---

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

                           E U R O P E

            Friday, June 8, 2012, Vol. 13, No. 114

                            Headlines



A U S T R I A

UBS AG: Moody's Cuts Rating on EUR25MM Credit-Linked Notes to Ba1
* AUSTRIA: Moody's Takes Ratings Actions on Three Banks
* AUSTRIA: Number of Insolvent Companies Reaches 3,260 in 2011


B E L G I U M

DEXIA SA: Gets EU Approval for EUR10-Bil. State Guarantee Hike


C R O A T I A

CROATIAN BANK: Moody's Standalone Financial Strength Still at Ba2


G E R M A N Y

SCHLECKER: CEO Sold Logistics Center Prior to Insolvency
SUEDZUCKER AG: S&P Raises Rating on Subordinated Notes to 'BB+'
* GERMANY: Moody's Cuts Takes Rating Actions on Seven Banks


G R E E C E

X.K TEGOPOULOS: Court Rejects Bankruptcy Classification Bid
* GREECE: Moody's Cuts Ratings on Structured Finance Securities


H U N G A R Y

ERSTE GROUP: Moody's Takes Rating Actions on Three Subsidiaries
PBG SA: Idea, Amplico Funds Seek "Immediate" Bond Buyback
PBG SA: Bankruptcy Filing No Impact on Rafako, PKO Bank
* POLAND: Banks No Exposure to Polish Builder Bankruptcies


I R E L A N D

BLOXHAM: Liquidator Allowed to Instruct Lawyers in Proceedings


R O M A N I A

* ROMANIA: Construction, Realty, Trade Sectors Face Insolvencies


R U S S I A

CARGO JFC: Court Suspends Proceedings in Sberbank Suit
MDM BANK: Moody's Changes Outlook on 'D' BFSR to Negative
RAIFFEISEN BANK: Moody's Takes Rating Actions on 5 Subsidiaries


S P A I N

BANKIA SA: Spanish Prosecutors Launch Probe After EUR19BB Bailout
BBVA RMBS: Moody's Assigns '(P)B1' Rating to Serie C Note
WHITE TOWER: Fitch Downgrades Rating on Class E Notes to 'Csf'


U N I T E D   K I N G D O M

EUROPEAN LOAN: Fitch Affirms 'CCCsf' Rating on Class E Notes
* UK: Court Closes Unscrupulous Landbanking, Carbon Credit Firms


U Z B E K I S T A N

UNIVERSAL BANK: Fitch Affirms 'CCC' LT Issuer Default Ratings


X X X X X X X X

* BOOK REVIEW: Ralph H. Kilmann's Beyond the Quick Fix


                            *********


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


UBS AG: Moody's Cuts Rating on EUR25MM Credit-Linked Notes to Ba1
-----------------------------------------------------------------
Moody's Investors Service has downgraded the rating of the
following credit linked notes issued by UBS AG:

Issuer: UBS AG

Ser 174, EUR25 million FIX Credit-Linked Step-Up Euro Medium Term
Notes, Downgraded to Ba1; previously on Nov 18, 2011 Baa2 Placed
Under Review for Possible Downgrade.

The transaction is a credit linked note issued by UBS AG
referencing the subordinated debt of UniCredit Bank Austria AG.

Ratings Rationale

Moody's explained that the rating action taken on June 6 is the
result of a rating action on UniCredit Bank Austria AG, whose
general program subordinate debt rating was downgraded to (P)
Baa3 from (P) A3 under review for possible downgrade on 6 June
2012.

The rating of the issuer, UBS AG, was also placed under review
for possible downgrade on February 15, 2012. Following the
guidance given in the press release titled "Moody's Reviews
Ratings for European Banks", Moody's considered various
sensitivity scenarios including up to a 3 notch downgrade of UBS.
The corresponding outcomes are consistent with the rating
assigned on June 6.

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

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

Moody's quantitative analysis of Repacks is designed to estimate
the expected loss "EL" borne by the Repack investor, given the
transaction structure, the Collateral and any other credit risks
arising under the transaction. To this end, Moody's relies on an
EL analysis in which Moody's identifies and attaches
probabilities to events that might give rise to losses to Repack
noteholders.

Moody's EL calculation assesses the probability and severity of
each possible loss-inducing event happening at discrete
(typically one-year) intervals through the life of the
transaction. The EL for each of these time points can then be
aggregated to provide a weighted-average EL for the rated notes.

No additional cash flow analysis or stress scenarios have been
conducted as the rating was directly derived as described above
using the ratings of UniCredit Bank Austria AG and UBS. Moody's
analysis also includes stresses on the default probability and
severity of the UniCredit Bank Austria AG subordinated debt in
order to take into account the widely defined credit event
definitions and deliverable obligations.


* AUSTRIA: Moody's Takes Ratings Actions on Three Banks
-------------------------------------------------------
Moody's Investors Service has taken various rating actions on
Austrian banks, including downgrades of the debt and deposit
ratings of the three largest Austrian banking groups.

The senior debt and deposit ratings of Raiffeisen Bank
International (RBI) and UniCredit Bank Austria (UBA) were
downgraded by one notch, whilst those of Erste Group Bank AG
(Erste) were downgraded by two notches. The new ratings are as
follows:

  * RBI, deposit ratings A2, standalone bank financial strength
    rating (BFSR) D+ / baseline credit assessment (BCA) ba1,

  * UBA, deposits A3, BFSR D+ / BCA ba1,

  * Erste, deposits A3, BFSR D+ / BCA baa3.

The short-term ratings for Erste and UBA have been downgraded by
one notch to Prime-2, reflecting the same considerations that
triggered the long-term rating changes. RBI's Prime-1 rating has
not been affected by the rating action.

The debt and deposit ratings and standalone credit assessment for
RBI carry stable outlooks. The debt and deposit ratings for UBA
carry negative outlooks, due to the negative outlook on its
parent's ratings. The standalone credit assessment for UBA
carries a stable outlook. The debt and deposit ratings and
standalone credit assessment for Erste carry negative outlooks
given the bank's less diversified CEE franchise which makes Erste
more vulnerable to negative developments in single countries such
as the adverse and uncertain operating conditions in Romania and
Hungary, where Erste has sizeable operations.

The rating downgrades for the three major Austrian banks reflect
their vulnerability to the adverse operating conditions in some
of their core markets in Central and Eastern Europe and the
Commonwealth of Independent States (CEE/CIS) and the increased
risk of further shocks from the ongoing euro area debt crisis.
Specifically, the main drivers underlying the rating actions are:

- Risks to asset quality resulting from their exposures to the
   CEE/CIS region and increased uncertainty from the euro area
   crisis.

- Limited capital buffers to absorb losses in a stressed
   environment, which leave banks vulnerable to further asset
   quality deterioration and other potential shocks. While
   Austrian banks have improved capital and reserves, loss-
   absorption capacity in an adverse scenario remains below that
   of many European banking peers.

- Moderate reliance on wholesale funds which, while manageable,
   renders the banks susceptible to the increased risk of
   possible disruptions amidst the adverse and highly uncertain
   current environment.

Moody's recognises several mitigating factors that have limited
the extent and scope of the actions on Austrian banks. These
include (i) the three largest banks' solid franchises which
generate solid pre-provision earnings; (ii) the relatively stable
domestic environment, (iii) the benefits derived from being an
integral part of the intrinsically strong Austrian cooperative
sector (in the case of RBI), of the Austrian savings banks sector
(in the case of Erste), and the broader franchise and access to
funding that UBA obtains via its parent UniCredit SpA (UniCredit,
deposits A3, BFSR C- / BCA baa2). Moody's also recognizes
positively that the three largest Austrian banks have limited
direct exposures to countries in Europe's southern periphery.

The average deposit rating for Austrian banks of A3 positions the
banks in the middle to lower range across western European
banking systems. The average standalone credit assessment of ba1
ranks at the lower end compared with many European peers. This
reflects Moody's view that the banks will be challenged by
adverse operating conditions in western Europe and the CEE/CIS
region, which Moody's expects will persist through 2012 and
likely beyond. The rating agency's assumptions about external
support for the three largest Austrian banks are unchanged and
lead to their deposit ratings being positioned three to five
notches above their standalone credit assessments.

Several Bank Ratings Remain On Review For Issuer-Specific Reasons

At the same time, Moody's decided to maintain the review for
downgrade of the ratings of Hypo Tirol Bank AG (deposits A2; BFSR
D / BCA ba2) and Oesterreichische Volksbanken AG (deposits Baa2;
BFSR E+ / BCA b1) together with its subsidiary Investkredit AG
(deposits Baa2; BFSR E+ / BCA b1). While these banks are also
affected by the worsening operating environment in Europe, the
ongoing rating reviews are mainly driven by reasons that are
specific to each individual bank. Moody's also maintains the
review for downgrade of the backed ratings of Pfandbriefstelle
der Oesterreichischen Landes-Hypothekenbanken (senior Aaa, review
for downgrade) that were put on review on February 21, 2012 as a
result of the gradual credit deterioration of Pfandbriefstelle's
member banking groups and their statutory guarantors, the
respective Austrian states or municipalities.

A List of the Affected Credit Ratings, which identifies each
affected issuer, is available at:

http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_142798

Moody's also published a Special Comment entitled "Key Drivers of
Austrian Bank Rating Actions," which provides more detail on the
rationales for these rating actions.  The Special Comment is
available at http://is.gd/eDM7sR

1.) RATINGS RATIONALE: STANDALONE CREDIT STRENGTH

- FIRST KEY DRIVER: RISKS TO ASSET QUALITY

Moody's expects that problem loan levels at the three largest
Austrian banks will remain persistently high in 2012 and beyond,
causing elevated provisioning requirements that may consume a
large portion of these banks' pre-provision earnings,
particularly if combined with possible further shocks from the
euro area debt crisis. This outlook considers their large
exposures to CEE/CIS markets that are more volatile (both
economically and in some cases politically) than most western
European economies, except for the most stressed euro area
countries.

Moody's believes that elevated risks, particularly in the current
volatile, uncertain environment, are highlighted by the recent
deterioration in asset quality, including losses in longstanding
markets for Austrian banks like Hungary. Average problem loan
levels of rated Austrian banks rank among the highest across
western European banking systems, at 11.0% of gross loans as of
year-end 2011, up from 9.9 % at year-end 2010 (source: company
reports).

- SECOND KEY DRIVER: LOW CAPITAL BUFFERS RELATIVE TO RISK
PROFILES

In Moody's view, the three largest Austrian banks' limited
capital buffers, combined with elevated asset quality risks,
leave them vulnerable to severe stress scenarios. As such,
limited capital cushions are a key negative credit driver for
these banks. While Moody's recognizes the banks' progress in
strengthening regulatory capital ratios in recent years, the
asset-weighted average Tier 1 ratio for Moody's-rated Austrian
banks of 9.5% at year-end 2011 (source: company reports) still
ranked below several western European peers. The average for all
rated Austrian banks is driven in large part by limited capital
at the three largest institutions.

- THIRD KEY DRIVER: RELIANCE ON WHOLESALE FUNDS

Another factor contributing to the downgrades is Moody's view
that the moderate reliance of the three largest Austrian banks on
wholesale funding, while manageable, increases their
susceptibility to external shocks. Given the current difficult
European operating environment, Moody's considers the risk of
sudden market movements and changes in investor confidence to be
elevated. This increased likelihood of shocks -- rather than any
change to the banks' funding profiles -- is a key driver behind
Moody's assessment that the risks facing creditors of the three
largest Austrian banks have increased.

Limiting concerns about liquidity risks, Moody's recognizes that
the three banks have to date weathered difficult funding market
conditions well. The rating agency also notes that, after relying
to some extent on wholesale funds to finance rapid loan growth in
CEE/CIS markets prior to the crisis, Austrian banks have in
recent years increasingly focused on raising local funding. This
reduces the need to access more costly wholesale funds and offers
a more sustainable business model. For now, however, a certain
portion of foreign assets is still funded in international
capital markets, including with short-term interbank deposits,
which Moody's regards as a potentially volatile funding source.

2.) RATINGS RATIONALE: LONG- AND SHORT-TERM DEBT & DEPOSIT
RATINGS

The downgrades of the senior debt and deposit ratings for the
three largest Austrian banking groups are driven by downgrades of
their standalone credit assessments. Moody's has not changed its
assumptions about the availability of support for the three
largest banks. Their senior debt and deposit ratings continue to
be positioned three to five notches above their standalone credit
assessments. This support-driven ratings uplift incorporates
Moody's assumptions about access to support from the Austrian
cooperative sector (leading to two notches of uplift for RBI),
parental support (leading to two notches of uplift for UBA) and
governmental support (leading to two additional notches of uplift
for UBA and three additional notches for Erste and RBI).

Moody's continues to consider Austria as a medium support
country. Given the importance of the banking system for Austria's
economy and industrial backbone together with the long standing
political tradition of the country in the CEE/CIS region, any
failure of a major banking institution with subsequent bail ins
of senior debt is likely to trigger a severe confidence crisis
for the Austrian banking system. Moody's therefore expects
further emphasis on macroprudential measures to contain these
risks rather than a withdrawal of support. Moody's notes that
support assumptions remain subject to review in the context of
the ongoing EU-wide resolution regime introduction.

The Austrian sovereign's own credit strength -- reflected in the
current government bond rating of Aaa, with a negative outlook --
did not contribute to any of the downgrades (for detail on the
sovereign.

3.) RATINGS RATIONALE: SUBORDINATED DEBT AND HYBRID RATINGS

In addition, Moody's has downgraded senior subordinated debt
ratings for Austrian banks, following the removal of assumption
of government (or systemic) support for this debt class. Senior
subordinated debt ratings are now notched off the banks' adjusted
stand-alone credit profile. This reflects Moody's view that
systemic support for the subordinated debt of Austrian banks may
no longer be sufficiently predictable or reliable to warrant
incorporating uplift into Moody's ratings. Moody's also
downgraded the hybrid ratings of the three major Austrian banks
in line with the downgrade of their adjusted stand-alone credit
profile.

4.) RATINGS RATIONALE: RBI'S US COMMERCIAL PAPER PROGRAM

At the same time, Moody's decided to downgrade RBI's US CP
program to Not Prime from P-1 as the program no longer meets
Moody's requirements for liquidity risk insurance for a P-1
rating due to a change in the program structure. As there is no
debt outstanding under the program, Moody's decided to
subsequently withdraw the rating for its own business reasons.

