---

       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, June 13, 2019, Vol. 20, No. 118

                           Headlines



C R O A T I A

3 MAJ: Rijeka Court Postpones Bankruptcy Hearing to July 4


G E R M A N Y

DEUTSCHE BANK: Fitch Lowers Rating on Add'l. Tier 1 Notes to 'B+'
IHO VERWALTUNGS: Fitch Gives Final 'BB+' Rating to New Secured Debt
LEISURE CARGO: Loss of Contracts Prompts Insolvency Filing


I R E L A N D

SCORPIO DAC 34: S&P Assigns BB- Rating on GBP24.5MM Cl. E Notes


I T A L Y

DECO 2019: Fitch Assigns 'BBsf' Rating on Class D Notes
DIOCLE SPA: S&P Assigns Prelim 'B' Rating on New EUR470MM Notes
NAPLES CITY: Fitch Maintains 'BB+' LT IDRs on Watch Negative


N E T H E R L A N D S

BLOCKPORT: Failed STO Prompts Bankruptcy Filing


P O L A N D

KANIA: Files for Accelerated Restructuring Proceedings


R U S S I A

ALFASTRAKHOVANIE PLC: Fitch Hikes IFS Rating to BB+, Outlook Stable
NOVOSIBIRSK CITY: Fitch Affirms 'BB' LongTerm IDRs, Outlook Stable


T U R K E Y

IS FAKTORING: Fitch Affirms & Then Withdraws 'B+' IDR


U K R A I N E

DNIPRO CITY: Fitch Affirms 'B-' LongTerm IDRs, Outlook Stable


U N I T E D   K I N G D O M

ARCADIA GROUP: Creditors Back Company Voluntary Arrangement
BLACK DIAMOND 2019-1: S&P Assigns Prelim B- Rating on F Notes
JAC VAPOUR: Bought Out of Provisional Liquidator by Magflo
REDHALL GROUP: Appoints Administrators, Shares Still Suspended
SYNLAB BONDCO: Fitch Gives B+(EXP) Rating to New EUR920MM Term Loan

VUE INTERNATIONAL: S&P Affirms 'B-' LT ICR, Outlook Negative

                           - - - - -


=============
C R O A T I A
=============

3 MAJ: Rijeka Court Postpones Bankruptcy Hearing to July 4
----------------------------------------------------------
SeeNews reports that the commercial court in Rijeka has postponed a
hearing on the launch of bankruptcy proceedings against Croatia's
troubled 3 Maj shipyard.

According to SeeNews, 3 Maj said in a filing to the Zagreb Stock
Exchange (ZSE) that the new hearing is scheduled for July 4 at
11:00 CET.

3 Maj is part of Croatia's troubled shipbuilding group Uljanik
Group, which is already under bankruptcy proceedings, SeeNews
discloses.

In March, prime minister Andrej Plenkovic said the government had
spent HRK9 billion (US$1.4 billion/EUR1.2 billion) between 1992 and
2017 for the recovery of 3 Maj, SeeNews relates.




=============
G E R M A N Y
=============

DEUTSCHE BANK: Fitch Lowers Rating on Add'l. Tier 1 Notes to 'B+'
-----------------------------------------------------------------
Fitch Ratings has downgraded Deutsche Bank AG's Long-Term Issuer
Default Rating to 'BBB', Viability Rating to 'bbb' and Derivative
Counterparty Rating (DCR) to 'BBB+(dcr)'. Fitch has also affirmed
the bank's Short-Term IDR at 'F2'. The Outlook on the Long-Term IDR
is Evolving.

The downgrade of Deutsche Bank reflects its continued difficulty
and limited progress in improving its profitability and stabilising
its business model. Unlike other rated global peers, Deutsche
Bank's retail franchise and pricing power in its home German market
are not strong enough to mitigate this.

The Evolving Outlook reflects Fitch's expectation that ratings
could over time benefit if the bank takes measures to strengthen
its business model. On the other hand, failure to address the
bank's weaknesses could put further pressure on ratings.

Management has indicated its willingness to make 'tough cutbacks'
and tighten its strategic focus on the better performing businesses
in the corporate and investment bank (CIB), accelerate the private
and commercial bank's (PCB) business integration and maintain cost
discipline. If implemented effectively and in a timely manner, such
actions could ultimately allow the bank to stabilise its business
model and generate acceptable returns. This could lead over time to
a positive rating action. However, Fitch  believes that a further
restructuring would be difficult to implement. Failure to deliver a
business mix with more adequate returns and strengthened ability to
generate capital internally could lead to a further downgrade of
the ratings.

KEY RATING DRIVERS

IDRS, VR, AND SENIOR NON-PREFERRED DEBT RATINGS
DEUTSCHE BANK

Deutsche Bank's IDRs and VR reflect the bank's wide-ranging
challenges and protracted progress in restoring adequate and
sustainable returns. The high reliance on, but insufficient
earnings from, the capital markets businesses, negatively
influences its assessment of the bank's company profile, strategy
and profitability. The bank's good capitalisation, funding,
liquidity and asset quality underpin the ratings.

Management remains committed to its global and CIB-heavy business
model, although over time favouring retail, asset management,
transaction banking and a CIB division refocused around its
stronger business lines could improve the bank's earnings and
stability. Statements made at this year's annual shareholder
meeting suggest further business scope adjustments in CIB. These
could support the ratings if the adjustments have a meaningful
impact on earnings prospects and risk appetite, and if management
contains the franchise damage potentially resulting from
restructuring measures.

Deutsche Bank has underperformed earnings expectations raised at
the 2018 strategic review and, absent an external or one-off boost,
Fitch expects the bank to miss its return on tangible equity (RoTE)
target of 4% in 2019. Revenue weakened in 4Q18 and 1Q19 in a
difficult environment for its market-driven businesses, and due to
the impact of disposals and lack of progress with restoring its
lost franchise. Global growth slowdown and the lower likelihood
that rates in Europe will rise in the near term also moved against
Deutsche Bank, making its longer term RoTE target of 10%
unattainable, in its view.

Cost reduction appears to be on track toward the initial adjusted
cost target of EUR22 billion Fitch identified as a VR sensitivity
during its last review. The bank's now slightly lower target of
EUR21.8 billion for 2019 would represent a cost reduction of EUR1
billion yoy. Fitch views this target as achievable but still
insufficient to address the bank's weakening revenue and lagging
efficiency relative to its peers.

Despite Deutsche Bank's modest earnings, Fitch expects its fully
loaded CET1 ratio to remain above management's 13% target and above
the bank's regulatory requirements and Pillar 2 guidance. The CET1
ratio of 13.7% at end-1Q19 provides some headroom to absorb about
40bp regulatory impact expected over the next two quarters, and
further flexibility can be gained through disposals in
risk-weighted asset (RWA)-heavy businesses. However, improving the
bank's ability to manage capital and absorb the impact of new
regulations, including the final Basel III rules, is contingent on
an increase in internal capital generation.

The bank's fully loaded leverage ratio of 3.9% at end-1Q19 is at
the lower end of its European peer group and falls short of the
bank's 4.5% medium-term target. The bank is principally managing
the ratio by reducing leverage exposure, as evidenced by a EUR100
billion reduction in CIB in 2018.

Deutsche Bank's funding is more confidence-sensitive than peers'
given the bank's weaker credit profile and significant share of
wholesale funding. About half of its external funding of about EUR1
trillion at end-2018 consisted of retail and transaction banking
deposits, which were well in excess of loans, and the merger with
Postbank has improved the fungibility of funding in the group.
Long-term senior and subordinated debt also provides stable, albeit
more expensive, funding. Less stable sources of funding (banks,
unsecured wholesale, trading liabilities, repos and securities
loaned, brokerage and securities payables, net derivatives)
represent around one third of total funding. Although sizeable, a
significant share of these is client-driven and matched with
assets.

The bank's liquidity position remains comfortable, and it expects
it to remain managed significantly above regulatory requirements,
despite a planned reduction. The bank reduced its EUR260 billion
liquidity portfolio by about EUR20 billion over the 12 months to
end-1Q19. This was part of a liquidity redeployment programme that
includes an absolute reduction and some reallocation from cash
(which is loss-making in the negative interest rate environment) to
higher-yielding liquid and business assets. The bank also plans to
reduce its debt issuance in 2019 to manage its funding costs by
deploying some excess liquidity.

Deutsche Bank's progress to improve risk controls, in particular
with respect to updating and improving the bank's IT
infrastructure, automating processes and strengthening
anti-money-laundering and know-your-customer controls has been
protracted and the bank, in its opinion, still lags its peers.
Deutsche Bank's contained appetite for credit and market risk and
retreat from business areas the bank views as more vulnerable are
important mitigating factors.

Underpinned by sound underwriting standards, Deutsche Bank's credit
risk exposure entails a high proportion of investment-grade
counterparties and resilient German commercial and retail
customers. Fitch views the exposure to leveraged finance,
commercial real estate and emerging markets as the bank's main
vulnerabilities in a downturn. The downsizing of non-strategic CIB
assets and underperforming shipping exposures has resulted in
credit risk reduction over the last years.

Fitch has affirmed the bank's Short-Term IDR at 'F2', which is the
higher of the two ratings mapping to the bank Long-Term IDR of
'BBB' according to Fitch's updated Short-Term Ratings Criteria.
This level reflects a funding and liquidity profile that is a
relative strength to the VR.

Consequently, the Short-Term IDR and the other short-term ratings
of Deutsche Bank and its rated subsidiaries are no longer Under
Criteria Observation, where they were placed on May 7, 2019
following Fitch's publication of its cross-sector criteria for
Short-Term Ratings.

Fitch has withdrawn the short-term senior non-preferred rating of
the bank's US dollar debt issuance programme. This rating is no
longer relevant for Fitch's coverage because debt issued with
original maturities of less than one year has preferred status
under the new German resolution regime.

DB PRIVAT- UND FIRMENKUNDENBANK AG (PFK)

The Long-Term IDR and senior non-preferred debt ratings of PFK are
equalised with its VR. PFK shares a common VR with its parent
Deutsche Bank as Fitch believes the credit profiles of the two
entities cannot be meaningfully disentangled. This reflects their
high management and operational integration (including its
expectation that capital and liquidity will remain fungible) and
PFK's large size relative to its parent. In line with Deutsche
Bank, PFK's Short-Term IDR is the higher of two levels that map to
the bank's Long-Term IDR.

Fitch has affirmed and withdrawn the ratings of PFK's commercial
paper and senior unsecured debt issuance programmes. These ratings
are no longer relevant for Fitch's coverage because these
programmes are no longer used for new issuance and Fitch does not
rate any outstanding issuance under the programmes.

DEUTSCHE BANK AG, LONDON BRANCH (DB - LONDON BRANCH), US AND
AUSTRALIAN SUBSIDIARIES

The IDRs and debt ratings of DB - London branch and Deutsche Bank's
US and Australian subsidiaries are equalised with Deutsche Bank's
to reflect their high integration and core roles within the group,
especially its capital markets activities, or their role as issuing
vehicles.

DCR, DEPOSIT AND SENIOR PREFERRED DEBT RATINGS

Deutsche Bank's DCR, long-term deposit and senior preferred debt
ratings and PFK's long-term deposit rating are one notch above the
respective entities' Long-Term IDRs. This reflects the statutory
preferential status of senior preferred and structured notes,
deposits and derivatives in Germany and Deutsche Bank's large
buffer of qualifying junior and senior non-preferred debt, which
Fitch estimates at about 22% at end-1Q19.

DB - London branch's DCR and long-term deposit and senior preferred
debt ratings benefit from the same one-notch uplift from the
Long-Term IDR as Fitch believes the insolvency hierarchy would be
derived from the incorporation of the legal entity (Germany) rather
than the branch's location (UK). However, Fitch has not given any
uplift to Deutsche Bank Securities, Inc.'s DCR over the entity's
Long-Term IDR to reflect the absence of preferential treatment for
derivative counterparties in the US.

The short-term deposit and, where applicable, senior preferred
ratings of Deutsche Bank, PFK and DB - London branch are the lower
of the two short-term ratings that map to their 'BBB+' long-term
deposit and senior preferred ratings as the junior and senior
non-preferred debt buffer that drives the uplift of their long-term
preferred ratings does not result in a liquidity enhancement at
instrument level.

SUPPORT RATINGS (SRS) AND SUPPORT RATING FLOORS (SRFS)
DEUTSCHE BANK, PFK, US AND AUSTRALIAN SUBSIDIARIES

Deutsche Bank's and PFK's SRs of '5' and SRFs of 'No Floor' reflect
its view that senior creditors cannot rely on receiving full
extraordinary support from the sovereign if the banks become
non-viable. This is due to the resolution legislation in place in
Germany since 2015. The US subsidiaries' SRs reflect its view of
Deutsche Bank's high propensity and ability to provide support.

