---

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

                           E U R O P E

           Friday, January 27, 2012, Vol. 13, No. 20

                            Headlines



B E L G I U M

DEXIA BANK: S&P Assesses Stand-alone Credit Profile at 'bb+'


C R O A T I A

SPLIT: Court Commences Bankruptcy Proceedings


G E R M A N Y

DECO 14: Fitch Maintains 'BB' Rating on EUR64.6MM Class C Notes
DELUXE TELEVISION: Files for Insolvency in Munich Court
SCHLECKER: Purchasing Cooperation with Markant Continues
SCHLECKER: Unilever Halts Delivery Amid Insolvency


G R E E C E

NAT'L BANK OF GREECE: S&P Lifts Ratings on Five Hybrids to 'CC'
NAT'L BANK OF GREECE: Fitch Keeps 'BB' Rating on Programme I
* GREECE: Public-Sectors May Take Hit on Loans, IMF Warns
* GREECE: Bondholders Put "Maximum Offer" on the Table


I R E L A N D

CORNERSTONE 2007-1: S&P Cuts Rating on Class E Notes to 'CCC+'
TBS INTERNATIONAL: Receives Non-Compliance Notice from Nasdaq
WILLOW NO.2: Moody's Lowers Rating on EUR7.1-Mil. Notes to 'B3'


I T A L Y

SEAT PAGINE: Board Set to Meet on Jan. 30 to Finalize Debt Plan


K A Z A K H S T A N

KAZAKH MORTGAGE: Fitch Junks Rating on Class C Notes


L A T V I A

BALTIJAS AVIACIJAS: airBaltic to Cover Veriko Debt


L U X E M B O U R G

VIRGOLINO DE OLIVEIRA: Moody's Rates US$200-Mil. Notes at 'B3'
VIRGOLINO DE OLIVEIRA: Fitch Assigns 'B' Issuer Default Ratings


M A L T A

AIR MALTA: EU Commission Launches Probe Into Restructuring Plan


N E T H E R L A N D S

CEVA GROUP: S&P Puts 'B-' Corp. Credit Rating on Watch Positive
MARCO POLO: Sues Creditors for Causing Bankruptcy


R U S S I A

TRANSCONTAINER JSC: Fitch Maintains RWN on 'BB+' Long-Term IDR


S P A I N

CABLEEUROPA SA: Fitch Affirms 'B' Issuer Default Ratings


S W I T Z E R L A N D

CLARIAN FINANCE: Moody's Assigns 'Ba1' Rating to EUR500MM Notes
PETROPLUS HOLDINGS: Administrators to Restart Coryton Shipments
PETROPLUS HOLDINGS: Petit Couronne Plant Attracts Interest


U K R A I N E

RODOVID BANK: Moody's Withdraws 'Caa2' Deposit Ratings
UKRSIBBANK: Moody's Confirms Ba2 Deposit Rating, Outlook Negative
* CITY OF KHARKOV: Fitch Rates UAH99.5-Mil. Domestic Bonds at 'B'


U N I T E D   K I N G D O M

CEVA GROUP: Moody's Assigns (P)Ba3 Rating to US$300-Mil Sr. Notes
ESSENDEN: Enters Into CVA Deal with Creditors
FOTEK PORTRAITS: Ceases Trading; To Appoint Liquidator
MISSOURI TOPCO: Moody's Lowers Corporate Family Rating to 'B3'
MISSOURI TOPCO: S&P Affirms 'B' Corp. Credit Rating; Outlook Neg.

PREMIER FOODS: S&P Lowers Corporate Credit Rating to 'B+'
YELL GROUP: S&P Raises Corp. Credit Rating to 'B-'; Outlook Neg.


X X X X X X X X

* BOOK REVIEW: Inside Investment Banking, Second Edition


                            *********


=============
B E L G I U M
=============


DEXIA BANK: S&P Assesses Stand-alone Credit Profile at 'bb+'
------------------------------------------------------------
Standard & Poor's Ratings Services maintained the 'A-' long-term
counterparty credit rating on Dexia Bank S.A. on CreditWatch with
negative implications, where it was placed on Dec. 8, 2011. The
short-term counterparty credit rating remains unaffected at 'A-
2'.

"The CreditWatch update follows our affirmation of the long-term
rating on the Kingdom of Belgium (AA/Negative/A-1+). At the
current 'AA' level of the sovereign rating, Dexia Bank's long-
term rating of 'A-' benefits from two notches of uplift for our
view of its 'high' systemic importance for the country, as our
criteria define the term. In addition, our Banking Industry
Country Risk Assessment (BICRA) for Belgium remains at '2', even
though we lowered the 'economic risk' subscore to '2' from '1',"
S&P said.

"Standard & Poor's bases the ratings on Dexia Bank on the 'a-'
anchor and our assessment of its 'adequate' business position,
'adequate' capital and earnings, 'weak' risk position, 'average'
funding, and 'weak' liquidity. The stand-alone credit profile
(SACP) is 'bb+'," S&P said.

"We continue to view Dexia Bank's capital and earnings as
'adequate,' even though we have revised our view about the
economic risk for banks operating in Belgium. This assessment is
based on Standard & Poor's projected risk-adjusted capital (RAC)
ratio, which we believe should reach about 7% in 2012, recovering
from under 7% in 2011 according to our estimates. The dip in 2011
is due to nonrecurring losses of about EUR1 billion on Greek bond
holdings and EUR500 million on other nonrecurring items, mainly
asset sales. In addition, we consider that Dexia Bank's
nationalization by the Belgian government on Oct. 20, 2011,
reduces pressure to distribute dividends," S&P said.

"Our risk position assessment for Dexia Bank is 'weak,' primarily
reflecting our view that it had a very large credit exposure
toward banks in the Dexia S.A. group (Dexia; not rated) -- mainly
to Dexia Credit Local (DCL; BBB+/Watch Neg/A-2). Dexia Bank
expects to rapidly reduce the very large credit exposure to Dexia
since DCL started issuing government guaranteed debt under a
program of EUR45 billion extended by Belgium, France, and
Luxembourg. We would consider this as positive for Dexia Bank's
risk position," S&P said.

"The issuer credit rating (ICR) on Dexia Bank is four notches
higher than the SACP. We apply two notches, to 'bbb' from 'bb+',
because we see government willingness to provide short-term
extraordinary liquidity. We also add two notches of additional
support because we consider that Dexia Bank has 'high' systemic
importance in Belgium and that the government is willing to
provide support," S&P said.

"We expect to resolve the CreditWatch placement when we have
greater visibility about trends for Dexia Bank's exposures to
banks in the Dexia group," S&P said.

"If we believe Dexia Bank could rapidly reduce its exposure to
Dexia and improve its risk position, without suffering a material
deterioration in its capital position, we would affirm the
ratings," S&P said.

"We could lower the long-term rating on Dexia Bank by a maximum
of one notch if Dexia Bank has difficulties in reducing its large
exposure to banks in the Dexia group and in managing its own risk
positions, leading to a deterioration of its capitalization," S&P
said.


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


SPLIT: Court Commences Bankruptcy Proceedings
---------------------------------------------
SeeNews reports that the commercial court in Croatia's Split has
started bankruptcy proceedings for Mediteranska Plovidba.

According to SeeNews, the company said in a statement posted on
the Web site of the Zagreb Stock Exchange on Wednesday that a
court hearing to examine creditor claims is scheduled for
March 29.

Mediteranska Plovidba is a local shipping company.


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


DECO 14: Fitch Maintains 'BB' Rating on EUR64.6MM Class C Notes
---------------------------------------------------------------
Fitch Ratings has maintained DECO 14 - Pan Europe 5's class A to
C notes on Rating Watch Negative (RWN), as follows:

  -- EUR855.1m class A-1 (XS0291363272) 'AAAsf'; maintained on
     RWN
  -- EUR159.0m class A-2 (XS0292121802) 'AAsf'; maintained on RWN
  -- EUR64.6m class A-3 (XS0292122289) 'AA-sf'; maintained on RWN
  -- EUR99.4m class B (XS0291365137) 'Asf'; maintained on RWN
  -- EUR64.6m class C (XS0291365566) 'BBsf'; maintained on RWN

The maintained RWN reflects the continuing high degree of
uncertainty created by the ongoing legal action against the WOBA
borrowers by the city of Dresden.  However, Fitch notes the
stable performance of the WOBA loan since the last rating action
in October 2011.

The city of Dresden has filed a request for arbitration and
initiated legal proceedings against various WOBA entities,
claiming EUR1.084 billion under the 2006 WOBA sale and purchase
agreement.  Both claims are based on 74 unit sales that occurred
between 2007 and 2010. The city alleges that the sales did not
fully comply with a requirement to pass on to the respective
purchasers certain restrictions in respect of future sales of the
units.  WOBA engaged Hengeler Mueller as its legal counsel, in
order to form its legal response.

In June 2011, the relevant WOBA entities issued responses to the
complaints, issued counterclaims, and sued the city and the
Finance Mayor of the city (a member of the supervisory board of
WOBA Dresden GmbH) for damages.  The Local Court in Dresden set a
deadline of 8 September 2011 for the city of Dresden to reply to
the responses and counterclaims; to date, no information has been
made public regarding the city's response.

The servicer reported in the November 2011 quarterly investor
report that the court is still collating information from both
parties.  It is expected that court hearings will take place in
2012, although the exact timing remains unclear.  Fitch expects
to downgrade the bonds if there are no positive developments in
the next three months.

Fitch will continue to monitor the performance of the
transaction.


DELUXE TELEVISION: Files for Insolvency in Munich Court
-------------------------------------------------------
Michelle Clancy at RapidTVNews reports that German commercial TV
broadcaster Deluxe Television has filed for insolvency at
Munich's district court.

RapidTVNews relates that Deluxe Television said in a statement
that the team and management are convinced of the business idea
and currently work intensely on giving the company a sustainable
perspective for the future. Broadcasting and business operations
will continue unchanged for the time being, the report says.

"We currently evaluate the files and look for investors prepared
to give the company a chance, thereby securing operation of the
channels in the long run," the report quotes preliminary
insolvency administrator Axel W. Bierbach as saying.

Deluxe Television operates free-to-air music channel Deluxe Music
which launched in 2005, HD channel Deluxe Lounge HD and radio
stations Deluxe Radio and Deluxe Lounge Radio.


SCHLECKER: Purchasing Cooperation with Markant Continues
--------------------------------------------------------
Julie Cruz at Bloomberg News reports that Arndt Geiwitz of law
and tax advisory firm Schneider Geiwitz & Partner, which is
Schlecker's insolvency administrator, said that Schlecker agreed
to continue its purchasing cooperation with Markant Group.

According to Bloomberg, Schlecker said on its Web site that it
aims to work on a sustainable solution for the company.

Schlecker said that discussions with the works council and trade
unions will continue in the next few days, Bloomberg notes.

As reported by the Troubled Company Reporter-Europe on Jan. 24,
2012, Bloomberg News, citing Deutsche Presse Agentur newswire,
related that Schlecker filed for self-administered insolvency at
an Ulm court on Jan. 23.

On Jan. 23, 2012, the Troubled Company Reporter-Europe disclosed
that Schlecker, as cited by Deutsche Welle, said negotiations for
interim financing of the company's operations failed.  Schlecker
has come under heavy criticism for poor management practices and
outdated stores in recent years, Deutsche Welle said.  By seeking
bankruptcy protection from its creditors, Schlecker hopes to push
through a restructuring plan aimed at making the chain
competitive again, Deutsche Welle noted.  Schlecker has been
facing intense competition from other drugstore chains in a
market where profit margins have been dwindling for years,
according to Deutsche Welle.


SCHLECKER: Unilever Halts Delivery Amid Insolvency
--------------------------------------------------
Reuters reports that Unilever has stopped delivering to insolvent
German drugstore chain Schlecker, a spokesman for the consumer
goods company said.

"As long as the situation is unclear, we have to hold off,"
spokesman Konstantin Bark told Reuters, adding Unilever would not
resume deliveries until Schlecker's insolvency administrator has
ensured goods will be paid for.

"But we expect that the situation will be cleared up and
Schlecker will have the opportunity to survive on the market via
an insolvency," Mr. Bark told Reuters.

A spokesman for German consumer goods company Henkel, whose
brands include Persil in Germany, Schwarzkopf hair products and
Pritt stick glue, told Spiegel Online that sales made before the
insolvency filing was made, were insured, according to Reuters.

"Financially, the default of Schlecker would not affect us,"
spokesman Wulf Klueppelholz told the website, Reuters relays.

As reported by the Troubled Company Reporter-Europe on Jan. 24,
2012, Bloomberg News, citing Deutsche Presse Agentur
newswire, related that Schlecker filed for self-administered
insolvency at an Ulm court on Jan. 23.

The TCR-Europe reported on Jan. 23, 2012, that Deutsche Welle
related that Schlecker said negotiations for interim financing of
the company's operations failed.  Schlecker has come under heavy
criticism for poor management practices and outdated stores in
recent years, Deutsche Welle disclosed.  By seeking bankruptcy
protection from its creditors, Schlecker hopes to push through a
restructuring plan aimed at making the chain competitive again,
Deutsche Welle noted.  Schlecker has been facing intense
competition from other drugstore chains in a market where profit
margins have been dwindling for years, according to Deutsche
Welle.