ACTIONS FOLLOW REVIEW ANNOUNCEMENTS ON FEBRUARY 15, 2012 AND
OTHER DATES

The rating actions follow Moody's decision to review for
downgrade the ratings of 114 European financial institutions,
including Austrian banks. Erste had already been placed on review
for downgrade before that date. The ratings for Pfandbriefstelle
der Oesterreichischen Landes-Hypothekenbanken (backed senior Aaa,
review for downgrade) were put on review on 21 February.

WHAT COULD MOVE THE RATINGS UP/DOWN

In view of the rating downgrades and the negative outlooks for
most banks, Moody's does not consider upgrades of the banks'
ratings to be likely in the near term. However, a limited amount
of upward rating pressure could develop if any bank substantially
improves its credit profile and resilience to the prevailing
conditions. This may occur through increased standalone strength,
e.g. bolstered capital and liquidity buffers, a work-out of asset
quality challenges or significantly improved earnings.

Several factors could cause further downward rating changes, such
as (i) asset quality deterioration beyond current expectations;
(ii) deteriorating earnings and capital levels; and (iii)
increasingly restricted capital markets access.

The methodologies used in these ratings 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.

Bank-Specific Rating Considerations

A List of Affected Credit Ratings is available at:

http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_142798

- ERSTE GROUP BANK (Erste) (deposits A3, BFSR D+ / BCA baa3)

The two notch lowering of Erste's standalone credit assessment
reflects the combination of the recent significant asset quality
deterioration and the sizable exposure to Hungary and Romania
which together with a less diversified franchise in the region
makes the bank more dependent on developments in the remaining
performing CEE countries, notably Czech Republic and Slovakia.
The negative outlook on the ratings is driven by the tail risk
resulting from Hungary and Romania. Capital ratios under Moody's
stress scenarios appear vulnerable. This weakness is partly
counterbalanced by Erste's strong domestic Austrian franchise
(carrying the savings bank brand) and the relatively low exposure
to euro area peripheral countries.

- RAIFFEISEN BANK INTERNATIONAL (RBI) (deposits A2, BFSR D+ /
BCA ba1)

The one notch lowering of RBI's stand-alone credit assessment
reflects the bank's vulnerability to further asset-quality
deterioration in the current volatile market environment given
the bank's tight capital profile. The bank's risk profile is more
geared toward riskier CEE/CIS countries than that of its major
Austrian competitors (67% of its loan book, 24% in non-
investment-grade countries; source: company reports). The rating
agency acknowledges that RBI has sound non-performing loans (NPL)
coverage ratios, which mitigate the potential credit-negative
effects if losses were to materialize. At their current level the
ratings already reflect a further moderate deterioration of the
operating environment in CEE / CIS, therefore the stable outlook.

- RAIFFEISEN ZENTRALBANK AG OESTERREICH (RZB) (deposits A3)

The one notch downgrade of RZB's long term and short term debt
and deposit ratings to A3 / Prime-2 follows the downgrade of the
long-term deposit rating of RZB's majority owned main operating
subsidiary RBI. Given that RZB's earnings as a holding company
depend almost exclusively on income streams from RBI, Moody's
continues to rate RZB 's long term ratings one notch below RBI's.
Certain backed long-term senior unsecured or subordinated ratings
of RZB benefit from an unconditional and irrevocable guarantee of
RBI, such that RBI's respective ratings continue to be passed
through to the eligible securities.

- UNICREDIT BANK AUSTRIA AG (UBA) (deposits A3, BFSR D+/BCA ba1)

The one notch lowering of UBA's stand-alone credit strength
assessment reflects the bank's vulnerability due to (i) weakened
asset quality with NPLs at 10.1% of gross loans, the highest
amongst the three largest Austrian banks, in combination with a
low problem loan coverage (52 %), and (ii) the bank's relatively
high gearing into wholesale funding (loan-to-deposit ratio of
136% as of FY2011; source: company reports). In Moody's view,
this renders the bank more vulnerable to confidence-sensitive
funding than its Austrian peers. The current rating is supported
by factors including the bank's solid capital adequacy levels and
its well diversified CEE/CIS franchise (49% of its loan book, 31%
in non-investment-grade countries; source: company reports).
UBA's fundamental credit strength incorporates a further moderate
deterioration of the operating environment in CEE / CIS,
therefore the stable outlook on the BFSR. The negative outlook on
the senior debt and deposit ratings is driven by the negative
outlook on the credit strength of the bank's parent, UniCredit.

- card complete Service Bank AG (card complete) (deposits Baa2,
BFSR D/BCA ba2)

The one notch lowering of card complete's deposit ratings to Baa2
reflects the weakening credit profile of UBA, its majority
shareholder. Moody's continues to incorporate very high parental
support assumptions into card complete's long-term ratings whose
negative outlook follows the outlook on UBA's long term ratings.


* AUSTRIA: Number of Insolvent Companies Reaches 3,260 in 2011
--------------------------------------------------------------
Austrian Times reports that Kreditschutzverband 1870 said that
some 3,260 companies declared themselves insolvent last year, a
threefold increase in the number of insolvencies since 1990 when
it was 1,250.  The main reasons for the closure of the businesses
have been management mistakes, competition and an overreaching of
resources, the report says.

Austrian Times notes that the number of firms however has also
increased from 210,000 to 470,000 since 1990.

According to the report, an analysis of the insolvencies show
that 53% were responsible for their own downfalls.

Kreditschutzverband 1870 is responsible for monitoring and
keeping tabs on bankruptcies in Austria.



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


DEXIA SA: Gets EU Approval for EUR10-Bil. State Guarantee Hike
--------------------------------------------------------------
John Martens at Bloomberg News reports that Dexia SA, the French-
Belgian lender that is being broken up, obtained European Union
approval for a EUR10 billion (US$12.6 billion) increase in state
guarantees as the bank faces margin calls after German bond
yields declined.

"The purpose of the guarantee and its current increase is to
preserve the financial stability of the member states concerned,
given the systemic importance of Dexia," Bloomberg quotes the
European Commission, the EU's antitrust regulator, as saying on
Wednesday in a statement.  "The ceiling is thus raised to a
maximal amount of EUR55 billion."

Dexia, which last week won a four-month extension of the
temporary government backstops until Sept. 30, has tapped almost
EUR44.8 billion of the guarantees, according to data compiled by
the Belgian central bank, Bloomberg notes.

The commission said in a statement on Wednesday that EU
regulators are probing the guarantees amid "doubts" that the
state support is compatible with EU rules for banks in crisis
because it adds to earlier "massive aid" to rescue the bank.

Under the terms of the temporary guarantee agreement, the lender
needs to post collateral for most of the government-backed
certificates of deposit that are issued by Paris-based Dexia
Credit Local SA, Bloomberg states.

The EU "will take a final decision on the temporary guarantee as
part of its final assessment of the orderly resolution plan of
Dexia," the regulator, as cited by Bloomberg, said.

The commission must examine large government subsidies to
companies and can order aid to be repaid if it harms competition,
Bloomberg discloses.

Dexia SA is a Belgian-based bank and insurance carrier that
focuses on Public and Wholesale Banking, providing local public
finance actors with banking and financial solutions, and on
Retail and Commercial Banking in Europe, mainly Belgium, France,
Luxembourg and Turkey.



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


CROATIAN BANK: Moody's Standalone Financial Strength Still at Ba2
-----------------------------------------------------------------
Moody's Investors Service has changed the outlook to negative
from stable on the Baa3 long-term foreign-currency issuer rating
of Croatia's government related issuer (GRI), the Croatian Bank
for Reconstruction and Development (HBOR). Similarly the outlook
on HBOR's (P)Baa3 backed senior unsecured MTN program rating was
also changed to negative from stable. The outlook change was
triggered by the recent change to negative from stable of the
outlook on the Baa3 local-currency sovereign bond rating.

The standalone financial strength of the institution, as measured
by its baseline credit assessment (BCA) of 12 (on a scale of 1-
21), equivalent to Ba2 on Moody's long-term rating scale, remains
unaffected and was not a driver of the outlook change.

Ratings Rationale

In view of the 100% government ownership of HBOR, Moody's
continues to believe that the Croatian government remains
committed to supporting this entity in case of need. This is
further underlined by HBOR's development mandate, its strategic
importance in terms of policy implementation, and the fact that
the bank's obligations benefit from an explicit, irrevocable
state guarantee. As HBOR's issuer and debt ratings benefit from a
two-notch systemic support uplift, the assigned negative outlook
reflects the corresponding outlook change on the support anchor,
Croatia's local-currency sovereign bond rating.

What Could Move The Ratings Up/Down

As HBOR's obligations benefit from an explicit, irrevocable state
guarantee, its issuer and senior unsecured debt ratings would
move up or down in tandem with any upgrade or downgrade of
Croatia's local-currency bond rating.

The methodologies used in this rating were Bank Financial
Strength Ratings: Global Methodology published in February 2007,
and Government-Related Issuers: Methodology Update published in
July 2010.

As of the end of December 2011, Croatian Bank for Reconstruction
and Development had total assets of HRH 22 billion (US$3.7
billion) and is headquartered in Zagreb, Croatia.



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


SCHLECKER: CEO Sold Logistics Center Prior to Insolvency
--------------------------------------------------------
Niklas Magnusson at Bloomberg News, citing Bild newspaper,
reports that Anton Schlecker, Chief Executive Officer of
Schlecker, sold the retail-drug store's logistics center in
Poechlarn, Austria, to his children Meike and Lars Schlecker for
EUR2.5 million (US$3.1 million) six days before the company filed
for insolvency.

As reported by the Troubled Company Reporter-Europe on March 20,
2102, Reuters related that Schlecker filed for insolvency in
January after struggling to secure funds against a gloomy
economic backdrop.

Schlecker is a German drugstore chain.  It employs 14,300 people
in the country.


SUEDZUCKER AG: S&P Raises Rating on Subordinated Notes to 'BB+'
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term corporate
rating on Germany-based sugar and related agro-products
manufacturer Suedzucker AG to 'BBB+' from 'BBB'. The outlook is
stable.

At the same time, we affirmed the 'A-2' short-term rating. We
also raised our issue rating on Suedzucker's unsecured notes to
'BBB+' from 'BBB', and our issue rating on Suedzucker's
subordinated notes to 'BB+' from 'BB'," S&P said.

"The upgrade reflects our view that Suedzucker will continue its
strong performance in fiscal 2013 (year-end is the end of
February) and fiscal 2014," S&P said.

"We believe the improvement in credits metrics--to 1.8x adjusted
leverage and FFO-to-debt of 44% in fiscal 2012--will persist in
fiscal 2013," said Standard & Poor's credit analyst Florence
Devevey. "We anticipate some decline in fiscal 2014 and
thereafter, but we believe metrics will remain commensurate with
the 'BBB+' rating, with leverage below 2.5x and FFO-to-debt
around 40%, on a sustainable basis."

"The stable outlook reflects our view that Suedzucker should be
able to continue to perform soundly over the next 18 months, and
continue to generate solid positive free cash flow despite
negative working capital movements and moderately increasing
capital expenditures," S&P said.

"We could lower the ratings if adjusted leverage was in the high-
2x area while FFO-to-debt was below 35% on a sustainable basis,"
S&P said.

"Given the predictability of the quota sugar operations for the
rest of the 2011/2012 sugar marketing year, and the elevated EU
sugar prices--which, we believe, will persist for a least part of
the 2012/2013 sugar campaign--we believe that for fiscal 2013,
downside risk would likely primarily result from the group's
unexpected deviation from its disciplined financial policy," S&P
said.

"An upgrade appears remote. However, we could raise the ratings
if Suedzucker were to commit to a tighter financial policy, or to
increasing its size and diversification, thereby improving its
business risk profile to 'strong' from the current
'satisfactory,'" S&P said.


* GERMANY: Moody's Cuts Takes Rating Actions on Seven Banks
-----------------------------------------------------------
Moody's Investors Service has taken various rating actions on
seven German banks and their subsidiaries, as well as one German
subsidiary of a foreign group. As a result, the long-term debt
and deposit ratings for six groups and one German subsidiary of a
foreign group have declined by one notch, while the ratings for
one group were confirmed. Moody's also downgraded the long-term
debt and deposit ratings for several subsidiaries of these
groups, by up to three notches. At the same time, the short-term
ratings for three groups as well as one German subsidiary of a
foreign group have been downgraded by one notch, triggered by the
long-term rating downgrades.

Further to these actions, Moody's has assigned stable outlooks to
the ratings of most German banks. The ratings of two groups and
of one German subsidiary of a foreign bank carry negative
outlooks, reflecting bank-specific vulnerabilities to a possible
further deterioration of the environment.

The ongoing rating review for Deutsche Bank AG and its
subsidiaries will be concluded together with the reviews for
other global firms with large capital markets operations.

The rating actions are driven by the increased risk of further
shocks emanating from the euro area debt crisis, in combination
with the banks' limited loss-absorption capacity. The key drivers
of the rating actions on German banks are:

- Increased risks to asset quality for the banks affected by the
actions due to their exposures to asset classes prone to further
deterioration if downside risks from the euro area debt crisis
and the weakened global economic outlook materialize.

- Limited loss-absorption capacity, given the comparatively
small equity cushions relative to total assets (not risk-
weighted) and low pre-provision earnings. As a result, many
German banks have limited capacity to absorb losses out of
earnings, raising the potential that capital could diminish in a
stress scenario.

Moody's notes that several factors have caused the ratings of
many German banks to decline by less than for other European
banks and also less than the initial maximum guidance
communicated on 15 February 2012. One mitigating factor is the
comparatively benign operating environment in the German home
market, supported by below-average unemployment, low household
and corporate debt levels and the general resilience of the
German economy. Another critical mitigating factor is the modest
funding risk of many German banks, underpinned by broadly matched
maturity profiles, recurring access to intra-sector funds (for
the Landesbanks and the central institutions of the German
cooperative banking sector), and improved liquidity buffers.
Moreover, Moody's recognizes the steps German banks have taken to
address past asset quality challenges; however, as stated above,
significant downside risks remain.

The rating actions have no impact on debt issued by Landesbanks
that is guaranteed by state governments (grandfathered debt). The
ratings for this debt continue to reflect the applicable sub-
sovereign long-term and short-term ratings.

A List of Affected Credit Ratings is available at:

  http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_142799

Moody's has also published a Special Comment entitled "Key
Drivers of German Bank Rating Actions," available at
http://is.gd/tJAjGy,which provides more detail on the rationale
for these rating actions.

The (asset-weighted) average deposit rating of German banks of A2
now falls in the mid-range for western European banking systems.
The average standalone credit assessment of baa3 ranks in the
mid-to-lower range compared with European peers. Moody's has not
changed its assumptions about the likelihood of support from
external sources, such as parent owners, broader sector groups,
and governments. Reflecting these support assumptions, many
German banks' debt and deposit ratings continue to be positioned
several notches above their standalone credit assessments.

