---

        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 22, 2012, Vol. 13, No. 124

                            Headlines



A U S T R I A

HOCHKAR SKI: Resort Goes Into Receivership, Affects 70 Creditors


C Z E C H   R E P U B L I C

SAZKA AS: Creditors to Get 20% of Claims Under Cupka's Proposal


G E R M A N Y

NORDDEUTSCHE LANDESBANK: Moody's Assigns Rating to Covered Bonds
STABILITY CMBS: Moody's Lowers Rating on Class E Notes to 'B3'
* GERMANY: Moody's Completes Review on Covered Bonds Transactions


I R E L A N D

CAMBER 4: S&P Affirms Rating on Class D Notes to 'D'
DUNCANNON CRE: Fitch Says Partial Repurchase Won't Affect Ratings


I T A L Y

BANCA POPOLARE: Moody's Withdraws 'Ba2/NP/D' Ratings


L I T H U A N I A

BANKAS SNORAS: Sues Former Owners in Britain for GBP395.5-Mil.
BANKAS SNORAS: E&Y Employee Lose Auditors License Over Bankruptcy


P O R T U G A L

BANCO POPULAR: Fitch Maintains 'BB+/B' Rating on Watch Negative


R O M A N I A

HIDROELECTICA SA: Romanian Court Approves Insolvency
HIDROELECTRICA SA: Moody's Lowers Corp. Family Rating to 'B2'


R U S S I A

EVROFINANCE-MOSNARBANK: Moody's Confirms 'Ba3' Deposit Ratings
TATNEFTS OAO: Fitch Upgrades Issuer Default Rating to 'BB+'


S L O V A K   R E P U B L I C

CSOB SLOVAKIA: Moody's Says 'D' BFSR Unaffected by Rating Actions


S P A I N

TELEFONICA SA: Moody's Cuts Sub. Preferred Stock Ratings to 'Ba1'


S W E D E N

SAAB AUTOMOBILE: New Owners Have Yet to Secure Brand Rights


T U R K E Y

* TURKEY: Moody's Upgrades Government Bond Ratings to 'Ba1'


U N I T E D   K I N G D O M

CORNERSTONE TITAN: S&P Lowers Rating on Class D Notes to 'B'
DANUBE DELTA: S&P Cuts Ratings on Three Note Classes to 'CCC-'
MARINE HOTEL: In Receivership After Owner Goes Bankrupt
NEMUS II: Fitch Raises Rating on Class F Notes to 'CCCsf'


X X X X X X X X

* Moody's Reveals 2012-13 Performance Outlooks for EU ABS & RMBS
* BOOK REVIEW: Learning Leadership


                            *********


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


HOCHKAR SKI: Resort Goes Into Receivership, Affects 70 Creditors
----------------------------------------------------------------
Austrian Times reports that Hochkar Ski has gone into
receivership proceedings.

According to an organization for the protection of creditors, KSV
1870, the debt of the organizers of the ski resort loved by the
Viennese because of its close proximity is around EUR10 million,
according to Austrian Times.

The report notes that the regional government in Lower Austria is
reported to be considering getting involved in a rescue package
together with the Schrocksnadel-Group.

Austrian Times says that the last two winters have been
particularly tough for ski areas in Lower Austria where as a
result of the economic crisis, fewer people have invested in a
skiing holidays.  In addition, the weather and snow situation
were not ideal in the region, which was the problem that hit
Hochkar, the report relays.

Austrian Times says that it meant that although in 2008, there
were 250,000 guests, it was only 147,000 last year.

Hochkar Sport-GmbH & Co KG Manager Katharina Putz confirmed the
receivership proceedings had been started.

The company has 26 staff and 70 creditors who are affected,
Austrian Times notes.



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


SAZKA AS: Creditors to Get 20% of Claims Under Cupka's Proposal
---------------------------------------------------------------
CTK reports that Josef Cupka, insolvency administrator at Sazka
AS, has sent a proposal to the Municipal Court in Prague under
which 2,000 creditors may get 20% of over CZK15 billion worth of
claims on Sazka, declared bankrupt in May 2011, that have been
acknowledged by Mr. Cupka.

Mr. Cupka can start paying money to the creditors after his
proposal is approved by the court, CTK discloses.  The Bank of
New York Mellon, the bondholders' security agent, was in March
sent CZK567 million from the amount of CZK3.81 billion, which was
the price paid by the groups PPF and KKCG for Sazka, CTK
recounts.

Mr. Cupka asked the court for permission of partial distribution,
which will allow him to distribute CZK874 million among the
creditors, CTK relates.

According to CTK, Mr. Cupka's spokeswoman Lenka Ticha said that
total claims to fall within partial distribution amount to CZK4.5
billion.

Sazka AS is a provider of lotteries and sport betting games in
the Czech Republic.



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


NORDDEUTSCHE LANDESBANK: Moody's Assigns Rating to Covered Bonds
----------------------------------------------------------------
Moody's Investors Service has assigned a provisional long-term
rating of (P)A2 to the Aircraft covered bonds (Flugzeug-
Pfandbriefe) issued by Norddeutsche Landesbank Girozentrale
(NORD/LB or the issuer), which are governed by the German
Pfandbrief Act (the program).

Ratings Rationale

The covered bonds will constitute direct, unconditional and
senior obligations of NORD/LB and are secured by a pool of
aircraft financings.

As of April 30, 2012, the total outstanding principal amount of
the assets in the cover pool, comprising 74 financings, was
approximately EUR0.95 billion. The financings comprise of direct
loans to airlines (43% of the cover pool), aircraft operating
leases (48%) and aircraft finance leases (9%). All financings are
backed by aircraft mortgages. For a detailed description of the
cover pool, see the pre sale report for this transaction.

A covered bond benefits from (i) the issuer's promise to pay
interest and principal on the bonds; and (ii) if the issuer
defaults, the economic benefit of a collateral pool (the cover
pool). The ratings therefore take into account the following
factors:

(i) The credit strength of Norddeutsche Landesbank Girozentrale
     (rated A3, P-2, D).

(ii) The value of the cover pool in the event of issuer default.
     The stressed level of losses modelled in the event of issuer
     default (cover pool losses) for this transaction is 72.9%.

The analysis of the value of the cover pool considered:

(a) The legal framework. Notable aspects of the legal framework
for Pfandbriefe include inter alia the regulatory requirement for
the issuer to maintain 2% over-collateralization on a stressed
present value basis; Moody's considers this over-
collateralization to be "committed". The framework imposes an LTV
threshold of 60% based on a clearly defined lending value. The
issuer is also required to cover potential liquidity gaps over
the next 180 days between payments expected to be received under
the cover pool assets and the payments due under the outstanding
covered bonds.

(b) The credit quality of the assets backing the covered bonds.
The covered bonds are backed by aircraft financings. The
collateral score for the cover pool is 100%.

(c) The exposure to interest rate and currency risk.

Moody's considers the transaction to be linked to the credit
strength of the issuer, particularly from a default probability
perspective. The uplift of the covered bond rating is restricted
to one notch above the issuer rating given (i) the high level of
losses that Moody's expects will impact covered bondholders
following issuer default; and (ii) the limited amount of relevant
historical data available to study collateral losses of aircraft
financings.

The TPI assigned to this transaction is Improbable.

The rating assigned by Moody's addresses the expected loss posed
to investors. 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 issues provisional ratings in advance of the final sale
of securities and these ratings only represent Moody's
preliminary opinion. Upon a conclusive review of the transaction
and associated documentation Moody's will endeavor to assign a
definitive rating to the covered bonds.

KEY RATING ASSUMPTIONS / FACTORS

Covered bond ratings are determined after applying a two-step
process: expected loss analysis and TPI framework analysis.

EXPECTED LOSS: Moody's determines a rating based on the expected
loss on the bond. The primary model used is Moody's Covered Bond
Model (COBOL), which determines expected loss as (i) a function
of the issuer's probability of default (measured by the issuer's
rating); and (ii) the stressed losses on the cover pool assets
following issuer default.

The cover pool losses for this program are 72.9%. This is based
on Moody's most recent modelling (based on data as per
30.04.2012) and is an estimate of the losses Moody's currently
models if the issuer defaults. Cover pool losses can be split
between market risk of 5.9% and collateral risk of 67.0%. Market
risk measures losses as a result of refinancing risk and risks
related to interest-rate and currency mismatches (these losses
may also include certain legal risks). Collateral risk measures
losses resulting directly from the credit quality of the assets
in the cover pool. Collateral risk is derived from the collateral
score.

Moody's uses a collateral score of 100% for this covered bond
program. The collateral score is Moody's opinion of how much
credit enhancement is needed to protect against the credit
deterioration of assets in the cover pool in order to reach a
theoretical Aaa expected loss, assuming those assets are
otherwise unsupported. The collateral score setting is due to (i)
the historic evidence that aircraft market values are exposed to
more frequent and higher volatility than conventional Pfandbrief
collateral (like residential mortgages), which is triggered by a
wide range of factors and (ii) the limited amount of relevant
historical data available to study collateral losses of aircraft
financings, especially following issuer failure, which does not
enable us at this stage to determine how much credit enhancement
is needed to protect against the credit deterioration of assets
in a cover pool in order to reach a theoretical Aaa expected
loss.

However, in Moody's view, some limited value can be given to the
cover pool and thus the aircraft covered bonds obtain a one notch
uplift over the issuer rating, as a result of i) the strength of
the German legal framework for Flugzeugpfandbriefe (aircraft
covered bonds), and ii) the role of the issuer in the program.
The strengths of the legal framework include a 60% LTV threshold
based on the aircraft lending value. The Flugzeugpfandbriefe
framework regulates the calculation of this lending value which
is defined as the lower of (a) the current market value of the
aircraft, (b) the average market value during the last 10 years
and (c) the value assuming balanced market conditions and an
average state of repair. This lending value concept can be
expected to soften the credit risk impact of the volatility of
the aircraft market. Moody's has also updated its assessment on
non-EEA assets in Pfandbrief cover pools.

The current over-collateralization in the cover pool is 87%, of
which 2% is provided on a "committed" basis. The minimum over-
collateralization level that is consistent with the (P)A2 rating
target is 0% (numbers in present value terms). Therefore, Moody's
is not relying on "uncommitted" over- collateralization in its
expected loss analysis.

All numbers in this section are based on Moody's most recent
modelling (based on data as per April 30, 2012).

TPI FRAMEWORK: Moody's assigns a "timely payment indicator"
(TPI), which indicates the likelihood that timely payment will be
made to covered bondholders following issuer default. The effect
of the TPI framework is to limit the covered bond rating to a
certain number of notches above the issuer's rating. The TPI
Leeway measures the number of notches by which the issuer's
rating may be downgraded before the covered bonds are downgraded
under the TPI framework.

Sensitivity Analysis

The robustness of a covered bond rating largely depends on the
credit strength of the issuer.

Based on the current TPI of Improbable, the TPI Leeway for this
program is 3 notches, meaning the covered bonds might be
downgraded as a result of a TPI cap once the issuer rating is
downgraded below Baa3, all other variables being equal.

However, as outlined above, the covered bond rating should be
expected to be restricted to one notch above the issuer rating as
a result of the expected loss analysis.

A multiple-notch downgrade of the covered bonds might occur in
certain limited circumstances. Some examples might be (i) a
sovereign downgrade negatively affecting both the issuer's senior
unsecured rating and the TPI; (ii) a multiple notch downgrade of
the issuer; or (iii) a material reduction of the value of the
cover pool.

