/raid1/www/Hosts/bankrupt/TCREUR_Public/190130.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, January 30, 2019, Vol. 20, No. 021


                            Headlines


A Z E R B A I J A N

AZERBAIJAN: Fitch Affirms BB+ LT IDR, Outlook Stable


C Z E C H   R E P U B L I C

PILSEN STEEL: Files for Insolvency; 1,000+ Workers to Lose Jobs


F R A N C E

PARTS EUROPE: Moody's Rates Sr. Sec. Notes B3, Outlook Stable


G E R M A N Y

RAILRUNNER EUROPE: Files Insolvency in Hamburg Bankruptcy Court
UNSER HEIMATBACKER: Lila Backer Files for Insolvency


I R E L A N D

* IRELAND: Builder Insolvencies up 50% Amid Housing Crisis


I T A L Y

ALITALIA SPA: Lufthansa in Talks to Take Majority Stake


N E T H E R L A N D S

GLOBAL UNIVERSITY: Moody's Affirms B3 CFR, Alters Outlook to Pos.


N O R W A Y

NORWEGIAN AIR: Launches Emergency Fundraising, Shares Plunge


R U S S I A

DME LIMITED: Moody's Alters Outlook on Ba1 CFR to Stable
NOVOSIBIRSK CITY: Fitch Affirms BB LT IDRs, Outlook Stable
ORENBURG REGION: Fitch Affirms BB+ LT IDR, Outlook Stable


U K R A I N E

ODESSA CITY: Fitch Affirms B- Long-Term IDRs, Outlook Stable


U N I T E D   K I N G D O M

PATISSERIE VALERIE: Sales in Secret Decline for Three Years
STONEGATE PUB: Moody's Affirms B2 CFR, Outlook Stable
STONEGATE PUB: S&P Affirms B- ICR on Refinancing Plans
TP ICAP: Moody's Cuts Corp. Family Rating to Ba2, Outlook Stable


                            *********



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A Z E R B A I J A N
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AZERBAIJAN: Fitch Affirms BB+ LT IDR, Outlook Stable
----------------------------------------------------
Fitch Ratings has affirmed Azerbaijan's Long-Term Foreign-
Currency Issuer Default Rating at 'BB+' with a Stable Outlook.

KEY RATING DRIVERS

Azerbaijan's 'BB+' ratings balance a strong external balance
sheet and low government debt, stemming from accumulated
surpluses in times of high oil revenues, with a heavy dependence
on hydrocarbons, an underdeveloped and opaque policy framework,
and a weak banking sector and governance indicators.

The economy is gradually recovering from the 2014 oil price
shock, subsequent policy tightening and currency devaluation.
Inflation fell to 2.3% yoy in November 2018, from 12.9% at end-
2017, due to cheaper imports and a stable exchange rate. Fitch
expects growth to pick-up to 3.5% in 2019, from 1.3% in 2018,
supported by the coming on stream of Shah Deniz 2 gas field and
investments stemming from the extension of the production sharing
agreement for the exploitation of the country largest oil field.
Tourism and agriculture will foster non-oil sector growth.

Azerbaijan's external position is a key rating strength and
improved in 2018, supported by higher average oil prices and
dynamic non-oil exports boosting the current account surplus to
7.6% of GDP. The assets of the Sovereign Oil Fund of Azerbaijan
(Sofaz) increased by 9% in January-October 2018 to USD39.0
billion (USD35.8 billion in 2017) or 81.2% of GDP, while
international official reserves reached USD6.6 billion at
October-end 2018 (USD6.7 billion at end-2017). Fitch forecasts
sovereign net foreign assets (SNFA) at 75.4% of GDP in 2018,
versus a negative current 'BB' median of 1.4% of GDP.

Fitch forecasts the current account surplus to increase to 8.4%
of GDP in 2019, compared with a deficit of 2.3% for the current
'BB' median. Ramp-up in production from Shah Deniz 2 will lead to
a surge in hydrocarbon exports, offsetting the pick-up in imports
following currency deprecations in major trading partners. Strong
demand from Russia for agriculture exports, a robust tourism
sector, and the completion of a new urea plant will stimulate
exports of non-oil goods and services. Infrastructure enhancement
will expand export capacity and custom rebates help maintain
competitiveness. Sustained external savings will support a
further build-up in SNFA, which Fitch forecasts at 83.1% of GDP
in 2019 and 84.7% in 2020.

However, the economy's vulnerabilities to another oil price shock
are still high, given ongoing weaknesses in the policy framework
and high commodity dependence. The hydrocarbon sector accounts
for 42% of GDP, 91% of goods exports and 63% of fiscal revenues.
Monetary policy effectiveness is constrained by an underdeveloped
capital market and a high level of dollarisation, accounting for
66% of deposits and 37% of loans in November 2018 and limited
exchange rate flexibility.

The exchange rate has remained stable at around 1.70AZN/USD since
April 2017, despite large fluctuations in oil prices and trade
partners' currencies against the US dollar and the authorities
stated commitment to a managed float regime. Limited exchange
rate flexibility allows little room for price adjustment and
could lead to a decrease in FX reserves, or SOFAZ assets, in case
of downward pressures on the currency.

Banking sector health is improving following 2017 restructurings,
but remains extremely weak relative to peers, as reflected by
Fitch Banking System Indicator (BSI) score of 'b'. Credit growth
recovered to 7% in 2018, supported by lower interest rates, and
capitalisation improved to 19.5% (excluding International Bank of
Azerbaijan; IBA) at end-2018 (18.4% in 2017). However, non-
performing loans still accounted for 17% of total loans at end-
2018.

Fitch estimates that the government recorded a consolidated
fiscal surplus of 3.9% of GDP in 2018, driven by higher Sofaz
revenues from oil, compared with a deficit of 2.8% for the
current 'BB' median. Fitch forecasts the fiscal balance to remain
in surplus in 2019 at 3.4% of GDP, supported by hydrocarbon
receipts and moderate expenditure growth. The 2019 government
consolidated budget complies with the fiscal rules adopted by
parliament in 2018 and provides for a moderate increase in
consolidated spending, including a 3.6% rise in Sofaz transfers
to the state to AZN11.4 billion, compared with a 13% rise in the
2018 revised budget.

The adoption of new fiscal rules and a medium-term debt
management strategy in 2018 and the planned adoption of a medium-
term expenditure framework should enable a more prudent and less
pro-cyclical fiscal policy. The rules include a nominal 3% limit
for yearly consolidated expenditure growth, a decline in non-oil
deficit/non-oil GDP and a formula capping oil revenue spending.
Development of a track record of fiscal discipline would help
rebuild buffers and enhance predictability and credibility of the
policy framework.

Azerbaijan's gross general government debt compares favourably
with peers at a forecast 18.4% of GDP in 2019, versus the current
'BB' median of 48.1% but contingent liabilities remain high.
Sovereign guarantees related to the purchase of the country's
largest bank's toxic assets, IBA, by state-owned Aqrarkredit,
account for 14.6% of GDP. Guarantees to the Southern Gas Corridor
accounted for 15.1% of GDP at end-2018, although the related
energy projects appear on track and profitable. Debt of state-
owned enterprises is high, including that of the state-oil
company of Azerbaijan (SOCAR), accounting for 22% of GDP at end-
2017. IBA's net short FX position remains large at USD0.9billion
(1.9% of GDP) at end-2018 and could lead to further government
support.

