/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/181017.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Wednesday, October 17, 2018, Vol. 19, No. 206 Headlines F R A N C E CARVEN: Icicle Fashion Buys Business Out of Bankruptcy I R E L A N D ARYZTA: Seeks to Halve Scale of Planned EUR800MM Rights Issue I T A L Y ITALY: Bond Markets Underpricing Debt Restructuring Risk ITALY: Government Approves Draft Budget Law for Next Year P O L A N D QUMAK SA: Files Motion for Accelerated Arrangement Proceedings S P A I N CATALONIA: DBRS Confirms BB(high) Long-Term Issuer Rating FTA RMBS SANTANDER 1: DBRS Confirms C Rating on Series C Notes IM CAJAMAR 1: DBRS Confirms C(sf) Rating on Series B Notes IM GBP MBS 3: DBRS Confirms C Rating on Series B Notes SRF 2017-1: DBRS Raises Rating on Class D Notes to BB(high) U N I T E D K I N G D O M BLOODHOUND PROGRAMME: Enters Administration, Explores Options CLAIRE'S: Boss Denies Store Closure Plans, CVA Rumors ********* =========== F R A N C E =========== CARVEN: Icicle Fashion Buys Business Out of Bankruptcy ------------------------------------------------------ Pascale Denis and Emmanuel Jarry at Reuters report that Shanghai- based Icicle Fashion Group, a high-end retailer little known outside China, has bought French couture house Carven out of bankruptcy and said on Oct. 12 it plans to relaunch the brand which was a favorite of singer Edith Piaf. Carven's buyout follows a series of recent attempts by retailers to restore once-prestigious labels to their former glory, banking on the resonance of their brand names, Reuters relates. The label was founded in 1945 by Carmen de Tommaso, alias Marie-Louise Carven, who died in 2015 at the age of 105, Reuters discloses. Carven made a comeback in 2010 under designer Guillaume Henry, dressing the likes of Alexa Chung, but the label struggled to recover from his departure in 2014, and annual sales halved to around EUR20 million (US$23 million) in 2017, Reuters relays, citing a person familiar with the business. The company, then controlled by its Asian distributor Bluebell, filed for bankruptcy protection in May, Reuters recounts. According to Reuters, a judicial source said it had attracted bids from other French groups, but Icicle was prepared to put more money into refloating the business. ============= I R E L A N D ============= ARYZTA: Seeks to Halve Scale of Planned EUR800MM Rights Issue ------------------------------------------------------------- Bloomberg News reports that Aryzta, the troubled Irish-Swiss baked goods group, has been urged to halve the scale of a planned EUR800 million rights issue designed to pay down debt and fund the group through a major restructuring of its operations. Cobas Asset Management, the Spanish group that is Aryzta's largest single shareholder, said on Oct. 15 that it is requesting an extraordinary general meeting of shareholders to reduce the money being raised to EUR400 million, Bloomberg relates. Cobas owns almost 15% of Aryzta's voting stock, Bloomberg discloses. The fund manager is also proposing that Aryzta sell EUR250 million of assets to improve its finances, Bloomberg relays. In a statement, Cobas, as cited by Bloomberg, said Aryzta's board had refused to add its proposal to the agenda of the meeting of shareholders already called for Nov. 1 to vote on its EUR800 million fundraise proposal. That position was confirmed by the company on Oct. 15, Bloomberg notes. It said there would be no change in the date or agenda for the Nov. 1 meeting, according to Bloomberg. The Cobas extraordinary general meeting will not be required unless shareholders reject the company's proposal, Bloomberg states. Aryzta, which makes frozen par-baked bakery products for customers, including restaurant group McDonald's as well as the Cuisine de France consumer range, is looking to sell shares to reduce its debt, which ballooned under former chief executive Owen Killian, Bloomberg relates. According to Bloomberg, on Oct. 11, the Company said its board was unanimous in its view that an EUR800 million "rights issue" -- or share sale to existing investors -- was needed to repay EUR500 million of debt, give it EUR150 million for restructuring and provide additional working capital. The fundraise would dilute Aryzta's earnings per share by about 25%, Bloomberg relays, citing Zuercher Kantonalbank analyst Patrik Schwendimann. ========= I T A L Y ========= ITALY: Bond Markets Underpricing Debt Restructuring Risk -------------------------------------------------------- John Ainger at Bloomberg News reports that Italy's bond markets may be underpricing the risk of the nation having to restructure its debt. According to Bloomberg, NatWest Markets said credit default swaps, which protect investors against