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

                          E U R O P E

          Thursday, June 27, 2019, Vol. 20, No. 128

                           Headlines



A Z E R B A I J A N

MUGANBANK: S&P Affirms 'B-/B' ICRs on Adequate Liquidity Buffer


D E N M A R K

STARK GROUP: S&P Alters Outlook to Negative on SGBDD Acquisition


F R A N C E

LOUVRE BIDCO: S&P Affirms 'BB-' ICR Amid Acquisition of Sistemia


G E R M A N Y

SILVER ARROW: S&P Assigns Prelim. 'BB+' Rating on Class D Notes


G R E E C E

ESTIA MORTGAGE: S&P Affirms CCC Rating on Class C Notes


I R E L A N D

VOYA EURO II: Fitch Assigns 'B-sf' Rating on Class F Debt
VOYA EURO II: Moody's Gives B3 Rating on EUR9.1MM Class F Notes


N E T H E R L A N D S

DIVERSEY: S&P Lowers ICR to 'B-' on Weak Credit Measures
OCI NV: S&P Raises ICR to 'BB' on Improving Organic Growth
PRECISE MIDCO: S&P Assigns 'B' ICR Following Buyout by KKR
UNITED GROUP: S&P Affirms 'B' ICR on Tele2 Croatia Acquisition


N O R W A Y

DOLPHIN DRILLING: Files for Bankruptcy, Creditors Seize Assets


R U S S I A

BELUGA GROUP: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
NATIXIS BANK: Moody's Withdraws Ba2 Ratings for Business Reasons
STATE TRANSPORT: S&P Raises ICR to 'BB' on Increased Public Role


S P A I N

DIA GROUP: Reaches New Financing Deal with Creditors


U K R A I N E

FERREXPO POLTAVA: S&P Alters Outlook to Negative & Affirms 'B' ICR


U N I T E D   K I N G D O M

AA BOND: S&P Affirms B+ Rating on Class B2 Notes
ARCADIA GROUP: Watchdog May Pursue Tina Green on Pension Deal
AVON INT'L: Moody's Rates Proposed $350MM Secured Notes 'Ba1'
BONMARCHE: Auditors May Raise Going Concern Doubt
BURY FC: Faces 12-Point Deduction Following CVA Proposal

CARPETRIGHT PLC: Plans to Shut Some Stores in Irish Division
GALAPAGOS HOLDING: S&P Cuts ICR to 'SD' on Missed Interest Payment
GAMING ACQUISITIONS: Fitch Assigns 'B(EXP)' LongTerm IDR
GRH FOOD: Failure to Find Buyer Prompts Administration
INSPIRED EDUCATION: S&P Assigns 'B' ICR, Outlook Stable

TOWER BRIDGE 4: Moody's Gives (P)B3 Rating on Class F Notes

                           - - - - -


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A Z E R B A I J A N
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MUGANBANK: S&P Affirms 'B-/B' ICRs on Adequate Liquidity Buffer
---------------------------------------------------------------
S&P Global Ratings affirmed its 'B-/B' long- and short-term issuer
credit ratings on Azerbaijan-based Muganbank. The outlook is
stable.

The affirmation reflects S&P's view that over the next 12 months,
Muganbank will maintain an adequate liquidity buffer to meet its
obligations when they become due, and will not be at risk of
breaching regulatory ratios, including prudential capital ratios.

In 2018, and for the first five months of 2019, Muganbank's
liquidity position remained broadly stable, with a buffer of liquid
assets sufficient to meet the bank's obligations in both normal
times and in times of stress. For example, the bank's broad liquid
assets covered about 22% of its total customer deposits as of April
1, 2019, while its high liquid assets represented about 7.0% of
total assets on the same date. S&P notes that over the past year,
Muganbank has managed to grow its customer deposits thanks to
depositors' improving confidence and the relatively high interest
rates that the bank pays for its customer funds.

S&P expects that Muganbank will maintain an adequate liquidity
buffer thanks to stable customer deposits and additional liquidity
that the bank is to receive under a system-wide government support
program. The program aims to support individuals who suffered from
the devaluation of Azerbaijani new manat (AZN) in 2015 and to
facilitate the clean-up of a material volume of nonperforming
assets at local banks. Muganbank has already received AZN21.6
million as part of this program as the government paid the bank
some of the overdue individual loans denominated in foreign
currency. The bank will also receive about AZN60 million to
restructure loans to individuals overdue by more than 360 days.
Aside from the positive impact on Muganbank's asset quality and
business prospects, S&P believes that the program will further
strengthen the bank's liquidity buffer and improve its flexibility
in managing its liquidity position.

Over the past year, Muganbank has continued developing its
corporate lending, mainly in the infrastructure and agriculture
sectors, while simultaneously exiting unsecured retail business.
Positively, the bank's customer base has become less volatile than
in the previous three years thanks to improving customer confidence
and a continuing economic recovery in Azerbaijan. Overall lending
growth has remained modest, at 5.0% versus 11% for the system
average. Meanwhile, the bank's earnings capacity has remained very
weak, with the return on average equity remaining below 2.0% due to
pressure on the net interest margin and weak operational
efficiency. (Muganbank's cost-to-income ratio was 80% at year-end
2018, compared to an average of 50%-55% for its peers). S&P expects
that in the next two years, Muganbank's profitability will remain
weak and the bank will continue to depend on capital injections
from the shareholder to support its business growth.

S&P said, "In 2018, Muganbank's capital position has deteriorated,
and our risk-adjusted capital (RAC) ratio declined to 3.4% from
5.0%. We expect that the bank will continue generating losses in
2019-2020 due to pressure on its margins, subdued operational
efficiency, and increased provisioning needs. We therefore expect
that the bank's capital position will likely weaken further, with
our RAC ratio declining to below 3.0%, taking into account a
negative earnings buffer.

"Muganbank may receive an additional AZN5 million of capital
support from the shareholder, but this is unlikely to substantially
improve its capital position. We take into account modest business
growth of 3%-5% over the next one-to-two years, balancing
relatively high growth in corporate lending with rather flat
dynamics in unsecured retail business. Nevertheless, we expect that
the bank will continue operating with a buffer of at least 100
basis points above the minimum capital regulatory ratio.

"We think that despite a potential improvement, Muganbank's asset
quality will continue weigh on its credit profile. At year-end
2018, the bank's stage 3 loans represented 37% of its loan
portfolio (down from 40% a year ago), versus about 20%-22% for the
system average. We expect that the bank's asset quality will
improve thanks to the system-wide government program launched
earlier this year, with stage 3 loans falling to about 26% by
year-end 2019. Nevertheless, Muganbank's stock of problem assets
will continue exceeding that of its peers. We expect that the
bank's credit losses will be stable but elevated, with a cost of
risk of 2.2%-2.3% in 2019-2020, as the bank will continue to create
provisions for its problem assets.

"In our view, Muganbank is not dependent on favorable business,
financial, and economic conditions to meet its financial
obligations, and we do not foresee a default over the next 12
months. This reflects Muganbank's sufficient liquidity and
regulatory capital buffer, stable credit losses, and improving
economic conditions in Azerbaijan.

"The stable outlook on Muganbank reflects our view that Muganbank's
credit profile will remain relatively unchanged over the next 12
months, supported by its acceptable liquidity buffer, curbed credit
losses, and stabilizing economic risks in Azerbaijan's banking
sector.

"We could lower ratings in the next 12 months if the volatility of
customer funds increases, weighing on Muganbank's liquidity
position, or if the bank's asset quality begins to deteriorate,
with nonperforming assets and credit losses materially exceeding
the system averages. A negative rating action may also follow
aggressive growth that is not supported by capital injections from
the shareholder, thereby putting pressure on the bank's capital
regulatory ratios."

A positive rating action is highly unlikely in the next 12 months.




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D E N M A R K
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STARK GROUP: S&P Alters Outlook to Negative on SGBDD Acquisition
----------------------------------------------------------------
S&P Global Ratings related that Danish Stark Group announced on May
20, 2019 that it would acquire Saint-Gobain Building Distribution
Deutschland (SGBDD). Stark Group is issuing a EUR300 million term
loan B as part of the acquisition, and is increasing the size of
its revolving credit facilities (RCF) to EUR150 million. The
transaction will dilute Stark Group's operating margins and
increase its financial leverage.

S&P Global Ratings revised its outlook on Stark Group's
intermediate parent company, LSF10 Wolverine Investment SCA, to
negative from stable and affirmed its 'B' rating.

Stark Group announced it would take over the German building
material distribution business of Compagnie de Saint-Gobain
(BBB/Stable/A-2) for about EUR231 million cash enterprise value.
The SGBDD sale is part of Saint-Gobain's EUR3 billion divestment
program. SGBDD is a building material distributor across Germany,
with a network of 220 branches. It provides heavy building
materials, timber, joinery, tiles, sewage equipment, etc., to small
and medium enterprises primarily in the renovation market. The
business consists of several brands, including Raab Karcher. SGBDD
reported EUR2 billion of net revenue and EUR48 million of
last-12-months adjusted EBITDA on April 30, 2019.

S&P said, "The outlook revision reflects our view that Stark
Group's profitability profile could weaken as a result of the
acquisition, and the more fragmented and competitive nature of the
German building material distribution market relative to Stark
Group's existing markets. However, we also recognize the improved
geographic diversity the acquisition brings.

"We note SGBDD's below-average profitability, with a reported
EBITDA margin of around 2.5% before the impact of International
Financial Reporting Standard 16. Additionally, we understand that
over recent years, profitability has been in line with the 2.5%
level. Pro forma the acquisition, Stark Group will report an EBITDA
margin of less than 4%. The group aims to rapidly improve
profitability through sourcing and cost initiatives, rally
underperforming branches, and seize synergies. However, we believe
that it could take some time to realize the benefits, given the
structure of the local market.

"Positively, we note the good performance of Stark Group in the
Nordic countries over the recent quarters. For the first nine
months of fiscal year 2019 (ending July 31, 2019), the company
reported more than 5% sales growth and improved margins, boosted by
rationalizing its footprint, through strategic initiatives, and
thanks to milder weather conditions than last year.

"The capital structure remains highly leveraged in our view. The
contemplated EUR300 million term loan B will fund the acquisition,
repay part of the existing notes, and pay transaction fees. Pro
forma the acquisition, we estimate adjusted debt to EBITDA will be
about 6x. We note that credit metrics are quite sensitive to small
changes in adjusted EBITDA margins. Our credit metrics also assume
that the RCF is undrawn at closing of the transaction, although the
total amount of the RCF will be upsized to EUR150 million. We
believe that the group could use its RCF to fund seasonal working
capital needs during the year, estimated at around EUR100 million
intra-year peak-to-trough for the combined group (compared with
estimated EUR135 million intra-year peak-to-trough for the Nordic
business alone). We also believe that free operating cash flow
(FOCF) for 2019-2020 could be affected by restructuring costs
linked to the transaction.

"In addition, our financial risk profile continues to reflect our
view of the group's private-equity ownership and potentially
aggressive strategy in using debt and debt-like instruments to
maximize shareholder returns during the investment horizon. The
capital structure includes a EUR100 million payment-in-kind toggle
note, which we consider as debt under our noncommon equity criteria
because it is held by a third party. For this reason, we include
this instrument in our adjusted debt calculation. Our debt
adjustments also include about EUR250 million of operating leases
(around EUR175 million at the SGBDD level), EUR125 million of
pension deficits, and about EUR30 million of rolled over debt.

"The negative outlook reflects our view that the combined group
could display a weaker profitability profile and S&P Global Ratings
adjusted-debt to EBITDA close to 6x following the transaction.

"We could lower the rating if Stark Group shows difficulties
integrating SGBDD and fails to improve the operating margins of the
combined group, such that FOCF is limited or negative and debt to
EBITDA is above 6x with little evidence or prospects of a swift
recovery.

"We could revise the outlook to stable if Stark Group successfully
integrates SGBDD without any major setbacks and if the group is
able to gradually improve its profitability to the level it
reported prior to the acquisition. Under that scenario, Stark Group
would post comfortable FOCF and debt to EBITDA well below 6x."

LSF10 Wolverine Investments SCA is the intermediate parent company
of Stark Group and is the debt-issuing entity. In 2018, private
equity firm Lone Star acquired Stark Group from Ferguson plc, and
refinanced its debt.




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F R A N C E
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LOUVRE BIDCO: S&P Affirms 'BB-' ICR Amid Acquisition of Sistemia
----------------------------------------------------------------
S&P Global Ratings said that it affirmed its 'BB-' long-term issuer
credit rating on Louvre Bidco, the non-operating holding company of
MCS & DSO (the Group), and its senior secured notes. The outlook is
stable.

On June 11, 2019, the Group agreed to acquire Italian debt servicer
Sistemia.

The acquisition will be entirely debt financed via a EUR55 million
senior secured tap issuance at the Louvre Bidco level, and a EUR25
million loan issued by Sistemia. As a result, the Group's gross
debt to EBITDA will increase to an estimated 4.4x from 4.0x as of
end-March 2019, including the full year effect of recent
acquisitions and about EUR5 million of expected synergies from the
DSO acquisition in October 2018. The affirmation reflects S&P's
view that, despite this slight re-leveraging, gross debt to EBITDA
remains commensurate with the current rating.

S&P said, "The Group's gross debt to EBITDA at end-2018 was an
estimated 4.2x, but this does not reflect its large amount of
cash--EUR94 million (excluding restricted cash) at end 2018
following low portfolio purchases--which we expect the group will
use to purchase cash-flow-generating assets over time. Renewed
dynamism in portfolio purchases in first-quarter 2019 (EUR19
million) supports this view. We also note that the Group has
deleveraging power, which it derives from operating in the still
relatively protected French market that is, however, subject to
spikes in competition. In this respect, we note that the Group has
the highest collections-to-book-value ratio of purchased debt in
our peer group of rated European distressed-debt purchasers.

"The affirmation also takes into account our view of the Group's
strengthened business risk profile thanks to the acquisition of
DSO, Serfin in December 2018, and now Sistemia, which have
rebalanced the business and cash flows toward debt servicing. While
this acquisition marks the Group's expansion into Italy, a country
with higher economic risk, the cash flow profiles of debt servicers
are typically more stable than those of debt collectors.

"Sistemia will also add geographical diversity to the Group which
has so far operated exclusively in France. That said, considering
Sistemia's loan due diligence capabilities, we cannot exclude
future acquisitions in the area of Italian distressed debt.

"The stable outlook on Louvre Bidco reflects our view that the
Group's credit ratios will remain relatively conservative for its
ownership profile over the next 12 months, including gross debt to
EBITDA at the lower end of the 4.0x-5.0x range."

It further reflects our expectation of the successful integration
of recently acquired entities, including DSO, a strong collection
performance, continued access to the French distressed debt market
while maintaining investment discipline, and dynamic servicing
revenue growth in France and Italy.

S&P could lower its rating on Louvre Bidco in the next 12 months
if:

  -- The integration of recently acquired entities in Italy (Serfin
and Sistemia) leads to unexpected operational and financial
challenges;

  -- The Group's expansion leads to a more volatile cash flow
profile;

  -- Leverage increases, such that gross debt to EBITDA is
sustainably above 4.5x, or funds from operations (FFO) to gross
debt is at the lower end of the 12%-20% range; and

  -- Growth or margins meaningfully deteriorate, potentially
because of prolonged adverse pricing developments in the French
distressed debt market.

S&P considers a positive rating action as unlikely in the next 12
months. Beyond this 12 months horizon, it could consider an upgrade
if deleveraging exceeds our expectation, leading to gross debt to
EBITDA sustainably below 3.0x and FFO to gross debt above 30%.




