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

                           E U R O P E

              Friday, May 18, 2012, Vol. 13, No. 99

                            Headlines



A Z E R B A I J A N

AGBANK: S&P Raises Long-Term Counterparty Credit Rating to 'B'
MUGANBANK OJSC: S&P Raises Counterparty Credit Rating to 'B-'


B E L A R U S

BELARUSIAN NATIONAL: S&P Alters Rating Outlook to Stable


G E O R G I A

BANK OF GEORGIA: Fitch Rates Senior Fixed Note Issue 'BB-(exp)'


G E R M A N Y

GROHE HOLDING: S&P Rates EUR375MM Sr. Secured Term Loan 'B-'
TUI AG: S&P Raises Rating on EUR300MM Perpetual Notes to 'CCC'


G R E E C E

* GREECE: Fitch Slashes Long-Term Issuer Default Ratings to 'CCC'


I R E L A N D

EIRCOM GROUP: Examiner Says Losses to Double Under Whampoa Bid
IRISH LIFE: S&P Keeps 'BB-' Counterparty Rating on Watch Negative
VERSAILLES CLO I: S&P Raises Rating on Class E Notes to 'BB-'


I T A L Y

EDISON SPA: S&P Affirms 'BB+/B' Corp. Credit Ratings; Off Watch
UNIONE DI BANCHE: S&P Reinstates 'BB+' Ratings on Preferred Stock
* ITALY: Moody's Lowers Four Structured Finance Transactions


L U X E M B O U R G

MONIER GROUP: S&P Affirms 'B-' Long-Term Corp. Credit Rating


N E T H E R L A N D S

ASM INTERNATIONAL: S&P Affirms Corporate Credit Rating at 'BB-'
DUCHESS VII: S&P Raises Rating on Class D Notes to 'BB'


P O L A N D

CENTRAL EUROPEAN: Moody's Maintains Review on 'Caa1' Ratings
DROMOST SP: Creditor Files Bankruptcy Petition


R U S S I A

DERZHAVA BANK: Moody's Assigns 'B3/E+' Ratings; Outlook Stable
MAGNITOGORSK IRON: Fitch Revises Outlook Rating to Negative
SEVERSTAL OAO: Fitch Affirms BB- Long-Term Issuer Default Rating


S P A I N

FTPYME TDA: Fitch Affirms Rating on EUR4.5-Mil. Notes at 'CCCsf'
NOSTRA EMPRESAS 1: Fitch Hikes Series D Notes Rating From 'BB-sf'


U K R A I N E

AGROTON PUBLIC: S&P Lowers Corporate Credit Rating to 'CCC+'
CIMBER STERLING: Managers to Buy Core Business


U N I T E D   K I N G D O M

ALBURN REAL ESTATE: Rothschild to Place Firm Into Receivership
ALPHA TOPCO: S&P Puts 'B+' Corp. Credit Rating on Watch Positive
EASTMAN KODAK: Sells British Special Effects Business
ICICI BANK: Moody's Downgrades Subordinated Rating to 'Ba1'
LOLA CARS: In Receivership Due to Financial Difficulties

PETROPLUS HOLDINGS: Deal on Coryton's Future Expected in 10 Days
RANGERS FOOTBALL: Livingston Plans to Sue SFA Over Demotion
ROYAL BANK: Fitch Upgrades Rating on Tier 1 Securities to 'B+'
GEORGIAN OIL: Fitch Assigns 'BB-' Rating to $250-Mil. Bonds
SOUTHERN PACIFIC 05-1: S&P Lowers Rating on Class E Notes to 'B-'


X X X X X X X X

* S&P Lowers Ratings on 12 Tranches From European CDOs to 'D'
* BOOK REVIEW: Leveraged Management Buyouts


                            *********


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A Z E R B A I J A N
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AGBANK: S&P Raises Long-Term Counterparty Credit Rating to 'B'
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term
counterparty credit rating on Azerbaijan-based AGBank to 'B' from
'B-'. The outlook is stable. "At the same time, we affirmed the
'C' short-term ratings," S&P said.

"The upgrade follows an upward revision of our Banking Industry
Country Risk Assessment (BICRA) on Azerbaijan to group '8' from
group '9', and a revision of our BICRA subcomponents, whereby the
economic risk score was raised to '7' from '8' and the industry
risk score to '8' from '9'," S&P said.

"Under our bank criteria, we use our BICRA economic risk and
industry risk scores to determine a bank's anchor, the starting
point in assigning an issuer credit rating. The anchor for a
commercial bank operating only in Azerbaijan is now 'bb-'," S&P
said.

"In light of this, we have revised our assessment of AGBank's
stand-alone credit profile (SACP) to 'b' from 'b-'," S&P said.

"Our ratings on AGBank continue to reflect the bank's 'moderate'
business position, 'moderate' capital and earnings, 'moderate'
risk position, 'average' funding, and 'adequate' liquidity, as
our criteria define these terms," S&P said.

"The long-term rating on AGBank is equal to the bank's SACP,
reflecting our view of the bank's 'low' systemic importance in
the Azerbaijani banking system. In addition, we do not factor in
any uplift for exceptional shareholder support," S&P said.

"The stable outlook reflects our expectation that the bank will
gradually reduce its problem loans, while increasing provisioning
levels and maintaining current levels of capitalization and
profitability," S&P said.


MUGANBANK OJSC: S&P Raises Counterparty Credit Rating to 'B-'
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term
counterparty credit rating on Azerbaijan-based Muganbank OJSC to
'B-' from 'CCC+'. "At the same time, we affirmed the 'C' short-
term rating. The outlook is stable," S&P said.

"The upgrade follows the revision of our Banking Industry Country
Risk Assessment (BICRA) on Azerbaijan to group '8' from group
'9', and the revision of our subcomponents of the BICRA on
Azerbaijan--economic risk score to '7' from '8' and the industry
risk score to '8' from '9'," S&P said.

"We have consequently revised our assessment of Muganbank's
stand-alone credit profile (SACP) to 'b-' from 'ccc+' owing to
the revision of the anchor for banks operating in Azerbaijan to
'bb-' from 'b+' as a result of our revised BICRA," S&P said.

"Standard & Poor's bases its ratings on Muganbank on the bank's
'weak' business position, 'moderate' capital and earnings,
'moderate' risk position, 'average' funding, and 'adequate'
liquidity, as our criteria define these terms," S&P said.

"The ratings on Muganbank are at the same level as its SACP,
because we assess the bank's systemic importance in Azerbaijan as
'low'. We do not give the ratings any uplift for extraordinary
shareholder support," S&P said.

"The stable outlook reflects our view that Muganbank's business
and financial profile will remain relatively unchanged over the
next 12 months. We expect lending growth to moderate to the same
level as the system average, supported by continued macroeconomic
growth in Azerbaijan. We expect that the RAC ratio before
adjustments will stay at about 7%, while funding and liquidity
should be supported by an inflow of deposits into Azerbaijan's
banking sector," S&P said.

"The possibility for a positive rating action is currently
remote; however, it could happen if Muganbank significantly
improves its business position, for example through a larger
franchise and decreased loan concentration," S&P said.

"The ratings incorporate the probability of a moderate weakening
of the bank's financial profile, although we could lower the
ratings if asset quality deteriorates sharply and drives
capitalization downward to the point where our RAC ratio before
adjustments would be lower than 5%. We would also consider a
negative rating action if the funding profile deteriorates
significantly, leading to depressed liquidity and loss of
confidence among depositors," S&P said.


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B E L A R U S
=============


BELARUSIAN NATIONAL: S&P Alters Rating Outlook to Stable
--------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Belarusian National Reinsurance Organization (Belarus Re) to
stable from negative. At the same time, the 'B-' long-term
counterparty credit and insurer financial strength ratings were
affirmed.

The outlook revision follows the similar rating action on the
Republic of Belarus (B-/Stable/C).

"We revised our outlook on Belarus Re to reflect our view that
there are signs of stabilization in the Belarusian economy due to
the liberalization of the exchange rate, decline in inflation,
and return of deposits to the banking system," S&P said.

"The ratings on Belarus Re continue to reflect industry and
country risk and the weak credit quality of its investment
portfolio. These risks are offset by adequate capitalization,
competitive advantages from its monopoly position in Belarus'
reinsurance market, significant regulatory authority stipulated
by legislation, and marginal operating results," S&P said.

"The ratings on Belarus Re reflect its stand-alone credit profile
only. In accordance with our criteria for government-related
entities (GREs), we assess the likelihood of timely and
sufficient extraordinary government support to Belarus Re as
'high'. This includes our view that Belarus Re plays an
'important' role in the Belarusian economy, holding a monopoly
position in Belarus' insurance market as the sole provider of
reinsurance protection. We also consider Belarus Re's link with
the Belarusian government as 'very strong' because the government
owns 100% of Belarus Re via the Belarusian Ministry of Finance.
However, we don't add any notches of uplift for the possibility
of extraordinary support from the government in times of
distress, because the long-term local currency sovereign credit
rating is no higher than Belarus Re's stand-alone credit
profile," S&P said.

"The ratings on Belarus Re are constrained by the sovereign
credit ratings on its country of domicile, in line with our
insurer country risk criteria. Our criteria use the long-term
local currency sovereign credit rating as a proxy for country
risk. The local currency sovereign credit rating on Belarus
limits the ratings on Belarus Re because the company's assets
include material amounts of domestic sovereign and bank debt, and
it has a largely domestic customer base," S&P said.

The stable outlook mirrors the outlook on Belarus.

"We do not envisage negative rating actions on Belarus Re, given
its current capitalization level and better underwriting results
than its regional peers. However, a negative rating action on
Belarus could trigger a similar rating action on Belarus Re," S&P
said.

"We view a positive rating action as unlikely within the next 12
months. However, we could raise the ratings on Belarus Re if we
were to raise the long-term local currency rating on Belarus,"
S&P said.

"We do not expect Belarus Re's GRE status to result in any
notches of support over the next 12 months, due to the low
sovereign rating," S&P said.


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G E O R G I A
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BANK OF GEORGIA: Fitch Rates Senior Fixed Note Issue 'BB-(exp)'
---------------------------------------------------------------
Fitch Ratings has assigned JSC Bank of Georgia's (BoG)
forthcoming senior fixed rate note issue an expected rating of
'BB-(exp)'.

The final rating will be contingent upon the receipt of final
documents conforming to information already received.

The proposed senior unsecured eurobonds will be issued directly
by BoG and listed in the UK.  Covenants in the terms and
conditions include a negative pledge in respect of the
subordination of holders of the bonds to 'new' creditors, as well
as clauses relating, among other things, to: business continuity;
mergers; the disposal of assets; changes of business;
transactions with affiliates; the payment of taxes; dividend
payments; indebtedness; and compliance with National Bank of
Georgia (NBG) prudential supervision ratios.  In addition, BoG is
required to maintain Basel I Tier 1 and total capital ratios of
8% and 12%, respectively.

The ratings of the senior notes are driven by BoG's Long-term
Issuer Default Rating (IDR) of 'BB-'/Stable.

BoG is the largest bank in Georgia with market shares of between
35% and 37% of total assets, loans and deposits as at end-2011,
according to NBG data.  The bank's strategic businesses include
retail and corporate banking and wealth management.  In addition,
BoG Group provides insurance and healthcare, affordable housing
and brokerage services throughout Georgia.  In February 2012 Bank
of Georgia Holdings plc, the 98.35% owner of BoG, listed on the
London Stock Exchange.


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


GROHE HOLDING: S&P Rates EUR375MM Sr. Secured Term Loan 'B-'
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' issue rating
to the proposed EUR375 million-equivalent senior secured term
loan (both U.S. dollar and euro denominated, with a split of at
least US$250 million and EUR100 million) to be issued by Germany-
based sanitary fittings manufacturer Grohe Holding GmbH (Grohe;
B-/Stable/--). "The recovery rating on the proposed loan is '3',
indicating our expectation of meaningful (50%-70%) recovery in
the event of a payment default," S&P said.

"At the same time, our 'B+' issue rating on Grohe's existing
EUR150 million super senior revolving credit facility (RCF) due
2016, our 'B-' issue rating on the existing EUR500 million senior
secured notes due 2017, and our 'CCC' issue rating on the
existing EUR335 million senior notes due 2014 (outstanding amount
expected to be at EUR260 million after the new issue) remain
unchanged," S&P said.

"This reflects our understanding that Grohe will use the proceeds
of the proposed term loan to fully repay the EUR300 million
existing senior secured FRNs due 2014 and to repay EUR75 million
of the senior notes maturing in 2014 (the outstanding amount will
be reduced from EUR335 million to EUR260 million)," S&P said.

                         RECOVERY ANALYSIS

"The proposed EUR375 million-equivalent senior secured term loan
will rank pari passu with the existing EUR500 million senior
secured notes due 2017. According to the intercreditor agreement,
the proposed term loan will rank senior to the existing senior
notes due 2014, but junior to the existing super senior RCF. The
proposed term loan is guaranteed and secured on the same basis as
the existing senior secured notes," S&P said.

