/raid1/www/Hosts/bankrupt/TCREUR_Public/190621.mbx        T R O U B L E D   C O M P A N Y   R E P O R T E R

                          E U R O P E

          Friday, June 21, 2019, Vol. 20, No. 124

                           Headlines



B E L A R U S

BELGAZPROMBANK: Fitch Affirms 'B' Issuer Default Ratings


F R A N C E

ALLEGRO FUND: H2O Asset Management Dismisses Liquidity Concerns


I C E L A N D

[*] ICELAND: Prepares for Deeper Recession Amid Tourism Issues


I R E L A N D

HORIZON AIRCRAFT II: Fitch to Rate Class C Notes "BB(EXP)"
SMURFIT KAPPA: Fitch Affirms BB+ LongTerm IDR, Outlook Stable


L U X E M B O U R G

OSTREGION INVESTMENTGESELLSCHAFT: S&P Raises Bond Ratings to 'BB-'


M A C E D O N I A

NORTH MACEDONIA: Fitch Raises LT IDRs to BB+, Outlook Stable


N E T H E R L A N D S

AMG ADVANCED: S&P Rates $300MM Unsecured Bonds 'B'
[*] NETHERLANDS: Number of Bankruptcies Down to 247 in May 2019


P O L A N D

ALIOR BANK: S&P Affirms 'BB/B' ICR on Reduced Economic Risks
IDEA BANK: Plans to Cut Workforce by Half This Year


R U S S I A

PJSC ACRON: Fitch Affirms 'BB-' LT Issuer Default Rating
UC RUSAL: Discussions About New US Plant Predated Sanctions


S P A I N

AYT GENOVA HIPOTECARIO VI: S&P Hikes Cl. D Notes Rating to BB+
CAIXABANK LEASINGS 3: Moody's Gives (P)B1 Rating on Series B Notes


U K R A I N E

MHP SE: Fitch Affirms 'B' LongTerm Issuer Default Ratings


U N I T E D   K I N G D O M

AIR NEWCO 5: S&P Raises ICR to 'B' on Improving Performance
EMERALD 2 LTD: S&P Affirms 'B' LongTerm ICR on Proposed Refinancing
FERROGLOBE PLC: Fitch Lowers LongTerm IDR to B-, Still on Watch Neg
JEWEL UK: S&P Hikes ICR 'B+' as IPO Reduces Debt, Outlook Stable
MONSOON ACCESSORIZE: Urges Landlords to Approve Rent Reductions

NEW LOOK BONDS: Fitch Assigns CCC+ LT Issuer Default Rating
PARAGON ENTERTAINMENT: To Appoint Administration Amid Cash Woes


X X X X X X X X

[*] BOOK REVIEW: AS WE FORGIVE OUR DEBTORS

                           - - - - -


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B E L A R U S
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BELGAZPROMBANK: Fitch Affirms 'B' Issuer Default Ratings
--------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Ratings
(IDRs) of BPS-Sberbank (BPSS), Belgazprombank (BGPB) and Bank
BelVEB OJSC (BVEB) at 'B'. The Outlooks on the IDRs are Stable.

Fitch has also upgraded BPSS's Viability Rating (VR) to 'b' from
'b-' and affirmed the VRs of BGPB and BVEB at 'b' and 'b-',
respectively.

The affirmation of the IDRs reflects Fitch's view of the likelihood
of the availability of institutional support for these banks in
case of need from their respective parents, some of Russia's
largest state-owned financial institutions. BPSS is 98.4%-owned by
Sberbank of Russia (SBR; BBB-/Positive), BVEB is 97.5%-owned by
Vnesheconombank, (BBB-/Positive), and BGPB is jointly owned by PJSC
Gazprom (BBB-/Positive) and JSC Gazprombank (GPB; BB+/Positive),
each with a 49.82% stake.

KEY RATING DRIVERS

LONG-TERM IDRs and SUPPORT RATINGS (SR)

The 'B' Long-Term IDRs of BPSS, BGPB and BVEB are aligned with and
capped at Belarus's 'B' Country Ceiling. The Country Ceiling
captures the high transfer and convertibility risks in Belarus and
limits the extent to which support from the banks' higher-rated
Russian parents can be factored into the subsidiaries' ratings.

Fitch believes the banks' respective parents would likely have a
high propensity to support their subsidiaries, if needed, due to
the strategic importance of the Belarusian market and the close
political and economic ties between the two countries. Majority
ownership, significant parent-subsidiary integration (including
board representation and operational links), a track record of
support provided to date (including assistance with business
origination), the small cost of potential support compared with the
parents' resources, and high reputational risks from a subsidiary
default also positively impact its assessment of parental support.

BGPB recently received a new equity contribution. There are no
plans for such injections for the other two banks, but Fitch
believes parental capital support will be available for all three
banks, if needed. BPSS, BGPB and BVEB from time to time have
received equity and subordinated debt from their parents. Transfers
of credit risk on some bulky loans from BPSS to SBR provided
further capital relief in 2013-2016.

Although the subsidiary banks rely on local funding sources, Fitch
expects liquidity support from their respective parents to be made
available to all of them, if required, and this would not be
constrained by the national regulators of Russia and Belarus.
Non-subordinated borrowings from parent banks equalled to 14% of
BVEB's total liabilities and 6% at BGPB at end-2018 (12% and 5%,
respectively, at end-2017). BGPB additionally had a significant 27%
share of deposits from Gazprom-related companies. Borrowings from
SBR were a negligible 3% of BPSS's total liabilities at end-2018
(2% at end-2017).

VRs

The upgrade of BPSS's VR to 'b' from 'b-' reflects Fitch's revised
view of the bank's credit profile relative to peers'. The bank's
more extended track record of good corporate governance and
enhanced risk controls (which were strengthened after the crisis),
stable and solid core capitalisation and improving profitability
now appear to more comfortably mitigate asset-quality risks.

BGPB's 'b' VR, which has been affirmed, reflects the bank's stable
and more profitable through-the-cycle performance than that of
peers, currently moderate loan-quality problems, as well as stable
and solid core capital.

BVEB's 'b-' VR, which has been affirmed, captures the bank's weaker
credit profile than the other two foreign-owned rated peers',
higher impaired and stressed loans, tighter capitalisation and
modest profitability.

Fitch's view of loan quality remains the key driver for the VRs of
all three rated banks in the context of Belarus's challenging and
cyclical operating environment, although for BPSS Fitch also
considers its solid capital buffer, which provides a significant
backstop against asset quality pressures.

A combined amount of Stage 3 and purchased or originated
credit-impaired (POCI) loans were at a high 18% of BPSS's gross
loans at end-2018, a moderate 11% at BVEB and 7% at BGPB and were
consistent with Fitch's view of most problem loans relative to the
previous rating review. Loan loss allowances at, respectively, 15%,
7% and 3% of gross loans, reduced incremental provisioning risks,
in particular for BPSS.

Further loan-quality and provisioning risks stem from considerable
stressed and previously restructured loan exposures. Stage-2 loans
as a share of gross loans were 9% at BPSS, 13% at BGPB and 14% at
BVEB. Foreign currency (FC) loans (mostly classified as performing
Stage-1 loan exposures), respectively at 50%, 66% and 75% of gross
loans at end-2018 - make asset quality additionally vulnerable to
potential exchange rate changes.

All these banks have recently maintained considerable core capital
buffers with Fitch Core Capital (FCC) standing at 16% of end-2018's
Basel I risk-weighted assets (RWAs) at BPSS, 14% at BGPB and
slightly lower 10% at BVEB. Unreserved impaired and stressed loans,
comprising mostly Stage 2 net loan exposures, made up a moderate
0.6x FCC at BPS, 0.8x at BGPB but a higher 1.2x at BVEB.

Operating performance improved notably at BPSS in 2018 as the bank
reduced loan impairment charges. Operating profits equalled to 3%
of RWAs at BPSS and BGPB but remained more modest, at 1% of RWAs at
BVEB.

All three banks' liquidity profiles suffer from low levels of
high-quality FC liquid assets, especially as liquidity inflows were
constrained for the banking sector in 2018. However, the
subsidiaries have access to liquidity resources of their
financially strong parents. Externally held liquid assets (cash and
bank placements) equalled to 9% of unrelated FC liabilities at BPSS
and BVEB and 11% at BGPB at end-1Q19.

RATING SENSITIVITIES

IDRs and SRs

The IDRs and SRs could be upgraded or downgraded in line with
Belarus's sovereign ratings and the Country Ceiling, although this
is currently unlikely given the Stable Outlook on the sovereign
rating. A downgrade is also possible upon a sharp weakening of the
ability or propensity of any of the three parent banks to provide
support but this is not Fitch's base case.

VRs

Downgrades of VRs could result from capital erosion due to a
further marked deterioration in asset quality without sufficient
and timely support being made available by parents. Upgrades of VRs
above the sovereign rating are unlikely given the high sovereign
exposures and many borrowers' high vulnerability to adverse changes
in the Belarusian state-controlled economy.

The rating actions are as follows:

Belgazprombank

Long-Term IDRs affirmed at 'B'; Outlook Stable
Short-Term IDRs affirmed at 'B'
Support Rating affirmed at '4'
Viability Rating: affirmed at 'b'

BPSS-Sberbank

Long-Term IDRs affirmed at 'B'; Outlook Stable
Short-Term IDRs affirmed at 'B'
Support Ratings affirmed at '4'
Viability Rating: upgraded to 'b' from 'b-'

Bank BelVEB OJSC

Long-Term IDRs affirmed at 'B'; Outlook Stable
Short-Term IDRs affirmed at 'B'
Support Ratings affirmed at '4'
Viability Ratings: affirmed at 'b-'




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F R A N C E
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ALLEGRO FUND: H2O Asset Management Dismisses Liquidity Concerns
---------------------------------------------------------------
Investment Week reports that the CEO of H2O Asset Management has
dismissed liquidity concerns over the firm's Allegro fund after
Morningstar suspended its bronze rating.

It follows news, originally reported by the Financial Times, which
described the fund's exposure to "certain bonds" connected to Lars
Windhorst, a "controversial German financier" it called a
"flamboyant entrepreneur with a history of legal troubles",
Investment Week relates.

H2O Asset Management is a subsidiary of French group Natixis
Investment Managers.  The EUR2.4 billion Allegro fund is an
absolute return strategy managed with "an annual ex-post volatility
target comprised between 7% and 12% over the recommended investment
horizon of four years."

The fund invests in sovereign debt, investment grade credit and
high yield paper, and currency markets.

According to Investment Week, Morningstar has placed the fund under
review "given concerns on the liquidity and appropriateness of
several holdings in the fund's corporate-bond sleeve".

However, CEO of H2O AM Bruno Crastes has dismissed concerns, adding
aggregate exposure to illiquid assets is limited to "between 5% and
10%" across the Allegro, Adagio and MultiBonds funds, Investment
Week discloses.

Mr. Crastes, as cited by Investment Week, said: "We emphasize to
our investors that liquidity is not an issue in these funds.
Subscriptions and redemptions are always adjusted on a real time
basis.

"We continue to be committed to providing investors with fully
transparent updates as to our funds' holdings."

The firm also acknowledged its link to Windhorst, which it told
investors has "proven to be a reliable business partner" over the
past four years, Investment Week notes.

In an analyst note published on June 19, director Mara Dobrescu
warned investors to brace themselves for "a bumpy ride", Investment
Week relays.

According to Investment Week, the note said: "After strong inflows
in 2017 and 2018, H2O closed two of its most-leveraged funds.
Allegro has ballooned to EUR1.4 billion, but there are no immediate
plans to curtail subscriptions."

However, Ms. Dobrescu said while capacity was "managed acceptably",
the team "continuously" moved outside its volatility range of
7%-12%, which she said raised concerns over risk management,
according to Investment Week.

She added: "The fund's high-conviction bets can lead to significant
drawdowns, such as in August 2018 when the fund lost 12.6%.  Though
so far such periods have been few and far between, investors need
to be prepared for a bumpy ride."




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I C E L A N D
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[*] ICELAND: Prepares for Deeper Recession Amid Tourism Issues
--------------------------------------------------------------
Jasmina Kuzmanovic at Bloomberg News reports that Iceland is
preparing for a deeper recession this year amid dropping tourism
arrivals and a failed capelin season, central bank Governor Mar
Gudmundsson said.

"We are prepared for the possibility of a deeper recession, and the
numbers we are getting on tourist arrivals seem to indicate that
that may happen," Bloomberg quotes Mr. Gudmundsson as saying in an
interview on the sidelines of a conference in Dubrovnik, Croatia.
"There may be a fall in tourism numbers to the 2016 level and this
may have a significant effect on households, but hopefully we'll be
out of this early next year."

The bankruptcy of budget airline Wow Air delivered a blow to the
Icelandic economy, prompting the central bank to cut its main
interest rate by half a point to 4% last month, Bloomberg relates.
At the time, the central bank also said the economy will probably
contract 0.4% this year, Bloomberg notes.

According to Bloomberg, the government has also said that it's
standing by to boost stimulus should it be needed, preparing to
trim planned surpluses.





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I R E L A N D
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HORIZON AIRCRAFT II: Fitch to Rate Class C Notes "BB(EXP)"
----------------------------------------------------------
Fitch Ratings expects to assign the following ratings and Outlooks
to the Horizon Aircraft Finance II Limited notes:

  -- $375,000,000 series A notes 'A(EXP)sf'; Outlook Stable;

  -- $69,000,000 series B notes 'BBB(EXP)sf'; Outlook Stable;

  -- $41,000,000 series C notes 'BB(EXP)sf'; Outlook Stable.

Fitch expects to rate the aircraft ABS notes issued by Horizon
Aircraft Finance II Limited. The issuer is a Cayman Islands limited
company with tax residency in Ireland, which will co-issue the
notes with Horizon Aircraft Finance II LLC (Horizon USA)
(collectively Horizon). Horizon USA is a special purpose Delaware
LLC and wholly owned subsidiary of Horizon Cayman. Horizon expects
to use the rated note and equity proceeds to acquire the initial 20
aircraft, fund the maintenance reserve account (MRA), security
deposit and series C reserve accounts, pay certain expenses and
fund the expense account.

The pool will be serviced by BBAM US LP (BBAM US; U.S. servicer)
and BBAM Aviation Services Limited (Irish servicer; collectively
the Servicers), both wholly owned subsidiaries of BBAM LP (BBAM;
not rated [NR] by Fitch), with the notes secured by each aircraft's
future lease and residual cash flows. This is the third Fitch-rated
aircraft ABS serviced by BBAM, and the company has serviced three
prior aircraft ABS (BBAIR NR by Fitch; ECAF I and Horizon I both
rated by Fitch). BBAM is one of the largest aircraft servicing and
management companies in the world.

KEY RATING DRIVERS

Strong Collateral Quality - 100% Liquid Narrowbody Aircraft: The
pool comprises solely of 20 narrowbody (NB), mostly Tier 1 aircraft
including 12 B737-800 (60.9%), six A320-200 (32.8%), one B737-900ER
(4.2%), and one A319-100 (2.1%). The weighted average (WA) age is
8.5 years, similar to recent transactions.

