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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

             Friday, June 4, 2010, Vol. 11, No. 094

                            Headlines



C Z E C H   R E P U B L I C

JAVORICE: Creditors Opt for Reorganization

* CZECH REPUBLIC: Company Insolvencies Stood at 120 in May 2010


D E N M A R K

AMAGERBANKEN AS: Moody's Reviews Long-Term Bank Deposit Ratings


F R A N C E

LE MONDE: Takeover Likely; Seeks Cash to Avert Administration


G E R M A N Y

ALMATIS BV: Wins U.S. Court's Nod to Limit Claims Trading
ALMATIS BV: Wins U.S. Court's Nod to Pay Contractors
ALMATIS BV: Wins U.S. Court's Nod to Pay Foreign Creditor Claims
ALMATIS BV: Has Final OK for Linklaters as U.K. & Germany Counsel
ARCANDOR AG: Karstadt In Talks with Metro Over Assets Sale

GATE SME: S&P Junks Rating on Class G 2005-2 Notes From 'BB'
MARSEILLE-KLINIKEN AG: S&P Affirms 'B+' Corporate Credit Rating
ROHWEDDER AG: Konstanz Court Opens Insolvency Proceedings
WESTLB AG: July 2 Deadline Set for WestImmo Unit Bids
WOOLWORTH GMBH: German Cartel Office Okays H.H. Holding Takeover


I C E L A N D

KAUPTHING BANK: Settles Dispute with Bank of Tokyo-Mitsubishi


I R E L A N D

EBS BUILDING: EU Commission Approves Emergency Recapitalization


L U X E M B O U R G

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


N E T H E R L A N D S

CARLSON WAGONLIT: Moody's Gives Stable Outlook on 'B3' Rating
ELEPHANT TALK: Posts US$12.3 Million Net Loss in Q1 2010


P O R T U G A L

BANCO COMERCIAL: Moody's Keeps D+ Bank Financial Strength Rating
CAIXA GERAL: Moody's Cuts Bank Financial Strength Rating to D+


R U S S I A

LSR GROUP: Moody's Upgrades Corporate Family Rating to 'B2'
RUSIA PETROLEUM: Files for Bankruptcy; TNK-BP Demands Repayment


S L O V A K   R E P U B L I C

AIR SLOVAKIA: Declared Bankrupt By Bratislva District Court


S W I T Z E R L A N D

SES SOLAR: Posts US$457,670 Net Loss in Q1 2010


U N I T E D   K I N G D O M

BRADFORD & BINGLEY: Fitch Affirms 'C' Ratings on Debt Securities
CATTLES PLC: In Talks with Creditors Over Rescue Plan
DEUTSCHE BANK: S&P Junks Ratings on Credit Default Swaps
FABRIC: In Administration; Edward Symmons Seeks Buyer
HERCULES PLC: Fitch Junks Rating on GBP29MM Class E Notes From B

INTERACTIVE PUBLISHING: Sells Vitality Publishing to Raise Funds
NORTHERN ROCK: To Close Banking Operation in Guernsey
NORTHERN ROCK: Bad Bank Returns to Profitability
NORTHERN ROCK: S&P Downgrades Rating on GBP200 Mil. 6.75% Notes
R&W CUSHWAY: Administrators Complete Sale to Cushway-Schmidt

RMAC SECURITIES: S&P Cuts Rating on Class B1c Notes to 'BB'
ROYAL BANK: To Cut 500 Jobs at Wealth Management Units
SGL CARBON: S&P Changes Outlook to Stable; Affirms 'BB' Rating
SOPHOS PLC: S&P Assigns 'B' Long-Term Corporate Credit Rating

* UK: HMRC to Challenge "Football Creditors" Rule in High Court


X X X X X X X X

* EUROPE: EU Calls for Single Supervisor of Credit Rating Firms

* BOOK REVIEW: Corporate Turnaround - How Managers Turn Losers




                         *********


===========================
C Z E C H   R E P U B L I C
===========================


JAVORICE: Creditors Opt for Reorganization
------------------------------------------
CTK reports that at a meeting in Brno Wednesday, creditors of
Javorice opted to reorganize the insolvent company rather than let
it go bankrupt.

According to the report, the company's sale to new investors would
generate more money in reorganization than its sale by parts in
bankruptcy.

Javorice runs a huge sawmill in Pteni, northern Moravia.


* CZECH REPUBLIC: Company Insolvencies Stood at 120 in May 2010
---------------------------------------------------------------
CTK, citing an analysis carried out by Deloitte, reports that a
total of 120 companies were declared bankrupt in the Czech
Republic in May, the lowest figure in the past 12 months.

In May 2009, 112 companies were declared bankrupt, the report
notes.


=============
D E N M A R K
=============


AMAGERBANKEN AS: Moody's Reviews Long-Term Bank Deposit Ratings
---------------------------------------------------------------
Moody's Investors Service has placed on review for possible
downgrade the Baa3 long-term bank deposit rating of Amagerbanken
A/S and the Baa3 long-term senior unsecured debt and bank deposit
ratings of FIH Erhvervsbank A/S.  At the same time, both banks'
Prime-3 short-term bank deposit ratings were also placed on review
for downgrade.  The rating action does not affect the standalone
bank financial strength ratings of Amagerbanken (E+/B1 negative)
and FIH Erhvervsbank (D-/Ba3 negative), both of which currently
carry a negative outlook.

The rating action is prompted primarily by the phasing-out of the
general government guarantee for Danish banks' deposit and senior
unsecured debt, scheduled to be completed by September 30, 2010.
Additionally, the review for possible downgrade also reflects the
numerous further reforms proposed in new legislation to amend the
Law on financial stability, the Financial Business Act, the Act on
a guarantee fund for depositors and investors and the Law on the
allocation of income to the state (approved by the Danish
parliament on June 1, 2010).  Amongst other measures, the new law
provides an enhanced level of depositor guarantee, as well as
setting out clearer expectations as to the role of senior
creditors in future banking crises.  Consequently, Moody's
believes that the Danish government's systemic support to the
banking sector will subside over time.

Since the introduction of the Danish government guarantee
mechanism in 2008, and following the downgrades of the standalone
BFSRs of Amagerbanken and FIH Erhvervsbank, the banks' deposit and
senior unsecured ratings have benefited from extraordinarily high
uplift, reflecting the strong systemic support provided to
depositors and senior creditors.  Reflecting this, both
Amagerbanken and FIH Erhvervsbank received government support in
2009 in the form of hybrid Tier 1 capital.  Moreover, FIH
Erhvervsbank received approval to issue debt amounting to
DKK50 billion under the individual government guarantee program,
and Amagerbanken has applied for up to DKK13.5 billion under the
same program.  If the two banks were to draw the full amounts
mentioned above, Moody's estimates that this could lead to over
40% of the two banks' total liabilities benefiting from individual
government guarantees.

During its ratings review, Moody's will address the ability and
willingness of the Danish government to continue to support the
banking sector, and these two banks in particular.  The rating
agency will assess the potential impact of the new legislation, as
well as any further guidelines provided by the Danish regulatory
authorities.  Moody's review will in particular focus on the
extent to which the new legislation will make it possible for the
government to impose burden-sharing of a bank's losses on
stakeholders, including senior creditors in a going concern
scenario.

Apart from the BFRSs which are not affected by the downgrade, the
rating action also does not affect the Aaa and Prime-1 backed
ratings on debt issued by FIH Erhvervsbank using the individual
guarantee mechanism from the Danish government.  Furthermore, the
rating action does not affect the B2 junior subordinated debt and
junior subordinated EMTN program ratings for FIH Erhvervsbank.

Moody's last rating action on Amagerbanken was implemented on
April 9, 2010, when the E+ bank financial strength rating (BFSR)
was confirmed with a negative outlook.

Moody's last rating action on FIH Erhvervsbank was implemented on
February 26, 2010, when the bank's rating for its junior
subordinated debt was downgraded to B2 from B1, in line with
Moody's revised Guidelines for Rating Bank Hybrids and
Subordinated Debt, as published in November 2009.

Both banks are headquartered in Copenhagen, Denmark.  At the end
of March 2010, Amagerbanken A/S and FIH Erhvervsbank A/S reported
total assets of DKK31.2 billion (EUR4.2 billion) and
DKK128 billion (EUR17.2 billion), respectively.


===========
F R A N C E
===========


LE MONDE: Takeover Likely; Seeks Cash to Avert Administration
-------------------------------------------------------------
The Times reports that Le Monde is on the verge of abandoning some
of its lofty ideals in the search for readers and cash to stave
off administration.

The Times says this week the daily will break with tradition as it
uses sex as a marketing ploy for the first time, albeit in a high-
brow format.  It is to offer readers the chance to purchase 20
classics from the history of erotic literature by authors such as
Casanova and the Marquis de Sade, The Times states.

                             Takeover

According to The Times, an even bigger change is likely as staff
meet to discuss four takeover offers for the group, which includes
the newspaper, its website and Telerama, the television listings'
guide.  The Times notes their decision is critical because all the
potential purchasers want an end to the complex structure that
gives journalists control of the company and a veto on the
appointments of their chief executive and editor.

"The alternative is going to the Commercial Court and that would
be worse," The Times quoted Gilles Van Kote, chairman of the
Society of Le Monde's journalists, which together with other
employee associations has a 52% stake in the holding company at
the top of the group, as saying.

Mr. Van Kote, as cited by The Times, said a takeover is
inevitable, with the daily losing EUR25 million (GBP21 million)
last year, the 10th year in a row it has been in the red amid a
deepening crisis for the whole of France's national press.  With
sales of EUR397 million, the group has debts of EUR125 million,
including EUR25 million that has to be repaid to BNP Paribas, the
bank, next year, The Times.  "We need cash," Mr. Van Kote said,
according to The Time.

The Times relates Mr. Van Kote said the newspaper may be the most
influential in France but, given its plight, a controlling stake
should cost no more than EUR60 million.  Contenders include Prisa,
the Spanish media empire that owns El Pais and already has a
minority stake in Le Monde, and l'Espresso, an Italian media group
owned by Carlo de Benedetti, The Times discloses.

Le Monde is a French newspaper.


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


ALMATIS BV: Wins U.S. Court's Nod to Limit Claims Trading
---------------------------------------------------------
Almatis B.V. and its units sought and obtained a final order
limiting certain transfers of claims against them and approving
related notice procedures.

The Debtors believe it may be possible for a holder of a claim
against them to circumvent the protections of the automatic stay
by transferring its claims to an entity that lacks minimum
contacts within the United States or a "foreign transferee" and
is not likely to be subject to the jurisdiction of the Bankruptcy
Court or the provisions of the Bankruptcy Code.

The Debtors are concerned that a Foreign Transferee might
consider itself to be beyond the jurisdiction of the Bankruptcy
Court, disregard the automatic stay, and institute proceedings to
enforce a claim in a foreign jurisdiction that has not agreed to
give effect to the bankruptcy laws of the United States.

Accordingly, at the Debtors' behest, Judge Glenn ruled that any
sale or other transfer of claims against the Debtors will be
subject to these Notice and Hearing Procedures:

  * Disposition of Claims.  Prior to effecting any disposition
    of claims against the Debtors, any person or entity
    attempting that disposition will file with the Court, and
    serve on the Debtors' counsel, a Notice of Intent to Sell,
    Trade, or Otherwise Transfer a Claim, specifically and in
    detail describing the intended disposition of claims against
    the Debtors, regardless of whether that disposition would
    also be subject to the filing, notice, and hearing
    requirements of Rule 3001 of the Federal Rules of
    Bankruptcy Procedure.

  * Acquisition of Claims.  Prior to effecting any acquisition
    of claims against the Debtors, any person or entity
    attempting that will file with the Court, and serve on the
    Debtors' counsel, a Notice of Intent to Purchase, Acquire,
    or Otherwise Accumulate a Claim, specifically and in detail
    describing the intended acquisition of claims against the
    Debtors, regardless of whether that acquisition would also
    be subject to the filing, notice, and hearing requirements
    of Bankruptcy Rule 3001.

  * Objection Procedures.  No later than the date that is 10
    calendar days after the Debtors' actual receipt of a Claims
    Disposition Notice or a Claims Acquisition Notice, the
    Debtors may file with the Court, and serve on a Proposed
    Claims Disposition Transferor or Proposed Claims Disposition
    Transferee an objection to any proposed transfer of claims
    described in a Claims Acquisition Notice or Claims
    Disposition Notice on the grounds that the transfer would
    inhibit the operation of the automatic stay.

    If the Debtors timely file an Objection by the Objection
    Deadline, the Proposed Claims Disposition Transaction or
    Proposed Claims Disposition Acquisition will not be
    effective unless approved by a Court order, after notice and
    a hearing, and that order is not subject to appeal, stay,
    modification, or reconsideration.

    If the Debtors do not timely file an Objection by the
    Objection Deadline, the Proposed Claims Disposition
    Transaction or Proposed Claims Disposition Acquisition may
    proceed only as specifically set forth under the Claims
    Notice.

Any acquisition or disposition or other transfer of claims
against the Debtors in violation of the Court-approved Claim
Transfer Procedures will be null and void ab initio as an act in
violation of the automatic stay and will confer no rights on the
transferee.
                 Debtors & GSO Ink Stipulation

The Debtors and GSO Capital Partners LP entered into Court-
approved stipulation in connection with the notice of hearing
procedures:

  (1) The Debtors agree to irrevocably waive the right to seek
      enforcement of the procedures with respect to the
      acquisition, on or before May 6, 2010, of claims by GSO
      Capital and the funds it manages;

  (2) The acquisition by the GSO Entities of the claims on or
      before May 6, 2010 without compliance with the procedures
      will not be deemed void ab initio and its non-compliance
      will be deemed not to effect the validity, enforceability
      or allowance of the claims;

  (3) None of the GSO entities will be deemed to have violated
      the automatic stay or the Court's interim order approving
      the procedures by virtue of their acquisition of the
      claims on or before May 6, 2010; and

  (4) The procedures contained in the Interim Order will not
      apply to the acquisition of any additional claims by the
      GSO Entities or to their counterparty with respect to the
      acquisition, sale, transfer or assignment of a claim
      against the Debtors from one GSO entity to another GSO
      entity.

A full-text copy of the Almatis-GSO Stipulation is available
without charge at http://bankrupt.com/misc/Almatis_StipGSO.pdf

                       About Almatis Group

Alamtis B.V., and its affiliates filed for Chapter 11 on April 30,
2010 (Bankr. S.D.N.Y. Lead Case No. 10-12308).  Almatis B.V.
estimated assets of US$500 million to US$1 billion and debts of
more than US$1 billion as of the bankruptcy filing.

Almatis, operationally headquartered in Frankfurt, Germany, is a
global leader in the development, manufacture and supply of
premium specialty alumina products.  With nearly 900 employees
worldwide, the company's products are used in a wide variety of
industries, including steel production, cement production, non-
ferrous metal production, plastics, paper, ceramics, carpet
manufacturing and electronic industries.  Almatis operates nine
production facilities worldwide and serves customers around the
world.  Until 2004, the business was known as the chemical
business of Alcoa.  Almatis is now owned by Dubai International
Capital LLC, the international investment arm of Dubai Holding.

Michael A. Rosenthal, Esq., at Gibson, Dunn & Crutcher LLP, serves
as counsel to the Debtors in the Chapter 11 cases.  Linklaters LLP
is the special English and German counsel and De Brauw Blackstone
Westbroek N.V. is Dutch counsel.  Epiq Bankruptcy Solutions, LLC,
serves as claims and notice agent.

Bankruptcy Creditors' Service, Inc., publishes Almatis Bankruptcy
News.  The newsletter tracks the Chapter 11 proceeding and
ancillary foreign proceedings undertaken by Almatis B.V., and its
affiliates.  (http://bankrupt.com/newsstand/or 215/945-7000)


ALMATIS BV: Wins U.S. Court's Nod to Pay Contractors
----------------------------------------------------
Almatis B.V. and its affiliated debtors obtained a final order
from the Court authorizing them to pay the pre-bankruptcy claims
of their contractors, distributors and warehousemen in the sum of
US$2 million.

Any contractor, distributor or warehouseman that receives payment
of claims is required to continue to extend customary trade
credit and provide other business terms; is not allowed to file
and record in any jurisdiction, or assert against the Debtors,
their estates and properties, a lien or security interest
relating in any manner to the claims already paid; and is
required to return goods or other assets in which the Debtors
have an interest.

Almatis B.V. and its debtor affiliates sought and obtained
final U.S. Court approval to pay the pre-bankruptcy claims of
their contractors, distributors and warehousemen.

The Debtors owe their Service Providers about US$2 million in fees
and charges for services rendered as of April 30, 2010.  The
services provided include maintenance and repair, and
transportation, distribution and storage of the Debtors' raw
materials and finished products.