Schlecker is Germany's biggest drugstore chain. The company has
roughly 7,500 branches and 11,000 employees in Germany.


===========
G R E E C E
===========


NAT'L BANK OF GREECE: S&P Lifts Ratings on Five Hybrids to 'CC'
---------------------------------------------------------------
Standard & Poor's Ratings Services raised to 'CC' from 'C' its
issue ratings on five hybrid securities issued by National Bank
of Greece Funding Ltd. and guaranteed by the National Bank of
Greece S.A. (NBG; CCC/Negative/C).

The rating action follows the bank's announcement on Jan. 16,
2012, of the completion of its tender offer launched on five
hybrid capital securities on Jan. 3, 2012. This action does not
affect the counterparty credit ratings on NBG or any other debt
issue rating.

"On Jan. 5, 2012, we said that we considered NBG's proposed
tender offer to be a 'distressed exchange' under our criteria,
and we accordingly lowered the issue rating on its five
outstanding hybrid capital securities to 'C'. We added that we
would review the rating on any untendered hybrid securities upon
completion of the offer," S&P said.

On Jan. 16, 2012, NBG announced it had completed its offer and
that it had accepted a total amount of about EUR200 million
tendered for purchase under the offer. Following the settlement
of the purchase, the remaining outstanding amount of the five
hybrid securities is about EUR190 million.

"We have reviewed the issue ratings on the remaining hybrid
securities in light of the completion of the tender offer, and
have decided to raise the ratings to 'CC', thereby equalizing
them with the stand-alone credit profile assigned to NBG. At this
level, the ratings on NBG's hybrid instruments already reflect
the high risks that we believe continue to weigh on the bank's
solvency. We believe that the magnitude of NBG's exposure to
government debt relative to its capital base means that a
potential government debt restructuring could substantially
impair its capital position. In our view, the possible impact of
a potential government debt restructuring, combined with
substantial credit losses, could eventually trigger a deferral of
the coupon payment on these instruments," S&P said.


NAT'L BANK OF GREECE: Fitch Keeps 'BB' Rating on Programme I
------------------------------------------------------------
Fitch Ratings has placed 35 tranches of Greek RMBS transactions
on Rating Watch Negative (RWN) and maintained seven Greek covered
bond programs on RWN.  Three ABS transactions have been affirmed
and the RWN maintained where already present.

The RWN on 16 Greek structured finance transactions and seven
covered bond programs reflects Fitch's concerns that Greece's
economic and financial outlook has deteriorated in recent months,
increasing the likelihood of events that could have a negative
effect on the underlying collateral's performance.  These
concerns have not arisen as a result of any one individual
factor, but rather as a result of Greece's deepening sovereign
debt crisis and the implications for its financial sector.  For
the Greek covered bond programs in particular, the RWN continues
to mirror the RWN placed on the Greek and Cypriot issuers and,
for some of them, the ongoing application of Fitch's updated
asset and mortgage refinancing spread assumptions.

Since the end of 2011, it has became clear that Greece is facing
a deeper and more protracted recession than previously expected,
which has undermined confidence in the government's ability to
meet fiscal targets and push through structural reforms.  Against
this background, mortgage arrears levels continue to increase and
with little turnover in the housing market, there is considerable
uncertainty over recovery and loss levels across collateral
pools.

Fitch's analysis of Greek structured finance and covered bond
securities is based on the expectation that Greek sovereign debt
will undergo an orderly restructuring process in the coming
weeks, following successful negotiations with private creditors.
This process is expected to be aligned with additional EU-IMF
support, thereby ensuring the maintenance of an operationally
functional payment system in the country at all times.  However
an alternative scenario, under which the sovereign could default
in a less controlled manner, potentially leading to Greece's exit
from the eurozone can no longer be wholly discounted. Fitch
continues to attach a low probability to this outcome, however
such an adverse scenario would most likely have a severe effect
on all structured finance and covered bond securities.  For this
reason, the agency will continue to monitor the possibility of
the occurrence of such events.

Fitch expects to resolve the RWN upon clarity over the sovereign
debt restructuring.  In resolving the RWN the agency will
consider the likely effects of the deteriorating macroeconomic
background on collateral performance as well as the level of
certainty surrounding the maintenance of a functional payment
system under a scenario of financial distress.

Covered bonds rating actions:

  -- Alpha Bank: maintained at 'BBB-'/RWN
  -- Bank of Cyprus: maintained at 'BBB'/RWN
  -- Eurobank EFG: maintained at 'BBB-'/RWN
  -- Marfin Popular Bank (Programme I): maintained at 'BBB'/RWN
  -- National Bank of Greece (Programme I): maintained at
     'BB-'/RWN
  -- National Bank of Greece (Programme II): maintained at
     'BBB-'/ RWN
  -- Piraeus Bank: maintained at 'BBB-'/RWN


* GREECE: Public-Sectors May Take Hit on Loans, IMF Warns
---------------------------------------------------------
Grainne McCarthy and Gabriele Parussini at Dow Jones Newswires
report that International Monetary Fund chief Christine Lagarde
said Greece's public-sector creditors may have to take a hit on
their loans if private lenders can't agree on a restructuring
plan that goes far enough to make the country's debt sustainable.

"The bigger the private effort, the smaller the participation of
public creditors will need to be," the Dow Jones quotes
Ms. Lagarde as saying.  "If the level demanded of private
investors isn't reached, then public creditors will have to step
in too."

Greece's principal public creditors are the European Central Bank
and euro-zone governments, Dow Jones discloses.  According to Dow
Jones, after Ms. Lagarde's remarks, the IMF said in a statement
that it "has not asked the ECB to play any specific role."  The
fund, as cited by Dow Jones, said it has "no view" on the
relative combination of private- and public-sector contributions,
but sees it as "essential" that any Greek deal brings the
nation's debt down to 120% of gross domestic product by 2020.

The ECB has opposed taking haircuts on its Greek bond holdings,
and has repeatedly said that it won't take part in any debt-
restructuring talks and that it will hold its Greek bonds until
they mature, Dow Jones notes.  Many ECB officials would likely
view losses on their Greek holdings as a violation of the central
bank's founding treaty, which forbids it from financing
governments, Dow Jones states.

Euro-zone officials are seeking to secure a deal for Greece and
stop the sovereign-debt crisis from engulfing larger nations such
as Italy, Dow Jones discloses.  An agreement between private-
sector lenders and the Greek government is a crucial part of that
effort, Dow Jones notes.  Unless private creditors agree to take
enough of a voluntary haircut on their holdings of Greek bonds,
the IMF and the European Union have said they won't channel more
funds to the debt-laden country, Dow Jones states.

On Wednesday, a steering committee representing Greece's private
creditors met in Paris, Dow Jones relates.  The meeting, run by
Institute of International Finance chief Charles Dallara and Jean
Lemierre, a senior adviser to BNP Paribas SA, suggests lenders
were regrouping to seek a way forward in talks with the Greek
government after negotiations stalled last week, Dow Jones
discloses.  The meeting was "to take stock of the latest
developments and to determine the course ahead," Dow Jones quotes
a person familiar with the matter as saying.

Costas Paris, Matina Stevis and Riva Froymovich at Dow Jones
Newswires report that European Union finance ministers on Tuesday
further pressured Greece and its private-sector creditors to
ensure a proposed deal to restructure Greece's private-sector
debt will be enough to put the country back on a firm fiscal
footing.

The IMF and wealthier euro-zone countries want a low average
interest rate on new bonds to be issued as part of the
restructuring, in order to ensure Athens can pay its debts and
avoid extra financing, Dow Jones says.

But after 24 hours of talks, EU finance ministers urged Greece to
implement tough austerity and structural overhauls and provide
more written assurances to its partners that it would meet its
promises before a second bailout can be implemented, Dow Jones
notes.

"We need clear commitments from all the political forces in
Greece so that there is clear backing for the new program.  That
is a necessary precondition for a new Greek program to succeed,"
Dow Jones quotes Olli Rehn, the European commissioner in charge
of economic affairs, as saying.

Dow Jones relates German Finance Minister Wolfgang Schauble said
Greece must commit to carrying out the pledges for overhauls the
country has made, no matter who wins elections expected to take
place in April.

                              Default

The news came as John Chambers, head of Standard & Poor's
sovereign-ratings committee, said Greece is "in all likelihood"
headed for a default in the first half of 2012, Dow Jones
relaets.

According to Dow Jones, speaking at Bloomberg's sovereign debt
conference in New York on Tuesday, Mr. Chambers said Greece will
suffer a default under the ratings firm's definition, whether it
happens in the form of a distressed exchange of debt or missed
payment on certain bonds.


* GREECE: Bondholders Put "Maximum Offer" on the Table
------------------------------------------------------
Christine Harper at Bloomberg News reports that BNP Paribas SA
Chairman Baudoin Prot said bondholders negotiating a debt swap
with Greece have made their "maximum" offer.

"The offer that is now on the table is the maximum acceptable for
a voluntary deal.  All the elements are now in place.  I hope the
discussion in the next few days will enable all parties to reach
a constructive agreement," Bloomberg quotes Mr. Baudoin as
saying.  "I am a cautious optimist.  We are starting to see signs
of a shift in sentiment towards Europe.  The ECB three-year
financing facility was really a catalyst.  We are on the right
track, but we need to keep moving forward."


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


CORNERSTONE 2007-1: S&P Cuts Rating on Class E Notes to 'CCC+'
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
Cornerstone Titan 2007-1 PLC's class D, and E notes.

The downgrades follow our assessment of the means available to
the issuer to pay interest on the notes.

"We understand that the excess spread, which is distributed to
the class X notes, is not available in this transaction to
mitigate interest shortfalls under the rest of the notes. In this
transaction, the issuer relies on servicer advances to address
timely payment of interest on the notes," S&P said.

However, the transaction documents indicate to S&P that the back-
up advancer is not allowed to make servicing advances to cover
interest shortfalls under the notes, if such shortfalls have
resulted from:

    Extraordinary expenses payable to the transaction parties
    (e.g., special servicing fees); or

    The reduction of servicing advances, if required to meet
    interest shortfalls under any of the loans, following the
    determination of an appraisal reduction amount (the appraisal
    reduction mechanism was structured to prevent drawings on the
    portion of the securitized loans that represents more than
    90% of the note value).

As reflected in the October 2011 cash manager report, the cash
manager has, on behalf of the issuer, already been deferring
unpaid interest on the class F and G notes, which S&P does not
rate.

"In view of impending lease rollovers and the increased number of
special serviced loans, we believe that this could have a near-
term impact on income that would exacerbate the size of these
interest shortfalls in the next 12 months. As a consequence, our
analysis indicates that the class D and E notes may be at risk of
suffering interest shortfalls (absent other mitigating factors).
We have therefore lowered our ratings on these classes of notes,"
S&P said.

"The rating actions have not resulted from a change in our
opinion on the creditworthiness of the remaining pool of loans
backing the transaction. However, we believe that increased note
interest shortfalls have become more likely. Our ratings address
timely payment of interest, payable quarterly in arrears, and
payment of principal not later than the legal final maturity date
(in January 2017)," S&P related.

Cornerstone Titan 2007-1 closed in March 2007 with a note balance
of EUR1,321.9 million. The underlying pool initially held 32
loans secured on real estate assets in Germany, the Netherlands,
Switzerland, France, and Poland. On the most recent note interest
payment date, in October 2011, 27 loans remained outstanding and
the outstanding note balance was EUR1,032.3 million.

         Potential Effects of Proposed Criteria Changes

"We have taken the rating actions based on our criteria for
rating European commercial mortgage-backed securities (CMBS).
However, these criteria are under review," S&P said.

"As highlighted in the Nov. 8 Advance Notice of Proposed Criteria
Change, we expect to publish a request for comment (RFC)
outlining our proposed criteria changes for rating European CMBS
transactions. Subsequently, we will consider market feedback
before publishing our updated criteria. Our review may result
in changes to the methodology and assumptions we use when rating
European CMBS, and consequently, it may affect both new and
outstanding ratings on European CMBS transactions," S&P said.

"Until such time that we adopt new criteria for rating European
CMBS, we will continue to rate and surveil these transactions
using our existing criteria," S&P said.

                  Standard & Poor's 17g-7 Disclosure Report

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and
a description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.