the nation failing to pay off its debts, suggest that Italian debt securities are still too expensive. It said to counter that, investors should place a curve flattening trade, betting on short-dated bonds selling off more than those further out, Bloomberg relates. An Italian default would be calamitous for the nation's bond and stock markets, possibly triggering regional contagion and spurring fears of another euro-area debt crisis, Bloomberg states. NatWest is joining other banks including HSBC Holdings Plc in betting on the yield curve flattening, as the European Commission starts reviewing Italy's budget deficit and spending plans, Bloomberg discloses. ITALY: Government Approves Draft Budget Law for Next Year --------------------------------------------------------- Giovanni Legorano at The Wall Street Journal reports that Italy's government on Oct. 15 approved a draft budget law for next year, confirming a set of expansionary measures that could lead to a fast-rising deficit and a conflict with the European Union. The government, a coalition of the anti-establishment 5 Star Movement and the far-right League, has rattled financial markets in the past month with its budget plans, with investors demanding significantly higher interest rates to buy the country's bonds, the Journal relates. The full draft budget law will be sent to the Italian parliament by Saturday, Oct 20, the Journal discloses. Lawmakers will need to approve it by the end of the year, the Journal notes. According to the Journal, the planned measures included in the draft law are set to widen the budget deficit to 2.4% of gross domestic product, in defiance of EU rules that require a shrinking deficit. EU officials fear the real deficit could be much higher than 2.4%, the Journal relays, citing people familiar with the matter. Rome said it would raise welfare and pension spending and cut taxes, despite the negative reaction from investors and Brussels to its proposals, the Journal notes. EU leaders had already warned that Italy's budget plans represented a "significant deviation" from recommended fiscal policies, raising the prospect of a major clash between Rome and Brussels over the Italian coalition government's plans, the Journal recounts. =========== P O L A N D =========== QUMAK SA: Files Motion for Accelerated Arrangement Proceedings -------------------------------------------------------------- Reuters reports that Qumak SA on Oct. 15 said it has filed a motion for opening restructuring proceedings -- accelerated arrangement proceedings. Qumak S.A. is a Polish IT and technology company which designs and implements ICT solutions for private clients and public sector. ========= S P A I N ========= CATALONIA: DBRS Confirms BB(high) Long-Term Issuer Rating --------------------------------------------------------- DBRS Ratings Limited confirmed the Long-Term Issuer Rating of the Autonomous Community of Catalonia at BB (high) and its Short-Term Issuer Rating at R-4. The trend on all the ratings is Stable. KEY RATING CONSIDERATIONS The ratings are underpinned by (1) the region's positive economic indicators and the slow but continued improvement in its fiscal performance; and (2) the financing support provided by the Kingdom of Spain (rated A, Stable, by DBRS) to the regional government. DBRS continues to consider that the political risk in the region, although it has eased throughout 2018, still offsets some of the improvements in the underlying economic and fiscal performance recorded in the region. DBRS views the region's Long-Term Issuer Rating as being currently constrained at the BB (high) level by Catalonia's high debt metrics and a still challenging political environment. This constraint remains despite some easing on the political front in the last few months, with what DBRS considers as a more moderate stance on the potential path towards independence from the current Catalan government. DBRS also views as a sign of normalization the fact that Catalonia has taken back control over its finances following the appointment of a new regional government in May 2018. Recently, additional financing provided to the region in acknowledgement of some historical underfinancing as well as the authorization from the national government for Catalonia to refinance part of its short-term debt with long-term loans are also positive developments. The Stable trend on Catalonia's ratings reflects DBRS's view that the risks to the ratings are balanced. In particular (1) early indications that the political tensions in the region had affected some of Catalonia's economic indicators are now fading; and (2) the fact that pro-independence parties kept their Parliamentary majority in the last regional elections, while it implies that