liquidity of approximately USD86 billion (comprising
mainly FC placed with the central bank under the ROM and short-
term currency swaps with foreign counterparties) provides solid
coverage of the banks' potential refinancing requirement.
However, a scenario in which Turkish borrowers have to pay down
foreign debt would result in a reduction in central bank's
foreign-exchange reserves and add to pressures on the exchange
rate, interest rates and economic growth. In addition, outflows
of FC deposits, which fell by USD12 billion or 6% in July-August
2018, represent a further potential risk to banks' liquidity
positions.

The RWN on Halk's VR reflects Fitch's view of a still material
risk of the bank becoming subject to a fine or other punitive
measures as a result of the US investigation, which resulted in
the conviction of its deputy general manager for violation of US
sanctions. Such measures could materially weaken solvency,
increase refinancing risks or negatively affect other aspects of
the bank's credit profile.

IDRS, SENIOR DEBT RATINGS AND NATIONAL RATINGS DRIVEN BY VRS

Akbank T.A.S (LTFC IDR: 'B+'/Negative)

Turkiye Is Bankasi A.S. (LTFC IDR: 'B+'/Negative)

The downgrades of Akbank and Isbank's IDRs are driven by the
downgrades of their VRs. The banks' higher Long-Term Local-
Currency (LTLC) IDRs, one notch above the LTFC IDRs, reflect
potential state support for the banks in local currency. The
Negative Outlooks on the banks' IDRs reflect the potential for
further deterioration in the operating environment, which could
place greater pressure on their financial metrics. The downgrades
of the National Ratings of the two banks reflect the downgrades
of their LTLC IDRs.

The affirmation of the banks' 'B' SRFs, three notches below the
sovereign's LTFC IDR, reflects the banks' systemic importance,
but also the Turkish authorities' limited ability to provide
support in FC in case of need, in light of its only moderate
level of FC reserves. The sovereign's greater ability to provide
support in local currency drives the banks' higher LTLC IDRs.

IDRs, SUPPORT RATINGS, SENIOR DEBT RATINGS AND NATIONAL RATINGS
OF STATE-OWNED COMMERCIAL BANKS AND DEVELOPMENT BANKS

T.C. Ziraat Bankasi A.S. (LTFC: IDR 'B+'/Negative)

Turkiye Halk Bankasi A.S. (LTFC: IDR 'B+'/Negative)

Turkiye Vakiflar Bankasi T.A.O (LTFC: IDR 'B+'/Negative)

Vakif Katilim Bankasi AS (LTFC IDR: 'B+'/Negative)

Turkiye Sinai Kalkinma Bankasi A.S. (LTFC: IDR 'B+'/Negative)

Turkiye Ihracat Kredi Bankasi A.S. (LTFC: IDR 'BB-'/Negative)

Turkiye Kalkinma Bankasi A.S. (LTFC: IDR 'BB'/Negative)

The LTFC IDRs, FC debt ratings and SRFs of the state-owned
commercial banks (Ziraat, Halk, Vakifbank, Vakif Katilim) and of
development bank TSKB have been downgraded by one notch to 'B+',
reflecting greater risks to the ability of the sovereign to
provide support in FC. At end-July 2018, the central bank's
foreign-exchange reserves were a moderate USD101 billion, while
net reserves (adjusted for USD71 billion of banks' placements
with the central bank, including under the ROM) were low at
around USD30 billion.

The downgrades of the LTLC IDRs of the five banks to one notch
below the sovereign LTLC IDR, reflect its view of a higher risk
of government intervention in the banks than of a sovereign
default, in the event of a stress in Turkey's external finances.
The downgrades of the National Ratings of these banks reflect the
downgrades of their LTLC IDRs.

Fitch continues to view the government's propensity to support
the state-owned commercial and development banks as high, in case
of need, based on their majority state ownership (except for
TSKB), systemic importance and significant state-related funding
(state-owned commercial banks) and policy roles (Ziraat, Halk and
the development banks).

The LTFC IDRs and SRFs of Turk Eximbank and TKB are affirmed at
'BB-' and 'BB', respectively, reflecting the banks' full state
ownership and policy roles. The higher rating of TKB, which is in
line with the sovereign rating, reflects its small size and
largely treasury-guaranteed funding. The banks' LTLC IDRs are
equalised with the sovereign rating.

The Negative Outlooks on the IDRs of the state-owned commercial
banks and development banks mirror those on the sovereign
ratings. In the case of Ziraat, Halk, Vakifbank, and TSKB, it
also reflects the potential for their VRs to be lowered in case
of further deterioration in the operating environment, which
could place greater pressure on the banks' financial metrics.

IDRs, SUPPORT RATINGS, SENIOR DEBT RATINGS AND NATIONAL RATINGS
OF FOREIGN-OWNED BANKS

Turkiye Garanti Bankasi A.S. (LTFC IDR: 'BB-'/Negative)

Yapi ve Kredi Bankasi A.S. (LTFC IDR: 'BB-'/Negative)

Turk Ekonomi Bankasi A.S. (LTFC IDR: 'BB-'/Negative)

QNB Finansbank A.S. (LTFC IDR: 'BB-' /Negative)

ING Bank A.S. (LTFC IDR: 'BB-'/Negative)

Kuveyt Turk Katilim Bankasi A.S (Kuveyt Turk; LTFC IDR: 'BB-
'/Negative)

Alternatifbank A.S. (Alternatifbank; LTFC IDR: 'BB-'/Negative)

Turkiye Finans Katilim Bankasi A.S. (TFKB; LTFC IDR: 'BB-
'/Negative)

Burgan Bank A.S. (Burgan Bank Turkey; LTFC IDR: 'BB-'/Negative)

ICBC Turkey Bank A.S. (LTFC IDR: 'BB-'/Negative)

BankPozitif Kredi ve Kalkinma Bankasi A.S. (LTFC IDR: 'BB-
'/Negative)

Denizbank A.S. (LTFC IDR: 'BB-'/Negative)

The IDRs, Support Ratings (SRs), FC senior debt ratings and
National Ratings of these banks are driven by potential support
from their shareholders. This reflects Fitch's view that the
banks constitute strategically important subsidiaries, to varying
degrees, for their parents. It also considers ownership stakes,
integration, the subsidiaries' roles within their respective
groups and, for some, common branding.

