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

                          E U R O P E

          Wednesday, May 1, 2019, Vol. 20, No. 87

                           Headlines



F R A N C E

FONCIA MANAGEMENT: Moody's Rates New EUR220MM Credit Facility 'B2'


G E R M A N Y

REVOCAR UG 2019: DBRS Assigns BB Rating on Class D Notes
SCHLECKER: Court Rejects Sentence Appeal of Owner's Children
SUEDZUCKER AG: S&P Raises EUR70MM Hybrid Bonds Rating to 'B+'


I R E L A N D

DONAL MACNALLY: Examiner Granted 30 Days to Form Rescue Scheme
EIRCOM HOLDINGS: Fitch Cuts EUR950MM Sec. Debt Rating to BB-(EXP)
GENERAL PRACTITIONERS ASSO: Owes Creditors EUR345,000


N E T H E R L A N D S

DELFT BV 2019: DBRS Finalizes B(low) Rating on Class F Notes


N O R W A Y

B2HOLDING ASA: Moody's Cuts Issuer Ratings to B1, Outlook Stable


P O L A N D

ZABRZE: Fitch Affirms BB+ LongTerm IDRs, Outlook Stable


R U S S I A

GAZ GROUP: Deripaska Says U.S. Sanctions May Lead to Bankruptcy
KRASNOYARSK REGION: Fitch Affirms LT IDRs at BB+, Outlook Stable
SISTEMA: S&P Alters Outlook to Positive & Affirms 'B+' ICR
X5 RETAIL: S&P Affirms 'BB' Issuer Credit Rating, Outlook Stable


S E R B I A

NAPREDAK POZEGA: Bankruptcy Agency to Auction Assets on May 30


S P A I N

FRUTAS HERMANOS: Files for Bankruptcy, Owes EUR6 Million
MBS BANCAJA: Fitch Corrects Dec. 12 Ratings Release
PYMES BANESTO 2: Fitch Cuts Class C Notes to Csf; Withdraws Ratings


U N I T E D   K I N G D O M

ARROW GLOBAL: Moody's Alters Outlook on Ba3 Debt Ratings to Neg.
ENSCO ROWAN: S&P Affirms B- ICR on Merger Completion, Outlook Neg.
FOUR SEASONS: Parent Companies File for Administration
NEMUS II PLC: Fitch Affirms CC Rating on GBP1MM Class F Notes
ROWAN COS: S&P Cuts ICR to 'B' on Merger with Ensco, Outlook Neg.

TOMORROW'S PEOPLE: Creditors to Get Less Payout Than Expected
VTB CAPITAL: Moody's Assigns Ba3 LT Issuer Ratings, Outlook Stable

                           - - - - -


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F R A N C E
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FONCIA MANAGEMENT: Moody's Rates New EUR220MM Credit Facility 'B2'
------------------------------------------------------------------
Moody's Investors Service has affirmed the B2 Corporate Family
Rating and B2-PD Probability of Default Rating of Foncia Management
SAS, parent company of the Foncia group, a leading provider of
residential real estate services primarily in France. Concurrently,
Moody's has assigned B2 instrument ratings to Foncia's new EUR220
million revolving credit facility and EUR50 million senior secured
acquisition/capex facility and affirmed the B2 rating of the
company's senior secured first-lien EUR899 million term loan B3,
which is being increased to EUR1,077million. The outlook remains
stable.

RATINGS RATIONALE

The rating action follows the company's announcement that it
intends to borrow an incremental EUR178 million under its senior
secured first-lien term loan B3 and, with lender consent, make
certain amendments to the terms of its RCF and ACF, including
extending the current maturity date of the RCF to March 2023.
Proceeds from the new loan tranche will be used to repay EUR175
million drawing under the RCF.

The company's B2 CFR reflects Foncia's (i) revenue concentration in
France, which accounted for approximately 90% of revenues in 2018,
and in residential real estate services, which is subject to
regulatory risk; (ii) relatively high financial leverage, measured
as Moody's-adjusted gross debt to EBITDA, of 5.9x,based on
unaudited figures as at 31 December 2018; and (iii) Foncia's
acquisitive growth strategy, to support low organic growth, which
may limit deleveraging when acquisitions are debt-financed.

Positively, the ratings reflect Foncia's (i) leading position in
the fragmented French residential real estate services market which
provides consolidation opportunities through acquiring smaller
players; (ii) good revenue visibility, arising from the recurring
nature of income in its core divisions - Lease Management (LM),
Joint Property Management (JPM) and Renting ; and (iii) solid
financial performance with margin improvement driven by cost
reduction programmes and track record of positive free cash flow
generation which is expected to continue.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook reflects Moody's expectations of Foncia's
continued EBITDA growth driven by a combination of organic growth
and contribution from smaller bolt-on acquisitions in the absence
of a substantial change in operational or regulatory environment.
It also reflects the rating agency's expectations of continued
successful integration of the acquisitions without negative impact
on Foncia's leverage or liquidity.

WHAT COULD CHANGE THE RATING UP/DOWN

Positive ratings pressure could arise if Foncia's credit metrics
were to improve as a result of stronger-than-expected operational
performance, leading to (i) Moody's adjusted debt/EBITDA ratio
(pro-forma for acquisitions) falling sustainably below 5.0x; and
(ii) and the company's FCF/debt ratio increases towards 10%.

Negative pressure could occur as a result of (i) Moody's adjusted
debt/EBITDA ratio (pro-forma for acquisitions) rising above 6.5x;
or (ii) free cash flow turning negative with a negative impact on
liquidity.

LIQUIDITY

Moody's expects Foncia to maintain good liquidity profile over the
next 12-18 months. Pro-forma for the transaction, the company's
liquidity consists of EUR58 million cash on balance sheet and full
availability of its EUR220 million RCF and EUR50 million ACF. There
is a single springing leverage covenant on the RCF if at least 35%
of facility is drawn with a comfortable headroom (net senior
leverage of 8.1x until 2022).

PRINCIPAL METHODOLOGY

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

CORPORATE PROFILE

Headquartered in France, Foncia is a leading provider of
residential real estate services through a network of approximately
620 branches in its core RRES and Brokerage activities. Foncia's
core services include JPM (29% of 2018 revenues), LM and Renting
(31%) and Real Estate Brokerage (16%). During 2018 Foncia generated
revenues of around EUR880 million and a reported EBITDA of EUR191
million resulting in an EBITDA margin of 21.7%. The company is
owned by a consortium led by private equity fund Partners Group.




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G E R M A N Y
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REVOCAR UG 2019: DBRS Assigns BB Rating on Class D Notes
--------------------------------------------------------
DBRS Ratings GmbH assigned ratings to the following bonds issued by
RevoCar 2019 UG (haftungsbeschrankt) (the Issuer):

-- AAA (sf) to the Class A Notes
-- A (sf) to the Class B Notes
-- BBB (sf) to the Class C Notes
-- BB (sf) to the Class D Notes

DBRS does not rate the Class E Notes in the transaction.

The ratings are based on DBRS's review of the following analytical
considerations:

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

  -- The ability of the transaction to withstand stressed cash flow
assumptions and repay investors according to the terms under which
they have invested.

  -- The Originator/Servicer's capabilities with respect to
originations, underwriting, and servicing.

  -- An operational risk review of Bank 11 fur Privatkunden und
Handel GmbH (Bank11), which DBRS deems to be an acceptable
servicer.

  -- The transaction parties' financial strength with regard to
their respective roles.

  -- The sovereign rating of the Federal Republic of Germany,
currently rated AAA with a Stable trend by DBRS.

  -- The consistency of the transaction's legal structure with
DBRS's Legal Criteria for European Structured Finance Transactions
methodology, the presence of legal opinions that address the true
sale of the assets to the Issuer and non-consolidation of the
Issuer with the seller.

Notes: All figures are in Euros unless otherwise noted.


SCHLECKER: Court Rejects Sentence Appeal of Owner's Children
------------------------------------------------------------
Xinhua News Agency reports that the children of former German
drugstore chain operator Anton Schlecker will have to face prison
sentence after the German Federal Court of Justice (BGH) rejected
their appeal as "predominantly unfounded" on April 25.

Lars and Meike Schlecker, 47 and 45 years old, had appealed against
a verdict of the Stuttgart Regional Court in 2017 that sentenced
them to almost three years' imprisonment for embezzlement, wrongful
insolvency, bankruptcy and aiding and abetting their father's
bankruptcy, Xinhua relates.

With 15,000 branches, Schlecker was once Germany's largest
drugstore chain, employing around 25,000 employees, Xinhua notes.
After years of financial losses, however, the company had to file
for insolvency in January 2012, Xinhua recounts.

According to the 2017 conviction of the Stuttgart court, the
Schlecker children had, only days before the company went bankrupt,
illegally paid out profits from the logistics company LDG that
belonged to Schlecker, Xinhua discloses.

Although the German Federal Court of Justice (BGH) rejected the
appeal, it reduced the Schlecker children's prison sentence by one
and two months because the Stuttgart court had not considered "the
defendants' lack of individual guilt in their favor", Xinhua
states.


SUEDZUCKER AG: S&P Raises EUR70MM Hybrid Bonds Rating to 'B+'
-------------------------------------------------------------
S&P Global Ratings raised its issue rating to 'B+' from 'CC' on
Suedzucker AG's EUR700 million subordinated hybrid bond issued by
its financing subsidiary Suedzucker International finance B.V.

This follows its successful covenant test based on the group's
consolidated audited accounts. According to Suedzucker's 2019
consolidated annual report, Suedzucker International Finance
doesn't expect it will record a cash-flow event or cancel its
remuneration payment on the hybrid instrument.

S&P said, "On April 2, 2019, Suedzucker AG (BBB-/Watch Neg/A-3) was
placed on CreditWatch negative, reflecting our opinion that the
company will likely post weaker-than-expected credit metrics and
cash flow generation in fiscal 2020 (fiscal year ends February
2020) due to weak sugar prices and higher restructuring costs. If
we downgrade Suedzucker AG following the CreditWatch resolution, we
will still maintain the four notches difference between the issuer
credit rating and the rating on the hybrid."




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I R E L A N D
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DONAL MACNALLY: Examiner Granted 30 Days to Form Rescue Scheme
--------------------------------------------------------------
Simone Smith at The Irish Times reports that the examiner appointed
to Donal MacNally Opticians, Dublin's largest opticians chain, has
been granted an extension of 30 days by Judge Jacqueline Linnane to
allow him further time to form a scheme aimed at saving the
company.

The Circuit Civil Court was told last month that Donal MacNally
Opticians and an associated company, Von Opticians, were insolvent
and unable to meet their debts, The Irish Times recounts.