1.) RATINGS RATIONALE -- STANDALONE CREDIT STRENGTH

The rating actions are driven by the increased risk of further
shocks emanating from the euro area debt crisis in combination
with the banks' limited loss-absorption capacity. This has
weakened the standalone credit strength of the affected banks.
All banking groups are affected, to varying degrees, by the key
adverse drivers and mitigating factors noted above. On balance,
these factors have reduced the standalone credit strength of
those German banks whose ratings have been downgraded.

FIRST ADVERSE DRIVER -- RISKS TO ASSET QUALITY

German banks' lending operations include activities that are
exposed to the risk of a worsening euro area debt crisis and to
the difficult overall European and international operating
environment.

Asset-side vulnerabilities include exposure to (i) the global
shipping sector, which is also vulnerable to weakening economic
growth and faces structural overcapacity; (ii) international
commercial real estate (CRE) markets, with CRE exposures of
several German banks being concentrated in markets that saw
falling prices, such as the US, the UK and Spain; (iii) legacy
holdings of structured credit products; and, (iv) securities of
and other exposures to stressed euro area countries (Greece,
Ireland, Italy, Portugal, Spain, or GIIPS). According to Moody's
estimates, the German banks affected by the rating actions had
combined exposures of approximately three times their Tier 1
capital in higher-risk asset classes at year-end 2011 after
hedges and estimated write-downs and provisions (source: company
information, Moody's Investors Service estimates).

While Moody's recognizes that German banks have taken actions in
recent years to address asset quality challenges, the rating
agency believes that banks have only partially incorporated the
downside risks posed by the ongoing euro area debt crisis and
evolving global economic trends. As such, they may record further
significant losses, if such downside risks materialize.

Positively, Moody's sees limited challenges arising from German
banks' domestic loan books amidst stable economic conditions.
Some elevated risks are, however, contained in exposures to
export-driven German manufacturers and in domestic CRE loans.

SECOND ADVERSE DRIVER -- LIMITED LOSS ABSORPTION CAPACITY

Moody's believes the capital positions of several German banks
are vulnerable to erosion under stress, given (i) their above-
described exposure to asset classes that are likely to be
impacted by a worsening operating environment in Europe, (ii)
elevated risks from the ongoing euro area crisis, and (iii) their
low pre-provision earnings.

While most German banks have significantly improved their
regulatory capital ratios, as well as the quality of their
capital, this is more than offset in Moody's opinion by the
elevated, and rising, risk of external shocks and losses that may
arise from the evolving European debt crisis. With only 4.0% of
their assets backed by equity at year-end 2011 (source: company
information), the simple balance-sheet leverage displayed by
rated German banks remains lower than that of many European
peers. While simple leverage does not capture the risk content of
assets, it complements regulatory ratios based on risk-weighted
assets (RWAs). The latter can be misleading, given differences in
regulatory rules and also given that some assets with very low
risk weights have caused massive losses in recent years,
including for German banks.

Moreover, Moody's expects German banks' pre-provision
profitability to remain low on an international comparison. This
outlook is driven by Germany's highly competitive banking market
and, for some banks, also by ongoing restructuring and franchise
adjustments that leave them below their full earnings potential.

MITIGATING FACTORS -- BENIGN DOMESTIC ENVIRONMENT AND MODEST
FUNDING RISK

The magnitude of the rating actions has been limited by the
benign domestic operating environment for German banks,
especially when compared with that of the more stressed euro area
countries. Germany currently enjoys low unemployment and
sustained, albeit slowing, economic growth, although the
economy's interconnectedness with other euro area countries poses
downside risks. Another mitigating factor is the modest funding
risk for many German banks, despite sizeable reliance on
wholesale funds. These funds are often provided by less
confidence-sensitive sources, for example by parent funding, or
intra-sector flows from deposit-rich local savings banks (for
Landesbanks) and local cooperative banks (for central
institutions of the cooperative banking sector).

2.) RATINGS RATIONALE -- LONG- AND SHORT-TERM DEBT AND DEPOSIT
RATINGS

The downgrade in German banks' long- and short-term debt ratings
was driven by downgrades of their standalone credit assessments.
Moody's has not changed its assumptions regarding the
availability of support from a bank parent, cooperative group or
regional or local government, or the central government. The
senior debt and deposit ratings of many German banks are
positioned several notches above their standalone credit
assessments, reflecting Moody's expectation that they would have
access to several sources of external support if necessary.

3.) OVERVIEW AND RATINGS RATIONALE -- SUBORDINATED DEBT AND
HYBRID RATINGS

Moody's has also downgraded the subordinated and hybrid debt
ratings of German banks by up to three notches. The downgrades
reflect changes in the banks' underlying creditworthiness, as
Moody's had previously removed assumptions of government (or
systemic) support from this debt class.

The Rating Actions Conclude the Reviews Of German Banks Announced
on February 15 2012

The rating actions conclude the review for downgrade of German
banks, which had been initiated alongside reviews for downgrade
of many other European financial institutions on 15 February
2012. Some of the bank ratings downgraded had already been placed
on review for downgrade on other dates.

What Could Move The Ratings Up/Down

Rating upgrades for German banks are unlikely over the near term
in view of the actions and the negative rating outlooks for some
banks. Nevertheless, a limited amount of upward rating pressure
could develop if a bank substantially improves its credit profile
and resilience to current conditions, for example, if improved
standalone strength were to be achieved by bolstering capital and
liquidity buffers, thereby reducing exposures to higher-risk
asset classes, or by recording significant growth in earnings.

Several factors could result in further downward rating changes.
These include (i) a further deterioration of the euro area crisis
leading to asset quality deterioration beyond current
expectations; (ii) deteriorating earnings and capital levels; and
(iii) increasingly restricted access to the debt capital markets.


The methodologies used in these ratings 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. Please see
the Credit Policy page on www.moodys.com for a copy of these
methodologies.

Bank Specific Rating Considerations:
(listed alphabetically, by group)

A List of the Affected Credit Ratings is available at:

http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_142799

COMMERZBANK AG (deposits A3, BFSR D+ / BCA baa3)

The confirmation of Commerzbank's standalone credit assessment
takes account of the recent progress the bank has made in
restoring its regulatory capitalization to the level required by
the European Banking Authority (EBA), as well as progress in its
efforts to de-risk and downsize its balance sheet. The deposit
ratings were downgraded by one notch each to A3/Prime-2, which
reflects the prior downgrade of Commerzbank's standalone credit
assessment on 18 January 2012. On 18 January, Moody's had lowered
Commerzbank's standalone credit assessment and kept it on review
for further downgrade. At the same time, Moody's had placed the
long-term and short-term ratings on review for downgrade, but not
yet downgraded them, given the uncertain outcome of the pending
review of the standalone credit assessment, as well as Moody's
review of short and long-term support considerations. Following
the confirmation of the standalone credit assessment at baa3, the
reviews of the long-term and short-term ratings have been
concluded with one-notch downgrades. The senior ratings
incorporate unchanged, high systemic support assumptions. The
outlook on the ratings was changed to negative, as
vulnerabilities remain in the areas of Commerzbank's large sector
and single-borrower risk concentrations and sizeable exposures to
borrowers in Europe's periphery, and also given the uncertain
outlook for European financial markets.

COMMERZBANK EUROPE IRELAND PLC (deposits A3, BFSR D+ / BCA baa3)

The confirmation of the standalone credit assessment of this
Irish entity and the one-notch downgrade of its deposit rating
follow the rating actions for its parent bank, Commerzbank AG,
and the unchanged approach to align all ratings of the subsidiary
with those of its parent. This approach is based on the legal
obligation of Commerzbank as majority stakeholder, based on the
"unlimited company" status of the Irish bank, to make good any
shortfalls of funds in liquidation. All ratings carry a negative
outlook, reflecting the outlook on the ratings of Commerzbank AG.

- COMMERZBANK INTERNATIONAL S.A., LUXEMBOURG (CISAL, deposits
Baa1, BFSR C- / BCA baa1)

The two notch decline of CISAL's standalone credit assessment to
baa1 takes account of the inter-linkages between its credit
profile and the weaker standalone profile of its parent, which
was downgraded by one notch on 18 January 2012. Moody's believes
that CISAL's franchise remains dependent on the overall
Commerzbank group, given the subsidiary's limited strategic and
financial autonomy. As such, the weakening of the parent's credit
profile adversely affects CISAL. The baa1 standalone credit
assessment for CISAL is now positioned two notches above
Commerzbank's, reflecting the linkage to the parent, as well as
CISAL's solid standalone wealth management franchise and its
sound liquidity and capital. While Moody's principally
acknowledges a high probability of parental support, this does
not lead to any uplift for CISAL's deposit rating. The outlook on
CISAL's ratings is negative, in line with its parent.

- DEUTSCHE SCHIFFSBANK (deposits A3, BFSR D / BCA ba2 - Ratings
Withdrawn)

Following the legal merger of Deutsche Schiffsbank into
Commerzbank, which took effect on 23 May 2012, Moody's has
confirmed the bank's long-term ratings and then withdrawn
Deutsche Schiffsbank's standalone credit assessment and the long-
term ratings at their current level.

- EUROHYPO AG (deposits Baa2, BFSR E / BCA caa1)

The one-notch lowering of the standalone credit assessment was
driven by the impairment of the bank's franchise and the recent
decision by the European Commission that Eurohypo has to
discontinue its business, relinquish its brand name and be
unwound by its parent bank, Commerzbank AG. In line with earlier
guidance, Moody's has downgraded the senior unsecured debt and
deposit ratings by two notches.

DEKABANK DEUTSCHE GIROZENTRALE (DekaBank, deposits A1, BFSR C- /
BCA baa2)

The two notch decline of DekaBank's standalone credit assessment
reflects Moody's concerns regarding the bank's wholesale-based
commercial banking activities and associated risk profile. In
Moody's view, DekaBank's sizeable banking activities lack the
breadth and client franchise of its domestic peers and carry
relatively high risk concentrations to financial intermediaries.
These exposures are material in relation to the bank's earnings
power and capital and better reflected in the lower standalone
credit assessment at baa2, down from a3. While earnings from core
asset management activities remain a key supporting factor for
DekaBank's standalone profile, Moody's considers high volatility
in capital markets and declining investor confidence as a
challenge for these activities which could lead to additional
pressure on earnings in the future. The one notch downgrade of
DekaBank's debt and deposit ratings to A1 reflects the lowering
of the bank's standalone credit assessment and Moody's assessment
of a very high probability of external support from Sparkassen-
Finanzgruppe (S-Finanzgruppe; corporate family rating Aa2,
stable).

DZ BANK DEUTSCHE ZENTRAL-GENOSSENSCHAFTSBANK AG (DZ BANK,
deposits A1, BFSR C- / BCA baa2)

The one notch decline of DZ BANK's standalone credit assessment
is driven by the bank's vulnerability to tail risks in a highly
adverse scenario, based on Moody's capital stress test
simulations, given its high leverage and sizable exposure to
countries in Europe's periphery. Nevertheless, Moody's considers
DZ BANK's capital position to be sufficient to cope with a
deteriorating operating environment in Europe in a base case
scenario, although DZ BANK may require additional capital to cope
with the transition to Basel III depending on details of the
emerging regulation. Moody's considers DZ BANK's liquidity
position to be comfortable, also in light of the strong deposit
intake of the cooperative sector banks throughout the financial
crisis. Moody's maintains its assumption of a high support
probability from Germany's cooperative banking sector (unrated)
given DZ BANK is firmly embedded in the sector. Moody's also
assumes that a degree of support for DZ BANK would be available
from the government if needed.

- DVB BANK S.E. (DVB, deposits Baa1, BFSR D- / BCA ba3)

The three notch lowering of DVB's standalone credit assessment
was driven by its high vulnerability to capital pressures, based
on Moody's stress tests, as a result of its large exposures to
global transportation finance activities. Another key driver was
the bank's limited independent funding franchise. The downgrade
of DVB's long-term debt and deposit ratings reflects the lowering
of DVB's standalone credit strength and Moody's assumption of a
very high probability of parental support from DVB's majority
shareholder, DZ BANK.

- DZ BANK Ireland plc (DZ BANK Ireland, deposits A3, BFSR C- /
BCA baa2)

DZ BANK Ireland is a highly integrated and harmonized institution
with its parent, DZ BANK. As such, its standalone credit
assessment is aligned with DZ Bank's and has therefore been
lowered in line with the parent. As a foreign subsidiary, DZ BANK
Ireland's senior unsecured ratings continue to benefit from two
notches of uplift, reflecting Moody's assumptions about the
availability of (indirect) support from the cooperative banks in
Germany (unrated), but not from any uplift due to government (or
systemic) support.

LANDESBANK BADEN-WUERTTEMBERG (LBBW, deposits A3, BFSR D+ / BCA
ba1)

The one notch decline of LBBW's standalone credit assessment to
ba1 was driven by concerns about tail risk, as LBBW's relatively
high leverage and concentration risks imply vulnerability to
unexpected losses in a scenario of highly adverse market
conditions. Continued pressure on profits represented another
important factor for the rating decision. Moody's also took
account of a number of counterbalancing factors, including the
bank's improved regulatory capitalization and modest funding
risks. The one notch downgrades of LBBW's senior long-term and
short-term debt ratings to A3/Prime-2 reflect the lower
standalone credit strength.

LANDESBANK HESSEN-THšRINGEN (Helaba, deposits A2, BFSR D+ / BCA
baa3)

The one notch lowering of Helaba's standalone credit strength to
baa3 was driven by the assessment that the bank's large exposure
to international commercial real estate markets could make it
vulnerable to capital pressures in a highly adverse scenario,
based on results of Moody's capital stress test simulations. At
the same time, Moody's considers Helaba's track record of
satisfactory risk management and comfortable funding profile as
important risk mitigating factors. The one notch downgrades of
Helaba's senior long-term debt ratings to A2 reflect the lower
standalone credit strength.

NORDDEUTSCHE LANDESBANK GIROZENTRALE GZ (NORD/LB, deposits A3,
BFSR D / BCA ba2)

The two notch decline of NORD/LB's standalone credit assessment
reflects concentration risks in its wholesale-based banking
activities, in particular in commercial real estate, ship finance
and public sector finance activities. Another key risk driver is
the declining creditworthiness of European banks in the context
of NORD/LB's sizeable bond holdings and credit default swaps
(CDS, protection sold) positions referenced to banks. The
aforementioned exposures leave NORD/LB vulnerable to pressures on
capital under adverse conditions, based on Moody's capital stress
test simulations (even when taking into account recently-
announced capital strengthening measures). The long-term ratings
reflect Moody's assumption of a very high probability of external
support from multiple sources, providing five notches of uplift
to NORD/LB's senior long-term ratings.