Lease Term and Maturity Schedule - Negative: The WA original lease
term is 10.2 years with 4.6 years remaining. This is a credit
negative as these maturing leases will have less certainty as to
cash flows, and the aircraft will be subject to remarketing costs
and downtime. 50.9% of the leases mature in 2020-2023, with seven
leases (28.8%) maturing in 2020, risks that Fitch took into account
when applying asset assumptions and stresses.

Lessee Credit Risk - Diverse / Weaker Credits: There are 16 airline
lessees with a significant amount of unrated/speculative-grade
airlines, typical of aircraft ABS. The pool is diverse with the top
three totaling 32.3% and 24.9% flag-carriers. Fitch assumed unrated
lessees would perform consistently with either a 'B' or 'CCC'
Issuer Default Rating (IDR) to accurately reflect the default risk
in the pool. Lessee ratings were further stressed during assumed
future recessions and as aircraft reach Tier 3 classification. The
concentration of assumed 'CCC' lessees total 46.5%, compared to
27.3% in Horizon I, and is on the higher end of recent ABS
transactions.

Operational and Servicing Risk - Strong Servicing Capability: BBAM
was founded in 1989 and is a very experienced/tenured aircraft
servicer/manager. Fitch believes BBAM is a capable servicer as
evidenced by its experienced team, the servicing of their managed
fleet and prior serviced/managed securitizations. Horizon Aircraft
Manager Co., Ltd. (Asset Manager), a wholly owned subsidiary of
BBAM and affiliate of the Servicers, will be the Asset Manager,
which Fitch views positively.

Transaction Structure - Consistent: Credit enchancement comprises
overcollateralization, a liquidity facility and a cash reserve. The
initial loan to value (LTV) ratios for the series A, B and C notes
are 65.7%, 77.8% and 85.0%, respectively, based on the average of
half-life base values adjusted for maintenance by Alton.

Aviation Market Cyclicality: Commercial aviation has been subject
to significant cyclicality due to macroeconomic and geopolitical
events. Fitch's analysis assumes multiple periods of significant
volatility over the life of the transaction.

Asset Value and Lease Rate Volatility: Downturns are typically
marked by reduced aircraft utilization rates, values and lease
rates as well as deteriorating lessee credit quality. Fitch employs
aircraft value stresses in its analysis, which takes into account
age and marketability to simulate the decline in lease rates
expected over the course of an aviation market downturn, and
decrease to potential residual sales proceeds.

Rating Cap of 'Asf': Fitch limits aircraft operating lease ratings
to a maximum cap of 'Asf' due to the factors detailed above, and
the potential volatility they produce.

RATING SENSITIVITIES

The performance of aircraft ABS can be affected by various factors,
which, in turn, could have an impact on the assigned ratings. Fitch
conducted multiple rating sensitivity analyses to evaluate the
impact of changes to a number of the variables in the analysis.
These sensitivity scenarios were also considered in determining the
ratings.

Lease Rate Factor Stress Scenario

Increased competition, largely from newly established APAC lessors,
has contributed to declining lease rates in the aircraft leasing
market over the past few years. Additionally, certain variants have
been more prone to value declines and lease rates due to oversupply
issues. Fitch performed a sensitivity analysis assuming lease rate
factors (LRFs) would not increase after an aircraft reached 11
years of age, providing a material haircut to future lease cash
flow generation. Per Fitch's criteria LRF curve, no subsequent
leases were executed at a LRF greater than 1.13%. This scenario
highlights the effect of increased competition in the aircraft
leasing market, particularly for mid- to end-of-life aircraft over
the past few years, and stresses the pool to a higher degree by
assuming lease rates well below observed market rates. Under this
scenario, the cash flow declined from the primary scenario by
approximately 7%. All three series pass their respective rating
scenarios and are unlikely to experience rating downgrades.

'CCC' Unrated Lessee Stress Scenario

Fitch evaluated a scenario in which all unrated airlines are
assumed to carry a 'CCC' rating. This scenario mimics a prolonged
recessionary environment in which airlines are susceptible to an
increased likelihood of default. This would, in turn, subject the
aircraft pool to more downtime and expenses as repossession and
remarketing events would increase. Under this scenario, the notes
show greater sensitivity with a sharper decline in cash flow by
10%-15% from the primary scenario, along with increased expenses.
This level of stress could result in the series A and C notes being
considered for a downgrade by up to one rating category each.

Technological Obsolescence Stress Scenario

The last sensitivity scenario is to address technological
replacement risk for current technology equipment. All aircraft in
the pool face replacement programs over the next decade,
particularly the A320ceo and B737 NG aircraft in the form of
A320neo and B737 MAX aircraft. Therefore, Fitch utilized a scenario
in which demand, and thus values, of existing aircraft would fall
significantly due to the replacement technology. The first
recession was assumed to occur two years following close, and all
recessionary value decline stresses were increased 10% at each
rating category. Fitch utilized a 25% residual assumption rather
than the base level of 50% to stress end-of-life proceeds for each
asset in the pool. Lease rates drop fairly significantly under this
scenario, and aircraft are essentially sold for scrap at the end of
their useful lives. Despite the declines, all three series pass
their respective rating scenarios and are unlikely to experience
rating downgrades.


SMURFIT KAPPA: Fitch Affirms BB+ LongTerm IDR, Outlook Stable
-------------------------------------------------------------
Fitch Ratings has affirmed Ireland-based packaging company Smurfit
Kappa Group plc's Long-Term Issuer Default Rating (IDR) at 'BB+'.
The Outlook is Stable. The senior unsecured ratings of Smurfit
Kappa Acquisitions and Smurfit Kappa Treasury Funding have also
been affirmed at 'BB+'.

The affirmation reflects SKG's continued solid financial and
operating performance with EBITDA margin supported by favorable
market conditions, completed and potential acquisitions. It also
reflects improving geographical diversification beyond Europe, a
stronghold of SKG, which continues to account for more than 75% of
its revenue, and its vertical integration into containerboard.
SKG's stable dividend policies, moderate leverage, capex
flexibility and the ability to generate positive free cash flow
(FCF) amid high capex also support the rating. The rating is
constrained by fairly limited product diversification and intense
sector competition.

SKG is the European leader in paper-based packaging, including
corrugated, containerboard and bag-in-box. In 2018, it generated
EUR1,524 million in EBITDA.

KEY RATING DRIVERS

Leading Packaging Producer: The ratings of SKG are supported by its
leading position in corrugated containers and exposure to the
broadly stable packaging markets. The credit profile is further
supported by its vertical integration into containerboard,
providing some margin protection against raw material cost
inflation. In addition, around 60% of the group's revenue is
generated by customers in the fast-moving consumer goods sector,
which provides stability to SKG's financial performance.

Acquisitions Support Moderate Growth: Over the last four years SKG
completed acquisitions for a total amount of around EUR900 million,
including the recent acquisition of Reparenco, a paper and
recycling business in the Netherlands, for EUR460 million. Fitch
expects acquisitions to continue, and to be complemented by
expansionary capex. In the past acquisitions were primarily funded
from positive FCF, and in its forecasts Fitch assumes this to
remain the case. Fitch also assumes that the majority of
expansionary capex will be spent on the Americas segment to
strengthen its foothold in the region and improve efficiency.

Solid Financial Performance: In 2015-18 SKG's revenue increased on
average by 3.3% p.a., and Fitch expects this trend to continue over
the next four years. Fitch forecasts revenues to grow on average
2.8% p.a. in 2019-2022, largely driven by somewhat higher scale of
operations in the Americas and Europe on the back of acquisitions
and organic growth. SKG's EBITDA margin significantly improved to
17% in 2018 from 14% in 2017, and Fitch assumes it will remain in
between 16% and 17% due to realised cost-cutting initiatives.

Favorable Market Conditions: The improvement in margins in 2018 was
partially driven by favourable market conditions. SKG passes its
raw materials costs onto customers with a time lag. Old corrugated
container prices decreased significantly in early 2018, while the
paper pricing (Kraftliner and Testliner, the intermediary products)
declined only in late 2018-early 2019. This explains the moderation
of margins in its forecasts from 2018 levels.

Stable FCF Generation: Fitch views the stability of margins, stable
dividend policy and positive FCF generation as positive features of
SKG's credit profile. Although the group's absolute level of debt
has remained broadly stable over 2015-2018, the completed
acquisitions, expansionary capex and efficiency improvements have
resulted in higher revenue and improved profitability, leading to
funds from operations (FFO) adjusted net leverage falling to below
3x in 2018. Fitch forecasts FCF to remain positive and leverage to
remain below 3x over the next four years.

DERIVATION SUMMARY

The ratings of SKG are supported by its leading packaging market
position, stable and diversified customer base and sound liquidity.
Its closest Fitch-rated peer is Stora Enso Oyj (BBB-/Stable), which
in its view has a comparable business profile, but lower projected
leverage, hence the one-notch difference in the ratings.

KEY ASSUMPTIONS

- Moderate single-digit revenue growth over 2019-2022

- EBITDA margin at around 16%-17%

- Net acquisitions of around EUR150 million annually over
2019-2022

- Capex around EUR600 million per year over 2019-2022

- Stable dividend payout

RATING SENSITIVITIES

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

- Increased geographic and product diversification leading to
reduced business risk

- FFO-adjusted net leverage sustainably below 2.5x

- FCF margin sustainably above 2.5% (2018: 3%)

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

- Larger-than-expected acquisitions or increased shareholder
returns that result in FFO adjusted net leverage above 4.0x on a
sustained basis

- FCF margin sustainably below 1%

LIQUIDITY AND DEBT STRUCTURE

Strong Liquidity: At end-2018 SKG had EUR417 million in cash and
short-term deposits (of which Fitch views EUR110 million as
restricted for working-capital and other operational requirements)
and EUR1 billion of undrawn committed credit facilities, while
short-term maturities stood at EUR167 million. Expected positive
FCF generation over the next 12 months should also provide ample
coverage for debt service.

SKG's next large maturity is in 2020 with EUR650 million. In
January 2019 the company refinanced its 2019 maturities by issuing
a EUR400 million bond due 2026. Furthermore, SKG has entered into a
new revolving facility of EUR1,350 million, simultaneously
releasing guarantor subsidiaries from guaranteeing the bonds at the
holding company level. Its liquidity analysis based on the rating
case shows no refinancing requirements at least in the next three
to four years.




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L U X E M B O U R G
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OSTREGION INVESTMENTGESELLSCHAFT: S&P Raises Bond Ratings to 'BB-'
------------------------------------------------------------------
S&P Global Ratings raised its long-term rating on the senior
secured bonds issued by Ostregion Investmentgesellschaft Nr. 1 S.A.
to 'BB-' from 'B+'.

Ostregion Investmentgesellschaft Nr. 1 S.A. (Ostregion), an
Luxembourg-based special-purpose vehicle, issued EUR775 million of
senior secured bonds and loans to design, build, finance, operate,
and maintain a 52-kilometer (km) stretch of motorway to the north
of Vienna under a 33-year public-private partnership concession
with the Austrian Roads Agency, Autobahnen-und
Schnellstrassen-Finanzierungs-AG (ASFINAG, AA+/Stable/A-1+). The
proceeds were onlent to Bonaventura Strassenerrichtungs GmbH
(Bonaventura or ProjectCo), the project concessionaire, which
receives revenues in the form of availability and shadow tolls
payments. Construction was completed in January 2010, on time and
within budget.

The debt comprises EUR425 million floating rate senior secured
bonds due March 31, 2039, and a EUR350 million floating rate senior
secured European Investment Bank loan due March 30, 2038. The bonds
and loan benefit from an unconditional and irrevocable guarantee of
scheduled interest and principal provided by Ambac Assurance U.K.
Ltd. (Ambac; not rated). According to S&P's criteria, the issue
rating on debt guaranteed by a monoline insurer is the higher of
the rating on the insurer, if any, and the S&P underlying rating
(SPUR). S&P does not rate Ambac and therefore the issue ratings
reflect the SPUR.

Strengths:

-- The project's relatively straightforward operations and
maintenance profile, with some degree of complexity due to three
tunnels totaling seven km, and exposure to adverse winter weather
conditions.

-- Stable relationship with ASFINAG, demonstrated by increased
collaboration between the parties. Between 2010 and 2014, ProjectCo
experienced an abnormally high number of penalty points, largely
due to a breakdown in this relationship, which was actively
addressed by the ProjectCo. In 2018,, ProjectCo only received
minimal points.

-- Operational cash flow has minimal market risk exposure under
S&P's forecasts, owing to the availability-based payments that
constitute about two-thirds of project revenue. The remaining
traffic-based revenue are derived from a five-tier banding
mechanism that limits the project's exposure to traffic decline.

Weaknesses:

-- Since operations began in February 2010, traffic has been well
below the levels forecast at financial close. S&P considers it
unlikely that traffic growth in the next years will be significant
enough to compensate for the project's weak performance in its
early years.

-- The traffic banding mechanism also limits ProjectCo's ability
to benefit from traffic upside, preventing the financial profile
from strengthening, unless traffic improves at a significant and
sustained rate.

-- Due to traffic performance being below the initial expectations
at the financial close, the project's financial profile is weak,
with a minimum debt service coverage ratio (DSCR) close to 1.01x.

The upgrade follows an improvement in ProjectCo's financial metrics
due to a combination of administrative cost savings and a
higher-than-expected increase in heavy vehicle traffic. S&P does
not expect Ostregion will rely on its reserve accounts to meet the
debt service under its base case, because the minimum DSCR is 1.01x
versus 0.99x last year.

While project operating costs are passed to the subcontractor,
Bonaventura Services GmbH, administrative costs and heavy
maintenance costs are ProjectCo's responsibility. A sustainable
reduction in administrative costs, therefore, would have a direct
impact on ProjectCo ratios.

Furthermore, overall traffic growth has been increasing, albeit
with high volatility over the recent years. In comparison to 2017,
the number of light vehicles increased by 6.5% in 2018 (2017: +1.5%
in comparison with 2016) and the number of heavy goods vehicles
increased by 6.8% (2017: +3.2%). Because of the banding mechanism,
traffic growth has a limited impact on revenue; however,
higher-than-expected-growth in heavy vehicles traffic had a minor
positive affect that, in combination with the referred cost
savings, resulted in the DSCR improving to over 1.0x.

S&P said, "The stable outlook reflects our expectation that the
project will demonstrate a sustainable financial performance, with
the forecast DSCR remaining above 1.00x throughout the term of the
debt. The stable outlook also reflects our expectation that the
project will continue to operate in line with contractual
requirements, operations will be smooth, and it will incur no major
penalties or unavailability deductions.

"We could lower the rating if the project's financial performance
weakens, leading the forecast minimum DSCR to fall below 1.00x
under our base case on a prolonged basis. We may also lower the
rating if ProjectCo's relationship with ASFINAG deteriorates
materially, which we currently view as unlikely.