TIER 2 SUBORDINATED DEBT AND HYBRID SECURITIES
DEUTSCHE BANK, DB - LONDON BRANCH, PFK, US AND AUSTRALIAN
SUBSIDIARIES

The Tier 2 subordinated notes and hybrid securities issued by
Deutsche Bank, DB - London branch and by issuing vehicles are
notched down from Deutsche Bank's VR in accordance with its
assessment of each instrument's respective risk of non-performance
and relative loss severity.

The legacy, non-Capital Requirements Regulation (CRR) compliant
Tier 1 securities issued by Deutsche Bank Contingent Capital Trust
II and V and by Deutsche Postbank Funding Trust I, II and III are
rated four notches below Deutsche Bank's VR, reflecting
higher-than-average risk of loss severity (two notches), as well as
high risk of non-performance (an additional two notches) given
their partial discretionary coupon omission features.

Deutsche Bank's CRR compliant high- and low-trigger additional Tier
1 (AT1) securities are rated five notches below the bank's VR. The
securities are notched down twice for loss severity risk as they
can be converted to equity or written down well ahead of
resolution, resulting in poor recovery prospects. In addition, they
are notched down three times for high non-performance risk,
reflecting their fully discretionary coupon omission features.

Deutsche Bank's EUR921 million AT1 coupon payment capacity
disclosed at end-2018 exceeded the EUR330 million coupons that
became due in April 2019. The bank's coupon payment flexibility has
been thus far lower than foreign peers' due to a more restrictive
definition of available distributable items (ADIs) in Germany.
This, however, should improve under the upcoming implementation of
the revised CRR. Non-payment of AT1 coupon would also be triggered
by a breach of the bank's maximum distributable amount (MDA)
relevant requirement of 11.8% for 2019. However, Deutsche Bank has
a substantial buffer above this threshold.

STATE-GUARANTEED NOTES ISSUED BY THE FORMER DSL BANK

Fitch has downgraded the ratings of PFK's four senior unsecured and
one Tier 2 subordinated bond initially issued by Deutsche
Siedlungs- und Landesrentenbank (DSL Bank) to 'A' from 'AA'. This
follows Fitch's reassessment of the bonds' non-performance risk.

The German government (AAA/Stable/F1+) has guaranteed these bonds
since their issuance by DSL Bank between 1993 and 1998. PFK became
DSL Bank's legal successor in 2018 following its merger with
Deutsche Postbank AG (DSL Bank merged into Deutsche Postbank in
2000). The guarantee was unaffected by the mergers and applies to
the five bonds until their maturity. Hence, Fitch sees an extremely
high probability that the government would fully reimburse
grandfathered creditors, should the guarantee ever be triggered by
a default of PFK.

However, Fitch believes that the DSL Transformation Act ('DSL
Bank-Umwandlungsgesetz') from 1999, on which the state guarantee is
based, does not oblige the government to honour the guarantee on
first demand. Therefore, in Fitch's opinion, there is no certainty
that a reimbursement would be carried out on a timely basis.

To reflect this uncertainty, Fitch has revised its assessment of
the five bonds' non-performance risk by deriving it from PFK's
creditworthiness. Consequently, it no longer notches down the
ratings of the five bonds twice from the German sovereign rating.
Instead, it notches them up three times from PFK's Long-Term IDR.
The three-notch uplift reflects the outstanding recovery prospects
arising from the guarantee.

RATING SENSITIVITIES

IDRs, VR, DCR, DEPOSIT AND SENIOR DEBT RATINGS
DEUTSCHE BANK, DB - LONDON BRANCH and PFK

The IDRs, VR and senior debt ratings of Deutsche Bank are primarily
sensitive to its ability to stabilise its business model, generate
acceptable returns and prudently manage its capital ratios. The
Evolving Outlook reflects its view that the ratings will change in
either direction over a one-to two-year horizon.

Fitch would upgrade the ratings if the bank makes tangible and
significant progress in refocusing on activities with a more
adequate risk/return profile and capital usage, primarily by
reducing its reliance on volatile and underperforming CIB
segments.

In the absence of such measures, a continuation of the bank's weak
operating performance would likely trigger a downgrade if Fitch
believes such underperformance jeopardises management's ability to
build up or raise capital. Franchise erosion in CIB evidenced by
market share declines in core businesses, particularly in global
transaction banking and in fixed income and currencies sales and
trading, would also put pressure on ratings.

A downgrade would also be triggered by a sharp or sustained
deterioration of regulatory capital ratios threatening to breach
regulatory requirements. A moderate decline of the CET1 ratio below
the management targeted floor of 13% would remain commensurate with
the current rating only if it is driven by compelling strategic
adjustments.

A weakening of the bank's liquidity profile, which could be
indicated by wholesale deposit outflows or a decreasing liquidity
coverage ratio, could also put pressure on ratings.

Several regulatory investigations into Deutsche Bank's
anti-money-laundering practices and controls are ongoing. Should
they result in material fines or business restrictions, this could
put ratings under pressure, depending on the impact and mitigating
actions. Failure to remedy regulatory findings in key jurisdictions
could also put ratings under pressure if this indicates fundamental
risk control shortcomings.

The DCRs, deposit and debt ratings are primarily sensitive to
changes in the Long-Term IDR. In addition, the DCRs, deposit and
senior preferred debt ratings are sensitive to a reduction of the
subordinated and senior non-preferred debt buffers relative to the
recapitalisation amount likely to be needed to restore viability
and prevent default on preferred obligations.

PFK's and DB - London branch's ratings will continue to move in
tandem with Deutsche Bank's.

STATE-GUARANTEED NOTES ISSUED BY THE FORMER DSL BANK

The ratings of the five state-guaranteed bonds initially issued by
DSL Bank are primarily sensitive to changes in PFK's Long-Term IDR.
They are also sensitive to a multi-notch downgrade of Germany's
Long-Term IDR and to changes to the relevant legislation, in
particular to the DSL Transformation Act. They are also sensitive
to timely execution of the guarantee by the sovereign, should PFK
become unable to honour its obligations.

SRS AND SRFS

An upgrade of Deutsche Bank and PFK's SRs and an upward revision of
the SRFs would be contingent on a positive change in the
sovereign's propensity to support banks' senior creditors in full.
While not impossible, this is highly unlikely, in its view.

US AND AUSTRALIAN SUBSIDIARIES

The ratings of Deutsche Bank's US and Australian subsidiaries would
move in line with the parent's IDRs. They are also sensitive to
changes in its assumptions around the propensity of Deutsche Bank
to provide timely support.

TIER 2 SUBORDINATED DEBT AND HYBRID SECURITIES

The Tier 2 subordinated notes and hybrid securities are primarily
sensitive to changes in Deutsche Bank's VR. The securities' ratings
are also sensitive to a change in their notching, which could arise
if Fitch changes its assessment of their non-performance risk
relative to the risk captured in the VR. This may reflect a change
in capital management in the group or an unexpected shift in
regulatory buffer requirements, for example.

Fitch could notch the AT1 securities further down from the VR if
the ADIs decline significantly or if either heightened regulatory
Pillar 2 requirements or CET1 erosion deplete its MDA buffer.

The rating actions are as follows:

Deutsche Bank AG

  Long-Term IDR downgraded to 'BBB' from 'BBB+'; Outlook Evolving

  Short-Term IDR affirmed at 'F2'

  Viability Rating downgraded to 'bbb' from 'bbb+'

  Support Rating affirmed at '5'

  Support Rating Floor affirmed at 'No Floor'

  Derivative Counterparty Rating downgraded to 'BBB+(dcr)' from
  'A-(dcr)'

  Long-term senior preferred debt, issuance programme and deposit
  ratings downgraded to 'BBB+' from 'A-'

  Short-Term senior preferred debt, issuance programme and
  deposit ratings affirmed at 'F2'

  Long-term senior non-preferred debt and issuance programme
  ratings downgraded to 'BBB' from 'BBB+'

  USD debt issuance programme's short-term senior non-preferred
  rating: 'F2' withdrawn

  Subordinated Tier 2 debt rating downgraded to 'BBB-' from 'BBB'

  Additional Tier 1 notes downgraded to 'B+' from 'BB-'

Deutsche Bank AG, London Branch

  Long-Term IDR downgraded to 'BBB' from 'BBB+'; Outlook Evolving

  Short-Term IDR affirmed at 'F2'

  Derivative Counterparty Rating downgraded to 'BBB+(dcr)' from
  'A-(dcr)'

  Long-term senior preferred debt and deposit ratings downgraded
  to 'BBB+' from 'A-'

  Short-term commercial paper programme and deposit ratings
  affirmed at 'F2'

  Long-term senior non-preferred debt rating downgraded to
  'BBB' from 'BBB+'

  Tier 2 subordinated debt rating downgraded to 'BBB-' from
  'BBB'

DB Privat- und Firmenkundenbank AG

  Long-Term IDR downgraded to 'BBB' from 'BBB+'; Outlook Evolving

  Short-Term IDR affirmed at 'F2'

  Viability Rating downgraded to 'bbb' from 'bbb+'

  Support Rating affirmed at '5'

  Support Rating Floor affirmed at 'No Floor'

  Long-term deposit rating downgraded to 'BBB+' from 'A-'

  Short-term deposit rating affirmed at 'F2'

  Commercial paper programme ratings affirmed at 'F2' and
  withdrawn

  Long-term senior unsecured debt issuance programme rating
  -downgraded to 'BBB' from 'BBB+' and withdrawn

  Short-term senior unsecured debt issuance programme rating
  affirmed at 'F2' and withdrawn

  State-guaranteed senior unsecured (DE0002432549, DE0002432556,
  DE0002435708 and DE0002461860) and Tier 2 subordinated
  (XS0081864489) bonds issued by the former DSL Bank: downgraded
  to 'A' from 'AA'

Deutsche Bank Securities, Inc.

  Long-Term IDR downgraded to 'BBB' from 'BBB+'; Outlook Evolving

  Short-Term IDR affirmed at 'F2'

  Support Rating affirmed at '2'

  Derivative Counterparty Rating downgraded to 'BBB(dcr)' from
  'BBB+(dcr)'

Deutsche Bank Trust Company Americas

  Long-Term IDR downgraded to 'BBB' from 'BBB+'; Outlook Evolving

  Short-Term IDR affirmed at 'F2'

  Support Rating affirmed at '2'

  Senior unsecured deposit ratings affirmed at 'F2'

  Deutsche Bank Trust Corporation

  Long-Term IDR downgraded to 'BBB' from 'BBB+'; Outlook Evolving

  Short-Term IDR affirmed at 'F2'

  Support Rating affirmed at '2'

Deutsche Bank Australia Ltd.

  Commercial paper short-term rating affirmed at 'F2'

Deutsche Bank Contingent Capital Trust II and V

  Preferred securities ratings downgraded to 'BB-' from 'BB'

Deutsche Postbank Funding Trust I, II and III

  Preferred securities ratings downgraded to 'BB-' from 'BB'


IHO VERWALTUNGS: Fitch Gives Final 'BB+' Rating to New Secured Debt
-------------------------------------------------------------------
Fitch Ratings has assigned IHO Verwaltungs GmbH's (IHO-V) new
senior secured PIK Toggle notes a final senior secured debt rating
of 'BB+'. Fitch has also withdrawn the 'BB+' senior secured debt
ratings of IHO-V's senior secured PIK Toggle notes due in 2021 and
2023, redeemed on June 6, 2019.

The assignment of the final ratings follows a review of the final
documentation, which materially conforms to the information
received when the expected ratings were assigned on May 21, 2019.

IHO-V is Schaeffler AG's (Schaeffler) immediate parent and 75.1%
owner.

The issued notes are rated at the same level as IHO-V's Long-Term
Issuer Default Rating of 'BB+'.

IHO-V issued two euro-denominated tranches with maturities of six
and eight years and two US dollar tranches with maturities of eight
and 10 years. The euro and US dollar notes have a total nominal
value of EUR1.3 billion and USD850 million, respectively.

The notes are senior secured obligations of IHO-V, ranking pari
passu with its existing notes and obligations under the senior
facilities agreement. The security consists of pledges over common
shares held by IHO-V, being 50% plus one share of the total share
capital of Schaeffler and around 41.9 million shares in Continental
AG (Continental, BBB+/Stable). The new and existing notes do not
benefit from a guarantee by any subsidiary of IHO-V, including the
Schaeffler Group, as of the issue date. These notes are
structurally subordinated to any existing and future indebtedness
of any non-guarantor subsidiary of IHO-V.