- NORD/LB LUXEMBOURG (NLBL, deposits Baa3, BFSR D / BCA ba2)

NLBL is a highly integrated and harmonized institution with its
parent, NORD/LB. As such, its standalone credit assessment is
aligned with NORD/LB's and has therefore been lowered in line
with the parent. As a foreign subsidiary, NLBL's long-term
ratings benefit from two notches of uplift, reflecting Moody's
assumption of a very high probability of support from NORD/LB.

- BREMER LANDESBANK KREDITANSTALT OLDENBURG GZ (BremerLB,
deposits A3, BFSR D+ / BCA baa3)

The two notch lowering of BremerLB's standalone credit strength
reflects its vulnerability to capital pressures under adverse
credit conditions (based on Moody's capital stress tests) in the
context of its exposures to the cyclical ship finance sector, but
also its CDS (protection sold) positions referenced to European
banks. The bank's announcement that it will strengthen the
quality of its capital by converting all of its existing hybrid
capital notes into common equity by the end of June 2012 is an
important mitigating factor in Moody's assessment of the bank's
capitalization. The one notch downgrade of BremerLB's long-term
debt ratings reflects the lowering of its standalone credit
assessment and Moody's assumption of a very high probability of
parental support from its parent, NORD/LB. The parental support-
driven ratings uplift for BremerLB also (indirectly) incorporates
the availability of support from other sources, as typically
available to Germany's public-sector banks.

- DEUTSCHE HYPOTHEKENBANK AG (Deutsche Hypo, deposits Baa2, BFSR
E+ / BCA b1)

The two notch decline of Deutsche Hypo's standalone credit
assessment reflects the bank's vulnerability to capital
pressures, based on Moody's capital stress tests, as a result of
its leveraged business model that focuses on CRE and public-
sector finance, and including sizeable CDS positions (protection
sold) referenced to European sovereigns. The potential for
unexpected losses from these exposures in combination with the
bank's limited loss-absorption capacity may require additional
capital support in a deteriorating economic environment. The
long-term debt and deposit ratings reflect Moody's assessment of
a very high probability of parental support from NORD/LB, also
given Deutsche Hypo's high degree of integration into the group.

UNICREDIT BANK AG (UCB, deposits A3, BFSR C- / BCA baa2)

The one notch lowering of UCB's standalone credit strength
reflects the operational interconnectedness with its parent bank,
UniCredit SpA (deposits A3, BFSR C- / BCA baa2), even though
direct exposure to its Italian parent is monitored and partly
collateralized. Supporting factors for the standalone credit
assessment include UCB's robust credit profile in combination
with its high loss-absorption capacity from earnings and capital,
as reflected in Moody's capital stress tests. The downgrade of
UCB's long-term and short-term ratings to A3/Prime-2 follow the
lowering of the standalone credit assessment and incorporate
Moody's unchanged external support assumptions, such as i) a very
high likelihood of parental support from UniCredit SpA; and ii) a
high likelihood of systemic support in case of need. The outlook
on UCB's ratings is negative, reflecting UCB's focus on corporate
and investment banking activities which add a degree of opacity
and tail risk to its credit profile, particularly in the current
environment.

- UNICREDIT LUXEMBOURG S.A. (UCL, deposits Baa2, BFSR C- / BCA
baa2)

The one-notch lowering of UCL's standalone credit assessment
follows the rating decisions taken for its parent bank, UCB, and
the unchanged approach to align the standalone credit rating of
the subsidiary with that of its parent (based on Moody's
treatment of highly integrated subsidiaries). The outlook on
UCL's ratings is negative, in line with its parent.

WGZ BANK AG (WGZ BANK) (deposits A1, BFSR C- / BCA baa2)

The standalone credit assessment of WGZ BANK was confirmed at
baa2 in recognition of the bank's comfortable liquidity position
and relatively low-risk credit profile. However, the negative
outlook on the ratings reflects WGZ BANK's vulnerability to a
further deterioration of the economic situation in European
peripheral countries to which the bank's majority-owned WL Bank
(unrated) has significant exposures. The negative outlook further
reflects the modest profitability of WGZ BANK's core franchise,
implying limited ability to absorb losses out of earnings.
Moody's maintains its assumption of a high support probability
from Germany's cooperative banking sector (unrated) given WGZ
BANK is firmly embedded in the sector.

- WGZ BANK Ireland plc (WGZ BANK Ireland, deposits A3, BFSR C- /
BCA baa2)

WGZ BANK Ireland is highly integrated and harmonized with its
parent, WGZ BANK. As such, its standalone credit assessment is
aligned with WGZ Bank's and was therefore confirmed at the parent
bank's level. As a foreign subsidiary, WGZ BANK Ireland's senior
debt and deposit ratings continue to benefit from two notches of
uplift, reflecting Moody's assumptions about the availability of
(indirect) support from the cooperative banks in Germany
(unrated), but not from systemic support-driven uplift. All
ratings carry a negative outlook, in line with those of its
parent.



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


X.K TEGOPOULOS: Court Rejects Bankruptcy Classification Bid
-----------------------------------------------------------
ANA-MPA reports that an Athens court on Wednesday rejected an
application by the X.K Tegopoulos Editions SA for classification
under the bankruptcy law.

According to a company notification to the Athens Stock Exchange
(ASE), an Athens first instance court, following discussion of
the company's application for its classification under the
provisions of Article 99 of the Bankruptcy Code, issued ruling
no. 704/2012 rejecting the company's petition, ANA-MPA relates.

X.K Tegopoulos Editions SA is a publisher of newspapers and
magazines including the Athens daily Eleftherotypia.

Court rejects Tegopoulos media publisher's application for
classification under bankruptcy law


* GREECE: Moody's Cuts Ratings on Structured Finance Securities
---------------------------------------------------------------
Moody's Investors Service has downgraded to Caa2(sf) the ratings
of the most senior securities in 9 Greek structured finance (SF)
transactions and to Caa3(sf) the ratings of subordinated
securities in 6 transactions. Moody's also placed all the
Caa2(sf) and Caa3(sf) ratings of Greek SF securities under review
for further downgrade.

The rating actions follow Moody's lowering of its Greek country
ceiling to Caa2 to reflect the heightened risk of a euro area
exit. As a result of the rating actions, the highest rating for
outstanding Greek SF securities is now Caa2(sf), down from B2(sf)
previously.

Ratings Rationale

-- Highest rating

The downgrades reflect Moody's lowering of its assessment of the
highest rating that can be assigned for debt obligations issued
by domestic Greek issuers, or where cash-flows used to repay debt
obligations are sourced from domestic Greek assets, to Caa2. This
level reflects the increasing risk of an exit by the country from
the euro area, and the near-automatic effect of currency
redenomination on default of those obligations. Therefore, the
maximum achievable rating applies to all forms of ratings in
Greece, including structured finance ratings.

Transactions backed by Greek local assets are significantly
exposed to a scenario where Greece exits the euro area. This
holds true regardless of the jurisdiction in which the debt
obligations are issued and the law governing such debt
obligations. Although most structured finance securities benefit
from diversification of revenue sources and are issued by non-
Greek issuers under UK law: 1) collateral assets are governed
under Greek law and are therefore all exposed to redenomination
risk and 2) underlying obligors are all similarly affected by
macroeconomic distress.

Structured finance transactions also rely on Greek banks to
provide servicing functions and other financial roles (such as
account banks, swap counterparties, and cash managers) and are
therefore vulnerable to the kind of banking sector distress that
would be generated by Greece exiting the euro area.

-- Subordination

The downgrades also reflect the affected securities' position in
the issuer's debt capital structure. Moody's rates the senior
notes in Greek SF transactions to the highest rating of Caa2(sf)
as these benefit from credit enhancement including subordination
from more junior notes. Conversely, Moody's downgraded to
Caa3(sf) all subordinated notes in Greek SF transactions to
reflect the high severity it expects these notes to suffer under
distressed scenarios, as all available cash-flows would first be
allocated to the much larger senior notes.

-- Rating Review

Moody's rating review for the affected securities will consider
the outcome of the June 17 Greek parliamentary elections, as
these will be a key driver of the probabilities (and speed) of
euro area exit. Following these elections, it is possible that
the risk of euro exit will increase further. If that were to
occur, the Caa2 maximum rating Moody's would assign to securities
issued in Greece or backed by Greek assets would fall further.

-- Sensitivity analysis

No cash flow analysis was conducted as Moody's lowering of its
country ceiling for Greek debt and subordination considerations
were the main drivers of the downgrade. Moody's stress scenarios
include a higher probability assigned to an exit of the country
from the euro area and redenomination risk. Further increases in
the likelihood of these events, a further deterioration in Greek
transaction counterparty creditworthiness would be credit
negative events.

-- Rating Methodologies

The rating considerations described in this press release
complement the methodologies applicable to each specific
transaction asset class.

The principal methodology used in rating Synergatis Plc was
Moody's Approach to Rating CDOs of SMEs in Europe, published in
February 2007. The principal methodology used in rating Epihiro
PLC was Moody's Approach to Rating Corporate Collateralized
Synthetic Obligations, published in September 2009. The principal
methodology used in rating Estia Mortgage Finance II PLC,
Grifonas Finance No. 1 Plc, KION Mortgage Finance Plc, Themeleion
Mortgage Finance PLC, Themeleion II Mortgage Finance Plc,
Themeleion III Mortgage Finance Plc S.r.I., and Themeleion IV
Mortgage Finance Plc was Moody's Approach to Rating RMBS in
Europe, Middle East, and Africa, published in October 2009.

List of affected securities:

Issuer: EPIHIRO PLC

    EUR1623M Class A Asset Backed Floating Rate Notes due January
    2035, Downgraded to Caa2 (sf) and Placed Under Review for
    Possible Downgrade; previously on Jan 19, 2012 Downgraded to
    B3 (sf)

Issuer: Estia Mortgage Finance II PLC

    EUR1137.5M A Notes, Downgraded to Caa2 (sf) and Placed Under
    Review for Possible Downgrade; previously on Jan 19, 2012
    Downgraded to B3 (sf)

Issuer: Grifonas Finance No. 1 Plc

    EUR897.7M A Certificate, Downgraded to Caa2 (sf) and Placed
    Under Review for Possible Downgrade; previously on Jan 19,
    2012 Downgraded to B3 (sf)

    EUR23.8M B Certificate, Downgraded to Caa3 (sf) and Placed
    Under Review for Possible Downgrade; previously on Jan 19,
    2012 Downgraded to Caa1 (sf)

    EUR28.5M C Certificate, Downgraded to Caa3 (sf) and Placed
    Under Review for Possible Downgrade; previously on Jun 10,
    2011 Downgraded to Caa1 (sf)

Issuer: KION Mortgage Finance Plc

    EUR553.8M A Certificate, Downgraded to Caa2 (sf) and Placed
    Under Review for Possible Downgrade; previously on Jan 19,
    2012 Downgraded to B2 (sf)

    EUR28.2M B Certificate, Downgraded to Caa3 (sf) and Placed
    Under Review for Possible Downgrade; previously on Jan 19,
     2012 Downgraded to B3 (sf)

    EUR18M C Certificate, Downgraded to Caa3 (sf) and Placed
    Under Review for Possible Downgrade; previously on Jan 19,
    2012 Downgraded to Caa1 (sf)

Issuer: Synergatis Plc

    EUR1414.5M A Certificate, Downgraded to Caa2 (sf) and Placed
    Under Review for Possible Downgrade; previously on Jan 19,
    2012 Downgraded to B2 (sf)

Issuer: Themeleion Mortgage Finance PLC

    EUR693.5M A Notes, Downgraded to Caa2 (sf) and Placed Under
    Review for Possible Downgrade; previously on Jan 19, 2012
    Downgraded to B2 (sf)

    EUR32M B Notes, Downgraded to Caa3 (sf) and Placed Under
    Review for Possible Downgrade; previously on Jan 19, 2012
    Downgraded to B3 (sf)

    EUR24.5M C Notes, Downgraded to Caa3 (sf) and Placed Under
    Review for Possible Downgrade; previously on Jan 19, 2012
    Downgraded to Caa1 (sf)

Issuer: Themeleion II Mortgage Finance Plc

    EUR690M A Certificate, Downgraded to Caa2 (sf) and Placed
    Under Review for Possible Downgrade; previously on Jan 19,
    2012 Downgraded to B2 (sf)

    EUR37.5M B Certificate, Downgraded to Caa3 (sf) and Placed
    Under Review for Possible Downgrade; previously on Jan 19,
    2012 Downgraded to B3 (sf)

    EUR22.5M C Certificate, Downgraded to Caa3 (sf) and Placed
    Under Review for Possible Downgrade; previously on Jan 19,
    2012 Downgraded to Caa1 (sf)

Issuer: Themeleion III Mortgage Finance Plc S.r.I.

    EUR900M A Certificate, Downgraded to Caa2 (sf) and Placed
    Under Review for Possible Downgrade; previously on Jan 19,
    2012 Downgraded to B2 (sf)

    EUR40M M Certificate, Downgraded to Caa3 (sf) and Placed
    Under Review for Possible Downgrade; previously on Jan 19,
    2012 Downgraded to B3 (sf)

    EUR20M B Certificate, Downgraded to Caa3 (sf) and Placed
    Under Review for Possible Downgrade; previously on Jan 19,
    2012 Downgraded to B3 (sf)

    EUR40M C Certificate, Caa3 (sf) Placed Under Review for
    Possible Downgrade; previously on Jun 10, 2011 Downgraded to
    Caa3 (sf)

Issuer: Themeleion IV Mortgage Finance Plc

    EUR1352.9M A Certificate, Downgraded to Caa2 (sf) and Placed
    Under Review for Possible Downgrade; previously on Jan 19,
    2012 Downgraded to B2 (sf)

    EUR155.5M B Certificate, Downgraded to Caa3 (sf) and Placed
    Under Review for Possible Downgrade; previously on Jan 19,
    2012 Downgraded to Caa1 (sf)

    EUR46.6M C Certificate, Downgraded to Caa3 (sf) and Placed
    Under Review for Possible Downgrade; previously on Jan 19,
    2012 Downgraded to Caa1 (sf)



=============
H U N G A R Y
=============


ERSTE GROUP: Moody's Takes Rating Actions on Three Subsidiaries
---------------------------------------------------------------
Moody's Investors Service has taken the following actions on
Erste Group Bank AG's subsidiaries:

- Downgraded by one notch the long-term deposit ratings of Ceska
Sporitelna in Czech Republic to A2, the standalone BFSR to C-
(mapping to a standalone credit assessment of baa1), with a
negative outlook, and confirmed the short-term deposit ratings of
Prime-1. The downgrade reflects Erste Bank's increasing financial
challenges -- which may be transmitted to its subsidiary -- as
indicated by the recent two-notch downgrade of Erste Bank
(deposits A3, negative; BFSR D+/ BCA baa3, negative), combined
with the weakening operating environment in Czech Republic.

