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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

          Thursday, May 16, 2019, Vol. 20, No. 98

                           Headlines



A U S T R I A

IMMIGON PORTFOLIOABBAU: Liquidation to Begin on June 30


B E L G I U M

NYRSTAR NV: Failed Rescue Deal to Hit Distressed-Debt Funds


B U L G A R I A

EXPRESSBANK AD: Fitch Affirms 'BB/B' IDRs, Outlook Stable


G E R M A N Y

SSC WIND: Files for Insolvency Following Project Delays


I R E L A N D

HOLLAND PARK: Moody's Hikes EUR37.5MM Class D Notes to Ba1


I T A L Y

MOBY SPA: Moody's Cuts CFR to Caa3 & EUR300MM Sec. Notes to Caa2


K A Z A K H S T A N

HALYK SAVINGS: S&P Affirms 'BB' LongTerm ICR, Outlook Stable


L U X E M B O U R G

EP BCO: Moody's Assigns 'Ba3' CFR & Rates First Lien Loan 'Ba2'
EP BCO: S&P Assigns 'BB-' Issuer Credit Rating, Outlook Stable
EVERGREEN SKILLS: Moody's Lowers CFR to Caa3, Outlook Negative


N E T H E R L A N D S

CONSTELLIUM NV: S&P Raises LongTerm ICR to 'B' on Healthy Demand


S P A I N

DEOLEO SA: Moody's Cuts CFR to Ca on Possible Debt Restructuring


T U R K E Y

TURKLAND BANK: Fitch Cuts IDRs to 'B', Outlook Stable


U N I T E D   K I N G D O M

BURY FOOTBALL CLUB: Judge Adjourns Tax Officials' Wind-Up Petition
JONATHAN WATERS: Deposits of Ipswich Tenants Disappeared
LONDON CAPITAL: FSCS Says Investors May Have Grounds to Claim
OUTDOOR & CYCLE: Four Stores Face Closure After CVA Approval
PINNACLE BIDCO: Fitch Affirms 'B' LongTerm IDR, Outlook Stable


                           - - - - -


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A U S T R I A
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IMMIGON PORTFOLIOABBAU: Liquidation to Begin on June 30
-------------------------------------------------------
Boris Groendahl at Bloomberg News reports that Immigon
Portfolioabbau, the bad bank of Austria's cooperative Volksbanken
group, got shareholder approval to begin its liquidation on June
30.

According to Bloomberg, the decision still needs approval by the
regulator.

Ithuba Capital has been appointed as liquidator, Bloomberg
discloses.  Liquidation will take several years to complete,
Bloomberg says.

Managers Stephan Koren, Michael Mendel will step down on June 30,
Bloomberg notes.





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B E L G I U M
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NYRSTAR NV: Failed Rescue Deal to Hit Distressed-Debt Funds
-----------------------------------------------------------
Luca Casiraghi and Antonio Vanuzzo at Bloomberg News report that
distressed-debt funds are facing losses after a failed effort to
take control of metal producer Nyrstar NV.

Holders of EUR955 million (US$1.1 billion) of bonds may recover
about 50% of face value in a debt restructuring that transfers the
company to commodity trader Trafigura Group, Bloomberg relays,
citing investors, who asked not to be identified because the terms
are private.

More than 90% of bond investors agreed to the deal to avoid
insolvency, paving the way for a court-led process in the U.K.,
Bloomberg discloses.

According to Bloomberg, people familiar with the matter said Avenue
Capital Management, Monarch Alternative Capital and Warwick Capital
Partners are among funds that bought the notes last year, hoping to
take control and profit from a debt-for-equity swap.

The plan backfired because they underestimated how urgently Nyrstar
needed money and how quickly its largest shareholder would stump up
the cash in its own bid for control, Bloomberg states.

Nyrstar -- https://www.nyrstar.com/ -- is a global multi-metals
business, with a market leading position in zinc and lead, and
growing positions in other base and precious metals.  Nyrstar has
mining, smelting and other operations located in Europe, the
Americas and Australia and employs approximately 4,100 people.
Nyrstar is incorporated in Belgium and has its corporate office in
Switzerland. Nyrstar is listed on Euronext Brussels under the
symbol NYR.

As reported by the Troubled Company Reporter-Europe on April 22,
2019, Moody's Investors Service downgraded the probability of
default rating of Nyrstar NV to Ca-PD/LD from Caa3-PD.
Concurrently, Moody's has affirmed Nyrstar's corporate family
rating of Caa3 and as well as the Ca rating of senior unsecured
notes issued by its guaranteed subsidiary Nyrstar Netherlands B.V.
The outlook remains negative.  The downgrade of the PDR to Ca-PD/LD
from Caa3-PD reflects the fact that Nyrstar did not pay the
interest payment on its senior unsecured notes issued by Nyrstar
Netherlands (Holdings) B.V. even after the 30 day grace period had
elapsed on April 15.




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B U L G A R I A
===============

EXPRESSBANK AD: Fitch Affirms 'BB/B' IDRs, Outlook Stable
---------------------------------------------------------
Fitch Ratings has upgraded Allianz Bank Bulgaria AD's Short-Term
Issuer Default Rating to 'F1' from 'F2'.

Fitch has also affirmed Long-Term IDRs of ABB at 'BBB+',
Raiffeisenbank (Bulgaria) EAD (Raiffeisenbank) at 'BBB', ProCredit
Bank (Bulgaria) EAD (PCBB) at 'BBB-', Expressbank AD and OTP
Leasing at 'BB'. The Outlooks are Stable.

The upgrade of ABB reflects the resolution of the Under Criteria
Observation status on its Short-Term IDR under the new Short-Term
Ratings Criteria (published on May 2, 2019). The higher of two
possible Short-Term IDRs corresponding to the bank's Long-Term IDR
reflects Fitch's view of the parent's solid liquidity and that the
propensity to support ABB is more certain in the near term.

The affirmation of the IDRs reflects Fitch's opinion of a high
(ABB, PCBB and Raiffeisenbank) and moderate (OTP Leasing)
probability of parental support, if ever required. The affirmation
of Expressbank's IDRs reflects no changes to the bank's standalone
credit profile since the last review in 2Q18 and also a moderate
probability of support from the bank's ultimate owner.

ABB is owned by Allianz SE (AA-/Stable, 66% stake), PCBB by
ProCredit Holding AG & Co. KGaA (PCH; BBB/Stable, 100%),
Raiffeisenbank by Raiffeisen Bank International AG (RBI; 100%),
Expressbank by DSK Bank (99.7%, ultimately owned by Hungary's OTP
Bank plc) and OTP Leasing by Expressbank (100%).

KEY RATING DRIVERS

IDRS AND SUPPORT RATINGS

Expressbank's IDRs are driven by the bank's standalone credit
profile, as expressed by the bank's 'bb' Viability Rating and are
also underpinned by potential support from the bank's ultimate
owner, OTP. The IDRs of the remaining banks and the leasing company
are support-driven. The Stable Outlooks reflects its view of
broadly balanced credit risks of Expressbank and of the parents' of
the remaining banks and OTP Leasing.

Raiffeisenbank, PCBB and Expressbank are based in a strategically
important region for their respective parents. ABB's strategic
importance to Allianz is limited, which is demonstrated in ABB's
Long Term IDR being four notches below that of Allianz. This is
based on the strategic focus of Allianz on the insurance business,
with ABB being its only banking subsidiary in central and eastern
Europe, and its marginal contribution to Allianz's insurance and
asset management business and its financial self-sustainability.

In its assessment of support for all banks and OTP Leasing, Fitch
also considers the high ownership stakes in the Bulgarian
subsidiaries and the high reputational risk to the owners if their
Bulgarian subsidiaries default. The synergies of ABB,
Raiffeisenbank and PCBB with their parents are strong and
underpinned by their long records of supporting their parents'
objectives and a high level of management and operational
integration.

The IDRs of OTP Leasing are equalised with those of Expressbank as
Fitch views the leasing company as the bank's core subsidiary. The
company is an integral part of financial services provided by the
bank and is strongly integrated into the parent group at the
operational level, while funding is largely provided by its
ultimate parent OTP.

Fitch believes that any required support would be immaterial (ABB,
Raiffeisenbank) and manageable (PCBB, Expressbank, OTP Leasing)
relative to their respective parents' ability to provide it.

The Short-Term IDRs of ABB (F1) and Raiffeisenbank (F2) are the
higher of the two possibilities corresponding to their Long-Term
IDRs of 'BBB+' and 'BBB', respectively. This reflects their
respective parents' solid liquidity and its view that parental
propensity to support is more certain in the near term.

VR

The challenging domestic operating environment has weighed on the
through-the-cycle performance of Bulgarian banks. As a result, the
VRs of all four banks are compressed in the 'bb' range, despite
their largely robust capital buffers, moderate risk appetites, low
refinancing risks and moderate profitability. The higher VR of
Raiffeisenbank (bb+) reflects mainly its superior asset quality.
The lower VRs of ABB and PCBB (both bb-) are constrained by their
overall modest market franchises.

Raiffeisenbank and Expressbank are medium-sized universal banks
with a market share of about 7.6% and 6.7% in total assets,
respectively, at end-2018. They are both classified as systemically
important credit institutions by the Bulgarian central bank. ABB
and PCBB are small banks with low systemic importance (about 2%
market share). PCBB's overall franchise is small but its foothold
in the Bulgarian SME segment is fairly strong and benefits from the
bank being part of the ProCredit Group. ABB has limited competitive
advantages given its small scale, but its deposits franchise is
moderately strong, supported by a fairly developed offering of
pension and asset management products of Allianz.

The sale of Expressbank (by Societe Generale S.A., A/Stable) to DSK
(OTP's Bulgarian subsidiary) in mid-January 2019 has a neutral
impact on its assessment of the bank's VR. Expressbank will operate
as a separate legal entity until a full operational merger with DSK
is complete, which is likely by mid-2020. Expressbank's strategy
has remained broadly unchanged under the new ownership. The bank's
strategic focus on containing customer churn appears reasonable,
but challenging in light of keen market competition. Fitch does not
expect Expressbank's loan and deposit franchise to be materially
weakened before the merger.