Michael Rosenthal, Esq., at Gibson Dunn & Crutcher LLP, in New
York, said that through the proposed payment, the service
providers won't have any reason to assert liens against the
Debtors' goods or refuse to release those goods that are in their
custody.

The estimated value of the goods that are in the possession of
the service providers reportedly exceeds US$2 million.

The payment of claims comes with a number of conditions: (1) the
service provider has possession of and control over goods in
which the Debtors have interest; (2) the service provider agrees
to release the goods at its sole cost and expense; and (3) the
payment must be made with reservation of rights regarding the
extent, validity, perfection or possible avoidance of any liens
and interests of the service provider.

In connection with the payment of claims, the Court authorized
the Debtors' banks and other financial institutions to honor
checks and transfers related to the service providers'
prepetition claims.

                       About Almatis Group

Alamtis B.V., and its affiliates filed for Chapter 11 on April 30,
2010 (Bankr. S.D.N.Y. Lead Case No. 10-12308).  Almatis B.V.
estimated assets of US$500 million to US$1 billion and debts of
more than US$1 billion as of the bankruptcy filing.

Almatis, operationally headquartered in Frankfurt, Germany, is a
global leader in the development, manufacture and supply of
premium specialty alumina products.  With nearly 900 employees
worldwide, the company's products are used in a wide variety of
industries, including steel production, cement production, non-
ferrous metal production, plastics, paper, ceramics, carpet
manufacturing and electronic industries.  Almatis operates nine
production facilities worldwide and serves customers around the
world.  Until 2004, the business was known as the chemical
business of Alcoa.  Almatis is now owned by Dubai International
Capital LLC, the international investment arm of Dubai Holding.

Michael A. Rosenthal, Esq., at Gibson, Dunn & Crutcher LLP, serves
as counsel to the Debtors in the Chapter 11 cases.  Linklaters LLP
is the special English and German counsel and De Brauw Blackstone
Westbroek N.V. is Dutch counsel.  Epiq Bankruptcy Solutions, LLC,
serves as claims and notice agent.

Bankruptcy Creditors' Service, Inc., publishes Almatis Bankruptcy
News.  The newsletter tracks the Chapter 11 proceeding and
ancillary foreign proceedings undertaken by Almatis B.V., and its
affiliates.  (http://bankrupt.com/newsstand/or 215/945-7000)


ALMATIS BV: Wins U.S. Court's Nod to Pay Foreign Creditor Claims
----------------------------------------------------------------
Almatis B.V. and its affiliated debtors sought and obtained
Final approval from the U.S. Bankruptcy Court to earmark as much
as US$23 million to pay the pre-bankruptcy claims of their foreign
creditors.

The claims are on account of goods and services provided by the
Foreign Creditors for the production and transportation of
specialty alumina products for the Debtors' customers located
throughout the world.  The creditors include suppliers, brokers,
and duty collectors, among others.

The Debtors proposed to pay their Foreign Creditors to prevent
the latter from withholding goods, asserting liens or terminating
service agreements or other actions detrimental to the Debtors'
operations, according to Michael Rosenthal, Esq., at Gibson Dunn
& Crutcher LLP, in New York.

Mr. Rosenthal said that several of the Foreign Creditors are not
likely to be subject to the jurisdiction of the U.S. Bankruptcy
Court, which oversees the Debtors' Chapter 11 cases.  "Foreign
creditors may consider themselves to be beyond the jurisdiction
of this Court, disregard the automatic stay and engage in conduct
that disrupts the Debtors' domestic and international
operations."

Judge Glenn also authorized the Debtors' banks and other
financial institutions to honor checks and transfers in relation
to the Foreign Creditor Claims payment.

In addition to the payment of the Foreign Creditors' claims, the
Debtors also obtained Court approval to continue a volume
purchase rebate program and pay all pre-bankruptcy claims
outstanding under that program.

Under the Rebate Program, the Debtors provide bulk rebates to
about 10 customers, which may qualify as foreign creditors, in
the form of a credit that may be applied against additional
orders.  The cost of maintaining the Program will not exceed
EUR200,000 for 2010 based on the Debtors' estimate.

In connection with the Program, the Court also authorized the
Debtors to reconcile accounts with suppliers and customers in the
ordinary course of their businesses regardless of the prepetition
or postpetition nature of any debit or credit involved in the
reconciliation.

                       About Almatis Group

Alamtis B.V., and its affiliates filed for Chapter 11 on April 30,
2010 (Bankr. S.D.N.Y. Lead Case No. 10-12308).  Almatis B.V.
estimated assets of US$500 million to US$1 billion and debts of
more than US$1 billion as of the bankruptcy filing.

Almatis, operationally headquartered in Frankfurt, Germany, is a
global leader in the development, manufacture and supply of
premium specialty alumina products.  With nearly 900 employees
worldwide, the company's products are used in a wide variety of
industries, including steel production, cement production, non-
ferrous metal production, plastics, paper, ceramics, carpet
manufacturing and electronic industries.  Almatis operates nine
production facilities worldwide and serves customers around the
world.  Until 2004, the business was known as the chemical
business of Alcoa.  Almatis is now owned by Dubai International
Capital LLC, the international investment arm of Dubai Holding.

Michael A. Rosenthal, Esq., at Gibson, Dunn & Crutcher LLP, serves
as counsel to the Debtors in the Chapter 11 cases.  Linklaters LLP
is the special English and German counsel and De Brauw Blackstone
Westbroek N.V. is Dutch counsel.  Epiq Bankruptcy Solutions, LLC,
serves as claims and notice agent.

Bankruptcy Creditors' Service, Inc., publishes Almatis Bankruptcy
News.  The newsletter tracks the Chapter 11 proceeding and
ancillary foreign proceedings undertaken by Almatis B.V., and its
affiliates.  (http://bankrupt.com/newsstand/or 215/945-7000)


ALMATIS BV: Has Final OK for Linklaters as U.K. & Germany Counsel
-----------------------------------------------------------------
Almatis B.V. and its debtor-affiliates received final approval
from the U.S. Bankruptcy Court for the Southern District of New
York to employ Linklaters LLP as their special corporate counsel
effective as of April 30, 2010.

The Debtors selected Linklaters because of its extensive expertise
in corporate matters and because of its prior representation of
the Debtors, Almatis Chief Executive Remco de Jong says.

Prior to their bankruptcy filing, the Debtors were assisted by the
firm in connection with their proposed financial restructuring as
well as in the negotiation of possible out-of-court restructuring
alternatives.

As special corporate counsel to the Debtors, Linklaters will:

  (1) advise the Debtors and assist their general bankruptcy
      counsel in connection with their prepetition credit,
      security and intercreditor agreements, exit financing,
      security and capital structure, among other things;

  (2) advise the Debtors and assist their bankruptcy counsel in
      formulating and drafting disclosure statement for their
      restructuring plan;

  (3) advise the Debtors and assist their bankruptcy counsel
      with respect to cross-border issues implicating laws of
      foreign jurisdictions particularly the laws of the
      United Kingdom and Germany; and

  (4) attend meetings, participate in negotiations and appear
      before the U.S. Bankruptcy Court or any other courts.

The Debtors will pay Linklaters for its services on an hourly
basis and will reimburse the firm for its necessary expenses.
The Linklaters professionals expected to provide the contemplated
services to the Debtors and their hourly rates are:

  Professionals          Resident Office     Hourly Rates
  -------------          ---------------     ------------
  Robert Elliott             London             GBP625
  Bruce Bell                 London             GBP625
  Michal Hlasek          London/Frankfurt       GBP625
  Kolja von Bismarck        Frankfurt           GBP625
  Paul Kuipers              Amsterdam           GBP625
  Verena Etzel              Frankfurt           GBP460
  Jacqueline Ingram          London             GBP280
  Birgit Weckler            Frankfurt           GBP280

Mr. Elliot, Esq., a partner at Linklaters, assures the Court that
his firm does not hold or represent interest adverse to the
Debtors and their estates.

                       About Almatis Group

Alamtis B.V., and its affiliates filed for Chapter 11 on April 30,
2010 (Bankr. S.D.N.Y. Lead Case No. 10-12308).  Almatis B.V.
estimated assets of US$500 million to US$1 billion and debts of
more than US$1 billion as of the bankruptcy filing.

Almatis, operationally headquartered in Frankfurt, Germany, is a
global leader in the development, manufacture and supply of
premium specialty alumina products.  With nearly 900 employees
worldwide, the company's products are used in a wide variety of
industries, including steel production, cement production, non-
ferrous metal production, plastics, paper, ceramics, carpet
manufacturing and electronic industries.  Almatis operates nine
production facilities worldwide and serves customers around the
world.  Until 2004, the business was known as the chemical
business of Alcoa.  Almatis is now owned by Dubai International
Capital LLC, the international investment arm of Dubai Holding.

Michael A. Rosenthal, Esq., at Gibson, Dunn & Crutcher LLP, serves
as counsel to the Debtors in the Chapter 11 cases.  Linklaters LLP
is the special English and German counsel and De Brauw Blackstone
Westbroek N.V. is Dutch counsel.  Epiq Bankruptcy Solutions, LLC,
serves as claims and notice agent.

Bankruptcy Creditors' Service, Inc., publishes Almatis Bankruptcy
News.  The newsletter tracks the Chapter 11 proceeding and
ancillary foreign proceedings undertaken by Almatis B.V., and its
affiliates.  (http://bankrupt.com/newsstand/or 215/945-7000)


ARCANDOR AG: Karstadt In Talks with Metro Over Assets Sale
----------------------------------------------------------
Richard Weiss at Bloomberg News, citing Westdeutsche Allgemeine
Zeitung, reports that Arcandor AG's insolvent German department-
store chain Karstadt is speaking to managers from competitor Metro
AG on the possible sale of some of its stores.

According to Bloomberg, the newspaper said insolvency
administrator Klaus Hubert Goerg has met with Kaufhof head Lovro
Mandac and Georg Mehring-Schlegel of Haniel, Metro's majority
shareholder, to discuss the possibility of Metro's buying some
Karstadt assets.

                         Insolvency Plan

As reported by the Troubled Company Reporter-Europe on June 2,
2010, Reuters reports that the district court in Essen postponed
its ruling on the insolvency plan of Arcandor AG's German
department store chain Karstadt to next week as the search for a
new investor is taking longer than expected.  Reuters disclosed
the court had initially planned to rule on on May 31 whether
Karstadt's insolvency plan was viable, but postponed its decision
to June 10 after a committee of Karstadt's creditors said it
needed more time to assess bids.  Reuters noted a contract with a
new investor is one of the key prerequisites for the insolvency
plan, and a break-up of Karstadt looms if the plan fails to win
approval by the court.

                         About Arcandor AG

Germany-based Arcandor AG (FRA:ARO) -- http://www.arcandor.com/--
formerly KarstadtQuelle AG, is a tourism and retail group.  Its
three core business areas are tourism, mail order services and
department store retail.  The Company's business areas are covered
by its three operating segments: Thomas Cook, Primondo and
Karstadt.  Thomas Cook Group plc is a tour operator with
operations in Europe and North America, set up as a result of a
merger between MyTravel and Thomas Cook AG.  It also operates the
e-commerce platform, Thomas Cook, supporting travel services.
Primondo has a portfolio of European universal and specialty mail
order companies, including the core brand Quelle.  Karstadt
operates a range of department stores, such as cosmopolitan
stores, including KaDeWe (Kaufhaus des Westens), Karstadt
Oberpollinger and Alsterhaus; Karstadt brand department stores;
Karstadt sports department stores, offering sports goods in a
variety of retail outlets, and a portal, karstadt.de that offers
online shopping, among others.

As reported by the Troubled Company Reporter-Europe, a local court
in Essen formally opened insolvency proceedings for Arcandor on
September 1, 2009.  The proceedings started for the Arcandor
holding company and for 14 units, including the Karstadt
department-store chain and Primondo mail-order division.

Arcandor filed for bankruptcy protection after the German
government turned down its request for loan guarantees.  On
June 8, 2009, the government rejected two applications for help by
the company, which employs 43,000 people.  The retailer sought
loan guarantees of EUR650 million (US$904 million) from Germany's
Economy Fund program.  It also sought a further EUR437 million
from a state-owned bank.


GATE SME: S&P Junks Rating on Class G 2005-2 Notes From 'BB'
------------------------------------------------------------
Standard & Poor's Ratings Services took various rating actions on
three GATE SME CLO transactions.

Specifically, S&P:

  -- Lowered and removed from CreditWatch negative its credit
     ratings on GATE SME CLO 2005-1 Ltd.'s class G notes and on
     GATE SME CLO 2005-2 Ltd.'s class D, E, F, and G notes;

  -- Lowered and kept on CreditWatch negative its ratings on GATE
     SME CLO 2006-1 Ltd.'s class B, C, D, and E notes;

* Affirmed its ratings on GATE 2005-1's class A to F notes and
  GATE 2005-2's class C notes; and

* Placed on CreditWatch negative its rating on GATE 2006-1's class
  A notes.

The actions follow a performance review of the transactions'
respective reference portfolios following S&P's CreditWatch
placement of certain notes in February 2010.

S&P's review focused primarily on credit migration and the share
of defaulted assets in the respective reference portfolios, as
well as on the relative erosion of credit enhancement due to loss
allocations.  The loss allocation is more pronounced in the GATE
2005-2 and 2006-1 transactions (reported as 0.96% and 0.63% of the
initial reference balance, respectively), whereas in GATE 2005-1
allocated losses amount to only 0.02% of the initial reference
portfolio.

As outlined on Feb. 10, 2010, when S&P first placed its ratings in
these transactions on CreditWatch negative, all three reference
portfolios have experienced a deterioration in credit quality over
the past 18 months.  In S&P's view, the extent of deterioration is
such that for some of the notes there is insufficient credit
enhancement available, relative to the riskiness of the pool, to
maintain their current ratings.  Therefore, S&P has lowered the
ratings to levels commensurate with the risk characteristics of
the portfolios.

Although S&P has removed GATE 2005-1 and 2005-2's notes from
CreditWatch negative, S&P has placed GATE 2006-1's class A notes,
and kept its entire capital structure, on CreditWatch negative.
The rating actions address the credit risk on a portfolio level.
S&P's analysis has, however, further indicated that there has been
an increase in the level of obligor concentration exposure in GATE
2006-1.  S&P will further review these concentration issues and
will resolve the CreditWatch placements once S&P has assessed the
idiosyncratic risk these issues represent.

                           Ratings List

                         Ratings Affirmed

                       GATE SME CLO 2005-1
               EUR151.5 Million Credit-Linked Notes

                        Class       Rating
                        -----       ------
                        A           AAA
                        B           AAA
                        C           AA
                        D           A
                        E           A
                        F           BBB

                       GATE SME CLO 2005-2
                EUR45 Million Floating-Rate Notes

                        Class       Rating
                        -----       ------
                        C           AAA

       Ratings Lowered and Removed From CreditWatch Negative

                       GATE SME CLO 2005-1
              EUR151.5 Million Credit-Linked Notes

                               Rating
                               ------
           Class       To                  From
           -----       --                  ----
           G           B                   BB+/Watch Neg

                       GATE SME CLO 2005-2
                EUR45 Million Floating-Rate Notes

                               Rating
                               ------
           Class       To                  From
           -----       --                  ----
           D           AA-                 AA/Watch Neg
           E           BBB                 A/Watch Neg
           F           B                   BBB/Watch Neg
           G           CCC-                BB/Watch Neg

               Rating Placed on CreditWatch Negative

                       GATE SME CLO 2006-1
         EUR185 Million Floating-Rate Credit-Linked Notes

                               Rating
                               ------
           Class       To                  From
           -----       --                  ----
           A           AAA/Watch Neg       AAA

         Ratings Lowered and Kept on CreditWatch Negative

                       GATE SME CLO 2006-1
         EUR185 Million Floating-Rate Credit-Linked Notes

                               Rating
                               ------
           Class       To                  From
           -----       --                  ----
           B           AA-/Watch Neg       AA/Watch Neg
           C           A-/Watch Neg        A/Watch Neg
           D           BBB-/Watch Neg      BBB/Watch Neg
           E           B+/Watch Neg        BB/Watch Neg


MARSEILLE-KLINIKEN AG: S&P Affirms 'B+' Corporate Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B+' long-
term corporate credit rating on Germany-based private nursing-care
provider Marseille-Kliniken AG.  S&P removed the rating from
CreditWatch, where it was placed with negative implications on
Nov. 13, 2009.  The outlook is negative.

"The rating reflects S&P's view that Marseille is likely to make
significant progress in reducing debt following the sale of its
rehabilitation division for an undisclosed sum in April, assuming
that it will use the disposal proceeds for debt reduction," said
Standard & Poor's credit analyst Olaf Toelke.  "However, the
rating also reflects S&P's concern that Marseille's leverage as of
fiscal year-end June 30, 2010, will still be above the lease-
adjusted total debt to earnings before interest, taxes,
depreciation, amortization, and rents of 5.5x that S&P considers
commensurate for the rating."