"The lenders of the RCF, the existing EUR500 million senior
secured notes, and the proposed EUR375 million-equivalent senior
secured term loan have a first-lien claim over the assets (such
as bank accounts, inventory, real estate, trade receivables, and
intellectual property) of the main subsidiaries, excluding those
registered in France, Italy, Spain, Belgium, and Austria. The
lenders also hold pledges on the shares of the main subsidiaries.
The RCF lenders benefit from some additional guarantees from
Grohe, as well as from some Spanish and Italian subsidiaries,"
S&P said.

"The proposed term loan's documentation restricts, among other
things, Grohe's ability to raise additional debt, pay dividends,
sell certain assets, or merge with other entities. However, the
documentation for the proposed term loan allows Grohe to raise
new debt if the fixed-charge coverage ratio is greater than 2.0x
(compared with 2.13x pro forma for the refinancing). The
documentation allows the issue of additional secured debt if the
consolidated secured leverage ratio is less than 5.5x (compared
with 4.66x gross pro forma for the refinancing). Aside from these
conditions, the permitted liens covenant allows for liens
securing obligations of no more than EUR25 million in aggregate
at any time," S&P said.

"The proposed term loan benefits from a change-of-control clause
and a cross-default clause (for any unpaid amount of more than
EUR20 million), and will not have any financial maintenance
covenants. The documentation also permits Grohe to raise and draw
on a receivables securitization facility (not subject to the
consolidated secured leverage ratio), which we believe, if used,
would erode the enterprise value available for creditors at
default," S&P said.

"The documentation on the existing super senior RCF includes one
maintenance covenant (an EBITDA floor of EUR100 million). It also
contains a change-of-control clause and a springing maturity
clause allowing the RCF to be repaid three months before any
senior secured or unsecured notes mature," S&P said.

"The indenture governing the existing senior secured EUR500
million notes limits, among other things, Grohe's ability to
raise additional debt, pay dividends, sell certain assets, or
merge with other entities. The documentation also contains a
change-of-control clause," S&P said.

"The documentation for the existing EUR335 million senior notes
(to be reduced to EUR260 million after the transaction) contains
restrictions similar to the proposed term loan on additional
debt, dividend distributions, sales of assets, and mergers and
acquisitions. The documentation also includes an incurrence
covenant limiting the issue of additional debt if the
consolidated fixed-charge coverage ratio is less than 2x. Similar
to the documentation for the proposed term loan and EUR500
million senior secured notes, the documentation for the senior
unsecured notes contains a change-of-control clause," S&P said.

"We treat the proposed term loan and existing senior secured
notes as ranking pari passu with each other by virtue of their
shared security. However, the RCF ranks structurally and
contractually prior to the senior secured term loan and notes and
senior unsecured notes. We treat the proposed term loan and
existing senior secured notes as ranking prior to the existing
senior unsecured notes, as per the intercreditor agreement," S&P
said.

"To determine recoveries, we simulate a hypothetical default
scenario. Our default scenario is based on our assumption of a
prolonged and severe deterioration in the construction market and
a weak macroeconomic environment from 2012. Under this scenario,
we calculate that Grohe would default in 2014 when the senior
unsecured notes mature. At the point of default, our projections
show that EBITDA would decline to about EUR200 million before
restructuring costs, which have been substantial in recent
years," S&P said.

"Our estimate of the stressed enterprise value at default is
about EUR1.1 billion, translating into a stressed EBITDA multiple
of 5.5x, which reflects our view of the group's strong brand
recognition and value. We then deduct priority liabilities of
about EUR220 million, consisting of enforcement costs, pension
liabilities, and debt at the subsidiaries. We also deduct EUR195
million of value available to the debtholders. This takes into
account the value leakage caused by Grohe fully consolidating its
Chinese joint venture Joyou AG, of which it owns 35.8%," S&P
said.

"Assuming EUR154 million outstanding at default (including six
months of prepetition interest), the coverage for the super
senior RCF sits comfortably in the 90%-100% range. This
translates into a recovery rating of '1', indicating our
expectation of very high recovery for creditors in the event of
default. The residual enterprise value allows for meaningful
recovery in the 50%-70% range for the proposed EUR375 million-
equivalent senior secured term loan and EUR500 million senior
secured notes, which equates to a recovery rating of '3' on these
instruments. This leaves no value for the EUR335 million senior
notes (we anticipate that post transaction, an outstanding amount
of EUR260 million). We affirm a recovery rating of '6' to the
senior notes, indicating our expectation of negligible (0%-10%)
recovery prospects in the event of default," S&P said.

RATINGS LIST

New Rating

Grohe Holding GmbH
Senior Secured
  EUR375 mil fltg-rate nts*             B-
   Recovery Rating                      3

* Guaranteed by Grohe Beteiligungs GmbH


TUI AG: S&P Raises Rating on EUR300MM Perpetual Notes to 'CCC'
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its recovery rating on
TUI AG's EUR300 million perpetual notes to '5' from '6'. The
issue rating on these notes was raised to 'CCC' from 'CCC-'. The
'B-' corporate credit rating and stable outlook on TUI are not
affected by this action and remain unchanged. The issue rating on
TUI's unsecured debt was affirmed at 'B-' and the '3' recovery
rating on these notes is unchanged.

"Our revision of the recovery rating on the perpetual
subordinated notes reflects our expectation of higher recovery
prospects on the notes at the point of default, following some
recent debt repayments. Further, we expect that some of the cash
currently on balance sheet will be used to pay the upcoming debt
maturities," S&P said.

"The revision of the recovery rating resulted in our raising the
issue rating to 'CCC' from 'CCC-'," S&P said.

"The ratings on German tour operator TUI AG reflect our view of
the group's 'highly leveraged' financial risk profile and 'weak'
business risk profile," S&P said.

"The ratings are constrained by TUI's limited access to cash
flows of its fully consolidated subsidiary, TUI Travel PLC (not
rated), based on a 56% control of the voting rights despite a
legal ownership of only 35%. Exposure to the cyclical and low-
margin tourism industry, which is highly exposed to event risks,
is also a drag on the ratings," S&P said.

"TUI's market-leading position in European tourism and
geographically diverse sales only partly offset these weaknesses,
in our view," S&P said.

"The stable outlook reflects our view that TUI will be able to
maintain an 'adequate' liquidity profile over the medium term,
despite a potentially more difficult operating environment in
2012 and 2013. It also reflects our expectation that any material
acquisition would be conservatively financed," S&P said.

"We could lower the ratings if event risk or unexpected operating
shortfalls significantly impaired liquidity. The ratings could
also be lowered if a change in TUI's strategy led to a
significant releveraging of the company due to mergers and
acquisitions activity," S&P said.

"An upgrade is unlikely over the next 12 months, given TUI's
holding company status; limited access to operating cash flows;
and still high group leverage on a consolidated basis, which we
do not see falling below 6x on a sustainable basis," S&P said.


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G R E E C E
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* GREECE: Fitch Slashes Long-Term Issuer Default Ratings to 'CCC'
-----------------------------------------------------------------
Fitch Ratings has downgraded Greece's Long-term foreign and local
currency Issuer Default Ratings (IDRs) to 'CCC' from 'B-'. The
Short-term foreign currency IDR has also been downgraded to 'C'
from 'B'. At the same time, the agency has revised the Country
Ceiling to 'B-'.

The downgrade of Greece's sovereign ratings reflects the
heightened risk that Greece may not be able to sustain its
membership of Economic and Monetary Union (EMU). The strong
showing of 'anti-austerity' parties in the 6 May parliamentary
elections and subsequent failure to form a government underscores
the lack of public and political support for the EU-IMF EUR173bn
programme.

In the event that the new general elections scheduled for June 17
fail to produce a government with a mandate to continue with the
EU-IMF programme of fiscal austerity and structural reform, an
exit of Greece from EMU would be probable. A Greek exit would
likely result in widespread default on private sector as well as
sovereign euro-denominated obligations, despite a moderate
sovereign debt service burden following the restructuring of
Greek government bonds in March.

Fitch previously assigned a single 'AAA' Country Ceiling across
all Euro Area Member States (EAMS) reflecting the very low risk
of transfer and convertibility controls being imposed within EMU
and on euro-denominated debt. With exit from EMU a material and
rising risk, Fitch has revised the Country Ceiling to 'B-' for
Greece, which effectively imposes a cap on the ratings of all
issuers and transactions domiciled in Greece. In the event of a
Greek exit from EMU, Fitch would treat the forcible re-
denomination of sovereign and private sector debt into a new
Greek currency as a default event in line with its Distressed
Debt Exchange rating criteria.

As Fitch previously commented (see 'Re-Run Elections Would Be
Critical for Greece, Eurozone', dated May 11, 2012 at
www.fitchratings.com), a Greek exit from EMU would break a
fundamental tenet underpinning Fitch's sovereign and other
ratings in the eurozone as well as exacerbating economic and
financial risks facing other EAMS. Consequently, Fitch would
place all eurozone sovereign ratings on Rating Watch Negative
(RWN) following the Greek elections if Fitch assesses that the
risk of a Greek exit from EMU is probable in the near term.

As a result of the revision of the Country Ceiling, 32 structured
finance (SF) notes that were rated above 'B-sf' have been
downgraded. All Greek structured finance ratings are now capped
by the Country Ceiling. This means that many tranches have the
same 'B-sf' rating despite the different characteristics of their
structures and collateral portfolios. Fitch will comment on the
relative strengths and weaknesses of these tranches based on the
performance of the underlying portfolios.

The SF tranches that were previously on RWN have been maintained
on RWN as a result of the uncertainty surrounding the political
situation in Greece. Fitch expects to downgrade these notes
further in the event that an exit of Greece from EMU becomes
probable, as discussed above. Additionally, the ratings of two
tranches that are credit-linked to the sovereign's Long-term IDR
have been downgraded.


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EIRCOM GROUP: Examiner Says Losses to Double Under Whampoa Bid
--------------------------------------------------------------
Joe Brennan at Bloomberg News reports that Hutchison Whampoa
Ltd.'s EUR2 billion (US$2.5 billion) bid for Eircom Group was
rejected partly because it would have doubled the losses suffered
by the phone company's most senior lenders.

Bloomberg relates that Michael McAteer, the examiner who turned
down the offer, said in a court filing, that the first lien
lenders to the company would have recovered 70% of their debts,
compared with their own plan for 85% recovery and full equity
control of Eircom.

Hutchison Whampoa and New York-based DW Investment Management,
which is representing some Eircom floating-rate note investors,
started a legal challenge on May 15 against Mr. McAteer's
rejection, Bloomberg discloses.  Judge Peter Kelly was due to
hear the case in Dublin on Thursday, after Mr. McAteer said he
will recommend a survival plan based on a proposal from the most
senior lenders after rejecting the offer from Hutchison's Irish
unit, Three Ireland, Bloomberg notes.

Headquartered in Dublin, Ireland, Eircom Group --
http://www.eircom.ie/-- is an Irish telecommunications company,
and former state-owned incumbent.  It is currently the largest
telecommunications operator in the Republic of Ireland and
operates primarily on the island of Ireland, with a point of
presence in Great Britain.


IRISH LIFE: S&P Keeps 'BB-' Counterparty Rating on Watch Negative
-----------------------------------------------------------------
Standard & Poor's Ratings Services maintained its 'BB-' long-term
counterparty credit rating on Irish Life & Permanent PLC (IL&P)
on CreditWatch with negative implications, where it was initially
placed on March 6, 2012.

"We are keeping the long-term counterparty credit rating on IL&P
on CreditWatch with negative implications following government
approval of IL&P's strategic direction," S&P said.

"This follows an announcement by the Irish government on April
26, 2012, that IL&P intends to carve a viable retail bank out of
its existing banking businesses. This follows an extended review
to determine the best way forward for the bank; the review
examined a number of strategic alternatives, including winding
down the bank, but decided against doing so," S&P said.

"The objective of the restructuring plan is to create a viable
Irish retail bank out of IL&P--one that can provide competition
for the two largest banks in Ireland, Allied Irish Banks PLC
(AIB; BB/Negative/B) and Bank of Ireland (BOI; BB+/Negative/B),
alongside a couple of foreign-owned banks. AIB and BOI have
domestic loan books in excess of EUR60 billion, leading market
shares, and the largest branch networks. They were named as the
two 'pillar' banks of the Irish banking system by the government
in 2011. We consider both AIB and BOI to be of 'high' systemic
importance," S&P said.

"The ratings on IL&P's wholly owned subsidiary, Irish Life
Assurance PLC (ILA; BBB-/Watch Dev) are unaffected by this
announcement. Following the granting of a direction order by the
High Court in March 2012, the Irish government has stated that it
intends to acquire ILA from IL&P for a consideration of EUR1.3
billion by the end of June 2012," S&P said.

Within the existing IL&P legal entity, it has been reported that
IL&P's loan book will be split into three constituent parts:

    "The core bank to comprise a EUR14.2 billion loan book, which
    we understand will mainly comprise Irish residential
    mortgages and IL&P's existing EUR14.7 billion of customer
    deposits (as reported at Dec. 31, 2011)," S&P said.

