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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

            Wednesday, May 18, 2011, Vol. 12, No. 97

                            Headlines


C Y P R U S

BANK OF CYPRUS: Moody's Reviews Ratings on 3 Cypriot Banks


F R A N C E

ALCATEL-LUCENT: Moody's Affirms 'B1' Ratings; Outlook Stable


G E R M A N Y

AGENDA GLASS: Hindusthan National Acquires Firm Out of Insolvency
QIMONDA AG: Unit Recovers US$11.75 Million From G2 Technology


G R E E C E

HELLENIC TELECOMS: S&P Cuts LT Corporate Credit Rating to 'BB-'


I C E L A N D

* ICELAND: 1,552 Companies May Face Bankruptcy, Ministry Says


I R E L A N D

ALLIED IRISH: S&P Cuts Rating on Lower Tier 2 Debt to 'D'
CORNERSTONE TITAN: Moody's Cuts Ratings on Class D Notes to 'Caa3'
P ELLIOTT: High Court Adjourns Winding-Up Petition
SKYE CLO I: Moody's Upgrades Rating on Class E Bond to 'B2 (sf)'
TBS INTERNATIONAL: Incurs US$17.96-Mil. Net Loss in First Quarter

TBS INTERNATIONAL: To Sell 30,000 Series B Preference Shares
TBS INTERNATIONAL: To Offer Rights to Buy 312,184 Pref. Shares
* IRELAND: Tanaiste Eamon Gilmore Rules Out Debt Restructuring


I T A L Y

BANCA MB: Unicredit Acquires Bank's Credit Portfolio For EUR246.1M


L U X E M B O U R G

DEMATIC HOLDING: S&P Assigns 'B' Long-Term Corp. Credit Rating
INTELSAT SA: Incurs US$215.7-Mil. Net Loss for First Quarter


N O R W A Y

TELLER AS: Fitch Affirms Long-Term Issuer Default Rating at 'BB+'


P O R T U G A L

* PORTUGAL: Gets Approval for EUR78 Billion Bailout


R U S S I A

NOVOROSSIYSK COMM'L: Moody's Cuts Corporate Family Rating to 'Ba3'
ROSTELECOM OJSC: S&P Lifts LT Corporate Credit Rating to 'BB+'
YUKOS OIL: Rosneft Owes US$160MM Interest on Arbitration Awards
* NOVOSIBIRSK: Fitch Affirms Long-Term Currency Ratings at 'BB'


S L O V E N I A

VEMONT: Files for Bankruptcy; Lack of Orders, Staff Strikes Blamed


S W E D E N

SAAB AUTOMOBILE: Economic Realities Blamed for Failed Hawtai Deal
SAAB AUTOMOBILE: Inks Joint Venture MoU with Pang Da Automobile


S P A I N

AYT KUTXA II: Fitch Junks Rating on Class C Notes to 'CCCsf'
TDA CAJAMAR 2: Fitch Affirms Rating on Class D Notes at 'BB+sf'


T U R K E Y

FINANSBANK: Moody's Assigns 'Ba1' Senior Unsecured Debt Rating


U N I T E D   K I N G D O M

FOCUS (DIY): 40 Jobs Under Threat in Trowbridge and Warminster
GREAT LEIGHS: Racecourse Could be Up and Running Again in 2013
HMV GROUP: In Talks with Banks Amid Search for Potential Buyers
JACOBS JEWELLERY: Goes Into Liquidation Due to Insolvency
PETER WERTH: Goes Into Administration, Puts 70 Jobs at Risk

ROYAL BANK: GBP5 Billion Share Sale Likely
SILENTNIGHT HOLDINGS: Labor Party Launches Petition
SILENTNIGHT HOLDINGS: Regulator Seeks to Force HIG to Contribute
YELL GROUP: Feels Pressure of Poor Advertising Demand
* UK: Small-Medium Hauliers at Significant Risk of Bankruptcy


X X X X X X X X

* S&P's Global Corporate Defaults List Has 15 So Far


                            *********


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C Y P R U S
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BANK OF CYPRUS: Moody's Reviews Ratings on 3 Cypriot Banks
----------------------------------------------------------
Moody's Investors Service has placed on review for possible
downgrade all the ratings of three Cypriot banks. This action
follows Moody's decision on May 9, 2011, to place Greece's B1
local and foreign-currency government bond ratings on review for
possible downgrade, which suggests that the likelihood of a Greek
sovereign debt restructuring could be rising.

The affected banks are: Bank of Cyprus Public Co Ltd (BoC), Marfin
Popular Bank Public Co Ltd (MPB) and Hellenic Bank Public Co Ltd
(Hellenic).

                       Rationale For Review

The rating actions reflect Moody's concerns over heightened risks
related to:

  (i) the banks' sizable exposure to debt instruments issued by
      Greece;

(ii) significant lending to the Greek private sector; and

(iii) the funding risks that could arise in the event of a
      potential Greek sovereign debt restructuring or in its
      aftermath.

Although all three banks have been placed on review for similar
reasons, one objective of the review will be to assess how any
potential rating action should reflect (i) the three banks'
differing exposures to Greek Government Bonds (GGBs) and Greek
private-sector lending; and (ii) their differing capacities to
absorb losses or mitigate funding shocks.

             Factors to be Considered in the Review

In conjunction with the review of Greece's government bond rating,
the review of these banks will focus on four areas:

(1) The Cypriot banks' ability to absorb losses in the event of a
    potential Greek debt restructuring, by considering both their
    exposures to GGBs -- which is estimated at about 68% of the
    rated banks' aggregate pro forma Tier 1 capital -- and current
    capitalization cushions and near-term capital raising plans.
    Although Moody's recognizes that the banks currently maintain
    solid capitalization levels overall, Moody's review will
    assess shock absorption capacity on a case-by-case basis under
    a stress scenario.

(2) The extent to which the banks' lending to the Greek private
    sector -- which accounts for around 41% of total loans on an
    aggregate basis -- may potentially cause a further rise in the
    banks' non-performing assets and, as a result, weaken
    profitability.

(3) The banks' ability to sustain their current funding and
    liquidity profiles in the context of high levels of
    uncertainty in the region. Cypriot banks' funding bases have
    shown resilience, including an inflow of deposits since the
    Greek crisis began; however, a relatively high reliance on
    offshore deposits exposes these banks to potential negative
    shifts in market confidence and the risk of deposit outflows.
    Moreover, although Cypriot banks currently maintain high
    levels of liquid assets and are net lenders in the interbank
    market, an erosion in market confidence could increase the
    cost of funding and dampen margins, thereby weakening
    profitability.

(4) The extent to which further pressure on the banking system may
    impact the Cypriot economy. Even though the direct links
    between the Greek and Cypriot economies are limited, potential
    increases in the cost of funding and asset-quality
    deterioration could constrain the banking sector's capacity to
    extend credit and support the country's still-fragile economic
    recovery.

                  Systemic Support Considerations

During the review, Moody's will also assess the Government of
Cyprus' willingness and ability to extend systemic support to the
banking sector, in the event of a possible Greek sovereign debt
restructuring.

These ratings were placed on review for downgrade:

   Marfin Popular Bank Public Co Ltd:

   -- Deposit and senior debt ratings of Baa3/Prime-3;

   -- Subordinated debt rating of Ba1;

   -- Standalone BFSR of D- (mapping to Ba3 on the long-term
      rating scale);

   Egnatia Finance plc (the funding subsidiary of Marfin Popular
   Bank):

   -- Senior unsecured debt ratings of (P) Baa3

   -- Subordinated debt ratings of (P) Ba1

   Bank of Cyprus Public Co Ltd:

   -- Deposit and senior debt ratings of Baa2/Prime-2;

   -- Subordinated debt rating of (P) Baa3;

   -- Junior subordinated notes rating of (P)Ba2;

   -- Standalone BFSR of D+ (mapping to Ba1 on the long-term
      rating scale);

   Hellenic Bank Public Co Ltd:

   -- Deposit and senior debt ratings of Ba1;

   -- Standalone BFSR of D- (mapping to Ba3 on the long-term
      rating scale);

             Rating History and Moody's Methodologies

The principal methodology used in rating these three banks was
"Bank Financial Strength Ratings: Global Methodology," published
in February 2007, and "Incorporation of Joint-Default Analysis in
Moody's Bank Ratings: A Refined Methodology," published in March
2007.

Headquartered in Nicosia, Cyprus, Marfin Popular Bank Public
Company Ltd reported total consolidated assets of EUR42.6 billion
as of December 2010.

Headquartered in Nicosia, Cyprus, Bank of Cyprus Public Co Ltd
reported total consolidated assets of EUR42.6 billion as of
December 2010.

Headquartered in Nicosia, Cyprus, Hellenic Bank Public Co Ltd
reported total consolidated assets of EUR8.2 billion as of
December 2010.


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ALCATEL-LUCENT: Moody's Affirms 'B1' Ratings; Outlook Stable
------------------------------------------------------------
Moody's Investors Service has affirmed Alcatel-Lucent's ratings
and changed the outlook on the ratings to stable from negative.
The affirmed ratings include the company's: (i) B1 corporate
family rating (CFR); (ii) B1 probability of default rating (PDR);
and (iii) B1 ratings for its senior securities and B3 ratings for
its trust-preferred securities issued by Lucent Technologies
Capital Trust.

                        Ratings Rationale

"Moody's affirmation of Alcatel-Lucent's ratings and the change of
outlook to stable from negative is based on: (i) Alcatel-Lucent's
return to revenue growth across its broad-based business portfolio
and the rating agency's expectation that the company will achieve
continued significant revenue growth year-on-year; (ii) the
company's return to the break-even level and the material
reduction in its cash consumption even in the seasonally weak
first quarter of a year; (iii) Moody's confidence that (a)
management targets for 2011 -- of an adjusted operating margin
above 5% and positive free cash flow -- are achievable, and (b)
that the company can achieve material positive free cash flow from
2012 onwards; and (iv) a continued conservative and liquid capital
structure," says Wolfgang Draack, a Moody's Senior Vice President
and lead analyst for Alcatel-Lucent.

Despite the change in outlook Alcatel-Lucent's B1 CFR is currently
weakly positioned in the rating category, given that the company's
profitability is still well below that of the industry leaders of
comparable scale (e.g. Ericsson, rated Baa1). For a more solid
positioning in the rating category, Moody's would expect Alcatel-
Lucent to generate cash on an annual basis, which it has not done
since the 2006 merger with Lucent Technologies. As a result of
this its cash flow/debt metrics have been marginal. With the
current trend of strengthening profitability and cash flows,
Moody's expects Alcatel-Lucent's financial metrics to come more in
line with the B1 rating category by the end of the 2011 fiscal
year.

The B1 CFR could come under downward pressure if: (i) the current
positive trend in Alcatel-Lucent's operating profitability were to
prove to be unsustainable; (ii) the company's cumulative cash
consumption in 2011 were to rise above EUR500 million (EUR213
million reported for Q1 2011) or above a quarter of its cash
liquidity (5%) during the course of the year; or (iii) cash, cash
equivalents and marketable securities were to decline below 40% of
gross adjusted debt (54% at end of Q1 2011).

A rating upgrade would likely require comparable sales growth
exceeding 5% as evidence of a robust market and an indication that
Alcatel-Lucent was able to maintain its leading positions with key
customers and even gain market share. Equally, upward pressure on
the ratings could result if Alcatel-Lucent were able to retain its
cost savings, which would be indicated by a sustained trend in the
company's EBITA margin towards the high single digits, and
importantly, a return to robust net cash generation after
restructuring costs.

           Last Rating Action & Principal Methodology

The principal methodologies used in this rating were Global
Communications Equipment Industry Rating Methodology, published in
June 2008. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the US, Canada and
EMEA, published in June 2009.

Headquartered in Paris, France, Alcatel-Lucent is one of the world
leaders in providing advanced solutions for telecommunications
systems and equipment to service providers, enterprises and
governments. The company achieved sales of EUR16 billion in 2010
and of EUR3.7 billion in Q1 2011.


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G E R M A N Y
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AGENDA GLASS: Hindusthan National Acquires Firm Out of Insolvency
-----------------------------------------------------------------
Dow Jones' DBR Small Cap reports that Deals India said Hindusthan
National Glass and Industries, India's largest glass-container
manufacturer, has bought Germany's Agenda Glas AG for
EUR50 million (US$71 million).


QIMONDA AG: Unit Recovers US$11.75 Million From G2 Technology
-------------------------------------------------------------
Bill Rochelle, Bloomberg News' bankruptcy columnist, reports that
Qimonda North America Corp., which sold most of the assets to
Texas Instruments Inc., will recover US$11.75 million from G2
Technology Inc. as the result of a successful arbitration.

Mr. Rochelle recounts that after the Chapter 11 filing in February
2009, Qimonda commenced an arbitration against G2, seeking US$8.4
million for breach of contract.  The creditors' committee was
authorized to take over and prosecute the arbitration.  The
arbitrator awarded Qimonda the full amount sought plus pre-
judgment interest.  The total award worked out to US$12.27
million.

According to the report, the committee and G2 agreed to a
settlement where G2 will pay US$11.75 million cash.  The
settlement will be presented before the bankruptcy court for
consideration on June 3.