The EUR2.1 billion equivalent proceeds from the new secured notes
have been used to partly fund a cash tender offer for the
outstanding euro and US dollar denominated notes due in 2021 and
2023, for a total nominal amount of EUR1.5 billion and USD1
billion. As a result, the average maturity has increased and
maturity concentration lowered. The repayment of the notes has also
been partly funded with available cash, lowering outstanding gross
debt. The secured notes due in September 2026 remain outstanding
and have not been part of the transaction.

Schaeffler's IDR of 'BBB-' reflects its solid business risk
profile, adequate financial structure and significant financial
flexibility. IHO-V's IDR of 'BB+' reflects the weaker financial
risk profile of the consolidated group (IHO-V: full consolidation
of Schaeffler and the dividend stream from IHO-V's 36% direct
holding in Continental) relative to Schaeffler's standalone
financial risk profile. Leverage metrics of the consolidated group
are significantly higher than those of Schaeffler.

The Stable Outlook on both IDRs reflect Fitch's projections that
Schaeffler's weak free cash flow (FCF) and IHO-V's high leverage
metrics are temporary and will improve to levels more commensurate
with the ratings by end-2021. Fitch also assesses FCF in
combination with leverage, with the former expected to remain in
line with the rating for the consolidated group and the latter for
Schaeffler.

The ratings were withdrawn with the following reason bonds were
prefunded/called/redeemed/exchanged/cancelled/repaid early.

KEY RATING DRIVERS

Strong Business Profile: Schaeffler's ratings are underpinned by a
business profile that Fitch views as commensurate with the 'BBB'
category. The company benefits from its large scale in the markets
covered, a positioning on high value-added parts, a top-ranking
position in high quality and reliability-driven market segments,
and a solid track record of innovation. Fitch expects Schaeffler's
longstanding relationships with large and renowned original
equipment manufacturers (OEMs) and the company's sound end-market
diversification to continue. Schaeffler has a global reach thanks
to a broad industrial footprint, with a presence in developed and
emerging markets, matching OEMs' production hubs.

Positioned to Benefit From Electrification: The extent and the
speed of transition from hybrid to fully electric vehicles will be
critical for Schaeffler because of its focus on mechanical parts
for drivetrains. Schaeffler's longstanding relationships with major
OEMs, strong innovation ability and global manufacturing footprint
position the company favourably to maintain growth in line with the
industry. Schaeffler already has several customer projects and
series contracts for its hybrid modules and e-axles and forecasts
that its E-Mobility unit will generate 10% of sales by 2020.

Solid Growth Prospects: Fitch expects Schaeffler to outperform
vehicle production growth over the foreseeable future. Schaeffler
has demonstrated a capacity to sustainably increase the value of
its content per vehicle by enhancing existing products, developing
integrated systems and bringing innovative solutions into the
markets in response to accompanying changes in requirements and
standards. In China, Fitch also expects the company to benefit from
its greater exposure to fast-growing local OEMs than its peers
(above 30% of local sales compared with typically 15%-20%).

Strong organic growth is also likely in the aftermarkets
businesses. Fitch expects the Automotive Aftermarket division to
benefit from stricter car inspection rules and increasing car
complexity. Large increases in car sales in several emerging
markets, notably in China since the early 2000s, also provide
opportunities to increase aftermarket revenue over the coming
years.

Temporary Weak Operating Profitability: Fitch expects Schaeffler's
EBIT margin to fall temporarily below its negative sensitivity with
margin slightly below 8% in 2019. Lower global vehicle production
volume and resulting restructurings add to ongoing pressures from
greater R&D intensity, higher ramp-up costs and strong growth in
the still unprofitable E-Mobility division. Profitability is
projected to improve as the group adjusts its costs base to the new
growth environment, vehicle production growth turns positive and
systems sold to electrified drivetrains gradually reach
profitability on higher volume. Mid-cycle EBIT margin of more than
8% is also supported by the high added value of the group's
production, a high level of vertical integration and exposure to
the more profitable aftermarket businesses.

Medium-Term FCF Pressure: Fitch expects FCF generation to remain
negative in 2019 and 2020. This is below its expectations for a
'BBB-' rating. The FCF margin is constrained by continuously high
investments to support the company's growth strategy and a generous
shareholder return policy relative to peers. Nonetheless, weak FCF
is partly mitigated by robust funds from operations (FFO) margins
for the rating. The FFO margin is expected to remain above 11% on
better cash conversion due to lower net interest paid and cash tax.
Fitch believes that the FCF margin will recover to more than 1% in
2021 as the investment cycle reached its peak in 2020 and
underlying operating profitability improve beyond 2019.

Higher Spending on Acquisition: Fitch believes Schaeffler will play
a more active role in growing M&A activity across the auto-supply
sector. Fitch expects the company will favour acquisitions of a few
hundred million euros to acquire technologies. Its rating case
includes several acquisitions for a total of around EUR0.2 billion
each year. Fitch also believes that management could consider a
large debt-funded acquisition under the right circumstances. Any
major acquisition or numerous bolt-on acquisitions would constitute
event risk and would be assessed on a case-by-case basis,
reflecting the impact on the company's business risk profile and
credit metrics.

Schaeffler's Adequate Financial Structure: Fitch expects
Schaeffler's FFO adjusted net leverage to increase slightly to 2.2x
at end-2019 from 2.1x in 2018 and 1.7x in 2017 due to higher net
debt because of negative FCF generation and cash absorbed by a few
small acquisitions. The forecast improving cash generation should
lead to FFO adjusted net leverage of around 2x beyond 2020, despite
further use of cash on acquisitions. Current and expected leverage
are below itsnegative sensitivity of 2.5x, although leaving only
moderate headroom in the rating for additional leverage.

IHO-V's High Leverage: Consolidated FFO-adjusted net leverage was
3.9x at end-2018, a level more commensurate with the Auto Supplier
Navigator 'B' mid-point. This level of net leverage is weaker than
forecast and above its negative guideline. Higher leverage for the
Schaeffler group and dividend paid to IHO Beteiligungs GmbH (IHO-B)
led the deterioration. However, deleveraging capacity is
significant under its assumptions of around EUR600 million of
dividend flows each year with cash up streamed to IHO-B limited to
40% of these flows. Combined with improving cash flow generation at
Schaeffler, this is expected to drive down FFO net leverage below
3.5x by 2021. Larger than assumed return to IHO-B before adequate
deleveraging could put pressure on IHO-V's and Schaeffler's
ratings.

Marketable Assets Support Ratings: IHO-V's 36% equity stake in
Continental AG (valued at about EUR8.9 billion at early-June 2019)
is a significant asset. The value of this minority stake is not
explicitly reflected in Fitch's credit metrics, only the dividends
received. Fitch would expect that a partial stake in this listed
company could be sold down fairly swiftly, which could allow IHO-V
to repay all its gross debt. The presence of this potential
liquidity source supports the weaker leverage metrics for the
consolidated group.

Parent-Subsidiary Linkage Established: Schaeffler's 'BBB-' ratings
incorporate a one-notch uplift from the consolidated group (IHO-V)
rating of 'BB+', due to Schaeffler's higher underlying rating and
the weak to moderate linkage between Schaeffler and IHO-V. Limited
documentary constraints on upstreaming of dividends do not
ring-fence Schaeffler from additional leverage at IHO-V. Fitch
expects dividend payments to remain predictable, and to support
modest deleveraging at Schaeffler.

No Notching Uplift from IHO's IDR: Fitch has not notched the senior
secured debt rating higher than IHO-V's IDR. The debt is secured by
a pledge on common shares and not by a pledge on readily saleable
hard assets or intangible assets. Fitch  acknowledges that the
current value of pledged shares considerably exceeds the first-lien
debt amount. However, the pledge is partly made of common shares of
Schaeffler, the sole controlled assets of IHO-V, which is the main
driver of IHO-V's IDR. Financial stress at the level of the holding
(IHO-V) is likely to be linked to financial stress at the level of
Schaeffler, therefore to lower value of the pledged shares. IHO-V's
indebtedness is also structurally subordinated to the Schaeffler
Group's indebtedness, potentially impairing recovery prospects of
IHO-V's creditors.

Average Recovery Assumed: The process of establishing ratings for
the obligations of issuers rated between 'AAA' and 'BB-' refers for
the most part to aggregate recoveries on defaulted bond market as a
whole, and not to issuer-specific analysis. For corporates entities
rated 'BB-' and above, the rating assigned to an issuer's senior
unsecured debt instrument assumes an average recovery available to
creditors in the event of bankruptcy, corresponding to the 31%-50%
range, 'RR4'. When average recovery prospects are present, IDRs and
debt instrument ratings are equal, with no notching.

DERIVATION SUMMARY

Schaeffler's business profile compares adequately with auto
suppliers in the 'BBB' rating category. Schaeffler benefits from
stronger business diversification than peers in Fitch's portfolio
of publicly rated auto suppliers, outranked only by Robert Bosch
GmbH (F1) and Continental AG. Like other large and global
suppliers, including Continental and Aptiv PLC (BBB/Stable),
Schaeffler has a broad and diversified exposure to large
international OEMs. However, the share of its aftermarket business
is smaller than tyre manufacturers such as CGE Michelin's
(A-/Stable), but greater than Faurecia S.E. (BB+/Stable).

Schaeffler also has stronger operating margins than a typical
auto-supplier that does not benefit from exposure to the tyre
businesses. However, Schaeffler's FCF and financial structure are
typically weaker than peers in the 'BBB' rating category. Fitch
used its "Parent and Subsidiary Linkage" criteria to derive
Schaeffler's ratings. No Country Ceiling or operating environment
aspects affect the rating.

KEY ASSUMPTIONS

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

  - Low single-digit decline in global vehicles production until
    2020, very low-single-digit growth over the medium term

  - Organic revenue growth above global vehicle production growth

  - Growing R&D intensity

  - Dividends paid to IHO-V by Continental AG of EUR0.3 billion
    each year

  - Stable dividends paid by Schaeffler

  - Around 40% of total dividend received by IHO-V up streamed
    to its sole shareholder, IHO Beteiligungs GmbH

  - Aggregate working capital outflows of EUR0.2 billion during
    2019-2021

  - Average capital expenditure intensity of around 8.5% of
    sales during 2019-2021

  - Yearly spending on acquisitions of around EUR0.2 billion

RATING SENSITIVITIES

As the ratings of Schaeffler and IHO-V are linked under Fitch's
"Parent and Subsidiary Linkage" criteria, the sensitivities are
common for both company's ratings.

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

  - IHO-V's FFO adjusted net leverage trending towards 2x

  - Schaeffler's FFO adjusted net leverage of around 1x

  - Schaeffler's FCF of around 2%

  - Weakening of formal linkage ties between Schaeffler and IHO-V

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

  - IHO-V's FFO adjusted net leverage above 3.5x

  - Schaeffler's net leverage above 2.5x

  - Schaeffler's EBIT margin below 8%

  - Schaeffler's FCF margin below 1%

  - Strengthening of formal linkage ties between Schaeffler and
IHO-V

  - A reduction in IHO-V's stake in Continental AG without adequate
deleveraging

LIQUIDITY AND DEBT STRUCTURE

Healthy Liquidity: Schaeffler's liquidity is supported by estimated
readily available cash of EUR0.3 billion at end-March 2019
including Fitch's adjustment for minimum operational cash of EUR370
million and the outflow for the redemption of notes closed in May
2019. The company has a EUR1.5 billion committed revolving credit
facility (RCF) available until September 2023, which was unused at
end-March 2019. These more than cover its expectation of slightly
negative FCF generation. The maturity profile is not an immediate
risk with any material maturity before March 2022, excluding
outstanding factoring.

IHO-V's liquidity is also healthy, benefiting from sound interest
cover from expected dividends flow and the absence of a material
maturity before May 2025. Liquidity is further supported by access
to a EUR400 million committed RCF available until May 2024,
expected to be mostly unused at end-June 2019.

The financing and the treasury of IHO-V and Schaeffler companies
are strictly separated.

Secured Debt Structure for IHO-V: The debt structure remains
secured following the closing of the EUR3.1 billion equivalent
refinancing. The secured term loan has been reduced to EUR600
million from EUR750 million and availability under the secured RCF
has been increased to EUR400 million from EUR250 million.
Maturities under the senior facilities agreement have been pushed
to May 2024. The total notes' outstanding amount is around EUR3.3
billion equivalent and the nearest maturity has been pushed to May
2025 from September 2021.