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G E R M A N Y
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SILVER ARROW: S&P Assigns Prelim. 'BB+' Rating on Class D Notes
---------------------------------------------------------------
S&P Global Ratings has assigned its preliminary credit ratings to
Silver Arrow S.A., Compartment 10's asset-backed floating-rate
class A, B(dfrd), C(dfrd), and D(dfrd) notes. At closing, Silver
Arrow, Compartment 10 will also issue unrated class Z notes.

This will be Mercedes-Benz Bank's 10th German publicly-rated
asset-backed securities (ABS) transaction and the fourth that S&P
has rated. The underlying collateral comprises German loan
receivables for cars, vans, and trucks. Mercedes-Benz Bank AG
originated and granted the loans to its private and commercial
retail customers. According to the preliminary pool, 75.1% of the
current principal balance on contracts amortize with a final
balloon payment.

A combination of excess spread, subordination, and the liquidity
reserve provides credit enhancement. Commingling and set-off risks
will be partially mitigated through separate reserves. S&P
accounted for the uncovered exposure in our cash flow model.

S&P said, "Our preliminary ratings address timely payment of
interest and ultimate payment of principal on the class A notes and
ultimate payment of interest and principal on the class B(dfrd),
C(dfrd), and D(dfrd) notes. Interest due on the class B(dfrd),
C(dfrd), and D(drfd) notes is deferrable if available funds are
insufficient to pay timely interest. Furthermore, there is no
compensation mechanism that would accrue interest on deferred
interest. As soon as any mezzanine note becomes the most senior,
interest payments will be timely, and any accrued interest will be
paid in full on the first payment date. Under these circumstances,
when the class B(dfrd), C(dfrd), and D(dfrd) notes are the
most-senior notes outstanding, our preliminary rating addresses
timely payment of interest and ultimate payment of principal.

"Our preliminary ratings in this transaction are not constrained by
our structured finance ratings above the sovereign criteria. We
expect the final documentation and the presented remedy provisions
at closing to adequately mitigate counterparty risk in line with
our counterparty criteria. We also expect that the final
documentation will adequately address any operational risk in line
with our operational risk criteria."

  Ratings List
  
  Silver Arrow S.A., Compartment 10

  Class  Prelim. rating Prelim. amount
                                 (mil. EUR)
  A         AAA (sf)       TBD
  B(dfrd) A (sf)               TBD
  C(dfrd) BBB (sf)       TBD
  D(dfrd) BB+ (sf)       TBD
  Z          NR                    TBD

  NR--Not rated.
  TBD--To be determined.
  dfrd--Deferrable.




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G R E E C E
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ESTIA MORTGAGE: S&P Affirms CCC Rating on Class C Notes
-------------------------------------------------------
S&P Global Ratings raised to 'B (sf)' from 'B- (sf)' its credit
rating on Estia Mortgage Finance PLC's class B notes. At the same
time, S&P affirmed its ratings on the class A and C notes.

S&P said, "Upon revising our structured finance sovereign risk
criteria, we placed our 'BBB- (sf)' rating on the class A notes
under criteria observation. Following our review of the
transaction's performance and the application of our relevant
criteria, our rating on the class A notes is no longer under
criteria observation.

"The rating actions follow the application of our revised
structured finance sovereign risk criteria. They also reflect our
credit and cash flow analysis of the most recent transaction
information as of the April 2019 interest payment date (IPD) and
the application of our revised counterparty criteria.

"Our rating actions also consider Greece's steadily improving
financial and economic conditions, which we reflected in our
affirmation of the sovereign, mantaining our positive outlook. We
forecast that financial and economic conditions will improve, with
real GDP growth increasing to 2.3% in 2019 and 2.7% in 2020, from
1.9% in 2018. We expect unemployment to decrease to 18.0% in 2019
and 17.2% in 2020, from 19.3% in 2018.

"In performing the credit analysis on this pool, we used the
methodology and assumptions for Spanish residential mortgage-backed
securities (RMBS) as stated in our European residential loans
criteria, but with some adjustments."

The foreclosure frequencies and loss severities for the archetypal
Greece residential loan pool, assuming benign starting conditions,
are the following:

  Foreclosure Frequencies And Loss Severities For Archetypal  
  Greece Residential Loan Pool
  Rating Foreclosure frequency (%) Loss severity (%)
  AAA    18.00                    100.00
  AA     12.00                        100.00
  A       9.00                        97.41
  BBB    6.60                            92.43
  BB     4.20                          88.78
  B      2.50                       85.23

S&P said, "In our loss severity analysis, we have assumed no over-
or undervaluation, and a current loan-to-value (LTV) ratio equal to
the archetypal original LTV ratio. Our analysis also includes the
negative carry resulting from interest due on the rated liabilities
during the foreclosure period."

In S&P's view, Greece's economic environment is not benign and is
still recovering from the recent severe crisis. Therefore, S&P has
increased its foreclosure assumptions as follows to account for the
current economic condition:

Foreclosure Frequencies And Loss Severities To Account For Current
Economic Conditions

  Rating Foreclosure frequency (%) Loss severity (%)
  AAA    30.00                       100.00
  AA     21.00                           100.00
  A             16.00                       97.41
  BBB        13.00                           92.43
  BB             9.00                         88.78
  B              7.50                    85.23

S&P said, "We have also applied a 1.10x multiple for geographic
concentration if it exceeds the following regional limits: Eastern
Macedonia and Thrace 11%, Central Macedonia 35%, Western Macedonia
5%, Thessaly 13%, Epirus 6%, Ionian Islands 4%, Western Greece 13%,
Central Greece 10%, Peloponnese 11%, Attica 60%, North Aegean 4%,
South Aegean 6%, and Crete 12%."

S&P has also applied a 2.5x adjustment for loans to non-Greek
citizens. For loan seasoning, S&P has applied the following
adjustment factors:

-- 0.75x for loans with a seasoning of five to six years;
-- 0.70x for loans with a seasoning of six to seven years;
-- 0.65x for loans with a seasoning of seven to eight years;
-- 0.60x for loans with a seasoning of eight to nine years;
-- 0.55x for loans with a seasoning of nine and 10 years; and
-- 0.50x for loans with a seasoning of over 10 years.

S&P adjusted for jumbo valuations by applying a threshold of
EUR315,500.

In S&P's analysis, it has used the same cash-flow assumptions as
defined for all jurisdictions in our European residential loans
criteria. S&P applied cash flow assumptions to prepayment rate
stresses and servicing fees as follows:

-- Prepayment stress during recession (per year): 1%
-- High prepayment stress pre- and post-recession (per year): 24%
-- Low prepayment stress pre- and post-recession (per year): 1%
-- Stressed servicing fee (yearly): the higher of 2x contractual
rate and 50 basis points.
-- S&P has assumed a foreclosure period of 84 months.

Since S&P's previous review, the available credit enhancement for
the class A, B, and C notes has increased to 44.7%, 18.1%, and
4.9%, from 39.5%, 16.0%, and 4.3%, respectively, due to the
portfolio's amortization and the sequential payment structure.

The transaction also has a cash reserve of about EUR4.19 million,
which is at its target level and cannot amortize as long as the
cumulative net default ratio exceeds 4.0% (currently at 4.1%). It
provides both liquidity support and credit enhancement, as it can
be used to cover interest shortfalls and defaults.

Arrears in the outstanding portfolio (excluding defaults) have been
almost stable. They have slightly increased to 6.0% as of March
2019 from 5.4% in March 2018, but are still far below the peak of
19.0% in September 2015. S&P has also added into its analysis an
arrears projection of 9.7%, which factors the loans that were
subject to a restructuring arrangement and the repurchased late
arrears loans. Severe delinquencies of more than 90 days are at
0.7%, slightly up from 0.5% as of March 2018, but still far below
the peak of 8.6% in September 2015. The overall decrease in total
arrears that started in 2016 reflects Greece's improving economic
and financial conditions and the servicer's (Piraeus Bank S.A.)
repurchasing and subsequent replacing of loans in late arrears.

Some of the loans (24.1% of the current pool balance) have a
maturity beyond the notes' legal maturity (April 2040). Therefore,
in our cash flow analysis, S&P has not given credit to any
installments due or recoveries collected on these loans after the
notes' legal maturity.

The cumulative net default ratio has been almost stable at 4.1%
since the beginning of 2015, as there have been no new defaults
since then. It has slightly decreased over time as new recoveries
were collected. If it falls below 4%, the cash reserve shall
amortize to its floor of EUR3.75 million from the current balance
of EUR4.19 million and the class A, B, and C notes shall amortize
pro rata. S&P tested a sensitivity run in its cash flows assuming a
cumulative net default ratio of just below 4% and we considered the
results of this sensitivity in its analysis.

In March 2016, the servicer repurchased almost all of the defaulted
loans for about EUR30 million. Therefore, the current level of
foreclosure is about 0.7% of the outstanding portfolio.

Prepayment levels are low and have been almost stable at 1%-3%
since 2015.

S&P said, "We have analyzed the credit quality of the assets in
this transaction by conducting a loan-level analysis of the
mortgage pool. For each loan in the pool, our analysis estimated
the foreclosure frequency and the loss severity and, by multiplying
the foreclosure frequency by the loss severity, the potential loss
associated with each loan. To quantify the potential losses
associated with the entire pool, we calculated a weighted-average
foreclosure frequency (WAFF) and a weighted-average loss severity
(WALS) at each rating level. The product of these two variables
estimates the required loss protection, in the absence of any
additional factors. We assume that the probability of foreclosure
is a function of both borrower and loan characteristics, and will
become more likely (and the realized loss on a loan more severe) as
the economic environment deteriorates."

After applying S&P's relevant criteria to this transaction,
assuming current conditions, our WAFF and WALS levels are as
follows:

  WAFF And WALS Levels
  Rating level WAFF (%) WALS (%)
  AAA           38.63    22.80
  AA            30.08    20.71
  A             22.40    16.73
  BBB          18.89     14.74
  BB           14.09     13.40
  B             11.53     12.20

In June 2010, the Greek parliament introduced a personal bankruptcy
process, which excluded the primary residence of the borrowers from
liquidation if the objective value was below EUR300,000. From
January 2016, further conditions were introduced to apply for the
exclusion of the primary residence from foreclosure for borrowers
who meet certain specific conditions relating to the household's
monthly expenses compared with the borrower's salary, and the
objective value of the house, depending on the family composition
and if borrowers are cooperative with the mortgage lender.

S&P said, "In our previous review we had included a sensitivity run
in our cash flow analysis by applying a 100% WALS assumption, since
we had not received enough information to assess how many borrowers
met those conditions.

"This time we were informed that approximately 60% of the bank's
portfolio applied for protection of main residency and about 45% of
these applications are expected to be accepted based on historical
data, i.e., about 27% of the portfolio is expected to be covered by
the old protection scheme. Based on this new information, we now
propose to reconsider our sensitivity run and assume that about30%
of the portfolio is protected from foreclosure. Therefore, the WALS
will be 100% for 30% of the pool, while for the remaining 70% of
the pool, we will use the WALS derived from our credit
calculation." After this adjustment, S&P's WAFF and WALS levels are
as follows:

  WAFF And WALS Levels With Adjustment
  Rating level WAFF (%) WALS (%)
  AAA        38.63    45.96
  AA           30.08    44.50
  A           22.40    41.71
  BBB           18.89    40.32
  BB           14.09    39.38
  B             11.53    38.54

A new law framework for the protection of primary residence was
introduced in March 2019. It is expected to have a positive impact
on the recovery amounts and timing for the bank, because it sets
stricter eligibility criteria for the protection of primary
residence and increases the controls.

It is too early to quantify the positive impact of this new law
framework and therefore our recovery assumptions in the sensitivity
run are based on the impact of the old framework. S&P may
reconsider its recovery assumptions once we receive information
from the bank.

S&P said, "Under our previous structured finance ratings above the
sovereign criteria, we could not assign the two additional notches
of uplift to the ratings in this transaction. Therefore, the
maximum rating uplift from the sovereign rating was limited at four
notches, as not all of the conditions in paragraph 48 of our
criteria were met. Under our revised structured finance sovereign
risk criteria, the maximum differential between the rating on the
security and the rating on the sovereign depends on the asset
sensitivity to country risk and the sovereign rating. 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. We typically use asset-class specific assumptions from
our standard 'A' run to replicate the impact of the sovereign
default scenario.

"Even if we considered the sensitivity for this transaction to be
low under our updated criteria, our analytical judgment of the
relative creditworthiness and portfolio led us to limit the uplift
to only four notches according to paragraph 23 of the criteria.
Greece is still recovering from a very severe economic and
financial recession and this might increase the volatility in the
performance of the underlying assets. Therefore, we classified the
assets' sensitivity to a sovereign default scenario as moderate
rather than low. Consequently, the application of our updated
ratings above the sovereign criteria still caps our ratings on the
notes in this transaction at four notches above our long-term
foreign currency rating on Greece (B+/Positive/B). Hence, our
criteria still cap our ratings in this transaction at 'BBB- (sf)'.

"Taking into account the results of our credit and cash flow
analysis, and the application of our revised counterparty criteria
and our ratings above the sovereign criteria, we have affirmed our
'BBB- (sf)' rating on the class A notes."

The transaction has an interest payment deferral mechanism for the
class B notes to defer interest payments on this class of notes
after principal payments on the class A notes. Similarly, this
mechanism applies to the class C notes to defer interest payments
until principal payments have been made on the class A and B notes.
This mechanism applies if the net cumulative default ratio exceeds
9.2% for the class B notes, or 5.8% for the class C notes.

S&P said, "Interest on the class B notes is not deferred in our
stressed cash flows at rating levels lower than 'AAA'. The class C
notes' interest deferral mechanism is breached in our rating
scenarios at the 'BB (sf)' rating level or above.

"The class B notes have sufficient credit enhancement to withstand
our stresses at the 'B (sf)' rating level. Taking into account the
results of our credit and cash flow analysis, we have raised to 'B
(sf)' from 'B- (sf)' our rating on this class of notes.

"The class C notes are still vulnerable and are dependent upon
favorable economic conditions to repay timely interest and
principal at maturity. Taking into account the results of our
credit and cash flow analysis and the application of our criteria
for assigning 'CCC' ratings, we have affirmed our 'CCC (sf)' rating
on this class of notes."

Estia Mortgage Finance is a Greek RMBS transaction backed by Greek
mortgage loans, which Piraeus Bank originated.

  Ratings List
  
  Estia Mortgage Finance PLC

  Class Rating to Rating from
  A    BBB- (sf) BBB- (sf)
  B    B (sf)    B- (sf)
  C    CCC (sf) CCC (sf)




=============
I R E L A N D
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VOYA EURO II: Fitch Assigns 'B-sf' Rating on Class F Debt
---------------------------------------------------------
Fitch Ratings has assigned Voya Euro CLO II DAC final ratings.

The transaction is a cash flow collateralised loan obligation
(CLO). Net proceeds from the issuance of the notes are being used
to purchase a portfolio of mostly senior secured leveraged loans
and bonds with a target par of EUR400 million. The portfolio is
managed by Voya Alternative Asset Management LLC. The CLO envisages
a 4.5-year reinvestment period and an 8.5-year weighted average
life (WAL).

KEY RATING DRIVERS

'B' Portfolio Credit Quality: Fitch places the average credit
quality of obligors in the 'B' category. The weighted average
rating factor (WARF) of the identified portfolio calculated by
Fitch is 32.7

High Recovery Expectations: At least 90% of the portfolio comprises
senior secured obligations. Recovery prospects for these assets are
typically more favourable than for second-lien, unsecured and
mezzanine assets. The weighted average recovery rating (WARR) of
the identified portfolio is 69.3%.

Diversified Asset Portfolio: The transaction has four Fitch test
matrices corresponding to two top 10 obligors concentration limits
at 17% and 26.5% and two maximum fixed-rate asset limits at 0% and
5%. The manager can interpolate within and between these matrices.
The transaction also includes various concentration limits,
including the maximum exposure to the three largest (Fitch-defined)
industries in the portfolio at 40% and top ten obligor
concentration. These covenants ensure that the asset portfolio will
not be exposed to excessive concentration.