The companies had sought the protection of the court after racking
up losses of EUR4 million, The Irish Times relates.  Judge Linnane
appointed chartered accountant Myles Kirby as the examiner tasked
with attempting to rescue the companies, The Irish Times
discloses.

The court had heard that the companies which employ 24 staff and
have stores in Clondalkin, Swords, Malahide, Sutton and Navan, ran
into trouble due to increased competition and changes to the
running of the business, The Irish Times relays.

Judge Linnane had previously stated that the scheme of arrangement
would have to pay dividends to the historical creditors and ensure
the company had a reasonable prospect of survival, The Irish Times
notes.

Mr. Rory Kennedy, for Brady Kilroy Solicitors, asked Judge Linnane
to extend the examinership until May 30 in order to allow Mr. Kirby
time to complete his report, according to The Irish Times.


EIRCOM HOLDINGS: Fitch Cuts EUR950MM Sec. Debt Rating to BB-(EXP)
-----------------------------------------------------------------
Fitch Ratings has affirmed Irish telecoms incumbent eircom Holdings
Limited's Long-Term Issuer Default Rating at 'B+' with a Stable
Outlook, and placed the existing senior secured rating on Rating
Watch Negative. The RWN reflects eir's recent announcement to
upsize the debt and dividend payment as part of its refinancing,
weakening recovery prospects.

Fitch has also downgraded the expected rating on eir's planned
EUR950 million debt issue, comprising both loans and notes, due in
2026, by one notch to 'BB-(EXP)' from 'BB(EXP'). After the
transaction, t he senior secured rating will be aligned with the
expected 'BB-' rating, reflecting the pari passu ranking of the new
loans and notes with all present and future senior secured
obligations.

The company will use the proceeds to refinance its existing EUR700
million bond due in May 2022 as well as finance a special dividend
of EUR400 million. The assignment of a final rating is contingent
upon successful completion of the refinancing and the receipt of
final documents conforming to the information already received.

KEY RATING DRIVERS

Temporary Leverage Pressure: Fitch expects eir's proposed
refinancing of the EUR700 million bond due 2022 and subsequent
payment of a EUR400 million special dividend to push funds from
operation adjusted net leverage to above 5.0x . Management plan to
fund the transactions through a combination of senior secured loans
and senior secured notes, equal to EUR950 million, temporarily
drawing the EUR100 million revolving credit facility with an
additional EUR60 million of cash from the balance sheet. As a
result, Fitch expects a breach of its FFO adjusted net leverage
downgrade sensitivity of 5.0x for the financial year ending June
2019.

Expected Deleveraging: Operational improvements achieved during 1H
FY19, with successful cost-cutting supporting profitability and
ongoing cash flow generation should mean leverage pressures will be
temporary. Growing EBITDA and materially reduced restructuring
costs should support FFO improvements beyond FY19, allowing eir to
reduce FFO adjusted net leverage to below 5.0x in FY20 . The IDR
will come under negative pressure should the company fail to
de-lever below 5.0x. An increasing cash balance by FY21 increases
the potential for further equity outflows, which may compromise
deleveraging.

Ownership Change Broadly Positive: In April 2018, Xavier
Niel-controlled NJJ and Iliad together acquired a 64.5% stake in
eir. The emphasis on operational efficiency, in line with Mr.
Niel's record in other countries, is broadly positive for eir's
credit profile. The new management have completed its staff
reduction programme while also implementing significant process
simplification and IT improvements, together with customer service
and network investment. These changes over the next two to three
years should further improve eir's financial performance, although
some execution risks in achieving these ambitious plan remain.

Competitive Irish Market: eir continues to defend its market
position against intense competition. In 1HFY19, underlying revenue
fell 0.8%, while EBITDA increased 13%. The company's convergence
strategy has underpinned the introduction of higher-value customer
bundles, with 31% of eir's customers on a triple/quad play bundle.
Its mobile subscriber base is altering with 53% of eir's mobile
customers now on a post-paid contract. Fitch expects average
revenue per user (ARPU) to gradually improve in the next two years
given the emphasis on higher-value products, continued fibre
take-up, against the backdrop of a stronger economy in Ireland.

FCF Generation to Improve: Fitch expects a reduction in personnel
costs, among other things, to support margin expansion into FY19.
FFO adjusted net leverage has historically been constrained by
limited EBITDA growth and weak free cash flow generation. Over the
next three years, growing EBITDA from stabilising revenue and a
lower cost base with falling restructuring costs and a stable capex
profile should increase FCF and therefore eir's deleveraging
capacity.

Ongoing Capex: Fitch expects capex excluding spectrum at around 23%
of FY19 revenue, before easing to 21% until FY22. eir initiated a
EUR150 million mobile network investment programme, which includes
site upgrades across 2,000 towers, coupled with the build of 500
new towers, expected to be completed over two years. At the same
time, eir announced a five-year, EUR500 million plan to expand its
FTTH footprint across urban and suburban Ireland. Historically, eir
has invested heavily in its network to become Ireland's leading
fibre and fixed-mobile convergence network. LTE mobile deployment
covered 96% of the population as at December 2018 and the company's
fibre network (mainly fibre to the cabinet) passed 1.86 million
premises (79% of Irish premises), connecting 670,000 customers,
with a customer penetration rate of 36%.

FTTH Roll-Out Plans: eir intends to roll out FTTH technology more
extensively into urban and suburban areas, challenging Virgin
Media's cable service. Starting in July 2019, this EUR500 million
project targets the rollout of FTTH to an additional 1.4 million
premises across the country. Fitch believes that this will help
cement eir's position as Ireland's leading fixed-network provider,
improve its broadband market share and ultimately grow revenue. In
its view, eir's withdrawal from the National Broadband Plan (NBP)
is neutral for the company's credit profile given that expected
winners, such as enet, are likely to rely on eir's infrastructure
to meet its NBP obligations.

DERIVATION SUMMARY

Relative to its European telecoms incumbent peers, Royal KPN N.V
(BBB/Stable) and Telenet Group Holding N.V (BB-/Stable) eir has
higher leverage, smaller size, a largely domestic focus, and a lack
of leadership in the mobile segment. Its EBITDA margin is similar
to peers, but pre-dividend FCF margin has historically been lower
due to higher capex as a percentage of revenue and cash
restructuring costs. Leveraged peers include Wind Tre SpA
(B+/Stable, standalone) and DKT Holdings ApS (BB-/Stable), with eir
maintaining higher margins than Wind but in line with DKT and
displaying materially better deleveraging capacity compared with
both.

The ratings also reflect eir's position as the leading telecoms
operator in a competitive Irish market. Fitch believes the recent
change in ownership is broadly credit-positive given the strategic
focus on customer service, network investment and cash flow
generation, albeit with execution risks. Growing EBITDA from
stabilising revenue and a lower cost base with declining
restructuring costs should increase eir's deleveraging capacity in
the medium term.

KEY ASSUMPTIONS

Fitch's Key Assumptions Within Its Rating Case for the Issuer

  - Revenue declines of 1.8% in each of the next two years,
    followed by gradual stabilisation;

  - EBITDA margin expansion to 45.6% in 2019 due to cost saving
    initiatives;

  - Capex excluding spectrum as a percentage of revenue of around
    23% in 2019 and 21% beyond, with an additional spectrum
payments
    anticipated in 2021;

  - Dividends maintained at 2018 levels;

  - No forecast M&A.

Key Recovery Rating Assumptions

  - The recovery analysis assumes that eir would be considered a
    going concern in bankruptcy and that the company would be
    reorganised rather than liquidated. Fitch has assumed a
    10% administrative claim in the recovery analysis.

  - eir's recovery analysis assumes a post-reorganisation EBITDA
    of EUR413 million, 25% below the company's reported December
    2018 LTM EBITDA.

  - For its recovery analysis, Fitch applies a distress enterprise
    value multiple of 5.0x, which is comparable with peers and
    reflects a conservative assumption based on the 6.5x
    multiple paid for eir in 2017.

  - Fitch has included in this analysis total senior secured debt
    of EUR2,650 million, comprised of eir's EUR1,600 million
Facility
    B, proposed EUR950 million senior secured loans and notes and
fully
    drawn EUR100 million RCF, all ranked pari passu. This results
in
    a recovery percentage of 70%, an 'RR3' rating (previously
'RR2'/73%
    before the debt issuance was increased by EUR100 million). The
    senior secured debt is therefore rated one notch higher than
the
    IDR.

RATING SENSITIVITIES

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

FFO adjusted net leverage expected to remain at or below 4.5x on a
sustained basis when combined with:

  - FCF margin expected to be consistently in the mid-single digit
    range, with ongoing revenue stability and EBITDA improvement;

  - Strengthened operating profile and competitive capability
    demonstrated by stable fixed broadband market share with
    increasing fibre penetration and mobile market share.

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

  - FFO adjusted net leverage above 5.0x on a sustained basis. Slow

    progress with deleveraging to below 5.0x may also be negative;

  - Weaker cash flow generation with FCF margin expected to remain

    in the low single digit percentages, driven by lower EBITDA or
    higher capex;

  - A deterioration in the regulatory or competitive environment
    leading to a material reversal in positive operating trends.

LIQUIDITY AND DEBT STRUCTURE

Adequate Liquidity: Liquidity at end-December 2018 was supported by
EUR219 million of cash, an undrawn EUR150 million RCF maturing in
2022 (revised down to EUR100 million from March 2019) and
forecasted positive pre-dividend FCF of EUR40 million-EUR150
million over the next four years. Given the proposed refinancing of
eir's EUR700 million loans due in 2022, the next significant debt
maturity has been pushed back to 2024. Additionally, as part of the
transaction, eir will temporarily draw its RCF. However, Fitch
expects this will be cleared following completion of the
refinancing.


GENERAL PRACTITIONERS ASSO: Owes Creditors EUR345,000
-----------------------------------------------------
Eilish O'Regan at Independent.ie reports that the National
Association of General Practitioners (NAGP) owed creditors
EUR345,000 in 2018, according to its last financial statement.

According to Independent.ie, the GP body, which now has an
uncertain future following the mass resignation of its president
Dr. Maitiu O Tuathail and council due to their concerns about
"serious governance issues", attempts to put together a "financial
rescue package".

The organization, which was set up in 2013 as GPs felt the
financial strain of recession cuts in HSE fees, recorded a
EUR33,000 deficit, according to its financial statements to the end
of March 2018, Independent.ie notes.

The NAGP, which has around 2,000 members, has seen a fall-off in
subscriptions, which is adding to its difficulties, Independent.ie
discloses.

It is facing the risk of liquidation or examinership,
Independent.ie states.

A report on governance by Ampersand, which was commissioned by the
NAGP, recommended a range of changes to tighten up how it is run,
Independent.ie says.