Fitch believes that asset quality in 2019 and beyond at the four
banks will benefit from contained inflow of new bad debts,
conservative origination of new loans, and a supportive economic
environment. All banks expect rapid loan growth in 2019
(particularly at PCBB and Raiffeisenbank), but Fitch does not
expect this to be achieved through a loosening of credit standards.


At end-2018, the banks' impaired loans ratios (comprising
predominantly Stage 3 loans) equalled 2.9% (PCBB), 2.6%
(Raiffeisenbank), 8.5% (ABB) and 7.8% (Expressbank), compared with
the sector average of 11.2%. PCBB's loan book quality has been the
most resilient through the cycle, due to a focused business model
and conservative risk appetite. Raiffeisenbank's ratio fell sharply
over the last five years due to a portfolio clean-up and loan
growth. In its assessment of ABB's asset quality, Fitch takes into
consideration the bank's significant volume of high-quality
non-loan exposures (about 52% of assets).

The four banks' earnings and profitability has fared well despite
falling margins (amplified by competition) and rising operating
expenses (except PCBB). Fitch expects the banks' profitability to
remain broadly stable in 2019, supported by low loan impairment
charges and solid cost efficiency. However, LICs should gradually
normalise in the coming periods. In 2018 operating
profits/risk-weighted assets remained strong at PCBB (3.9%),
Raiffeisen (3.4%) and solid at ABB (2.9%) and Expressbank (2.8%).
Profitability at all banks benefit from unsustainably low LICs.

Capitalisation is a rating strength at the four banks and reflects
their high capital adequacy ratios, moderate risk profiles,
ordinary parental support and low stock of unreserved impaired
loans. Its assessment of capitalisation at ABB and PCBB is
constrained by their small (in absolute terms) capital base
(although capital ratios are strong), which leaves them more
vulnerable to unforeseen events, especially in light of high
country risks. Raiffeisenbank's large capital surplus over
regulatory minimums will materially shrink in the coming years (due
to rapid loan growth and hefty dividends), but Fitch does not
expect this factor (in isolation) to cause a downgrade of the
bank's VR.

At end-2018 the Fitch Core Capital ratios of ABB (18.9%), PCBB
(21.9%) and Raiffeisenbank (21%) were among the highest in CEE. The
FCC ratio at Expressbank (17.3%) was moderately lower, partly
because its balance sheet is skewed towards high capital- absorbing
assets (such as corporate loans).

Funding and liquidity is a rating strength at the four banks,
particularly at Raiffeisenbank and Expressbank because their more
diversified deposit franchises are sufficient to withstand even a
severe market stress. Liquidity at all banks is strong and
sufficiently covers their refinancing needs in 2019 and 2020. The
banks' high self-financing capacity is reflected in their
moderate-to-low gross loans/deposits ratios. They equalled 56%, 84%
(Raiffeisenbank), 96% (Expressbank) and 99% at end-2018. A greater
share of non-deposit funding at Expressbank reflects direct funding
of its fully consolidated leasing subsidiary from OTP.

RATING SENSITIVITIES

IDRS AND SUPPORT RATINGS

The IDRs of ABB, PCBB and Raiffeisenbank and Support Ratings of all
four banks are sensitive to its view of propensity and ability of
their respective parents to support them.

Expressbank's IDRs could be upgraded if the bank's VR is upgraded
or if OTP's support ability is strengthened. A downgrade of the
bank's IDRs would require both a downgrade of the VR and a
weakening, in Fitch's view, of potential support from OTP.

The IDRs and Support Rating of OTP Leasing are sensitive to changes
in Expressbank's IDRs.

VR

An upgrade of ABB's and PCBB's VRs would be contingent on a
significant improvement of the banks' respective market franchises,
coupled with maintaining adequate capitalisation and asset quality.
A VR upgrade of Raiffeisenbank and Expressbank would require an
improvement of the Bulgarian operating environment or, for
Expressbank, a strengthening of its overall credit risk profile.
Deterioration in the operating environment, which would result in a
substantial inflow of new bad debts and capital erosion at all
banks, could lead to their downgrade.

The rating actions are as follows:

Allianz Bank Bulgaria

  - Long-Term IDR affirmed at 'BBB+'; Outlook Stable

  - Short-Term IDR upgraded to 'F1' from 'F2'; off UCO

  - Support Rating affirmed at '2'

  - Viability Ratings affirmed at 'bb-'

ProCredit Bank (Bulgaria)

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

  - Short-Term Foreign-Currency IDR affirmed at 'F3'

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

  - Short-Term Local-Currency IDR affirmed at 'F3'

  - Support Rating affirmed at '2'

  - Viability Rating affirmed at 'bb-'

Raiffeisenbank

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

  - Short-Term Foreign-Currency IDR affirmed at 'F2'

  - Support Rating affirmed at '2'

  - Viability Rating affirmed at 'bb+'

Expressbank

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

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

  - Support Rating affirmed at '3'

  - Viability Rating affirmed at 'bb'

OTP Leasing

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

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

  - Support Rating affirmed at '3'



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G E R M A N Y
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SSC WIND: Files for Insolvency Following Project Delays
-------------------------------------------------------
Renewables Now reports that SSC Wind GmbH, a German wind industry
services provider, has filed for insolvency following delays and
construction freezes at the sites of two large wind projects and
due to turbine maker Senvion's bankruptcy.

Schultze & Braun made this announcement last week, saying that 100
jobs are secured until June 2019, Renewables Now relates.  

Tim Beyer has been named provisional insolvency administrator,
Renewables Now discloses.

According to Renewables Now, SSC Wind CEO Hinrich Eden said the
firm is holding advanced talks with an unnamed party interested in
buying into the company.

SSC Wind specializes in the construction and maintenance of both
onshore and offshore wind farms.





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I R E L A N D
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HOLLAND PARK: Moody's Hikes EUR37.5MM Class D Notes to Ba1
----------------------------------------------------------
Moody's Investors Service has upgraded the ratings on the following
notes issued by Holland Park CLO Designated Activity Company:

  EUR58,750,000 Class A-2-R Senior Secured Floating Rate Notes
  due 2027, Upgraded to Aaa (sf); previously on Sep 14, 2018
  Upgraded to Aa1 (sf)

  EUR30,000,000 Class B-R Senior Secured Deferrable Floating
  Rate Notes due 2027, Upgraded to Aa3 (sf); previously on
  Sep 14, 2018 Upgraded to A1 (sf)

  EUR23,750,000 Class C-R Senior Secured Deferrable Floating
  Rate Notes due 2027, Upgraded to A3 (sf); previously on
  Sep 14, 2018 Upgraded to Baa1 (sf)

  EUR37,500,000 Class D Senior Secured Deferrable Floating
  Rate Notes due 2027, Upgraded to Ba1 (sf); previously
  on Sep 14, 2018 Affirmed Ba2 (sf)

Moody's has also affirmed the ratings on the following notes:

  EUR291,875,000 (current outstanding amount EUR 251.9M)
  Class A-1-R Senior Secured Floating Rate Notes due 2027,
  Affirmed Aaa (sf); previously on Sep 14, 2018 Affirmed
  Aaa (sf)

  EUR17,500,000 Class E Senior Secured Deferrable Floating
  Rate Notes due 2027, Affirmed B2 (sf); previously on Sep
  14, 2018 Affirmed B2 (sf)

Holland Park CLO Designated Activity Company, issued in April 2014,
is a collateralized loan obligation (CLO) backed by a portfolio of
mostly European broadly syndicated first lien senior secured
corporate loans. The portfolio is managed by Blackstone / GSO Debt
Funds Management Europe Limited. The transaction's reinvestment
period ended in May 2018.

RATINGS RATIONALE

The rating actions on the notes are primarily a result of the
significant deleveraging of the senior Class A-1-R notes following
amortisation of the underlying portfolio since the last rating
action in September 14, 2018. The Class A-1-R notes have paid down
by approximately EUR 23.1 million since the last rating action and
by EUR 40.0 million since closing. As a result of the deleveraging,
over-collateralisation (OC) has increased across the capital
structure. According to the trustee report dated March 20, 2019 the
Class A-R, Class B-R and Class C-R, Class D OC ratios are reported
at 146.72%, 133.80%, 125.08% and 113.41% compared to the first
payment date August 1, 2018 levels of 140.65%, 129.57%, 121.96% and
111.61%, respectively.

In light of reinvestment restrictions during the amortization
period, and therefore the limited ability to effect significant
changes to the current collateral pool, Moody's analyzed the deal
assuming a higher likelihood that the collateral pool
characteristics would maintain an adequate buffer relative to
certain covenant requirements. In particular Moody's has used the
actual portfolio metrics rather than the portfolio covenants.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base case,
Moody's analysed the underlying collateral pool as having a
performing par and principal proceeds of EUR 455.8 million, a WARF
of 2836 over a weighted average life of 4.7 years, a weighted
average recovery rate upon default of 45.85% for a Aaa liability
target rating, a diversity score of 42 and a weighted average
spread of 3.88%.

The default probability derives from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool. The estimated average recovery rate on future
defaults is based primarily on the seniority of the assets in the
collateral pool. In each case, historical and market performance
and a collateral manager's latitude to trade collateral are also
relevant factors. Moody's incorporates these default and recovery
characteristics of the collateral pool into its cash flow model
analysis, subjecting them to stresses as a function of the target
rating of each CLO liability it is analyzing.

Moody's notes that the April 2019 trustee report was published at
the time it was completing its analysis of the March 2019 data. Key
portfolio metrics such as WARF, diversity score, weighted average
spread and life, and OC ratios exhibit little or no change between
these dates.

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was "Moody's Global
Approach to Rating Collateralized Loan Obligations" published in
March 2019.

Counterparty Exposure:

The rating action took into consideration the notes' exposure to
relevant counterparties, such as account bank and swap providers,
using the methodology "Moody's Approach to Assessing Counterparty
Risks in Structured Finance" published in January 2019. Moody's
concluded the ratings of the notes are not constrained by these
risks.