The one-notch downgrade of the banks' LTFC IDRs and FC senior
debt ratings, to one notch below the level of the sovereign LTFC
IDR, reflects its view that, in case of a marked deterioration in
Turkey's external finances, the risk of government intervention
in the banking sector would be higher than that of a sovereign
default. The banks' LTLC IDRs are also downgraded by one notch to
reflect intervention risks. The Negative Outlooks on the banks'
IDRs reflect those on the Turkish sovereign.

Fitch continues to view the risk of capital controls being
imposed in Turkey as remote given Turkey's high dependence on
foreign capital (and ensuing strong incentive to retain market
access) and the eventually orthodox policy response to recent
market pressures. Nevertheless, in case of a marked deterioration
in Turkey's external finances, some form of intervention in the
banking system that might impede the banks' ability to service
their FC obligations would become more likely, in Fitch's view.

The downgrades of the banks' National Ratings reflect the
downgrades of their LTLC IDRs.

GUARANTEED DEBT RATING

Alternatifbank's guaranteed debt rating of 'A' is equalised with
the rating of its Qatari guarantor, The Commercial Bank
(P.Q.S.C.) (A/Stable).

SUBORDINATED DEBT RATINGS

The subordinated notes ratings of YKB, Kuveyt Turk, Garanti and
Alternatifbank - which are notched down one level from their
support-driven IDRs - and the subordinated notes ratings of
Isbank, Akbank, Vakifbank and TSKB - which are notched down one
level from their VRs - have been downgraded in line with the
downgrades of their respective anchor ratings.

The notching in each case includes one notch for loss severity
and zero notches for non-performance risk (relative to the anchor
ratings).

SUBSIDIARY RATINGS

Akbank AG (LTFC IDR: 'B+'/Negative)

Ak Yatirim Menkul Degerler AS (LTFC IDR: 'B+' /Negative)

Ak Finansal Kiralama A.S. (LTFC IDR: 'B+' /Negative)

Alternatif Finansal Kiralama AS (LTFC IDR: 'BB-'/Negative)

Deniz Finansal Kiralama A.S. (LTFC IDR: 'BB-'/Negative)

Joint-Stock Company Denizbank Moscow (LTFC IDR: 'BB-'/Negative)

Garanti Faktoring A.S. (LTFC IDR: 'BB-'/Negative)

Garanti Finansal Kiralama A.S. (LTFC IDR: 'BB-'/Negative)

Is Faktoring A.S. (LTFC IDR: 'B+'/Negative)

Is Finansal Kiralama A.S. (LTFC IDR: 'B+'/Negative)

Is Yatirim Menkul Degerler A.S. (Long-Term National Rating:
'A+(tur)'/Stable)

QNB Finans Finansal Kiralama A.S. (LTFC IDR: 'BB-'/ Negative)

QNB Finans Faktoring A.S. (LTFC IDR: 'BB-'/ Negative)

Yapi Kredi Finansal Kiralama A.O. (LTFC IDR: 'BB-'/ Negative)

Yapi Kredi Faktoring A.S. (LTFC IDR: 'BB-'/ Negative)

Yapi Kredi Yatirim Menkul Degerler A.S. (LTFC IDR: 'BB-
'/Negative)

Ziraat Katilim Bankasi A.S. (LTFC IDR: 'B+' /Negative)

The downgrades of the IDRs of the subsidiaries of Akbank,
Alternatifbank, Denizbank, Garanti, Isbank, QNB Finansbank, YKB
and Ziraat mirror those of their respective parents. Subsidiary
ratings are equalised with those of their parents, reflecting
their strategic importance to, and integration with, their
respective groups.

Akbank AG's Deposit Ratings are downgraded in line with the
bank's LTFC IDR. In Fitch's opinion, debt buffers do not afford
any obvious incremental probability of default benefit over and
above the support benefit factored into the bank's IDRs.

RATING SENSITIVITIES

VRs OF ALL BANKS, AND IDRS, SENIOR DEBT RATINGS AND NATIONAL
RATINGS OF AKBANK AND ISBANK

Further downgrades could result from a further marked
deterioration in the operating environment, as reflected, in
particular, in negative changes in the lira exchange rate,
domestic interest rates, economic growth prospects and external
funding market access; bank-specific deterioration of asset
quality; marked erosion of capital ratios; a weakening of the
banks' FC liquidity positions (without this being offset by
shareholder support); or deposit instability that lead to
pressure on banks' liquidity and funding profiles.

Downgrades of state-owned banks' VRs would only result in
negative action on their IDRs if at the same time Fitch believes
the ability or propensity of the Turkish authorities to provide
support - as reflected in their SRFs - has also weakened.

Halk's VR could be downgraded if a fine or other punitive
measures resulting from the US investigation materially weaken
solvency, increase refinancing risks or negatively affect other
aspects of the bank's standalone credit profile.

The Outlooks could be revised to Stable if economic conditions
stabilise and bank financial metrics do not deteriorate
significantly.

IDRs, SUPPORT RATINGS, SUPPORT RATING FLOORS, SENIOR DEBT RATINGS
AND NATIONAL RATINGS OF STATE-OWNED COMMERCIAL BANKS AND
DEVELOPMENT BANKS

The SRs and SRFs of Ziraat, Halk, Vakifbank, Vakif Katilim, TSKB
and Turk Eximbank could be downgraded and revised lower if Fitch
concludes that the stress in Turkey's external finances is
sufficient to materially reduce the reliability of support for
these banks in FC from the Turkish authorities.

Downward revision of the SRFs of Ziraat, Halk, Vakifbank and TSKB
will only result in downgrades of their LTFC IDRs and FC senior
debt ratings if their VRs are also downgraded.

The ratings of these banks, and of TKB, could also be downgraded
if the Turkish sovereign is downgraded or if Fitch believes the
sovereign's propensity to support the banks has reduced (not
Fitch's base case). TKB's ratings could also be downgraded by one
notch, to the level of Turk Eximbank, if the proportion of non-
guaranteed funding increases materially.