"We would consider an upgrade if we see further financial
improvement, corroborated by a sustainable increase in the forecast
minimum DSCR to above 1.05x. This could be achieved if the
long-term budget for capital expenditure (capex) is revised
materially, if we understand the new expenditure profile is
adequate and sustainable enough to ensure the asset's good
condition."




=================
M A C E D O N I A
=================

NORTH MACEDONIA: Fitch Raises LT IDRs to BB+, Outlook Stable
------------------------------------------------------------
Fitch Ratings has upgraded North Macedonia's Long-Term Foreign and
Local-Currency Issuer Default Ratings (IDRs) to 'BB+' from 'BB'.
The Outlook is Stable.

KEY RATING DRIVERS

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

HIGH

There has been a sustained period of improved governance standards,
underpinning reform implementation and providing greater
reassurance that the country will not revert to the political
paralysis of 2014-2017. This in turn has facilitated further
progress towards NATO membership and the opening of EU accession
negotiations, which support investor confidence and act as policy
anchors for sustained reform and macroeconomic stability. Since its
last review in January, the Greek parliament has ratified the name
change to the Republic of North Macedonia, resolving the
long-standing dispute, which paved the way for the signing of the
NATO protocol in February with membership expected next year. The
European Commission technical assessment in May recommended the
opening of EU accession negotiations, reflecting steady reform
progress in key areas such as the rule of law, judicial system and
public administration, although Fitch considers the European
Council is more likely to delay the decision beyond the discussions
scheduled later this month.

MEDIUM

The more conducive political backdrop and reform progress underpin
a firmer economic recovery. Fitch forecasts an acceleration of GDP
growth to 3.4% in 2019 and 3.6% in 2020, from 2.7% in 2018 and just
0.2% in 2017. Growth is relatively broad-based, and boosted by a
recovery in domestic investment, alongside sustained private
consumption growth. Labour market dynamics have strengthened, with
unemployment falling 3.8pp over the last year to 17.8% in 1Q19 and
credit conditions are more supportive. An increase in productive
capacity in the Technological and Industrial Development Zones has
led to higher sustainable net exports, although in the near term
trade will contribute less to GDP growth than in 2018 due to weaker
eurozone demand. Fitch assesses North Macedonia's trend GDP growth
at around 3.5%, with some upside potential from a quickening of
reforms under an EU negotiation process.

Firmer policy anchors and fiscal reform measures have reduced
downside risks to public finances. Steps have been taken to improve
public financial management, including greater budget transparency
and introduction of a fiscal expenditure rule for municipalities.
The general government deficit narrowed by 1.7pp in 2018 to 1.1% of
GDP (compared with its deficit forecast of 1.8% of GDP at the last
review) on the back of a large under-execution of public investment
projects, 9.4% tax revenue growth, and improved local government
balances. Fitch forecasts a widening to 2.4% of GDP in 2019 and
2.2% in 2020, driven by higher expenditure, principally on capital,
as well as arrears clearance this year. Measures implemented in the
2019 budget to raise pension contributions, better-target social
assistance, and introduce a new top rate of income tax will have a
bigger deficit reducing impact from next year.

North Macedonia's 'BB+' IDRs also reflect the following key rating
drivers:

The ratings are supported by a track record of coherent
macroeconomic and financial policy, which underpins the
longstanding exchange rate peg to the euro, and by somewhat more
favourable governance and human development indicators than the
'BB' medians. The business climate, according to the World Bank's
Ease of Doing Business Survey, stands out as significantly better
than the 'BB' peer group, and supports a dynamic export performance
and solid net FDI inflow, albeit this is concentrated in
Technological and Industrial Development Zones that are not well
integrated with the rest of the economy. The ratings are
constrained by greater exposure to exchange rate risk than the peer
group median, banking sector euroisation, and still-high structural
unemployment, partly reflecting a large informal economy and skills
mismatches, together with weak productivity growth.

Fitch forecasts that gross general government debt will increase
2.0pp in 2019 to 42.5% (of which 1.3pp is a build-up of central
government deposits ahead of the 2020 Eurobond amortisation) before
falling to 42.2% in 2020, close to the 'BB' median of 42.5%.
Government guarantees of public entities, mainly related to roads
projects, account for an additional 7.9% of GDP and are set to
rise, to an estimated 10.5% of GDP in 2020. Under its longer-term
debt projections, which assume an average primary deficit of 1.0%
of GDP from 2019-2028 and average GDP growth of 3.5%, general
government debt is broadly flat from next year, reaching 42.9% of
GDP in 2028. North Macedonia's debt structure remains more exposed
to currency risk than peers, with 78.7% of government debt
FX-denominated, albeit predominately in euros, compared with the
'BB' median of 60.0%. However, this exposure is mitigated somewhat
by the longevity and credibility of the exchange rate peg.

Strong export growth, which supported a 0.5pp improvement in the
2018 current account deficit to 0.4% of GDP, continued in 1Q19, at
15.6%. Imports are growing almost as fast, at 14.4% in 1Q19, but
have a high capital and export-orientated content. Nominal wages
and overall unit labour costs rose close to 6% in 2018, partly due
to carryover effects from minimum wage hikes, but Fitch anticipates
an easing to close to 3% this year. Fitch expects a gradual
increase in the current account deficit, to 1.2% of GDP in 2020 due
to weaker external demand from key eurozone trading partners, and a
higher primary income deficit. Fitch forecasts a normalisation of
net FDI from the 10-year high of 5.8% of GDP in 2018 to an average
3.6% in 2019-2020, and an increase in net external debt from 21.6%
of GDP in 2018 to 23.3% in 2020, similar to the current 'BB' median
of 24.3%.

Foreign exchange reserves have been stable at close to 3.9 months
of current external payments, with strong FDI inflows and subdued
inflation (up 1.4% in the year to May) allowing the central bank to
narrow the difference between its policy rate and the ECB's,
without putting pressure on the exchange rate peg. The policy rate
was cut from 3.0% last August to a historical low of 2.25% in March
and Fitch now expects it to remain at close to that level through
2020, facilitated by the ECB's more accommodative monetary policy
stance, contained domestic inflation, which Fitch forecasts to
steadily rise to 1.9% in 2020, and sustained capital inflows. Fitch
forecasts an increase in FX reserves to 4.3 months of current
external payments in 2020, slightly above the 'BB' median of 4.1
months.

Last month's election of President Pendarovski, who was backed by
the ruling SDSM, has shored up the coalition government and should
help the passage of legislation in the remainder of this term. His
candidacy had partly been viewed as a vote of confidence in Prime
Minister Zaev, who had pledged to trigger new parliamentary
elections should he lose, and on the issue of the earlier
constitutional reforms that settled the name dispute. However,
coalition strains were evident during the campaign and the
relatively low turnout (of 42% in the first round and 47% in the
second) precipitated the sacking of 78 municipal leaders and six
deputy SDSM leaders. Additionally, a cabinet reshuffle has been
announced, as Prime Minister Zaev seeks to win back support ahead
of parliamentary elections due next year. While the election timing
and outcome is uncertain, Fitch does not expect a marked change in
economic or fiscal policy.

The banking sector is relatively well capitalised, liquid and
profitable, a majority of assets are controlled by foreign-owned
institutions reducing contingent liability risk, and asset quality
has improved. The NPL ratio fell to 5.3% in April from 6.3% at
end-2017 (and from 10.8% at end-2015), the provisions ratio remains
high at 119%, and the Tier 1 capital ratio is unchanged from a year
earlier at 10.8%. The sector is benefiting from stronger economic
growth and confidence. Deposits are growing at 11.3%, and the share
of foreign currency deposits is similar to a year ago at 42.7%.
Credit growth accelerated in 1Q19, to 9.3%, from 7.6% in 2018, and
Fitch expects a further moderate increase due to higher credit
demand and banks' favourable capital position.


DERIVATION SUMMARY

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

Fitch's proprietary SRM assigns North Macedonia a score equivalent
to a rating of 'BB+' on the Long-Term FC IDR scale.

Fitch's sovereign rating committee did not adjust the output from
the SRM to arrive at the final Long-Term Foreign-Currency IDR.

The removal of the -1 notch under Structural Features since the
previous review reflects a further period of improved political
stability following the prolonged 2014-2017 political crisis,
underpinning progress towards NATO membership and the opening of EU
accession negotiations that provide a firmer anchor for sustained
reform and macroeconomic stability.

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

KEY ASSUMPTIONS

- Fitch's long-run debt sustainability calculations also assume a
GDP deflator of 2.0% from 2021, a gradual increase in marginal
interest rates from 2021, and do not incorporate any
crystallisation of government guarantees.

RATING SENSITIVITIES

The Outlook is Stable. Consequently, Fitch's sensitivity analysis
does not currently anticipate developments with a high likelihood
of leading to a rating change. The main risk factors that,
individually or collectively, could lead to an upgrade are:

  - Implementation of a medium-term fiscal consolidation programme
consistent with a reduction in the public debt/GDP ratio.

  - An improvement in medium-term growth prospects without creating
macro-economic imbalances, for example through implementation of
structural economic reform measures.

  - Further improvement in governance standards, reduction in
political risk, and progress towards EU accession.

The main risk factors that, individually or collectively, could
lead to a downgrade are:

  - Adverse political developments that affect governance standards
and the economy.

- Fiscal slippage or the crystallisation of contingent liabilities
that increases risks to the sustainability of the public finances.

  - A widening in the current account deficit that exerts pressure
on foreign currency reserves and/or the currency peg against the
euro.




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

AMG ADVANCED: S&P Rates $300MM Unsecured Bonds 'B'
--------------------------------------------------
S&P Global Ratings affirmed its 'BB-' ratings on Netherlands-based
specialty metals producer AMG Advanced Metallurgical Group N.V.
(AMG) and assigned its 'B' issue-level rating and '6' recovery
rating to the $300 million of unsecured tax-exempt revenue bonds,
which the company intends to issue to finance the construction of a
new spent catalyst recycling facility.

S&P also raised the issue rating on the company's secured revolving
credit facility and term loan B to 'BB' from 'BB-'. The recovery
rating on both issues is '2'.

The affirmation reflects S&P's view that AMG will maintain leverage
within its expectations of 2x-3x while incurring increased debt to
fund capital expenditures (capex) related to the company's new
Cambridge II oil refinery spent catalyst recycling plant. AMG is
planning to issue $300 million of unsecured tax-exempt revenue
bonds. The Ohio Air Quality Development Authority will issue the
bond on behalf of AMG subsidiary AMG Vanadium LLC. The bonds will
have a 30-year maturity and all the proceeds will be used for
capex.

The stable outlook reflects S&P's view that AMG's credit metrics
will weaken but remain in ranges supportive of the rating over the
next 12 months. This includes S&P's forecast for leverage reaching
about 3x EBITDA given higher debt associated with the Cambridge II
development project. Under current market conditions of strong
end-market demand for AMG's products but very high price
volatility, S&P expects AMG will produce EBITDA of about $150
million, translating into debt to EBITDA of about 2.5x in 2019 and
3.0x in 2020.

"We could lower our ratings on AMG if adjusted debt to EBITDA
exceeded 4x. This could be the result of weak operating performance
from a prolonged softening of metals prices and end-market demand
or additional capital spending from major cost overruns or delays
for the ongoing development projects that lead to
larger-than-anticipated free operating cash deficits," S&P said.

"We do not expect to raise the rating in the next 12-18 months.
Over the medium term, a higher rating would require positive free
operating cash flow and reduced project execution risks, triggered
by the successful ramp up or completion of the ongoing development
projects," S&P said.


[*] NETHERLANDS: Number of Bankruptcies Down to 247 in May 2019
---------------------------------------------------------------
Statistics Netherlands (CBS) reports that the number of corporate
bankruptcies in the Netherlands has decreased in May 2019.

According to CBS, there were 19 fewer bankruptcies in May 2019 than
in the previous month.  The trend has been relatively stable in
recent years, CBS notes.

If the number of court session days is not taken into account, 247
businesses and institutions (excluding one-man businesses) were
declared bankrupt in May 2019, CBS states.  With a total of 52, the
trade sector suffered most, CBS relays.

Trade is among the sectors with the highest number of businesses,
CBS discloses.  In May, the number of bankruptcies was relatively
highest in the sector accommodation and food services, according to
CBS.




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

ALIOR BANK: S&P Affirms 'BB/B' ICR on Reduced Economic Risks
------------------------------------------------------------
S&P Global Ratings took the following rating actions on Polish
banks:

-- S&P revised the outlook on Bank Polska Kasa Opieki S.A. (Bank
Pekao) to positive from stable, and affirmed the 'BBB+/A-2'
ratings.

-- S&P affirmed the long- and short-term ratings on mBank at
'BBB+/A-2'. The outlook remains negative.

-- S&P affirmed the long- and short-term ratings on Alior Bank at
'BB/B'. The outlook remains stable.

RATIONALE

S&P said, "The continued strong pace of real GDP growth in Poland
results in the private sector's strengthened debt capacity and
leads us to see less overall credit risk for the banking sector. We
now consider the Polish banking sector to be in line with that of
Spain, Slovenia, Estonia, and Ireland. As such, we assess the
Polish banking sector to be in group '4', versus '5' previously,
under our Banking Industry Country Risk Assessment (BICRA) and have
revised up to 'bbb' from 'bbb-' the anchor, the starting point for
our rating analysis on banks.

"We expect the Polish economy to continue expanding by
approximately 3%-4% over the next two years, increasing GDP per
capita above $16,000 by end-2021. In our view, improving disposable
income, alongside private-sector indebtedness sustained at
manageable levels, leads to better private sector creditworthiness
and is positive for banks. The ratio of private sector debt,
including household and corporate debt to GDP, was 76% (excluding
debt transactions within the same sector) in December 2018, and we
assume it will remain relatively constant over 2019-2020. At about
35% of GDP at end-December 2018, household debt is low and markedly
below the eurozone average of approximately 60% at the same date.

"We note, however, moderate pressure on economic imbalances
stemming from faster rising residential property market prices.
Growth in real estate prices accelerated in 2017-2018 to about
6%-7% in real terms, mostly due to supply side limitations. We do
not expect further acceleration over the next two years, but we
note that the pace will also depend on the central bank's interest
rate policy.

"We have not observed a negative impact on the banking industry
from government ownership of a large share of banks. However,
potential for government interference is a lingering concern for
the banking sector's stability. In addition, the main supervisory
authorities Polish Financial Supervision Authority (KNF) and Bank
Guarantee Fund (BFG)--which is also a resolution authority in
Poland, contrary to the central bank--remain under potential
government influence. Furthermore, the strategy of the
government-controlled banks could change depending on the stage of
the economic or political cycle. For example, we could see some
distortion of competitive dynamics in relation to underwriting or
pricing."

The probability of any unprepared and radical Swiss franc (CHF)
loan conversion at historical exchange rates that could burden the
banking sector with substantial additional costs and endanger its
stability has significantly diminished in the past three years. It
could resurface, however, with the approach of the autumn 2019
parliamentary elections.

Below, a brief rating rationale on each of the three Polish banks
included in today's rating actions.

Bank Polska Kasa Opieki S.A.