New Unsecured Debt Structure for Schaeffler: Schaeffler's debt
profile is diversified and consists mainly of four euro-denominated
notes for a total outstanding amount of EUR2.8 billion. The notes
due in March 2022, 2024 and 2027 were issued in March 2019 under
Schaeffler's EUR5.0 billion EMTN programme. The net proceeds have
been used to redeem most of the outstanding notes issued by
Schaeffler Finance B.V. in May 2019, excluding EUR600 million of
notes due in May 2025. The notes' maturities remain well spread
starting from March 2022 and going to March 2027.

Schaeffler also raised debt through two unsecured term loans for a
total outstanding amount of EUR684 million as at end-March 2019.
The fully drawn EUR500 million term loan is due in September 2023
and the partly drawn (EUR184 million as at end-March 2019) EUR250
million investment facility is due in December 2022. For its
short-term financial needs, the group has access to an undrawn
unsecured revolving credit line for a total EUR1.5billion also
falling due in September 2023. The group can also use account
receivables factoring to fund its working-capital needs.


LEISURE CARGO: Loss of Contracts Prompts Insolvency Filing
----------------------------------------------------------
Alexander Whiteman at The Load Star reports that Leisure Cargo (LC)
is to enter insolvency following the loss of contracts with TUI and
another carrier.

A spokesperson for the GSSA confirmed to The Loadstar it had begun
insolvency proceedings at a court in Dusseldorf, with White & Case
appointed as trustees.

"We want to stabilize business operations quickly and continue as
smoothly as possible," The Load Star quotes reorganization manager
Tillmann Peeters, of Falkensteg Restrukturierung, as saying.

"Together with the provisional trustee, we will explore the
remediation options as swiftly as possible, and as thoroughly as
necessary, during the June-August bankruptcy period."

Rumours had been circulating for some time that LC was struggling
after TUI dropped it, moving to competitor ECS Group, The Load Star
relates.

"[The loss of] order volumes of this magnitude cannot be
compensated by Leisure Cargo in the short term, not least due to
the declining freight business," The Load Star quotes Mr. Peeters
as saying.

At one point, LC ran freight operations for some 14 leisure and
low-cost carriers, The Load Star discloses.

Leisure Cargo GmbH, an air cargo management company, markets cargo
space of various touristic orientated airlines on international and
regional basis. It specializes in turn-key cargo sales and service
concepts, as well as cargo management services. The company was
founded in 2000 and is based in Dusseldorf, Germany. Leisure Cargo
GmbH operates as a subsidiary of Air Berlin PLC. As of October 25,
2017, Leisure Cargo GmbH operates as a subsidiary of Zeitfracht
Logistik GmbH.




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

SCORPIO DAC 34: S&P Assigns BB- Rating on GBP24.5MM Cl. E Notes
---------------------------------------------------------------
S&P Global Ratings has assigned its credit ratings to Scorpio
(European Loan Conduit No.34) DAC's class RFN, A1, A2, B, C, D, and
E notes. At closing, Scorpio (European Loan Conduit No. 34) also
issued unrated class X notes.

The transaction is backed by one senior loan, which Morgan Stanley
Principal Funding Inc. (Morgan Stanley) originated in May 2019 to
facilitate the acquisition of the light industrial portfolio by The
Blackstone Group L.P.

The senior loan backing this true sale transaction equals GBP286.4
million and is secured by 112 light industrial properties in the
U.K.

The securitized loan balance is 82.5% of the senior loan (GBP286.4
million) with Morgan Stanley holding a GBP50.0 million interest
that ranks pari passu with the securitized loan. The issuer created
a GBP12.4 million (representing 5% of the securitized senior loan)
vertical risk retention loan (VRR loan) in favor of Morgan Stanley
to satisfy EU and U.S. risk retention requirements.

The portfolio is essentially concentrated in light industrial
properties spread out across England, Scotland, and Wales. The
appraisers have valued the portfolio at GBP428.6 million, and the
current loan-to-value (LTV) ratio is 66.8%. The two-year loan (with
three one-year extension options) does not provide for amortization
or default covenants prior to a permitted change in control.
Instead, there are cash trap mechanisms set at a 75.00% LTV ratio,
or a minimum debt yield set at 9.24%.

S&P said, "Since we assigned preliminary ratings, the borrower
entered into an interest rate cap at a strike rate of 2.0%. The
replacement language in the hedging agreement is in line with our
current counterparty criteria to support a maximum potential rating
of 'AAA (sf)' on the notes.
  
"Our ratings address Scorpio (European Loan Conduit No. 34)'s
ability to meet timely interest payments and principal repayment no
later than the legal final maturity in May 2029. Our ratings on the
notes reflect our assessment of the underlying loan's credit, cash
flow, and legal characteristics, and an analysis of the
transaction's counterparty and operational risks."

  RATINGS ASSIGNED

  Scorpio (European Loan Conduit No. 34) DAC

  Class         Rating               Amount
                                   (mil. GBP)
  RFN           AAA (sf)               10.4
  A1            AAA (sf)              112.3
  A2            AA+ (sf)               14.5
  B             AA- (sf)               14.5
  C             A (sf)                 23.5
  D             BBB- (sf)              35.3
  E             BB- (sf)               24.5
  X             NR                      0.1

  NR--Not rated.




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

DECO 2019: Fitch Assigns 'BBsf' Rating on Class D Notes
-------------------------------------------------------
Fitch Ratings has assigned DECO 2019 - VIVALDI S.r.L.'s
floating-rate notes final ratings.

The transaction is a 95% securitisation of two commercial mortgage
loans totalling EUR233.935 million to two Italian borrowers both
sponsored by Blackstone funds. The loans are both variable-rate
(with variable margins) and each secured on an Italian retail
outlet. A merger of the propco and holdco is expected for the
Franciacorta borrower.

The Rating Actions are:

Entity/Debt               Rating              Prior

DB- Italian Retail Outlets-Project Spark

  Class A notes    LT   A+sf    New Rating  previously A+(EXP)sf
  Class B notes    LT   A-sf    New Rating  previously A-(EXP)sf
  Class C notes    LT   BBB-sf  New Rating  previously BBB-(EXP)sf

  Class D notes    LT   BBsf    New Rating  previously BB(EXP)sf

KEY RATING DRIVERS

Weakening Macro-economic Environment

Italian GDP growth has stalled as domestic policy uncertainty and
weaker external demand have dragged down investment, while private
consumption growth has also lost momentum. The risk of this
filtering into asset performance is reflected in Fitch's base
market value declines (MVDs) both being greater than 20%, with no
ratings above the 'Asf' category.

Sound Collateral Stabilises Income

The portfolio is generally of good quality, attracting solid
occupational demand. The catchment areas support stable sales from
customers who view these outlets as attractive leisure
destinations. This mitigates the characteristically short weighted
average (WA) lease to break of 2.4 years and the predominantly
unrated tenant base.

Franciacorta Weighs on Ratings

With an exit debt yield of 7.6%, the Franciacorta loan's high
leverage is a constraint on the ratings, given the pro rata
structure. This is despite good performance in the fashion outlet,
which has recorded strong rental growth over recent years, due in
part to investment in expanding the centre. Both centres having
large catchment areas limits scope for adverse selection, although
prepayment of Palmanova constrains the class A to C notes'
ratings.

Pre-merger Risk

Around EUR35 million of Franciacorta's debt is to the parent
holdco. The mortgaged propco cannot pay dividends before the holdco
and propco are merged. This means excess rent will be trapped,
building credit enhancement as long as the parent pays interest by
drawing on a letter of credit. Once the mortgage is discharged and
all propco debt is settled, the parent can receive liquidation
proceeds net of any unsecured creditors of the propco. No unsecured
creditors affect Fitch's rating analysis.

RATING SENSITIVITIES

KEY PROPERTY ASSUMPTIONS (all by market value)

'Bsf' weighted average (WA) cap rate: 6.1%

'Bsf' WA structural vacancy: 10.0%

'Bsf' WA rental value decline: 2%

'BBsf' WA cap rate: 6.7%

'BBsf' WA structural vacancy: 12.3%

'BBsf' WA rental value decline: 4%

'BBBsf' WA cap rate: 7.2%

'BBBsf' WA structural vacancy: 13.7%

'BBBsf' WA rental value decline: 8.3%

'Asf' WA cap rate: 7.9%

'Asf' WA structural vacancy: 15.2%

'Asf' WA rental value decline: 14.3%

'AAsf' WA cap rate: 8.6%

'AAsf' WA structural vacancy: 16.5%

'AAsf' WA rental value decline: 21.1%

'AAAsf' WA cap rate: 9.4%

'AAAsf' WA structural vacancy: 18.0%

'AAAsf' WA rental value decline: 28.4%

RATING SENSITIVITIES

Current ratings: 'A+sf'/'A-sf'/'BBB-sf'/'BBsf'

The change in model output that would apply in a high interest rate
scenario with full rental value declines is as follows:

'Asf'/'BBBsf'/'BB+sf'/'BBsf'

The change in model output that would apply in a high interest rate
scenario with full rental value declines and a 1.1x increase in SVs
is as follows:

'A-sf'/'BBB-sf'/'BB+sf'/'BBsf'

The change in model output that would apply in a high interest rate
scenario with full rental value declines and a 1.1x increase in cap
rates is as follows:

'BBB+sf'/'BBB-sf'/'BB-sf'/'Bsf'

The change in model output that would apply in a high interest rate
scenario with full rental value declines and a 1.1x increase in
both cap rates and SVs is as follows:

'BBB+sf'/'BB+sf'/'B+sf'/'Bsf'

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

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

DATA ADEQUACY

Fitch reviewed the results of a third-party assessment conducted on
the asset portfolio information, and concluded that there were no
findings that affected the rating analysis.

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



DIOCLE SPA: S&P Assigns Prelim 'B' Rating on New EUR470MM Notes
---------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'B' ratings to Diocle
S.p.A (DOC Generici) and the company's proposed EUR470 million
floating rate note, which is being used to finance its acquisition
by ICG group and Merieux Equity Partners.

S&P said, "The final ratings will be subject to our receipt and
satisfactory review of all the transaction documentation.
Accordingly, the preliminary ratings should not be construed as
evidence of the final ratings. If the terms and conditions of the
final documentation depart from what we have already reviewed, or
if the financing transaction does not close within what we consider
to be a reasonable time frame, we reserve the right to withdraw or
revise the ratings.

"Our preliminary B rating on DOC Generici follows its recent
acquisition from ICG private equity group and Merieux Equity
Partners. Post-transaction they will have about 83% and 12%
ownership in the group while management will retain the remaining
5%."

The 'B' rating reflects DOC Generici's relatively modest scale of
operations, high geographic concentration in Italy, and potential
future regulatory framework risk, which constrains its business
profile. However, the rating benefits from the company's stable
market share in the oligopolistic Italian generics market, a
favorable regulatory framework that creates effective barriers to
entry and limits price competition, a track record of quick
time-to-market product launches, and increasing generics
penetration in Italy. With reported opening debt to EBITDA of 5.5x,
S&P believes DOC Generici's financial profile is highly leveraged.

Furthermore, the group's ownership by private-equity sponsor ICG
Group constrains our overall financial risk assessment. That said,
we expect the company to continually expand its EBITDA base which
should translate into a gradual deleveraging over our forecast
horizon. S&P also expects the company to report free operating cash
flow (FOCF) within the EUR36 million-EUR39 million range in
2019-2020.

DOC Generici is based in Italy, where all of the commercialization
and distribution efforts of the company take place. The Italian
generics market is based on a reference reimbursed generic price
that is updated and published monthly by the AIFA, the Italian
healthcare regulator. This reference price is set at a 45%-75%
discount to the value of the originator for class A (reimbursable)
products. The National Health Service will only reimburse the
lowest priced generic in the reference price list. If there is a
mismatch between the reference price and any other product in the
market, the customer will have to pay the difference. However, and
for instance, if the price of the originator and the reference
price are the same, the customer will be fully reimbursed.

Because of this, the market is based on the price difference
between the reference and the originator price, making price
competition among generics players irrelevant. Furthermore, the
Italian regulator has banned free commercial discounts to
pharmacies and wholesale providers, replacing them with an 8%
additional maximum fixed margin. This effectively eliminates price
discount competition between pharmaceutical companies at the point
of sale, which reinforces the market positions of the existing
oligopoly of five players. In this group, DOC Generici secured
15.8% market share as of December 2018.