Adverse Selection and Portfolio Management: The transaction
features a 4.5 year reinvestment period and includes reinvestment
criteria similar to other European transactions. Fitch's analysis
is based on a stressed-case portfolio with the aim of testing the
robustness of the transaction structure against its covenants and
portfolio guidelines.

Cash Flow Analysis: Fitch used a customised proprietary cash flow
model to replicate the principal and interest waterfalls and the
various structural features of the transaction, and to assess their
effectiveness, including the structural protection provided by
excess spread diverted through the par value and interest coverage
tests.

Recoveries of Secured Senior Obligations: For the purpose of
Fitch's recovery rate calculation, in case no recovery estimate is
assigned, secured senior loans will be assumed to have a strong
recovery. For secured senior bonds, recovery will be assumed at
'RR3'. The different treatment in regards to recovery reflects
historically lower recoveries observed for bonds and that revolving
credit facilities (RCFs) typically rank pari passu with loans but
senior to bonds. The transaction features a RCF limit of 15% to be
considered when categorising the loan or bond as senior secured.

RATING SENSITIVITIES

A 25% default multiplier applied to the portfolio's mean default
rate, and with this increase added to all rating default levels,
would lead to a downgrade of up to two notches for the rated notes.
A 25% reduction in recovery rates would lead to a downgrade of up
to four notches for the rated notes.

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

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

DATA ADEQUACY

The majority of the underlying assets have ratings or credit
opinions from Fitch and/or other Nationally Recognised Statistical
Rating Organisations and/or European Securities and Markets
Authority-registered rating agencies. Fitch has relied on the
practices of the relevant groups within Fitch and/or other rating
agencies to assess the asset portfolio information.

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

Voya Euro CLO II DAC
   
Class A;   LT AAAsf  New Rating
Class B-1; LT AAsf   New Rating
Class B-2; LT AAsf   New Rating   
Class C;   LT Asf    New Rating
Class D;   LT BBB-sf New Rating   
Class E;   LT BB-sf  New Rating   
Class F;   LT B-sf   New Rating   
Class M-1; LT NRsf   New Rating   
Class X;   LT AAAsf  New Rating


VOYA EURO II: Moody's Gives B3 Rating on EUR9.1MM Class F Notes
---------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to notes issued by Voya Euro CLO II
Designated Activity Company:

EUR2,250,000 Class X Senior Secured Floating Rate Notes due 2032,
Definitive Rating Assigned Aaa (sf)

EUR248,000,000 Class A Senior Secured Floating Rate Notes due 2032,
Definitive Rating Assigned Aaa (sf)

EUR28,275,000 Class B-1 Senior Secured Floating Rate Notes due
2032, Definitive Rating Assigned Aa2 (sf)

EUR10,000,000 Class B-2 Senior Secured Fixed Rate Notes due 2032,
Definitive Rating Assigned Aa2 (sf)

EUR26,300,000 Class C Senior Secured Deferrable Floating Rate Notes
due 2032, Definitive Rating Assigned A2 (sf)

EUR22,850,000 Class D Senior Secured Deferrable Floating Rate Notes
due 2032, Definitive Rating Assigned Baa3 (sf)

EUR24,000,000 Class E Senior Secured Deferrable Floating Rate Notes
due 2032, Definitive Rating Assigned Ba3 (sf)

EUR9,150,000 Class F Senior Secured Deferrable Floating Rate Notes
due 2032, Definitive Rating Assigned B3 (sf)

RATINGS RATIONALE

The rationale for the ratings is based on a consideration of the
risks associated with the CLO's portfolio and structure as
described in its methodology.

The Issuer is a managed cash flow CLO. At least 90% of the
portfolio must consist of senior secured obligations and up to 10%
of the portfolio may consist of senior unsecured obligations,
second-lien loans, mezzanine obligations and high yield bonds. The
portfolio is expected to be 90% ramped as of the closing date and
to comprise of predominantly corporate loans to obligors domiciled
in Western Europe. The remainder of the portfolio will be acquired
during the six month ramp-up period in compliance with the
portfolio guidelines.

Voya Alternative Asset Management LLC ("VAAM") will manage the CLO.
It will direct the selection, acquisition and disposition of
collateral on behalf of the Issuer and may engage in trading
activity, including discretionary trading, during the transaction's
four and half-year reinvestment period. Thereafter, subject to
certain restrictions, purchases are permitted using principal
proceeds from unscheduled principal payments and proceeds from
sales of credit impaired obligations or credit improved
obligations.

Interest and principal amortisation amounts due to the Class X
Notes are paid pro rata with payments to the Class A Notes. The
Class X Notes amortise by 12.5% or EUR281,250 over the first 8
payment dates starting on the 2nd payment date.

In addition to the eight classes of notes rated by Moody's, the
Issuer will issue EUR33,724,000 of Class M-1 Notes and EUR626,000
of Class M-2 Notes which will not be rated. The Class M Notes
accrue interest in an amount equivalent to a certain proportion of
the subordinated management fees and its notes' payment is pari
passu with the payment of the subordinated management fee.

The transaction incorporates interest and par coverage tests which,
if triggered, divert interest and principal proceeds to pay down
the notes in order of seniority.

Methodology underlying the rating action:

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

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

The rated notes' performance is subject to uncertainty. The notes'
performance is sensitive to the performance of the underlying
portfolio, which in turn depends on economic and credit conditions
that may change. The collateral manager's investment decisions and
management of the transaction will also affect the notes'
performance.

Moody's modeled the transaction using a cash flow model based on
the Binomial Expansion Technique, as described in Section 2.3 of
the "Moody's Global Approach to Rating Collateralized Loan
Obligations" rating methodology published in March 2019.

Moody's used the following base-case modeling assumptions:

Par Amount: EUR 400,000,000

Diversity Score: 43

Weighted Average Rating Factor (WARF): 2925

Weighted Average Spread (WAS): 3.65%

Weighted Average Coupon (WAC): 5.5%

Weighted Average Recovery Rate (WARR): 45%

Weighted Average Life (WAL): 8.5 years

Moody's has addressed the potential exposure to obligors domiciled
in countries with local currency ceiling (LCC) of A1 or below. As
per the portfolio constraints and eligibility criteria, exposures
to countries with LCC of A1 to A3 cannot exceed 10% and obligors
cannot be domiciled in countries with LCC below A3.




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

DIVERSEY: S&P Lowers ICR to 'B-' on Weak Credit Measures
--------------------------------------------------------
S&P Global Ratings, on June 20, 2019, lowered its issuer credit
rating on Amsterdam-based cleaning chemicals and service provider
Diamond (BC) B.V. (Diversey) to 'B-' from 'B'.

S&P also lowered the issue-level ratings on Diversey's senior
secured and unsecured debt to 'B-' from 'B' to reflect the lower
issuer credit rating. The recovery ratings on secured and unsecured
debt remain '3' and '4' respectively.

S&P said, "The downgrade to 'B-' reflects our view that credit
measures have weakened to levels more appropriate for the lower
rating. Credit measures have continued to weaken in recent quarters
due to higher than expected costs related to Diversey's separation
from former parent company Sealed Air, and costs related to
establishing Diversey as a standalone business. Specifically, at
the end of March 2019, Debt to EBITDA exceeded 10x based on our
adjusted credit metrics. In addition, the company has undertaken
significant expenditures related to the preparation of dosing and
dispensing equipment for large new customers that are expected to
ramp up throughout 2019 and 2020. Each of these factors has
consumed cash, leading to negative free cash flow in 2018. We
expect the same factors to lead to negative free cash flow in 2019
as well, before turning positive in 2020 as spending on these
projects wind down. The negative outlook reflects uncertainty
regarding the magnitude and timing of additional expenditure
required to complete the transition process. We do not expect
significant debt reduction in 2019 as the company has prioritized
cash toward transition initiatives. Those initiatives have included
restructuring, IT transformation projects such as an enterprise
resource planning (ERP) implementation and other back office system
upgrades, and rebranding. Our base case assumes that although
credit measures will be stretched in 2019, continued growth and the
completion of transition initiatives will lead to improved credit
measures in 2020 and thereafter. While credit measures will be weak
in 2019 at around 10x debt to EBITDA, we expect weighted average
debt to EBITDA of between 8x and 9x on a sustainable basis."

The negative outlook on Diamond reflects the recent weakening of
credit measures and uncertainty around the timing and magnitude of
remaining expenditures required to complete the company's
transition to a standlone entity following its separation from
Sealed Air. S&P said, "We view further delays or cost overruns of
these transition projects as a key risk factor which could limit
the company's ability to reduce debt. Our base case assumes that
transformation projects are substantially complete by the end of
2019, leading to lower expenses and improved credit measures
starting in 2020. We expect that while 2019 metrics will be
moderately weaker, debt to EBITDA will be between 8x and 9x on a
weighted average sustainable basis."

S&P said, "We could lower the ratings within the next 12 months if
Diamond's operating performance deteriorates significantly as a
result of unexpected challenges in its transformation and cost
reduction initiatives. Delays or cost overruns in transformation
efforts could lead to lower profitability than our base-case
forecast, as well as weaker credit measures. In particular, we
could lower the rating if Diamond's EBITDA margins missed our
expectations by 200 basis points (bps) , resulting in debt to
EBITDA above 10x for a longer than expected period of time. This
could also occur if EBITDA margins experience pressure due to
rising raw material costs that the company is unable to pass to
customers. We could also lower the rating if against our
expectations a large debt-funded acquisition led to increased
leverage. Lastly, we could consider a downgrade if unexpected cash
outlays or business challenges reduce the company's liquidity such
that liquidity sources fall to less than 1.2x uses and we expect
that cushion under the company's covenants becomes tight.

"We could revise our outlook to stable within the next 12 months if
the company delivers timely completion of transformation
initiatives and stronger-than-expected profitability due to
successful cost reduction initiatives. We could consider an outlook
revision if EBITDA margins exceeded our expectations by 200 bps
while our revenue expectations are exceeded, resulting in improved
credit measures that we believe will be sustained with debt to
EBITDA below 8x. We would also expect that the improved leverage is
sustainable and consistent with Diamond's financial policies and
objectives."


OCI NV: S&P Raises ICR to 'BB' on Improving Organic Growth
----------------------------------------------------------
S&P Global Ratings raised its long-term issuer credit and issue
ratings on OCI N.V. and its senior secured notes to 'BB' from 'BB-'
and revising up the recovery rating and expectations to '3' (60%)
from '4' (40%).

The upgrade is due to improvement in Netherlands-headquartered
OCI's business and financial risk. This is thanks to the completion
of large green-field projects Natgasoline and IFCo, with a
successful ramp-up of volumes, as well as the new partnership with
ADNOC. The new JV will provide OCI with larger scale, greater
diversification, substantial cost synergies, higher and more
resilient profit margins, and stronger free cash flow generation.
Pro forma group sales and adjusted EBITDA would reach above $3.8
billion and $1.2 billion, respectively, in 2018, an increase of
more than 18% and 24% before the transaction. S&P said, "We expect
adjusted FFO to debt will improve to above 20% in 2019 (above 25%
pro forma from 13.4% in 2018), supported by the gradual recovery in
the nitrogen fertilizer industry and supportive market fundamentals
for methanol. Under our forecast, FFO to debt will then further
strengthen to above 30% in 2020 through the full-year effect of the
consolidation of the new JV."

OCI's business risk benefits from the completion of construction at
Natgasoline in 2018 and continuous ramp-up of volumes at the
project and IFCo, both of which have reached full utilization. This
has removed the execution risks regarding the completion of
large-scale green-field projects and led to a significant increase
in the group's production capacity and revenue base. The full
ramp-up of IFCo and Natgasoline has resulted in an increase in
total production capacity by more than 50% from 2016 levels to a
run-rate of 14.0 million metric tons per year in 2019--including
50% capacity at Natgasoline.

OCI's profitability will benefit from the higher margins of ADNOC
Fertilizers and substantial synergies from the strategic
partnership. ADNOC Fertilizers has signed a long-term gas supply
agreement with ADNOC, which will ensure feedstock supply based on a
competitive pricing formula. Combined with cost competitive
feedstock supply at OCI MENA, the setup of the JV will reinforce
OCI's advantaged position on the global cost curve for nitrogen
fertilizers (the first quartile). The combination will create the
largest global seaborne export platform for nitrogen fertilizers
and enable the generation of substantial synergies from economies
of scale via optimization of freight and logistics costs, and
higher efficiency across the supply chain, distribution network,
and marketing. S&P expects total synergies of $60 million-$75
million to be realized over the next two years. Based on this, S&P
forecasts an increase in adjusted EBITDA margin of 31%-33% in 2019
and 35% in 2020, up from 30.3% in 2018.

The successful establishment of the new JV with ADNOC will result
in larger scale and improved diversification in productions assets
and revenue. Combining OCI MENA assets (including EFC, EBIC,
Sofert, and OFT) with ADNOC Fertilizers, the JV will become the
largest nitrogen fertilizer producer in MENA and No.3 globally
(behind CF Industries and Yara), versus No.4 before the deal,
behind Nutrien. The JV will have a combined production capacity of
5 million tons of urea (including 2.1 million tons from ADNOC
Fertilizers) and 1.5 million tons of sellable ammonia. The JV's
annual revenue will stand at $1.74 billion (nearly $600 million
from ADNOC Fertilizers) and reported EBITDA at $740 million (about
$240 million from ADNOC Fertilizers) based on 2018 pro forma
figures. OCI and ADNOC will own 58% and 42% of the JV,
respectively. ADNOC Fertilizers' operations will also provide
improved geographic diversification in terms of both revenue and
production, via its two plants located in the United Arab Emirates
and higher share of sales generated in Latin America, Asia, and the
Middle East compared with OCI.

S&P said, "We assume that OCI's swift deleveraging will continue,
due to the continuous ramp-up of volumes at new facilities and
improving capacity utilization at existing assets, combined with
supportive market fundamentals for both nitrogen fertilizers and
methanol. This should translate into strengthened free cash flow
generation in 2019, supported by reduced capital expenditure
(capex) after the completion of large green-field projects. OCI had
a record year in 2018, with revenue growth of above 44% over 2017
and adjusted EBITDA up by more than 85% to $984 million. Free
operating cash flow (FOCF) strengthened to about $400 million, up
from $63 million in 2017, and adjusted FFO to debt increased to
13.4%, up from 5.6%. However, the latter was below our previous
expectations of close to 20% due to a lower-than-expected one-off
dividend from Natgasoline's refinancing. We note that the group's
first-quarter 2019 performance was not as strong as first-quarter
2018, but this was due to seasonal fluctuations in fertilizer
demand. We expect a rebound in second-quarter 2019, as seen in the
higher shipping volumes and normalized inventory levels as of May.
For 2019, we expect a 6%-8% increase in OCI's volumes (before the
deal with ADNOC) through improving capacity utilization across most
fertilizer plants, the planned start-up of the second line at
BioMCN in the second half, and a 13% increase in methanol capacity
at OCI Beaumont. In our view, market fundamentals will remain
supportive, with moderate price increases in nitrogen fertilizers
and a broadly stable methanol price compared with 2018."

The full consolidation of the new JV will strengthen OCI's credit
metrics because ADNOC Fertilizers is debt free and generates solid
free cash flow, supported by a very high EBITDA margin (about 40%),
relatively limited maintenance capex, low interest costs, and low
effective tax rates. S&P forecasts group adjusted FFO to debt of
above 20% in 2019 (including three months of the new JV),
strengthening to above 30% in 2020. Moreover, we expect OCI to
generate significant positive discretionary cash flow--after the
pro rata distribution of free cash flows generated at the JV to
ADNOC and minority shareholders at Sofert and EBIC--of at least
$400 million in 2019 and above $500 million in 2020.