If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:

      http://standardandpoorsdisclosure-17g7.com

Ratings List

Class                      Rating
                To                        From

Cornerstone Titan 2007-1 PLC
EUR1.322 Billion Commercial Mortgage-Backed Floating-Rate Notes

Ratings Lowered

D               BB- (sf)                  BBB- (sf)
E               CCC+ (sf)                 BB- (sf)


TBS INTERNATIONAL: Receives Non-Compliance Notice from Nasdaq
-------------------------------------------------------------
TBS International plc received formal notification from The
Nasdaq Stock Market that it was not in compliance with Nasdaq's
continued listing standard under Nasdaq Listing Rule
5450(b)(1)(C).  The Company failed to meet this listing standard
because the market value of the Company's Class A ordinary shares
for each trading day in the 30-day period from Nov. 29, 2011, to
Jan. 11, 2012, was less than US$5,000,000.  The Company has 180
days, or until July 10, 2012, to regain compliance by having the
market value of the Company's Class A ordinary shares close at
US$5,000,000 or more for a minimum of 10 consecutive trading
days.  If the Company fails to regain compliance, Nasdaq will
provide written notification to the Company that the Company's
Class A ordinary shares will be subject to suspension and
delisting procedures.  As previously disclosed, the Company
expects that, unless the closing bid price for its Class A
ordinary shares exceeds US$1.00 for 10 consecutive days prior to
March 26, 2012, Nasdaq will provide written notice to the Company
that its Class A ordinary shares will be subject to suspension
and delisting procedures.

                    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.

The Company also reported a net loss of US$55.16 million on
US$282.64 million of total revenue for the nine months ended
Sept. 30, 2011, compared with a net loss of US$29.21 million on
US$311.06 million of total revenue for the same period a year
ago.

The Company's balance sheet at Sept. 30, 2011, showed US$659.28
million in total assets, $409.77 million in total liabilities and
US$249.51 million in total shareholders' equity.

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.


WILLOW NO.2: Moody's Lowers Rating on EUR7.1-Mil. Notes to 'B3'
---------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of these
notes issued by Willow No.2 Series 39:

Issuer: WILLOW NO.2 (IRELAND) PLC Series 39

   -- Series 39 EUR7,100,000 Secured Limited Recourse Notes due
      2039, Downgraded to B3 (sf); previously on Nov 18, 2011 B1
      (sf) Placed Under Review for Possible Downgrade

Willow no.2 (Ireland) Plc Series 39 represents a repackaging of
Grifonas Finance No.1 Plc Class A Notes, a Greek residential
mortgage-backed security (the "Collateral"). All interest and
principal received on the underlying asset are passed net of on-
going costs to Willow No.2 series 39 notes. This rating is
essentially a pass-through of the rating of the "Collateral."

Ratings Rationale

Moody's explained that the rating action taken is the result of a
rating action on Grifonas Finance No.1 Plc Class A Notes, which
was downgraded by Moody's to B3 (sf) from B1 (sf) under review
for possible downgrade on January 19, 2012.

This rating is essentially a pass-through of the rating of the
underlying securities. Noteholders are exposed to the credit risk
of Grifonas Finance No.1 Plc Class A Notes and therefore the
rating moves in lock-step.

Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, which could negatively impact the
ratings of the notes, as evidenced by 1) uncertainties of credit
conditions in the general economy, especially as the transaction
is exposed to an obligor located in Greece and 2) more
specifically, any uncertainty associated with the underlying
credits in the transaction could have a direct impact on the
repackaged transaction.

As noted in Moody's comment 'Rising Severity of Euro Area
Sovereign Crisis Threatens Credit Standing of All EU Sovereigns'
(28 November 2011), the risks of multiple sovereign defaults by
Euro area sovereigns and of multiple exits from the Euro area are
rising. As a result, Moody's could lower the maximum achievable
rating for structured finance transactions in some countries,
which could result in rating downgrades.

The principal methodology used in this rating was "Moody's
Approach to Rating Repackaged Securities" published in April
2010.

No cash flow analysis or stress scenarios have been conducted as
the rating was directly derived from the rating of the
collateral.


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


SEAT PAGINE: Board Set to Meet on Jan. 30 to Finalize Debt Plan
---------------------------------------------------------------
Chiara Remondini at Bloomberg News reports that the board of Seat
Pagine Gialle SpA will meet on Jan. 30 to complete a proposal for
the company's debt reorganization.

According to Bloomberg, a person with direct knowledge of the
matter said that the board will give creditors as much as three
weeks to accept the restructuring plan.

Seat Pagine said on Jan. 17 that it will present a final proposal
for the company's debt reorganization to all parties by the end
of January, Bloomberg recounts.  The company said at the time
that in the absence of an accord, the date for accepting the
proposal won't be extended further, adding that if an accord
isn't reached, it may file for special administration, Bloomberg
notes.

The proposal for the company will include the consensus
thresholds required for the various categories of creditors,
which include senior lenders, bondholders and junior noteholders,
Bloomberg discloses.

                        About Seat Pagine

Seat Pagine Gialle SpA (PG IM) -- http://www.seat.it/-- is an
Italy-based company that operates multimedia platform for
assisting in the development of business contacts between users
and advertisers.  It is active in the sector of multimedia
profiled advertising, offering print-voice-online directories,
products for the Internet and for satellite and ortophotometric
navigation, and communication services such as one-to-one
marketing.  Its products include EuroPages, PgineBianche,
Tuttocitta and EuroCompass, among others.  Its activity is
divided into four divisions: Directories Italia, operating
through, Seat Pagine Gialle; Directories UK, through TDL
Infomedia Ltd. and its subsidiary Thomson Directories Ltd.;
Directory Assistance, through Telegate AG, Telegate Italia Srl,
11881 Nueva Informacion Telefonica SAU, Telegate 118 000 Sarl,
Telegate Media AG and Prontoseat Srl, and Other Activitites
division, through Consodata SpA, Cipi SpA, Europages SA, Wer
liefert was GmbH and Katalog Yayin ve Tanitim Hizmetleri AS.

                         *     *     *

As reported by the Troubled Company Reporter-Europe on Nov. 4,
2011, Standard & Poor's Ratings Services lowered its long-term
corporate credit rating on Italy-based international publisher of
classified directories SEAT Pagine Gialle SpA to 'CC' from
'CCC+'.  S&P said that the outlook is negative.


===================
K A Z A K H S T A N
===================


KAZAKH MORTGAGE: Fitch Junks Rating on Class C Notes
----------------------------------------------------
Fitch Ratings has downgraded Kazakh Mortgage Backed Securities
2007-I B.V. (Kazakh MBS), as follows:

  -- Class A (ISIN XS0293196266): downgraded to 'BB-sf'from
     'BB+sf'; Outlook Negative; RWN removed

-- Class B (ISIN XS0293196696): affirmed at 'Bsf'; Outlook
     Negative; RWN removed

  -- Class C (ISIN XS0293196779): downgraded to 'CCCsf' from 'B-
     sf'; RWN removed

Kazakh MBS is a securitization of mortgage loans originated by
BTA Ipoteka (BTAI), a wholly-owned subsidiary of BTA Bank (rated
'RD').  The transaction closed in March 2007 and as of January
2012 was amortized to around 13% of the original issuance
balance.

The downgrades and Negative Outlooks on the notes reflect the
numerous uncertainties in relation to (i) the removal of the USD-
indexation of the mortgage loans, which will result in a
immediate reduction on the collateral amount denominated in USD
and expose the transaction to future exchange rate fluctuation;
and (ii) BTA's recently announced debt restructuring, as
reflected by its current 'RD' rating (see "Fitch Downgrades BTA
Bank to 'RD'", dated January 19, 2012 at www.fitchratings.com).

The agency estimated that the removal of the USD-indexation would
dilute the mortgage portfolio as of end-November by around 31%,
to US$17.2 million from US$25.1 million.  However, credit
enhancement would remain at 45.5% for the class A, 22.3% for the
class B and 7.8% for the class C due to the existing
overcollateralization and the cash reserve in the transaction.
Fitch's estimate assumes that for each loan which still has an
outstanding balance, the balance would be redefined as the
original amount, net of any historical payments in excess of the
interest due had the loan not been USD-indexed.  The transaction
will also be exposed to exchange rate fluctuation.  Fitch
currently estimates that a depreciation of KZT relative to USD by
more than 9% could impair the class C notes.

The actual impact of the USD-indexation removal is subject to
several uncertainties. It could be significantly more harmful if
the borrowers whose loan are now repaid in full were entitled to
claim back from BTAI excess payments made pursuant to the
indexation mechanism.  This would impact the transaction if BTAI
can claim back these amounts against the issuer, which Fitch
considers unlikely.

The announcement of BTA's second debt restructuring raises
concerns about servicing risk for the transaction. Even if called
in by the transaction trustee, Fitch believes the named back-up
servicer is unlikely to step in.  However, based on the last
restructuring in 2010, Fitch currently sees a continuation of
BTA's servicing operations as likely.

The portfolio performance deteriorated during 2011. Fitch
calculates a distress rate, which measure the percentage of
arrear loans repurchased from the issuer.  This increased to 4.7%
in 2011 from 2%-3% in 2009/29010.  However, the agency does not
consider this to be a threat to the credit quality of the notes,
given the healthy levels of excess spread in the transaction
(between 5% and 10% annualized in 2011).

Fitch will continue to monitor the transaction and take the
appropriate rating actions if necessary.


===========
L A T V I A
===========


BALTIJAS AVIACIJAS: airBaltic to Cover Veriko Debt
--------------------------------------------------
The Baltic Times reports that airBaltic Corporation made an offer
to cover the debt of Baltijas Aviacijas Sistemas to Veriko for
brokerage services.

airBaltic made the offer during the Riga Regional Court session
on BAS' insolvency the Baltic Times relates.

According to the Baltic Times, LETA reported that Veriko filed
the insolvency claim against BAS.

If this offer goes through, airBaltic in its turn wants the
insolvency claim dropped, the Baltic Times notes.

Baltijas Aviacijas Sistemas is the private shareholder of the
Latvian national airline airBaltic.


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


VIRGOLINO DE OLIVEIRA: Moody's Rates US$200-Mil. Notes at 'B3'
--------------------------------------------------------------
Moody's Investors Service has affirmed the B3 corporate family
rating to Agropecuaria Nossa Senhora do Carmo S.A. ("Virgolino")
and assigned a B3 rating to its proposed US$200 million up to 10-
year senior unsecured notes issued by its Luxembourg-based
offshore subsidiary, Virgolino de Oliveira Finance Limited, with
an unconditional guarantee from Agropecuaria Nossa Senhora do
Carmo S.A., and its subsidiaries Virgolino de Oliveira S.A.
Acucar e Alcool, (" Virgolino de Oliveira"), A‡ucareira Virgolino
de Oliveira S.A. ("Acucareira Virgolino"), and Agropecuaria
Terras Novas S.A. ("Agropecuaria Terras Novas"). The outlook for
both ratings is stable.

Rating assigned is:

US$200 million senior unsecured guaranteed notes: B3 (foreign
currency)

Ratings affirmed:

- Corporate family rating: B3 (Global scale)

- US$300 million 10.5% senior unsecured guaranteed notes due
   2018: B3 (foreign currency)

Ratings Rationale

"The B3 rating reflects the good medium-term prospects for the
sugar-ethanol industry due to still-constrained global
inventories supporting sugar and ethanol prices," said Moody's
local market analyst Marianna Waltz. "It also takes into account
the benefits from Virgolino's partnership agreement with
Copersucar, which assures the sale of all sugar produced and
generates more stable cash flows, while reducing logistics
costs," explains Waltz. The company plans to use the issuance
proceeds to (i) prepay shorter term debt and lengthen its
maturity profile, (ii) invest in the renewal and expansion of its
sugarcane harvest, and (iii) increase its cash balance.

Offsetting some of the positive rating attributes is the
company's still modest cash cushion and its relatively small size
as compared both to international peers, as well as the larger
Brazilian companies in this industry. Although Virgolino benefits
from the advantages of operating in one of the highest yielding
sugar cane regions of the world, the rating reflects its raw
material concentration in the state of Sao Paulo, which increases
the risks related to plant diseases and weather-related events.
Moreover, the region's good climate and better soil are reflected
in its higher lease and labor costs, which reduce its margins in
lower production years, such as 2011.

Moody's consider as a credit positive the company's 60%-40%
flexibility to change its mix to produce either sugar or ethanol,
depending on the prevailing market conditions. However, Virgolino
is a pure-play sugar and ethanol producer, which constrains the
company's rating, as its results are highly correlated to the
pricing of these historically very volatile commodities prices.

Like most other companies in the sector, Virgolino experienced
some difficulties during the recent financial crisis, when both
its revenues and operating margins declined. Investment in
harvest renewal and expansion was also forestalled at that time.
For this reason, one of the company's goals is to organically
increase sugarcane crushing from the 8.7 million tons to 11.7
million tons in the next five years. Hence, the rating assumes
that Virgolino will manage leverage and CAPEX prudently,
considering that current total debt to EBITDA is at 4.6x
(according to Moody's standard adjustments).

The stable outlook reflects Moody's expectation that Virgolino
will be able to profit with the favorable outlook for the sugar-
ethanol industry, sustaining operating margins near current
levels, and that management will remain focused on improving its
debt maturity profile, reducing leverage and improving cash flow
metrics.

Virgolino's ratings could be positively affected by an
improvement in liquidity levels, with a consistently higher
minimum cash cushion. The company would also need to maintain
debt to EBITDA below 4.5x, RCF to net debt above 20% and EBITA to
interest expense above 1.5x, on a sustained basis.