S&P sid, "We believe Doc Generici's relatively small operations and
lack of geographical diversification significantly constrain its
business risk profile. However, we note that the Italian regulatory
environment creates effective barriers to entry as new entrants
cannot compete on prices or discounts to pharmacies. Furthermore,
DOC Generici benefits from underlying positive market dynamics
because generics penetration in Italy has increased. Class A
products reached a 28% penetration rate in 2018 due to increased
awareness and the supportive regulatory environment. We note that
generics penetration in Italy is still lagging behind other key
European countries, leaving significant headroom for growth.

"We consider the group's regulatory framework risk to be limited at
this stage. Under the current legislation, the Italian government
automatically generates savings of 45%-75% on products facing
patent expiry, which supports the budget. Moreover, the government
is unlikely to decrease reference prices because they are already
very low and further pressure could push generic companies out of
the market, leading to product shortages. Having said that, we do
not rule out future regulatory changes and we understand that any
negative change in the regulatory environment will have a material
effect on DOC Generici, which constrains our assessment.

"In our opinion, DOC Generici has good profitability, with adjusted
EBITDA margins of 36%-38%, owing to its solid and efficient supply
chain management. The company is involved in the marketing and
selling of drugs, while it outsources all of its manufacturing to
other contract manufacturers. As a result, the company has limited
working capital needs and capital expenditure (capex). This has
allowed quick time-to-market product launches, which is an
important aspect of the Italian generic industry because pharmacies
tend to shortlist only three-to-four major generics brands. First
movers benefit from a higher market share in relation to the new
generic products, which is then difficult for competitors to
contest. We believe that failure to continue timely new launches
could put pressure on the company's market share and on the
rating.

"Despite having a well-balanced portfolio in molecules and
therapeutic areas, we consider the group reliant on favorable
patent cliff dynamics for organic growth. After three years of
substantial patent expiries, patent cliffs are expected to
moderate, which could lead to a smaller product pipeline and lower
growth. Having said that, we expect DOC Generici to benefit from
the ramp-up of its recently launched drugs, such as Olmesartan and
Cholecalciferol, and from the roll out of its ophthalmology and
cardiovascular franchises. We do not expect DOC Generici to engage
in cross-border activities or to enter the challenging biosimilar
market, due to its conservative business strategy.

"We consider DOC Generici's supplier base to be well managed and
based on long-standing relationships. The licensing contracts with
developers typically span five years and the majority include a
pass-through mechanism with a floor price, and no minimum set
volumes. However, we note that the company exhibits concentration
to Italian suppliers (46% of molecules), which further increases
its concentration risk to Italy.

"We believe DOC Generici's capital structure is highly leveraged as
a result of its debt-funded acquisition by private equity firm ICG
Group. We forecast adjusted debt to EBITDA of 5.5-6.0x in 2019,
before decreasing to nearly 5.5x in 2020 thanks to the company's
EBITDA expansion. For the same period, we forecast FOCF of EUR36
million-EUR39 million per year, supported by low capex, and low
working capital requirements. Due to the group's asset-light
nature, capex represents only about 2% of sales and is mainly
related to the acquisition of dossiers of molecules to be launched
after patent expiration, and to support the launch of the new
ophthalmology and cardiovascular ventures.

"We understand that the group followed a deleveraging profile under
the ownership of its previous financial sponsors. Although we
expect the company to follow a similar path, any material increase
in debt as a result of acquisitions or dividend recapitalization
could put pressure on the rating. Overall, private-equity ownership
of the group and the uncertainty as to whether the new financial
sponsors will sustainably support DOC Generici's deleveraging
trajectory and FOCF generation weigh on our assessment.

"The outlook is stable because we expect DOC Generici to generate
continued EBITDA growth supported by the stability of the Italian
regulatory environment, ramp-up of recently introduced products,
launch of its ophthalmology and cardiovascular ventures, and
increasing generics penetration in Italy. This should allow the
company to sustain adjusted debt to EBITDA of 5.5x-6.0x in 2019 and
2020, while generating positive FOCF.

"We could lower the ratings if DOC Generici's performance deviates
materially from our base case so that adjusted debt to EBITDA is
significantly above 6x or EBITDA interest coverage is below 3x for
a protracted period. We could also lower the ratings if FOCF turned
negative due to higher-than-expected capex or working capital
outflows, or if the financial sponsor engaged in aggressive
dividend recapitalizations.

"We could raise the rating if we were convinced that the financial
sponsor would consistently support the group's deleveraging
trajectory such that adjusted debt to EBITDA could remain
comfortably within the 4x-5x range, supported by sustained FOCF
generation. We also could consider a positive rating action if the
company markedly increased the scale and diversity of its product
offerings, but we do not expect this in the near term."


NAPLES CITY: Fitch Maintains 'BB+' LT IDRs on Watch Negative
------------------------------------------------------------
Fitch Ratings has maintained the City of Naples' Long-Term Foreign-
and Local-Currency Issuer Default Ratings at 'BB+' on Rating Watch
Negative. Its Short-Term Foreign Currency IDR has been affirmed at
'B'. The issue ratings on Naples' senior unsecured bond and on the
city's programme - also rated at 'BB+' - remain on RWN.

The IDRs of Naples reflect its low- to midrange-risk profile,
implying a high risk that operating cash flow will shrink due to
weak tax and fee collection rates and exposure to curtailment of
operating transfers. The ratings also reflect Naples' reliance on a
supportive institutional framework in the form of preferential
payments for timely debt service and inter-governmental lending, as
well as net outstanding payables at 100% of operating revenue.

The RWN reflects a high risk of downgrade due to Fitch's
expectations that Naples will fail to strengthen its operating
performance on a cash flow basis to cover annual debt service
requirements by 1x and to reduce the debt payback ratio, after
support and payables, below 11 years.

KEY RATING DRIVERS

Revenue Robustness: Midrange

Fitch's rating scenario of flat revenue considers the low
cyclicality of municipalities' tax bases, while transfers including
those from the national equalisation scheme, account for 33% of
operating revenue. In real terms, Naples' EUR1.1 billion operating
revenue declined roughly 3% in 2010-2018, due to substitution of
property tax bases with transfers, transfer cuts to support Italy's
consolidation efforts, and the city's inability to increase
collection rates from an average 75%, driving Fitch's expectation
of an operating balance at EUR90 million on a cash basis in its
2019-2023 rating scenario. Offsetting these rigidities is Naples's
good socio-economic wealth indicators by international standards,
with a GDP per capita of EUR19,000 or 63% of EU's (EUR30,000).

Revenue Adjustability: Weaker

Naples is under a recovery plan since 2014, which required raising
tax and fees charges up to the legal limit. Therefore, Naples'
revenue flexibility is limited to improvement of tax collection
rates as well as expanding the tax base by fighting tax evasion, a
lengthy process which nonetheless yielded mild improvements in 5M19
with a 5% yoy growth of cash flow. A downsized asset sales
programme to EUR180 million from EUR400 million offers little
budget flexibility to reduce debt or outstanding commercial
liabilities.

Expenditure Sustainability: Midrange

Naples had a good track record of cost control over 2010-2018, with
operating expenditure declining at the same pace of operating
revenue, driven by a 35% decrease in staff costs as headcount fell
to 7,500 from over 10,000. The city annually recognises about EUR40
million off-balance liabilities and regularly delays less urgent
payments.

Expenditure Adjustability: Weaker

Fitch does not expect further curtailments of public spending,
given the city's low level of existing services following repeated
spending cuts to cope with decades of financial distress. In
Fitch's rating case, Naples' operating cash flow does not fully
cover the city's EUR180 million annual debt service, resulting in
substantial non-compliance with the national balanced budget rule.
State and EU funds will continue to support Fitch-expected
five-year capex of close to EUR1 billion, mainly for transportation
and urban renovation.

Liabilities and Liquidity Robustness: Stronger

National prudential regulation includes borrowing for capex, debt
amortising structures, no foreign currency debt exposure and
interest expenses capped at 10% of operating revenue. Cassa
Depositi e Prestiti (BBB/Negative) and the national government
account for 75% of Naples' long-term debt and almost the entire
stock of Naples' loans carries fixed interest rates, reflecting a
low risk appetite and low risk of debt servicing increasing
sharply.

Liabilities and Liquidity Flexibility: Weaker

Fitch estimates that Naples had EUR100 million cash at end-2018
earmarked for payables settlement, while past unpaid liabilities
continue to put pressure on the city's liquidity. Positively, the
city reduced its reliance on cash advances from the bursar by 40%
in 2018 compared with previous year.

Debt Sustainability Assessment: 'b'

Under Fitch's rating case for 2019-2023, Naples' debt will rise to
EUR2.7 billion and debt sustainability will fall to the 'b'
category (from bb) due to a debt payback ratio of above 25 years.
Fitch expects debt to remain above 200% of operating revenue with
no liquidity buffer and weak debt service coverage.

SCP AND RATING DERIVATION

A combination of Naples' low midrange risk profile and 'b' debt
sustainability leads to an SCP in the 'b' category. A debt service
coverage below 1x and a debt burden above 200% lead to a
notch-specific SCP at 'b-'.

Supported Ratings

Naples has received EUR1.3 billion subsidised loans to pay down its
commercial liabilities, which Fitch views as junior with respect to
market financial debt in case of stressed finances. The city
extensively uses the preferential payments system, which allows
prioritising debt service, together with staff costs and some
defined essential services, over less urgent expenses.

Fitch calculates Naples' prioritised operating expenditure at 85%
of total spending and estimates the city's adjusted operating
balance on average at EUR250 million for 2019-2023. With market
financial debt of EUR1.7 billion, excluding inter-governmental
lending, and an adjusted operating balance, Naples has a debt
payback ratio of six years, which results in a seven-notch uplift
of its SCP to a 'BBB' IDR.

Asymmetric Risk: Management and Governance

Naples' long-standing deficit highlights weak governance and lax
interpretation of accounting rules. In Fitch's view, continued
reliance on the preferential payment mechanism carries a systemic
risk as pressures on liquidity from net outstanding payables and
contingent liabilities may hamper the functioning of the mechanism,
eventually leading to default.

Fitch does not expect Naples' EUR1.1 billion net outstanding
payables to shrink in the medium term. When added to the market
financial debt, Naples' recalculated payback weakens towards 11
years (debt sustainability at 'a') by 2023 from 10 years in 2019,
resulting in the debt-to-revenue ratio rising back to 230%. This,
combined with a low-midrange risk profile, shaves off three rating
notches, eventually leading to an IDR of 'BB'.

KEY ASSUMPTIONS

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

  - Stagnant revenue growing below GDP growth amid 25%
uncollectible operating revenue

  - Operating expenditure growth on average at 0.5%, below
inflation rate

  - The negative capital balance to be funded with reserves and new
debt subscription

  - Stable net outstanding payables around EUR 1.1 billion

  - Preferential payments will continue to support timely debt
service

RATING SENSITIVITIES

Fitch expects to resolve the RWN by the next scheduled CRA3 review.
A debt payback ratio, after state support and asymmetric risks, at
above 11 years would lead to a downgrade of the IDR to 'BB'.

The ratings could also be downgraded if debt and equivalents rise
above 2.5x operating revenue or if the preferential payment
mechanism protecting financial lenders is removed or undermined by
regulatory changes.




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

BLOCKPORT: Failed STO Prompts Bankruptcy Filing
-----------------------------------------------
Bitcoin Magazine reports that Blockport, an Amsterdam-based
currency exchange, has filed for bankruptcy after its Security
Token Offering (STO) failed to meet expectations.

According to a blog post published in April 2019, the co-founder
and chief product officer Sebastiaan Lichter said the company
failed to reach its soft cap of EUR1 million (US$1.13 million) for
its STO, Bitcoin Magazine relates.  Recently found bankruptcy
records indicate the company was declared bankrupt on May 21, 2019,
Bitcoin Magazine discloses.

Blockport's STO was launched on April 16 and lasted until May 15,
Bitcoin Magazine notes.  Investors were given the opportunity to
purchase BPS (Blockport Securities) in exchange for a minimum of
EUR500 investment, Bitcoin Magazine states.

Blockport's native token, BPT, has dropped in value by over 88%
within 24 hours after the bankruptcy announcement, Bitcoin Magazine
recounts.  All investors that participated will be refunded their
investment amount in Euros, Bitcoin Magazine relays.




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

KANIA: Files for Accelerated Restructuring Proceedings
------------------------------------------------------
Konrad Krasuski at Bloomberg News reports that Polish meat
processing company Kania said it filed with a Katowice court for
accelerated restructuring proceedings due to insolvency risk.