uncertainty over the region's political agenda is likely to remain, is counterbalanced by some indications of an improved dialogue between Catalonia and the national government. RATING DRIVERS Upward rating pressures could materialize if any or a combination of the following occur: (1) the political situation in Catalonia eases further and stabilizes, with the regional government pursuing a significantly softer political agenda, reinforcing the region's linkages with the national government; (2) the region reduces its indebtedness and improves its debt sustainability metrics markedly faster than currently foreseen. Negative downward pressure on the ratings could materialize if any or a combination of the following materializes (1) the relationship between Catalonia and the national government materially worsens. In particular, indications that the current liquidity and financing support received by the region may be reduced would have negative credit implications; (2) there is a reversal in the region's current fiscal consolidation path, leading to widening financing deficits compared with that recorded in 2017; or (3) there is material evidence of a significant and lingering economic slowdown in the region. RATING RATIONALE The Political Environment Remains a Key Rating Consideration The political environment continues to weigh on Catalonia's rating. While the pro-independence regional government somewhat softened its independence rhetoric -- in part supported by the government change at the national level -- DBRS considers that political uncertainty remains. In the current context of some former Catalan politicians in jail awaiting trial, a possible escalation of the conflict cannot be excluded. As a result, in DBRS's view, a potential worsening of the relationship between the national and regional governments remains a key rating consideration which continues to negatively affect DBRS's assessment of the region's political risk. On the positive side, DBRS points out that economic momentum in the region has remained strong despite early indications of slowing economic performance following the political tensions in the region. Economic Growth Continues to Drive Fiscal Rebalancing After years of poor financial results, Catalonia's fiscal performance has substantially improved in 2016 and 2017. Its deficit stood at 0.56% of the region's gross domestic product (GDP) in 2017, just below the target of 0.60% set by the national government, and substantially improved from the 2.83% deficit recorded in 2015. Catalonia's fiscal consolidation was largely driven by the positive real GDP growth reported on average over the last 3 years in the region (3.7%) and the rest of Spain (3.3%). Marked GDP growth led to a pick-up in tax revenues -- regional taxes and regional share of national taxes -- which, coupled with continued control over regional expenditure, led to a rapid reduction in the headline deficit figures. For 2018, DBRS expects fiscal consolidation to continue, although at a slower pace, on the back of still dynamic economic indicators. DBRS currently considers that the deficit target of 0.4% of GDP is within reach for the Catalan government. In line with still strong economic growth and tax collection, DBRS also views positively the continued increase in fiscal transfers from the national government towards Spanish regions in 2019. This increase should further support Catalonia's fiscal consolidation, a positive credit feature. Financing Provided by the National Government Critical to the Region's Creditworthiness The debt financing provided by the national government to its regions, the good conditions attached to it and DBRS's expectation that this support will continue going forward are critical for Catalonia's rating. The region's large financing and refinancing needs have fully benefited from the national government's support since 2012. While Catalonia's debt is very high at EUR81.5 billion at the end of 2017 (278% of its operating revenues), DBRS gains comfort on its sustainability, given the national government's support and very low funding costs from which the region currently benefits. DBRS also highlights that the regional debt-to-revenue ratio decreased in 2017 for the second consecutive year (from 305% in 2015), supported by lower financing needs and dynamic operating revenues. In its baseline scenario, DBRS anticipates that this positive trend would continue in 2018 and 2019. RATING COMMITTEE SUMMARY The DBRS European Sub-Sovereign Scorecard generates a result in the BBB (high) -- BBB (low) range. Additional consideration factored into the Rating Committee decision included the uncertainty related to the political environment in the region and its potential impact on the region's