Negative pressure could develop on the rating if liquidity were
to deteriorate or free cash flow remains negative, EBITA to
interest expense fell below 1.0x and EBITDA margin was reduced to
below 20% on a sustainable basis. Although unlikely in Moody's
view, if Virgolino were to exit the Copersucar partnership for
any reason, it would also pressure the rating.

The principal methodology used in this rating was Global Food -
Protein and Agriculture Industry published in September 2009.

Company Profile

Founded in the 1930's and based in Sao Paulo state, Brazil,
Virgolino is a family owned sugar-ethanol producer still headed
by the founding Oliveira family. The company has a crushing
capacity of 12 million tons of sugarcane and posted BRL1.06
billion revenues (approximately US$609 million) for the fiscal
year ending April 2011.

The group owns approximately 50.4% of its sugarcane and leases
87.3% of its harvested land and has a 60%-40% flexibility to
change its mix to produce either sugar or ethanol. Its four
operating mills produced 826.3 thousand tons of sugar and 351.6
liters of ethanol over that period, representing 66% and 31% of
sales, respectively. All the production is sold, both
domestically and for export, through Copersucar (Cooperative of
Sugarcane, Sugar and Alcohol Producers of the State of Sao
Paulo).


VIRGOLINO DE OLIVEIRA: Fitch Assigns 'B' Issuer Default Ratings
---------------------------------------------------------------
Fitch Ratings has assigned foreign and local currency Issuer
Default Ratings (IDRs) of 'B' to Virgolino de Oliveira S/A Acucar
e Alcool (GVO) and to Virgolino de Oliveira Finance S/A
(Virgolino Finance).  The Rating Outlook is Stable.  Virgolino
Finance is a fully owned subsidiary of GVO. Fitch has also
assigned a rating of 'B/RR4' to Virgolino Finance's proposed
senior unsecured notes of approximately US$200 million for a
tenor up to 10 years.  The recovery rating follows Fitch's soft
cap for recovery ratings in Brazil of 'RR4'.  The notes are
unconditionally guaranteed by GVO, Agropecuaria Nossa Senhora do
Carmo S/A, Acucareira Virgolino de Oliveira S/A and Agropecuaria
Terras Novas S/A.  Net proceeds from this proposed issuance will
be used for general corporate purposes, including the repayment
of existing debt, the financing of capital expenditures and the
strengthening of cash reserves.

GVO's strategic shareholding position in Copersucar fundamentally
supports the ratings at their current level.  GVO and Virgolino
Finance's ratings also reflect the consolidated financial profile
of the group, in particular its leveraged capital structure and
tight liquidity position.  The ratings further incorporate the
group's exposure to the cyclicality of the sugar and ethanol
commodities' price cycle, as well as the volatility of cash flow
generation, exposing the group to refinancing risk.  They also
reflect the exposure of GVO's sugar cane production business to
volatile weather conditions, foreign currency risk relative to a
portion of its debt; and the risk of governmental interference in
the ethanol commercialization policies within the local market.
The ratings benefit from GVO's adequate business model and the
geographical location of its production units.

Competitive Advantages Linked to GVO's participation in
Copersucar:

GVO benefits from EBITDAR margins above the industry average and
good access to financing, mitigating the risks derived from its
middle-tier business position within the industry.  The company
also benefits from the favorable prospects related to ethanol
consumption in the country and Brazil's significant presence in
the global sugar trade.  GVO's main challenges are related to the
expansion of its agricultural activities.  The execution of
necessary crop investments in order to allow for better capacity
utilization and higher processing volumes are key to sustain an
increase in its consolidated operational cash flow over the next
few years and, consequently, to lower its leverage ratios.

Strengthened Business Profile:

GVO's position as the largest Copersucar shareholder strengthens
its financial and business profiles.  The group benefits from
Copersucar's robust scale, which results in mitigated demand
risks, lower logistics costs and better stability in the
company's collection flow.  GVO also benefits from less
restrictive access to liquidity during challenging operating
scenarios when compared to other peers in the agribusiness, due
to the credit lines provided by Copersucar. GVO holds 10.36% of
Copersucar's total capital.  Copersucar's large scale business
accounts for approximately 18% of sugar and ethanol sales in the
Central South region of Brazil and 10% of the sugar international
market, making it an important price making agent.  Copersucar
has 48 partner mills with a combined sugar cane crushing capacity
of around 115 million tons per year and also counts on sales
contracts with non-partner mills, in a lesser extent.

Cost Savings, Scale Benefits and Risk Management Support Related
to Copersucar:

GVO sells 100% of its production to Copersucar, through a long
term exclusivity contract, mitigating demand risk.  Prices for
its products are linked to the average sugar and ethanol market
prices plus a premium (Esalq+2%).  The premium is possible due to
logistics savings and scale gains obtained through the
partnership with Copersucar. GVO is responsible for the
agricultural activities and for the sugar and ethanol production,
while Copersucar is responsible for all commercial activities and
associated logistics, as well as for the implementation of
hedging policies.  Copersucar remunerates GVO based on the
realized production on a monthly basis during the year,
independently of the moment the sale to the final customer
occurs.  This translates to a higher flexibility in GVO's working
capital management compared to other companies that face
seasonality in their activities.  GVO's businesses are exposed to
the volatility of the sugar and ethanol prices.  However, the
risks of future sales operations through derivatives transactions
and eventual margin calls remain under Copersucar's
responsibility.

Standalone Liquidity Remains Weak:

GVO's liquidity position remains weak, despite a number of long
term financing transactions that closed during the last year.  As
of Oct. 31, 2011, the group reported a cash position of BRL127.8
million that covered only 23% of its short-term debt.  Partially
mitigating refinancing risk, GVO's financial profile benefits
from a significant working capital financing line, in the amount
of up to 40% of its annual revenues, equivalent to approximately
BRL400 million, granted by Copersucar.  This credit line is
subject to certain limits in terms of revenues and it is linked
to guarantees on inventories and/or bank guarantees.  This
facility is an important liquidity source for GVO, especially in
periods of more restrictive access to credit.

Leverage Still High:

GVO improved its leverage ratios over recent periods, but
compared to 2009 and 2008, they still remain relatively high.
The group's high debt level derives mainly from large investments
made to double production capacity, which were badly timed with
the global economic crisis and the downward cycle of the sugar
and ethanol industry.  These events severely impacted GVO's
credit metrics during 2008 and 2009.  The group's net debt to
EBITDA ratio reached the peak of 13.0 times (x) as of April 30,
2008, being reduced along the last two years, due mainly to the
increase in production capacity with the start-up of new
industrial facilities and the robust sugar and ethanol average
prices in the period.  GVO's consolidated net adjusted
debt/EBITDAR adjusted by dividends received from Copersucar ratio
for the last 12 months (LTM) ended on April 30, 2011 was 4.4x.
This ratio should be maintained at around 4.3x for the LTM ending
April 30, 2012, with a trend of moderate reduction in following
years.  This prediction assumes average prices of sugar, hydrous
ethanol and anhydrous ethanol of up to BRL850/ton, BRL950/m3 and
BRL1050/m3, respectively.  These prices compared to average
prices of BRL1040/ton, BRL962/m3 and BRL1100/m3 in 2010,
respectively.

Positive Free Cash Flow, Despite Higher Capital Expenditures:

GVO presented a significant decline of 24.6% in sugar cane
processing volumes for the LTM ending April 30, 2011.  Production
reached 8.8 million tones.  This performance reflected the
negative impact of the Brazilian harvest due to unfavorable
weather conditions and low investments in sugar cane crop
renovation over the last few years.  However, the group's net
revenues on a consolidated basis remained relatively stable
compared to the previous year, reaching BRL1 billion.  This
result was obtained due to a sales mix more focused on sugar and
to the maintenance of robust average prices for both sugar and
ethanol.  During the same period, the group reported EBITDAR
adjusted for dividends received from Copersucar of BRL349
million, compared to BRL359 million in April 2010.  Dividends
from Copersucar totaled BRL40 million in the 2010/2011 harvest
period.

GVO's consolidated funds from operations (FFO) and cash flow from
operations (CFO) were BRL310 million and BRL264 million,
respectively, for the LTM ended on April 30, 2011.  This
performance compares to BRL180 million and BRL235 million,
respectively, for the same period 2010.  Capex totaled BRL 220
million for the recent LTM period, higher than the amounts spent
in the previous years.  This increase is mainly due to higher
expenses related to the expansion and renovation of sugar cane
plantations.  This is important to sustain higher sugar cane
crushing volumes in the next crop periods in order to increase
the group's operational cash flow generation.  Free cash flow
(FCF) was BRL44 million for the period. During the next few
years, investments are expected to return to lower levels,
between BRL110 million-130 million per year, concentrating on the
agricultural area. Fitch expects GVO to generate positive FCF
from 2012.

Moderate Exposure to FX Fluctuations:

GVO's debt profile is moderately exposed to foreign exchange
movements. As of Oct. 31, 2011, consolidated adjusted debt
including obligations related to leased land was BRL1.8 billion.
The debt comprised an international notes issuance (27%); loans
granted by Copersucar (21%); financings from the Brazilian
Economic Social and Development Bank (BNDES, 15%); export
prepayment transactions (11%) and others (26%).  For the same
period, only the notes issuance was exposed to exchange risks as
there was no protection through derivatives for this operation.
During the LTM ended April 30, 2011, 55% of GVO's revenues were
from exports.

Adequate Business Profile:

GVO has an adequate business profile, based on its favorable
location, diversified production base and operational
flexibility.  The group consists of four industrial units located
in the State of Sao Paulo, conveniently located near the main
consumption markets and export channels.  GVO has an installed
crushing capacity for 12 million tons of sugar cane, with
flexibility to reach up to 60% of total capacity for sugar or
ethanol.  The group's production is totally integrated and
benefits from sugar cane supply from its own and leased land for
approximately 40% of its needs.  The remaining 60% is supplied by
third parties, through long term contracts and there is no supply
concentration above 5%.

Key Rating Drivers:

Negative rating actions could be driven by lower than expected
operational cash flow generation or deterioration of GVO's
operating margins.  Improvement in the group's liquidity position
coupled with a longer and more manageable debt maturity profile
with lower leverage levels, could lead to a positive rating
action.

Fitch rates GVO and Virgolino Finance as follows.

GVO:

  -- Long-term national scale corporate rating at 'BBB(bra)';
  -- 1st debenture issuance due 2014 at 'BBB(bra);
  -- Foreign and local currency IDR at 'B'.

Virgolino Finance:

  -- Foreign and local currency IDR at 'B';
  -- Senior unsecured notes at 'B/RR4'.


=========
M A L T A
=========


AIR MALTA: EU Commission Launches Probe Into Restructuring Plan
---------------------------------------------------------------
Times of Malta reports that Air Malta's rescue plan enters its
most delicate phase as Brussels raises concerns on the aid the
government plans to give to the airline.

Following months of discussions with the Maltese authorities, the
European Commission on Wednesday decided to launch what is known
as an investigation into the draft restructuring plan submitted
by the government in May, Times of Malta relates.  The aim of the
exercise is to determine whether the EUR130 million aid package
slated for Air Malta is in line with EU competition rules, Times
of Malta states.

This is the last phase of a lengthy process that started in
November 2010 when the Commission granted the government
temporary permission to lend the national air carrier EUR52
million as rescue aid, Times of Malta notes.

This last phase includes the publication of the plans in the EU's
official journal and a one-month time window in which interested
parties, including airlines, can post their objections, Times of
Malta discloses.

It will only be at the end of this process and the hearing of new
submissions by the Maltese government that the Commission will
make its final decision on this case, sometime in May, according
to Times of Malta.

Announcing the investigation on Wednesday, the Commission
highlighted a number of issues that still seem to worry EU
officials with regard to the effectiveness of the submitted plan,
Times of Malta relates.  These include doubts on whether the plan
complies with the requirements of the EU's state aid rules on
airline restructuring, the 2004 EU Rescue and Restructuring
Guidelines, Times of Malta notes.

"In particular, the Commission is concerned that the forecasts on
long-term viability may not be realistic enough and that the
proposed capacity reduction may not be appropriate to compensate
for the distortions of competition created by the state support,"
Times of Malta quotes the Commission as saying.  "The Commission
also has doubts whether Air Malta's own contribution to the
restructuring cost is sufficient and more information is needed
to determine whether Air Malta is eligible for restructuring aid
in view of a capital injection carried out by Malta in 2004."

Should the Commission decide against allowing state-aid, Air
Malta would either have to fold or be sold and privatized, Times
of Malta states.

In November 2010, after registering some EUR30 million in losses,
the airline turned to the government for help, Times of Malta
recounts.  After obtaining temporary permission from Brussels,
the government lent Air Malta EUR52 million to save it from
bankruptcy, Times of Malta discloses.

Times of Malta says the five-year restructuring plan, if
approved, would, hopefully, return the national airline to the
black by 2016.  It involves a bold cost-cutting exercise,
including the shedding of about 500 workers, and a multi-million
euro injection in the company's share capital in state aid, Times
of Malta states.