                       About Qimonda AG

Qimonda AG (NYSE: QI) -- http://www.qimonda.com/-- is a leading
global memory supplier with a diversified DRAM product portfolio.
The Company generated net sales of EUR1.79 billion in financial
year 2008 and had -- prior to its announcement of a repositioning
of its business -- approximately 12,200 employees worldwide, of
which 1,400 were in Munich, 3,200 in Dresden and 2,800 in
Richmond, Va.

Qimonda AG commenced insolvency proceedings in a local court in
Munich, Germany, on January 23, 2009.  On June 15, 2009, QAG filed
a petition (Bankr. E.D. Va. Case No. 09-14766) for relief under
Chapter 15 of the U.S. Bankruptcy Code.

Qimonda North America Corp., an indirect and wholly owned
subsidiary of QAG, is the North American sales and marketing
subsidiary of QAG.  QNA is also the parent company of Qimonda
Richmond LLC.  QNA and QR sought Chapter 11 protection (Bankr.
D. Del. Case No. 09-10589) on Feb. 20, 2009.  Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Maris J. Finnegan, Esq.,
at Richards Layton & Finger PA, represent the Debtors.
Roberta A. DeAngelis, the United States Trustee for Region 3,
appointed seven creditors to serve on an official committee of
unsecured creditors.  Jones Day and Ashby & Geddes represent the
Committee.  In its bankruptcy petition, Qimonda Richmond, LLC,
estimated more than US$1 billion in assets and debts.  The
information, the Debtors said, was based on Qimonda Richmond's
financial records which are maintained on a consolidated basis
with Qimonda North America Corp.


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HELLENIC TELECOMS: S&P Cuts LT Corporate Credit Rating to 'BB-'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on Greek telecom operator Hellenic
Telecommunications Organization S.A. (OTE) to 'BB-' from 'BB'. "In
addition, we affirmed the 'B' short-term rating. The outlook is
negative. At the same time, we removed all ratings from
CreditWatch, where they were placed with negative implications on
Dec. 6, 2010," S&P said.

"The rating action primarily reflects the revision of our business
risk profile assessment on OTE to 'weak' from 'fair', primarily
because of a recent lowering of the long-term sovereign rating on
the Hellenic Republic (Greece) to 'B' from 'BB-' and associated
increasing country risk, and our view of OTE's weak operating
results due to a very difficult economic environment and currently
fierce competition in OTE's domestic market. In addition, OTE
faces large debt maturities in the medium term and we currently
expect the group to generate only modestly positive discretionary
cash flow in 2011, with some improvement in 2012," according to
S&P.

"The 'BB-' rating on OTE is one notch higher than our assessment
of the company's stand-alone credit profile, primarily because we
factor in moderate support from OTE's 30% shareholder Deutsche
Telekom AG (DT; BBB+/Positive/A-2), which fully consolidates OTE
in its financial results in line with a shareholder agreement with
the Greek government. Together with our view of OTE's increasing,
but still not excessive, financial leverage and currently adequate
liquidity profile, we continue to view the group's financial risk
profile as 'significant'," S&P continued.

"On the basis of our recently published criteria, we do not
currently apply a sovereign rating cap to OTE because of our
assumption that the group is likely to receive sufficient and
timely support from DT. In addition, in our opinion, there is a
limited link between OTE and the Greek government, which currently
directly and indirectly controls 20% of OTE's common shares,
primarily because we expect the Greek government to reduce or
fully dispose of its stake in OTE in the near to medium term," S&P
said.

"In the first quarter of 2011, OTE posted weaker results than we
had expected. Revenues declined by 13% year on year to EUR1.2
billion and EBITDA excluding restructuring costs declined by 16%
to EUR433 million, primarily due to very challenging economic
conditions in Greece and strong competitive and regulatory
pressure on the group's domestic mobile and fixed-line operations.
As of March 31, 2011, OTE's debt to EBITDA ratio and ratio of
funds from operations (FFO) to debt, as adjusted by Standard &
Poor's, were 3.5x and 22%. In our base-case assessment, we
currently expect a further modest deterioration of these credit
measures in the next few quarters. In our analysis, we consolidate
OTE's Romanian subsidiary, RomTelecom, on a proportional basis,"
S&P mentioned.

"The negative outlook reflects the possibility of a downgrade in
the next 12 months if OTE's liquidity profile or our view on DT's
commitment to OTE weakens. Furthermore, we could lower the rating
if OTE's operating performance or free cash flow generation
weakens more than we currently expect," S&P added.


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* ICELAND: 1,552 Companies May Face Bankruptcy, Ministry Says
-------------------------------------------------------------
Omar R. Valdimarsson at Bloomberg News reports that about a
quarter of Icelandic companies with debts between ISK10 million
(US$86,400) and ISK1 billion are likely to fail.

According to Bloomberg, the Economy Ministry said in a statement
on its Web site that of Iceland's 5,977 companies, 1,974 won't
need to restructure their bank loans, while 1,925 have negotiated
more lenient repayment terms.  A further 526 companies may need to
negotiate repayment terms, while another 1,552 companies may face
bankruptcy, Bloomberg discloses.

"The odds are that the majority of companies falling under an
agreement on debt restructuring for small and medium size
companies will be offered a solution by June 1," the Ministry
said in the statement.  "Small and medium sized companies account
for a large portion of the country's economic output and represent
about 90% of the country's corporations."


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ALLIED IRISH: S&P Cuts Rating on Lower Tier 2 Debt to 'D'
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
lower Tier 2 subordinated debt instruments issued by Allied Irish
Banks PLC (AIB) to 'D' from 'CC'.

The 'BB/B' counterparty credit ratings on AIB remain on
CreditWatch, where they were placed with negative implications on
Nov. 26, 2010. The rating action affects neither AIB's debt issues
that are guaranteed by the Republic of Ireland (BBB+/Stable/A-2)
nor its unguaranteed senior instruments.

"The rating action on the lower Tier 2 debt reflects our opinion
that a tender offer on the debt by AIB is a 'distressed exchange'
and tantamount to default in accordance with our criteria. There
is no related rating action on the counterparty credit ratings
because senior debt issues are unaffected by the offer," S&P
stated.

"We announced on April 20, 2011, in connection with a decision by
the Irish High Court changing the terms and conditions on AIB's
subordinated debt, that we expected to lower the ratings on AIB's
lower Tier 2 instruments to 'D' upon completion of the appeals
process. That appeals process remains in train and is scheduled to
be heard in court on June 2, 2011. However, the launch of the
tender offer has brought forward the timing of our rating action,"
S&P related.

"According to our criteria, deferrable hybrid instruments are
rated 'C' in the event of a distressed exchange. AIB's instruments
are already rated at this level because coupons have been
deferred," S&P continued.

AIB has offered affected bondholders the opportunity to tender any
or all of their existing notes at a rate of 10 cents-25 cents on
the euro (or a similar rate for dollar and sterling denominated
issues). "We consider this to be a "distressed exchange" because
bondholders stand to receive significantly less than the original
promise and because there is a realistic possibility of a
government-enforced default through coercive burden-sharing on the
instruments subject to the exchange, over the near to medium
term," S&P stated.

"If a rump of notes remain outstanding after the buyback program,
we will consider the rating on those instruments in the light of
the outcome of the tender offer and appeal processes," S&P said.

The exchange applies to nearly EUR2.6 billion in outstanding
subordinated debt and implies a weighted average cash exchange of
about 19%. Full subscription to the exchange would contribute just
above EUR2 billion to the Irish government's recapitalization of
AIB by EUR13.3 billion as announced on March 31, 2011, following
the Prudential Capital Assessment Review and Prudential Liquidity
Assessment Review exercise.

"The CreditWatch status indicates our view of the difficulties
associated with the restructuring plan and the impact of the
aggressive deleveraging plans on the bank's stand-alone credit
profile. We aim to resolve the CreditWatch placement by July," S&P
added.


CORNERSTONE TITAN: Moody's Cuts Ratings on Class D Notes to 'Caa3'
------------------------------------------------------------------
Moody's Investors Service has downgraded these classes of Notes
issued by Cornerstone Titan 2007-1 p.l.c. (amounts reflect initial
outstandings):

   -- EUR333M Class A-2 Notes, Downgraded to A1 (sf); previously
      on Mar 2, 2011 Aa3 (sf) Placed Under Review for Possible
      Downgrade

   -- EUR75.1M Class B Notes, Downgraded to B1 (sf); previously on
      Oct 8, 2009 Downgraded to Baa3 (sf)

   -- EUR44.175M Class C Notes, Downgraded to Caa2 (sf);
      previously on Oct 8, 2009 Downgraded to Ba3 (sf)

   -- EUR97.185M Class D Notes, Downgraded to Caa3 (sf);
      previously on Oct 8, 2009 Downgraded to B3 (sf)

At the same time, Moody's has kept the Aaa (sf) ratings of the
Class A1 and X Notes on review for possible downgrade. The Class
A1, A2 and X Notes were previously placed on review for possible
downgrade due to Moody's initial assessment of the transaction
under Moody's methodology "Global Structured Finance Operational
Risk Guidelines: Moody's Approach to Analyzing Performance
Disruption Risk" published on March 2, 2011.

Moody's operational risk guidelines stipulate the highest
achievable rating if certain operational risk factors are present
which could disrupt payments to investors. In the case of
Cornerstone Titan 2007-1 p.l.c., the operational risk results from
having a servicer unrated by Moody's combined with uncertainty
about the cash manager's access to the servicer advances if the
servicer defaults. A single-A rating is the maximum achievable
rating if the transaction's cash manager is investment-grade rated
(like in this transaction) and the payment disruption would exceed
two note interest payment dates. The Class A2 Notes of Cornerstone
Titan 2007-1 p.l.c. are therefore no longer on review for
downgrade due to operational risk since the current rating is now
at the rating-cap level that could be imposed due to operational
risk.

Moody's did not assign ratings to the Class E, F, G, VA and VB
Notes of the Issuer.

The rating action takes into account Moody's updated central
scenarios as described in Moody's Special Report "EMEA CMBS: 2011
Central Scenarios".

                         Ratings Rationale

The key parameters in Moody's analysis are the default probability
of the securitized loans (both during the term and at maturity) as
well as Moody's value assessment for the properties securing these
loans. Moody's derives from those parameters a loss expectation
for the securitized pool. Based on Moody's revised assessment of
the parameters, the loss expectation for the pool has increased
since the last review in October 2009.

The rating of the Class A1 Notes is driven by (i) the current
credit enhancement levels, and (ii) a fully sequential payment
allocation to the Notes.

The rating downgrade on the Class A2, B, C and D Notes is mainly
due to Moody's increased refinancing default risk and loss
assessment for the remaining loans in the pool. Moody's expects
most of the loans to default when they will mature over the next
three years. The transaction is overly exposed to non-prime
property quality. The availability of financing for this market
segment decreased over the past year and Moody's does not expect a
significant recovery of the lending market in the next two years,
when the majority of the loans in the pool mature, as per its EMEA
CMBS 2011 Central Scenario. The loans show on average a Moody's
whole loan to value (LTV) ratio at maturity of 106%, which makes a
refinancing in this lending market environment very unlikely.

Approximately 70% of the loans mature over the next 12 months.
Moody's has assumed a high default probability at loan maturity
for these loans. Depending on the percentage of loans actually
being refinanced or defaulting at loan maturity there could be
rating sensitivity.

Moody's analysis reflects a forward-looking view of the likely
range of collateral performance over the medium term. From time to
time, Moody's may, if warranted, change these expectations.
Performance that falls outside an acceptable range of the key
parameters may indicate that the collateral's credit quality is
stronger or weaker than Moody's had anticipated during current
review. Even so, deviation from the expected range will not
necessarily result in a rating action. There may be mitigating or
offsetting factors to an improvement or decline in collateral
performance, such as increased subordination levels due to
amortization and loan re- prepayments or a decline in
subordination due to realized losses.

Primary sources of assumption uncertainty are the current stressed
macro-economic environment and continued weakness in the
occupational and lending markets. Moody's anticipates (i) delayed
recovery in the lending market persisting through 2012, while
remaining subject to strict underwriting criteria and heavily
dependent on the underlying property quality, (ii) values will
overall stabilize but with a strong differentiation between prime
and secondary properties, and (iii) occupational markets will
remain under pressure in the short term and will only slowly
recover in the medium term in line with the anticipated economic
recovery. Overall, Moody's central global scenario remains
'hooked-shaped' for 2011; Moody's expects sluggish recovery in
most of the world's largest economies, returning to trend growth
rate with elevated fiscal deficits and persistent unemployment
levels.

                    Moody's Portfolio Analysis

As of the April 2011 interest payment date, the transaction's
total pool balance was GBP 1,134.8 million down by 14% since
closing due to repayments and prepayments.

The largest loan in the pool is the Xanadu Loan (24.8% of the
current pool). The loan is secured by a portfolio of seven office
properties located throughout Germany, which are fully let to a
subsidiary of Deutsche Telekom AG with a weighted average (WA)
remaining lease term of nine years without break options. The
whole loan LTV based on Moody's current market value estimate is
101%. There is a high default risk at the loan maturity in January
2012.