    "A separately managed, noncore, asset management unit (AMU)
    to have a loan book of EUR12.5 billion. We understand this
    will mainly comprise Irish residential mortgages, in
    particular low-yielding tracker mortgages, and IL&P's legacy
    commercial investment property loans. For the time being, the
    AMU will remain within IL&P, but the authorities have stated
    that their aim is to eventually remove it from the bank," S&P
    said.

    Capital Home Loans (CHL) to be the third business unit and to
    comprise IL&P's U.K. loan book of EUR7.1 billion, which is
    mainly made up of buy-to-let mortgages. CHL has been closed
    to new business since 2008.

"We treat IL&P as being of 'high' systemic importance because its
share of the stock of residential mortgages is close to 20%, its
deposit market share exceeds 10%, and it has a useful current
account franchise. Through the economic crisis, IL&P has been one
of the main recipients of support from the Irish government, in
the form of extraordinary capital (in July 2011) and the mandated
injection of deposits from the former Irish Nationwide Building
Society (in February 2011)," S&P said.

"We do not consider IL&P to be a government-related entity, even
though it is more than 99% owned by the government. The
government stated on April 26, 2012, that it intends to
eventually return the bank to private ownership," S&P said.

"We will be meeting IL&P's new management team in the coming
weeks to discuss the future strategy and profile of IL&P, in the
light of the heavy loss which IL&P reported in 2011. Our analysis
of the stand-alone credit profile (SACP) of IL&P will continue to
focus primarily upon the existing legal entity until we consider
that an orderly exit of the AMU from the bank is imminent," S&P
said.

"Standard & Poor's aims to resolve the CreditWatch placement
around the time that the government completes the acquisition of
ILA from IL&P, which we understand will be around the end of
June," S&P said.

"The long-term rating could be affected in two ways by our
review. First, if we revise our assessment of IL&P's systemic
importance to 'moderate' from 'high,' then the long-term rating
could be lowered by one notch. The assessment will focus upon
IL&P's market position, its current and future role in the market
and its impact on the Irish banking system as a whole. Second,
the long-term rating could also be lowered if we consider that
IL&P's SACP has weakened, taking into account IL&P's weakening
revenues, elevated loan impairment charges, and new business
prospects. Our assessment will consider, in particular, our view
of IL&P's business position, capital and earnings, and risk
position. If we consider that our existing assessment holds, then
we will affirm the long-term rating," S&P said.


VERSAILLES CLO I: S&P Raises Rating on Class E Notes to 'BB-'
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its credit ratings on
Versailles CLO M.E. I PLC's class A-1-D, A-1-T, A-2, B, C, D, and
E notes. "At the same time, we affirmed our rating on the class S
notes," S&P said.

"For our review of the transaction's performance, we used data
from the trustee report dated March 30, 2012, in addition to our
cash flow analysis. We have taken into account recent
developments in the transaction, and have applied our 2010
counterparty criteria, as well as our cash flow criteria," S&P
said.

"Since our last review in June 2010, we have observed a positive
rating migration in the underlying portfolio. For example, the
proportion of 'CCC' rated assets has decreased by about five
percentage points, and now comprises 7.84% of the portfolio,
versus 13.32% in June 2010," S&P said.

All coverage tests are currently in compliance.

"Other positive findings in our analysis include a decrease in
the weighted-average life to 4.61 years from 5.36 years, and an
increase in the weighted-average spread to 3.41% from 2.55%," S&P
said.

"We subjected the transaction's capital structure to a cash flow
analysis to determine the break-even default rate for each rated
class, at each rating level. We used the portfolio balance that
we consider to be performing (EUR333 million), the reported
weighted-average spread (3.41%), and the weighted-average
recovery rates that we consider to be appropriate. We
incorporated various cash flow stress scenarios using our
standard default patterns, levels, and timings for each rating
category assumed for each class of notes, in conjunction with
different interest rate stress scenarios," S&P said.

"Therefore, and in accordance with our analysis, we have raised
our ratings on the class A-1-D, A-1-T, A-2, B, C, D, and E notes
to levels that reflect the portfolio's credit quality and the
transaction's performance, in our opinion," S&P said.

"We have also observed that the credit support available to the
class S notes is commensurate with the current rating, and we
have therefore affirmed our rating on this class of notes," S&P
said.

Versailles CLO M.E. I is a cash flow collateralized loan
obligation (CLO) transaction backed primarily by leveraged loans
to speculative-grade corporate firms. Versailles CLO M.E. I
closed in November 2006, and is managed by BNP Paribas.

           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 Reports
included in this credit rating report are available at:

         http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class                    Rating
                To                   From

Versailles CLO M.E. I PLC
EUR337.5 Million Floating-Rate Notes and Subordinated Notes

Ratings Raised

A-1-D           AA+ (sf)             A+ (sf)
A-1-T           AA+ (sf)             A+ (sf)
A-2             AA+ (sf)             A+ (sf)
B               A+ (sf)              BBB+ (sf)
C               BBB+ (sf)            BB+ (sf)
D               BBB- (sf)            BB (sf)
E               BB- (sf)             CCC+ (sf)

Rating Affirmed

S               AAA (sf)


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


EDISON SPA: S&P Affirms 'BB+/B' Corp. Credit Ratings; Off Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' long-term
and 'B' short-term corporate credit ratings on Italy-based
utility Edison SpA. "At the same time, we removed the ratings
from CreditWatch, where they were placed with negative
implications on March 6, 2012. The outlook is positive," S&P
said.

"We also affirmed our 'BB+' issue ratings on Edison's various
debt instruments, and removed them from CreditWatch negative. The
'3' recovery rating on these instruments indicates our
expectation of meaningful (50%-70%) recovery in the event of a
payment default," S&P said.

"The rating action follows last week's approval by the
Commissione Nazionale per le Societa e la Borsa (CONSOB)--Italy's
stock-exchange watchdog--of the terms of Electricite de France
S.A.'s (EDF; A+/Stable/A-1) mandatory tender offer on Edison at
an increased price of EUR0.89 per share. The revised terms of
Edison's shareholder restructuring were approved by the various
stakeholders' Boards of Directors. The price revision does not
alter the key features of the reorganization of Edison's
ownership structure agreed on Feb. 16, 2012," S&P said.

"We anticipate that the reorganization of the ownership
structure, now approved by CONSOB and other relevant antitrust
authorities, will be completed by May 31, 2012. Upon completion,
EDF will acquire full managerial control of Edison with a stake
ranging between 80.7% and 100%, depending on the outcome of the
tender offer for minorities, which is expected to close by July
30, 2012. EDF's stronger managerial control over Edison, compared
with its previous joint-ownership, supports the one-notch of
uplift for shareholder support that we currently factor into our
ratings on Edison," S&P said.

"This transaction ends a long period of uncertainty surrounding
Edison's shareholder structure, which has prevented the company
from securing its funding needs, including the refinancing of its
large maturities exceeding EUR1 billion in 2013. This will in our
view significantly strengthen Edison's liquidity position, which
we currently assess as 'less than adequate,'" S&P said.

"The positive outlook reflects our view that Edison's stronger
integration into EDF could have a positive effect on our ratings
on Edison in the coming year, according to our criteria governing
the links between parents and subsidiaries," S&P said.

"Once EDF effectively gains full managerial control of Edison, we
could consider raising the long-term rating and stand-alone
credit profile (SACP) on Edison by a maximum of 5 notches, in
line with EDF's 'a' SACP if we assessed Edison as a fully
integrated 'core' subsidiary. Our assessment of Edison's
strategic importance for EDF, and of the degree (and permanence)
of its integration into EDF's operations, strategy, control, and
management, would likely depend on the outcome of the tender
offer for minorities, and more importantly on EDF's long-term
plans for Edison, which it will likely disclose upon completion
of the tender offer," S&P said.

"We could revise the outlook to stable if EDF's stronger
shareholder support doesn't offset further deterioration in
Edison's SACP, which we believe remains constrained by the
worsening conditions in Italy's energy markets. We currently view
this scenario as unlikely," S&P said.


UNIONE DI BANCHE: S&P Reinstates 'BB+' Ratings on Preferred Stock
-----------------------------------------------------------------
Standard & Poor's Ratings Services reassigned the issue ratings
on Italian bank Unione di Banche Italiane Scpa (UBI,
BBB+/Negative/A-2):

    The 'BBB' issue rating on one EUR300 million Lower Tier 2
    instrument (ISIN: XS0272418590) issued by UBI;

    The 'BB+' issue rating on the hybrid instrument (EUR300
    million trust preferred securities; ISIN: XS0123998394)
    issued by indirectly wholly owned subsidiary Banca Popolare
    di Bergamo Capital Trust;

    The 'BB+' issue rating on the hybrid instrument (EUR115
    million trust preferred securities; ISIN: XS0131512450)
    issued by indirectly wholly owned subsidiary Banca Popolare
    Commercio e Industria Capital Trust (BPCI Capital Trust); and

    The 'BB+' issue rating on the preferred securities issued by
    Banca.

Popolare Commercio e Industria Funding LLC, an intermediary
financial vehicle, and subscribed by BPCI Capital Trust.

These issue ratings were withdrawn in error following an exchange
offer on these securities, which took place in June 2009.

"We have reassigned the ratings at their current levels in
accordance with our revised hybrid capital criteria. Under these
criteria, the 'BB+' issue rating on UBI's Tier 1 hybrid
securities is three notches below our assessment of the bank's
stand-alone credit profile (SACP). Our approach factors in
subordination risk, the risk of partial or untimely payment, and
the presence of a write down contingency clause on the activation
of a non-viability trigger," S&P said.

The Tier 1 hybrid securities benefit from a subordinated
guarantee by UBI.

"The 'BBB' issue rating on UBI's Lower Tier 2 notes is one notch
below the SACP on the bank, in accordance with our criteria," S&P
said.

RATINGS LIST
New Rating

Unione di Banche Italiane Scpa
Subordinated                            BBB

Banca Popolare Commercio e Industria Capital Trust
Preferred Stock*                        BB+

Banca Popolare Commercio e Industria Funding LLC
Preferred Stock*                        BB+

Banca Popolare di Bergamo Capital Trust
Preferred Stock*                        BB+

* Guaranteed by Unione di Banche Italiane Scpa


* ITALY: Moody's Lowers Four Structured Finance Transactions
------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of
structured finance securities directly exposed to the declining
credit quality of Italian banks, which Moody's downgraded on
May 14, 2012. The rating actions affect four tranches, including
two asset-backed securities ("ABS"), one residential mortgage-
backed security "(RMBS"), and one repackaged security in Europe.

Issuer: Erice Finance S.r.l.

    EUR92.8M B Certificate, Downgraded to Ba1 (sf); previously on
    Feb 17, 2012 Baa3 (sf) Placed Under Review for Possible
    Downgrade

Issuer: Medioleasing Finance S.r.l

    EUR105.4M B Certificate, Downgraded to Ba1 (sf); previously
    on Feb 17, 2012 Baa1 (sf) Placed Under Review for Possible
    Downgrade

Issuer: Patagonia finance S.A. Restructuring

    EUR453.2115M Senior Zero coupon notes Notes, Downgraded to
    Ba3; previously on Dec 2, 2011 Baa2 Placed Under Review for
    Possible Downgrade

Issuer: Voba Finance N.2 S.r.l.

    EUR49.9M B Notes, Downgraded to Ba1 (sf); previously on
    Feb 17, 2012 Baa1 (sf) Placed Under Review for Possible
    Downgrade

Ratings Rationale

The reason for Moody's actions is the linkage between the ratings
of the structured finance securities and those of the banks. This
linkage is due to the direct exposure of the structured finance
securities to the declining credit quality of four Italian banks
each of which acts as the guarantor of the securities or is the
issuer of collateral securities in a repackaged transaction.
Because of the linkage, each rating is essentially a pass-through
of the rating of the bank.

-- Banca Italease, Ba1 (formerly Baa3, under review for possible
downgrade) is the guarantor of the Tranche B certificates of the
ABS security, Erice Finance S.r.l,

-- Banca delle Marche, Ba1 (formerly Baa1, under review for
possible downgrade) is the guarantor of the Tranche B
certificates of the ABS security, Medioleasing Finance S.r.l,

-- Banca Monte dei Paschi di Siena S.p.A., Ba3 (formerly Baa2,
under review for possible downgrade) is the issuer of
subordinated notes serving as the underlying collateral of the
repackaged transaction, Patagonia finance S.A. restructuring, and

-- Banca Popolare Alto Adige - Suedtiroler Volksbank, Ba1
(formerly Baa1, under review for possible downgrade) is the
guarantor of the Tranche B notes in the RMBS transaction, Voba
Finance No. 2 S.r.l.

Moody's notes that these transactions are 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 and 2) the acute sovereign and
banking crisis in the euro area, which is weakening the credit
profiles of banks exposed to the currency union. This crisis
accentuates challenges facing banks globally.

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

Moody's conducted no additional cash flow analysis or stress
scenarios because the ratings are a pass-through of the rating of
the underlying entity.