S&P said, "We have revised up our assessment of Bank Pekao's
stand-alone credit profile (SACP) to 'bbb+' from 'bbb', reflecting
our opinion that the bank's capitalization has strengthened amid
lower economic risk in Poland. We now believe our main measure for
a bank's capitalization, the risk-adjusted capital ratio, will
remain comfortably above 10% over the next two years. Continued
business growth will also be counterbalanced by capitalization of
at least 25% of Pekao's annual earnings over the next years.

"At the same time, we now consider Bank Pekao's business position
to be more in line with that of peer banks operating in Poland and
other countries with a similar industry risk environment. This is
also due to the gradual change in the sector structure reflecting
consolidations on the Polish market, which result in the emergence
of strong Polish competitors. As a result, Bank Pekao experiences
even stronger competition, including in retail lending, which might
challenge some of its competitive advantage and franchise.

"Our positive outlook on Bank Pekao reflects that on PZU, its
majority shareholder. We could upgrade PZU within the next 12-18
months and this would most likely result in a similar rating action
on Bank Pekao."

mBank

S&P said, "We expect that the improved economic environment will
support mBank's performance over the medium term but not enough to
significantly bolster the bank's creditworthiness. We expect that
benefits will be largely offset by the gradual change of the
portfolio structure toward higher-margin lending. We anticipate
that the shift in lending focus will result in comparably higher
risk costs, despite a stronger overall economy." This, as well as
some sizable corporate defaults, caused mBank's risk costs to
increase to about 80 basis points (bps) as of December 2018, versus
40-60 bps over 2016-2017.

Also, compared with most peers, mBank has a materially higher
proportion of foreign currency loans, which makes the bank more
sensitive to tail risks than its peers. Approximately 40% of the
bank's retail portfolio (or 17% of its total loans as of
first-quarter 2019) continue to comprise legacy, predominantly
CHF-denominated mortgage loans. S&P notes that the nonperforming
loans of 1%-2% in this segment are currently low and that the
portfolio has been gradually maturing. However, interest rates or
the foreign currency environment could change and affect the
currently low NPLs. In addition, the mortgage portfolio denominated
in foreign currency remains prone to potential legal risks or
possible conversion mechanisms that may be imposed on some
concerned banks in Poland.

The negative outlook on mBank mirrors the outlook on its parent
Commerzbank AG (A-/Negative/A-2).

Alior Bank S.A.

S&p said, "We assume that the stronger Polish economy will support
Alior's performance. However, we consider that Alior is generally
more vulnerable to downturns than its larger peers in Poland or in
other countries with similar a economic risk environment." This is
because of Alior's concentrated business model in the higher-margin
and higher-risk product areas, especially consumer lending, as well
as in some riskier corporate loans.

Due to rigorous competition in the Polish banking sector, S&P sees
a possibility that Alior might need to search for even riskier
assets to be able to meet its own 2020 return on equity target of
14%-15%. It already reports cost of risk at about 190 bps--more
than double the Polish market average.

  Ratings List

  Ratings Affirmed; Outlook Action  
                                     To               From
  Bank Polska Kasa Opieki S.A.
   Issuer Credit Rating          BB+/Positive/A-2  BBB+/Stable/A-2
   Resolution Counterparty Rating   A-/--/A-2    A-/--/A-2

  Ratings Affirmed  

  mBank
   Issuer Credit Rating          BBB+/Negative/A-2
   Resolution Counterparty Rating A-/--/A-2
   Senior Unsecured              BBB+

  mFinance France S.A
   Senior Unsecured BBB+

  Alior Bank S.A.
   Issuer Credit Rating BB/Stable/B


IDEA BANK: Plans to Cut Workforce by Half This Year
---------------------------------------------------
Marcin Goclowski at Reuters reports that Polish mid-tier lender
Idea Bank SA plans to cut its workforce by half this year to cut
costs and boost profits.

"The reason for the planned layoffs is the need to restructure the
operating costs, including the reduction of the level and cost of
employment at the bank," Reuters quotes the bank's June 19
statement as saying.

Idea Bank said it would save PLN50 million (US$13.13 million) a
year by cutting around 750 jobs, Reuters relates.

"Despite the fact that the origins of 2018's high losses came from
the past and the then-unstable business model, their size requires
extraordinary actions today.  They are necessary to heal the bank,"
Idea Bank CEO Jerzy Pruski, as cited by Reuters, said in a
statement.

Last year, Idea Bank's net loss amounted to PLN1.89 billion
(US$496.14 million), Reuters discloses.  In the first quarter of
2019, it suffered a PLN81 million loss, Reuters relays.

As reported by the Troubled Company Reporter-Europe on November 23,
2018, The Financial Times related that Poland's central bank
temporarily eased the reserve requirements for the small Polish
lender, Idea Bank, as it battles to contain the fallout from
bribery allegations that have unnerved the country's financial
sector.  Idea Bank said in a statement released on Oct. 20 via the
Warsaw stock exchange that the central bank (NBP) had released it
from the obligation to maintain 50% of its reserve requirements,
and that the reduction would remain in force until 2021, the FT
noted.  Shares in Idea Bank have lost 40% of their value since it
emerged last week that the bank's owner, Leszek Czarnecki, had
accused the head of Poland's financial regulator, Marek
Chrzanowski, of soliciting a bribe, according to the FT.




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

PJSC ACRON: Fitch Affirms 'BB-' LT Issuer Default Rating
--------------------------------------------------------
Fitch Ratings has affirmed Russian fertiliser group PJSC Acron's
Long-Term Issuer Default Rating (IDR) at 'BB-' with a Stable
Outlook.

Acron's rating is underpinned by the company's strong cost position
in nitrogen-based and complex fertilisers and partial backward
integration into ammonia and phosphate supporting margins in excess
of 30% across the cycle. Constraints include the group's
operational scale and diversification vs. larger domestic and
international peers, although Acron's planned expansion into potash
with the Talitsky mine could be credit positive beyond the rating
horizon.

The rating also factors in Acron's financial profile, which Fitch
expects to remain commensurate with the 'BB-' rating, with
marginally negative free cash flow generation driven by
expansionary capex and funds from operations (FFO) adjusted net
leverage maintained below its 3.0x negative sensitivity under its
base case in 2019-2022.

The Stable Outlook reflects its view that Acron's investments plans
are flexible and could be scaled down or delayed in a severe
downturn while scope remains for dividend cuts and the potential
divestment of the minority stake in Polish fertiliser producer
Grupa Azoty.

KEY RATING DRIVERS

No Deleveraging on Intensifying Capex: Its base case forecasts net
FFO leverage roughly stable at around 2.7x in 2019-2022 as Acron
pursues capacity increases and large scale projects at its Talitsky
(assumed to be consolidated) and Oleniy Ruchey mines. Although this
leaves limited headroom under its 3.0x negative sensitivity, Fitch
believes that Acron's investments and dividend policy offer some
flexibility in the event of a severe downturn. Its base case
assumes capex to sales at 15% on average over 2019-2022 and
dividend payouts in line with historical levels. Fitch also
forecasts single digit increase in operating cash flows yoy
supported by capacity additions, offsetting moderate pricing
pressure.

Ambitious Expansion Plans: Acron's largest project is the
development of the Talitsky section of the Verkhnekamsk potash
deposit in the Perm region. The exploration and development license
was acquired in 2008 through Acron's subsidiary, CJSC Verkhnekamsk
Potash Company (VPC). VPC, which is 60.1% owned by Acron and 39.9%
by Sberbank, has a commitment to bring the mine to design capacity
by 2028. Construction and shaft sinking works have started and the
total capex for 2mtpa is estimated at USD1.5 billion with full ramp
up by 2025. 700 ktpa of the mine's output is expected to feed into
Acron's NPK production.

Acron's other projects include ongoing processing capacity
additions in various core products and the completion of the
underground apatite concentrate mine at Oleniy Ruchey. Capex for
the latter is estimated at USD75 million in 2019-2021 with gradual
production ramp up from 1.2mtpa to 2.0mtpa by 2023.

Base Case Consolidates VPC: In June 2019, Acron signed Term Sheet
with GazpromBank, Sberbank and VEB for a USD1.7 billion project
finance loan to fund the development of the Talitsky mine, with
first disbursements in 2020. Fitch understands from management that
terms and conditions are being finalised and should ultimately
result in the removal of existing clauses tying Acron to VPC and
precluding the treatment of the facility as a non-recourse
liability.

Its base case conservatively assume that VPC remains consolidated
with debt drawdowns aligned with around USD420 million of capex
earmarked for Talitsky over 2020-2021. This treatment will be
reviewed once Fitch assesses the final project financing
documentation for the level of exposure and recourse it creates to
Acron, if any. Fitch assumes that the financial headroom created by
a deconsolidation would likely be taken up by other expansion
projects currently under consideration.

Higher Cash Flows on Capacity Additions: Its base case forecasts a
mid-single digit growth in sales on average over 2019-2021 as
capacity increases offset moderate pressure on core products'
prices. Acron revenues grew 14.5% in 2018 to RUB108 billion and the
Fitch-adjusted EBITDA margin increased to 33.7% (31%) on the back
primarily of strong prices stemming from capacity outages and
higher feedstock costs. Prices for urea and DAP have moderated in
2019, with resulting pressure on NPK and Fitch assumes single digit
price recoveries beyond 2019 and demand gradually mops up capacity
additions and China's capacity closure take effect.

Grupa Azoty Stake: Acron owns a 19.8% stake in Polish nitrogen
fertiliser producer Grupa Azoty. Acron had initially bid for a
controlling stake in Azoty in 2012 to gain access to ammonia
feedstock. With the commissioning of its own 2.1mt of ammonia
capacity in Russia in 2016, the group's strategic interest in Grupa
Azoty is now purely financial and could offer some flexibility for
deleveraging should Acron decide to sell the stake. As at end-2018,
the fair value of the investment was RUB11.3 billion.

DERIVATION SUMMARY

Acron is broadly on a par with its Russian fertiliser peers PJSC
PhosAgro (BBB-/Stable), EuroChem Group AG (BB/Stable) and PJSC
Uralkali (BB-/Stable) with regards to global cost position and
backward integration but falls behind in terms of operational scale
and product diversification. Completion of the Talitsky potash
mining project is likely to enhance the group's business profile
beyond the rating horizon.

Acron's rating is supported by a financial profile historically
stronger than that of most peers, with the exception of PhosAgro.
Large expansionary investments are expected to result in net FFO
adjusted leverage around 2.7x in 2019-2021 vs. its 3.0x negative
sensitivity but Fitch believes that the capex and dividend policy
will offer some flexibility in a downturn.

KEY ASSUMPTIONS

- Product price assumptions based on Fitch's Fertilisers Price
Deck:

- Nitrogen fertilisers prices to remain relatively stable with
urea prices declining to USD240 per ton in 2019, then progressively
increasing to USD260 per ton in 2022;

- Complex fertilisers prices to moderately decline to USD287 per
ton in 2019, then to USD280 per ton in 2022;

- Fertiliser output to grow by 3.5% per year over 2019-2022;

- USD/RUB rate relatively stable at 67.5;

- Capital intensity up to 15% on average and linked to further
nitrogen and phosphate and potash-based fertiliser expansion;

- VPC project finance consolidated;

- Annual dividend close to USD220 million (RUB14 billion) to be
paid to shareholders over 2019-2022;

- No material M&A activity.

RATING SENSITIVITIES

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

  - An enhanced operational profile as a result of larger scale
and/or product diversification.

  - FFO adjusted net leverage below 2x and continued prudent
financial investments.

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

  - Aggressive capex or dividends resulting in leverage being
sustained above 3x.

  - Sharp deterioration in market conditions or cost position
driving EBITDA margin sustainably below 20% (2018: 33.7%).

LIQUIDITY AND DEBT STRUCTURE

Credit Line Supports Liquidity: At end of March 2019, the group
held cash balances of RUB14.6 billion. This compares with
short-term financial debt of RUB6.6 billion post extension of the
USD750 million a mortising pre-export facility in May 2019. The
latter was extended to 2024 from 2022 with a two-year grace period.
As a result, repayments of USD142 million in 2019 and USD243
million in 2020 were rescheduled to beyond May 2021 (approximately
RUB27 billion). The group's liquidity is also supported by undrawn
lines in excess of RUB20 billion and also comfortably covers the
RUB4.4 billion negative free cash flow forecast under its 2019 base
case.


UC RUSAL: Discussions About New US Plant Predated Sanctions
-----------------------------------------------------------
RJR News reports that Windalco's parent company UC Rusal said
discussions over the Russian company investing in a new US plant
predated the imposition of American sanctions.

In April last year, the US imposed sanctions on billionaire Oleg
Deripaska and his businesses, including Rusal, causing turmoil in
the global aluminium market, according to RJR News.

The Treasury lifted restrictions on Rusal in late January after Mr.
Deripaska agreed to reduce his ownership and relinquish control of
the firm, the report notes.

Several months later, Rusal said it planned to invest as much as
USD200 million in a Kentucky plant being built by closely held
Braidy Industries, the report relays.

While Mr. Deripaska remains under sanctions, some US lawmakers have
also called for a review of Rusal's investment in the project, the
report adds.

                  About UC Rusal

Headquartered in Russia, RUSAL is one of the largest integrated
aluminium producers, with aluminium output of 3.8 million tonnes in
2018. The company generated revenue of $10.3 billion and
Moody's-adjusted EBITDA of $2.2 billion in 2018.




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

AYT GENOVA HIPOTECARIO VI: S&P Hikes Cl. D Notes Rating to BB+
--------------------------------------------------------------
S&P Global Ratings raised its credit ratings on AyT Genova
Hipotecario VI Fondo de Titulizacion Hipotecaria's class B, C, and
D notes. At the same time, S&P has affirmed its rating on the class
A2 notes.

S&P said, "The rating actions follow the implementation of our
revised structured finance sovereign risk criteria and counterparty
criteria. They also reflect our full analysis of the most recent
transaction information that we have received and the transaction's
current structural features.

"Upon revising our structured finance sovereign risk criteria, we
placed our ratings on the class B and C notes under criteria
observation. Following our review of the transaction's performance
and the application of our structured finance sovereign risk
criteria, our ratings on these notes are no longer under criteria
observation.

"The analytical framework in our revised structured finance
sovereign risk criteria assesses the ability of a security to
withstand a sovereign default scenario. These criteria classify the
sensitivity of this transaction as low. Therefore, the highest
rating that we can assign to the tranches in this transaction is
six notches above the Spanish sovereign rating, or 'AAA (sf)', if
certain conditions are met.

"In order to rate a structured finance tranche above a sovereign
that is rated 'A+' and below, we account for the impact of a
sovereign default to determine if under such stress the security
continues to meet its obligations. For Spanish transactions, we
typically use asset-class specific assumptions from our standard
'A' run to replicate the impact of the sovereign default scenario.

We have also applied our new structured finance counterparty
criteria.