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

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
notes, in light of uncertainty about credit conditions in the
general economy. CLO notes' performance may also be impacted either
positively or negatively by 1) the manager's investment strategy
and behavior and 2) divergence in the legal interpretation of CDO
documentation by different transactional parties because of
embedded ambiguities.

Additional uncertainty about performance is due to the following:

  - Portfolio amortization: The main source of uncertainty in this
transaction is the pace of amortization of the underlying portfolio
net of reinvestment of unscheduled principal proceeds, which can
vary significantly depending on market conditions and have a
significant impact on the notes' ratings. Amortization could
accelerate as a consequence of high loan prepayment levels or
collateral sales by the collateral manager or be delayed by an
increase in loan amend-and-extend restructurings. Fast amortization
would usually benefit the ratings of the notes beginning with the
notes having the highest prepayment priority.

In addition to the quantitative factors that Moody's explicitly
modelled, qualitative factors are part of the rating committee's
considerations. These qualitative factors include the structural
protections in the transaction, its recent performance given the
market environment, the legal environment, specific documentation
features, the collateral manager's track record and the potential
for selection bias in the portfolio. All information available to
rating committees, including macroeconomic forecasts, input from
other Moody's analytical groups, market factors, and judgments
regarding the nature and severity of credit stress on the
transactions, can influence the final rating decision.




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I T A L Y
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MOBY SPA: Moody's Cuts CFR to Caa3 & EUR300MM Sec. Notes to Caa2
----------------------------------------------------------------
Moody's Investors Service has downgraded Italian ferry operator
Moby S.p.A.'s corporate family rating to Caa3 from Caa2 and its
probability of default rating to Caa3-PD from Caa2-PD.
Concurrently, Moody's has downgraded the EUR300 worth of million
senior secured notes to Caa2 from Caa1. The outlook remains
negative.

"Our rating action reflects Moby's continued fall in earnings in
the last quarter of 2018", says Guillaume Leglise, a Moody's
Assistant Vice President and lead analyst for Moby. "Moby's
liquidity profile continues to be weak and a balance sheet
restructuring involving losses for financial creditors looks
increasingly likely in the next 12 to 18 months" add Mr. Leglise.

RATINGS RATIONALE

The downgrade reflects Moby's very weak trading performance during
its fourth quarter of 2018. Moby reported a significant fall in
EBITDA, down to EUR47.5 million vs. EUR110 million in 2017,
excluding gains on the sale of assets, which translated into a
material increase in leverage (measured as Moody's-adjusted gross
debt/EBITDA) at around 10.4x at end-December 2018, from 6.0x at
year-end 2017. This significant EBITDA decline was mostly driven by
adverse fuel price fluctuations during the second half of the year.
Moody's expects limited earnings recovery in 2019, given the
uncertainty over oil price fluctuations during the summer peak
season and the company's weak hedging to date.

In addition, Moby's liquidity profile is fragile, given the limited
earnings growth prospects and sustained capital spending
requirements expected in the next 18 months. The company's cash
balance was at EUR176 million at end-December 2018, although
Moody's notes that Moby used a factoring facility for around EUR70
million at the end of 2018 to secure in advance the receivables
from the State subsidy for 2019. Absent any major disposal of
vessels in 2019, Moody's expects Moby's liquidity profile to
deteriorate because of significant cash outflows in the next 12
months, notably following the repayment of EUR50 million in
February 2019 due under the company's amortizing bank loan.

Given the limited earnings recovery prospects in 2019, sustained
maintenance capital expenditures and seasonal working capital
swings, Moody's believes that the company will potentially face a
liquidity shortfall in the next 12 to 18 months. As such, the
rating action reflects the increased likelihood that Moby will seek
to restructure its balance sheet in a way that leads to losses for
some of the company's senior financial creditors.

In addition, there are still material uncertainties related to the
phasing of potential payments to be made under the Italian
anti-trust fine and the ongoing European Commission (EC)
investigation, which could further strain the company's liquidity
position although the timing of this remains uncertain. Moody's
notes that the existing EUR29 million Italian antitrust fine is
currently suspended during the appeal process, which will resume
this month.

In addition, the ongoing EC investigation into Tirrenia-CIN's
subsidies received since 2012 carries significant uncertainties.
The timing and outcome of the EC investigation also remains
uncertain. Moody's cautions that should the EC outcome require a
reduction in the subsidies, Moby could be asked to reimburse the
excess subsidies received in the past, which could weigh on Moby's
liquidity profile, although Moody's would expect this to be offset
by a reduction in the outstanding EUR180 million deferred payments.
At the same time, even a positive outcome under the investigation
would imply a resumption of the deferred payments which are
currently suspended.

Under a possible scenario of a payment of the anti-trust fine
combined with a conclusion of the EC investigation, both occurring
within the next 12 months, Moody's believes that Moby would not
have enough financial resources to pay its obligations. Also,
Moody's notes that Moby's EUR60 million revolving credit facility
(RCF) was fully drawn as at end-December 2018, which leaves limited
financial flexibility to the company.

RATIONALE FOR NEGATIVE OUTLOOK

The negative outlook reflects Moody's view that Moby's liquidity
could weaken further in the next 12 to 18 months. The company faces
material debt repayments, while weakening profitability could
reduce the company's access to additional funding . The outlook
also reflects limited recovery in earnings owing to sustained
competitive pressure and because recent strategic initiatives will
take time to become profitable.

STRUCTURAL CONSIDERATIONS

The notes are rated at Caa2, one notch above the CFR, reflecting
the significant amount of obligations which are junior to the
senior notes and bank facilities in the capital structure, notably
the EUR180 million deferred payments due by Tirrenia-CIN. These
deferred payments are unsecured obligations and are subordinated to
the issuer's notes and credit facilities instruments with respect
to the collateral enforcement proceeds. However, Moody's cautions
that depending on the outcome of the EC investigation, the
one-notch uplift could be removed if the unsecured liabilities are
reduced or disappear from the capital structure.

The notes rank pari passu with the issuer's EUR100 million secured
term loan due 2021 and the EUR60 million RCF due 2021. The notes
are secured on a first-priority basis by most of the group's assets
(including mortgages over Moby and Tirrenia-CIN's vessels) and
benefit from a guarantor package including upstream guarantees from
Moby and Tirrenia-CIN, representing more than 90% of the group's
EBITDA.

WHAT COULD CHANGE THE RATINGS DOWN/UP

An upgrade is unlikely at this stage in light of Moody's action.
Over time, upward pressure on the rating could develop if Moby
restores its profitability and materially improves its free cash
flow generation. Also, a rating upgrade would require liquidity to
strengthen, supported, for instance, by adequate covenant headroom,
and more visibility over potential future cash outflows in relation
to the Italian antitrust fine and the EC investigation.

Conversely, Moody's could downgrade the ratings if Moby's liquidity
deteriorates as a result of a further drop in operating performance
or higher-than-expected capital expenditure, or if recovery
prospects weaken in a potential debt restructuring.

COMPANY PROFILE

Domiciled in Milan, Italy, Moby S.p.A. is a maritime transportation
operators focusing primarily on passengers and freight
transportation services in the Tyrrhenian Sea, mainly between
continental Italy and Sardinia. Through Moby and its main
subsidiary Tirrenia-CIN, the company operates a fleet of 64 ships,
of which 47 are ferries and 17 tugboats. In 2018, the company
recorded revenues of EUR584 million and EBITDA of EUR47.5 million.




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

HALYK SAVINGS: S&P Affirms 'BB' LongTerm ICR, Outlook Stable
------------------------------------------------------------
S&P Global Ratings said that it affirmed its 'BB' long-term and 'B'
short-term issuer credit ratings on Halyk Savings Bank of
Kazakhstan (Halyk Bank). The outlook on the ratings is stable. S&P
has also affirmed its 'kzA+' Kazakhstan national scale rating on
the bank.

S&P said, "We believe the bank has a prudent liquidity management
policy and enjoys strong customer loyalty. We therefore expect it
to keep its ample liquidity buffers, despite challenging conditions
in the Kazakhstan banking sector, and revise our assessment of the
bank's standalone credit profile (SACP) to 'bb' from 'bb-'. This
forecast is supported by the bank's lack of large debt repayments
due in the medium term and conservative lending strategy. In
addition, we note that a significant part of the bank's liquid
assets consist of local sovereign and central bank exposures. We
estimate liquid assets currently account for 49% of the bank's
total assets and will not decrease below 40% over the next two
years." Net broad liquid assets covered 77% of short-term customer
deposits as of Jan. 1, 2019, which is a significantly higher level
than local peers.

Halyk Bank dominates the Kazakhstani banking sector in terms of
both retail and corporate customer deposits, with market shares of
37% and 39% respectively as of April 1, 2019. It is historically
known as the country's savings bank and considered a safe harbor
during periods of turmoil in the local market. This was the case in
2018, when Halyk Bank's customer funding continued to grow despite
some closures to optimize the branch network after the integration
of Kazkommertsbank (KKB). Halyk Bank's stable funding and long-term
funding ratios were 198% and 99% respectively at end-2018, which is
better than the indicators reported by the majority of peers.

S&P said, "We continue to consider Halyk Bank highly systemically
important in the Kazakhstan banking sector. However, we no longer
incorporate any support in the bank's issuer credit rating because
its intrinsic creditworthiness is now closer to our 'BBB-'
sovereign local currency rating on Kazakhstan."

Halyk Bank benefits from an experienced management team, which has
demonstrated stable financial performance over the economic cycle.
S&P expects the bank to maintain a risk-adjusted capital (RAC)
ratio of 7.7%-8.3% over the next two years, supported by sound
earnings, and a balanced dividend policy.