One of the founding GPs, Dr. Andrew Jordan, who is a director, said
they will "strive to ensure that a rescue package will be in place
within the next two weeks which will facilitate the continuation of
the organisation and implement the recently commissioned Ampersand
governance report", Independent.ie relays.

Independent TD Dr Michael Harty, who is a long-time member of the
NAGP, said on March 31 it is unclear what will happen to the
organisation in the future, according to Independent.ie.




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N E T H E R L A N D S
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DELFT BV 2019: DBRS Finalizes B(low) Rating on Class F Notes
------------------------------------------------------------
DBRS Ratings Limited finalized the provisional ratings on the
following notes issued by Delft 2019 B.V.:

-- Class A at AAA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (low) (sf)
-- Class D at BBB (low) (sf)
-- Class E at BB (low) (sf)
-- Class F at B (low) (sf)
-- Class G at CCC (sf)

Additionally, the Class B to G notes were all maintained Under
Review with Positive Implications (UR-Pos.).

The UR-Pos. rating actions reflect the publication of the "European
RMBS Insight: Dutch Addendum - Request for Comment" (the Updated
Methodology) on March 6, 2019.

The Updated Methodology presents the criteria with which Dutch
residential mortgage-backed securities ratings and, where relevant,
Dutch covered bonds ratings are assigned. DBRS updated its house
price indexation and market value decline rates to reflect data
through the third quarter of 2018.

This update is deemed to be material as the assumptions changed are
deemed to be key assumptions, and for Delft 2019 the positive
rating changes may be up to two notches.

Following the end of the Request for Comment period and release of
the final version of the Updated Methodology, DBRS expects to
resolve the current UR-Pos. status on all the affected ratings.

The rating assigned to the Class A notes addresses the timely
payment of interest and the ultimate repayment of principal by the
legal final maturity date in October 2042. The rating assigned to
the Class B addresses the timely payment of interest, when they are
the most senior notes after redemption of Class A notes only, and
the ultimate repayment of principal. The ratings assigned to the
Class C, D, E, F, and G notes address the ultimate payment of
interest and repayment of principal by the legal final maturity
date. DBRS does not rate the Class Z notes or residual
certificates.

Delft 2019 is a new transaction formed by securitizing the
collateral previously in EMF-NL 2008-2 B.V. (EMF 2008), a seasoned,
Dutch, non-conforming transaction comprising mortgage loans
originated by ELQ Portefeuille 1 B.V. (ELQ) and Quion 50 B.V.
(Quion), which were subsidiaries of Lehman Brothers through ELQ
Hypotheken N.V. and no longer originate loans. EMF 2008 was called
on its last interest payment date on April 17, 2019. Adaxio B.V.
will service the mortgage portfolio during the life of the
transaction with Intertrust Administrative Services B.V. acting as
the replacement servicer facilitator. The servicing of loans
originated by Quion will be delegated to Quion Hypotheekbemiddeling
B.V. until July 1, 2020, after which all servicing will be
performed by Adaxio B.V.

As of March 31, 2019, the portfolio balance was EUR 138,709,575.
The portfolio includes mortgage loans with non-conforming
characteristics such as self-certified borrower income (60.8% by
loan balance), negative Bureau Krediet Registratie (BKR) listings
of borrower credit history (31.8%) and borrowers classified as
unemployed, self-employed and pensioners (43.7%). The loans are
mostly floating rate (87.0%), repay on an interest-only (99.9%)
basis and have a weighted-average coupon of 2.9%. The
weighted-average indexed current loan-to-value (CLTV) ratio of the
portfolio is 81.9%, with 16.8% of loans exceeding a 100% CLTV
ratio.

The rated notes benefit from credit enhancement provided by
subordination and – excluding the Class G notes – the
non-liquidity reserve, which can clear any principal deficiency
ledger (PDL) debits in the revenue priority of payments. Initially,
the Class A notes will have 27.6% of credit enhancement. The
liquidity reserve is additionally available to cover interest
shortfalls on the Class A notes.

The general reserve will be funded from the issuance of the Class R
notes and can be applied to cover shortfalls in senior fees, pay
interest on Classes A to F and clear PDL balances on the
sub-ledgers of Classes A to F. The general reserve has a balance
equal to 2% of the initial balance of Class A to Z notes minus the
required balance of the liquidity reserve. The liquidity reserve is
available to support senior fees and interest shortfalls on the
Class A note, following the application of revenue and the general
reserve. While the Class A notes are outstanding, the liquidity
reserve will have a required balance equal to 2% of the outstanding
balance of the Class A notes, subject to a floor of 1% of the
initial balance of Class A notes. As this liquidity reserve
amortizes, the excess amounts will become part of the revenue
available funds and allow the general reserve to increase in size.

Principal funds can be diverted to pay shortfalls in senior fees
and unpaid interest due on the Class A to F notes, which remain
after applying revenue collections and exhausting both reserve
funds. Principal receipts can only be used to pay interest
shortfalls if the corresponding note has a PDL balance of less than
10% of its outstanding balance. This does not apply to the
senior-most note where the principal can always be used to cover
interest shortfalls.

If principal funds are diverted to pay revenue liabilities,
including replenishing the liquidity reserve, the amount will
subsequently be debited to the PDL. The PDL comprises eight
sub-ledgers that will track principal used to pay interest, as well
as realized losses, in a reverse-sequential order that begins with
the Class Z sub-ledger.

On the interest payment date in April 2022, the coupon due on the
notes will step up and the notes may be optionally called. The
notes must be redeemed at par plus pay any accrued interest.

Monthly mortgage receipts are deposited into a bankruptcy remote
Stitching collection foundation accounts at ABN AMRO Bank N.V (ABN
AMRO), mostly via direct debit. The funds credited to the
collection accounts are swept monthly into the account bank.
Commingling risk is considered mitigated by the use of a Stitching
and the regular sweep of funds. The collection account bank is
subject to a DBRS investment-grade downgrade trigger. ABN AMRO is
also the account bank for the transaction. DBRS's account bank
reference rating, one notch below its Critical Obligations Rating
of AA (low), is consistent with the minimum institution rating
given the ratings assigned to the Class A notes, as described in
DBRS's "Legal Criteria for European Structured Finance
Transactions" methodology.

In its cash flow assessment, DBRS applied two 8-year default timing
curves (front-ended and back-ended), prepayment curves (low, medium
and high assumptions) and interest rate stresses as per the DBRS
"Interest Rate Stresses for European Structured Finance
Transactions" methodology. The cash flows were analyzed using Intex
DealMaker.

DBRS based its ratings primarily on the following analytical
considerations:

  -- The transaction capital structure, including the form and
sufficiency of available credit enhancement.

  -- The credit quality of the mortgage loan portfolio and the
ability of the parties to perform servicing and collection
activities.

  -- DBRS calculated the portfolio default rate (PD), loss given
default (LGD) and expected loss assumptions on the mortgage loan
portfolio.

  -- The transaction's ability to withstand stressed cash flows
assumptions and repays investors according to the terms of the
transaction documents.

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

  -- The relevant counterparties, as rated by DBRS, are
appropriately in line with DBRS legal criteria to mitigate the risk
of counterparty default or insolvency.

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

Notes: All figures are in Euros unless otherwise noted.




===========
N O R W A Y
===========

B2HOLDING ASA: Moody's Cuts Issuer Ratings to B1, Outlook Stable
----------------------------------------------------------------
Moody's Investors Service has affirmed B2Holding ASA's Corporate
Family rating at Ba3, and downgraded its local and foreign currency
issuer ratings to B1 from Ba3. The outlook on the issuer was
changed to stable from review for downgrade previously.

RATINGS RATIONALE

The affirmation of the Ba3 CFR reflects B2Holding's: (i) good
historical and anticipated financial performance; (ii) strong
capitalisation and leverage metrics compared to peers; and (iii)
well-diversified portfolio of non-performing loans (NPL),
comprising debt across 23 countries and spread between secured and
unsecured debt; a strength despite a high proportion in countries
Moody's considers to have less mature NPL markets. These strengths
are balanced against: (i) risks related to the company's rapid
historical growth, which Moody's expect will continue albeit at a
slower pace, and the company's limited track record since its 2011
inception; (ii) fast liquidity consumption because of the rapid
growth, thereby increasing funding needs beyond what the maturity
schedule implies; and (iii) high revenue concentration of purchased
NPLs, with only limited revenue stemming from third party
collection and other sources.

The downgrade of B2Holding's issuer ratings reflects the results of
Moody's LGD model and the priorities of claims and asset coverage
in the company's capital stack. The size of B2Holding's senior
secured revolving credit facility indicates higher
loss-given-default for senior unsecured creditors, leading to a one
notch downgrade of the issuer ratings from B2Holding's Ba3 CFR.
Issuer Ratings are opinions of the ability of entities to honor
senior unsecured debt and debt like obligations.

The stable outlook reflects Moody's expectation that B2Holding's
credit profile will remain in line with that of a Ba3 CFR. The
rating agency expects that the company's profits, relative to its
assets, will decline as it grows its asset base, although overall
financial performance and capitalisation are expected to remain
robust. The outlook also reflects Moody's expectation that the
company will return to debt capital markets in the short term to
fund its growth.

WHAT COULD CHANGE THE RATING UP / DOWN

Moody's could upgrade B2Holding's CFR if the company successfully
meets its financial targets while (i) reducing liquidity risk;
and/or (ii) reducing operational and execution risks related to its
rapid expansion. An upgrade of B2Holding's CFR would likely result
in an upgrade of the issuer ratings.

B2Holding's issuer ratings could also be upgraded due to a positive
change to its debt capital structure that would increase the
recovery rate for senior unsecured debt classes.

Moody's could downgrade B2Holding's CFR if the company's (i)
liquidity position deteriorates beyond its expectations, for
example if the RCF is fully utilised over a prolonged period or the
company is unable to reduce RCF utilisation and extend its maturity
profile through new bond issuance over the next 12-18 months; (ii)
capitalisation falls materially, with tangible common equity to
tangible assets dropping below 15%; and/or (iii) profitability
metrics falls below peers. A downgrade of B2Holding's CFR would
likely result in a downgrade of the issuer ratings.

B2Holding's issuer ratings could also be downgraded if the company
were to materially increase its EUR510 million RCF, which is senior
to the company's senior unsecured liabilities.

The principal methodology used in these ratings was Finance
Companies published in December 2018.

Issuer: B2Holding ASA

Downgrades:

  Long-term Issuer Ratings, Downgraded to B1 from Ba3

Affirmations:

  Long-term Corporate Family Rating , Affirmed Ba3

Outlook Action:

  Outlook Changed To Stable From Rating Under Review




===========
P O L A N D
===========

ZABRZE: Fitch Affirms BB+ LongTerm IDRs, Outlook Stable
-------------------------------------------------------
Fitch Ratings has affirmed the Polish City of Zabrze's Long-Term
Foreign- and Local-Currency Issuer Default Ratings at 'BB+' and
National Long-Term Rating at 'BBB+(pol)'. The Outlooks are Stable.