"Banco Santander S.A. provides the interest rate swap contract,
which is in line with our previous counterparty criteria. Under our
new criteria, our collateral assessment is adequate, and
considering the downgrade language in the swap documents and the
current resolution counterparty rating (RCR) on Banco Santander
S.A., the maximum supported rating on the notes is 'AAA (sf)'. Our
European residential loans criteria, as applicable to Spanish
residential loans, establish how our loan-level analysis
incorporates our current opinion of the local market outlook. Our
current outlook for the Spanish housing and mortgage markets, as
well as for the overall economy in Spain, is benign. Therefore, our
expected level of losses for an archetypal Spanish residential pool
at the 'B' rating level is 0.9%. Our foreclosure frequency
assumption is 2.00% for the archetypal pool at the 'B' rating
level.

"After applying our European residential loans criteria to this
transaction, the overall effect in our credit analysis results in a
slight decrease in the weighted-average foreclosure frequency
(WAFF) at all rating levels and an unchanged weighted-average loss
severity (WALS) at all rating levels, except at the 'AAA' rating
level, since our June 2018 review."

The slight decrease in the WAFF is mainly driven by the decrease in
the collateral's arrear levels. The WALS was unchanged for all
rating levels, except at the 'AAA' rating level at 2.25%, as the
updated market value decline assumptions still floor the pool level
at 2.00% at each rating level. The transaction's current indexed
loan-to-value (LTV) ratio is also very low. Because the pool's
attributes indicate better credit quality than the archetypal pool,
S&P increased the projected loss that it modeled to meet the
minimum floor under our European residential loans criteria.

Below are the credit analysis results after applying S&P's European
residential loans criteria to this transaction.

  Rating level     WAFF (%)    WALS (%)
  AAA                 7.49        46.56
  AA                  5.00        42.77
  A                   3.75        31.78
  BBB                 2.75        26.30
  BB                  1.75        14.01
  B                   1.00        10.53

S&P said, "The class A2, B, C, and D notes' credit enhancement
based on the performing balances have slightly increased to 10.38%,
8.15%, 5.69%, and 3.37% respectively, from 9.2%, 7.2%, 5.0%, and
2.9% since our previous review, due to the sequential amortization
of the notes and the reserve fund being almost at its required
level.

"The transaction has performed in line with our expectations, and
the arrears level has always been lower than in our Spanish
residential mortgage-backed securities (RMBS) index. Cumulative
defaults, which stand at 0.44% of the original pool balance, are
also lower than in other Spanish RMBS transactions that we rate.
The collateral's strong quality is due to the strong underwriting
procedures for granted mortgage loans, with a weighted-average
original LTV ratio that is lower than that for other Spanish
mortgage lenders.

"Following the application of our revised criteria, we have
determined that our assigned ratings on the classes of notes in
this transaction should be the lower of (i) the rating as capped by
our sovereign risk criteria, (ii) the rating as capped by our
counterparty criteria, or (iii) the rating that the class of notes
can attain under our European residential loans criteria.
Our credit and cash flow results indicate that available credit
enhancement for the class A2, C, and D notes is commensurate with
'AAA (sf)', 'A (sf)', and 'BB+ (sf)' ratings, respectively.

"Under our credit and cash flow analysis, the class B notes could
withstand our stresses at a higher rating level than that we
assigned; however, the rating was constrained by additional factors
we considered. First, we considered the relative position of this
class in the capital structure and its lower credit enhancement
compared to the senior notes. In addition, we factored into our
rating action this class' sensitivity to pro rata payments.

"Our ratings on the class B and C notes are no longer capped by the
sovereign risk criteria. We have therefore raised our ratings on
these classes of notes to 'AA+ (sf)' and 'A (sf)', respectively;
raised our rating on the class D notes to 'BB+ (sf)'; and affirmed
our 'AAA (sf)' rating on the class A2 notes."

AyT Genova Hipotecario VI is a Spanish RMBS transaction that closed
in June 2005.

  RATINGS LIST

  AyT Genova Hipotecario VI, Fondo de Titulizacion Hipotecaria

  RATINGS RAISED
  Class             Rating
              To               From
  B           AA+ (sf)         AA (sf)
  C           A (sf)           A- (sf)
  D           BB+ (sf)         BB- (sf)

  RATING AFFIRMED

  Class       Rating
  A2          AAA (sf)


CAIXABANK LEASINGS 3: Moody's Gives (P)B1 Rating on Series B Notes
-------------------------------------------------------------------
Moody's Investors Service assigned the following provisional
ratings to the debts to be issued by CAIXABANK LEASINGS 3, FONDO DE
TITULIZACION:

EUR1,573.8M Serie A Notes due December 2039, Assigned (P)Aa3 (sf)

EUR256.2M Serie B Notes due December 2039, Assigned (P)B1 (sf)

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

The transaction is a static cash securitisation of credit rights
(interest and principal, excluding the purchase option and indirect
taxes such as VAT) derived from lease receivables granted by
CaixaBank, S.A. ("CaixaBank", Long Term Deposit Rating: A3 /Short
Term Deposit Rating: P-2, Long Term Counterparty Risk Assessment:
A3(cr) /Short Term Counterparty Risk Assessment: P-2(cr)) to small
and medium-sized enterprises (SMEs), self-employed individuals and
corporates located in Spain.

RATINGS RATIONALE

The ratings of the notes are primarily based on the analysis of the
credit quality of the underlying portfolio, the structural
integrity of the transaction, the roles of external counterparties
and the protection provided by credit enhancement.

In Moody's view, the strong credit positive features of this deal
include, amongst others: (i) performance of CaixaBank originated
transactions has generally been better than the average observed in
the Spanish market; (ii) diversified pool across industry sectors
and regions; and (iii) refinanced and restructured contracts have
been excluded from the pool. However, the transaction has several
challenging features, such as: (i) material obligor concentration
as the top ten obligor groups represent 14.6% of the pool volume
and the effective number in terms of obligor groups is 309 (ii)
exposure to the construction and building sector at around 20.9% of
the pool volume, which includes a 10.7% exposure to real estate
developers, in terms of Moody's industry classification; (iii)
strong linkage to CaixaBank as it holds several roles in the
transaction (originator, servicer and accounts bank); and (iv) no
interest rate hedge mechanism being in place while the notes pay a
fixed coupon and 64.9% of the pool balance consists of
floating-rate contracts (most of them referenced to Euribor).

- Key collateral assumptions:

Mean default rate: Moody's assumed a mean default rate of 8.2% over
a weighted average life of 2.8 years (equivalent to a Ba3 proxy
rating as per Moody's Idealized Default Rates). This assumption is
based on: (1) the available historical vintage data, (2) the
performance of the previous transactions originated by CaixaBank
and (3) the characteristics of the line-by-line portfolio
information. Moody's also took into account the current economic
environment and its potential impact on the portfolio's future
performance, as well as industry outlooks or past observed
cyclicality of sector-specific delinquency and default rates.

Default rate volatility: Moody's assumed a coefficient of variation
of 49.2%, as a result of the analysis of the portfolio
concentrations in terms of single obligors and industry sectors.

Recovery rate: Moody's assumed a 40% stochastic mean recovery rate,
primarily based on the characteristics of the collateral-specific
line-by-line portfolio information, complemented by the available
historical vintage data. In addition, Moody's assumed a 15%
recovery rate mean upon insolvency of the originator.

Portfolio credit enhancement: the aforementioned assumptions
correspond to a portfolio credit enhancement of 22%, that takes
into account the Spanish current local currency country risk
ceiling (LCC) of Aa1.

As of May 2019, the audited provisional asset pool of underlying
assets was composed of a portfolio of 37,676 contracts amounting to
EUR 1,914.2 million. The top industry sector in the pool, in terms
of Moody's industry classification, is Construction & Building
(20.9%), which includes an exposure to real estate developers
(10.7%).

The top obligor group represents 2.78% of the portfolio and the
effective number of obligor groups is 309.The assets were
originated mainly between 2014 and 2019 and have a weighted average
seasoning of 2.6 years and a weighted average remaining term of 5.3
years. The interest rate is floating for almost 64.9% of the pool
while the remaining part of the pool bears a fixed interest rate.
The weighted average spread on the floating portion is 1.57%, while
the weighted average interest on the fixed portion is 2.12%.
Geographically, the pool is concentrated mostly in the regions of
Catalonia (28.2%) and Madrid (16.6%). At closing, leases up to 30
days in arrears will not exceed 5% of the total pool balance, while
leases more than 30 days in arrears and up to 90 days in arrears
will not exceed 1% of the total pool balance.

Assets are represented by receivables belonging to different
sub-pools: equipment (38.9%), vehicles (36.5%%) and real estate
(24.6%).The securitized portfolio does not include the final
instalment amount to be paid by the lessee (if option is chosen) to
acquire full ownership of the leased asset (i.e. the residual value
instalment).

- Key transaction structure features:

Reserve fund: The transaction benefits from EUR 89,670,000 reserve
fund, equivalent to 4.9% of the balance of the Class A and Class B
Notes at closing. The reserve fund provides both credit and
liquidity protection to the notes.

- Counterparty risk analysis:

CaixaBank will act as servicer of the leases for the Issuer, while
CaixaBank Titulizacion, S.G.F.T., S.A.U. (NR) will be the
management company of the transaction.

All of the payments under the assets in the securitised pool are
paid into the collection account at CaixaBank. There is a daily
sweep of the funds held in the collection account into the Issuer
account. The Issuer account is held at CaixaBank with a transfer
requirement if the rating of the account bank falls below Ba2.




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

MHP SE: Fitch Affirms 'B' LongTerm Issuer Default Ratings
---------------------------------------------------------
Fitch Ratings has affirmed MHP SE's Long-Term Foreign-Currency and
Long-Term Local-Currency Issuer Default Ratings and senior
unsecured rating at 'B'. The rating Outlook is Stable.

MHP's LC IDR of 'B' reflects the group's strong business profile
with reasonable scale and vertical integration, both translating
into high operating profitability, supported by a strong financial
profile and moderate leverage. Continued export growth and the
recent acquisition of a poultry business in Slovenia contribute to
increasing geographical diversification of MHP's operations. The FC
IDR at 'B', rated one notch above Ukraine's Country Ceiling of
'B-', is supported by strong hard-currency debt service coverage
which Fitch expects will remain at around 1x, or higher, in
2019-2020.

KEY RATING DRIVERS

Strong Business Profile: The ratings benefit from MHP's strong
market position as the dominant poultry and processed meat producer
in Ukraine, with larger scale, better access to bank financing and
a higher degree of vertical integration than local competitors and
other rated peers globally. The company's ability to further expand
and diversify export sales is another strong driver of MHP's
business profile.

Increasing Diversification: The acquisition of Slovenia-based
Perutnina Ptuj D.D (PPJ) (90% controlling stake completed in
February 2019) is beneficial to MHP's business profile and not
materially detrimental to the group's financial profile. PPJ has
strong market positions in the Balkan region and is also
vertically-integrated from the production of animal feeds and
poultry breeding to poultry and meat processing, and enjoys a high
share of added-value products (more than 40% of PPJ's sales). Fitch
estimates that PPJ will represent around 7% of the group's EBITDA
in 2019, enabling MHP to generate two-thirds of its revenue and
around 57% of EBITDA from exports, or outside Ukraine.

Continued Business Expansion: In 2018 MHP launched the expansion of
its Vinnytsia poultry complex --Phase 2 project with a total capex
at about USD420 million (estimated USD112 million spent in 2018),
with a planned increase of poultry output by 48% by 2022 versus
2017 production volume. MHP has a strong track record of greenfield
projects realisation and Fitch does not expect material execution
risk for the Phase 2 project. Most of increased volumes are planned
to be sold for export, which in conjunction with the acquisition of
PPJ is expected to boost the share of overseas markets to around
68% of revenue by 2022 from 59% in 2018.

EBITDA Margin above Peers': MHP's EBITDA margin fell sharply in
2018 to 26.9% from 34% in 2017, due mainly to cancellation of VAT
subsidies from the government as expected. Nevertheless
profitability remains significantly higher than that of most of its
international peers and much higher than the 8% EBITDAR margin
median for 'BBB' rating category peers based on Fitch's Protein
Rating Navigator. In 2019, consolidated EBITDA margin will be
further affected by the inclusion of PPJ's lower-margin business
and Fitch estimates sustainable profitability at around 23.5%-24.5%
for 2019-20 in its rating case projections.

FCF Pressured by High Capex: In addition to elevated capex due to
the Phase 2 project, MHP announced readiness to invest additionally
up to EUR200 million into PPJ's business in the medium term. Exact
investments into the Slovenian business are still under
consideration, but Fitch conservatively assumes an additional USD50
million annual capex on PPJ from 2020-22. This is likely to lead to
negative free cash flow (FCF) generation in 2020-21 before
recovering to around 3.5% of revenue by 2022.

Continuing FX Mismatch: FX mismatch continues to weigh on MHP's
credit profile, with debt of USD1.4 billion at end-2018 mainly
denominated in U.S. dollars and euros, while domestic operations
accounted for 41% of revenue in 2018. Fitch does not expect a
material reduction in FX risks over the medium term, although
poultry exports should continue to grow, particularly once the
planned extension of production capacity is completed by 2022.

Tight Headroom under Covenants in 2019: Based on its rating case
projections MHP may temporarily breach its Eurobond debt incurrence
covenant of 3x net debt-to-EBITDA in 2019 (its estimate is 3.2x),
before returning to below 3x from 2020. Fitch believes that such
risks are mitigated by MHP's flexibility in timing of capex, both
for Phase 2 and PPJ, as well as by the group's ability to manage
working capital effectively to protect cash flows and avoid such a
breach. Moreover, MHP has a permitted general debt basket of up to
USD75 million, a working capital basket of USD10 million and a
capital lease basket of USD25 million (under the Eurobond due 2020)
which should be sufficient to finance short-term operating needs in
2019.

Strong Financial Profile: Fitch expects funds from operations (FFO)
adjusted gross leverage at 3.6x at end-2019 (2018: 3.2x), close to
Fitch's positive sensitivity for the Local Currency (LC) IDR of
3.5x. Fitch estimates that increasing EBITDA from the new capacity
expansion, and PPJ, will allow the group to reduce leverage metrics
sustainably below this threshold from 2020. An increasing scale and
business diversification could lead to an additional one-notch
uplift for its LC IDR to 'B+', assuming MHP maintains a prudent
balance sheet but likely not before 2021.

Average Recoveries for Unsecured Bondholders: The ratings of senior
unsecured Eurobonds are aligned with MHP's FC IDR of 'B',
reflecting average recovery prospects given default. Fitch treats
Eurobonds pari passu with other senior unsecured debt of the group,
which is raised primarily by operating companies, despite being
issued by the holding company. There are no structural
subordination issues, as the Eurobond is covered by suretyships
from operating companies that accounted for around 85% of the
group's EBITDA in 2018.