S&P said, "That said, we believe that Halyk Bank is exposed to
significant legacy problem assets stemming from the acquisition of
KKB in 2017. The volume of problem assets--classified as Stage 3
and purchased or originated credit impaired (POCI) under
International Financial Reporting Standards (IFRS) 9--is still high
at about 19.6% of total loans at end-2018, down from 27.2% of total
loans at end-2017. However, the bank's loans overdue by more than
90 days decreased to about 8.2% of total loans at end-2018, from
12.1% a year before. Furthermore, we believe the bank has better
interest collection than Kazakhstani peers, demonstrated by its
interest-received-in-cash-to-interest-accrued ratio of about 94% in
2018. Loan loss provisions cover Stage 3 and POCI loans by 44%,
which is similar to the average level of Kazakhstan-based banks.

"The stable outlook on Halyk Bank reflects our expectation that the
credit profile will be broadly unchanged in the next 12 months,
supported by its leading market shares in the domestic banking
system and good earnings generation capacity.

"We could raise the ratings on Halyk Bank during the next 12 months
if its asset quality indicators improved materially, with all other
parameters remaining broadly stable."

A negative rating action appears remote in the next 12 months,
because it would require a simultaneous deterioration of the bank's
asset quality indicators or capitalization, with the RAC ratio
decreasing below 7%, and the depletion of its liquidity cushion.




===================
L U X E M B O U R G
===================

EP BCO: Moody's Assigns 'Ba3' CFR & Rates First Lien Loan 'Ba2'
---------------------------------------------------------------
Moody's Investors Service has assigned a Ba3 Corporate Family
Rating and a Ba3-PD Probability of Default Rating to EP BCo SA, the
direct shareholder of Euroports Holdings S.a.r.l, an international
port operator with bulk/breakbulk specialist terminals based in
Northern and Southern Europe as well as in China. In addition,
Moody's has assigned a Ba2 rating to the proposed EUR 315 million
senior secured first lien term loan B and EUR 25 million revolving
credit facility; and a B2 rating to the proposed EUR 105 million
senior secured second lien term loan, all to be borrowed by EP BCo
SA. Proceeds of the loans will be used to fund the acquisition of
Euroports Holdings S.a.r.l by a joint venture comprising of
R-Logitech S.A.M (a subsidiary of Monaco Group Resources-unrated)
and Belgian funds PMV and SFPI-FPIM. The outlook is stable.

This is the first time Moody's has assigned ratings to Euroports.

The assigned ratings are based on preliminary documentation
received by Moody's as of the rating assignment date. Moody's does
not expect changes to the documentation reviewed over this period
nor does it anticipate changes in the main conditions that the
credit facilities will carry. Should borrowing conditions and/or
final documentation of the credit facilities deviate from the
original ones submitted and reviewed by the rating agency, Moody's
will assess the impact that these differences may have on the
ratings and act accordingly.

RATINGS RATIONALE

The Ba3 CFR assigned to EP BCo SA reflects : (i) the strategic
location of Euroports' key terminals which are close to key trade
routes, clients and well connected with their respective
hinterland, (ii) a high degree of geographic and industry
diversification, through strong terminal presence in Northern and
Southern Europe and in China, (iii) long standing relationships
with a well-diversified group of large industrial customers and
increasing use of take or pay or volume requirement clauses which
somewhat offsets the volatility of underlying commodities handled,
and (iv) the growth potential derived from revenue synergies
involving the activities of the new majority shareholder Monaco
Resources Group.

The Ba3 CFR also takes into consideration : (i) the concentration
of Euroports' operating cash flows on the paper and pulp and sugar
industries which together represent more than 40% of the company's
reported EBITDA, and exposure to economic cycles, negative sector
trends or adverse weather conditions notwithstanding contractual
arrangements with key customers, (ii) high financial leverage
evidenced by a Moody's adjusted Funds from Operation (FFO) to Debt
ratio of 7% for 2018 pro forma for the transaction; (iii) a
de-leveraging path which will essentially rely on EBITDA growth in
the absence of debt amortizing, (iv) relatively weak historical
operating performance over the last 5 years, and (v) the limited
creditor protection embedded in the proposed financing structure,
leaving flexibility for the company to carry out M&A transactions
and incur additional debt.

The stable outlook indicates Moody's expectation that the company
will be able to progressively improve its operating performance
mainly through a combination of cost reduction and revenue
synergies, and effectively strengthen its financial profile such
that it will be positioned within guidance for the Ba3 CFR rating
within the next 12 to 18 months.

Moody's assigned EP BCo SA a probability of default rating of
Ba3-PD, in line with its CFR, reflecting a family-wide loss given
default rate of 50%, typically assumed by Moody's for a capital
structure that consists of first and second lien credit facilities.
The proposed EUR 315 million senior secured first lien term loan
and EUR 25 million revolving credit facility will be secured by all
material assets of the company and its subsidiaries including bank
accounts, intercompany receivables and concession agreements (but
excluding real estate rights). As such, they are ranked first in
priority of claim, together with claims at the operating
subsidiaries, including trade payables, pension obligations and
lease rejection claims, and were assigned a Ba2 rating. The
proposed EUR 105 million senior secured second lien term loan was
assigned a B2 rating, reflecting its second priority ranking of
claim due to its contractual subordination to the first lien credit
facilities, as per the finance documentation.

Moody's considers Euroports' liquidity profile as adequate. Under
the new financing structure the company will not face any debt
maturity until 2026 when the senior secured first lien term loan is
due. Following a period of intense capital expenditure, with annual
spend of around EUR 40-70 million since 2016 driven by expansion of
infrastructure assets, the company expects to reduce its expansion
capex in future years. Against this backdrop Moody's anticipates
the company will generate neutral to positive free cash flow in the
next 12 to 18 months. The company will also have access to the RCF,
initially set at EUR 25 million and due in 2025, which will
partially be drawn to cover transaction related expenses.

WHAT COULD CHANGE THE RATING UP/DOWN

An upgrade of the assigned ratings could be considered should
Euroports demonstrate a material and consistent growth in EBITDA or
reduction in debt, such that FFO to Debt reaches at least the low
teens in percentage terms on a sustainable basis.

Conversely, a downgrade of the assigned ratings could result from
the absence of material improvements in Euroports' operating
performance such that FFO to Debt is likely to remain sustainably
below 10%. A more aggressive stance than expected on financial
policy or a marked deterioration in Euroports liquidity profile
could also exert negative pressure on the ratings.

LIST OF AFFECTED RATINGS

Assignments:

Issuer: EP BCo SA

Corporate Family Rating, Assigned Ba3

Probability of Default rating, Assigned Ba3-PD

Senior Secured Revolving Credit Facility, Assigned Ba2

Senior Secured Term Loan B -- first lien, Assigned Ba2

Senior Secured Term Loan -- second lien, Assigned B2

Outlook, Assigned Stable

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Privately
Managed Port Companies published in September 2016.

COMPANY PROFILE

EP BCo SA is the direct shareholder of Euroports Holdings S.a.r.l,
an international port operator whose operations consist of
large-scale ports which are situated in fifteen main terminal areas
in Northern and Southern Europe as well as in China. Through its
terminals the company handles, stores and transports primarily bulk
and breakbulk products for a diverse customer base across seven end
markets : Paper & Pulp, Sugar, Metals & Steel, Fertilizer &
Minerals, Agribulk, Coal and Fresh and Frozen products. In 2018
Euroports Holdings S.a.r.l reported EUR 606 million in revenues and
EUR 60 million in EBITDA.


EP BCO: S&P Assigns 'BB-' Issuer Credit Rating, Outlook Stable
--------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' long-term issuer credit
rating to special purpose company, EP BCo S.A. (EP) and its 'BB-'
issue and '3' recovery ratings to EP's proposed seven-year EUR315
million term loan B and six-year EUR25 million senior revolving
credit facility (RCF). S&P is assigning its 'B' rating to EP's
eight-year EUR105 million second-lien facility.

S&P said, "The ratings on EP primarily reflect the stand-alone
credit quality of the EP group and its port terminal operating
business, Euroports, and our view that the EP group is partially
protected from potential negative intervention from its majority
shareholder, MRG, whose credit quality we see as weaker than
Euroports'. The ring-fencing comes from the fact that MRG acquired
53.16% in Euroports in a consortium with Belgium sovereign wealth
funds PMV (23.42%) and FPIM (23.42%). We understand that the
transaction will be funded by raising a EUR315 million term loan B,
EUR25 million senior RCF, and EUR105 million second-lien facility.

"We assess EP's stand-alone credit profile (SACP) at 'bb-'. This
reflects our view of Euroports' well-connected network of
strategically located port terminals in Europe and China (including
Antwerp, Rostock, Ghent, Tarragona, and Changshu). Terminal areas
are located near key production or consumption regions for EP's
core seven commodities (sugar, forest products, metals, fertilizer
and minerals, agribulk, fresh and frozen and coal) with large
import/export flows to and from Europe and other continents."
Despite its exposure to commodity market risk and some revenue
concentration on the top 20 clients (50% of the total revenues),
Euroports handles diverse commodities through longstanding
relationships of more than 10 years with a varied industrial
customer base.

Euroports operates its terminal areas under long-term concession or
lease agreements with extension provision for most of the
terminals. Three terminal areas have concessions expiring in the
next two-to-four years, but none of these concessions would
materially affect Euroports' balance sheet if not renewed apart
from Changshu (contributing about 6%-8% of the group's total
EBITDA). That said, S&P understands from management that renewal
risk is limited as negotiations are advanced.

Euroports generated low S&P Global Ratings-adjusted EBITDA and S&P
Global Ratings-adjusted EBITDA margin in 2018 of EUR80.7 million
and 13.3%, respectively, which is below average for the
transportation infrastructure sector. This is partly explained by
its exposure to the low-margin logistic business and the few of the
non-profitable terminals it operates.

S&P said, "We note some degree of earnings volatility because of
Euroports' exposure to trade volume and commodity prices and
changes in the group's perimeter with business divestments and
acquisitions. These factors have been partially mitigated by
Euroports' ability to secure contracts of three-to-four years,
representing about 45% of the total revenues including Manuport
Logistics (MPL). Euroports has also been managing some critical
client contracts on a long-term, minimum take-or-pay basis,
providing earnings stability. We believe the main challenges for
Euroports include improving operations and results from its
developing terminals, and delivering revenue and cost synergies
between MRG and Euroports.