- Downgraded the deposit ratings of Banca Comerciala Romana
(BCR) in Romania to Ba1/Not-Prime (with a negative outlook), and
the standalone BFSR to E+ (mapping to a standalone credit
assessment of b1). The downgrade reflects the impact of the
deterioration of the operating environment in Romania combined
with the bank's rapidly weakening financial performance,
counterbalanced by Moody's view of Erste's continuing commitment
to the Romanian market.

- Confirmed the long-term deposit ratings of Erste Bank Hungary
(EBH) at Ba3, with a negative outlook. The confirmation reflects
the parent's continuing commitment to its Hungarian operations
and Moody's view that the ratings are appropriately positioned to
capture the highly adverse local market environment.

These actions follow Moody's recent decision to downgrade Erste
Bank.

The actions on the three subsidiaries conclude the reviews
initiated on 21 February 2012, when the ratings of these
subsidiaries were placed on review for downgrade, following
concerns deriving from the pressure facing the parent group Erste
Bank, as well as from standalone considerations for the Czech and
the Romanian subsidiaries with respect to their own markets.

CESKA SPORITELNA (CZECH REPUBLIC)

Ratings Rationale

Moody's says that the one-notch downgrade of Ceska Sporitelna's
long-term deposit ratings to A2 and the standalone BFSR to C-
(mapping to a standalone credit assessment of baa1) reflects: (i)
the pressures that the bank faces, emanating from the weakening
of Erste Bank's credit profile; and (ii) the more difficult
operating environment in Czech Republic that Moody's expects will
constrain the bank's ability to generate stable earnings.

-- Pressures From Weakened Group Profile

Moody's recognises that Ceska Sporitelna is an important part of
Erste Group Bank's overall franchise, contributing almost half of
the Group's profits in 2011. However, pressure on the bank's
performance stems from (i) the risk of overall group restrictions
on the extent to which Ceska Sporitelna can increase its risk
weighted assets; (ii) cost reductions at group level, which may
lead to a decline in group support that has historically
underpinned the bank's operating strength; and (iii) the risk of
capital being up-streamed to the parent, directly affecting Ceska
Sporitelna's capital cushion.

-- Operating Environment Expected To Weaken

The operating environment for Czech banks has weakened,
illustrated by the slowdown in economic output and further
downside risks related to weakening export demand from European
trading partners. Moody's expects Czech GDP growth to decline to
0% in 2012 from 1.7% in 2011, and the European Commission
forecasts unemployment to increase to 7.2% in 2012. Despite the
bank's strong capital position -- with a 13.5% Tier 1 ratio as of
March 2012 -- and its solid funding profile, Moody's expects that
the economic slowdown will outweigh these mitigating factors.
Specifically, Moody's expects Ceska Sporitelna's problem loans to
remain under pressure from the level of 5.9% posted at the end of
2011.

Ceska Sporitelna's deposit ratings continue to benefit from two
notches of uplift from systemic support, reflecting the very high
probability of support from the Czech government, in case of
need. The negative outlook on Ceska Sporitelna's deposit ratings
reflects the possibility that pressures on the parent could lead
to the bank becoming more weakly positioned in the C- BFSR
category, resulting in a lowering of the mapping to baa2.

What Could Move The Ratings Up/Down

The negative outlook on Ceska Sporitelna's deposit ratings
reflects Moody's expectation that upwards pressure on the bank's
ratings is limited at this stage. Over time, the ratings could be
stabilized if the bank strengthens its performance metrics and/or
the parent's ratings stabilize.

Further downwards pressure on the standalone and deposit ratings
could be exerted if the group's performance were to negatively
affect the subsidiary.

BANCA COMERCIALA ROMANA (ROMANIA)

Ratings Rationale

-- Weakening Operating Environment in Romania

Moody's says that the increasing challenges posed by the Romanian
operating environment have reduced the creditworthiness of BCR,
reflected in the downgrade of standalone BFSR to E+/b1, and its
deposit ratings to Ba1/Not-Prime (with a negative outlook).

Given Romania's high dependence on external markets, particularly
in terms of exports and private sector capital inflows, the
increasing pressure from euro area countries is dragging on
Romania's economic performance. In the last quarter of 2011 and
in the first quarter of 2012 Romania experienced a mild GDP
contraction quarter-on-quarter. Private consumption remains
subdued, and unemployment is rising. Although economic growth
should improve in the coming years, this will likely remain well
below the 2008 pre-crisis levels (about 6% GDP growth per annum),
thus making income convergence with core Europe more challenging,
given the significant disparity in household income, at 64% below
the EU27 average. The macroeconomic weaknesses affect banking
sector performance with weak credit demand, lower revenues and
asset-quality pressures.

In particular for Banca Comerciala Romana, the rapid escalation
of non-performing loans (NPLs), which reached 22.4% of the total
loan portfolio at the end of March 2012, is a function of the
weakening operating environment. This NPLs trend reflects the
bank's (i) large loan exposure to the weak small and medium
enterprises and micro companies; and (ii) significant level of
foreign-currency lending, equal to about 62% of the total loan
portfolio, mainly Euro-denominated, which also represent a key
credit risk in the current environment. Poor asset quality led to
a relatively large loss in the first quarter of 2012 and will
continue to exert pressure on profitability through 2013.

-- Largest Franchise in Romania Combined With Assumptions of
    Parental Support Provides Rating Uplift

Banca Commerciala Romana is the largest bank in Romania, with
market shares of around 20% in deposits and 22% on loans. Erste
Bank has recently increased its stake in the bank to 92.3% and
continues to provide significant funding support to its
subsidiary, mostly to fund its sizeable foreign-currency
portfolio. These considerations drive Moody's assumptions of
parental and system support for the bank, thus resulting in a
three-notch rating uplift from the current b1 standalone credit
assessment.

The outlook on all the bank's ratings is negative and reflects
the possibility that the pressures on profitability and capital,
if sustained, could lead to the bank becoming more weakly
positioned in the E+ BFSR category, resulting in a lowering of
the mapping to b2.

What Could Move The Ratings Up/Down

Banca Comerciala Romana's ability to maintain its dominant
position -- coupled with a return to a sustainable profitability
and significant asset quality improvements -- could result in
upwards pressure on the BFSR and the deposit ratings.

Further downward pressure on the standalone rating could be
exerted if the bank became consistently loss-making. This would
have a material impact on the sustainability of Banca Comerciala
Romana's dominant franchise in Romania, and on its capitalization
level, which Moody's currently views as an important cushion. In
addition, further deterioration in the economic conditions in
Romania leading to an acceleration in asset quality deterioration
of the bank might result in downwards pressure on the standalone
credit strength and long-term deposit ratings, as well as a
further downgrade of Erste Bank's ratings.

ERSTE BANK HUNGARY (HUNGARY)

Ratings Rationale

-- Parent Remains Committed to its Hungarian Operations

Erste Bank Hungary's long-term deposit ratings were originally
placed on review over concerns that the challenges facing the
parent group could negatively impact its capacity and willingness
to support its Hungarian subsidiary. However, the confirmation of
EBH's long-term deposit ratings of Ba3, with a negative outlook,
reflects Erste Bank's ongoing commitment to its Hungarian
operations, due to the subsidiary's strategic fit and
geographical proximity. The parent has provided ongoing capital
and funding to Erste Bank Hungary, although the subsidiary is
deleveraging because of the adverse operating environment. The
parent recapitalized its subsidiary in 2011 following the large
losses posted that year, and provided subordinated debt in the
first quarter of 2012. Funding support continues to be
significant, although it is decreasing in line with the bank's
assets.

The confirmation of Erste Bank Hungary's long-term deposit
ratings reflects the two-notch rating uplift that Moody's
continues to incorporate into Erste Bank Hungary's ratings, due
to the rating agency's assessment of moderate parental support
assumptions for the bank.

What Could Move The Ratings Up/Down

Any upward movement on the ratings depend on material improvement
in the European operating environment and a consequent easing of
pressures on the bank and its parent. In the longer term, a
potential upgrade of the BFSR could be driven by (i) an
improvement in the bank's financial fundamentals, especially a
significant increase in its Tier 1 capital ratio; (ii) an
improvement in the structural mismatches on the balance sheet
that stem from the significant level of foreign-currency loans in
its retail portfolio; and (iii) a sustainable improvement in
asset quality.

Downwards pressure on Erste Bank Hungary's deposit ratings might
develop if the parent bank's willingness to provide support
reduces. Similarly, in the current challenging operating
environment, a further significant weakening of Erste Bank
Hungary's financial fundamentals -- combined with pressure on its
capitalization -- may also exert downwards pressure on the
ratings.

FULL LIST OF RATING ACTIONS

The following ratings were affected:

  Issuer: Ceska Sportitelna a.s.

Long-term local and foreign-currency deposit ratings downgraded
to A2 from A1, with negative outlook

Short-term local- and foreign-currency deposit ratings of Prime-1
confirmed

Bank financial strength rating downgraded to C- (mapping to baa1)
from C (mapping to a3), with stable outlook

  Issuer: Banca Comerciala Romana S.A.

Long-term local-currency deposit rating downgraded to Ba1 from
Baa2, with negative outlook

Long-term foreign-currency deposit rating downgraded to Ba1 from
Baa3, with negative outlook

Short-term local-currency deposit rating downgraded to Not-Prime
from Prime-2

Short-term foreign-currency deposit rating downgraded to Not-
Prime from Prime-3

Bank financial strength rating downgraded to E+ (mapping to b1)
from D (mapping to ba2), with stable outlook

  Issuer: Erste Bank Hungary

Long-term local and foreign-currency deposit ratings of Ba3
confirmed, with negative outlook

The following ratings were unaffected:

  Issuer: Erste Bank Hungary

Bank financial strength rating of E+, with stable outlook
(mapping to b2)

Short-term local and foreign-currency deposit ratings of Not
Prime

The principal methodologies used in these ratings 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.


PBG SA: Idea, Amplico Funds Seek "Immediate" Bond Buyback
---------------------------------------------------------
Maciej Martewicz at Bloomberg News reports that PBG SA said in a
regulatory statement Idea TFI SA mutual funds and Amplico OFE
pension fund demanded that the company "immediately" buys back
its bonds.

As reported by the Troubled Company Reporter-Europe on June 6,
2012, Bloomberg News disclosed that PBG decided to file for
bankruptcy to help reach an agreement with creditors to cut debt
by as much as 31%.  PBG  said in a regulatory filing on Monday
that the company is proposing to honor 69% of its debt to
creditors owed more than PLN1 million (US$282,700), 80% to those
owned from PLN100,000 to PLN1 million and 100% for those owned
lesser sums, Bloomberg noted.  PBG Chief Financial Officer
Przemyslaw Szkudlarczyk said on Monday that PBG's unconsolidated
debt, which doesn't include the borrowings of its unit, amounts
to PLN1.5 billion, Bloomberg related.  According to Bloomberg,
Kinga Banaszak-Filipiak, a spokeswoman, said the entire group's
debt at its 12 crediting banks is at PLN1.7 billion.  The CFO, as
cited by Bloomberg, said that PBG's four biggest bank creditors
are Bank Pekao SA, Bank Zachodni WBK SA, ING Bank Slaski SA and
Nordea Bank Polska SA.  PBG said that holders of more than
PLN1 million of PBG debt may also be given the option of
converting 12% of the debt into company shares at a rate of
PLN40 a share, to be executed one year after a debt agreement is
reached, Bloomberg noted.

PBG SA is Poland's third largest builder.


PBG SA: Bankruptcy Filing No Impact on Rafako, PKO Bank
-------------------------------------------------------
David McQuaid at Bloomberg News reports that Rafako SA, the power
engineering unit of Poland's third-largest builder PBG SA, said
in a regulatory statement the company sees no "significant"
impact on its operations from its corporate parent's decision on
Monday to file for bankruptcy.

According to Bloomberg, Rafako said it has no "significant"
contracts with PBG or its Hydrobudowa Polska SA or Aprivia SA
units and hasn't issued any guarantees or pledges for debts of
PBG or its units to the financial industry.

In a separate report, Bloomberg News' Maciej Martewicz relates
that PKO Bank Polski SA PKO spokeswoman Aneta Styrnik-Chaber said
Poland's largest lender has no exposure to the country's third-
largest builder PBG or to its Hydrobudowa Polska SA or Aprivia SA
units.

As reported by the Troubled Company Reporter-Europe on June 6,
2012, Bloomberg News disclosed that PBG decided to file for
bankruptcy to help reach an agreement with creditors to cut debt
by as much as 31%.  PBG  said in a regulatory filing on Monday
that the company is proposing to honor 69% of its debt to
creditors owed more than PLN1 million (US$282,700), 80% to those
owned from PLN100,000 to PLN1 million and 100% for those owned
lesser sums, Bloomberg noted.  PBG Chief Financial Officer
Przemyslaw Szkudlarczyk said on Monday that PBG's unconsolidated
debt, which doesn't include the borrowings of its unit, amounts
to PLN1.5 billion, Bloomberg related.  According to Bloomberg,
Kinga Banaszak-Filipiak, a spokeswoman, said the entire group's
debt at its 12 crediting banks is at PLN1.7 billion.  The CFO, as
cited by Bloomberg, said that PBG's four biggest bank creditors
are Bank Pekao SA, Bank Zachodni WBK SA, ING Bank Slaski SA and
Nordea Bank Polska SA.  PBG said that holders of more than PLN1
million of PBG debt may also be given the option of converting
12% of the debt into company shares at a rate of PLN40 a share,
to be executed one year after a debt agreement is reached,
Bloomberg noted.

PBG SA is Poland's third largest builder.


* POLAND: Banks No Exposure to Polish Builder Bankruptcies
----------------------------------------------------------
Wojciech Moskwa at Bloomberg News reports that central bank
Governor Marek Belka said in Warsaw on Wednesday bankruptcy
filings by several Polish builders "pose no risk" for the
country's banks.



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


BLOXHAM: Liquidator Allowed to Instruct Lawyers in Proceedings
--------------------------------------------------------------
The Irish Times reports that the High Court has granted
permission to the provisional liquidator of Bloxham stockbrokers
to instruct lawyers in proceedings involving the company due to
be heard by the English courts later this month.