Strong Parent-Subsidiary Links: The Long-Term IDRs of PJSC
Myronivsky Hliboproduct, MHP SE's 99.9% owned subsidiary, are
equalised with those of MHP, due to strong strategic and legal ties
between the two companies. Myronivsky Hliboproduct is a marketing
and sales company for goods produced by the group in Ukraine. The
strong legal links with the rest of the group are ensured by the
presence of cross-default/cross-acceleration provisions in
Myronivsky Hliboproduct's major loan agreements and suretyships
from operating companies generating a substantial portion of the
group's EBITDA.

DERIVATION SUMMARY

MHP has a strong business and financial profile more comparable to
the 'BB'-rating category, but its LC IDR is constrained by most of
its operations being in Ukraine, which has a sovereign LC IDR of
'B-'. The group has smaller business size and weaker ranking on a
global scale than international meat processors Tyson Foods Inc.
(BBB/Stable), Smithfield Foods Inc. (BBB/Stable), BRF S.A.
(BB/Stable) and Pilgrim's Pride Corporation (BB/Stable) in global
poultry production. This is balanced by higher profitability than
most peers' and lower leverage than that of lower-rated
international companies in the meat processing sector. MHP's
vertically-integrated business model is similar to Agri Business
Holding Miratorg LLC's (B/Stable). Absent the Ukraine's Country
Ceiling constraint, Fitch would rate MHP higher than Miratorg due
to a stronger financial profile and better corporate governance.

KEY ASSUMPTIONS

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

- Revenue growing to USD2.2 billion by 2022

- EBITDA margin at 23.4% in 2019 (pro forma for PPJ), trending
towards 25.8% by 2022

- Average hryvnia/US dollar exchange rate at 28.86 in 2019, 30.60
in 2020, 32.27 in 2021 and 33.89 in 2022

- 6.5% CAGR in chicken meat production volume over 2019-2022,
driven by the expansion of the Vinnytsia complex

- Revenue from export of poultry products to increase towards 68%
of total sales in 2021, absorbing the majority of production volume
growth

- No government grants or VAT discounts

- Capex at 9%-13% of sales in 2019-2022

- Cash held offshore equal to 75% of total cash

- Dividends of USD80 million a year in 2019-2021

- Acquisition of the non-controlling 9.4% shares of PPJ by
end-2019

KEY RECOVERY RATING ASSUMPTIONS

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

MHP's going concern EBITDA is based on 2018 EBITDA pro forma for
PPJ discounted by 40% to reflect the group's vulnerability to FX
risks and the volatility of poultry, grain and sunflower seeds
prices, as well as costs of certain raw materials. The
going-concern EBITDA estimate reflects Fitch's view of a
sustainable, post-reorganisation EBITDA level upon which Fitch
bases the valuation of MHP.

An enterprise value (EV)/EBITDA multiple of 4x is used to calculate
a post-reorganisation valuation and reflects a mid-cycle multiple.
The multiple is same as for Kernel Holding S.A., a Ukrainian
agricultural commodity trader and processor, and is unchanged
relative to its previous review.

Its debt waterfall assumptions take into account MHP's debt
position at 31 December 2018. In addition, Fitch does not consider
its Pre-export financing (PXF) facility as fully drawn. Contrary to
a revolving credit facility, there are several drawdown
restrictions on the PXF, and the availability window is limited to
only part of the year. Senior unsecured Eurobonds and unsecured
bank loan creditors are structurally subordinated to secured PXF
lenders.

The waterfall results in a 'RR3' Recovery Rating for senior
unsecured Eurobonds. However, the Recovery Rating is capped at
'RR4' due to the Ukrainian jurisdiction. Therefore, the senior
unsecured Eurobonds are rated 'B'/'RR4'/50%.

RATING SENSITIVITIES

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

For LC IDR:

- Improved operating environment in Ukraine reflected in a higher
sovereign LC IDR

- Reduction in MHP's dependence on the local economy as measured
by some decrease in the share of domestic sales in revenue without
impairing the group's profitability materially

- In both cases, an upgrade would be subject to maintaining
adequate liquidity and FFO adjusted gross leverage sustainably
below 3.5x.

For FC IDR:

- Hard-currency debt service ratio above 1.5x over the next four
years, as calculated in accordance with Fitch's methodology "Rating
Non-Financial Corporates Above the Country Ceiling"

- Upgrade in Ukraine's Country Ceiling to 'B+' or above

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

For LC IDR:

- FFO adjusted gross leverage above 4.5x and FFO fixed-charge
cover below 2.0x on a sustained basis

- Liquidity ratio below 1x on a sustained basis coupled with
deteriorated access to external funding

For FC IDR:

- FFO adjusted gross leverage above 4.5x and FFO fixed-charge
cover below 2.0x on a sustained basis

- Liquidity ratio below 1x on a sustained basis coupled with
deteriorated access to external funding

- Hard-currency debt service ratio below 1x over the next four
years

LIQUIDITY AND DEBT STRUCTURE

Sufficient Liquidity: At end-2018 MHP had USD187 million
Fitch-calculated readily available cash, along with USD100 million
committed long-term bank lines and a EUR115 million committed M&A
facility (for PPJ acquisition) which, together with expected
positive FCF of USD49 million in 2019, should be sufficient to
cover short-term debt of USD137 million, finance the sunflower
crushing cycle and pay for the 100% stake in PPJ in 2019 (EUR239
million).




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

AIR NEWCO 5: S&P Raises ICR to 'B' on Improving Performance
-----------------------------------------------------------
S&P Global Ratings raised its ratings on business software provider
Advanced's holding company Air Newco 5 S.a.R.L. and on its senior
secured loans to 'B' from 'B-'.

The upgrade reflects continued solid performance by Advanced,
including recurring revenue growth and improvement in reported
EBITDA margins to a mid-30s percentage by successfully executing on
its cost transformation program. In addition, the recently
announced acquisition and related combined debt and equity
financing should further contribute to reducing Advanced's leverage
and improving cash flow generation in financial 2020.

Advanced has recently made a few bolt-on acquisitions, which will
contribute about GBP10 million of EBITDA after synergies to be
created with Advanced's existing software and IT solutions. The
acquisition, which will be about 50% funded with equity from
Advanced shareholder Vista, reflects transaction leverage
(including synergies) of less than 3x, further supporting S&P's
forecast of reduction in leverage in financial 2020. In addition,
these acquisitions, as well as the acquisition of Science Warehouse
and Docman in financial 2019, contribute to Advanced's competitive
position as they enhance its capabilities, improve cross-selling
opportunities, and have increased its share of recurring revenues
to nearly 70%, up from 64% in financial 2018.

S&P said, "We also see some improvement in Advanced's operating
efficiency after the successful execution of its cost
transformation program over the last three years. We therefore
expect EBITDA margins (before exceptional costs but after
capitalized development costs) to increase to about 36% in
financial 2020 from about 30% in financial 2018. Our adjusted
EBITDA figure still reflects some negative impact of exceptional
costs related to acquisition financing and related integration
costs, but we expect a significant decline in restructuring costs
from the cost-cutting program as it comes to an end, and much lower
financing-related exceptional costs.

"We forecast a more than 30% EBITDA increase in financial 2020 on a
pro forma basis through acquisitions, organic growth, and decline
in exceptional costs. As a result, we expect adjusted leverage to
decline to about 6.5x in financial 2020 (about 5.9x excluding
exceptional costs) from our forecast of about 8x in financial 2019
(about 6.5x excluding exceptional costs).

"Combined with an improved cost structure, this should help
Advanced to sustain an S&P Global Ratings-adjusted EBITDA margin
above 30% over our forecast horizon. The company refinanced its
second-lien facility in June 2018 by upsizing its first-lien term
loan, which we anticipate will lower future interest expenses.
Additionally, we expect lower working capital outflows from better
accounts receivable management. This should allow the company to
increase its ratio of free operating cash flow (FOCF) to debt to
more than 5% by FY2019. We also forecast a significant increase in
free cash flow generation to about GBP35 million-GBP40 million,
reflecting FOCF to debt of 5%-6%.

"Our adjusted debt measures exclude the financial sponsor's
preferred equity certificates (PECs) as we consider that their
terms favor third-party creditors. They create an economic
inventive for the financial sponsor not to enforce its creditor
rights under the PECs, as this would jeopardize its control of the
company.

"Our view of Air Newco's business still reflects the company's
small scale compared with other established software peers (with
annual revenues of about GBP270 million on a pro forma basis
incorporating the acquisitions) and limited geographic diversity,
with all revenues generated in the U.K. Other weaknesses include
the highly competitive and fragmented market in which the company
operates and the limited barriers to entry. Advanced competes with
both large established players like Capita and smaller IT and
software companies.

These weaknesses are partly offset by Advanced's solid positions in
the niche segments of health care solutions and back-office
enterprise resource planning (ERP) solutions for legal services and
advanced learning in the U.K., and its position as the No. 4
software provider in the U.K.'s financial management software
market. In addition, Advanced benefits from high customer loyalty.
It has a client retention rate of about 90% and a significant
proportion of recurring revenues (67%-68%), which gives the company
relatively good revenue visibility.

In S&P's base case for Advanced, it assumes:

-- Revenue growth of about 13%-15% in financial 2020 (reflecting
organic growth of 3%-4%) and about 2%-3% in 2021. Revenue growth
will be fueled by hosting and subscription revenues for the
company's private and public sector ERP through its
software-as-a-service solutions as well as annual price increases.

-- 500-600 basis point improvement in adjusted EBITDA margins from
financial 2018 to 2020. The majority of the margin improvement in
2020 will come from the remaining benefit of cost-containment
initiatives.

-- Capital expenditure (capex) of roughly GBP11 million-GBP12
million per year, including capitalized development costs.

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

-- Adjusted debt to EBITDA of about 6.5x in 2020 and about 6x in
2021.

-- Funds from operations (FFO) to debt of about 7%-8%.

-- FOCF of about 5%-6%.

The stable outlook reflects S&P's expectation that Advanced will
grow revenues organically at a low-single-digit rate, maintain
EBITDA margins (excluding exceptional costs) at a mid-30s
percentage, reduce exceptional costs, and improve its working
capital cycle. These factors, combined with contributions from
bolt-on acquisitions, should enable the company to reduce its
adjusted leverage to sustainably below 7x and generate free
operating cash flow of at least GBP30 million.


EMERALD 2 LTD: S&P Affirms 'B' LongTerm ICR on Proposed Refinancing
-------------------------------------------------------------------
S&P Global Ratings affirmed its 'B' long-term issuer credit rating
on U.K.-based international environmental consulting firm Emerald 2
Ltd. (ERM), and assigned its 'B' ratings to ERM Emerald US, Inc.
and Eagle 4 Ltd., ERM's financial subsidiaries and co-borrowers of
the new facilities.

S&P is assigning its 'B' issue rating, with a '3' recovery rating,
to the proposed first-lien debt facilities, and its 'CCC+' issue
rating, with a '6' recovery rating, to the proposed second-lien
facility.

S&P said, "Our 'B' issuer credit ratings on ERM and its financial
subsidiaries reflect the pro forma capital structure upon
completion of the proposed refinancing. The company intends to use
the proceeds of the $875 million issuance to refinance its existing
debt structure. Although the transaction is broadly leverage
neutral, it will bring some recent equity-financed acquisitions
into the restricted group, resulting in a slight improvement to the
company's EBITDA as adjusted by S&P Global Ratings.

"We understand the new facilities will be used to repay the current
$70 million acquisition facility (due in 2020); the first-lien $550
million term loan B1 and the EUR75 million term loan B2 (both due
in 2021); and the $175 million second-lien facility (due in 2022).
Following the proposed refinancing, we expect ERM's credit metrics
will continue to be in line with our 'B' rating, including an S&P
Global Ratings-adjusted leverage ratio in the 5.7x-6.1x range in
fiscal 2020.

"Our view of ERM's financial risk profile combines the company's
high leverage with our forecast of adjusted debt of approximately
$962 million at the end of fiscal 2020. Our estimate of gross debt
includes the proposed $875 million debt facilities following the
refinancing, approximately $84 million of operating lease
obligations, and around $3 million of deferred considerations. Due
to ERM's financial-sponsor ownership, we do not include the
benefits of our forecast of $170 million cash on the balance sheet
following the transaction.

"ERM's capital structure includes non-common-equity financing in
the form of preference shares held by management shareholders, and
a subordinated unsecured shareholder loan. We have excluded these
from our financial analysis, including our leverage and coverage
calculations, since we believe there is sufficient alignment of
economic interests between the common-equity financing and the
non-common-equity financing. We believe that the financial sponsor
would not exercise any credit rights associated with the
shareholder loan. In October 2018, the group amended its articles
of association to reduce the dividend rate on preference shares
(with a corresponding reduction of the interest rate on the
shareholder loan notes), create a new class of preference shares,
and reverse the ranking of repayment of interest and dividend on
the preference shares and shareholder loan notes. In addition, new
payment-in-kind investor loan notes were created. These amendments
are neutral to our view of ERM's creditworthiness.

"We forecast that ERM's key adjusted credit metrics will remain
consistent with current levels over the medium term, and note the
group's better free operating cash flow (FOCF) generation compared
with peers' in the same rating category, supported by limited
capital expenditure (capex) requirements at about 1.0%-1.5% of
gross revenues per year. While ERM is exposed to some highly
cyclical markets, its exposure to Oil and Gas--in particular, the
commoditized upstream sector--has decreased over the past four
years. In addition, the group has been able to maintain its margins
through its flexible bonus, and its partnership-remuneration model
supports the rating. ERM is 40%-owned by management and
employees."

ERM benefits from good geographic diversity and its ability to
closely integrate with and retain clients over time, leading to
repeat business for the group. Furthermore, ERM focuses on
rebalancing its portfolio of end markets in response to the
macroeconomic pressure those industries are experiencing, and it
meets companies' increasing need to meet sustainability
requirements or environmental regulations. ERM's business risk is
constrained by its "pure-play" consultancy model and relatively
limited, albeit improving, end-market diversity, making the company
vulnerable to specific sectors' cyclical downturns, as S&P observed
between 2015 and 2017.

S&P said, "The stable outlook reflects our view that the group's
revenue and EBITDA will increase moderately in fiscal 2020. We
anticipate that ERM can benefit from the more positive prospects
for the oil and gas as well as metals and mining end markets, in
addition to a boost from an expansion in power and chemicals. We
also believe that ERM will continue to generate sound FOCF, while
maintaining adjusted FFO interest coverage around 2x over the next
12 months.

"We could consider a downgrade if ERM failed to improve its
absolute EBITDA in line with improving market conditions, resulting
in sustained weak or negative FOCF generation, and FFO interest
coverage of less than 1.5x. We could also consider lowering the
rating if ERM adopts a more aggressive financial policy, in terms
of shareholder returns and acquisitions, than we currently
envisage.

"We see limited potential for a positive rating action at this
stage, given our forecast that ERM will maintain its highly
leveraged credit metrics. However, if we see sustained deleveraging
and improving credit metrics, such as adjusted debt to EBITDA
staying below 5x, and a financial policy that supports such levels
going forward, we could then consider an upgrade."


