/raid1/www/Hosts/bankrupt/TCREUR_Public/190104.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

               Friday, January 4, 2019, Vol. 20, No. 003


                            Headlines


I R E L A N D

INVESCO EURO I: Moody's Assigns B2 Rating to Class E Notes
INVESCO EURO I: Fitch Assigns B-sf Rating to Class F Debt


K A Z A K H S T A N

SAMRUK-KAZYNA: Fitch Withdraws BB+ LT Issuer Default Ratings


N E T H E R L A N D S

BARINGS EURO 2018-3: Moody's Assigns B2 Rating to Class F Notes
BARINGS EURO 2018-3: Fitch Assigns B-sf Rating to Class F Debt


U K R A I N E

FERREXPO PLC: Moody's Raises CFR to B3, Outlook Stable
PRIVATBANK: Moody's Raises LC Deposit Rating to Caa1
SBERBANK PJSC: Moody's Raises LC Deposit Rating to Caa1


X X X X X X X X

* BOOK REVIEW: Risk, Uncertainty and Profit


                            *********



=============
I R E L A N D
=============


INVESCO EURO I: Moody's Assigns B2 Rating to Class E Notes
----------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to notes issued by Invesco Euro CLO I
Designated Activity Company:

EUR 214,400,000 Class A-1 Senior Secured Floating Rate Notes due
2031, Assigned Aaa (sf)

EUR 30,000,000 Class A-2 Senior Secured Fixed Rate Notes due 2031,
Assigned Aaa (sf)

EUR 41,200,000 Class B Senior Secured Floating Rate Notes due
2031, Assigned Aa2 (sf)

EUR 26,400,000 Class C Senior Secured Deferrable Floating Rate
Notes due 2031, Assigned A2 (sf)

EUR 25,600,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2031, Assigned Baa3 (sf)

EUR 22,400,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2031, Assigned Ba2 (sf)

EUR 12,000,000 Class F Senior Secured Deferrable Floating Rate
Notes due 2031, Assigned B2 (sf)

RATINGS RATIONALE

Moody's definitive ratings of the rated notes reflect the risks
from defaults on the underlying portfolio of loans given the
characteristics and eligibility criteria of the constituent
assets, the relevant portfolio tests and covenants, as well as the
transaction's capital and legal structure. Furthermore, Moody's
considers that the collateral manager Invesco European RR L.P. has
sufficient experience and operational capacity and is capable of
managing this CLO.

The Issuer is a managed cash flow CLO. At least 90% of the
portfolio must consist of senior secured obligations and up to 10%
of the portfolio may consist of unsecured senior loans, second-
lien loans, mezzanine obligations and high yield bonds. The
portfolio is expected to be 80% ramped up as of the closing date
and comprises predominantly corporate loans to obligors domiciled
in Western Europe. The remainder of the portfolio will be acquired
during the six month ramp-up period in compliance with the
portfolio guidelines.

Invesco will manage the CLO. It will direct the selection,
acquisition and disposition of collateral on behalf of the Issuer
and may engage in trading activity, including discretionary
trading, during the remaining transaction's four-year reinvestment
period. Thereafter, purchases are permitted using principal
proceeds from unscheduled principal payments and proceeds from
sales of credit risk obligations or credit improved obligations,
and are subject to certain restrictions.

In addition to the seven classes of notes rated by Moody's, the
Issuer has issued EUR 37,800,000 of Subordinated Notes which are
not rated.

The transaction incorporates interest and par coverage tests
which, if triggered, divert interest and principal proceeds to pay
down the notes in order of seniority.

Methodology underlying the rating action:

The principal methodology used in these ratings was "Moody's
Global Approach to Rating Collateralized Loan Obligations"
published in August 2017.

The Credit Ratings of the notes issued by Invesco Euro CLO I
Designated Activity Company were assigned in accordance with
Moody's existing Methodology entitled "Moody's Global Approach to
Rating Collateralized Loan Obligations" dated August 31, 2017.
Please note that on November 14, 2018, Moody's released a Request
for Comment, in which it has requested market feedback on
potential revisions to its Methodology for Collateralized Loan
Obligations. If the revised Methodology is implemented as
proposed, the Credit Ratings of the notes issued by Invesco Euro
CLO I Designated Activity Company may be neutrally affected.

Factors that would lead to an upgrade or downgrade of the ratings:

The rated notes' performance is subject to uncertainty. The notes'
performance is sensitive to the performance of the underlying
portfolio, which in turn depends on economic and credit conditions
that may change. The collateral manager's investment decisions and
management of the transaction will also affect the notes'
performance.

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

Moody's used the following base-case modeling assumptions:

Par Amount: EUR 400,000,000

Diversity Score: 38

Weighted Average Rating Factor (WARF): 2800

Weighted Average Spread (WAS): 3.55%

Weighted Average Coupon (WAC): 5.0%

Weighted Average Recovery Rate (WARR): 43.1%

Weighted Average Life (WAL): 8.5 years

Moody's has addressed the potential exposure to obligors domiciled
in countries with local currency ceiling (LCC) of A1 or below. As
per the portfolio constraints and eligibility criteria, exposures
to countries with LCC of A1 to A3 cannot exceed 10% and obligors
cannot be domiciled in countries with LCC below A3.


INVESCO EURO I: Fitch Assigns B-sf Rating to Class F Debt
---------------------------------------------------------
Fitch Ratings has assigned Invesco Euro CLO I DAC final ratings,
as follows:

Class A-1: 'AAAsf'; Outlook Stable

Class A-2: 'AAAsf'; Outlook Stable

Class B: 'AAsf'; Outlook Stable

Class C: 'Asf'; Outlook Stable

Class D: 'BBB-sf'; Outlook Stable

Class E: 'BBsf'; Outlook Stable

Class F: 'B-sf'; Outlook Stable

Subordinated notes: 'NRsf'

Invesco Euro CLO I DAC is a cash flow collateralised loan
obligation (CLO). Net proceeds from the issuance of the notes are
being used to purchase a portfolio of EUR400 million of mostly
European leveraged loans and bonds. The portfolio is actively
managed by Invesco European RR L.P. The CLO envisages a four-year
reinvestment period and an 8.5-year weighted average life (WAL).