The restructuring program is expected to cost the taxpayer about
EUR200 million, Times of Malta notes.

Air Malta is the national airline of Malta, headquartered in
Luqa.  It operates services to over 50 destinations in Europe,
North Africa and the Eastern Mediterranean, with 200 flights a
week.


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


CEVA GROUP: S&P Puts 'B-' Corp. Credit Rating on Watch Positive
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B-' long-term
corporate credit rating on Netherlands-based integrated logistics
services provider CEVA Group PLC (CEVA) on CreditWatch with
positive implications.

S&P also placed on CreditWatch Positive:

    The 'B' issue ratings on the US$1.5 billion-equivalent senior
    secured bank facilities and the existing US$450 million
    first-lien senior secured notes due 2017 issued by CEVA. "The
    recovery rating on these facilities and notes is '2',
    indicating our expectation of substantial (70%-90%) recovery
    in the event of a payment default," S&P said.

    The 'CCC+' issue ratings on the US$210 million 1.5-lien
    secured notes due 2016, the US$702 million junior-priority
    senior secured notes due 2018, the EUR11 million and EUR266
    million senior unsecured notes due 2014, and the EUR73
    million senior unsecured notes due 2018. "The recovery rating
    on these instruments remains '5', indicating our expectation
    of modest (10%-30%) recovery in the event of a payment
    default," S&P said.

    "The 'CCC' issue ratings on CEVA's senior subordinated notes,
    comprising an EUR81 million tranche due 2016 and a EUR57
    million tranche due 2018. The recovery rating remains at '6',
    indicating our expectation of negligible (0%-10%) recovery in
    the event of a payment default," S&P said.

"At the same time, we assigned a 'B+' issue rating to the
proposed US$300 million first-lien senior secured notes due 2017
to be issued by CEVA. We have assigned a recovery rating of '2'
to these notes. We further assigned a 'B-' issue rating to the
new proposed US$665 million-equivalent senior unsecured notes due
2020 to be issued by CEVA. Of this total, US$525 million will be
offered to investors and a US$140 million-equivalent will be
subscribed by Apollo Global Management, LLC, CEVA's controlling
shareholder. The notes have been assigned a recovery rating of
'5'," S&P said.

The CreditWatch placement reflects CEVA's plans to refinance its
upcoming debt maturities, most importantly bank loans maturing in
2013, and to convert into equity about EUR860 million of debt
held by Apollo Global Management, LLC, CEVA's controlling
shareholder.

"In our view, a successful completion of these proposed
transactions will reduce CEVA's financial leverage, and thereby
its cash interest costs. It would also enhance the company's
financial flexibility, eliminating major debt maturities until
2015. We therefore anticipate raising the rating on CEVA to
'B' from 'B-' once these transactions are completed," S&P said.

"Based on our preliminary assessment of the benefits of the
proposed transactions and our expectations of CEVA's improving
operating performance, we could raise the rating by one notch to
'B' soon after completion of the transactions. If however, CEVA
fails to complete the proposed transactions, we could affirm the
rating at 'B-'," S&P said.


MARCO POLO: Sues Creditors for Causing Bankruptcy
-------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Seaarland Shipping Management filed a lawsuit
blaming two creditors for precipitating its bankruptcy by taking
actions that "completely derailed the debtors' efforts to
restructure outside of bankruptcy."

The complaint, filed on Jan. 17 in U.S. Bankruptcy Court in
Manhattan, contends that Bansky Shipping Co. and Indiana R
Shipping Co. seized a vessel that Seaarland was under contract to
sell for US$41.4 million.  The seizure resulted in a collapse of
the sale and the inability to generate funds financing an out-of-
court restructuring.  The two creditors also attached Seaarland's
interest in a joint venture, cutting off access to US$5 million
in cash.  The attachment violated an agreement to arbitrate
disputes, according to the complaint. Seaarland wants the
bankruptcy judge to declare that attaching the stock was a
fraudulent transfer.  The seizure of the vessel constituted
inequitable conduct, Seaarland contends, for which the company
wants the bankruptcy judge to subordinate the creditors' claims.

The lawsuit is Marco Polo Seatrade BV v. Bansky Shipping
Co. (In re Marco Polo Seatrade BV), 12-01027, U.S. Bankruptcy
Court, Southern District of New York (Manhattan). The bankruptcy
case is In re Marco Polo Seatrade BV, 11-13634, U.S. Bankruptcy
Court, Southern District of New York (Manhattan).

                         About Marco Polo

Marco Polo Seatrade B.V. operates an international commercial
vessel management company that specializes in providing
commercial and technical vessel management services to third
parties.  Founded in 2005, the Company mainly operates under the
name of Seaarland Shipping Management and maintains corporate
headquarters in Amsterdam, the Netherlands.  The primary assets
consist of six tankers that are regularly employed in
international trade, and call upon ports worldwide.

Marco Polo and three affiliated entities filed for Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 11-13634) on July 29,
2011.  The other affiliates are Seaarland Shipping Management
B.V.; Magellano Marine C.V.; and Cargoship Maritime B.V.

Marco Polo is the sole owner of Seaarland, which in turn is the
sole owner of Cargoship, and also holds a 5% stake in Magellano.
The remaining 95% stake in Magellano is owned by Amsterdam-based
Poule B.V., while another Amsterdam company, Falm International
Holding B.V. is the sole owner of Marco Polo.  Falm and Poule
didn't file bankruptcy petitions.

The filings were prompted after lender Credit Agricole Corporate
& Investment Bank seized one ship on July 21, 2011, and was on
the cusp of seizing two more on July 29.  The arrest of the
vessel was authorized by the U.K. Admiralty Court.  Credit
Agricole also attached a bank account with almost US$1.8 million
on July 29.  The Chapter 11 filing precluded the seizure of the
two other vessels.

The cases are before Judge James M. Peck.  Evan D. Flaschen,
Esq., Robert G. Burns, Esq., and Andrew J. Schoulder, Esq., at
Bracewell & Giuliani LLP, serve as the Debtors' bankruptcy
counsel.  Kurtzman Carson Consultants LLC serves as notice and
claims agent.

The petition noted that the Debtors' assets and debt are both
more than US$100 million and less than US$500 million.

Tracy Hope Davis, United States Trustee for Region 2, appointed
three members to serve on the Official Committee of Unsecured
Creditors.  The Committee has retained Blank Rome LLP as its
attorney.

Secured lender Credit Agricole Corporate and Investment Bank is
represented by Alfred E. Yudes, Jr., Esq., and Jane Freeberg
Sarma, Esq., at Watson, Farley & Williams (New York) LLP.


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


TRANSCONTAINER JSC: Fitch Maintains RWN on 'BB+' Long-Term IDR
--------------------------------------------------------------
Fitch Ratings has maintained Russia-based JSC TransContainer's
Issuer Default Rating (IDR) on Rating Watch Negative (RWN).

TransContainer's 'BB+' Long-term IDR currently includes a one-
notch uplift for parental support from JSC Russian Railways (RZD,
'BBB'/Stable/'F3'), its majority shareholder.  The maintained RWN
reflects RZD's decision to further reduce its stake in
TransContainer and the continued uncertainty regarding the
percentage of shares to be disposed, the timing of the disposal,
and the identify of the future majority shareholder.

RZD's intention is to dispose of a 25% stake in TransContainer
but maintain a 25% +1 share stake. However, the Russian
government, RZD's sole shareholder, is considering plans for RZD
to fully divest its stake in the company.  Discussions between
RZD and the Russian government are still ongoing.  A final
decision regarding the precise dilution of RZD's stake had been
expected at the end of 2011, but is now anticipated in Q112.  If
decisions regarding the sale are not made in Q112 or the timing
is likely to be postponed to 2013, the agency would assign the
rating a Negative Outlook.

The agency emphasizes that TransContainer's ratings may be
impacted by the relative credit strength of a new majority
shareholder and the parent-subsidiary arrangements put in place,
including the effect of possible acquisition funding.  To resolve
the RWN, Fitch will therefore seek clarification about the new
ownership structure and details of any acquisition financing.

The one-notch uplift for parental support from RZD applied to
TransContainer's ratings is in accordance with Fitch's Parent-
Subsidiary Rating Linkage methodology.  The agency recognizes the
moderate operational and strategic ties between TransContainer
and RZD, whose intention to maintain a 25% stake implies a
continued commitment to TransContainer and its perceived
importance to RZD in terms of strategy and operations.

TransContainer's performance in 9M11 was stronger than
anticipated with EBITDAR and cash flow in excess of Fitch's
forecasts due to increased volumes, favorable pricing, improved
empty run ratios and cost management efforts.  Capex spending was
also lower than expected given management's decision to forego
the purchase of flat cars, which were considered too expensive.
Consequently, as at 9M11 credit metrics improved substantially
with net adjusted debt/EBITDAR strengthening to around 1.1x on an
annualized basis.  In FY12, Fitch anticipates increased capex
spending and potentially a slowing in demand will lead to some
increase in this leverage ratio, but remain comfortably below
2.0x in the medium term, a level commensurate with the standalone
'BB' rating.

TransContainer's standalone rating continues to reflect its
market position as the leading rail container operator in Russia,
geographical reach and relatively diversified customer base. As
at 30 September 2011, the company owned c.60% of total flatcars
in Russia and holds an estimated 51% of all rail container
transportation.  It owns and operates more than 24,000 flatcars
and c.60,000 containers.

The rating actions are as follows:

  -- Long-term IDR: 'BB+'; RWN maintained
  -- Short-term IDR: 'B'; affirmed
  -- Local currency long-term IDR: 'BB+'; RWN maintained
  -- Local currency short-term IDR: 'B'; affirmed
  -- National Long-term rating: 'AA'(rus)'; RWN maintained
  -- Senior unsecured Rating: 'BB+'; RWN maintained


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


CABLEEUROPA SA: Fitch Affirms 'B' Issuer Default Ratings
--------------------------------------------------------
Fitch Ratings has revised the Outlook on Cableuropa S.A.'s Long-
term Issuer Default Rating (IDR) to Positive from Stable and
affirmed the Long term IDR and Short-term IDR at 'B',
respectively.

"The revision of Cableuropa's Outlook to Positive acknowledges
the steady progress the company is making in improving its
financial metrics, its resilient operational performance in the
face of a difficult economy, and its proactive approach to
managing debt maturities," said Stuart Reid, a Senior Director in
Fitch's European TMT team.  "Financial metrics are strong for the
existing rating and would justify a higher rating in a more
benign communications market.  The Spanish economy, and in
particular private consumption, is likely to remain weak over at
least the next 18 months.  The revision of the Outlook is a
cautious response to the good progress but recognizes that market
challenges remain."

Cableuropa's ratings take into account the company's revenue and
cash flow resilience despite the economy and a contracting
telecoms market, with Spain's overall telecoms revenues down 4.8%
yoy in Q311. The company is reporting good service bundle metrics
across the subscriber base, which itself remains stable, while
the business is achieving ARPU growth despite the economy and
austerity measures.  The completed upgrade of 100% of its network
to DOCSIS 3.0, a digital compression technology that enables very
high speed broadband, provides the company with a technology
advantage and is improving important in the battle for broadband
customers - customers who invariably take more than one bundled
service.

While the company's performance indicates an ability to buck the
wider market (9M11 revenues ahead 0.1% and 3Q11 up 2.5%), Fitch
believe revenues and operating metrics could come under renewed
pressure in 2012, with Fitch's sovereign group modelling very
weak private consumption over the next two years.  Telecoms
spending, particularly discretionary spending in areas such as
fixed to mobile calling and non-subscription based pay TV
consumption, have proven more susceptible to the economy than
previously expected, Nonetheless Cableuropa's own experience in
areas such as fixed voice (revenues down 0.6% yoy in 3Q11 verses
a market down by 8.6%, according to Spanish regulator, CMT) and
broadband (Cableuropa up 12.3%; against a flat market), point to
a good competitive position.

However, Telefonica ('BBB+'/Stable), the main casualty of market
declines, is likely to step up competitive action, while Spain is
proving to be an increasingly hard-fought multi-play market
given the presence of quad-play operators such as Vodafone ('A-
'/Stable), and France Telecom's ('A-'/Stable) Orange, and triple-
play altnet, Jazztel. Although not considered Cableuropa's key
revenue driver, the pay TV market is likely to intensify.  Prisa,
owners of Sogecable, the country's DTH satellite platform, has
recently reached agreement with its banks over a new financing
package, which should allow it to refocus on operational quality,
while the overall market is experiencing a degree of
fragmentation.

Cableuropa's leverage (net debt EBITDA) of 4.6x and free cash
flow margin approaching double digits are potentially already in
line with a 'B+' rating.  Resilience and visibility of cash
flows, even in the event of renewed austerity driven top-line
pressure suggest these metrics will be sustained.  Concerns over
the economy and the risk of renewed pressure on the consumer -
the company's primary source of revenues constrain an upgrade at
present. Net FFO leverage below 5.0x (correlating to around 4.5x
net debt EBITDA) and FCF margin sustained at current levels in
2012 should justify an upgrade in the rating.  Progress in
addressing the 2013 bank refinancing will also be a key
consideration.  Financial metrics trending wider than current
levels, and an absence of a successful bank refinancing are
likely to be negative for the rating or Outlook.