GDP per capita on a PPP basis and human development indicators
are in line with the 'BB' medians, but governance indicators are
below peers. Azerbaijan scores better than peers in the World
Bank Ease of Doing Business indicator, and has gained 32 places
in the 2019 ranking to 25th out of 190 countries, from 57th in
2018, reflecting some potential improvement in the business
environment. The president Ilham Aliyev has been in power since
2003, and his mandate was renewed for seven years after the April
2018 presidential elections. This will likely support policy
continuity, given the long-standing centralisation of power.
Political risk associated with the unresolved conflict with
Armenia over NagornoKarabakh also remains material. A resolution
is not expected in the near term and escalation is a real risk.

SOVEREIGN RATING MODEL (SRM) and QUALITATIVE OVERLAY (QO)

Fitch's proprietary SRM assigns Azerbaijan a score equivalent to
a rating of 'BB' on the Long-Term Foreign-Currency (LT FC) IDR
scale.

Fitch's sovereign rating committee adjusted the output from the
SRM to arrive at the final LT FC IDR by applying its QO, relative
to rated peers, as follows:

  - External Finances: +1 notch, to reflect the size of Sofaz
assets, which underpin Azerbaijan's exceptionally strong foreign
currency liquidity position and the very large net external
creditor position of the country.

Fitch's SRM is the agency's proprietary multiple regression
rating model that employs 18 variables based on three-year
centred averages, including one year of forecasts, to produce a
score equivalent to a LT FC IDR. Fitch's QO is a forward-looking
qualitative framework designed to allow for adjustment to the SRM
output to assign the final rating, reflecting factors within its
criteria that are not fully quantifiable and/or not fully
reflected in the SRM.

RATING SENSITIVITIES

The main factors that could, individually or collectively,
trigger positive rating action are:

  - Improvement in the macroeconomic policy framework,
strengthening the country's ability to address external shocks
and reducing macro volatility.

  - A significant improvement in public and external balance
sheet.

  - An improvement in governance and the business environment
leading to progress in economic diversification underpinning
growth prospects.

The main factors that could, individually or collectively,
trigger negative rating action are:

  - An oil price or other external shock that would have a
significant adverse effect on the economy, the public finances or
the external position.

  - Developments in the economic policy framework that undermine
macroeconomic stability.

  - Weakening growth performance and prospects.

KEY ASSUMPTIONS

Fitch forecasts Brent Crude to average USD65/b in 2019 and
USD62.5/b in 2020.

Fitch assumes that Azerbaijan will continue to experience broad
social and political stability and that there will be no
prolonged escalation in the conflict with Armenia over Nagorno-
Karabakh to a level that would affect economic and financial
stability.

The full list of rating actions is as follows:

Long-Term Foreign-Currency IDR affirmed at 'BB+'; Outlook Stable

Long-Term Local-Currency IDR affirmed at 'BB+'; Outlook Stable

Short-Term Foreign-Currency IDR affirmed at 'B'

Short-Term Local-Currency IDR affirmed at 'B'

Country Ceiling affirmed at 'BB+'

Issue ratings on long-term senior unsecured foreign-currency
bonds affirmed at 'BB+'

Issue ratings on long-term senior unsecured local-currency bonds
affirmed at 'BB+'


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C Z E C H   R E P U B L I C
===========================


PILSEN STEEL: Files for Insolvency; 1,000+ Workers to Lose Jobs
---------------------------------------------------------------
Czech Radio, citing the daily E15, reports that Plzen's main
steelworks company has filed an insolvency petition and accrued
CZK5 billion in debt. Pilsen Steel saw its funding from a Russian
bank cut off last year, the report says.

Czech Radio relates that the steelworks' largest creditors are
both majority controlled by Russian entities -- VEB Kapital and
Vemex -- while CEZ Prodej, part of the Czech state-controlled
utility, is also a major creditor.

Pilsen Steel trade unions said they expect a significant number
of the more than 1,000 employees to be laid off and fear salaries
may go unpaid, Czech Radio adds.


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F R A N C E
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PARTS EUROPE: Moody's Rates Sr. Sec. Notes B3, Outlook Stable
-------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to the new EUR175
million senior secured floating rate notes due 2022 to be issued
by Parts Europe S.A., a subsidiary of car parts distributor Parts
Holding Europe S.A.S.

The corporate family rating of B3 and the probability of default
rating (PDR) of B3-PD at Parts Holding Europe S.A.S, and the B3
ratings on the existing senior secured fixed and floating rate
notes due 2022 issued by Parts Europe S.A. are unchanged.

The rating outlook is stable.

RATINGS RATIONALE

The B3 rating on the new notes reflects their pari passu ranking
with the company's existing notes, also rated B3. The transaction
will not affect the company's credit metrics because proceeds
will mainly be used to repay drawings under the EUR90 million
revolving credit facility (RCF) currently fully drawn, and
refinance EUR72 million of existing floating rate notes.

However, the company's liquidity will improve because the RCF
will become fully available and EUR10 million of the expected
proceeds are earmarked for general corporate purposes.

Parts Holding Europe's B3 CFR reflects its high leverage
following the acquisition of Oscaro in November 2018. The
Moody's-adjusted debt/EBITDA increased to 8.0x from 7.0x (as of
September 2018, excluding future cost savings and synergies)
because the transaction was funded with drawings under the
revolving credit facility. The acquisition will also have an
initial dilutive impact on the company's margins because Oscaro
had a negative EBITDA of approximately EUR9 million in the last
twelve month ended September 30, 2018.

LIQUIDITY

Liquidity remains adequate but will improve if the transaction is
completed as envisaged. At closing, the company will have cash
balances of EUR48 million (as of September 2018 and net of bank
overdrafts), and access to a fully undrawn EUR90 million RCF. The
company also has access to factoring facilities of EUR190 million
in aggregate (on- and off-balance sheet) with an average
utilisation of EUR60 million throughout the year.

The RCF benefits from a springing financial maintenance covenant,
set at 0.7x super senior net leverage when the RCF is drawn. A
breach of this maintenance covenant triggers a draw-stop, but not
an event of default.

STRUCTURAL CONSIDERATIONS

The B3 rating on the senior secured notes, at the same level as
the CFR, reflects their subordination to the relatively small
super senior RCF ranking ahead as well as trade payables at
operating subsidiaries mitigating the senior secured notes
relatively weak guarantor and security packages. While the RCF
benefits from the same security package as the notes, it will
rank ahead of the notes in an enforcement scenario under the
provisions of the intercreditor agreement. Also, the obligations
of the notes' subsidiary guarantor are capped at EUR282 million.

RATING OUTLOOK

The stable outlook reflects Moody's expectations that modest
organic growth, merger synergies, and cost efficiencies will lead
to a reduction of the Moody's-adjusted debt/EBITDA towards 6.5x
within 18 months, albeit with execution risk.

FACTORS THAT COULD LEAD TO AN UPGRADE/DOWNGRADE

While unlikely in the near term given the rating action, Moody's
will consider upgrading the ratings if growth in earnings and a
more conservative financial policy would result in a Moody's-
adjusted debt/EBITDA of below 6.5x on a sustained basis as well
as the maintenance of adequate liquidity including positive free
cash flow.

Moody's will consider downgrading the ratings if the Moody's-
adjusted debt/EBITDA remains above 7.5x on a sustained basis, or
liquidity weakens including negative free cash flow.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Distribution
& Supply Chain Services Industry published in June 2018.


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G E R M A N Y
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RAILRUNNER EUROPE: Files Insolvency in Hamburg Bankruptcy Court
---------------------------------------------------------------
Railway Gazette reports that RailRunner Europe GmbH has filed for
insolvency, with the bankruptcy court of Hamburg appointing Dr
Susanne Riedemann of specialist law firm Prof Dr Pannen
Rechtsanwalte as preliminary insolvency administrator on
January 18.