KEY RATING DRIVERS

B' Portfolio Credit Quality

Fitch places the average credit quality of obligors in the 'B'
range. The Fitch-weighted average rating factor of the current
portfolio is 31.6.

High Recovery Expectations

At least 90% of the portfolio will comprise senior secured
obligations. Fitch views the recovery prospects for these assets
as more favourable than for second-lien, unsecured and mezzanine
assets. The Fitch-weighted average recovery rate of the current
portfolio is 68.3%.

Diversified Asset Portfolio

The transaction features different Fitch test matrices with
different allowances for exposure to the 10-largest obligors
(maximum 21% and 26.5%). The manager can then interpolate between
these matrices. The transaction also includes limits on maximum
industry exposure based on Fitch's industry definitions. The
maximum exposure to the three-largest (Fitch-defined) industries
in the portfolio is covenanted at 40%. These covenants ensure that
the asset portfolio will not be exposed to excessive
concentration.

Portfolio Management

The transaction features a four-year reinvestment period and
includes reinvestment criteria similar to other European
transactions. Fitch's analysis is based on a stressed-case
portfolio with the aim of testing the robustness of the
transaction structure against its covenants and portfolio
guidelines.

Cash Flow Analysis

Fitch used a customised proprietary cash flow model to replicate
the principal and interest waterfalls and the various structural
features of the transaction, and to assess their effectiveness,
including the structural protection provided by excess spread
diverted through the par value and interest coverage tests.

RATING SENSITIVITIES

A 125% default multiplier applied to the portfolio's mean default
rate, and with this increase added to all rating default levels,
would lead to a downgrade of up to two notches for the rated
notes. A 25% reduction in recovery rates would lead to a downgrade
of up to four notches for the rated notes.

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO RULE 17G-10

Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.

DATA ADEQUACY

The majority of the underlying assets or risk-presenting entities
have ratings or credit opinions from Fitch and/or other Nationally
Recognised Statistical Rating Organisations and/or European
Securities and Markets Authority-registered rating agencies. Fitch
has relied on the practices of the relevant groups within Fitch
and/or other rating agencies to assess the asset portfolio
information.

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


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


SAMRUK-KAZYNA: Fitch Withdraws BB+ LT Issuer Default Ratings
------------------------------------------------------------
Fitch Ratings has withdrawn Kazakhstan's Real Estate Fund Samruk-
Kazyna 'BB+' Long-Term Foreign- and Local-Currency Issuer Default
Ratings and 'AA(kaz)' National Long-Term Rating with Stable
Outlooks. The agency has also withdrawn REFSK's 'B' Short-Term
Foreign-Currency IDR.

KEY RATING DRIVERS

Fitch is withdrawing the ratings as REFSK has chosen to stop
participating in the rating process. Therefore, Fitch will no
longer have sufficient information to maintain the ratings and has
withdrawn REFSK's ratings without affirmation. Accordingly, Fitch
will no longer provide ratings or analytical coverage for REFSK.

RATING SENSITIVITIES

Not applicable


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


BARINGS EURO 2018-3: Moody's Assigns B2 Rating to Class F Notes
---------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to Notes issued by Barings Euro CLO
2018-3 B.V.:

EUR 231,800,000 Class A-1 Senior Secured Floating Rate Notes due
2031, Definitive Rating Assigned Aaa (sf)

EUR 12,200,000 Class A-2 Senior Secured Fixed Rate Notes due 2031,
Definitive Rating Assigned Aaa (sf)

EUR 10,000,000 Class B-1 Senior Secured Floating Rate Notes due
2031, Definitive Rating Assigned Aa2 (sf)

EUR 30,000,000 Class B-2 Senior Secured Fixed Rate Notes due 2031,
Definitive Rating Assigned Aa2 (sf)

EUR 27,000,000 Class C Senior Secured Deferrable Floating Rate
Notes due 2031, Definitive Rating Assigned A2 (sf)

EUR 24,000,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2031, Definitive Rating Assigned Baa3 (sf)

EUR 24,000,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2031, Definitive Rating Assigned Ba2 (sf)

EUR 10,000,000 Class F Senior Secured Deferrable Floating Rate
Notes due 2031, Definitive Rating Assigned B2 (sf)

RATINGS RATIONALE

Moody's definitive ratings of the rated Notes reflect the risks
from defaults on the underlying portfolio of loans given the
characteristics and eligibility criteria of the constituent
assets, the relevant portfolio tests and covenants, as well as the
transaction's capital and legal structure. Furthermore, Moody's
considers that the collateral manager Barings Limited has
sufficient experience and operational capacity and is capable of
managing this CLO.

The Issuer is a managed cash flow CLO. At least 90% of the
portfolio must consist of senior secured obligations and up to 10%
of the portfolio may consist of senior unsecured obligations,
second-lien loans, mezzanine obligations and high yield bonds. The
portfolio is expected to be 80% ramped as of the closing date and
to comprise of predominantly corporate loans to obligors domiciled
in Western Europe. The remainder of the portfolio will be acquired
during the 7 months ramp-up period in compliance with the
portfolio guidelines.

Barings will manage the CLO. It will direct the selection,
acquisition and disposition of collateral on behalf of the Issuer
and may engage in trading activity, including discretionary
trading, during the four and a half year reinvestment period.
Thereafter, purchases are permitted using principal proceeds from
unscheduled principal payments and proceeds from sales of credit
risk obligations and/or credit improved obligations, and are
subject to certain restrictions.

