/raid1/www/Hosts/bankrupt/TCREUR_Public/190226.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

          Tuesday, February 26, 2019, Vol. 20, No. 41

                           Headlines



B E L G I U M

ARMONEA GROUP: S&P Places B- ICR on Watch Pos. on Financiere Deal


G E O R G I A

GEORGIA: Fitch Hikes Long-Term IDR to BB, Outlook Stable


G E R M A N Y

SENVION S.A.: Moody's Lowers CFR to B3, Outlook Negative


I R E L A N D

EUROCHEM FINANCE: Fitch Rates Upcoming US$ Guaranteed Notes BB(EXP)
SAPPHIRE AVIATION: Fitch Affirms Series C Notes at BBsf


N E T H E R L A N D S

ARES EUROPEAN XI: Fitch Assigns B-(EXP)sf Rating on Class F Debt
ARES EUROPEAN XI: Moody's Gives (P)B3 Rating to Class F Notes


R U S S I A

BANK IBSP: Bankruptcy Hearing Scheduled for March 5
EAST-SIBERIAN TRANSPORT: Bankruptcy Hearing Scheduled for March 5
LIPETSK REGION: Fitch Affirms LT IDRs at BB+, Outlook Stable
NEW FORWARDING: Fitch Gives RUB5BB Notes Issue Final BB+ Rating
TINKOFF BANK: Moody's Ups Deposit & Sr. Unsec. Debt Ratings to Ba3



S P A I N

DIA GROUP: Capital Increase to Be Included in Shareholder Vote


T U R K E Y

YASAR HOLDING: Moody's Withdraws Caa1 CFR & Negative Outlook


U N I T E D   K I N G D O M

FLYBE GROUP: Heathrow Boss Supports Virgin-Led Rescue
FLYBMI: BDO Partners Appointed as Administrators
GREENE KING: S&P Affirms BB+ (sf) Rating on Class B1/B2 Notes
LAING O'ROURKE: Bosses Get Rise in Payouts Despite Losses
[*] BDO Completes Merger with Moore Stephens

[*] C. Kandel Joins Morrison & Foerster's London Office
[*] UK: High Street Retailers Suffer Worst January Since 2013
[*] UK: Manufacturing Output Hits 15-Month Low Amid Brexit

                           - - - - -


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B E L G I U M
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ARMONEA GROUP: S&P Places B- ICR on Watch Pos. on Financiere Deal
-----------------------------------------------------------------
France-based nursing home operator Financiere Colisee has announced
it has entered into a definitive agreement to acquire Belgium-based
private healthcare services provider Armonea Group N.V.

Therefore, S&P Global Ratings is placing on CreditWatch with
positive implications its 'B-' issuer credit rating on Armonea and
our 'B-' issue rating on its EUR250 million term loan B.

The CreditWatch placement follows the announcement on Feb. 19,
2019, that Financiere Colisee has agreed to purchase Armonea. The
transaction's financing mix is yet to be determined.

Once the acquisition is completed, S&P could raise by one notch or
affirm the ratings on Armonea. This will depend on, among other
factors, our assessment of the combined group's competitive
position, given its increased scale and geographical
diversification, and the extent to which Armonea is successfully
integrated. The final rating would also depend on the group's
capital structure, leverage, and its level of free operating cash
flow.

Armonea manages nursing homes operating on 87 sites across Belgium,
48 sites in Spain, and 16 sites in Germany. S&P estimates that
Armonea will achieve revenues of about EUR530 million and EBITDA of
about EUR40 million in 2018, with estimated leverage of about
7.5x-7.8x.

Financiere Colisee is a France-based nursing homes operator that
provides services though about 119 facilities France, Italy, and
Spain, and home-based services agencies in France. Financiere
Colisee's acquisition of Armonea will therefore create a large
group in the elderly care segment in Europe. S&P believes that the
combined group will benefit from greater geographic diversity and
scale than Armonea on a stand-alone basis

S&P said, "We will monitor developments in the coming months to
gain clarity on the aforementioned issues and ascertain the effect
of the proposed acquisition on the company's credit profile.

"We plan to resolve the CreditWatch once details of financing plans
for the acquisition become available. Upon the resolution of the
CreditWatch placement, we could raise our ratings by one notch or
affirm the ratings on Armonea."



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G E O R G I A
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GEORGIA: Fitch Hikes Long-Term IDR to BB, Outlook Stable
--------------------------------------------------------
Fitch Ratings has upgraded Georgia's Long-Term Foreign-Currency
Issuer Default Rating (IDR) to 'BB' from 'BB-'. The Outlook is
Stable.

KEY RATING DRIVERS

The upgrade of Georgia's IDRs reflects the following key rating
drivers and their relative weights:

High

The Georgian economy proved resilient to negative developments in
2018. Economic growth remained robust, the currency was relatively
stable and the National Bank of Georgia (NBG) built reserves
despite a severe economic shock in Turkey and heightened sanctions
risk in Russia. Georgia's resilience reflects a diversification of
sources of current account inflows, the floating exchange rate and
prudent fiscal and monetary policy settings, underpinned by
steadfast adherence to its IMF programme. All requirements under
the Extended Fund Facility with the IMF were achieved as of
end-June 2018 and end-December 2018.

External imbalances are gradually easing. Georgia's current account
deficit is structurally high, but Fitch estimates that it narrowed
to 7.5% of GDP in 2018, despite the testing external environment.
In 2017, Russia and Turkey were Georgia's second- and third-largest
trading partners, respectively, in addition to being leading
sources of tourists, remittance and FDI, although financial sector
links are small. Rising tourism revenues and remittances, notably
from the EU, and exports resulted in an estimated 13.9% increase in
current external receipts. The first quarterly current account
surplus on record was recorded in 3Q, the peak tourism season.

Fitch forecasts a further narrowing of the current account deficit
as the recently launched funded pension pillar will likely
encourage savings and the implementation of macro-prudential
measures will lead to a deceleration in consumer lending, reducing
pressure on imports. The deficit is expected to remain over 7% of
GDP to 2020, which is large compared with the current 'BB' median
of 2%.

The 3Q current account surplus insulated the lari from the sharp
fall in the Turkish lira and caused an appreciation of the real
effective exchange rate. REER appreciation, combined with weak
fiscal stimulus and contained wage pressures slowed annual average
inflation to 2.6% in 2018 from 6% in 2017. The NBG cut its
refinancing rate by 25bp in January 2019 to 6.75%, owing to subdued
inflationary pressure. Additional monetary policy easing is likely,
given the expectation of decelerating credit growth and low
imported inflation from neighbouring countries. Fitch forecasts
inflation to remain in line with the NBG target of 3.0% (and below
the current peer median of 3.5%) in 2019-2020.

Growth remained robust at an estimated 4.8% in 2018 and the
five-year average of 5.0%, which compares favourably with the
current median for peers of 3.1%. Private investment and external
demand supported growth in 2018, which should be bolstered in 2019
by a pick-up in capital spending, which dipped last year. Growth
potential is estimated between 4.5%-5.0% by the NBG and at 5.2% by
the IMF, driven by productivity gains and capital formation.

Medium

The 2018 fiscal outturn, an estimated augmented deficit of 2.5% of
GDP, including budget on-lending, outperformed the authorities'
2.8% initial target and current 'BB' median, due to strong revenue
performance and delayed implementation of infrastructure projects,
meaning public capex was subdued. Fitch expects the augmented
fiscal deficit to widen slightly in 2019 to 2.6% of GDP as the
government ramps up capital spending. Contained current expenditure
and dynamic tax receipts will help maintain a neutral fiscal
stance. The newly adopted fiscal rule replaces the previous
expenditure ceiling and sets a 3% of GDP upper limit for the fiscal
deficit and a 60% of GDP debt ceiling.

Fiscal policy is consistent with a gradual decline in gross general
government debt (GGGD)/GDP, which Fitch forecasts at 42.5% of GDP
in 2019, lower than the current 'BB' median of 48.1%. With 81% of
total GGGD external, it is vulnerable to exchange rate fluctuation.
Fitch expects the share of external debt to decrease, as the
government increases local issuance to deepen domestic capital
market. Debt composition is favourable with 72% being to
multilateral creditors. Interest payments account for an estimated
4.4% of government revenues in 2018, almost half the current 'BB'
median, while government maturities coming due within one year are
in line with peers at 4.9% of GDP.

Fitch forecasts that sustained FDI, along with portfolio flows and
private sector borrowing will fully finance the current account
deficit. Net foreign direct investment slowed in 2018 to 7.4% of
GDP, from 9.5% in 2017, due to the completion of a large
infrastructure project. Fitch expects it to recover in 2019-2020 to
an average 8% of GDP, boosted by new Free Trade Agreements, large
projects in the transportation sector and development of the
Anaklia port. Fitch expects the central bank will continue its
policy of reserve accumulation through interventions in the FX
market and the launching of FX put options in 2019, while remaining
committed to a floating exchange rate. Fitch forecasts reserves to
rise to USD3.5billion at end-2019 from USD3.3billion at end-2018
(3.2 months of CXP cover; peer median 4.2).

Georgia's 'BB' IDRs also reflect the following key rating drivers:

External finances remain a key rating weakness with net external
debt at 61.9% of GDP at end-2018, 4.5x the current 'BB' median.
Large external indebtedness gives rise to large gross external
financing needs, at a forecast 86.4% of international reserves in
2019. Georgia is highly vulnerable to an external shock that would
put downward pressure on the currency and lead to a sharp rise in
external debt service. Low external liquidity, at 107.5% versus
150.3% for the current 'BB' median, provides little buffer to the
economy in case of a surge in external financing needs.

Governance and business environment indicators are well above the
current medians of 'BB' category peers, with Georgia ranking 6th
out of 190 in the 2019 World Bank Ease of Doing Business Indicator.
Political risk associated with unresolved conflict with Russia in
Abkhazia and South Ossetia remains material.