The RailRunner Europe management said they intend to reorganise
and restructure the company, the report relates.

According to Railway Gazette, the European subsidiary of US
holding company RailRunner NA Inc was founded in Hamburg in 2015,
and since the end of July 2017 has operated a Braunschweig-
Bratislava intermodal service using pocket wagons and Mega
Trailers, swapbodies and containers.

This was intended to enable the company to collect data ahead of
a planned European launch of its own road-rail technology, which
uses a container-carrying chassis with road wheels that can be
mounted on rail bogies, the report says.

Railway Gazette relates that RailRunner Europe said it had served
more than 200 customers, with much of this business involving
automotive components. However, several factors had limited its
ability to scale up the operation:

- long latencies in loading and unloading trailers at plants
   and warehouses, increasing first and last mile costs;

- extensive periods of 'limited acceptable rail service' owing
   to infrastructure works on the route through the Elbe valley;

- demands for extremely long payment periods from customers; and

- extreme weather and the general industrial outlook had put
   additional pressure on revenue and cash flows.

"RailRunner Europe GmbH has made tremendous strides in providing
consistent, high quality service over the past 18 months using
traditional intermodal pocket cars and GPS-equipped craneable
trailers from leading trailer manufacturers", the report quotes
Charles Foskett, RailRunner Europe Managing Director and CEO of
RailRunner NA Inc., as saying.

"While large challenges still remain, under this more controlled
environment we will have the opportunity to mitigate some of the
market externalities as well as to focus on our internal
operations and improve our financial performance for the benefit
of all of our customers and commercial partners."


UNSER HEIMATBACKER: Lila Backer Files for Insolvency
----------------------------------------------------
Oscar Geen at Unquote reports that Deutsche Beteiligungs AG
(DBAG) portfolio company Unser Heimatbacker has filed an
application for voluntary insolvency.

DBAG carried the investment at EUR1.7 million, Unquote discloses.

Meanwhile, The Nordkurier reports that the employees of the
bakery chain Unser Heimat-Backer can hope that they can continue
to work for the company in March and possibly beyond. "On March
1, the company will not close 100 percent," Nordkurier quotes
lawyer Manuel Sack of the law firm Brinkmann & Partner as saying.

According to The Nordkurier, the law firm has been assigned to
the company, which is in self-responsibility in insolvency
proceedings, as insolvency administrator.

The Nordkurier relates that employees will receive bankruptcy
compensation from the Employment Agency by the end of February.
After ensuring that employees receive their wages after the
bankruptcy petition and suppliers continue to provide for the
production, the restructuring process is now being continued, the
report states.

This includes the search for investors. "First investors have
contacted each other. Among them are competitors. We have to
check that out now," Mr. Sack said.

The lawyer assured that existing legal claims of employees, such
as overtime, will be examined, The Nordkurier relays. At the
present time, however, he can't promise whether all jobs can be
secured. The aim is to get as many as possible from the company
with its approximately 2,700 employees, the report notes.

Unser Heimatbacker operates the fifth largest branch bakery in
Germany with more than 400 branches under the brand name "Lila
Backer" and employs about 2,700 people.


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I R E L A N D
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* IRELAND: Builder Insolvencies up 50% Amid Housing Crisis
----------------------------------------------------------
Irish Independent reports that the number of builders going
insolvent increased by almost 50% last year, in the midst of a
housing crisis where building services are sorely needed.

New figures compiled by Deloitte show 158 construction firms went
into insolvency last year, compared to 108 in 2017, Irish
Independent discloses.

The report says builders taking on contracts with fixed prices
are being hit by rising costs of labour and materials.

In addition, a number of firms may have been affected by the
collapse of UK builder Carillion, Irish Independent says.

Irish Independent notes that one definite Irish victim of
Carillion's collapse was Sammon Contracting Ireland. It went into
liquidation because a schools project it had been working on was
put on pause when Carillion went bust.

"The increase in construction-related insolvencies reflects that
there are still legacy issues at play in the sector," Irish
Independent quotes Deloitte partner David van Dessel as saying.
The cost inflation was having an impact on profitability, he
added.

The inflationary environment is having an impact on companies
that take on fixed price contracts, Mr. van Dessel said. He also
said slowing growth in house prices is having an impact, Irish
Independent relays.

The figures will inevitably raise fears that the housing crisis
will take longer to be solved.

Irish Independent says the Deloitte figures show construction is
lagging the rest of the economy, with insolvencies down 12pc
overall.

The figures show, however, that only a handful of firms are
availing of the examinership process - which offers insolvent
firms a chance to be rescued, the report states.

Examinership means firms are given 100 days' protection from
creditors to see if they can work out a way to stay alive. Only
3% of total insolvencies were examinerships, Deloitte said,
adding that it encouraged company directors to avail of the
examinership process. Deloitte warned that any hard Brexit may
boost insolvencies this year, Irish Independent adds.


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I T A L Y
=========


ALITALIA SPA: Lufthansa in Talks to Take Majority Stake
-------------------------------------------------------
Ilona Wissenbach at Reuters reports that German airlines group
Lufthansa has held talks to take a majority stake in ailing
Italian carrier Alitalia and would be interested in a full
takeover in the long run.

According to Reuters, Lufthansa board member Harry Hohmeister
said on Jan. 28 Alitalia, which was put under special
administration in 2017, would remain operationally independent
within the Lufthansa group, with its own brand.

"We are fighting for the Italian market and that includes
Alitalia," Mr. Hohmeister told Reuters, adding the group's tough
conditions for a takeover remained unchanged.

Italy's daily Il Corriere della Sera reported on Jan. 27 that
Italian state railway Ferrovie dello Stato (FS) was set to choose
on Tuesday its partner for a restructuring of Alitalia, with U.S.
carrier Delta Air Lines in pole position, Reuters relates.

Lufthansa is only prepared to buy in if Alitalia first undergoes
a major round of job cuts under state administration and if it
gets full control without co-ownership by the Italian government,
Reuters notes.

"We are interested in Alitalia but only if the conditions are
right -- they have not fundamentally changed," Mr. Hohmeister, as
cited by Reuters, said, adding Lufthansa wanted to own all of
Alitalia in the long-term.

Mr. Hohmeister put the number of Alitalia staff that needs to be
cut at fewer than 3,000, adding this should happen in a socially
responsible way, Reuters discloses.


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


GLOBAL UNIVERSITY: Moody's Affirms B3 CFR, Alters Outlook to Pos.
-----------------------------------------------------------------
Moody's Investors Service affirmed the B3 corporate family
rating, B3-PD Probability of Default Rating of Global University
Systems Holding B.V. a private higher education provider, as well
as Markermeer Finance B.V.'s B3 senior secured loan ratings.
Concurrently, Moody's has changed the outlook to positive from
stable.

The change in outlook reflects GUS's improved metrics and the
expectation that they will continue to strengthen driven by
strong demand for GUS's portfolio of professionally-oriented
courses, with sound free cash flow generation expected going
forward, that could translate into a credit profile commensurate
with a higher rating.

RATINGS RATIONALE

GUS' B3 CFR reflects the company's: (i) one of the largest
European private higher education providers with a strong base in
the UK; (ii) solid growth through acquisitions and organically
whilst maintaining good margins; (iii) revenue visibility from
committed student enrollments and supporting underlying growth
drivers for the private-pay education market.

Conversely, the rating is constrained by: (i) exposure to the
highly competitive and fragmented higher education market with
requirements to comply with rigorous regulatory standards; (ii)
some geographic concentration, given its traditional focus on the
UK; (iii) risks inherent to the recruitment services division,
including sizeable working capital outflows and limited
visibility on EBITDA and cash flow contribution of this division.