The affirmation reflects Fitch's unchanged view that that despite
expected modest operating results in the medium term, Zabrze's debt
ratios will remain in line with a 'BB+' rating. Fitch assesses
Zabrze's standalone credit profile at 'bb+'.

Zabrze is a medium-sized city by Polish standard, located in the
Slaskie region and is part of the Silesia Metropolis (more than two
million inhabitants). It benefits from its location at the
crossroads of the main Polish rail and road corridors. Zabrze's tax
base is diversified but weaker than other Polish cities. GDP per
capita in 2016 (last available data) for the Gliwicki sub-region,
where Zabrze is located was 123% of the national average but this
probably overestimates Zabrze's performance. Zabrze's local economy
is dominated by industry and construction (48% of the sub-region's
GVA in 2016), above 35% of the average for Poland.

KEY RATING DRIVERS

Revenue (Robustness) Assessed as Midrange

Fitch assesses Zabrze's revenue robustness as Midrange in view of
the city's stable revenue sources with revenue growth prospects in
line with national GDP growth. Current transfers accounted for
almost 47% of operating revenue in 2018, with the majority
transfers from the state budget (A-/Stable). These transfers are
not subject to discretional changes as the majority are defined by
law. Tax revenue accounted for almost 40% of Zabrze's operating
revenue in 2018, based on moderately cyclical economic activities.
Personal income tax accounts for 25% of operating revenue, local
taxes for 13% while corporate income tax, a more volatile revenue
item, accounts for only 1%. Zabrze's tax base is diversified but
weaker than other Polish cities.

Revenue (Adjustability) Assessed as Weaker

Fitch assesses Zabrze's ability to generate additional revenue in
response to possible economic downturn as Weak, in line with the
majority of Polish cities, but this is mitigated by the proven
track record of revenue growth, even in times of lower GDP growth.

Income tax rates are set by the central government, as well as the
majority of current transfers. Zabrze has little flexibility on
local taxes (13% of operating revenue) as the rates on local taxes
are constrained by the ceilings set in the national tax
regulations. In light of its tax revenue per capita being lower
than the average for other Polish cities, Zabrze is entitled to
receive equalisation subsidy, but the amounts received are law in
relation to the city's budget In 2019 this equalisation subsidy
will rise to PLN20 million from PLN15 million in 2017, but it will
still account for only 2% of operating revenue. The city could
increase its revenue by intense asset sale (on average PLN30
million of proceeds in 2014-2018, ie. about 4% of total revenue),
but this source of revenue may prove not sustainable in times of
economic downturn.

Expenditure (Sustainability) Assessed as Midrange

Fitch assesses the city's expenditure sustainability as Midrange in
line with the majority of Polish cities. The city's main
responsibilities are non-cyclical, including education, public
transport, municipal services, administration, housing economy,
culture, sport, as well as public safety and family benefits
mandated and financed from the central budget.

Zabrze exhibited a track record of moderate control of operating
expenditure growth. Opex has generally grown in line with operating
revenue growth, which resulted in the operating balance accounting
on average for 5%-6% of operating revenue in 2014-2018. The city's
capex is linked to availability of non-returnable EU grants and
Fitch expects these to rise in 2019-2023 to leading to budgetary
deficits up to 5% of the total revenue.

Expenditure (Adjustability) Assessed as Midrange

Fitch assesses the city's ability to reduce spending in response to
shrinking revenue as Midrange. The city can reduce significant part
of its capital expenditure and more than 10% of its operating
expenditure. The city's capex (PLN120 million in 2018 or 12.6% of
total expenditure) is almost equally split between investments and
contributions to the city's companies. The city may easily
influence its capex aimed at investments, with much lower
flexibility in respect to capital injections to the city's
companies.

The city's mandatory responsibilities with the least spending
flexibility account for 74% of opex, including education, social
care, administration, public safety and family benefits. The city
has higher spending flexibility in respect to other sectors,
including public transport, culture, sport, healthcare and housing
economy.

Liabilities and Liquidity (Robustness) Assessed as Midrange
Fitch assesses the national framework regulations for Polish LRGs'
liabilities and liquidity as midrange as well as Zabrze's
individual framework for debt, liquidity and off-balance sheet
management.

At end-2018 the city's loan portfolio was dominated by bonds (70%
of the total with maturity up to 10 years), preferential loans and
loans from local banks (10% of the total) and the remaining 20% was
made of a European Investment Bank (EIB; AAA/Stable) loan. Zabrze
has still PLN236 million available under the EIB loan, which
secures the city's debt financing needs in the next two years. The
EIB loan will ensure Zabrze a long-term and smooth repayment
schedule until 2042, thus mitigating repayment risk. The city's
debt is in Polish zloty with floating interest rates, which exposes
the city to interest rate risk as Polish cities are not allowed to
use derivatives. The city partially mitigates this risk with its
prudent budget practice, securing in its budget higher amounts for
debt service.

Under the new LRG criteria in the "Other Fitch-classified debt",
Fitch includes the debt of the city's football stadium company as
the company's debt was raised to build a facility on behalf of the
city and is primarily paid by the city. Fitch also includea the
liabilities stemming from the sell and buy back transaction of the
football club company. However, the transactions are of medium size
in relation to the city's budget (PLN179 million at end-2018) and
the city's ongoing financial contributions are secured in the
city's budget under capital expenditure.

Liabilities and Liquidity Framework (Flexibility) Assessed as
Midrange

Fitch assesses the city's liquidity framework as Midrange as there
is no emergency liquidity support from upper tiers of government
and Zabrze has liquidity available under its committed liquidity
line provided by ING Bank (A/Stable).

Zabrze frequently uses its low costs liquidity lines (with a limit
of PLN50 million) to manage its liquidity during the year and to
postpone the drawdown of more costly long term debt closer to
year-end. This policy results in low levels of cash at year-end,
accounting for 15% of the annual debt service in 2017-2018, and
Fitch assumes this will continue in the following years.

Fitch assesses Zabrze's Risk Profile as Midrange in result of the
combination of five factors assessed as Midrange and one factor
assessed as Weaker (Revenue adjustability), the latter being of
lower weight in the overall assessment.

Debt Sustainability Assessment: 'bbb'

Under itsnew criteria introduced in April 2019 (Rating Criteria for
International Local and Regional Governments), Fitch classifies the
city of Zabrze - as for all Polish local and regional governments
(LRGs) - as type B as it covers debt service from its cash flow on
an annual basis. Under its rating case for 2019-2023, Fitch
projects the city's payback ratio (net adjusted debt-to-operating
balance), which is the primary metric of the Debt Sustainability
assessment for Zabrze, will rise to about 14.7x from about 13x in
2018 thus being in line with a 'bbb' assessment. For the secondary
metrics, Fitch's rating case projects that the fiscal debt burden
will remain strong during the forecast period, falling from about
78% in 2018 to 65% in 2023 under the rating case. Strong fiscal
debt burden ratio counterbalances the city's weak synthetic and
actual debt service coverage ratio (ADSCR) of about 1x. All these
metrics justify the city's debt sustainability assessment at 'bbb'.


RATING DERIVATION

Fitch assesses Zabrze's standalone credit profile at 'bb+', which
results from a Midrange assessment of its Risk Profile and 'bbb'
assessment of Debt Sustainability. Zabrze's SCP assessment factors
in favoured positioning among peers in the same rating category.
The city's final IDRs are not affected by any asymmetric risk or
extraordinary support from the Polish state.

KEY ASSUMPTIONS

Fitch's key assumptions within its rating case for the issuer
include:

  - Operating revenue growing by the CAGR of 3.8% within the next
five years,

  - Operating expenditure growing by the CAGR of 4.1%,

  - Capital revenue and capital expenditure based on the management
objectives set in the long-term projections and revised down in
line with the historical pattern of investment implementation,

  - Interest rates paid on debt higher than in base case by 0.25pp
annually from 2020

  - Declining Other Fitch classified debt in line with the
repayment schedule (no new debt financed investments undertaken by
GRE envisaged by the city).

RATING SENSITIVITIES

The ratings could be upgraded if Zabrze improves its debt payback
ratio below 13 years on a sustained basis and also improves its
debt service coverage ratios above 1x according to Fitch's rating
case.

The ratings could be downgraded if Zabrze's debt payback ratio
deteriorates towards 16-18 years on a sustained basis according to
Fitch's rating case.




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

GAZ GROUP: Deripaska Says U.S. Sanctions May Lead to Bankruptcy
---------------------------------------------------------------
Yuliya Fedorinova at Bloomberg News reports that Oleg Deripaska,
the Russian billionaire under U.S. sanctions, said his car business
GAZ Group may not survive if the company isn't removed from the
American blacklist.

According to Bloomberg, he said there are currently no talks with
U.S. Office of Foreign Assets Control over the terms of lifting the
sanctions since the company, Russia's largest commercial carmaker,
filed a proposal in October.

GAZ currently operates with licenses from OFAC that allow other
companies to keep working with the carmaker, Bloomberg discloses.
However, if the licenses expire as scheduled in July, anyone doing
business with GAZ will be subject to harsh U.S. penalties,
Bloomberg states.

"It might go bankrupt and may be nationalized," Bloomberg quotes
Mr. Deripaska as saying in an interview at the company's
headquarters in Nizhny Novgorod on April 16.  Even if the company
is taken over by the Russian state, thousands of workers will still
likely lose their job, he predicted, Bloomberg relays.

Whether GAZ will be subject to the full weight of U.S. sanctions is
still an open question, according to Bloomberg.

Mr. Deripaska, as cited by Bloomberg said he's prepared to reduce
his influence at GAZ, but admitted that for now there's a "low
chance" of success in the talks with the Treasury.

There's less incentive for the U.S. to lift the sanctions on GAZ,
which operates entirely in Russia, than Rusal, which runs plants
around the world, Bloomberg says.


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

Under the new Rating Criteria for International Local and Regional
Governments (LRG), Fitch classifies Krasnoyarsk in line with other
Russian LRGs as a type B LRG, which covers debt service from cash
flow on an annual basis. The region's standalone credit profile is
assessed at 'bb+', which reflects a combination of a 'Weaker' risk
profile and 'aa' debt sustainability assessment resulting from
sound debt metrics.

Krasnoyarsk is the second-largest Russian region, accounting for
about 14% of the country's territory, and the population close to
three million people. GRP per capita, which estimated at USD12,733
in 2018, is higher than the national median. The region is rich in
natural resources (nickel, gold, platinum, copper and substantial
reserves of oil and gas), which supports it's above average wealth
metrics. According to budgetary regulation, Krasnoyarsk can borrow
on the domestic market. The budget accounts are presented on a cash
basis.