FERROGLOBE PLC: Fitch Lowers LongTerm IDR to B-, Still on Watch Neg
-------------------------------------------------------------------
Fitch Ratings has downgraded Ferroglobe PLC's Long-Term Issuer
Default Rating to 'B-' and the senior unsecured rating of the
group's USD350 million notes to 'B'/'RR3' from 'B+'/'RR3'. Fitch
has simultaneously maintained Rating Watch Negative (RWN) on the
IDR and notes.

The downgrade follows the release of the group's 1Q19 interim
results and a continued decline in spot sales prices for
Ferroglobe's main output, silicon metal as well as for ferrosilicon
in Europe. Its manganese alloys business has been hit even harder
by a spike in costs for its main inputs including manganese ore,
which combined with a weak pricing environment, made this segment a
negative contributor to EBITDA throughout 2018 and into 1Q19.

The RWN reflects the potential for further negative rating action
if the market for ferroalloys in Europe and North America shows no
significant recovery. This could result in liquidity pressures for
the group with a potential breach of its covenants under its
revolving credit facility (RCF) in 3Q19 or 4Q19. Fitch expects to
resolve the RWN over the next six months. Factors Fitch will be
monitoring over this period include: 1) progress with Ferroglobe's
publicly stated plans to divest the group's Spanish hydro assets
for EUR170 million, 2) plans to refinance the RCF with new debt
facilities secured by US assets, and 3) the evolution of near-term
market conditions and prices, which remain key to EBITDA recovery
from 2H18-1H19 lows.

KEY RATING DRIVERS

Continued Weakness in Silicon Markets: Silicon metal prices have
continued to decline since 2Q18 due to a combination of weak demand
from photovoltaic modules, a surplus of silicon metal-rich
aluminium scrap in the US and increased competition from Malaysia
and eastern Europe. Unexpected weakness in the European automotive
sector, combined with overall weaker economic growth in Europe and
geopolitical uncertainty, has led to demand being further supressed
resulting in silicon metal spot prices in Europe approaching
USD2,000/t in May 2019 (versus USD2,422/t on average in 2018).
Fitch sees a potential for silicon metal prices to recover by
high-single digit percentage levels in 2H19 as capacity cuts
restrict supply.

Ferrosilicon Price Collapse: Spot ferrosilicon (FeSi) prices in
Europe have almost halved over the past one year to around
USD1,100/t in early 2019. FeSi is the most volatile silicon-based
alloy Ferroglobe produces whereas prices of magnesium ferrosilicon
and calcium silicon are in aggregate relatively stable. Ninety per
cent of FeSi demand is driven by steel production. The pronounced
weakness in 1Q19 European steel production (-2% according to CRU)
as opposed to 4.5% growth in the rest of the world is expected to
continue throughout 2019 as witnessed by the bankruptcy of British
Steel and Europe's largest steel producer ArcelorMittal cutting
steel production in 2019 by approximately 10%. Weakness in Europe
is affecting North American pricing as well through arbitrage.

Divestitures Drive Deleveraging Potential: On June 3, 2019
Ferroglobe announced the sale of the Cee-Dumbria ferroalloys plant
and 10 hydroelectric plants for EUR170 million (USD190 million) to
TPG Sixth Street Partners. The transaction includes a long-term
tolling agreement for the production of ferroalloys with Ferroglobe
as the exclusive off-taker. Ferroglobe expects to finalise the
transaction by 3Q19.

The transaction requires the approval of local authorities, Spanish
anti-trust commission and authorisation from Ferroglobe's lenders.
Fitch views clearance from the Spanish anti-trust commission (CNMC)
regarding the ferrosilicon business at Cee-Dumbria and
authorisation from Ferroglobe's lenders as lesser hurdles. A
similar transaction in 2017 when Ferroglobe intended to sell its
hydroelectric assets in Spain (including HNE) for EUR255 million to
Brookfield was blocked by the water authority of the Galicia
province, Aguas de Galicia. Fitch views the main hurdles for the
transaction in the approval for the lease facility to be terminated
and the co-ownership regime of the concessions to be amended.

Non-core Asset Sales Continue: Ferroglobe has identified several
assets it might divest in addition to the hydro assets. This
includes a timber farm in South Africa, hydro assets in France, an
asset in Poland, and, though less likely, the company's Venezuela
assets. At end-2018 Ferroglobe had managed to divest hydroelectric
assets in Aragon (HNE) for USD20 million, a timber farm in South
Africa for USD6.8 million and other assets for USD6.9 million.

Input Costs Have Peaked: In 2018 Ferroglobe saw a double-digit
increase in production costs since early 2017 in all three major
segments - silicon metal, silicon alloys and manganese alloys. An
increase in low-ash coal and coke prices has been driven by China's
'Blue skies' policies, which hit silicon and manganese alloys.
European power prices have risen sharply in 2018 and mostly
affected silicon metal and silicon alloys. Manganese margins were
also affected by manganese ore price, which peaked in March 2018
and which remain elevated on strong Chinese imports.

Fitch expects energy prices to remain stable in US dollar terms
from 2020-2022, partly due to the euro weakness. Manganese ore
prices are expected to moderate but remain above pre-2017 levels as
Ferroglobe and other producers cut output. Fitch also expects coal
and coke prices to moderate from the recent highs, in line with
Fitch's metals mid-cycle commodity price assumptions (March 2019).

Potential Extension to Capacity Cuts: In November 2018 Ferroglobe
announced that it will reduce its production capacity starting from
4Q18 aimed at destocking its excess inventories coming from weak
sales volumes earlier in 2018. The idling of three US and three
France-based furnaces will lead to a 76,000 tonne reduction in
silicon metal capacity, leaving 328kt capacity under operation.
Manganese-based alloys capacity is reduced by 112kt to 552kt. In
case economic growth weakens further additional capacity cuts are
possible in its view.

Manganese Alloy Margins Bottoming Out: Manganese alloys prices have
improved by single-digit percentage levels from the 4Q18 lows and
Fitch expects prices to remain stable throughout 2019. Coupled with
lower manganese ore prices expected in 2019, profitability will
improve slowly albeit remain at depressed levels. From 2Q17
manganese alloy prices have started to decline, before gathering
pace in 2018 due to oversupply in the market outside of China.
Fitch expects the manganese alloys market to remain oversupplied in
2019. Fitch does not expect significant price declines, however, as
Ferroglobe, Nikopol (Ukraine) and South32 (South African
facilities) curtailed/idled production, while South32 is reviewing
its South African operations due to high electricity costs.

Relationship with Parent: Spain's Grupo Villar Mir, a privately
held Spanish conglomerate is the majority shareholder (53.9% at
end-2018) of Ferroglobe. Fitch rates Ferroglobe on a standalone
basis. GVM has pledged most of its shares in Ferroglobe to secure a
syndicate loan led by Credit Suisse. Although the USD350 million
notes prohibit upstreaming of dividends in the absence of
profitability, GVM can materially influence Ferroglobe's strategic
decision-making, such as potentially restarting the solar-grade
silicon project.

DERIVATION SUMMARY

Ferroglobe is the largest western producer of silicon metal,
silicon-based and manganese-based alloys with product
diversification comparable to PAO Koks (B/Stable) and Ferrexpo plc
(B+/Stable). Ferroglobe's position on the upper end of the global
silicon-based and manganese-based alloys cost curves is a relative
weakness compared with peers, which translated into much higher
earnings volatility both in 2015-2016 and since 2H18. The recent
margin pressure was driven by a combination of demand-driven price
weakness and input cost hikes leading to substantial EBITDA
pressure. Ferroglobe's critical mass in the alloys markets has been
historically viewed as its strength but the group's higher-cost
capacity suspensions have not yet translated into a material price
rebound.

Ferroglobe's financial profile is materially weaker primarily due
to the group's EBITDA decline. Ferroglobe's deleveraging path is to
a lesser extent reliant on positive free cash flow (FCF) generation
as EBITDA and funds from operations (FFO) rebound remain key.

No operating environment or Country Ceiling constraint affected the
ratings.

No Parent/Subsidiary Linkage is applicable as Grupo Villar Mir is
an investment holding company.

KEY ASSUMPTIONS

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

- Average 2019-2022 realised prices for silicon metal,
silicon-based alloys and manganese-based alloys of around
USD2,425/t, USD1,625/t and USD1,175/t, respectively, with low
single-digit recovery in 2020-2021 from 2019 lows

- Capacity cuts and inventory release, coupled with high
single-digit sales volumes decline in silicon metal partly
mitigated by silicon- and manganese-based alloys sales volumes
increase in 2019, before recovering to 2018 levels

- Single-digit reduction in coal/coke prices and double-digit
manganese ore price decline in 2019, slight decrease in electricity
price in 2019, before stabilising

- EBITDA to fall to around USD105 million in 2019 before returning
to an average of USD160 million in 2020-2022

- Capex averaging USD80 million a year from 2020 as EBITDA
recovers

Fitch's key assumptions for bespoke recovery analysis include:

- Ferroglobe will be liquidated in bankruptcy rather than
reorganised. Fitch has assumed a 10% administrative claim.

- Fitch applies a conservative 50% advance rate to Ferroglobe'
inventories and receivables as well as 40% advance rate to plant,
property and equipment balance value.

- Its debt waterfall includes senior secured debt of USD267
million, including USD67 million finance leases and the USD200
million RCF, which Fitch assumes will be fully drawn under the
distressed scenario. Unsecured debt totaling USD411 million
includes the USD350 million notes and USD61 million government
loans.

- Its analysis results in a 'RR3' Recovery Rating for the USD350
million notes, which corresponds to a 'B' issue rating.

RATING SENSITIVITIES

Resolution of the RWN will be based on the divestment process for
the Cee-Dumbria assets. The outcome of this will shape Ferroglobe's
liquidity profile for the next 12-24 months. Based on developments
in ferroalloys markets Fitch may assign a Negative Outlook if
persistence in current trends would suggest a sustained higher FFO
adjusted gross leverage.

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

- Deterioration in liquidity

- Sustained FFO adjusted gross leverage above 6x through the cycle
(2018: 4.8x)

LIQUIDITY AND DEBT STRUCTURE

Ferroglobe's debt mainly consists of the USD350 million notes due
in March 2022 and a USD200 million RCF - under which USD133 million
has been drawn at end-1Q19 - maturing in February 2021.
Ferroglobe's debt also includes USD66.5 million in finance leases
linked to hydroelectric assets in Spain, which would be paid off it
the proposed transaction goes through. Government loans totalling
USD61.9 million - of which USD52.5 million are coming due in 2019 -
consist mostly of a USD50 million loan from the Spanish government
tied to the solar grade silicon project becoming payable during
2019 as the terms of the loan have been breached.

Ferroglobe makes use of a USD303 million accounts receivable
securitisation facility, under which it received USD233 million in
cash proceeds at end-2018. Fitch includes the cash proceeds in
short-term financial debt in case the securitisation ceases to
exist and the receivables reconstitute themselves on the balance
sheet of Ferroglobe. During 1Q19-2020 Ferroglobe faces USD94
million in scheduled maturities against its cash position of USD217
million as of end-1Q19. Fitch projects positive FCF in 2019 of
USD65 million, which is exclusively due to expected destocking.

The proposed sale of the ferroalloy plant at Cee-Dumbria and
hydroelectric assets in Spain, as well as the announced refinancing
would constitute a marked improvement in liquidity by end-3Q19. Of
the USD190 million in proceeds USD66.5 million would be used to pay
off associated finance leases. The remaining proceeds would be used
to redeem the USD133 million RCF. The current accounts receivable
securitisation would also be replaced by a USD125 million senior
secured term loan secured by US tangible assets and by a USD140
million asset backed loan secured by North American accounts
receivable and inventories. In this case Fitch projects liquidity
of around USD230 million at end-2019 and around USD210 million at
end-2020, providing sufficient liquidity to meet maturities until
2022.

SUMMARY OF FINANCIAL ADJUSTMENTS

- Fitch adjusted Ferroglobe's debt by adding USD233.5 million of
receivables factored at end-2018 and reclassified USD63.2 million
of annual change in balance of receivables factored from working
capital inflow to cash flow from financing.

- USD20.4 million cross currency swaps and USD61.8 million
financial loans from government agencies reclassified as debt

- Fitch adjusted Ferroglobe's end-2018 debt by USD78 million, or
capitalising operating lease expense of USD9.7million at 8x


JEWEL UK: S&P Hikes ICR 'B+' as IPO Reduces Debt, Outlook Stable
----------------------------------------------------------------
S&P Global Ratings raised its ratings on Jewel UK Midco Ltd., to
'B+' from 'B-' and discontinuing its ratings on the GBP265 million
senior secured notes previously issued by Jewel UK Bondco PLC,
which S&P understands have been fully repaid.

The upgrade reflects the Watches of Switzerland (WOS) Group's
successful listing on the London Stock Exchange following an IPO
process that saw the group raise around GBP220 million of net
proceeds, allowing it to reduce gross financial debt by around
GBP130 million. The group has refinanced, paying down its
outstanding senior secured notes using proceeds from the IPO and a
new GBP120 million term loan facility.

S&P expects this substantial reduction in debt and associated
interest expenses will support lower leverage and a steady
improvement in credit metrics from FY2020 on. S&P now expects
leverage to reduce to around 3.5x by the end of FY2020, rather than
the 5.5x we had previously expected.

The group is still majority-owned by a financial sponsor, Apollo;
as such, its financial policy could remain aggressive. However, as
part of the IPO process, it announced net leverage guidance of
1.5x-2.0x and that cash flows would be used for internal
investment, rather than dividends, in the near term. The group's
public leverage guidance translates to S&P Global Ratings-adjusted
leverage of around 3.0x-4.0x, a level we consider commensurate with
a 'B+' rating.

S&P said, "We are discontinuing our ratings on the GBP265 million
senior secured notes previously issued by Jewel UK Bondco PLC,
which we understand have now been called and fully repaid.

"Our stable outlook indicates that we think WoS is likely to
increase its earnings through the successful integration and
expansion of its new U.S. operations, and through robust
like-for-like growth in the U.K. Combined with the significant debt
reduction achieved following the IPO, this means we now forecast
group leverage will fall to around 3.5x by the end of FY2020.
Although we still see meaningful execution risk relating to the
group's ambitious growth expectations, we also consider the new
capital structure more supportive of the group's ability to
generate material reported free operating cash flows (FOCF), which
should allow for more significant deleveraging beyond FY2020.

"We could lower the rating if, due to operating setbacks or a more
aggressive financial policy than we currently expect, WOS's cash
flows turn materially negative or leverage increases toward 5x."

Ratings upside is limited in the near term, given the group's
still-modest scale, its leverage guidance, and that financial
policy is still dictated by the financial sponsor owner. S&P
expects these factors to somewhat limit the prospect of WoS further
reducing leverage to a level commensurate with a higher rating.

That said, S&P could raise the ratings in the next 12-18 months if
the group continues to successfully reduce leverage through a
combination of earnings growth, and the use of cash flows for debt
reduction. It would depend on a decrease in adjusted debt to EBITDA
to consistently below 3x, and a sustainable improvement in reported
EBITDAR coverage to above 2.5x.