As the euro area crisis continues, the rating of covered bonds
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 covered
bonds.

These figures are based on the latest data that has been analysed
by Moody's and are subject to change over time. These numbers are
typically updated quarterly in Performance Overviews published by
Moody's.

Rating Methodology

The principal methodology used in this rating was "Moody's
Approach to Rating Covered Bonds" published in March 2010.


STABILITY CMBS: Moody's Lowers Rating on Class E Notes to 'B3'
--------------------------------------------------------------
Moody's Investors Service has taken rating action on the
following classes of Notes issued by Stability CMBS 2007-1 GmbH
(amounts reflect initial outstanding):

    EUR726.7M Senior Credit Default Swap, Affirmed at Aaa (sf);
    previously on May 22, 2007 Definitive Rating Assigned Aaa
    (sf)

    EUR0.5M Class A+ Notes, Affirmed at Aaa (sf); previously on
    May 22, 2007 Definitive Rating Assigned Aaa (sf)

    EUR31.8M Class A Notes, Affirmed at Aaa (sf); previously on
    May 22, 2007 Definitive Rating Assigned Aaa (sf)

    EUR46.4M Class B Notes, Affirmed at Aa2 (sf); previously on
    May 22, 2007 Definitive Rating Assigned Aa2 (sf)

    EUR30.5M Class C Notes, Affirmed at A2 (sf); previously on
    May 22, 2007 Definitive Rating Assigned A2 (sf)

    EUR30.4M Class D Notes, Downgraded to Baa3 (sf); previously
    on May 22, 2007 Definitive Rating Assigned Baa2 (sf)

    EUR28.2M Class E Notes, Downgraded to B3 (sf); previously on
    May 22, 2007 Definitive Rating Assigned Ba3 (sf)

Moody's does not rate the Class F Notes.

Ratings Rationale

The downgrade actions are driven by Moody's increased loss
expectation for the pool since its last review, combined with the
anticipation that the defaulted claims currently being worked-out
will result in losses to the Class F Notes, and consequently
contribute to eroding the credit enhancement available to the
other Classes of Notes. The increased loss expectation is
primarily due to the higher refinancing risk of most of the loans
in the pool, and especially some of the largest ones, as a
consequence of (i) Moody's generally lower value assessment for
the properties securing the claims, with little hopes of recovery
over the short term, (ii) the subdued refinancing market in
Germany, especially for highly leveraged loans, and (iii) the
uncertainty with respect to the path and timing for a recovery of
the lending market.

The ratings of the Senior Credit Default Swap and Classes A+, A,
B and C are affirmed because the loan repayment proceeds
allocated sequentially increased substantially the credit
enhancement to the senior Classes over the last year, and
compensates for the higher expected losses.

The key parameters in Moody's analysis are the default
probability of the securitized loans (both during the term and at
maturity) as well as Moody's value assessment for the properties
securing these loans. Moody's derives from those parameters a
loss expectation for the securitized pool.

In general, Moody's analysis reflects a forward-looking view of
the likely range of commercial real estate collateral performance
over the medium term. From time to time, Moody's may, if
warranted, change these expectations. Performance that falls
outside an acceptable range of the key parameters such as
property value or loan refinancing probability for instance, may
indicate that the collateral's credit quality is stronger or
weaker than Moody's had anticipated when the related securities
ratings were issued. Even so, a deviation from the expected range
will not necessarily result in a rating action nor does
performance within expectations preclude such actions. There may
be mitigating or offsetting factors to an improvement or decline
in collateral performance, such as increased subordination levels
due to amortization and loan re- prepayments or a decline in
subordination due to realized losses.

Primary sources of assumption uncertainty are the current
stressed macro-economic environment and continued weakness in the
occupational and lending markets. Moody's anticipates (i) delayed
recovery in the lending market persisting through 2013, while
remaining subject to strict underwriting criteria and heavily
dependent on the underlying property quality, (ii) strong
differentiation between prime and secondary properties, with
further value declines expected for non-prime properties, and
(iii) occupational markets will remain under pressure in the
short term and will only slowly recover in the medium term in
line with anticipated economic recovery. Overall, Moody's central
global macroeconomic scenario is for a material slowdown in
growth in 2012 for most of the world's largest economies fueled
by fiscal consolidation efforts, household and banking sector
deleveraging and persistently high unemployment levels. Moody's
expect a mild recession in the Euro area.

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.

Moody's Portfolio Analysis

Stability CMBS 2007-1 GmbH closed in 2007 and represents the
synthetic securitization of initially 218 commercial mortgage
loans granted to 91 distinct borrower groups and secured on
aggregate by 119 properties located in Europe. The loans were
originated by IKB Deutsche Industriebank Aktiengesellschaft
("IKB") in the course of its ordinary commercial mortgage loan
activity.

Since closing of the transaction, the reference portfolio has
reduced from EUR909 million to EUR403 million as per April 2012,
for 84 claims to 51 distinct borrower groups . The portfolio's
concentration has increased as shown in a current Herfindahl
Index of 11 compared to 32 at closing. The largest 3 borrower
groups are now representing 37% of the pool, by comparison to 23%
at closing.

The main property type remains office building, at 84% of the
portfolio compared to 77% at closing, followed by retail and
mixed use properties. The asset location remains predominantly
Germany with 82% of the pool (90% at closing) with the remaining
being distributed across Austria, the UK, Luxembourg and the
Netherlands.

The structure is sponsored by KfW, which provides credit
protection to IKB for the reference portfolio. KfW in turn hedged
its exposure through a senior credit default swap and the
issuance of certificates of indebtedness to the issuer, Stability
CMBS 2007-1 GmbH. The issuer financed the acquisition of the
certificates through the issuance of credit-linked notes to
investors. The legal final maturity of the transaction is May
2022.

No loss claim was reported since closing, however 3 claims to 2
distinct borrower groups and totaling 2.5% of the pool balance
have defaulted and are currently being worked out. These
defaulted claims are expected to produce losses which will be
allocated reverse-sequentially, starting with the Class F Notes.
Overall, the current pool is expected to experience limited
losses.

In the course of its annual review of the transaction, Moody's
obtained updated information about the 10 largest borrower group
in the portfolio, totaling 69% of the pool combined, and
conducted a more comprehensive analysis of these largest
exposures. Noticeably, the default probability at maturity of the
largest claim, representing 25% of the pool, was reviewed upwards
and is now high. Indeed, the whole-loan LTV ratio of this very
large syndicated loan is expected to be 116% based on Moody's
estimated property value at maturity in December 2013, making
refinancing unlikely. However, with a more moderate A-loan LTV of
78%, and accounting for the very strong covenant of the tenant,
the length of the leases and the potential future rental increase
due to inflation, a default of this claim is not anticipated to
result in any substantial losses for the securitized position.

Potential operational risks of the transaction were also reviewed
in light of the current credit situation of the loan originator
and servicer, IKB. Moody's withdrew IKB's ratings on 14 July
2011. Although the risk of default of IKB should not impact
directly on the ratings of the senior CDS and Notes due to the
synthetic nature of the transaction, any weakening of the credit
strength of the servicer could trigger a gradual deterioration of
the servicing and reporting. This risk is mitigated by the fact
that compliance with the servicing standards is a condition to
the allocation of realized losses that must be checked by the
trustee.

Rating Methodology

The methodologies used in this rating were Moody's Approach to
Real Estate Analysis for CMBS in EMEA: Portfolio Analysis (MoRE
Portfolio) published in April 2006, and Update on Moody's Real
Estate Analysis for CMBS Transaction in EMEA published in June
2005.

Other factors used in this rating are described in European CMBS:
2012 Central Scenarios published in February 2012.

The updated assessment is a result of Moody's on-going
surveillance of commercial mortgage backed securities (CMBS)
transactions. Moody's prior assessment is summarized in a press
release dated June 24, 2011. The last Performance Overview for
this transaction was published on May 9, 2012.

In rating this transaction, Moody's used both MoRE Portfolio and
MoRE Cash Flow to model the cash-flows and determine the loss for
each tranche. MoRE Portfolio evaluates a loss distribution by
simulating the defaults and recoveries of the underlying
portfolio of loans using a Monte Carlo simulation. This portfolio
loss distribution, in conjunction with the loss timing calculated
in MoRE Portfolio is then used in MoRE Cash Flow, where for each
loss scenario on the assets, the corresponding loss for each
class of notes is calculated taking into account the structural
features of the notes. As such, Moody's analysis encompasses the
assessment of stressed scenarios.


* GERMANY: Moody's Completes Review on Covered Bonds Transactions
-----------------------------------------------------------------
Moody's Investors Service said that it has completed its review
of whether covered bondholders would benefit from US and Swiss
assets in cover pools backing German covered bond transactions,
following the insolvency of a covered bond issuer (the issuer).
The review focused on whether, following the default of an
issuer, unsecured creditors might be able to access assets
outside the European Economic Area (EEA) and to satisfy their
claims against the issuer, thus depriving covered bondholders of
the economic benefit provided by these assets.

Moody's has concluded that it will continue to give full value to
US and Swiss assets contained in the cover pools of German
covered bond transactions. Moody's notes that based on this
approach, it does not expect any covered bond rating to change
following this updated assessment.

U.S. Assets in Cover Pools

Moody's has finalized its analysis of legal opinions and
structural solutions -- in terms of trust structures -- proposed
by issuers to mitigate legal risks associated with US assets.
Following the analysis, Moody's continues to incorporate the full
value of US assets in its analysis for those transactions that
have confirmed the execution of the above-mentioned structural
solutions. This applies to US assets in mortgage and public-
sector cover pools as well as in aircraft cover pools. US assets
not benefitting from these structural solutions will not be given
any value by Moody's when assessing German covered bond
transactions.

Swiss Assets in Cover Pools

On April 13, 2010, Moody's updated the market, indicating that
due to the limited nature of potential risks to covered
bondholders regarding Swiss assets, Moody's continued to give
full benefit to these assets in German cover pools.

Moody's has been provided with legal comfort for Swiss assets in
both mortgage and public-sector pools, indicating that these
limited risks are even further reduced after the implementation
of structural solutions.

With regards to Swiss mortgage assets, the issuer will transfer
the mortgage loans and pledge the corresponding real estate
security rights to a bankruptcy remote SPV under Swiss law. The
SPV will act as a fiduciary (Treuhaender) who will only be able
to release the mortgage assets for the benefit of covered bond
holders.

With regards to Swiss public sector assets, the issuer will
pledge the assets in the cover pool to a fiduciary (Treuhaender)
who will only be able to realize the pledged assets for the
benefit of covered bond holders. Moody's notes, however, that in
the case of the fiduciary's insolvency, it is possible for the
protection provided to covered bondholders by this structure to
fall away, recreating the same legal situation as if there had
been no such solution. Following its analysis, Moody's concludes
that the suggested structural solution will further strengthen
the position of covered bond holders in the event of an issuer
default, but not have any negative effect on covered bondholders
interests, should it fall away.

Moody's will continue to give full value to Swiss assets
independently of whether or not these solutions have been
implemented.

Other Non-EEA Assets

Moody's understands that several German issuers are continuing to
work on the implementation of structural solutions for cover
assets located in Japan. For highly rated issuers where such
mitigants are expected to be implemented, Moody's continues to
incorporate the full value of Japanese assets in its analysis.

However, Moody's understands that no German issuer that is rated
by Moody's is working on a legal solution for Canadian assets.
Therefore, Moody's is not giving any economic value to Canadian
assets in any cover pool.