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


MONIER GROUP: S&P Affirms 'B-' Long-Term Corp. Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' long-term
corporate credit rating on Luxembourg-registered building
materials manufacturer Monier Group (Monier). "We also affirmed
our 'B+' issue rating on the group's existing super senior
revolving credit facility (RCF) of EUR150 million and 'B-' issue
rating on the EUR650 million senior financing agreement (EUR683
million currently outstanding)," S&P said.

"Following Monier's announced decision to postpone its bond
placement, we have withdrawn our 'B-' issue rating on the
proposed EUR250 million senior secured notes due 2019, which were
to be issued by Monier Bond Finance & Co S.C.A. (Monier Bond
Finance; not rated), an orphan special-purpose vehicle (SPV). We
also withdrew our 'B+' issue rating on the proposed EUR150
million super senior RCF due 2017," S&P said.

"The affirmation reflects our view that Monier's liquidity
continues to be adequate under our criteria, despite the
postponement of the proposed bond placement. This is because the
company has no debt maturities over the next two years. Monier's
liquidity is also supported by its substantial cash balance,
which we consider to be more than sufficient to meet the
operating cash needs of the business," S&P said.

"The ratings on Monier reflect our view of the group's 'highly
leveraged' financial risk profile and 'fair' business risk
profile. In our opinion, the main constraint on the ratings is
the group's heavy debt burden. Standard & Poor's-adjusted total
debt for Monier stood at EUR1.7 billion at year-end 2011," S&P
said.

"Our assessment of Monier's 'fair' business risk profile includes
our view of the industry's highly cyclical and capital-intensive
nature, as well as the group's exposure to volatile input costs
and significant exposure to the early-cyclical, and still-
depressed residential end markets. In part, this is offset by
Monier's solid market positions, a degree of product innovation,
fair geographic diversity within Europe, and several credit-
positive features of the industry. These features include a large
share of renovation-led demand, high barriers to entry, the local
nature of markets, and moderate substitution risks," S&P said.

Monier manufactures roofing tiles and related components and
chimneys, which it mainly sells through builders' merchants. The
company focuses primarily on the European and Asian markets, with
130 production sites in 33 countries.

"The stable outlook reflects our view of Monier's 'adequate'
liquidity profile, independent of the previously proposed
refinancing and its highly leveraged credit metrics, which in our
view are unlikely to improve meaningfully in the near term," S&P
said.

"We view rating downside risk as remote. It could arise, however,
if interest coverage weakens materially or if we see a weakening
in liquidity, which we do not consider likely at this stage. Any
additional aggressive shareholder actions or debt-funded spending
could also put pressure on the ratings," S&P said.

Ratings upside would likely depend on a meaningful improvement in
credit metrics, specifically in cash flow measures. This could
occur as a result of a recovery in the building materials
industry and trading conditions.


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


ASM INTERNATIONAL: S&P Affirms Corporate Credit Rating at 'BB-'
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on The
Netherlands-based semiconductor equipment manufacturer ASM
International N.V. (ASMI) to positive from stable. "At the same
time, we affirmed the long-term corporate credit rating at 'BB-
'," S&P said.

"In addition, we affirmed our 'BB-' issue rating on the group's
outstanding EUR150 million convertible bond, due 2014. The
recovery rating remains unchanged at '3', indicating meaningful
(50%-70%) recovery in the event of a default," S&P said.

"The outlook revision reflects our view that ASMI's financial
risk profile has strengthened in 2011 and will likely improve
further over the next 12-18 months, primarily thanks to improving
industry demand for semiconductor equipment. Furthermore, in our
view, ASMI's business risk profile could strengthen in the medium
term, due to increasing demand for atomic layer deposition
technology, where its front-end segment currently has a strong
niche market position. As a result, we forecast improving profit
margins and cash flow generation at ASMI's front-end segment
through the industry cycle," S&P said.

"We assess ASMI's business risk profile as 'weak', which reflects
the highly cyclical and competitive nature of the industry, the
still relatively small scope of ASMI's front-end operations,
substantial technology risks, and a concentrated customer base.
These factors are partly offset by what we see as the group's
established niche market positions, solid technological product
portfolio, and ASMPT's strong profitability," S&P said.

"Our assessment of ASMI's financial risk profile as 'significant'
reflects the only modest free cash flow generation of its front-
end operations through the cycle and the high dividend leakage to
minority shareholders. Cash flow from ASMPT is restricted to
semiannual dividend payments. These constraints are partly offset
by the group's solid capitalization, including large cash
balances, and the high value of ASMI's stake in ASMPT relative to
its financial debt," S&P said.

"The positive outlook reflects the possibility that we could
raise the long-term rating on ASMI in the next 12 months, if the
front-end's profitability continues to improve and if the group
at least maintains its current net financial cash position. An
upgrade would hinge upon ASMI's ability to generate operating
margins well in excess of 10% in the front-end segment on a
sustainable basis. At the same time, an upgrade would depend on
ASMPT's demonstrably improving its operating margins above 20%
and continuing to distribute solid dividends to ASMI," S&P said.

"We would likely revise the outlook to stable if we considered
that ASMI's profitability would not materially improve over the
next 12 months from current levels or if net financial cash
position at the front-end segment turned into a net financial
debt position as a result of large shareholder distributions,"
S&P said.


DUCHESS VII: S&P Raises Rating on Class D Notes to 'BB'
-------------------------------------------------------
Standard & Poor's Ratings Services raised its credit ratings on
Duchess VII CLO B.V.'s class A-1, B, C, and D notes, and on the
variable funding notes (VFN). "At the same time, we affirmed our
rating on the class E notes," S&P said.

"For our review of the transaction's performance, we used data
from the trustee report dated February 2012, in addition to our
cash flow analysis. We have taken into account recent
developments in the transaction and have applied our 2010
counterparty criteria, as well as our cash flow criteria," S&P
said.

"Since our last review in June 2010, we have observed a positive
rating migration in the underlying portfolio. For example, the
'CCC' rated assets have decreased by 11 percentage points, and
are now equal to 5.43% of the portfolio, versus 16.49% in June
2010," S&P said.

"All coverage tests are currently in compliance and have improved
since our last review," S&P said.

"Other positive findings in our analysis include a reduction of
the weighted-average life to 4.57 years from 6.05 years, and an
increase of the weighted-average spread to 3.59% from 2.82%," S&P
said.

"We subjected the transaction's capital structure to a cash flow
analysis to determine the break-even default rate for each rated
class, at each rating level. We used the portfolio balance that
we consider to be performing (EUR470 million), the reported
weighted-average spread (3.59%), and the weighted-average
recovery rates that we consider to be appropriate. We
incorporated various cash flow stress scenarios using our
standard default patterns, levels, and timings for each rating
category assumed for each class of notes, in conjunction with
different interest rate stress scenarios," S&P said.

"Therefore, and in accordance with our analysis, we have raised
our ratings on the class A-1, B, C, and D notes and the VFN, to
levels that appropriately reflect the portfolio's credit quality
and the transaction's performance," S&P said.

"We have also observed that the credit support available to the
class E notes is commensurate with the current rating, and we
have therefore affirmed our rating on this class of notes," S&P
said.

"Duchess VII CLO is a cash flow collateralized loan obligation
(CLO) transaction backed primarily by leveraged loans to
speculative-grade corporate firms. Duchess VII CLO closed in
December 2006 and is managed by Babson Capital Europe Ltd.," 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 Reports
included in this credit rating report are available at:

         http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class                 Rating
              To                   From

Duchess VII CLO B.V.
EUR517.5 Million Secured Notes

Ratings Raised

VFN           A+ (sf)              A- (sf)
A-1           A+ (sf)              A- (sf)
B             BBB+ (sf)            BBB- (sf)
C             BBB- (sf)            BB+ (sf)
D             BB (sf)              B+ (sf)

Rating Affirmed

E             CCC (sf)


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


CENTRAL EUROPEAN: Moody's Maintains Review on 'Caa1' Ratings
------------------------------------------------------------
Moody's Investors Service has said that it is maintaining on
review for downgrade the Caa1 ratings of Central European
Distribution Corporation (CEDC). The B3 rating on approximately
USD900 million of senior secured notes due in 2016 issued by CEDC
Finance Corporation International also remains on review for
downgrade. Moody's initiated the review for downgrade on
December 20, 2011 and extended it on March 7, 2012.

Ratings Rationale

"The decision to maintain CEDC's ratings on review for downgrade
reflects the fact that the definitive agreement for a strategic
alliance between CEDC and Russian Standard Corporation, as signed
on April 23, 2012, is still subject to shareholders' approval,
which the company expects to receive on June 29, 2012," says
Paolo Leschiutta, a Moody's Vice President -- Senior Credit
Officer and lead analyst for CEDC. "According to the agreement,
Russian Standard will provide financial support to CEDC to repay
its US$310 million of senior convertible notes due March 2013."

Moody's understands that this transaction, if successfully
completed, will not result in any loss for existing bondholders
and will help the company to address its short-term refinancing
needs. As a result, Moody's is likely to confirm CEDC's ratings
at the current levels once the company obtains shareholders'
approval.

However, failure to obtain shareholders' approval would
immediately exert pressure on CEDC's ratings. This is because,
despite the USD100 million of cash injections already received by
Russian Standard, CEDC would still be faced with significant
short-term debt maturities, including the remaining portion of
the US$310 million of convertible notes and US$70 million of new
notes issued to Russian Standard.

As part of its review, Moody's will also take into consideration
the currently challenging operating environment in Russia, which
the rating agency expects will constrain CEDC's key credit
metrics over the short to medium term.

Principal Methodology

The methodologies used in these ratings were Global Alcoholic
Beverage Rating Methodology published in September 2009, and Loss
Given Default for Speculative-Grade Non-Financial Companies in
the U.S., Canada and EMEA published in June 2009.

Headquartered in Warsaw, Poland, CEDC is one of the largest vodka
producers in the world, with annual sales of around 33.2 million
nine-litre cases, mainly in Russia and Poland. Following
investments in Russia over the past two years and the
consolidation since February 2011 of Whitehall Group, an importer
and distributor of premium spirits and wine, CEDC generated net
revenues of around US$878 million during FYE December 2011.


DROMOST SP: Creditor Files Bankruptcy Petition
----------------------------------------------
Maciej Martewicz at Bloomberg News reports that PBG SA, Poland's
third largest builder, said creditor Andrzej Kasprzak filed for
bankruptcy of its unit Dromost Sp. z o.o. on April 4.

Bloomberg relates that PBG said in a regulatory statement on
Wednesday that the Poznan, western Poland-based court appointed
on May 10 an interim supervisor in Dromost to protect the
creditor's interests.

According to Bloomberg, Kinga Banaszak-Filipiak, PBG's
spokeswoman, said on Thursday that the company, which has 10 days
to respond to the court's decision, plans to pay back the
creditor.

The spokeswoman said that the court will decide how to proceed
with the motion once it gets Dromost's reply, Bloomberg notes.


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


DERZHAVA BANK: Moody's Assigns 'B3/E+' Ratings; Outlook Stable
--------------------------------------------------------------
Moody's Investors Service has assigned the following ratings to
Derzhava Bank: E+ standalone bank financial strength rating
(BFSR) mapping to a baseline credit assessment (BCA) of b3, B3
long-term local and foreign currency deposit ratings, and 'Not
Prime' short-term local and foreign currency deposit ratings. All
the bank's long-term ratings carry a stable outlook.

Moody's assessment is primarily based on Derzhava's audited
financial statements for 2010 -- prepared under IFRS, and
unaudited financial statements as at December 31, 2011 --
prepared under Russian Accounting Standards (RAS).

Ratings Rationale

According to Moody's, Derzhava's ratings are constrained by: (i)
high market, credit and liquidity risk appetite, (ii) weak
franchise value, and (iii) weak recurring revenue generation. At
the same time, the ratings reflect the bank's currently adequate
liquidity position.

Moody's explains that Derzhava's appetite for market and credit
risks stems from its sizeable investments in risky financial
instruments (that accounted for around a third of Tier 1
capital), and from high borrower concentration (of up to 3x Tier
1 capital). Moody's views these risk concentrations as a
significant challenge for the bank given its modest capital
cushion (14% as at YE2011).

Moody's notes that Derzhava's depositor concentration is
considerably higher compared to similarly rated peers. As a
result, the rating agency views Derzhava's significant liquidity
cushion as necessary, with free-from-pledge liquid assets
exceeding 30% of total liabilities as at YE2011.

Derzhava has a relatively small scale of operations, limited
business geography and narrow customer base operating from a
single office in Moscow. According to Moody's, in the absence of
a clearly articulated strategy, Derzhava's ability to maintain
its current customer base and overall franchise value will prove
challenging in the longer term.

Moody's adds that Derzhava's recurring revenue generation
capacity is also weak, as 60% of its pre-provision income is
derived from trading transactions. The bank's relatively solid
bottom-line profitability under RAS in 2011 was a result of
release of loan loss reserves.

WHAT COULD CHANGE THE RATINGS UP/DOWN

According to Moody's, Derzhava's ratings have limited upside
potential in the medium term. Some upward pressure could be
exerted on the ratings if the bank augments its capital base
and/or its provision buffer. Derzhava's ratings could also be
positively affected as a result of improvement of the bank's core
profitability and franchise value, provided the level of related-
party transactions and/or risky investments do not increase.