The banking sector remains sound and profitable, with robust
capitalisation, adequate liquidity and good asset quality. However,
dollarisation remains high at 64.4% of deposits at end-November
2018 and Fitch's MPI score of 2* reflects some vulnerabilities from
sustained high credit growth. High growth in consumer lending and
mortgage loans has led to a fast rise in household indebtedness,
but new macro-prudential measures, including limits on
loan-to-value and payment-to-income ratios, an increased floor on
new FX-lending, a new leverage ratio and capital requirements will
likely ease credit growth.

Fitch has revised Georgia's Country Ceiling to 'BBB-', two notches
above the Long-Term Foreign-Currency IDR, from 'BB', one notch
above, to reflect its view that the country's high private sector
external debt, reliance on FDI, commitment to liberalising its
economy, integrating with the global economy and creating a
favourable business climate, and successful navigation of recent
external stresses substantially reduce the likelihood of the
authorities imposing capital and/or exchange controls.

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

Fitch's proprietary SRM assigns Georgia 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 that relative to its
peer group, Georgia has higher net external debt, structurally
larger current account deficits, and a large negative net
international investment position.

The removal of the -1 notch under "Macroeconomic policy and
performance" since the previous review reflects Georgia's track
record of resilience to negative developments in its main trading
partners. Policy framework is sound and strengthening, as reflected
by the NBG meeting its inflation target, prudent fiscal strategy
and compliance with IMF's quantitative performance criteria and
structural benchmarks.

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 risk factors that, individually or collectively, could
trigger positive rating action:

  - A significant reduction in external vulnerability, stemming
from decreasing external indebtedness and rising external buffers.

  - Further fiscal consolidation leading to a decline in GGGD/GDP.

  - Stronger GDP growth prospects leading to higher GDP per capita
level, consistent with preserving macro stability.

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

  - An increase in external vulnerability, for example a sustained
widening of the CAD not financed by FDI.

  - Worsening of the budget deficit, leading to a sustained rise in
public indebtedness.

  - Deterioration in either the domestic or regional political
environment that affects economic policymaking or regional growth
and stability.

KEY ASSUMPTIONS

The global economy performs in line with Fitch's Global Economic
Outlook.

The full list of rating actions is as follows:

Long-Term Foreign-Currency IDR upgraded to 'BB' from 'BB-'; Outlook
Stable

Long-Term Local-Currency IDR upgraded to 'BB' from 'BB-'; Outlook
Stable

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

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

Country Ceiling upgraded to 'BBB-' from 'BB'

Issue ratings on long-term senior unsecured foreign-currency bonds
upgraded to 'BB' from 'BB-'

Issue ratings on long-term senior unsecured local-currency bonds
upgraded to 'BB' from 'BB-'

Issue ratings on short-term senior unsecured local-currency bonds
affirmed at 'B'



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G E R M A N Y
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SENVION S.A.: Moody's Lowers CFR to B3, Outlook Negative
--------------------------------------------------------
Moody's Investors Service downgraded to B3 from B2 the corporate
family rating (CFR) and to B3-PD from B2-PD the probability of
default rating (PDR) of Senvion S.A. (Senvion). Concurrently
Moody's downgraded to Caa1 from B3 the rating of the senior secured
notes issued by Senvion Holding GmbH. The outlook on both entities
remains negative.

RATINGS RATIONALE

"Moody's decision to downgrade Senvion's ratings by one notch was
triggered by the company's revision of its guidance for fiscal year
2018 issued on 19 February," said Oliver Giani, lead analyst for
Senvion. "While we had expected weak results for 2018, the profit
warning indicates an even worse situation. Loss of profits due to
delayed revenues, provisions for cost overruns and liquidated
damages due to delays in installations led to EBITDA being just at
break-even level in the last quarter of 2018," he added. "As a
consequence of the profitability erosion, Senvion's leverage is no
longer in line with the requirements for the previous B2 rating",
Mr. Giani continues.

Senvion's CFR of B3 is constrained by (1) its leveraged capital
structure and declining profitability, driven by the structurally
low profitability of the consolidating and intensely competitive
wind turbine industry as well as some loss-making projects, (2) the
limited product and end-industry diversification with more than 75%
of revenues (September 2018 LTM) coming from the installation of
new wind turbines and (3) some geographical concentrations with
Senvion's historical key markets of Germany, France and the UK
still representing 55% of new installations and 46% of revenues in
2017.

Senvion's CFR of B3 is supported (1) the company's size and market
positions, albeit significantly smaller than the leaders Vestas,
Siemens Gamesa and GE Renewables, and (2) a solid level of firm
order book (+37% y-o-y as of September 2018) which provides good
revenue visibility for the next 12-18 months.

LIQUIDITY

The B3 rating incorporates Moody's expectation that Senvion will
preserve a sufficient liquidity cushion, in particular the ability
to remain in compliance with financial covenants of the EUR 125
million revolving credit facility maturing in April 2022, as well
as continued access to the EUR825 million letter of guarantee
facility. Furthermore the current rating is based on the
expectation that Senvion will generate a positive free cash flow
generation in 2019, driven by an improvement of the operating
performance. However, Moody's acknowledges the fact that there is
an element of unpredictability and volatility in cash flows,
considering the large size and long lead times of projects.

STRUCTURAL CONSIDERATIONS

Senvion Holding GmbH's EUR400 million senior secured notes due 2022
are rated Caa1, one notch below the B3 CFR. This principally
reflects the subordinated position of the notes in the loss given
default waterfall with regards to the super senior secured
syndicated facility in a default scenario, even though the facility
and the notes share the same guarantor and collateral package. The
facility is large enough (i.e., EUR125 million in revolving credit
facility and EUR825 million in letter of guarantee facility) to
justify the notching of the senior secured notes below the CFR. The
EUR825 million letter of guarantee facility, although not a cash
credit, enjoys super seniority status versus the notes.

RATIONALE FOR OUTLOOK

The negative outlook mirrors Moody's concern that Senvion may be
challenged to materially restore its credit metrics in 2019 to a
level that would position the company more adequately in the B3
rating category. Over the next 3 to 6 months Moody's will closely
monitor the further development in particular with regard to
management's strategy to turnaround the operating performance and
possible further restructuring needs being identified, as well as
the company's ability to reduce leverage towards a level more in
line with Moody's expectations for a solid B3 rating as well as
liquidity and covenant compliance.

WHAT COULD CHANGE THE RATING UP/DOWN

The ratings on Senvion could be downgraded (1) in case the company
fails to grow its topline and improve its operating performance in
2019, reflected in an EBITA-Margin below 3%, or (2) if leverage is
not restored back to levels more in line with the B3 rating
category, precisely debt to EBITDA below 7.0x, or (3) the company's
liquidity profile deteriorates due to continued negative free cash
flow generation or the inability to comply with the financial
covenant under its credit facilities agreement.

Albeit unlikely at the moment, upward potential would develop if
the company's (1) Moody's-adjusted EBITA margin remains positive on
a sustained basis, (2) free cash flow turns positive, and (3)
Moody's-adjusted gross leverage declines below 5.0x on a sustained
basis.

Issuer: Senvion Holding GmbH

Downgrade:

BACKED Senior Secured Regular Bond/Debenture, Downgraded to Caa1
from B3

Outlook Action:

Outlook, Remains Negative

Issuer: Senvion S.A.

Downgrades:

LT Corporate Family Rating, Downgraded to B3 from B2

Probability of Default Rating, Downgraded to B3-PD from B2-PD

Outlook Action:

Outlook, Remains Negative

The principal methodology used in these ratings was Global
Manufacturing Companies published in June 2017.

Senvion S.A. is a publicly quoted entity and the ultimate holding
company of the Senvion group. Headquartered in Hamburg, Germany,
Senvion is one of the leading manufacturers of wind turbine
generators (WTGs). The group develops, manufactures, assembles and
installs WTGs with nominal outputs ranging from 2.0 MW to 6.3 MW,
covering all wind classes in both onshore and offshore markets.
Moody's notes that Senvion can also occasionally partner with its
clients via codevelopment/coinvestment projects. Senvion has a
workforce of about 4,500 worldwide and generated revenue of close
to €1.4 billion during the twelve months period to September
2018, with cumulative global installed capacity of around 18.1 GW.
In March 2016, private equity firm Centerbridge Partners sold a
stake of around 26.4% in Senvion S.A. to private investors in an
initial public offering.



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I R E L A N D
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EUROCHEM FINANCE: Fitch Rates Upcoming US$ Guaranteed Notes BB(EXP)
-------------------------------------------------------------------
Fitch Ratings has assigned EuroChem Finance Designated Activity
Company's upcoming US dollar-denominated, five year guaranteed
notes an expected senior unsecured rating of 'BB(EXP)'. The final
rating is contingent upon the receipt of final documentation
conforming to information already received.

The prospective notes will be issued for the refinancing of the
notes due in 2021 issued by EuroChem Finance Designated Activity
Company and of the notes due 2020 issued by EuroChem Global
Investments Designated Activity Company. The noteholders will
benefit from the guarantees of EuroChem Group AG's (EuroChem,
BB/Stable) and the holding company for the group's Russia-based
assets, JSC MCC EuroChem and will rank pari passu with current and
future outstanding unsecured and unsubordinated debt. EuroChem
Finance DAC is an Ireland-based special purpose financing vehicle
of EuroChem.

KEY RATING DRIVERS

Full Year Performance in Line With Expectation: EuroChem's funds
from operations (FFO)-adjusted net leverage fell to 3.1x in 2018,
below Fitch;s expectation of 3.4x and from 4.5x at end-2017. This
mostly reflects a better-than-expected pricing environment for
fertilisers throughout 2018, while gross debt only decreased by
slightly more than USD200 million. Fitch forecasts positive
pre-dividend free cash flow (FCF) from 2019 as the group's capex
levels normalise and contributions from the new ammonia and potash
capacity ramp up. In the absence of specific guidance, Fitch
conservatively assumes that some of the group's FCF will
up-streamed to the shareholder in the form of loan repayments or
dividends from 2020.