RATING OUTLOOK

The positive outlook reflects Moody's expectation that GUS will
continue to improve its credit metrics that are commensurate with
a B2 rating in the next 12 months, driven by continued revenue
growth on an organic basis, and sound positive free cash flow
generation, allowing for some de-leveraging trajectory. The
positive outlook also reflects Moody's expectation that each GUS
brand will maintain its current regulatory approval status,
including the University title and degree awarding powers.

FACTORS THAT COULD LEAD TO AN UPGRADE

The rating could be upgraded if Moody's-adjusted Debt/EBITDA
remains around or below 5.5x, and free cash flow to debt improves
towards 5.0%, whilst maintaining an adequate liquidity profile.

FACTORS THAT COULD LEAD TO A DOWNGRADE

Conversely, the ratings could be downgraded if earnings were to
weaken such that Moody's-adjusted Debt/EBITDA increases above 7x,
or if free cash flow to debt reduces towards zero, or liquidity
weakens. Any material negative impact from a change in any of the
company brands' regulatory approval status, degree awarding
powers or University title could also pressure the ratings.

LIQUIDITY

Moody's continues to view GUS's liquidity as good. As of October
30, 2018, the company had GBP156.7 million of cash on balance
sheet and access to a senior secured committed GBP90 million
revolving credit facility (RCF) due 2023. There is a net senior
leverage maintenance covenant, under which Moody's expect the
company to retain sufficient headroom.

STRUCTURE

The B3 ratings on the GBP590 million British pounds equivalent,
senior secured term loans due 2024 and the GBP90 million senior
secured RCF due 2023 are aligned with the CFR as they rank pari
passu and represent the major debt instruments in the capital
structure.

LIST OF AFFECTED RATINGS

Issuer: Global University Systems Holding B.V.

Affirmations:

Corporate Family Rating, Affirmed B3

Probability of Default Rating, Affirmed B3-PD

Outlook Actions:

Outlook, Changed To Positive From Stable

Issuer: Markermeer Finance B.V.

Affirmations:

BACKED Senior Secured Bank Credit Facility, Affirmed B3

Outlook Actions:

Outlook, Changed To Positive From Stable

PRINCIPAL METHODOLOGY

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

CORPORATE PROFILE

Global University Systems Holding B.V. (GUS, company) is a
private higher education provider offering accredited academic
under- and postgraduate degrees, vocational and professional
qualifications and language courses at its institutions but also
through its online platform. GUS is headquartered in the
Netherlands but the UK is its main country of operation,
alongside Ireland, Germany, Canada, Singapore and Israel. The
company also provides marketing, recruitment, retention and
online services to third party higher education institutions. The
company is controlled by its founder Aaron Etingen.

Founded in 2003, the company generated around GBP311 million
revenue in the 12 months ended August 30, 2018, and c. GBP366
million including the pending R3 Education acquisition in the US.


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N O R W A Y
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NORWEGIAN AIR: Launches Emergency Fundraising, Shares Plunge
------------------------------------------------------------
Alan Tovey at The Telegraph reports that shares in Norwegian Air
Shuttle plunged on Jan. 29 after the airline launched an
emergency fundraising in a bid to avoid breaching its debt
covenants.

According to The Telegraph, the budget carrier's fell as much as
30% in Oslo following the NOK3 billion (GBP270 million) rights
issue, which came just days after International Airlines Group
(IAG) said it would dump its near-4% holding in Norwegian, before
recovering to be down just over 10%.

The British Airways owner's decision to walk away on Jan. 24
triggered a 20% dive in Norwegian's shares, ending a nine-month
pursuit that saw the budget airline twice rebuff IAG's
approaches, The Telegraph relates.


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


DME LIMITED: Moody's Alters Outlook on Ba1 CFR to Stable
--------------------------------------------------------
Moody's Investors Service changed the outlook on all ratings of
DME Limited (Moscow Domodedovo Airport) to stable from positive.
Concurrently, Moody's affirmed the company's Ba1 corporate family
rating, Ba1-PD probability of default rating and Ba1 senior
unsecured rating of the USD loan participation notes issued by
DME Airport DAC.

RATINGS RATIONALE

The change of the outlook to stable reflects DME's weaker than
expected operating and financial performance as well as the
suspension to 1H2019 of the full-scale launch of the new terminal
initially scheduled for 1H2018 due to delays in development of
the airfield facilities by the government.

In 2018, DME's passenger traffic contracted by around 4% vs. a
10% growth in the Moscow Air Cluster (MAC) as the company's
competitive positioning has been under pressure from (1) the
intense competition with the other MAC airports, which stay ahead
of DME in their development programmes; and (2) the inherent
exposure to airlines' failures, exacerbated by Russian economic
and geopolitical risks. In particular, DME's operating results in
2018 were affected by the bankruptcy of Vim-Avia in October 2017,
the third-largest client at that time and smaller Saratov
Airlines in May 2018 as well as transit of the fourth largest
airline, Azur Air, as well as a number of smaller air carriers to
other airports.

The suspension of the new international terminal launch at full
capacity also didn't allow the airport to strengthen its
competitive position and enhance revenue base and profitability
as expected, although Moody's acknowledges that the delay was
rather due to the government's inability to complete new aprons
on time, while the company delivered its part of the investment
programme on schedule.

In addition, the exposure to rouble depreciation, coupled with
peaking capital spending and weak passenger traffic, will drive
the deterioration in DME's credit metrics with the reported net
debt/EBITDA of around 3.5x which is a breach of its financial
policy and leverage debt covenants set at net debt/EBITDA of
3.0x.

With adjusted funds from operations (FFO)/debt at the upper teens
in percentage terms in 2018, the company's financial profile
will, however, remain fairly healthy and commensurate with the
Ba1 rating supported by its resilient revenue base and
profitability. Thus, in 2018, despite weaker traffic, DME's
revenue is to grow by around 5%-7% and EBITDA margin to improve
backed by (1) the benign tariff regime; and (2) the more
profitable international traffic, which benefits from the rouble
depreciation partly offsetting the negative impact of weaker
rouble on its debt level.

The rating is further underpinned by DME's sound liquidity with
the comfortable debt maturity profile following the successful
refinancing of the $221.5 million notes in November 2018. DME has
also obtained all the waivers for bank debt covenants' breaches
for 2018, proving its established relationships with banks, while
the moderate size of its relative outstanding bank loans shows
that they are not particularly critical for the company's
liquidity position. Covenants embedded in its Eurobonds are
incurrence thus will only limit the company's ability to procure
new debt, which it does intend to raise as the remaining capital
spending under the development programme has already been fully
prefunded.

DME may commence its gradual deleveraging starting 2019, when the
company plans to resume positive free cash flow generation upon
the completion of its major investment projects. Along with the
expected stabilisation in the company's operating performance,
the new terminal, when fully operational, should help to boost
the company's EBITDA generation via the rise in high-margin
commercial revenue from the increased retail area. Moody's also
understands that DME will be focused on reducing its foreign
currency exposure in the medium-term by gradually rising the
share of rouble-denominated debt.

The rating continues to reflect DME's still strong position as
the second largest airport in the MAC which it should preserve
supported by (1) the vast MAC market with solid growth potential;
(2) DME's well-developed airport and transport infrastructure and
the largest capacity for future development with limited physical
or legal/regulatory constraints; (3) the company's diversified
carrier base with sound anchor airline and mostly origin and
destination (O&D) traffic, and (4) its wide service offering. The
current expansion programme, once complete, should further
strengthen DME's competitive position improving its service
offering and providing sufficient capacity to accommodate the
medium-term growth.