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


CAMBER 4: S&P Affirms Rating on Class D Notes to 'D'
----------------------------------------------------
Standard & Poor's Ratings Services affirmed its credit ratings on
all classes of notes in CAMBER 4 PLC.

CAMBER 4 is a bankruptcy-remote public company, incorporated with
limited liability under the laws of Ireland. Its only purposes
are to acquire the portfolio, issue the notes, and engage in
certain related transactions.

"The rating actions follow our assessment of the transaction's
performance. We have used data from the April 2012 trustee
report, performed our credit analysis, and taken into account
recent transaction developments. We have applied our 2012 CDO of
asset-backed securities (ABS) criteria, 2010 counterparty
criteria, and our 2009 corporate CDO criteria," S&P said.

"From our analysis, we have observed that the concentration of
assets that we consider to be rated in the 'CCC' category
('CCC+', 'CCC', or 'CCC-') is still significantly high--
accounting for more than 35% of the performing pool. The assets
that we consider to be defaulted (rated 'CC', 'C', 'SD'
[selective default], or 'D') account for more than 30% of the
pool. All of the transaction's coverage tests are below the
trigger required by the transaction documents (see table 4). The
class B and C notes are currently deferring interest and, with a
lower aggregate collateral balance, the credit enhancement levels
available to these classes of notes have continued to reduce
since our previous review of the transaction on Dec. 21, 2010,
and since the closing date on Dec. 17, 2004. We have also
observed that the pool has experienced a negative ratings
migration since the closing date," S&P said.

"Based on our observation of the trustee report, the issuer has
used principal proceeds to pay interest on the nondeferrable
notes," S&P said.

"Taking into account the above factors in our credit analysis, we
consider the credit enhancement available to all rated classes of
notes in this transaction to be commensurate with the current
ratings. We have therefore affirmed our ratings on these classes
of notes. All of our ratings in this transaction are at 'CC (sf)'
-- apart from that on the class B notes, which is at 'D (sf)',"
S&P said.

"In our analysis, we have also considered our ratings on the
counterparty in this transaction. However, given the low ratings
on the notes and the current pool performance, this was not a
driving factor in our ratings decision," S&P said.

RATINGS LIST

Class            Rating
          To                From

CAMBER 4 PLC
US$1.004 Billion Asset-Backed Floating-Rate Notes

Ratings Affirmed

A1-A      CC (sf)           CC (sf)
A1-B      CC (sf)           CC (sf)
A2        CC (sf)           CC (sf)
A3        CC (sf)           CC (sf)
B         D (sf)            D (sf)
C         CC (sf)           CC (sf)


DUNCANNON CRE: Fitch Says Partial Repurchase Won't Affect Ratings
-----------------------------------------------------------------
Fitch Ratings says that Duncannon CRE CDO I plc's notes' ratings
will not be impacted as a result of the recent partial repurchase
of Duncannon CRE CDO I plc's class A notes.  The notes' ratings
are as follows:

  -- EUR2.1m Class X (ISIN XS0311199367): 'BBsf'; Outlook Stable
  -- EUR0 RCF (no ISIN): 'Bsf'; Outlook Stable
  -- EUR177.3m Class A (ISIN XS0311199524): 'Bsf'; Outlook Stable
  -- EUR40.0m Class B (ISIN XS0311200710): 'CCsf'
  -- EUR40.7m Class C1 (ISIN XS0311202500): 'Csf'
  -- EUR20.4m Class C2 (ISIN XS0311203813): 'Csf'
  -- EUR21.7m Class D1 (ISIN XS0311204464): 'Csf'
  -- EUR21.8m Class D2 (ISIN XS0311204621): 'Csf'
  -- EUR22.0m Class D3 (ISIN XS0311204977): 'Csf'
  -- EUR23.0m Class E1 (ISIN XS0311206329): 'Csf'
  -- EUR23.2m Class E2 (ISIN XS0311206592): 'Csf'

As per Condition 7 (h) of the Duncannon CRE CDO I plc prospectus,
the issuer may at any time, at the direction of the portfolio
manager, purchase senior or mezzanine notes in the open market or
in privately negotiated transactions, at a price not exceeding
the notes' par value.  Under the buyback, the repurchase of a
total par value of EUR61.9 million of the class A notes was
undertaken at a discounted purchase price.  The repurchased notes
were subsequently cancelled, thereby marginally increasing the
available credit enhancement to all rated notes.  The buyback
follows earlier buybacks of class A notes in 2009, 2010, 2011 and
2012.

The repurchase was funded using cash available in the principal
collection account and the proceeds from the sale of two
portfolio assets.  Generally, proceeds in the principal
collection account can be used by the portfolio manager to invest
in new portfolio assets, limited by the eligibility criteria, or
they may be distributed to noteholders, if no such investment
opportunity exists.  Due to the funding of the repurchase of the
class A notes, the amount of principal proceeds available for
immediate distribution to the remaining noteholders will be
substantially lower.  At the same time, noteholders will benefit
from an increase in credit enhancement due to the relative
increase of assets compared with liabilities in the structure.

The second senior and mezzanine par value tests were breaching
their limits as of April 2012.  Fitch notes that all par value
ratios will improve as a result of the repurchase with the second
senior par value test expected to return to compliance.
Consequently, the amount of interest required to be diverted on
future payment dates to the senior notes to cure the par value
tests may be reduced.


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


BANCA POPOLARE: Moody's Withdraws 'Ba2/NP/D' Ratings
----------------------------------------------------
Moody's Investors Service has withdrawn Banca Popolare di
Cividale ScpA's (BP Cividale) D standalone bank financial
strength rating (BFSR), which maps to a ba2 standalone credit
assessment, the Ba2 long-term and Not-Prime short-term deposit
ratings. At the time of the withdrawals, the long-term deposit
ratings and the BFSR had a negative outlook.

Ratings Rationale

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

Headquartered in Cividale, Italy, BP Cividale reported
consolidated total assets of EUR4.8 billion as of December 2011,
and is privately owned.

Ratings Withdrawn

- Bank Deposits: Ba2/NP

- Bank Financial Strength: D

- Senior Unsecured -Dom Curr: Ba2

- Subordinate MTN -Dom Curr: (P)Ba3

- Jr Subordinate MTN -Dom Curr: (P)B1

- Tier III MTN -Dom Curr: (P)Ba3

- Other Short Term -Dom Curr: (P)NP



=================
L I T H U A N I A
=================


BANKAS SNORAS: Sues Former Owners in Britain for GBP395.5-Mil.
--------------------------------------------------------------
Erik Larson at Bloomberg News reports that Bankas Snoras AB, the
failed Lithuanian lender that was seized by the government in
November, sued former owners Vladimir Antonov and Raimondas
Baranauskas in Britain for GBP395.5 million (US$621.8 million).

According to Bloomberg, the bank said in court papers filed
May 18 in London and made public on Thursday that Messrs. Antonov
and Baranauskas breached their duties to Snoras and
misappropriated or misused its assets.  The men were arrested by
British police and freed on bail in November after Lithuania
issued a European arrest warrant and sought their extradition for
alleged fraud and embezzlement, Bloomberg recounts.  Both men
have denied the claims, Bloomberg notes.

"The defendants are obliged as a matter of Lithuanian law to
provide compensation and damages to Snoras Bank," Bloomberg
quotes the Vilnius-based lender's U.K. law firm, Linklaters LLP,
as saying in an outline of the claims filed in court.

Bloomberg notes that a statement made in court during a hearing
on June 21 said a court order freezing the men's assets was
granted May 17 by Judge Nigel Teare in London.  At that hearing,
the bank sought to force Antonov to reveal more of his assets and
said he had only disclosed a house in Switzerland, Bloomberg
relates.

Similar asset-freeze requests have been made in Panama and
Latvia, Bloomberg states.

Bankas Snoras AB is Lithuania's fifth biggest lender.  Snoras
held LTL6.05 billion in deposits and had assets of LTL8.14
billion at the end of September.  It competes with Scandinavian
lenders including SEB AB, Swedbank AB (SWEDA), and Nordea AB.  It
also controls investment bank Finasta and Latvian lender Latvijas
Krajbanka AS.


BANKAS SNORAS: E&Y Employee Lose Auditors License Over Bankruptcy
-----------------------------------------------------------------
Milda Seputyte at Bloomberg News reports that Lithuanian
authorities canceled an auditors license for an Ernst & Young
Baltic UAB employee and told the company to improve controls
after reviewing his financial reports on Bankas Snoras AB issued
before the lender's bankruptcy.

The bank's auditor, Ramunas Bartasius, lacked 'skepticism" and
failed to gather sufficient evidence to mitigate auditing risks
to "acceptable low levels," Bloomberg quotes the Authority of
Audit and Accounting in Vilnius as saying in a statement on its
Web site on Wednesday.  It said that Ernst & Young Baltic must
improve auditing controls by Dec. 15, Bloomberg notes.

Lithuania's central bank took over Snoras, then the country's
third biggest bank by deposits, in November after discovering
assets reported on the lender's balance sheet were missing,
Bloomberg recounts.  The bank was declared bankrupt, Bloomberg
discloses.

According to Bloomberg, Ernst & Young Baltic said it rejected the
authority's decision because the regulator reviewed the auditor's
report after receiving additional information such as legal
investigation into suspicion of criminal activity at the bank by
its shareholders.

Bankas Snoras AB is Lithuania's fifth biggest lender.  Snoras
held LTL6.05 billion in deposits and had assets of LTL8.14
billion at the end of September.  It competes with Scandinavian
lenders including SEB AB, Swedbank AB (SWEDA), and Nordea AB.  It
also controls investment bank Finasta and Latvian lender Latvijas
Krajbanka AS.



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


BANCO POPULAR: Fitch Maintains 'BB+/B' Rating on Watch Negative
---------------------------------------------------------------
Fitch Ratings has downgraded Banco Popular Portugal's (BPP;
'BB+'/Negative/'B') Obrigacoes Hipotecarias (OH; mortgage covered
bonds) to 'BBB-'/Rating Watch Negative (RWN) from 'BBB'/RWN and
has maintained them on RWN.  At the same time, Fitch has
downgraded Banco Santander Totta's (Totta; 'BBB-'/Negative/'F3')
EUR5.63 billion outstanding OH to 'BBB' from 'BBB+' and placed
them on RWN.

The rating action is a result of the downgrade of Banco Popular
Portugal and Banco Santander Totta's Issuer Default Rating (IDR)
to 'BB+' from 'BBB-' and to 'BBB-' from 'BBB', respectively.

In both cases, the covered bonds' rating on a Probability-of-
Default (PD) basis is equalized with the bank's IDR due to the
100% Discontinuity Factor.

As per Fitch's methodology, covered bonds may benefit from up to
two or three notches uplift for recoveries depending on whether
the rating on a PD basis is in the investment or sub-investment
grade category, and provided overcollateralization (OC) is
sufficient to maintain the rating.  In the case of issuers rated
below 'F2' and in line with the agency's covered bonds rating
criteria Fitch will give credit to level of OC the issuers
commits to or in the absence of a commitment the legal minimum.

BPP's OH currently benefit from a one notch uplift for recoveries
based on the committed overcollateralization level of 47%. The
RWN reflects the addition of commercial assets to the cover pool
in December 2011 and the subsequent possible deterioration of the
credit quality of the cover pool.  Fitch is awaiting receipt of
information from the issuer which will help form a more complete
opinion on the credit quality of the cover pool.  Should a
complete information package not be delivered by the end of June,
BPP covered bonds will likely be downgraded and the rating
equalized to the issuer's IDR.