relationship with the national government as well as the regional economic prospects. The main points discussed during the Rating Committee include: the relationship between the central government and the Autonomous Community of Catalonia, the political situation in the region, the region's debt metrics and financial performance and Catalonia's economic growth. KEY INDICATORS FOR THE KINGDOM OF SPAIN The following national key indicators were used for the sovereign rating. The Kingdom of Spain's rating was an input to the credit analysis of the Autonomous Community of Catalonia. Fiscal Balance (% GDP): -3.1 (2017); -2.7 (2018F); -2.3 (2019F) Gross Debt (% GDP): 98.1 (2017); 97.4 (2018F); 96.0 (2019F) Nominal GDP (EUR billions): 1,166 (2017); 1,209 (2018F); 1,256 (2019F) GDP per Capita (EUR): 25,064 (2017); 25,887 (2018F); 2,6799 (2019F) Real GDP growth (%): 3.0 (2017); 2.6 (2018F); 2.2 (2019F) Consumer Price Inflation (%): 2.0 (2017); 1.8 (2018F); 1.7 (2019F) Domestic Credit (% GDP): 208.1 (2016); 199.6 (2017); 197.5 (Mar- 2018) Current Account (% GDP): 1.8 (2017); 1.3 (2018F); 1.1 (2019F) International Investment Position (% GDP): -85.3 (2016); -83.8 (2017); -82.6 (Jun-2018) Gross External Debt (% GDP): 167.0 (2016); 166.6 (2017); 168.2 (Jun-2018) Governance Indicator (percentile rank): 81.7 (2017) Human Development Index: 0.89 (2017) Notes: All figures are in Euros (EUR) unless otherwise noted. Governance indicator represents an average percentile rank (0- 100) from Rule of Law, Voice and Accountability and Government Effectiveness indicators (all World Bank). Human Development Index (UNDP) ranges from 0-1, with 1 representing a very high level of human development. FTA RMBS SANTANDER 1: DBRS Confirms C Rating on Series C Notes -------------------------------------------------------------- DBRS Ratings Limited took the following rating actions on the Notes issued by four Santander Spanish residential mortgage- backed securities (RMBS) transactions: FTA RMBS Santander 1 (SAN1): -- Series A Notes upgraded to AAA (sf) from AA (sf) -- Series B Notes confirmed at CCC (sf) -- Series C Notes confirmed at C (sf) FTA RMBS Santander 3 (SAN3): -- Series A Notes upgraded to AAA (sf) from AA (sf) -- Series B Notes upgraded to B (low) (sf) from CCC (sf) -- Series C Notes confirmed at C (sf) FT RMBS Santander 4 (SAN4): -- Series A Notes upgraded to AA (sf) from A (high) (sf) -- Series B Notes upgraded to B (low) (sf) from CCC (sf). -- Series C Notes confirmed at C (sf) FT RMBS Santander 5 (SAN5): -- Series A Notes upgraded to AA (sf) from A (high) (sf) -- Series B Notes confirmed at CCC (sf) -- Series C Notes confirmed at C (sf) The ratings on the Series A Notes in the four transactions address the timely payment of interest and ultimate payment of principal on or before the respective final maturity dates. The ratings on the Series B and Series C Notes address the ultimate payment of interest and principal on or before the respective final maturity dates. Additionally, DBRS removed the Under Review with Positive Implications (UR-Pos.) status on the Series A and Series B Notes from the four transactions. The rating actions are the result of an annual review of the transaction following publication of an update to the "European RMBS Insight: Spanish Addendum" on October 2, 2018, where DBRS updated its house price indexation and market value decline rates to reflect data through the third quarter of 2017. The ratings on the Series A Notes and Series B Notes of SAN1, SAN3, SAN4 and SAN5 were originally placed UR-Pos. on April 30, 2018, following the upgrade of the Kingdom of Spain's Long-Term Foreign and Local Currency -- Issuer Rating to 'A' from A (low). For additional information on the upgrade, please see DBRS's press release entitled "DBRS Upgrades the Kingdom of Spain to A, Stable Trend", published on April 6, 2018. The UR-Pos. status of the notes was extended following the publication of the "European RMBS Insight: Spanish Addendum - Request for Comment" on July 24, 2018. The rating actions are based on the following analytical considerations: -- Portfolio performances, in terms of delinquencies and defaults, as of the latest payment date for each transaction. -- Updated portfolio default rates (PD), loss given defaults (LGD) and expected loss assumptions on the remaining collateral portfolios. -- Current available credit enhancement (CE) to the rated Notes to cover the expected losses at their respective rating levels. All four transactions are securitizations of Spanish first-lien mortgage loans. The pool of SAN1 is originated and serviced by Banco Santander S.A. (Santander). The pools of SAN3 and SAN4 are originated by Santander and Banco de Credito Espanol (Banesto, now fully integrated into