At the same time, the rating remains constrained by DME's
exposure to the evolving regulatory environment and an overall
less-developed legal, political and economic frameworks in
Russia. Although, risks related to the company's reliance on the
government to develop airfield facilities should be removed
following the expected transition to concession from the current
lease contract, this shift is somewhat increasing the regulatory
uncertainty for the moment, in particular, given delays in
agreement between the state and DME related to its long-term
development plans.

Weaker corporate governance standards with high risk of elevated
shareholder distributions is another risk factor incorporated in
the rating.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook reflects Moody's expectation that the company
will maintain healthy financial and liquidity profiles, while
preserving its solid market position despite weaker than expected
operating performance and delay in launching the new terminal. In
particular, Moody's expects DME to maintain FFO/debt at least in
the mid-teens in percentage terms and to resume compliance with
internal financial policy thresholds and debt covenants in the
next 12-18 months.

WHAT COULD CHANGE THE RATINGS UP/DOWN

The rating could be upgraded, subject to an upgrade of Russia's
government bond rating (Ba1 positive), provided there is no
material deterioration in regulatory environment and DME (1)
successfully operates the new terminal facility; (2) resumes
passenger traffic growth; (3) maintains reported leverage
comfortably within its financial policy and with healthy cushions
under debt covenants; (4) reduces its exposure to foreign
exchange risks; and (5) preserves its sound liquidity profile.

Negative pressure on the rating could develop if DME's financial
and liquidity profiles weaken as a result of, among other things,
(1) an ongoing deterioration in the company's competitive
position, driving a material decline in revenue and
profitability; (2) aggressive debt-financed dividend payouts or
other substantial shareholder distributions; or (3) material
adverse changes to the economic environment or regulatory
framework. Moody's would also consider downgrading the rating in
the event of major impediments to the completion of the company's
investment programme or increasing concerns related to political
and legal risks or corporate governance. The rating is likely to
be downgraded if there is a downgrade of Russia's sovereign
rating.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Privately
Managed Airports and Related Issuers published in September 2017.

DME Limited (DME) is the owner and operator of Moscow Domodedovo
Airport, one of the largest airports in the Commonwealth of
Independent States and Eastern Europe in terms of passenger and
cargo volume, with around 29.4 million passengers handled in
2018. In the 12 months ended June 30, 2018, DME generated around
RUB42.0 billion of revenue and RUB16.2 billion of adjusted
EBITDA. DME is ultimately controlled by Dmitry Kamenshchik.


NOVOSIBIRSK CITY: Fitch Affirms BB LT IDRs, Outlook Stable
----------------------------------------------------------
Fitch Ratings has affirmed the Russian City of Novosibirsk's
Long-Term Foreign- and Local-Currency Issuer Default Ratings
(IDRs) at 'BB' with Stable Outlooks and Short-Term Foreign-
Currency IDR at 'B'. Novosibirsk's senior debt has been affirmed
at long-term 'BB'.

The affirmation reflects Fitch's expectation that the city will
continue to control its fiscal deficit over the medium term and
maintain a positive current balance, according to Fitch's rating
case. The ratings reflect Novosibirsk's moderate direct risk with
a smooth maturity profile, and the city's diversified economy.
The ratings also factor in Russia's weak institutional framework
and a sluggish national economic environment.

KEY RATING DRIVERS

Fiscal Performance (Neutral/Stable)

Novosibirsk's operating performance has improved, with the
operating margin reaching 9.6% according to 2018 preliminary
results from an average of 6.4% for 2015-2017. The improvement
was driven by operating transfers growth and led to a narrowing
of the fiscal deficit to 3% of total revenue from about 7% one
year earlier.

Fitch expects maintenance of the city's sound budgetary
performance with the operating margin at about 11% and the
current margin at about 7% over the medium term in Fitch's base
case scenario. According to Fitch's rating case scenario, which
envisages some stress on revenue and expenditure, the operating
margin could be close to 8%-9%, which will still be sufficient to
cover annual interest payments, so the current margin should stay
in a low positive range.

Budgetary performance will be underpinned by the higher share of
gross income tax that was granted to the city from 2019 and
steady growth of personal income tax, which accounts for about
one-third of the city's total revenue. Another important
operating revenue source is transfers from Novosibirsk Region
(BBB-/Stable), which averaged 40% over the last three years.

Debt and Other Long-Term Liabilities (Neutral/Stable)

In 2018 the city's direct risk grew by 7% yoy and reached RUB20.6
billion, driven by a moderate deficit before debt variation.
Fitch's base case projects the city's direct risk to total around
RUB22.4 billion by end-2019, driven by a fiscal deficit, which
Fitch expects to total about 4.3% of total revenue. In relative
terms, direct risk will stay close to 55% of current revenue
(2018: 53.3%). Fitch's rating case assumes direct risk growth to
about 67% of current revenue by end-2023, remaining within the
'BB' rating range.

The city debt's debt structure is favourable compared with
national peers as the city relies primary on amortising domestic
bond issues (49% of direct risk as of 1 January 2019) with up to
nine-year maturity, followed by revolving lines of credit from
local banks with maturity of up to five years (40% of total
direct risk). The remainder is low-cost loans from Novosibirsk
region's budget.

Management and Administration (Neutral/Stable)

Like most Russian local and regional governments (LRGs),
Novosibirsk's budgetary policy is strongly dependent on the
decisions of the federal and regional authorities. The city's
fiscal flexibility is limited due to the very low proportion of
modifiable taxes and rigid expenditure structure. The
administration has a socially-oriented fiscal policy and aims to
fulfil all social obligations, which is controlled by the upper
government level.

Novosibirsk demonstrates sophisticated debt management, and
unlike most of its Russian peers, the city mostly relies on long-
term market funding to smooth the city's annual refinancing
needs. The administration focused its budgetary policy on gradual
deficit narrowing leading to stabilisation of the debt level in
relative terms.

Economy (Neutral/Stable)

The city is the capital of Novosibirsk region, and with a
population of about 1.6 million inhabitants is the third-largest
metropolitan city in Russian Federation. Novosibirsk's economy is
diversified, with a well-developed processing industry and
service sector. The sound economic performance of local companies
supports Novosibirsk's fiscal capacity, with tax revenue
accounting for 45% of operating revenue in 2018. Fitch estimates
national GDP grew 1.8% yoy in 2018 and forecasts moderate growth
of 1.5%-1.9% in 2019-2020, which should support Novosibirsk's
economic and budgetary performance.

Institutional Framework (Weakness/Stable)

The city's credit profile remains constrained by the weak
institutional framework for LRGs in Russia. Russia's
institutional framework for LRGs has a shorter record of stable
development than many international peers. The predictability of
Russian LRGs' budgetary policy is hampered by the frequent
reallocation of revenue and expenditure responsibilities among
government tiers.

RATING SENSITIVITIES
Restoring the operating margin to above 10% on a sustained basis
and maintaining direct risk below 60% of current revenue as per
Fitch's rating case, with a debt maturity profile corresponding
to the direct risk payback ratio could lead to an upgrade.

Deterioration of the budgetary performance as per Fitch's rating
case, leading to an inability to cover interest expenditure with
the city's operating balance, and direct risk increasing to above
70% of current revenue would lead to a downgrade.


ORENBURG REGION: Fitch Affirms BB+ LT IDR, Outlook Stable
---------------------------------------------------------
Fitch Ratings has affirmed the Russian Orenburg Region's
Long-Term Foreign- and Local-Currency Issuer Default Ratings at
'BB+' with Stable Outlooks and Short-Term Foreign-Currency IDR at
'B'. The region's senior debt long-term rating has also been
affirmed at 'BB+'.