"We expect EP group's consolidated debt and credit metrics to
remain relatively leveraged. In particular, we expect the adjusted
weighted-average ratio of funds from operations (FFO) to debt in
2019-2021 will be about 7%-8% and debt to EBITDA 5x-6x.

"We see Euroports as highly strategic to its main new sponsor,
diversified natural resources holding company MRG (53.16% stake),
because of its strategic fit with the shareholder's logistics
business. We believe EP will enhance MRG's scale and diversity with
exposure to less volatile industries than its existing trading and
marketing metals businesses. We expect EP to contribute about
65%-70% of the group's total reported EBITDA on a fully
consolidated basis. In our view, MRG's financials will remain
highly leveraged after it takes on more debt to fund its pro-rata
stake in the acquisition of Euroports."

At the same time, the ratings on EP could differ by up to two
notches from MRG's credit quality thanks to the protections from
the significant minority shareholders and their powers under the
shareholder agreement. While MRG will control EP--given its
significant influence on EP's management and board--the minority
shareholders (PMV and FPIM have a combined 46.84% stake) have veto
on a number of important matters including EP group's budget,
dividends, new borrowings, any transaction or agreement with the
shareholder, and voluntary bankruptcy. Therefore, S&P believes the
two sovereign wealth funds can exercise active oversight and joint
decision making when it comes to Euroports' strategy and cash
flows. In addition, there are certain restrictions in the financial
documentation, which prevents dividend distribution unless leverage
is below 4.25x.

S&P said, "In our analysis, we focus on the credit quality of the
consolidated group up to the ultimate parent company, Thaumas N.V.
The group includes the operating subsidiary Euroports Netherlands
and the issuer of the bonds, EP BidCo; and we understand that there
are no other financial liabilities at other group companies."

EP's 'bb-' SACP reflects our expectations that its port operating
business, Euroports, will sustain its resilient operating
performance, underpinned by modest demand growth, price increases,
and cost-control capabilities. This should enable the group to
maintain a credit profile commensurate with the rating. S&P
considers adjusted FFO to debt of at least 7% and debt to EBITDA no
greater than 6.0x-6.5x to be consistent with the 'bb-' SACP.
Furthermore, S&P assumes the company will implement a sufficiently
cautious financial policy to support credit measures consistent
with the rating.

S&P said, "We could rate EP up to two notches above MRG's credit
quality based on protections related to significant minority
interests.

"We could lower our rating on EP if we revise downward our view of
MRG's credit quality as a result of additional leverage at MRG or
operational underperformance of its riskier trading business. We
could also lower the rating if we believe the insulation between
MRG and EP has weakened. This will depend on the stability of the
shareholder pact and the way they execute the agreed terms under
the shareholders' agreement.

"We could revise downward EP's SACP if it made an unexpected,
aggressive debt-funded acquisition or shareholder returns, or due
to an unforeseen significant setback in operating performance,
materially weakening credit measures (driving FFO to debt below 7%
and debt to EBITDA above 6.5x for example) or liquidity.

"We are unlikely to raise the rating in the near term due to our
view of MRG's highly leveraged profile and its potential effect on
Euroports' financial profile."


EVERGREEN SKILLS: Moody's Lowers CFR to Caa3, Outlook Negative
--------------------------------------------------------------
Moody's Investors Service downgraded Evergreen Skills Lux S.a
r.l.'s corporate family rating to Caa3 from Caa1. Moody's also
downgraded Skillsoft's Probability of Default rating to Caa3-PD
from Caa1-PD, downgraded the first lien credit facilities to Caa2
from B3, and downgraded the second lien term loan to Ca from Caa3.
The outlook remains negative.

The downgrades reflect Moody's view that the sustainability of
Skillsoft's capital structure is highly uncertain and will require
a significant turnaround in sales and earnings growth to support a
timely refinancing of the company's credit facilities. Moody's
believes liquidity will remain tight over the next 12-18 months as
a result of the ongoing growth challenges and restructuring costs.
As such, there is an elevated risk that Skillsoft will miss an
interest payment, breach covenants, or engage in a debt
restructuring which could be deemed a limited default.

Downgrades:

Issuer: Evergreen Skills Lux S.a r.l.

  Probability of Default Rating, Downgraded to Caa3-PD from
  Caa1-PD

  Corporate Family Rating, Downgraded to Caa3 from Caa1

  Senior Secured First Lien Term Loan, Downgraded to Caa2
  (LGD3) from B3 (LGD3)

  Senior Secured Second Lien Term Loan, Downgraded to Ca
  (LGD5) from Caa3 (LGD5)

Outlook Actions:

Issuer: Evergreen Skills Lux S.a r.l.

  Outlook, Remains Negative

RATINGS RATIONALE

Skillsoft's Caa3 Corporate Family Rating reflects the company's
very high leverage (estimated at about 10x), weak liquidity and
risk that it will be able to turnaround overall organic revenue and
EBITDA declines. The rating incorporates Moody's expectation for
continued execution risks in restructuring its operations and
marketing its product offerings. The rating also recognizes the
highly competitive nature of the human capital management and
enterprise e-learning markets, which have low barriers to entry in
addition to relatively discretionary demand drivers. Weakness in
contract renewals has contributed to continued revenue declines and
ongoing restructuring initiatives are expected to constrain cash
generation in the near term.

The Caa3 rating derives support from Skillsoft's business model
that generates fairly predictable revenues from contracts with
retention rates in the 90% range. The rating is also supported by
the company's highly diversified customer base consisting of
enterprise and small & medium sized businesses, as well as organic
growth opportunities for certain segments of its content library
and its Percipio delivery platform.

The negative outlook reflects Moody's expectation for continued
weak liquidity, difficulty in reversing revenue declines and
potential difficulty in supporting the company's sizeable debt
burden. The outlook could be changed to stable if the company is
able to turn around revenue and EBITDA declines and generate
sufficient free cash flow to support restructuring activities and
reduce debt balances.

Though unlikely in the near term, Skillsoft could be upgraded if
the company were to improve its liquidity position materially,
reverse revenue and EBITDA declines and refinance upcoming debt
maturities at affordable terms.

The ratings could be further downgraded if the risk of default
increases or Moody's recovery estimates deteriorate. Ratings could
also be downgraded if liquidity deteriorates for any reason.

Liquidity is considered weak, based on the company's minimal cash
balances, expectations for negative free cash flow generation and
substantial revolver borrowings over the next 12 months.

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

Evergreen Skills Lux S.a r.l. provides cloud-based e-learning
solutions for enterprises, government, and education customers
through its Skillsoft, Percipio and SumTotal businesses. Evergreen
Skills was formed in connection with Skillsoft's leveraged buyout
by Charterhouse Capital Partners LLP for approximately $2.3 billion
in April 2014. Evergreen Skills reported $534 million of revenue in
its fiscal year ended January 31, 2019. In September 2014 Evergreen
Skills acquired SumTotal Systems, Inc. for approximately $725
million. SumTotal is a global provider of personalized learning and
human capital management software to organizations. The company is
headquartered in Nashua, New Hampshire.




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

CONSTELLIUM NV: S&P Raises LongTerm ICR to 'B' on Healthy Demand
----------------------------------------------------------------
S&P Global Ratings raised to 'B' from 'B-' its long-term issuer
credit rating on The Netherlands-based aluminum producer
Constellium N.V.

S&P is also raising to 'B' from 'B-' its issue rating on the
company's senior unsecured debt.

The upgrade reflects Constellium's improved credit metrics in 2018,
and our expectations for a further step up in 2019 and 2020.
Healthy demand for Constellium's products across its different
divisions supports the improvement in the company's results. Under
its base case, S&P expects the company to report an S&P Global
Ratings adjusted EBITDA of EUR520 million-EUR550 million in 2019,
translating into adjusted debt to EBITDA of about 5x by 2020, a
level that S&P sees as commensurate with the current 'B' rating.

Management has set several key financial objectives to achieve by
2020, including EBITDA of more than EUR500 million, positive free
operating cash flow (FOCF) in 2019, and reported net debt to EBITDA
of less than 4.0x (it was 4.3x on March 31, 2019). Constellium
refined those targets recently, and the company now aims for EBITDA
of more than EUR700 million by 2022, with debt to EBITDA decreasing
further to 2.5x. In S&P's view, the current contracts in place, as
well as the future contribution from the ongoing projects, should
translate into positive FOCF and ensure the company's ability to
meet its objectives.

In the first quarter (Q1) of 2019, the company was able to increase
its shipments across its three divisions (packaging & automotive
rolled products, aerospace & transportation, and automotive
structures & industry), reaching 413,000 tons compared with 388,000
tons in Q1 2018. Healthy demand, together with improved product
mix, translated into a company-adjusted EBITDA of EUR135 million in
Q1 2019, which is equivalent to an average EBITDA per ton of
EUR329, up from EUR312 in 2018. This would have been even higher
were it not for the current costs associated with the ramping up of
some of its plants.

According to management, the existing order book secures revenues
for the rest of the year and for the majority of 2020. S&P
understands that the soft demand in the automotive industry in
Europe and the production slowdown of the Boeing 737 are not going
to affect the company's results. In the medium term, secular growth
in the automotive and aerospace industries, along with the shift
toward light weighting products and disciplined capacity increase
across the industry, will more than offset increasing uncertainty
regarding the global economy, such as trade tensions stemming from
protectionist measures or weakening of the automotive sector.

As of March 31, 2019, the company's adjusted debt was EUR3.2
billion, comprising reported net debt of EUR2.2 billion, EUR494
million of pensions, EUR470 million of trade receivables sold,
EUR63 million of asset retirement obligations, and EUR11 million of
guarantees. At this stage, S&P continues to view the very high
absolute debt level--which it does not expect to change materially
over the medium term--as a key constraint for a further upgrade.
This means reduction in leverage will mainly stem from the higher
EBITDA over the short term, before being supported gradually by
positive FOCF.