The introduction of bank resolution legislation in Turkey aimed
at limiting sovereign support for failed banks could also
negatively affect Fitch's view of support, but Fitch does not
expect this in the short term.

IDRS, SUPPORT RATINGS, SUPPORT RATING FLOORS, SENIOR DEBT RATINGS
AND NATIONAL RATINGS OF FOREIGN-OWNED BANKS

The LTFC IDRs, FC senior debt ratings and SRs of foreign-owned
banks could be downgraded if the Turkish sovereign is downgraded,
or if there is a sharp reduction in a parent bank's ability or
propensity to support its Turkish subsidiary.

SUBORDINATED DEBT RATINGS

Subordinated debt ratings are primarily sensitive to changes in
anchor ratings, namely the VRs of Isbank, Akbank, Vakifbank and
TSKB, and the Long-Term IDRs of YKB, Garanti, Kuveyt Turk and
Alternatifbank.

The ratings are also sensitive to a change in notching from the
anchor ratings due to a revision in Fitch's assessment of the
probability of the notes' non-performance risk or of loss
severity in case of non-performance.

GUARANTEED DEBT RATING

Alternatifbank's guaranteed debt rating of 'A' is sensitive to a
change in The Commercial Bank (P.Q.S.C)'s Long-Term IDR.

SUBSIDIARY RATINGS

The ratings of these entities are sensitive to changes in the
Long-Term IDRs of their parents.



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


FIAT CHRYSLER: DBRS Ups Issuer Rating & Unsec. Debt Rating to BB
----------------------------------------------------------------
DBRS Limited upgraded the Issuer Rating and Senior Unsecured Debt
rating on Fiat Chrysler Automobiles N.V. to BB (high) from BB
(low). DBRS also revised the recovery rating on the Company's
Senior Unsecured Debt to RR3 from RR4. All trends are Stable. The
upgrade is based, in large part, on FCA's strong earnings/cash
flow generation and sizable debt reduction, which have
strengthened its financial risk assessment (FRA) to levels
meaningfully above the previously assigned ratings. This rating
action also resolves the Under Review with Developing
Implications status, initially assigned on January 16, 2017, and
subsequently maintained on January 16, 2018.

The ratings were initially placed Under Review with Developing
Implications following the U.S. Environmental Protection Agency's
announcement that it had issued a notice of violation of the
Clean Air Act to FCA in connection with the Company's 2014-2016
model year light-duty vehicles sold in the United States and
equipped with 3.0-litre diesel engines (the Diesel Issue).
Moreover, in May 2017, the U.S. Department of Justice filed a
civil lawsuit against FCA in connection with the Diesel Issue.
DBRS acknowledges that these actions have yet to be settled,
which could ultimately entail the imposition of consequential
fines and/or penalties, among other matters. Moreover, it remains
uncertain when or under what terms the Diesel Issue will be
resolved; however, DBRS recognizes that the Company's credit
metrics and, notably, its balance sheet have improved
substantially since the onset of the Diesel Issue. This is
demonstrated by sizable debt repayments, under which consolidated
industrial indebtedness decreased to EUR 14.5 billion as of June
30, 2018, from EUR 22.5 billion as of YE2016. Additionally, FCA's
liquidity remains strong, exceeding EUR 21 billion as of June 30,
2018. As such, DBRS notes that the Company's credit metrics have
enough cushions to absorb any foreseeable penalty stemming from
the Diesel Issue and remain in line with the upgraded ratings,
which enables DBRS to resolve the Under Review status in advance
of the Diesel Issue's conclusion.

Furthermore, the Company's earnings continue to trend positively,
despite slight softening in Q2 2018 caused by weaker demand in
China, in line with import-duty reductions effective July 2018
which postponed vehicle purchases. Performance remained solid in
the core NAFTA region where the operating margin was 8% in Q2
2018. Going forward, earnings are anticipated to benefit further
from higher forecasted global vehicle demand amid a firmer sales
mix (reflecting additional growth in Jeep, Ram, Maserati and Alfa
Romeo). Cost headwinds are also estimated to be partly offset by
increasing platform consolidation and related scale/purchasing
efficiencies as well as through additional manufacturing
efficiencies.

While FCA faces headwinds including commodity cost pressures and
tightening emissions controls, among others, its materially
stronger FRA provides cushion against unexpected challenges even
at the newly upgraded ratings level, thereby making a negative
rating action unlikely. Additionally, a resolution of the Diesel
Issue on terms DBRS considers reasonable and/or continued
strengthening credit metrics would likely result in additional
positive rating actions.


HOUSE OF FRASER: Sports Direct Sacks Ex-Directors and Management
----------------------------------------------------------------
Wil Crisp at The Telegraph reports that the former directors and
senior management of House of Fraser have been sacked by Sports
Direct amid calls for an investigation into the collapse of the
department store group.

Sports Direct acquired the chain in August in a GBP90 million
deal to buy the company out of administration, the report notes.

According to the report, the dismissals were announced in a
statement that was released to investors after the London stock
market closed.

Commenting on the latest move by Sports Direct Richard Lim, the
CEO of Retail Economics, said putting the House of Fraser back on
track will be a significant challenge, The Telegraph relays.

"The new management team will need to prioritise right-sizing
initiatives and utilise any excess space to sweat assets more
effectively in a move become fit-for-purpose in today's digital
age," the report quotes Mr. Lim as saying.  "The retailer
operates in the part of the industry under the most significant
amount of pressure and race is on to rapidly restructure the
business to ensure the takeover is a success."

Earlier this month, Mike Ashley, the billionaire founder of
Sports Direct, called for the demise of House of Fraser to be
"fully investigated," The Telegraph recalls.

According to The Telegraph, Mr. Ashley said the House of Fraser
chairman Frank Slevin and other colleagues had misled suppliers
and warehouse operators by promising to pay them with cash from
the business's former owner, Chinese conglomerate Sanpower.

A report compiled by the administrator EY showed the company had
debts totalling GBP484 million, including GBP30.4 million owed to
XPO Logistics, The Telegraph discloses.

The Telegraph says Mr. Ashley has called for House of Fraser's
former directors to face an Insolvency Service inquiry.

He also hit out at Mr. Slevin accusing him of retaining a company
car and flat as the retailer collapsed, the report relates.