The second largest loan is the Hugo Loan (16.2% of the current
pool). This Shari'ah compliant loan is secured by a portfolio of
four office properties located in and around Paris. The largest
tenants are PSA Peugeot Citroen (Baa3) (42% of the rental income)
and Alstom accounting for 29%. The WA lease term of 4.7 years is
rather short but is typical for the French market; however, the
lease of the largest tenant expires in July 2012. Given that the
loan matures in January 2012, Moody's believes that its
refinancing prospects are highly dependent on the decision of this
tenant on the renewal of its lease. Moody's has taken this risk
into account when analyzing the default probability of the loan at
maturity. Combined with an LTV ratio of 108% based on Moody's
market value estimate there is a high default risk at the loan
maturity.

Nine of the remaining loans accounting for 26% of the current pool
balance are defaulted. Two loans (8.8% of the pool balance) have a
payment default. The other loans did either not refinance or show
covenant breaches.

According to a servicer notice the Loews Loan (8.7% of the current
pool balance) will be worked-out shortly as a sale and purchase
agreement for the underlying multifamily portfolio has been
signed. Moody's expects a loss for this loan. The loan is in
default since September 2008 and has been transferred to special
servicing. The default was triggered by the application for
opening of insolvency proceedings in Germany of the Loews
borrowers and their general partners. Already in August 2008,
administration orders were issued in respect of other affiliated
companies of the borrower group.

Portfolio Loss Exposure: Taking into account the increased
refinancing risk assessment for the remaining loans, Moody's
anticipates a high amount of losses on the securitized portfolio,
which will, given the back loaded default risk profile and the
anticipated work-out strategy for defaulted loans, crystallize
only towards the mid to end of the transaction term.

                         Rating Methodology

The principal methodology used in this rating was "Moody's
Approach to Real Estate Analysis for CMBS in EMEA: Portfolio
Analysis (MORE Portfolio)" published April 2006. Other methodology
and factors considered can be found in "Update on Moody's Real
Estate Analysis for CMBS Transactions in EMEA" published June
2005.

Moody's Investors Service did not receive or take into account a
third party due diligence report on the underlying assets or
financial instruments related to the monitoring of this
transaction in the past six months.

The updated assessment is a result of Moody's ongoing surveillance
of commercial mortgage backed securities (CMBS) transactions.
Moody's prior review is summarized in a Press Release dated
October 08, 2009. The last Performance Overview for this
transaction was published on May 5, 2011.


P ELLIOTT: High Court Adjourns Winding-Up Petition
--------------------------------------------------
Vivion Kilfeather at Irish Examiner reports that the High Court
has adjourned for two weeks a petition seeking to have P Elliott
and Co Ltd. wound up.

The petition was lodged by recruitment firm MCR Personnel, trading
as the MCR group, which claims it is owed some EUR1.793 million by
P Elliott, Irish Examiner relates.

Irish Examiner relates that on Monday, Ms. Justice Mary Laffoy was
informed that the petition had not been advertised and the court
was asked if the matter could be adjourned.  The judge agreed to
move the matter to May 30, Irish Examiner discloses.

In its petition, MCR Personnel, which specializes in the
recruitment of professionals for the construction industry, claims
that it demanded payment of more than EUR1.7 million from P
Elliott late last year for services it says it provided over a
six-year period, according to Irish Examiner.  MCR claims its
demand has not been satisfied, and it is now seeking to have P
Elliott put into liquidation as the entity is insolvent and is
unable to pay debts, Irish Examiner notes.

The court was also informed that P Elliott is facing other
winding-up petitions from a number of different creditors, Irish
Examiner states.  Among other things, a separate petition seeking
to have the company wound is due to be heard by the High Court
next week, the report notes.

According to Irish Examiner, companies William Cox Ireland and
Oran Precast have lodged High Court petitions seeking to have P
Elliott wound up, while subcontracting firm OMC Engineering had
served a 21-day notice on P Elliott seeking payment of EUR100,000
due regarding a number of projects.

P Elliott and Co Ltd. is a Cavan-based construction firm.


SKYE CLO I: Moody's Upgrades Rating on Class E Bond to 'B2 (sf)'
----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of four classes
of notes issued by Skye CLO I Limited.

   Issuer: Skye CLO I Limited

   -- EUR50M Class B Bond, Upgraded to Aaa (sf); previously on Aug
      20, 2010 Upgraded to Aa1 (sf)

   -- EUR20M Class C Bond, Upgraded to Aa1 (sf); previously on Aug
      20, 2010 Upgraded to Aa3 (sf)

   -- EUR25M Class D Bond, Upgraded to A3 (sf); previously on Apr
      27, 2009 Downgraded to Baa3 (sf) and Confirmed

   -- EUR27.5M Class E Bond, Upgraded to B2 (sf); previously on
      Apr 27, 2009 Downgraded to Caa1 (sf) and Confirmed

                          Ratings Rationale

Skye CLO I Limited is a synthetic CLO with exposure to 81%
European senior secured loans and 19% mezzanine loans. The
underlying portfolio has been in its amortization phase since
March 2009.

According to Moody's, the rating actions taken on the notes,
result primarily from the amortization of the underlying
portfolio. Since the last rating action in August 2010, the size
of the Super Senior Swap has reduced by approximately EUR30MM from
EUR54.3MM in August 2010 to EUR24.3MM as reported in the March
2011 trustee report. As a consequence of deleveraging,
overcollateralization ratios have increased from 160.40% to
177.60% for Class B, from 121.20% to 125.80% for Class D and from
104.30% to 105.80% for Class E between August 2010 and March 2011.

In its base case, Moody's analyzed the underlying collateral pool
with a weighted average recovery rate of 56%, a weighted average
spread of 3.12% and a stressed default probability consistent with
a weighted average rating factor (WARF) of 4117. The standard
asset correlation framework as set in CDOROM has been used.

In addition to its base case analysis, Moody's also tested the
impact of the passage of time on the notes by modelling the
current portfolio one year forward. Moody's observed that the
benefit for the notes was less than 1 notch from the base case
model outputs.

Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, as evidenced by (1) uncertainties of
credit conditions in the general economy and (2) the large
concentration of speculative-grade debt maturing between 2012 and
2014 which may create challenges for issuers to refinance.

Sources of additional performance uncertainties are:

1. Lack of portfolio granularity: The performance of the portfolio
   depends to a large extent on the credit conditions of a few
   large obligors, especially when they experience jump to
   default. Due to the deal's low diversity score and lack of
   granularity, Moody's supplemented its typical Binomial
   Expansion Technique analysis with a simulated default
   distribution using Moody's CDOROMTM software and/or individual
   scenario analysis.

2. Portfolio amortization: Deleveraging of the transaction may
   accelerate due to high prepayment levels in the loan market
   which may have significant impact on the notes' ratings.

The principal methodology used in the rating was Moody's Approach
to Rating Collateralized Loan Obligations published in August
2009.

Under the methodologies, Moody's relies on a simulation based
framework. Moody's therefore used CDOROM to generate default and
recovery scenarios for each asset in the portfolio, and then
Moody's EMEA Cash-Flow model in order to compute the associated
loss to each tranche in the structure.

Due to the impact of revised and updated key assumptions
referenced in "Moody's Approach to Rating Collateralized Loan
Obligations" and "Annual Sector Review (2009): Global CLOs", key
model inputs used by Moody's in its analysis, such as par,
weighted average rating factor, diversity score, and weighted
average recovery rate, may be different from the trustee's
reported numbers.

Moody's Investors Service did not receive or take into account a
third party due diligence report on the underlying assets or
financial instruments related to the monitoring of this
transaction in the past six months.


TBS INTERNATIONAL: Incurs US$17.96-Mil. Net Loss in First Quarter
-----------------------------------------------------------------
TBS International plc filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q reporting a net loss
of US$17.96 million on US$89.82 million of total revenue for the
three months ended March 31, 2011, compared with a net loss of
US$7.84 million on US$100.07 million of total revenue for the same
period during the prior year.

The Company's balance sheet at March 31, 2011, showed US$681.39
million in total assets, US$406.22 million in total liabilities,
and US$275.17 million in total shareholders' equity.

Ferdinand V. Lepere, senior executive vice president and chief
financial officer, commented: "The weakening freight and charter
rate environment that began in the second half of 2010 continued
into early 2011, and adversely affected our revenues and our
ability to maintain financial ratios as required by our credit
facilities.

"Our lenders, as previously announced on April 18, 2011, agreed to
modify our financial covenants through December 31, 2011, reducing
the minimum consolidated interest charges coverage ratio for the
fiscal quarters ending June 30, 2011 through December 31, 2011
from 3.35 to 1.00 to 2.50 to 1.00.  In addition, the modifications
increased the maximum consolidated leverage ratio for the same
periods from 4.00 to 1.00 to 5.10 to 1.00, and reduced the minimum
cash requirement from US$15 million to US$10 million for the
period from July 1, 2011 to December 31, 2011."

A full-text copy of TBS' Form 10-Q filing is available without
charge at http://is.gd/1bxE5S

                     About TBS International plc

Dublin, Ireland-based TBS International plc (NASDAQ: TBSI)
-- http://www.tbsship.com/-- provides worldwide shipping
solutions to a diverse client base of industrial shippers through
its Five Star Service: ocean transportation, projects, operations,
port services and strategic planning.  The TBS shipping network
operates liner, parcel and dry bulk services, supported by a fleet
of multipurpose tweendeckers and handysize/handymax bulk carriers,
including specialized heavy-lift vessels and newbuild tonnage.
TBS has developed its franchise around key trade routes between
Latin America and China, Japan and South Korea, as well as select
ports in North America, Africa, the Caribbean and the Middle East.

The Company reported a net loss of US$247.76 million on US$411.83
million of total revenue for the year ended Dec. 31, 2010,
compared with a net loss of US$67.04 million on US$302.51 million
of total revenue during the prior year.

PricewaterhouseCoopers LLP expressed substantial doubt about the
Company's ability to continue as a going concern.  PwC believes
that the Company will not be in compliance with the financial
covenants under its credit facilities during 2011, which under the
agreements would make the debt callable.  According to PwC, this
has created uncertainty regarding the Company's ability to fulfill
its financial commitments as they become due.

As reported in the TCR on Feb. 8, 2011, TBS International on
Jan. 31, 2011, announced that it had entered into amendments to
its credit facilities with all of its lenders, including AIG
Commercial Equipment, Commerzbank AG, Berenberg Bank and Credit
Suisse and syndicates led by Bank of America, N.A., The Royal Bank
of Scotland plc and DVB Group Merchant Bank (the "Credit
Facilities").  The amendments restructure the Company's debt
obligations by revising the principal repayment schedules under
the Credit Facilities, waiving any existing defaults, revising the
financial covenants, including covenants related to the Company's
consolidated leverage ratio, consolidated interest coverage ratio
and minimum cash balance, and modifying other terms of the Credit
Facilities.

The Company currently expects to be in compliance with all
financial covenants and other terms of the amended Credit
Facilities through maturity.

As a condition to the restructuring of the Company's credit
facilities, three significant shareholders who also are key
members of TBS' management agreed on Jan. 25, 2011, to provide up
to US$10 million of new equity in the form of Series B Preference
Shares and deposited funds in an escrow account to facilitate
satisfaction of this obligation.  In partial satisfaction of this
obligation, on Jan. 28, 2011, these significant shareholders
purchased an aggregate of 30,000 of the Company's Series B
Preference Shares at US$100 per share directly from TBS in a
private placement.


TBS INTERNATIONAL: To Sell 30,000 Series B Preference Shares
------------------------------------------------------------
TBS International plc, on Jan. 25, 2011, executed an investment
agreement with three significant shareholders who are also members
of management.  The investors are Joseph Royce, the Company's
president and chief executive officer and the chairman of the
Board; Gregg McNelis, the Company's senior executive vice
president and chief operating officer; and Lawrence Blatte, the
Company's senior executive vice president.

Under the Investment Agreement, the Company agreed to sell, and
the Investors agreed to purchase, an aggregate of 30,000 Series B
Preference Shares at US$100 per share immediately and up to an
additional aggregate of 70,000 Series B Preference Shares at
US$100 per share.  The Company also agreed to conduct a rights
offering pursuant to which the Company's ordinary shareholders
would be entitled to receive subscription rights for the purchase
of Series A Preference Shares with the same terms and conditions
as the Series B Preference Shares issued to the Investors.  The
Investment Agreement provides that the Investors' commitment to
purchase up to 70,000 additional Series B Preference Shares would
be reduced, share for share, by the number of Series A Preference
Shares issued in connection with the rights offering and to the
extent the significant shareholders were required to purchase
Series B Preference Shares from the Company prior to the closing
of the rights offering in connection with the Company's liquidity
needs.

The initial conversion price applicable to the Series A preference
shares was established in January 2011 at 25 shares, equivalent to
US$4.00 per share.  Since that time, the market price of the Class
A ordinary shares has declined from approximately US$3.50 per
share to US$1.70 per share.  On May 6, 2011, the Company's board
of directors concluded that it would be desirable to decrease the
initial conversion price to 50 shares, equivalent to US$2.00 per
share in order to increase the likelihood of a successful rights
offering and, consistent with that determination, the board
amended the certificate of designation for the preference shares
to decrease the initial conversion price from US$4.00 to US$2.00
by increasing the conversion rate for the Series A Preference
Shares from 25.0 to 50.0 Class A ordinary shares per preference
share.