Santander) and serviced by Santander. The pool of SAN5 is originated by Santander, Banesto and Banco Banif S.A.U., and serviced by Santander. As of the September 2018 payment date, the SAN1 portfolio totalled EUR 887.4 million with a pool factor of 68.3%. As of the August 2018 payment date, the SAN3 portfolio totalled EUR 4,785.7 million with a pool factor of 73.6%. As of the September 2018 payment date, the SAN4 portfolio totalled EUR 2,244.7 million with a pool factor of 76.1%. As of the July 2018 payment date, the SAN5 portfolio totalled EUR 1,035.4 million with a pool factor of 81.2%. PORTFOLIO PERFORMANCE The portfolios are performing within DBRS's expectations. The delinquent and defaulted loans have remained fairly stable since the last annual reviews in all four transactions. The 90+ delinquency ratios stood at 1.5 %, 0.8%, 1.0% and 1.0% of the outstanding collateral pool of SAN1, SAN3, SAN4 and SAN5, respectively, as of the latest payment dates. The cumulative defaulted ratios were 3.4%, 2.1%, 1.6% and 1.0% computed on the original portfolio balances of SAN1, SAN3, SAN4 and SAN5, respectively. PORTFOLIO ASSUMPTIONS DBRS conducted loan-by-loan analyses on the remaining collateral pools of receivables and updated its PD and LGD assumptions as follows: -- In SAN1, the base case PD and LGD are 14.6% and 36.2%, respectively; -- In SAN3, the base case PD and LGD are 9.3% and 36.9%, respectively; -- In SAN4, the base case PD and LGD are 10.5% and 38.9%, respectively; -- In SAN5, the base case PD and LGD are 12.8% and 34.9%, respectively. CREDIT ENHANCEMENT The CEs available to the Series A Notes have continued to increase as the transactions continue to deleverage with the CEs to the Series B Notes remaining fairly stable. The Series C Notes were issued to fund the Reserve Funds and are in a first loss position supported only by available excess spread. Given the characteristics of the Series C Notes as defined in the transaction documents, the default would most likely be recognized at maturity or following an early termination of the transaction. The CEs consist of the overcollateralization provided by the outstanding collateral portfolios and include the Reserve Funds in all transactions. The CEs were as follows: -- In SAN1, the Series A and Series B Notes CEs were 44.2% and 3.7% as of the September 2018 payment date. -- In SAN3, the Series A and Series B Notes CEs were 38.2% and 5.4% as of the August 2018 payment date. -- In SAN4, the Series A and Series B Notes CEs were 31.7% and 5.4% as of the September 2018 payment date. -- In SAN5, the Series A and Series B Notes CEs were 30.7% and 5.4% as of the July 2018 payment date. The reserve funds were funded through the issuances of the junior series and are available to cover principal losses, senior fees and interest shortfalls on the rated Notes. As of the latest payment dates, the reserves were at EUR 33.2 million in SAN1, EUR 259.9 million in SAN3, EUR 120.8 million in SAN4 and EUR 56.2 million in SAN5. None of the reserve funds are at their target level. Santander acts as the account bank for all four transactions. Based on the reference rating of Santander at A (high), one notch below DBRS Long-Term Critical Obligations Rating of AA (low), and the downgrade provisions outlined in the transaction documents, DBRS considers the risk arising from the exposure to Santander to be consistent with the ratings assigned to the Notes, as described in DBRS's "Legal Criteria for European Structured Finance Transactions" methodology. Notes: All figures are in euros unless otherwise noted. IM CAJAMAR 1: DBRS Confirms C(sf) Rating on Series B Notes ---------------------------------------------------------- DBRS Ratings Limited took rating actions on the notes issued by IM BCC Cajamar 1 FT (Cajamar 1), IM Cajamar 5 F.T.A. (Cajamar 5) and IM Cajamar 6 F.T.A. (Cajamar 6) as follows: Cajamar 1 -- Series A notes upgraded to AAA (sf) from AA (sf) -- Series B notes confirmed at C (sf) Cajamar 5 -- Class A Notes confirmed at A (sf) Cajamar 6 -- Class A Notes upgraded to AA (low) (sf) from A (high) (sf) The ratings on all the Series A and Class A notes address the timely payment of interest and the ultimate payment of principal payable on or before the Final Maturity Date. The rating on the Series B notes of Cajamar 1 addresses the ultimate payment of interest and principal payable on or before the Final Maturity Date. Additionally, DBRS removed all the rated notes (all together, the Notes) from their Under Review with Positive Implications (UR- Pos.) status. The rating actions are the result of an annual review of the transaction following the publication of an update to the "European RMBS Insight: Spanish Addendum" methodology on October 2, 2018, where DBRS updated