However, Derzhava's standalone BFSR and deposit ratings could be
downgraded as the result of a significant decrease in the
liquidity buffer, or substantial and ongoing deterioration of the
bank's asset quality. An increase in the level of the bank's
related-party transactions and/or risky investments could also
exert downward pressure on its ratings.

Principal Methodologies

The methodologies used in this rating were Bank Financial
Strength Ratings: Global Methodology published in February 2007,
and Incorporation of Joint-Default Analysis into Moody's Bank
Ratings: Global Methodology published in March 2012.

Headquartered in Moscow, Russia, Derzhava reported -- under
(unaudited, non-consolidated) RAS -- total assets of US$422
million and total equity of US$67 million as at December 31,
2011; net income for 2011 stood at US$8 million.


MAGNITOGORSK IRON: Fitch Revises Outlook Rating to Negative
-----------------------------------------------------------
Fitch Ratings has revised the Outlook on OJSC Magnitogorsk Iron &
Steel Works' (MMK) Long-term Issuer Default Rating (IDR) to
Negative from Stable and affirmed the rating at 'BB+'.  The
agency has also affirmed MMK's Short-term IDR at 'B', local
currency Long-term IDR at 'BB+' and Long-term National Rating at
'AA(rus)' and revised the Outlooks to Negative.

The revision of the Outlooks to Negative is due to the increase
in the company's leverage in FY11 above previous Fitch's
expectations.  This was because of the increase in the relative
iron ore purchase price vs. steel products' selling prices and
the underutilization of newly-launched facilities in Turkey.

Fitch notes the healthy performance of the main steel consuming
industries (construction, automotive and pipe production) in
Russia in 2011, which resulted in an increase in apparent steel
products consumption by 16% in 2011 yoy.  Demand-driving factors
in steel-consuming industries will likely remain strong in the
medium term.  At the same time, steel products' price dynamics
have been negative since May 2011, which explains the squeeze in
margins for steel producers.

MMK finalized two scaled investment projects in 2011: the
construction of steelmaking and rolling facilities in Turkey with
annual production capacity of 2.3m tons and the first stage of
Rolling Mill 2000 with annual production capacity of 2.0m tons.
This considerably strengthens the company's position as a
producer of high value-added steel products and improves its
geographic diversification of assets and revenues.

The agency estimates that MMK's slab cash costs will decrease in
2012 vs. 2011 following the re-negotiation of the iron ore price
formula under contract with ENRC, its main iron ore supplier.
Combined with an expected decrease in capex, this will boost the
company's free cash flow.

Fitch expects MMK to show 14%-16% EBITDAR margin in FY2012 (14.6%
in FY2011) with an increase to 17%-19% in FY2014.  Net EBITDAR
leverage is expected to decrease to 2.4x by end-2012 (2.9x at
end-2011), to 2.1x by end-2013 and to 1.3x-1.5x by end-2014.

Negative free cash flow in 2012, resulting in the company being
unable to deleverage in line with the agency's expectations,
would put pressure on the ratings.


SEVERSTAL OAO: Fitch Affirms BB- Long-Term Issuer Default Rating
----------------------------------------------------------------
Fitch Ratings has affirmed OAO Severstal's Long-term Issuer
Default Rating (IDR) at 'BB-' with a Stable Outlook.

The affirmation reflects Severstal's ability to maintain credit
metrics consistent with the 'BB' category during 2011.  The
company's EBITDAR margin decreased to 22.6% in FY11 from 23.9% in
FY10 due to the deconsolidation of gold segment.  Severstal's
excess capacity in iron ore and coking coal in Russia boosted
profitability, as the relative prices of steel raw materials vs.
steel products were at one of the highest levels of the past five
years in 2011.

Fitch notes the healthy performance of the main steel consuming
industries (construction, automotive and pipe production) in
Russia in 2011, which resulted in an increase in apparent steel
products consumption by 16% in 2011 yoy.  Demand-driving factors
in steel-consuming industries will likely remain strong in the
medium term.  Severstal will benefit from expected increase of
demand for steel products in Russia in 2012.

The company finalized investment projects at its North American
steelmaking facilities, Deaborn and Columbus in 2011, which will
likely improve their competitiveness and operating performance in
2012.

A change in the company's strategy with a focus on growing
markets and more profitable mining operations may be beneficial
in the long term.  However, it will require additional
investments in the medium term.

Fitch expects the EBITDAR margin to decrease to 17%-19% in 2012
and net EBITDAR leverage to increase to 1.6x by end-2012 (1.2x at
end-2011).

The rating actions are as follows:

  -- Long-term IDR affirmed at 'BB-'; Stable Outlook
  -- Short-term IDR affirmed at 'B'
  -- Senior unsecured rating affirmed at 'BB-'
  -- Local currency Long-term IDR affirmed at 'BB-'; Stable
     Outlook
  -- Local currency senior unsecured rating affirmed at 'BB-'
  -- National Long-term rating affirmed at 'A+ (rus)'; Stable
     Outlook


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


FTPYME TDA: Fitch Affirms Rating on EUR4.5-Mil. Notes at 'CCCsf'
----------------------------------------------------------------
Fitch Ratings has taken various rating actions on FTPYME TDA 6,
F.T.A.'s notes, as follows:

  -- EUR16.3  million Class 2 CA (ISIN ES0339742019): affirmed at
     'Asf'; Outlook Negative

  -- EUR4.1 million Class 2 SA (ISIN ES0339742027): downgraded to
     'BBBsf' from 'Asf'; Outlook Negative

  -- EUR4.5 million Class 3 SA (ISIN ES0339742035): affirmed at
     'CCCsf'; Recovery Estimate is RE 85%

The portfolio's performance has been volatile since the last
review in September 2011.  There are currently no loans more than
90 days in arrears in the portfolio, compared with 2.3% of the
portfolio balance in September 2011.  However, since the last
review 90+ day delinquencies peaked at 3.0%.

The downgrade of the class 2 SA notes reflects the high obligor
concentration in the transaction. There are currently 228
obligors in the portfolio, with the largest obligor representing
5.9% of the portfolio balance.  The low granularity of the
portfolio amplifies the performance volatility as the situation
of a single obligor can drive overall portfolio arrears and
defaults.  Fitch maintains a Negative Outlook on the class 2 SA
notes since high and rising levels of obligor concentration
increase the sensitivity of the notes to a deterioration in
portfolio credit quality.

The affirmation of the class 2 CA notes is based on the guarantee
of the Kingdom of Spain ('A'/Negative/'F1').

FTPYME TDA 6, F.T.A. (the issuer) is a static cash flow SME CLO
originated by Banco Guipuzcoano ('BBB+'/Rating Watch
Negative/'F2').  On closing the issuer used the note proceeds to
purchase a EUR150m portfolio of secured and unsecured loans
granted to Spanish small and medium enterprises and self-employed
individuals.


NOSTRA EMPRESAS 1: Fitch Hikes Series D Notes Rating From 'BB-sf'
-----------------------------------------------------------------
Fitch Ratings has upgraded TDA SA Nostra Empresas 1, FTA's series
C, D and E notes and maintained series A and B on Rating Watch
Negative (RWN) as follows:

  -- EUR35,214,451Series A (ISIN:ES0377969003): 'AAAsf',
     maintained on RWN

  -- EUR16,475,208 Series B (ISIN:ES0377969011): 'Asf',
     maintained on RWN

  -- EUR9,226,116 Series C (ISIN:ES0377969029): upgraded to
     'BBB+sf' from 'BBB-sf', Outlook Stable

  -- EUR12,435,797 Series D (ISIN:ES0377969037): upgraded to
     'BBBsf' from 'BB-sf', Outlook Stable

  -- EUR5,650,695 Series E (ISIN:ES0377969045): upgraded to
     'BBsf' from 'Bsf', Outlook Stable

The RWN on Series A and B reflects the notes' material exposure
to Confederacion Espanola de Cajas de Ahorros (CECA;
'BBB+'/Negative/'F2'), as remedial actions have not been fully
implemented following its downgrade.  CECA is the guarantor of
transaction's reinvestment account, which holds the reserve fund.

The upgrades of the series C, D and E notes are based on the
substantial levels of credit enhancement (CE) available to the
notes due to structural deleveraging and the notes' ability to
withstand the agency's stresses for the ratings.  The CE
available to series C is in excess of Fitch's 'Asf' loss
expectation.  However, the upgrade to 'Asf' was constrained by
counterparty risk stemming from CECA.

The transaction's performance has been stable during the past
year with the 90+ delinquency rate at 0.67%, having reduced from
a peak of 5.49% in October 2011.  The default rate in the
transaction is below the agency's expectation with only one
defaulted loan currently in the portfolio accounting for 0.16% of
the outstanding asset balance.  Total cumulative defaults are
below 1% of the outstanding asset balance, with only 9 loans
having defaulted since closing.  The low 90+ delinquency rate has
allowed the reserve fund to amortize to EUR17.65 million from
EUR29.75 million at the last review and also maintain the pro-
rata amortization of the notes, in line with the amortization
triggers in the documentation.

Fitch notes that the dynamic delinquency trend in the transaction
has been erratic with 90+ arrears peaking at levels around 5% and
then reducing to zero with minimal migration into higher
delinquency buckets or into default.  Prepayment levels seem to
spike at the same time as the delinquencies recede.

The agency highlights the concentration levels in the portfolio
in terms of region, industry and borrower. More than 90% of the
assets are in Balearic Islands while about 60% of the portfolio
is exposed to lodging and real estate.  The largest borrower
represents 4.47% of the outstanding balance while the top 50
borrowers make up 70% of the portfolio.  Nevertheless, Fitch is
comfortable with the ratings as the notes benefit from robust CE
levels and the portfolio has high security coverage with more
than 90% of the loans backed by commercial property.  The
weighted average loan to value (LTV) is low at 30% with 74% of
the properties having a first lien ranking.

Fitch has not received updated valuations on the property values
and the LTV metric is based on the initial valuations which were
done when the loans were originated.  This was addressed in the
agency's rating analysis by applying severe market value decline
(MVD) stresses for commercial properties, which constitute most
of the collateral.  The MVD stress at the 'AAAsf' level is 75%.

The transaction is a securitization of a static pool of mostly
secured originated by Caja de Ahorros y Monte de Piedad de Las
Baleares (Sa Nostra) and granted to small and medium-sized
enterprises.  TDA SA NOSTRA EMPRESAS 1 Fondo de Titulizacion de
Activos is the first single-seller SME securitization transaction
originated by Sa Nostra.  The issuer is legally represented and
managed by TDA, a limited liability special purpose management
company incorporated under the laws of Spain.


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


AGROTON PUBLIC: S&P Lowers Corporate Credit Rating to 'CCC+'
------------------------------------------------------------
Standard & Poor's Ratings Services lowered to 'CCC+' from 'B- its
long-term corporate credit rating and senior unsecured debt
ratings on Ukrainian agricultural producer Agroton Public Ltd.
(Agroton). "At the same time, we put the ratings on CreditWatch
with developing implications," S&P said.

"The CreditWatch developing status means we could raise, lower,
or affirm the ratings on Agroton upon resolution," S&P said.

"The downgrade and CreditWatch placement follow the qualified
opinion report on Agroton's 2011 results under International
Financial Reporting Standards (IFRS) delivered by auditor Baker
Tilly Klitou because of a lack of adequate documentary evidence
for US$66 million in sales transactions, or about two-thirds of
Agroton's 2011 consolidated sales," S&P said.

"Out of these sales transactions, the group reported gross
receivables of about US$45 million on Dec. 31, 2011, including
about US$41 million still outstanding on the publication date of
the auditor report, April 30, 2012. Baker Tilly Klitou has said
it has not been able to satisfy itself as to the completeness and
validity of the sales transactions, and the recoverability of the
receivables, with consequent possible uncertainty as to the
group's ability to continue as a going concern, according to the
qualified opinion report," S&P said.

"We consider that even though Agroton's short-term debt appeared
manageable at the end of 2011, the combination of increasing
receivables and the qualified auditor opinion may have weakened
liquidity," S&P said.

"The ratings continue to reflect our assessment of Agroton's weak
business risk profile and highly leveraged financial risk
profile," S&P said.

"Agroton's weak business risk profile is constrained by our view
of the high risk associated with doing business in Ukraine
(B+/Negative/B), which has a history of government intervention
in the agricultural sector. We view negatively the fact that
external factors like weather conditions can greatly influence
the global supply of soft commodities, such as Agroton's main
crops wheat and sunflower seeds. This, in turn, creates high
earnings volatility for Agroton," S&P said.

"Partly offsetting these risks are the positive long-term demand
trends for crops, especially in emerging markets like the Middle
East. We also view positively Agroton's balanced growth strategy,
the sizable scale of its operations, and its storage capacities
in Ukraine," S&P said.

"The company's highly leveraged financial risk profile is mainly
driven by our forecast of negative free cash flow until 2014, as
we foresee Agroton expanding its operations and investing in
equipment. We note a high exposure to currency exchange risk,
given that Agroton's revenues are in local currency (Ukrainian
hryvnia), whereas its debt obligations are denominated in U.S.
dollars," S&P said.