In the case of Totta, as the bank's Short-term IDR is below 'F2'
and lacking any contractual or public commitment on the part of
the issuer, Fitch only gives credit to the minimum level of OC
required by the Portuguese covered bond legislation, namely 5.26%
for the OH.  When assuming the aforementioned minimum legal OC,
stressed recoveries from the cover pool in a 'BBB' scenario are
not sufficient to ensure 100% recoveries for all covered bonds.
Nonetheless, they may sustain recoveries in excess of 51% on the
longer dated covered bonds, leading to a one notch uplift above
the covered bonds rating on a PD basis.  The RWN reflects,
however, the recalculation of the OC levels pending the
redetermination of refinancing costs and expected loss levels.

The level of OC supporting a given rating will be affected,
amongst other factors, by the profile of cover assets versus
covered bonds, which is subject to change even in the absence of
new issuances.  It can therefore not be assumed that a given OC
supporting the rating will remain stable over time.

All else equal, a downgrade of BPP's or Totta's IDR will lead to
an equivalent downgrade of their respective OH.



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


HIDROELECTICA SA: Romanian Court Approves Insolvency
-----------------------------------------------------
Andra Timu at Bloomberg News reports that Remus Borza, the
judiciary administrator in Hidroelectrica SA's case, on Wednesday
said a Romanian court approved the insolvency of Hidroelectica SA
as the company looks to reorganize itself.

Meanwhile, Ioana Tudor at Ziarul Financiar reports that Bancpost
president Mihai Bogza said Wednesday the situation at
Hidroelectrica may be regarded by foreign analysts as a warning
that, since one of the largest state companies enters insolvency,
Romania might witness municipal bankruptcy or even default on its
loan obligations.

As reported by the Troubled Company Reporter-Europe on June 21,
2012, Bloomberg News related that Romania may delay selling a
minority stake in Hidroelectrica that was agreed with the
International Monetary Fund and the European Union, as the power
utility lacks liquidity to pay its bills and seeks to enter
insolvency.

Hidroelectrica SA is Romania's state-owned hydro-power generator.


HIDROELECTRICA SA: Moody's Lowers Corp. Family Rating to 'B2'
-------------------------------------------------------------
Moody's Investors Service has downgraded to B2 from Ba1 the long-
term corporate family rating (CFR) and probability of default
rating (PDR) of Hidroelectrica S.A. Concurrently, Moody's has
placed the company's ratings on review for further downgrade.
There is no rated debt outstanding.

Ratings Rationale

"The four-notch downgrade of Hidroelectrica's ratings to B2 from
Ba1 follows the company's recent filing for insolvency, which
indicates significantly increased payment default risk, and
incorporates the inherent unpredictability of future developments
under the insolvency proceedings," says Richard Miratsky, a
Moody's Vice President -- Senior Analyst and lead analyst for
Hidroelectrica. "The downgrade also reflects that we have revised
downwards our assumption of extraordinary support for
Hidroelectrica from the Romanian government, reflecting its
inactivity and lack of transparency concerning recent
developments at the company," adds Mr. Miratsky.

Given its 80% ownership by the government of Romania,
Hidroelectrica falls within the scope of Moody's rating
methodology for government-related issuers (GRIs). In accordance
with this methodology, Hidroelectrica's rating incorporates an
uplift for potential government support to its standalone credit
quality, which is expressed as a baseline credit assessment
(BCA). Moody's has downgraded Hidroelectrica's BCA to 17
(equivalent to a Caa1 rating) from 14 (equivalent to a B1 rating)
to reflect the elevated risk of default on the company's
liabilities following its recent filing for insolvency. This
increased risk might initiate the acceleration of debt maturities
above the company's repayment capacity and significantly hinder
arrangement of any new financing.

The uplift to the BCA, reduced to two notches, reflects (i) the
credit quality of Hidroelectrica's government shareholder
(Government of Romania, Baa3 stable); (ii) Moody's assessment of
the probability of government support in the event of financial
distress; and (iii) default dependence between the company and
its governmental owner. Moody's has revised downwards to strong
from high the rating agency's assumption of extraordinary
support, reflecting the government's inactivity and lack of
transparency evidenced in the recent developments in
Hidroelectrica to date. The high default dependence level remains
unchanged, reflecting that Hidroelectrica and its governmental
owner have a significant degree of exposure to common drivers of
credit quality.

The insolvency filing creates a high degree of uncertainty as to
whether or not Hidroelectrica will have the ability and financial
flexibility to meet its debt service and debt repayments during
the insolvency process. Consequently, Hidroelectrica's ratings
remain on review for downgrade. The review will focus on (i) the
outcome and consequences of the ruling of High Court of the
Municipality of Bucharest regarding Hidroelectrica's filing for
insolvency, which is expected on June 20, 2012; and (ii) whether
or not tangible financial support will be provided by the
government to ensure that Hidroelectrica can continue to meet its
debt service and debt repayments on a timely basis.

What Could Change The Rating Up/Down

Given the review for downgrade, Moody's does not currently expect
upward pressure on Hidroelectrica's ratings. Conversely, if
Moody's concludes that it is unlikely that Hidroelectrica will
obtain financial support to enable it to meet its obligations,
the company could be subject to a further multi-notch downgrade.

Principal Methodologies

The methodologies used in this rating were Unregulated Utilities
and Power Companies published in August 2009, and Government-
Related Issuers: Methodology Update published in July 2010.

Hidroelectrica S.A., a 80% government-owned pure hydropower
producer, is amongst the leading electricity generators in
Romania. With a low-cost hydropower generation fleet of 273
hydropower plants and pumping stations and total installed
capacity of more than 6,438 MW, Hidroelectrica generated RON3.18
billion (EUR750 million) in revenues and delivered 14.7 terawatt
hours (TWh) of electricity in 2011.



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


EVROFINANCE-MOSNARBANK: Moody's Confirms 'Ba3' Deposit Ratings
--------------------------------------------------------------
Moody's Investors Service has confirmed the Ba3 long-term local
and foreign currency deposit ratings of Evrofinance-Mosnarbank.
The outlook is negative. This confirmation concludes the review
for downgrade initiated in February 2011 and renewed in January
2012. The review was driven by the uncertainty associated with
the plan to convert Evrofinance-Mosnarbank into a bank with
Russian and Venezuelan state interest.

Moody's has also affirmed Evrofinance-Mosnarbank's standalone E+
bank financial strength rating (BFSR) -- mapping to a standalone
credit assessment of b1 -- with a stable outlook, as well as the
Not Prime short-term local and foreign currency deposit ratings.
The standalone BFSR and short-term ratings were not subject to
the aforementioned review.

Moody's assessment is primarily based on Evrofinance-Mosnarbank's
unaudited financial statements for 2011 prepared under IFRS,
unaudited financial statements for Q1 2012 prepared under Russian
Accounting Standards (RAS), public information and company
information.

Ratings Rationale

According to Moody's, the confirmation of Evrofinance-
Mosnarbank's long-term local and foreign currency deposit ratings
reflects the increased probability of success in creating the
interstate Russian-Venezuelan bank -- Moscow Narodny Development
Bank -- on the basis of Evrofinance-Mosnarbank. The key documents
stipulating the activity of the new bank (i.e., an interstate
agreement to create a development bank, including the bank's
charter) have been signed by the governments of Russia
(Baa1/stable) and Venezuela (B2/stable), and are to be approved
by the respective parliaments this year, according to information
from the bank. Moody's acknowledges that the slow progress in
shaping the necessary agreements for the functioning of the new
bank has hampered Evrofinance-Mosnarbank's development.

Moody's said that the negative outlook on Evrofinance-
Mosnarbank's Ba3 long-term ratings reflects the significant and
continued uncertainties about the mutual Russian-Venezuelan
relationship, including the pending presidential elections in
Venezuela which may further delay or even disrupt the planned
banking joint venture.

In December 2011, Russia and Venezuela signed a mutual interstate
agreement that, according to Evrofinance-Mosnarbank, defines (i)
the status of the new bank, which is envisaged to be
international; (ii) the capital of the new bank (expected to
amount to US$4 billion, to be received within the period 2013-
2014); (iii) the ownership structure of the new bank and
composition of its management bodies, with the Russian Federation
likely to assume a 50% ownership stake in the new bank (this
stake is currently owned by state banks VTB and Gazprombank); and
(iv) Evrofinance-Mosnarbank's strategic role and the nature of
its main operations.

Moody's incorporates a "low" probability of systemic support from
Russia for Evrofinance-Mosnarbank's Ba3 long-term ratings, given
the bank's current majority ownership by two state banks, its
anticipated 50% direct ownership by Russia, and its future status
as an interstate development bank. Russian-Venezuelan
relationships are important for Russia both economically (as it
has significant trading volumes with Venezuela) and politically.
The bank is expected to be 50/50 owned by the Russian and
Venezuelan governments, but Russia will have more control in the
joint venture's decision-making process. At the same time,
significant uncertainty associated with the success of this joint
venture and its short track record does not enable the rating
agency to incorporate a higher probability of support. As a
result, Evrofinance-Mosnarbank's long-term Ba3 ratings now
include: (i) its standalone credit assessment of b1 and (ii)
Moody's assessment of a low probability of systemic support.

Moody's notes that there is some pressure on the bank's
standalone credit assessment stemming from (i) significant
uncertainties relating to the future risk profile of the new
entity under its new status and (ii) the risk of deterioration of
the bank's financial fundamentals if the new joint venture is not
created and the bank fails to generate sufficient earnings to
cover costs.

What Could Change The Ratings Up / Down

Moody's notes that any failure of the two national parliaments to
approve the interstate agreement, and/or other impediments to
creating a Russian-Venezuelan banking joint venture would exert
negative pressure on Evrofinance-Mosnarbank's long-term ratings.

Evrofinance-Mosnarbank's deposit ratings could be downgraded and
its standalone credit assessment could be lowered as a result of
(i) a possible increase in its risk profile under the new status
of the bank, or (ii) low ability to generate earnings, as
profitability would become a primary consideration if the planned
banking joint venture is not created.

Moody's does not expect any upward pressure to be exerted on
Evrofinance-Mosnarbank's standalone BFSR in the short to medium
term. However, significant diversification and improvement of the
bank's business franchise is likely to exert upward pressure on
the standalone BFSR if accompanied by maintenance of good asset
quality, liquidity and capitalization. The standalone BFSR could
also benefit from improvements to franchise, capital and funding
resulting from successful development of the Russian-Venezuelan
project. Evrofinance-Mosnarbank's long-term ratings could benefit
from a better strategic fit to the Russian government which could
stem from a more successful exploration of Russian-Venezuelan
relationships.

Principal Methodologies

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

Domiciled in Moscow, Russia, Evrofinance-Mosnarbank reported --
as at December 31, 2011 -- total IFRS (unaudited) assets of US$2
billion and total equity of US$420 million. The bank's net income
amounted to US$7 million as at December 31, 2011.


TATNEFTS OAO: Fitch Upgrades Issuer Default Rating to 'BB+'
-----------------------------------------------------------
Fitch Ratings has upgraded OAO Tatneft's Long-Term Issuer Default
Rating (IDR) to 'BB+' from 'BB'.  The Outlook on the Long-Term
IDR is Stable.  Fitch has also affirmed the Short-Term IDR at
'B'.

The rating upgrade reflects progress in construction of the
Taneco refinery, relatively conservative capex spending plans
post-2012 and the expected gradual deleveraging.