its house price indexation (HPI) and market value decline (MVD) rates to reflect data through the third quarter of 2017. The Notes were originally placed UR-Pos. on April 30, 2018, following the upgrade of the Kingdom of Spain's Long-Term Foreign and Local Currency -- Issuer Rating to "A" from A (low). For additional information on the upgrade, please see DBRS's press release entitled "DBRS Upgrades the Kingdom of Spain to A, Stable Trend", published on 6 April 2018. The UR-Pos. status of the notes was extended following the publication of the "European RMBS Insight: Spanish Addendum - Request for Comment" on July 24, 2018. The rating actions are based on the following analytical considerations: -- The portfolio performance, in terms of delinquencies, defaults and losses. -- Updated portfolio default rate (PD), loss given default (LGD) and expected loss assumptions on the remaining receivables. -- Current available credit enhancement (CE) to the Notes to cover the expected losses at their respective rating levels. All three transactions are Spanish residential mortgage-backed securities transactions originated and serviced by Cajamar Caja Rural, Sociedad Cooperativa de Credito (Cajamar). PORTFOLIO PERFORMANCE AND ASSUMPTIONS For Cajamar 1, the current cumulative default ratio is 0.1%. As of June 2018, the 30+ and 90+ delinquency ratios were 2.0% and 0.2%, respectively. For Cajamar 5, the current cumulative default ratio is 5.7%. As of June 2018, the 30+ and 90+ delinquency ratios were 2.6% and 0.4%, respectively. For Cajamar 6, the current cumulative default ratio is 8.1%. As of June 2018, the 30+ and 90+ delinquency ratios were 3.2% and 0.4%, respectively. The performance of each transaction is within DBRS's expectations. DBRS conducted a loan-by-loan analysis of the remaining pool of the receivables in each transaction and has updated its base case PD and LGD assumptions as follows: For Cajamar 1, DBRS has updated its base case PD and LGD assumptions to 7.7% and 34.7%, respectively. For Cajamar 5, DBRS has updated its base case PD and LGD assumptions to 3.6% and 9.5%, respectively. For Cajamar 6, DBRS has updated its base case PD and LGD assumptions to 4.2% and 18.7%, respectively. The updated assumptions incorporate the Spanish sovereign rating which was upgraded to "A" from A (low) on April 6, 2018, as well as the updated MVDs and HPIs, as per the "European RMBS Insight: Spanish Addendum" published on October 2, 2018. CREDIT ENHANCEMENT For each transaction, credit enhancement (CE) to the rated notes is provided by the subordination of junior classes and a Cash Reserve. For Cajamar 1, Series A CE was 25.6% and Series B CE was 0.0%, as of the June 2018 payment date. For Cajamar 5, Class A Notes CE remained at 10.7%, as of the June 2018 payment date. For Cajamar 6, Class A Notes CE remained at 16.9%, as of the June 2018 payment date. Santander acts as the Account Bank for the three transactions. On the basis of Santander's reference rating of A (high), being one notch below its DBRS public Long-Term Critical Obligations Rating of AA (low), and the mitigants outlined in the transaction's documents, DBRS considers the risk arising from the exposure to Santander to be consistent with the rating of the Notes. Notes: All figures are in euros unless otherwise noted. IM GBP MBS 3: DBRS Confirms C Rating on Series B Notes ------------------------------------------------------ DBRS Ratings Limited upgraded and confirmed its ratings on the notes issued by IM Grupo Banco Popular MBS 3, FT (IM GBP MBS 3) as follows: -- Series A notes upgraded to A (high) (sf) from A (low) (sf) -- Series B notes confirmed at C (sf) The rating on the Series A notes addresses the timely payment of interest and the ultimate payment of principal payable on or before the final maturity date in December 2058. The rating on the Series B notes addresses the ultimate payment of interest and principal payable on or before the final maturity date. Additionally, DBRS removed the Under Review with Positive Implications (UR-Pos.) status from the notes. The rating actions are the result of an annual review of the transaction following the publication of an update to the "European RMBS Insight: Spanish Addendum" methodology on October 2, 2018 where DBRS updated its house price indexation and market value decline rates to reflect data through the third quarter of 2017. The notes were originally placed UR-Pos. on April 30, 2018, following the upgrade of the Kingdom of Spain's Long-Term Foreign and Local Currency -- Issuer Rating to "A" from A (low). For additional information on the upgrade, please see DBRS's press release entitled "DBRS Upgrades the Kingdom of Spain to A, Stable Trend", published on April 6, 2018. The UR-Pos. status of