KEY RATING DRIVERS

Revenue Robustness Assessed as Weaker

The region's economic profile is stronger than the average Russian
region due to its rich natural resources. This results in a strong,
but concentrated tax base. The top 10 taxpayers contributed 40% to
the region's total revenue in 2018. Corporate income tax, which is
exposed to volatility, is the largest revenue source, accounting
for 38% of the region's revenue in 2018. Fitch expects the region's
tax base to expand, but it will remain exposed to volatility due to
dependence on the economic cycles and the situation in the
commodities markets. This justifies the Weaker assessment of
revenue robustness for Krasnoyarsk.

Revenue Adjustability Assessed as Weaker

The Weaker assessment mainly considers that the federal government
holds significant tax-setting authority, which limits Russian LRGs'
fiscal autonomy and overall revenue adjustability. The regional
governments have limited rate-setting power over several property
taxes. The proportion of these taxes in the region's total revenue
is low and accounted for 11% in 2018. The ability to determine
rates on these taxes is constrained by the ceilings, which are set
by national tax regulation, and this limits the region's revenue
adjustability.

Expenditure Sustainability Assessed as Midrange

Like other national peers, Krasnoyarsk has responsibilities in
education, healthcare, some types of social benefits, public
transportation and road construction. The education and healthcare
sectors, which are of counter- or non-cyclical nature, accounted
for 31% of total expenditure in 2018. In line with other Russian
regions, Krasnoyarsk is not required to adopt anti-cyclical
measures, which would inflate expenditure related to social
benefits in a downturn.

Expenditure Adjustability Assessed as Weaker

The vast majority of spending responsibilities are mandatory for
Russian subnationals, which leads to inflexible items dominating
the expenditure structure. Consequently, the bulk of expenditure
could be difficult to cut in response to potential revenue
shrinking, although the region retains some flexibility to cut
capex, particularly taking into account that Krasnoyarsk just
finished a large investment cycle connected with preparation for
Universiade, which the region hosted in March 2019. However, the
ability to curb expenditure is constrained by overall high demand
for infrastructure development.

Liabilities and Liquidity Robustness Assessed as Midrange

According to national budgetary regulation, Russian LRGs are
subject to debt stock limits and new borrowing restrictions as well
as limits on annual interest payments. Derivatives and floating
rates are prohibited for LRGs in Russia. The limitations on
external debt are very strict and in practice no Russian region
borrows externally.

Krasnoyarsk follows a prudent debt policy, as demonstrated by its
moderate debt levels, which fell to 45% of current revenue in 2018
from a peak of 54% in 2016. Debt is dominated by domestic bonds,
which represented 71% of the total at the beginning of 2019, as the
region is among the most experienced participants in the domestic
bond market. Intergovernmental loans accounted for 22% and bank
loans composed residual 7% of the region's debt. The region is not
exposed to material off-balance sheet risks.

Liabilities and Liquidity Flexibility Assessed as Midrange

The region's own cash reserves averaged RUB3.4 billion at year-end
in 2013-2018 (end-2018: RUB4.0 billion), which is not that high
considering the material size of the region's budget. Krasnoyarsk
has reasonable access to domestic funding including domestic banks
or debt capital markets.

The region's liquidity flexibility is also supported by liquidity
instruments in the form of a federal treasury line to cover
intra-year cash gaps. This treasury facility amounted to 1/12th of
annual budgeted revenue (excluding intergovernmental transfers) and
can be rolled over during the financial year. Nonetheless, as the
potential counterparty risk associated with domestic liquidity
providers is 'bbb-', its assessment of this risk factor is
Midrange.

Debt Sustainability Assessment: 'aa'

The 'aa' assessment is derived from a combination of a sound
payback ratio (net adjusted debt/operating balance), which
according to Fitch's rating case, will remain in line with a 'aa'
assessment, a moderate fiscal debt burden (net adjusted debt to
operating revenue), corresponding to a 'aa' assessment and a weak
actual debt service coverage ratio (ADSCR: operating balance to the
debt service, including short-term debt maturities) at the 'b'
level.

According to Fitch's rating case, the payback ratio, which is the
primary metric of debt sustainability, will remain below 5x during
most of the projected period and will rise above 5x only in 2023.
For the secondary metrics, Fitch's rating case projects that the
fiscal debt burden will exceed 50% in 2022-2023, while the ADSCR
will be in the range of 1.0-1.2 in 2021-2023. The combination of
the primary and secondary metrics results in a 'aa' overall debt
sustainability assessment.

RATING DERIVATION

Fitch assesses Krasnoyarsk's SCP at 'bb+', which reflects a
combination of a 'Weaker' risk profile and a 'aa' assessment of
debt sustainability. The notch-specific 'bb+' SCP also factors in
favourable positioning against national peers and is supported by a
strong payback ratio. The IDR is not affected by asymmetric risk or
extraordinary support from upper-tier government, which results in
the 'BB+' rating.

KEY ASSUMPTIONS

Fitch's key assumptions within its base case for 2020-2023
include:

  - CIT growth in line with local GRP nominal growth, other taxes
to grow in line with inflation

  - Operating expenditure growth in line with inflation

  - The proportion of capex at around 14% of total expenditure

Fitch's rating case envisages the following stress compared with
the base case:

  - Stress of corporate income tax by -2.23 pp annually compared
with base case growth

  - Stress on current transfers made by +1 pp annually to reflect
higher opex growth in the rating case

RATING SENSITIVITIES

Debt payback below five years under Fitch's rating case on a
sustained basis could lead to an upgrade.

A positive reassessment of the region's risk profile could be
positive for the ratings.

The deterioration of the region's debt payback above nine years
according to Fitch's rating case on a sustained basis could lead to
a downgrade.


SISTEMA: S&P Alters Outlook to Positive & Affirms 'B+' ICR
----------------------------------------------------------
S&P Global Ratings revised to positive from stable its outlook on
Russia-based holding company Sistema and affirmed its 'B+' rating
on the company, and its senior unsecured debt issued by special
purpose vehicle Sistema International Funding S.A.

S&P said, "We are revising the outlook on Russian holding company
Sistema to positive because of gradual improvements in the
company's financial leverage, measured by its loan-to-value (LTV)
ratio that declined to less than 45%. This was due to its increased
portfolio value, which we now assess at more than $7 billion (about
5% more than at end-July 2018), supported by its unlisted assets'
strong performance and despite some decline in the value of Mobile
TeleSystems PJSC (MTS), its major listed asset. We also believe the
group is committed to further deleveraging, using remaining
investees' dividend income after interest and general
administrative costs.

The recent increase in Sistema's portfolio value was mainly thanks
to increased value of several of its smaller assets, including pulp
and paper producer Segezha Group LLC, and medical clinics chain
Medsi Group JSC. In 2018, Segezha's operating income before
depreciation and amortization (OIBDA) increased by more than 70% on
the back of increased volume and capacity, and higher prices for
paper and paper packaging. Medsi's OIBDA increased by more than 60%
over the same period, supported by continued expansion of its
clinics network, ramp up of its facilities, and increased revenue
per square meter of medical space. Smaller assets' strong growth
was somewhat offset by a 4% decline in market value of MTS' shares,
which represent more than 55% of Sistema's portfolio. Growth of
smaller assets, in S&P's view, helps gradually reduce the company's
significant exposure to MTS, which it views as a key business risk
for Sistema.

A number of recent transactions have also supported Sistema's
portfolio diversification. For example, the acquisition of a 25%
stake in Russian residential real estate developer Etalon Group,
after 49% of its other investee Leader Invest JSC (B/Positive/B)
was sold to Etalon, has strengthened Sistema's presence in the
residential real estate development business. Furthermore, Sistema
also acquired pharmaceutical producer OBL Pharm and plans to merge
it with its other investee Binnopharm in 2019, aiming to create a
top-five Russian pharmaceutical player in the non-state segment.
Additionally, Sistema increased its stake to 36% in Ozon, Russia's
large e-commerce player.

S&P said, "We understand Sistema's management is committed to
deleveraging, after its debt increased following the settlement
with Oil Company Rosneft OJSC (BBB-/Stable/--). We estimate Sistema
is likely to reduce its debt by at least Russian ruble (RUB)10
billion annually through the use of its discretionary cash flows,
which we estimate at about RUB10 billion-RUB20 billion. We
understand that Sistema is targeting a nominal debt level in the
medium term of about RUB140 billion-RUB150 billion, compared with
RUB223 billion at year-end 2018.

"In 2018, Sistema's financial liabilities reduced marginally by
RUB4 billion from RUB227 billion at end-2017, despite a net
repayment of RUB12 billion due to a RUB8 billion revaluation of its
debt because of a weakening ruble. We expect Sistema will
materially reduce its foreign debt exposure after repaying the
outstanding amount under its $500 million Eurobond due in May
2019.

"We also don't exclude the possibility of deleveraging via
monetization of some of Sistema's assets. We assume asset
monetization is subject to execution risk and its success will
depend on market conditions. Due to this uncertainty, at this point
we do not include asset monetization in our base case.

"Sistema's refinancing in 2018 and early 2019 helped increase
company's average debt maturity from 2.0 years as of end of March
2018 to 2.4 years as of March 2019, which we view as positive."

Sistema's business risk profile continues to be constrained by
high-risk country of Russia, where all of its assets are located.
Sistema's portfolio liquidity is constrained by its position as the
majority owner of its largest listed assets, MTS and Detsky Mir,
with more time required to sell majority stakes compared with
smaller minority stakes of listed companies. All other smaller
assets of Sistema, except for real estate developer Etalon, are
unlisted and therefore inherently less liquid.

Sistema's investments are diversified across a number of
industries. S&P expects this diversification will reduce portfolio
volatility over the cycle. Sistema exerts control over most of its
assets, which facilitates strategic planning and access to
dividends. Despite the high share of listed assets within Sistema's
portfolio, at just below 70%, S&P believes that the pledge of part
of Sistema's listed assets (MTS) could somewhat constrain these
assets' liquidity. At the same time, MTS' 'bbb-' stand-alone credit
profile supports S&P's assessment of the average credit quality of
Sistema's assets as in its 'BB' category.

S&P said, "In our view, Sistema operates as a pure holding company,
with well-defined procedures, a clear exit strategy for each
investment, and with almost all subsidiaries having autonomous
management and financing. Still, we believe Sistema continues to
rely heavily on its key shareholder and chairman Vladimir
Evtushenkov, and his future standing in Russia's business and
political landscape. However, most of Sistema's board members are
independent directors who actively participate in decision-making,
which should somewhat counterbalance the controlling ownership of
one individual, in our view.