S&P said, "The stable outlook reflects our expectation that
Constellium will continue to decrease leverage, as profitability
increases and FOCF becomes more material, reducing the company's
absolute debt level over time. This will translate into FOCF of
about EUR100 million in 2019 and EUR100 million-EUR150 million in
2020, with adjusted debt to EBITDA of 5.6x-5.8x in 2019 before
dropping close to 5.0x in 2020. We view adjusted debt to EBITDA of
5.0x and positive FOCF as commensurate with the 'B' rating.

"We could lower the rating if market conditions deteriorated
sharply or if the company posted negative FOCF, which could also
stem from large working capital outflows or higher capital
expenditure (capex). This could lead to adjusted debt to EBITDA
trending back toward 6.0x. We could also lower the rating if the
current liquidity position weakened."

S&P does not currently expect to upgrade Constellium in the coming
12 months. In S&P's view, such a decision would depend on the
following:

-- Completion of the ongoing expansion programs with tangible
contribution to the EBITDA;

-- Some track record of reduction in the absolute debt level,
supported by more meaningful positive FOCF; and

-- An adjusted debt-to-EBITDA of close to 4x.

S&P said, "Under our base-case scenario, we project that
Constellium's adjusted EBITDA will be about EUR520 million-EUR550
million in 2019 and EUR550 million-EUR600 million in 2020, compared
with adjusted EBITDA of EUR514 million in 2018. The implementation
of IFRS 16 will result in EUR102 million in financial liabilities
and an increase in EBITDA of about EUR22 million, which is in line
with our historical operating lease adjustments."

In S&P's base-case scenario, it makes the following assumptions:

-- Underlying demand from Constellium's end markets (automotive,
cans, and aerospace) will be broadly in line with GDP growth. S&P
expects the U.S. and the European economies to expand by 2% per
year in 2019 and 2020. That said, the demand for aluminum products
in the automotive industry should grow faster than the industry as
a whole (7%-10% per year in 2019 and 2020).

-- The company generally passes on any hikes in raw material
prices to customers; therefore, aluminum prices are not a key
factor in S&P's model.

-- Shipment growth of about 4.5% in 2019 and in 2020, driven
mainly by the automotive market, reaching 1.6 million-1.7 million
tons. S&P understands that most of the volumes are secured. In
2018, the company shipped 1.5 million tons.

-- Further positive contribution from the ongoing cost-cutting
initiatives. As of March 31, 2019, the company achieved an annual
saving run rate of EUR60 million (compared to an overall target of
EUR75 million in 2019);

-- Positive contribution of about EUR25 million-EUR30 million from
the ramp up of its Bowling Green and CALP facilities, as well as
increased production at its Muscle Shoals facility.

-- Negative change in working capital of about EUR35 million in
each of the coming years, since we expect continued strong demand,
as well as a slight increase in aluminum prices.

-- Capex of EUR265 million-EUR285 million per year in 2019 and
2020, including about EUR100 million of expansion capex. In S&P's
view, with the completion of the company's flagship
projects--Muscle Shoals and Bowling Green--the company will have
significant flexibility to adjust its capex to meet its financial
objectives.

-- No dividends, at least until it meets its financial
objectives.
-- No acquisitions. S&P understands that the management's first
priority would be to optimize the current production facilities and
build some financial flexibility before looking to expand
inorganically.

Based on these assumptions, S&P arrives at the following credit
measures:

-- A positive FOCF in 2019 of about EUR100 million, exceeding
company's public guidance of EUR50 million (year-to-date the
company generated EUR73 million). S&P expects this to further
improve in 2020 to about EUR100 million-EUR150 million. In 2018,
the company had a negative FOCF of EUR168 million, of which 239
million was linked to working capital outflow;

-- Adjusted debt to EBITDA of 5.6x-5.8x in 2019 and close to 5.0x
in 2020, compared with 6.1x in 2018; and

-- Adjusted funds from operations (FFO) cash interest coverage of
about 4.0x in 2019 and 4.2x or higher in 2020, compared with 3.5x
in 2018.




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

DEOLEO SA: Moody's Cuts CFR to Ca on Possible Debt Restructuring
----------------------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating of Deoleo S.A. to Ca from Caa1 and its probability of
default rating to Ca-PD from Caa1-PD. Concurrently, Moody's has
also downgraded to Ca from Caa1 the ratings on the senior secured
EUR460 million first lien term loan due June 2021 and the EUR85
million first lien revolving credit facility due June 2020, and to
C from Caa3 the rating on the senior secured EUR55 million second
lien term loan due June 2022. The outlook remains negative.

"[The] rating action reflects the increased likelihood that Deoleo
will need to restructure its debt or to request an extension of its
debt maturities which will result in losses for its financial
creditors. Such losses would qualify for a distressed debt exchange
(DE) which Moody's consider as a default", says Giuliana
Cirrincione, Moody's lead analyst for Deoleo.

RATINGS RATIONALE

Deoleo's operating performance during 2018 continued the downward
trend started in 2014, with the company-reported EBITDA dropping to
EUR15.4 million from EUR31.3 million in the prior year. As a result
of the low EBITDA, Moody's-adjusted (gross) debt to EBITDA ratio
was in excess of 30x as of December 2018, which Moody's view as
unsustainable.

Moody's believes that Deoleo's capital structure is unsustainable
and the slow and uncertain EBITDA recovery prospects suggest a very
high likelihood of a balance sheet restructuring over the next
12-18 months that could be detrimental to some of the company's
financial creditors. The Ca CFR assumes a family recovery rate
between 35% and 65%. The closest debt maturity date for Deoleo is
in June 2020, i.e. when the EUR60 million drawings (as of 31st
March 2019) under its RCF become due. Moody's considers that a
temporary extension of upcoming maturities might be also viewed as
a distressed debt exchange, under Moody's criteria, depending on
the agreed terms of the extension.

The company has engaged in an extensive overhaul of its business
operations over the past three years and is currently intensifying
investments into its premium brands to support recovery in
profitability. However, Deoleo is still facing tough trading
conditions in the core Italian and US markets as a result of lower
volumes and strong price competition. In Moody's view, the
company's strategy to focus on advertising, marketing and R&D to
favour a shift in competition from price to quality will require
time to bear fruits. This underpins the rating agency's expectation
that Deoleo's credit metrics will remain very weak over the next
12-18 months and this leaves high uncertainty around the company's
financial strategy and future capital structure. As a result the
likelihood of a debt restructuring has increased as the debt
maturities approach.

Despite a cash balance of EUR79 million as of March 31, 2019 (which
includes the additional EUR26 million draw down under the RCF
during the first quarter of 2019, leading to a total outstanding
amount of EUR60 million under this facility), Deoleo's liquidity
has weakened further due to refinancing risk. This reflects a
persistently negative free cash flow generation (i.e. after
interest payments, as per Moody's definition) which has been eroded
over the past five years by restructuring costs and unfavorable
olive oil prices and foreign exchange movements.

According to Moody's estimates, the company's internally generated
cash flow over the next 12-18 months will not be enough to cover
for interest expenses, the planned advertising investments,
seasonal working capital requirements and maintenance capital
spending. However, Deoleo's ability to fully draw down the RCF,
whose total size is EUR85 million and will expire in June 2020, is
constrained by the facility's first lien net leverage covenant of
7.75x, tested if the RCF is more than 70% (or EUR60 million)
drawn.

STRUCTURAL CONSIDERATIONS

The Ca ratings of the EUR85 million first lien RCF and EUR460
million first lien term loan are in line with the CFR, while the
rating of the EUR55 million second lien term loan is C because of
the subordination of claims in an enforcement scenario in
accordance with the terms of the intercreditor agreement. Neither
the first and second lien facilities have financial covenants, with
the exception of a 7.75x total net leverage ratio covenant, tested
when drawings under the RCF exceed 70% of the committed amount. The
second lien can be paid ahead of the first lien, provided the total
net leverage ratio is below 4.25x or if it is equity financed.

RATIONALE FOR THE NEGATIVE OUTLOOK

The negative outlook reflects Moody's view that the risk of a
default remains high, with potential losses for financial
creditors, either in the form of a distressed debt exchange or debt
maturity extensions.

WHAT COULD CHANGE THE RATING UP/DOWN

Upward pressure on the ratings is unlikely in the short term but
could arise if a sustainable financial structure is put in place
and the company is able to restore positive free cash flow
generation capacity.

Downward pressure on the ratings could materialise if Deoleo is
unable to refinance its upcoming maturities or if Moody's believes
that recovery prospects for creditors will further deteriorate.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Global Packaged
Goods published in January 2017.

COMPANY PROFILE

Headquartered in Madrid, Deoleo is the largest branded olive oil
bottler globally, with proprietary brands including Carapelli,
Bertolli, Carbonell and Hojiblanca. The company engages in the
refining, blending, distribution and sale of olive oil (over 80% of
revenue), but also of seed oil, vinegars and sauces, mostly through
the retail channel. In 2018 the company reported EUR606 million
sales (2017: EUR692 million) and EUR15 million EBITDA (2017: EUR31
million). Since 2014, CVC Capital Partners (CVC) is the reference
shareholder of Deoleo, with an ownership stake which has increased
over time to 56.4% following subsequent capital increases, the last
of which was completed in October 2018.




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

TURKLAND BANK: Fitch Cuts IDRs to 'B', Outlook Stable
-----------------------------------------------------
Fitch Ratings has downgraded Turkland Bank A.S.'s Long-Term Issuer
Default Ratings to 'B' from 'B+'. The Outlook is Stable. At the
same time, Fitch has downgraded T-Bank's Viability Rating to 'ccc+'
from 'b-'.

The downgrade of T-Bank's support-driven IDRs to 'B' from 'B+'
reflects Fitch's view that shareholder Arab Bank Plc's (BB/Stable)
propensity to provide support to T-Bank, in case of need, has
diminished given i) Arab Bank has reclassified T-Bank as an
investment held for sale; ii) the reduced importance of T-Bank, and
Turkey, to Arab Bank's international operations; and iii) T-Bank's
persistently weak performance in recent years.