the notes was extended following the publication of the "European RMBS Insight: Spanish Addendum - Request for Comment" on July 24, 2018. The rating actions are based on the following analytical considerations: -- The portfolio performance, in terms of delinquencies, defaults and losses. -- Updated portfolio default rate (PD), loss given default (LGD) and expected loss assumptions on the remaining receivables. -- Current available credit enhancement (CE) to the Series A notes to cover the expected losses at the A (high) (sf) rating level. IM GBP MBS 3 is a securitization of Spanish prime residential mortgage loans originated by Banco Popular Espanol, S.A. and Banco Pastor, S.A., which closed in December 2015. After its acquisition of Banco Popular, Banco Santander SA (Santander) began acting as the servicer of the portfolio. PORTFOLIO PERFORMANCE AND ASSUMPTIONS The portfolio is performing within DBRS's expectations. As of the June 2018 payment date, loans in arrears for over 90 days represented 0.9% of the outstanding collateral portfolio, while the current cumulative default ratio was at 1.7% of the original portfolio balance, up from 0.7% a year ago. DBRS conducted a loan-by-loan analysis on the remaining collateral pool of receivables and updated its PD and LGD assumptions. The updated base-case PD and LGD are 12.3% and 39.7%, respectively. The updated assumptions incorporate the Spanish sovereign rating which was upgraded to "A" from A (low) on April 6, 2018, as well as the updated MVDs and HPIs, as per the "European RMBS Insight: Spanish Addendum" published on October 2, 2018. CREDIT ENHANCEMENT The CE available to the Series A notes has continued to increase as the transaction deleverages. The Series A notes are supported by the subordination of the Series B notes and a non-amortizing reserve fund (RF), which is available to cover senior fees, interest and principal on the Series A notes until the Series A notes are paid in full, after which time the RF will be available to support the Series B notes. As of June 2018, the RF was at its target of EUR 27 million, and the CE to the Series A notes was 29.0%, increasing from 26.6% as of March 2017. Santander acts as the Account Bank for the transaction. On the basis of Santander's reference rating of A (high), which is one notch below DBRS's Long-Term Critical Obligations Rating of AA (low), and the mitigants outlined in the transaction documents, DBRS considers the risk arising from the exposure to Santander to be consistent with the rating of the notes. Notes: All figures are in euros unless otherwise noted. SRF 2017-1: DBRS Raises Rating on Class D Notes to BB(high) ----------------------------------------------------------- DBRS Ratings Limited took the following rating actions on the bonds issued by three Spanish residential mortgage-backed securities (RMBS) transactions originated by Catalunya Banc, S.A., Caixa d'Estalvis de Catalunya, Caixa d'Estalvis de Tarragona and Caixa d'Estalvis de Manresa. The three transactions are serviced by Banco Bilbao Vizcaya Argentaria S.A. (BBVA) through its delegated servicer, Anticipa Real Estate, S.L.U. SRF 2016-1 Fondo de Titulizacion (SRF 2016-1): -- Class A confirmed at AAA (sf) -- Class B upgraded to A (high) (sf) from A (sf) -- Class C upgraded to BBB (high) (sf) from BBB (sf) SRF 2017-1 Fondo de Titulizacion (SRF 2017-1): -- Class A confirmed at AAA (sf) -- Class B upgraded to A (high) (sf) from A (sf) -- Class C upgraded to BBB (high) (sf) from BBB (sf) -- Class D upgraded to BB (high) (sf) from BB (sf) SRF 2017-2 Fondo de Titulizacion (SRF 2017-2): -- Class A confirmed at AAA (sf) -- Class B upgraded to AA (high) (sf) from AA (sf) -- Class C upgraded to A (sf) from A (low) (sf) -- Class D upgraded to BBB (low) (sf) from BB (sf) The ratings on the Class A notes in all three transactions address the timely payment of interest and ultimate payment of principal on or before the legal final maturity date, while the ratings on the Class B, Class C and Class D notes address ultimate payment of interest and principal. Additionally, DBRS removed the Under Review with Positive Implications (UR-Pos.) status on the mezzanine and junior notes in each transaction. The rating actions are the result of an annual review of the transactions following publication of an update to the "European RMBS Insight: Spanish Addendum" on October 2, 2018 where DBRS updated its house price indexation and market value decline rates to reflect data through the third quarter of 2017. The ratings on the mezzanine and junior notes in each transaction were placed UR-Pos. on April 30, 2018, following the upgrade of the Long-Term Foreign and Local Currency - Issuer Rating on the Kingdom of Spain to 'A' from A (low). For additional