The rating further reflects S&P's view of the uncertainty
regarding the company's future strategy and financial policy
following the recent change in Marseille's CEO and other
management changes over the past 12 months.  S&P also considers
that Marseille's liquidity profile was "less-than-adequate" at
least until the end of the third quarter of fiscal year 2010
(March 31) and therefore a further rating constraint.  While S&P
believes that Marseille can significantly reduce its exposure to
short-term debt rollover facilities with the divestiture proceeds
from the sale of the rehabilitation division, S&P has not yet seen
evidence that management intends to do this.

The operating environment in Marseille's nursing-care division
improved over the first nine months of fiscal 2010 to March 31, as
demonstrated by a 6.3% sales growth year on year.  This had a
significantly positive effect on EBITDA, which improved to
EUR11 million in the first nine months of fiscal 2010, compared
with about EUR7 million year on year.  This should help Marseille
to reduce the high leverage it amassed last year following high
cost increases and slower opening of new nursing homes than
originally scheduled.  However, although S&P expects that leverage
is likely to decline significantly, S&P considers it not yet clear
whether such a decline will be to a level that S&P considers
rating-commensurate and whether the new management is willing to
achieve this.

"S&P could lower the rating if Marseille's fiscal year-end
leverage is above lease-adjusted total debt to EBITDAR of 5.5x,
the level S&P considers commensurate for the rating," said Mr.
Toelke.  "However, S&P would revise the outlook to stable if S&P
assessed that Marseille's debt levels and financial policy would
lead to a significant improvement in credit metrics by June 30,
2010."


ROHWEDDER AG: Konstanz Court Opens Insolvency Proceedings
---------------------------------------------------------
Anke Schroeter at evertiq reports that the Konstanz District Court
has opened insolvency proceedings in respect of the assets of
Rohwedder AG.

The report relates Volker Grub was appointed as the insolvency
administrator.

According to the report, the insolvency administrator has received
several offers to take over all of the company's business
activities.  The report says individual offers have also been
received for the company's locations in Bermatingen, Bruchsal,
Radolfzell and Loerrach, for the JOT Automation Ltd. subgroup in
Finland and for Rohwedder Canada Inc.  Mr. Grub expects the
takeover talks to be concluded within the next four weeks.

The management board and insolvency administrator will apply for
the company's stock to be delisted.

Rohwedder AG -- http://www.rohwedder.de/-- is a Germany-based
company that supplies automation system solutions for the
assembly, production and testing technology within two segments.
Within the Mechatronics Production Solutions segment the Company
concentrates on Assembly Technologies in Europe and North America,
offering automation solutions for the automotive industry; and
Micro Technologies, which specializes in assembly solutions for
the production of micro products.  The Electronics Production
Solutions segment includes MIMOT Surface Mount Technologies, which
provides surface mount device placement technology products;
Mobile Device Solutions, focusing on automation solutions for the
mobile communication industry; Standard Products, which offers
products through the brand JOT Automation; and Customer Specific
Solutions, providing fully automatic and semiautomatic as well as
manual solutions.  The Company operates through numerous direct
and indirect subsidiaries as well as affiliated companies.


WESTLB AG: July 2 Deadline Set for WestImmo Unit Bids
-----------------------------------------------------
WestLB AG will accept binding offers for its real estate finance
unit WestImmo on July 2, William Launder and Eyk Henning at Dow
Jones Newswires report, citing people familiar with the matter.
According Dow Jones, the people said the bank is also awaiting
approval for around EUR7.5 billion in state refinancing guarantees
for the unit it applied for in April in order to help the sales
process.

Dow Jones notes one of the people familiar with the matter said
the early July bidding deadline "should set the stage for a sale
by the middle of the year," of WestImmo.

Dow Jones says bidders for WestImmo include German real-estate
financier Aareal Bank AG and buyout firms Apollo Management L.P.,
The Blackstone Group L.P. and Terra Firma Capital Partners Ltd.

WestLB is mandated by the European Union to sell WestImmo as part
of a broader restructuring tied to its use of government bailouts,
Dow Jones notes.

                          About WestLB

Headquartered in Duesseldorf, Germany, WestLB AG (DAX:WESTLB)
-- http://www.westlb.com/-- provides financial advisory,
lending, structured finance, project finance, capital markets
and private equity products, asset management, transaction
services and real estate finance to institutions.

In the United States, certain securities, trading, brokerage and
advisory services are provided by WestLB AG's wholly owned
subsidiary WestLB Securities Inc., a registered broker-dealer
and member of the NASD and SIPC.

WestLB's shareholders are the two savings banks associations in
NRW (25.15% each), two regional associations (0.52% each), the
state of NRW (17.47%) and NRW.BANK (31.18%), which is owned by
NRW (64.7%) and two regional associations (35.3%).

                           *     *     *

As reported by the Troubled Company Reporter-Europe on May 6,
2010, Moody's Investors said the E+ bank financial strength rating
(BFSR, which maps directly to a B2 baseline credit assessment,
BCA), was affirmed and the outlook on this rating changed to
stable from developing.

Moody's affirmation of the E+ BFSR and the change of its outlook
to stable reflects that, despite positive developments,
the BFSR remains constrained by the bank's weak franchise, which
includes several core segments that do not (or only
insufficiently) contribute to group profits, thus resulting in the
bank's continued dependence on volatile, wholesale-focused sources
of income.  Moody's does not rule out that the bank could be split
up and unwound if efforts to divest the bank were to prove
unsuccessful.


WOOLWORTH GMBH: German Cartel Office Okays H.H. Holding Takeover
----------------------------------------------------------------
Holger Elfes at Bloomberg News reports that Ottmar Hermann, the
insolvency administrator of 162 Woolworth GmbH & Co., said in an
e-mailed statement Wednesday that Germany's Federal Cartel Office
has approved the complete takeover of all of the company's 162 by
a group formed by Tengelmann Group und H.H. Holding GmbH.

Bloomberg notes the statement said there are no further obstacles
to the planned July 1, 2010 takeover.

As reported by the Troubled Company Reporter-Europe on May 12,
2010, Bloomberg News, citing FT Deutschland, said H.H. Holding
will pay a "low double-digit" million-euro amount for Woolworth.

                    About Woolworth GmbH & Co.

Woolworth GmbH & Co. is a German department store chain.  The
company is owned by British investor Argyll Partners.

Woolworth filed for insolvency in April following the collapse of
its British counterpart in November 2008.


=============
I C E L A N D
=============


KAUPTHING BANK: Settles Dispute with Bank of Tokyo-Mitsubishi
-------------------------------------------------------------
Kaupthing Bank HF has won approval in U.S. proceedings to settle a
dispute with Bank of Tokyo-Mitsubishi UFJ Ltd. over claims to
US$50 million transferred in connection with a foreign currency
exchange agreement, Bankruptcy Law360 reports.

Law360 relates Judge Martin Glenn issued an order Wednesday in the
U.S. Bankruptcy Court for the Southern District of New York
approving the settlement, allowing Kaupthing to pay US$1.9
million.

                         About Kaupthing Bank

Headquartered in Reykjavik, Kaupthing Bank --
http://www.kaupthing.com/-- is Iceland's largest bank and among
the Nordic region's 10 largest banking groups.  With operations in
more than a dozen countries, the bank offers a range of services
including retail banking, corporate finance, asset management,
brokerage, private banking, treasury, and private wealth
management.  Kaupthing was created by the 2003 merger of
Bunadarbanki and Kaupthing Bank.  In October 2008 the Icelandic
government assumed control of Kaupthing Bank after taking similar
measures with rivals Landsbanki and Glitnir.

As reported by the Troubled Company Reporter on Nov. 30, 2008,
Olafur Gardasson, assistant for Kaupthing Bank hf., in a
proceeding under Act No. 21/1991, pending before the Reykjavik
District Court, and foreign representative of the Debtor, filed a
petition under chapter 15 of title 11 of the United States Code in
the United States Bankruptcy Court for the Southern District of
New York commencing the Debtor's chapter 15 case ancillary to the
Icelandic Proceeding and seeking recognition for the Icelandic
Proceeding as a "foreign main proceeding" under the Bankruptcy
Code and relief in aid of the Icelandic Proceeding.


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


EBS BUILDING: EU Commission Approves Emergency Recapitalization
---------------------------------------------------------------
BreakingNews.ie reports that the European Commission has
authorized under EU state aid rules the EUR875 million emergency
recapitalization of EBS building society.

The report relates the Commission said it had approved the measure
temporarily for a period of six months as urgent rescue aid.

The report says EBS, which was severely affected by the commercial
real estate crisis, now needs to submit a restructuring plan, to
address its difficulties in the long-term and to become viable
without continued state support.

EBS, a mutual company is owned by its members, had a balance sheet
of EUR21.5 billion at the end of 2009, according to
BreakingNews.ie.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on April 7,
2010, Moody's Investors Service changed the outlook on EBS
building society's D Bank Financial Strength Rating to positive
from developing and the non-cumulative tier 1 instruments were
downgraded to Caa1 from B3.


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


OSTREGION INVESTMENTGESELLSCHAFT: S&P Raises Bond Rating to 'BB-'
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it raised its long-
term rating to 'BB-' from 'B' on EUR425 million floating-rate
senior secured bonds, due 2039, and a EUR350 million floating-rate
senior secured loan from the European Investment Bank
(AAA/Stable/A-1+), due 2038.  Both the bonds and loan were issued
by Luxembourg-registered special-purpose vehicle Ostregion
Investmentgesellschaft Nr. 1 S.A. to finance Ostregion Package 1,
a 33-year concession to design, build, finance, operate, and
maintain a 52-kilometer motorway (the project) to the north of the
City of Vienna (AAA/Stable/A-1+).  The bonds and loan benefit from
an unconditional and irrevocable guarantee of payment of scheduled
interest and principal from Ambac Assurance U.K. Ltd.
(CC/Developing/--).

"The upgrade reflects its view that a potential default by Ambac
would no longer reduce the funds available to Ostregion for full
and timely senior debt service on the bonds and loan," said
Standard & Poor's credit analyst Timon Binder.  "The last drawdown
of the bond occurred on May 31, 2010, and as a result the bond is
now fully drawn."

Under the project documentation, bondholders could have blocked
the remaining drawdowns under the proviso of an Ambac default.  In
this scenario, the lack of drawdown funding available to Ostregion
would have reduced the amount of cash available for full and
timely senior debt service.

The ratings remain constrained, in its view, because Ostregion may
be obliged to pay a margin step-up on the EIB loan of 0.85% from
mid-2012.  S&P believes that such a step-up would negatively
affect the project's debt service cover ratios.  According to the
financing documents, the interest margin on the EIB loan depends
on the rating on Ambac.

"The developing outlook reflects the possibility that S&P could
raise the ratings if shadow toll revenue reaches levels that S&P
originally forecast," said Mr. Binder, "and if operating and other
costs remain in line with its initial expectations."


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


CARLSON WAGONLIT: Moody's Gives Stable Outlook on 'B3' Rating
-------------------------------------------------------------
Moody's Investors Service has changed the outlook to stable from
negative on the B3 corporate family rating and Probability of
Default Rating of Carlson Wagonlit BV as well as on the Caa2
rating of CWT's EUR285 million notes and the B2 rating of its
US$850 million senior facilities.

While Moody's remains cautious about the pace of recovery for
business travel overall, CWT has experienced renewed growth in its
quarterly net revenues since Q4 2009.  The stabilization of the
ratings reflects Moody's view that the company has achieved its
restructuring plans with the result that its cost base has now
been significantly reduced, EBITDA levels have markedly improved
over the last couple of quarters and the company is once again
free cash flow positive.  This in turn has improved interest cover
and reduced leverage and the rating agency expects that
debt/EBITDA (as adjusted by Moody's) will fall to below 6.0x by
year-end 2010.  The stable outlook therefore factors in the
expectation of continued delivery of improved earnings and
declining leverage.  The outlook is also premised on the company's
liquidity profile remaining adequate.

The B3 rating is supported by CWT's business profile, as one of
the world's leading travel management companies and its
diversified customer base, which will help its performance to
improve as the demand for global travel recovers.  Moody's also
notes that CWT successfully renegotiated certain provisions of the
Senior Facilities Agreement in mid-2009 and there is now adequate
headroom under the the financial covenants.  The rating is
constrained by the company's significant debt position, which has
led to high leverage and weak debt protection metrics at the low
point in the company's business cycle.  The rating does not
incorporate any material debt-financed acquisitions.

The last rating action was implemented on May 20, 2009, when
Moody's downgraded CWT's CFR to B3 from B2 and assigned a negative
outlook.

Headquartered in the Netherlands, CWT is a global leader in travel
management, serving corporations of all sizes and government
institutions.  It reported net revenues of approximately
US$1.55 billion in 2009.


ELEPHANT TALK: Posts US$12.3 Million Net Loss in Q1 2010
--------------------------------------------------------
Elephant Talk Communications, Inc., filed its quarterly report on
Form 10-Q, reporting a net loss of US$12.3 million on US$9.9
million of revenue for the three months ended March 31, 2010,
compared with a net loss of US$2.1 million on US$9.4 million of
revenue for the same period ended March 31, 2009.

The Company's balance sheet as of March 31, 2010, showed
US$45.4 million in assets and US$47.7 million of liabilities, for
a stockholders' deficit of US$2.3 million.

As reported in the Troubled Company Reporter on April 7, 2010,
BDO Seidman, LLP expressed substantial doubt about the Company's
ability to continue as a going concern after auditing the
Company's financial statements for the year ended December 31,
2009.  The independent auditors noted that the Company incurred a
net loss of US$17.4 million, used cash in operations of US$5.4
million and had an accumulated deficit of US$62.3 million.

The Company has an accumulated deficit of US$74.7 million as of
March 31, 2010.

"If we are unable to secure additional capital, as circumstances
require, we may not be able to continue operations.  As of
March 31, 2010, these conditions raised substantial doubt from our
auditors as to our ability to continue as a going concern."

A full-text copy of the quarterly report is available for free at:

               http://researcharchives.com/t/s?63e4

Based in Schiphol, The Netherlands, Elephant Talk Communications,
Inc. is an international provider of business software and
services to the telecommunications and financial services
industry.  Elephant Talk installs its operating software at the
network operating centers of mobile carrier and receives a fee per
month per cell phone subscriber on the network.  Currently the
subscribers are wholesale customers of Vizzavi (a subsidiary of
the Vodafone group) in Spain and T-Mobile in the Netherlands.  The
Company also operates landline telephony services in nine European
countries and Bahrain.


===============
P O R T U G A L
===============


BANCO COMERCIAL: Moody's Keeps D+ Bank Financial Strength Rating
----------------------------------------------------------------
Moody's Investors Service has concluded the first part of its
review for possible downgrade of ten rated Portuguese banks by
confirming the standalone bank financial strength rating of seven
Portuguese banks at their respective current levels.  At the same
time, Moody's is maintaining the ongoing review for possible
downgrade of the long-term debt and deposit ratings of nine
Portuguese banks and confirmed the ratings of one bank.  The
rating agency will conclude the review of these debt ratings upon
the conclusion of Moody's ongoing review of the Portuguese
government's rating.

                    Summary of Rating Actions

On May 5, 2010, Moody's had placed the standalone BFSRs of eight
banks on review for possible downgrade.  (From among the ten rated
Portuguese banks, the E+ BFSR with a negative outlook of Banco
Portugues de Negocios had not been placed under review; also, the
rated Espirito Santo Financial Group does not have a BFSR assigned
because it is a holding company.) Of these eight banks, Moody's
has downgraded the BFSR of Caixa Geral de Depositos by one notch
to D+ (mapping to the long-term scale of Baa3) and has confirmed
the BFSRs of the remaining seven banks.

The rating action concludes the review for possible downgrade of
the BFSRs of the eight banks which had been initiated on May 5,
2010.

With regard to the long-term debt and deposit ratings of the ten
banks, Moody's has confirmed the long-term debt and deposit
ratings of Banco Itau Europa at Baa1 with a negative outlook, and
downgraded the long-term debt and deposit ratings of CGD by one
notch to Aa3, maintaining it on review for possible further
downgrade.

Moody's is therefore maintaining the review for possible downgrade
of the long-term debt and deposit ratings for all Portuguese banks
apart from Banco Itau Europa.  (This is because the rating of
Banco Itau Europa does not benefit from Portuguese government
support, but rather benefits from the support of its Brazilian
parent, Itau Unibanco (rated Baa3/Prime-3/B-)).  The rating agency
explains that the rating of the Portuguese government is a key
factor in assessing the ability and willingness of Portuguese
authorities to support Portuguese banks.  Therefore, the
conclusion of the review of debt and deposit ratings is dependent
on and will take place at the same time as the conclusion of the
ratings review of the Portuguese Republic.  Any potential
downgrade of banks' ratings is likely to be limited to one notch
and in a few cases to possibly two notches.