Business Profile Enhanced Beyond 2021: Fitch maintains a cautious
view on the ramp-up of potash volumes as the two projects have been
delayed from original projections. Fitch's base case assumes that
they start contributing materially to earnings in 2021 with full
ramp-up of phase 1 to 4 million tonnes a year of potash production
in aggregate. The projects are estimated to have a first-quartile
position on the global potash cost curve. Along with the northwest
ammonia project in Kingisepp, which targets a capacity of almost
1mtpa by 2021, they should more than cover EuroChem's internal
needs and enhance the group's vertical integration and product
diversification with presence in all three major nutrients.

Supportive Market Environment: Global prices for fertiliser
products increased in 2018, on the back of idle/suspended
capacities or delayed ramp-ups, higher feedstock costs and solid
demand. As a result, EuroChem's sales and EBITDA increased 15% and
30% yoy in 2018. In the medium term, Fitch expects the robust
trends to persist in nitrogen markets on the back of limited
capacity additions and cost increase at non-integrated producers
while phosphates and potash are likely to face supply-driven price
volatility. Fitch believes that EuroChem's scale, market reach and
strong cost position should support profitability and cash flow
generation through the cycle.

Potash and Ammonia Projects Progress: EuroChem's Usolskiy potash
mine produced 0.3mt of potash in 2018 and the group targets to
ramp-up to 1.1mt in 2019 and 3mt by 2021. Two trains (out of four)
are fully operational in commissioning mode and working at their
projected capacity of 1.1mt per year. The VolgaKaliy floatation
plant is in commissioning mode and first production of marketable
product is expected in 1H19. The group is building a freeze wall
around the cage shaft where water inflow halted sinking progress in
March 2017. The first commercial ammonia from EuroChem Northwest
ammonia project in Kingisepp was obtained in early 2019. The
project targets almost 1mtpa of ammonia by 2021.

Normalised Capex to Support FCF: Out of about USD8 billion
dedicated to the potash and ammonia projects, USD5.5 billion has
been spent with the remaining USD2.9 billion mostly earmarked for
phase 2 of the potash expansion over the next five years. Fitch's
base case assumes annual capex of USD700 million-USD800 million
from 2019 (USD1.1 billion in 2018), which also includes several
small and medium-sized investments across the range of EuroChem's
fertiliser production and trading facilities. Production ramp-up
and decreasing investments should support positive pre-dividend FCF
generation from 2019.

Return of Cash Flow to Shareholders: In 2016, the group signed an
agreement for a perpetual shareholder loan of up to USD1 billion,
of which USD250 million were outstanding in 2016 and USD850 million
at end-2018. The loan has been treated as equity under Fitch's
methodology. The 2018 drawdown was used towards the repayment of
the Usolskiy project finance facility. Fitch believes that under
the current rating case, the group will start to return cash to
shareholders in the form of loan repayments and/or dividends from
2020. Fitch does not expect EuroChem to make overly aggressive
distributions and expect the group to maintain neutral FCF.

Strong Business Fundamentals: EuroChem has a strong presence in CIS
and European fertiliser markets (more than 50% of 2018 sales) with
around a 15% share of premium fertiliser sales. It is the
seventh-largest EMEA fertiliser company by total nutrient capacity
and aims to join the top three in the world with capacity in all
three primary nutrients. The group also has access to the premium
European compound fertiliser market, with production in Antwerp,
trademarks and third-party sales (25% of sales) distributed through
its own network.

EuroChem's Russia-based phosphate and nitrogen production assets
are comfortably placed in the first quartile of their respective
global cost curves, supported by the weaker rouble.

Project Financing Facilities Consolidated: EuroChem had procured
project financing for its Usolskiy Potash project (repaid) and its
Baltic ammonia project. Even though the financing is specific to
the projects and has non-recourse features that separate it from
EuroChem's outstanding debt, Fitch continues to consolidate the
debt due to the strategic importance of the investments and the
inclusion of a cross default clause within the financing
agreements.

DERIVATION SUMMARY

EuroChem's scale is on a par with that of large fertiliser peers
such as CF Industries Holdings, Inc. (BB+/Stable) or Israel
Chemicals Ltd. (ICL, BBB-/Stable) or OCP S.A. (BBB-/Stable). The
group's level of diversification across nutrients and complex
fertilisers is similar to that of PJSC PhosAgro (BBB-/Stable), The
Mosaic Company, ICL and PJSC Acron (BB-/Stable). EuroChem also has
some exposure outside of the fertiliser market (iron ore) but it
remains limited compared with ICL's bromine-based specialty
chemicals and OCI N.V.'s (BB/Stable) industrial chemicals. EuroChem
ranks behind OCP and PhosAgro in terms of leadership in the
phosphates market, and behind Mosaic and PJSC Uralkali (BB-/Stable)
in the more concentrated potash segment.

EuroChem's partial vertical integration underpins a cost position
on the lower part of the global urea and diammonium phosphate (DAP)
cost curves, but substantial trading operations partly dilute the
group's EBITDAR margins to 27% (23% in 2017). This is below other
cost leaders', such as Uralkali (2017: 49%), Acron (32%), CF
Industries (31%) or PhosAgro (29%), but comparable with OCP (26%)
and above OCI (23%) and Mosaic (17%).

EuroChem's rating also incorporates Fitch's expectation of
deleveraging given the end of the capex cycle. FFO adjusted net
leverage peaked in 2017 at 4.5x before decreasing to 3.1x in 2018
and it is now below most of its peers'. However, the rating is
still constrained by negative FCF generation and potential further
delays in ramping up of potash projects, especially for VolgaKaliy
project.

KEY ASSUMPTIONS

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

  - Nitrogen and phosphate fertilisers pricing to remain positive
over the next three years; potash prices to decrease gradually

  - VolgaKaliy Potash and Kingisepp Ammonia projects to start
adding production volumes from 2019

  - USD/RUB at around 62 from 2019

  - Capex/sales to normalise at 15% by 2021

  - Shareholder loan repayment in 2020 and 2021 equally

  - Dividend distribution at around USD500 million from 2020
leading to neutral FCF

RATING SENSITIVITIES

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

  - Visible progress in ramping up potash operations resulting in
an enhanced operational profile.

  - Positive FCF on moderated capex leading to FFO adjusted net
leverage at or below 3.0x.

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

  - Continued aggressive capex or shareholder distributions
translating into FFO adjusted net leverage sustainably above 3.5x.

LIQUIDITY

Manageable Liquidity: At end-2018, EuroChem had cash balances of
USD342 million, undrawn committed credit facilities of about USD226
million and USD97 million under the ammonia project facility
against USD609m million of short-term debt. Fitch believes that
EuroChem's liquidity remained manageable and is supported by a
combination of uncommitted revolving facilities of about USD1.1
billion, and by the group's proven and continued access to the
international and domestic funding. The group also has access to a
remaining USD150 million of a shareholders loan.

SAPPHIRE AVIATION: Fitch Affirms Series C Notes at BBsf
-------------------------------------------------------
Fitch Ratings has affirmed Sapphire Aviation Finance I Limited as
follows:

  -- Series A at 'Asf'; Outlook Stable;

  -- Series B at 'BBBsf'; Outlook Stable;

  -- Series C at 'BBsf'; Outlook Stable.

KEY RATING DRIVERS

The affirmation of the class A, B, and C notes reflects
performance, which has been within expectations to date. Lease cash
flows have been above Fitch's base and stressed expectations, and
all classes are paying according to their amortization schedule.
While LTVs have increased marginally, they remain within initial
expectations. Further, given that aircraft values are
maintenance-adjusted, future valuations will be supported by
maintenance performed on the assets. As of February 2019 reporting,
only 1.6% of the pool was off lease, and no aircraft have been sold
to date. While a few lease transitions have occurred, the majority
of the aircraft remain on their initial leases.

Cash flow modelling was not completed for this review consistent
with criteria, as performance has been within expectations, no
performance triggers have been tripped, and the transaction has
been modelled within the past 18 months.

The transaction is serviced by Avolon Aerospace Leasing Limited
(AALL), a wholly owned indirect subsidiary of Avolon Holdings
Limited (Avolon). Avolon is currently rated 'BB+' with a Positive
Rating Outlook.

RATING SENSITIVITIES

Due to the correlation between global economic conditions and the
airline industry, the ratings may be impacted by the strength of
the macro-environment over the remaining term of this transaction.
Global economic conditions that are inconsistent with Fitch's
expectations and stress parameters could lead to negative rating
actions. In the initial rating analysis, Fitch found the
transaction to have minimal sensitivity to the timing or severity
of assumed recessions.

Fitch tested the structure against the default of Sri Lankan and
the prolonged recovery of their leased A330 aircraft found that the
notes showed limited sensitivity to such a scenario. Fitch found
the notes to be more susceptible to the timing or degree of
technological advancement in the commercial aviation space and the
impacts these changes would have on values, lease rates, and
utilization. In this scenario, Fitch lowered initial aircraft
valuations and future residual assumptions. Lease rates drop fairly
significantly under this scenario and aircraft are essentially sold
for scrap at the end of their useful lives. Such a scenario would
have a material impact on the notes as they could experience
multiple level downgrades.



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

ARES EUROPEAN XI: Fitch Assigns B-(EXP)sf Rating on Class F Debt
----------------------------------------------------------------
Fitch Ratings has assigned Ares European CLO XI B.V. expected
ratings, as follows:

Class X: 'AAA(EXP)sf'; Outlook Stable

Class A-1: 'AAA(EXP)sf'; Outlook Stable

Class A-2: 'AAA(EXP)sf'; Outlook Stable

Class B-1: 'AA(EXP)sf'; Outlook Stable

Class B-2: 'AA(EXP)sf'; Outlook Stable

Class C: 'A(EXP)sf'; Outlook Stable

Class D: 'BBB-(EXP)sf'; Outlook Stable

Class E: 'BB-(EXP)sf'; Outlook Stable

Class F: 'B-(EXP)sf'; Outlook Stable

Subordinated notes: 'NR(EXP)sf'

The assignment of final ratings is contingent on the receipt of
final documents conforming to information already reviewed.