"Standard & Poor's aims to resolve the CreditWatch placement
within the next three months. During this period we expect to
receive adequate and updated financial and operating information
to conduct our analysis. We will monitor factors including the
cash collection of outstanding receivables reported at year-end
2011, any future developments with the group's auditors, and the
group's liquidity and operations. We understand that Agroton has
selected KPMG as its new independent auditor," S&P said.

"If, however, we did not receive sufficient and timely financial
and operational information in order to conduct our analysis, we
could withdraw or suspend the ratings on Agroton," S&P said.

"We could lower the ratings if we saw weakening in the group's
liquidity. We could raise the ratings if we came to the
conclusion that the qualified opinion report produced by Baker
Tilly Klitou had no significant negative impact, and Agroton at
the same time provided us with timely and sufficient
information," S&P said.

"We think that an affirmation is unlikely at this stage," S&P
said.


CIMBER STERLING: Managers to Buy Core Business
----------------------------------------------
Mette Fraende at Reuters reports that managers of Cimber Sterling
are to buy the core of the business, which will continue to fly
under the Cimber name.

The airline said on Wednesday its former Ukrainian owner Igor
Kolomoisky will buy Cimber Air Maintenance Center and Cimber Air
Data units, Reuters relates.  It gave no financial details of the
deals, Reuters notes.

The airline declared bankruptcy two weeks ago after turnaround
efforts failed and its owner, Mr. Kolomoisky's Cyprus-based
Mansvell Enterprises Ltd., withdrew financial support, Reuters
recounts.

"The deals mean that a significant part of Cimber Sterling's
activities have now been sold and not least, that between 200 and
260 jobs have been saved," Reuters quotes the company as saying.

Cimber, as cited by Reuters, said it will focus on contract
business, operating flights for other companies.

Cimber Sterling is a Danish budget airline.


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


ALBURN REAL ESTATE: Rothschild to Place Firm Into Receivership
--------------------------------------------------------------
The Irish Times reports that solicitor Noel Smyth's Alburn Real
Estate UK is to be put into receivership by Rothschild, ending
his efforts to regain command of the heavily indebted property
portfolio which has breached a number of its borrowing covenants.

The move by Rothschild follows the failure of Alburn, which owns
47 offices, warehouses and other properties, to meet a demand
from the bank for accelerated repayment of approximately GBP200
million (EUR250 million), including interest, according to The
Irish Times.

The report notes that the 25 offices owned by the property
company are valued at GBP94.5 million, while up to a dozen
industrial warehouses are valued at GBP22.1 million.  The Irish
Times says that two shops are worth GBP3 million, and the
Waterdale shopping center in Doncaster is valued at just under
GBP10 million.

In a statement to the stock exchange, Rothschild said that Alburn
had "indicated its willingness to work with the loan servicer,
receivers and administrators in their efforts to maximize
recoveries on behalf of the company's bondholder," The Irish
Times notes.

Last September, the report says that Mr. Smyth sought to persuade
three lenders, the Royal Bank of Scotland, Deutsche Bank and the
Co-operative Bank, to extend the life of its debt by three years
and agree to incentive management fees.

The Irish Times discloses that the company, registered in Jersey,
is owned by Mr. Smyth and his wife, Anne-Marie.  Mr. Smith argued
in September that a longer maturity for the debt would allow time
for the property market to stabilize and offer the prospect of
repaying 25% more of the debt.

The Irish Times notes that the GBP130 million valuation placed on
the company's assets and put against the debt and a junior loan
held by the Co-operative Bank takes the securitized loan-to-value
ratio to 142% and the whole loan to value at 15%, against
covenants of 125% and 135%, respectively.

Last night, The Irish Times says that Rothschild, which is the
servicer for the loans, said it had allowed time for the junior
lender to appoint a special servicer, but this had not proved to
be possible: "It is thought now that this is the best way to move
forward," a spokesman told The Irish Times.

Rothschild disputed earlier reports that 80% of Alburn's
portfolio is to be sold within eight months, saying that the
"core advice" has been that the properties should be sold off
over time: "This is not a fire-sale," the spokesman said, The
Irish Times relays.

The report notes that the decision has been "well-flagged",
according to Rothschild, which pointed to a statement in December
where it said it would "take appropriate enforcement steps and
pursue a managed sell down of the assets, in order to comply"
with regulations.

Two receivers for the properties will be appointed drawn from a
list of four Savills staff, Julian Clarke, Kevin Mersh, Matthew
Nagle, or Neal Morrison, while administrators will be appointed
to deal with those located in Scotland, The Irish Times adds.


ALPHA TOPCO: S&P Puts 'B+' Corp. Credit Rating on Watch Positive
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B+' long-term
corporate credit rating on U.K.-based Alpha Topco Ltd. (Formula
One), the Formula One World Championship organizer and owner of
the sport's commercial rights, on CreditWatch with positive
implications.

"We also placed our 'BB-' issue rating on Formula One's existing
senior secured facilities on CreditWatch positive," S&P said.

At the same time, S&P assigned its 'BB' issue rating to the
following proposed new senior secured loans:

    US$1,300 million amortizing term loan B due in June 2018;

    US$450 million amortizing term loan A maturing in June 2017;
    and

    US$50 million revolving credit facility (RCF) maturing in
    June 2017.

"In addition, we assigned these proposed senior debt issues a
recovery rating of '2', indicating our expectation of substantial
(70%-90%) recovery in the event of a payment default," S&P said.

"The CreditWatch placement reflects our view that, if successful,
Formula One's proposed IPO that calls for the reduction of gross
senior debt should result in significantly and durably lower
leverage. That's despite our understanding that shareholder
loans, which are stapled to equity and that we view as debt-like
obligations, will continue to remain present in the group's
proposed capital structure," S&P said.

"At present, funds managed or advised by CVC Capital Partners
have control of the board and voting control of about 63%. The
IPO should result in a material reduction in CVC Partners' level
of control, and will provide liquidity for its remaining stake in
Formula One. However, we remain mindful that CVC Partners may
retain an important influence over financial policy matters. In
addition, we understand the group may be contemplating sizable
dividends, permitted under the proposed indentures, which should
provide its shareholders with a significant regular flow of
income," S&P said.

"Also on the positive side, we believe management's guidance on
Formula One's future financial policy -- with a net debt to
EBITDA target of 2.5x to 3.5x, and a focus on organic growth --
should contribute to this sustainable improvement," S&P said.

"Our main adjustment to Formula One's debt is the addition of
shareholder loans at holding company Delta Topco Ltd. (not
rated). As part of the proposed refinancing, we understand that
the existing US$4 billion of shareholder loans will remain in the
capital structure embedded into the to-be-listed security,
thereby preserving the group's current tax structure. As a
result, our estimate for Standard & Poor's-adjusted gross debt to
EBITDA ratio is about 12x at year-end 2012 under the new capital
structure and about 3.4x excluding the shareholder loans," S&P
said.

"The current rating remains constrained mainly by our view of the
group's financial risk profile as 'highly leveraged' primarily
owing to its high adjusted leverage, which includes sizable
shareholder loans stapled to equity -- that we consider to be
debt-like obligations under our criteria -- and its ultimate
ownership by private equity sponsors," S&P said.

"These factors are partly mitigated by Formula One's business
risk profile, which we consider to be 'satisfactory.'
Underpinning our assessment is the group's high contract backlog
of over US$7 billion, which provides some visibility and
stability to the proposed capital structure, as well as interest
coverage that is in line with the ratings and good free cash flow
generation. We anticipate that Standard & Poor's-adjusted EBITDA
interest coverage over the next two to three years will be about
1x, or more than 5x excluding shareholder loans," S&P said.

"Further rating weaknesses include Formula One's continuous need
to maintain its high audience share, the existence of substitute
entertainment events to Formula One races that compete for
similar audiences, some exposure to economic downturns, mostly at
contract renewal times, and potential CEO succession risks," S&P
said.

"We aim to resolve the CreditWatch positive placement upon
completion of the IPO and the refinancing, which we understand
could take place in June 2012," S&P said.

"If the IPO is successful, we could raise the corporate credit
rating and issue ratings by one notch, provided we continue to
expect that adjusted leverage excluding shareholder loans will
fall durably below 4x, and that we still expect an exit of CVC
Partners in the medium term," S&P said.

"The CreditWatch resolution will also critically depend on the
ultimate ownership structure and our understanding of the exit
strategy of private equity sponsors. We believe that continuing
control by private equity sponsors will likely continue to
constrain the rating," S&P said.


EASTMAN KODAK: Sells British Special Effects Business
-----------------------------------------------------
Eastman Kodak CO. is selling off Cinesite Ltd. to the special
effects company's management team and to private equity firm
Endless LLP, according to a report by Democrat and Chronicle.

The U.K.-based Cinesite sale joins a growing list of operations
which Eastman Kodak has exited since filing for bankruptcy
protection, including its Kodak Gallery photo online service, and
its digital capture business of point-and-shoot cameras and
pocket video cameras.

Cinesite has done special effects for such television series as
Band of Brothers and Rome and such motion pictures as X-Men:
First Class and the Harry Potter series.

The British special effects company said its goal now is to
expand its service offerings and the territories in which it
operates, Democrat and Chronicle reported.

                        About Eastman Kodak

Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11
petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan.
Subsidiaries outside of the U.S. were not included in the filing
and are expected to continue to operate as usual.

Kodak, founded in 1880 by George Eastman, was once the world's
leading producer of film and cameras.  Kodak sought bankruptcy
protection amid near-term liquidity issues brought about by
steeper-than-expected declines in Kodak's historically profitable
traditional businesses, and cash flow from the licensing and sale
of intellectual property being delayed due to litigation tactics
employed by a small number of infringing technology companies
with strong balance sheets and an awareness of Kodak's liquidity
challenges.

In recent years, Kodak has been working to transform itself from
a business primarily based on film and consumer photography to a
smaller business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies.  Kodak has 8,900 patent and trademark registrations
and applications in the United States, as well as 13,100 foreign
patents and trademark registrations or pending registration in
roughly 160 countries.

Kodak disclosed $5.10 billion in assets and $6.75 billion in
liabilities as of Sept. 30, 2011.  The net book value of all
assets located outside the United States as of Dec. 31, 2011 is
$13.5 million.

Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors.  FTI Consulting,
Inc., is the restructuring advisor.   Lazard Freres & Co. LLC, is
the investment banker.   Kurtzman Carson Consultants LLC is the
claims agent.  A group of second lien lenders are represented by
Akin Gump Strauss Hauer & Feld LLP.

The Official Committee of Unsecured Creditors has tapped
Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.

Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK
BANKRUPTCY NEWS.  The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Eastman Kodak and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).


ICICI BANK: Moody's Downgrades Subordinated Rating to 'Ba1'
-----------------------------------------------------------
Moody's Investors Service has downgraded the long-term debt and
deposit ratings of ICICI Bank UK plc to Baa3 from Baa2, the short
term rating to P-3 from P-2, the subordinated rating to Ba1 from
Baa3 and the junior subordinated rating to Ba2 (hyb) from Ba1
(hyb). All ratings have a stable outlook. ICICI Bank UK's
standalone BFSR of D/ba2 is not affected by this action.

The rating action follows the BFSR rating downgrade of its parent
bank, India's ICICI Bank Limited to D+/baa3 from C-/baa2, taken
in the context of an ongoing global review of banks whose
standalone ratings are higher than the rating of the government
where they are domiciled.

The rating action concludes the review for downgrade initiated on
May 2, 2012.

Rating Rationale

ICICI Bank UK's debt and deposit ratings benefit from Moody's
assessment of very high parental support from ICICI Bank Limited.
The lower standalone bank financial strength rating of its parent
institution indicates a marginal decline in its ability to
support its UK subsidiary, resulting in a one-notch reduction of
the parental support uplift for ICICI Bank UK, hence a one notch
downgrade of ICICI Bank UK's debt and deposit ratings. The
outlook on these ratings is stable. The standalone BFSR rating of
ICICI UK remains at D (mapping to BCA of ba2).

WHAT COULD CHANGE THE RATING -- UP/DOWN

An upgrade of the bank deposit and senior debt rating is unlikely
in the short term. However, upward pressure on the standalone
BFSR would likely require a further sustained improvement in the
bank's UK corporate and retail franchise, including a meaningful
diversification among its core customer base and reduction in its
loan concentrations. An established track-record of a core retail
deposit base and minimizing the impact of one-off events on its
profitability would also contribute to this trend. A sharp
reduction in profitability or losses, caused by the realisation
of the negative mark-to-market valuation of some investments
could lead to downward pressure on the BFSR. Pressure on the
liquidity position or high volatility in the deposit base given
its price-sensitivity could also put a significant downward
pressure on the bank's standalone ratings. A downgrade of ICICI
Bank Limited 's BFSR is likely to lead to downgrade of ICICI UK
senior ratings.