                    Summary Rating Rationale

"Moody's review of the banks' standalone credit profile focused on
three aspects: (1) the impact on profitability of higher funding
costs; (2) the resilience of banks to different liquidity
stresses; and (3) the impact on asset quality and solvency of a
challenged operating environment," explains Olga Cerqueira,
Assistant Vice President and Moody's lead analyst for Portuguese
banks.  "Moody's stress-tests of the banks' ratings under these
three aspects showed that the current standalone rating levels of
most Portuguese banks incorporated a sufficient degree of asset
quality and profitability deterioration," adds Ms. Cerqueira.

Apart from Banco Santander Totta, which has a standalone rating of
C (mapping to the long-term scale of A3), the standalone ratings
of all other reviewed banks range from C- to D- (mapping to
Baa2/Baa3 on the long-term scale for the largest domestic banks
and to the Ba category for smaller domestic banks).  At these
levels, the ratings incorporate life-time expected losses in their
loan and securities portfolios, ranging from 2.59% to 4.8 % in
Moody's base case scenario, based on year-end 2009 figures.
(Please refer to Moody's Special Comment entitled "Moody's
Approach to Estimating Expected Losses for Portuguese banks",
published in September 2009.)

"Moody's analyzed the impact of higher funding costs by applying
recent spreads to all refinancing needs for 2010 (using Portuguese
government CDS spreads for Moody's base case and Greek spreads for
Moody's stressed case scenario)," Ms Cerqueira continues.  The
rating agency also adjusted its liquidity analysis downwards in
cases where banks have funding shortfalls over the next 12 months,
assuming they have no access to capital or interbank markets and
also assuming a deposit outflow of 7.5% for retail deposits and
15% for other deposits.  "Together with other conservative revenue
and expense assumptions, this analysis did not reveal further
weaknesses in the banks' standalone credit profile beyond what had
been already incorporated," says Ms. Cerqueira.

Despite the structural dependence of Portuguese banks on wholesale
funding, Moody's notes that all Portuguese banks could survive a
closure of wholesale funding markets for a period of 12 months by
making use of currently available liquid assets and increasing
their reliance on European Central Bank funds.  During the ongoing
financial crisis, Portuguese banks have been able to continue to
tap the wholesale markets on several occasions and their recourse
to ECB funding has been relatively contained.  However, this
situation changed in recent weeks as markets have been closed,
interbank funding has reduced and ECB funding has increased.
Nevertheless, while noting that the ECB is the key backstop for
funding needs, Moody's believes that the actual funding costs for
Portuguese banks are still significantly below these stressed
assumptions.

                     Rating Actions in Detail

Moody's has taken these rating actions:

                    Caixa Geral De Depositos

Moody's has downgraded CGD's BFSR by one notch to D+ (which maps
to the Baa3 on the long-term scale) from C- (which maps to a
Baa2).  The outlook on the BFSR is stable.  The downgrade
primarily reflects Moody's concerns about CGD's profitability
levels, which have been very pressured since the beginning of the
crisis.  Additionally, the downgrade reflects the rating agency's
expectation that there will not be a reversal in this trend over
the short term given the low interest rate environment (which
particularly impacts CGD given the long-term nature of its loan
book), the increase in its wholesale funding costs, and the
ongoing asset quality deterioration.  Despite the increase in the
bank's wholesale funding dependence in the recent past, CGD
continues to display the lowest ratio of loans to deposits among
Portuguese banks.  In addition, it displays a good liquidity
profile and can survive a closure of capital markets for a period
of 12 months.

"Although CGD has one of the most stable retail deposit bases and
should benefit in its funding from its ownership by the
government, Moody's primary concern is that the bank's
profitability may come under increasing pressure as its owner, the
Portuguese government, is trying to address the challenges of
fiscal austerity while ensuring sufficient credit flow," explains
Ms. Cerqueira.  "Moody's believes that CGD may therefore not be
defending its margins at all costs in these economically
challenged times, thereby deliberately accepting weaker internal
capital generation, but with the implicit backstop of government
support to offset some of this standalone weakening."

The stable outlook on the bank's BFSR is underpinned by its good
resilience to a liquidity squeeze in wholesale funding which is
lower than that of its peers.  The stable outlook also reflects
Moody's view that the anticipated deterioration in profitability,
efficiency and asset quality is sufficiently incorporated within
its D+ BFSR.  Negative pressure on the BFSR could come about in
the event of a faster decline in profitability and a lack of
internal capital generation, or the need to incur upfront losses
that go beyond Moody's anticipated scenario of low- to mid-single-
digit expected losses in its base case scenario.

CGD's LT debt and deposit ratings were downgraded to Aa3 from Aa2,
reflecting the weakened standalone credit profile.  These ratings
remain under review for possible downgrade pending the conclusion
of the review for downgrade of the Portuguese sovereign rating.
CGD's short-term ratings were affirmed at Prime-1.  The uplift for
CGD's long-term ratings from its Baa3 BCA continues to reflect
Moody's view of its very high probability of systemic support,
given its dominant position in Portugal and its 100% government
ownership.

Moody's has also downgraded CGD's senior subordinated debt to A1
from Aa3, and is maintaining this rating on review for further
possible downgrade.  CGD's junior subordinated debt was downgraded
to Baa2 with a stable outlook, from Baa1(under review for
downgrade).  The bank's preferred securities were downgraded to
Ba1 with a stable outlook, from Baa3 (under review for downgrade).

                    Banco Comercial Portugues

Moody's has confirmed BCP's BFSR at D+ (which maps to a Baa3 on
the long-term scale), with a negative outlook.  Despite BCP's
structural dependence on wholesale funding, with a loan-to-deposit
ratio of around 170%, and its net interbank borrowing position,
the confirmation of the rating reflects the bank's sufficient
liquid assets to cover all wholesale funding that matures in the
next 12 months -- although Moody's notes that BCP has increased
its reliance on ECB funding since the beginning of 2010.

Moody's believes that the challenging operating environment in
Portugal is sufficiently factored into the bank's current D+ BFSR.
BCP's asset quality and profitability deterioration has been
deeper than it has been for the other large, privately owned
Portuguese banks.  However, Moody's expects further declines in
BCP's profitability to be more moderate than for some of its
peers, as BCP suffered from the decline in interest rates earlier
than some of its peers.  The reinforcement of its capital over the
past year has also increased BCP's risk absorption capacity.
Moreover, Moody's notes that the restructuring of the bank's
subsidiary in Poland has started to have a positive contribution
to profits after a few difficult quarters in late 2008 and
beginning of 2009.  Despite these positive developments, Moody's
believes that BCP's domestic operations will continue to have a
very weak performance, given: (i) the low interest rates, the
increase in wholesale funding costs and the reduced business
activity; and (ii) the ongoing asset quality deterioration,
particularly on the corporate loan book, and the related
provisioning needs.

With respect to international operations, Moody's believes that
these are likely to add some volatility, mainly as result of its
exposures to Greece and Turkey, although this should be
compensated by the better performance of Polish and African
operations.  In addition, BCP continues to finance some of its
shareholders, a situation inherited from the past.  While Moody's
acknowledges the current management's intention to reduce this,
the rating agency believes that this situation continues to pose a
risk for BCP, particularly in the current economic crisis.

The negative outlook is driven by the challenging operating
environment the bank faces both in Portugal and in some of its
international operations as well as by the negative trend in terms
of asset quality, which could position Moody's expected losses
closer to the stressed scenario.

Moody's is maintaining BCP's A1/Prime-1 long-term and short-term
debt and deposit ratings on review for possible downgrade.  The
uplift that the debt and deposit ratings receive from the
standalone BFSR of D+ (Baa3 on the long-term scale) reflect the
key systemic importance of BCP as the largest privately owned
Portuguese bank and therefore Moody's assessment of a very high
probability of systemic support.

Moody's is also maintaining BCP's A2 senior subordinated debt on
review for possible downgrade.  BCP's Tier 1 capital instruments
were confirmed at Ba3 and assigned a negative outlook.

Furthermore, Moody's has also confirmed the long-term deposit
ratings of BCP's subsidiary, Bank Millennium, at Baa2 with a
negative outlook.  The confirmation is based on the rating action
of the parent bank BCP and concludes the review for possible
downgrade initiated on 5 May 2010.

                       Banco Espirito Santo

Moody's has confirmed BES's BFSR at C-, but reflected the
pressures on the bank by changing the long-term scale equivalent
rating to Baa2 from Baa1.  The outlook on the BFSR is negative.
The confirmation of the bank's BFSR reflects the fact that Moody's
stress-tests of profitability and liquidity show that they would
not jeopardize BES's satisfactory financial fundamentals.  In
changing the BCA to Baa2, Moody's notes that BES has the highest
reliance on wholesale funding among Portuguese banks -- with a
loan-to-customer-deposit ratio of almost 200% -- and also the
greatest exposure to capital markets activities.  Despite the
bank's current ability to pay all wholesale funding maturities in
the next 12 months with currently available liquid assets, BES's
structural dependence on wholesale markets raises some concerns in
terms of funding and liquidity.  Moody's will therefore continue
to monitor the evolution of liquid assets and developments of
customer deposits.  The negative outlook is underpinned by (i) the
challenging operating environment in Portugal where Moody's
anticipates a decline in terms of earnings (mostly due to lower
net interest income) and an ongoing deterioration in asset
quality; (ii) BES's traditional exposure to capital markets, which
make it more vulnerable to stress situations and more volatile
earnings; and (iii) the bank's higher exposure to wholesale
funding and the consequent need to prudently manage its liquidity
position under adverse liquidity scenarios.

Moody's is maintaining BES's A1/Prime-1 debt and deposit ratings
on review for possible downgrade.  The uplift from the Baa2 BCA
reflect the key systemic importance of BES for the Portuguese
financial system and therefore Moody's assessment of a very high
probability of systemic support.

BES's A2 senior subordinated debt remains under review for
possible downgrade.  BES's junior subordinated debt was downgraded
by one notch to Baa3, with a negative outlook, in line with the
downgrade by one notch of its adjusted BCA to Baa2.  BES's Tier 1
capital instruments were also downgraded by one notch to Ba2, with
a negative outlook.

The potential impact of this rating action on BES's rated
subsidiary, BES Investimento do Brasil, SA will be discussed in a
separate press release.

                  Espirito Santo Financial Group

Moody's is maintaining ESFG's issuer rating of A3 on review for
possible downgrade in line with maintaining the review of the A1
long-term debt and deposit rating of BES, which is ESFG's main
operating subsidiary and accounted for 78% of ESFG's pre-tax
income in 2009.  The Prime-2 short-term ratings of ESFG's ECP
program also remain on review for possible downgrade.  The senior
subordinated debt rated Baa1 was also maintained on review for
possible downgrade, while the preferred securities were downgraded
to Ba3 with a negative outlook, from Ba2 (under review for
downgrade), as result of the downgrade of BES's adjusted BCA to
Baa2.

                            Banco BPI

Moody's has confirmed BPI's BFSR at C- (mapping to a Baa2 on the
long-term scale), with a negative outlook.  The confirmation
primarily reflects BPI's good liquidity position, with a more
limited reliance on wholesale funding than its Portuguese peers,
its better-than-average asset quality and its currently
satisfactory financial fundamentals.  Moody's notes that BPI's
profitability and efficiency indicators compare modestly with
those of the other large Portuguese banks and that profitability
has been largely supported by its international operations
(predominantly Angola), which accounted for 62% of net profits in
Q1 2010.  The negative outlook reflects further profitability
pressures (not only at net interest income level, but also due to
potential losses on its sizeable fixed income portfolio), which
will only be partially compensated by the international activity.
The negative outlook also takes account of the pressure on the
bank's capitalization under Moody's stressed scenario as tangible
common equity -- which excludes minority interests -- would fall
below minimum levels.

BPI's A1/Prime-1 debt and deposit ratings remain under review for
possible downgrade.  Overall, Moody's believes that the
probability of systemic support in the event of need is very high,
resulting in the debt and deposit ratings receiving a significant
uplift from the standalone ratings.

BPI's senior subordinated debt rating also remains on review for
possible downgrade.  BPI's junior subordinated debt was confirmed
at Baa3, with a negative outlook.  BPI's preferred securities were
confirmed at Ba2, with a negative outlook.

                      Banco Santander Totta

Moody's has confirmed BST's BFSR at C (mapping to a A3 on the
long-term scale), with a negative outlook.  The confirmation
primarily reflects: (i) the bank's strong liquidity position,
despite its significant dependence on wholesale funding; and (ii)
the good performance of the bank during the crisis and the
resilience of its financial fundamentals to a stress-test on
profitability, liquidity and asset quality.  BST displays the
lowest problem loan ratio among Portuguese banks, as well as
strong capitalization levels and the best profitability indicators
in Portugal.  The negative outlook reflects the deteriorating
operating environment in Portugal (BST has a negligible
international contribution to earnings), which will continue to
adversely affect asset quality and profitability.  Moody's also
notes that BST has a greater-than-average reliance on wholesale
funding (with a loan-to-deposit ratio of close to 200%) and
therefore a greater exposure to market turmoil, although it is
expected to be able to resort to parental funds in case of need.

BST's Aa3 long-term debt and deposit ratings remain under review
for possible downgrade.  Overall, Moody's assesses the bank's
probability of systemic support in case of need to be very high
and expects a high probability of parental support from Santander
(rated B-/Aa2/Prime-1).

Moody's has also affirmed the bank's short-term ratings Prime-1.
BST's A1 senior subordinated debt remains under review for
possible downgrade, while BST's junior subordinated debt was
confirmed at A3, with a negative outlook.

                  Caixa Economica Montepio Geral

Moody's has confirmed Montepio's BFSR at D (mapping to a Ba2 on
the long-term scale), with a stable outlook.  The confirmation
primarily reflects the resilience of Montepio to liquidity
stresses, given the modest refinancing needs in the next 12
months, the availability of liquid assets and the relatively
moderate reliance on wholesale funding.  Although Moody's
anticipates a decline in profitability in 2010 -- as a result of
pressured net interest income, higher provisioning needs related
to its high problem loans ratio and the expected absence of
trading revenues -- but this decline should be compatible with a D
BFSR.  The stable outlook is underpinned by the low risk of
ratings transition under a more adverse economic scenario.
Moody's believes that the negative operating environment will
weaken the bank's financial fundamentals but that they will still
be at a level compatible with its D BFSR.

Montepio's Baa1/Prime-2 debt and deposit ratings remain under
review for possible downgrade.  Moody's expects a high probability
of systemic support for the bank, hence the several notches of
uplift from the Ba2 BCA.

Montepio's Baa2 senior subordinated debt remains under review for
possible downgrade, while the junior subordinated debt was
confirmed at Ba3, with a stable outlook, in line with the stable
outlook of Montepio's BFSR.

                              Banif

Moody's has confirmed Banif's BFSR at D- (mapping to a Ba3 BCA),
with a stable outlook.  The confirmation primarily reflects the
bank's ability to survive a closure of capital markets for a
period of 12 months, because of its low refinancing needs and
despite its net interbank borrowing position and a relatively
small cushion of available liquid assets.  Banif has significantly
increased its usage of ECB funding since the beginning of the
year, but it also continues to enlarge the pool of assets that can
be pledged with the ECB.  Banif already displays modest
profitability indicators (particularly bottom-line profits) and
any stress on the bank's profitability does not change
significantly Moody's assessment of the bank's creditworthiness.
Banif significantly reinforced its capital position in 2009 and
plans to increase capital further in 2010.  Despite addressing one
of Moody's main concerns -- namely low capitalization levels --
Moody's notes that this institution continues to have high
related-party lending and other corporate governance issues that
constrain the current BFSR.

Banif's Baa1/Prime-2 debt and deposit ratings remain under review
for possible downgrade.  Moody's expects a high probability of
systemic support for this bank, resulting in several notches of
uplift from the Ba3 BCA.

Banif's Baa2 senior subordinated debt remains under review for
possible downgrade.  Banif's junior subordinated debt was
confirmed at B1 with a stable outlook in line with the stable
outlook of the BFSR.  Banif's preferred securities were confirmed
at B3, with stable outlook, in line with the stable outlook on the
BFSR.

The potential impact of Banif's ratings confirmation on other
rated subsidiaries will be discussed in separate press releases.