Taneco refinery commenced commercial operations in December 2011.
Further development of the Taneco refinery includes mainly
construction of the hydrocracker unit (expected completion in
2013) and an increase in the refining depth.  Fitch considers the
reduced completion risk and the addition of the refining capacity
(especially following further investment to increase its
complexity) as positive changes to Tatneft's business profile.
Fitch expects that the planned capex spending for Taneco
development between 2012 and 2014 will be internally financed and
will significantly decrease post-2012 compared to levels noted
between 2009 and 2012.

Fitch understands that Tatneft put on hold its earlier plans to
double Taneco's capacity mainly due to the tax changes introduced
in the Russian Federation ('BBB'/Stable) on 1 October 2011 (the
so called '60-66' tax regime).  Lower resulting capex spending
and, therefore, respective expected leverage, are likely to
support Tatneft's credit metrics.

Tatneft's FFO gross adjusted leverage in fiscal year 2011 (FY11)
decreased to 1.1 times (x) from 1.5x in FY10, and Fitch expects
further deleveraging over 2012-2015.  Under Fitch's base case
scenario using a relatively conservative oil price deck of
USD95/bbl in 2012, the company would likely need to refinance
part of the upcoming debt maturities.  Nevertheless, Fitch
believes that the resulting leverage levels would still compare
well with the company's Russian peers and support the rating
upgrade to 'BB+'.

The agency notes that Tatneft's ratings are constrained by its
smaller scale of operations compared with the major Russian oil
and gas producers, its mature oil reserves with a high sulphur
content, and by relatively high lifting costs.  As a result of
these factors, Tatneft's earnings per barrel are lower compared
with most of its Russian peers.  This is partially mitigated by
the long estimated hydrocarbon reserves life of over 33 years,
which is higher than for Fitch-rated Russian oil companies.

Fitch views the headroom for a further rating upgrade in the
medium term as limited.  Rating downgrade may follow if the FFO
gross adjusted leverage is consistently above 2x, while the FFO
coverage ratio is below 10x.

Liquidity at end-March 2012 was adequate with a short-term loan
balance of RUB35.7 billion against an unrestricted cash balance
of RUB28.1 billion.  Fitch assumes Tatneft will be able to
refinance part of maturities falling due until end-March 2013 and
expects a positive free cash flow in 2012.



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


CSOB SLOVAKIA: Moody's Says 'D' BFSR Unaffected by Rating Actions
-----------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of
Ceskoslovenska obchodni banka (CSOB Czech Republic) and
Ceskoslovenska obchodna banka (CSOB Slovakia), two subsidiaries
of KBC Bank NV.

These downgrades are prompted by the weakened financial capacity
of the Belgian parent group, KBC Bank, as indicated by Moody's
downgrade on June 15 of the bank's standalone Bank Financial
Strength Rating (BFSR) to D+ (mapping to a standalone credit
assessment of baa3) from C-/baa1 and the downgrade of KBC Bank's
long-term debt and deposit ratings to A3 from A1.

Moody's says that an additional factor contributing to the
downgrade of the Czech subsidiary's ratings is the weakening
operating environment in the Czech Republic.

The actions on the two subsidiaries conclude the reviews
initiated on February 21, 2012, when the ratings of these
subsidiaries were placed on review for downgrade, following the
pressures facing the parent group KBC Bank, as well as from
standalone considerations for the Czech subsidiary with respect
to its own market.

A full list of affected ratings is provided at the end of this
press release.

Ratings Rationale -- CSOB (CZECH REPUBLIC)

Moody's says that the one-notch downgrade of CSOB Czech
Republic's long-term deposit ratings to A2 from A1 and the
standalone BFSR to C-/baa1 from C/a3 reflects (i) the pressures
that the bank faces from the weakening of KBC Bank group's credit
profile; and (ii) the more difficult operating environment in
Czech Republic that Moody's believes will likely dampen earnings
generation and pressure asset quality.

-- PRESSURES FROM THE GROUP'S WEAKENED CREDIT PROFILE

Moody's recognizes that CSOB Czech Republic is an important part
of KBC Bank's overall franchise, contributing almost one third of
the KBC Bank's profits in 2011. However, pressure on CSOB Czech
Republic's performance stems from (i) the risk of overall parent
group restrictions limiting the extent to which the subsidiary
can increase its risk-weighted assets; (ii) the risk of capital
being up-streamed to the parent, directly deteriorating the
subsidiary's capital cushion (dividends in 2011 exceeded 2010
profits); and (iii) cost reductions at group level, which may
lead to a decline in group support that has historically
underpinned the bank's operating strength.

-- MORE DIFFICULT OPERATING ENVIRONMENT

Moody's says that the operating environment in the Czech Republic
has weakened, as illustrated by the slowdown in economic output
and further downside risks related to weakening export demand
from European trading partners. Real GDP contracted by 0.7% year-
on-year in Q1 2012, and Moody's expects GDP growth of 0% in 2012,
compared to 1.7% in 2011, as reported in Moody's Country Credit
Statistical Handbook, whilst the European Commission forecasts
unemployment to increase to 7.2% in 2012.

Despite CSOB Czech Republic's strong capital position -- with a
11% 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 that the
weakening operating environment will constrain earnings and exert
pressure on the bank's problem loans from the level of 3.9%
posted at end-2011.

The deposit ratings of CSOB Czech Republic, which is one of the
largest banks in the country, 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 the bank'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 lower standalone credit assessment of baa2.

What Could Move The Ratings Up/Down

The negative outlook on CSOB Czech Republic'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
pressures from the parent group subside.

Further downwards pressure on the standalone and deposit ratings
could be exerted following (i) weaker-than-expected performance
at the group level; and/or (ii) or a worse-than-expected
weakening of the operating environment.

Ratings Rationale -- CSOB (SLOVAKIA)

Moody's says that the one-notch downgrade of CSOB Slovakia's long
and short-term deposit ratings to Baa3/Prime-3 from Baa2/Prime-2
reflects the weakening capacity of the parent, KBC Bank NV, to
provide timely capital and funding support to its subsidiary, if
needed, as indicated by the two-notch downgrade of the parent
group on June 15, 2012.

-- WEAKENING CAPACITY OF THE PARENT BANK TO PROVIDE SUPPORT

Under Moody's Joint Default Analysis methodology, the long-term
ratings of the Slovak subsidiary incorporate uplift from parental
support assumptions; the two-notch lowering of KBC Bank's
standalone credit strength prompted the one-notch rating
downgrade for the Slovak subsidiary's deposit ratings.

What Could Move The Ratings Up/Down

Currently, CSOB Slovakia's ratings reflect its high borrower
concentration, including exposure to commercial real-estate and
project finance, and its challenging asset-quality profile.
Moody's says that these factors are counterbalanced by CSOB
Slovakia's solid franchise in the Slovak market (relative to its
peers) and its currently adequate capitalization levels.

In the medium-term, a sustained reduction in borrower
concentration and an improvement in asset quality could exert
upwards pressure on the bank's ratings. Conversely, a significant
deterioration in the bank's financial fundamentals, particularly
related to asset quality, liquidity and capitalization, could
exert downwards pressure on the ratings. In addition, further
significant downwards pressure on KBC Bank's ratings could affect
CSOB Slovakia's ratings.

List of Affected Ratings

The following ratings were affected:

Issuer: CSOB Czech Republic

  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-/baa1 from C/a3,
  with stable outlook

Issuer: CSOB Slovakia

  Long-term local- and foreign-currency deposit ratings to Baa3
  from Baa2, with stable outlook

  Short-term local- and foreign-currency deposit ratings to
  Prime-3 from Prime-2

The following ratings were unaffected:

Issuer: CSOB Slovakia

  BFSR of D/ba2, with a stable outlook

The methodologies used in rating Ceskoslovenska obchodni banka,
a. s. 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.

The methodologies used in rating CSOB Slovakia 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
=========


TELEFONICA SA: Moody's Cuts Sub. Preferred Stock Ratings to 'Ba1'
-----------------------------------------------------------------
Moody's Investors Service has downgraded the long-term senior
unsecured ratings and issuer ratings of Telefonica S.A. to Baa2
from Baa1. Concurrently, Moody's has also downgraded the ratings
of all Telefonica's guaranteed subsidiaries, including the
subordinated preferred stock ratings, to Ba1 from Baa3. All
ratings, including the short-term Prime-2 rating, remain on
review for further downgrade.

The rating downgrades reflect:

   (i) Moody's increasing concerns related to Spain's
       macroeconomic environment and the impact on consumer
       spending in the country, which will continue to affect
       Telefonica's domestic revenues;

  (ii) The high shareholder distribution policy Telefonica has in
       place, which constrains the company's ability to generate
       free cash flow to reduce its debt; and

(iii) The execution risk related to management's deleveraging
       strategy, which will most likely translate into Telefonica
       finding it challenging to achieve ratios commensurate with
       a higher rating.

The actions also follow the weakening of the Spanish government's
creditworthiness, as captured by Moody's downgrade of Spain's
government bond ratings to Baa3 from A3 on June 13, 2012, and the
initiation of a review for further downgrade.

Given the multiple channels of contagion that exist between the
sovereign and corporate issuers domiciled in Spain, Moody's
considers it challenging for Telefonica, in the current
circumstances, to mantain a rating of more than one notch higher
than the sovereign rating. This in turn reflects the fact that,
notwithstanding Telefonica's credit profile reflected in its new
rating, the weakening of the Spanish government's
creditworthiness creates a risk of contagion for issuers
domiciled in or materially exposed to Spain as well as requiring
substantial and recurrent access to debt capital markets for
refinancing, such as Telefonica.

Ratings Rationale

"The downgrade of Telefonica's long-term ratings reflects our
view that the company does not have the domestic or financial
strength, or sufficiently robust access to liquidity, to distance
itself from the current and future credit environment implied by
the sovereign's Baa3 rating," says Carlos Winzer, a Moody's
Senior Vice President and lead analyst for Telefonica.

Moody's points out that although Telefonica has taken some
measures to mitigate the difficult operating environment in Spain
-- including a modest reduction in shareholder remuneration in
December 2011 and some asset disposals -- continued pressure on
revenues and EBITDA will further challenge the company's ability
to improve credit metrics as previously anticipated by Moody's
and consistent with the previous rating.

"We are particularly concerned about the weakness in Telefonica's
financial ratios and do not expect it to meet the financial ratio
guidance set for the previous rating level over the short to
medium term," notes Mr. Winzer. This guidance included the
expectation of debt reductions and operating performance
reflecting a positive trend towards adjusted net debt/EBITDA of
2.5x and adjusted retained cash flow (RCF)/net debt sustained
above 20%.

Although Telefonica will maintain its strong domestic and
international market positions in view of management's strategy
and business model, Moody's believes that the required
strengthening of the company's financial ratios and challenging
domestic and international operations will increase its overall
business and financial risk.

Prior to the one-notch downgrade, Moody's had already recognised
that Telefonica's rating was weakly positioned in its previous
rating category, with little margin for operating under-
performance. The rating downgrade is also in line with Moody's
previously published guidance for companies that would normally
be expected to have a rating close to that of the government of
the country in which they are located.

Telefonica's Baa2 rating reflects (i) the group's large size and
scale; (ii) the diversification benefits associated with its
strong positions in many different markets; (iii) its
management's track record and ability to execute a well-defined
and concise business strategy; and (iv) its operating cash flow
generation and management's stated commitment to maintain its
reported net debt/EBITDA ratio below 2.35x.