According to Bloomberg, the company plans to offer new 4-year
restructuring bonds to existing bondholders with a 3.5% fixed
coupon.

Kania, Bloomberg says, also seeks to extend repayments of its loans
for 96 months after 2-year grace period.  The new loan interest may
be set at 2%, Bloomberg notes.

The company said it had PLN526.6 million of debt as of May 23,
including PLN362.1 million of loans granted by Bank Handlowy, Alior
Bank and Santander Bank Polska, Bloomberg relates.

Kania, as cited by Bloomberg, said it must reduce production and
may further halt any meat processing without new sources of
finance.



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

ALFASTRAKHOVANIE PLC: Fitch Hikes IFS Rating to BB+, Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has upgraded AlfaStrakhovanie PLC (Russia)'s Insurer
Financial Strength Rating to 'BB+' from 'BB'. The Outlook is
Stable.

KEY RATING DRIVERS

The upgrade of AlfaStrakhovanie's rating reflects the improvement
in the insurer's risk-adjusted capital score in 2018, its
continuously strong profitability, its better-than-peers' quality
of investments and a favourable business profile in the domestic
market. Fitch continues to see the insurer's thin, although
gradually improving, risk-adjusted capital position as a key rating
factor.

According to Fitch's Prism Factor-Based Capital Model (Prism FBM),
AlfaStrakhovanie 's risk-adjusted capital score improved to
slightly above 'Somewhat Weak' in 2018, marking the fifth
consecutive year of capital strengthening. Strong profit
generation, coupled with an absence of capital withdrawal by the
shareholder, helped the company's capital position improve amid
continuing rapid premium growth. A moderate RUB0.5 billion dividend
withdrawal is scheduled for 2019 for the first time since 2012.

In 2018, AlfaStrakhovanie reported a very strong net profit of
RUB11 billion, with a return on equity (ROE) of 49% (2017: 37%) and
a five-year average ROE of 33%. The improvement was largely due to
a RUB5.9 billion FX gain. Profit was also supported by ongoing good
investment performance, a strong non-life underwriting result and a
moderately positive result of its life insurance subsidary. The
insurer's non-life underwriting profit grew to RUB4.8 billion in
2018 from RUB3.9 billion in 2017. The combined ratio stood at 94%
in 2018, in line with 93% in 2017, and better than the five-year
average of 99% in 2013-2017. AlfaStrakhovanie's two non-insurance
businesses continued to make immaterial contribution to the group's
consolidated result.

From 2H17 AlfaStrakhovanie has been rapidly increasing its segment
share in the Russian motor third-party liability (MTPL) insurance.
The insurer's segment share, measured by the number of MTPL
policies issued, peaked at 17.5% in 4Q18 up from an average of 5.2%
in 2016-1H17. The weight of MTPL in AlfaStrakhovanie's non-life net
earned premiums grew to 30% in 2018 from 22% in 2017.

Such growth was not accompanied by deterioration in
AlfaStrakhovanie's commission ratio for the line as the insurer
prioritised online sales, which were launched as a requirement for
the MTPL line by the regulator starting from 2018. However, the
insurer had to decrease its average premium per MTPL policy to be
closer to market-average levels.

The insurer's MTPL loss ratio improved to 72% in 2018 from 78% in
2017, supported by rapid premium growth. However, in 1Q19
AlfaStrakhovanie recorded a notable deterioration in MTPL loss
ratio compared with1Q18, as the effect of lower average premium
started to materialise and the frequency of claims grew. The latter
effect impacted many segment underwriters and had not been
accurately reflected in insurers' pricing policy.
AlfaStrakhovanie started in 1Q19 to gradually reduce MTPL as a
share of its portfolio and to revise some tariffs, which are now
partially liberalised. AlfaStrakhovanie does not expect the MTPL
negative loss trends seen in 1Q19 to prevent it from achieving
positive underwriting result for the whole portfolio in 2019.

Fitch believes that AlfaStrakhovanie has a favourable business
profile in the domestic non-life insurance sector. The company's
non-life portfolio is well-diversified in many aspects, including
business mix, presence in the retail and commercial segments and
distribution pattern. AlfaStrakhovanie's non-life premiums have
been growing faster than the Russian non-life insurance sector,
including both motor-related lines and non-motor segments. The
insurer has a large branch network and a well-known brand name.

On the life insurance side, AlfaStrakhovanie also holds very strong
sector position, but its business mix is very concentrated as is
the case for the whole Russian life insurance sector.
AlfaStrakhovanie's portfolio is mainly focused on two products:
hybrid products and payment protection insurance sold as a
supplement to consumer lending products. With 99% of life insurance
premiums written through banks in 2018, AlfaStrakhovanie's life
business is fully dependent on this distribution channel.

As the Russian Central Bank has tightened the sales regulation for
the life hybrid products in 2019, these products have already
started to experience a sharp decline in new premiums and very low
renewal rates. AlfaStrakhovanie might therefore see a contraction
of its life portfolio, although with low surrender risk as the
hybrid products were designed as single-premium contracts with high
penalties for premature policy termination.

Fitch views the credit and liquidity quality of AlfaStrakhovanie's
investment portfolio as good from a domestic perspective. However,
due to the exposure to non-investment-grade securities (mainly
domestic bonds), the risky assets-to- equity ratio is high.
AlfaStrakhovanie held 47% of total investments in bonds at
end-2018, maintaining the credit quality at a higher level than
other domestic insurers'.

RATING SENSITIVITIES

The rating could be upgraded if AlfaStrakhovanie improves its
risk-adjusted capital position to at least 'Adequate' under Fitch's
Prism FBM on a sustained basis, provided that financial performance
remains strong.

The rating could be downgraded if AlfaStrakhovanie's capitalisation
weakens as measured by Prism FBM or if its profitability weakens
substantially.


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

The affirmation is based on a 'Weaker' assessment of the republic's
risk profile and debt sustainability assessment of 'aa' according
to Fitch's rating case. This reflects Fitch's expectation that the
city will continue to control its fiscal deficit over the medium
term and maintain moderate debt. The ratings also factor in the
moderate size of the city's budget leading to a limited fiscal
capacity and flexibility.

Novosibirsk is the administrative centre of the Novosibirsk Region
(BBB-/Stable). With a population of about 1.6 million inhabitants,
the city is the largest metropolitan area of Siberian Federal
District and is the third-largest city in Russia after Moscow and
Saint Petersburg. According to budgetary regulation, Novosibirsk
can borrow on the domestic market. Its budget accounts are
presented on a cash basis while the law on a budget is approved for
three years.

KEY RATING DRIVERS

Revenue Robustness Assessed as Weaker

The city's tax base is moderate in size and has modest growth
prospects, in Fitch's view, stemming from the limited scope of
taxes that are collected by Russian municipalities according to
national legislation. The city's revenue has demonstrated a
negative dynamic in real terms in the past, while economic growth
in Novosibirsk region is modest and close to that of Russia,
reflecting the overall sluggish national economic environment.

Taxes are a notable revenue source for Novosibirsk, accounting for
about 40% of the city's total revenue. The most important is
personal income tax (PIT), which accounted for about 30% of the
city's total revenue in 2018. PIT has demonstrated a good dynamic
and has not been subject to significant economic activities
fluctuations in the past. However, PIT is a federal tax and its
allocation between government tiers is regulated by the Budgetary
Code, which exposes the city to some volatility risk that
crystallised in 2015.

Revenue Adjustability Assessed as Weaker

Fitch assesses Novosibirsk's ability to generate additional revenue
in response to possible economic downturns as limited. The federal
government holds significant tax-setting authority, which limits
Russian local and regional governments' (LRG) fiscal autonomy and
revenue adjustability. Land tax and personal property tax are the
only two local taxes and Novosibirsk has the authority to set the
rate and base for both. However, the city's ability to determine
taxes is constrained by the limits set in the National Tax Code.
Also, the revenue generated from the local taxes is not high; in
aggregate they contributed 8% of the city's total revenue in 2018.

Expenditure Sustainability Assessed as Midrange

Novosibirsk has demonstrated prudent control of expenditure, which
is evident from the track record of the spending dynamic being
close to that of revenue during the last five years. Like other
Russian municipalities, Novosibirsk's expenditure structure is
dominated by education, which is of a counter-cyclical nature and
accounted for 58% of total expenditure in 2018.

Russian cities are not required to adopt anti-cyclical measures,
which would not inflate expenditure related to social benefits in
the times of downturn. At the same time, the city's budgetary
policy is dependent on the decisions of the federal and regional
authorities, which could negatively affect the dynamic of
expenditure.

Expenditure Adjustability Assessed as Weaker

Like most Russian LRGs, Fitch assesses Novosibirsk's expenditure
adjustability as low. The vast majority of spending
responsibilities are mandatory for Russian subnationals, which
leads to inflexible items dominating the expenditure structure.
This is why the bulk of expenditure could be difficult to cut in
response to potential revenue shrinking. Expenditure rigidity for
Russian municipalities is high as a material part (Novosibirsk:
above 40%) is funded by earmarked transfers from the upper-tier
government. The ability to cut expenditure is also constrained by
the low level of per capita expenditure compared with international
peers (USD378 in 2018).

Liabilities and Liquidity Robustness Assessed as Midrange

According to national budgetary regulation, Russian LRGs are
subject to debt stock limits and new borrowing restrictions as well
as limits on annual interest payments. Derivatives and floating
rates are prohibited for LRGs in Russia. The limitations on
external debt are very strict and in practice no Russian region
borrows externally. Novosibirsk follows prudent debt policy that is
evident from moderate debt level, as the fiscal debt burden (net
adjusted debt/operating revenue) was maintained below 55% in
2015-2018.

The city's direct debt structure is well-balanced between market
borrowings in the form of amortising domestic bond issues (49% of
direct risk as of January 1, 2019) with up to nine-year maturity
followed by revolving lines of credit from local banks with
maturity of up to five years (40%) and the remaining 11% are
low-cost loans from the Novosibirsk region. The city is not exposed
to material off-balance sheet risks.

Liabilities and Liquidity Flexibility Assessed as Midrange

Novosibirsk's liquidity flexibility is supported by the liquidity
instruments in the form of a federal treasury line to cover
intra-year cash gaps. This treasury facility amounted to 1/12th of
annual budgeted revenue (excluding intergovernmental transfers) and
can be rolled over during the financial year. The counterparty risk
associated with the liquidity providers is 'BBB-', which limits the
assessment of this risk factor to Midrange. As of
January 1, 2019, the city had RUB8.9 billion of unused credit lines
with local banks, which exceed refinancing needs as well as the
expected deficit for 2019.

Debt Sustainability Assessment: 'aa'

Like other Russian LRGs Fitch classifies Novosibirsk as a Type B
LRGs, which are required to cover debt service from cash flow on an
annual basis. The 'aa' assessment of debt sustainability is driven
by a strong payback ratio (net adjusted debt/operating balance),
which is the primary metric of the debt sustainability assessment
for Type B LRGs. According to Fitch's rating case, which envisages
some stress on both revenue and expenditure to capture historical
volatility, the payback ratio will remain sustainably below 9x over
the five-year projected period (2018: 5.5x).

RATING DERIVATION

Fitch assesses Novosibirsk's standalone credit profile (SCP) at
'bb', which reflects a combination of a Weaker assessment of the
city's risk profile (result of three Weaker and three Midrange
assessments of Key Risk Factors) and a 'aa' assessment of debt
sustainability. The notch-specific rating positioning is assessed
against national peers. The IDRs are not affected by any asymmetric
risk or extraordinary support from an upper tier of government. As
a result, the city's IDRs are equal to its SCP.

KEY ASSUMPTIONS

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

  - Tax revenue growth in line with local economy nominal growth

  - Operating expenditure growth of in line with inflation

  - Capital expenditure growth in line with local economy growth

  - Deficit is covered by new debt

  - Interest expenditure increasing in line with debt increase

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

  - Stress on personal income tax by -1pp annually to reflect
weaker economic environment in the rating case

  - Stress on personnel cost and goods and services spending made
by +0.5pp annually compared with base case growth to reflect higher
inflation in the rating case

RATING SENSITIVITIES

Fitch's rating case consistently showing debt payback at about 6x
coupled with sound fiscal debt burden below 60% could lead to an
upgrade. A positive reassessment of Novosibirsk's risk profile,
particularly due to expenditure flexibility improvement, could be
positive for the ratings, provided debt sustainability metrics
remain unchanged.

A deterioration of the region's debt payback beyond nine years
according to Fitch's rating case would lead to a downgrade.