information on the upgrade, please see DBRS's press release entitled "DBRS Upgrades the Kingdom of Spain to A, Stable Trend", published on April 6, 2018. The UR-Pos. status of the notes was extended following the publication of the "European RMBS Insight: Spanish Addendum - Request for Comment" on July 24, 2018. The rating actions are based on the following analytical considerations: -- Portfolio performance, in terms of delinquencies, defaults and losses. -- Portfolio default rate (PD), loss given default (LGD) and expected loss assumptions on the remaining receivables. -- Current available credit enhancement (CE) to the notes to cover the expected losses at their respective rating levels. PORTFOLIO PERFORMANCE -- For SRF 2016-1, the cumulative default ratio as of June 2018 was 0.6% and the 90+ delinquency ratio was 1.1%. -- For SRF 2017-1, the cumulative default ratio as of June 2018 was 0.6% and the 90+ delinquency ratio was 2.0%. -- For SRF 2017-2, the cumulative default ratio as of June 2018 was at zero and the 90+ delinquency ratio was 1.3%. PORTFOLIO ASSUMPTIONS DBRS conducted a loan-by-loan analysis of the remaining pool of receivables in each transaction and has updated its base case PD and LGD assumptions as follows: -- For SRF 2016-1, DBRS has updated its base case PD and LGD assumptions to 22.1% and 19.5%, respectively. -- For SRF 2017-1, DBRS has updated its base case PD and LGD assumptions to 23.5% and 30.9%, respectively. -- For SRF 2017-2, DBRS has updated its base case PD and LGD assumptions to 19.3% and 28.4%, respectively. CREDIT ENHANCEMENT -- For SRF 2016-1, Class A CE was 35.6%, Class B CE was 27.5% and Class C CE was 22.9%, as of the July 2018 payment date. -- For SRF 2017-1, Class A CE was 41.7%, Class B CE was 30.7%, Class C CE was 26.3% and Class D CE was 23.0%, as of the July 2018 payment date. -- For SRF 2017-2, Class A CE was 41.3%, Class B CE was 31.0%, Class C CE was 26.8% and Class D CE was 21.7%, as of the July 2018 payment date. Credit enhancement to each class of notes is provided by subordination of junior classes. BNP Paribas Securities Services, Spanish branch acts as the account bank for each transaction. On the basis of DBRS's private rating of BNP Paribas Securities Services, Spanish branch and the mitigants outlined in the transaction documents, DBRS considers the risk arising from the exposure to the account bank to be consistent with the rating assigned to the notes. Notes: All figures are in euros unless otherwise noted. =========================== U N I T E D K I N G D O M =========================== BLOODHOUND PROGRAMME: Enters Administration, Explores Options ------------------------------------------------------------- Business Sale reports that Bloodhound Programme, the Bristol-based company that commissioned the project to break the land speed record, has gone into administration to find a solution in order to take the project to completion. According to Business Sale, partners of specialist business advisory firm FRP Advisory LLP, Andrew Sheridan -- andrew.sheridan@frpadvisory.com -- and Geoff Rowley -- geoff.rowley@frpadvisory.com -- have been appointed as joint administrators of Bloodhound Programme. Talks are currently underway to find potential solutions and offers are being invited, Business Sale discloses. "Entering into administration provides some breathing space to identify an investor who will bring the guaranteed funding, impetus and expertise required to drive the project forward," Business Sale quotes Mr. Sheridan as saying. Founded in 2007, Project Bloodhound aims to hit speeds of 1,000 mph on the specially built race track in the Northern Cape of South Africa. CLAIRE'S: Boss Denies Store Closure Plans, CVA Rumors ----------------------------------------------------- According to City A.M.'s Sebastian McCarthy, fashion accessory retailer Claire's has strongly denied reports that it is mulling store closures as part of a turnaround bid to revive the firm. The high street retailer's boss said that there were no plans to trigger an insolvency process -- known as a company voluntary arrangement (CVA) -- despite earlier reports that the firm was considering a number of restructuring options, City A.M. relates. "We have no plans for either a CVA or major store closures in the UK in the foreseeable future. Any stores we do close or open in the UK would be as part of our normal course of business," City A.M. quotes Claire's boss Ron Marshall as saying. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than US$3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/booksto order any title today. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2018. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. * * * End of Transmission * * *