From a liquidity risk management perspective, Moody's believes
that although Telefonica is effectively managing its upcoming
maturities, uncertainty remains regarding the company's future
access to the debt capital markets due to the macroeconomic
crisis affecting Spain. At the end of March 2012, Telefonica had
in excess of EUR5 billion in cash and cash equivalents. The
group's external liquidity sources include EUR8 billion worth of
committed long-term bank facilities, which were undrawn as of
March 2012, and can be drawn at any time, not being subject to
material adverse change (MAC) clauses or financial covenants.
Telefonica has accumulated debt maturities in excess of EUR17
billion through the end of 2014.

Rationale for Review for Further Downgrade

The ratings remain on review for further downgrade in line with
the ongoing review for further downgrade of the Spanish sovereign
rating. The review will therefore take account of the outcome of
Moody's review of the sovereign rating as well as the extent to
which Telefonica might be affected by the risk of contagion from
a weaker sovereign, including (i) slowing economic activity; (ii)
liquidity constraints, access to funding and higher financing
costs; (iii) scope for increased austerity measures affecting
operating fundamentals; and (iv) increased risks of political
interference.

What Could Change the Rating Up/Down

A rating downgrade could arise if (i) Moody's were to downgrade
the sovereign rating; or (ii) Telefonica were to deviate from its
financial-strengthening plan, as a result of weaker cash flow or
the incurrence or assumption of further substantial debt in
conjunction with the pursuit of acquisitions or more aggressive
shareholder distribution policies. Resulting metrics could
include an RCF/net adjusted debt ratio trending towards 15% and a
net adjusted debt/EBITDA ratio approaching 3.0x in the medium
term. Any future strategic corporate transaction would have to be
predominantly equity-financed and within Telefonica's current
business footprint to prevent pressure being exerted on the
rating. In addition, downward pressure on the ratings could
develop if Moody's were to become concerned about Telefonica's
ongoing access to funding at reasonable terms.

In line with the action and the review for downgrade, positive
pressure on the ratings is unlikely in the short to medium term.
Provided sovereign-related concerns were to abate, Moody's could
consider a rating upgrade to Baa1 if Telefonica's debt ratios
were to strengthen significantly as a result of improvements in
its operational cash flows and further reduction in debt. The
rating could benefit from positive pressure if it became clear
that the group would achieve sustainable improvements in its debt
ratios, such as an adjusted RCF/net debt ratio trending towards
the mid twenties and adjusted net debt/EBITDA comfortably below
2.5x.

List of Affected Ratings

Downgrades:

  Issuer: Telefonica Emisiones S.A.U.

    EUR40000M Multiple Seniority Medium-Term Note Program,
    Downgraded to (P)Baa2 from (P)Baa1; Placed Under Review for
    further Possible Downgrade

    US$850M Senior Unsecured Regular Bond/Debenture Feb 4, 2013,
    Downgraded to Baa2 from Baa1; Placed Under Review for further
    Possible Downgrade

    EUR24M Senior Unsecured Regular Bond/Debenture Jan 31, 2018,
    Downgraded to Baa2 from Baa1; Placed Under Review for further
    Possible Downgrade

    EUR55M Senior Unsecured Regular Bond/Debenture Dec 30, 2021,
    Downgraded to Baa2 from Baa1; Placed Under Review for further
    Possible Downgrade

    EUR400M Senior Unsecured Regular Bond/Debenture Jun 2, 2015,
    Downgraded to Baa2 from Baa1; Placed Under Review for further
    Possible Downgrade

    EUR100M Senior Unsecured Regular Bond/Debenture Dec 23, 2014,
    Downgraded to Baa2 from Baa1; Placed Under Review for further
    Possible Downgrade

    GBP750M 5.375% Senior Unsecured Regular Bond/Debenture Feb 2,
    2018, Downgraded to Baa2 from Baa1; Placed Under Review for
    further Possible Downgrade

    GBP500M 5.375% Senior Unsecured Regular Bond/Debenture Feb 2,
    2026, Downgraded to Baa2 from Baa1; Placed Under Review for
    further Possible Downgrade

    US$1250M 6.421% Senior Unsecured Regular Bond/Debenture Jun
    20, 2016, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    US$2000M 7.045% Senior Unsecured Regular Bond/Debenture Jun
    20, 2036, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    GBP500M 5.888% Senior Unsecured Regular Bond/Debenture Jan
    31, 2014, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    CZK2600M 4.623% Senior Unsecured Regular Bond/Debenture Jun
    19, 2014, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    US$700M 6.221% Senior Unsecured Regular Bond/Debenture Jul 3,
    2017, Downgraded to Baa2 from Baa1; Placed Under Review for
    further Possible Downgrade

    US$750M 5.855% Senior Unsecured Regular Bond/Debenture Feb 4,
    2013, Downgraded to Baa2 from Baa1; Placed Under Review for
    further Possible Downgrade

    US$1250M 4.949% Senior Unsecured Regular Bond/Debenture Jan
    15, 2015, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    US$1000M 5.877% Senior Unsecured Regular Bond/Debenture Jul
    15, 2019, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    GBP650M 5.289% Senior Unsecured Regular Bond/Debenture Dec 9,
    2022, Downgraded to Baa2 from Baa1; Placed Under Review for
    further Possible Downgrade

    US$1400M 5.134% Senior Unsecured Regular Bond/Debenture Apr
    27, 2020, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    US$1200M 2.582% Senior Unsecured Regular Bond/Debenture Apr
    26, 2013, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    US$900M 3.729% Senior Unsecured Regular Bond/Debenture Apr
    27, 2015, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    GBP400M 5.445% Senior Unsecured Regular Bond/Debenture Oct 8,
    2029, Downgraded to Baa2 from Baa1; Placed Under Review for
    further Possible Downgrade

    US$1250M 3.992% Senior Unsecured Regular Bond/Debenture Feb
    16, 2016, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    US$1500M 5.462% Senior Unsecured Regular Bond/Debenture Feb
    16, 2021, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    GBP700M 5.597% Senior Unsecured Regular Bond/Debenture Mar
    12, 2020, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    CZK1250M 3.934% Senior Unsecured Regular Bond/Debenture Mar
    30, 2017, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    EUR1750M 4.375% Senior Unsecured Regular Bond/Debenture Feb
    2, 2016, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    EUR1500M 4.674% Senior Unsecured Regular Bond/Debenture Feb
    7, 2014, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    EUR1250M 5.58% Senior Unsecured Regular Bond/Debenture Jun
    12, 2013, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    EUR2000M 5.431% Senior Unsecured Regular Bond/Debenture Feb
    3, 2014, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    EUR1500M 5.496% Senior Unsecured Regular Bond/Debenture Apr
    1, 2016, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    EUR1750M 4.693% Senior Unsecured Regular Bond/Debenture Nov
    11, 2019, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    EUR1400M 3.406% Senior Unsecured Regular Bond/Debenture Mar
    24, 2015, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    EUR1000M 3.661% Senior Unsecured Regular Bond/Debenture Sep
    18, 2017, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    EUR1420M 4.75% Senior Unsecured Regular Bond/Debenture Feb 7,
    2017, Downgraded to Baa2 from Baa1; Placed Under Review for
    further Possible Downgrade

    EUR1000M 4.967% Senior Unsecured Regular Bond/Debenture Feb
    3, 2016, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    EUR1500M 4.797% Senior Unsecured Regular Bond/Debenture Feb
    21, 2018, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

  Issuer: Telefonica Europe B.V.

    EUR8000M Multiple Seniority Medium-Term Note Program,
    Downgraded to (P)Baa2 from (P)Baa1; Placed Under Review for
    further Possible Downgrade

    GBP12333M Senior Unsecured Bank Credit Facility, Downgraded
    to Baa2 from Baa1; Placed Under Review for further Possible
    Downgrade

    GBP6167M Senior Unsecured Bank Credit Facility, Downgraded to
    Baa2 from Baa1; Placed Under Review for further Possible
    Downgrade

    GBP2100M Senior Unsecured Bank Credit Facility Dec 7, 2012,
    Downgraded to Baa2 from Baa1; Placed Under Review for further
    Possible Downgrade

    GBP2100M Senior Unsecured Bank Credit Facility Dec 7, 2013,
    Downgraded to Baa2 from Baa1; Placed Under Review for further
    Possible Downgrade

    JPY5000M 4.75% Senior Unsecured Bank Credit Facility Jul 27,
    2037, Downgraded to Baa2 from Baa1; Placed Under Review for
    further Possible Downgrade

    JPY5000M 4.75% Senior Unsecured Bank Credit Facility Jul 27,
    2037, Downgraded to Baa2 from Baa1; Placed Under Review for
    further Possible Downgrade

    JPY5000M 4.75% Senior Unsecured Bank Credit Facility Jul 27,
    2037, Downgraded to Baa2 from Baa1; Placed Under Review for
    further Possible Downgrade

    JPY15000M Senior Unsecured Regular Bond/Debenture Jul 19,
    2012, Downgraded to Baa2 from Baa1; Placed Under Review for
    further Possible Downgrade

    US$1250M 8.25% Senior Unsecured Regular Bond/Debenture Sep
    15, 2030, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    JPY15000M 2.11% Senior Unsecured Regular Bond/Debenture Jul
    19, 2012, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    EUR2000M 5.125% Senior Unsecured Regular Bond/Debenture Feb
    14, 2013, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    EUR500M 5.875% Senior Unsecured Regular Bond/Debenture Feb
    14, 2033, Downgraded to Baa2 from Baa1; Placed Under Review
    for further Possible Downgrade

    US$10000M Senior Unsecured Shelf, Downgraded to (P)Baa2 from
    (P)Baa1; Placed Under Review for further Possible Downgrade

  Issuer: Telefonica Finance USA LLC

    EUR2000M Pref. Stock Preferred Stock, Downgraded to Ba1 from
    Baa3; Placed Under Review for further Possible Downgrade

  Issuer: Telefonica S.A.

    EUR350M Senior Unsecured Bank Credit Facility Apr 21, 2017,
    Downgraded to Baa2 from Baa1; Placed Under Review for further
    Possible Downgrade

    EUR350M Senior Unsecured Bank Credit Facility Apr 21, 2015,
    Downgraded to Baa2 from Baa1; Placed Under Review for further
    Possible Downgrade

    EUR30M 0% Senior Unsecured Regular Bond/Debenture Jul 21,
    2029, Downgraded to Baa2 from Baa1; Placed Under Review for
    further Possible Downgrade

On Review for Possible Downgrade:

  Issuer: Telefonica Emisiones S.A.U.

    EUR40000M Multiple Seniority Medium-Term Note Program, Placed
    on Review for Possible Downgrade, currently (P)Baa2

  Issuer: Telefonica Europe B.V.

    EUR3000M Senior Unsecured Commercial Paper, Placed on Review
    for Possible Downgrade, currently P-2

  Issuer: Telefonica S.A.

     Commercial Paper, Placed on Review for Possible Downgrade,
     currently P-2

Outlook Actions:

  Issuer: Telefonica Finance USA LLC

    Outlook, Changed To Rating Under Review From Negative

Principal Methodology

The principal methodology used in these ratings was Global
Telecommunications Industry published in December 2010.

Telefonica S.A. is the leading integrated telecommunications
provider in Spain, delivering a full range of services and
products including telephony, data exchange, interactive content
and information and communications technology solutions.
Telefonica is also one of the world's leading telecommunications
carriers, with some 264.3 million customers worldwide (excluding
Spain). As of March 2012, approximately 75% of group revenues and
77% of group EBITDA were generated outside Spain.