In addition to the eight classes of Notes rated by Moody's, the
Issuer has issued EUR 39,000,000 of Subordinated Notes which are
not rated.

The transaction incorporates interest and par coverage tests
which, if triggered, divert interest and principal proceeds to pay
down the notes in order of seniority.

Methodology underlying the rating action:

The principal methodology used in these ratings was "Moody's
Global Approach to Rating Collateralized Loan Obligations"
published in August 2017.

The Credit Ratings of the Notes issued by Barings Euro CLO 2018-3
B.V. were assigned in accordance with Moody's existing Methodology
entitled "Moody's Global Approach to Rating Collateralized Loan
Obligations" dated August 31, 2017. Please note that on November
14, 2018, Moody's released a Request for Comment, in which it has
requested market feedback on potential revisions to its
Methodology for Collateralized Loan Obligations. If the revised
Methodology is implemented as proposed, the Credit Rating of the
Notes issued by Barings Euro CLO 2018-3 B.V. may be neutrally
affected.

Factors that would lead to an upgrade or downgrade of the ratings:

The rated notes' performance is subject to uncertainty. The notes'
performance is sensitive to the performance of the underlying
portfolio, which in turn depends on economic and credit conditions
that may change. The collateral manager's investment decisions and
management of the transaction will also affect the notes'
performance.

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

Moody's used the following base-case modeling assumptions:

Par Amount: EUR 400,000,000.00

Diversity Score: 44

Weighted Average Rating Factor (WARF): 2850

Weighted Average Spread (WAS): 3.65%

Weighted Average Coupon (WAC): 4.50%

Weighted Average Recovery Rate (WARR): 42.50%

Weighted Average Life (WAL): 8.5 years

Moody's has addressed the potential exposure to obligors domiciled
in countries with local currency ceiling ("LCC") of A1 or below.
As per the portfolio constraints and eligibility criteria,
exposures to countries with LCC of below Aa3 cannot exceed 10% and
exposures to countries with LCC of below A3 cannot exceed 0%. In
addition obligors cannot be domiciled in countries with LCC below
A3.


BARINGS EURO 2018-3: Fitch Assigns B-sf Rating to Class F Debt
--------------------------------------------------------------
Fitch Ratings has assigned Barings Euro CLO 2018-3 B.V. ratings,
as follows:

EUR231.8 million Class A-1: 'AAAsf'; Outlook Stable

EUR12.2 million Class A-2: 'AAAsf'; Outlook Stable

EUR10 million Class B-1: 'AAsf'; Outlook Stable

EUR30 million Class B-2: 'AAsf'; Outlook Stable

EUR27 million Class C: 'Asf'; Outlook Stable

EUR24 million Class D: 'BBB-sf'; Outlook Stable

EUR24 million Class E: 'BB-sf'; Outlook Stable

EUR10 million Class F: 'B-sf'; Outlook Stable

EUR39 million subordinated notes: 'NRsf'

Barings Euro CLO 2018-3 B.V. is a securitisation of mainly senior
secured obligations (at least 90%) with a component of senior
unsecured, mezzanine, and second-lien loans. Net proceeds from the
issuance of the notes are being used to fund a portfolio with a
target par of EUR400 million. The portfolio will be managed by
Barings (U.K) Limited. The CLO envisages a 4.5 year reinvestment
period and an 8.5-year weighted average life (WAL).

KEY RATING DRIVERS

'B' Portfolio Credit Quality

Fitch places the average credit quality of obligors in the 'B'
range. The Fitch-weighted average rating factor (WARF) of the
identified portfolio is 31.5.

High Recovery Expectations

At least 90% of the portfolio comprises senior secured
obligations. Recovery prospects for these assets are typically
more favourable than for second-lien, unsecured and mezzanine
assets. The Fitch-weighted average recovery rating (WARR) of the
identified portfolio is 62.7%.

Diversified Asset Portfolio

The transaction features four different Fitch test matrices with
different allowances for exposures to both the 10 largest obligors
and fixed-rate bucket. The manager can interpolate between these
matrices. The transaction also includes limits on maximum industry
exposure based on Fitch's industry definitions. The maximum
exposure to the three largest (Fitch-defined) industries in the
portfolio is covenanted at 40%. These covenants ensure that the
asset portfolio will not be exposed to excessive concentration.

Portfolio Management

The transaction features a 4.5-year reinvestment period and
includes reinvestment criteria similar to other European
transactions. Fitch's analysis is based on a stressed-case
portfolio with the aim of testing the robustness of the
transaction structure against its covenants and portfolio
guidelines.

Cash Flow Analysis

Fitch used a customised proprietary cash flow model to replicate
the principal and interest waterfalls and the various structural
features of the transaction, and to assess their effectiveness,
including the structural protection provided by excess spread
diverted through the par value and interest coverage tests.

Limited Interest Rate Risk

Up to 20% of the portfolio can be invested in unhedged fixed-rate
assets, while fixed-rate liabilities represent 10.5% of the target
par. Fitch modelled both 0% and 20% fixed-rate buckets and found
that the rated notes can withstand the interest rate mismatch
associated with each scenario.

RATING SENSITIVITIES

A 125% default multiplier applied to the portfolio's mean default
rate, and with this increase added to all rating default levels,
would lead to a downgrade of up to two notches for the rated
notes. A 25% reduction in recovery rates would lead to a downgrade
of up to four notches at the 'BB-' rating level and two notches
for other rated notes.

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO RULE 17G-10

Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.

DATA ADEQUACY

The majority of the underlying assets or risk-presenting entities
have ratings or credit opinions from Fitch and/or other Nationally
Recognised Statistical Rating Organisations and/or European
Securities and Markets Authority-registered rating agencies. Fitch
has relied on the practices of the relevant groups within Fitch
and/or other rating agencies to assess the asset portfolio
information.