OCI's financial policy continues to focus on deleveraging. This is
illustrated by the group's clearly defined aim to use its free cash
flow to reduce gross debt and reach a leverage target of reported
net debt to EBITDA of toward 2.0x through the cycle.

S&P said, "However, we believe OCI still needs to establish a track
record of continuous improvement in profitability, reduction in
gross debt through free cash flow generation, and the realization
of synergies through the successful establishment of the new JV,
despite the strong operating performance and steep deleveraging in
2018. In addition, there is still a certain level of execution
risk, due to pending legal and regulatory approvals for launching
the JV with ADNOC. The transaction is expected to close in
third-quarter 2019.

"The stable outlook reflects our view that OCI will substantially
strengthen its operating performance and continually deleverage in
2019-2020. We anticipate that this will follow the full
consolidation of ADNOC Fertilizers under the new JV with ADNOC, as
well as higher capacity utilization in a supportive market
environment for both nitrogen fertilizers and methanol. We also
expect OCI to continue its strong free cash flow generation and use
it for deleveraging. The stable outlook factors in our expectation
that the group's FFO to debt will improve to above 20% in 2019 and
to above 30% in 2020 with the full-year effect of the consolidation
of the new JV.

"We could raise the rating if the expected improvement in operating
performance, spurred by the successful establishment of the JV with
ADNOC and realization of substantial synergies, were to materialize
in the next 12-18 months, such that adjusted FFO to debt stood
sustainably above 25%. An upgrade would also depend on the company
producing sustained and significant discretionary cash flows over
the cycle and adopting a financial policy in line with a higher
rating.

"We could lower the rating if the improvement in operating
performance and the subsequent deleveraging were below our
expectations, such that adjusted FFO to debt remained below 20%.
This could follow a failure to get the antitrust approval for the
JV with ADNOC, combined with weaker-than-expected market
conditions, or lower plant efficiency because of unexpected
operational issues. In addition, negative free cash flow,
insufficient headroom under financial covenants, or a less
supportive financial policy than we expected would also result in
downward pressure on the rating."


PRECISE MIDCO: S&P Assigns 'B' ICR Following Buyout by KKR
----------------------------------------------------------
S&P Global Ratings assigned a 'B' rating to Precise Midco B.V.,
Exact's new holding company. S&P also assigned its 'B' issue
ratings to Precise Bidco B.V.'s EUR50 million first-lien senior
secured revolving credit facility and EUR450 million first-lien
senior secured term loan.

The ratings are in line with the preliminary ratings S&P assigned
to Precise Midco and Precise Bidco on March, 25, 2019.

Private equity firm KKR recently acquired Dutch accounting and
enterprise resource planning (ERP) software provider Exact from
APAX partners. The acquisition was funded by a EUR450 million
first-lien senior secured term loan, a EUR175 million second-lien
senior secured term loan, and a combination of preferred equity
certificates and common equity.

As a result of the transaction, Exact's reported debt increased to
EUR625 million from EUR330 million at year-end 2018. S&P said, "We
therefore forecast the company's adjusted debt to EBITDA at about
9x and free operating cash flow (FOCF) to debt of 5%-7% in 2019,
compared with 5.8x and 11% in 2018. We think that these significant
debt levels and associated higher interest costs will result in
weaker credit metrics compared with those of other 'B' rated peers,
and would leave limited headroom under our thresholds for the
current ratings."

The 'B' rating reflects S&P's view that it is highly likely Exact's
high recurring revenues, solid growth prospects from cloud
solutions, and declining cash burn from its operations outside the
Netherlands will translate into solid EBITDA growth and annual
reported free cash flow of at least EUR30 million, which will
likely support good deleveraging towards 7.5x by 2020.

However, swift deleveraging would also be dependent on the
successful execution of Exact's business plan, including increasing
online customer numbers, maintaining low customer churn, and
continuing to improve operation margins.

Exact's strategy to refocus on its home market has led to
significantly improved EBITDA and cash flow. The company has scaled
back its presence in loss-making European markets through 2018
following the divestment of its American operations in 2017.
Exact's revenue increased by 14% to EUR209 million in 2018,
predominantly thanks to strong organic growth plus small bolt-on
acquisitions, with reported EBITDA increasing to about EUR57
million on a consolidated basis, compared with about EUR19 million
in 2017. This increase supported an improvement in adjusted EBTIDA
margins to about 30% in 2018, compared with about 16% in 2017. We
expect the company will expand margins further, toward 34%-36% by
2020, through operating leverage and a further reduction in losses
from its operations outside the Netherlands.

The 'B' rating is supported by good earnings visibility, because
85% of Exact's total revenues are recurring in nature, and in
particular stem from the company's cloud-based business. The
company typically bills the customer monthly or yearly in advance,
resulting in limited working capital needs. It also has very
limited capital expenditure (capex) needs. S&P said, "We expect
that, by scaling back its presence in European markets, the company
will demonstrate solid cash flow generation, consistent with the
strong performance of its previously restricted group (that
excluded the loss-making international small business and
accountancy [SB&A] division). EBITDA margins for these restricted
subsidiaries, as adjusted by Exact, steadily improved to 33.6% in
2018, from 28.5% in 2015. Additionally, we think that the company's
large and diversified customer base will continue to support its
growth in the medium term."

S&P said, "Our assessment of Exact's business profile is mainly
constrained by its small scale and limited diversification. With
EUR209 million revenue generated in 2018, the company is much
smaller than large global enterprise software providers like SAP or
Microsoft, and mid-size ERP software vendors such as
Netherlands-based competitor Unit4. We think that the company's
small size will limit its ability to spend on research and
development and product innovation, including larger upfront
outlays for the development of new products. Exact heavily relies
on its home market in the Netherlands, Belgium, and Luxembourg
(Benelux), which generated 87% of revenue in 2018. In addition,
more than half of its revenue is currently from the niche segment
of accounting software and related solutions, with a strong focus
on SB&A clients. In our view, this makes the company vulnerable to
adverse developments in its specific product and customer segments,
such as an increase in the number of small businesses going out of
business in an economic downturn.

"The negative outlook reflects our view that we could lower the
rating by one notch over the next 12 months if a
weaker-than-forecast operating performance, higher-than-anticipated
cash outflows as a result of slower growth, adverse macroeconomic
conditions, or higher costs for strategic initiatives or
restructuring measures, results in FOCF to debt falling to less
than 5%, and adjusted debt to EBITDA remaining higher than 8x
beyond 2019.

"We could revise the outlook to stable if Exact significantly
overperforms our base case for 2019, with stronger EBITDA growth
indicating prospects for more rapid leverage reduction and reported
free cash flow exceeding EUR35 million."


UNITED GROUP: S&P Affirms 'B' ICR on Tele2 Croatia Acquisition
--------------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on United
Group and its 'B' issue ratings on its existing senior secured
notes. S&P also affirmed its 'B-' issue rating on the EUR306
million payment-in-kind (PIK) notes.

S&P said, "The affirmation reflects our view that United Group's
announced acquisition of Tele2's Croatian mobile business at an EV
of EUR220 million will be broadly leverage neutral in 2019. This is
because we expect that the EUR200 million additional debt raised by
tapping the existing senior secured notes due in 2024 will be
balanced by Tele2 Croatia's EUR30 million-EUR35 million adjusted
EBITDA (based on 2018 figures), as well as our expectations for
continued organic growth both for United Group and Tele2 Croatia.
As a result, we expect that United Group's consolidated adjusted
leverage will remain at about 7.0x in 2019 (similar to 2018),
before declining to about 6.5x and below in 2020 and 2021. We also
expect interest coverage ratios to remain relatively solid at
nearly 3x.

"We expect the acquisition of Tele2 Croatia will add about 20% and
10%-15% to United Group's consolidated revenue and EBITDA,
respectively, in 2019. It will also increase the group's exposure
to a wealthier country than Serbia and Bosnia-Herzegovina. In our
view, the acquisition is supportive of the group's operational
diversity and growth prospects, but it also incorporates some
execution challenges. This is mainly because Tele2 Croatia largely
relies on national roaming agreements since it has significantly
less coverage than its competitors. As a result, its profit margins
are relatively low (EBITDA margin below about 20% in 2018), which
makes it harder for the company to market unlimited data offers to
data-heavy users. In addition, Tele2 is a mobile-only player
competing with two fixed, mobile convergent, and financially sound
operators (subsidiaries of Deutsche Telekom and Telekom Austria),
which hold 45% and 37% of the market by subscribers compared with
Tele2's 18%. Management estimates this translates to a 21% market
share by revenue. Although Tele2 has successfully expanded its
customer base and average revenue per user (ARPU) despite being a
mobile-only player, it may be disadvantaged over the longer term in
some areas if convergence gains significant traction in the market
and fixed-line players subsidize their mobile offers within a
bundle of fixed and mobile services."

That said, United Group's management is planning for margin
improvement and increased operating efficiency going forward,
including lower national roaming fees in Croatia. This includes
significant investment in expanding its coverage by increasing the
number of sites by about 50%, which would likely bring the Croatian
mobile business' margins to about 20% in 2020. Furthermore, S&P
expects steady margin increases thereafter from rising monthly ARPU
as more customers migrate to unlimited data bundles and carriage
fees from the recently acquired media assets.

S&P said, "In addition, we believe the group has a proven track
record, having successfully managed a mobile operator in Slovenia,
including in areas where it does not have fixed broadband coverage
and is effectively operating as a mobile-only provider. In 2015,
United Group acquired Slovenian mobile operator Tusmobil, which,
similarly to Tele2 Croatia, is the No. 3 mobile challenger.
Following the acquisition, United Group managed to improve
Tusmobil's market share from about 14% to about 21% and modernized
the network. It currently provides 4G coverage to 94% of the
population. That being said, we do not expect any material
near-term synergies of the acquired mobile business with United
Group's existing assets in Croatia--namely pay-TV content assets
like Nova TV and other channels, internet portals, and potentially
an over-the-top service.

"Despite strong EBITDA growth after the acquisitions in 2018-2019,
we expect United Group to continue generating negative free
operating cash flow (FOCF) due to significant capital expenditure
(capex) that we estimate at 26% of sales in 2020, compared with 26%
in 2017 and 29% in 2018. This compares with management's estimate
of just below 25% in 2020. Investments in 2018 included equipment
on customer premises, programming rights, and a new headquarters in
Slovenia. Excluding any potential spectrum costs, we assume that
capex intensity will decrease in 2019 to about 22% of sales, with
less intense network and other investments being partly offset by
investments in media content production. However, we expect a
rebound of capex to revenue in 2020 because United Group will
likely need to invest in spectrum and new mobile sites in Croatia.
As a result, we do not expect a significant improvement in FOCF
generation in 2019-2020 due to our assumption of greater interest
payments and higher capex. We therefore do not anticipate any
significantly positive FOCF before 2021.

"The stable outlook reflects our view that that United Group will
continue to benefit from strong organic revenue growth of more than
10% and successfully manage the Tele2 Croatia operations, helping
it reduce adjusted leverage to less than 6.5x by 2021. We forecast
funds from operations (FFO) cash interest coverage of 2.8x-3.0x
over 2019-2020.

"We could lower our ratings if we expect adjusted gross leverage to
remain above 7.0x from 2019, if FFO cash interest declines to less
than 2.5x, or if underperformance leads to sustained significant
negative FOCF, which is not offset by strong commercial success. We
could also lower the rating if we view liquidity as less than
adequate, for example, if the group draws a very significant amount
on its revolving credit facility (RCF).

"We are unlikely to raise the rating over the next 12-24 months
because we do not anticipate any significant and sustainable
reduction in leverage under United Group's financial sponsor
ownership. Additionally, the rating will likely remain constrained
by the group's limited FOCF generation prospects due to its
ambitious growth plans, which we anticipate will result in
continued high capex and bolt-on acquisitions."




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

DOLPHIN DRILLING: Files for Bankruptcy, Creditors Seize Assets
--------------------------------------------------------------
Terje Solsvik at Reuters reports that Norwegian oil and gas rig
operator Dolphin Drilling filed for bankruptcy on June 26, leading
creditors to seize its key assets in a restructuring that will see
the company maintain operations.

Formerly known as Fred. Olsen Energy, Dolphin Drilling ASA's annual
report shows that it had debt of just over US$1 billion at the end
of 2018 and a net loss for the year of almost US$300 million,
Reuters cites.

Once a dominant supplier of drilling rigs to oil and gas firms
exploring the North Sea, Dolphin was hit hard by a collapse in oil
prices from 2014 to 2016 as well as competition from newcomers that
drove down rig rates, Reuters discloses.

Its share price has fallen 88% over the past year and was down 6.6%
early in the June 26 session, until trading was suspended before
the bankruptcy announcement, Reuters relates.

While the old holding company will be wound down, its rig-owning
subsidiaries were restructured and will continue to offer services
to oil firms, Reuters states.  Investment funds advised by
Strategic Value Partners will be the main shareholders of the new,
reconstructed company, Reuters notes.

Lenders to Dolphin ahead of the bankruptcy included Danske Bank,
DNB, SEB and Swedbank, as well as Strategic Value Partners and its
affiliates, Reuters relays.




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

BELUGA GROUP: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
-------------------------------------------------------------
Fitch Ratings has affirmed PJSC BELUGA GROUP's Foreign-Currency
Long-Term Issuer Default Rating at 'B+'. The Outlook on the IDR is
Stable.

The rating reflects its expectations that Beluga will maintain its
leading positions in the Russian spirits industry, with expected
low single-digit revenue growth in vodka to be supplemented by
faster growth in other spirits, exports and recently acquired
retail and wine businesses. The rating headroom remains tight,
suggesting no ability to absorb share repurchases in excess of
RUB0.5 billion or M&A in near term. Fitch expects gradual reduction
of leverage from 2020 due to growing EBITDA and decreasing capex.
The rating also reflects Beluga's smaller scale and lower
profitability compared with global peers.

KEY RATING DRIVERS

Modest Spirits Market Growth: Fitch expects Beluga's own spirits
sales in Russia to grow in low-single digits in 2019-2022 as
consumer environment is likely to remain muted with continued high
demand for promo campaigns and high price sensitivity. The local
vodka market, the core segment for Beluga, may benefit from further
contraction of illegal spirits production in the country, while
consumption growth is likely to be pressured by a downtrend in
alcohol consumption and consumers shifting from vodka to other
spirits categories. Beluga is responding by expanding its portfolio
into wine, brandy and flavored spirits, in line with the shift of
consumer preference towards these categories.

Strong Market Positions Locally: Beluga maintains its leading
market positions as the largest distilled and flavoured spirits
producer and the second-largest independent alcohol importer in
Russia. The group owns a wide portfolio of leading local vodka
brands in all pricing categories. The flagship Beluga brand is
exported to more than 90 countries and is within the top-5
super-premium vodka brands globally according to ISWR (2017). In
2018 45% of Beluga brand vodka sales were for export. The group's
positions locally are enforced by a wide distribution network and
established relationships with key retail chains in the country.

Growing Diversification: Beluga's product diversification has been
gradually improving over the past five years, with vodka
contribution to alcohol revenue in Russia falling to 42% in 2018
from 73% in 2013. This results in lower dependence on a single
product category, opening opportunities to increase revenue from
faster-growing categories in Russia, such as wine and brown
spirits. Beluga has diversified both into own production of brandy
and flavored liquors (2018: 25% of alcohol revenue) as well as into
wine and spirits imports (2018: 25% each). Beluga also continues to
grow its export revenue (2018: 24% yoy; 8% of alcohol revenue).

Improved EBITDA margin: Fitch projects Beluga's EBITDAR at around
12.2%-12.7% in 2019-2020 (2018: 12.1%), which is above the average
of around 10% over 2015-17, but still low compared with the 25%-35%
reported by global spirits producers. In 2018, Beluga increased its
profitability by 150bp, on new cost-cutting initiatives, as well as
improved profitability in the food segment from exceptional low
levels in 2018. The group plans to continue to rationalise its
workforce and optimise its logistic and production capacities, with
the aim to add another 50bp to its EBITDA margin by 2020.