KEY RATING DRIVERS

The affirmation is based on Fitch's expectation that the region
will continue to demonstrate sound operating performance and
healthy debt ratios over the medium term. At the same time, the
ratings take into account concentration of the region's tax base
in oil and gas sector as well as high dependence on the decisions
of the federal authorities amid a weak institutional framework
for Russian subnational.

Fiscal Performance (Neutral/Stable)

Fitch's base case scenario projects Orenburg's operating margin
at around 10% in 2019-2023 supported by the region's strong tax
base and cautions approach of the region's management to
spending. This will be lower than the extremely good result of
2018, when the operating margin peaked at 20.5%, according to
preliminary data, on the back of 24% growth of tax revenue.

Corporate income tax (CIT) was the main contributor to the tax
revenue growth and it increased by 41% in 2018. The growth was
supported by better performance in the oil & gas and metal
sectors, which are key for the region's economy, amid favourable
conditions on commodity markets, and completion of the region's
largest taxpayers' investment programmes. CIT remains the largest
tax source for Orenburg (about 45% of total tax revenue), which
exposes the region to market risk and volatility.

Under Fitch's rating case scenario, which envisages some
additional stress on CIT, the region's operating balance remains
satisfactory at 5%-7% of operating revenue over a five-year
horizon while the budget deficit remains in a moderate range of
3%-6% of operating revenue. In 2018, the region recorded a high
budget surplus of 12.9% of total revenue (preliminary data),
which allowed it to reduce the debt burden and materially enhance
its liquidity position.

Debt and Other Long-Term Liabilities (Neutral/Stable)

Fitch expects the region will maintain healthy debt metrics over
a five-year horizon with payback ratio (net direct risk to
operating balance) around two years under its base case scenario.
In 2018, the direct risk declined to RUB24.4 billion from RUB27.0
billion one year before, which in conjunction with improved
operating balance led to the payback ratio at below one year -
according to preliminary data (2017: three years).

Orenburg's direct risk structure remains balanced. Budget loans
represented 53% of the total at January 1, 2019 and domestic
bonds 47%. The maturity profile is smooth and long with the
weighted average life of debt at 6.1 years, which is still below
that of international peers. The region's contingent risk has
been low and well-controlled. Data for 2018 will be available
later in the year.

Economy (Neutral/Stable)

Orenburg's economy is strong in the national context. Rich
deposits of oil and gas as well as metal production contributes
to GRP per capita at 112% of the national median in 2016 (the
latest available data). However, it lags the EU average, which
leads us to assess Economy as Neutral. Concentration in oil and
gas sector exposes the region to potential changes in the fiscal
regime, business cycles or price fluctuations.

Management (Neutral/Stable)

The region's management follows a prudent and coherent budgetary
policy. It strictly monitors operating expenditure dynamics. This
is evident from the sound fiscal performance amid some tax
revenue volatility. The region's debt policy is reasonable, which
has resulted in a moderate volume of debt, smooth maturity
profile and limited refinancing pressure. However, the region's
budgetary policy is dependent on the decisions of the federal
authorities, which limits revenue and expenditure flexibility.

Institutional Framework (Weakness/Stable)

The region's credit profile remains constrained by the weak
institutional framework for Russian local and regional
governments (LRGs), which has a shorter record of stable
development than many of its international peers. Weak
institutions lead to lower predictability of Russian LRGs'
budgetary policies, which are subject to the federal government's
continuous reallocation of revenue and expenditure
responsibilities within government tiers.

RATING SENSITIVITIES

An operating margin sustainably above 15%, accompanied by the
maintenance of sound debt metrics with a direct risk-to-current
balance (2017: 3.6 years) below weighted average life of debt
(2017: 6.6 years), would lead to an upgrade.

Growth of direct risk, accompanied by deterioration in the
operating performance leading to a direct risk-to-current balance
rising towards 10 years on a sustained basis, would lead to a
downgrade.


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


ODESSA CITY: Fitch Affirms B- Long-Term IDRs, Outlook Stable
------------------------------------------------------------
Fitch Ratings has affirmed the Ukrainian City of Odessa's
Long-Term Foreign- and Local-Currency Issuer Default Ratings
(IDRs) at 'B-'. The Outlooks are Stable.

The ratings continue to be constrained by Ukraine's sovereign
ratings (B-/Stable/B) and the weak institutional framework
governing Ukrainian local and regional governments. Positively,
the ratings take into account Fitch's expectations that the city
will maintain its sound operating results over the medium term.
The ratings further take into account Odessa's expected low
direct debt over the medium term, as well as low contingent
liabilities stemming from guarantees issued to municipal
companies.

KEY RATING DRIVERS

Institutional Framework Assessed as Weakness/Stable

The institutional framework governing Ukrainian subnationals is
characterised by political risks, particularly ahead of national
elections in 2019. The challenging reform agenda arising from
Ukraine's IMF programme to secure external funding led to
continued financial decentralisation, which resulted in frequent
changes to the allocation of revenue sources and spending
responsibilities for subnationals. A high inflation environment
(11% estimated for 2018) and frequent increases in interest rates
(policy rate was 18% as of December 2018) make forecasting
subnationals' budgets, debt and investments challenging.

Fiscal Performance Assessed as Neutral/Stable

Fitch expects Odessa's operating margin to have remained close to
20% in 2018 and projects the same for 2019, in line with the 2017
result (20.3%). It will be supported by expected tax revenue
growth, which is the city's main current revenue source (57% in
2017), outpacing inflation and current cost restraint. During
3Q18 Odessa collected 74.8% of its revenue budgeted for the full
year and incurred 71.5% of its full-year expenditure, which
resulted in an intra-year budget surplus of about UAH360 million.
Based on 3Q18 results Fitch estimates the operating balance for
2018 at above UAH2 billion, accounting for more than 20% of
operating revenue.

Odessa has large investment needs stemming from all areas of the
city's responsibilities (infrastructure, public transport,
housing, and waste management). Fitch assumes that the city will
spend at least 20% of total expenditure on investments, ie around
UAH2.3 billion annually in 2018-2019. Capital expenditure in 3Q18
amounted to UAH2.1 billion. Fitch expects expenditure to
accelerate towards the end of the year due to a seasonal rise in
outlays in the fourth quarter.

Debt and Other Long-Term Liabilities Assessed as Neutral/Stable
Odessa's direct debt rose to UAH1 billion at end-2018 from UAH0.5
billion at end-2017, which is in line with its projections. The
city has drawn down a five-year loan from a local bank. The loan
has fixed interest costs and a smooth repayment schedule with
quarterly instalments.

Fitch expects Odessa's net overall risk, including guarantees
issued to municipal companies, to remain low at around 13% of
current revenue in 2018-2019 (2017: 15.2%). This is in line with
the city's policy in supporting municipal companies that
undertake large infrastructural investments by issuing guarantees
on loans from international institutions. In 3Q18, the value of
these guarantees totalled UAH1 billion compared with UAH981
million at end-2017. The guaranteed loans were provided by EBRD
and IBRD (World Bank Group) in euros and US dollars with final
maturity in 2027-2028.

Management and Administration Assessed as Neutral/Stable
The city authorities' main priority is to support the dynamic
growth of the city, by making it attractive to investors and
inhabitants. The authorities follow a policy of gradually
increasing local tax rates for the city's inhabitants and fees
for public services, and strive to increase efficiency in service
delivery.