"We understand that part of the MTS shares owned by Sistema remains
pledged to secure the RUB60 billion outstanding under the RUB105
billion facility from Sberbank. If Sistema draws more on this
facility, the share of secured debt as part of total debt would
increase further. At the same time, we understand management is
giving preference to unsecured financing sources when considering
future refinancing options. As a result, we don't see heightened
subordination risks for unsecured bondholders at this stage.

"The positive outlook reflects our view that we could upgrade
Sistema within the next 12 months if it maintains its LTV ratio
materially below 45% on a sustainable basis. We expect Sistema will
use most of its discretionary cash flow generation for
deleveraging, as well major part of the proceeds if it sells any
assets. Finally, our positive outlook factors in our expectation
that Sistema will continue to proactively manage its liquidity.

"We could consider a negative rating action if Sistema's financial
risk profile deteriorates, with its LTV ratio approaching 55%-60%
or higher. This could result from an aggressive debt-financed asset
acquisition, which we currently do not expect, asset divestment not
balanced by proportionate debt reduction, or deterioration of
performance of Sistema's key assets, which is not our base case. We
may also downgrade Sistema if its liquidity deteriorates.

"We may upgrade Sistema by one notch if its LTV ratio stays below
45% as a result of deleveraging using its discretionary cash flow,
and if its portfolio value increases. Sufficient liquidity sources
to cover its near-term maturities, and further lengthening of its
debt maturity profile would also be required for an upgrade."


X5 RETAIL: S&P Affirms 'BB' Issuer Credit Rating, Outlook Stable
----------------------------------------------------------------
S&P Global Ratings affirmed its 'BB' ratings on X5 Retail Group
N.V. and its subsidiary OOO X5 Finance, and on the senior unsecured
debt issued by its financing subsidiary X5 Finance B.V.

S&P said, "The affirmation reflects our view of Russian food
retailer X5's sound operating results in the first quarter of 2019,
with positive like-for-like (LFL) sales growth, revenue growth of
15.5%, and 1% improvement in its X5-adjusted EBITDA margin (versus
first-quarter 2018) to 7.3% thanks to operating efficiency
measures, as well as its leading position in the Russian food
retail market.

"It also reflects our expectations that the group will continue to
defend its market position and post robust revenue and EBITDA
growth in 2019-2020. We expect that operations growth will largely
result from new store openings, mainly in the proximity-store
format. X5 has posted positive LFL sales growth for more than 22
quarters, including 5% growth in the first quarter of 2019. We
anticipate this will continue, supported by its attractive customer
value proposition across all segments. Furthermore, X5 has
renovated its Pyaterochka proximity stores and the majority of its
Perekrestok stores, with the group continually adapting its product
offering in each format in order to address changing customer needs
and tastes.

"We take into account X5's leading position in the Russian food
retail market, reflected by its market share of 10.7% in 2018. In
2018, we note that the second largest Russian food retailer PJSC
Magnit increased its market share by only 0.2%, to 7.7%, while X5
extended its market presence by 1.2% in the same period."
Additionally, X5 has a strong position in lucrative markets in
Moscow, the Moscow region, and St. Petersburg, with a market share
of about 14%, 25%, and approaching 25% respectively. The group
benefits from good retail format diversity--present in the
proximity, supermarket and hypermarket store formats--and the food
retail industry's general resilience and predictability.

Albeit still small, X5's online operations, currently based in
Perekrestok, have the potential to expand. In the first quarter of
2019, the company's online service had about 275 thousand orders
compared with 200 thousand in the fourth quarter of 2018, and more
than 400 thousand orders overall in 2018. In addition, X5 offers
lockers in its Pyaterochka proximity stores, enabling customers to
pick up ordered goods, which supports the company's offline
traffic. The group also announced the launch of "click & collect"
in its hypermarkets, currently in Moscow and St-Petersburg. This
service makes shopping more convenient, because customers can make
orders online and collect them in stores. X5 runs a loyalty
program, with more than 38 million loyalty cards across all food
retail formats and more than 30 million active Pyaterochka loyalty
cards. In the coming years, S&P expects X5 will focus on increasing
the share of high-value customers through further focus on customer
value proposition and personalized offers, hence increasing the
spending of this group of customers.

S&P said, "At the same time we think that the pressure on
profitability is likely to persist due to the food retail market in
Russia remaining highly fragmented and competitive, combined with a
weak macroeconomic environment, a muted forecast for private
consumption, and cost inflation. As a result of these factors, X5's
reported EBITDA margin in 2018 declined to 7.0% from 7.4% in 2017.
In 2019-2020, we anticipate that X5 will offset at least some of
this pressure on margins through operating efficiency measures,
with the group focusing on shrinkage reduction in the
proximity-store format, improving its gross margin through better
conditions from suppliers, and increasing the share of private
labels and own production (higher-margin products), as well as
direct-import food items in the revenues mix. However, we don't
anticipate margins will recover to historical levels, but will
instead be about 6.7%-7.2%.

"In addition, we note that the group's geographic concentration in
Russia and exposure to emerging-market risks, such as currency
volatility, persistent cost inflation, and political uncertainty,
are the main constraints for the business.

"We anticipate X5 will be able to generate sound funds from
operations (FFO) and cash flows from operations despite some EBITDA
margin pressure. We expect effective working capital management
will support the group's cash flow generation. Therefore, our base
case now incorporates an assumption of small albeit positive
reported free operating cash flow (FOCF) in 2019-2020. Our base
case reflects the group's significant capital expenditure (capex),
mainly on new store openings, representing a large part of total
capex. In line with X5's strategy, we expect fewer new store
openings in 2019-2020 compared with more than 2,700 in 2018, with
the group instead focusing on more carefully selecting new
locations, and profitable growth in existing geographies.

"We expect X5 will maintain its prudent financial policy,
incorporating the group's target of net debt to EBITDA not
exceeding 2.0x, and dividend payments of at least 25% of net
income. However, we understand that the payout ratio in 2018 was
almost 69% of net income in 2017, and the proposed dividend payment
in 2019 will correspond to a payout ratio of about 87% of 2018 net
income. Therefore, we don't expect the group will generate positive
reported discretionary cash flows in 2019-2020 (FOCF after
dividends and share buybacks).

"We forecast that the group will not deleverage in 2019-2020
because its cash flows will be absorbed by capex, small
acquisitions, and dividend payments. This will result in rather
flat leverage of 3.2x-3.5x in 2019-2020, after achieving 3.3x in
2018.

"The stable outlook on X5 reflects our view that the group will
continue to strengthen its leading position in the Russian food
retail market by increasing its market share by 1.0%-1.5% in the
next 12 months. We expect X5 will continue to post positive
absolute EBITDA growth, reflecting revenue growth, but anticipate
reported EBITDA margins of 6.7%-7.2%, reflecting competitive and
cost pressure.

"The outlook also reflects X5 focus on more balanced stores opening
and our expectation of at least neutral-to-slightly-positive
reported FOCF, adjusted debt to EBITDA of 3.2x-3.5x, and adjusted
FFO to debt of 20%-22%.

"We could consider raising the rating if X5's market position
strengthens above our base case, supported by sales growth,
positive LFL development, and stable or increasing profitability
margins beyond our expectations. Rating upside will also depend on
the group's track record of posting meaningful reported FOCF.

"We would consider raising our rating if our adjusted FOCF to debt
improves to over 15% and adjusted debt to EBITDA to below 3x on a
sustainable basis, and if management commits to maintaining such
ratios. A positive rating action would also hinge on maintaining
adequate liquidity through advanced refinancing of its upcoming
debt maturities, and a prudent financial policy."

A negative rating action might result from a worsening operating
performance or a deviation from the company's current financial
policy in the form of large-scale debt-funded investments or
acquisitions that causes X5's adjusted FFO to debt to fall below
20%. S&P would also lower the rating if adjusted EBITDA interest
coverage falls below 3x, or if it perceives any deterioration in
liquidity.




===========
S E R B I A
===========

NAPREDAK POZEGA: Bankruptcy Agency to Auction Assets on May 30
--------------------------------------------------------------
SeeNews reports that Serbia's Bankruptcy Supervision Agency said it
will offer at an auction assets of insolvent furniture maker
Napredak Pozega, including factories in Pozega and Uzice.

The agency said in a statement the auction will take place on May
30, SeeNews relates.

According to SeeNews, the starting price for the factories in
Pozega and Uzice is set at RSD174.1 million (US$1.65
million/EUR1.48 million) and RSD42.9 million, respectively.

The list of assets put up for sale also includes retail space in
Kladovo and a building in Smederevo, SeeNews discloses.

Napredak was declared bankrupt in October 2017, SeeNews recounts.




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

FRUTAS HERMANOS: Files for Bankruptcy, Owes EUR6 Million
--------------------------------------------------------
Fresh Plaza reports that the Spanish firm Frutas Hermanos Catala
Benicolet, better known as Fruterca, based in the Valencian
municipality of Palma de Gandia, has filed for bankruptcy with a
liability of some EUR6 million and debts of different amounts owed
to more than 300 agricultural producers.  The latter had sold
Fruterca their crops, mainly citrus fruits, and now they are unable
to receive what they are owed, Fresh Plaza notes.

Likewise, a hundred workers of the firm itself are demanding to be
paid their salaries, Fresh Plaza states.

According to Fresh Plaza, the legal services of the Valencian
Association of Agricultural Producers (AVA-ASAJA) are already
representing about thirty of the growers who are owed money by
Fruterca.

At this time, the lawyers of the agrarian organization are studying
the possibility of getting the case transferred from a civil to a
criminal court through the filing of a complaint to claim criminal
liability to the society's administrators, considering that
Fruterca was already in a very delicate economic situation in 2017,
but continued negotiating citrus purchases and issuing promissory
notes, Fresh Plaza discloses.


MBS BANCAJA: Fitch Corrects Dec. 12 Ratings Release
---------------------------------------------------
Fitch corrects the rating action commentary published on December
12, 2018 to delete the reference to MBS Bancaja No. 4 Class A3
notes, which had been paid in full.

The revised release is as follows:

Fitch Ratings has maintained the Rating Watch Positive on 14 MBS
Bancaja RMBS ratings and removed the RWP on three other ratings.
The RWP were assigned on June 18, 2018 following the publication of
Fitch's Counterparty Criteria Exposure Draft.

KEY RATING DRIVERS

MBS Bancaja

Fitch has maintained 13 ratings relating to 3 issuers on RWP. These
ratings will be the subject of a full review by January 31, 2019.
The review will take into account the counterparty criteria update
as well as updated transaction data.