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


SAAB AUTOMOBILE: New Owners Have Yet to Secure Brand Rights
-----------------------------------------------------------
Ola Kinnander at Bloomberg News reports that National Electric
Vehicle Sweden AB, the investment group that last week agreed to
buy Saab Automobile with the aim of making electric vehicles, has
yet to secure the rights to use the Saab name and logo.

The Chinese-Japanese consortium and the bankruptcy administrators
who are leading the disposal of the Swedish carmaker are
continuing negotiations over the rights to the brand name with
defense company Saab AB and truckmaker Scania AB, Bloomberg
discloses.  Saab AB, Saab Auto and Scania, once a single company,
own the brand name together and must approve the transfer,
Bloomberg notes.

"The brand name discussion isn't over," Bloomberg quotes Erik
Ljungberg, Scania's spokesman as saying.  "It's a complex issue
and several questions must be sorted out.  We're very keen that
the griffin brand isn't used for anything we can't stand behind."

"Even though their formal name is Saab Automobile, they're
generally called Saab, so there's a clear risk a lot of people
may confuse them with us," Saab AB spokesman Erik Magni, as cited
by Bloomberg, said.

Mikael Ostlund, a spokesman for National Electric Vehicle Sweden,
said that the parties are seeking to resolve the brand issue "as
quick as possible."  According to Bloomberg, Mr. Ostlund said
that the buyer plans to close the Saab purchase in a couple of
months.

Separately, the Swedish government said on Thursday that it plans
to take ownership "later this summer" of Saab Auto's parts, which
wasn't included in the purchase and was separated in the
bankruptcy process, Bloomberg relates.

The state got the components business and parts of the tools unit
as collateral for backing a SEK2.2 billion (US$316 million) loan
Saab got from the European Investment Bank that the carmaker
didn't repay, Bloomberg says.

Saab Automobile AB is a Swedish car manufacturer owned by Dutch
automobile manufacturer Swedish Automobile NV, formerly Spyker
Cars NV.  Saab Automobile AB, Saab Automobile Tools AB and Saab
Powertain AB filed for bankruptcy on Dec. 19, 2011, after running
out of cash.



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


* TURKEY: Moody's Upgrades Government Bond Ratings to 'Ba1'
-----------------------------------------------------------
Moody's Investors Service has upgraded Turkey's government bond
ratings by one notch to Ba1 from Ba2, and has maintained the
positive outlook.

The key drivers for the rating action are:

1. The significant improvement in Turkey's public finances and
the resulting increased shock-absorption capacity of the
government's balance sheet; and

2. Policy actions that have the potential to address external
imbalances, such as the large current account deficit, which is
the largest credit risk facing the country.

Moody's decision to maintain the positive outlook on Turkey's
ratings reflects the rating agency's expectation that both of the
drivers that led to the rating upgrade will continue to improve
the country's fiscal and macroeconomic resilience. Looking ahead,
an upgrade to an investment-grade rating will probably be
dependent on Turkey becoming more resilient to balance-of-payment
shocks, given the already favorable public-finance metrics.

Ratings Rationale

The first driver underlying Moody's decision to upgrade Turkey's
sovereign rating is the increased resilience of Turkey's public
finances. Although the international economic environment has
become more challenging and Turkish domestic growth is slowing
down, the country's ongoing efforts to reduce its debt burden are
unlikely to be significantly affected. Moody's notes that the
relatively minor and short-lived deterioration in Turkey's public
finances after the 2008-09 financial crisis gives some cause for
optimism. Moreover, the deficit reduction and primary surpluses
that the Turkish government has recorded over the past two years
are largely due to expenditure restraint than revenue increases,
despite the booming economic growth of the past two years. In
fact, since 2009, Turkey's general government expenditure as a
percentage of GDP has fallen from 40.1% to 37.4%, whereas general
government revenues have risen from 34.2% to 36.1%. Even in
Moody's adverse scenario, which includes more pessimistic
outcomes (relative to Moody's forecasts) for nominal GDP growth,
the primary balance and interest costs, the rating agency assumes
only a slight decline over a two-year time horizon for Turkey's
debt burden (both general government debt as a percentage of GDP
and the debt affordability ratio). In fact, Turkey's general
government debt level of 39.4% in 2011 was much lower than the
Ba1 median of 54.6% and more in line with the Baa3 median of
38.5%.

The second driver for the upgrade is a set of policies that the
Turkish government has been pursuing with the aim of addressing
the root causes of the country's external vulnerabilities, such
as the high import content of its exports, the low savings rate
and its modest level of foreign-exchange reserves. In April 2012,
the government announced a new investment incentive scheme that
uses tax breaks and interest-rate subsidies to encourage greater
domestic production of intermediate goods in key sectors such as
energy, automotives and mining. The scheme has the potential to
not only reduce the need for Turkish exporters to import these
types of goods, but to also increase foreign direct investment
inflows into these sectors, and thus provide a much more stable
source of current-account financing. The government has also
taken action to address the private-sector savings shortfalls
with the passage of legislation on June 13, 2012 that increases
the incentives for individuals to invest in personal pension
schemes. While their impact will take time to materialize,
policies like these should help to address over time the root
causes of Turkey's weak domestic savings rate, which currently
renders the country vulnerable to swings in risk perception among
foreign-bank lenders and institutional investors. For example,
Turkey's 2011 external vulnerability indicator (EVI), which is
the ratio of external debt payments to official foreign-exchange
reserves, was 173.8, as compared to a Ba1 median of 66.2 and a
Baa3 median of 55.8. Looking ahead, some of Turkey's external
vulnerabilities, such as the current account deficit, are now
starting to become less pronounced. Moreover, Turkey's real
external vulnerabilities situation may be more favorable than the
headline data suggest, as indicated by the net errors and
omissions position in its balance of payments.

Although not a specific driver of the rating action, Turkey's
current Ba1 rating level is also underpinned by the country's
considerable economic strengths, such as its size and dynamism.
The country's diversification is also an important strength,
especially since it has reduced its trade dependence on the
European Union in recent years -- a development that should
provide the country with some additional shock-absorption
capacity should macroeconomic stress in the euro area intensify
further. Turkey's creditworthiness is also supported by a well-
capitalized banking sector.

What Could Move the Rating Up/Down

Turkey has considerable economic strengths, such as its size,
dynamism and its economic influence in both Europe and the Middle
East. As mentioned above, the government's financial strength is
also an advantage for the country. However, a prerequisite for
Turkey attaining an investment-grade rating is a greater
resilience to balance-of-payment shocks, such as a sharp decline
in capital inflows into Turkey from foreign-bank lenders and/or
institutional investors. Moody's would also consider upgrading
Turkey's rating if the government made further progress in
lowering its external vulnerabilities by structurally reducing
its current account deficit, increasing foreign-exchange
reserves, or reducing the private sector's external borrowing.

Turkey's currently positive outlook on its sovereign bond rating
would likely be moved to stable if progress on addressing
external vulnerabilities were to be reversed. A material
deterioration in the government's public-finance metrics would
also result in downward movement in the outlook or, in extremis,
the rating itself. Although not likely given the country's
improved resilience, Moody's believes that a sudden and sustained
stop in foreign capital flows would exert downward pressure on
the ratings.

Country Ceilings

As part of the rating actions, Moody's has adjusted Turkey's
long-term foreign-currency bond ceiling to Baa2 from Ba1, its
short-term foreign-currency bond ceiling has been changed to
Prime-2 from Not-Prime, its long-term foreign-currency deposit
ceiling has been raised to Ba2 from Ba3. The rating agency has
also adjusted Turkey's local-currency bond and deposit ceilings
to A3 from A2 to better capture the country's system risk and the
default correlation between the government and private-sector
borrowers.

The principal methodology used in these ratings was Sovereign
Bond Ratings published in September 2008.



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


CORNERSTONE TITAN: S&P Lowers Rating on Class D Notes to 'B'
------------------------------------------------------------
Standard & Poor's Ratings Services took various credit rating
actions in Cornerstone Titan 2006-1 PLC.

Specifically, S&P has:

- lowered and removed from CreditWatch its ratings on the class
   A, B, C, and D notes; and

- affirmed its ratings on the class E to J notes.

"Cornerstone Titan 2006-1 closed in July 2006. The notes are
secured against six loans, originated by Credit Suisse AG and
Capmark Bank Europe PLC, backed by properties in the U.K. The
Woolgate Exchange loan (the largest in the pool, comprising 56%
of the remaining balance) and Lloyd's Chamber loan (second-
largest, at 19% of the pool) have matured and are in special
servicing. The remaining loans are scheduled to mature this year
and in 2013. The note maturity date is in April 2015," S&P said.

"The repayment of the Woolgate Exchange loan, which would have
followed the proposed sale of the property backing it, did not
occur. On April 2, 2012, we placed on CreditWatch developing our
ratings on the class A, B, and C notes, and on CreditWatch
negative our rating on the class D notes. These CreditWatch
placements reflected our view that the repayment of this loan
would improve the pool credit characteristics and could have
resulted in an upgrade or affirmation of our ratings on the class
A, B, C, and D notes," S&P said.

"As the Woolgate Exchange loan did not repay, and consequently
the notes did not amortize sequentially as anticipated, we have
today lowered and removed from CreditWatch our ratings on the
class A, B, C, and D notes. The downgrades of these classes
reflect our opinion of the credit characteristics of the six
loans remaining in the pool after a postponement of the Woolgate
property sale. We have also affirmed our ratings on the class E
to J notes. Our ratings on the class E and F notes reflect our
expectation of losses, while the class G, H, and J notes have
already suffered principal and interest shortfalls. If the
Woolgate Exchange loan, or any other loan, repay in the future,
this could have positive rating implications for the remaining
classes of notes as a result of sequential repayments," S&P said.

          POTENTIAL EFFECTS OF PROPOSED CRITERIA CHANGES

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

"As highlighted in the Nov. 8 Advance Notice Of Proposed Criteria
Change, we expect to publish a request for comment (RFC)
outlining our proposed criteria changes for rating European CMBS
transactions," S&P said.

"On June 4, we published a request for comment (RFC) outlining
our proposed criteria changes for CMBS Global Property Evaluation
Methodology. The proposed criteria do not significantly change
Standard & Poor's longstanding approach to deriving property net
cash flow (S&P NCF) and value (S&P Value). We therefore
anticipate very limited impact for European outstanding ratings
when the updated CMBS Global Property Evaluation Methodology
criteria are finalized," S&P said.

"However, because of its global scope, the proposed CMBS Global
Property Evaluation Methodology does not include certain market-
specific adjustments. An application of these criteria to
European transactions will therefore be published when we release
our updated rating criteria," S&P said.

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

             STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

         http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class        Rating
       To                 From

Cornerstone Titan 2006-1 PLC
GBP564.266 Million Commercial Mortgage-Backed Floating-Rate Notes

Ratings Lowered and Removed From CreditWatch Developing

A      A (sf)             A+ (sf)/Watch Dev
B      BB+ (sf)           BBB (sf)/Watch Dev
C      BB- (sf)           BB+ (sf)/Watch Dev

Rating Lowered and Removed From CreditWatch Negative

D      B (sf)             BB- (sf)/Watch Neg

Ratings Affirmed

E      B- (sf)
F      CCC (sf)
G      D (sf)
H      D (sf)
J      D (sf)


DANUBE DELTA: S&P Cuts Ratings on Three Note Classes to 'CCC-'
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered and removed from
CreditWatch negative its credit ratings on the class A-1 VFN, A-2
VFN, and A-3 VFN notes co-issued by Danube Delta Corp. and Danube
Delta PLC. "At the same time, we have affirmed our ratings on the
class C-1, C-2, D-1, and D-2 notes," S&P said.