The Telegraph adds that the CEO of Tea Terrace, one of House of
Fraser's suppliers, has also claimed that the company's
executives hadn't given him a transparent overview of operations
ahead of the collapse.

Ehab Shouly accused Mr. Slevin of failing to disclose financial
information and "stringing us along," The Telegraph says.

When Sports Direct acquired House of Fraser it threw out plans to
close 31 of the company's 59 stores. After negotiations with
landlords a total of 20 stores were saved from closure, the
report notes.

As reported by the Troubled Company Reporter-Europe on Aug. 14,
2018, James Davey at Reuters related that Sports Direct, the
British sportswear retailer controlled by tycoon Mike Ashley,
snapped up House of Fraser from the department store group's
administrators for GBP90 million (US$115 million).  Earlier on
Aug. 10, House of Fraser appointed Ernst and Young as
administrators after talks with investors and creditors failed to
find "a solvent solution" for the business, Reuters disclosed.


LONDON: Key Markets Would Be in The Lurch Under A No-Deal Brexit
----------------------------------------------------------------
Philip Stafford at the Financial Times reports that London is
bracing itself for an uncertain six months in the run-up to the
UK's departure from the European Union.

Operators of the crucial market infrastructure that ensures that
money flows around the world -- from exchanges, and fixed income
markets to clearing and settlement houses -- are activating their
plans for life outside the EU, according to Financial Times.

Some of London's biggest markets operators, such as TP ICAP,
Thomson Reuters, Cboe Europe and Turquoise are setting up hubs in
Europe, centred on Amsterdam, Paris and Dublin, the report notes.

Hopes that the UK's vote to leave may have helped to unhitch the
UK from some of the EU's financial markets rules have been set
aside, at least temporarily, the report relays.

The report says that instead there has been a growing, if
reluctant, acceptance that political divisions mean the UK will
probably be leaving the EU in six months' time, but with little
clarity over the long-term arrangements for life outside the
bloc.

With the only certainty being the looming March 2019 deadline,
regulators either side of the Channel have become more vocal
about the impact of the UK leaving without a political exit
agreement, the report notes.

"This would mean the sudden loss of all market access rights
based on passporting, without the benefit of additional time to
implement the necessary structural changes," says Peter Bevan,
global head of financial regulation at Linklaters, the London law
firm, the report relays.

"In this event, it may be that regulators could help plug the
gaps left by the political process by allowing firms some further
time to adjust, but this would depend on trust between UK and EU
authorities and retaining that trust may be increasingly
difficult if this turns into an acrimonious divorce," the report
quoted Mr. Bevan as saying.

UK regulators have said they would issue temporary licences for
EU trading venues to access the UK market. However, that may not
be enough, the report notes.  As the Institute for Government, a
UK think-tank, pointed out last month: "There are many areas that
require EU action, and no guarantee it will reciprocate," the
report relays.

"I don't think the City has ever believed in a no-deal scenario.
But the mood swing in the last quarter is down to the amount of
preparation that's necessary for it," says Alasdair Haynes, chief
executive of Aquis Exchange, a UK trading venue, the report
discloses.  In September, it announced plans to set up a Paris
office to ensure access to EU markets. "You have to be prepared
for this as it could be one of those days in which you see huge
spikes in the market," the report quoted Mr. Haynes as saying.

Many outstanding markets issues remain. Chief among them is the
uncertainty over derivatives markets, one of London's strengths.
Its industry expertise makes it the main global hub for
originating, executing and booking deals, the report relays.  The
Bank of England estimates it could affect about a quarter of
contracts entered into by parties in both the UK and European
Economic Area, of which contracts with a notional value of GBP16
trillion mature after March, the report noes.

London is also the main global hub for managing the daily price
fluctuations on the contracts, via clearing houses such as LCH,
majority-owned by the London Stock Exchange Group, and ICE Clear
Europe, the report relays.  They act as buffers by standing
between two parties in a deal and helping to prevent a default
spreading, the report says.

European institutions such as banks and insurance companies rely
heavily on UK clearing houses, the report notes.  London
processes about 90 per cent of euro-denominated interest rate
swaps used by institutions in the eurozone, according to the
European Central Bank, the report discloses.  That could mean
derivatives with a notional value of GBP67 trillion could be
affected, according to the Bank of England, the report relays.

To prevent a rupture, the EU and UK have to recognize each
other's regulations as being of "equivalent" standard, the report
says.  But, as critics note, the European Commission's view on
whether it can grant equivalence is as much about politics as
meeting regulatory standards, the report notes.

The most notable signal from London relating to Brexit has come
in the clearing of interest rates, used by investors to hedge
portfolios against swings in prices, the report relays.  Eurex,
owned by Deutsche Borse, has set up a rival scheme for banks to
clear their portfolios of interest rates denominated in euros in
the EU, the report says.

Now it is clearing a notional EUR9.3 trillion of contracts,
compared with about EUR1.8 trillion before the scheme started,
the report notes.  Even so, about two-thirds of that total is in
forward rate agreements, which is short term, low margin and
often generated between banks as a side-effect of bigger deals,
the report discloses.  The more lucrative and substantial
business, between dealers and their end customers, remains at
LCH, the report says.

"We think the spectre of disruption stemming from the UK's exit
from the EU will force market participants to increase
connectivity to Eurex, driving market share in that direction,"
Michael Werner, an analyst at UBS, wrote in a research note last
month, the report notes.  He forecast that a quarter of the
higher-margin, dealer-to-customer business would shift to Eurex
by 2020, the report discloses.

In the event of no "equivalence" agreement next March, that
business would shift immediately, the report says.  At the same
time, he expects EU customers -- deprived of LCH -- would also
have to pull their US dollar-denominated business from London and
transfer it to CME Group in the US. For the City, a nervous six
months awaits, the report adds.


MITIE GROUP: To Sell Pest Control Unit as Part of Restructuring
---------------------------------------------------------------
Reuters reports that Mitie Group Plc said on Oct. 1 it would sell
its pest control business to Rentokil Initial Plc for GBP40
million ($52.1 million) cash, as it looks to focus on its core
businesses as part of a restructuring.