The methodologies used in this rating were Bank Financial
Strength Ratings: Global Methodology published in February 2007,
and Incorporation of Joint-Default Analysis into Moody's Bank
Ratings: Global Methodology published in March 2012.


LOLA CARS: In Receivership Due to Financial Difficulties
--------------------------------------------------------
James Fish at Epoch Times reports that Lola Cars International
Limited and Lola Composites Limited, two companies within the
Lola Group, are in financial difficulties and an administrator
will be appointed to run them as they restructure.

A statement from Lola Group explains that the firm, which also
operates defense and marine divisions, has lost expected
government research and development tax credits and now has cash
flow problems, according to Epoch Times.  The report relates that
by appointing an administrator, Lola Group can continue operate
and seek investors or purchasers, instead of declaring bankruptcy
and closing up shop.

Lola Cars International Limited and Lola Composites Limited, two
companies within the Lola Group, are in financial difficulties
and an administrator will be appointed to run them as they
restructure, Epoch Times notes.

The report notes that a statement from Lola Group explains that
the firm, which also operates defense and marine divisions, has
lost expected government research and development tax credits and
now has cash flow problems.  By appointing an administrator, Lola
Group can continue operate and seek investors or purchasers,
instead of declaring bankruptcy and closing up shop, Epoch Times
discloses.

Lola Cars started in 1958, and has produced successful racing
vehicles of several varieties, both single-seat and sports cars,
including IndyCar, F3000, F5000, Can Am, and Le Mans-style sports
cars.  Lola Composites started after the company was taken sold
in 1998, and serves defense, aerospace, and marine customers.
Lola Composites also has a renewable materials and energy
division.


PETROPLUS HOLDINGS: Deal on Coryton's Future Expected in 10 Days
----------------------------------------------------------------
Nidaa Bakhsh at Bloomberg News reports that a local member of the
European Parliament said administrators for Petroplus Holdings AG
may reach an agreement within 10 days to keep the insolvent Swiss
company's Coryton oil refinery in the U.K. operating.

"I understand that we're 10 days away from a possible deal,"
Bloomberg quotes Richard Howitt, an MEP for the east of England,
as saying on Thursday in a telephone interview.  "There are two
serious bidders on the table."

He didn't identify the bidders, Bloomberg notes.

Mr. Howitt didn't specify whether the plant was to be sold or
kept in operation under a long-term tolling arrangement,
Bloomberg states.

The Coryton plant is one of five refineries that Petroplus
operated in Europe, Bloomberg discloses.  Lenders cut credit
lines to the company, forcing it to file for insolvency in
January, Bloomberg recounts.  According to Bloomberg, two of its
facilities, in Belgium and Switzerland, have been sold to trading
companies, while another two in Germany and France are shut and
up for sale.

Coryton has been operating through a so-called tolling agreement
with Morgan Stanley, KKR & Co. and AtlasInvest, Bloomberg says.
The three investors supply crude to the plant, pay a processing
fee and take ownership of the products, Bloomberg notes.
According to Bloomberg, administrators at PricewaterhouseCoopers
LLP in London said on Feb. 15 that this arrangement was to last
for an initial period of three months.

Mr. Howitt said that the tolling arrangement ended on Thursday,
Bloomberg relates.

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


RANGERS FOOTBALL: Livingston Plans to Sue SFA Over Demotion
------------------------------------------------------------
John McGarry at Mail Online reports that Livingston plan to sue
the Scottish Football Association for up to GBP1.2 million in
lost revenue if Rangers Football Club is given a lesser
punishment to the one they received for entering administration
three years ago.

The West Lothian club was relegated from the First to the Third
Division by the Scottish Football League in 2009 for breaching
insolvency rules, Mail Online recounts.   The club's appeal to
the SFA was rejected, meaning they had to work their way up the
divisions with back-to-back promotions, Mail Online notes.

A consortium led by former Cowdenbeath chairman Gordon McDougall
bought the club from disgraced Italian Angelo Massone -- only to
be thrown to the bottom tier of the senior game the following
week, Mail Online discloses.

According to Mail Online, Mr. McDougall has been outspoken in his
criticism of the decision to demote Livingston and has already
claimed Scottish football will be "tarnished" if Rangers are
allowed to start afresh in the SPL as a newco, should attempts to
secure a Company Voluntary Arrangement (CVA) fail.

It is understood Livingston wrote to the SFA last week seeking
"clarity" on their handling of the Rangers financial crisis and
have warned they view their own treatment as a precedent, Mail
Online notes.

The First Division club is expected to ask questions of the
governing body if the Old Firm giants are not dealt with in the
same manner and could take legal action to recover loss of
income, Mail Online says.

Both Livingston and the SFA refused to comment on the letter.
The 12 SPL clubs will meet again on May 30 to consider proposals
for dealing with newco scenarios, Mail Online discloses.

Prospective new Rangers owner Charles Green's preference for
exiting administration is through a CVA.  But, if he fails to
persuade 75% of creditors to vote for his proposal, he would then
turn to a newco option, Mail Online states.

                   About Rangers Football Club

Rangers Football Club PLC -- http://www.rangers.premiumtv.co.uk/
-- is a United Kingdom-based company engaged in the operation of
a professional football club.  The Company has launched its own
Internet television station, RANGERSTV.tv.  The station combines
the use of Internet television programming alongside traditional
Web-based services.  Services offered include the streaming of
home matches and on-demand streaming of domestic and European
games, which include dedicated pre-match, half-time and post-
match commentary.  The Company will produce dedicated news
magazine and feature programs, while the fans can also access a
library of classic European, Old Firm and Scottish Premier League
(SPL) action.  Its own dedicated television studio at Ibrox
provides onsite production, editing and encoding facilities to
produce content for distribution on all media platforms.


ROYAL BANK: Fitch Upgrades Rating on Tier 1 Securities to 'B+'
--------------------------------------------------------------
Fitch Ratings has taken rating actions on a number of hybrid
securities issued by Royal Bank of Scotland Group Plc (RBSG;
'A'/'bbb'/Stable), Lloyds Banking Group plc (LBG;
'A'/'bbb'/Stable) and LBG's subsidiaries.

Tier 1 securities with discretionary payments were upgraded to
'B+' from 'CC'.  Upper tier 2 securities with discretionary
payments were upgraded to 'BB' from 'CCC'.  Fitch also affirmed
RBSG's Tier 1 securities with non-discretionary payments at 'BB-'
and assigned new ratings to a number of Upper Tier 2 and Tier 1
securities issued by LBG and its subsidiaries.

The rating actions reflect Fitch's expectation that all
discretionary payments on both the Tier 1 and Upper Tier 2
securities issued by RBSG, LBG and LBG's subsidiaries will resume
following the expiry (at end-January 2012 for LBG and its
subsidiaries and at end April 2012 for RBSG) of the EC ban on
coupon payments on all hybrid debt.

Despite the ban applying to all hybrid debt issued by RBSG, LBG
and LBG's subsidiaries, both groups were only able to suspend
coupon payments on those Tier 1 securities which were fully
discretionary.  For this reason and to reflect the higher non
performance risk of these securities compared to other Tier 1
debt, these discretionary notes are notched five notches below
their respective issuers' viability ratings (VRs).  Conversely,
the Tier 1 securities that remained performing under the EC ban,
have proved to be non-discretionary and, therefore, are rated
only four notches below RBSG's and LBG's VRs.

Upper Tier 2 securities issued by LBG and its subsidiaries are
rated three notches below LBG's VR irrespective of their previous
performance record under the EC ban.  The notching of Upper Tier
2 securities reflects their lower loss severity relative to Tier
1 securities.

Fitch understands that both groups intend to finance the payments
of coupons through the issuance of ordinary shares thus
neutralising any impact on the equity.

The rating actions are as follows:

  -- RBSG Tier 1 discretionary (CA780097AT83, XS0149161217,
     XS0237530497, XS0277453774, US780097AS09/ XS0323865047,
     US74927FAA93, XS0159056208, US749274AA41, US74927QAA58,
     DE000A0E6C37, XS0205935470, XS0323734961, XS0323839042,
     US7800977131, US780097AU54, US7800977628, US7800977545,
     US7800977966, US7800977479, US7800977396, US74927PAA75,
     US7800977701) upgraded to 'B+' from 'CC'

  -- Tier 1 non-discretionary (US780097AH44, XS0121856859,
     US780097AE13, US7800978790) affirmed at 'BB-'

  -- LBG Tier 1 discretionary (US539439AB54 / US539439AA71,
     GB00B3KSB238, GB00B3KSB568, GB00B3KS9W93, XS0408826427,
     XS0408828803 / GB00B3KSB675, USG5533WAB30 / US539439AD11,
     USG5533WAA56 / US539439AC38, US539439AE93 / US539439AF68,
     XS0406095041, XS0406095637) assigned 'B+'

  -- Upper Tier 2 (XS0145407507) assigned 'BB'

Lloyds TSB Bank

  -- Tier 1 discretionary (XS0408623311, XS0408620135,
     XS0408620721, XS0107228024) upgraded to 'B+' from 'CC'
  -- Tier 1 discretionary (XS0218638236) assigned 'B+'
  -- Tier 1 non-discretionary (XS0156372343) assigned 'BB-'
  -- Upper Tier 2 (XS0099508698, GB0001905362, XS0099507963,
     GB0005205751, GB0005232391, GB0005224307) assigned 'BB'
  -- Upper Tier 2 (XS0079927850, XS0099507534, XS0169667119)
     upgraded to 'BB' from 'CCC'

Bank of Scotland plc

  -- Upper Tier 2 (XS0059171230, XS0083932144, XS0046690961)
     upgraded to 'BB' from 'CCC'
  -- Upper Tier 2 (GB0005242879, GB0000394915, GB0000395094,
     GB0000395102, GB0000765403) assigned 'BB'

HBOS plc

  -- Upper Tier 2 (US4041A2AG96, US4041A3AF96, XS0188201619,
     XS0188201536, XS0177955381, XS0205326290) upgraded to 'BB'
     from 'CCC'
  -- Tier 1 discretionary (XS0255242769, XS0353590366) assigned
     'B+'
  -- Tier 1 non-discretionary (XS0139175821, XS0165483164)
     assigned 'BB-'


GEORGIAN OIL: Fitch Assigns 'BB-' Rating to $250-Mil. Bonds
-----------------------------------------------------------
Fitch Ratings has assigned JSC Georgian Oil and Gas Corporation
(GOGC)'s US$250 million bond a final senior unsecured rating of
'BB-'.

Proceeds from the bond issue will primarily be used to fund
GOGC's capex plans, notably with regard to the construction of a
planned hydroelectric power project.

The bond features a number of protective covenants, including:

  -- a bondholder put option in the event of a change of control
     (should the state of Georgia cease to own more than 50% of
     GOGC's shares);

  -- a negative pledge, covering both bond and bank indebtedness
     and foreign and local currency, to which certain exclusions
     apply, including project financings;

  -- a restriction on the incurrence of new debt if net
     debt/EBITDA exceeds 3.5x, using the aggregate amount of
     EBITDA for the most recent annual financial period for which
     consolidated financial statements have been delivered;

  -- a limitation on the disposal of core assets, named as the
     Main Gas Pipeline System and Western Route Export Pipeline,
     subject to a materiality threshold of 10% of core asset book
     value, but excluding the forthcoming investment in a new
     hydroelectric power plant.

GOGC's current ratings are as follows:

  -- Long-term foreign and local currency Issuer Default Ratings
     (IDRs): 'BB-'; Outlooks Stable

  -- Short-term foreign and local currency IDRs: 'B'

  -- Foreign currency senior unsecured rating: 'BB-'

The ratings are based upon the linkage of GOGC to Georgia's
sovereign rating.  GOGC's role as national energy company will
remain critical to the Georgian economy given the country's
position at a crossroads of supply between the landlocked Caspian
basin and western markets.  Management links to the government
are extremely strong and, despite plans for a minority stake sale
in future, majority state ownership is consistent with Georgia's
ongoing reform program.  Tangible financial assistance has been
advanced by the Georgian state over recent years, and the
Georgian government has underlined its commitment to continue
supporting the financial health of GOGC in its discussions with
Fitch.

Positive features in the company's standalone profile, which
Fitch assesses at the 'B+' level, are led by GOGC's dominance of
the Georgian gas midstream segment and by a favourable margin
structure, following contract restructurings.  Stable fee income
from gas and oil transit operations also provides a floor of
predictable and high-margin revenues.

GOGC has a large single-counterparty exposure to a subsidiary of
SOCAR ('BBB-'/Stable), as the single-purchaser intermediary of
gas supplies to the Georgian downstream gas market.  The single-
purchaser model does reduce GOGC's leverage in negotiations with
SOCAR compared to a more open market structure.  However, in
addition to providing GOGC with a largely fixed midstream spread
of c.USD40/mcm, the current structure also gives SOCAR dominant
access to Georgia's gas downstream and its own c.USD30/mcm spread
on regulated sales.  As such, the concentration of risks on the
relationship with SOCAR should be viewed against the background
of broader energy policy interdependencies between Azerbaijan and
Georgia.