Southern Pacific Financing

Fitch has removed classes C, D and E of Southern Pacific Financing
05-B Plc from RWP. Having completed a review of the prior analysis
of these ratings, Fitch has determined that the counterparty
criteria update will not affect the ratings and therefore removed
the ratings from RWP.
RATING SENSITIVITIES

The ratings maintained on RWP may be positively affected by the
update to the counterparty criteria as described in the exposure
draft report dated May 31, 2018.

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

Fitch has not conducted any checks on the consistency and
plausibility of the information it has received about the
performance of the asset pools and the transactions. Fitch has not
reviewed the results of any third-party assessment of the asset
portfolio information or conducted a review of origination files as
part of its ongoing monitoring.

SOURCES OF INFORMATION

Not applicable

MODELS

Not applicable

MBS Bancaja 2, FTA

  - Class C (ES0361795026): 'AA+sf'; remains on RWP

  - Class D (ES0361795034): 'AA-sf'; remains on RWP

  - Class E (ES0361795042): 'BBB+sf'; remains on RWP

MBS Bancaja 3, FTA

  - Class A2 (ES0361796016): 'AA-sf'; remains on RWP

  - Class B (ES0361796024): 'A+sf'; remains on RWP

  - Class C (ES0361796032): 'Asf'; remains on RWP

  - Class D (ES0361796040): 'BBB-sf'; remains on RWP

  - Class E (ES0361796057): 'CCsf'; RE40%; remains on RWP

MBS Bancaja 4, FTA

  - Class A2 (ES0361797014): 'AA-sf'; remains on RWP

  - Class B (ES0361797030): 'BBB+sf'; remains on RWP

  - Class C (ES0361797048): 'BBB-sf'; remains on RWP

  - Class D (ES0361797055): 'BBsf'; remains on RWP

  - Class E (ES0361797063): 'CCsf'; RE40%; remains on RWP

Southern Pacific Financing 05-B Plc

  - Class C (XS0221840910): 'AAsf'; off RWP; Outlook Stable

  - Class D (XS0221841561): 'A-sf'; off RWP; Outlook Stable

  - Class E (XS0221842023): 'BB+sf'; off RWP; Outlook Stable


PYMES BANESTO 2: Fitch Cuts Class C Notes to Csf; Withdraws Ratings
-------------------------------------------------------------------
Fitch Ratings has downgraded FTA, Pymes Banesto 2's Class C notes'
rating to 'Csf' from 'CCsf', with an increase in recovery estimate
to 75% from 50%, and subsequently withdrawn the rating.
Accordingly, Fitch will no longer provide ratings or analytical
coverage for FTA, Pymes Banesto 2's class C notes.

This is a granular cash flow securitisation of secured and
unsecured loans to small and medium-sized enterprises in Spain
serviced by Banco Santander, S.A. (A-/Stable/F2).

KEY RATING DRIVERS

Rating Withdrawn

Fitch is withdrawing the rating of FTA, Pymes Banesto 2's class C
notes as it is no longer considered by Fitch to be relevant to the
agency's coverage, due to the highly distressed nature of the
rating.

Significant Undercollateralisation

Class C structural credit enhancement is negative 44.4% as of the
latest reporting period, meaning that a default of the class C
notes at or prior to maturity appears inevitable. In Fitch's credit
analysis, the projected sum of all available funds is still lower
than the class C outstanding balance.

Low Recoveries from Defaulted Loans

The weighted average recovery rate observed to date on historical
defaulted assets is slightly above 30%, a rate used by Fitch when
assessing the class C notes recovery estimate.

Portfolio Lifetime Defaults

Total defaulted assets since the closing date in 2006 represent
slightly above 5% of the portfolio's initial balance. The
securitised portfolio is highly seasoned, and its current balance
is just 2.2% of its initial amount.

RATING SENSITIVITIES

n/a

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

Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset pool
and the transaction. There were no findings that affected the
rating analysis. Fitch has not reviewed the results of any
third-party assessment of the asset portfolio information or
conducted a review of origination files as part of its ongoing
monitoring. Fitch did not undertake a review of the information
provided about the underlying asset pool ahead of the transaction's
initial closing. The subsequent performance of the transaction over
the years is consistent with the agency's expectations given the
operating environment, and Fitch is therefore satisfied that the
asset pool information relied upon for its initial rating analysis
was adequately reliable. Overall, Fitch's assessment of the
information relied upon for the agency's rating analysis according
to its applicable rating methodologies indicates that it is
adequately reliable.




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

ARROW GLOBAL: Moody's Alters Outlook on Ba3 Debt Ratings to Neg.
----------------------------------------------------------------
Moody's Investors Service affirmed the backed local- and foreign
currency senior secured debt ratings of Arrow Global Finance plc at
Ba3. At the same time, the agency affirmed Arrow Global Group PLC's
Ba3 Corporate Family Rating. The outlook on both issuers changed to
negative from stable.

Moody's has also withdrawn the outlooks on Arrow and Arrow Global
Finance plc's existing instrument ratings for its own business
reasons. The withdrawal of these outlooks has no impact on the
issuer-level outlook for Arrow.

RATINGS RATIONALE

The affirmation of the Ba3 CFR reflects (i) Arrow's good
profitability and Moody's expectation that its interest coverage
will improve over the next 12-18 months, driven by increasing
EBITDA while interest expenses stabilise; (ii) Moody's expectation
that Arrow will deleverage over the next 12-18 months after it
revised its target leverage levels, driven by stable portfolio
purchase volumes over the next few years, thereby constraining new
debt accumulation; (iii) limited equity to provide loss absorption
to creditors in an unlikely event of default; and (iv) some
maturity concentration in 2024/2025, mitigated by no maturing debt
until 2024.

The affirmation of Arrow's senior secured debt ratings reflects the
application of Moody's Loss Given Default for Speculative-Grade
Companies (LGD model) and their priorities of claims and asset
coverage in the company's capital stack. Following the increase of
Arrow's RCF in late 2018, the modelled rating outcome is one notch
below the CFR. However, Moody's expects that Arrow's growth will
slow down and over the next 12-18 months, likely offsetting the
negative rating pressure stemming from the liability structure at
the end of December 2018.

The negative outlook reflects the downside risk that Moody's
modelled loss given default rate for Arrow's senior secured debt,
as assessed under Moody's LGD model, will not improve sufficiently
over the next 12-18 months. The outlook also incorporates Moody's
view that Arrow's financial performance will remain in line with
that of its Ba3 CFR over the next 12-18 months, incorporating the
agency's expectation of deleveraging.

WHAT COULD CHANGE THE RATING UP / DOWN

Arrow's CFR could be upgraded if (i) EBITDA to interest expenses
improves and stabilises above 5.5x; (ii) gross debt to EBITDA drops
and stabilises at around 3.0x; and/or (iii) underlying free cash
flow generation improves and stabilises as a consequence of good
collection performance and stable volumes of purchased loans.

Conversely, Arrow's CFR could be downgraded if (i) return on assets
drops below 2.5% and interest coverage falls below 3.5x; (ii) gross
debt to EBITDA increases beyond 4.5x; and/or (iii) cash flow
generation weakens, driven by materially weaker collection
performance than expected.

Because the modelled loss given default rate for Arrow already
implies a lower senior secured rating, the senior secured debt
ratings could be downgraded because of limited positive changes or
adverse changes to the liability structure that do not sufficiently
reduce expected loss for senior secured creditors.

LIST OF AFFECTED RATINGS

Issuer: Arrow Global Finance plc

Affirmations:

  Backed Senior Secured Regular Bond/Debenture, Affirmed Ba3,
  Stable outlook withdrawn

Outlook Action:

  Outlook changed to negative from stable

Issuer: Arrow Global Group PLC

Affirmations:

  Long-term Corporate Family Rating , Affirmed Ba3,
  Stable outlook withdrawn

Outlook Action:

  Outlook changed to negative from stable


ENSCO ROWAN: S&P Affirms B- ICR on Merger Completion, Outlook Neg.
------------------------------------------------------------------
U.K.-based offshore contract drilling companies Ensco PLC and Rowan
Co PLC have completed their merger. The merged company is known as
Ensco Rowan PLC.

S&P Global Ratings affirmed its 'B-' issuer credit rating on Ensco
Rowan and removed all ratings from CreditWatch, where S&P placed
them with positive implications on Oct. 9, 2018. The outlook is
negative.

The 'B' issue-level rating and '2' recovery rating on Ensco Rowan's
unsecured notes are unchanged, reflecting its expectation of
substantial (70%-90%; rounded estimate: 85%) recovery in the event
of default.

The rating action follows the closing of Ensco PLC's merger with
Rowan Co PLC. The rating reflects S&P Global Ratings view that
demand for offshore contract drilling rigs and services, especially
for deepwater rigs, will remain weak for the next 18-24 months, due
to the higher costs, higher risks, and longer payback periods
associated with offshore exploration and production than onshore
unconventional projects. Although tenders and bidding activity for
ultra-deepwater and deepwater floaters have picked up since the
2016 trough, day rates have remained close to break-even levels and
we expect only limited improvement before 2021. As a result, S&P
estimates Ensco Rowan's debt to EBITDA to exceed 8x in the next
couple of years, improving thereafter as demand for offshore
drilling services recovers. Nevertheless, following the merger,
Ensco Rowan benefits from the largest offshore drilling fleet
worldwide, with a majority of high specification rigs and jack ups,
a large and diversified customer base, and a strong operational
track record. All these factors place it well to benefit from an
industry recovery.

S&P said, "The negative outlook reflects our expectation that
market conditions in the offshore drilling sector will remain very
challenging over the next 24 months. We expect Ensco's credit
ratios will be very weak through 2021, with FFO to debt about 5%
and debt to EBITDA 8x to 10x."


FOUR SEASONS: Parent Companies File for Administration
------------------------------------------------------
Luca Casiraghi and Antonio Vanuzzo at Bloomberg News report that
Four Seasons Health Care's parent companies filed for
administration on April 30 after more than a year of negotiations
with creditors.

Britain's second largest care-home provider hired three
administrators from Alvarez & Marsal to manage Elli Investments Ltd
and Elli Finance Plc, with the aim to sell the company by the end
of the year, Bloomberg relates.

Four Seasons has been in debt-restructuring talks since late 2017
with creditors, led by H/2 Capital Partners, Bloomberg notes.  The
company borrowed GBP525 million (US$588 million) in bonds seven
years ago to fund its GBP825 million buyout by Guy Hands's private
equity firm Terra Firma Capital Partners, Bloomberg discloses.