The company, which provides cleaning, security and healthcare
services, has been restructuring after a string of profit
warnings, which it has blamed on rising costs and Brexit
uncertainty, Reuters says.

Reuters relates that Mitie has also formed a preferred supplier
partnership with Rentokil, to provide a range of services,
including pest control, to Mitie's customers.

According to Reuters, the company said the deal with Rentokil,
UK's largest provider of pest services, would free up its funds
to invest in its core businesses.

The announcement comes a week after Mitie forecast muted profit
and higher debt in the first half of the year, blaming increased
technology costs, Reuters notes. The company has been investing
in technology and employee retention in a turnaround plan.

In December, the Bristol-based company said it would not sell its
property management unit, as it saw "greater shareholder and
strategic value in keeping the business," adds Reuters.

Mitie Group plc, through its subsidiaries, provides strategic
outsourcing services in the United Kingdom and internationally.
It offers engineering services, such as technical and building
maintenance services, as well as offers specialist services, such
as heating, cooling, lighting, water treatment, and building
controls; and security services and products, including security
personnel, emergency mobile response solutions, and fire and
security systems.


PLAYTECH PLC: Moody's Assigns Ba2 CFR, Outlook Stable
-----------------------------------------------------
Moody's Investors Service has assigned a Ba2 corporate family
rating and a Ba2-PD probability of default rating to the global
technology leader for the gambling and financial trading
industries Playtech PLC. Concurrently, Moody's has assigned Ba2
rating to the EUR530 million senior secured notes to be issued by
Playtech. The outlook on all ratings is stable.

The proceeds from notes, together with EUR428 million of balance
sheet cash will be used to redeem Snaitech S.p.A. ("Snaitech")'s
outstanding bonds, to repay the EUR412 million bridge loan, and
to pay the transaction fees. The bridge loans, including a EUR250
million senior secured revolving credit facility due April 2021,
were put in place in April 2018 to fund Snaitech's acquisition,
which completed on June 5, 2018. At closing of this refinancing
transaction, Moody's expects Playtech to have approximately
EUR202 million of available cash and the RCF entirely undrawn.

This is the first time Moody's has assigned ratings to Playtech.

RATINGS RATIONALE

The Ba2 rating assigned to Playtech reflects (1) its position as
established global technological operator in the online gaming
software market; (2) the medium term contracts and entrenched
relationships particularly with the largest customers within B2B
gambling, albeit some uncertainty on the contract terms with GVC
Ladbrokes Coral due 2021; (3) positive fundamentals underpinning
the online gambling and financial trading industries; (4) the
historic strong organic growth of Playtech stand-alone albeit
this has decelerated in 2017 and became negative in 2018 mainly
to changes in the market conditions in Malaysia and China and
weak performance of B2C gambling; (5) the high level of cash
generated from operations which has been used either to
distribute special dividends or pursue the company's acquisition
strategy, and (6) the moderate pro forma gross leverage (as
adjusted by Moody's) of 2.4x close but likely to increase at the
end of 2018 as a result of the weakened trading.

The recent acquisition of Snaitech has improved Playtech's
business profile in terms of scale and geographic diversity.
Snaitech, one of the largest Italian gaming company, will add
approximately EUR890 million of revenue and EUR150 million of
EBITDA to the group and it will increase its presence in
regulated jurisdictions to 82% from 69% of total revenue.
Playtech intends to use its online gambling and omni-channel
expertise and capabilities to take advantage of the under
penetrated Italian online gambling market in order to boost
Snaitech's revenue in addition to the estimated EUR10 million
cost synergies to be achieved over the period 2019-2022. Only 20%
of Snaitech's contribution margin is currently derived from the
faster growing online segment.

However, in Moody's view, this strategic acquisition has
increased the operating risk of the group (similarly to
Playtech's diversification into the financial trading industry
since 2015). Snaitech, which is mainly exposed to the mature
gaming machines and retail betting market segments, displayed a
more volatile performance in the historical period due to ongoing
tax increases, unfavorable regulatory changes and periods of high
sports betting pay-out ratios leading to some market share
losses. Despite a stronger performance in most recent trading,
the company will continue to face an evolving regulatory
framework, which is progressively introducing stricter measures
to address gambling addiction (e.g. advertising ban, restrictions
on opening hours) in addition to steady tax increases on gaming
machines from September 2018. Although expected to be minor,
Snaitech will also be impacted in the near term by the 35%
reduction of its AWP installed base which was completed in April
2018. These measures are likely to offset some of the synergies
expected to be achieved with the acquisition and decelerate
prospective growth of the group. Snaitech will also reduce
Playtech's profitability with its EBITDA margin expected to
decline to approximately 25% from 34% and exposes the group to
the risk of losing existing Italian customers which compete with
Snaitech.

The rating also takes into consideration (1) the high degree of
customer concentration (5 largest customers account for 38% of
B2B gambling) and some exposure unregulated markets within the
gambling division, albeit this has diluted with Snaitech and
recent headwinds underpinning the Asian operations; (2) the fact
that the group operates in a highly competitive operative
environment, as evidenced by the recent events in China, where
new players or technologies as well as consolidation and in
sourcing trends represent a threat to Playtech's business model;
(3) the risk of substantial losses in the financial trading
division as a result of extreme market movements, partially
mitigated by the risk management processes; and (4) threat for
more stringent regulatory requirements in both gambling
(particularly in key markets such as Italy and the UK) and
financial trading (following ESMA's adoption of MiFid2 guidelines
in August 2018).

LIQUIDITY

Moody's considers Playtech's liquidity position to be good for
its near term requirements. This is supported by (1) available
cash on balance sheet of at least EUR202 million at close, a (2)
full availability under its EUR250 million RCF maturing April
2021, and (3) from continued high levels of operating cash flow.
These sources are sufficient to cover capital expenditures of
EUR120-130 million per annum, the EUR60 million cost to renew the
sports betting rights in Italy likely to occurred in 2019, and
shareholders' distributions. Additionally, the group has EUR180
million earn-out liabilities due the over the next three years
and EUR297 million convertible bonds, currently out of the money,
maturing November 2019. The latter will likely be refinanced with
cash from operations and debt. Potential small bolt-on
acquisitions will have to be funded with additional drawings of
the RCF or other debt.