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


FERREXPO PLC: Moody's Raises CFR to B3, Outlook Stable
------------------------------------------------------
Moody's Investors Service has upgraded to B3 from Caa1 the
corporate family ratings and to B3-PD from Caa1-PD the probability
of default ratings of three companies operating in Ukraine:
Ferrexpo plc, Metinvest B.V. and MHP SE. Concurrently, Moody's has
upgraded the national scale corporate family ratings of Metinvest
and MHP to A3.ua from Baa3.ua and the senior unsecured ratings of
notes issued by Ferrexpo Finance Plc to B3 from Caa1. The outlook
on the ratings for all of these companies has been changed to
stable from positive.

The rating action follows Moody's upgrade of Ukraine's government
bond rating to Caa1 from Caa2, with a stable outlook, and raising
of the foreign-currency bond country ceiling to B3 from Caa1 on
December 21, 2018.

RATINGS RATIONALE

The rating action primarily reflects the upgrade of Ukraine's
government bond rating to Caa1 from Caa2 and raising of the
foreign-currency bond country ceiling, which remains the key
constraint for the companies' ratings, to B3 from Caa1.

The upgrade of Ukraine's government bond rating is based on the
following key drivers: (1) the anticipated improvement in external
strength as a consequence of the new Stand-by Arrangement reached
with the IMF, including the likelihood of renewed capital market
access that will reduce the risk of default; (2) Moody's
expectations that recently adopted reforms will make incremental
progress on reducing corruption, one of the country's most credit-
negative institutional weaknesses; and (3) an incremental
improvement in Ukraine's resilience to the ongoing conflict with
Russia.

The business profiles and financial metrics of Ferrexpo,
Metinvest, and MHP are strong for a B3 rating. However, the
companies are directly exposed to Ukraine's political, legal,
fiscal and regulatory environment, despite a significant share of
export revenues, given that most or all of their assets are
located within the country.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook on the ratings of Ferrexpo, Metinvest and MHP
is in line with the stable outlook on Ukraine's sovereign rating,
and reflects Moody's expectation that the companies will sustain
strong operating and financial performance for their current
rating level, and maintain healthy liquidity.

WHAT COULD CHANGE THE RATINGS UP/DOWN

Moody's could upgrade the ratings of Ferrexpo, Metinvest and MHP
if it were to upgrade Ukraine's sovereign rating and/or raise the
foreign-currency bond country ceiling, provided there is no
material deterioration in the company-specific factors, including
their operating and financial performance, market position and
liquidity.

Moody's could downgrade the ratings if it were to downgrade
Ukraine's sovereign rating and/or lower the foreign-currency bond
country ceiling, or the companies' operating and financial
performance, market position or liquidity were to deteriorate
materially.

PRINCIPAL METHODOLOGIES

The principal methodology used in rating Ferrexpo plc and Ferrexpo
Finance Plc was Mining published in September 2018. The principal
methodology used in rating Metinvest B.V. was Steel Industry
published in September 2017. The principal methodology used in
rating MHP SE was Global Protein and Agriculture Industry
published in June 2017.

Ferrexpo plc, headquartered in Switzerland and incorporated in the
UK, is a mid-sized iron ore pellet producer with mining and
processing assets located in Ukraine. The group has total Joint
Ore Reserves Committee Code (JORC) classified resources of 6.6
billion tonnes, around 1.4 billion tonnes of which are proved and
probable reserves. The average grade of Ferrexpo's ore is
approximately 31% Fe. In 2017, the group achieved a pellet
production of 10.4 million tonnes and generated revenues of $1.2
billion. Ferrexpo is listed on the London Stock Exchange and 50.3%
of its shares are held by Fevamotinico S.a.r.l, a Luxembourg based
holding company owned by Kostyantin Zhevago, CEO of Ferrexpo plc,
and the remaining is free float.

Metinvest B.V., registered in the Netherlands, is the holding
company of a vertically integrated steel and mining group,
Metinvest, with assets in Ukraine, the European Union and the US.
The company produces finished flat and long steel products, pipes,
semi-finished steel products (slabs), pig iron and coke products,
iron ore and coking coal concentrate, and iron ore pellets. For
the last 12 months ended June 30, 2018, Metinvest reported revenue
of $11.2 billion (2017: $8.9 billion) and its Moody's-adjusted
EBITDA amounted to $2,162 million (2017: $1,806 million).
Metinvest's major shareholders are System Capital Management
(71.24%) and SMART group (23.76%).

MHP SE, domiciled in Cyprus, is a leading agro-industrial group in
Ukraine. The company's operations include the production of
poultry and sunflower oil, as well as the production and sale of
convenience foods. The company is vertically integrated into grain
and fodder production, and has one of the largest land banks in
Ukraine. For the 12 months ended September 2018, the company's
total revenue and Moody's-adjusted EBITDA were around $1.5 billion
and $432.1 million, respectively. MHP's controlling beneficiary
shareholder (with a stake of around 60%) is Yuriy Kosyuk, the
founder and CEO of the company. The company has traded on the
London Stock Exchange since its May 2008 IPO.


PRIVATBANK: Moody's Raises LC Deposit Rating to Caa1
----------------------------------------------------
Moody's Investors Service has taken rating actions on four
Ukrainian banks. These follow the recent improvement in the
creditworthiness of the Government of Ukraine, reflected in
Moody's upgrade of Ukraine's sovereign bond rating to Caa1, with a
stable outlook, from Caa2 (positive outlook) on December 21, 2018.
The rating actions were driven by (1) high inter-linkages between
the sovereign creditworthiness and standalone credit fundamentals
of the three government owned banks, (2) improvement in banks'
standalone credit profiles, and (3) Moody's expectations that
Ukrainian banks' creditworthiness will gradually improve, driven
by improving asset quality and profitability.

Moody's has changed the outlooks to stable from positive on the
affected banks' ratings.