This is a cash flow collateralized debt obligation of asset-
backed securities (CDO of ABS) transaction that closed in August
2006.

"The rating actions follow our assessment of the transaction's
performance. We have used data from the March 2012 trustee report
and February 2012 payment date report, performed our credit
analysis, and taken into account recent transaction developments.
We have applied our 2010 counterparty criteria, our 2009 cash
flow criteria, and our 2012 CDO of ABS criteria," S&P said.

"From our analysis of the trustee report, we have observed that
the concentration of assets that we consider to be rated in the
'CCC' category ('CCC+', 'CCC', or 'CCC-') is still significantly
high--accounting for more than 21% of the performing pool.
Additionally, the concentration of assets that we consider to be
defaulted (rated 'CC', 'C', 'SD' [selective default], or 'D')
have increased since our previous review of the transaction on
June 22, 2010 (see "Ratings Lowered In Danube Delta Corp. And
Danube Delta PLC Cash Flow CDO Of ABS Transaction")--and are now
more than EUR50 million in notional (approximately 18% of the
pool balance). Additionally, the class AB-2, AB-3, C-2, D-1, and
D-2 transaction's par value tests are below the trigger levels
required under the transaction documents. The class C and D notes
are currently deferring interest and, with a lower aggregate
collateral balance, the credit enhancement has also reduced since
our previous review of the transaction," S&P said.

"Based on our observation of the February 2012 payment date
report, the issuer has used interest proceeds to pay principal on
the variable funding notes (VFNs) and paid no interest on the
deferrable notes (the class C and D notes)," S&P said.

"Our ratings on all classes of notes in this transaction are
currently constrained by the application of our largest obligor
default test--a supplemental stress outlined in our 2012 criteria
update for CDO of ABS transactions," S&P said.

"Taking into account our credit analysis, we consider that the
credit enhancement available to the class A-1 VFN, A-2 VFN, and
A-3 VFN notes is commensurate with lower ratings than we
previously assigned. We have therefore lowered and removed from
CreditWatch negative our ratings on these classes of notes. At
the same time, we have affirmed our ratings on the class C-1, C-
2, D-1, and D-2 notes, to reflect our view that credit
enhancement levels are commensurate with our current ratings on
these classes of notes. The ratings, which are now all at 'CCC-
(sf)' reflect our view that all of these classes of notes are
currently vulnerable to nonpayment," S&P said.

"In our analysis, we have also considered our ratings on the
counterparty in this transaction. However, given the low ratings
on the notes and the current pool performance, this was not a
driving factor in our ratings decision," S&P said.

RATINGS LIST

Class            Rating
             To                From

Danube Delta Corp./Danube Delta PLC
EUR286 Million, GBP0 Million, US$36 Million Variable-Funding
Notes, EUR6 Million and US$6 Million Senior Secured Deferrable
Floating-Rate Notes, EUR6 Million and US$6 Million Secured
Deferrable Floating-Rate Notes, US$10 Million Composite Notes,
and EUR9 Million and US$21 Million Subordinated Notes

Ratings Lowered and Removed From CreditWatch Negative

A-1 VFN      CCC- (sf)         CCC (sf)/Watch Neg
A-2 VFN      CCC- (sf)         CCC (sf)/Watch Neg
A-3 VFN      CCC- (sf)         CCC (sf)/Watch Neg

Ratings Affirmed

C-1          CCC- (sf)
C-2          CCC- (sf)
D-1          CCC- (sf)
D-2          CCC- (sf)


MARINE HOTEL: In Receivership After Owner Goes Bankrupt
-------------------------------------------------------
BBC News reports that a seaside town in County Antrim could be in
line for a much needed tourism boost with the potential sale and
reopening of a landmark hotel.

The Marine Hotel, which closed about 18 months ago, was the only
major hotel in Ballycastle, according to BBC News.  The report
relates that it went into receivership in May 2011 after its
former owner -- property developer Mervyn McAlister -- went
bankrupt.

It was put on the market late last year and a sale has recently
been agreed, according to BBC News.

The report notes that the closure of the hotel was a major blow
to the town's economy, as the Marine not only catered for
tourists, but many local clubs and sporting organisations used
its function rooms for meetings and events.

Ballycastle Chamber of Commerce has described the Marine as the
town's "flagship" and "focal point," BBC News says.

BBC News notes that Ballycastle does not have a leisure centre;
so many residents also lost access to a pool when the hotel
closed its doors at Christmas 2010.

When contacted, selling agents Osborne King would not comment
other than to confirm that a sale has been agreed, BBC News
discloses.

However, it is understood that Marine could reopen to the public
by late summer, BBC News adds.


NEMUS II: Fitch Raises Rating on Class F Notes to 'CCCsf'
---------------------------------------------------------
Fitch Ratings has upgraded Nemus II (Arden) plc's class E and F
notes and affirmed the rest as follows:

  -- GBP173.3m Class A (XS0278300487) affirmed at 'AA+sf';
     Outlook Stable
  -- GBP13.9m Class B (XS0278300560) affirmed at 'AA-sf'; Outlook
     Stable
  -- GBP9.3m Class C (XS0278300727) affirmed at 'Asf'; Outlook
     Stable
  -- GBP8.3m Class D (XS0278301295) affirmed at 'BBBsf'; Outlook
     Stable
  -- GBP15.3m Class E (XS0278301378) upgraded to 'B-sf' from
     'CCCsf'; Outlook Stable
  -- GBP1m Class F (XS0278301535) upgraded to 'CCCsf' from
     'CCsf'; Recovery Estimate RE0%

The upgrades reflect the repayment in full of the defaulted
Somerfield/Oriel Property loan, which in Fitch's view was at risk
of suffering a loss.  The affirmations of classes A through D
reflect the stability of other loans, with neither the GBP127.3
million Victoria loan, GBP41.9 million Buchanan House nor the
GBP40 million Kinnaird House reporting material changes.

The class F note remains in the distressed category largely owing
to ongoing concerns with the specially-serviced GBP11.9 million
Carlton House loan, which defaulted on a principal payment.  An
"amortization holiday" granted to the borrower expired in
January, and a possible extension is being discussed with the
special servicer.  The loan is secured on three average quality
retail assets in Birmingham, with overall vacancy of 3.9%
(concentrated in one property).  The unexpired lease terms in the
three properties range from three to 8.5 years.

The three other loans, Kinnaird House, Buchanan House and
Victoria, mature between May and October 2013.  The reported
securitized loan-to-value ratios (LTV) suggest moderate leverage,
and although Fitch estimates higher LTVs than the reported
figures between 74.1% and 85.5%, there are reasonable grounds to
expect orderly repayment in each case, in spite of the existence
of non-securitized B-notes.  The loans are secured on good assets
in city centre locations: Kinnaird House on a prime office in
London's West End; Victoria and Buchanan on good secondary
offices in London Midtown and Glasgow respectively.

The properties securing these three loans are close to fully let,
on long leases (weighted average unexpired terms of 7 years, 16
years and 11 years respectively) to strong tenants.  With bond
maturity in 2020, the special servicer (CBRE Loan Servicing,
rated 'CSS2-') would have some flexibility should any of the
three stronger loans fail to repay at maturity.  Until LIBOR
picks up there will be scope for cash sweep amortization and
capital expenditure, although this would have to be weighed up
against decay in the value of the leases.



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


* Moody's Reveals 2012-13 Performance Outlooks for EU ABS & RMBS
----------------------------------------------------------------
In a report published on June 20, Moody's Investors Service says
that its outlook for the collateral performance of asset-backed
securities (ABS) and residential mortgage-backed securities
(RMBS) transactions in 2012-13 is i) stable for prime assets in
France, Germany, the Netherlands and the UK and (ii) negative for
Greece, Ireland, Italy, Portugal and Spain.

The new report is entitled " European ABS And RMBS Outlooks: June
2012 Update".

While Moody's outlook for prime assets in France, Germany, the
Netherlands and the UK remains within the stable band, it has
deteriorated somewhat compared to the last time the rating agency
updated the market on its views, in December 2011. The rating
agency now expects 2012-13 economic growth to be slower and
unemployment rates to be higher across most jurisdictions.

All existing outlooks remain the same as they were in December
2011. Moody's has added an outlook for UK Buy-To-Let RMBS for the
first time.


* BOOK REVIEW: Learning Leadership
----------------------------------
Author: Abraham Zaleznik
Publisher: Beard Books
Hardcover: 548 pages
Listprice: US$34.95
Review by Henry Berry

The lesson in Learning Leadership -- The Abuse of Power in
Organizations is to "use power so that substance leads process."
This is done, says the author, by keeping the "content of work at
the center of communication."

The premise of this intriguing book is that many managers,
executives, and other business leaders allow "forms of
communication [to become] the center of work."  As a result,
misguided and counterproductive leadership and management
practices have settled into many organizations.  A culprit is the
popular "how-to" leadership manuals that offer simple,
superficial principles that only skim the surface of leadership.
Zaleznik argues that the primary way to get work done is to put
aside personal agendas and deal directly with those who are
involved in the work.

With this emphasis on substance over process, the concept of
leadership lies not in techniques, but personal qualities.  The
essential personal qualities of leadership are captured by the
"three C's" of competence, character, and compassion.  The author
then delves more deeply into each of these C's.  We learn, for
example, that the three C's are not learned skills.  Competence
entails "building one's power base on talent."

Character and compassion are the two other qualities of a leader
that must be present before there is any talk about methods of
operation, lines of communication, definition of goals, structure
of a team, and the like.  There is more to character that the
common definition of the "quality of the person."  Character also
embraces, says the author, the "code of ethics that prevents the
corruption of power."  Compassion is defined as a "commitment to
use power for the benefit of others, where greed has no place."
This concept of a good leader is not idealized or unrealistic.
It takes into account human nature and the troubling behavior of
many leaders.  Of course, any position of leadership brings with
it temptations and the potential to abuse power.  Effective
leaders are those who "take responsibility for [their] own
neurotic proclivities," says the author.  They do this out of a
sense of the true purpose of leadership, which is communal
benefit.  The power holder will "avoid the treacheries of an
unreasonable sense of guilt, while recognizing the omnipresence
of unconscious motivation."

Zaleznik's definition of the essentials of leadership comes from
his study of notable (and sometime notorious) leaders.  Some
tales are cautionary.  The Fashion Shoe Company illustrates the
problems that can occur when a leader allows action to overcome
thought.  The Brandon Corporation illustrates the opposite
leadership failing -- allowing thought to inhibit action. Taken
together, the two examples suggest that balance is needed for
good leadership.  Andrew Carnegie exemplifies the struggle
between charisma and guilt that affects some leaders.  Frederick
Winslow Taylor is seen by the author as an obsessed leader.  From
his behavior in the Sicilian campaign in World War II, General
Patton is characterized as a leader who violated the code binding
leaders and those they lead.

With his training in psychoanalysis and his experience in the
business field, Zaleznik's leadership dissections and discussions
are instructive.  The reader will find Learning Leadership -- The
Abuse of Power in Organizations to be an engaging text on the
human qualities and frailties of leaders.

Abraham Zaleznik is emeritus Konosuke Matsushita Professor of
Leadership at the Harvard Business School.  He is also a
certified psychoanalyst.


                            *********

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 * * *