Ms. Justice Mary Laffoy on Wednesday made an order allowing
Kieran Wallace, who was appointed provisional liquidator to
Bloxham last week, to instruct lawyers on litigation against US
bank Morgan Stanley over bonds that collapsed in value, the Irish
Times relates.

One of the reasons Mr. Wallace's appointment was sought was to
instruct solicitors for that litigation, the Irish Times notes.
According to the Irish Times, In an affidavit to the court on
Wednesday, Mr. Wallace said Morgan Stanley is being sued for
EUR20.5 million by investors over the loss of almost all of their
investment in the so-called Saturn bonds, provided by Morgan
Stanley, and sold by Bloxham.

Bloxham was joined to the UK proceedings by Morgan Stanley for
the purpose of claiming an indemnity and a contribution from the
firm, the Irish Times discloses.  In a counterclaim, Bloxham is
suing Morgan Stanley for alleged breach of contract and losses
arising from having been exposed to claims by its clients, the
Irish Times states.

That action is to start before the Commercial division of the
English High Court on June 18, the Irish Times says.

Mr. Wallace, as cited by the Irish Times, said he believed there
was merit in allowing Bloxham to continue to participate in the
English proceedings.

Arising from legal advice received, Mr. Wallace said he believed
continued participation in the English proceedings was more
likely to advance the financial position of the liquidation, the
Irish Times relates.

He added not taking part could result in a judgment being
obtained against the company that would be extremely prejudicial
to the winding-up, the Irish Times notes.

Bloxham is one of Ireland's oldest stockbrokers.



=============
R O M A N I A
=============


* ROMANIA: Construction, Realty, Trade Sectors Face Insolvencies
----------------------------------------------------------------
Ioana Tudor at Ziarul Financiar, citing data by liquidator Casa
de Insolventa Transilvania, reports that most Romanian firms that
entered insolvency this year operate in the construction, real
estate, commerce and production sectors.



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


CARGO JFC: Court Suspends Proceedings in Sberbank Suit
------------------------------------------------------
Rapsinews.com reports that the St Petersburg Regional Commercial
Court has suspended proceedings in a lawsuit in which Sberbank is
attempting to recover US$41.84 million from Cargo JFC.

The suspension has come about while it is considered whether the
bank can enter the creditor claims register, as Cargo JFC has
filed for bankruptcy, Rapsinews.com relates.

Currently creditors are claiming a total of 5 billion rubles, or
US$149.44 million US, from Cargo JFC, Rapsinews.com discloses.
There is a further claim from Sberbank, for US$92.65 million,
which will be heard on June 20 by the Moscow Commercial Court,
Rapsinews.com notes.  The Moscow court will also be considering
the claims of Raiffeisenbank, for somewhere in the region of
US$14.94 million, Rapsinews.com states.

According to Rapsinews.com, JFC Director Vladimir Kakhman says he
is working towards resolving the company's financial problems and
is drawing up a new business plan, which is expected to be ready
in around three months.

Cargo JFC is part of major Russian fruit importer, JFC.


MDM BANK: Moody's Changes Outlook on 'D' BFSR to Negative
---------------------------------------------------------
Moody's Investors Service has changed to negative from stable the
outlook on the D standalone bank financial strength rating
("BFSR") and Ba2 long-term global local and foreign currency
deposit ratings of MDM Bank (Russia). Moody's also changed the
outlook on MDM Bank's Ba2 local currency senior unsecured debt
rating to negative from stable. The bank's Not Prime short-term
local and foreign currency deposit ratings were affirmed.

Moody's revision of the outlook on MDM Bank's ratings is
primarily based on the bank's audited financial statements for
2011 prepared under IFRS.

Ratings Rationale

The revision of the outlook on MDM Bank's ratings reflects
Moody's concerns regarding the bank's weak financial performance
and poor asset quality that have emerged as new lending activity
stagnates. MDM Bank's net comprehensive loss of RUB6.9 billion
(US$214 million) posted in 2011 was mainly driven by high loan
loss provisions which amounted to 4.6% of the average gross loan
book in 2011 -- a much higher level compared to other large
Russian banks. Furthermore, the bank's recurring income
generation has also weakened in recent years, reflecting the
reduction of the bank's interest-earning assets. MDM Bank's cost-
to income-ratio also deteriorated to 73% in 2011 from 65% in 2010
as its deleveraging activity was not sufficiently offset by
reduced operating costs.

"The deterioration of MDM Bank's asset quality was amplified by
material loan book shrinkage, while most of the bank's
competitors resumed new lending growth. Consequently, the bank's
asset quality ratios approached levels that are weaker than those
of peers: at year-end 2011, 24% of MDM Bank's total loans were
either overdue by more than 90 days or restructured, and one half
of these loans comprised seasoned problem loans overdue by more
than one year for which Moody's expects low recovery rates", said
Olga Ulyanova, a Moody's Vice President and lead analyst for the
bank. "In this context, the loan loss reserves of 15.3% of the
total gross loan book accumulated at year-end 2011 appear
insufficient to us," Ms. Ulyanova added.

The rating agency notes that MDM Bank's capital adequacy (the
bank reported Basel I Tier 1 and total capital adequacy ratios of
16.2% and 17.8%, respectively, at year-end 2011) remains one of
the strongest factors underpinning the bank's ratings, as the
capital levels provide a sufficient buffer to absorb further
losses over the outlook horizon. At the same time, Moody's
cautions that the bank's weak financial performance may lead to
further capital erosion in the long-term.

What Could Change The Ratings Up/Down

Moody's may downgrade MDM Bank's ratings if it witnesses no
material improvement in the bank's financial performance. The
bank's failure (i) to work-out effectively its legacy problem
loans, and (ii) to boost operating profitability through active
resumption of new lending, while at the same time ensuring good
loan quality, may result in a continuing decline of MDM Bank's
capital adequacy levels and/or further material reduction in MDM
Bank's market share. If these negative trends continue, the
rating agency may downgrade MDM Bank's ratings.

For the outlook on MDM Bank's ratings to be revised back to
stable, the bank would need to return to sustainable
profitability, demonstrate visible improvements in its asset
quality and other financial metrics, while simultaneously
regaining its recently weakened market franchise and achieving
further diversification of its loan book and customer funding
base.

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: A Refined Methodology published in March 2012.

Domiciled in Novosibirsk, Russia, MDM Bank reported -- at year-
end 2011 -- total consolidated assets of US$10.7 billion and
total equity of US$1.6 billion under audited IFRS.


RAIFFEISEN BANK: Moody's Takes Rating Actions on 5 Subsidiaries
---------------------------------------------------------------
Moody's Investors Service has taken the following actions on
Raiffeisen Bank International (RBI) subsidiaries:

- Downgraded by one notch the deposit ratings of Tatra Banka
a.s. (Tatra) in Slovakia to A3/Prime-2, and confirmed the
standalone bank financial strength rating (BFSR) of C- (mapping
to a standalone credit assessment of baa2), with negative
outlook. The downgrade reflects the reduced capacity of the
parent, RBI, whose ratings were recently downgraded by one notch
(deposits A2, stable; BFSR D+/ BCA ba1, stable), to provide
support.

- Downgraded by one notch the deposit ratings of Raiffeisen Bank
SA in Romania to Ba1/Not-Prime and the standalone BFSR to D-
(mapping to a standalone credit assessment of ba3), with stable
outlook. The downgrade reflects the impact of the deterioration
of the operating environment in Romania, as reflected in a lower
standalone BFSR for the bank. Parental support uplift of two
notches in the deposit ratings is maintained, reflecting the
RBI's relatively stronger credit profile from which support can
be deployed.

- Confirmed the deposit and debt ratings of ZAO Raiffeisenbank
in Russia at Baa3/Prime-3, and affirmed the standalone BFSR at D+
(now mapping to a standalone credit assessment of baa3 from ba1
previously), with stable outlook. The confirmation reflects its
strong performance, as well as its relative resilience from
potential pressures stemming from the parent.

- Downgraded by two notches the deposit and debt ratings of
Raiffeisen Bank Aval in Ukraine to Ba3, with a negative outlook,
lowered the standalone BFSR to E+ (mapping to a standalone credit
assessment of b2), and downgraded the national scale ratings of
Raiffeisen Leasing Aval (a fully-consolidated subsidiary of
Raiffeisen Bank Aval) in Ukraine to Aa2.ua from Aa1.ua. The
rating actions on Raiffeisen Bank Aval reflect the parent RBI's
reduced capacity to provide support to the Ukrainian entity,
combined with its significant exposure to Ukrainian sovereign
risk, which is rated B2 with a negative outlook. The rating
action on Raiffeisen Leasing Aval reflects a similar action on
its parent.

These actions follow Moody's recent decision to downgrade these
banks' parent, RBI.

The rating actions on Tatra (Slovakia), Raiffeisen Bank (Romania)
and ZAO Raiffeisenbank (Russia) conclude the reviews Moody's
initiated on 21 February 2012, which were based on concerns
deriving from the pressure facing the parent banking group RBI,
as well as on standalone considerations for the subsidiaries with
respect to their own markets.

The rating actions on Raiffeisen Bank Aval and Raiffeisen Leasing
Aval (Ukraine) conclude the reviews that Moody's initiated on 21
February 2012 and on 5 April 2012, which were based on concerns
deriving from the level of default correlation between Raiffeisen
Bank Aval and the Ukrainian sovereign, as well as the negative
effects on the banks' credit profile stemming from the challenges
facing their parent.

TATRA BANKA (SLOVAKIA)

Ratings Rationale

-- Weakening Capacity Of The Parent Bank To Provide Support

Moody's says that the lowering to ba1 of the standalone credit
assessment of Tatra's parent, RBI, has caused the downgrade of
the bank's deposit ratings to A3/Prime-2 from A2/Prime-1, with a
negative outlook, given that the deposit ratings of Tatra
incorporated uplift from parental support. In addition, Moody's
confirmed the standalone BFSR of Tatra at C- (mapping to baa2),
with a negative outlook.

-- Uncertain Operating Environment In Slovakia

The negative outlook assigned to Tatra's C- BFSR and to the long-
term deposit ratings reflects Moody's expectation that the bank's
profitability and asset quality may be affected by the
increasingly uncertain operating environment in Slovakia, amidst
the broader European Union economic slowdown which affects the
country mainly through its large dependence on external demand.
Moody's expects Slovakia's GDP growth to decelerate to about 1.7%
for 2012, down from 3.1% in 2011 and 4% in 2010.

Despite Tatra's return to adequate profits in the last two years,
Moody's believes that the weakening operating environment will
affect the bank's profitability, through: (i) a slowdown in
lending growth; (ii) a likely increase in loan-loss charges,
compared to 2010 and 2011; (iii) the payment of a new bank tax,
which will be levied by the government for the first time in
2012; and (iv) pressures on interest margins.

In addition, the bank shows some further vulnerability to the
difficult operating environment given its significant activity in
corporate lending which accounts for about 60% of the bank's loan
book (with a significant exposure to the commercial real-estate
segment), combined with significant corporate borrower
concentrations.

The standalone BFSR of C-/baa2, with a negative outlook, also
reflects Tatra's resilient franchise in Slovakia as the third
largest bank, with market shares of around 17% in loans and
deposits. In addition, the bank's currently satisfactory
profitability and adequate funding profile, based largely on
customer deposits, underpin the current rating. Finally, Moody's
believe that Tatra is relatively well insulated from the
pressures experienced by its parent, which is now rated two
notches lower on a standalone basis, ba1 compared to baa2 for
Tatra.

Tatra's deposit ratings continue to benefit from a two-notch
rating uplift from systemic support, reflecting the very high
probability of support from the Slovak government, in case of
need.

What Could Change the Ratings Up/Down

Any upward movement on the ratings depend on material improvement
in the European operating environment and a consequent easing of
pressures on the bank and its parent. In addition, significant
downwards pressure on Slovakia's government debt ratings could
affect Tatra's deposit ratings.

A sustained reduction in borrower concentration, improvement in
asset quality, and resilient profitability and liquidity could
exert upward pressure on the standalone rating of the bank.

RAIFFEISEN BANK (ROMANIA)

Ratings Rationale

-- Increasingly Challenging Operating Environment in Romania

Moody's says that the increasing challenges posed by the Romanian
operating environment have reduced the creditworthiness of
Raiffeisen Bank SA, reflected by the one-notch downgrade of
standalone BFSR to D-/ba3, with a stable outlook, from D/ba2, and
of its deposits ratings to Ba1/Not-Prime from Baa3/Prime-3.

Given Romania's high dependence on external markets, particularly
in terms of exports and private sector capital inflows, the
increasing pressure from euro area countries is dragging on
Romania's economic performance. In the last quarter of 2011 and
in the first quarter of 2012 Romania experienced a mild GDP
contraction quarter-on-quarter. Private consumption remains
subdued, and unemployment is rising. Although economic growth
should improve in the coming years, this will likely remain well
below the 2008 pre-crisis levels (about 6% GDP growth per annum),
thus making income convergence with core Europe more challenging,
given the significant disparity in household income, at 64% below
the EU27 average. The macroeconomic weaknesses affect banking
sector performance through weak credit demand, lower revenues and
asset-quality pressures.

For Raiffeisen Bank SA, Moody's is particularly concerned about
potential asset quality pressure that could stem from a partially
unseasoned loan book, following rapid loan growth of around 17%
per year in the past two years, in the context of a general
stagnation within the domestic banking system. The bank's
relatively high corporate borrower concentration intensifies the
risks associated with rapid loan growth. In addition, given the
risks associated with the euro area, Moody's views the bank's
capitalization as providing only a limited cushion against
possible stress scenarios. This exposure to external shocks is
further exacerbated by the significant amount of foreign-currency
loans granted by the bank, currently at 44% of gross loans,
mainly Euro-denominated.

Moody's also acknowledges that Raiffeisen Bank SA benefits from a
relatively good franchise as a second tier bank in Romania, with
market shares of 6.5% in loans and 8.4% in deposits, with an
extensive distribution network and well recognized brand name. In
addition, the bank currently reports good profitability and a
satisfactory funding profile based largely on customer deposits
denominated both in local and foreign currencies. These factors
combined with Moody's view of the strategic importance of the
subsidiary within the RBI group, currently result in a two-notch
rating uplift for the bank's deposit rating, from Moody's
parental support assumptions and underpin the stable outlook on
the bank's ratings.

What Could Change The Ratings Up/Down

Any upward movement of the standalone rating depends on
sustainable improvements in the operating environment in Romania,
a further strengthening of the bank's franchise and significantly
improved financial fundamentals.