Wine Business Acquisition: In 2019 Beluga acquired Golubitskoe
Estate (GE), a premium winery in the South of Russia with an
expected capacity of 2.5 million bottles of wine. Fitch believes
the cost to acquire GE is not materially detrimental to the group's
financial profile, with RUB537 million (0.1x of 2019E EBITDA) to be
paid in 2019 and another nearly RUB1 billion over 2020-23. Beluga
is well-positioned to rapidly expand GE's sales using its wide
distribution network and WineLab retail chain.

Own Sales Channel: In 2018 Beluga obtained full control over
WineLab (49% stake before), a specialty alcohol retail chain in
Russia. At end-2018 WineLab had 468 stores located in the European
part of Russia (42% of stores) and Far East accounted for 13% of
Beluga's spirits sales (incl. VAT and excises). In 2018, WineLab
operated with an EBITDA margin of 8%, strong for the retail sector
and despite rapid store expansion. Nevertheless this is below the
11% margin of Beluga's core alcohol segment, and contributed to a
marginal dilution of the group's margin.

Beluga plans to maintain its rapid expansion pace over 2019-20,
increasing the total number of stores up to 800 over the period.
This would require around RUB1 billion of additional capex over the
next two years and would put temporary pressure on the group's FCF
generation.

Tight Rating Headroom: Fitch expects Beluga's leverage headroom
under the current rating to remain limited with funds from
operations (FFO) adjusted gross leverage to remain close to 4.5x in
2019 (2018: 4.9x), due to the GE acquisitions and the additional
capex to expand the WineLab chain. In 2018, leverage was also
impacted by an unexpectedly high sum spent on share buybacks
(RUB1.3 billion) to simplify the group's equity structure
(cancellation of treasury shares). Fitch understands from
management that there are no plans for further material share
repurchases in the near term, but it conservatively assumes an
additional RUB0.5 billion of share buy-backs for 2019 and none
thereafter.

DERIVATION SUMMARY

Beluga has smaller scale and narrower geographic and product
diversification than other Fitch-rated spirits producers, such as
Diageo plc (A-/Stable), Becle, S.A.B. de C.V. (BBB+/Stable), Pernod
Ricard S.A. (BBB/Positive) and Thai Beverage (BBB-/Negative). This,
together with lower profitability, weaker FFO fixed charge coverage
and free cash flow (FCF) generation, explains the large
differential in ratings compared with its global peers. This is
balanced by strong leverage metrics more comparable to medians for
a 'BB' rating category according to Fitch's Alcoholic Beverages
Rating Navigator. A one- notch difference compared with Amphora
Finance Limited (B/Stable), an Australia-based wine producer, is
explained by Amphora's significantly higher leverage and weaker
operating profitability, while the business scale is comparable.

Beluga's ratings take into consideration the higher-than-average
systemic risks associated with the Russian business and
jurisdictional environment. No Country Ceiling or parent/subsidiary
linkage aspects affected these ratings.

KEY ASSUMPTIONS

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

  - Low-to-mid single-digit revenue growth for own spirits and 14%
revenue CAGR for imported brands over 2019-22. The growth in own
brands is expected to be mainly driven by a positive price mix,
albeit with flat volumes over the period;

  - No increase in excise duties on ethanol in Russia over
2019-22;
  
  - EBITDAR margin trending towards 12.7% by 2021;

  - Capex at around RUB1.3 billion in 2019 (2.7% of revenue)
reducing to RUB0.8 billion in 2020 and RUB1.2 billion annually
thereafter;

  - RUB0.6 billion of GE acquisition to be paid in 2019 with the
remaining RUB1.1 billion over 2020-23;

  - No further M&A activity; and

  - Share buybacks not exceeding RUB500 million in 2019, and none
thereafter.

KEY RECOVERY RATING ASSUMPTIONS

  - Beluga would be considered a going-concern in bankruptcy and
that the group would be reorganised rather than liquidated.

  - A 10% administrative claim.

  - Beluga's going concern EBITDA is based on 2018 EBITDA of
RUB4,276 million discounted by 25% to reflect the potential
pressure from deterioration of the market conditions in Russia,
reliance on a single country and potential pressure on
profitability from increasing competition in the Russian spirits
market, which remains fairly fragmented. The going-concern EBITDA
estimate reflects Fitch's view of a sustainable,
post-reorganisation EBITDA level upon which Fitch bases the
valuation of the group.

  - Fitch used an EBITDA multiple of 5.0x which is in line with the
average food business's distressed multiple. Although operations
are mainly located in Russia (group D), Beluga is a market leader
in Russia with multiple champion brands split among several spirit
categories. In addition, its flagship Beluga brand is well
recognised around the world as luxury vodka.

  - Fitch has estimated that Beluga would be able to draw down
RUB3.2 billion out of its long-term committed revolving credit
facilities (RCFs) of RUB9.3 billion upon default. The lower amount
of RCFs drawn under its stress scenario are constrained by
financial covenants under most of the credit facilities, and also
because these RCFs are used largely as guarantees on excise stamp
duties to regulatory bodies. The debt waterfall also included
factoring outstanding at end-2018 discounted by 25% used for the
distressed EBITDA calculation. The discount reflects a lower level
of receivable and therefore factoring level in a stress scenario.
Fitch has treated the rouble bonds issued by the holding company as
structurally subordinated to the rest of the group's debt.

The waterfall results in a 'RR5' recovery for senior unsecured
rouble bonds. Therefore, the instrument rating is one notch below
Beluga's IDR.

RATING SENSITIVITIES

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

  - Increasing diversification towards a higher share of non-vodka
products and/or growing share of exports in its profits

  - FCF turning and remaining positive, with an EBITDAR margin of
around 15% (2018: 12.1%)

  - FFO-adjusted gross leverage below 3.5x (2018: 4.9x) and FFO
fixed charge coverage above 2x (2018: 1.6x) on a sustained basis

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

  - Deterioration in FFO-adjusted gross leverage to above 4.5x and
of FFO fixed charge coverage ratio below 1.5x for a sustained
period

  - Persistently negative FCF and weak liquidity resulting from
expansion-led capex and working capital investments not mitigated
by asset disposals, or due to a more aggressive financial policy

  - Contraction of EBITDAR margin to below 10% for a sustained
period

  - Regulatory changes or rebound in illegal production in the
Russian spirits sector that may put more pressure on the group's
sales and profitability

LIQUIDITY AND DEBT STRUCTURE

Adequate Liquidity: As of December 31, 2018, Beluga's liquidity
position was adequate with readily available cash of RUB1.1 billion
and RUB9.3 billion of long-term committed RCFs. As most of these
RCFs have financial covenants, Fitch calculates that under current
EBITDA level Beluga will be able to draw down only RUB5.2 billion
of RCF without breaching these covenants. This is still sufficient
to cover short- term debt of RUB4.2 billion (RUB0.5 billion
excluding outstanding factoring) and negative FCF of RUB0.3 billion
projected for 2019 (Fitch's estimate).


NATIXIS BANK: Moody's Withdraws Ba2 Ratings for Business Reasons
----------------------------------------------------------------
Moody's Investors Service has withdrawn the following ratings of
Natixis Bank JSC:

  - Long-term bank deposit ratings of Ba2

  - Short-term bank deposit ratings of Not Prime

  - Long-term Counterparty Risk Ratings of Ba1

  - Short-term Counterparty Risk Ratings of Not Prime

  - Long-term Counterparty Risk Assessment of Ba1(cr)

  - Short-term Counterparty Risk Assessment of Not Prime(cr)

  - Baseline credit assessment (BCA) of ba3, and

  - Adjusted BCA of ba2

At the time of the withdrawal, the bank's long-term deposit ratings
carried a stable outlook.

RATINGS RATIONALE

Moody's has decided to withdraw the ratings for its own business
reasons.

Natixis Bank JSC is a 100% subsidiary of France's Natixis
(long-term bank deposits A1 stable, BCA baa3) in Russia. It is a
small financial institution, ranking 143rd by total assets among
Russian banks as of 1 April 2019. As of year-end 2018, the bank
reported total IFRS assets of RUB23 billion and total equity of
RUB2.4 billion. The bank's net IFRS loss for the year 2018 amounted
to RUB43 million.


STATE TRANSPORT: S&P Raises ICR to 'BB' on Increased Public Role
----------------------------------------------------------------
S&P Global Ratings raised its long-term issuer credit rating on
Russia-based State Transport Leasing Co. PJSC (STLC) to 'BB' from
'BB-'. At the same time, S&P affirmed its 'B' short-term issuer
credit rating on STLC. The outlook is stable.

S&P said, "The upgrade stems from our view that STLC's public role
in the modernization and development of Russia's transport sector
has gradually strengthened over the past two years, with STLC
securing an increasing share of the transport leasing market and
greater involvement in state programs. We consider STLC to be a
government-related entity and have revised the likelihood of
extraordinary government support upward to high from moderately
high. This reflects STLC's important role for the Russian
government due to its involvement in policy, and STLC's very strong
link with the Russian government due to the government's full
ownership and strong oversight of STLC's business and strategy. As
a result, our long-term rating on STLC is now three notches higher
than its stand-alone credit profile (SACP), compared to two notches
previously.

"We understand that the government does not have plans to privatize
STLC and therefore we expect STLC to continue implementing the
government's agenda to support the transport industry. Moreover,
STLC's strategy is under the supervision and coordination of the
government, including the Ministry of Transport and the Ministry of
Industry and Trade of the Russian Federation. Other state-related
leasing companies remain under sanctions and might not have the
capacity or willingness to contribute, making STLC even more
important as a leasing tool for the government, in our view."

Although the leasing market remains very competitive, with a large
number of private- and public-sector players, STLC plays a unique
role in the government's import-substitution policy in the
transport sector, including aviation projects. STLC is also
involved in implementing government programs for noncommercial
leasing in certain key segments, such as energy efficiency leasing,
maritime leasing and the development of transport infrastructure.
These segments are important for the transport industry's long-term
development, but are not attractive to private leasing companies
because of their long-term, capital-consuming nature and low
margins. STLC's leasing portfolio has increased several fold since
2014; the company now ranks first in Russia by the size of its
leasing portfolio, as well as by its generation of new leasing
business. S&P therefore believes that STLC will continue to be
irreplaceable in the government's transport policy.

S&P said, "Our view of STLC's SACP has not changed. We continue to
note high single-name concentration. In 2018, the 20 largest
lessees represented about 70% of the gross leasing portfolio (89%
in 2017), and exposure to the largest client accounts about 14% of
the leasing portfolio. We view positively STLC's intention to
diversify the portfolio by business line, but we believe that it
will take time to reduce each line and will be difficult to achieve
given the company's involvement in state projects."

STLC's asset quality compares favorably with that of peers, with
assets classified in stage 3 under IFRS 9 comprising 0.47% of the
gross leasing portfolio at year-end 2018, with 96% covered by
provisions. The low percentage is, however, to a large extent
supported by very fast asset growth over the past several years.
S&P said, "We consider the quality of STLC's portfolio to be
vulnerable to swings in operating conditions, particularly due to
single-name concentration in riskier operating leasing activities.
We note, however, that those risks are partly mitigated by STLC's
growing expertise in managing both problem exposures--by taking
over the underlying assets--and residual value risk."

S&P said, "Over 2018, STLC's risk-weighted asset growth outpaced
that of its capital base, and we expect this trend to continue in
2019-2020. As a result, we observe that STLC's projected capital
buffers measured by our risk-adjusted capital (RAC) ratio fell to
5.3%-5.7% in 2019-2020 from 7.7% in 2018. However, this decline
remains neutral for the ratings. We include in our forecast
additional capital of Russian ruble (RUB) 13.8 billion that is
stated in the government budget and that STLC expects to receive in
2020. At the same time, we consider that STLC could potentially
receive additional capital in the course of the current budgeting
process for 2020-2022."

The Russian government has increased STLC's capital substantially
to support the execution of various transport development programs.
In total, the government has provided STLC with about RUB89 billion
in the past 10 years, including RUB20.7 billion in 2018.

S&P said, "We understand that STLC will continue increasing its
business volumes and its involvement in state programs, driving
substantial lease portfolio growth that could exceed 17% in 2019
and be above the market average. Government injections have been a
key source of fresh capital for STLC, as its ability to generate
capital internally remains weak. We understand that profitability
is not the company's or its shareholder's key priority, given its
public role and its involvement in noncommercial leasing.
Therefore, we do not expect any meaningful improvement in STLC's
earnings capacity in 2019-2020.

"In our view, STLC's stable funding position supports its business
performance and it can manage its liquidity requirements on an
ongoing basis and in periods of stress. We consider STLC's funding
profile to be in line with the system average for nonbank financial
institutions in Russia, for which we take ongoing support from
state-owned banks into account. In our view, STLC's liquidity is
adequate, since the company generates enough cash to cover interest
payments and other costs. Our cash flow analysis shows that STLC's
liquidity buffer exceeds its monthly requirements by 1.3x on
average over the coming two years.

"The stable outlook on STLC reflects our view that in the next 12
months, the solid pipeline of government programs that involve STLC
as a policy tool will continue to support the company's market
share and its growing leasing portfolio, thereby sustaining its
significant public policy role for the Russian government."

S&P could take a negative rating action within the next 12 months
if:

  -- The growth of risk-weighted assets outpaced that of the
capital base, resulting in insufficient capital buffers and a
projected RAC ratio below 5%.

  -- S&P observed a weakening of STLC's risk management systems,
for example, via a pronounced deterioration of asset quality, due
to one large borrower defaulting without a proper action plan from
the government, or to an elevation of residual value risk.

  -- S&P considered that the likelihood of support from the
government had diminished, for example, due to the company's
reduced public policy role.

  -- S&P sees the possibility of a positive rating action as remote
in the coming 12 months.




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

DIA GROUP: Reaches New Financing Deal with Creditors
----------------------------------------------------
Sam Edwards at Reuters reports that Spain's struggling supermarket
chain DIA reached a new deal with its creditors, the company said
in a statement on June 25.

DIA said it would propose raising the planned capital increase from
EUR500 million (US$569 million) to EUR600 million at the upcoming
AGM, Reuters relates.

According to Reuters, DIA said the company's biggest shareholder,
investment fund LetterOne, will inject EUR490 million into DIA
through a participating loan, which will be repaid to LetterOne
with the proceeds of the capital increase.

The new financing, which extends maturities to 2020 and 2021, will
include credit lines for EUR280 million, Reuters states.

DIA will also refinance EUR900 million of a syndicated loan and
obtain new financing for EUR280 million from its creditors, Reuters
discloses.




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

FERREXPO POLTAVA: S&P Alters Outlook to Negative & Affirms 'B' ICR
------------------------------------------------------------------
S&P Global Ratings revising the outlook on its 'B' rating to
negative from stable on Ukrainian iron ore pellet producer Ferrexpo
Poltava Mining.

S&P said, "We revised the outlook on Ukrainian iron ore pellet
producer Ferrexpo to negative as past donations to a local charity
in Ukraine might roll into reputational risk. We understand that
the board's investigation is still ongoing.

"At this stage, we lack sufficient clarity regarding the severity
of the issues, if at all, and the timeline to resolution.

"According to the company, the ongoing issues had no impact on its
operations. In addition, we take some comfort from the company's
relatively strong balance sheet. Iron ore prices, at above $100 per
ton, are supportive and should mitigate certain potential financial
implications. We will continue to monitor any impact on the
company's operations."

According to Ferrexpo's 2018 annual report, the company donated
around $110 million to a Ukrainian charity, Blooming Land between
2013 and May 2018, when it stopped the donations. In the same
period, the company generated cumulative free operating cash flow
(FOCF) of about $800 million and distributed $390 million to its
shareholders.