The RCF has two financial maintenance covenants to be tested on a
quarterly basis, which are a maximum leverage ratio of 3.25x
(stepping down to 3.1x in October 2019) and minimum interest
cover ratio of 4.0x. Moody's anticipates large headroom under
these covenants in the next 12-18 months.

STRUCTURAL CONSIDERATIONS

The CFR has been assigned to Playtech PLC, the top entity of the
restricted group and the issuer of the notes. Using Moody's Loss
Given Default (LGD) methodology, the Ba2-PD PDR rating is aligned
to the Ba2 CFR. This is based on a 50% recovery rate, as is
typical for transactions including both bonds and bank debt. The
Ba2 instrument rating assigned to the EUR530 million SSNs is in
line with the CFR under the assumption that the EUR297 million
convertible bonds due November 2019 will be granted the same
security and rank pari passu with the notes.

Both the notes and the RCF rank pari passu and are secured mainly
against share pledges of certain companies of the group. As at
June 2018, the notes benefit from the guarantees of subsidiaries
representing, together with the issuer, 150% of consolidated
EBITDA and 42% of total net assets. The RCF is guaranteed by
material subsidiaries representing at least 75% of consolidated
EBITDA and 55% of gross assets.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook assumes that Playtech will maintain Moody's
adjusted leverage below 3.0x over time as well as a cash cushion,
and will be able to adapt to further adverse regulatory changes
in the gambling or financial trading industries with no material
customer or volume losses. The stable outlook also incorporates
the assumptions that the group will continue to make bolt-on
acquisitions and distribute dividends maintaining a prudent
capital structure.

WHAT COULD CHANGE THE RATING UP/DOWN

Positive pressure on the ratings is unlikely in the near term due
to the high uncertainty of the market conditions. However, it
could develop if Playtech can successfully adapt to the changes
in the operating environment by sustaining revenue and EBITDA
growth, demonstrates stabilization of its Asian operations and
recovery in the casual games and Sun Bingo, maintains its
profitability measured as EBITDA margin at around 25%, as well as
positive free cash flow generation. Quantitatively, positive
pressure could occur if Moody's-adjusted debt/EBITDA falls
towards 2.0x, FCF/Debt stays above 10%, while maintaining good
liquidity.

Conversely, negative pressure on the ratings could arise if (1)
the Moody's-adjusted debt/EBITDA moves towards 3.5x on a
sustained basis; (2) its free cash generation and liquidity
profile weaken; and (3) its profitability deteriorates owing to
competitive, regulatory and fiscal pressure or an inability to
integrate acquired businesses. A more aggressive financial policy
including large-scale debt-funded acquisitions which
significantly increase leverage would be likely to cause negative
rating pressure.

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

Assignments:

Issuer: Playtech Plc

Corporate Family Rating, Assigned Ba2

Probability of Default Rating, Assigned Ba2-PD

Backed Senior Secured Regular Bond/Debenture, Assigned Ba2

Outlook Actions:

Issuer: Playtech Plc

Outlook, Assigned Stable

Headquartered in the Isle of Man, Playtech is a leading
technology company in the gambling and financial trading
industries and the world largest online gambling software and
services supplier, employing over 5,800 people across 17 offices,
of which 1,800 are developers. Playtech was founded by Israeli
entrepreneur Teddy Sagi in 1999 and has grown through a
combination of organic growth and acquisitions. It is currently
listed on the London Stock Exchange with a market capitalisation
of approximately GBP1.5 billion. In the last twelve months to
June 2018, the group, pro forma for Snaitech, generated EUR1,657
million of revenue and EUR438 million of EBITDA (EUR436 million
on a Moody's adjusted basis).


PLAYTECH PLC: S&P Assigns 'BB' Long-Term ICR, Outlook Stable
------------------------------------------------------------
S&P Global Ratings said that it assigned its 'BB' long-term
issuer credit rating to Isle of Man-incorporated, U.K.-based
gaming industry software provider and gaming operator Playtech
Plc.

S&P said, "At the same time, we assigned our 'BB' issue rating to
the proposed EUR530 million of senior secured notes. This is
based on a recovery rating of '3', indicating our expectation of
meaningful (50%-70%; rounded estimate: 65%) recovery prospects in
the event of a payment default."

The rating takes into account Playtech's established position as
the leading provider of online software, content, and services to
gaming operators. This allows it to cross-sell its wider omni-
channel product portfolio, which is integrated under a single
client relationship management system, to tier one operators. In
addition to acquisitions, this has bolstered the company's
historical compound annual growth rate (CAGR) in revenues of
about 13% over 2015-2017. With the acquisition of Snaitech SpA --
one of Italy's leading retail betting operators (20.3% market
share in 2017 by gross gaming revenue) and No. 2 gaming machine
operator (14.6% market share) -- in June 2018, Playtech is now a
vertically integrated gambling operator that controls its own
technology. It can also expand the Snaitech brand's offering
further toward online channels, which represented only about 15%
of the operator's total wagers in 2017.

S&P said, "Other factors that support our view of Playtech's
business include that its technology platform can use player data
across various gaming verticals and channels to allow operators
to maximize player retention and lifetime value. Given that
Playtech's comprehensive solutions cover key back-end systems of
its operators and help customers' maximize revenue generation, we
view the B2B gaming division's offering as having high switching
costs. As a result, Playtech has never lost a major licensee.
Revenue visibility is further reinforced by licensing contracts,
which typically last three to five years. We also believe
Playtech's wide content portfolio across a range of gaming
verticals further supports its ability to be entrenched as a
major supplier to large online operators.

"On the other hand, we note that Playtech is considerably exposed
to regulatory risks due to its focus on the gambling sector, as
well as through its financial trading division." For example,
Snaitech is directly exposed to recent regulatory changes in
Italy including requesting concessionaires to reduce amusement-
with-prize (AWP) machine permits by about 35% by April 2018,
raising gaming taxes on AWPs and video lottery terminals (VLTs)
by about 0.5 percentage points each gradually by 2021, and a ban
on gambling-related advertising. In Malaysia, a tougher
government stance on unregulated gambling since late 2017 has
reduced remote gambling activity and therefore Playtech's B2B
gaming division's revenues, which are based on a share of
operators' revenues.