Refinancing risk is being managed and the company is approaching
its 2013 debt refinancing in a better operational position than
when it last refinanced in 2010.  The company's funding sources
have been diversified - with EUR1.0 billion of senior secured
bonds having been raised since the bank amendment in 2010.  The
company has also successfully refinanced its 2014 subordinated
notes, extending their maturity until 2019.  This ensures a level
of junior debt remains in the capital structure with a
sufficiently long maturity, to allow any potential bank
refinancing to go ahead unencumbered by the maturity of its
junior debt.  Recent documentation changes relating to the
balance between bank and bond investor voting rights, should help
both further issuance in the secured bond market as well as bank
refinancing.

The following instruments have had their ratings affirmed:

  -- Cableuropa senior secured bank: 'BB-'/'RR2'
  -- Nara Cable Funding senior secured bonds: 'BB-'/'RR2'
  -- ONO Finance II plc unsecured notes: 'CCC'/'RR6'


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


CLARIAN FINANCE: Moody's Assigns 'Ba1' Rating to EUR500MM Notes
---------------------------------------------------------------
Moody's Investors Service has assigned Ba1/LGD 4 (63) ratings to
the new EUR500 million 2017 senior unsecured notes to be issued
by Clariant Finance (Luxembourg) S.A., a financial subsidiary of
Clariant AG.

The notes will be guaranteed by Clariant AG on senior unsecured
basis and rank pari passu with the existing senior unsecured
obligations of the guarantor and the issuer.

Ratings Rationale

Clariant's Ba1 ratings reflect Moody's expectation that the pace
of the deleveraging in 2012-2013 is likely to slow down because
the weakening economic environment in Europe and a slow-down in
growth in the emerging markets will likely curtail further
improvement in the earnings, as opposed to the assumption that
supported the positive outlook assigned to the ratings at the
start of 2011.

Following the acquisition of Sud-Chemie AG, funded in part
through an equity placement, Clariant's total debt level has
increased and is expected to be at approximately CHF3 billion at
the end of 2011 (before Moody's adjustments for leases and
pension liabilities). However, Moody's continues to assume
further reduction in debt in 2012, with recent placements of
EUR390 million in certificates of indebtedness in the German
market and the new bond supporting the scheduled repayments in
the next 12 months. With investment in the improvement of the
business weighting on the FCF generation in 2012, further
reduction in leverage in the next 12-18 months was assumed to
come from the growth in earnings, which Moody's now expects will
be slower. At the end of 3Q 2011, Moody's estimates that
Clariant's leverage stood at 3.1x on LTM Net Adjusted Debt to
EBITDA basis and (RCF-CAPEX)/Debt was around 3.5%.

Moody's continues to positively view the acquisition of Sud-
Chemie AG, that has added to the scale and quality of the
company's revenue base. It has reduced the uncertainty regarding
Clariant's near term growth strategy and provided flexibility for
further portfolio measures, as recently confirmed by the company.
Moody's expects such measures to focus on the more cyclical and
less profitable businesses, leading, over time, to stronger
average margins and a further reduction in the earnings
volatility. Moody's views these measures, together with the CAPEX
commitments underpinning capacity rationalization, to be building
on the results of the comprehensive restructuring program
implemented by Clariant. Moody's expects that Clariant will
maintain its strong execution of the integration plan for Sud-
Chemie. The company estimates that cost rationalization measures
in the acquired businesses will bring synergy benefits of
CHF75-CHF95 million in earnings in the medium term.

The stable outlook on Clariant's Ba1 ratings is underpinned by
the expectation that Clariant will maintain a strong liquidity
profile as it continues to proactively manage its refinancing
requirements.

Liquidity and Structural Considerations

The successful placement of the new EUR500 million bond will
support the liquidity and refinancing profile of the company in
2012/2013, as it faces CHF250 million bond maturity in 2012 and a
further EUR600 million bond maturity in 2013. The company has
also recently placed CHF300 million in Swiss Franc bonds and
EUR390 million in certificates of indebtedness in the German
market to support the refinancing requirements.

Clariant maintains a significant cash balance (which at the end
of 3Q 2011 stood at CHF1 billion) that also supports the
liquidity position during the refinancing period. The company,
however, also uses part of its high cash balances to back up
uncommitted short-term bank facilities that fund its working
capital requirements. The company has confirmed that it is
looking to maintain a liquidity reserve of c. CHF350 million -
CHF450 million to support operations, of which CHF300-CHF400
million may be replaced over time by a committed bank facility.

As a result of the acquisition of Sud-Chemie AG, the level of
debt at operating subsidiaries has increased and at the end of 3Q
2011 stood at c. CHF806 million (prior to recent EUR182 million
prepayment). Clariant's trade creditor obligations are
substantially located at operating level as well. The company has
confirmed that it is committed to reducing the level of
indebtedness at the operating level in 2012, including through
refinancing and repayment of loans at operating subsidiaries. The
Ba1 rating on the notes, therefore, assumes that the company will
manage this issue of structural subordination by reducing down
the obligations at the operating companies in the next 12-18
months, as it has successfully done so in the past.

The principal methodology used in rating Clariant was the Global
Chemical Industry Methodology published in December 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.

Headquartered in Muttenz, Switzerland, Clariant AG is a leading
international chemicals group. In 2010, Clariant reported
revenues of approximately CHF7.1 billion (consolidated revenues
of CHF7.2 billion reported for 9 months 2011, inclusive of the
contribution by Sud-Chemie AG, that Clariant acquired in April
2011 and consolidates it since May 1, 2011).


PETROPLUS HOLDINGS: Administrators to Restart Coryton Shipments
---------------------------------------------------------------
Brian Swint at Bloomberg News reports that Petroplus Holdings
AG's administrators said they will restart fuel shipments from
the Coryton refinery in the U.K.

According to Bloomberg, Unite, the U.K.'s biggest union, said
that the plant, running at reduced capacity after Petroplus had
US$1 billion in credit lines frozen last month, supplies about
20% of southeast England's fuel.

"I am pleased that we are able to resume fuel supplies in the
region," Bloomberg quotes Steven Pearson, a partner at
PricewaterhouseCoopers LLP, as saying in an e-mailed statement.
"The team has worked collaboratively with customers to get to
this stage so quickly."

Bloomberg relates that Richard Howitt, a European Parliament
member for the east of England, said on Wednesday the 220,000
barrel-a-day Coryton refinery has enough crude supplies to last a
number of days.

Bloomberg notes that administrators said on Wednesday Petroplus'
Ingolstadt plant in Germany is also operating at about 50% of
capacity.

                             Default

As reported by the Troubled Company Reporter-Europe on Jan. 25,
2012, Petroplus Holdings AG disclosed that the company and its
subsidiaries received notices of acceleration on Monday from the
lenders under its Revolving Credit Facility.  During the past
several weeks, Petroplus has been negotiating with these lenders
to reopen credit lines needed to maintain operations and meet
financial obligations.  In addition, the Company has been
seeking to arrange alternative financing and liquidity
facilities, as well as other strategic options.

The negotiations with the lenders under the Revolving Credit
Facility have not been successful (despite the Company having
reached an agreement for crude oil supply) and they have served
notices of acceleration, commenced enforcement actions and
appointed a receiver in respect of Petroplus Marketing AG's
assets in the UK.  Such acceleration constitutes an event of
default under the U$1.75 billion aggregate principal amount of
outstanding senior notes and convertible bonds of Petroplus
Finance Limited.  The primary goal of Petroplus' Board of
Directors is to ensure that operations are safely shut down and
to preserve value for all stakeholders.  The Board of Directors
has resolved to prepare for a filing for insolvency or
composition proceedings ("Nachlassstundung") in Switzerland and
will make the necessary filings as soon as possible.  Similar
steps are being taken by Petroplus subsidiaries in various
jurisdictions.  The filing of insolvency proceedings by any
entity that is a guarantor of the senior notes, including
Petroplus Holdings AG, Petroplus Refining and Marketing Ltd. and
Petroplus Holdings France SAS, will result in an automatic
acceleration of the senior notes.

Jean-Paul Vettier, Petroplus' Chief Executive Officer, said, "It
is unfortunate to have reached the point where the Executive
Committee and Board of Directors have to inform our employees,
shareholders, bondholders and other stakeholders about these
circumstances.  We have worked hard to avoid this outcome, but
were ultimately not able to come to an agreement with our lenders
to resolve these issues given the very tight and difficult
European credit and refining markets.  We are fully aware of the
impact that this will have on our workforce, their families and
the communities where we have operated our businesses."

Based in Zug, Switzerland, Petroplus Holdings AG is Europe's
largest independent oil refiner.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on Jan. 20,
2012, Standard & Poor's Ratings Services lowered its long-term
issuer credit ratings on Switzerland-based refiner Petroplus
Holding AG to 'CC' from 'CCC+'.  "At the same time, we lowered
our long-term issue ratings on senior unsecured notes totaling
US$1.6 billion and a US$150 million convertible bond issued by
finance subsidiary Petroplus Finance Ltd. (Bermuda) to 'C' from
'CCC'.  The recovery ratings of '5' on all rated instruments
remain unchanged," S&P said.


PETROPLUS HOLDINGS: Petit Couronne Plant Attracts Interest
----------------------------------------------------------
Tara Patel at Bloomberg News reports that Petroplus Holdings AG's
refinery at Petit Couronne in Normandy has received several
"technical visits" by parties that may be interested in taking
over the plant.

"There are signs that there could be interest," Bloomberg quotes
Yvon Scornet, a representative of the CGT labor union, as saying
on Tuesday before a meeting with French Industry Minister Eric
Besson.  Mr. Scornet, as cited by Bloomberg, said that workers at
the plant are blocking about EUR200 million (US$260 million)
worth of refined products as a "guarantee" that they will be
paid.

Mr. Scornet said that Petit Couronne supplied oil products for
the French market to Royal Dutch Shell Plc, which sold Petroplus
the plant in 2008, Bloomberg notes.  He said that the refined
products stored at the site are the union's only bargaining chip
to ensure workers get paid in the coming months, adding that
employees would welcome investors from countries such as
Azerbaijan, Brazil and Qatar which have hydrocarbon wealth and
little or no crude-processing capacity, Bloomberg relates.

About 550 jobs at Petit Couronne are at risk at a politically-
sensitive time ahead of the April, May two-round presidential
elections in France, Bloomberg states.  The halt is the fourth
suspension in two years and reflects Europe's declining refining
profits, Bloomberg says.  Union workers have said that the French
site has lost money for the past three years, union workers,
Bloomberg recounts.

As reported by the Troubled Company Reporter-Europe on Jan. 25,
2012, Petroplus Holdings AG disclosed that the company and its
subsidiaries received notices of acceleration on Monday from the
lenders under its Revolving Credit Facility.  During the past
several weeks, Petroplus has been negotiating with these lenders
to reopen credit lines needed to maintain operations and meet
financial obligations.  In addition, the Company has been
seeking to arrange alternative financing and liquidity
facilities, as well as other strategic options.

The negotiations with the lenders under the Revolving Credit
Facility have not been successful (despite the Company having
reached an agreement for crude oil supply) and they have served
notices of acceleration, commenced enforcement actions and
appointed a receiver in respect of Petroplus Marketing AG's
assets in the UK.  Such acceleration constitutes an event of
default under the U$1.75 billion aggregate principal amount of
outstanding senior notes and convertible bonds of Petroplus
Finance Limited.  The primary goal of Petroplus' Board of
Directors is to ensure that operations are safely shut down and
to preserve value for all stakeholders.  The Board of Directors
has resolved to prepare for a filing for insolvency or
composition proceedings ("Nachlassstundung") in Switzerland and
will make the necessary filings as soon as possible.  Similar
steps are being taken by Petroplus subsidiaries in various
jurisdictions.  The filing of insolvency proceedings by any
entity that is a guarantor of the senior notes, including
Petroplus Holdings AG, Petroplus Refining and Marketing Ltd. and
Petroplus Holdings France SAS, will result in an automatic
acceleration of the senior notes.

Jean-Paul Vettier, Petroplus' Chief Executive Officer, said, "It
is unfortunate to have reached the point where the Executive
Committee and Board of Directors have to inform our employees,
shareholders, bondholders and other stakeholders about these
circumstances.  We have worked hard to avoid this
outcome, but were ultimately not able to come to an agreement
with our lenders to resolve these issues given the very tight and
difficult European credit and refining markets.  We are fully
aware of the impact that this will have on our workforce, their
families and the communities where we have operated our
businesses."