MONSOON ACCESSORIZE: Urges Landlords to Approve Rent Reductions
---------------------------------------------------------------
BBC News reports that Monsoon Accessorize is calling on landlords
to approve rent reductions on some of its 258 leased stores as part
of a restructuring of the troubled High Street chain.

According to BBC, the two chains operate under separate names and
are asking for rent cuts on 135 stores after a period of
"difficult" trading.

To win support from landlords, the company is offering them up to
GBP10 million if it trades profitably in the future, BBC
discloses.

No stores are to be closed, BBC states.

Jobs are not expected to be lost from the 4,440-strong workforce
either under the restructuring of the company, which is owned by
entrepreneur Peter Simon, BBC notes.

The restructuring is taking place under a Company Voluntary
Arrangement (CVA), which allows companies to continue trading while
reaching agreement with creditors, BBC relays.

Mr. Simon has given the company an emergency GBP12 million loan and
offered another GBP18 million at 0% interest if the CVA is
approved, BBC recounts.

According to BBC, Peter Allen, chief executive of Monsoon
Accessorize, said sales had been falling over the last two years.

"Although the group has no external debt, the current rate of sales
decline and recent working capital pressures have had a material
impact on the group liquidity position," BBC quotes
Mr. Allen as saying.

"Trading for the group has been difficult for some time, as it has
been for much of the retail industry. This is due to a combination
of factors, including rising costs, increased competition and
subdued consumer spending."

Restructuring experts at Deloitte are handling the CVA, which is
the latest to be used by troubled retailers, BBC discloses.


NEW LOOK BONDS: Fitch Assigns CCC+ LT Issuer Default Rating
-----------------------------------------------------------
Fitch Ratings has assigned New Look Bonds Limited (New Look) a Long
Term Issuer Default Rating (IDR) of 'CCC+'. Fitch has also rated
the financing vehicle New Look Financing Plc's GBP250 million
reinstated senior secured May 2024 notes and GBP150 million new
money May 2024 bonds at 'CCC'/'RR5'/21%. New Look Bonds Limited is
a newly incorporated intermediate holding company , indirect
subsidiary of New Look Retail Holdings Limited (new topco), and is
the successor rated entity of New Look Retail Group following the
completed debt restructuring.

Fitch has also downgraded New Look Retail Group Limited's Long-Term
IDR to Restricted Default (RD), from 'C' and withdrawn the rating.
In addition, Fitch has also downgraded to RD and then withdrawn the
instrument ratings on New Look's Secured Issuer plc's 2022 senior
secured notes and New Look's Issuer PLC's senior notes.

The completion of the financial restructuring represents a
restricted default under Fitch's Distressed Debt Exchange (DDE)
criteria.

The 'CCC+' IDR reflects high execution risk in the company's
'back-to-basics' turnaround strategy, returning to broad appeal
product, in an extremely competitive mass market clothing sector
characterised by the increasing presence of pure online retailers,
Brexit uncertainty and rising input prices, while maintaining high
leverage. This is despite positive measures taken in tandem with
the debt restructuring such as the company voluntary arrangement
(CVA) with its landlords, allowing New Look to close approximately
100 stores and reduce rent payments, additional costs savings, and
exit of non-core loss making international businesses.
Nevertheless, the liquidity uplift resulting from the new money
injection, lower interest burden with flexibility to service debt
in cash or payment in kind (PIK) along with the decline in rents
enables the company to focus on strategy execution.

The ratings were withdrawn with the following reason: Bankruptcy Of
The Rated Entity, Debt Restructuring or Issue/Tranche Default

KEY RATING DRIVERS

Debt Restructuring Completed: With the debt restructuring completed
in May 2019 New Look now has a financial profile with greater
financial flexibility and some headroom to invest in its business
model while withstanding some further economic headwinds. The DDE
has included the substantial writing down of nearly GBP925 million
of pre-restructured debt, moving to a partially PIK/toggle interest
payment mechanism, while maintaining liquidity for peak season
working capital requirements by retaining the committed GBP100
million revolving credit facility (RCF) and GBP100 million
operating facility.

Senior secured noteholders converted all their existing claims of
GBP1,070 million into GBP250 million of new senior secured 2024
notes and 20% of the ordinary share capital of New Look Retail
Holdings Ltd post-restructuring. In addition, the group's liquidity
was strengthened by a new five-year GBP150 million new money 2024
senior secured bond, which received around 72% of the group's
equity upon closing. Both the reinstated notes and the new money
notes include a PIK/toggle option. Both the RCF and operating
facility are ranked super senior to the notes in security
enforcement, although they are parri passu with the notes under the
intercreditor agreement.

Rent Profile Reduced: New Look completed a CVA with its landlords
in March 2018, allowing it to close unprofitable stores and reduce
rent payments. The average lease length of UK stores is now less
than five years, which gives a degree of operational flexibility
with regards to the turnaround plan. Further to the CVA, New Look
has closed more stores and now has only 519 in the UK and Ireland
(previously around 600).

Other Cost Savings Achieved: New Look has achieved additional cost
savings of GBP43 million, through headcount reduction, headquarters
rationalisation and reduction in e-commerce logistics. The exit of
non-core loss making international businesses, with the China and
Belgium businesses already shut down and the Poland and France
businesses in the process of winding down operations, has led to
upfront cash restructuring costs, but will allow New Look to focus
on the UK business. To support this move, New Look has also begun
recruiting experienced industry professionals to ensure its
transformation is carried out as efficiently as possible.

Turnaround Based on Back to Basics: The group's turnaround
prospects are balanced. New Look is working to restore its back to
basics and broad appeal reputation, ensure its logistics system is
up to par and can ensure stock is in store or available online in
industry leading time, be recognised again as a value-for-money
retailer by an increasingly cautious and price sensitive customer
base, while maintaining an intelligent pricing policy, which allows
some limited discounting in the face of competitor promotions, New
Look will benefit though from the significant cost measures it has
taken in recent months in tandem with the debt restructuring.

Competitive UK Clothing Market: New Look operates in an extremely
competitive UK mass market clothing sector characterised by reduced
consumer confidence, Brexit uncertainty and rising input prices.
The group is also challenged by a new generation of pure online
retailers such as ASOS, Boohoo.com and Shop Direct, which benefit
from lower cost bases and a lack of legacy IT and logistics
systems. New Look must also compete with traditional store-based
retailers such as Next Plc, and Marks & Spencer (M&S; BBB-/Stable),
which are rapidly developing their online offer and integrating
this business with their existing store portfolio.

Post-Restructuring Leverage Still High: While the debt write-down
significantly reduces New Look's leverage (Fitch estimated 7.0x at
end March 2020 on a funds from operations (FFO) lease adjusted net
leverage basis versus 13.9x at March 31, 2018), this remains high
for a fashion clothing retailer operating in a challenging UK
clothing market, in particular given weak FFO fixed charge cover,
which is expected to improve to 1.5x only by FY22. While Fitch
expects New Look to return to positive free cash flow (FCF)
generation by 2020, any additional consumer downturn or continuing
Brexit uncertainty could weaken New Look's financial profile, and
increase its refinancing risks, despite the cash flow relief from
the PIK/cash-pay toggle mechanism of the new debt.

DERIVATION SUMMARY

New Look is a fast fashion multi-channel retailer operating in the
value segment of the UK clothing & footwear market for women, men
and teenage girls. Its e-commerce platform has been a key
differentiating factor relative to other sector peers, such as
Financiere IKKS S.A.S (C) or Novartex SA (CCC-/RWN). With the new
capital structure following the restructuring, the decline in New
Look's Fitch-estimated FFO adjusted net leverage to 7.0x from 13.9x
and improved liquidity position New Look's rating is better than
IKKS's and Novartex's.

New Look's EBITDAR margin (12.6% in FY18) is also below most
non-food retailers and cash conversion is weaker than online
asset-light competitors, such as Boohoo, ASOS and Shop Direct
(B/Negative). However, Fitch expects a rebound in profitability to
a large extent driven by the reduction in rents due to the CVA
concluded in April 2018, exiting non-core loss making international
operations and reduced costs. Fitch expects the FFO margin to
break-even in FY19, trending to 5% by 2021- more aligned with 'B'
category peers, better than 1% expected for Novartex but well below
the 8%-10% FFO margin range achieved by better capitalised M&S
between 2015 and 2019 despite the low-margin food offer in M&S's
business mix.

KEY ASSUMPTIONS

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

- Negative sales growth in FYE March 2019/2020 heavily influenced
by agreed store closures; between +1.8% and +2% per year
thereafter;

- EBITDA margin between 6.6% and 8.7% from 2019 to 2022 driven by
rent reductions and other implemented cost savings;

- Restricted cash of GBP50 million per year assumed for intra-year
working capital requirements;

- Capex scaled back to GBP15 million in FY19, GBP30 million
thereafter;

- Full cash-pay interest assumed (no PIK toggle exercise)

KEY RECOVERY ASSUMPTIONS

- The recovery analysis assumes that New Look would be considered
a going concern in bankruptcy and that the company would be
reorganised rather than liquidated.

- Fitch assigned a 0% discount on the estimated FY19 EBITDA to
reflect the fact that the company has already gone through
distress. This reflects a going concern EBITDA of GBP79 million,
which is enough to cover GBP35 million of interest, GBP30 million
of maintenance capex and GBP10 million of taxes and restructuring
costs leaving FCF broadly neutral.

- Fitch is maintaining the distressed multiple at 4.0x to reflect
the weakened business model and high degree of execution risks
under challenging market conditions. The distressed multiple is in
line with Novartex SA at 4.0x and lower than IKKS's (5.0x).

Outcome:

Based on the payment waterfall the RCF (GBP100 million) and the
utilised operating facilities (GBP100 million) rank super senior to
the reinstated debt and new bonds. Factoring this, after deduction
of 10% for administrative claims, its waterfall analysis generates
a ranked recovery for the senior secured bonds in the 'RR5' band,
indicating a 'CCC' instrument rating. The waterfall analysis output
percentage on current metrics and assumptions was 21%. The UK
jurisdiction has no impact on the debt instrument rating

RATING SENSITIVITIES

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

Fitch does not expect positive rating action in the near future.
Such a move would necessitate evidence of a successful
implementation of the turnaround strategy, reflected in positive
like-for-like sales growth, and a material improvement in the
EBITDA margin.

- Significant improvement in liquidity, primarily measured by FCF
trending toward neutral while maintaining sufficient intra-year
liquidity as well as availability under the operating facility.

- FFO lease adjusted net leverage falling below 6.0x on a
sustained basis.

- FFO fixed charge cover increasing above 1.5x.

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

- Failure to overcome profit margin pressure, FX impact or loss of
market share and weakening consumer confidence in UK leading to
EBITDA margin erosion.

- Liquidity erosion, e.g. driven by continuing negative FCF
resulting in FFO lease adjusted net leverage staying over 7.0x.

- FFO fixed charge cover not recovering above 1.2x by FY21

LIQUIDITY AND DEBT STRUCTURE

Improved Liquidity, Minimal Headroom: The decline in the interest
burden and the optionality to toggle cash payments as a result of
the restructuring provides some flexibility for the group. However,
with the GBP100 million RCF fully drawn, GBP19 million availability
under the company's operating facility as of December 2018 and
minimal cash on balance sheet, New Look has minimal liquidity
headroom and could come under pressure if the turnaround strategy
is not successful over the next two years. As a result of the
agreed DDE, New Look's debt maturity schedule is more relaxed with
no material debt maturities before 2024.


PARAGON ENTERTAINMENT: To Appoint Administration Amid Cash Woes
---------------------------------------------------------------
Yadarisa Shabong at Reuters reports that Paragon Entertainment said
on June 20 it did not have enough cash to run its operations or pay
its dues and the company has decided to appoint administrators as
soon as possible, while its top boss resigned.

The company, which has designed visitor attractions and experiences
such as The Rolling Stones Exhibitionism at the Saatchi Gallery,
said Chief Executive Damien Latham has resigned with immediate
effect, Reuters relates.

According to Reuters, Paragon Entertainment said it did not have
enough cash to continue operations and to pay its creditors,
including HSBC.

The company said once appointed, the administrators would look for
buyers for Paragon Entertainment's business and assets, Reuters
notes.

The AIM-listed company, which has a market capitalization of about
GBP2.5 million (US$3.2 million), also said trading of its shares
had been suspended, Reuters discloses.






===============
X X X X X X X X
===============

[*] BOOK REVIEW: AS WE FORGIVE OUR DEBTORS
------------------------------------------
Authors: Teresa A. Sullivan, Elizabeth Warren, & Jay Westbrook
Publisher: Beard Books
Softcover: 370 Pages
List Price: $34.95
Order your personal copy today at https://is.gd/29BBVw

So you think you know the profile of the average consumer debtor:
either deadbeat slouched on a sagging sofa with a three day growth
on his chin or a crafty lower-middle class type opting for
bankruptcy to avoid both poverty and responsible debt repayment.

Except that it might be a single or divorced female who's the one
most likely to file for personal bankruptcy protection, and her
petition might be the last stage of a continuum of crises that
began with her job loss or divorce. Moreover, the dilemma might be
attributable in part to consumer credit industry that has increased
its profitability by relaxing its standards and extending credit to
almost anyone who can scribble his or her name on an application.

Such are among the unexpected findings in this painstaking study of
2,400 bankruptcy filings in Illinois, Pennsylvania, and Texas
during the seven-year period from 1981 to 1987. Rather than relying
on case counts or gross data collected for a court's administrative
records, as has been done elsewhere, the authors use data contained
in the actual petitions. In so doing, they offer a unique window
into debtors' lives.

The authors conclude that people who file for bankruptcy are, as a
rule, neither impoverished families nor wily manipulators of the
system. Instead, debtors are a cross-section of America. If one
demographic segment can be isolated as particularly debt prone, it
would be women householders, whom the authors found often live on
the edge of financial disaster. Very few debtors (3.7 percent in
the study) were repeat filers who might be viewed as abusing the
system, and most (70 percent in the study) of Chapter 13 cases fail
and become Chapter 7s. Accordingly, the authors conclude that the
economic model of behavior -- which assumes a petitioner is a
"calculating maximizer" in his in his decision to seek bankruptcy
protection and his selection of chapter to file under, a profile
routinely used to justify changes in the law -- is at variance with
the actual debtor profile derived from this study.

A few stereotypes about debtors are, however, borne out. It is less
than surprising to learn, for example, that most debtors are simply
not as well-off as the average American or that while bankrupt's
mortgage debts are about average, their consumer debts are off the
charts. Petitioners seem particularly susceptible to the siren song
of credit card companies. In the study sample, creditors were found
to have made between 27 percent and 36 percent of their loans to
debtors with incomes below $12,500 (although the loans might have
been made before the debtors' income dropped so low). Of course,
the vigor with which consumer credit lenders pursue their goal of
maximizing profits has a corresponding impact on the number of
bankruptcy filings.

The book won the ABA's 1990 Silver Gavel Award. A special 1999
update by the authors is included exclusively in the Beard Book
reprint edition.



                           *********


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
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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 * * *