                        Banco Itau Europa

Moody's has confirmed BIE's BFSR at C- (mapping to a Baa2 on the
long-term scale), with a negative outlook.  The confirmation
primarily reflects the resilience of the bank to several liquidity
stresses and profitability stress based on an increase in funding
costs.  BIE has been relatively immune to the liquidity and
profitability pressures that Portuguese banks have experienced, as
a result of its low exposure to the Portuguese operating
environment.  Excluding its equity stake of around 9%in BPI, BIE's
exposure to Portugal represents less than 5% of its operating
income.  In addition, BIE has a very comfortable liquidity
position as it places funds with Central Banks and displays modest
refinancing needs over the next 12 months.

The negative outlook is underpinned by the challenges BIE faces as
a result of its very rapid growth in the recent past and the need
to consolidate its position in the very competitive worldwide
private banking business.  As result of several group
acquisitions/mergers over the past two to three years, BIE has
tripled its assets under management to EUR8.2 billion at the end
of March 2010 from EUR2.5 billion at the beginning of 2007.
Despite the significant recent volume growth, which makes year-on-
year comparisons challenging, BIE's underlying performance remains
modest with risk-adjusted profitability measures inflated by the
strong increase in commission income from off-balance sheet assets
that have not translated into an increase in risk-weighted assets.

Moody's has confirmed the Baa1 long-term debt and deposit rating
of BIE and assigned a negative outlook.  The short-term ratings
were also affirmed at Prime-2 and the senior and junior
subordinated MTN programs were affirmed at Baa2 and Baa3,
respectively.

                     Previous Rating Actions

The previous rating actions on Banif, BCP, BES, BPI, ESFG, Itau
Europa and Montepio were implemented on 5 May 2010, when Moody's
placed their BFSRs, long-term debt and deposit ratings and short-
term ratings under review for possible downgrade.  The last rating
actions on BST and CGD were implemented on 5 May 2010, when
Moody's placed their BFSRs and long-term debt and deposit ratings
under review for possible downgrade, and affirmed the short-term
ratings.  The last rating action on BPN was implemented on 5 May
2010, when Moody's placed its long-term debt and deposit ratings
and short-term ratings under review for possible downgrade, and
affirmed its BFSR.  The last rating action on Banco Millennium was
implemented on 5 May 2009, when Moody's placed its long-term debt
and deposit ratings under review for possible downgrade, following
the review for possible downgrade of the parent bank's ratings.

Banif is headquartered in Funchal, Portugal.  At 31 December 2009,
it had total unaudited assets of EUR11.6 billion.

BCP is headquartered in Oporto, Portugal.  At 31 December 2009, it
had total assets of EUR95.6 billion.

BM is headquartered in Warsaw, Poland.  At 31 December 2009, it
reported IFRS consolidated total assets of PLN44.9 billion
(EUR10.9 billion).

BES is headquartered in Lisbon, Portugal.  At 31 December 2009, it
had total assets of EUR82.3 billion.

BPI is headquartered in Lisbon, Portugal.  At 31 December 2009, it
had total assets of EUR47.5 billion.

BST is headquartered in Lisbon, Portugal.  At 31 December 2009, it
had total unaudited assets of EUR45.7 billion.

CGD is headquartered in Lisbon, Portugal.  At 31 December 2009, it
had total assets of EUR120.9 billion.

ESFG is headquartered in Luxembourg.  At 31 December 2009, it had
total assets of EUR85.3 billion.

Itau Europa is headquartered in Lisbon, Portugal.  At 31 December
2009, it had total assets of EUR5.1 billion.

Montepio is headquartered in Lisbon, Portugal.  At 31 December
2009, it had total assets of EUR17.2 billion.


CAIXA GERAL: Moody's Cuts Bank Financial Strength Rating to D+
--------------------------------------------------------------
Moody's Investors Service has concluded the first part of its
review for possible downgrade of ten rated Portuguese banks by
confirming the standalone bank financial strength rating of seven
Portuguese banks at their respective current levels.  At the same
time, Moody's is maintaining the ongoing review for possible
downgrade of the long-term debt and deposit ratings of nine
Portuguese banks and confirmed the ratings of one bank.  The
rating agency will conclude the review of these debt ratings upon
the conclusion of Moody's ongoing review of the Portuguese
government's rating.

                    Summary of Rating Actions

On May 5, 2010, Moody's had placed the standalone BFSRs of eight
banks on review for possible downgrade.  (From among the ten rated
Portuguese banks, the E+ BFSR with a negative outlook of Banco
Portugues de Negocios had not been placed under review; also, the
rated Espirito Santo Financial Group does not have a BFSR assigned
because it is a holding company.) Of these eight banks, Moody's
has downgraded the BFSR of Caixa Geral de Depositos by one notch
to D+ (mapping to the long-term scale of Baa3) and has confirmed
the BFSRs of the remaining seven banks.

The rating action concludes the review for possible downgrade of
the BFSRs of the eight banks which had been initiated on May 5,
2010.

With regard to the long-term debt and deposit ratings of the ten
banks, Moody's has confirmed the long-term debt and deposit
ratings of Banco Itau Europa at Baa1 with a negative outlook, and
downgraded the long-term debt and deposit ratings of CGD by one
notch to Aa3, maintaining it on review for possible further
downgrade.

Moody's is therefore maintaining the review for possible downgrade
of the long-term debt and deposit ratings for all Portuguese banks
apart from Banco Itau Europa.  (This is because the rating of
Banco Itau Europa does not benefit from Portuguese government
support, but rather benefits from the support of its Brazilian
parent, Itau Unibanco (rated Baa3/Prime-3/B-)).  The rating agency
explains that the rating of the Portuguese government is a key
factor in assessing the ability and willingness of Portuguese
authorities to support Portuguese banks.  Therefore, the
conclusion of the review of debt and deposit ratings is dependent
on and will take place at the same time as the conclusion of the
ratings review of the Portuguese Republic.  Any potential
downgrade of banks' ratings is likely to be limited to one notch
and in a few cases to possibly two notches.

                    Summary Rating Rationale

"Moody's review of the banks' standalone credit profile focused on
three aspects: (1) the impact on profitability of higher funding
costs; (2) the resilience of banks to different liquidity
stresses; and (3) the impact on asset quality and solvency of a
challenged operating environment," explains Olga Cerqueira,
Assistant Vice President and Moody's lead analyst for Portuguese
banks.  "Moody's stress-tests of the banks' ratings under these
three aspects showed that the current standalone rating levels of
most Portuguese banks incorporated a sufficient degree of asset
quality and profitability deterioration," adds Ms. Cerqueira.

Apart from Banco Santander Totta, which has a standalone rating of
C (mapping to the long-term scale of A3), the standalone ratings
of all other reviewed banks range from C- to D- (mapping to
Baa2/Baa3 on the long-term scale for the largest domestic banks
and to the Ba category for smaller domestic banks).  At these
levels, the ratings incorporate life-time expected losses in their
loan and securities portfolios, ranging from 2.59% to 4.8 % in
Moody's base case scenario, based on year-end 2009 figures.
(Please refer to Moody's Special Comment entitled "Moody's
Approach to Estimating Expected Losses for Portuguese banks",
published in September 2009.)

"Moody's analyzed the impact of higher funding costs by applying
recent spreads to all refinancing needs for 2010 (using Portuguese
government CDS spreads for Moody's base case and Greek spreads for
Moody's stressed case scenario)," Ms Cerqueira continues.  The
rating agency also adjusted its liquidity analysis downwards in
cases where banks have funding shortfalls over the next 12 months,
assuming they have no access to capital or interbank markets and
also assuming a deposit outflow of 7.5% for retail deposits and
15% for other deposits.  "Together with other conservative revenue
and expense assumptions, this analysis did not reveal further
weaknesses in the banks' standalone credit profile beyond what had
been already incorporated," says Ms. Cerqueira.

Despite the structural dependence of Portuguese banks on wholesale
funding, Moody's notes that all Portuguese banks could survive a
closure of wholesale funding markets for a period of 12 months by
making use of currently available liquid assets and increasing
their reliance on European Central Bank funds.  During the ongoing
financial crisis, Portuguese banks have been able to continue to
tap the wholesale markets on several occasions and their recourse
to ECB funding has been relatively contained.  However, this
situation changed in recent weeks as markets have been closed,
interbank funding has reduced and ECB funding has increased.
Nevertheless, while noting that the ECB is the key backstop for
funding needs, Moody's believes that the actual funding costs for
Portuguese banks are still significantly below these stressed
assumptions.

                     Rating Actions in Detail

Moody's has taken these rating actions:

                    Caixa Geral De Depositos

Moody's has downgraded CGD's BFSR by one notch to D+ (which maps
to the Baa3 on the long-term scale) from C- (which maps to a
Baa2).  The outlook on the BFSR is stable.  The downgrade
primarily reflects Moody's concerns about CGD's profitability
levels, which have been very pressured since the beginning of the
crisis.  Additionally, the downgrade reflects the rating agency's
expectation that there will not be a reversal in this trend over
the short term given the low interest rate environment (which
particularly impacts CGD given the long-term nature of its loan
book), the increase in its wholesale funding costs, and the
ongoing asset quality deterioration.  Despite the increase in the
bank's wholesale funding dependence in the recent past, CGD
continues to display the lowest ratio of loans to deposits among
Portuguese banks.  In addition, it displays a good liquidity
profile and can survive a closure of capital markets for a period
of 12 months.

"Although CGD has one of the most stable retail deposit bases and
should benefit in its funding from its ownership by the
government, Moody's primary concern is that the bank's
profitability may come under increasing pressure as its owner, the
Portuguese government, is trying to address the challenges of
fiscal austerity while ensuring sufficient credit flow," explains
Ms. Cerqueira.  "Moody's believes that CGD may therefore not be
defending its margins at all costs in these economically
challenged times, thereby deliberately accepting weaker internal
capital generation, but with the implicit backstop of government
support to offset some of this standalone weakening."

The stable outlook on the bank's BFSR is underpinned by its good
resilience to a liquidity squeeze in wholesale funding which is
lower than that of its peers.  The stable outlook also reflects
Moody's view that the anticipated deterioration in profitability,
efficiency and asset quality is sufficiently incorporated within
its D+ BFSR.  Negative pressure on the BFSR could come about in
the event of a faster decline in profitability and a lack of
internal capital generation, or the need to incur upfront losses
that go beyond Moody's anticipated scenario of low- to mid-single-
digit expected losses in its base case scenario.

CGD's LT debt and deposit ratings were downgraded to Aa3 from Aa2,
reflecting the weakened standalone credit profile.  These ratings
remain under review for possible downgrade pending the conclusion
of the review for downgrade of the Portuguese sovereign rating.
CGD's short-term ratings were affirmed at Prime-1.  The uplift for
CGD's long-term ratings from its Baa3 BCA continues to reflect
Moody's view of its very high probability of systemic support,
given its dominant position in Portugal and its 100% government
ownership.

Moody's has also downgraded CGD's senior subordinated debt to A1
from Aa3, and is maintaining this rating on review for further
possible downgrade.  CGD's junior subordinated debt was downgraded
to Baa2 with a stable outlook, from Baa1(under review for
downgrade).  The bank's preferred securities were downgraded to
Ba1 with a stable outlook, from Baa3 (under review for downgrade).

                    Banco Comercial Portugues

Moody's has confirmed BCP's BFSR at D+ (which maps to a Baa3 on
the long-term scale), with a negative outlook.  Despite BCP's
structural dependence on wholesale funding, with a loan-to-deposit
ratio of around 170%, and its net interbank borrowing position,
the confirmation of the rating reflects the bank's sufficient
liquid assets to cover all wholesale funding that matures in the
next 12 months -- although Moody's notes that BCP has increased
its reliance on ECB funding since the beginning of 2010.

Moody's believes that the challenging operating environment in
Portugal is sufficiently factored into the bank's current D+ BFSR.
BCP's asset quality and profitability deterioration has been
deeper than it has been for the other large, privately owned
Portuguese banks.  However, Moody's expects further declines in
BCP's profitability to be more moderate than for some of its
peers, as BCP suffered from the decline in interest rates earlier
than some of its peers.  The reinforcement of its capital over the
past year has also increased BCP's risk absorption capacity.
Moreover, Moody's notes that the restructuring of the bank's
subsidiary in Poland has started to have a positive contribution
to profits after a few difficult quarters in late 2008 and
beginning of 2009.  Despite these positive developments, Moody's
believes that BCP's domestic operations will continue to have a
very weak performance, given: (i) the low interest rates, the
increase in wholesale funding costs and the reduced business
activity; and (ii) the ongoing asset quality deterioration,
particularly on the corporate loan book, and the related
provisioning needs.

With respect to international operations, Moody's believes that
these are likely to add some volatility, mainly as result of its
exposures to Greece and Turkey, although this should be
compensated by the better performance of Polish and African
operations.  In addition, BCP continues to finance some of its
shareholders, a situation inherited from the past.  While Moody's
acknowledges the current management's intention to reduce this,
the rating agency believes that this situation continues to pose a
risk for BCP, particularly in the current economic crisis.

The negative outlook is driven by the challenging operating
environment the bank faces both in Portugal and in some of its
international operations as well as by the negative trend in terms
of asset quality, which could position Moody's expected losses
closer to the stressed scenario.

Moody's is maintaining BCP's A1/Prime-1 long-term and short-term
debt and deposit ratings on review for possible downgrade.  The
uplift that the debt and deposit ratings receive from the
standalone BFSR of D+ (Baa3 on the long-term scale) reflect the
key systemic importance of BCP as the largest privately owned
Portuguese bank and therefore Moody's assessment of a very high
probability of systemic support.

Moody's is also maintaining BCP's A2 senior subordinated debt on
review for possible downgrade.  BCP's Tier 1 capital instruments
were confirmed at Ba3 and assigned a negative outlook.

Furthermore, Moody's has also confirmed the long-term deposit
ratings of BCP's subsidiary, Bank Millennium, at Baa2 with a
negative outlook.  The confirmation is based on the rating action
of the parent bank BCP and concludes the review for possible
downgrade initiated on 5 May 2010.

                       Banco Espirito Santo

Moody's has confirmed BES's BFSR at C-, but reflected the
pressures on the bank by changing the long-term scale equivalent
rating to Baa2 from Baa1.  The outlook on the BFSR is negative.
The confirmation of the bank's BFSR reflects the fact that Moody's
stress-tests of profitability and liquidity show that they would
not jeopardize BES's satisfactory financial fundamentals.  In
changing the BCA to Baa2, Moody's notes that BES has the highest
reliance on wholesale funding among Portuguese banks -- with a
loan-to-customer-deposit ratio of almost 200% -- and also the
greatest exposure to capital markets activities.  Despite the
bank's current ability to pay all wholesale funding maturities in
the next 12 months with currently available liquid assets, BES's
structural dependence on wholesale markets raises some concerns in
terms of funding and liquidity.  Moody's will therefore continue
to monitor the evolution of liquid assets and developments of
customer deposits.  The negative outlook is underpinned by (i) the
challenging operating environment in Portugal where Moody's
anticipates a decline in terms of earnings (mostly due to lower
net interest income) and an ongoing deterioration in asset
quality; (ii) BES's traditional exposure to capital markets, which
make it more vulnerable to stress situations and more volatile
earnings; and (iii) the bank's higher exposure to wholesale
funding and the consequent need to prudently manage its liquidity
position under adverse liquidity scenarios.

Moody's is maintaining BES's A1/Prime-1 debt and deposit ratings
on review for possible downgrade.  The uplift from the Baa2 BCA
reflect the key systemic importance of BES for the Portuguese
financial system and therefore Moody's assessment of a very high
probability of systemic support.

BES's A2 senior subordinated debt remains under review for
possible downgrade.  BES's junior subordinated debt was downgraded
by one notch to Baa3, with a negative outlook, in line with the
downgrade by one notch of its adjusted BCA to Baa2.  BES's Tier 1
capital instruments were also downgraded by one notch to Ba2, with
a negative outlook.

The potential impact of this rating action on BES's rated
subsidiary, BES Investimento do Brasil, SA will be discussed in a
separate press release.

                  Espirito Santo Financial Group

Moody's is maintaining ESFG's issuer rating of A3 on review for
possible downgrade in line with maintaining the review of the A1
long-term debt and deposit rating of BES, which is ESFG's main
operating subsidiary and accounted for 78% of ESFG's pre-tax
income in 2009.  The Prime-2 short-term ratings of ESFG's ECP
program also remain on review for possible downgrade.  The senior
subordinated debt rated Baa1 was also maintained on review for
possible downgrade, while the preferred securities were downgraded
to Ba3 with a negative outlook, from Ba2 (under review for
downgrade), as result of the downgrade of BES's adjusted BCA to
Baa2.