According to the company's statement on April 29, 2019, some
questions around the donations were first raised in August 2018,
when Deloitte informed Ferrexpo of some "discrepancies" in the copy
bank statements received from Blooming Land. In response, Ferrexpo
requested relevant information from Blooming Land on multiple
occasions, which it did not obtain. In February 2019, Ferrexpo's
board initiated an independent review of the donations.

On April 26, 2019, Deloitte resigned, referring in its audit
opinion to "some element of the funds could have been
misappropriated" and mentioned criminal legal proceedings against
Blooming Land.

On the same day, two of the independent non-executive directors on
Ferrexpo's board resigned. This follows an earlier resignation at
the end of January.

The company has said that the CEO has no linkages to the charity
and it is not a related party.

S&P understands that the company expects the board's investigation
to be concluded in the coming weeks. It is not yet clear whether
other national or international authorities will initiate their own
investigations into the donations to Blooming Land.

Any such additional investigations could increase the risk of
reputational risk. This could materially affect the company's
relationship with stakeholders, such as customers, suppliers, and
banks. This is particularly relevant for a single commodity company
that carries out all its operations in one country, Ukraine.

Even if Ferrexpo resolves the current situation without any lasting
implications, the absolute size of the donations, combined with the
possibility that some of those donations may not have been used for
their stated purpose, suggests weak governance. As a result, S&P
has revised its management and governance assessment to weak from
fair.

Ferrexpo's board currently comprises the non-executive chairman,
CEO, the chief financial officer, and two non-executive independent
directors (one of whom joined the company in June 2019 and the
other in November 2016). There are two open non-executive
independent director seats.

S&P said, "At the same time, we anticipate Ferrexpo will post
record high results in 2019. Iron ore is currently trading above
$100 per ton and pellet premiums remain at elevated levels. Under
our revised base-case scenario, we expect the company to record
EBITDA of $625 million-$675 million (assuming prudent iron ore
prices of $75 in the second half of the year). There is
considerable potential upside in our forecast, at about $50 million
for every $10 per ton above our price assumption.

"In our view, Ferrexpo's strong performance and our estimate that
it had a cash balance of $100 million-$150 million as of June 30,
2019, should mitigate some of the potential reputational risk,
especially risks related to reduced access to capital markets." The
company's cash flow generation should be strong enough to allow it
to repay all its coming maturities without refinancing."

The negative outlook indicates the potential for adverse
developments as the independent review progresses, especially if
the authorities initiate their own processes. This could increase
reputational risk and affect the company's ability to operate
without interference. It is not yet clear to S&P how serious are
the issues on the line or what the timeline to resolution could
be.

S&P said, "Under our base case, we assume S&P Global
Ratings-adjusted EBITDA of $625 million-$675 million in 2019. This
translates into adjusted debt to EBITDA comfortably below 1.0x.
This is well below the 2.0x that we consider commensurate with the
current rating.

"We could lower our rating on Ferrexpo if the issues regarding the
donations to Blooming Land turned out to be concrete, which would
materially increase the risk of reputational damage. Our rating on
Ferrexpo could also come under pressure if local or international
authorities initiated their own investigations that would have a
material financial impact or adverse consequences for operations.

"The ratings would also come under pressure if pellet prices
declined by more than 25% from our assumption price (around
$130/ton, which is about $40/ton below current spot prices), a
scenario we consider as less likely over the short-term. This would
significantly constrain the company's free cash flows, and limit
its ability to meet its ongoing maturities without relying on
refinancing, unless it reduced capital expenditure (capex) and
dividends."

A sovereign downgrade could also cause S&P to lower its rating on
Ferrexpo.

S&P could revise the outlook to stable once the situation and its
potential impact becomes clearer.




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

AA BOND: S&P Affirms B+ Rating on Class B2 Notes
------------------------------------------------
S&P Global Ratings affirmed its 'BBB- (sf)' credit ratings on AA
Bond Co. Ltd.'s class A2, A3, A5, A6, and A7 notes, and its 'B+
(sf)' rating on the class B2 notes.

AA Bond Co.'s financing structure blends a corporate securitization
of the operating business of the AA Intermediate Co. Ltd. (the AA;
the borrowing group holdco) in the U.K. with a subordinated
high-yield issuance. The corporate securitization originally closed
in July 2013 and was most recently tapped in July 2018.

The transaction features two classes of notes (A and B), the
proceeds of which have been on-lent by the issuer to the borrower,
via issuer-borrower loans. The operating cash flows generated by
the borrowing group are available to repay its borrowings from the
issuer which, in turn, uses those proceeds to service the notes.

The transaction will likely qualify for the appointment of an
administrative receiver under the U.K. insolvency regime. An
obligor default would allow the noteholders to gain substantial
control over the charged assets prior to an administrator's
appointment, without necessarily accelerating the secured debt,
both at the issuer and at the borrower level.

Following S&P's review of the AA's performance, it has affirmed its
ratings on the class A and B notes.

S&P said, "We have lowered our base-case forecasts of cash flow
available for debt service, reflecting our lower EBITDA and higher
capital expenditures (capex) expectations, while our satisfactory
business risk profile (BRP) remains unchanged. As a consequence,
the minimum debt service coverage ratios (DSCRs) in both our
base-case and downside analyses have decreased. That said, they
remain above the lower end of the range for a 'bbb' anchor in our
base-case analysis, and above the breakpoint between a strong and a
satisfactory resilience score in our downside analysis."

  Ratings List

  AA Bond Co. Ltd.

  Class   Rating
  -----   ------
    A2    BBB- (sf)
    A3    BBB- (sf)
    A5    BBB- (sf)
    A6    BBB- (sf)
    A7    BBB- (sf)
    B2    B+ (sf)


ARCADIA GROUP: Watchdog May Pursue Tina Green on Pension Deal
-------------------------------------------------------------
Lucy Burton at The Telegraph reports Pensions Regulator boss
Charles Counsell has warned it could pursue Arcadia Group's
ultimate owner Lady Tina Green if she reneges on promises to pump
money into the struggling retailer's pension scheme.

Sir Philip Green's wife, who is the owner of Taveta Investments,
which owns Arcadia, has agreed to put GBP100 million in cash into
the scheme to shore up its deficit in addition to more than GBP200
million in security secured on property and assets, The Telegraph
relates.

According to The Telegraph, Mr. Counsell told MPs on June 26 that
the regulator had the power to step in if Lady Tina did not follow
up on her promise even though she is not a UK taxpayer.

As reported by the Troubled Company Reporter-Europe on June 6,
2019, Reuters related that Arcadia fashion group secured the
backing of Britain's pensions regulator for a major restructuring,
increasing the chances of his Topshop-to-Dorothy Perkins business
avoiding a collapse into administration.  Late on June 4, Arcadia,
as cited by Reuters, said it would provide GBP210 million (US$267
million) of security over assets for its pension schemes, including
an additional GBP25 million to help close a funding deficit as
agreed with the Pensions Regulator (TPR).  The move comes on top of
a pledge by Tina Green, Philip Green's Monaco-based wife and
Arcadia's ultimate owner, to contribute GBP75 million over three
years plus an additional GBP25 million, making a total of GBP100
million, Reuters stated.  According to Reuters, the restructuring
would reduce Arcadia's own annual contributions to its pension
schemes from GBP50 million to GBP25 million for three years.

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


AVON INT'L: Moody's Rates Proposed $350MM Secured Notes 'Ba1'
-------------------------------------------------------------
Moody's Investors Service has assigned a Ba1 rating to the proposed
$350 million senior secured notes to be issued by Avon
International Capital, PLC (AIC), a fully owned subsidiary of Avon
Products, Inc. (Avon), and has simultaneously placed the rating
under review with direction uncertain. Proceeds from this issuance,
together with available cash, may be used to prepay the $387
million outstanding senior unsecured notes maturing in March 2020.

Avon's B1 corporate family rating, B1-PD probability of default
rating and B3 senior unsecured notes rating, all of which are under
review with direction uncertain, as well as the Ba1 senior secured
rating on the $500 million senior secured notes due in 2022 issued
by Avon International Operations, Inc.'s ("AIO"), remain
unchanged.

RATINGS RATIONALE

The Ba1 instrument rating of the proposed senior secured notes
reflects the instruments' priority position in the capital
structure and the fact that the secured debt benefit from the loss
absorption provided by the significant amount of unsecured debt
sitting below in the structure. The new $350 million notes will
rank pari passu with the outstanding $500 million senior secured
notes due in 2022 issued by AIO and the RCF maturing in 2022 and
under which AIC is the borrower. The new notes will benefit from
the same security and guarantee structure as the rest of the
secured debt, including an unconditional guarantee from Avon, AIC,
AIO and their restricted subsidiaries, representing approximately
85% of consolidated assets. The notes and RCF are secured by first
priority liens on, and security interests in, substantially all of
the assets of AIO, AIC and the subsidiary guarantors subject to
certain exceptions.

Avon's rating were placed under review with direction uncertain
after the announcement on 22 May 2019 that Avon and the Brazilian
beauty company Natura & Co had reached an agreement whereby Natura
will acquire Avon's capital in an all share transaction. If
successfully completed, the transaction may be credit positive for
Avon, because of the enhanced business profile of the combined
entity as one of the largest beauty companies in the world. In
addition, Moody's estimates that the financial leverage of the
combined entity would be somewhat lower than the current high level
of Avon.

Conversely, should the transaction not proceed, the rating review
process may conclude with a rating downgrade because of Avon's weak
operating performance. Moody's expects that Avon's credit metrics
will remain weak in the next 12 months, with leverage (measured as
Moody's-adjusted gross debt/EBITDA) deteriorating to above 6.5x in
2019, which is well above Moody's guidance of 5.5x for the B1
rating.

At this time, Moody's believes that Avon's ability to reduce
leverage will be challenged because of weak operating performance
and the execution risk in its restructuring plan. Although some of
the actions that the company is taking to revamp sales, such as
better pricing and promotion initiatives, are bearing some fruits,
the number of active representatives continued to decline in 1Q 19
in all geographies, with an acceleration in the negative trend (-9%
from -5% in 2018). In Moody's view, Avon's ability to stabilize the
number of representatives is key to improving operating
performance. The company's actions to address this problem have not
yet produced positive results, reflecting the execution risk on the
company's restructuring plan.

The issuance of the proposed notes and the refinancing of the $387
million senior unsecured notes maturing on 15 March 2020 will
alleviate pressure on Avon's liquidity. However, Moody's expects
that the company's cash generation will remain weak in 2019, with
negative free cash flow at around $70 million (excluding the
proceeds from assets disposals). In addition, the covenants of the
revolving credit facility will tighten over time.

As part of the rating review, Moody's will primarily focus on
assessing: (1) the benefits which could result from combining the
two groups in terms of business profile and potential for
synergies; (2) the future strategy of the group; (3) expectations
around the combined entity's financial leverage on an ongoing
basis; and (4) the provision of guarantees from Natura on Avon's
debt.

LIST OF AFFECTED RATINGS

Assignments:

Issuer: Avon International Capital PLC

Backed Senior Secured Regular Bond/Debenture, Assigned Ba1; Placed
Under Review Direction Uncertain

Outlook Actions:

Issuer: Avon International Capital PLC

Outlook, Assigned Rating Under Review

PRINCIPAL METHODOLOGY

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

CORPORATE PROFILE

Avon is a global beauty product company and one of the largest
direct sellers through around five million active representatives.
Avon's products are available in over 70 countries and include
categories such as color cosmetics, skin care, fragrance and
fashion and home. Cerberus Capital Management L.P., through
controlled affiliates, owns around 16.4% of Avon through a
preferred stock investment. Avon generated about $5.6 billion in
revenue and $235 million in operating profit in 2018.


BONMARCHE: Auditors May Raise Going Concern Doubt
-------------------------------------------------
BBC News reports that troubled fashion chain Bonmarche has warned
that trading in the first quarter has been "poor" and reversed its
opposition to the GBP5.7 million takeover offer from UK billionaire
Philip Day.

Its shares fell 26% as it blamed bad weather for its performance
and said Mr. Day's offer was now more acceptable, BBC relates.

It warned that it was also possible that its losses could be
greater than the GBP5 to GBP6 million it was previously expecting,
BBC discloses.

The Yorkshire-based chain has 312 shops with clothing aimed at
over-50s women.  It employs 1,900 full-time equivalent people, but
Edinburgh Woollen Mill Group-owner Mr. Day has previously warned he
expects a "material reduction" in headcount at the chain, BBC
notes.

Through his Dubai-based investment vehicle, Spectre, Mr. Day made a
mandatory takeover bid in April after buying a 52.4% stake in the
retailer, BBC relays.  The offer is at 11.445p per share, BBC says.


According to BBC, the Bonmarche board had been holding out against
the offer, saying its own cost reduction programme would improve
performance.

It said the medium and long-term prospects for the Bonmarche
business were good, but it had been told by its auditors that
unless trading improved by the time of its results on July 26, they
might include a caveat in its results about its ability to operate
as "a going concern" in the long term, BBC relates.

If the deal goes ahead, it could reunite Bonmarche with Peacocks,
which was bought out of administration by Mr. Day's Edinburgh
Woollen Mill in 2012, BBC states.  At the time, Bonmarche was kept
out of the administration and bought by a private equity firm
before being floated on the stock market, BBC recounts.


BURY FC: Faces 12-Point Deduction Following CVA Proposal
--------------------------------------------------------
BBC Sport reports that the Bury Football Club face a 12-point
deduction next season after owner Steve Dale put forward a proposal
to help clear some of the club's debts.

According to BBC Sport, in a company voluntary arrangement (CVA)
proposal, seen by BBC Radio Manchester, Dale has offered to pay the
club's football creditors in full.

Unsecured creditors, including HMRC, will be paid 25% of what they
are owed, BBC Sport discloses.

If approved, the CVA would qualify as an insolvency event under EFL
rules, which would see Bury deducted points, BBC Sport notes.

The proposal states that football creditors are owed GBP950,652
while unsecured creditors are owed GBP5,982,765, including GBP3.6
million to Dale, BBC relays.

The club appeared in the High Court last week over a winding-up
petition originally brought by former head coach Chris Brass but
which was taken over by HM Revenue & Customs (HMRC), BBC recounts.

HMRC, BBC says, are now owed GBP1 million but would be paid a
quarter of what they are due under the arrangement, while Dale
states he will not be seeking the money owed to him by the club.

The proposal requires agreement from creditors owed 75% or more of
the total debts to be passed and also requires agreement from 50%
of the club's shareholders, according to BBC.

The club are set to reappear in court on July 9 at 11:00 BST to
meet with creditors and agree to a resolution, BBC states.


CARPETRIGHT PLC: Plans to Shut Some Stores in Irish Division
------------------------------------------------------------
Mark Paul at The Irish Times reports that listed flooring retailer
Carpetright plc has announced that it will shut some of the stores
in its Irish division.  The British company has 19 outlets in the
Republic.

According to The Irish Times, the group, which has struggled in
recent years and reported its financial results on June 25, said
full-year sales at its Irish division fell by 5.5% to EUR8.6
million.  The bulk of the decline was accounted for by the closure
of one of its Irish stores, with revenues down just 1.3% on a
like-for-like basis, The Irish Times states.

Carpetright, as cited by The Irish Times, said its Irish business
"has an oversized store footprint which we are looking to reduce as
opportunities arise".

The overall group said its turnaround was on track as it reported a
narrowing of losses in
2018-19, and a return to underlying growth in sales in its new
financial year, The Irish Times relays.

Carpetright's shareholders last year backed a company voluntary
arrangement (CVA) restructuring scheme to keep the company alive.
The plan closed 80 underperforming stores and cut jobs, The Irish
Times recounts.  The group's shares are down 42% year-on-year, The
Irish Times discloses.