On May 10, 2011, the Company and the Investors entered Amendment
No. 1 to the Investment Agreement.  The amendment replaces the
significant shareholders' prior commitment to purchase up to
70,000 Series B Preference Shares (reduced, share for share, by
the number of shares issued in the rights offering) with a standby
purchase commitment.  Pursuant to their standby purchase
commitment, the significant shareholders are obligated to purchase
an aggregate of 70,000 Series A Preference Shares from the Company
at US$100 per share if subscription rights for the exercise of
such number of Series A Preference Shares remain unexercised upon
the expiration of the rights offering.  Because each significant
shareholder has agreed not to exercise the subscription rights
issued with respect to ordinary shares beneficially owned by him,
subscription rights for more than 70,000 Series A Preference
Shares will expire without being exercised and such 70,000 Series
A Preference Shares will be purchased at US$100 per share by the
significant shareholders as standby purchasers.  The standby
purchase commitment will still be reduced, share for share, by the
number of Series B Preference Shares the significant shareholders
are required to purchase prior to the closing of the rights
offering in connection with the Company's liquidity needs.

On May 6, 2011, the Company amended its certificate of designation
for the Series A and Series B Preference Shares to increase the
initial conversion rate for the Series A Preference Shares from
25.0 to 50.0 Class A ordinary shares per preference share.  All
holders of the 30,000 outstanding Series B Preference Shares,
acting by unanimous written consent without a meeting, consented
to the amendment.

                    About TBS International plc

Dublin, Ireland-based TBS International plc (NASDAQ: TBSI)
-- http://www.tbsship.com/-- provides worldwide shipping
solutions to a diverse client base of industrial shippers through
its Five Star Service: ocean transportation, projects, operations,
port services and strategic planning.  The TBS shipping network
operates liner, parcel and dry bulk services, supported by a fleet
of multipurpose tweendeckers and handysize/handymax bulk carriers,
including specialized heavy-lift vessels and newbuild tonnage.
TBS has developed its franchise around key trade routes between
Latin America and China, Japan and South Korea, as well as select
ports in North America, Africa, the Caribbean and the Middle East.

The Company's balance sheet at March 31, 2011, showed US$681.39
million in total assets, US$406.22 million in total liabilities,
and US$275.17 million in total shareholders' equity.

The Company reported a net loss of US$247.76 million on US$411.83
million of total revenue for the year ended Dec. 31, 2010,
compared with a net loss of US$67.04 million on US$302.51 million
of total revenue during the prior year.

PricewaterhouseCoopers LLP expressed substantial doubt about the
Company's ability to continue as a going concern.  PwC believes
that the Company will not be in compliance with the financial
covenants under its credit facilities during 2011, which under the
agreements would make the debt callable.  According to PwC, this
has created uncertainty regarding the Company's ability to fulfill
its financial commitments as they become due.

As reported in the TCR on Feb. 8, 2011, TBS International on
Jan. 31, 2011, announced that it had entered into amendments to
its credit facilities with all of its lenders, including AIG
Commercial Equipment, Commerzbank AG, Berenberg Bank and Credit
Suisse and syndicates led by Bank of America, N.A., The Royal Bank
of Scotland plc and DVB Group Merchant Bank (the "Credit
Facilities").  The amendments restructure the Company's debt
obligations by revising the principal repayment schedules under
the Credit Facilities, waiving any existing defaults, revising the
financial covenants, including covenants related to the Company's
consolidated leverage ratio, consolidated interest coverage ratio
and minimum cash balance, and modifying other terms of the Credit
Facilities.

The Company currently expects to be in compliance with all
financial covenants and other terms of the amended Credit
Facilities through maturity.

As a condition to the restructuring of the Company's credit
facilities, three significant shareholders who also are key
members of TBS' management agreed on Jan. 25, 2011, to provide up
to US$10 million of new equity in the form of Series B Preference
Shares and deposited funds in an escrow account to facilitate
satisfaction of this obligation.  In partial satisfaction of this
obligation, on Jan. 28, 2011, these significant shareholders
purchased an aggregate of 30,000 of the Company's Series B
Preference Shares at USUS$100 per share directly from TBS in a
private placement.


TBS INTERNATIONAL: To Offer Rights to Buy 312,184 Pref. Shares
--------------------------------------------------------------
TBS International plc filed with the U.S. Securities and Exchange
Commission Amendment No.3 to Form S-1 registration statement
relating to the distribution to eligible holders of the Company's
Class A and Class B ordinary shares one non-transferable
subscription right to subscribe for the Company's Series A
Preference Shares for each ordinary share held at 5:00 p.m., New
York City time, on May 7, 2011, the record date for the rights
offering.  Each 100 subscription rights entitle a holder to
subscribe for one Series A Preference Share at a subscription
price of US$100 per Series A Preference Share.  Each Series A
Preference Share initially will be convertible into 50.0 Class A
ordinary shares, subject to adjustments to reflect semiannual
increases in liquidation value and stock splits and
reclassifications.  As of the record date for the rights offering,
18,018,169 of the Company's Class A ordinary shares and 13,200,305
of the Company's Class B ordinary shares were outstanding.
Holders of these shares on the record date are eligible to receive
the subscription rights.

The Company is conducting this rights offering in connection with
the restructuring of its various credit facilities.  As a
condition to the restructuring of its credit facilities, the
Company's lenders have required three significant shareholders who
also are key members of the Company's management to agree to
provide up to US$10.0 million of new equity in the form of
preference shares.  In partial satisfaction of this requirement,
on Jan. 28, 2011, these significant shareholders purchased an
aggregate of 30,000 of the Company's Series B Preference Shares at
US$100 per share directly from the Company in a private placement.
In addition, they agreed to purchase an additional aggregate of
70,000 of the Company's preference shares at US$100 per share
directly from the Company.

The aggregate purchase price of Series A Preference Shares offered
in the rights offering would be US$18.8 million if all eligible
rights were exercised.  "Eligible rights" are the subscription
rights held by shareholders other than the significant
shareholders, who have agreed that they will not exercise their
rights, but instead will act as standby purchasers and purchase up
to 70,000 Series A Preference Shares upon completion of the rights
offering.  As a result, the minimum amount that the Company will
raise from the sale of preference shares to the significant
shareholders will be US$10 million (which includes US$3 million of
preference shares sold to the significant shareholders in January
2011), and the maximum amount that the Company would raise from
all holders, including the significant shareholders in the private
placements or upon standby purchases, if all eligible rights were
exercised, would be US$28.8 million.

The rights offering will dilute the ownership interest and voting
power of the ordinary shares owned by shareholders who do not
fully exercise their subscription rights.  Shareholders who do not
fully exercise their subscription rights should expect, upon
completion of the rights offering, to own a smaller proportional
interest of the Company's ordinary shares than before the rights
offering.

The Company's Class A ordinary shares are quoted on the Nasdaq
Global Select Market under the symbol "TBSI."  The closing price
of the Company's Class A ordinary shares on May 9, 2011, as
reported by Nasdaq, was US$1.71 per share.  The Company has not
listed, and do not expect to list for trading, the subscription
rights or the Company's Class B ordinary shares, Series A
Preference Shares or Series B Preference Shares.

A full-text copy of the amended prospectus is available for free
at http://is.gd/VHi0GY

                   About TBS International plc

Dublin, Ireland-based TBS International plc (NASDAQ: TBSI)
-- http://www.tbsship.com/-- provides worldwide shipping
solutions to a diverse client base of industrial shippers through
its Five Star Service: ocean transportation, projects, operations,
port services and strategic planning.  The TBS shipping network
operates liner, parcel and dry bulk services, supported by a fleet
of multipurpose tweendeckers and handysize/handymax bulk carriers,
including specialized heavy-lift vessels and newbuild tonnage.
TBS has developed its franchise around key trade routes between
Latin America and China, Japan and South Korea, as well as select
ports in North America, Africa, the Caribbean and the Middle East.

The Company's balance sheet at March 31, 2011, showed US$681.39
million in total assets, US$406.22 million in total liabilities
and US$275.17 million in total shareholders' equity.

The Company reported a net loss of US$247.76 million on US$411.83
million of total revenue for the year ended Dec. 31, 2010,
compared with a net loss of US$67.04 million on US$302.51 million
of total revenue during the prior year.

PricewaterhouseCoopers LLP expressed substantial doubt about the
Company's ability to continue as a going concern.  PwC believes
that the Company will not be in compliance with the financial
covenants under its credit facilities during 2011, which under the
agreements would make the debt callable.  According to PwC, this
has created uncertainty regarding the Company's ability to fulfill
its financial commitments as they become due.

As reported in the TCR on Feb. 8, 2011, TBS International on
Jan. 31, 2011, announced that it had entered into amendments to
its credit facilities with all of its lenders, including AIG
Commercial Equipment, Commerzbank AG, Berenberg Bank and Credit
Suisse and syndicates led by Bank of America, N.A., The Royal Bank
of Scotland plc and DVB Group Merchant Bank (the "Credit
Facilities").  The amendments restructure the Company's debt
obligations by revising the principal repayment schedules under
the Credit Facilities, waiving any existing defaults, revising the
financial covenants, including covenants related to the Company's
consolidated leverage ratio, consolidated interest coverage ratio
and minimum cash balance, and modifying other terms of the Credit
Facilities.

The Company currently expects to be in compliance with all
financial covenants and other terms of the amended Credit
Facilities through maturity.

As a condition to the restructuring of the Company's credit
facilities, three significant shareholders who also are key
members of TBS' management agreed on Jan. 25, 2011, to provide up
to US$10 million of new equity in the form of Series B Preference
Shares and deposited funds in an escrow account to facilitate
satisfaction of this obligation.  In partial satisfaction of this
obligation, on Jan. 28, 2011, these significant shareholders
purchased an aggregate of 30,000 of the Company's Series B
Preference Shares at US$100 per share directly from TBS in a
private placement.



* IRELAND: Tanaiste Eamon Gilmore Rules Out Debt Restructuring
--------------------------------------------------------------
The Irish Times reports that Tanaiste Eamon Gilmore has pledged
Ireland will not restructure its debts.

According to The Irish Times, the Government is "confident" it
will be able to reduce its deficit under the current economic
program.

An Irish Times article last week noted that economist Prof Morgan
Kelly said Ireland was on track to owe a quarter of a trillion
euro by 2014 and that a prolonged and chaotic national bankruptcy
was becoming "inevitable".  He advocated abandoning the bailout
offered by the European Union and International Monetary Fund, The
Irish Times recounts.

"National survival requires that Ireland walk away from the
bailout.  This in turn requires the Government to do two things:
disengage from the banks, and bring its budget into balance
immediately," The Irish Times quotes Mr. Kelly as saying.

However, Taoiseach Enda Kenny has rejected Prof Kelly's
suggestion, describing it as a "lethal injection" to the Irish
economy, The Irish Times notes.


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


BANCA MB: Unicredit Acquires Bank's Credit Portfolio For EUR246.1M
------------------------------------------------------------------
The Banking Business Review reports that Unicredit has acquired
Banca MB's entire credit portfolio placed in liquidation for
EUR246.1 million, instead of the nominal EUR414.5 million it is
worth.

Citing a statement released by Unicredit, BBR says the agreement
undersigned with the loss adjuster concerns both performing and
non-performing credits.

According to BBR, as per the agreement, the depositors of Banca MB
will be entitled to:

   -- follow the standard reimbursement procedure, requesting
      the payment directly to the liquidator; or

   -- benefit from the funds directly made available by UniCredit,
      up to a maximum amount of EUR127.8m, through payment of the
      relevant amount into current accounts to be opened by
      depositors, starting from 20 May 2011.  Such amounts will be
      deducted from the price payable for the credit portfolio.

The remaining portion of the purchase price due by UniCredit will
be paid in cash directly to the liquidator, BBR notes.

In this manner, Unicredit is participating in the liquidation of
Banca MB organized by representatives appointed by the Bank of
Italy, according to BBR.

As reported in the Troubled Company Reporter-Europe on July 15,
2009, Bloomberg News noted that Bank of Italy said Banca MB SpA
has been put under bankruptcy protection.  Administrators were
named by the central bank.

Based in Milan, Italy, Banca MB SpA provides commercial banking
services.


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


DEMATIC HOLDING: S&P Assigns 'B' Long-Term Corp. Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' long-term
corporate credit rating to Luxembourg-based materials-handling
solutions provider Dematic Holding S.a.r.l. The outlook is stable.

"At the same time, we assigned a 'B' issue rating to the company's
US$300 million senior secured notes, with a recovery rating of
'4', indicating our expectation of average recovery (30%-50%) in a
default scenario," S&P noted.

"The ratings on Dematic primarily reflect our view of its
financial risk profile, which we classify as highly leveraged
under our criteria. The dividend recapitalization via the issuance
of US$300 million senior secured notes leads to a leverage ratio
of about 4.5x in the fiscal year 2011, according to our
calculations. The rating likewise captures Dematic's business risk
profile, which we consider weak under our criteria," according to
S&P.