Specifically, Moody's has:

(1) Upgraded the Baseline Credit Assessments (BCAs) of four banks
(Privatbank, Savings Bank of Ukraine, Ukreximbank and Pivdennyi
Bank JSCB);

(2) Upgraded the long-term Local Currency (LC) deposit ratings of
four banks (Privatbank, Savings Bank of Ukraine, Ukreximbank and
Pivdennyi Bank JSCB);

(3) Upgraded the Foreign Currency (FC) deposit ratings of four
banks (Privatbank, Savings Bank of Ukraine, Ukreximbank and
Pivdennyi Bank JSCB);

(4) Upgraded the long-term LC senior unsecured debt rating of one
bank (Savings Bank of Ukraine);

(5) Upgraded the long-term FC senior unsecured debt ratings of two
banks (Savings Bank of Ukraine and Ukreximbank);

(6) Upgraded the FC subordinated debt ratings of one bank
(Ukreximbank);

(7) Upgraded the National Scale Ratings (NSRs) of two banks
(Savings Bank of Ukraine and Pivdennyi Bank JSCB);

(8) Upgraded the long-term Counterparty Risk Assessments (CR
Assessments) of four banks (Privatbank, Savings Bank of Ukraine,
Ukreximbank and Pivdennyi Bank JSCB);

(9) Upgraded the long-term Counterparty Risk Ratings (CRR) of four
banks (Privatbank, Savings Bank of Ukraine, Ukreximbank and
Pivdennyi Bank JSCB).

Moody's has changed the outlooks to stable from positive on the
affected banks' ratings.

RATINGS RATIONALE

OPERATING ENVIRONMENT

The macro profile for Ukrainian banks remains "Very Weak" as
economic conditions and operating environment in Ukraine remain
generally stable. Moody's expects annual GDP growth averaging 3%
in 2019-2020 and believes that a combination of better economic
conditions and more stable local currency will help to stimulate
credit demand and improve the repayment capacity of existing
borrowers, supporting banks' profitability. In addition, lower
geopolitical risk have enhanced the stability of bank deposits
reducing pressure on liquidity.

  --- BANK-SPECIFIC FACTORS

  -- PRIVATBANK

The upgrade of state-owned Privatbank's LC deposit rating to Caa1
with a stable outlook from Caa2 (positive outlook), FC deposit
rating to Caa2 with a stable outlook from Caa3 (positive outlook)
and the upgrade of the bank's BCA to caa1 from caa3 is driven by
the upgrade of the Ukraine's sovereign rating and strengthened
standalone financial fundamentals.

The upgrade of the bank's BCA is in turn driven by (1) the high
inter-linkage between the bank's standalone credit fundamentals
and sovereign creditworthiness, given the bank's high direct
exposure to sovereign debt (in total, over 60% of total assets or
640% of the bank's equity at Q3 2018); (2) improved asset quality
metrics as a result of increased problem loans coverage with
reserves to around 90%; (3) material improvement in profitability
metrics in 2018, driven by strengthened recurring revenues and
reduced credit cost; and (4) the bank's low reliance on market
funding and high level of liquid assets (over 50% of total assets
at Q3 2018).

  -- SAVINGS BANK OF UKRAINE

The upgrade of state-owned Savings Bank of Ukraine's long-term LC
deposit and long-term LC and FC senior unsecured debt ratings to
Caa1 with a stable outlook from Caa2 (positive outlook), the
bank's FC deposit rating to Caa2 with a stable outlook from Caa3
(positive) and the upgrade of the bank's BCA to caa1 from caa2 is
driven by the upgrade of the sovereign rating. The changes reflect
in turn: (1) the high inter-linkage between the bank's standalone
credit fundamentals and sovereign creditworthiness, given the
bank's high direct exposure to sovereign debt, bonds guaranteed by
the state, and state-owned companies including Naftogaz (in total,
64% of the bank's total assets or 893% of the bank's equity at Q3
2018); (2) improved coverage of problem loans; and (3) high level
of liquid assets (over 50% of total assets at Q3 2018).

  -- UKREXIMBANK

The upgrade of state-owned Ukreximbank's long-term LC deposit and
FC senior unsecured debt ratings to Caa1 with a stable outlook
from Caa2 (positive outlook), the bank's FC deposit rating to Caa2
with a stable outlook from Caa3 (positive outlook), FC
subordinated debt rating to Caa2 from Caa3 and the bank's BCA to
caa1 from caa2 is driven by the upgrade of the sovereign rating.
The upgrade of the bank's BCA reflects: (1) the high inter-linkage
between the bank's standalone credit fundamentals and sovereign
creditworthiness, given the bank's high direct exposure to
sovereign debt and bonds guaranteed by the state (over 62% of the
bank's assets or 1200% of the bank's equity as at Q3 2018); (2)
improved coverage of problem loans, (3) strengthened recurring
profitability in 2018; and (4) high level of liquid assets (over
50% of total assets at Q3 2018).

  -- PIVDENNYI BANK, JSCB

The upgrade of Pivdennyi Bank, JSCB's (Pivdennyi) long-term LC
deposit rating to Caa1 with a stable outlook from Caa2 (positive
outlook), FC deposit rating to Caa2 with a stable outlook from
Caa3 (positive outlook) and the bank's BCA to caa1 from caa2
follows the sovereign rating action on Ukraine, which lifts the
previous rating constraints and reflects the bank's (1) asset
quality improvement driven by repayments, write-offs and new
lending; (2) track record of profitable performance in recent
years and strengthened recurring profitability in 2018; and (3)
limited reliance on market funding and ample liquidity cushion
(around 30% of total assets at Q3 2018).

STABLE OUTLOOK

The stable outlooks on the long-term ratings of these four
Ukrainian bank ratings reflect the stable outlook on the sovereign
rating and Moody's expectations for a steady performance of these
banks over the next 12-18 months.