Ares European CLO XI B.V. is a cash flow collateralised loan
obligation (CLO). Net proceeds from the issuance of the notes will
be used to purchase a EUR400 million portfolio of mostly European
leveraged loans and bonds. The portfolio is actively managed by
Ares European Loan Management, LLP. The CLO envisages a 4.5-year
reinvestment period and an 8.5-year weighted average life.

KEY RATING DRIVERS

'B' Portfolio Credit Quality

Fitch assesses the average credit quality of obligors at the 'B'
category. The Fitch-weighted average rating factor of the
identified portfolio is 33.25.

High Recovery Expectations

At least 96% of the portfolio comprises 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 64.89%.

Diversified Asset Portfolio

The covenanted maximum exposure to the top 10 obligors for
assigning the expected ratings is 23% of the portfolio balance. The
transaction also includes limits on maximum industry exposure based
on Fitch's industry definitions. The maximum exposure to the
largest three Fitch-defined industries in the portfolio is
covenanted at 40%.

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.

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-sf' level and of up to two notches for
all other rating levels.

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.

SOURCES OF INFORMATION

The following information was used in the analysis:

  - Loan-by-loan data provided by the arranger as at February 14,
2019.

  - Preliminary offering circular provided by the arranger as at
February 21, 2019.

REPRESENTATIONS AND WARRANTIES

A description of the transaction's representations, warranties and
enforcement (RW&E) mechanisms that are disclosed in the offering
document and which relate to the underlying asset pool was not
prepared for this transaction. Offering documents for EMEA CLO
transactions do not typically include RW&Es that are available to
investors and that relate to the asset pool underlying the
security. Therefore, Fitch credit reports for EMEA CLO transactions
will not typically include descriptions of RW&Es.

ARES EUROPEAN XI: Moody's Gives (P)B3 Rating to Class F Notes
-------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following provisional ratings to notes to be issued by Ares
European CLO XI B.V.

  - EUR 2,000,000 Class X Senior Secured Floating Rate Notes due
2032, Assigned (P)Aaa (sf)

  - EUR 240,000,000 Class A-1 Senior Secured Floating Rate Notes
due 2032, Assigned (P)Aaa (sf)

  - EUR 7,000,000 Class A-2 Senior Secured Floating Rate Notes due
2032, Assigned (P)Aaa (sf)

  - EUR 19,000,000 Class B-1 Senior Secured Floating Rate Notes due
2032, Assigned (P)Aa2 (sf)

  - EUR 20,000,000 Class B-2 Senior Secured Fixed Rate Notes due
2032, Assigned (P)Aa2 (sf)

  - EUR 21,000,000 Class C Senior Secured Deferrable Floating Rate
Notes due 2032, Assigned (P)A2 (sf)

  - EUR 28,500,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2032, Assigned (P)Baa3 (sf)

  - EUR 24,500,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2032, Assigned (P)Ba3 (sf)

  - EUR 9,500,000 Class F Senior Secured Deferrable Floating Rate
Notes due 2032, Assigned (P)B3 (sf)

Moody's issues provisional ratings in advance of the final sale of
financial instruments, but these ratings only represent Moody's
preliminary credit opinions. Upon a conclusive review of the
transaction and associated documentation, Moody's will endeavour to
assign definitive ratings. A definitive rating (if any) may differ
from a provisional rating.

RATINGS RATIONALE

Moody's provisional 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 Ares European Loan Management
LLP ("AELM") 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 75-80% 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 6-month ramp-up period in compliance with the
portfolio guidelines.

AELM 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 transaction's 4.5-year reinvestment period. Thereafter,
purchases are permitted using principal proceeds from unscheduled
principal payments and proceeds from sales of credit risk
obligations, and are subject to certain restrictions.

Interest and principal amortisation amounts due to the Class X
Notes are paid pro rata with payments to the Class A-1 Notes. The
Class X Notes amortise by 0.125% or EUR 250,000 over the first 8
payment dates starting on the 2nd payment date.

In addition to the nine classes of notes rated by Moody's, the
Issuer will issue EUR 38,700,000 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 Ares European CLO XI 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
Ares European CLO XI 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

Diversity Score: 47

Weighted Average Rating Factor (WARF): 3,000

Weighted Average Spread (WAS): 3.70%

Weighted Average Coupon (WAC): 5.00%

Weighted Average Recovery Rate (WARR): 44.0%

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.



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

BANK IBSP: Bankruptcy Hearing Scheduled for March 5
---------------------------------------------------
The provisional administration to manage the credit institution
Bank IBSP (JSC) (hereinafter, the Bank) appointed by virtue of Bank
of Russia Order No. OD-2853, dated October 31, 2018, following the
banking license revocation, in the course of its inspection of the
Bank's financial standing established that the Bank's executives
had conducted operations to divert assets by transferring claims on
a number of counterparties to their shareholder and by purchasing
illiquid assets.

The provisional administration estimates the value of the Bank's
assets to be no more than RUR10.8 billion, vs RUR23.9 billion of
its liabilities to creditors.

On November 12, 2018, the Bank of Russia applied to the Court of
Arbitration of Saint Petersburg to declare the bank insolvent
(bankrupt).  The hearing is scheduled for March 5, 2019.

The Bank of Russia submitted the information on the financial
transactions bearing the evidence of criminal offense conducted by
the Bank's executives to the Prosecutor General's Office of the
Russian Federation, the Ministry of Internal Affairs of the Russian
Federation and the Investigative Committee of the Russian
Federation for consideration and procedural decision-making.

The current development of the bank's status has been detailed in a
press statement released by the Bank of Russia.

EAST-SIBERIAN TRANSPORT: Bankruptcy Hearing Scheduled for March 5
-----------------------------------------------------------------
The provisional administration to manage Joint Stock Company
East-Siberian Transport Commercial Bank (hereinafter, the Bank)
appointed by virtue of Bank of Russia Order No. OD-2716, dated
October 19, 2018, following the banking license revocation, in the
course of its inspection of the Bank, established evidence
suggesting that the Bank's executives conducted operations to
either siphon off funds or conceal assets previously siphoned off,
by theft of funds or abuse of authority.

The provisional administration estimates the bank's assets to total
RUR2,043 million, whereas its liabilities to creditors amount to
RUR2,282 million.

The Bank of Russia submitted a claim to the Court of Arbitration of
the Irkutsk Region to declare the bank bankrupt.  The hearing is
scheduled for March 5, 2019.

The Bank of Russia submitted the information on the financial
transactions bearing the evidence of criminal offense conducted by
the Bank's executives to the Prosecutor General's Office of the
Russian Federation, the Ministry of Internal Affairs of the Russian
Federation and the Investigative Committee of the Russian
Federation for consideration and procedural decision-making.

The current development of the bank's status has been detailed in a
press statement released by the Bank of Russia.


LIPETSK REGION: Fitch Affirms LT IDRs at BB+, Outlook Stable
------------------------------------------------------------
Fitch Ratings has affirmed the Russian Lipetsk Region's Long-Term
Foreign- and Local-Currency Issuer Default Ratings (IDR) at 'BB+'
with Stable Outlooks and Short-Term Foreign-Currency IDR at 'B'.
The region's senior unsecured debt ratings have been affirmed at
'BB+'.

KEY RATING DRIVERS

The affirmation reflects Lipetsk's sound budgetary performance,
moderate direct risk and healthy liquidity in the medium term. The
ratings also factor Russia's weak institutional framework and the
region's highly concentrated economy, which is prone to steel
market fluctuations, and consequent volatility of the region's tax
revenue.

Institutional Framework (Weakness/Stable)

Fitch views the region's credit profile as constrained by the weak
Russian institutional framework for sub-nationals, which has a
shorter record of stable development than many of its international
peers. The predictability of Russian local and regional
governments' (LRGs) budgetary policy is hampered by the frequent
reallocation of revenue and expenditure responsibilities within
government tiers.

Fiscal Performance (Strength/Stable)

Fitch's base case scenario projects the region to continue posting
sound budgetary performance with an operating margin of 9%-14% in
2019-2023. This will be lower than the abnormal result of 2018,
when the operating margin peaked at 20.5%, according to preliminary
data, on the back of a 19.5% annual increase in taxes.

The main contributor to the region's 2018 tax revenue growth was
corporate income tax (CIT), which went up by 44.6% yoy. This solid
growth was linked to improved performance in the region's prime
industry - the metal sector - boosted by favourable terms of trade.
CIT is historically the largest source of tax revenue for Lipetsk
region, accounting for up to 49% of 2018 total tax revenue. Fitch
notes that material dependence on the prime industry, with a
pronounced tax concentration on a particular company - PJSC
Novolipetsk Steel (BBB-/Stable), exposes the region to revenue
volatility associated with the market risk in the metals sector and
financial decisions of the company's management.

Applying additional stress on CIT under Fitch's rating case
scenario for 2019-2023, it projects the region's operating margin
to remain satisfactory at 7%-9%, supplemented by a deficit before
debt variation at about 8%-9% of total revenue. However, these
metrics remain within the 'BB+' rating range. Based on preliminary
data analysis the region recorded a sound year-end surplus of 9.9%
of total revenue in 2018. This positively affected its debt
position and improved liquidity.