"We consider the major constraint on the business risk profile to
be Dematic's weak historical profitability, combined with
considerable volatility, said Mr. Staeblein.  "The business risk
profile is also constrained by limited product diversity,
significant customer concentration, a degree of cyclicality in the
material handling market, project risks, and exposure to raw
material price fluctuations."

"In our view, the business is supported by solid market shares in
a fragmented market for intralogistics products; Dematic's high
share of stable and recurring service revenues; fairly stable,
prime end markets such as food, beverage, and supermarkets; low
capital intensity both in terms of capital expenditures and
working capital; and moderate operating leverage," S&P continued.

Dematic designs, manufactures, installs, and services automated
material-handling systems for the retail distribution, food and
beverage, supermarkets, general manufacturing, and related
sectors. Dematic's majority shareholder is the private equity firm
Triton, after Triton acquired Dematic from Siemens AG
(A+/Positive/A-1+) in 2006.

"Based on our EBITDA forecast for 2011 and assumption of low
single-digit organic growth, and including the proposed US$300
million notes, we expect Dematic's financial leverage ratio in
2011 to be about 4.5x and funds from operations (FFO) to debt
about 15%. Our fully adjusted debt figure of about EUR300 million
consists of the proposed notes (EUR210 million) and operating
lease and pension adjustments (EUR90 million) less excess cash,"
S&P stated.

"The stable outlook reflects our expectation that Dematic will
operate within credit measures commensurate for the rating over
the business cycle," said Mr. Staeblein. "The ratings incorporate
our expectation of modest organic revenue growth coupled with
operating profitability margins (EBITDA) of 8%-9% over the
medium term. In our base case, Dematic's EBITDA margins could fall
to 6%-7%. We also assume Dematic will generate positive FOCF," S&P
added.


INTELSAT SA: Incurs US$215.7-Mil. Net Loss for First Quarter
------------------------------------------------------------
Intelsat S.A. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q, reporting a net loss
of US$215.75 million on US$640.18 million of revenue for the three
months ended March 31, 2011, compared with a net loss of US$103.42
million on US$621.14 million of revenue for the same period during
the prior year.

The Company's balance sheet at March 31, 2011, showed US$17.23
billion in total assets, US$18.12 billion in total liabilities,
US$16.44 million in redeemable non-controlling interest, a
US$907.42 million total Intelsat S.A. shareholders' deficit, and
US$1.82 million in non-controlling interest.

"Intelsat delivered solid 3 percent revenue growth in the first
quarter of 2011 and also progressed on initiatives that position
the company for long-term profitable growth," said Intelsat CEO
David McGlade.  "The quarter featured the addition of leading
programmers to our regional video neighborhoods, new strategic
agreements with large African and Latin American communications
providers, and increased orders under large government programs at
our Intelsat General Corporation business.  We ended the quarter
with US$9.9 billion in contracted services backlog, underscoring
the stability and visibility inherent in our business."

A full-text copy of Intelsat's Form 10-Q filing is available for
free at http://is.gd/CZqwjg

                           About Intelsat

Intelsat S.A., formerly Intelsat, Ltd., provides fixed-satellite
communications services worldwide through a global communications
network of 54 satellites in orbit as of Dec. 31, 2009, and ground
facilities related to the satellite operations and control, and
teleport services.  It had US$2.5 billion in revenue in 2009.

Luxembourg-based Intelsat S.A. carries 'B' issuer credit ratings
from Standard & Poor's.  It has 'Caa1' corporate family and
probability of default ratings from Moody's Investors Service.

Washington D.C.-based Intelsat Corporation, formerly known as
PanAmSat Corporation, is a fully integrated subsidiary of Intelsat
S.A., its indirect parent.  Intelsat Corp. had US$7.70 billion in
assets against US$4.86 billion in debts as of Dec. 31, 2010.

The Company reported a net loss of US$507.77 million on
US$2.54 billion of revenue for the year ended Dec. 31, 2010,
compared with a net loss of US$782.06 million on US$2.51 billion
of revenue during the prior year.


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


TELLER AS: Fitch Affirms Long-Term Issuer Default Rating at 'BB+'
-----------------------------------------------------------------
Fitch Ratings has affirmed Teller AS's Long-term Issuer Default
Rating (IDR) at 'BB+' with a Stable Outlook, Short-term IDR at
'B', Individual Rating at 'C' and Support Rating at '3'.
Teller's ratings reflect its strong franchise in Norwegian
merchant acquiring of international payment cards and the cash-
generative and low credit risk nature of its business. They also
consider its small capital base and exposure to operational risk.
The Stable Outlook also reflects Teller's strong franchise. Given
its small size, there is limited upside to the ratings. Downside
risk could arise from unforeseen challenges during the Nets
group's integration or changes in Teller's risk profile.

Teller's parent, Nordito AS, merged with PBS Holding A/S in early
2010 to form Nets Holding A/S. Fitch believes that the merged
entity should benefit from economies of scale and an improved
Nordic franchise, although integration risk remains in the short
to medium term. In Fitch's view, there is a moderate probability
that support would be forthcoming from Teller's ultimate
shareholders, which include various banks in Norway and Denmark.

Teller's profitability remained relatively stable throughout the
financial crisis. Volumes have continued to improve, although
there has been some pressure on margins. Credit costs have
remained low, partly because exposures with significant pre-paid
risk have been less affected by bankruptcies. Fitch expects
Teller's performance to remain robust as part of a larger group.
Teller's performance would be significantly affected by material
changes to the pricing of international payment card transactions.

Operational risk losses including fraud have historically been
moderate, and group-wide business continuity plans are in place,
including procedures for system failures. Teller has no debt to
service and liquidity needs are generally small. Capitalization is
adequate.

Since 2010, Teller has been part of the Nets group, the leading
payments, cards and solutions provider in the Nordic countries.
Teller has retained its brand and will remain focused on merchant
acquiring of international payment cards.


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


* PORTUGAL: Gets Approval for EUR78 Billion Bailout
---------------------------------------------------
James G. Neuger and Anabela Reis at Bloomberg News report that
European finance chiefs endorsed a EUR78 billion (US$111 billion)
bailout for Portugal as they stepped up pressure on Greece to do
more to win improved aid terms.

Portugal followed Greece and Ireland in seeking emergency loans
from the European Union and the International Monetary Fund,
bringing to EUR256 billion the aid provided to stamp out the
sovereign debt crisis, Bloomberg relates.

According to Bloomberg, Portuguese Finance Minister Fernando
Teixeira dos Santos said after a meeting in Brussels after
Portugal will receive the first tranche of the loan, EUR18
billion, at the end of the month or beginning of June.

The backing for Portugal came during deliberations clouded by the
absence of IMF Managing Director Dominique Strauss-Kahn, Bloomberg
discloses.  Finance ministers, according to Bloomberg, said the
IMF's role as the contributor of a third of the bailout money for
Greece, Ireland and Portugal won't be hampered by Mr. Strauss-
Kahn's May 14 arrest on sexual-assault charges in New York.

EU Monetary Affairs Commissioner Olli Rehn said on May 10 that IMF
loans to Portugal will come at a 3.25% interest rate, Bloomberg
notes.  The rate on the European portion will be between 5.5% and
6%, Bloomberg adds.


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


NOVOROSSIYSK COMM'L: Moody's Cuts Corporate Family Rating to 'Ba3'
------------------------------------------------------------------
Moody's Investors Service has downgraded to Ba3/Aa3.ru from
Ba1/Aa1.ru (on review for downgrade) the corporate family rating
(CFR) and probability of default rating (PDR) of PJSC Novorossiysk
Commercial Seaport. Concurrently, Moody's has also downgraded the
USD300 million worth of 7% loan participation notes due in 2012
issued by Novorossiysk Port Capital S.A. to B1/Loss Given Default
assessment of LGD4 from Ba1/LGD4. In addition, Moody's has
affirmed NCSP's 50% family-wide LGD assessment. The rating outlook
is stable.

                        Ratings Rationale

Moody's two-notch downgrade of NCSP's issuer rating follows its
completion of the debt-financed acquisition of Primorsk Trade Port
LLC ("PTP") and various changes to NCSP's share ownership
structure, including the change of control of the company. This
rating action concludes the review for downgrade of NCSP's ratings
initiated on Sept. 27, 2010 in response to the company's
announcement that it intended to acquire PTP.

"More particularly, the rating downgrade reflects NCSP's increased
debt burden and the terms of the US$1.95 billion term loan
facility provided by Sberbank to finance the acquisition of PTP
(the "Sberbank Loan")," says Andrew Blease, a Moody's Senior Vice
President and lead analyst for NCSP. "This is offset somewhat by
the larger scale of the NCSP group following its acquisition of
PTP and its increased strategic importance," adds Mr. Blease. As a
rating methodology technicality, Moody's has also removed the
specific one-notch uplift to NCSP's rating previously incorporated
to reflect the likelihood of extraordinary support being provided
by the Government of Russia (Baa1, stable) in the event that this
were ever required by the company, NCSP's strategic importance now
being factored directly into its rating.

However, more positively, NCSP's Ba3 CFR reflects: (i) the
company's position as Russia's largest port and its successful
transition over the past few years to a more modern provider of
bulk cargo and container handling capacity at the Port of
Novorossiysk; (ii) its proven ability to grow cargo volumes and
maintain tariff levels appropriate to maintaining financial
health, but which remains somewhat untested at PTP; (iii) its
moderate capital expenditure (capex) plans and possible investment
strategy.

The Ba3 CFR further reflects a PDR of Ba3 and a firm-wide LGD
assessment of 50%. The national scale rating of Aa3.ru maps to Ba3
on the Moody's Global Rating Scale.

The B1 rating of the Loan Participation Notes and the Loss Given
Default assessment of LGD4 reflect the current and anticipated
group debt structure, which comprises the borrowers and guarantors
pertaining to each of NCSP group's debt instruments.

Although the Russian government still owns 20% of NCSP through the
Federal State Property Management Agency, Moody's notes that there
is an increased likelihood of the shares being sold in line with
previous announcements by the Russian government. Nevertheless,
Moody's notes that following the change of ownership of NCSP, the
company is 50.1% owned by Novoport Holding Limited, itself jointly
owned by the 100% Russian government owned Transneft and private
interests. Furthermore, on May 3, 2011, NCSP reported that the
Russian government has been awarded "golden share" rights with
veto powers over major changes to the corporate structure of NCSP.
While this emphasizes the strategic importance of NCSP to Russia,
Moody's concludes that the probability of direct extraordinary
support being provided is a little less than has previously been
embedded within NCSP's ratings given the possibility of a future
sale of the Government's shares.

Prior to the acquisition of PTP, NCSP steadily reduced its debt
burden by using revenue and cash flow generated from a successful
investment and growth strategy at the Port of Novorossiysk. By the
year ending December 2010, NCSP had debt of US$321 million and
cash and cash equivalents of US$265 million. Consequently, the
US$2.15 billion acquisition of PTP, mostly financed by the
Sberbank Loan, has increased NCSP's indebtedness significantly.
PTP is Russia's largest crude oil exporting port, and with the
recent addition of capacity to handle oil products, would be
expected to generate good cash flow over the coming years. The
seven-year tenor of the Sberbank Loan suggests that a fairly rapid
pay-down of the debt is possible. Nevertheless, NCSP is carrying
significantly more debt leverage than previously.

Moody's notes that the Sberbank Loan benefits from a guarantee
from PTP, and has a charge over Novoport's shares in NCSP.
Furthermore, as is common with domestic Russian bank loan
agreements, a significant proportion of NCSP's revenues need to be
paid into Sberbank bank accounts as a condition of the loan.
Sberbank has power of attorney over such bank accounts to withdraw
funds if NCSP misses a debt payment. Overall, these features
provide a level of protection and priority of claim that do not
pertain to the Loan Participation Notes, hence the reason for
Moody's more significant downgrade of the Loan Participation Notes
to B1.

The stable outlook on the ratings reflects Moody's expectation
that: (i) NCSP will see continued growth in its business; (ii) the
company's capex programs are appropriate for the expected growth;
and (iii) cash flows generated will enable NCSP to deleverage in
terms of debt/EBITDA, thereby allowing the company to meet its
debt maturities on a timely basis and comply with the financial
covenants of the Sberbank loan.

Moody's would consider upgrading NCSP's ratings if it were to see
a material significant reduction in the company's expected debt
levels, which would be evidenced by a sustained reduction in its
debt/EBITDA ratio to below 3.0x, as calculated by Moody's.
Alternatively, the rating agency would consider downgrading NCSP's
ratings if the company were unable to deleverage in terms of
debt/EBITDA, which would be evidenced by this ratio remaining over
4.0x over the medium term.

NCSP's ratings were assigned by evaluating factors that Moody's
considers relevant to the credit profile of the issuer, such as
the company's (i) business risk and competitive position compared
with others within the industry; (ii) capital structure and
financial risk; (iii) projected performance over the near to
intermediate term; and (iv) management's track record and
tolerance for risk. Moody's compared these attributes against
other issuers both within and outside NCSP's core industry and
believes NCSP's ratings are comparable to those of other issuers
with similar credit risk. Other methodologies used include Loss
Given Default for Speculative Grade Issuers in the US, Canada, and
EMEA, published June 2009.