The retailer said on June 25 that it made a statutory pretax loss
of GBP24.8 million in the year to April 27, compared with a loss of
GBP69.8 million in the previous financial year, The Irish Times
notes.


GALAPAGOS HOLDING: S&P Cuts ICR to 'SD' on Missed Interest Payment
------------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
heat exchanger manufacturing holding company Galapagos Holding S.A.
to 'SD' (selective default) from 'CC'.

S&P said, "We are also lowering our rating on the company's senior
secured notes to 'D' (default) from 'CC' and our rating on its
senior unsecured notes to 'D' from 'C'. At the same time, we are
affirming our 'CCC' ratings on the super senior revolving credit
facility."

S&P said, "We downgraded Galapagos to 'SD' because it missed
interest payments of EUR8.8 million on its EUR250 million senior
unsecured notes and EUR5.8 million on its EUR333 million senior
secured notes. A payment default has not yet occurred under the
indenture governing the notes, which provides a grace period.

"However, we believe the company will not remedy the missed payment
for the senior unsecured and senior secured notes. This is because
Galapagos announced a balance-sheet restructuring plan and clearly
stated that missed interest payments will be not made during the
grace period for the senior secured and senior unsecured notes. We
consider this will be tantamount to a default and therefore lowered
our rating on the senior secured notes to 'D' from 'CC' and our
rating on the senior unsecured notes to 'D' from 'C'.

"We affirmed our 'CCC' rating on the super senior revolving credit
facility (RCF) because we understand that the company is current on
all payment obligations for this facility. We understand that
discussions with lenders, note holders, and shareholders are
ongoing to agree on Galapagos' balance-sheet restructuring and
restore financial flexibility." Under its proposed balance-sheet
restructuring, Galapagos is seeking:

-- An equity injection of about EUR140 million to support
deleveraging and the funding of restructuring measures and
transaction costs.

-- Full repayment of drawings under the EUR75 million super senior
RCF funded by the equity injection, and the reduction of the RCF
size to EUR65 million.

-- The reduction of the super senior guarantee facility to EUR260
million.

-- The exchange of the outstanding EUR333 million 5.375% senior
secured notes with new 8.25% senior secured notes maturing in six
years, with amended terms.

-- Alternatively, the replacement of the EUR333 million notes with
new third-party debt.

-- The removal of the EUR250 million, 7% senior unsecured notes
from the capital structure after restructuring, which might be
reached through a debt-to-equity swap.

All lenders of Galapagos' super senior RCF and super senior
guarantee facility, and more than 79% of the holders of its senior
secured notes, have shown their support for the planned transaction
by signing a lock-up agreement. Under the lock-up agreement, the
consenting creditors have agreed not to take any enforcement
action. S&P understands that the senior unsecured debtholders would
not be entitled to take enforcement action against Galapagos SA and
its subsidiaries until at least 179 days from an event of default.

S&P considers the exchange offer of the senior secured notes
tantamount to a default because it is a distressed offer, delays
the payment of interest, and extends the final maturity date from
the original instrument.

The new capital structure would include only the super senior RCF
and guarantee facility, and the new senior secured notes. Adjusted
debt will be materially reduced when the transaction is
successfully completed, once the senior unsecured notes leave the
capital structure and the RCF is paid down.

Coupled with a pickup in operating performance and order intake in
the first four months of 2019, compared with the same period in
2018, this could result in materially lower leverage following the
transaction.

Additionally, S&P notes the company has moved its head office and
principle place of business from Luxembourg to the U.K.

S&P will reevaluate its ratings on Galapagos when the restructuring
has been completed and it becomes clear whether the company will
continue to make payments on its financial obligations, including
the super senior facility that includes the guarantee facility and
RCF.


GAMING ACQUISITIONS: Fitch Assigns 'B(EXP)' LongTerm IDR
--------------------------------------------------------
Fitch Ratings has assigned Inspired Entertainment, Inc. an expected
Long-Term Issuer Default Rating of 'B(EXP)'. The Rating Outlook is
Stable. Fitch has also assigned Gaming Acquisitions Limited's
planned GBP220 million term loan B (in tranches of GBP140 million
and EUR90 million) an expected senior secured debt rating of
'BB-(EXP)'/'RR2'.

The assignment of final ratings will be contingent on the
satisfactory completion of Inspired's takeover of Novomatic's UK
Gaming Technology Group (NTG), currently expected to complete by
3Q19 and subject to regulatory approvals. The assignment of the
final instrument ratings is also contingent on final documents
conforming to information already received.

The 'B(EXP)' rating reflects the group's leading position as an
innovative provider of virtual, mobile and served-based games.
However, Fitch's assessment is constrained by some lack of
diversification, both by customer and geography, as well as the
modest size of the enlarged group compared with global peers. This
makes Inspired's debt service capabilities vulnerable to economic
downturn, adverse regulatory changes or increased competition. The
rating is supported by Inspired's strong financial profile,
enhanced by moderate leverage, satisfactory profitability with
expected cost synergies offsetting the negative impact of UK
government Triennial Review of maximum betting stakes, and a high
portion of revenue derived from medium-term contracts.

Fitch expects the currently moderate funds from operations adjusted
net leverage could fall to 2.8x in 2022 from 4.3x in 2019. This
should result from positive free cash flow in 2020, helped by cost
savings from NTG's integration. Sustained financial discipline and
smooth integration would be positive for the rating.

KEY RATING DRIVERS

Recurring Revenue Enhances Credit Profile: Inspired has established
itself in the global gaming sector as an innovative and reliable
provider of virtual, mobile and served-based games. This enables
the group to win new contracts for the supply of technology and the
management of online games and virtual sports betting in its
markets. These contracts have a typical duration of three-to-five
years, which support cash flow visibility. According to management,
around 90% of gross profit is derived from recurring revenue
arrangements. Fitch's rating reflects its expectation that the
enlarged group will continue to renew its medium-term contracts on
broadly similar terms.

Moderate Size, Diversification: Fitch believes the current
small-to-moderate size of the merged group will constrain the
rating to the 'B' rating category. The combined group will be
significantly smaller than competitors such as International Game
Technology, Scientific Games or Playtech, which all generate more
than USD1 billion revenue per annum. Fitch sees this relative small
size as potentially constraining Inspired's ability to face off
economic downturns or larger competitors' pricing pressures.
However, if the integration is implemented successfully and
leverage remains moderate, this will provide Inspired with
sufficient financial flexibility to pursue further growth
opportunities.

High Client Concentration Decreasing: Fitch expects the combined
group to derive a significant portion of its profitability from a
small number of clients, with the top 10 representing around 50% of
combined revenue (top five clients generating around 35%). Fitch
also expects some concentration in the UK pub and licensed betting
offices sectors. Inspired has nevertheless concluded medium-term
contracts with these companies, and the churn risk is mitigated by
high associated switching costs. However, the loss of a key
customer would materially affect revenue while competitive pressure
remains intense.

Material Exposure to UK Market: Fitch expects the UK market to
generate a significant 70% of estimated pro forma revenue for 2019.
The continuous decline of the number of pubs in the UK (17% of 2018
pro-forma revenue), and the recent UK government Triennial Review
(maximum GBP2 stake for B2 machines) has put pressure on B2B gaming
technology companies in the UK market. Additionally, Fitch believes
that with responsible gaming becoming part of the political
landscape in the UK and the EU, further regulatory changes could
occur and impact growth prospects and profitability of gaming
operators.

Growth Potential in Certain Markets: The liberalisation of gaming
markets, government's eagerness to find new tax-raising avenues and
an increasing supply of new games should all provide opportunities
for Inspired, be it in the gaming machine sector or virtual sport
branches. The group should be able to leverage its expertise and
reputation and benefit from a limited number of suppliers in the
industry, allowing it to expand and grow in new countries. Inspired
is well-positioned to take advantage of the nascent U.S. online
gaming market, further to recent changes in legislation, although
competition will be intense from native gaming software providers
such as IGT and SGB.

High Capex to Decline: Fitch expects the combined group to reduce
capex intensity to a more normalised level of around USD43 million
from 2020 onwards. This is due to both the now completed capex
related to the Greek OPAP contract (USD27 million capex in
2017-2018) and a change in NTG's business model from revenue
participation arrangements to rental agreements. These rental
agreements require less capex, due to the digitisation of the
business and the longer life of new machines. However, the betting
games market is competitive and games can quickly go into and out
of fashion. As a result companies, such as Inspired, are required
to refresh and/or introduce new games on a regular basis to
maintain sales.

Profitability to Improve: Both Inspired and NTG are engaged in the
B2B gaming technology business, with high complementarity of cost
base. Fitch believes that Inspired should be able to manage the
currently inefficient cost structure of NTG to generate sizeable
cost synergies of around USD10 million per year within 12 months to
offset both the weaker profitability of NTG and the impact of the
UK government Triennial Review. Fitch forecasts FFO margin to
gradually improve to around 25.5% over the next four years, which
is solid for the rating, from an estimated pro-forma 21.4% in
2019.

Moderate Execution Risks: Inspired could be contemplating further
acquisitions of a significant size after NTG, at a time when
headcount reduction may put pressure on operational efficiencies.
Furthermore, a large percentage of the expected NTG margin
improvement is based on contract re-negotiations with UK pub
operators, with only four out of the top eight UK operators having
signed a new agreement. According to management a further three
major operators are close to reaching an agreement.

Opportunistic Financial Policy: Management has a public net
debt/EBITDA target of 2.0x (consistent with FFO adjusted net
leverage of 3.0x-3.5x). However, Fitch does not rule out any
opportunistic, further debt-funded acquisitions that could push
leverage higher, even though this may be temporary. It currently
does not factor in further M&A-driven growth, or dividends, in its
projections; therefore it assumes that FFO adjusted net leverage
could decrease to 2.8x by 2022 from an estimated 4.3x in 2019.

DERIVATION SUMMARY

Inspired is a growing, moderately sized B2B gaming technology
company, with EBITDAR margin and FFO capabilities higher than
peer's such as Intralot S.A. (CCC+). Inspired is smaller and has
slightly weaker profitability (post transaction) than global peers
such as International Game Technology plc (IGT) and Scientific
Gaming Corporation (SGC). This constrains its ability to compete
should these larger groups decide on aggressive marketing and
pricing policies. Inspired has a strong presence in the
fast-growing gaming software market in a diverse number of
countries. Post-merger with Novomatic's UK NTG, the group will have
moderate leverage and a reasonably solid financial profile, which
underpins the 'B(EXP)' IDR.

KEY ASSUMPTIONS

  - Revenue to be negatively impacted by the fixed odds betting
terminal (FOBT) GBP2 maximum stake in the UK in 2019. Fitch then
estimates 2%-4% p.a. growth from 2020 onwards, due to the
digitisation of NTG, the execution of the OPAP contract, ramp-up of
operations within the US, and virtual sport revenue increasing;

  - Profitability to be impacted by the FOBT GBP2 maximum stake in
2019, before being enhanced by synergies (around USD10 million run
rate), cost discipline and digitisation of NTG. Fitch expects FFO
margin to be around 24% by 2020;

  - Capex should decline from 2020 and stabilise at around USD43
million p.a. as a consequence of digitisation of NTG and the end of
OPAP investments. Fitch forecasts capex at around 15% of sales, to
maintain a competitive advantage in high-end products;

  - No dividends; and

  - GBP/USD exchange rate stable at 1.30

KEY RECOVERY ASSUMPTIONS

Fitch assumes that Inspired would be considered a going concern in
bankruptcy and that it would be re-organised rather than
liquidated.

It has assumed an EBITDA discount of 30%, leading to a
post-restructuring pro-forma EBITDA of USD49.4 million, which it
believes should be sustainable post-restructuring.

It has considered a distressed enterprise value/EBITDA multiple at
5.0x, reflecting Inspired's good profitability and market
position.

Both the GBP20 million senior secured revolving credit facility and
GBP220 million senior secured TLB rank equally with each other.
After deducting 10% for administrative claims, its waterfall
analysis generates an above-average recovery for senior secured
lenders in the 'RR2' band, indicating a 'BB-' instrument rating.
The waterfall analysis recovery output is 71%, at the low-end of
the 'RR2' band.

RATING SENSITIVITIES

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

  - Improvement in the business profile through further
diversification of customers and geographies, increased scale
without compromising profitability, smooth renewal of contracts at
existing, or even more beneficial terms, together with a stabilised
regulatory environment in the UK and other key markets

  - Maintenance of financial policies and structure with FFO
adjusted gross leverage below 4.0x on a sustained basis

  - Sustainable positive FCF margin of at least 3%

  - FFO fixed charge cover remaining above 3.0x

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

  - Lack of financial discipline, including opportunistic financing
or investment activities, leading to FFO adjusted gross leverage
above 5.5x on a sustained basis especially if combined with
downward pressure, or increased volatility in FCF generation

  - Loss of contracts with main customers, leading to shrinking
EBITDA

  - Failure to achieve synergies and/or cost discipline resulting
in FFO margin materially below 20% for a sustained period

  - FFO fixed charge cover falling below 1.8x on a sustained basis

LIQUIDITY AND DEBT STRUCTURE

Satisfactory Liquidity: The acquisition of NTG is fully
debt-funded. Fitch understands from management that NTG's existing
debt will be repaid before the closing of the acquisition.
Post-merger, Inspired's debt structure will include a GBP220
million equivalent secured TLB and a GBP20 million RCF due 2025.
Fitch forecasts the RCF will be drawn by USD4 million by end-2019,
with full repayment in 2020. Fitch views Inspired's liquidity as
satisfactory and improving over the next four years, due to
positive FCF generation from 2020 onwards.


GRH FOOD: Failure to Find Buyer Prompts Administration
------------------------------------------------------
Business Sale reports that GRH Food Company, a cheese-making
factory in Snowdonia, has collapsed into administration, citing an
increase in business costs and a failed attempt to find a buyer as
the reason for its downfall.

The company has forced to cease its trading operations and call in
professional advisory firm KPMG to handle the administration
process, with partners Paul Dumbell --
paul.dumbell@kpmg.co.uk -- and David Costley-Wood --
david.costley-wood@kpmg.co.uk -- appointed as joint administrators,
Business Sale relates.

According to Business Sale, a spokesperson for KPMG said: "The
company suffered cash flow issues and was unable to meet its
financial obligations as they fell due."

Mr. Dumbell, as cited by Business Sale, said: "GRH was an ambitious
business that had grown in recent years, but the squeeze of
increased costs and liabilities put too much pressure on its
finances.

"Despite efforts to market the business for sale, a buyer could not
be found, which led to the administration.

"Although the facility will not trade during the administration
period, we continue to explore all options for this
multi-million-pound production facility."


INSPIRED EDUCATION: S&P Assigns 'B' ICR, Outlook Stable
-------------------------------------------------------
S&P Global Ratings assigned its 'B' issuer and issue ratings to
Inspired Education Holdings Ltd. and its EUR465 million term loan.
The ratings are in line with the preliminary ratings S&P assigned
on Nov 02, 2018.

Inspired has a network of 51 privately-funded K-12 schools, spread
across 18 countries (including recently completed or announced
acquisitions). Although the group in its current structure was set
up in October 2016, every school has been in operation for more
than 15 years. The K-12 sector (kindergarten through grade 12)
represents the sum of primary and secondary education in several
countries. An increase in the wealth of middle-class families in
various countries has enabled parents to pursue the best education
for their children. Key factors parents consider when selecting a
school include the school's brand and reputation; quality of the
teaching staff, facilities and activities; and academic results
relative to other schools within the same catchment area.