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

According to Fitch's base case scenario, it projects the region's
direct risk to remain moderate, hovering at about 20%-30% of
current revenue in 2019-2023 (preliminary 2018: 26%), supplemented
by a narrow deficit before debt variation of about 3%-6% of total
revenue. The region's direct risk position decreased materially to
RUB14.8 billion at end-2018 from RUB16.2 billion a year earlier, on
the back of solid budget performance. This led to an improvement in
the preliminary estimated year-end direct risk payback ratio to one
year and four months in 2018 (2017: two years and six months).

The region's 2018 debt stock composition was fairly
well-diversified, comprising budget loans (43.5%), domestic bonds
(39.6%) and bank loans (16.9%). Despite stretched maturities till
2034, the region's debt remains front-loaded, as 50% of its direct
risk stock is scheduled to mature in 2019-2020. The mitigating
factors offsetting near-term concentrated maturities are sound
liquidity buffers and moderate level of indebtedness, maintained by
the region.

Management and Administration (Neutral/Stable)

The region's administration adheres to prudent financial planning
and management, focusing on preserving excess to tax proceeds and
imposing strict control over opex. The region's debt portfolio
remains well-managed, with good overall control over the level of
debt burden. The region's budgetary approach is conservative and
actual budget execution normally leads to a lower than expected
deficit. Fitch assumes continuity of these policies and practices
in 2019-2023.

Economy (Neutral/Stable)

The region's economy is weighted towards the traded industrial
sector, with a focus on the ferrous metallurgy, supporting wealth
metrics above the national median level. In 2017 (latest available
data) the 10 largest taxpayers contributed 40% of total tax
revenues, underlining a narrow tax base and making the regional
economy vulnerable to steel market fluctuations.

According to preliminary data, local GRP expanded by 2.2% in 2018,
which is in line with the government estimate for the wider Russian
economy (2.3% growth). According to the administration's base case
forecast, the region's GRP will increase by about 2% yoy in
2019-2021, outperforming Fitch's estimates for Russia GDP growth of
1.5% yoy in 2019 and 1.8% yoy in 2020.

RATING SENSITIVITIES

An operating margin sustainably above 15%, accompanied by sound
debt metrics with a direct risk-to-current balance (preliminary
2018:1.3 years) in line with the weighted average life of debt
(preliminary 2018: 2.1 years), would lead to an upgrade.

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

NEW FORWARDING: Fitch Gives RUB5BB Notes Issue Final BB+ Rating
---------------------------------------------------------------
Fitch Ratings has assigned Joint Stock Company New Forwarding
Company's (NFC, 100% owned subsidiary of Globaltrans Investment Plc
(GLTR, BB+/Positive)) domestic RUB5 billion notes issued under a
RUB100 billion domestic bond programme a final local currency
senior unsecured rating of 'BB+'.

The notes are rated at the same level as GLTR's Long-Term
Local-Currency Issuer Default Rating (IDR) of 'BB+' due to the
benefit of the public irrevocable offer issued by GLTR.

The ratings of GLTR reflect its robust financial profile with funds
from operations (FFO) adjusted net leverage at below 1.5x, despite
high capex and shareholder distributions as well as an expected
market rates correction from 2020. The ratings incorporate GLTR's
position as one of the leading commercial rolling-stock operators,
with a market share of around 7% of Russian freight rail turnover
(tonnes-km) in 1H18, and its exposure to cyclical commodity
industries. An upgrade is likely if the group maintains its prudent
financial policy, despite the sector's highly cyclical nature.

KEY RATING DRIVERS

Public Irrevocable Offer: Bondholders benefit from GLTR's public
irrevocable offer under which the parent undertakes to offer to
purchase the bonds if NFC is in default, making this instrument
effectively recourse to GLTR. Fitch understands that GLTR's
obligation under the irrevocable offer ranks pari passu with the
group's unsecured obligations.

Robust Financial Profile: Fitch expects GLTR to maintain a robust
financial profile with an estimated FFO adjusted net leverage well
below 1.5x (0.9x in 2017) on average and strong FFO fixed charge
coverage over 2018-2022, due to a low debt burden. This is based on
Fitch's assumptions of moderate growth of freight rail turnover,
expected decline in freight rates from 2020, average annual
investments being above the group's maintenance capex and continued
payment of high dividends from 2018, above the group's dividend
policy.

Positive FCF before Dividends: Fitch expects GLTR to continue
generating positive free cash flow (FCF) before dividends in
2018-2022, due to highly flexible capex, which Fitch still expects
to be significant. Fitch assumes slightly higher-than-average
annual investments of around RUB10 billion over 2018-2022, which is
well above the historical annual average of RUB3 billion over
2014-2017. Fitch also assumes a dividend payout ratio of above 70%
of GLTR's net income on average over 2018-2022, which is above the
group's dividend policy and could result in FCF (after dividends)
turning  negative.

Prudent Financial Policy: GLTR's dividend policy provides a clear
formula-linked mechanism, which is leverage-driven and flexible
depending on the group's financial needs. GLTR is not exposed to FX
fluctuations as only a negligible share of operating expenses is
denominated in foreign currencies. At end-1H18, all of its debt was
denominated in roubles and interest rates were fixed, eliminating
FX or interest rate risk. Following the placement of a RUB5 billion
five-year bond issued by NFC in February 2018, GLTR's overall
effective interest rate improved to 7.9% at end-1H18 (9.4% in
2017).

Profitability Offsets Turnover Declines: GLTR's adjusted EBITDA
margin improved to 55% in 1H18 (1H17: 48%). In 1H18, adjusted
revenue increased 19% yoy to RUB30.1 billion while total operating
cash costs increased only 2%. Despite faltering turnover, earnings
growth was supported by the continued recovery of gondola rates
from 2016, together with an improving capacity balance in the
market. GLTR benefited from the ban on the use of old railcars from
2016 as its railcars are relatively young with an average age of
10.1 years and 14 years for gondolas and rail tank cars at
end-1H18, respectively, compared with a useful life of 22 years and
32 years.

Volumes and Turnover Temporarily Weaken: Given the healthy dynamics
of the Russian freight rail market, Fitch expects GLTR's freight
rail turnover and volumes will grow in the medium term, albeit at a
slower rate than during 2016-2017 as Fitch forecasts Russian GDP to
increase 1.5%-1.9% in 2019-2022. Its turnover and volumes were weak
in 2018, mainly due to GLTR rebalancing its fleet, by returning
leased-in railcars and expanding its own fleet instead. The timing
difference in the delivery of railcars led to a temporary drop in
average operated rolling stock by 3% yoy in 1H18, exacerbated by
changes in client logistics. Overall, the Russian freight rail
market continued to grow 4.3% and 2.4% yoy in turnover and volume,
respectively, in 10M18.

Focus on Higher-Priced Cargoes: GLTR focuses on transportation of
higher-priced cargo categories, including oil products & oil and
metallurgical cargoes, which accounted for 72% of net revenue from
operation of rolling stock and 68% of total freight rail turnover
in 1H18. However, Fitch expects oil and oil products transportation
to remain under pressure from increased competition from
new/existing pipelines and decrease in overall volumes of oil
products. Transportation of coal accounted for 21% of turnover and
11% of volume in 1H18.

Long-Term Contracts Add Visibility: The operations under medium- to
long-term contracts with good credit quality counterparties
contributed 55% of net revenue as of 1H18, which increases
cash-flow visibility and secures the use of GLTR's rail fleet.
However, GLTR remains exposed to volume risk as several agreements
fix only the percentage of customer's estimated freight rail
transportation needs, rather than actual volumes. GLTR's key
customers are the large Russian industrials, such as Rosneft, OJSC
Magnitogorsk Iron & Steel Works (MMK, BBB-/Stable) and AO Holding
Company Metalloinvest (BB/Positive). The group has recently signed
five-year service contracts with two other clients, TMK and PJSC
Chelyabinsk Pipe Plant (BB-/Stable). However, it remains fully
exposed to price risk.

Large Operator: GLTR is one of the largest freight railcar
transportation groups in Russia by volume with around a 7% market
share in 1H18. It focuses on transportation of higher-priced cargo,
including metallurgical cargo and oil products, and owns a
relatively young rail fleet, with lower maintenance and fleet
renewal costs than sector peers. Including leased-in fleet, GLTR
has about 66,000 railcars.

DERIVATION SUMMARY

GLTR's close competitor is Russian rolling stock operator JSC
Freight One (BB+/Positive). Freight One benefits from both a larger
size and market share of 13% vs. GLTR's around 7% in total Russian
freight rail transportation. However, GLTR's rating benefits from
the group's competitive position due to the focus on transportation
of higher-priced cargo, including metallurgical cargo and oil
products, and from ownership of a relatively young rail fleet (11
years vs. almost 16 years for Freight One). This results in higher
efficiency and an adjusted EBITDA margin for GLTR of above 40% on
average over 2014-2017, compared with Freight One's average 30%.
Both GLTR's and Freight One's ratings are supported by similar
forecast financial profiles and medium- to long-term contracts with
major clients. Fitch views GLTR's group structure as more complex
than that of Freight One.

KEY ASSUMPTIONS

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

  - Domestic GDP growth of 1.5%-2% over 2018-2022

  - Inflation of 2.9%-4.6% over 2018-2022

  - Freight transportation rates to decline 10% in 2020 and a
further 5% in 2021

  - Elevated capex to continue in 2018-2022

  - Dividends above GLTR's dividend policy over 2H18-2022

RATING SENSITIVITIES

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

  - Further diversification of the customer base, lengthening of
contract duration with better volume visibility and lower rate
volatility

  - Sustainable market share in fleet numbers and consequently
transported volumes and revenue, allowing greater efficiency

  - Maintenance of FFO adjusted net leverage below 1.5x and FFO
fixed charge cover above 5x on a sustained basis

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

  - Inability to maintain  FFO adjusted net leverage below 1.5x and
FFO fixed charge coverage above 5x would lead to a revision of the
Outlook to Stable from Positive

  - A sustained rise in FFO adjusted net leverage above 2x and FFO
fixed charge cover of below 3x, which may lead to a downgrade

  - Unfavourable changes to the Russian legislative framework for
the railway transportation industry

LIQUIDITY AND DEBT STRUCTURE

Adequate Liquidity: Fitch views GLTR's liquidity position as
adequate. As of end-1H18, GLTR's cash and cash equivalents were
RUB6.2 billion and together with unused credit facilities of RUB4.2
billion available to subsidiaries with a drawdown period of over
one year, were sufficient to cover short-term maturities of RUB5.5
billion. Fitch estimates that FCF (after dividends) may turn
negative in 2018-2019 due to high dividend payment, although the
group's dividend policy remains flexible.