          Last Rating Action & Principal Methodology

Following this rating action, NCSP has these ratings outstanding
with a stable outlook:

   -- CFR (foreign currency) -- Ba3/Aa3.ru

   -- CFR (foreign currency) and PDR -- Ba3

   -- Novorossiysk Port Capital S.A. -- US dollar Loan
      Participation Notes -- B1

   -- Novorossiysk Port Capital S.A. -- US dollar Loan
      Participation Notes -- LGD4

Moody's National Scale Ratings (NSRs) are intended as relative
measures of creditworthiness among debt issues and issuers within
a country, enabling market participants to better differentiate
relative risks. NSRs differ from Moody's global scale ratings in
that they are not globally comparable to the full universe of
Moody's rated entities, but only with NSRs for other rated debt
issues and issuers within the same country. NSRs are designated by
a ".nn" country modifier signifying the relevant country, as in
".mx" for Mexico. For further information on Moody's approach to
national scale ratings, please refer to Moody's Rating
Implementation Guidance August 2010 "Mapping Moody's National
Scale Ratings to Global Scale Ratings."

PJSC Novorossiysk Commercial Sea Port is company providing
stevedoring services at the Port of Novorossiysk, located on
Russia's Black Sea coast. For the year ending Dec. 31, 2010, the
company had revenues of US$635 million and total assets of
US$1.383 billion.


ROSTELECOM OJSC: S&P Lifts LT Corporate Credit Rating to 'BB+'
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term corporate
credit and related issue ratings on Russian telecommunications
operator OJSC Rostelecom to 'BB+' from 'BB'. The outlook is
stable.

"The upgrade reflects the change of our analytical approach to
Rostelecom as a government-related entity (GRE). We believe there
is a moderate likelihood that the government of the Russian
Federation (foreign currency BBB/Stable/A-3; local currency
BBB+/Stable/A-2; Russia national scale 'ruAAA') will provide
extraordinary government support to Rostelecom in a situation of
financial distress," S&P related. S&P based this approach on
Rostelecom's:

    * "Strong" link with the state, reflecting the state's
      majority control over Rostelecom with no immediate plans to
      decrease its stake in the medium term; and

    * "Limited" importance for the government, as S&P views the
      Russian telecoms market as quite mature and competitive,
      which makes it possible to replace Rostelecom by other
      service providers.

Following the merger of the state-owned fixed-line telecoms assets
into Rostelecom, the state (via holding company Svyazinvest,
Vnesheconombank [foreign currency BBB/Stable/A-3; local currency
BBB+/Stable/A-2], and the state's Deposit Insurance Agency) has
maintained its majority control in Rostelecom. Moreover, the state
has mandated that Rostelecom should acquire 25% of its shareholder
Svyazinvest from Comstar United TeleSystems (JSC) (NR), which
complements the state's existing 75% stake in Svyazinvest. "We
view this as evidence of a strengthening link between Rostelecom
and the government," S&P noted.

"We have affirmed our assessment of Rostelecom's stand-alone
credit profile at 'bb'," S&P related.

"The rating is constrained by the limited visibility on
Rostelecom's strategy and financial policy, with increasing risk,
in our view, of mergers and acquisitions. Further constraining
factors include Rostelecom's weak position in mobile telephony and
intense competition in the industry. The company's largest
competitors in the most lucrative segments are actively expanding
their fixed-line operations on the back of their nationwide 3G
mobile networks," S&P stated.

These risks are partly mitigated, however, by Rostelecom's
exclusive ownership of nationwide fixed-line telecoms
infrastructure, the cash generating nature of its core fixed-line
business, and ongoing support of state-owned banks.

"The stable outlook reflects our expectation that Rostelecom's
fixed-line business will generate sufficient cash flows to finance
its growth in other segments of the market, such as broadband
Internet. We also assume that Rostelecom's investments in
restructuring its operations, developing a nationwide brand, and
unifying its billing system will be prudently managed
and will not lead to significant operating disruptions or
increases in debt leverage. At this rating level, we expect a
ratio of debt to EBITDA of not meaningfully more than 2x," S&P
related.

A downgrade could result from Rostelecom's implementation of a
more aggressive financial policy, for example fueled by mergers
and acquisitions, that would lead an increase of the adjusted
debt-to-EBITDA ratio, as calculated by Standard & Poor's to above
2.5x. "A significant reduction in the state's shareholding in
Rostelecom and the consequent reappraisal of our GRE
assessment could lead to a one-notch downgrade," noted S&P.

"In our view, an upgrade is unlikely in the next 12 months, as it
could only follow significant improvement in Rostelecom's business
risk profile, such as a meaningfully stronger market position in
mobile telephony and better operating efficiency. Moreover, an
improvement in Rostelecom's capital structure, notably in terms of
liquidity, could help trigger an upgrade, although we consider
such an improvement as unlikely in the next 12 months," S&P added.


YUKOS OIL: Rosneft Owes US$160MM Interest on Arbitration Awards
---------------------------------------------------------------
James Lumley at Bloomberg News reports that a U.K. judge was told
that OAO Rosneft, the world's biggest gas producer and Russia's
top oil company, owes US$160 million in interest on arbitration
awards paid last year to Yukos Capital after a failed court
challenge.

According to Bloomberg, a lawyer for the Dutch former unit of
bankrupt Yukos Oil Co. on Monday said in London that the interest
stems from Rosneft's "refusal to satisfy" awards totaling $425
million until four years after they were issued by a Russian
commercial tribunal.

Yukos Capital sued state-controlled Rosneft in the U.K. over
claims a Russian court had annulled the awards as a result of
political interference, Bloomberg discloses.  The Moscow-based
company paid the arbitration awards in August, after asset
freezing orders were issued against it in Britain, the
Netherlands, New York, Ireland and the British dependency of
Jersey, Bloomberg recounts.

"The Russian government wanted to take control of Yukos and its
assets" in order to "control a major resource and destroy a
political enemy," Bloomberg quoted Gordon Pollock, Yukos Capital's
lawyer with Essex Court Chambers, as saying at Monday's hearing.

Rosneft has denied the allegations, Bloomberg notes.  The company,
as cited by Bloomberg, said in court papers this month that a
Dutch appeals court ruling behind the U.K. asset freeze may be
challenged again in the interest-payment dispute because Yukos
Capital didn't prove the Russian annulment ruling was biased.

Most of Yukos's assets were sold to Rosneft after the company was
bankrupted in 2004 and liquidated by then-President Putin's
government to recover some of the more than US$30 billion in taxes
Yukos Oil was said to owe the government, Bloomberg recounts.


* NOVOSIBIRSK: Fitch Affirms Long-Term Currency Ratings at 'BB'
---------------------------------------------------------------
Fitch Ratings has revised the Russian region of Novosibirsk's
rating Outlook to Positive from Stable and affirmed the region's
Long-term foreign and local currency ratings at 'BB'. The agency
has also affirmed the region's National Long-term rating at 'AA-
(rus)' and Short-term foreign currency rating at 'B'.
The Outlook revision reflects Novosibirsk's sound budgetary
performance, the rebound of its economy, which triggered a
recovery in taxes, as well as Fitch's expectation of continued
improvement in the region's operating performance in 2011-2013 and
debt remaining at a manageable level. However, the ratings also
factor in the increased rigidity of the region's operating
expenditure in 2010 and a level of capex that lags its peers in
the 'BB' rating category. Fitch notes that an upgrade to 'BB+'
would be subject to sustained operating margins in line with
projections and maintenance of debt below 15% of current revenue
in the medium term.

The region's tax base was positively affected by the rebound of
the local economy, which expanded by 6.3% yoy in 2010 after a
decrease of 10.6% yoy in 2009. The restored taxation and optimized
operating expenditure led to a sound operating margin of 11.3% in
2010 (2009: 10.1%). Fitch expects that the region's track record
of prudent fiscal policy will continue in 2011-2013, leading to a
further improvement in budgetary performance, with margins of
about 12%-14%.

Fitch expects the region's direct risk to remain relatively low by
international standards, at less than 10% of current revenue in
2011 and below 15% in the medium term. Novosibirsk's direct risk
increased slightly in 2010, up to RUB4.5 billion or 6% of current
revenue from 4.6% in 2009, while its payback ratio stabilized at
about six months of current balance in 2009-2010. Federal budget
loans contracted in 2009-2010 as the replacement of domestic bonds
effectively smoothed the debt profile, increasing maturities up to
2015. The region repaid in full its outstanding short-term bank
loans of RUB1.8 billion in April 2011, significantly reducing its
refinancing risk. Novosibirsk's minor contingent liabilities
comprise the low, self-serviced debt of its public companies.

The Novosibirsk region is located in Russia's Siberian federal
district. The region's well diversified and service-oriented
economy supports it above the median Russian region wealth
indicators. The region accounted for 1.3% of national GDP and 1.9%
of the Russian population in 2009.


===============
S L O V E N I A
===============


VEMONT: Files for Bankruptcy; Lack of Orders, Staff Strikes Blamed
------------------------------------------------------------------
Aggregates Business Europe reports that Vemont has filed for
bankruptcy.

According to Aggregates Business Europe, lack of orders this year
and staff strikes have been cited as the cause of financial
difficulties at Vemont, despite recording a turnover of EUR9.8
million in 2010.

The company has not paid wages to staff since January 2011,
Aggregates Business Europe notes.

Vemont is a Slovenia-based concrete producer.


===========
S W E D E N
===========


SAAB AUTOMOBILE: Economic Realities Blamed for Failed Hawtai Deal
-----------------------------------------------------------------
Bloomberg News reports that Hawtai Motor Group on Friday said that
Sweden's Saab Automobile failed to secure investment from Hawtai
Motor Group because of "commercial and economic realities," not a
lack of government approval.

According to Bloomberg, Hawtai said in a statement that
cooperation with Saab's owner, Spyker Cars NV, remains a "top
priority" for the Beijing-based company and partnership options
are still being explored.

As reported by the Troubled Company Reporter-Europe on May 13,
2011, BBC News said Spyker's funding deal with Hawtai was unveiled
on May 3, with Hawtai pledging to invest EUR150 million (US$221
million; GBP134 million) into Spyker.  In exchange for the EUR150
million investment, Hawtai was to take a 30% stake in Spyker and
it had also reached an agreement on sharing manufacturing and
technology, BBC disclosed.

On April 21, 2011, the Troubled Company Reporter-Europe, citing
Global Insolvency, reported that Saab urgently needs fresh funds
to pay its suppliers and resume production.  Production came to a
halt in recent weeks because of parts shortages after some
suppliers stopped deliveries, Global Insolvency recounted.  Global
Insolvency related that on April 15, the Swedish government
granted the car maker approval to sell its property and set
several conditions for the National Debt Office to allow Saab to
release its collateral.  The conditions were mainly related to the
expected price and the potential buyer, Global Insolvency stated.

With an annual production of up to 126,000 cars, Saab's current
models include the 9-3 (available as a convertible or sport
sedan), the luxury 9-5 sedan (also available in a sport wagon),
and the seven-passenger 9-7X SUV.  As it prepared to separate from
General Motors, Saab filed for bankruptcy protection in February
2009.  A year later, in February 2010, GM sold Saab to Dutch
sports car maker Spyker Cars for about US$400 million in cash and
stock.


SAAB AUTOMOBILE: Inks Joint Venture MoU with Pang Da Automobile
---------------------------------------------------------------
RTT News reports that Sweden's Saab Automobile AB on Monday
announced the signing of a Memorandum of Understanding with
Chinese automobile distributor Pang Da Automobile Trade Co., Ltd.
to form joint ventures for manufacturing and distribution of Saab
vehicles.

The announcement follows roughly two weeks after a similar deal
with Chinese automaker Hawtai Motor failed, RTT relates.

According to RTT, MoU includes a strategic alliance between Saab
and Pang Da.  This, in turn, will include a 50/50 distribution
joint venture and also a manufacturing JV for Saab branded
vehicles as well as a manufacturing JV owned brand, RTT discloses.
Saab will own up to 50% in the manufacturing JV, with Pang Da and
a to-be-selected manufacturing partner owning the remainder, RTT
states.

Under the MoU, Pang Da, which owns over 1,100 dealerships in
China, will pay EUR30 million for the purchase of Saab vehicles,
the iconic European premium brand, RTT says.  Subject to certain
circumstances, it will pay an additional EUR15 million for the
purchase of more Saab vehicles within 30 days, according to RTT.

Further, Pang Da will take a 24% equity stake in Spyker for 4.19
euros per share or for a total amount of EUR65 million, RTT notes.
This will give Pang Da the right to nominate a member to the
supervisory board of Spyker and/or the board of Saab, RTT
discloses.

Meanwhile, the share subscription by Pang Da will secure Saab's
medium term funding needs, RTT says.

Pang Da's EUR30 million of initial payment will provide Saab with
the liquidity required to restart production as soon as possible,
RTT states.

On April 21, 2011, the Troubled Company Reporter-Europe, citing
Global Insolvency, reported that Saab urgently needs fresh funds
to pay its suppliers and resume production.  Production came to a
halt in recent weeks because of parts shortages after some
suppliers stopped deliveries, Global Insolvency recounted.  Global
Insolvency related that on April 15, the Swedish government
granted the car maker approval to sell its property and set
several conditions for the National Debt Office to allow Saab to
release its collateral.  The conditions were mainly related to the
expected price and the potential buyer, Global Insolvency stated.