FOREIGN CURRENCY DEPOSIT RATINGS

Moody's has upgraded FC deposit ratings with a stable outlook of
four banks to Caa2 following the change in the country's FC
deposit ceiling to Caa2 from Caa3. The FC deposit ratings of the
banks continue to be constrained by the country's FC bank deposit
ceiling.

WHAT COULD MOVE THE RATINGS UP/DOWN

Moody's considers that banks' ratings could be upgraded following
further improvement of the country's macro-economic environment,
combined with an improvement in banks' standalone credit profiles
and/or positive rating action(s) on the sovereign
ratings/ceilings.

Conversely, negative pressure on the banks' ratings could result
from (1) increased volatility in the operating environment,
leading to growing pressure on the banks' standalone credit
profiles, increasing insolvency risk and/or (2) negative rating
action(s) on the sovereign ratings.

THE SPECIFIC RATING ACTIONS IMPLEMENTED ARE AS FOLLOWS:

Issuer: Ukreximbank

Upgrades:

Adjusted Baseline Credit Assessment, Upgraded to caa1 from caa2

Baseline Credit Assessment, Upgraded to caa1 from caa2

Counterparty Risk Assessment, Upgraded to B3(cr) from Caa1(cr)

Counterparty Risk Rating, Upgraded to B3 from Caa1

Subordinate Regular Bond/Debenture, Upgraded to Caa2 from Caa3

Senior Unsecured Regular Bond/Debenture, Upgraded to Caa1 from
Caa2, Changed To Stable From Positive

Deposit Rating (Foreign Currency), Upgraded to Caa2 from Caa3,
Changed To Stable From Positive

Deposit Rating (Local Currency), Upgraded to Caa1 from Caa2,
Changed To Stable From Positive

Outlook Actions:

Outlook, Changed To Stable From Positive

Issuer: Privatbank

Upgrades:

Adjusted Baseline Credit Assessment, Upgraded to caa1 from caa3

Baseline Credit Assessment, Upgraded to caa1 from caa3

Counterparty Risk Assessment, Upgraded to B3(cr) from Caa1(cr)

Counterparty Risk Rating, Upgraded to B3 from Caa1

Deposit Rating (Foreign Currency), Upgraded to Caa2 from Caa3,
Changed To Stable From Positive

Deposit Rating (Local Currency), Upgraded to Caa1 from Caa2,
Changed To Stable From Positive

Outlook Actions:

Outlook, Changed To Stable From Positive

Issuer: Savings Bank of Ukraine

Upgrades:

Adjusted Baseline Credit Assessment, Upgraded to caa1 from caa2

Baseline Credit Assessment, Upgraded to caa1 from caa2

Counterparty Risk Assessment, Upgraded to B3(cr) from Caa1(cr)

Counterparty Risk Rating, Upgraded to B3 from Caa1

NSR Counterparty Risk Rating, Upgraded to Baa1.ua from Baa3.ua

Senior Unsecured Regular Bond/Debenture, Upgraded to Caa1 from
Caa2, Changed To Stable From Positive

NSR Senior Unsecured Regular Bond/Debenture , Upgraded to Ba1.ua
from B1.ua

Deposit Rating (Foreign Currency), Upgraded to Caa2 from Caa3,
Changed To Stable From Positive

Deposit Rating (Local Currency), Upgraded to Caa1 from Caa2,
Changed To Stable From Positive

NSR Deposit Rating, Upgraded to Ba1.ua from B1.ua

Outlook Actions:

Outlook, Changed To Stable From Positive

..Issuer: Pivdennyi Bank, JSCB

Upgrades:

Adjusted Baseline Credit Assessment, Upgraded to caa1 from caa2

Baseline Credit Assessment, Upgraded to caa1 from caa2

Counterparty Risk Assessment, Upgraded to B3(cr) from Caa1(cr)

Counterparty Risk Rating, Upgraded to B3 from Caa1

NSR Counterparty Risk Rating, Upgraded to Baa1.ua from Baa3.ua

Deposit Rating (Foreign Currency), Upgraded to Caa2 from Caa3,
Changed To Stable From Positive

Deposit Rating (Local Currency), Upgraded to Caa1 from Caa2,
Changed To Stable From Positive

NSR Deposit Rating, Upgraded to Ba2.ua from B1.ua

Outlook Actions:

Outlook, Changed To Stable From Positive

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


SBERBANK PJSC: Moody's Raises LC Deposit Rating to Caa1
-------------------------------------------------------
Moody's Investors Service has taken rating actions on three
Ukrainian banks. These follow the recent improvement in the
creditworthiness of the Government of Ukraine, reflected in
Moody's upgrade of Ukraine's sovereign bond rating to Caa1, with a
stable outlook, from Caa2 (positive outlook) on December 21, 2018.

Specifically, Moody's has:

(1) Upgraded the Baseline Credit Assessments (BCAs) of two banks
(Raiffeisen Bank Aval and Sberbank PJSC) and affirmed BCA of one
bank (Prominvestbank);

(2) Upgraded the long-term Local Currency (LC) deposit ratings of
two banks (Raiffeisen Bank Aval and Sberbank PJSC) and affirmed
the long-term LC deposit rating of one bank (Prominvestbank);

(3) Upgraded the Foreign Currency (FC) deposit ratings of three
banks (Raiffeisen Bank Aval, Sberbank PJSC, and Prominvestbank);

(4) Upgraded the National Scale Ratings (NSRs) of two banks
(Raiffeisen Bank Aval and Sberbank PJSC) and affirmed the NSRs of
one bank (Prominvestbank);

(5) Upgraded the long-term Counterparty Risk Assessments (CR
Assessments) of two banks (Raiffeisen Bank Aval and Sberbank PJSC)
and affirmed the long-term CR Assessments of one bank
(Prominvestbank);

(6) Upgraded the long-term Counterparty Risk Ratings (CRR) of two
banks (Raiffeisen Bank Aval and Sberbank PJSC) and affirmed the
long-term CRR of one bank (Prominvestbank).