SUMMARY OF FINANCIAL ADJUSTMENTS

  - Fitch applied a blended 4x multiple for railcars and 6x
multiple (standard for Russia) for other assets. For railcars,
Fitch capitalised a lower, base level of operating lease expenses,
reflecting the flexibility of operating-lease contracts, which can
be dissolved at relatively short notice, and the company's
demonstrated ability to manage lease costs to match the stage of
the business cycle. This resulted in a lower blended multiple of 4x
for railcars.  

  - Adjustments to 2017 financials relate primarily to non-cash
items such as loss on sale of PP&E and impairment of PP&E.

TINKOFF BANK: Moody's Ups Deposit & Sr. Unsec. Debt Ratings to Ba3
------------------------------------------------------------------
Moody's Investors Service upgraded the long-term foreign and local
currency deposit ratings and senior unsecured local currency debt
rating of Tinkoff Bank (Tinkoff) to Ba3 from B1. The rating agency
also upgraded the bank's long-term Counterparty Risk Assessment (CR
Assessment) to Ba2(cr) from Ba3(cr), its local and foreign currency
Counterparty Risk Ratings (CRRs) to Ba2 from Ba3, and the baseline
credit assessment (BCA) and adjusted BCA to ba3 from b1. The
outlook on the senior unsecured and long-term debt deposit ratings
remains stable.

Additionally, Moody's affirmed Tinkoff's short-term deposit ratings
and short-term CRRs at Not Prime (NP), and the short-term CR
Assessment at Not Prime(cr).

RATINGS RATIONALE

The rating action was driven by the bank's demonstrated resilience
to economic and credit cycles as reflected in (1) a sustained track
record of strong profitability, (2) sound control over credit
risks, (3) robust loss absorption capacity as well as (4) a solid
liquidity cushion supported by short duration of assets and low
reliance on wholesale funding.

The bank continues to demonstrate robust performance as reflected
in a very high return on average assets of over 8% during the first
nine months of 2018 and in 2017. This is supported by strong
revenues, lower costs of risks and good efficiency. In addition,
Tinkoff's revenues are gradually becoming more diversified, but it
still remains highly reliant on its credit card business.

Moody's expects that Tinkoff will maintain strong control over its
asset quality, with a cost of risk of below 7% over the next 12-18
months (compared to an average cost of risk of around 11% during
2010-2018). The bank has increased its focus on higher-income
customers, resulting in a better customer credit profile. Together
with an ability to quickly adjust to changing market conditions,
this will lead to improved asset quality.

Tinkoff's reliance on wholesale funding is now very low, at only 4%
of tangible banking assets at end-Q3 2018. By contrast, it
continues to maintain a healthy liquidity cushion with liquid
assets comprising over 30% of total assets at end-Q3 2018. The
bank's liquidity is supported by a solid customer deposit base
predominantly composed of stickier retail funds, coupled with the
relatively short maturity of its assets in the form of consumer
credit.

Tinkoff's loss absorption buffer is good, with a Tangible Common
Equity to Risk Weighted Assets ratio of 11% at end-Q3 2018, while
the coverage of problem loans by reserves was ample at 139%.

The stable outlook reflects Moody's expectations that the key
credit metrics such as capitalisation, liquidity and profitability
will remain strong over the next 12-18 months.

WHAT COULD MOVE THE RATINGS UP/ DOWN

The bank's BCA could be upgraded if the bank significantly
diversifies its revenue stream while other key credit metrics
remain strong. The ratings could be negatively affected by (1) the
bank's inability to adapt to a downturn in the credit cycle,
eroding asset quality, capital and profitability; and/or (2) an
increase in the bank's risk appetite by targeting less creditworthy
customers or/and new products of which it has less experience.

PRINCIPAL METHODOLOGY

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

LIST OF AFFECTED RATINGS

Issuer: Tinkoff Bank

Upgrades:

  - Adjusted Baseline Credit Assessment, Upgraded to ba3 from b1

  - Baseline Credit Assessment, Upgraded to ba3 from b1

  - Long-term Bank Deposits, Upgraded to Ba3 from B1, Outlook
Remains Stable

  - Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3 from
B1, Outlook Remains Stable

  - Long-term Counterparty Risk Assessment, Upgraded to Ba2(cr)
from Ba3(cr)

  - Long-term Counterparty Risk Rating, Upgraded to Ba2 from Ba3

Affirmations:

  - Short-term Bank Deposits, Affirmed NP

  - Short-term Counterparty Risk Assessment, Affirmed NP(cr)

  - Short-term Counterparty Risk Rating, Affirmed NP

Outlook Action:

  - Outlook Remains Stable



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

DIA GROUP: Capital Increase to Be Included in Shareholder Vote
--------------------------------------------------------------
Expansion.com reports that LetterOne, a company contracted by
Russian investor Mikhail Fridman, has requested that the proposed
capital increase of EUR500 million foreseen in its takeover bid be
put to the vote at the shareholders' meeting of Dia.

According to Expansion.com, Dia announced, through a statement sent
to the National Securities Market Commission, LetterOne has
requested that this vote be included in the agenda of the
shareholders meeting to be held on March 20 in second call.

In this way, the shareholders of Dia will have to decide on the
expansion of EUR500 million proposed and insured by LetterOne and
the EUR600 million proposed by the board of directors of the group,
an operation insured by Morgan Stanley, Expansion.com discloses.

Dia Group is a Spanish supermarket chain.




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

YASAR HOLDING: Moody's Withdraws Caa1 CFR & Negative Outlook
------------------------------------------------------------
Moody's Investors Service has withdrawn Yasar Holding A.S.
(Yasar)'s Caa1 corporate family rating (CFR), Caa1-PD probability
of default rating (PDR) and the Caa1 senior unsecured rating on the
company's $250 million notes maturing in May 2020.

At the time of the withdrawal, the outlook was negative.

RATINGS RATIONALE

Moody's has decided to withdraw the ratings because of inadequate
information to monitor the ratings, due to the issuer's decision to
cease participation in the rating process.

Established in 1945, Yasar is a leading diversified Turkish
consumer products group with major interests in food and beverage
(F&B) and paint coatings, with two leading brands: Pinar and Dyo.
Yasar reported TRY4.7 billion ($1.1 billion) of sales and TRY507
million ($119 million) of operating profits in in the 12 months to
September 30, 2018, and operated 24 plants and more than 170,000
sales points across Turkey in 2017. The company is fully owned and
controlled by the Selcuk Yasar family.



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

FLYBE GROUP: Heathrow Boss Supports Virgin-Led Rescue
-----------------------------------------------------
Oliver Gill at The Telegraph reports that the boss of Heathrow has
come out in support of the Virgin Atlantic-led rescue of Britain's
biggest regional airline Flybe as the airline completed the sale of
its operating companies to the consortium.

According to The Telegraph, John Holland-Kaye believes a cut-price
takeover by Connect Airways, which also includes Southend Airport
owner Stobart and US private equity firm Cyrus Capital "could be a
really positive move".

It would allow Virgin Atlantic to create a "hub" at Heathrow, he
said, providing a "viable competitor" to British Airways owner IAG,
The Telegraph notes.

Flybe's 1p-a-share deal with Connect is under threat from a rival
proposal, announced and rejected on Feb. 20, from US airline Mesa
Air and private equity firm Bateleur Capital, The Telegraph
discloses.

As reported by the Troubled Company Reporter-Europe on Feb. 5,
2018, The Financial Times related that Flybe has been struggling
with cash flow as its credit card acquirers -- companies that
process customers' payments -- had imposed tougher requirements on
the airline, withholding cash as collateral in case the airline
found itself unable to pay.

                          About Flybe

Flybe Group PLC -- https://www.flybe.com/ -- operates regional
airline in Europe.  The Company operates in two segments: Flybe UK,
which comprises the Company's main scheduled United Kingdom
domestic and the United Kingdom-Europe passenger operations and
revenue ancillary to the provision of those services, and Flybe
Aviation Services (FAS), which focuses on providing aviation
services to customers, largely in Western Europe.  The FAS supports
Flybe's United Kingdom activities, as well as serving third-party
customers.

FLYBMI: BDO Partners Appointed as Administrators
------------------------------------------------
BDO LLP business restructuring partners Graham Newton --
graham.newton@bdo.co.uk -- Tony Nygate -- tony.nygate@bdo.co.uk --
and James Stephen -- james.stephen@bdo.co.uk -- have been appointed
as Joint Administrators over British Midland Regional Limited, the
East Midlands-based airline which operated as flybmi.

Flybmi operated 17 regional jet aircraft on routes to 25 European
cities.  The Company ceased to trade on February 16, 2019, at which
point all flights were cancelled with immediate effect.  The
majority of flybmi's 376 employees across the UK, Germany, Sweden
and Belgium have regrettably been made redundant, although some
have been retained to assist the Joint Administrators.

Customers who booked directly with flybmi should contact their
payment card issuer to obtain a refund for flights which have not
yet taken place.  Customers who have booked flybmi flights via a
travel agent or one of flybmi's codeshare partner airlines are
advised to contact their agent or airline for details of options
available to them.  Customers who have travel insurance should
contact their travel insurance provider to find out if they are
eligible to claim for cancelled flights and the procedure for doing
so.