                            Banco BPI

Moody's has confirmed BPI's BFSR at C- (mapping to a Baa2 on the
long-term scale), with a negative outlook.  The confirmation
primarily reflects BPI's good liquidity position, with a more
limited reliance on wholesale funding than its Portuguese peers,
its better-than-average asset quality and its currently
satisfactory financial fundamentals.  Moody's notes that BPI's
profitability and efficiency indicators compare modestly with
those of the other large Portuguese banks and that profitability
has been largely supported by its international operations
(predominantly Angola), which accounted for 62% of net profits in
Q1 2010.  The negative outlook reflects further profitability
pressures (not only at net interest income level, but also due to
potential losses on its sizeable fixed income portfolio), which
will only be partially compensated by the international activity.
The negative outlook also takes account of the pressure on the
bank's capitalization under Moody's stressed scenario as tangible
common equity -- which excludes minority interests -- would fall
below minimum levels.

BPI's A1/Prime-1 debt and deposit ratings remain under review for
possible downgrade.  Overall, Moody's believes that the
probability of systemic support in the event of need is very high,
resulting in the debt and deposit ratings receiving a significant
uplift from the standalone ratings.

BPI's senior subordinated debt rating also remains on review for
possible downgrade.  BPI's junior subordinated debt was confirmed
at Baa3, with a negative outlook.  BPI's preferred securities were
confirmed at Ba2, with a negative outlook.

                      Banco Santander Totta

Moody's has confirmed BST's BFSR at C (mapping to a A3 on the
long-term scale), with a negative outlook.  The confirmation
primarily reflects: (i) the bank's strong liquidity position,
despite its significant dependence on wholesale funding; and (ii)
the good performance of the bank during the crisis and the
resilience of its financial fundamentals to a stress-test on
profitability, liquidity and asset quality.  BST displays the
lowest problem loan ratio among Portuguese banks, as well as
strong capitalization levels and the best profitability indicators
in Portugal.  The negative outlook reflects the deteriorating
operating environment in Portugal (BST has a negligible
international contribution to earnings), which will continue to
adversely affect asset quality and profitability.  Moody's also
notes that BST has a greater-than-average reliance on wholesale
funding (with a loan-to-deposit ratio of close to 200%) and
therefore a greater exposure to market turmoil, although it is
expected to be able to resort to parental funds in case of need.

BST's Aa3 long-term debt and deposit ratings remain under review
for possible downgrade.  Overall, Moody's assesses the bank's
probability of systemic support in case of need to be very high
and expects a high probability of parental support from Santander
(rated B-/Aa2/Prime-1).

Moody's has also affirmed the bank's short-term ratings Prime-1.
BST's A1 senior subordinated debt remains under review for
possible downgrade, while BST's junior subordinated debt was
confirmed at A3, with a negative outlook.

                  Caixa Economica Montepio Geral

Moody's has confirmed Montepio's BFSR at D (mapping to a Ba2 on
the long-term scale), with a stable outlook.  The confirmation
primarily reflects the resilience of Montepio to liquidity
stresses, given the modest refinancing needs in the next 12
months, the availability of liquid assets and the relatively
moderate reliance on wholesale funding.  Although Moody's
anticipates a decline in profitability in 2010 -- as a result of
pressured net interest income, higher provisioning needs related
to its high problem loans ratio and the expected absence of
trading revenues -- but this decline should be compatible with a D
BFSR.  The stable outlook is underpinned by the low risk of
ratings transition under a more adverse economic scenario.
Moody's believes that the negative operating environment will
weaken the bank's financial fundamentals but that they will still
be at a level compatible with its D BFSR.

Montepio's Baa1/Prime-2 debt and deposit ratings remain under
review for possible downgrade.  Moody's expects a high probability
of systemic support for the bank, hence the several notches of
uplift from the Ba2 BCA.

Montepio's Baa2 senior subordinated debt remains under review for
possible downgrade, while the junior subordinated debt was
confirmed at Ba3, with a stable outlook, in line with the stable
outlook of Montepio's BFSR.

                              Banif

Moody's has confirmed Banif's BFSR at D- (mapping to a Ba3 BCA),
with a stable outlook.  The confirmation primarily reflects the
bank's ability to survive a closure of capital markets for a
period of 12 months, because of its low refinancing needs and
despite its net interbank borrowing position and a relatively
small cushion of available liquid assets.  Banif has significantly
increased its usage of ECB funding since the beginning of the
year, but it also continues to enlarge the pool of assets that can
be pledged with the ECB.  Banif already displays modest
profitability indicators (particularly bottom-line profits) and
any stress on the bank's profitability does not change
significantly Moody's assessment of the bank's creditworthiness.
Banif significantly reinforced its capital position in 2009 and
plans to increase capital further in 2010.  Despite addressing one
of Moody's main concerns -- namely low capitalization levels --
Moody's notes that this institution continues to have high
related-party lending and other corporate governance issues that
constrain the current BFSR.

Banif's Baa1/Prime-2 debt and deposit ratings remain under review
for possible downgrade.  Moody's expects a high probability of
systemic support for this bank, resulting in several notches of
uplift from the Ba3 BCA.

Banif's Baa2 senior subordinated debt remains under review for
possible downgrade.  Banif's junior subordinated debt was
confirmed at B1 with a stable outlook in line with the stable
outlook of the BFSR.  Banif's preferred securities were confirmed
at B3, with stable outlook, in line with the stable outlook on the
BFSR.

The potential impact of Banif's ratings confirmation on other
rated subsidiaries will be discussed in separate press releases.

                        Banco Itau Europa

Moody's has confirmed BIE's BFSR at C- (mapping to a Baa2 on the
long-term scale), with a negative outlook.  The confirmation
primarily reflects the resilience of the bank to several liquidity
stresses and profitability stress based on an increase in funding
costs.  BIE has been relatively immune to the liquidity and
profitability pressures that Portuguese banks have experienced, as
a result of its low exposure to the Portuguese operating
environment.  Excluding its equity stake of around 9%in BPI, BIE's
exposure to Portugal represents less than 5% of its operating
income.  In addition, BIE has a very comfortable liquidity
position as it places funds with Central Banks and displays modest
refinancing needs over the next 12 months.

The negative outlook is underpinned by the challenges BIE faces as
a result of its very rapid growth in the recent past and the need
to consolidate its position in the very competitive worldwide
private banking business.  As result of several group
acquisitions/mergers over the past two to three years, BIE has
tripled its assets under management to EUR8.2 billion at the end
of March 2010 from EUR2.5 billion at the beginning of 2007.
Despite the significant recent volume growth, which makes year-on-
year comparisons challenging, BIE's underlying performance remains
modest with risk-adjusted profitability measures inflated by the
strong increase in commission income from off-balance sheet assets
that have not translated into an increase in risk-weighted assets.

Moody's has confirmed the Baa1 long-term debt and deposit rating
of BIE and assigned a negative outlook.  The short-term ratings
were also affirmed at Prime-2 and the senior and junior
subordinated MTN programs were affirmed at Baa2 and Baa3,
respectively.

                     Previous Rating Actions

The previous rating actions on Banif, BCP, BES, BPI, ESFG, Itau
Europa and Montepio were implemented on 5 May 2010, when Moody's
placed their BFSRs, long-term debt and deposit ratings and short-
term ratings under review for possible downgrade.  The last rating
actions on BST and CGD were implemented on 5 May 2010, when
Moody's placed their BFSRs and long-term debt and deposit ratings
under review for possible downgrade, and affirmed the short-term
ratings.  The last rating action on BPN was implemented on 5 May
2010, when Moody's placed its long-term debt and deposit ratings
and short-term ratings under review for possible downgrade, and
affirmed its BFSR.  The last rating action on Banco Millennium was
implemented on 5 May 2009, when Moody's placed its long-term debt
and deposit ratings under review for possible downgrade, following
the review for possible downgrade of the parent bank's ratings.

Banif is headquartered in Funchal, Portugal.  At 31 December 2009,
it had total unaudited assets of EUR11.6 billion.

BCP is headquartered in Oporto, Portugal.  At 31 December 2009, it
had total assets of EUR95.6 billion.

BM is headquartered in Warsaw, Poland.  At 31 December 2009, it
reported IFRS consolidated total assets of PLN44.9 billion
(EUR10.9 billion).

BES is headquartered in Lisbon, Portugal.  At 31 December 2009, it
had total assets of EUR82.3 billion.

BPI is headquartered in Lisbon, Portugal.  At 31 December 2009, it
had total assets of EUR47.5 billion.

BST is headquartered in Lisbon, Portugal.  At 31 December 2009, it
had total unaudited assets of EUR45.7 billion.

CGD is headquartered in Lisbon, Portugal.  At 31 December 2009, it
had total assets of EUR120.9 billion.

ESFG is headquartered in Luxembourg.  At 31 December 2009, it had
total assets of EUR85.3 billion.

Itau Europa is headquartered in Lisbon, Portugal.  At 31 December
2009, it had total assets of EUR5.1 billion.

Montepio is headquartered in Lisbon, Portugal.  At 31 December
2009, it had total assets of EUR17.2 billion.


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


LSR GROUP: Moody's Upgrades Corporate Family Rating to 'B2'
-----------------------------------------------------------
Moody's Investors Service has upgraded LSR Group OJSC's corporate
family rating to B2 and the national scale rating to Baa1.ru.  The
outlook on both ratings is stable.

The rating action was prompted by the announcement of a secondary
public offering leading to net proceeds of around US$ 380 million,
the company's resilient operating performance in 2009 with an
adjusted debt/ EBITDA ratio of 2.7x and RCF/ net debt ratio of
22%, an expected recovery in the Russian real estate market and an
expected positive contribution of LSR's new cement plant to the
business coming into operation towards the end of 2010.  On the
negative side the rating also incorporates LSR's still weak
liquidity profile with high debt maturities in 2011 that the
company is planning to improve going forward.

The US$380 million proceeds from the rights issue have helped to
improve the company's short-term liquidity which is particularly
needed for the ongoing high capex spending for real estate
development, other growth projects and the repayment of maturing
indebtedness.  In addition, the construction of LSR's new cement
plant with a total capacity of nearly 2 million tons per annum
needs a high amount of funding which has already been provided
with by long term loans.  This plant is expected to come into
operation towards the end of 2010.  Moody's expects the plant to
make a positive contribution to group operating performance in
2011 given the cheaper sourcing internally.

Also the overall Russian real estate market shows some first signs
of a stabilization.  In St. Petersburg the sales of new apartments
have increased significantly in the fourth quarter 2009 partly
driven by an improvement in mortgage lending and a more positive
economic outlook.  In addition, the pricing environment is showing
signs of improvement.  In the first quarter 2010 new residential
real estate prices remained stable in St.  Petersburg and were
increasing in Moscow.  Hence, Moody's takes some comfort that the
bottom in these markets has been reached.

The rating also takes into account LSR's still weak liquidity
profile despite the secondary offering given the limited amount of
confirmed long term credit lines which, however, is a pattern that
is not unusual for companies in Russia.  A significant part of
LSR's debt is coming due in 2011 starting from Q2 2011.  The
upgrade takes into account the assumption that LSR will
successfully address these debt maturities shortly, helped by the
expected improvement in the overall economic environment in Russia
and the track record of LSR to remain liquid even in the worst
year for the industry in 2009.

The rating could be upgraded if LSR successfully improves its
short term liquidity further and if the company sustainably
achieves a RCF/net debt ratio above the low twenties.  Negative
pressure could arise if LSR fails to improve its short term
liquidity position and/or if the RCF/net debt ratio would slip
below the 15% threshold and if debt/EBITDA would move above 3.5x.

The stable outlook incorporates the expectation that LSR Group
will achieve the ratios outlined above in the current financial
year given the pickup in the overall construction industry and
that LSR will address its debt maturities in the coming months.

Upgrades:

Issuer: LSR Group OJSC

  -- Probability of Default Rating, Upgraded to B2 from B3

  -- Corporate Family Rating, Upgraded to Baa1.ru, B2 from
     Baa2.ru, B3

Outlook Actions:

Issuer: LSR Group OJSC

  -- Outlook, Changed To Stable From Rating Under Review

Moody's last rating action on LSR Group on April 21, 2010, was to
place the company's corporate family rating and the national scale
rating under review for possible upgrade.

LSR Group, headquartered in St. Petersburg, Russia, is the leading
building materials supplier in the St.  Petersburg region and
ranks among the top three local real estate developers.  In the
full year 2009 LSR Group achieved a turnover of RUR51 billion /
US$1.6 billion.


RUSIA PETROLEUM: Files for Bankruptcy; TNK-BP Demands Repayment
---------------------------------------------------------------
Ilya Khrennikov and Maria Ermakova at Bloomberg News report that
TNK-BP said its Rusia Petroleum unit filed for bankruptcy amid a
dispute with OAO Gazprom over a field with enough natural gas to
supply Asia for four years.

According to Bloomberg, TNK-BP said in an e-mailed statement
yesterday that Rusia Petroleum filed for bankruptcy in the Irkutsk
region of Siberia after TNK-BP on May 14 demanded repayment for
the loans it made to the unit to fund the development of the
Kovykta deposit.

"As the major shareholder and creditor of Rusia Petroleum,
TNK-BP is determined to recover its investments and minimize its
financial losses," Bloomberg quoted TNK-BP as saying in
yesterday's statement.  "For this purpose, the company is
determined to resort to the procedures prescribed by the current
legislation."


=============================
S L O V A K   R E P U B L I C
=============================


AIR SLOVAKIA: Declared Bankrupt By Bratislva District Court
-----------------------------------------------------------
CTK reports that the Bratislva District Court has declared Air
Slovakia bankrupt, upholding a petition filed by the carrier's
restructuring administrator Vladimir Neuschl.

According to the report, the court appointed Jozef Pukalovic as
bankruptcy administrator.

As reported by the Troubled Company Reporter-Europe on May 26,
2010, CTK said Air Slovakia got permission for restructuring but
the state has recently withdrawn its license for running air
transport.

Air Slovakia is an airline based in Bratislava.  It operates
charter passenger, ACMI and scheduled flights.


=====================
S W I T Z E R L A N D
=====================


SES SOLAR: Posts US$457,670 Net Loss in Q1 2010
-----------------------------------------------
SES Solar Inc. filed its quarterly report on Form 10-Q, reporting
a net loss of US$457,670 on zero revenue for the three months
ended March 31, 2010, compared with a net loss of US$626,377 on
US$1,022,416 of revenue for the same period ended March 31, 2009.

The Company's balance sheet as of March 31, 2010, showed
US$20,217,420 in assets, US$18,643,976 of liabilities, and
US$1,573,444 of stockholders' equity.

The Company has experienced losses from operations and anticipates
incurring losses in the near future.  The Company incurred a net
loss of US$457,670, generated a positive cash flow from operations
of US$2,550,194, and had a working capital deficiency of
US$16,339,591 as of March 31, 2010.  "These matters raise
substantial doubt about its ability to continue as a going
concern."

A full-text copy of the quarterly report is available for free at:

               http://researcharchives.com/t/s?63c8

Based in Geneva, Switzerland, SES Solar Inc. is a Delaware
corporation engaged in the business of designing, engineering,
producing and installing solar panels or modules and solar tiles
for generating electricity.  The Company conducts its operations
through two wholly owned subsidiaries, SES Prod. S.A. and SES
Societe d'Energie Solaire S.A.  The Company's shares are quoted
on the OTC Bulletin Board under the symbol "SESI.OB".

                          *     *     *

As reported in the Troubled Company Reporter on April 21, 2010,
BDO Ltd., in Zurich, Switzerland, expressed substantial doubt
about the Company's ability to continue as a going concern after
auditing the Company's financial statements for the year ended
December 31, 2009.  The independent auditors noted that the
Company has suffered recurring losses from operations.


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


BRADFORD & BINGLEY: Fitch Affirms 'C' Ratings on Debt Securities
----------------------------------------------------------------
Fitch Ratings has affirmed Bradford & Bingley's Long- and Short-
term Issuer Default Ratings at 'A+' and 'F1+'.  All other B&B
ratings are also affirmed.

The Long- and Short-term IDRs reflect UK government ownership of
B&B, which also underpins the Support Rating of '1'.  The Long-
and Short-term IDRs are at the Support Rating Floor, which
reflects Fitch's expectation of continuing government ownership
and funding for the bank.  The senior unsecured debt securities
are rated 'AAA', the same level as the United Kingdom, as they are
guaranteed by the UK government.

The ratings on B&B's subordinated debt securities reflect the
bank's announcement that it is unlikely to pay coupons or
principal on any subordinated debt until it has fully repaid its
statutory debt to the UK Financial Services Compensation Scheme.
For dated and undated debt securities, the coupons are cumulative.
Although one issue of preference shares (ISIN: XS0148804536) is
paying coupons because a subordinated guarantee exists, Fitch
nevertheless considers that the junior ranking of the security
acts as a cap on its rating.

Fitch notes the announcement by the bank that it has tendered to
buy back certain lower and upper tier 2 subordinated securities.
It considers that despite improvement in the bank's equity, the
bank is likely to continue deferring coupons on the securities.
The agency also considers that the ratings of the other securities
and of the bank are unaffected by the tender offer.