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

IS FAKTORING: Fitch Affirms & Then Withdraws 'B+' IDR
-----------------------------------------------------
Fitch Ratings has affirmed Is Faktoring's Long-Term Foreign
Currency Issuer-Default Rating at 'B+' with Negative Outlook. The
rating has simultaneously been withdrawn for commercial reasons.

KEY RATING DRIVERS

The rating of Is Faktoring is equalised with that of its parent,
Turkiye Is Bankasi A.S., (B+/ Negative) reflecting Is Faktoring's
strategic importance to, and integration with the group as well as
shared branding. The Negative Outlook to Is Faktoring prior to
withdrawal reflects that of the parent company.

RATING SENSITIVITIES

Rating sensitivities are no longer relevant given its rating
withdrawal.

The rating actions are as follows:

  Long-Term Foreign Currency IDR affirmed at 'B+' with Negative
  Outlook and withdrawn

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

  Long-Term Local Currency IDR affirmed at 'BB-' with Negative
  Outlook and withdrawn

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

  National Long Term Rating affirmed at 'A+(tur)' with Stable
  Outlook and withdrawn

  Support Rating affirmed at '4' and withdrawn




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

DNIPRO CITY: Fitch Affirms 'B-' LongTerm IDRs, Outlook Stable
-------------------------------------------------------------
Fitch Ratings has affirmed the City of Dnipro's Long-Term Foreign
and Local-Currency Issuer Default Ratings at 'B-' with Stable
Outlooks. The Short-Term Foreign-Currency IDR has been affirmed at
'B'. The city's National Long-Term Rating has been affirmed at
'AA-(ukr)' with Stable Outlook.

The affirmation reflects Fitch's unchanged view of the city as
constrained by the sovereign rating of Ukraine (B-/Stable). Fitch
also assesses the city's standalone credit profile (SCP) at 'bb-',
based on the combination of Dnipro's vulnerable risk profile and
debt sustainability assessment at 'aaa'.

Dnipro is one of the largest cities in the country with a
population of about one million. Dnipro's economy is industrialised
and is dominated by metallurgy and heavy manufacturing sectors.
According to budgetary regulation, Dnipro has the right to borrow
on the domestic market and externally. Budget accounts are
presented on a cash basis while the law on budget is approved for
one year.

KEY RATING DRIVERS

Revenue Robustness Assessed as Weaker

The city's revenue framework is unstable amid continuous shaping of
tax and budgetary regulation. Predominantly nationally collected
taxes represented 60% of operating revenue in 2018 and are Dnipro's
main revenue source. Transfers from the central government ('b-'
rated counterparty) historically account for close to 40% of the
city's revenue. The operating margin is historically sound,
hovering around 20% in 2014-2018. Nonetheless, continuous
amendments to national fiscal regulation and the dependence on a
weak counterparty for a material portion of the city's revenue
drive the Weaker assessment for the robustness of Dnipro's revenue
framework.

Revenue Adjustability Assessed as Weaker

Fitch assesses Dnipro's ability to generate additional revenue in
response to possible economic downturns as limited. Despite a
formal increase in the city's rate-setting power, as the proportion
of local taxes with the city's rate-setting power significantly
grew from 9% of revenue in 2013 to an average 23% in 2016-2018, its
real ability to generate additional revenue is limited. To this
end, a potential increase of the tax rates on local taxes is
constrained by both legally set ceilings and the relatively low
income of residents.

Expenditure Sustainability Assessed as Weaker

The spending dynamic during the last five years has been influenced
by high albeit lowering inflation and reallocation of spending
responsibilities. Currently, the city's main spending
responsibilities are in education and healthcare, which are of a
counter-cyclical nature. However, the city is responsible only for
the maintenance of schools and healthcare institutions while the
salaries of teachers and healthcare personnel are financed by
transfers from the national budget. Owing to the overall structural
weakness of Ukraine, a transfer of these responsibilities to the
municipal level is very likely, as was the case with the recent
transfer of certain social benefits. Therefore the city's
expenditure framework is characterised as fragile, leading to a
Weaker assessment of its sustainability.

Expenditure Adjustability Assessed as Weaker

Fitch assesses the city's ability to reduce spending in response to
shrinking revenue as weak. This is evidenced by a material
proportion of inflexible items in the city's operating expenditure
and overall low per capita spending compared with international
peers. The share of capex was volatile, ranging between 7% and 30%
of total spending in 2014-2018 due to a lack of investment
strategy. The decision on the amount of capital spending is
dictated more by the availability of resources in a particular year
while the city's overall infrastructure needs are high amid serious
infrastructure underfinancing during prolonged period of time.

Liabilities and Liquidity Robustness Assessed as Weaker

Ukraine's framework for debt and liquidity management is weak. The
national capital market is underdeveloped, while the sovereign's
unfavourable credit history, including Ukraine's default in 2015,
exerts further downward pressure. The recent sovereign default has
impaired Ukrainian LRGs' access to debt capital markets.

Consequently, like many national peers, Dnipro did not borrow from
the market and maintained a debt-free status in 2014-2017. Dnipro
resumed borrowing in 2018 following Ukraine's return to the capital
market. The city contracted a loan of UAH498.7 million from the
local state-owned bank in the end-2018. The loan matures in 2020
and bears 18.4% annual interest rate (Ukraine's key policy rate was
reduced to 17.5% in the end-April 2019 from 18.0%).

Liabilities and Liquidity Flexibility Assessed as Weaker

Dnipro's available liquidity is restricted to the city's own cash
reserves, which are low (end-2018: UAH 154.2 million). The city has
no undrawn committed credit lines. Potential liquidity providers
are local banks ('b-' rated counterparties) justifying the Weak
assessment for the liquidity profile. There are no emergency
bail-out mechanisms from the national government in place due to
the fragile capacity and hence the weak public finance position of
the sovereign, which is dependent on IMF funding for the smooth
repayment of its external debt.

Debt Sustainability Assessment: 'aaa'

Fitch's rating case expects the debt payback ratio (net direct
risk-to-operating balance) - the primary metric of debt
sustainability assessment - will remain far below five years over
the rating horizon, which justifies the city's debt sustainability
'aaa' assessment. The secondary metrics - fiscal debt burden (net
direct risk to operating revenue) and actual debt service coverage
ratio (ADSCR, operating balance/debt service, including short-term
debt maturities) - also support strong debt sustainability
assessment.

According to Fitch's rating case, the payback ratio will remain
strong over the projected period and account for 2.3 years in 2023.
The fiscal debt burden will be gradually rising from a low 2.7% in
2018 as it expects the city will continue to incur borrowing to
finance its capex needs, but will not exceed 25% in 2023. The
ADSCR, which is currently very strong (2018: 50.6) will fluctuate
in 2019-2023, slightly deteriorating in the years of expected debt
repayment, but overall remaining sound, averaging almost 6x in
Fitch's rating case scenario.

RATING DERIVATION

The city's IDRs are capped by the Ukrainian sovereign IDRs.
Dnipro's SCP is assessed at 'bb-', which reflects a combination of
'Vulnerable' risk profile and strong debt metrics leading to a
'aaa' debt sustainability assessment. The SCP also factors in
national peer comparison. The IDRs are not affected by any
asymmetric risk or extraordinary support from the central
government.

KEY ASSUMPTIONS

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

  - Nominal growth of operating revenue close to expected
inflation

  - Nominal growth of operating expenditure above 2.2pp of
inflation
    (compared with 0.7pp in the base case)

  - Proportion of capex to average 20% of the city's total
expenditure
    over the rating horizon, in line with five-year historical
average

  - Fiscal debt burden to rise to 25% by 2023

RATING SENSITIVITIES

Dnipro's IDRs are currently constrained by the sovereign ratings
while the city's SCP is assessed at 'bb-'. Therefore, any rating
action on the sovereign will be mirrored on the city's IDRs.

The SCP could be also positively affected by the sovereign upgrade
provided the maintenance of the strong debt sustainability
metrics.

The city's SCP could be downgraded if the payback deteriorates
above nine years.




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

ARCADIA GROUP: Creditors Back Company Voluntary Arrangement
-----------------------------------------------------------
BBC News reports that Sir Philip Green's Arcadia retail empire has
been saved by a rescue deal that will trigger the closure of 48
stores and a thousand jobs.

According to BBC, the plan, a Company Voluntary Arrangement (CVA),
was approved by Arcadia's creditors.

After a week's delay and five hours of discussion Arcadia'a
landlords finally agreed to rent cuts, 23 store closures and 520
job losses, BBC relates.

Following the CVA, another 25 stores and another 500 jobs will be
axed, BBC states.

The CVA forces store closures and reduced rents of 25% to 50%
across 194 of its 566 UK and Irish stores over a three-year period,
BBC discloses.

Arcadia Group Ltd. is the UK's largest privately owned fashion
retailer with seven major high street brands: Burton, Dorothy
Perkins, Evans, Miss Selfridge, Topshop, Topman and Wallis, along
with its out-of-town fashion destination Outfit.  


BLACK DIAMOND 2019-1: S&P Assigns Prelim B- Rating on F Notes
-------------------------------------------------------------
S&P Global Ratings assigned preliminary credit ratings to Black
Diamond CLO 2019-1 DAC's class X, A-1, A-2, A-3, B-1, B-2, C, D, E,
and F notes. At closing, the issuer will also issue unrated
subordinated notes.

The preliminary ratings assigned to the notes reflect S&P's
assessment of:

-- The diversified collateral pool, which consists primarily of
broadly syndicated speculative-grade senior secured term loans and
bonds that are governed by collateral quality tests.

-- The credit enhancement provided through the subordination of
cash flows, excess spread, and overcollateralization.

-- The collateral manager's experienced team, which can affect the
performance of the rated notes through collateral selection,
ongoing portfolio management, and trading.

-- The transaction's legal structure, which S&P expects to be
bankruptcy remote.

-- The counterparty risk.

S&P said, "We consider that the transaction's documented
counterparty replacement and remedy mechanisms adequately mitigate
its exposure to counterparty risk under our current counterparty
criteria.

"Following the application of our structured finance ratings above
the sovereign criteria, we consider the transaction's exposure to
country risk to be limited at the assigned preliminary rating
levels, as the exposure to individual sovereigns does not exceed
the diversification thresholds outlined in our criteria.

"At closing, we consider that the transaction's legal structure
will be bankruptcy remote, in line with our legal criteria.

"Following our analysis of the credit, cash flow, counterparty,
operational, and legal risks, we believe that our preliminary
ratings are commensurate with the available credit enhancement for
each class of notes."

Black Diamond CLO 2019-1 is a European cash flow corporate loan
collateralized loan obligation (CLO) securitization of a revolving
pool, comprising euro- and U.S. dollar-denominated senior secured
loans and bonds issued mainly by speculative grade borrowers. Black
Diamond CLO 2019-1 Adviser, LLC is the collateral manager.

Ratings List

  Issuer  

  Black Diamond CLO 2019-1 DAC  

  Class Prelim. rating Amount (mil.)
      X     AAA (sf) EUR3.00
    A-1     AAA (sf) EUR187.00
    A-2     AAA (sf) $34.36
    A-3     AAA (sf) $25.00
    B-1      AA (sf) EUR27.00
    B-2      AA (sf) EUR25.00
      C       A (sf) EUR22.00
      D     BBB (sf) EUR25.00
      E      BB (sf) EUR22.00
      F      B- (sf) EUR11.00
M1 Sub   NR EUR24.50
M2 Sub   NR $8.152

Sub--Subordinated.
NR--Not rated.


JAC VAPOUR: Bought Out of Provisional Liquidator by Magflo
----------------------------------------------------------
Hannah Burley at The Scotsman reports that Edinburgh vaping
business JAC Vapour has been rescued from the brink of collapse in
a deal safeguarding almost a dozen jobs.

According to The Scotsman, the e-cigarette maker and retailer has
been bought out of provisional liquidation by newly incorporated
firm Magflo for an undisclosed sum.

Three staff members were made redundant, while 11 employees have
been transferred to the new owner, which will continue the JAC
Vapour brand, The Scotsman discloses.

Following "a period of difficult trading conditions" for JAC,
Richard Gardiner of Thomson Cooper was appointed provisional
liquidator and stated that the firm's "challenging cash position"
made liquidation "the only viable option", The Scotsman relates.


REDHALL GROUP: Appoints Administrators, Shares Still Suspended
--------------------------------------------------------------
Redhall Group plc on June 10 disclosed that the Board, under the
provisions of the Insolvency Act 1986, has resolved to appoint
Christopher Petts [ chris.petts@uk.gt.com ], and Sarah O'Toole [
Sarah.A.OToole@uk.gt.com ], both of Grant Thornton, as joint
administrators to Redhall Group plc, Booth Industries Limited and
Redhall Jex Limited.