Other key business risks include the fragmented and competitive
nature of the gaming industry, especially the online gambling
markets. In 2018, new licensee entrants in the Chinese remote
gambling market, together with associated lower-priced content
providers, have put pressure on Playtech's B2B gaming revenues,
resulting in a EUR70 million reduction in the company's 2018
outlook for Asian revenues. S&P said, "In the longer term, we
also see a potential risk of competition from in-house software
and content solutions by some of the established operators trying
to boost profitability. Furthermore, the B2B gaming division has
meaningful customer concentration, with the top 10 licensees
contributing 57% of the division's revenues in the first half of
2018. We also note that Snaitech, as a concessionaire, does not
own or operate most of its gaming machines or points of sale.
This results in lower margins than other rated gambling
operators."

S&P said, "The recent regulatory changes in Italy and adverse
political and competitive dynamics in unregulated, but high-
margin, Asian markets mean that we now expect a pro forma revenue
decline of about 4.5% in 2018 compared to growth of about 6% in
2017. Furthermore, in addition to the effect of consolidating the
lower-margin Snaitech business (15% reported EBITDA margin in
2017), we expect Playtech's pro forma S&P Global Ratings-adjusted
EBITDA margins to decrease to just above 20% in 2018 from 35% in
2017. We view these margins as generally being at the lower end
of the rated peer group." However, there have also been some
positive developments such as the May 2018 legalization of sports
betting in the U.S. Playtech continues to target such newly
regulated markets.

As part of the proposed refinancing transaction, Playtech plans
to use about EUR427 million of cash, largely obtained through the
recent sales of equity investments in Plus500 and GVC, to partly
prepay existing debt, that is, the bridge facilities for the
Snaitech acquisition and the EUR513 million of outstanding
Snaitech bonds. Playtech's capital structure will also include
the existing EUR297 million convertible bond. In S&P's view, the
reduction in net debt from the asset sales should offset the
recent operational headwinds on the group's credit metrics.
Therefore, S&P forecasts Playtech's S&P Global-Ratings adjusted
debt to EBITDA at about 3x in 2018.

S&P said, "Our assessment of Playtech's financial risk also takes
into account its ability to reduce leverage over 2019 and 2020
from EBITDA growth and positive discretionary cash flow (DCF)
generation -- that is, free operating cash flow (FOCF) after
dividend payments. We forecast pro forma company-adjusted EBITDA
growth of about 7% in 2019, following a fall of about 12% in
2018. This is due to stabilization in Playtech's operating
environment in Asia and Snaitech-related cost synergies. We also
forecast Playtech to generate positive reported DCF of just below
EUR130 million in 2019 with FOCF conversion of 55% of EBITDA
supported by modest working capital needs and capital
expenditures (capex). However, we note that the extent of future
leverage reduction could be hindered by Playtech's acquisitive
nature and its progressive dividend policy.

"Our adjusted debt includes the group's earn-out liabilities of
EUR157.7 million in 2017, as well as the full principal of the
convertible bond, and we apply our standard adjustment for
operating leases. We net from debt Playtech's cash balance after
deducting funds held for operator jackpots, client funds, and
deposits, as well as an additional haircut for restricted cash
for capital adequacy and operational purposes. Our adjusted
EBITDA and capex deducts capitalized development costs of about
EUR51 million, which we expense in 2017.

"We see meaningful integration risks over the first 12-18 months
following the closing of the acquisition of Snaitech. These
reflect the meaningful size of this acquisition, Playtech's first
substantial entrance to the gaming industry as an operator, and
the need to create an operational setup that avoids any conflicts
with Playtech's other customers. Our rating also incorporates
some uncertainty regarding Playtech's operating environment in
the next few years."

S&P's base-case scenario incorporates its following assumptions:

-- Growth in the global online gambling market at a CAGR of
    about 7% between 2017-2020 supported by increased penetration
    of internet devices, in-play gambling during live events, and
    the continued convergence of retail gambling operators toward
    online products. S&P believes this supports longer-term
    growth in Playtech's revenues despite some significant near-
    term headwinds.

-- Revenue decline of about 4.5% in 2018 pro forma the Snaitech
    acquisition, compared with 5.9% growth in 2017. S&P assumes a
    return to growth of 3%-4% in 2019. In addition to assumed
    bolt-on acquisitions, this reflects the following:

-- B2B Gaming revenue decline in 2018 due to the increased
    competition in the unregulated Chinese market. S&P assumes a
    return to growth in 2019 as this market stabilizes and
    Playtech gains traction in new products like Gaming Platform
    as a Service and PBS.

-- B2C Gaming revenues, pro forma the Snaitech integration, to
    decline in 2018 with reduced gaming machines and increased
    taxes in Italy due to regulatory changes. S&P assumes a
    return to growth in 2019 helped by increasing online wagers.

-- Financials division revenues assumed to be supported by
    higher trading activity in the B2C segment and new wins in
    the B2B segment.

-- Pro forma company-adjusted EBITDA margins of about 25.5% in
    2018, declining from about 27.5% in 2017, before rising to
    about 26% in 2019. Margins for 2018 are affected by lower
    high-margin B2B Gaming revenues from Asia, while 2019 should
    benefit from Snaitech-related cost synergies and some cost
    efficiencies in the Financials division.

-- Pro forma S&P Global Ratings-adjusted EBITDA margins of about
    21.5% in 2018 and about 23% in 2019. This incorporates higher
    acquisition-related costs in 2018 due to the Snaitech deal
    and some integration costs in future years and expensed
    capitalized development costs.

-- Pro forma reported capex of 12.5% of revenues in 2018,
    including one-off Snaitech concession renewal fees of about
    EUR60 million and betting rights extension fees of about
    EUR10 million, before normalizing to about 7% of revenues in
    2019. This includes annual capitalized development costs of
    about EUR55 million over 2018-2019.

-- Dividend payments of EUR110 million-EUR120 million over 2018
    and 2019.

-- Bolt-on acquisition spending of about EUR150 million is
    assumed in 2019.