Material concerns on the standalone profile are two-fold: size
and planned expansion into hydro-electric power.  GOGC has been
mandated by the government to expand into the power sector, with
a hydro power project (two plants in the Namakhvani power plant
(NHPP) cascade) which will dominate capex over the next three
years.  Expansion into power generation is a departure from
current operations.  The state's rationale for giving this
project mandate to GOGC is, however, plausible and presents fewer
risks for GOGC than a number of alternative investment
opportunities (e.g. overseas upstream expansion).

The investment for this project, while small in global terms
(approximately USD265m) will double GOGC's (largely depreciated)
balance sheet.  Positively, construction and operational risks
are lower than average.  Negatively, despite the government's
generally transparent and constructive approach to the state-
owned sector, asset churn is inherent to the role of a national
energy company, and there is potential for NHPP to be separated
out from the GOGC grouping at some point post-construction.  The
Ministry of Finance in Georgia has indicated to Fitch their
current view that any transfer of NHPP after completion would
reflect the importance to Georgia of maintaining the bankability
and financial stability of GOGC.

The main constraint on the standalone profile, however, is size.
GOGC is small for the rating category (EBITDA of GEL109m/USD67m
in 2011).  Size is marginally offset by a lowly levered balance
sheet, following a government debt writedown, in turn related to
a 2010 restructuring of the midstream market and associated
delinquent receivables.  Capex on existing assets is minimal,
further reduced by obligations upon other pipeline operators/sub-
operators to fund routine maintenance expenditure on GOGC-owned
pipes.

This profile will nonetheless lever up, under Fitch's forecasts,
into the 2.5x-3.0x range on a net debt/EBITDA basis following the
expansion into hydro power, peaking in 2014.  Delevering can
occur relatively rapidly thereafter once hydro power revenues
with low marginal costs materialize, although leverage is not
currently a major constraint upon either the ratings or the
standalone profile.

GOGC's rating alignment to the ratings of the sovereign would be
expected to track any upward movement in the sovereign, currently
'BB-'/Stable, within the 'BB' category, though, similar to
Georgian Railways LLC ('BB-'/Stable), linkage may weaken if
Georgia's sovereign ratings were eventually to move into
investment grade in future.

GOGC's ratings would also track any downgrade of the sovereign.
With regard to the standalone profile, the current assessment of
'B+' incorporates headroom for leverage of up to 3.5x-4.0x with
the proposed business mix.  Leverage in excess of this level
would trigger a lower standalone assessment, though no impact on
GOGC's ratings, unless Fitch judged the deterioration to be
linked to or simultaneous with the weakening of sovereign
support.


SOUTHERN PACIFIC 05-1: S&P Lowers Rating on Class E Notes to 'B-'
-----------------------------------------------------------------
Standard & Poor's Ratings Services took various credit rating
actions on Southern Pacific Securities 05-1 PLC (SPS 05-1) and
Southern Pacific Securities 05-2 PLC's (SPS 05-2) notes.

In SPS 05-1, S&P has:

-- lowered and removed from CreditWatch negative its ratings on
    the class D1c and E notes; and

-- removed from CreditWatch negative its ratings on the class
    B1c and C1c notes in relation to its U.K. RMBS criteria.
    "These notes remain on CreditWatch negative in relation to
    our counterparty criteria," S&P said

In SPS 05-2, S&P has:

-- raised and removed from CreditWatch negative its ratings on
    the class C1a and C1c notes;

-- affirmed and removed from CreditWatch negative its ratings on
    the class D1a and E2c notes;

-- lowered and removed from CreditWatch negative its rating on
    the class E1c notes; and

-- removed from CreditWatch negative its ratings on the class
    B1a and B1c notes in relation to S&P's U.K. RMBS criteria.
    These notes remain on CreditWatch negative in relation to
    S&P's counterparty criteria.

"Our analysis reflects our December 2011 U.K. residential
mortgage-backed securities. In addition, we have applied our 2010
counterparty criteria, given our recent downgrades of the
transaction counterparties," S&P said.

"On Dec. 12, 2011, we placed on CreditWatch negative our ratings
on all classes of notes in SPS 05-1 and SPS 05-2, following the
implementation of our 2011 U.K. RMBS criteria," S&P said.

"The class B1c and C1c notes in SPS 05-1 and the class B1a and
B1c notes in SPS 05-2 are also on CreditWatch negative following
a breach of the documented replacement triggers," S&P said.

"Despite their high number, total delinquencies declined in both
transactions during the past year. Credit enhancement has
increased across all classes of notes due to the deleveraging of
the transactions, both reserve funds remain fully funded, and
there is excess spread in both transactions," S&P said.

"Both transactions are currently paying sequentially because the
90+ days arrears figures are greater than the required trigger to
initiate pro rata payment. We have considered the possibility of
this trigger being breached and taken into account historical
arrears movements, to determine when these transactions would be
likely to pay pro rata. We have incorporated this in our cash
flow analysis," S&P said.

"After applying our December 2011 U.K. RMBS criteria to SPS 05-1
and SPS 05-2, our credit analysis results show a decrease in the
weighted-average foreclosure frequency (WAFF) for all rating
levels in both transactions. The weighted-average loss severity
(WALS) for each rating level in both transactions increased, due
to the application of our market value decline assumptions. The
combined result is an increase in the required credit coverage
for each rating level," S&P said.

"We have lowered and removed from CreditWatch negative our
ratings on SPS 05-1's class D1c and E notes, and on SPS 05-2's
class E1c notes, as the current levels of credit enhancement
available to these notes are insufficient to mitigate the
increase in required credit coverage. Our cash flow analysis
shows that the level of credit enhancement available for the
class D1a and E2c notes in SPS 05-2 is sufficient to maintain
their current ratings. We have therefore affirmed and removed
from CreditWatch negative our ratings on SPS 05-2's class D1a and
E2c notes," S&P said.

"We have raised to 'A+ (sf)' our ratings on SPS 05-2's class C1a
and C1c notes, due to the improved performance of the assets
backing the transaction and an increase in credit enhancement,"
S&P said.

"Our ratings on SPS 05-1's class B1c and C1c notes, and on SPS
05-2's class B1a and B1c notes, remain on CreditWatch negative
for counterparty-related reasons, following our Nov. 29, 2011
lowering to 'A+' from 'AA-' of our long-term issuer credit rating
(ICR) on the account bank provider, Barclays Bank PLC
(A+/Stable/A-1). Since the Nov. 29 downgrade, Barclays Bank has
been in breach of its replacement triggers documented in the bank
account agreements, which require a short-term rating of 'A-1+',"
S&P said.

"We have received a plan indicating that the cash/bond
administrator may amend the documentation so as to comply with
our counterparty criteria. We will resolve these CreditWatch
placements once we have received confirmation of the amendments
and analyzed their effects. These notes are no longer on
CreditWatch negative in relation to our U.K. RMBS criteria," S&P
said.

"Our credit stability analysis indicates that the maximum
projected deterioration that we would expect at each rating level
for time horizons of one year and three years, under moderate
stress conditions, are in line with our 2010 credit stability
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 Reports
included in this credit rating report are available at:

         http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class                 Rating
            To                    From

Southern Pacific Securities 05-1 PLC
EUR306 Million and GBP489.7 Million Mortgage-Backed Floating-Rate
Notes

Ratings Remaining On CreditWatch Negative[1]

B1c         AA- (sf)/Watch Neg
C1c         AA- (sf)/Watch Neg

Ratings Lowered and Removed From CreditWatch Negative

D1c         BB- (sf)              BBB (sf)/Watch Neg
E           B- (sf)               BB (sf)/Watch Neg

Southern Pacific Securities 05-2 PLC
EUR145.8 Million, US$205 Million, and
GBP310.75 Million Mortgage-Backed Floating-Rate Notes

Ratings Remaining On CreditWatch Negative[1]

B1a         AA- (sf)/Watch Neg
B1c         AA- (sf)/Watch Neg

Ratings Raised and Removed From CreditWatch Negative

C1a         A+ (sf)               A (sf)/Watch Neg
C1c         A+ (sf)               A (sf)/Watch Neg

Ratings Affirmed and Removed From CreditWatch Negative

D1a         BBB- (sf)             BBB- (sf)/Watch Neg
E2c         B (sf)                B (sf)/Watch Neg

Rating Lowered and Removed From CreditWatch Negative

E1c         B- (sf)               B (sf)/Watch Neg

[1]These ratings are no longer on CreditWatch negative for
criteria-related reasons, but remain on CreditWatch negative for
counterparty-related reasons.


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


* S&P Lowers Ratings on 12 Tranches From European CDOs to 'D'
-------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its credit ratings on
16 European synthetic collateralized debt obligation (CDO)
tranches.

A full list of the rating actions is accessible for free at:

                       http://is.gd/4qwDYI

S&P has withdrawn its ratings on these tranches for different
reasons, including:

- the issuer has fully repurchased and canceled the notes,
- the notes have been redeemed earlier, and
- the notes have paid down in full.

"We provide the rating withdrawal reason for each individual
tranche in the separate ratings list," S&P said.

"We have lowered to 'D (sf)' and subsequently withdrawn our
ratings on 12 tranches. 's downgrades to 'D (sf)' follow
confirmation that losses from credit events in the underlying
portfolios exceeded the available credit enhancement levels. This
means that the noteholders did not receive full principal on the
early termination date for these tranches. The ratings lowered to
'D (sf)' will remain at 'D (sf)' for a period of 30 days before
the withdrawals becomes effective," 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 Reports
included in this credit rating report are available at:

         http://standardandpoorsdisclosure-17g7.com


* BOOK REVIEW: Leveraged Management Buyouts
-------------------------------------------
Edited by Yakov Amihud
Beard Books, Washington, D.C. 2002
(reprint of 1989 book published by Dow Jones-Irwin).
268+xiii pages. $34.95 trade paper, ISBN 1-58798-138-6.

The twelve papers were first presented at a 1988 conference
sponsored by the Salomon Brothers Center for the Study of
Financial Institutions held at the New York University Leonard N.
Stern School of Business.  The papers by leading business figures
were "intended to expand the understanding of the causes and
consequences of leveraged management buyouts and to contribute to
the debate on the appropriate public policy to be applied" [from
the editor Amihud's Preface].  This aim involved the analyses of
leveraged management buyouts [MBO] by businesspersons who had
participated in such transactions, review of the latest academic
research on the topic, and a critical look at the relevant
regulatory proposals.  The interest in policy--i. e., government
policy--on MBO's is emphasized by the presence of the notable
Edward J. Markey--at the time the chairman of the
Telecommunications and Finance Subcommitte of the U. S. House of
Representatives--to give a paper on "Legislative Views on
Management Buyouts."  The participaton of Joseph A. Grundfest of
the Securities and Exchange Commission adds to this emphasis.
Other participants are outstanding lawyers and professors in the
fields of corporate finance and buyouts and one participant from
Goldman, Sachs.

When the conference was held and the book published shortly
thereafter in the late 1980s, leveraged buyouts were occurring
across the United States business landscape in "unprecedented
levels, both in number and in size of transaction."  One recalls
that this was the latter years of the two Reagan presidential
terms during which entrepreneurialism, deregulation, mergers and
acquisitions, and other practices for new kinds of business
growth were officially encouraged.  The Reagan policies created a
new business environment.  MBOs were a part of this.

Resembling for the most part the leveraged buyouts (LBOs) which
were occurring widely at the time, MBOs were distinguished within
this activity in that "the incumbent management [of the firm
being bought out] acquires a substantially greater proportion of
the firms' equity than it previously had and the public firm is
merged into the privately owned firm that usually continues to
operate the acquired firm as an independent company."  Oftentimes
particular assets and sometimes whole divisions of the acquired
firm are sold off.  The firm acquiring a company is "normally a
group of investors [who formed] a shell holding corporation,
whose equity is privately held."  Such investors would have a
great deal more latitude in making acquisitions and in selling
off parts of an acquired company than in typical mergers-and-
acquisitions between companies for the purposes of symbiosis or
efficiencies in operations for example.  The managers of a
company more or less take this position toward their company in a
leveraged management buyout.

The concerns and questions raised especially by leveraged
management buyouts in the late 1980s are the same ones as today.
Then as now, MBOs "inspire the question of fairness and the
question of whether this form of restructuring has real economic
benefits."  The papers try to answer these questions though no
definitive answers can be given since questions of fairness and
economic benefits raise further questions about fairness and
benefits for whom; and also business conditions are continually
changing leading to new perspectives and assessments of leveraged
management buyouts.

The severe United States' recession with global repercussions
starting in 2008 once again raises such ethical and economic
questions.  The closing words of Roberta Romano of the Yale Law
School in her paper "Management Buyout Puzzles" still apply:
"Although we have learned a great deal about MBOs, in my
estimation, we are still groping in the dark." As in many
matters, there are no permanent answers or positions.  Some MBOs
are right and beneficial, while others are wrong and harmful.
The learned papers of this collection help readers weigh which
MBOs are which type.

Yakov Amihud is the Ira Leon Rennett Professor of Entrepenurial
Finance at the NYU Stern School of Business who has written on
corporate finance, mergers and acquisitions, and securities'
trading.


                            *********

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.


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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.


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