Inspired operates through brands such as Reddam House, Reddford,
and International School of Europe, and ACG. Pro forma the
acquisition of ACG Education -- a New Zealand-based K-12 operator
operating in three countries through seven schools and two early
years schools --S&P understands that, for fiscal year 2019, the
group has capacity for 48,500 students, about 35,000 students
enrolled, and total revenues of about EUR400 million. The ACG
acquisition supports management's strategy to reduce its
concentration to one or a few specific countries and allow access
to markets such as New Zealand, Indonesia, and Vietnam, where it
had no presence. Additionally, ACG Education reports an EBITDA
margin of close to 40% while operating with 50% occupancy rates,
and represents a good addition to Inspired's network of schools.

Inspired faces the challenges of operating in a highly fragmented
market in which competition depends on local dynamics. S&P
estimates that its share of the private education market remains in
the low single digits. Competition could intensify in certain
regions where new local education providers with access to capital
might enter the market, attracted by high margins, good earnings
visibility, and strong industry growth.

However, these challenges are somewhat offset by Inspired's good
earnings visibility, supported by the group's average student
tenure of about eight years, its geographic diversity, ability to
achieve above-inflation fee increases each year, a track record of
successfully completing greenfield projects, and acquisition of
schools that fit its ethos and standards. High revenue visibility
stems from the confirmation of total enrolments and the practice of
increasing prices at the beginning of each academic year. K-12
businesses benefit from working capital movements because the
schools collect fees at the start of each term, while staff
expenses and other operating expenses are paid in arrears.

S&P said, "We view Inspired's business model and competitive
position as comparable with those of other rated K-12 operators,
such as Bach Finance Ltd. (trading as Nord Anglia) and Cognita.
However, we consider Nord Anglia's competitive position to be
relatively better, on account of its larger scale (about $950
million of revenues), higher revenue per student, and better
adjusted EBITDA margins of about 31%. Yet Inspired has lower
exposure to expat students and has the potential to improve margins
via recent completed acquisitions. Compared with peers, Inspired
has higher exposure to emerging markets, where we calculate the
group will generate about 46% of its revenues. We consider those
countries to be either moderately high risk or high risk,
reflecting the underlying economic and institutional risks of
operating in them. Nevertheless, the demand for good-quality
international education is quite high in emerging markets, owing to
the increased disposable income among middle-class families and the
schools' primary focus on local students rather than expat
students. Moreover, the group generates higher margins in those
countries than in Europe.

"Inspired is effectively controlled by Nadim Nsouli; therefore we
do not consider it to be owned by a financial sponsor, despite the
minority stake of some firms that we typically consider to be
financial sponsors. However, we believe the likelihood of
consolidation and expansion activities within this sector to be
very high, since the current players continue to build scale in the
fragmented market. Consequently, we think that Inspired will seek
to expand through inorganic means. We will observe how financially
aggressive Inspire intends to become to achieve this growth. We
consider Inspired's recent acquisition of ACG Education to be a
one-off transaction, which was partly funded by new equity. On an
ongoing basis, we expect Inspired to undertake single-school
acquisitions.

"Because of increased enrolment in Inspired's greenfield projects
(particularly in Italy and South Africa) through fiscal year 2019,
we calculate the group's adjusted leverage will be about 6.0x by
the end of fiscal year 2019. We calculate the group's adjusted debt
at about EUR600 million, comprising the EUR465 million term loan B,
EUR15 million of rolled-over debt, deferred consideration of about
EUR20 million, and an operating lease adjustment of about EUR225
million--offset by a surplus cash adjustment of about EUR125
million.

"Rather than an operating risk, we consider exposure to emerging
countries to be a financial risk for Inspired. Volatility of
foreign exchange rates relative to the euro will affect the group's
credit metrics because the pro forma debt is largely denominated in
euros. The group does not plan to hedge its EBITDA earnings from
emerging markets, and will focus on reducing exposure to those
countries by diversifying into stable markets. However, compared
with Nord Anglia and Cognita (where we calculate S&P Global
Ratings-adjusted debt to EBITDA at 9x-10x for the next 18 months),
Inspired will have lower leverage to start with and therefore has
headroom under our rating to manage the risk of foreign currency
volatility."

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

-- Inspired's revenue growth has a low correlation with GDP growth
and depends on the demand for quality education. Therefore, S&P
expects tuition fees will increase faster than inflation since most
of the markets that Inspired operates in have few good schools
providing quality international education.

-- Inspired can achieve above-inflation fee increases, so S&P
focuses on the inflation rate as a key macroeconomic factor in its
forecasts.

-- Consumer price inflation of 4.6% in 2018 and 4.7% in 2019 for
South Africa; 1.2% in 2018 and 1.0% in 2019 for Italy; 1.6% in 2018
and 1.7% in 2019 for New Zealand; and 2.1% in 2018 and 3.5% in 2019
for Bahrain.

-- Key foreign currency exchange rates, including: EUR1 to South
African rand (ZAR) 15.0443 in 2017, EUR1 to ZAR15.6390 in 2018, and
EUR1 to ZAR16.3020 in 2019; as well as for New Zealand, EUR1 to
NZ$1.5899 in 2017, EUR1 to NZ$1.7076 in 2018, and EUR1 to NZ$1.6635
in 2019.

-- With the consolidation of ACG and other bolt-on acquisitions,
the group will report revenue of about EUR400 million in fiscal
year 2019 after factoring in the negative impact of foreign
exchange fluctuations (particularly in the South African rand). S&P
assumes small bolt-on acquisitions, higher utilization rates, and
fee increases will continue, resulting in revenue growth of 10%-11%
for fiscal year 2020.

-- Total acquisition spend of about EUR440 million including ACG,
Park International School (Portugal), and San Patricio (Spain) in
fiscal 2019.

-- About EUR50 million worth of acquisitions annually from fiscal
year 2020, for an implied EBITDA multiple of about 10x.

-- S&P Global Ratings-adjusted margins will improve, from 26% in
fiscal year 2018, to 27%-28% in fiscal 2019 and 28%-29% in fiscal
2020, as Inspired consolidates the higher-margin ACG group and
improves capacity utilization across its school portfolio. Strong
cost control measures, along with lower exceptional costs, would
also benefit group margins, albeit to a small extent.

-- Annual capital expenditure (capex), in line with that in fiscal
2018, of EUR45 million-EUR50 million in fiscal 2019 and EUR20
million-EUR25 million in fiscal 2020, with a major portion
dedicated to discretionary expansion capex.

-- Small working capital inflows of EUR5 million-EUR10 million for
the next two years.

-- About EUR11 million of deferred consideration payouts to be
made in fiscal year 2020 related to previous acquisitions.

-- An equity infusion of about EUR240 million during 2019.

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

-- S&P Global Ratings-adjusted debt to EBITDA of about 6.0x in
fiscal year 2019 and about 5.0x in fiscal year 2020.

-- EBITDA interest coverage of 3.0x for the next two years.

-- Free operating cash flow (FOCF) to debt of about 5% in fiscal
year 2019 and about 8% for fiscal year 2020.

S&P said, "The stable outlook reflects our view that Inspired's
average student tenure of about eight years, and its ability to
achieve above-inflation fee increases, provide strong revenue
visibility and cash flow generation potential. Additionally, we
expect the acquisition of higher-margin ACG Education, along with
an improving utilization rate for its schools, will enable the
group to maintain leverage around 6.0x in fiscal year 2019 and
maintain sound FOCF generation. We also assume the group will
pursue acquisitions and greenfield projects in a financially
conservative manner.

"We could consider a negative rating action over the next 12 months
if the group's credit metrics were to deteriorate materially, such
that the S&P Global Ratings-adjusted debt to EBITDA ratio increases
above 7.5x, alongside sustained, negative FOCF and weakening
liquidity. Such a scenario could result from a significant
deterioration in operating performance, unfavorable movements of
foreign exchange rates in key markets (including South Africa,
Bahrain, and New Zealand), material debt-financed acquisitions or
greenfield projects, shareholder distributions, or an event that
tarnished the group's global brand.

"We could raise the rating if Inspired demonstrated a track record
of prudent financial policy regarding acquisitions, greenfield
projects, and shareholder distributions, and achieved adjusted debt
to EBITDA of less than 5.0x, while generating materially positive
FOCF on a sustainable basis. Such a scenario would be supported by
higher-than-expected growth of utilization rates combined with an
improvement in adjusted margins beyond our expectations."


TOWER BRIDGE 4: Moody's Gives (P)B3 Rating on Class F Notes
-----------------------------------------------------------
Moody's Investors Service has assigned provisional long-term credit
ratings to the following classes of Notes to be issued by Tower
Bridge Funding No. 4 plc:

GBP[-]M Class A Mortgage Backed Floating Rate Notes due December
2062, Assigned (P)Aaa (sf)

GBP[-]M Class B Mortgage Backed Floating Rate Notes due December
2062, Assigned (P)Aa2 (sf)

GBP[-]M Class C Mortgage Backed Floating Rate Notes due December
2062, Assigned (P)A3 (sf)

GBP[-]M Class D Mortgage Backed Floating Rate Notes due December
2062, Assigned (P)Baa3 (sf)

GBP[-]M Class E Mortgage Backed Floating Rate Notes due December
2062, Assigned (P)Ba3 (sf)

GBP[-]M Class F Mortgage Backed Floating Rate Notes due December
2062, Assigned (P)B3 (sf)

Moody's has not assigned ratings to the GBP[-]M Class G Mortgage
Backed Floating Rate Notes due December 2062, nor to the GBP[-]M
Class X Floating Rate Notes due December 2062, and nor to the
GBP[-]M Class Z Notes due December 2062.

This transaction represents the fourth securitisation transaction
that is backed by buy-to-let mortgage loans and non-conforming
loans originated by Belmont Green Finance Limited. This is the
first transaction by Belmont Green where the notes reference
SONIA.

The portfolio consists of [1,989] loans, secured by first ranking
mortgages on properties located in the UK, of which [74.3]% are buy
to let and [25.7]% are owner occupied. The current pool balance was
approximately GBP [370] million as of the 31st May 2019,
provisional cut-off date. The seller can sell up to GBP [130]
million of additional loans into the transaction until and
including the first interest payment date, subject to certain
eligibility conditions on the additional loan portfolio.

RATINGS RATIONALE

The ratings take into account the credit quality of the underlying
mortgage loan pool, from which Moody's determined the MILAN Credit
Enhancement and the portfolio expected loss, as well as the
transaction structure and legal considerations. The expected
portfolio loss of [5.0]% and the MILAN required Credit Enhancement
("MILAN CE") of [21.0]% serve as input parameters for Moody's cash
flow model and tranching model.

The expected loss is [5.0]%, which is in line with other recent UK
non-conforming transactions and takes into account: (i) the
proportion of the portfolio having some adverse credit; (ii) the
relatively high number of buy-to-let loans [74.3]% or interest-only
loans [73.3]%, which Moody's deems riskier than owner occupied and
repayment loans; (iii) the weighted average current LTV of [71.3]%;
(iv) the lack of historical performance data from the originator in
particular through any economic downturn; (v) the current
macroeconomic environment and its view of the future macroeconomic
environment in the UK after Brexit; and (vi) benchmarking with
similar transactions in the UK non-conforming sector.

MILAN CE for this pool is [21.0]%, which is in line with other
recent UK non-conforming transactions and takes into account: (i)
the original LTV of [71.5]%; (ii) borrowers with adverse credit
history; (iii) lack of seasoning of the originated loans; (iv)
potential portfolio deterioration given prefunding in the deal,
subject to certain limits; (v) less standard income streams of the
underlying borrowers; (vi) loans to expatriate borrowers or
companies, where the loans are for buy-to-let purposes; and (vii)
an additional penalty to account for the limited track record of
the originator.

The structure allows for additional loans to be added to the pool
between the closing date and before the first interest payment date
in December 2019. Prefunding in the deal may equal up to [26.0]% of
the principal amount of the Notes to be issued.

The risk of pool deterioration is mitigated by concentration limits
in relation to the added loans; including a [75]% average original
LTV limit; and [11.5]% limit on loans with CCJs; as well as other
concentration limits, for example, geographical. The structure also
benefits from a prefunding revenue reserve, which mitigates
potential negative carry up until the end of the prefunding period.
Additionally, the purchase by the issuer of such prefunded loans is
conditional upon Moody's providing a rating agency confirmation.
Should the prefunding not take place in full, remaining funds in
the prefunding principal reserve not used will be released to the
principal redemption waterfall.

At closing, the non-amortising General Reserve Fund is initially
[2.0]% and will be increased to 2.5% of the closing principal
balance of the principal backed Notes i.e. GBP[•] million. The
General Reserve Fund will be increased and replenished from the
interest waterfall after the PDL cure of the Class F Notes and can
be used to pay senior fees and costs, interest and PDLs on the
Class A-F Notes. The Liquidity Reserve Fund target is [1.5]% of the
outstanding Class A and B Notes and is funded by the diversion of
principal receipts until the target is met. Once the Liquidity
Reserve Fund is fully funded, it will be replenished from the
interest waterfall. The Liquidity Reserve Fund is available to
cover senior fees, costs and Class A and B Notes interest only.
Amounts released from the Liquidity Reserve Fund will flow down the
principal priority of payments. The class A Notes, or if these are
not outstanding, the most senior Notes outstanding at that time,
further benefit from a principal to pay interest mechanism.

Operational Risk Analysis: Although Belmont Green is the servicer
in the transaction, it delegates all the servicing to Homeloan
Management Limited, "HML" (not rated, parent Computershare Ltd
rated Baa2), who also acts as the standby servicer. U.S. Bank
Global Corporate Trust Limited ("US Bank", not rated) will be the
cash manager. Although US Bank is not rated, it is part of the U.S.
Bancorp (A1/P-1). In order to mitigate the operational risk, CSC
Capital Markets UK Limited (not rated) will act as back-up servicer
facilitator. To ensure payment continuity over the transaction's
lifetime, the transaction documents incorporate estimation
language, whereby the cash manager can use the three most recent
monthly servicer reports to determine the cash allocation in case
no servicer report is available. The transaction also benefits from
the equivalent of at least [10] months liquidity once the Liquidity
Reserve has been funded from principal, to supplement the General
Reserve which is funded at [2.0]% of the principal-backed Notes at
closing.

Interest Rate Risk Analysis: majority of mortgages in the pool
[99.8%] carry a fixed rate. The transaction benefits from a swap
agreement to mitigate the fixed-floating mismatch between the
initial fixed rate paid by the mortgages and the SONIA paid under
the Notes. The swap provider is Natwest Markets Plc (Baa2/P-2; A3
(cr)/P-2(cr)). Over time, all the loans in the portfolio will reset
from fixed rate to a floating rate linked to LIBOR or Belmont
Green's base rate (Vida Variable Rate ["VVR"]). As is the case in
many UK RMBS transactions, this basis risk mismatch between the
floating rate on the underlying loans and the floating rate on the
notes will be unhedged. Moody's has applied a stress to account for
the basis risk on the mortgage loans linked to LIBOR, in line with
the stresses applied to the various types of unhedged basis risk
seen in UK RMBS.

Moody's issues provisional ratings in advance of the final sale of
securities, but these ratings represent only Moody's preliminary
credit opinions. Upon a conclusive review of the transaction and
associated documentation, Moody's will endeavour to assign
definitive ratings to the Notes. A definitive rating may differ
from a provisional rating. Other non-credit risks have not been
addressed, but may have a significant effect on yield to
investors.

The principal methodology used in these ratings was "Moody's
Approach to Rating RMBS Using the MILAN Framework" published in
March 2019.

The analysis undertaken by Moody's at the initial assignment of
ratings for RMBS securities may focus on aspects that become less
relevant or typically remain unchanged during the surveillance
stage.

FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS:

Factors that may cause an upgrade of the ratings of the Notes
include significantly better than expected performance of the pool
together with an increase in credit enhancement of Notes.

Factors that would lead to a downgrade of the ratings include: (i)
increased counterparty risk leading to potential operational risk
of servicing or cash management interruptions; and (ii) economic
conditions being worse than forecast resulting in higher arrears
and losses.



                           *********


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.

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