Based in Zug, Switzerland, Petroplus Holdings AG is Europe's
largest independent oil refiner.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on Jan. 20,
2012, Standard & Poor's Ratings Services lowered its long-term
issuer credit ratings on Switzerland-based refiner Petroplus
Holding AG to 'CC' from 'CCC+'.  "At the same time, we lowered
our long-term issue ratings on senior unsecured notes totaling
US$1.6 billion and a US$150 million convertible bond issued by
finance subsidiary Petroplus Finance Ltd. (Bermuda) to 'C' from
'CCC'.  The recovery ratings of '5' on all rated instruments
remain unchanged," S&P said.


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


RODOVID BANK: Moody's Withdraws 'Caa2' Deposit Ratings
------------------------------------------------------
Moody's Investors Service has withdrawn all ratings of Rodovid
Bank (Ukraine) for business reasons. At the time of withdrawal,
Rodovid Bank's ratings were as follows: long-term local and
foreign currency deposit ratings of Caa2 with developing outlook,
short-term local and foreign currency ratings of Not Prime, Bank
Financial Strength Rating (BFSR) of E with stable outlook, and
B3.ua National Scale Rating (NSR) with no specific outlook.

Ratings Rationale

Moody's has withdrawn the rating for its own business reasons.

Headquartered in Kiev, Ukraine, Rodovid Bank reported total
assets of UAH10.48 billion (US$1.3 billion) and total equity of
UAH1.15 billion (US$143 million) in accordance with Ukrainian
Accounting Standards at year-end 2010.

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 with 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 published in March 2011 entitled "Mapping
Moody's National Scale Ratings to Global Scale Ratings".


UKRSIBBANK: Moody's Confirms Ba2 Deposit Rating, Outlook Negative
-----------------------------------------------------------------
Moody's Investors Service has confirmed UkrSibbank's Ba2 long-
term local currency deposit rating and its Aa1.ua national scale
rating. The Ba2 local currency deposit rating carries a negative
outlook. The bank is headquartered in Kiev, Ukraine.

UkrSibbank's E+ standalone bank financial strength rating (BFSR)
-- which maps to B2 on the long-term scale -- as well as its B3
foreign currency deposit rating are unaffected by this rating
action. The outlook on the BFSR is stable, while the outlook on
the B3 foreign currency deposit rating is negative driven by the
negative outlook on Ukraine's foreign currency deposit ceiling.

Ratings Rationale

The rating action concludes Moody's review for downgrade of
UkrSibbank's deposit rating initiated on December 14, 2011 to
reassess parental support probability from UkrSibbank's
controlling shareholder BNP Paribas.

While Moody's continues to incorporate parental support in
UkrSibbank's deposit rating, the level of this support could be
revised downwards in the next 12 to 18 months as reflected in the
negative outlook on the bank's local-currency deposit rating.
Such a downward revision of parental support may materialize if
the rating agency considers that UkrSibbank's strategic
importance to its parent has diminished. In response to the
negative pressure on the parent bank's financial fundamentals,
BNP Paribas, like many other Western European banks, may adapt
defensive strategies and retrench closer to national borders
which, in turn, may also affect its willingness to provide
support.

Moody's observes that such considerations may shift the parent's
assessment of its cross-border exposures and its willingness to
commit financial and managerial resources to its foreign
subsidiaries.

Methodologies Used

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

Headquartered in Kiev, Ukraine, UkrSibbank reported total assets
and equity of UAH42.2 billion (US$5.3 billion) and UAH3.6 billion
(US$455 million) respectively, in accordance with its regulatory
financial statements, at end-Q3 2011.

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 with 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 published in March 2011 entitled "Mapping
Moody's National Scale Ratings to Global Scale Ratings".


* CITY OF KHARKOV: Fitch Rates UAH99.5-Mil. Domestic Bonds at 'B'
-----------------------------------------------------------------
Fitch Ratings has assigned the City of Kharkov's UAH99.5 million
domestic bonds issue (UA4000131346), due on December 8, 2014, a
final Long-term local currency rating of 'B' and a National Long-
term rating of 'AA-(ukr)'.

The city's Long-term foreign and local currency ratings are both
'B' with a Stable Outlook.  The city has a Short-term foreign
currency rating of 'B', and a National Long-term rating of 'AA-
(ukr)' with a Stable Outlook.

The bond issue has 12 quarterly interest payment periods with a
flat 15% interest rate.  The proceeds from the issue will be used
to fund capital expenditure related to the EURO 2012 football
championship being hosted in the city.


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


CEVA GROUP: Moody's Assigns (P)Ba3 Rating to US$300-Mil Sr. Notes
-----------------------------------------------------------------
Moody's Investors Service assigned a (P)Ba3 rating to CEVA Group
Plc's new US$300 million senior secured notes due 2017, and a
(P)Caa2 rating to its new US$525 million senior notes due 2020.
Moody's also placed on review for upgrade CEVA's Caa1 corporate
family rating (CFR) and probability of default rating (PDR), as
well as the ratings on the senior secured bank and revolving
facilities, senior secured notes due 2017, priority and junior
priority lien notes due 2016 and 2018, senior unsecured notes due
2014 and 2018 and senior subordinated notes due 2016 and 2018.

Moody's issues provisional ratings in advance of the final sale
of securities. Upon closing of the transaction and a conclusive
review of the final documentation, Moody's will endeavor to
assign definitive ratings. A definitive rating may differ from a
provisional rating.

Ratings Rationale

The rating actions follow the announcement by CEVA of a planned
debt refinancing and exchange. This comprises the issuance of the
new notes, together with the proposed exchange of certain debt
held by CEVA's holding company's (CEVA Investments Ltd) main
shareholder Apollo. As part of the Apollo debt exchange, US$140
million of senior notes due 2020 (on top of the US$525 million)
will be issued to Apollo in exchange for existing debt due 2014
and 2016, and Apollo will also exchange over EUR860 million of
debt for equity, as discussed below.

The new notes will be used to refinance existing CEVA
indebtedness; whilst Moody's understands that the debt exchange
by Apollo is intended to reduce CEVA's overall indebtedness. The
proposed transactions are intended to result in the repayment of
the senior secured bank facility due 2013, the senior unsecured
notes due 2014, the senior subordinated notes due 2016 and the
senior unsecured loan due 2015.

Subject to the debt exchange proceeding as outlined, Moody's
currently anticipates upgrading CEVA's CFR and PDR by 1 notch to
B3. The ratings of existing debt will be adjusted in line with
Moody's loss-given default approach to the ultimate capital
structure, depending on the amounts of new notes and also debt
retired.

The proposed debt exchange includes EUR533 million of CEVA
indebtedness due in 2018 to be exchanged for new equity in CEVA
Investments Ltd ("CIL"). Moody's understands that Apollo will
exchange CEVA debt -- which will be retired - for equity in CIL
that will be gifted as a capital contribution, which will not
create any ongoing obligation from the restricted group. The
review for upgrade will consider the extent of deleveraging of
the business post the potential conversion of EUR533 million in
CEVA's debt (as well as EUR355 million of debt outside the CEVA
restricted group), all held by the shareholder Apollo into
preferred equity in CIL, a holding company above the restricted
group. Furthermore, it will consider potential improvements in
the liquidity profile after the refinancing of approximately
EUR720 million in near term maturities associated with the
issuance of the new notes and the potential increase in the
Revolving Credit Facility (RCF) by EUR100 million to EUR179
million, which is also conditional upon the transaction.

The (P)Ba3 and (P)Caa2 ratings of the new notes are based on
Moody's assumption of issuance levels of about US$300 million
senior secured notes and US$665 million of unsecured notes
(US$525 million of unsecured notes issued to investors and
approximately US$140 million issued to Apollo as part of a
private exchange). Moody's notes that these ratings are sensitive
to final amounts of each tranche actually issued.

Moody's currently anticipates that CEVA's CFR and PDR will be at
the same level, assuming an expected family recovery rate of 50%.
The (P)Ba3 rating on the new first lien secured Notes reflects
that they will rank ahead of over EUR1 billion in financial debt.
The (P)Caa2 rating on the new unsecured Notes, two notches below
the CFR, reflects the fact that they will rank behind over EUR1.5
billion in financial debt and that the new capital structure will
have a higher proportion of secured debt after the proposed
transaction given the reduction in unsecured debt.

The new instruments will be issued at the same level, CEVA Group
plc, and guaranteed by the same subsidiaries that guarantee the
senior secured credit facilities. In total, the guarantors will
represent 59% of the group's aggregate revenues and 53% of its
aggregate EBITDA for the year ended December 2010.

CEVA'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 CEVA's core industry and
believes CEVA's ratings are comparable to those of other issuers
with similar credit risk. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in
the U.S., Canada and EMEA published in June 2009.


ESSENDEN: Enters Into CVA Deal with Creditors
---------------------------------------------
Manchester Evening News reports that three Tenpin bowling sites
in the north west are due to close after its parent company,
Essenden, entered into a compulsory voluntary arrangement with
its creditors.

The sites that will be affected are those at Pilsworth Industrial
Estate in Bury, Grand Central Station Leisure Park in Stockport
and the Greyhound Leisure Park in Liverpool, MEN discloses.  They
will close by the end of February affecting around 60 jobs if the
landlords are unable to find new operators for the premises, MEN
notes.

Tenpin has also entered into an arrangement with the landlord at
Chester, another site subject to the CVA, to continue operating
the site at Greyhound Leisure Park on revised terms, MEN
discloses.  A further site in Sunderland has been surrendered
back to the landlords, MEN says.

Essenden's bowling business, which is the second largest bowling
operator in the UK with an approximate 20% share of the market
and 37 sites, said that a successful implementation of the CVA,
which it enforced in September 2011, has enabled the business to
remove its loss making sites, MEN relates.


FOTEK PORTRAITS: Ceases Trading; To Appoint Liquidator
------------------------------------------------------
creditman.biz reports that the director of Fotek Portraits Ltd
has instructed PKF Accountants & business advisers to assist him
with placing the Company into Creditors' Voluntary Liquidation.
Fotek Portraits ceased trading last week, the report says.

creditman.biz says the director has convened meetings of Fotek
Portraits' members and creditors with a view to placing the
company into liquidation on Jan. 31, 2012.  Once appointed, the
report notes, liquidators will endeavour to secure a prompt sale
of the company's business and assets in order to maximise the
chances of a purchaser honouring existing bookings.

"We realise that many schools will be concerned by Fotek
Portraits' demise and that some are owed money by the company,"
the report quotes Brian Hamblin, a partner at the Nottingham
office of PKF, as saying.

"It is anticipated that the liquidators will look to find a
purchaser for the business, goodwill and assets, who will honour
all of the bookings that have already been made and to maintain
the relationships that Fotek established over many years with
thousands of schools across the country."

Swindon-based Fotek Portraits Ltd is a photography company
specialising in school pictures.


MISSOURI TOPCO: Moody's Lowers Corporate Family Rating to 'B3'
--------------------------------------------------------------
Moody's Investors Service has downgraded to B3 from B2 the
corporate family rating (CFR) and probability of default rating
(PDR) of Missouri TopCo Limited (Matalan), following the further
downward revision of the company's EBITDA guidance announced at
the time of its third-quarter results publication for FYE
February 2012. Concurrently, Moody's has downgraded Matalan
Finance Plc's senior secured rating to B1 with a loss given
default assessment of 2 (LGD2) from Ba3, and its senior unsecured
rating to Caa2 (LGD5) from Caa1. The outlook on all these ratings
is stable.

Ratings Rationale

The rating action reflects the continuing pressure on Matalan's
earnings and Moody's view that the company's key metrics, as
adjusted by the rating agency, are no longer commensurate with a
B2 rating, notably that gross leverage should not exceed 6.5x. At
the time of its third-quarter results publication, the company
again revised its guidance for EBITDA, down to the GBP90-95
million range compared with the GBP100-GBP110 million range at
the previous quarter.

"For the 12 months up to November 2011, we estimate Matalan's
debt/EBITDA to be 6.9x, which we expect will increase further
towards the end of the current fiscal year, based on current
guidance," explains Richard Morawetz, a Moody's Vice President
and lead analyst for Matalan.

"We also note the reduced headroom under Matalan's financial
covenants and the increased likelihood that at year-end, it will
breach one of its revolving credit facility (RCF) covenants;
however, we acknowledge that Matalan has engaged in discussions
with its two relationship banks to request a covenant reset,"
explains Mr. Morawetz.

While Matalan posted strong like-for-like sales growth of 9.9%
for the five weeks to December 31, 2011, the promotional
markdown, higher input costs and the VAT increase in January 2011
have continued to exert significant pressure on the company's
margins, resulting in the downward revision of its EBITDA
guidance. Matalan now projects that its fourth quarter EBITDA
will be between GBP7 and GBP12 million, a sharp fall from the
previous year fourth quarter of GBP18.7 million.

Moody's believes that the more recent stability in some commodity
prices should, if sustained, ease cost pressure on Matalan;
however, Moody's also believes that this will only materialize in
the second half of FY2013. Moody's notes Matalan's stated
intention to reduce its capital spending (now targeted at
approximately GBP20 million in FY2012 and GBP10-GBP15 million in
FY2013) and that it expects to end the financial year with around
GBP80 million in cash.