The downgrade of T-Bank's VR to 'ccc+' from 'b-' reflects continued
significant asset quality deterioration, which has put pressure on
capitalisation, given material unreserved impaired loans, and the
ensuing weak profitability.

KEY RATING DRIVERS

IDRS AND SUPPORT RATING

T-Bank's 'B' support-driven IDRs are notched three times from Arab
Bank Plc. This reflects T-Bank's limited role in the Arab Bank
group, weak performance in recent years and in its view, Turkey
being a non-core market compared with Arab Bank's other
strategically important markets. Arab Bank classified T-Bank as an
investment held for sale in its end-2018 financial statements. This
reflects a high potential for disposal and lower reputational risk
for Arab Bank, which combined with other factors reduces its
propensity to provide support in case of need to T-Bank, in Fitch's
view.

The Support Rating also reflects Arab Bank's only 50% ownership of
T-Bank, which may complicate the prompt provision of solvency
support, if required. Nevertheless, T-Bank's Support Rating also
takes into account a record of timely and sufficient provision of
capital and liquidity support from both Arab Bank and its other 50%
shareholder, Lebanon's BankMed Sal; both shareholders agreed to
inject USD30 million of Additional Tier 1 notes into the bank in
January 2019. The Stable Outlook on T-Bank's IDRs mirrors that on
Arab Bank.

VR

T-Bank's 'ccc+' VR primarily reflects weak execution in recent
years, which has led to a material deterioration in asset quality,
profitability and capital ratios. The VR also considers the bank's
limited franchise in Turkey where it controlled less than 0.2% of
sector assets, loans and deposits at end-2018.

T-Bank's asset quality metrics continued to deteriorate in 2018
following the ongoing loan book clean up and ensuing deleveraging,
as well as loan seasoning. The impaired loans (Stage 3; overdue by
90+ days) ratio increased to a significant 37% at end-2018 from 11%
at end-2017 due to large increases in impaired loans recognition
and to a lesser extent, reduction of the loan book. In addition,
Stage 2 loans, which could further increase impaired loans, were
equivalent to a high 18% at end-2018, of which about a fifth had
been restructured.

Reserve coverage of impaired loans is considered weak, as total
loan loss allowances covered 62% of impaired loans at end-2018.
Coverage of total impaired loans and Stage 2 loans is a weaker 42%
at end-2018.

Profitability is suffering as a result of large loan impairment
charges and the bank recorded a large loss of TRY265million in 2018
(equivalent to 47% of average equity). However, core revenues and
margins improved slightly as the bank continues efforts to reprice
its assets. Profitability is expected to remain weak as the bank
continues to provision against problem loans but also due to
slowing economic growth and higher funding costs.

T-Bank's capital ratios have come under pressure given the bank's
weak profitability and asset quality. Fitch core capital to risk
weighted assets fell to a low 10.2% at end-2018 from 14% at
end-2017, reflecting the large loss in 2018 and lira depreciation
(as it inflates foreign currency RWAs). Shareholders have approved
a USD30 million AT1 injection, which is expecting regulatory
approval by end-2Q19, and this is estimated to provide an uplift of
about 530bp to the end-1Q19 Tier 1 and total capital ratios.
Nevertheless, the unreserved share of NPLs to FCC (104% at
end-2018) and Tier 1, post-capital injection, is expected to remain
significant and leaves capital vulnerable, particularly in light of
the bank's weak profitability and small absolute size of equity
(USD74 million at end-2018).

T-Bank is aiming for aggressive loan book growth of above 50% in
2019 post-AT1 capital approval following years of deleveraging.
This could again weaken capital ratios and also lead to future
asset quality problems given the current operating environment
pressures including weak GDP growth, high interest rates and market
volatility.

Funding and liquidity at T-Bank is a relative strength for the VR.
The bank was nearly entirely funded by customer deposits at
end-2018 (94% of total funding) which limits refinancing risks. The
bank's loans-to-deposits ratio of 80% at end-2018, one of the
lowest among Fitch-rated Turkish banks, would have been moderately
lower net of the large stock of impaired loans. Nevertheless, the
bank's liquidity could come under pressure if there were material
deposit outflows, given the bank's limited franchise and less
flexible pricing power.

NATIONAL RATING

The downgrade of T-Bank's National Rating to 'BBB+(tur)' from
'A(tur)' reflects its view that the bank's creditworthiness has
weakened relative to peers given the reduced likelihood of
receiving support, in case of need.

RATING SENSITIVITIES

IDRS, SUPPORT RATING AND NATIONAL RATING

The IDRs and Support Rating could be downgraded if there is a sharp
reduction in the ability or propensity of the parent bank to
support its Turkish investment. T-Bank's support-driven ratings
could be downgraded if the bank does not receive sufficient and
timely support to offset the impact of the bank's weak asset
quality and ensuing weak performance.

VR

Further deterioration in T-Bank's asset quality or the inability to
effectively improve the bank's weak performance that exposes its
capital position could lead to further downgrades of the VR.

The rating actions are as follows:

  Long-Term Foreign- and Local-Currency IDRs: downgraded
  to 'B' from 'B+'; Stable Outlook

  Short-Term Foreign- and Local-Currency IDRs: affirmed
  at 'B'

  Viability Rating: downgraded to 'ccc+' from 'b-'

  Support Rating: affirmed at '4'

  National Long-Term Rating: downgraded to 'BBB+(tur)'
  from 'A(tur)'; Stable Outlook




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

BURY FOOTBALL CLUB: Judge Adjourns Tax Officials' Wind-Up Petition
------------------------------------------------------------------
Brian Farmer at Press Association reports that a judge has
adjourned a bid by tax officials to wind up newly promoted League
One football club Bury.

According to Press Association, Judge Sebastian Prentis was told on
May 15 that the struggling club could soon be sold and debts paid.

He had considered a winding up application by lawyers representing
HM Revenue and Customs at an Insolvency and Companies Court hearing
in London, Press Association relates.

The judge, as cited by Press Association, said the case would be
reconsidered on June 19.

Lawyers representing Bury said prospective buyers were interested
and debts could be paid off, Press Association notes.

Judge Prentis said an adjournment was justified given there was a
chance of saving the "historic" club, Press Association relays.

Earlier this year, Judge Sally Barber had been told the club had a
number of debts, including an unpaid tax bill of more than
GBP200,000, Press Association recounts.


JONATHAN WATERS: Deposits of Ipswich Tenants Disappeared
--------------------------------------------------------
Andrew Hirst at Ipswich Star reports that tenants and landlords are
demanding justice after more than GBP30,000 of deposits allegedly
disappeared from Jonathan Waters Estate Agents Limited (JWEAL),
which went into liquidation.

According to Ipswich Star, the deposits paid by Ipswich tenants to
JWEAL should have gone into a government-backed protection scheme
but customers say the money has vanished.

Pauline Scott Property Management (PSPM), which took over managing
properties for the landlords after JWEAL agreed to be voluntarily
wound up last August, confirmed the deposits were missing, Ipswich
Star relates.

PSPM also told landlords their tenants' deposits had not been paid
into protection schemes, Ipswich Star notes.

Tenants and landlords are calling for authorities to take action
against JWEAL's owner and director Jane Russell, who bought the
company from Mr. Waters, Ipswich Star discloses.


LONDON CAPITAL: FSCS Says Investors May Have Grounds to Claim
-------------------------------------------------------------
Kate Beioley, Philip Georgiadis and Caroline Binham at The
Financial Times report that the UK's financial compensation scheme
has offered a glimmer of hope to some 11,500 customers wiped out by
the GBP236 million collapse of London Capital & Finance by stating
they could have grounds to claim, rowing back on an earlier
decision.

According to the FT, the Financial Services Compensation Scheme
said on May 10 it was exploring whether or not LCF was conducting
regulated activities "which might give rise to a claim".  This
represents a U-turn on its original position when the FSCS told
investors the company's activities fell outside its remit, the FT
notes.

LCF sold unregulated "mini-bonds" to investors and fell into
administration in January, sparking a criminal probe, a regulatory
investigation and an inquiry into rules around unregulated
mini-bonds, the proceeds of which fund small businesses, the FT
relates.

The FSCS originally told customers they were not protected because
LCF "issued its own mini-bonds to investors on a non-advised basis"
and the bonds were not transferable, the FT recounts.

The change in position follows pressure from lawyers and
administrators at Smith & Williamson, who have trawled through
hours of recorded calls between LCF sales people and promotional
material to uncover evidence of regulated activities, such as
proving customers were advised to buy mini-bonds, the FT states.

Finbarr O'Connell -- finbarr.oconnell@smithandwilliamson.com --
Adam Stephens -- adam.stephens@smithandwilliamson.com -- Colin
Hardman and Henry Shinners -- henry.shinners@smithandwilliamson.com
-- all of Smith & Williamson LLP were appointed Joint
Administrators of London Capital & Finance Plc on January 30, 2019.




OUTDOOR & CYCLE: Four Stores Face Closure After CVA Approval
------------------------------------------------------------
Grace Whelan at Drapers reports that two Cotswold Outdoor stores
and one Snow+Rock shop are to close as part of the approved Outdoor
& Cycle Concepts company voluntary arrangement (CVA).

According to Drapers, under the CVA, approved on May 14 by more
than 97% of creditors, four stores from the UK retailer's portfolio
will close in the next three months.

This includes the Peterborough and Ipswich branches of Cotswold
Outdoor and the Bridgend Snow+Rock store, Drapers discloses.

Outdoor & Cycle Concepts also owns the brands Runners Need and
Cycle Surgery.  One Cycle Surgery store will also be affected,
Drapers notes.


PINNACLE BIDCO: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has affirmed Pinnacle Bidco Plc's Long-Term Issuer
Default Rating at 'B' with Stable Outlook.

The rating reflects the company's high leverage and is constrained
by its expectation of negative free cash flow in 2019 due to high
development capex. Positively the rating takes into account the
company's market-leading position in the UK value gym market, where
its strong value and low-cost proposition is leading to good
growth. Pure Gym has over 225 gyms and an ambitious development
programme.