Odessa's administration is prudent in its budgetary policy and
its financial goal is to maintain an operating surplus that
allows it to secure funding for the city's investment needs. The
city's credit policy foresees medium- and long-term financing
from local and international financial institutions with smooth
repayment schedules. The administration exercises strong
oversight over the city's companies.

Economy Assessed as Weakness/Stable

Odessa is the third-largest city in Ukraine and has its key port
at the Black Sea. Besides the maritime and tourist industries the
city is one of the country's key scientific, industrial and
cultural centres. Its economy is diversified across services and
manufacturing. The Ukrainian economy has continued its mild
recovery, which Fitch estimates to grow 3.3% and 2.9% in 2018 and
2019, respectively, supporting the city's economic prospects and
tax revenue growth. However, the wealth indicators of Ukraine and
Odessa are weak by international comparison, with a national GDP
per capita of USD2,193 in 2016.

RATING SENSITIVITIES

The city's ratings are constrained by those of the sovereign.
Positive rating action on Ukraine will lead to corresponding
action on Odessa's ratings, provided the city's credit profile
remains unchanged.


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


PATISSERIE VALERIE: Sales in Secret Decline for Three Years
-----------------------------------------------------------
Oliver Gill at The Telegraph reports that Patisserie Valerie
sales were in secret decline for at least three years before the
discovery of the accounting black hole that triggered its
collapse, The Daily Telegraph can reveal.

According to The Telegraph, documents containing the stricken
cafe chain's finances show revenues from "un-loved" established
stores were falling even as the management team under executive
chairman Luke Johnson pursued an "ambitious roll-out plan".

Marketing material rushed together by administrators KPMG reveals
like-for-like revenue has been on an accelerating downward slide
since 2015, including a 4% drop in the past two years, The
Telegraph relates.


STONEGATE PUB: Moody's Affirms B2 CFR, Outlook Stable
-----------------------------------------------------
Moody's Investors Service affirmed the B2 corporate family rating
and B2-PD probability of default rating of Stonegate Pub Company
Limited. Concurrently Moody's affirmed the existing B2 ratings of
the existing senior secured notes of Stonegate Pub Company
Financing plc and assigned a B2 rating to the new GBP150 million
senior secured notes due 2022 to be issued by that company. The
outlook on all ratings is stable.

"While Stonegate's leverage remains high, the company has a
strong track of successfully integrating acquisitions and we
expect this to continue with these latest deals", said David
Beadle, a Moody's Senior Credit Officer and lead analyst for
Stonegate. "The company's clear strategic focus on drinks-led
pubs and significant investment capital spending is driving
strong like-for-like sales and stable profit margins, despite the
competitive and cost challenges faced by the industry", he added.

RATINGS RATIONALE

Individually and collectively the latest acquisitions, which are
being funded by the new senior secured notes, are not material in
the context of Stonegate's existing scale. As such Moody's
expects the company's experienced management team to continue its
track record of rapid integration and strong execution.

More broadly, Stonegate's B2 ratings reflect the company's focus
on operating in the faster-growing and better-performing managed
rather than tenanted segment. The company operates multiple but
well defined formats, mostly led by drinks, and with a bias
towards town and city centre locations. Moody's notes positively
that this strategy effectively limits Stonegate's exposure to the
highly competitive food-led segment, where alternatives such as
casual dining restaurants are limiting underlying revenue growth.

The company's debt funded acquisitions and relatively high
investment capital spending constrain free cash flow (FCF)
generation and means that gross Moody's-adjusted leverage has
remained elevated for the rating category, at around 7x.
Moreover, although Stonegate has good geographic diversity within
the UK, it is nevertheless exposed to the operating conditions in
a single country, which of late have included rising costs for
pub chains alongside weak consumer sentiment.

Moody's believes the operating conditions will remain challenging
and this highlights the importance of strong execution for
Stonegate. In this context, while the rating agency expects the
company to achieve profit growth, driven by both its core estate
and the acquisitions, Moody's expects deleveraging will be modest
over the next 12-18 months. As such, the company remains weakly
positioned in the B2 rating category, with downward pressure
likely if issues were to materialise with integrating the latest
acquisitions and/or maintaining positive momentum in underlying
sales and profitability.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook reflects Moody's expectations that with the
latest acquisitions Stonegate will maintain its track record of
successfully integrating acquired pubs into its portfolio while
generating solid like-for-like revenue growth and maintaining
margins. The rating agency expects the company to continue to
record moderately improving interest coverage and leverage trends
over time.

WHAT COULD CHANGE THE RATING UP/DOWN

Upward pressure on the rating is unlikely in the short term but
could develop in the event of a sustained improvement in interest
coverage closer to 1.8x and leverage sustainably below 6.0x,
combined with consistently positive FCF and good liquidity.

Conversely, negative rating pressure could arise in the event of
a weakening in performance, such as soft like-for-like sales or
declining margins, leading to expectations that interest coverage
would fall towards 1.0x, or leverage remain above 7.0x for a
sustained period. Persistently negative FCF or aggressive changes
in its financial policy and weak liquidity could also lead to a
downgrade.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Restaurant
Industry published in January 2018.


STONEGATE PUB: S&P Affirms B- ICR on Refinancing Plans
------------------------------------------------------
S&P Global Ratings is affirming its 'B-' long-term issuer credit
rating on Stonegate Pub Co. Ltd. S&P is also affirming the 'B-'
rating on the group's existing senior secured facilities (GBP405
million fixed-rate notes and GBP190 million floating-rate notes)
and assigning a 'B-' rating on the proposed new GBP150 million
floating-rate notes. The recovery rating is unchanged at '3',
reflecting S&P's expectation of meaningful recovery prospects
(50%-70%; rounded estimate: 60%) in the event of default.

The affirmation follows Stonegate Pub Co. Ltd.'s announced plans
to issue GBP150 million of senior secured notes, mainly to repay
the outstanding borrowings of GBP90 million under the bridge
facilities used to finance acquisitions made last year, and to
finance additional acquisitions. Aggressive debt-funded
opportunistic acquisitions and ongoing high capital expenditure
(capex) have resulted in elevated leverage and materially
negative cash flows for the past two years. Stonegate continued
its expansion plans in 2018, using GBP72 million for capex and
GBP65 million on acquisitions. It now plans to spend another
GBP30 million from the new borrowings under the new notes on
acquisitions, with capex remaining elevated.

Although these actions have continued to increase leverage,
Stonegate has improved its liquidity and cash position thanks to
GBP21 million overfunding of its acquisitions in 2018 through
bridge loan facilities. In addition, S&P expects the GBP150
million new notes issuance to provide an additional GBP27 million
of overfunding, which will help maintain adequate liquidity.

S&P said, "In our view, the operating environment for managed
pubs is increasingly challenging, with persistently rising costs
that continue to weigh on margins. While the pub sector is
relatively drink-focused, we see some added pressure on food
sales. These continue to be hit by cautious customer spending,
competition in the casual dining sector, and the increase in food
delivery service options. We expect the managed pubs segment to
face continuous rising cost pressures in the U.K., primarily on
account of the rising National Living Wage, increasing food and
drinks costs due to the weaker pound sterling, and a surge in
utilities expenses." This, combined with very weak real wage
growth in the U.K. and high competition, is making it
increasingly difficult for pub operators such as Stonegate to
pass on higher costs through price increases to consumers.
Therefore, management efforts to secure synergies and integration
benefits from newly acquired pubs, continuously boost operating
performance, and manage costs to maintain margins will continue
to be key in this tough competitive environment.