Rationale for the Stable Outlook

The stable outlook reflects Moody's expectation that (i) the
operating performance will stabilize within the next quarters,
helped by reduced input costs in the second half of FY2013 and
(ii) the company will obtain a reset of its covenants with
adequate headroom, therefore maintaining a satisfactory liquidity
profile.

What Could Change the Rating Up/Down

Additional negative pressure could be exerted on Matalan's
ratings if (i) it were to report a further deterioration in its
operational performance beyond current guidance; (ii) its free
cash flow were to turn negative; or (iii) its liquidity were to
weaken, as a result, for example, of the company not retaining
access to its RCF.

Nevertheless, Moody's considers that positive pressure could
develop if Matalan were to show a sustainable improvement in its
earnings trend and if its ratio of debt/EBITDA were to fall below
6x, with an improved liquidity profile.

Principal Methodology

The principal methodology used in rating Missouri Topco Ltd was
the Global Retail Industry Methodology published in June 2011.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.

Headquartered in Skelmersdale, UK, Missouri TopCo Limited is the
ultimate holding company that owns Matalan Retail Limited -- the
principal operating subsidiary of the group -- a leading out-of-
town value clothing retailer with total revenue of GBP1.1 billion
in the financial year ending February 26, 2011.


MISSOURI TOPCO: S&P Affirms 'B' Corp. Credit Rating; Outlook Neg.
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Missouri TopCo Ltd., the parent company of U.K.-based clothing
retailer Matalan, to negative from stable. "At the same time, we
affirmed our 'B' long-term corporate credit rating on Missouri
TopCo," S&P said.

"In addition, we affirmed our 'BB-' issue rating on the GBP250
million senior secured notes issued by Matalan Finance Ltd. and
our 'CCC+' issue rating on Matalan Finance's GBP225 million
senior unsecured notes," S&P said.

"The outlook revision reflects further deterioration in Matalan's
operating performance and credit metrics in the context of a
challenging macroeconomic environment for U.K. retailers.
Matalan's earnings have been impaired by pressure on gross
margins from strong competition, discounting of stock to maintain
sales, and the impact that higher cotton prices in 2010 and 2011
have had on Matalan's input costs," S&P said.

According to Matalan's financial results for the nine months to
Nov. 27, 2011, last-12-month reported EBITDA has fallen 37% to
GBP101.6 million, from GBP160.1 million in the corresponding
period the previous year. Top-line revenues have remained stable
thanks to promotional activities. However, Matalan's strategy
of maintaining sales, preserving cash flow, and reducing
inventory has been at the expense of profits.

"For the financial year ending Feb. 28, 2012, we anticipate
revenues of about GBP1.1 billion and reported EBITDA of about
GBP90 million. We forecast that Standard & Poor's-adjusted debt
to EBITDA will be about 6.9x, up from 5.3x a year earlier, and
commensurate with our assessment of a 'highly leveraged'
financial risk profile. Adjusted EBITDA interest coverage will be
about 1.5x, and on the borderline of our guidance for the current
rating. As a mitigating factor, free operating cash flow (FOCF)
remains positive, and Matalan will have about GBP80 million cash
on hand at the end of financial 2012," S&P said.

"In our base-case scenario for Matalan, we foresee the tough
environment for U.K. retailers continuing throughout 2012. We
think that top-line sales are likely to remain flat and that
gross margins will remain under pressure from strong competition.
In the second half of the financial year ending Feb. 28, 2013, we
think there is likely to be a gradual improvement in gross
margins as the fall in cotton prices from their peak in March
2011 takes affect. We forecast a slight improvement in reported
EBITDA to about GBP100 million, but with no material improvement
in credit metrics. Downside risks remain if operating performance
does not stabilize against a difficult economic backdrop for U.K.
consumers," S&P said.

"In our view, any further deterioration in earnings may impair
Matalan's financial flexibility, and its debt servicing, due to
its highly leveraged capital structure. This is in the context of
a challenging operating environment for U.K. retailers," S&P
said.

"We could lower the rating if Matalan's operating performance
deteriorates further or if its liquidity position weakens. This
could primarily result from: reported EBITDA falling to less than
GBP90 million, with adjusted EBITDA interest coverage of
sustainably less than 1.5x; or an inability to renegotiate the
RCF with adequate (15%-30%) headroom under its financial
covenants," S&P said.

"We could revise the outlook to stable if margins and earnings
improve on the back of low-single-digit revenue growth and lower
input costs. A revision of the outlook to stable depends on
Matalan maintaining adjusted EBITDA interest coverage of more
than 1.5x," S&P said.


PREMIER FOODS: S&P Lowers Corporate Credit Rating to 'B+'
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
corporate credit rating on U.K. packaged food producer Premier
Foods PLC to 'B+' from 'BB-'. "At the same time, we kept the
rating on CreditWatch with negative implications, where it was
placed on Oct. 18, 2011," S&P said.

"The downgrade reflects our view of Premier Foods' deteriorating
operating performance compared to our previous forecasts. Premier
Foods' operating performance in the first quarter of 2011 was
impaired by a delay in achieving price increases in an
inflationary environment. Additionally, Premier Foods'
sensitivity to actions by retailers in response to these price
increases led to volume pressure in the second and third quarters
of 2011. This sensitivity was greater than we had originally
anticipated," S&P said.

"We expect EBITDA for the year ended Dec. 31, 2011, to be GBP20
million-GBP30 million lower than our previous forecast of GBP252
million. This translates into a deterioration in Premier Foods'
debt protection metrics to below the level that we consider
commensurate with the 'BB-' rating. Specifically, we forecast
that Standard & Poor's-adjusted debt to EBITDA will be well above
5x in the year ended Dec. 31, 2011, which we consider
commensurate with a 'highly leveraged' financial risk profile and
consequently with a 'B+' rating. Consequently, we have revised
our assessment of Premier Food's financial risk profile to
'highly leveraged' from 'aggressive,'" S&P said.

Like other market participants, Premier Foods faced an increase
in commodity costs of approximately GBP150 million for the full-
year 2011, equivalent to a 14% increase. This resulted in
significant margin pressure in the first half of 2011. For the 12
months ended June 25, 2011, funds from operations (FFO) stood at
GBP170 million, mainly due to a reduction in trading profit in
the first half of 2011.

"As a result of operating developments since the start of 2011,
Premier Foods' debt-reduction program is proceeding more slowly
than in our original forecast. In 2011, we anticipated that
Premier Foods would be able to improve its debt metrics
materially with noncore business disposals, and by repaying debt
with free operating cash flow. However, increasing commodity
prices materially affected cash flow generation in 2011," S&P
said.

"The ongoing CreditWatch placement reflects our view of the risks
associated with covenant renegotiations under Premier Foods'
existing banking facilities. We aim to review the CreditWatch
placement within the next three months, depending on the timing
of the outcome of management's negotiations with its banks for a
covenant reset," S&P said.

"We could lower the rating if Premier Foods were unable to reset
its covenants. Additional pressure on the rating could stem from
further deterioration in operating performance, which could
result in Premier Foods being unable to maintain its debt
protection metrics in line with the 'B+' rating," S&P said.

"We could affirm the rating if Premier Foods were able to resolve
its covenant issues. An affirmation would also depend on Premier
Foods' ability to generate operating cash flow to maintain the
stability of its capital structure over the medium term,
alongside adequate covenant headroom. We consider adjusted
interest coverage of close to 2x to be commensurate with the 'B+'
rating," S&P said.


YELL GROUP: S&P Raises Corp. Credit Rating to 'B-'; Outlook Neg.
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term corporate
credit rating on U.K.-based classified directories publisher Yell
Group PLC to 'B-' from 'SD' (Selective Default). The outlook is
negative.

"The upgrade reflects our reassessment of Yell's credit profile
after the completion of its first subpar debt repurchase on
Jan. 19, 2012. The company's amended and restated 2009 credit
agreement allows for ongoing subpar repurchases of its term debt
until 2014 as long as certain conditions are met. About GBP110
million of on-balance-sheet cash is still available for
repurchasing debt below par, and our credit assessment assumes
that the company will use most or all of its current availability
for further subpar repurchases. The term loan is trading at a
significant discount to par value, which in our opinion provides
Yell with an economic incentive to pursue further subpar
buybacks," S&P said.

"The 'B-' corporate credit rating reflects our view that Yell's
business will remain under pressure. We consider that there is a
significant risk of secular declines in the print directories
sector, as well as increased competition as small business
advertising expands across a greater number of online marketing
channels. We see increased business risk as the company strives
to contain the pressure on margins that will likely result from
the transition to operating in a highly fragmented, competitive,
and rapidly evolving market," S&P said.

"The rating also reflects our view that Yell is likely to use
most or all of its current availability (approximately GBP110
million of cash) for debt repurchases below par. That said, We
will evaluate separately any intention to use future possible
additional availability (beyond the current GBP110 million cash)
for subpar repurchases and distressed transactions and, based on
our criteria, we could possibly treat these transactions as
tantamount to a default," S&P said.

"In our view, Yell's declining business fundamentals could hinder
the refinancing of its 2014 debt maturity," S&P said.

"We could lower the rating if it appears likely that the declines
in advertising sales and profits are not moderating, further
hampering the company's ability to refinance its debt prior to
maturity. Equally, we could lower the rating if Yell fails to
take tangible steps to address the upcoming refinancing. We could
also lower the rating if we become convinced that the company's
headroom under its most stringent financial covenant could
tighten to less than 15%, as a result of continued significant
EBITDA declines in 2013. Similarly, any plans for future debt-
restructuring measures, other than the envisaged subpar debt
repurchases using the currently available cash of GBP110 million,
would lead us to lower the rating," S&P said.

A revision of the outlook to stable would likely involve Yell
returning to marked nominal EBITDA growth, refinancing its 2014
debt maturity in a timely manner, and maintaining an "adequate"
liquidity profile (including at least 15% headroom under its
maintenance financial covenants). "We believe this scenario would
entail an increase in digital revenues, as we anticipate that
trends in print advertising sales at SMEs will remain under
significant structural pressure. At this stage, we deem the
chances of an upgrade in the short term to be remote," S&P said.


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


* BOOK REVIEW: Inside Investment Banking, Second Edition
--------------------------------------------------------
Author:  Ernest Bloch
Publisher: BeardBooks,
Softcover: 430 pages
List Price: $34.95
Review by Henry Berry

Even though Bloch states that "no last word may ever be written
about the investment banking industry," he nonetheless has
written a timely, definitive book on the subject.

Bloch wrote Inside Investment Banking book after discovering that
no textbook on the subject was available when he began teaching a
course on investment banking.  Bloch's book is like a textbook,
though one not meant to be restricted to classroom use.  It's a
complete, knowledgeable study of the structure and operations of
the field of investment banking.  With a long career in the
field, including work at the Federal Reserve Bank of New York,
Bloch has the background for writing the book.  He sought the
input of many of his friends and contacts in investment banking
for material as well as for critical guidance to put together a
text that would stand the test of time.

While giving a nod to today's heightened interest in the
innovative securities that receive the most attention in the
popular media, Inside Investment Banking concentrates for the
most part on the unchanging elements of the field.  The book
takes a subject that can appear mystifying to the average person
and makes it understandable by concentrating on its central
processes, institutional forms, and permanent aims.  The author
shows how all aspects of the complex and ever-changing field of
investment banking, including its most misunderstood topic of
innovative securities, leads to a "financial ecology" which
benefits business organizations, individual investors in general,
and the economy as a whole.  "[T]he marketplace for innovative
securities becomes, because of its imitators, a systematic
mechanism for spreading risk and improving efficiency for market
makers and investors," says Bloch..

For example, Bloch takes the reader through investment banking's
"market making" which continually adapts to changing economic
circumstances to attract the interest of investors.  In doing so,
he covers the technical subject of arbitrage, the role of the
venture capitalist, and the purpose of initial public offerings,
among other matters.  In addition to describing and explaining
the abiding basics of the field, Bloch also takes up issues
regarding policy (for example, full disclosure and government
regulation) that have arisen from the changes in the field and
its enhanced visibility with the public.  In dealing with these
issues, which are to a large degree social issues, and similar
topics which inherently have no final resolution, Bloch deals
indirectly with criticisms the field has come under in recent
years.

Bloch cites the familiar refrain "the more things change, the
more they remain the same" and then shows how this applies to
investment banking.  With deregulation in the banking industry,
globalization, mergers among leading investment firms, and the
growing number of individuals researching and trading stocks on
their own, there is the appearance of sweeping change in
investment banking.  However, as Inside Investment Banking shows,
underlying these surface changes is the efficiency of the market.

Anyone looking for an authoritative work covering in depth the
fundamentals of the field while reflecting both the interest and
concerns about this central field in the contemporary economy
should look to Bloch's Inside Investment Banking.

After time as an economist with the Federal Reserve Bank of New
York, Ernest Bloch was a Professor of Finance at the Stern School
of Business at New York University.


                            *********

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, Ivy B. Magdadaro, Frauline S.
Abangan and Peter A. Chapman, Editors.

Copyright 2012.  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 Peter Chapman at 240/629-3300.


                 * * * End of Transmission * * *