With an annual production of up to 126,000 cars, Saab's current
models include the 9-3 (available as a convertible or sport
sedan), the luxury 9-5 sedan (also available in a sport wagon),
and the seven-passenger 9-7X SUV.  As it prepared to separate from
General Motors, Saab filed for bankruptcy protection in February
2009.  A year later, in February 2010, GM sold Saab to Dutch
sports car maker Spyker Cars for about US$400 million in cash and
stock.


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


AYT KUTXA II: Fitch Junks Rating on Class C Notes to 'CCCsf'
------------------------------------------------------------
Fitch Ratings has downgraded one and affirmed five tranches of Ayt
Kutxa Hipotecario I and II, FTA (Kutxa I and Kutxa II), a series
of Spanish RMBS. The underlying assets in the portfolios contain
loans originated by Caja de Ahorros y Monte de Piedad de Gipuzkoa
y San Sebastian (Kuxta; 'A-'/Negative/'F2'). The rating actions
are:

AyT Kutxa Hipotecario I, FTA

   -- Class A (ISIN ES0370153001): affirmed at 'AAAsf'; Outlook
      Stable; assigned Loss Severity (LS) rating of 'LS-1'

   -- Class B (ISIN ES0370153019): affirmed at 'Asf'; Outlook
      Stable; 'LS-2'

   -- Class C (ISIN ES0370153027): affirmed at 'BBBsf'; Outlook
      Negative; Loss Severity revised to 'LS-2' from 'LS-3'

AyT Kutxa Hipotecario II, FTA

   -- Class A (ISIN ES0370154009): affirmed at 'AAAsf'; Outlook
      Negative; 'LS-1'

   -- Class B (ISIN ES0370154017): affirmed at 'BBBsf'; Outlook
      Negative; 'LS-3'

   -- Class C (ISIN ES0370154025): downgraded to 'CCCsf' from
      'Bsf'; assigned a Recovery Rating of 'RR4'

The affirmation of Kutxa's ratings is the result of the pools'
stabilized performance. Over the past 12 months, loans in arrears
by more than three months have remained below 0.5% of the current
pool balance. Meanwhile, the level of loans in arrears by more
than three months in Kutxa II have stabilized to levels below 1%.
Both transactions feature a provisioning mechanism whereby
defaults, defined as loans with at least 18 months or more of
unpaid installments, are written off through available excess
spread and available reserve funds.

However, the Negative Outlooks on Kutxa II's class A and B's notes
reflect Fitch's ongoing concerns over the future performance of
the underlying assets. Since the October 2008 interest payment
date (IPD), the transaction has experienced continuous reserve
fund draws due to high volume of loans rolling through into
default. As of the last investor report dated April 2011,
cumulative gross defaults were calculated at 2.51% of the initial
pool balance, while cumulative net defaults were 2.56% of the
current asset balance.

In April 2011, Kutxa II reported EUR6 million of period recoveries
and managed to top up its reserve fund to EUR12 million (43.7% of
its target amount of EUR27.6 million compared to 23% of previous
IPD). Of the EUR6 million of recoveries received, EUR5.3 million
are not coming from repossession and sales but likely from
refinancing.  Fitch believes that potential refinancing practice
is not representative of a long-term sustainable option for
distressed obligors and therefore has not given any credit to this
in its analysis of the transaction.

Although quarterly period defaults over the past three IPDs have
declined compared to the volume observed up to the July 2010 IPD,
in Fitch's view the level of potential defaults remains high
considering the current pipeline of loans in arrears.  With the
current level of period excess revenue generated by the pool,
estimated to be 0.3% of the current asset balance in annualized
terms, potential future defaults could lead to further reserve
fund draws. For this reason, the Outlooks on the senior and
mezzanine notes remain Negative and the class C notes have been
downgraded to 'CCCsf'.

Fitch has been notified that a portion of the pools (1.38% of the
asset balance at close in Kutxa I and 0.13% in Kutxa II) has been
subject to loan modifications. These include the extension of the
maturity date or a change in the loan margin, which will lead to
improved borrower affordability. Fitch has also been informed that
another portion of the pool (EUR15 million at the end of January
2011) is subject to the 'Alivio Hipoteca' scheme, a parallel
financing support scheme which allows borrowers in temporary
distress to meet their due installments. 'Alivio Hipoteca' is
allowed for up to three years. During this time the borrower is
entitled to pay 40% of the monthly installment whereas the
remaining 60% will be paid by the bank through a second lien loan.

Although at present the exposure to loan modifications and 'Alivio
Hipoteca' is limited, in Fitch's view the portion of such loans
could increase as more borrowers become distressed. As a result,
such arrangements could lead to the alteration of pool
characteristics or an 'artificial' improvement in performance. For
these reasons, the Outlook on Kutxa I's class C' notes remains
Negative and Kutxa II's class C notes have been downgraded to
'CCCsf'.

All of the loans in both transactions are floating rate, which
leaves the performance of the underlying borrowers exposed to
interest rate rises. In Fitch's view, higher interest rates could
lead to an increase in the level of arrears and defaults, and the
agency's concerns are reflected in the ratings of the notes.

Fitch also continues to have concerns over the loan profile,
characterized by higher original loan-to-value ratios (OLTV) at
close (81.9% for Kutxa I and 84% for Kutxa II). Since issuance,
both pools have deleveraged by 35% and 28% respectively. Although
loans that have deleveraged fall in OLTV buckets above 95%, the
latest pool data (end of February 2011 for Kutxa I and end of
March 2011 for Kutxa II) showed that the majority of the
outstanding loans remain in the 80% plus OLTV buckets. Meanwhile
one-third of the loans in the portfolios have current LTV ratios
in the range of 70%-85%. In the current declining housing market,
these loans may result in higher losses for these transactions.

Fitch has been notified that the paying agent and the account bank
in the transactions have been transferred from Kutxa to
Confederacion Espanola de Cajas de Ahorros (CECA:
'A+/Negative/F1'). In Fitch's view, this change has no negative
impact on the ratings of the notes.


TDA CAJAMAR 2: Fitch Affirms Rating on Class D Notes at 'BB+sf'
---------------------------------------------------------------
Fitch Ratings has affirmed TDA Cajamar 2, Fondo de Titulizacion de
Activos, a Spanish RMBS transaction:

   -- Class A2 (ISIN ES0377965019) affirmed at 'AAAsf'; Outlook
      Stable; assigned Loss Severity Rating 'LS-1'

   -- Class A3 (ISIN ES0377965027) affirmed at 'AAAsf'; Outlook
      Stable; assigned Loss Severity Rating 'LS-1'

   -- Class B (ISIN ES0377965035) affirmed at 'AAsf' Outlook
      Stable; assigned Loss Severity Rating 'LS-2'

   -- Class C (ISIN ES0377965043) affirmed at 'Asf' Outlook
      Stable; assigned Loss Severity Rating 'LS-3'

   -- Class D (ISIN ES0377965050) affirmed at 'BB+sf'; Outlook
      Stable; assigned Loss Severity Rating 'LS-2'

The affirmation reflects the continued strong collateral
performance. The pool now consists of well-seasoned loans, with a
weighted average current loan-to-value ratio of 52.3%. As of
March 2011, the portion of loans in arrears by more than three
months of the total outstanding pool balance was 0.75% whilst
gross cumulative defaults were below 1% of the total original pool
balance. As a result of the solid performance of the underlying
assets, the transaction switched to pro-rata amortization of the
notes in June 2010.

The deleveraging of the portfolio has led to an increase in the
credit enhancement levels for the rated notes, which is provided
by subordination and a fully funded reserve fund. The annualized
gross excess spread generated by the transaction remains at
approximately 1.49% of the current portfolio balance and has been
sufficient to cover period defaults (defined as loans in arrears
by more than 12 months) incurred to date. Given the current low
pipeline of potential defaults (with three months plus arrears at
0.75% of current balance), Fitch believes that the transaction
will continue to generate sufficient revenue to provision for such
loans on the upcoming payment dates.

In Fitch's view, the performance of the underlying loans in the
pool remains susceptible to a rise in interest rates, which could
lead to a rise in arrears levels. However, the agency believes
that the level of credit support available to the rated tranches
is sufficient to withstand the respective stresses, as reflected
by the affirmations.


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


FINANSBANK: Moody's Assigns 'Ba1' Senior Unsecured Debt Rating
--------------------------------------------------------------
Moody's Investors Service has assigned a Ba1 foreign-currency
senior unsecured debt rating to Finansbank A.S.  The outlook on
the rating is positive.

                         Ratings Rationale

Moody's foreign-currency debt ratings are subject to the foreign-
currency bond ceiling assigned to the country in which the issuer
is domiciled. As a result, even though Finansbank's global local-
currency (GLC) deposit rating of Baa2 is higher than the Ba1
foreign-currency bond ceiling for Turkey, Finansbank's foreign-
currency senior unsecured debt rating is constrained by and thus
equal to Turkey's Ba1 (positive) ceiling.

While the Turkish government bond rating is set at Ba2 with
positive outlook, the foreign currency bond ceiling for Turkey is
Ba1 (positive), one notch higher than the government rating, based
on Moody's assessment of a lower probability that a government
would resort to a moratorium on external payments of issuers
domiciled in the country in the event the government itself
defaulted on its foreign currency debt obligation.

This rating was assigned in the context of Finansbank issuing its
first foreign-currency debt notes. The terms and conditions of the
notes include (amongst other factors) a negative pledge and a
cross-default clause. The notes will be unconditional,
unsubordinated and unsecured obligations and will rank pari passu
with all of Finansbank's other senior unsecured obligations. Any
subsequent foreign-currency senior unsecured bonds issued by
Finansbank would also be rated Ba1.

An upgrade of the foreign-currency bond ceiling would result in an
upgrade of the rating of the notes, since it is constrained by its
applicable ceiling. Similarly, a downgrade of the foreign-currency
bond ceiling -- or a downgrade of Finansbank's GLC deposit rating
below that of the foreign-currency bond ceiling for Turkey --
would result in a downgrade of the rating of the notes.

The principal methodologies used in this rating were Bank
Financial Strength Ratings: Global Methodology published in
February 2007, and Incorporation of Joint-Default Analysis into
Moody's Bank Ratings: A Refined Methodology published in March
2007.

Finansbank is headquartered in Istanbul, Turkey.  At the end of
December 2010, the company had total assets of US$25.6 billion.


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


FOCUS (DIY): 40 Jobs Under Threat in Trowbridge and Warminster
--------------------------------------------------------------
Wiltshire Times reports that around 40 jobs are under threat in
Trowbridge and Warminster with the news that Focus (DIY) has gone
into administration.  Altogether, 24 people are employed in
Trowbridge and 16 in Warminster.

As reported in the Troubled Company Reporter-Europe on May 10,
2011, H&V News related that Focus DIY fell into administration.
Ernst & Young, who were appointed as administrator, said that they
are looking for a buyer for the company's 144 stores, which
continue to trade as normal, according to H&V News.

Simon Allport, one of the joint administrators from Ernst and
Young, said, "Despite management's actions to tightly control
costs and restructure the operations, unfortunately it has not
been possible for the business to continue to trade outside of
insolvency," according to Wiltshire Time.

Focus DIY was founded by Bill Archer in 1987, with six stores in
the Midlands and the north of England.  The company now has 178
stores in England, Scotland and Wales, and employs more than 3,900
staff.


GREAT LEIGHS: Racecourse Could be Up and Running Again in 2013
--------------------------------------------------------------
Marcus Armytage at The Telegraph reports that the Great Leighs is
now owned by West Register, a subsidiary of the Royal Bank of
Scotland, while the actual artificial surface itself is owned by
Martin Collins.

The Telegraph relates that the Essex all-weather track was opened
for under a year before going into administration in January 2009.

A deal to rescue the property by local businessman Terry Chambers
and racehorse owner Bill Gredley fell at the final hurdle in
September 2009 and as recently as March 2011, according to The
Telegraph.

The Telegraph notes that even if Great Leighs is sold, it will be
a minimum 18 months before it could expect to be up and running
again as a racecourse as it has missed the boat for the 2012
fixture allocation.

Great Leighs course was a popular venue with trainers 50 miles
away in Newmarket who otherwise have to travel twice as far to get
to the next closest all-weather venues at Southwell and Kempton.


HMV GROUP: In Talks with Banks Amid Search for Potential Buyers
---------------------------------------------------------------
The Independent reports that HMV Group is in talks with its banks
following news that eight expressions of interest for its bookshop
chain Waterstone's were not near the GBP70 million price the
company had hoped for.

The group has more than GBP130 million of net debt and had hoped
to raise GBP75 million from the sales of Waterstones and its
Canadian business, The Independent discloses.  HMV, The
Independent says, is still considering all options, including a
company voluntary arrangement, but it is thought that the company
CEO Simon Fox is against it.

As reported by the Troubled Company Reporter-Europe on May 17,
2011, The Financial Times said that Russian billionaire Alexander
Mamut made a GBP43 million (US$70 million) cash offer to buy the
Waterstone's book chain from HMV.  Mr. Mamut's bid is higher than
previous speculation that he would offer GBP35 million for the
chain, which has 298 UK stores and is expected to make a pre-tax
contribution to the group of about GBP5 million this year, the FT
disclosed.  The retailer has issued three profit warnings this
year and its share price collapsed when it revealed it was on
course to breach banking covenants following its April year-end,
the FT related.