The outlooks on the affected banks' ratings is stable.

RATINGS RATIONALE

OPERATING ENVIRONMENT

The macro profile for Ukrainian banks remains "Very Weak" as
economic conditions and operating environment in Ukraine remain
generally stable. Moody's expects annual GDP growth averaging 3%
in 2019-2020 and believes that a combination of better economic
conditions and more stable local currency will help to stimulate
credit demand and improve the repayment capacity of existing
borrowers, supporting banks' profitability. In addition, lower
geopolitical risk have enhanced the stability of bank deposits
reducing pressure on liquidity.

  --- BANK-SPECIFIC FACTORS

  -- RAIFFEISEN BANK AVAL

The upgrade of Raiffeisen Bank Aval's long-term LC deposit rating
to B3 with a stable outlook from Caa1 (positive outlook), FC
deposit rating to Caa2 with a stable outlook from Caa3 (positive
outlook) and BCA to caa1 from caa2 are driven by the combination
of improved operating environment reflected in the sovereign
rating action, which also lifts the previous rating constraints on
the bank's ratings, as well as the bank's sound financial
fundamentals. In particular, the bank has demonstrated: (1) good
capital buffer with total regulatory capital adequacy ratio
amounting to high 17.2% as of Q3 2018, (2) asset quality
improvement driven by write-offs and new lending (e.g. problem
loans accounted for 21% as at end-2017 down from 52% at end-2016
and continued its decline in 2018 as per Moody's estimation), (3)
strong recurring and bottom-line profitability on the back of
widening net interest margin and reduced credit costs, and (4)
stable funding with limited reliance on market funding.

Moody's continues to incorporate a moderate probability of
affiliate support for Raiffeisen Bank Aval from the bank's parent,
Raiffeisen Bank International AG (LT bank deposits A3 / senior
unsecured A3 Stable, BCA baa3), resulting in a one-notch uplift to
the bank's long-term deposit ratings.

  -- SBERBANK PJSC

The upgrade of Sberbank PJSC's long-term LC deposit rating to Caa1
from Caa2 with a stable outlook, FC deposit rating to Caa2 with a
stable outlook from Caa3 (positive outlook) and BCA to caa2 from
caa3 are driven by a combination of the better operating
environment, material improvement of the bank's both solvency and
liquidity profiles over the past year and the sovereign rating
action which lifted constrains on the bank' deposit rating.
Sberbank PJSC has benefited from extensive capital support from
its parent in 2018 - it received UAH8.3 billion in capital in the
second quarter of 2018 (via conversion of parental funding to
equity), which constituted a significant amount compared with the
bank's shareholders' capital of UAH12.7 billion reported as of
year-end 2017. Additional capital has enabled the bank to improve
the coverage of problem loans with reserves to 89% as at end-
September 2018 (as per its estimate) from 61% as at end-2017. As
at end-September 2018, Sberbank PJSC's regulatory capital adequacy
stood at 21.7%, well above the minimum of 10%, and increased from
14.1% as at end-2017. Additionally, despite the contraction of
deposit base in 2017-18 triggered by sanctions against Russian
subsidiaries, the bank's liquidity profile has improved -- liquid
assets covered 93% of customer deposits and 34% of total
liabilities as at end-September 2018 compared to 56% and 17% as at
end-2017, respectively.

The bank's long-term LC deposit rating of Caa1 benefits from one
notch of uplift from its BCA due to Moody's assessment of a
Moderate probability of affiliate support which balances the
Russian Sberbank's (FC deposit rating Ba2 stable / senior
unsecured debt Ba1 positive, BCA ba1) intention to sell the
subsidiary, the full control and ownership by the parent, the
provision of financial support from the parent, as well as
reputational risks stemming from sharing Sberbank's brand in
Ukraine.

  -- PROMINVESTBANK

The upgrade of Prominvestbank's long-term FC deposit rating to
Caa2 from Caa3 with a stable outlook follows the change in the
country's FC deposit ceiling to Caa2 from Caa3. The Affirmation of
its caa3 BCA reflects Moody's expectation that the bank will
continue to rely highly on the extraordinary support from its
parent, Vnesheconombank (Ba1 positive), to meet its financial
obligations and comply with its capital requirements. The PIB's
BCA of caa3 reflects (1) very high volume of problem loans with
significant part not covered by provisions which makes potential
pressure on the bank's capital; (2) the bank's weak performance
with interest received in cash form and fee and commission income
did not cover the operating expenses in the first three quarters
of 2018; and (3) its currently limited business activity and
contracting customer funding.

The bank's long-term LC deposit rating of Caa2 benefits from one
notch of uplift from its BCA due to Moody's assessment of a
moderate probability of affiliate support from the bank's parent
Vnesheconombank (VEB), which balances VEB's intention to sell the
subsidiary, as well as existing financial support from the parent
and full ownership from VEB.

STABLE OUTLOOK

The stable outlooks on the long-term ratings of these three
Ukrainian bank ratings reflect the stable outlook on the sovereign
rating and Moody's expectations for a steady performance of these
banks over the next 12-18 months.

FOREIGN CURRENCY DEPOSIT RATINGS

Moody's has upgraded FC deposit ratings with a stable outlook of
three banks to Caa2 following the change in the country's FC
deposit ceiling to Caa2 from Caa3.

WHAT COULD MOVE THE RATINGS UP/DOWN

Moody's considers that banks' ratings could be upgraded following
further improvement of the country's macro-economic environment,
combined with an improvement in banks' standalone credit profiles
and/or positive rating action(s) on the sovereign
ratings/ceilings.

Conversely, negative pressure on the bank's ratings could result
from (1) increased volatility in the operating environment,
leading to growing pressure on the banks' standalone credit
profiles, increasing insolvency risk and/or (2) negative rating
action(s) on the sovereign ratings.