The ratings are:

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

  -- Short-Term IDR affirmed at 'F1+'

  -- Support Rating affirmed '1'

  -- Support Rating Floor affirmed at 'A+'

  -- Senior unsecured debt securities (guaranteed) affirmed at
     'AAA'

  -- Short-Term debt securities (guaranteed) affirmed at 'F1+'

  -- Lower tier 2 subordinated debt securities affirmed at 'C'

  -- Upper tier 2 subordinated debt securities affirmed at 'C'

  -- Tier 1 subordinated debt securities affirmed at 'C'


CATTLES PLC: In Talks with Creditors Over Rescue Plan
-----------------------------------------------------
Harry Wilson at The Daily Telegraph reports that shareholders of
Cattles plc will not get more than 1p per share after the business
agreed a restructuring plan.

According to the report, Cattles, which made a loss of GBP745
million in 2008 and said last month it had suffered a "significant
loss" last year, is in discussions with creditors about rescuing
the company.

The report relates in a statement to the market Wednesday, Cattles
said one option would be to set up a new company that would buy
the old one, but that existing shareholders would see little in
the way of compensation.  The report notes Cattles said there was
no certainty of even this offer and would not say when it expected
any deal to close.

Cattles plc -- http://www.cattles.co.uk/-- is a financial
services company specializing in providing consumer credit to non-
standard customers in United Kingdom.  The Company also provides
debt recovery services to external clients and its consumer credit
business, and working capital finance for small- and medium-sized
businesses.  It also has a car retail operation, which is an
introducer of hire purchase customers to its consumer credit
business.  Its business divisions include Welcome Financial
Services, The Lewis Group and Cattles Invoice Finance.  Welcome
Financial Services consists of three businesses: Welcome Finance,
Shopacheck and Welcome Car Finance.  Shopacheck provides short-
term home collected loans to some 260,000 customers through 52
branches.  The Lewis Group provides debt recovery and
investigation services, serving both external clients and Welcome
Financial Services.  In September 2007, it announced the
acquisition of a debt portfolio of United Kingdom credit card,
loan and overdraft receivables.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on April 8,
2010, Fitch Ratings upgraded Cattles Plc's Long-term Issuer
Default rating to 'C' from 'Restricted Default' and Short-term IDR
to 'C' from 'RD'.  The company's senior unsecured bonds' Long-term
rating was affirmed at 'C' and the Recovery Rating is 'RR5'.

Fitch said the upgrade reflects the standstill agreement in place
between Cattles and its creditors, which became effective on 17
December 2009.  Conditions that are indicative of a Long-term IDR
of 'C' include an issuer that has entered into a standstill
agreement following a payment default.  Fitch downgraded Cattles'
Long-term IDR to 'RD' on July 8, 2009, following confirmation that
the company would not pay the coupon on its GBP400 million 7.125%
bonds, due 2017, that fell due on July 6, 2009.

According to Fitch, there continues to be uncertainty over the
level of recoveries available to bondholders.


DEUTSCHE BANK: S&P Junks Ratings on Credit Default Swaps
--------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
the credit default swaps between Deutsche Bank AG London and N.V.
Slibverwerking Noord-Brabant, and on Coriolanus Ltd.'s series 66
credit-linked notes.

On May 25, 2010, S&P raised the ratings on the notes as part of
its regular monthly synthetic collateralized debt obligation
surveillance.  In taking this rating action, S&P considered the
synthetic rated overcollateralization results.  However, when
calculating the SROC results, S&P used incorrect portfolio
information.

The rating action follows the discovery of this error and reflects
the updated portfolio.

                          Ratings List

                         Ratings Lowered

   Deutsche Bank AG London and N.V. Slibverwerking Noord-Brabant
               EUR84.27 Million Credit Default Swap
          Including a Tap Issuance of EUR21,700 Million)

                          Rating
                          ------
                     To                From
                     --                ----
                     CCC-srp           B-srp

   Deutsche Bank AG London and N.V. Slibverwerking Noord-Brabant
               EUR156.311 Million Credit Default Swap
           (Including a Tap Issuance of EUR18.996 Million)

                          Rating
                          ------
                     To                From
                     --                ----
                     CCC-srp           B-srp

                          Coriolanus Ltd.
       EUR10 Million Variable Credit-Linked Notes Series 66

                          Rating
                          ------
                     To                From
                     --                ----
                     CCC-              CCC


FABRIC: In Administration; Edward Symmons Seeks Buyer
-----------------------------------------------------
Pan Kwan Yuk at The Financial Times reports that Fabric has gone
into administration after being hit by the downturn.

The FT relates PwC on Wednesday confirmed that it has been
appointed administrator to the nightclub.

According to the FT, Edward Symmons, the property agency that has
been instructed by PwC to find a buyer for the club, said it was
confident of securing a buyer for the business.

"Just 24 hours after being appointed, we have already received a
number of inquiries from potential purchasers," the FT quoted
Colin White, partner in the hospitality and leisure division at
Edward Symmons, as saying.  "We anticipate continued interest in
the sale of Fabric, particularly from other major club operators
in London and the south east, and we are confident that a purchase
will be secured for the business as a going concern."

The nightclub industry has been hard hit over the past few years
as new bars mushroomed across Britain's high streets and changes
to licensing laws in 2005 increased competition by extending pub
opening hours, the FT notes.

Fabric is one of London's largest and best-known nightclubs.  It
has a capacity of 1,510, according to the FT.


HERCULES PLC: Fitch Junks Rating on GBP29MM Class E Notes From B
----------------------------------------------------------------
Fitch Ratings has downgraded Hercules (Eclipse 2006-4) plc's CMBS
notes, due October 2018:

  -- GBP647.9m class A (XS0276410080): downgraded to 'A' from
     'AA'; Outlook Negative

  -- GBP43.9m class B (XS0276410833): downgraded to 'BBB' from
     'AA'; Outlook Negative

  -- GBP25.0m class C (XS0276412375): downgraded to 'BB' from
     'BBB'; Outlook Negative

  -- GBP50.9m class D (XS0276413183): downgraded to 'B' from 'BB';
     Outlook Negative

  -- GBP29.0m class E (XS0276413340): downgraded to 'CCC' from
     'B'; assigned Recovery Rating of 'RR6'

The downgrades are mainly driven by the weakening of the Cannon
Bridge loan, the A-note of which was securitized in December 2006
along with several other commercial mortgage loans originated by
Barclays Bank plc in Hercules (Eclipse 2006-4) plc.  Cannon Bridge
is secured by a single grade A office property located in the City
of London.  The A-note (19.5% of the outstanding CMBS) has a
reported loan-to-value ratio of 134.8%, based on a revaluation of
the property conducted in July 2009.  Fitch estimates a current
LTV of 125%.

On March 31, 2010, the Cannon Bridge loan, originally due July
2011, was extended until January 2015.  This reflects the notable
difficulty faced by the borrower in raising external funds needed
to repay the loan.  As part of the extension, a full cash trap has
been introduced, subject to which rental income in excess of the
borrower's debt service will be held in escrow and used for
capital expenditure and, at loan maturity, the redemption of the
A-note.

However, until October 2011, the projected rental income will be
insufficient even to pay loan interest without recourse to an
additional GBP2.9 million recently received as a lease surrender
payment from Standard Bank.  Coupled with the expiry of three
other leases in September 2009, the property has lost
GBP4.1 million of Standard Bank rent.  Although the bulk of space
vacated has now been leased to a single tenant, an initial rent-
free period means that this income will be lost for a further 36
months.  Moreover, the new rent has been struck at less than 50%
of what passed previously, although under the new 15-year contract
rent will be annually indexed to cumulative growth in the retail
price index on an upwards-only basis.

Fitch also understands that the remaining 18,500 square feet of
space may also be let in the near future, albeit also under a
likely rent-free period.  From October 2011, the borrower will
enjoy a reduction in debt service on account of locking in a
forward-starting swap rate that is 1.3% lower than the existing
one.  This will allow for surplus cash to be trapped in the
quarters leading up to loan maturity, although without net
inflation, the amount of trapped surpluses will be limited, and
the possibility of loss on the class E notes, higher.

The Chapelfield loan (26.7%) is secured on a shopping centre in
Norwich.  Falls in rental income recently caused the interest
coverage ratio to dip below the 1.2x cash trap trigger.  To
release cash trapped and improve the prospects of retaining
surplus rental cash flow, the borrower recently spent
GBP10 million of its own funds to reduce its swap rate and boost
ICR.  While this should allow the loan to perform during its term,
Fitch views this as bearish behavior, signaling concern about the
likely course of future income.  Consequent to this action, less
cash will be trapped by loan maturity, at which point the amended
hedging will offer the issuer no value.  Overall, Fitch views this
change as credit negative because it increases balloon risk,
which, judging by Fitch's estimated LTV of 111%, is already
elevated.


INTERACTIVE PUBLISHING: Sells Vitality Publishing to Raise Funds
----------------------------------------------------------------
Mark Sweney at guardian.co.uk reports that Interactive Publishing
has sold its Vitality Publishing, which owns gay lifestyle
magazine Attitude and Women's Fitness, for GBP421,616 to Financial
One Securities to generate funds and clear debts with Barclays
Bank.

According to the report, the failure of magazine distributor
Magazine Marketing Company left another Interactive Publishing
subsidiary, Trojan Publishing, with no revenue from newsstand
titles for March, April and May -- and none forthcoming for June,
July or August.  The report says this amounted to about GBP1
million and "left Trojan with no choice but to cease trading".

As a result of the financial situation Interactive Publishing is
also in the process of de-listing from the Plus market, a small
and mid-capitalization stock exchange, with shareholders having
until June 8 to raise objections to the move, the report notes.

Interactive Publishing also runs Sailing Today, through its Marine
Media subsidiary, and several hairstyle magazines through its
subsidiary ScissorHands Media, according guardian.co.uk.


NORTHERN ROCK: To Close Banking Operation in Guernsey
-----------------------------------------------------
BBC News reports that Northern Rock's banking operation in
Guernsey is to close on September 2.  BBC relates some 6,000
customers have received letters giving them three months' notice
to close their accounts.

According to BBC, the bank said that the Guernsey operation no
longer met its "long-term commercial objectives" following a
review of offshore operations.

BBC recalls Northern Rock's customers recently lost the 100%
safety net on their savings as government ownership nears an end.
The guarantee has reverted to each saver's first GBP50,000 --as is
the case with other banks not backed by the government, BBC notes.

                            About RBS

The Royal Bank of Scotland Group plc (NYSE:RBS) --
http://www.rbs.com/-- is a holding company of The Royal Bank of
Scotland plc (Royal Bank) and National Westminster Bank Plc
(NatWest), which are United Kingdom-based clearing banks.  The
company's activities are organized in six business divisions:
Corporate Markets (comprising Global Banking and Markets and
United Kingdom Corporate Banking), Retail Markets (comprising
Retail and Wealth Management), Ulster Bank, Citizens, RBS
Insurance and Manufacturing.  On October 17, 2007, RFS Holdings
B.V. (RFS Holdings), a company jointly owned by RBS, Fortis N.V.,
Fortis SA/NV and Banco Santander S.A. (the Consortium Banks) and
controlled by RBS, completed the acquisition of ABN AMRO Holding
N.V. (ABN AMRO).  In July 2008, the company disposed of its entire
interest in Global Voice Group Ltd.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on March 29,
2010, Standard & Poor's Ratings Services said that it lowered its
ratings on "may pay" Tier 1 securities issued or guaranteed by The
Royal Bank of Scotland Group PLC (A/Stable/A-1) to 'C' from 'CC'.
At the same time, the rating on the RBSG-related security issued
by Argon Capital PLC was similarly lowered to 'C' from 'CC'.  The
counterparty credit ratings and stand-alone credit profiles of
RBSG and subsidiaries, and the ratings on other debt securities
issued by these entities, are unaffected.


NORTHERN ROCK: Bad Bank Returns to Profitability
------------------------------------------------
Sharlene Goff at The Financial Times reports that the old mortgage
portfolio that was separated from Northern Rock's core business at
the start of this year is back in profit after falling loan
impairments and lower costs have boosted its performance.

Northern Rock's existing loan book has been dubbed its "bad bank"
as it includes a high proportion of risky mortgages, the FT notes.

The FT relates Northern Rock on revealed that its asset management
business -- which comprises most of its GBP50 billion existing
mortgage book along with unsecured loans, its government loan and
other debt -- recorded an underlying pre-tax profit in the first
four months of this year.

The FT says the improved financial performance was disclosed as
the nationalized bank offered to buy back a portion of its
existing debt from investors.  Northern Rock, as cited by the FT,
said it would pay 25p in the pound -- or 25 cents in the dollar
for US debt -- for certain types of bonds.  The bank could gain a
maximum of about GBP700 million from the offer, which could be
used to pay down its GBP22 billion government loan, the FT states.

                             About RBS

The Royal Bank of Scotland Group plc (NYSE:RBS) --
http://www.rbs.com/-- is a holding company of The Royal Bank of
Scotland plc (Royal Bank) and National Westminster Bank Plc
(NatWest), which are United Kingdom-based clearing banks.  The
company's activities are organized in six business divisions:
Corporate Markets (comprising Global Banking and Markets and
United Kingdom Corporate Banking), Retail Markets (comprising
Retail and Wealth Management), Ulster Bank, Citizens, RBS
Insurance and Manufacturing.  On October 17, 2007, RFS Holdings
B.V. (RFS Holdings), a company jointly owned by RBS, Fortis N.V.,
Fortis SA/NV and Banco Santander S.A. (the Consortium Banks) and
controlled by RBS, completed the acquisition of ABN AMRO Holding
N.V. (ABN AMRO).  In July 2008, the company disposed of its entire
interest in Global Voice Group Ltd.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on March 29,
2010, Standard & Poor's Ratings Services said that it lowered its
ratings on "may pay" Tier 1 securities issued or guaranteed by The
Royal Bank of Scotland Group PLC (A/Stable/A-1) to 'C' from 'CC'.
At the same time, the rating on the RBSG-related security issued
by Argon Capital PLC was similarly lowered to 'C' from 'CC'.  The
counterparty credit ratings and stand-alone credit profiles of
RBSG and subsidiaries, and the ratings on other debt securities
issued by these entities, are unaffected.


NORTHERN ROCK: S&P Downgrades Rating on GBP200 Mil. 6.75% Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its rating
on the GBP200 million 6.75% callable step-up Upper Tier 2 notes
issued by Northern Rock (Asset Management) PLC (A/Stable/A-1) to
'C' from 'CC'.  The counterparty credit ratings and the ratings on
NRAM's other debt securities are unaffected, including the 'C'
ratings on its four other rated Upper Tier 2 issues.

This rating action reflects its view of the statement by NRAM
regarding a tender offer for its five rated Upper Tier 2 debt
securities, which have an aggregate book value of GBP1.1 billion.
NRAM announced that it is offering to buy back these issues for
cash at 25% of par (including an early tender payment).  Depending
on take-up of the offer and exchange rates, S&P calculate that
NRAM would generate a gain of up to about GBP800 million, and S&P
considers that its sizable tax loss carryforwards should enable a
high proportion of this sum to flow through to shareholders'
funds.  Although its overall regulatory capital resources would
decline, S&P considers that it would retain a comfortable surplus
over the minimum regulatory requirement, which is materially lower
for mortgage providers such as NRAM than for deposit-taking banks.

S&P regards the tender offer as a "distressed exchange" under its
criteria.  This is because bondholders would receive a material
discount to par if they accept the offer, and also because NRAM
has suspended coupon payments on the relevant issues.  Four of the
five rated Upper Tier 2 issues have each missed a coupon already
and are therefore rated 'C'.  The GBP200 million 6.75% callable
step-up Upper Tier 2 notes have not yet missed a coupon, but NRAM
has previously announced that it will not pay the next coupon, due
on June 17, 2010.  S&P has lowered the rating on this issue to 'C'
from 'CC' in accordance with its view that the tender offer is a
"distressed exchange" under S&P's criteria.

The announcement by NRAM also included an overview of its current
performance.  It stated that it was profitable on an underlying
pretax basis in the first four months of 2010, which is a stronger
result than S&P had expected.  S&P notes that NRAM's earnings are
supported by a relatively low interest rate paid on its loan
facilities from the U.K. government (AAA/Negative/A-1+), on which
it reported that the gross principal outstanding was about
GBP22.8 billion at May 31, 2010.  NRAM disclosed that it pays 25
basis points over the Bank of England base rate on this drawn
balance, and that the government has the right to adjust the
spread unilaterally.  In S&P's view, any changes in the loan
pricing could have a material effect on NRAM's future earnings and
its ratings, and trends in impairment losses through the U.K.'s
fragile economic recovery will also have an important influence on
its performance.