Tony Nygate, BDO business restructuring partner, said: "As Joint
Administrators, we are taking all necessary steps to ensure
customers, staff and suppliers are supported through the
administration process.  Our job is to maximise recoveries and
minimise distress for all parties, acting as smoothly and swiftly
as possible.

"Customers can find information on the flybmi website regarding the
steps they need to take to apply for a refund from their payment
provider or travel company.  We are also working with the Company's
employees to provide them with guidance on how to make a claim for
monies which may be due to them.  In addition, we are contacting
suppliers to explain how to apply for monies owed to them."

Further information for customers may be found at: www.flybmi.com
Employees, suppliers, customers and other creditors may contact BDO
at BMR@bdo.co.uk.


GREENE KING: S&P Affirms BB+ (sf) Rating on Class B1/B2 Notes
-------------------------------------------------------------
S&P Global Ratings assigned its 'BBB (sf)' credit rating to Greene
King Finance PLC's new 3.593% fixed-rate GBP250 million fully
amortizing class A7 notes. S&P said, "At the same time, we have
affirmed our 'BBB (sf)' ratings on the outstanding class A notes.
We have also affirmed our 'BBB-(sf)' rating on the class AB2 notes,
and our 'BB+ (sf)' ratings on the class B1 and B2 notes. Our
ratings on all the notes address the timely payment of interest and
principal due, excluding any subordinated step-up coupons."

The issuer used the class A7 notes' issuance proceeds to grant a
loan to the borrower, which in turn used the loan proceeds to
acquire 177 pubs (164 managed pubs and 13 tenanted pubs) from
Greene King Brewing and Retailing Ltd. (GKB&R), which had
previously purchased about two thirds of them from Spirit Pub
Company (Leased) Ltd. and Spirit Pub Company (Managed) Ltd. (Spirit
Pub, collectively). The transaction helps Greene King's strategy of
consolidating the GK Retailing and Spirit Pub estates to simplify
its funding structure. Greene King's management team controls both
GK Retailing and Spirit Pub, so there will be minimal integration
efforts required after the pub transfer, as the pubs in transition
largely operate under the same formats. As part of its ongoing
disposal program, GK Retailing disposed of 16 managed pubs and 29
tenanted pubs from the securitization estate on or about the
closing date. The borrower also sold nine hotels to GKB&R on the
closing date.

Since S&P assigned preliminary ratings to this transaction, the
additional liquidity facility amount has been reduced to GBP35
million, compared to GBP41.8 million at the preliminary stage. Due
to the implementation of the U.K. bank ringfencing regulation, the
issuer also replaced HSBC Bank PLC by HSBC UK Bank PLC as liquidity
provider and Abbey National Treasury Services by the London branch
of Banco Santander S.A. as swap provider.

The net pub transfers to GK Retailing did not have a material
effect on the borrower's business fundamentals and as such, S&P
continues to view GK Retailing's business risk profile as fair.
  
The transaction will likely qualify for the appointment of an
administrative receiver under the U.K. insolvency regime. An
obligor default would allow the noteholders to gain substantial
control over the charged assets prior to an administrator's
appointment, without necessarily accelerating the secured debt.

RATING RATIONALE

Greene King Finance's primary sources of funds for principal and
interest payments on the notes are the loan interest and principal
payments from the borrower and amounts available from the liquidity
facility.

S&P's ratings on all the classes of notes address the timely
payment of interest and principal due, excluding any subordinated
step-up coupons. They are based primarily on its ongoing assessment
of the borrowing group's underlying business risk profile, the
integrity of the transaction's legal and tax structure, and the
robustness of operating cash flows supported by structural
enhancements.

DSCR Analysis

S&P's cash flow analysis serves to both assess whether cash flows
will be sufficient to service debt through the transaction's life
and to project minimum debt service coverage ratios (DSCRs) in
base-case and downside scenarios.

Base-Case Projections

S&P said, "We derive our base-case EBITDA and short-term operating
cash flow projections, and our assessment of the company's business
risk profile from our corporate methodology, based on which we give
credit to growth through the end of FY2020. From FY2021, we apply
our assumptions for capital expenditures (capex) and taxes, in line
with our global corporate securitization methodology, which we then
use to arrive at our projections for the cash flow available for
debt service." For GK Retailing, our assumptions were:

-- Maintenance capex (capitalized): GBP24 million and GBP23
million for FY2019 and FY2020, respectively. Thereafter S&P assumes
GBP21 million, based on the covenants and its cash flow
projections.

-- Development capex: GBP25 million and GBP28 million for FY2019
and FY2020, respectively. Thereafter, as S&P assumes no growth and
in line with its corporate securitization criteria, it considered
no development capex.

-- Tax: GBP8 million for FY2019 and GBP10 million thereafter.

S&P established an anchor of 'bb' for the class A and AB notes and
an anchor of 'bb-' for the class B notes based on:

-- S&P's assessment of GK Retailing's fair business risk profile,
which it associates with a business volatility score of 4; and

-- The minimum DSCR achieved in S&P's base-case analysis, which
considers only operating-level cash flows, but does not give credit
to issuer-level structural features (such as the liquidity
facility).

The notes are fully amortizing, with the amortization schedule of
the class AB and B notes being significantly back-loaded.

Downside DSCR Analysis

S&P said, "Our downside DSCR analysis tests whether the
issuer-level structural enhancements improve the transaction's
resilience under a stress scenario. Considering GK Retailing's and
U.K. pubs' historical performance during the financial crisis, in
our view a 15% decline in the managed segment's EBITDA and a 25%
decline in the tenanted segment's EBITDA from our base case are
appropriate for the borrower's particular business. This results in
a blended EBITDA decline of 17% based on the repartition of each
business in the portfolio currently and on a probable projection in
the future. We applied the decline to the base-case at the point
where we believe the stress on debt service would be greatest.

"Our downside DSCR analysis resulted in a strong resilience score
for the class A notes, and a satisfactory resilience score for the
class AB and B notes."

The combination of a strong resilience score and the 'bb' anchor
derived in the base-case results in a resilience-adjusted anchor of
'bbb-' for the class A notes. Similarly, the combination of a
satisfactory resilience score and the 'bb' and 'bb-' anchors
derived in the base-case results in resilience-adjusted anchors of
'bbb-' and 'bb+' respectively, for the class AB and B notes.

The liquidity facility amounts available to the issuer for both the
class A and AB notes represent significant levels of liquidity
support, measured as a percentage of their expected outstanding
balances post issuance. Given that the full two notches above the
anchor have been achieved in the resilience-adjusted anchor of the
class A and AB notes, S&P considers a one-notch increase to their
resilience-adjusted anchor warranted. Finally, in spite of their
apportioned liquidity support from the issuer's liquidity facility
being marginally above 10%, measured as a percentage of the current
outstanding balance of the class B notes, and their
resilience-adjusted anchor being two notches above their anchor,
S&P did not grant an additional notch to the junior class B notes.
In a severe cash flow disruption scenario, S&P believes that the
class B notes' liquidity support could be partly utilized by the
issuer to service the class A or class AB notes. Considering this
factor, S&P deemed that the margin of safety above its 10%
threshold was insufficient.

Modifiers And Comparable Analysis

S&P applied a one-notch downward adjustment to the class AB notes
to reflect their subordination and weaker access to the security
package compared to the class A notes.

COUNTERPARTY RISK

S&P's ratings are not currently constrained by the ratings on any
of the counterparties, including the liquidity facility,
derivatives, and bank account providers.

OUTLOOK

A change in S&P's assessment of the company's business risk profile
would likely lead to a rating action on the notes as its would
require higher DSCRs for a weaker business risk profile to achieve
the same anchor.

UPSIDE SCENARIO

Due to the increasingly competitive operating environment and
declining margins, S&P is unlikely to raise its business risk
assessment over the next two years. A higher business risk
assessment would require GK Retailing to demonstrate a track record
of consistently strong like-for-like sales growth that exceeds
inflation and improve significantly its EBITDA margin based on an
improving EBITDA per pub on a sustainable basis.

DOWNSIDE SCENARIO

S&P said, "Following our reassessment of GK Retailing's business
risk profile in August 2018, we do not foresee further pressure on
its business risk in the near term.

"We could also lower our anchor or the resilience-adjusted anchor
for the class A7 notes if our minimum projected DSCR gets closer to
the lower end of the 1.30:1-1.80:1 range in our base-case DSCR
analysis or falls below 1.30:1 in our downside scenario. This could
happen if a deterioration in trading conditions reduces cash flows
available to the borrowing group to service its loans."

Potential Effects Of Proposed Criteria Changes

S&P said, "Our ratings are based on our applicable criteria,
including "Counterparty Risk Framework Methodology And
Assumptions," published on June 25, 2013. However, these criteria
are under review. As a result of this review, we may amend our
analysis of counterparty risk. These changes may affect the ratings
on the outstanding bonds issued under this corporate securitization
transaction. Until this time, we will continue to rate and surveil
these corporate securitization bonds using our existing criteria."


  RATING ASSIGNED

  Greene King Finance PLC

  Class           Rating       Amount (mil. GBP)
  A7              BBB (sf)              250.0

  RATINGS AFFIRMED

  Greene King Finance PLC

  Class     Rating

  A1        BBB (sf)
  A2        BBB (sf)
  A3        BBB (sf)
  A4        BBB (sf)
  A5        BBB (sf)
  A6        BBB (sf)
  AB2       BBB- (sf)
  B1        BB+ (sf)
  B2        BB+ (sf)


LAING O'ROURKE: Bosses Get Rise in Payouts Despite Losses
---------------------------------------------------------
Jack Torrance and Oliver Gill at The Telegraph report that bosses
at Britain's largest private construction business enjoyed a sharp
rise in payouts last year despite ongoing losses and a bumpy
refinancing that forced it to file its accounts months after the
legal deadline.