Further downgrades of either the standalone ratings or the
deposit ratings would likely stem from a severe deterioration in
the bank's asset quality, profitability and capitalization as a
result of the challenging macro-economic environment in Romania.
A downgrade of the bank's deposit ratings could also occur if
RBI's ratings were downgraded further.

ZAO RAIFFEISENBANK (RUSSIA)

Ratings Rationale

-- Improvement In Standalone Credit Profile

Moody's has confirmed ZAO Raiffeisenbank's debt and deposit
ratings of Baa3/Prime-3 and affirmed the D+ BFSR (now mapping to
a standalone credit assessment of baa3 from ba1). The
strengthening of the bank's standalone credit assessment to baa3
from ba1 effectively neutralized the reduction in debt and
deposit rating uplift from parental support following the
downgrade of RBI.

Moody's recognizes the bank's decreased reliance on wholesale
funding sources; the bank's local customer deposit base accounted
for 79.4% of its total liabilities as at end-March 2012 compared
with 67.9% at year-end 2010. ZAO Raiffeisenbank also has been
able to sustain one of the lowest funding costs among its Russian
peers.

Moody's also acknowledges the bank's low-risk appetite, reflected
by its robust asset quality and much lower level of problem loans
compared to its major peers. The bank's financial fundamentals
are strong, in particular (i) the robust loss-absorbing buffer
(as at end-March 2012 equity-to-assets ratio and return on
average total assets totalled 16.6% and 2.9% respectively); (ii)
the robust liquidity cushion (with loan--to-deposit ratio of
87%); and (iii) highly liquid assets (cash and cash equivalents),
accounting for 31% of the bank's total liabilities as at end-
March 2012.

In Moody's view, these factors -- combined with ZAO
Raiffeisenbank's entrenched franchise and highly conservative
risk appetite -- places the bank in a stronger position relative
to its peers to manage the potential risks of deterioration in
the operating environment.

Finally, Moody's believes that the credit profile of ZAO
Raiffeisenbank is relatively well insulated from the pressures
experienced by its parent, which is now rated one notch lower on
a standalone basis, ba1 compared to baa3 for ZAO Raiffeisenbank.

What Could Change The Ratings Up/Down

Moody's believes there is little likelihood of any upward
pressure on ZAO Raiffeisenbank's ratings in the near-term, unless
there is a material improvement in the operating environment and
a consequent easing of pressures on the parent bank.

Any substantial deterioration in the operating environment
resulting in significant erosion of the bank's historically
robust financial fundamentals could warrant a downgrade of ZAO
Raiffeisenbank's ratings. In addition, further significant
downward pressure on RBI's standalone rating could affect the
Russian subsidiary's debt and deposit ratings.

RAIFFEISEN BANK AVAL AND RAIFFEISEN LEASING AVAL (UKRAINE)

Ratings Rationale

Raiffeisen Bank Aval's ratings were placed under review for two
reasons: (i) to assess the extent to which the bank's standalone
creditworthiness is correlated with that of the Ukrainian
government's credit profile, which was initiated on 5 April 2012
in the context of an ongoing global review affecting all banks
whose standalone ratings are higher than the rating of the
government where they are domiciled; and (ii) to assess the
capacity of the parent group to provide support.

Moody's says that the high correlation between the credit profile
of Raiffeisen Bank Aval and of the B2 rated Ukrainian sovereign
(negative outlook), and the reduced capacity of the parent RBI to
provide support, have resulted in a downgrade of Raiffeisen Bank
Aval's deposit and debt ratings to Ba3 from Ba1, with a negative
outlook, its standalone BFSR to E+ (mapping to a standalone
credit assessment of b2) from D- (mapping to a standalone credit
assessment of ba3). In addition, the national scale ratings of
Raiffeisen Leasing Aval (a fully-consolidated subsidiary of
Raiffeisen Bank Aval) in Ukraine were downgraded to Aa2.ua from
Aa1.ua following a similar action on its parent.

-- Correlation to the Creditworthiness Of The Ukrainian
    Government

Moody's lowered Raiffeisen Bank Aval's standalone credit
assessment by two notches to b2, in line with Ukraine's B2
sovereign rating. The downward revision of the bank's standalone
ratings reflects Moody's assessment of the extent to which its
creditworthiness is correlated with that of Ukrainian
government's credit strengths. This reflects the bank's (i)
significant exposure to the Ukrainian government bonds,
accounting for about 120% of its Tier 1 capital; and (ii) the
geographical concentration of the bank's operations in Ukraine's
challenging operating environment.

-- Weakening Capacity Of The Parent Bank To Provide Support

The downgrade of Raiffeisen Bank Aval's local-currency deposit
and debt ratings to Ba3, with a negative outlook, from Ba1 also
reflects RBI's reduced capacity to provide capital and funding
support to its Ukrainian subsidiary, if needed, as reflected by
the one-notch downgrade of RBI's ratings. Moody's incorporates
moderate parental support probability in Raiffeisen Bank Aval's
ratings, which results in a two-notch of rating uplift from its
b2 standalone credit assessment.

What Could Change The Ratings Up/Down

Moody's believes there is little likelihood of any upward
movement in Raiffeisen Bank Aval's and Raiffeisen Leasing Aval's
ratings in the near-term, unless there is a material improvement
in the operating environments of the bank and its parent group.

The banks' ratings could be downgraded if the operating
environment deterioration in Ukraine increases the pressure on
the asset quality and capitalization. A downgrade of RBI's
ratings would also have negative rating implications for the
Ukrainian subsidiaries.

FULL LIST OF RATING ACTIONS

The following ratings were affected:

  Issuer: Tatra Banka a.s.

Long-term deposit ratings downgraded to A3 from A2, with negative
outlook

Short-term deposit ratings downgraded to Prime-2 from Prime-1

Bank financial strength rating confirmed at C-/baa2, with
negative outlook

  Issuer: Raiffeisen Bank SA

Long-term local and foreign-currency deposit ratings downgraded
to Ba1 from Baa3, with stable outlook

Short-term local and foreign-currency deposit ratings downgraded
to Not-Prime from Prime-3

Bank financial strength rating downgraded to D-/ba3 from D/ba2,
with stable outlook

  Issuer: ZAO Raiffeisenbank

Long-term local and foreign-currency deposit ratings of Baa3,
confirmed with a stable outlook

Local-currency senior unsecured debt rating of Baa3, confirmed
with a stable outlook

Foreign-currency senior unsecured debt rating of (P)Baa3,
confirmed with a stable outlook

Short-term local and foreign-currency deposit ratings of Prime-3,
confirmed

Foreign-currency senior unsecured debt rating of (P)Prime-3,
confirmed

Foreign-currency subordinated debt rating of (P)Ba1, confirmed
with a stable outlook

Bank financial strength rating of D+/baa3, affirmed with a stable
outlook

  Issuer: Raiffeisen Bank Aval

Long-term local-currency deposit ratings downgraded to Ba3 from
Ba1, with negative outlook

Long-term local-currency senior unsecured debt ratings downgraded
to Ba3 from Ba1, with negative outlook

Bank financial strength rating downgraded to E+/b2 from D-/ba3,
with stable outlook

  Issuer: Raiffeisen Leasing Aval

National scale issuer and debt ratings downgraded to Aa2.ua from
Aa1.ua

Raiffeisenbank (Bulgaria)'s Baa3/Prime-3, long and short-term
local and foreign-currency deposit ratings remain on review for
downgrade. This reflects the ongoing review of the bank's D+
standalone BFSR, mapping to ba1, which was initiated on 18 May
2012. Moody's expects to conclude the review on the bank's
ratings within the coming weeks.

The principal methodologies used in these ratings 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.



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


BANKIA SA: Spanish Prosecutors Launch Probe After EUR19BB Bailout
-----------------------------------------------------------------
Harry Wilson at The Telegraph reports that Spanish prosecutors
have opened an investigation into Bankia, only weeks after the
lender requested EUR19 billion (GBP15.4 billion) in state aid to
prevent its collapse.

Eduardo Torres-Dulce, Spain's attorney general, said on Wednesday
that he had ordered the country's anti-corruption unit to
investigate whether there were grounds to take "penal" action
against the management of the bank, the Telegraph relates.

The Spanish authorities are currently looking at how to fund the
nationalization of Bankia after it asked for the EUR19 billion
bail-out on May 25, the Telegraph discloses.  The bank is
expected to put forward its own proposal on its rescue next week,
the Telegraph notes.

Bankia SA accepts deposits and offers commercial banking
services.  The Bank offers retail banking, business banking,
corporate finance, capital markets, and asset and private banking
management services.


BBVA RMBS: Moody's Assigns '(P)B1' Rating to Serie C Note
---------------------------------------------------------
Moody's Investors Service has assigned the following provisional
ratings to the debt to be issued by BBVA RMBS 11, Fondo de
Titulizacion de Activos:

    EUR1,204.0M Serie A Note, Assigned (P)Aa2 (sf)

    EUR119.0M Serie B Note, Assigned (P)Ba1 (sf)

    EUR77.0M Serie C Note, Assigned (P)B1 (sf)

The transaction represents the eleventh residential mortgage
securitization transaction originated by Banco Bilbao Vizcaya
Argentaria ("BBVA") (A3/P-2). The assets supporting the notes,
which amount to around EUR1,400 million, consists of mortgage
loans extended to individuals and are backed by first economic
lien on residential properties located in Spain. BBVA is acting
as Servicer of the loans while Europea de Titulizacion S.G.F.T.,
S.A. is the Management Company ("Gestora").

Ratings Rationale

The ratings of the notes take into account the credit quality of
the underlying mortgage loan pool and the vintage data for
defaults and recoveries received from the originator from which
Moody's determined the MILAN Aaa Credit Enhancement and the
portfolio expected loss.

The expected portfolio loss of 7% of original balance of the
portfolio at closing and the MILAN Aaa required credit
enhancement of 21% served as input parameters for Moody's cash
flow model, which is based on a probabilistic lognormal
distribution as described in the report Testing Structural
Features with the MARCO Model (Moody's Analyser of Residential
Cash Flows) published in January 2006.

The key drivers for the MILAN Aaa Credit Enhancement number,
which is in line than the Spanish High Loan-to-Value ("HLTV")
RMBS sector, takes into account (i) the weighted-average current
LTV of 86.92% which is significantly higher than the market
average as only mortgage loans with a current LTV above 80% have
been selected; (ii) 20.9% of the pool corresponds to loans
originated via brokers (iii) 86.9% of the portfolio can modify
the amortization profile and request a final payment at maturity
which can vary between 10% and 30% of the initial loan amount and
(iv) the quality of historical information provided by the
originator. The MILAN number has been qualitatively adjusted in
order generate a loss distribution with a certain volatility to
account for a higher probability of "fat tail" events with
respect to the losses.

The key drivers for the portfolio expected loss, which is higher
than the Spanish sector average, is based on Moody's assessment
of the lifetime loss expectation for the pool taking into account
(i) the historical performance of loans originated by BBVA; (ii)
benchmarking with comparable transactions in the Spanish market;
and (iii) the negative outlook Moody's has on Spanish RMBS.

The Notes benefit from (i) a reserve fund fully funded upfront
equal to 12.75% of the Notes to cover potential shortfall in
interest and principal, (ii) a liquidity reserve for Class A
upfront equal to 3% of the Notes to cover potential shortfall in
interest during the life of the deal and available for principal
at the end of the deal.

Interest rate risk in the transaction, generated by the reset
timing mismatches and, to a limited extent, by base rate
mismatches between interest paid by the loans (99% linked to the
12-months EURIBOR) and the 3-months EURIBOR linked interest
payable on the notes, is un-hedged. Moody's has haircut the
available interest in order to take into account such assets-
liability mismatches.

The V Score for this transaction is Medium, which is in line with
the V score assigned for the Spanish RMBS sector. Four sub
components underlying the V Score have been assessed higher than
the average for the Spanish RMBS sector. Sector's Historical
Downgrade Rate is medium because High LTV deals have shown worse
performance than the market index. Issuer/Sponsor/Originator's
Historical Performance Variability is assessed as Medium/High
because recent HLTV deals from BBVA show worse recovery than
other originators in Spain within this segment, and the Sovereign
risk may increase performance volatility. Transaction Complexity
is Medium because HLTV pools are more exposed to higher house
price declines. Analytic complexity is assessed as Medium because
there is no hedging for the interest rate risk.

Moody's Parameter Sensitivities provide a quantitative/model-
indicated calculation of the number of rating notches that a
Moody's structured finance security may vary if certain input
parameters used in the initial rating process differed. The
analysis assumes that the deal has not aged and is not intended
to measure how the rating of the security might migrate over
time, but rather how the initial rating of the security might
have differed if key rating input parameters were varied.
Parameter Sensitivities for the typical EMEA RMBS transaction are
calculated by stressing key variable inputs in Moody's primary
rating model. For instance, if the assumed MILAN Aaa Credit
Enhancement of 21% used in determining the initial rating was
increased to 33% and the expected loss of 7.0% was increased to
16.0%, the model output for Series A, B and Series C of Aa2, Ba1
and B1 would have changed to Baa2, Caa1 and C respectively.

The principal methodology used in this rating was Moody's
Approach to Rating RMBS in Europe, Middle East, and Africa
published in October 2009.

In rating this transaction, Moody's used ABSROM to model the cash
flows and determine the loss for each tranche. The cash flow
model evaluates all default scenarios that are then weighted
considering the probabilities of the lognormal distribution
assumed for the portfolio default rate. In each default scenario,
the corresponding loss for each class of notes is calculated
given the incoming cash flows from the assets and the outgoing
payments to third parties and noteholders. Therefore, the
expected loss or EL for each tranche is the sum product of (i)
the probability of occurrence of each default scenario; and (ii)
the loss derived from the cash flow model in each default
scenario for each tranche.

As such, Moody's analysis encompasses the assessment of stressed
scenarios.

The ratings address the expected loss posed to investors by the
legal final maturity of the notes. In Moody's opinion, the
structure allows for timely payment of interest and ultimate
payment of principal with respect to the Notes by the legal final
maturity. Moody's ratings address only the credit risks
associated with the transaction. Other non-credit risks have not
been addressed, but may have a significant effect on yield to
investors.

Moody's will monitor this transaction on an ongoing basis.

As the Euro area crisis continues, the rating of the structured
finance notes remain exposed to the uncertainties of credit
conditions in the general economy. The deteriorating
creditworthiness of euro area sovereigns as well as the weakening
credit profile of the global banking sector could negatively
impact the ratings of the notes.