Stonegate reported strong revenue growth in the financial year
ending September 2018 (FY2018) of 11%. This was primarily due to
increased sales from refurbished pubs and the football World Cup,
and due to an additional week of trading during the 53 weeks
ended Sept. 30, 2018. Despite rising costs, this led to an
improvement in S&P Global Ratings-adjusted EBITDA margins to
19.5% from 18.9% in the previous year. S&P said, "Our adjusted
debt to EBIDTA remained at 7.9x in FY2018 in line with our
expectations of sound operating performance offset by continued
debt-funded acquisitions. Our calculation factors in costs of
about GBP15.9 million related to acquisitions, restructuring,
integration, and management fees, which the company reports as
exceptional costs. Owing to continued expansion, we see limited
deleveraging prospects and our adjusted debt to EBITDA will
likely remain within 7.5x-8.0x. Barring any further acquisitions,
we forecast our adjusted debt to EBITDA could improve marginally
to 7.5x in FY2019 and 7.2x-7.4x in FY2020."

S&P said, "Nevertheless, we expect around 1.6x-1.7x EBITDAR
coverage (defined as reported EBITDA before deducting rent costs
over cash interest plus rent costs) in FY2019 and FY2020. We also
anticipate over 50% headroom on the group's minimum EBIDTA
financial covenant. If the refinancing transaction is completed
per plan, and assuming no further material acquisitions, there
should no near-term refinancing need as the senior secured notes
will mature in March 2022.

"The ratings on the proposed refinancing are subject to the
successful completion of the transaction, and to our review of
the final documentation. If S&P Global Ratings does not receive
the final documentation within a reasonable timeframe, or if the
final documentation materially departs from the information we
have already reviewed, we reserve the right to revise or withdraw
our ratings.

"The stable outlook reflects our view that Stonegate will
continue to achieve positive like-for-like sales growth and
improve its earnings through operational efficiency and cost
management initiatives.

"Accordingly, given the elevated leverage and the current low
headroom for the rating under the credit metrics, our stable
outlook is predicated on gradual improvement in leverage on the
back of positive reported free operating cash flow (FOCF) in the
next two years.

"This is supported by our expectation that management will pursue
a balanced financial policy and moderate the pace of investments
and acquisitions, such that S&P Global Ratings-adjusted debt to
EBITDA improves to around 7.5x.

"We could lower the rating if competitive pressures in the
industry or weaker operating performance, together with continued
capex investment, resulted in Stonegate's FOCF failing to turn
positive within the next two years. In such a scenario, leverage
will continue to remain elevated, with EBITDAR coverage weakening
toward 1.2x.

"We could also lower the ratings if Stonegate pursued a more
aggressive financial policy regarding acquisitions, capital
investment, or shareholder returns that caused the capital
structure to become unsustainable.

"Although not in our base case, downside rating pressure could
arise from tight liquidity if the refinancing transaction is not
successful, or if the bridge loans are not converted to longer-
term borrowings.

"Based on Stonegate's very high leverage and debt-funded
acquisition track record, we view an upgrade as unlikely over the
next 12 months. Nevertheless, we could consider raising the
ratings if the group reduced debt to EBITDA to below 7x on the
back of positive reported FOCF generation on a sustainable
basis." This would be accompanied by greater visibility on the
financial policy of financial sponsor, TDR Capital, in relation
to capex, acquisitions, and shareholder returns.


TP ICAP: Moody's Cuts Corp. Family Rating to Ba2, Outlook Stable
----------------------------------------------------------------
Moody's Investors Service downgraded to Ba2 from Ba1 the
corporate family rating of TP ICAP plc. The rating outlook is
stable. The rating action concludes the review of TP ICAP's
rating that began on October 11, 2018.

In addition, Moody's has decided to subsequently withdraw the
rating for its own business reasons.

List of Affected Ratings:

Issuer: TP ICAP plc

Corporate Family Rating, Downgraded to Ba2 from Ba1

Outlook, Changed To Stable From Rating Under Review

RATINGS RATIONALE

The downgrade reflects Moody's view that increased costs,
increased debt levels, and increased capital expenditures at TP
ICAP, all of which are unlikely to abate over the near term, have
led to a weakening of the firm's financial profile.

Moody's noted that TP ICAP's acquisition of the ICAP voice
broking unit in late 2016 has taken longer to integrate than the
firm initially anticipated, with higher costs to achieve and
lower cost savings. The rating agency had previously expected the
level of acquisition and integration costs to be appreciably
lower in 2018 and for the integration to be completed by the end
of 2018. Instead, the integration will take another year to
complete and the firm expects to incur an incremental GBP60
million in costs to achieve between July 2018 and the end of
2019.

TP ICAP has also disclosed that it expects to incur additional
costs over the next few years due to the impact of Brexit, MIFID
II, regulatory and legal costs, and IT security. And at the same
time the firm expects significantly higher levels of capex
through 2019 which Moody's believes will likely fully utilize the
firm's retained cash flow over the period.

Moody's also noted that in June TP ICAP borrowed GBP87 million
from its revolving credit facility to fund additional regulatory
capital requirements at several of its regulated UK subsidiaries
that were imposed by its regulator. The firm has announced that
it plans to refinance this borrowing at a higher level and also
plans to refinance its GBP80 million in sterling notes maturing
in June 2019.

Moody's had previously expected that TP ICAP's gross debt/EBITDA
(including Moody's adjustment for operating leases) would delever
to below 2.5x before the end of 2019 through a combination of
improved EBITDA generation and an optimization of cash levels
that would allow for some debt reduction in connection with the
maturity of the sterling notes. However, the rating agency
believes this outcome is now unlikely given the increased costs
and capex, the longer timeline for completion of the ICAP
integration, and the higher debt burden.

As a result, Moody's expects TP ICAP's credit profile and
financial metrics to be more consistent with a Ba2 rating over
the medium-term, especially since the rating agency expects the
firm will continue to face revenue pressures from both cyclical
and secular factors which have affected the entire inter-dealer
broker industry.

The stable outlook reflects Moody's expectation that TP ICAP's
pre-tax earnings and pre-tax margin will improve only gradually
over the next two years as the firm continues to focus on the
integration of the IGBB franchise, the achievement of identified
cost synergies, and the challenges posed by MIFID II, Brexit, and
the revenue pressures from both cyclical and secular factors
which have affected the entire inter-dealer broker industry. The
stable outlook also reflects Moody's expectation that the firm's
debt levels will remain unchanged over the medium term, with the
firm's gross debt/EBITDA remaining above 2.5x and its
EBITDA/interest expense remaining below 6x at least through the
end of 2019, and that TP ICAP's retained cash flow less capex
will remain relatively modest (below 10% of gross debt including
Moody's adjustment for operating leases).

WHAT COULD CHANGE THE RATING - UP

A rating upgrade could occur should performance in the business
improve materially, leading to significantly stronger leverage
metrics and an increase in retained cash flow such that gross
debt/EBITDA falls below 2.5x on a sustained basis and retained
cash flow less capex exceeds 10% of gross debt.

WHAT COULD CHANGE THE RATING -- DOWN

The rating could be downgraded if cost savings from the
integration of the IGBB business are unlikely to materialize or
are likely to be fully offset by other costs, if revenues come
under further pressure, or if the costs to re-organize and run TP
ICAP's business following the UK's planned exit from the European
Union are expected to result in a significant deterioration in
the firm's EBITDA without a corresponding reduction in debt
levels or dividends. Moody's said TP ICAP's rating could also be
downgraded should it use or plan to use debt to materially
increase shareholder distributions.

The principal methodology used in this rating was Securities
Industry Service Providers published in June 2018.



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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.


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

Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
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
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Information contained herein is obtained from sources believed to
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members of the same firm for the term of the initial subscription
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