These appointments follow the previous announcement made by the
Company on May 28, 2019, when it advised that the Board intended to
appoint Administrators within 10 business days.

Redhall Networks Limited and Jordan Manufacturing Limited have not
yet gone into administration, though it is expected that they will
do so shortly.

        Resignation of Nominated Adviser (NOMAD)

In light of the Company's decision to appoint administrators and
with the mutual agreement of the Board, GCA Altium Limited has
resigned as NOMAD to the Company with immediate effect.

Pursuant to AIM Rule 1, if a replacement NOMAD is not appointed
within one month, the admission of the Company's ordinary shares to
trading on AIM will be cancelled.  The Company has not appointed a
replacement NOMAD and has no current intention of so doing.

Trading in the Company's ordinary shares on AIM remains suspended
pursuant to the notice of May 24, 2019.

Redhall Group plc -- https://www.redhallgroup.co.uk/ -- is a
multi-disciplined engineering business offering design,
manufacture, installation, testing, maintenance and decommissioning
services to the nuclear, oil & gas, defence, infrastructure,
telecom, petrochemical and food process sectors.


SYNLAB BONDCO: Fitch Gives B+(EXP) Rating to New EUR920MM Term Loan
-------------------------------------------------------------------
Fitch Ratings has assigned Synlab Bondco PLC's new term loan of
EUR920 million an expected senior secured rating of
'B+(EXP)'/'RR3'. The loan will be issued to redeem the senior
secured notes (SSN) of EUR900 million and will rank pari passu with
existing senior secured debt. The assignment of the final
instrument rating is subject to transaction execution terms
materially conforming to the draft terms. Fitch also expects to
withdraw the senior secured rating on the EUR900 million SSN, as
they will be redeemed at closing.

At the same time, Fitch has affirmed Synlab's Issuer Default Rating
(IDR) at 'B' with Stable Outlook reflecting the leverage-neutral
nature of the contemplated refinancing.

The IDR is materially constrained by Synlab's aggressive leverage
profile and financial policies, albeit balanced by the defensive
nature of the company's routine medical testing business model.
Fitch's expectation of increasing earnings scale and improving cash
conversion, allows for limited deleveraging capacity, mitigating
Synlab's persistently high financial risk, as reflected in the
Stable Outlook.

KEY RATING DRIVERS

Rating Neutral Refinancing: The envisaged partial re-financing is
rating-neutral given the broadly unchanged total amount of the
financial debt estimated at EUR2.7 billion at the end of 2019,
although it should lead to a lower debt service cost by around
EUR20 million. Fitch projects the credit metrics, including funds
from operations (FFO) adjusted gross leverage and FFO fixed charge,
to remain relatively unchanged at 8.0x and 2.0x, respectively, over
the rating horizon. At the same time, the new term loan B will
diversify the currently concentrated maturity profile of the first
lien debt between July 2022 and July 2026.

Leverage Headroom Fully Exhausted: High financial leverage
continues to materially constrain Synlab's ratings. With FFO
adjusted leverage at 8.6x in 2018 the leverage headroom is already
fully exhausted. Following the refinancing, Fitch projects FFO
adjusted gross leverage will remain at or marginally below 8.0x
over the rating horizon. In the absence of meaningful deleveraging
the rating is therefore dependent on stable underlying operational
performance and disciplined execution and integration of continuous
business additions.

Stable Organic Performance: Compared with other Fitch-rated
laboratory testing companies, Fitch views Synlab's operations as
robust, benefiting from scale and diversification across products
and geographies. In 2018 and 1Q19, despite reimbursement pressures
in individual national markets and rising costs, Synlab
demonstrated positive organic growth and stable margins, although
profitability remained weak against prior years. In light of the
market headwinds in the last two years and mounting complexity of
the business due to acquisitions, Fitch does not see scope for
margin expansion, projecting fairly stable EBITDA margins of around
18.5% over the next four years.

Focus on Acquisition Integration: Synlab's buy-and-build strategy
highlights the need for disciplined asset selection and rigorous
integration process. While management has demonstrated robust
execution skills, upward asset valuations in a consolidating
laboratory testing services market make it harder to realise
synergies from acquisitions, which require greater attention on
integration and value extraction. An inability to implement the
margin-accretive M&A-based strategy will put the ratings under
pressure. Fitch's assumptions supporting the IDR with a Stable
Outlook are based on target acquisition multiples ranging between
8.5x-10.0x with an annual M&A spend of EUR200 million, contributing
around EUR22 million to EBITDA each year.

Strengthening Cash Flows: Fitch views Synlab's low deleveraging
capacity as remaining intact against the strengthening cash flow
generation. Fitch projects steadily growing free cash flow (FCF)
and margins as the business increases in scale on the back of
organic and acquisitive growth. After a slightly positive FCF
margin of 2% in 2018, it projects FCF margins will expand toward
4%-5% in the medium term. This reflects the improvement of FCF to
sustainably positive from previously volatile and underpins its
view that a supportive operating profile will be capable of
absorbing excessive financial risks.

DERIVATION SUMMARY

Following the merger of Synlab and Labco in 2015, the combined
group is the largest lab testing company in Europe, twice the size
of its nearest competitor, Sonic Healthcare. Its operations consist
of a network of 475 laboratories across 37 countries, providing
good geographical diversification and limited exposure to single
healthcare systems.

The company's EBITDA margin at around 18% slightly lags behind
European industry peers, due to its exposure to the German market
with structurally lower profitability. The laboratory testing
market in Europe has attracted significant private equity
investment, leading to highly leveraged financial profiles. Synlab
is highly geared for its rating (pro forma annualised FFO adjusted
gross leverage at above 8.0x in 2018), which is a key rating
constraint. At the same time, like other sector peers such as
Cerba, Synlab benefits from a defensive and stable business model
given the infrastructure-like nature of the laboratory testing
services. Fitch therefore expects that Synlab will be able to
generate satisfactory FCF once the current restructuring programme
has been successfully implemented.

KEY ASSUMPTIONS

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

  - Low to mid-single digit organic growth in key markets

  - EBITDA margin gradually improving towards 18.5% due to cost
    savings and economies of scale achieved from the enlarged
group;

  - Around EUR200 million of bolt-on acquisitions per annum funded
    by debt drawdowns and internal cash flows;

  - Moderate capital intensity with capex/sales estimated at
    around 4.0-4.5%;

  - Satisfactory FCF generation of around 4%-5% on average over
the
    four-year rating horizon;

  - No dividends paid.

RECOVERY ASSUMPTIONS

  - Going concern approach over balance sheet liquidation given
    Synlab's asset-light operations;

  - Pre-distress EBITDA of EUR352 million estimated based on 2018A
    EBITDA of EUR356 million plus estimated earnings contribution
of
    EUR18 million from acquisitions to be completed by using the
    incremental term loan B of EUR150 million less estimated cost
of
    financial lease service of EUR21 million, which Fitch expects
    will remain available to the company post-distress and which
it
    has, therefore, excluded from the list of financial creditors;

  - The resulted estimated pre-distress EBITDA of EUR352 million
    has been discounted by 20% (unchanged from last review)
leading
    to a post-distress EBITDA of EUR282 million; at this EBITDA
    level Synlab's FCF would be neutral to marginally negative;

  - Distressed EV/EBITDA multiple of 6.0x;

Outcome:

After deduction of 10% for administrative claims, its waterfall
analysis generated the following ranked recovery:

  - Super senior revolving credit facility (RCF): 'BB'/'RR1'/100%

  - Senior secured facilities: 'B+'/'RR3'/55%

  - Senior secured debt (New EUR920 million TLB):
'B+'(EXP)/'RR3'/55%

  - Senior note rating: 'CCC+'/'RR6'/0%

RATING SENSITIVITIES

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

  - FFO adjusted gross leverage above 8.0x (FY18:8.6x) or FFO
    fixed charge cover at less than 1.5x (FY18: 1.6x) for a
     sustained period (both adjusted for acquisitions);

  - Reduction in FCF margin to only slightly positive levels
    or large debt-funded and margin-dilutive acquisition
    strategy could also prompt negative rating action;

  - Absence of or negative Like-for-Like growth or Inability
    to extract synergies, integrate acquisitions or other
    operational challenges leading to EBITDAR margin declining to
below 22%;

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

  - FFO adjusted gross leverage below 6.5x and FFO fixed
    charge cover above 2.0x;

  - Improved FCF margin in the mid- to high single digits or
    more conservative financial policy reflected in lower
    debt-funded M&A spending.

LIQUIDITY AND DEBT STRUCTURE

Satisfactory Liquidity: Organic liquidity is satisfactory,
estimated to reach EUR124 million in FY19, and projected to rise
progressively towards EUR225 million by 2022, after considering
EUR30 million deducted as restricted cash needed for operations.
This level of internal cash generation will fund up to 50% of M&A
over the next four years. Fitch projects the remainder of the
acquisitions will be supported by the committed RCF of EUR250
million, forecast to be fully undrawn by approximately EUR100
million a year until maturity in June 2021.

Synlab benefits from a diversified funding structure with access to
both public debt and loan markets with most of its debt becoming
due in July 2022, and the planned new TLB in July 2026.


VUE INTERNATIONAL: S&P Affirms 'B-' LT ICR, Outlook Negative
------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' long-term ratings on Vue
International Bidco Ltd. and its existing debt, and assigned its
'B-' issue and '3' recovery ratings to the proposed first-lien
senior secured term loans and a new GBP65 million-equivalent
revolving credit facility.

S&P affirmed the rating because it expects the proposed transaction
will allow Vue to extend its debt maturities and, in particular, to
resolve the refinancing risk arising from the approaching maturity
of its GBP611 million-equivalent senior secured fixed- and
floating-rate notes that are due in July 2020.

The group will issue GBP648 million-equivalent euro-denominated
senior secured term loans due in 2026, including a new EUR114
million delay-draw facility to fund the acquisition of CineStar,
and a GBP165 million second-lien secured PIK notes due in 2027
provided by one of its main shareholders, OMERS. Vue will use the
proceeds to redeem the existing EUR120 million term loan due in
2023, GBP300 million senior secured fixed-rate notes, and EUR360
million floating-rate notes due in 2020, and will cancel the
existing EUR114 million delay-draw facility. The group will also
arrange a new GBP65 million-equivalent multicurrency RCF due in
2025.

Once the refinancing is completed, S&P expects to affirm the rating
at 'B-' and revise the outlook to stable. S&P will also review its
assessment of Vue's liquidity, which is currently constrained by
the refinancing risk.

Following the transaction, Vue's capital structure will remain
highly leveraged, with S&P Global Ratings-adjusted debt to EBITDA
exceeding 9.0x in 2019-2020. This is a result of weak performance
in its markets in Germany and Italy in 2017-2018 and debt-financed
acquisitions. Incorporating the acquisition of CineStar in Germany
in 2019, S&P forecasts that adjusted debt to EBITDA will remain at
about 10.0x, in line with 2018, and will only reduce to about 9.5x
in 2020. Leverage, excluding the existing GBP813 million unsecured
and subordinated shareholder loans and including the proposed
GBP165 million senior secured second-lien PIK notes, will be about
7.0x in 2019 and 6.0x-6.5x in 2020.

S&P said, "We expect deleveraging in 2019-2020 will be slow due to
the high amount of debt and despite the recovery in the German and
Italian markets and a strong slate of film releases. Initially,
lower profitability at CineStar and restructuring and
transaction-related costs will dilute Vue's S&P Global
Ratings-adjusted EBITDA margin, such that it will remain at about
30% in 2019, in line with 2018. As the group achieves operating
synergies, we expect the margin will gradually improve in
2020-2021."

The negative outlook indicates that if the company cannot complete
the proposed refinancing transaction by the beginning of July 2019,
its senior secured note liabilities due in 2020 would become
current.

S&P said, "Once the refinancing is completed, we expect to affirm
the 'B-' rating and revise the outlook to stable. This would
reflect our expectation that Vue will continue to perform in line
with our base case, improve its reported EBITDA generation in the
financial year (FY) ending November 2019 to at least GBP120
million, maintain reported FFO cash interest coverage comfortably
above 2x, and continue to generate positive free operating cash
flows.

"We will lower the rating if Vue is unable to successfully complete
the proposed refinancing transaction in the next several weeks."



                           *********


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

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

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

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Europe subscription rate is US$775 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
contact Peter Chapman at 215-945-7000.


                * * * End of Transmission * * *