THE SPECIFIC RATING ACTIONS IMPLEMENTED ARE AS FOLLOWS:

Issuer: Raiffeisen Bank Aval

Upgrades:

Adjusted Baseline Credit Assessment, Upgraded to b3 from caa1

Baseline Credit Assessment, Upgraded to caa1 from caa2

Counterparty Risk Assessment, Upgraded to B3(cr) from Caa1(cr)

Counterparty Risk Rating, Upgraded to B3 from Caa1

NSR Counterparty Risk Rating, Upgraded to A3.ua from Baa3.ua

Bank Deposit Rating (Local Currency), Upgraded to B3 from Caa1,
Changed To Stable From Positive

Bank Deposit Rating (Foreign Currency), Upgraded to Caa2 from
Caa3, Changed To Stable From Positive

NSR Bank Deposit Rating, Upgraded to A3.ua from Baa3.ua

Outlook Actions:

Outlook, Changed To Stable From Positive

Issuer: Sberbank PJSC

Upgrades:

Adjusted Baseline Credit Assessment, Upgraded to caa1 from caa2

Baseline Credit Assessment, Upgraded to caa2 from caa3

Counterparty Risk Assessment, Upgraded to B3(cr) from Caa1(cr)

Counterparty Risk Rating, Upgraded to B3 from Caa1

NSR Counterparty Risk Rating, Upgraded to Baa1.ua from Ba2.ua

Bank Deposit Rating (Foreign Currency), Upgraded to Caa2 from
Caa3, Changed To Stable From Positive

Bank Deposit Rating (Local Currency), Upgraded to Caa1 from Caa2,
Remains Stable

NSR Bank Deposit Rating, Upgraded to Ba2.ua from B2.ua

Outlook Actions:

Outlook, Changed To Stable From Stable(m)

Issuer: Prominvestbank

Upgrades:

Bank Deposit Rating (Foreign Currency), Upgraded to Caa2 from
Caa3, Changed To Stable From Positive

Affirmations:

Adjusted Baseline Credit Assessment, Affirmed caa2

Baseline Credit Assessment, Affirmed caa3

Counterparty Risk Assessment, Affirmed Caa1(cr)

Counterparty Risk Rating, Affirmed Caa1

NSR Counterparty Risk Rating, Affirmed Ba2.ua

Bank Deposit Rating (Local Currency), Affirmed Caa2, Remains
Stable

NSR Bank Deposit Rating, Affirmed B2.ua

Outlook Actions:

Outlook, Changed To Stable From Stable(m)

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


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


* BOOK REVIEW: Risk, Uncertainty and Profit
-------------------------------------------
Author: Frank H. Knight
Publisher: Beard Books
Softcover: 381 pages
List Price: $34.95
Review by Gail Owens Hoelscher

Order your personal copy today at
http://www.amazon.com/exec/obidos/ASIN/1587981262/internetbankrupt

The tenets Frank H. Knight sets out in this, his first book, have
become an integral part of modern economic theory. Still readable
today, it was included as a classic in the 1998 Forbes reading
list. The book grew out of Knight's 1917 Cornell University
doctoral thesis, which took second prize in an essay contest that
year sponsored by Hart, Schaffner and Marx. In it, he examined the
relationship between knowledge on the part of entrepreneurs and
changes in the economy. He, quite famously, distinguished between
two types of change, risk and uncertainty, defining risk as
randomness with knowable probabilities and uncertainty as
randomness with unknowable probabilities. Risk, he said, arises
from repeated changes for which probabilities can be calculated
and insured against, such as the risk of fire. Uncertainty arises
from unpredictable changes in an economy, such as resources,
preferences, and knowledge, changes that cannot be insured
against.

Uncertainty, he said "is one of the fundamental facts of life."
One of the larger issues of Knight's time was how the
entrepreneur, the central figure in a free enterprise system,
earns profits in the face of competition. It was thought that
competition would reduce profits to zero across a sector because
any profits would attract more entrepreneurs into the sector and
increase supply, which would drive prices down, resulting in
competitive equilibrium and zero profit.

Knight argued that uncertainty itself may allow some entrepreneurs
to earn profits despite this equilibrium. Entrepreneurs, he said,
are forced to guess at their expected total receipts. They cannot
foresee the number of products they will sell because of the
unpredictability of consumer preferences. Still, they must
purchase product inputs, so they base these purchases on the
number of products they guess they will sell. Finally, they have
to guess the price at which their products will sell. These
factors are all uncertain and impossible to know. Profits are
earned when uncertainty yields higher total receipts than
forecasted total receipts. Thus, Knight postulated, profits are
merely due to luck.

Such entrepreneurs who "get lucky" will try to reproduce their
success, but will be unable to because their luck will eventually
turn. At the time, some theorists were saying that when this luck
runs out, entrepreneurs will then rely on and substitute improved
decision making and management for their original
entrepreneurship, and the profits will return. Knight saw
entrepreneurs as poor managers, however, who will in time fail
against new and lucky entrepreneurs. He concluded that economic
change is a result of this constant interplay between new
entrepreneurial action and existing businesses hedging against
uncertainty by improving their internal organization.

Frank H. Knight has been called "among the most broad-ranging and
influential economists of the twentieth century" and "one of the
most eclectic economists and perhaps the deepest thinker and
scholar American economics has produced." He stands among the
giants of American economists that include Schumpeter and Viner.
His students included Nobel Laureates Milton Friedman, George
Stigler and James Buchanan, as well as Paul Samuelson. At the
University of Chicago, Knight specialized in the history of
economic thought. He revolutionized the economics department
there, becoming one the leaders of what has become known as the
Chicago School of Economics. Under his tutelage and guidance, the
University of Chicago became the bulwark against the more
interventionist and anti-market approaches followed elsewhere in
American economic thought. He died in 1972.



                            *********

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 2019.  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 * * *