The value gym sector should display some resilience to a downturn,
including post-Brexit, given its low-cost nature and has only low
subscription fees. However the sector is inherently cyclical, and
gym membership is not a necessity. Although Fitch expects funds
from operations lease adjusted gross leverage will be high at 6.9x
in 2019, the company has capacity for de-leveraging from 2020/21
once FCF becomes positive as its portfolio matures.

KEY RATING DRIVERS

Growing UK Value Gym Market: As with airlines, Fitch expects Pure
Gym's low-cost/value segment to be the fastest-growing part of the
market at the expense of public gyms and private mid-market
operators. The UK gym market, the largest in Europe, is growing at
around 3% to 5% p.a. with total spending of GBP4.9 billion in 2017
(Source: Leisure db May 2018). Around 6.6 million of the UK's
population hold private gym membership and around 15% use a gym.
Within this growth, value gyms have increased their market share
and value members now represent around 25% of gym members as
customers now require a more affordable and flexible product. .

Fragmented, but Competitive Market: While Pure Gym is now the UK 's
market leader with a 10% market share by members and a UK-wide
presence with strong clustering in major cities, the sector remains
fragmented with no other competitor having more than 6% of the
market (The Gym has 724,000 members at 160 gyms). Fitch believes
that the private mid-market gym sector is the most likely
sub-segment to come under pressure, as increasingly time- and
cost-sensitive customers look to more affordable and flexible
solutions. The public gym sector will also suffer as hard-pressed
local authorities concentrate their budgets on core activities
(social care, education etc)

Potential Volatility from Business Model: Retention rates remain an
issue in the sector, although data analytics technology is now
allowing operators to track and remedy cancellations more
effectively. Pure Gym has a long membership affiliation averaging
17 months, but its business model is based on customers joining and
leaving regularly and with low subscription fees. This introduces
potential revenue volatility for the company.

Cost Competitive Advantage: Pure Gym's value/low-cost business
model distinguishes the company from most other main UK players,
excluding its main competitor The Gym. Monthly fees are typically
50% less than traditional private operators' and there is no
membership contract with notice periods. This provides current and
potential customers with a much more flexible product, 24/7
opening, a range of membership options and membership numbers per
gym have been stable.

Exposed to Spending Changes, Brexit: Due to its low-cost/value
nature, Pure Gym displays some trading resilience and has a
comparatively defensive position, relative to peers. However, a
prolonged downturn in UK consumer spending, for example due to a
difficult post-Brexit economy, could lead to lower revenue and a
more volatile revenue profile. While UK consumers have moved away
from material to experience expenditures and embraced value
propositions in many sectors such as airlines, gym membership is
not a consumer necessity and can be replaced by other cheaper
leisure activities. While the sector is maturing, the 2008
financial crisis showed that gym expenditure, particularly in the
mid-market, was not immune to belt tightening.

Low but Increasing Entry Barriers: The sector is characterised by
low, but increasing, barriers to entry. Brand recognition, network
scale, digital competence/service and landlord covenant are now
raising competitive entry barriers, although competition to gain
new members remains key to shaping the profitability of fitness
clubs. With most premises leased and staff outsourced, initial
capital costs are low and there is no real protection for existing
operators. There is growing brand recognition in the sector, and
Pure Gym is supported by its low-cost value proposition, low cost
of acquisition per customer, nationwide presence and large and
small size sites.

Continued Digital Investment: Pure Gym has a growing multi-channel
digital-led marketing strategy using up-to-date technology and
applications, including fully digitalised gyms/studios, online
support and quick joining programmes. This ensures low acquisition
costs per member, critical in the value gym sector, and provides
for increasingly sophisticated pricing/yield management strategies.
The system also allows Pure Gym to compile detailed data on its
customer base and tailor offers to them.

High Development Capex: Its forecasts assume that Pure Gym will
show high capex intensity (slightly above 25% of sales) in 2019 due
to new gym openings. While Fitch subsequently expects a slower pace
of expansion, it sees rising refurbishing capex on existing gyms
from 2020. With few ancillary facilities such as swimming pools and
restaurants, fit-out capex at individual Pure Gym sites remain low
as a percentage of revenue compared with peers'. Pure Gym's
exercise equipment stock remains early in its useful life and
maintenance capex is not material. The company has also developed
both big box and small box formats to appropriately service
different types and size of catchments areas.

Exposure to Leases: Unlike some leisure businesses, gyms require
physical space and the company is exposed to lease costs, which
remain the largest cost within the business. While the majority of
rents are still subject to RPI increases, Pure Gym imposes a
standard lease and uses contractual arrangements to limit rent
increases. Pure Gym is also beginning to benefit from the more
tenant-friendly environment in the difficult and challenged UK high
street, with rents now under severe pressure from multiple retail
bankruptcies and compulsory voluntary arrangements (CVA). Fitch
expects UK rents at Pure Gym to flatten out in 2019 and could even
slightly decline on average per gym from 2020.

Weak Cash Flows to Improve: Due to the highly leveraged nature of
Pure Gym's financing structure and still significant expansionary
capex, Fitch forecasts that FCF generation is likely to be negative
in 2019. However, FCF should turn positive in 2020, albeit
depending on the pace of future expansion, as existing gyms mature
and given its expectation of solid EBITDA margin (around 30%) for
the sector.

High Leverage: Pure Gym's GBP390 million (originally GBP360
million) of senior secured debt has created a highly leveraged
financial structure, corresponding to a 'B' category rating. While
this is in line with medians for other UK fitness groups, it
constrains the ratings in a traditionally volatile sector. However,
based on its current forecasts showing a strenghtening FCF profile
post-2020, some de-leveraging should materialise and lower FFO
adjusted leverage towards 6.0x over the next three years, a level
that Fitch deems as comfortable for the rating.

DERIVATION SUMMARY

Pure Gym's IDR of 'B'/Stable reflects the company's position as the
leading value gym provider in the UK with a 10% market share and
228 sites, more than any other gym group in the UK. Due to its
scale and a value/low-cost business model, it operates on higher
EBITDAR margins than the median for gym operators rated by Fitch,
including those within its credit opinion on food/non-food retail/
leisure portfolios. Due to the competitive nature of its pricing
structure and the recent weak growth in real income among UK
consumers it has been taking market share mainly from its
mid-market peers.

Leverage is high at around 6.9x forecasted for 2019 on a FFO gross
lease-adjusted basis but in line with that of similar US and UK
fitness groups within the 'B' rating category. As Pure Gym's
development programme will involve significant capex in 2019, FCF
should only become positive from 2020. Deleveraging will therefore
be moderate over the next three years, constraining the ratings.

KEY ASSUMPTIONS

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

  - Lfl revenue growth per gym of between 0.5% and 0.6% p.a. from
2019 to 2021. Gym membership average at 4,529 per gym in 2022

  - Between 20 and 30 site openings in 2019 and conservatively
around 15 p.a. thereafter, even though future expansion may be
higher based on the management case; longer "maturation" period to
full revenue and lower EBITDAR margin

  - Development capex per site between 20% and 40% higher per site
than management case from 2018, depending on type of site

  - Around 20 gym refurbishments per annum

  - Ancillary income 8%-8.7% of total revenue

  - No growth in rents as a percentage of sales from 2019 onwards
as UK high street vacancy rate continues to increase

  - No dividends paid

  - No acquisitions to 2020

Key Recovery Assumptions:

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

Pure Gym's going concern EBITDA is based on 2018 EBITDA. The
going-concern EBITDA estimate reflects Fitch's view of a
sustainable, post-reorganisation EBITDA upon which it bases the
valuation of the company. This is 20% below 2018 EBITDA to reflect
the industry's move from top-of- the cycle conditions to mid-cycle
conditions and intensifying competitive dynamics.

An enterprise value (EV)/EBITDA multiple of 5.5x is used to
calculate a post-reorganisation valuation. The estimate considered
the following factors:

The current Fitch-distressed EV/EBITDA multiples for other gym
operators in the 'B' rating category has been around 5x to 6x.
Fitch recognises that the company has a leading market share in the
growing value gym market and this justifies a higher 5.5x multiple,
although Pure Gym currently does not have any unique
characteristics that would allow for a higher EBITDA multiple, such
as a significant unique brand, or undervalued assets (ie., real
estate).

The RCF is assumed to be fully drawn upon default. The RCF ranks
super senior to the senior secured notes.

Senior secured debtholders would achieve a recovery of 62%,
resulting in an instrument rating of 'B+'/'RR3'. The super senior
RCF facility would achieve a 100% recovery, resulting in an
instrument rating of 'BB'/'RR1'.

RATING SENSITIVITIES

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

  - Improvement in the retention rate and market share gains

  - EBITDA margin trending towards 35% (2018: 32.6%) and FFO charge
cover above 2.0x on a sustained basis (2018: 1.7x)

  - Steady EBITDA growth along with sustainable capex leading to
positive FCF margin above 4% (2018: 2.8%) on a sustained basis

  - FFO adjusted gross leverage below 6.0x through the cycle, due
to additional profits from new clubs and/or sustainable ancillary
income streams

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

  - Weakening consumer spending over two years leading to a
sustained fall in lfl sales revenue

  - Loss of revenue leading to EBITDA margins consistently below
30% and FFO fixed charge cover below 1.5x

  - Profit erosion, volatile or negative FCF prompted by continuing
development capex, leading to FFO adjusted gross leverage trending
above 7.0x on a sustained basis from 2020 onwards.

LIQUIDITY AND DEBT STRUCTURE

Satisfactory Liquidity: Liquidity is satisfactory supported by the
full availability under a GBP60 million revolving credit facility
(RCF) and GBP32 million cash on balance sheet at end-2018. As a
result of the refinancing transaction in 2018, debt maturities were
extended until 2025 from 2022, providing additional flexibility.
The GBP60 million super senior RCF facility is available until 2023
before the maturity of the GBP390 million 2025 senior secured
notes.



                           *********


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

Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante,
Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman,
Editors.

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

This material is copyrighted and any commercial use, resale or
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