The counterparty credit ratings on NRAM principally reflect S&P's
view of the significant support provided by the government.  The
government owns 100% of NRAM, supplies it with substantial senior
funding, provides a guarantee arrangement covering most of its
third-party obligations except residential mortgage-backed
securities and subordinated issues, and has committed to inject up
to GBP1.6 billion of capital, if required.  In S&P's view, this
support partly compensates for what S&P sees as relatively weak
aspects of NRAM's stand-alone credit profile, particularly its
asset quality and capitalization.

                          Ratings List

                         Rating Lowered

               Northern Rock (Asset Management) PLC
      GBP200 mil step-up perp upper tier 2 sub hybrid ser 158
                        (ISIN XS0098556961)

                     To                 From
                     --                 ----
                     C                  CC


R&W CUSHWAY: Administrators Complete Sale to Cushway-Schmidt
------------------------------------------------------------
R&W Cushway & Co. Ltd., specialists in resistance welding
components, were successfully sold to Cushway-Schmidt Ltd., a
subsidiary of Cushway Schmidt Inc., on Friday, May 28, 2010.

R&W Cushway entered into administration on May 6, 2010. Jason
Baker and Geoff Rowley, Client Partners at Vantis Business
Recovery Services (BRS), a division of Vantis, the UK accounting,
tax and business advisory group, were appointed as Joint
Administrators.

R&W Cushway is a family-run business dating over three
generations.  Based in Waltham Abbey, Essex, the company has been
supplying specialist resistance welding consumables to the
automotive industry for over seventy-three years.

With support of key customers, key suppliers and the employees,
R&W Cushway traded normally throughout the Administration period
while the Administrators sought to secure the future of the
business.

Commenting on the administration, Jason Baker said: "The decline
of the automotive industry badly affected R&W Cushway & Co Limited
and ultimately the trading losses incurred became unsustainable.
However, we are delighted to have sold the business to Cushway-
Schmidt Limited, and wish the new owners and the employees a more
positive future."

The remaining 12 staff members, not to be mistaken for the 12
redundancies that were made following the appointment of the Joint
Administrators in May 2010, have been transferred to the new
company.  The business of R&W Cushway will now trade under the new
name of Cushway-Schmidt and from the Waltham Abbey factory
location, while a new trading location is sought.


RMAC SECURITIES: S&P Cuts Rating on Class B1c Notes to 'BB'
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered and removed from
CreditWatch negative its credit ratings on the class M1, M2, and
B1 notes in RMAC Securities No. 1 PLC's series 2006-NS1, and
affirmed its rating on the class A2 notes.

These rating actions follow its credit and cash flow analysis
using the most recent information available for this transaction.
The main driver behind the decision was an overall deterioration
in credit performance of the transaction.  The downgrades were
also due to a rise in the severe arrears (90+ days), which S&P
view as an indicator of future repossessions, and in its rating
analysis S&P assume that a high percentage of these loans will
ultimately default.  This has placed rating pressure on the
subordinate notes.

The transaction has seen an improvement in total delinquencies as
they continue to fall, and cumulative losses remain low relative
to other RMAC-originated transactions.  In its view, this may
suggest that the transaction has now turned a corner in terms of
performance.

RMAC Securities No. 1 series 2006-NS1 is a U.K. nonconforming
residential mortgage-backed securities transaction that closed in
March 2006.  The collateral comprises first-ranking mortgages
secured on freehold and leasehold owner-occupied properties in the
U.K.

S&P will continue to monitor the transaction's performance,
regarding long-term arrears, future repossessions, losses, and
loss severities.

                          Ratings List

                    RMAC Securities No. 1 PLC
EUR539.5 Million, GBP558.25 Million, and US$470 Million Mortgage-
            Backed Floating-Rate Notes Series 2006-NS1

       Ratings Lowered and Removed From CreditWatch Negative

                               Rating
                               ------
              Class       To            From
              -----       --            ----
              M1a         AA            AA+/Watch Neg
              M1c         AA            AA+/Watch Neg
              M2a         A             A+/Watch Neg
              M2c         A             A+/Watch Neg
              B1c         BB            BBB/Watch Neg

                         Ratings Affirmed

                        Class       Rating
                        -----       ------
                        A2a         AAA
                        A2c         AAA


ROYAL BANK: To Cut 500 Jobs at Wealth Management Units
------------------------------------------------------
Sharlene Goff at The Financial Times reports that Royal Bank of
Scotland is to shed one in seven jobs at its wealth management arm
over the next three years, the bulk of which will come from Coutts
& Co, its private bank.

According to the FT, the bank plans to cut 500 of the 3,500 staff
who work for Coutts, based in London, and Adam & Co, its smaller
wealth management division which has its headquarters in
Edinburgh, as it moves to introduce a more efficient IT system
across these businesses.

RBS, the FT says, has launched a major investment program to
upgrade the technology it uses to service wealthy customers.

"We are working hard to rebuild RBS in order to repay taxpayers
for their support and having to cut jobs is the most difficult
part of this process," the FT quoted bank as saying.

                            About RBS

The Royal Bank of Scotland Group plc (NYSE:RBS) --
http://www.rbs.com/-- is a holding company of The Royal Bank of
Scotland plc (Royal Bank) and National Westminster Bank Plc
(NatWest), which are United Kingdom-based clearing banks.  The
company's activities are organized in six business divisions:
Corporate Markets (comprising Global Banking and Markets and
United Kingdom Corporate Banking), Retail Markets (comprising
Retail and Wealth Management), Ulster Bank, Citizens, RBS
Insurance and Manufacturing.  On October 17, 2007, RFS Holdings
B.V. (RFS Holdings), a company jointly owned by RBS, Fortis N.V.,
Fortis SA/NV and Banco Santander S.A. (the Consortium Banks) and
controlled by RBS, completed the acquisition of ABN AMRO Holding
N.V. (ABN AMRO).  In July 2008, the company disposed of its entire
interest in Global Voice Group Ltd.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on March 29,
2010, Standard & Poor's Ratings Services said that it lowered its
ratings on "may pay" Tier 1 securities issued or guaranteed by The
Royal Bank of Scotland Group PLC (A/Stable/A-1) to 'C' from 'CC'.
At the same time, the rating on the RBSG-related security issued
by Argon Capital PLC was similarly lowered to 'C' from 'CC'.  The
counterparty credit ratings and stand-alone credit profiles of
RBSG and subsidiaries, and the ratings on other debt securities
issued by these entities, are unaffected.


SGL CARBON: S&P Changes Outlook to Stable; Affirms 'BB' Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it revised its
outlook on Germany-headquartered graphite electrode producer SGL
Carbon SE to stable from negative.  At the same time, S&P affirmed
the 'BB' long-term corporate credit rating on SGL.

"The outlook revision reflects S&P's opinion that SGL's
performance should gradually improve over the next 12 to 18
months, benefiting from a recovery in the steel industry," said
Standard & Poor's credit analyst Paulina Grabowiec.  "However, S&P
still believe that any recovery in SGL's performance in 2010 will
be relatively limited."

In S&P's view, the company's key profit-generating Performance
Products division could report moderately better results than in
2009.  On the one hand, PP's performance is likely to be supported
by the improved demand for graphite and carbon electrodes from the
steel industry.  However, S&P also expects some pressure on
margins, as high input costs, notably for needle coke, may be only
partly mitigated by improved volumes.  Furthermore, S&P believes
that PP's performance could be hampered by the subdued demand for
cathodes as a result of lower investments in primary aluminum
smelters.

S&P also anticipates that the pace of recovery in SGL's financial
performance could be somewhat held back by the late-cycle Graphite
Materials and Systems division, where margins could remain weak.
In addition, the Carbon Fibres and Composites division is likely
to report losses, in S&P's view.  Despite these negative factors,
S&P believes SGL's profitability and cash flow generation in the
next 12 to 18 months should gradually improve compared with 2009,
driven by a general economic recovery.

In 2010, S&P anticipates SGL to remain focused on growth, with
high spending close to the levels seen in 2009.  In S&P's view,
these investments, coupled with likely working capital outflows,
could lead to negative free operating cash flow in 2010.  Based on
adjusted debt of EUR623 million on March 31, 2010, the ratio of
funds from operations FFO to adjusted debt was 23.5%.  This ratio
is slightly below the 25% that S&P considers commensurate for the
rating, but S&P believes that it will improve in the near to
medium term.

The stable outlook reflects S&P's belief that SGL's performance
will gradually improve over the next 12 to 18 months.  Although
S&P believes that the company's capex will likely lead to
moderately negative FOCF in 2010, S&P anticipate that leverage
will not increase to adjusted debt to EBITDA of more than 4x on an
ongoing basis.  In addition, S&P considers a ratio of FFO to
adjusted debt of about 25% as commensurate with the rating.

However, downward rating pressure could arise if SGL's
profitability and cash flow generation weakened, or did not
recover sufficiently enough to support ongoing heavy capex, such
that the company's ratios were not, in S&P's view, commensurate
with the rating.  S&P does not envisage upside rating potential in
the near term.


SOPHOS PLC: S&P Assigns 'B' Long-Term Corporate Credit Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its
preliminary 'B' long-term corporate credit rating to U.K.-
domiciled Sophos PLC, a leading provider of integrated IT security
and data protection software and applications.  The outlook is
stable.

At the same time, S&P assigned its preliminary 'B+' rating to the
proposed US$90 million equivalent term loan A due in 2016, the
proposed US$210 million term loan B maturing in 2017, and the
proposed US$20 million revolving credit facility maturing in 2016
that are to be issued by finance subsidiary Lux Finance Co. S&P
understand that these debt instruments will be guaranteed by
Sophos BidCo Ltd., Sophos HoldCo Ltd., and Sophos PLC.

In addition, the debt issues were assigned a preliminary recovery
rating of '2', indicating S&P's expectation of substantial (70%-
90%) recovery in the event of a payment default.

Final ratings will be assigned once S&P has received the final
version of the loan documentation and the transaction has closed.

"The preliminary corporate credit rating on Sophos is constrained
by S&P's view of the group's highly leveraged financial risk
profile and its anticipation of modest cash generation after
sizeable interest charges," said Standard & Poor's credit analyst
Helen O'Toole.  "Further constraints on the rating are the highly
competitive market for security software and antimalware
technologies worldwide; the constantly evolving industry and
shifts in security technology; and the relatively high operational
leverage at Sophos, which S&P thinks would result in much weaker
profitability if revenues were to decline."

Following the transaction close, the proposed capital structure
will comprise US$300 million of bank financing and equity.  The
equity component of the financing includes US$270.0 million of
preferred equity certificates, US$233.3 million of subordinated
preference certificates, US$71.9 million of ordinary shares,
US$6.0 million of deferred shares, and US$1.7 million of class C
shares.

S&P believes that the PECs and the SPCs exhibit some debt-like
features.  S&P considers that there are risks regarding the
permanency of these instruments, and are of the opinion that this
hybrid equity may not be available at a future date to absorb
potential credit losses, if needed.

S&P believes the preliminary ratings could come under pressure if
there were to be a deterioration in the group's liquidity, or if
operating performance were to be lower than planned, resulting in
a deterioration in profitability and credit metrics.  Equally, the
ratings could come under pressure in the event of a significant
tightening in covenant headroom.


* UK: HMRC to Challenge "Football Creditors" Rule in High Court
---------------------------------------------------------------
The Guardian reports that the Premiere League's "football
creditors" rule, which permits millionaire players to take huge
sums out of insolvent clubs while smaller creditors are denied
most of their dues, is being challenged in the high court.

According to the report, HM Revenue & Customs has named the
Premier League as the defendant in a complaint that could change
the face of football.

"There is no legal basis for the football creditor rule," the
report quoted a spokesman for HMRC as saying.  "Non-football
creditors are being seriously short-changed and enough is enough."

The report notes the Premier League said Wednesday it will
"robustly defend" its position.  The report says the League will
contend that when failed clubs are forced to honor their debts to
competitor clubs it contains the problem -- if not a knock-on
effect could ensue, potentially causing more insolvencies.  It
will also argue that change would prompt more liquidations than
rescues, with debtor clubs unable to secure re-election to the
league, and leaving creditors such as HMRC receiving even less,
the report states.

The HMRC has grown angry at a spate of club insolvencies that have
cost it tens of millions of pounds, the report recounts.


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


* EUROPE: EU Calls for Single Supervisor of Credit Rating Firms
---------------------------------------------------------------
Erik Larson at Bloomberg News reports that the European Union on
Wednesday called for a single supervisor of credit-rating
companies.

According to Bloomberg, the European Commission proposed giving
the power to investigate, issue fines and revoke licenses to a new
EU authority.  The Brussels-based commission also proposed reining
in risk-taking behavior and compensation at financial companies to
prevent a repeat of the credit crunch, Bloomberg discloses.

Bloomberg notes the commission said banks, investment firms and
other companies that issue structured-finance instruments should
give all interested credit-ratings firms access to the same data
they give their chosen credit-rating company.  The commission, as
cited by Bloomberg, said powers over credit-ratings companies
would be given to the proposed European Securities and Markets
Authority, called ESMA.

Bloomberg relates scrutiny of the industry intensified after
Standard & Poor's cut Greece's rating to junk status on April 27,
adding urgency to European plans to bail out the debt-plagued
nation.


* BOOK REVIEW: Corporate Turnaround - How Managers Turn Losers
             Into Winners!
--------------------------------------------------------------
Author:  Donald B. Bibeault
Publisher: Beard Books
Softcover: 424 pages
List Price: US$34.95

Corporate Turnaround offers, claims the author, a "four-pronged
approach" to taking the "mystery out of turnaround management."
One of the prongs -- Mr. Biebeault's personal experiences -- is
complemented with another prong -- interviews with sixteen top
turnaround specialists.  Together, they bring forth the drama and
the stakes of turnarounds.  The other two prongs -- surveys of
eighty-one corporate presidents and the author's exhaustive
research (400 references in all, taken from books, periodicals,
and scholarly writings) -- lend a great deal of substance and
authority to the book's subject matter.  This variety of material
greatly enriches the book, which is perhaps more relevant today
than it was in 1982 when it was first published.

Identifying the underlying causes for failure can be a futile
chicken-and-egg pursuit.  "Businesses decline for both
uncontrollable external reasons and for controllable internal
reasons," says Mr. Bibeault.  Nonetheless, Mr. Bibeault adds that
"[i]n most cases . . . business problems are internally
generated."  As one of his sources explains, managing a company is
like piloting a ship.  "If the ship is in good condition and the
captain is competent, it is almost impossible for it to be sunk by
a wave or a succession of waves."  A competent captain with a ship
in good condition can even bring it through a storm.

The manager of a company is different from the captain of a ship,
however, in that the manager not only has to pilot the company,
but is also responsible for its condition.  The central challenge
for a manager is to ensure that the company is structurally solid,
operationally relevant, efficient, and adaptable to be able to
weather any conditions the company might encounter.  Even though,
as Bibeault maintains, in practically all cases business problems
are internally generated, this does not rule out having to heed
external conditions.  External economic, political, or market
conditions expose and exacerbate a company's internal weaknesses.
"Management is not always able to deal with outside forces, even
when they can see them gathering."  A manager can be effective,
however, in "getting a company into a posture, both from a
marketing and financial point of view, where it can resist normal
business hazards and other more serious external challenges."  In
such circumstances, a turnaround may be a company's only hope for
survival, and the abilities of a turnaround manager are required.

Bibeault describes such managers as "the George Pattons of the
business world."  "They don't have a lot of friends, they're not
social successes, they're just known as blood-and-guts guys," is
the way one corporate executive puts it; a description repeated in
different words by other experienced businesspersons Bibeault
consulted.

In Corporate Turnaround, Bibeault explores every facet of a
turnaround.  The causes of a company's decline are followed with a
thorough consideration of the management basics in effecting a
turnaround.  The book also examines the attributes of the
turnaround manager and offers specific pragmatic steps for getting
on the path to recovery.  Lastly, Corporate Turnaround offers an
overall strategy.  The book is not only informative about the
crucial subject of corporate turnaround, but also a manual for
managing one.

Bibeault has worked on turnarounds of distressed companies for
over 25 years in addition to holding top executive positions in a
number of corporations.  He also holds advisory or governing board
positions with different universities and business groups.


                            *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than US$3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Thursday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/booksto order any title today.

                            *********


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., Frederick,
Maryland USA.  Joy A. Agravante, Valerie U. Pascual, Marites O.
Claro, Rousel Elaine T. Fernandez, Frauline S. Abangan and Peter
A. Chapman, Editors.

Copyright 2010.  All rights reserved.  ISSN 1529-2754.

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

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

The TCR Europe subscription rate is US$625 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each.  For subscription information,
contact Christopher Beard at 240/629-3300.


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