United Kingdom-based HMV Group plc is engaged in retailing of pre-
recorded music, video, electronic games and related entertainment
products under the HMV and Fopp brands, and the retailing of books
principally under the Waterstone's brand.  The Company operates in
four segments: HMV UK & Ireland, HMV International, HMV Live, and
Waterstone's.  HMV International consists of HMV Canada, HMV Hong
Kong and HMV Singapore.  Waterstone's is a bookseller, which
operates through 314 stores and a transactional Web site for the
sale of both physical and e-books for download.  The Company has
operations in seven countries, with principal markets being the
United Kingdom and Canada.  Its retail businesses operate through
417 stores in the United Kingdom, Canada, Hong Kong and Singapore.
On Jan. 29, 2010, the Company completed the acquisition of MAMA
Group Plc.  Its subsidiaries include HMV Canada Inc, HMV Guernsey
Limited, HMV Hong Kong Limited, and HMV (IP) Limited.


JACOBS JEWELLERY: Goes Into Liquidation Due to Insolvency
---------------------------------------------------------
Professional Jeweller reports that Jacobs Jewellery Design has
gone into liquidation.

"JJD has stopped trading as we were insolvent," Barry Jacobs, the
company's owner, told Professional Jeweller.

No information has been released regarding JJD staff, its assets,
or its creditors following the liquidation, Professional Jeweller
says.

JJD specialized in creating hand-made, one-off jewellery designs
in platinum and 18 carat gold at its workshop in Hatton Garden,
London's jewellery quarter.


PETER WERTH: Goes Into Administration, Puts 70 Jobs at Risk
-----------------------------------------------------------
Sky News HD reports that advisory specialists FRP, led by Jason
Baker and Geoff Rowley, have been appointed administrators to the
Peter Werth's business.

FRP has made an undisclosed number of redundancies at the firm's
head office, according to Sky News HD.  There 70 staff remaining
across both firms, according to Sky News HD.  The report relates
that the company is continuing to trade while a buyer is sought.

Sky News HD notes that documents filed at the High Court show that
Springrealm, Peter Werth's trading company, appointed FRP
administrators.

"The current management team had conducted a review of the Peter
Werth brand towards the end of last year in collaboration with a
leading brand consultancy.  The new proposition, including a
complete rebranding, was launched to the trade at the Bread&Butter
trade show in January this year and was universally well received.
However, despite the rebranding, the group's investors concluded
that they could not provide continued funding.  The directors
sought another investor, however, despite interest, agreement
could not be concluded in the timeframe the directors had set and,
reluctantly, in order to protect the interests of all
stakeholders, they placed the group into administration," FRP said
in a statement obtained by the news agency.

Sky News HD further reveals that the company's sister firm,
womenswear retailer Pink Soda, has also been put into
administration.

Peter Werth is an Upmarket menswear brand sold through 34 House of
Fraser concessions, 1,440 wholesale UK accounts and one standalone
store in Liverpool.


ROYAL BANK: GBP5 Billion Share Sale Likely
------------------------------------------
The Scotsman reports that the UK government could see the first
returns on its multi-billion-pound bail-out of British banks as
early as the first half of 2012 after senior figures over the
weekend hinted at plans for a GBP5 billion share sale for The
Royal Bank of Scotland.

A sale, potentially to investors and sovereign wealth funds from
the Middle East and Asia, would represent about 13% of the
government's 83% stake in RBS, The Scotsman points out, the bank.

A decision on the divestment will be clearer by the end of this
year after the Independent Commission on Banking releases its
report on the industry, The Scotsman 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.


SILENTNIGHT HOLDINGS: Labor Party Launches Petition
---------------------------------------------------
Craven Herald and Pioneer reports that members of Pendle Labour
Party launched a petition in support of Silentnight Holdings Plc.

The party collected signatures at a stall in Barnoldswick town
square, according to Craven Herald and Pioneer.

Craven Herald and Pioneer notes that Silentnight has proposed a
company voluntary arrangement to creditors and members of a
pension fund.  The report relates that it is to address a GBP100
million pension black hole and banking problems.

Labor members want ministers to offer more assistance to staff and
bosses at the Barnoldswick firm, Craven Herald and Pioneer
discloses.

Silentnight Holdings Plc was founded in 1946 and supplies about
500,000 beds a year to retailers.  It employs about 1,250 staff at
sites across Barnoldswick, Cumbria, West Yorkshire and Ireland.


SILENTNIGHT HOLDINGS: Regulator Seeks to Force HIG to Contribute
----------------------------------------------------------------
The Pensions Regulator is currently investigating whether it is
able to use its "moral hazard" clause to force HIG Europe into
contributing more to the pension scheme of the UK bed manufacturer
Silentnight Holdings Plc, which it has just pushed into
administration.

The company has gone to administration after HIG Europe offered
very low terms towards its pensions creditors, such as six pence
to the pound on pension debt as compared to 65 pence to the pound
for other creditors.

The move allows HIG Europe to dump this debt onto the Pensions
Protection Fund (PPF), and could cause 1,340 pensioners to lose up
to one third of their benefits.

"Though the investigation is still at its early stages, it's
important to determine exactly how much the Pensions Regulator can
do about this situation," said Samir El-Alami of
PensionCalculator.org.

"This sends a clear message to other companies who are thinking of
dropping pensions debt as part of a restructuring deal, that these
actions won't go by unnoticed.  Even though shedding this debt
allows companies to save jobs, in the long run, it's creating a
dangerous situation for retired ex-employees who may see one-third
of their post-retirement benefits taken away," Mr. El-Amir says.

"This seems to certainly fit the category of 'moral hazard', and I
think it's certainly within the Pensions Regulator's duty to
investigate," Mr. El-Alami asserts.

Silentnight Holdings Plc was founded in 1946 and supplies about
500,000 beds a year to retailers.  It employs about 1,250 staff at
sites across Barnoldswick, Cumbria, West Yorkshire and Ireland.


YELL GROUP: Feels Pressure of Poor Advertising Demand
-----------------------------------------------------
Michael Kavanagh at The Financial Times reports that poor demand
for advertising among small businesses in the Europe and the
Americas has put further pressure on Yell Group, the indebted
publisher of Yellow Pages directories, which saw full-year
revenues to March fall by 12%.

The FT relates that Chief Executive Mike Pocock said the strong
cash flow had allowed early repayment of debt payments on
borrowings, which fell by GBP329 million to GBP2.76 billion.

Concerns over Yell's ability to support its debt pile has seen its
share price collapse from above GBP5 in 2007 to below 10p this
year, wiping out most of its equity value, the FT discloses.

Mr. Pocock, as cited by the FT, said he was not expecting any
improvement in the economic environment and it would take some
time before planned efficiency savings across Yell's portfolio of
print and digital products would become evident.

According to the FT, print revenues, which continue to account for
about three-quarters of Yell's group revenues, fell 17% to GBP752
million in its main market of the U.S., while print revenues in
the UK and Spain fell more than 20%.

Free cash flow of GBP265 million generated during the year allowed
Yell, down GBP77 million on the previous year, to make some early
debt repayments and meet the GBP800 million minimum reduction
target agreed under Yell's 2009 refinancing package, the FT
discloses.  The debt payments mean Yell is not required to pay
one-off fees of GBP15 million or suffer increases in interest rate
charges which would have occurred if it had not met those targets,
the FT notes.

Yell, which made a pre-tax profit of GBP66 million, down from
GBP70 million, added that its auditors would make reference to
uncertainties which could affect the carrying value of its
goodwill, currently put at GBP3 billion, according to the FT.
Yell said the audit opinion would be "unqualified and unmodified,"
FT notes.

                         About Yell Group

Headquartered in Reading, England, Yell Group plc --
http://www.yellgroup.com/-- is an international directories
business operating in the classified advertising market through
printed, online, and phone media in the U.K. and the US.  Yell
also owns 100% of TPI (renamed "Yell Publicidad"), the largest
publisher of yellow and white pages in Spain, with operations in
certain countries in Latin America.  Yell's revenue for the twelve
months ended March 31, 2008, was GBP2,219 million and its
Adjusted EBITDA was GBP738.9 million.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on Feb. 9,
2011, Standard & Poor's Ratings Services lowered to 'B-' from 'B'
its long-term corporate credit rating on U.K.-based international
publisher of classified directories Yell Group PLC.  At the same
time, S&P revised the outlook on Yell to negative from stable.

"The downgrade mainly reflects S&P's opinion that Yell continues
to face a difficult operating environment and an excessively
leveraged capital structure, which S&P believes could negatively
affect the group's liquidity position," said Standard & Poor's
credit analyst Carlo Castelli.

Moreover, as a result of the declining profitability, Yell's
Standard & Poor's-adjusted leverage ratio is likely to increase
above 6x (beyond S&P's initial forecast of less than 6x).  S&P
also believes that headroom under one specific covenant will
shrink considerably from September 2011, with the risk of a breach
in financial 2012.  In S&P's opinion, the rating on Yell may be
negatively affected by the costs or other credit implications of
avoiding or repairing a covenant breach.

In S&P's opinion, Yell's operating performance will likely remain
under strain as a result of the ongoing difficult economic
environments in its main countries of operation and the ongoing
decline in the profitable traditional print business.  S&P
believes that liquidity may come under renewed pressure over the
next 12-18 months if the group fails to stabilize its operating
performance.  While S&P anticipates that Yell should have
sufficient liquidity sources over the near to medium term to cover
manageable debt amortization requirements, S&P thinks that
covenant headroom could tighten rapidly under S&P's scenario of a
mid- to high-single-digit top-line decline in financial 2012.

There is a risk of a downgrade should the measures needed to
remove covenant pressure, which S&P thinks will become inevitable,
have negative credit implications.  S&P will monitor closely any
risk of debt restructuring, which S&P would view as tantamount to
a default under its criteria; however, S&P is not aware of any
tangible step by Yell in this direction.


* UK: Small-Medium Hauliers at Significant Risk of Bankruptcy
-------------------------------------------------------------
Joanna Bourke at RoadTransport.com, citing a new research by Bibby
Financial Services, reports that more than half of logistics firms
in the U.K. had to cut costs during the first quarter after a
sluggish start to the year.

Bibby, in its latest quarterly business index, said this placed UK
SMEs within the sector at significant risk of bankruptcy, despite
revenue growth in March, RoadTransport.com relates.

"The SMEs will be in greatest danger, as the cost of fuel bites
deeper into profits of business managers and owners,"
RoadTransport.com quotes Edward Rimmer, UK CEO of Bibby Financial
Services, as saying.

According to RoadTransport.com, the Bibby index, which measures
the average monthly turnover of 3,000 Bibby business customers
from a range of industries, shows that the warehousing and
distribution sector had an average score of 99.9 in the three
months to March 31 (with a score of more than 100 regarded as
strong).  This was an improvement on the 90.3 reported in Q1 2010.

Of the logistics firms tracked, 59% admitted they had to cut costs
to prepare for future economic challenges, while 45% confirmed
they were doing worse than a year ago.  The gloomy outlook comes
despite 41% saying they had seen an increase in the number of new
contract wins.

Casualties during Q1 include Kent-based Derek Linch Haulage,
Lincolnshire-based Hurst Transport, Tyne & Wear-based Kent
Connection, and Essex operator E-Freight.

"It is imperative that firms of all sizes have a funding in place
to secure their business performance, or even to invest in
opportunities for growth," Mr. Rimmer said.


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


* S&P's Global Corporate Defaults List Has 15 So Far
----------------------------------------------------
Puerto Rico-based yellow pages publisher Caribe Media Inc. filed
for bankruptcy protection, raising the 2011 global corporate
default tally to 15, said an article published May 13 by Standard
& Poor's Global Fixed Income Research.  Ten of this year's
defaults were based in the U.S., two were based in New
Zealand, and one each was based in Canada, the Czech Republic, and
Russia, according to the article, titled "Global Corporate Default
Update (May 6-12, 2011) (Premium)."

By comparison, 35 global corporate issuers had defaulted by this
time in 2010.  Of these defaulters, 24 were based in the U.S., two
in Europe, three in the emerging markets, and six in the other
developed region (Australia, Canada, Japan, and New Zealand).
Six of this year's defaults were due to distressed exchanges and
five were due to missed interest or principal payments--both among
the top reasons for default in 2010.  Of the remaining four, two
issuers defaulted after they filed for bankruptcy, another had its
banking license revoked by its country's central bank, and the
fourth was forced into liquidation as a result of regulatory
action.

Of the defaults in 2010, 28 defaults resulted from missed interest
or principal payments, 25 resulted from Chapter 11 and foreign
bankruptcy filings, 23 from distressed exchanges, three from
receiverships, one from regulatory directives, and one from
administration.


                            *********

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.
Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez,
Joy A. Agravante, Psyche A. Castillon, Julie Anne G. Lopez,
Ivy B. Magdadaro, Frauline S. Abangan and Peter A. Chapman,
Editors.

Copyright 2011.  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.


                 * * * End of Transmission * * *