NEMUS II PLC: Fitch Affirms CC Rating on GBP1MM Class F Notes
-------------------------------------------------------------
Fitch Ratings has affirmed Nemus II (Arden) PLC's floating-rate
notes due 2020:

  GBP0.6 million class B (XS0278300560) affirmed at 'Asf';
  Outlook Negative

  GBP7.7 million class C (XS0278300727) affirmed at 'Bsf';
  Outlook Negative

  GBP7.1 million class D (XS0278301295) affirmed at 'Bsf';
  Outlook Negative

  GBP13.9 million class E (XS0278301378) affirmed at 'CCsf';
  Recovery Estimate (RE) revised to 100% from 50%

  GBP1 million class F (XS0278301535) affirmed at 'CCsf'; RE 0%

The transaction closed in December 2006 and was originally the
securitisation of six loans secured on 22 properties located in the
UK and Jersey. The only remaining loan is for GBP30.2 million on
Buchanan House, which is secured on a Glasgow office property of
the same name.

KEY RATING DRIVERS

As per the RIS regulatory notification of April 10, 2019, it is the
intention of the "B lender" (Burlington Loan Management DAC) to
exercise its purchase option of the securitised loan from the
issuer. Fitch understands from the servicer that the purchase price
should be sufficient to cover the repayment of principal and
interest amounts, including interest that would accrue for the
entirety of the payment period in which the option was exercised.
This positive credit outcome supports the RE revision for the class
E notes to 100% from 50%.

The loan purchase removes uncertainty related to the remedial works
on Buchanan House, in part as a consequence of the heightened
scrutiny applied to cladding following the Grenfell Tower fire in
2017. With less than a year until bond maturity, there was a risk
that works would not be completed in time to allow the property to
be sold prior to this deadline.

Fitch expects the loan purchase price to be decomposed into
interest and principal, and applied by the issuer in the
corresponding priorities of payments, although this is unclear from
the documentation. While the purchase price explicitly includes
"linked costs", the definition is silent regarding which costs can
be considered "linked". Given that, Fitch expects the special
servicer to charge the issuer a final liquidation or workout fee,
whether this will be received by the issuer in addition to loan
interest and principal - and available to the issuer as revenue
funds - will determine interest to be paid to the notes.

Senior fees have anyway been volatile recently for reasons that are
not clear to Fitch, creating uncertainty as to how much will be
incurred by the issuer at the next interest payment date in May
(expected to be the final one). Should these items exceed the funds
available to the issuer to pay revenue items, then all the notes
stand to suffer a final interest shortfall (in the case of the
class B, in an immaterial amount for Fitch's rating). Unlike the
class E and F notes, Fitch expects the B, C and D notes to receive
interest in full, but it nevertheless maintains Negative Outlooks
given the degree of uncertainty.

RATING SENSITIVITIES

Not applicable.

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

Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset pool
and the transaction. There were no findings that were material to
this analysis. Fitch has not reviewed the results of any
third-party assessment of the asset portfolio information or
conducted a review of origination files as part of its monitoring.


Prior to the transaction closing, Fitch reviewed the results of a
third-party assessment conducted on the asset portfolio
information, which indicated no adverse findings material to the
rating analysis.

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


ROWAN COS: S&P Cuts ICR to 'B' on Merger with Ensco, Outlook Neg.
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.K.-based
offshore contract drilling company Rowan Cos. PLC to 'B-' from
'B'.

S&P said, "We are raising the 'B-' issue-level ratings on Rowan's
unsecured notes to 'B' and , are revising the recovery ratings on
the notes to '2' from '5', reflecting our expectation of
substantial (70%-90%; rounded estimate: 85%) recovery in the event
of default. We are also withdrawing our rating on Rowan's credit
facility following its termination in conjunction with the merger.

"The rating action follows the closing of Rowan Cos. PLC's merger
with Ensco PLC. We lowered our issuer credit rating on Rowan to
'B-' with a negative outlook to equalize it with that of Ensco
Rowan, as we now consider Rowan to be a core entity of the combined
company. We believe Ensco Rowan will likely provide long-term
support for Rowan, which represents a substantial proportion of the
combined company's asset portfolio.

"The negative outlook reflects our expectation that market
conditions in the offshore drilling sector will remain very
challenging over the next 24 months. We expect Ensco Rowan's credit
ratios will be very weak through 2021, with funds form operations
(FFO) to debt at about 5% and debt to EBITDA at 8x-10x.

"We could lower the rating if we expected a more prolonged industry
downturn than currently anticipated or if liquidity weakens, which
would most likely result from higher-than-expected reactivation
expenses or capital spending.

"We could consider a stable outlook if offshore contract drilling
market conditions improve and the company adds backlog such that we
expect debt to EBITDA to improve closer to 6x and FFO to debt
closer to 12%."


TOMORROW'S PEOPLE: Creditors to Get Less Payout Than Expected
-------------------------------------------------------------
Rob Preston at Civil Society reports that Tomorrow's People, an
employment charity that collapsed last year, will now pay creditors
less than was initially expected, according to the administrator's
progress report.

The charity entered administration in March last year citing a
"tough fundraising landscape", with most of its 135 staff losing
their jobs, Civil Society recounts.

The charity, which said it owed an estimated GBP1.63 million to
creditors when it collapsed, appointed Lane Bednash --
lb@cmbukltd.co.uk -- from CMB Partners as the administrator, Civil
Society discloses.

Bednash filed an administrator's progress report with Companies
House, setting out the action taken in the six months since
September last year to wind down the charity and future plans,
Civil Society relays.

It said the charity has now paid all arrears to preferential
creditors, estimated at GBP72,000, which mainly comprise of staff
that were made redundant, Civil Society notes.

Mr. Bednash had previously estimated the amount the charity owed to
unsecured creditors at GBP1.56 million, but in the latest report
this has been revised down to GBP1.04 million, Civil Society
states.

According to Civil Society, the report says this revaluation is due
to reductions in staff redundancy costs, leasehold property costs
and other costs such as vehicle and equipment hire.

Unsecured creditors are now expected to receive 61.7p in the pound,
slightly lower than the original estimate of 65p, Civil Society
says.

                         Exit Route

The report says that the charity, which had an income of GBP4.8
million for the year to March 2017, plans to enter a company
voluntary arrangement (CVA) as an exit route rather than going into
liquidation, Civil Society discloses.

Mr. Bednash has drafted a proposal for a CVA, which he says will
seek to offer a better outcome for creditors than if the charity
were placed into liquidation, Civil Society notes.

He called for a "significant number of creditors" who have not yet
done so to submit claims so he can prepare an updated estimated
outcome statement, according to Civil Society.


VTB CAPITAL: Moody's Assigns Ba3 LT Issuer Ratings, Outlook Stable
------------------------------------------------------------------
Moody's Investors Service assigned Ba3 long-term and Not Prime
short-term local- and foreign-currency issuer ratings to UK-based
VTB Capital plc. The issuer-level outlook changed to stable from
rating under review. The agency confirmed VTBC's Ba3 long-term
local- and foreign-currency bank deposit ratings and affirmed the
Not Prime short-term local- and foreign-currency bank deposit
ratings prior to withdrawing these deposit ratings. This follows
the shift in VTBC's business model to investment banking rather
than corporate banking and reduced emphasis on taking deposits from
third parties. VTBC's Baseline Credit Assessment (BCA) of b2,
adjusted BCA of b1, the long-term and short-term Counterparty Risk
Assessments (CR Assessments) of Ba1(cr) and Not Prime(cr) were also
withdrawn.

The rating actions concludes the reviews for downgrade on VTBC's
ratings and assessments initiated on June 25, 2018.

RATINGS RATIONALE

CHANGE OF APPLIED METHODOLOGY REFLECTING SHIFT IN BUSINESS MODEL

In 2018, in response to the UK's planned exit from the European
Union and increased geopolitical risks, VTBC's parent Bank VTB,
PJSC (VTB; Baa3 stable, b1) undertook a strategic review of its
subsidiary's business model. It concluded that it would restructure
VTBC, focusing on investment banking and brokerage, while
reallocating part of its loan portfolio and derivative exposures to
other VTB group entities domiciled in Germany and Russia and
running down its third party deposits.

Moody's now applies its Securities Industry Market Makers
methodology to VTBC, in the place of the Banks methodology hitherto
employed. This reflects the recent shift in VTBC's business model,
balance sheet and related risks based on the following: (1) VTBC
will cease lending; (2) it will focus on trading, brokerage and
investment banking services; and (3) its liability structure will
be skewed towards related-parties and will remain largely
short-term. This type of business is better captured by the
Securities Industry Market Makers methodology.

ISSUER RATINGS ASSIGNMENT

The Ba3 long-term issuer ratings assigned to VTBC reflect a
standalone assessment of B1 and a moderate probability of support
from the Russian Government (Baa3 stable), the controlling
shareholder of VTBC's parent Bank VTB, resulting in one notch of
uplift. The stable issuer-level outlook reflects Moody's
expectation that the firm's standalone creditworthiness will remain
broadly unchanged in the next 12-18 months due to balanced
financial profile and operating environment.

The B1 standalone assessment of VTBC is driven by an operating
environment score of B1 which reflects VTBC's operations in a mix
of emerging and developed countries. The standalone assessment is
also constrained by a B1 financial profile score, reflecting a
string of net losses, high earnings volatility, and a shortfall of
long-term capital relative to long-term assets.

The financial profile is nevertheless supported by a good resilient
liquidity cushion and low leverage.

WHAT COULD MOVE THE RATINGS UP/DOWN

Moody's could upgrade the issuer rating if there were a significant
improvement in VTBC's financial profile, notably if it were to
return to sustainable profitability, if its long-term funding were
to be enhanced, or if its business profile shifted towards less
risky countries.

Moody's may downgrade the long-term issuer ratings in the event of
a lower standalone assessment, for example due to higher leverage,
or if government support should diminish.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Securities
Industry Market Makers published in June 2018.

LIST OF AFFECTED RATINGS

Issuer: VTB Capital plc

Assignments:

Long-term Issuer Rating, Assigned Ba3, stable outlook assigned

Short-term Issuer Rating, Assigned NP

Confirmation and withdrawal:

Long-term Bank Deposits, Confirmed at Ba3, Outlook Changed To
Stable From Rating Under Review - ratings will be Withdrawn

Affirmation and withdrawal:

Short-term Bank Deposits, Affirmed NP - ratings will be Withdrawn

Withdrawals:

Adjusted Baseline Credit Assessment, Withdrawn, previously rated
b1

Baseline Credit Assessment, Withdrawn, previously rated b2

Long-term Counterparty Risk Assessment, Withdrawn, previously rated
Ba1(cr)

Short-term Counterparty Risk Assessment, Withdrawn, previously
rated NP(cr)

Outlook Action:

Outlook Changed To Stable From Rating Under Review



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

Troubled Company Reporter-Europe is a daily newsletter co-
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Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante,
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Editors.

Copyright 2019.  All rights reserved.  ISSN 1529-2754.

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