Based on these assumptions, S&P arrives at the following adjusted
pro forma credit metrics:

-- Debt to EBITDA of about 2.9x-3.0x in 2018 and 2019, from 1.4x
    in 2017 based on actual results excluding Snaitech.

-- Funds from operations (FFO) to debt of 28.0%-29.0% in 2018
    and 29.5%-30.5% in 2019, from 66.4% in 2017.

-- FOCF to debt of about 14% in 2018 (about 22% excluding
    Snaitech concession renewal fees) and 23%-24% in 2019, from
    62.3% in 2017.

-- DCF to debt of about 3% in 2018 (about 10.5% excluding the
    Snaitech concession renewal) and 13%-14% in 2018, from 35.7%
    in 2017.

S&P said, "The stable outlook reflects our expectation that
Playtech's adjusted debt to EBITDA will reach about 3x in 2018,
despite a forecast organic revenue decline of about 4% (excluding
Snaitech) and lower S&P Global Ratings-adjusted EBITDA margins of
about 22%. We also expect DCF to debt to improve to about 14% in
2019 with the absence of Snaitech concession renewal fees in
2018.

"We could lower the rating if Playtech's adjusted debt to EBITDA
weakened to about 3.5x and DCF to debt remained below 10% on a
sustainable basis."

This could result from materially weaker operating performance
caused by delays in competitive rationalization in China, more
intense competition in regulated markets, and churn of major
customers in the B2B gaming business. It could also be driven by
adverse regulatory changes, or operating challenges following the
integration with Snaitech. This could also result from further
material debt-funded acquisitions or significantly higher
shareholder distributions.

While S&P sees an upgrade as unlikely in the next 12 months, it
could raise the rating if Playtech sustainably reduced adjusted
debt to EBITDA to below 2.5x and strengthened DCF to debt to
about 15% on a sustainable basis.

This could be driven by higher than anticipated revenues and cost
synergies from the integration of Snaitech, combined with
considerable easing in the competitive environment in the Asian
non-regulated market for the B2B gaming division.


UNIFIN: Moody's Assigns B2 Corp. Family Rating, Outlook Stable
--------------------------------------------------------------
Moody's Investors Service has assigned a B2 corporate family
rating and B2-PD probability of default rating to UniFin. At the
same time, Moody's has assigned B2 ratings to the EUR305 million
term loan B and the EUR25 million revolving credit facility
borrowed at the level of UniFin. All ratings have a stable
outlook. Proceeds from the transaction will be used to refinance
the company's existing term loan B and partially reimburse
shareholder loans.

RATINGS RATIONALE

RATIONALE FOR THE B2 CFR

The B2 CFR of Unither reflects (1) a solid long-term track record
as a niche operator within the broader contract development and
manufacturing organization (CDMO) market; (2) strong historical
organic growth and further good near term growth perspectives
underpinned by favorable fundamentals for end-markets, such as
asthma and ophthalmology; (3) some barriers to entry due to the
capital intensity and regulated nature of the business; (4) the
company's high profitability where EBITDA-margins -- fuelled by
positive operating leverage -- will remain above 20% for the
foreseeable future; and, (5) a management team, which -- in
addition to displaying a long experience -- also holds a
substantial ownership stake in the company. Moreover, Unither
continues to be partly owned by the founding family and this
provides some incremental comfort to future financial policies.

At the same time, the B2 CFR reflects (1) the company's modest
size with 2018 revenues estimated to be around EUR300 million;
(2) a degree of customer concentration which -- albeit improving
-- remains fairly high with top 10 customers representing 66% of
2017 revenues; (3) a high opening leverage which will only move
below 5x Moody's adjusted debt/ EBITDA by the end of 2019; (4) an
overall weak free cash flow generation due to heavy investments
in expansion of capacity; and, (5) a degree of business risk
which is considered higher than the average company rated after
the business services methodology as, for example, failure to
comply with required manufacturing standards could lead to a halt
in production for a longer period of time.

RATIONALE FOR THE B2-PD AND B2 RATINGS ASSIGNED TO LOAN
FACILITIES

The loan facilities will benefit from guarantees from
subsidiaries representing at least 80% of EBITDA. In addition,
the loan facilities will benefit from a first ranking transaction
security over shares of material subsidiaries, bank accounts and
intragroup receivables. In view of the covenant-lite structure of
the transaction, Moody's has applied a 50% recovery rate
resulting in a B2-PD rating.

In addition to the senior secured facilities, Unither's capital
structure will also include convertible bonds. Further to Moody's
assessment, these are considered as equity and not included in
its credit metrics or loss given default waterfall.

Moody's has assigned the CFR at the level of UniFin, which is the
top entity of the restricted group. Uni Invest, the parent
holding company of Uni Fin, will file the consolidated accounts
going forward. As such, the rating agency expects there will be a
reconciliation of the financial and operating position of the two
entities over the lifetime of the credit facilities.

STABLE OUTLOOK

The stable outlook factors in Moody's expectations that Unither
will continue to benefit from overall solid market fundamentals
allowing for its EBITDA to continue growing on an organic basis
so that its leverage ratio moves below 5x by 2019. The stable
outlook also assumes Unither will maintain its solid track record
of long-term customer relationship and further diversify its
customer base.

LIQUIDITY

Unither's liquidity profile is good. In spite of forecasted
capacity expansion, Moody's expects Unither's free cash flow to
be positive and to exceed EUR10 million by 2019. Further
liquidity cushion is provided by access to an undrawn EUR25
million RCF under which Unither will have ample headroom to its
springing financial covenant.

WHAT COULD CHANGE THE RATING UP/ DOWN

Upward pressure on the ratings is unlikely in the short term. For
upward pressure to develop, Unither's business profile would have
to become more diversified as exemplified by improved customer
concentration and diversification of end markets. In addition,
Moody's would expect Unither to display a leverage ratio
sustainably below 4.5x, sustain a positive free cash flow and
maintain adequate liquidity.

Downward pressure on the ratings could develop should industry
fundamentals become less favorable and/or if Unither were to lose
important customers. More quantitatively, Unither's B2 rating
could come under pressure should Unither's leverage remain well
above 5x for a sustained period of time.

METHODOLOGY

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



                            *********

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
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                            *********


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

Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
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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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