WHITE TOWER: Fitch Downgrades Rating on Class E Notes to 'Csf'
--------------------------------------------------------------
Fitch Ratings has downgraded White Tower 2007-1's class B, C, D
and E notes and affirmed the class A notes due 2015, as follows:

  -- EUR36.9m class A (XS0300055620): 'AAsf'; on Rating Watch
     Negative (RWN)

  -- EUR19.7m class B (XS0300056198): downgraded to 'Bsf' from
     'Asf'; Outlook Negative

  -- EUR19.5m class C (XS0300056271): downgraded to 'CCsf' from
     'BBsf'; Recovery Estimate (RE) 15%

  -- EUR19.4m class D (XS0300056354): downgraded to 'CCsf' from
     'CCCsf'; RE0%

  -- EUR11.7m class E (XS0300056511): downgraded to 'Csf' from
     'CCsf'; RE0%

The downgrades of the B, C, D, and E notes reflects the
deteriorating performance, and increased risk profile of the
collateral supporting the one remaining loan, the Spanish Loan
(Heron City).  This follows the full repayment of the two
Deutsche Bahn loans on the January 2012 interest payment date
(IPD), which reduced the outstanding balance of the notes to
EUR107.2 million from EUR349.6 million at closing.

The remaining Heron City loan is secured by a single leisure-
orientated shopping centre located on the outskirts of Barcelona.
The property's largest tenants are Cinesa, a large multiplex
cinema operator, and Virgin Active, an international gym
operator, which together account for 41.9% of current passing
rent.  A revaluation of the asset as at December 2011, suggests
the loan is considerably over-leveraged, with a reported loan-to-
value ratio (LTV) of 173%.  This revaluation to EUR61 million,
from EUR82.5 million in December 2010, represents a 26% market
value decline (MVD) in one year and takes the total MVD since
loan origination to 56%.

The centre targets a young demographic, making it particularly
exposed to the very high levels of youth unemployment in Spain.
As a result, the level of occupancy, which was previously very
high, has recently fallen to 85% as tenants have declined to
renew their leases.

According to the latest valuation, much of the leisure space,
which accounts for 62% of rental income, is significantly over-
rented, especially the gym and cinema.  Fitch understands that
Cinesa wishes to vacate the premises due to poor attendance
figures. However, the long lease, which expires in 2024, would
invoke a prohibitively high surrender premium.  Cinesa is
currently in arbitration with the landlord over the contractual
terms of the lease, the result of which could range from no
change to the current lease terms, to a lowered renegotiated
rent, or even a termination of the current lease.  The last
scenario would result in a fall in income by EUR2.2 million, or
35% of passing rent, with little hope of finding a new operator
in the short term.

The Heron City loan passed its scheduled maturity date in
December 2011 and the borrower is in negotiations with the
special servicer for a six-month renewable standstill agreement.
This agreement contains certain asset management expectations,
designed to enhance the value of the asset.  Many of the asset
management requirements relate to the leisure units within the
centre, in particular the bowling alley and cinema space.  Fitch
expects the RWN on the class A notes to be resolved when the
standstill agreement is in place and progress on the asset
management is ongoing.

As explained in its EMEA CMBS criteria, Fitch is concerned by
loans backed by assets with poor prospects of sustained income-
generation.  The Heron City asset falls into this category and,
given the worsening economic conditions in Spain, there is an
increased risk that this property may not be sold or the loan
refinanced by final maturity of the notes in October 2015.
Although the loan is currently paying an additional 3% default
interest, post scheduled maturity, the excess spread that could
otherwise be available to de-leverage the transaction is being
extracted by the class X notes.



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


EUROPEAN LOAN: Fitch Affirms 'CCCsf' Rating on Class E Notes
------------------------------------------------------------
Fitch Ratings has affirmed (European Loan Conduit No. 19) plc's
floating rates notes due 2029 and revised the Outlook on two
tranches, as follows:

  -- GBP9.8m Class A (XS0198457888) affirmed at 'AAAsf'; Outlook
     Stable

  -- GBP17.5m Class B (XS0198458266) affirmed at 'AA+sf'; Outlook
     revised to Positive from Stable

  -- GBP15.5m Class C (XS0198459157) affirmed at 'A+'; Outlook
     Stable

  -- GBP11.4m Class D affirmed at 'BBB-sf'; Outlook revised to
     Stable from Negative

  -- GBP7.1m Class E affirmed at 'CCCsf'; Recovery Estimate RE90%

The rating actions reflect the stable performance of the
underlying loans and continued paydown of the notes.  In the past
12 months, 13 loans have been repaid in full.  As of the February
2012 interest payment date (IPD), the outstanding portfolio
balance was GBP66.8 million, accounting for 11.5% of the original
pool. Principal receipts have been applied to the notes on a
modified pro rata basis.  All amortization and 33% of prepayments
and bullet payments have been allocated sequentially, while the
remaining 66% of prepayments and bullet payments have been
applied on a pro rata basis.

As a result of the ongoing significant scheduled and unscheduled
principal payments each quarter, 97.9% of the class A notes had
been redeemed by May 2012.  In contrast, 53.7% of the class B, C
and D notes has been paid down since closing in August 2004.  On
top of its pro rata share of the principal receipts, class E has
amortized by GBP2.2m using excess spread, leaving 34.9% of the
tranche outstanding.

The overcollateralization created by the "turbo-amortization" of
the class E notes (using excess interest from the loans to partly
repay the notes, to create a gap between aggregate loan portfolio
balance and issuance) reduced by GBP0.9 million in October 2010,
as a result of loss allocations.  Therefore, a further GBP1.4
million of loan level losses could be absorbed before the rated
notes are affected.

The weighted average (WA) loan-to-value ratio of the portfolio
marginally improved to 55.5% as of February 2012 IPD since May
2011.  The WA interest and debt service coverage ratios, most
recently reported at a healthy 6.0x and 3.6x, also remained
almost unchanged.  Although secondary assets have experienced
significant value declines since the beginning of the global
crisis in 2008, most of these assets were valued prior to closing
in 2004, meaning that values increased for several years before
subsequently declining again due to adverse yield shifts.

Due to the redemption of 335 loans since closing and the
corresponding paydown of 88.5% of the original portfolio,
granularity has significantly decreased.  The largest loan, MS
Acquired Loan 9, standing at GBP13.2m, represents 20% of the
February 2012 portfolio.  The loan is secured on two good
secondary office properties and one leisure building, located in
central London.  On the basis of the current market situation,
Fitch expects no losses from this loan.


* UK: Court Closes Unscrupulous Landbanking, Carbon Credit Firms
----------------------------------------------------------------
The Insolvency Service said that a web of disreputable land
banking and carbon credit companies have all been ordered into
liquidation in the High Court on grounds of public interest
following an investigation by Company Investigations of the
Insolvency Service.

Before being closed down, the companies between them misled the
public into investing around GBP6.5 million.

The companies involved are Manor Rose Limited, MR Investment Club
Limited, MR Investment Club Phase 1 LLP, Manor Rose Carbon Credit
Limited, Betta Build (NW) Ltd, MRT Land Holdings Ltd, Boldacre
Ltd, Morgan Rey Consultants Limited and Dakota Partners
International CC Limited

Manor Rose Limited and a company called Dakota Partners
International Limited and Dakota Partners International CC
Limited operated land banking businesses selling small plots of
land for investment to the public and also offered to the public
carbon credits for investment.

Morgan Rey Consultants Limited, MRT Land Holdings Ltd and
Boldacre Ltd were an integral part of the land banking business
acting as intermediaries between at least ten different sales
agents (including Manor Rose Limited, Dakota Partners
International Limited and Dakota Partners International CC
Limited) and the various land owners who gave permission to the
companies to market and sell the plots on the respective sites.

The sites were at:

-- Cross Keys, Keys Farm. Mattishall, Norfolk.
-- Flax Lane, Ormskirk, Lancashire.
-- Hollinsfield, Hollins Farm, Burnley, Lancashire.
-- Gambles Development, Gambles Lane, Bishops Cleve, Cheltenham.
-- Portvale Mill, Middleport, Stoke-on-Trent.

Misleading statements were made by the companies in order to sell
plots of land at these sites (and shares in Portvale Mill) at
over the market value to members of the public who they cold
called making false representations that the investments would
bring significant returns in a 2-3 year period.

In an attempt to further deceive potential investors into
purchasing plots of land at one particular site at Flax Lane,
Ormskirk, Lancashire, the brochures included a letter from Betta
Build (NW) Ltd of 1A Deysbrook Lane, Liverpool, L12 8RE which
falsely stated that they were interested in developing the Flax
Lane site.

Plots of land at both the Cross Keys and Flax Lane sites were
also sold by another land banking company called Century Property
Group Limited which was ordered into liquidation on grounds of
public interest on April 4, 2012, having raised over GBP10
million from the public.

MR Investment Club Limited and MR Investment Club Phase 1 LLP
were, together with Manor Rose Limited, involved in selling
shares in a site with planning permission at Portvale Mill,
Middleport, Stoke-on-Trent. They were all based at 125 Old Broad
Street in the City of London opposite Tower 42, the former
trading address of Century Property Group Limited.

Manor Rose Carbon Credit Limited was set up to sell carbon
credits as an investment opportunity but has not traded as a
result of the Service's enforcement action taken against the
company.

Company Investigations Supervisor Chris Mayhew said: "The
investigation found that false and misleading claims regarding
the investment potential of the land and the carbon credits were
made to the public and investors were misled into believing that
the land and the carbon credits they were buying had serious
investment potential.

There is no credible evidence to support the assertions made to
investors who had virtually nothing to gain and everything to
lose from their investment.

Unscrupulous companies, and those behind them, who prey on the
vulnerable and gull honest people out of their hard earned money
will not be tolerated by the Service."



===================
U Z B E K I S T A N
===================


UNIVERSAL BANK: Fitch Affirms 'CCC' LT Issuer Default Ratings
-------------------------------------------------------------
Fitch Ratings has affirmed Uzbekistan-based Universal Bank's (UB)
Long-Term Foreign and Local Currency Issuer Default Ratings (IDR)
at 'CCC'.

The IDRs reflect UB's weak credit profile due to its modest
franchise, high concentration risks on both sides of the balance
sheet, large volume of related-party transactions and expected
rapid balance sheet expansion in the near- to medium- term.

The ratings also take into account weaknesses in Uzbekistan's
operating environment and high operating costs associated with
the overall development of the bank's business.  The bank's
liquidity position is also potentially vulnerable due to its
reliance on corporate settlement accounts.  However, the bank's
reported capitalization is reasonable.

Privately-owned UB is one of the smallest (24th of 30) domestic
banks by assets (end-2011: US$27.4 million), based in densely
populated eastern Uzbekistan where it operates a few banking
outlets.  The bank has a short track record as it was founded
only in 2001.  In late 2010, a regional private equity investment
fund acquired control of UB.  UB focuses on commercial banking
operations with predominantly corporate clients.  The new owner
is focused on franchise expansion and building management
processes and controls.

The rating actions are as follows:

  -- Long-Term Foreign Currency IDR: affirmed at 'CCC'
  -- Short-Term Foreign Currency IDR: affirmed at 'C'
  -- Long-Term Local Currency IDR: affirmed at 'CCC'
  -- Short-Term Local Currency IDR: affirmed at 'C'
  -- Viability Rating: affirmed at 'ccc'
  -- Support Rating: Affirmed at '5'
  -- Support Rating Floor: affirmed at 'No Floor'



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


* BOOK REVIEW: Ralph H. Kilmann's Beyond the Quick Fix
------------------------------------------------------
Author: Ralph H. Kilmann
Publisher: Beard Books
Hardcover: 320 pages
Listprice: $34.95
Review by Henry Berry

Every few years, a new approach is offered for unleashing the
full potential of organized efforts.  These are the quick fixes
to which the title of this book refers.  The jargon of the quick
fix is familiar to any businessperson: decentralization, human
resources, restructuring, mission statement, corporate strategy,
corporate culture, and so on.  These terms are all limited in
scope or objective, and some are even irrelevant or misconceived
with regard to the overall well-being and purpose of a
corporation.

With his extensive experience as a corporate consultant, author
of numerous articles, and professor in business studies, Kilmann
recognizes that each new idea for optimum performance and results
is germane to some area of a corporation.  However, he also
recognizes that each new idea inevitably falls short in bringing
positive change -- that is, a change that is spread throughout
the corporation and is lasting.  At best, when a corporation
relies on an alluring, and sometimes little more than
fashionable, idea, it is a wasteful distraction.  At worst, it
can skew a corporate organization and its operations, thereby
allowing the corporation's true problems or weaknesses to grow
until they become ruinous.  As the author puts it, "Essentially,
it is not the single approach of culture, strategy, or
restructuring that is inherently ineffective.  Rather, each is
ineffective only if it is applied by itself -- as a "quick fix"."

Kilmann tells corporate leaders how to break the cycle of
embracing a quick fix, discarding it after it proves ineffective,
and then turning to a newer and ostensibly better quick fix that
soon proves to be equally ineffective.  For a corporation to
break this self-defeating cycle, the author offers a five-track
program.  The five tracks, or elements, of this program are
corporate culture, management skills, team-building, strategy-
structure, and reward system.  These elements are interrelated.
The virtue of Kilmann's multidimensional five-track program is
that it addresses a corporation in its entirety, not simply parts
of it.

Kilmann's five tracks offer structural and operational aspects of
a corporation that executives and managers will find familiar in
their day-to-day leadership and strategic thinking.  Thus, the
author does not introduce any unfamiliar or radical perspectives
or ideas, but rather advises readers on how to get all parts of a
corporation involved in productive change by integrating the five
tracks into "a carefully designed sequence of action: one by one,
each track sets the stage for the next track."  Kilmann does
more, though, than bring all significant features of a modern
corporation together in a five-track program and demonstrate the
interrelation of its elements.  His singularly pertinent and
useful contribution is providing a sequence of steps to be
implemented with respect to each track so that a corporation
progresses toward its goals in an integrated way.

Beyond the Quick Fix is a manual for implementing and evaluating
the progress of a five-track program for corporate success.  The
book should be read by any corporate leader desiring to bring
change to his or her organization.

Ralph H. Kilmann has been connected with the University of
Pittsburgh for 30 years.  For a time, he was its George H. Love
Professor of Organization and Management at its Katz Graduate
School of Business.  Additionally, he is president of a firm
specializing in quantum transformations.


                            *********

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

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

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

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


                            *********


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA.  Valerie U. Pascual, Marites O. Claro, Rousel Elaine T.
Fernandez, Joy A. Agravante, Ivy B. Magdadaro, Frauline S.
Abangan and Peter A. Chapman, Editors.

Copyright 2012.  All rights reserved.  ISSN 1529-2754.

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

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

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


                 * * * End of Transmission * * *