Five directors at Laing O'Rourke, which has worked on major
projects such as Crossrail and Heathrow Terminal 5, were paid
GBP3.4 million in salaries and short-term incentives in the year to
March 2018, compared with just GBP1.6 million in the previous 12
months, The Telegraph discloses.

According to The Telegraph, the accounts were due to be filed in
September but auditors refused to sign off on the company as a
going concern until it refinanced GBP177 million of debt in its UK
business.

They were finally published last week, The Telegraph notes.
Revenues fell from GBP3.2 billion to GBP2.9 billion, The Telegraph
states.


[*] BDO Completes Merger with Moore Stephens
--------------------------------------------
BDO has completed its merger with Moore Stephens LLP, creating the
largest UK accountancy and business advisory firm focused on
mid-sized, entrepreneurially-spirited businesses.

From February 4, 2019, the merged firm will operate under the BDO
brand and as part of BDO's international network, which has 80,000
people and revenues of $9bn across 162 countries.

In the UK, BDO LLP now has a combined workforce of 5,000 people
across 17 locations, delivering revenues of GBP590 million.  

The merger, which relates to the London, Birmingham, Reading,
Bristol and Watford offices of Moore Stephens LLP, will make BDO
the third biggest auditor of listed companies, strengthening its
position as calls to improve quality and competition at the upper
end of the audit market continue.

In addition, it cements BDO's ranking as the UK's leading auditor
to AIM-listed companies and will enhance its expertise in sectors
including financial services, insurance and shipping.

Paul Eagland, Managing Partner of BDO, said:

"The audit market is going through a significant period of reform
and our clients are facing unprecedented uncertainty as Brexit
looms and global trade undergoes fundamental changes.
Notwithstanding these uncertainties I'm confident that a
combination of our 5,000 people and our reputation for trust and
quality, puts us in a fantastic position to help our clients and
our people to capitalise on the opportunities that always accompany
such change.

"Our clear sense of purpose and growth strategy will help our
entire team make this merger a huge success."

Simon Gallagher, former Managing Partner at Moore Stephens LLP,
joins BDO's Leadership Team as Head of Advisory.  Formerly Moore
Stephens LLP's Chief Operating Officer, Jon Randall also joins the
Leadership Team as Head of Integration and Transformation.  

Mr. Gallagher said: "From the moment we started our conversations,
our shared ambition was to create a fully-integrated firm that our
people are proud of and one which leads in serving what we call the
UK's ‘economic engine' -- the entrepreneurially-spirited,
mid-sized businesses that are driving UK growth.

"This merger is one of growth and creates a new force in the
market, enabling us to challenge our existing competition and
deliver an increasingly impressive range of services to help our
people and clients succeed."


[*] C. Kandel Joins Morrison & Foerster's London Office
-------------------------------------------------------
BankruptcyData.com reported that Morrison & Foerster announced that
Christopher Kandel had joined the firm's London office as a partner
in its Finance practice.  He comes to MoFo from Latham & Watkins,
where he served as co-chair of the global banking practice.

Mr. Kandel's practice spans a broad spectrum, including European
and U.S. senior, second lien and mezzanine financings, high yield
securities, structured loans, capital markets and restructurings.
Over the course of his career, he has advised on many significant
matters, including numerous European acquisition financings, the
largest LBO financing in Asia, the second-ever high yield issue in
Japan, the first international syndicated loan to a corporate in
Turkey, the first super-senior revolver in Europe, the first pari
passu secured bank/bond issue in Europe, and the first
western-sponsor style leveraged buyout financing in Russia.

"Chris is a market-leader with more than 20 years of experience in
the London finance market," said Larren Nashelsky, chair of
Morrison & Foerster.  "He has extensive experience leading
leveraged finance and restructuring matters under both English and
U.S. law, setting him apart in the market and further building our
ability to support our clients with their most complex cross-border
financial transactions.  We are delighted that Chris has decided to
join our growing London team, and we are certain he will contribute
greatly to our increasingly robust global Finance practice."

"Chris's addition underscores the momentum of our London office, as
we continue our transformation following two years of exceptional
growth," added Paul Friedman, Morrison & Foerster's managing
partner for Europe.  "Given his tremendous reputation in the
market, I am delighted that our continued progress enables us to
continue to attract new partners of Chris's caliber."

Mr. Kandel commented, "I believe the acquisition finance market is
looking for more choice.  Morrison & Foerster has all the right
elements in London to make an impact -- great M&A, real estate,
funds and competition lawyers, a growing finance team and, for
deals that run into problems afterwards, a standout U.S./London
restructuring practice.  The vision here is compelling."

Mr. Kandel earned his B.A. from Yale University (magna cum laude
with distinction) and his J.D. from Cornell Law School (cum laude).
He is qualified as a solicitor in England and Wales, and is
admitted to the bar in California, the District of Columbia and
Maryland.


[*] UK: High Street Retailers Suffer Worst January Since 2013
-------------------------------------------------------------
An early surge in in-store shopping in the first week of the month
couldn't rescue high street retailers from the worst January since
2013, figures released on Feb. 8 by accountancy and business
advisory firm BDO LLP reveal.

According to BDO's High Street Sales Tracker (HSST), in-store high
street sales dropped -0.2% in January from a base of +0.6 in the
same period last year, as deep-seated discounting failed to prevent
a lacklustre start to 2019.

January's decline marked the twelfth consecutive month without
growth for in-store like-for-like sales and the worst January since
2013, according to BDO.  The poor performance follows the high
street's worst year on record as in-store sales reported negative
growth every month from February to December during 2018.

Showing initial signs of promise, heavy discounting produced good
results in the first week of January with total in-store
like-for-like sales increasing by +5.12% from a positive base of
+1.47% for the equivalent week last year.

However, weeks two to four saw like-for-like sales dip into
negative territory. With concerns about the general economic
outlook close to hitting levels not seen since the crash in 2008,
the deterioration in consumer confidence offset the potential
impact of lingering discounts as shoppers reined in in-store
spending.

Though both fashion and homeware in-store like-for-like sales were
marginally up by +0.6% in January, lifestyle suffered the cruellest
decline with in-store sales falling by -2.0% in January.  This
result marks the twelfth consecutive month of negative results for
in-store lifestyle like-for-like sales.  Despite a poor start to
the year for the high street, non-store like-for-like sales grew by
+19.1% this month from a strong base of +17.4%.

Sophie Michael, Head of Retail and Wholesale at BDO LLP, said: "It
has been a calamitous start to the year for the high street.
Deeper and earlier discounts may have enticed consumers to shop in
early January but this soon disappeared and has put increasing
pressure on retailers that are already being stretched paper thin.


"While some reports have referred to an uptick in consumer
spending, it's clear that this is not being seen by the UK high
street especially in non-food spending.  Looking ahead, innovation
will be key in creating an attractive shopping experience and
embracing retail theatre to lure consumers back in store."

                         About BDO LLP

BDO LLP operates in 17 locations across the UK, employing 5,000
people offering tax, audit and assurance, and a range of advisory
services.  BDO LLP has underlying revenues of GBP590 million and is
the UK member firm of the BDO International network.


[*] UK: Manufacturing Output Hits 15-Month Low Amid Brexit
----------------------------------------------------------
The UK economy has had a stuttering start to 2019, with output in
the manufacturing sector plunging to its lowest point since October
2017, according to new research from accountants and business
advisors BDO LLP.

BDO's Manufacturing Index, which tracks business output growth in
the sector, fell by 0.23 points to 98.37 in January.  Although
manufacturing firms have been ramping up their preparations in
anticipation of a disorderly Brexit, January's decline points to an
underlying weakness in the sector.  It is likely that stockpiling
activity has masked an even greater fall in output than is
suggested by these figures.  

In the month that Theresa May saw her proposed EU Withdrawal
Agreement crushed by MPs, UK business confidence also suffered a
significant decline.  BDO's Optimism Index, which tracks firms'
expectations of their performance over the coming months, fell from
100.16 to 99.98 in January.  This marks a decrease of 2.11 points
from January 2018 and is the first time that the index has fallen
below 100 since December 2016.

The manufacturing sector was worst hit by the collapse in
confidence, with BDO's Manufacturing Optimism Index falling 0.5
points to 104.4 in January.  This reflects concerns raised by
manufacturers including Nissan, Airbus and Siemens, who have
repeatedly warned that uncertainty around the UK's future
relationship with the EU is not helping companies plan for the
future.

The UK's services sector -- which is critical to the success of the
economy, accounting for approximately 80 per cent of GDP -- also
experienced a malaise.  At 97.10, output remains well below the
long-term average growth rate of 100, despite witnessing a marginal
improvement in January.  

Commenting on the BDO Business Trends Report's findings, Peter
Hemington -- peter.hemington@bdo.co.uk -- Partner at BDO LLP,
said:

"Since the EU referendum result in July 2016, our indexes show that
business output has declined by 2.45 points while confidence has
slumped by 2.8 points.

"Manufacturing firms have been ramping up their preparations for a
disorderly Brexit, in large part through the stockpiling of
imported goods.  This has had the effect of inflating activity
levels.  So the underlying slowdown is probably rather worse than
suggested by our headline figures.  Stripping out the impact of
these Brexit preparations, there is a real risk that the economy
will contract in the first quarter.

"It's too late to do anything about this now.  But a disorderly
Brexit would be far worse than the current relatively mild
slowdown, possibly disastrously so.  With now just 46 days to go,
we are concerned it looks more likely than ever that we will exit
the EU without a deal.  We believe that the government should seek
an extension to Article 50 as soon as practicable to give itself
the time to reach an acceptable Brexit compromise."  

To download BDO's New Economy report and find out more visit
www.neweconomy.bdo.co.uk  

                          About BDO LLP

BDO LLP operates in 17 locations across the UK, employing 5,000
people offering tax, audit and assurance, and a range of advisory
services.  BDO LLP has underlying revenues of GBP590 million and is
the UK member firm of the BDO International network.



                           *********


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.


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